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CHAPTER-1 INTRODUCTION
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INTRODUCTION TO PROJECT

Online banking, also known as internet banking, e-banking or virtual banking, is

an electronic payment system that enables customers of a bank or other financial institution to
conduct a range of financial transactions through the financial institution's website. The online
banking system will typically connect to or be part of the core banking system operated by a
bank and is in contrast to branch banking which was the traditional way customers accessed
banking services.

To access a financial institution's online banking facility, a customer with internet access will
need to register with the institution for the service, and set up a password and
other credentials for customer verification. The credentials for online banking is normally not the
same as for telephone or mobile banking. Financial institutions now routinely allocate customers
numbers, whether or not customers have indicated an intention to access their online banking
facility. Customer numbers are normally not the same as account numbers, because a number of
customer accounts can be linked to the one customer number. Technically, the customer number
can be linked to any account with the financial institution that the customer controls, though the
financial institution may limit the range of accounts that may be accessed to, say, cheque,
savings, loan, credit card and similar accounts.

The customer visits the financial institution's secure website, and enters the online banking
facility using the customer number and credentials previously set up. The types of financial
transactions which a customer may transact through online banking are determined by the
financial institution, but usually includes obtaining account balances, a list of the recent
transactions, electronic bill payments and funds transfers between a customer's or
another's accounts. Most banks also enable a customer to download copies of bank statements,
which can be printed at the customer's premises (some banks charge a fee for mailing hard copies
of bank statements). Some banks also enable customers to download transactions directly into
the customer's accounting software. The facility may also enable the customer to order a cheque
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book, statements, report loss of credit cards, stop payment on a cheque, advise change of address
and other routine actions.

Today, many banks are internet-only institutions. These "virtual banks" have lower overhead
costs than their brick-and-mortar counterparts. In the United States, many online banks are
insured by the Federal Deposit Insurance Corporation (FDIC) and can offer the same level of
protection for the customers' funds as traditional banks.

BANKING STRUCTURE IN INDIA:

In today’s dynamic world banks are inevitable for the development of a country. Banks play
a pivotal role in enhancing each and every sector. They have helped bring a draw of
development on the world’s horizon and developing country like India is no exception.

Banks fulfills the role of a financial intermediary. This means that it acts as a vehicle for
moving finance from those who have surplus money to (however temporarily) those who
have deficit. In everyday branch terms the banks channel funds from depositors whose
accounts are in credit to borrowers who are in debit.

Without the intermediary of the banks both their depositors and their borrowers would have
to contact each other directly. This can and does happen of course. This is what has lead to
the very foundation of financial institution like banks.

Before few decades there existed some influential people who used to land money. But a
substantially high rate of interest was charged which made borrowing of money out of the
reach of the majority of the people so there arose a need for a financial intermediate.
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The Bank have developed their roles to such an extent that a direct contact between the
depositors and borrowers in now known as disintermediation.

Banking industry has always revolved around the traditional function of taking deposits,
money transfer and making advances. Those three are closely related to each other, the
objective being to lend money, which is the profitable activity of the three. Taking deposits
generates funds for lending and money transfer services are necessary for the attention of
deposits. The Bank have introduced progressively more sophisticated versions of these
services and have diversified introduction in numerable areas of activity not directly relating
to this traditional trinity.
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INDIAN BANKING SYSTEM

Reserve Bank of India

Schedule Banks Non-Schedule Banks

Central co-op
State co-op Commercial Banks and Commercial Banks
Banks Banks Primary Cr.
Societies

Indian Foreign

Public Sector
Banks Private Sector HDFC,
Banks ICICI etc.

State Bank of Other Nationalized Regional Rural

India and its Banks Banks
Subsidiaries
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INDIAN BANKING INDUSTRY ANALYSIS:

The banking scenario in India has been changing at fast pace from being just the borrowers and
lenders traditionally, the focus has shifted to more differentiated and customized product/service
provider from regulation to liberalization in the year 1991, from planned economy to market.

Economy, from licensing to integration with Global Economics, the changes have been swift. All
most all the sector operating in the economy was affected and banking sector is no exception to
this. Thus the whole of the banking system in the country has undergone a radical change. Let us
see how banking has evolved in the past 57 years of independence.

After independence in 1947 and proclamation in 1950 the country set about drawing its road map
for the future public ownership of banks was seen inevitable and SBI was created in 1955 to
spearhead the expansion of banking into rural India and speed up the process of magnetization.

Political compulsion’s brought about nationalization of bank in 1969 and lobbying by bank
employees and their unions added to the list of nationalized banks a few years later.

Slowly the unions grew in strength, while bank management stagnated. The casualty was to the
customer service declined, complaints increased and bank management was unable to item the
rot.
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In the meantime, technology was becoming a global phenomenon lacking a vision of the future
and the banks erred badly in opposing the technology up gradation of banks. They mistakenly
believed the technology would lead to retrenchment and eventually the marginalization of
unions. The problem faced by the banking industry soon surfaced in their balance sheets. But the
prevailing accounting practices unable banks to dodge the issue.

The rules of the game under which banks operated changed in 1993. Norms or income
Recognition, Assets classification and loan loss provisioning were put in place and capital
adequacy ratio become mandatory. The cumulative impact of all these changes has been on the
concept of state ownership in banks. It is increasingly becoming clear that the state ownership in
bank is no longer sustainable.

The amendment of banking regulation act in 1993 saw the entry of new private sector banks and
foreign banks.

MAJOR PLAYER IN INDIA

1. STATE BANK OF INDIA LTD

2. HDFC BANK LTD

3. ICICI BANK LTD

4. PUNJAB NATOINAL BANK LTD

5. BANK OF BARODA LTD

6. FEDERAL BANK LTD

7. AXIS BANK LTD

8. ING VYSYA BANK LTD

9. IDBI BANK LTD

10. INDUSIND BANK LTD

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INTERNET BANKING

INTERNET:-

INTRODUCTION: -

There is a sea change in the media world. While most consumers see the news papers, the same
magazines and listen to the same radio programs, behind this bland public exterior there is a
seething world of innovation, acquisition, global partnership and divorces, births and deaths…
all of it most readily interpreted as the inevitable result of the technological revolution that is in
the process of merging telephones, computers, televisions in to a single all singing, all dancing
magic kit that will, very possible, change all of our lives more than we can imagine some day

There are 2 ways you can respond to this 1 is to panic, which may mean simply curling up in a
corner and wishing that it would all go away. The other is to embrace the new religion with
messianic fervor and go out to proclaim the millennium. I welcome you to the new emerging
world of the Info-High-Way, destined to redefine the world of communications.

HISTORY: -

It is said that necessity is the mother of invention. And true, it is seeds of Internet were sown in
the ashes of the world war
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Having bombed the cities of Hiroshima and Nagasaki, US military was forced to provide the
answer to the question – What if someone bombed the USA? So for many years after the war,
most of the US military research concentrated on ways and means to survive the nuclear
holocaust. And one of the most important strategic problems was- “How would us authorities
communicate with each other in the aftermath of a nuclear attack?” computers were already
there. But, communication networks were connected to each in a private fashion- in sort of
chains: somewhat like an electricity line to your home. This means that if even one chain in the
middle were blown up, the whole network would collapse.

Then in the 1960’s the problem was taken by America’s foremost military think tank, the Rand
Corporation. After a lot of ideas were put up and knocked down, Paul baron- a rand “thinker” hit
upon an idea. “What if the network was not built like a chain but like a fish net?” he said. If one
strand on the fish net broke the net would still be functional. After spending many agonizing
hours over it, he came up with 11-volume report for the pentagon. But, as fate would have it was
rejected. By then, young engineers were impressed by the idea and worked on it.

Well before the end of the decade, the first net was created and called ARPANET, connecting
four American research organizations- university of Utah, university of California in Los
Angeles and Santa Barbara, and Stanford research institute.

Internet as a communication medium and as a repository of information has caught the

imagination of computer users. This has fuelled an unparalleled growth in the number of
Internet users.

VARIOUS PARTS OF INTERNET: -

The Internet is made up of terminal computers through which subscribers access the net;
gateways servers which connect the users to the rest of the network (of computers); servers
which host information in them; and, the communication network over which data actually
flows.

Internet offers its users a variety of services. The subscribers may have access to all or any of the
following services depending upon the type of connection that one has subscribed for:
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1) E-Mail

2) World Wide Web (WWW)

3) File Transfer Protocol (FTP)

4) Telnet

The net banking, thus, now is more of a norm rather than an exception in many developed
countries due to the fact that it is the cheapest way of providing banking services.

Internet banking refers to the use of the Internet as a remote delivery channel for banking
services. Such services include traditional ones, such as opening a deposit account or transferring
funds among different accounts, and new banking services, such as electronic bill presentment
and payment (allowing customers to receive and pay bills on a bank’s Web site). Banks offer
Internet banking in two main ways. An existing

bank with physical offices can establish a Web site and offer Internet banking to its customers as
an addition to its traditional delivery channels. A second alternative is to establish a “virtual,”
“branchless,” or “Internet-only” bank. The computer server that lies at the heart of a virtual bank
may be housed in an office that serves as the legal address of such a bank, or at some other
location. Virtual banks may offer their customers the ability to make deposits and withdraw
funds via ATMs or other remote delivery channels owned by other institutions.

The impact of E-transaction and authentication issues in banking

It's hardly great news that there has been tremendous growth in the use of the Internet and
other electronic facilities to process financial transactions. According to the Federal
Deposit Insurance Corp., transactional Web sites have more than doubled each year for the
past six years, growing from one in 1995 to nearly 2,500 in 2000.

This growth is a reflection of the fact that over the past few years, financial leaders have been
considering various ways in which to allow their customers to transact business using the
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Internet. This objective is now reaching beyond the financial services industry into non-
electronic business segments, such as the building supply industry. Furthermore, this growth is
likely to continue to climb as the number of Internet users, Internet connection speed, and the
number of transactional Web sites continues to increase. The number of adults using PC banking
is also growing. With this growth, there is an increased awareness of the benefits of using online
transaction processing, thereby fueling the thought that all business should be electronically
facilitated.

Gartner predicts that worldwide business-to-business (B2B) e-commerce will total $3.6 trillion by
2003 and $8.5 trillion in 2005. Online financial activity had a slower start, but has had steady
growth, from 6 million users in 1998 to 27.5 million users in 2000. During 2000, only 30 percent of
the Internet-capable households were using some form of Internet banking, indicating that there
is tremendous room for increased use.

The e-Commerce Value Chain Consider that the consumer and the merchant are on either ends of
the electronic commerce value chain, with the authentication network and transaction processor
(bank) in the middle. Banks have traditionally been the trusted agents, have the largest
customer base, and have received the initial benefits from electronic commerce. Value has
begun a steady migration to the ends of the value chain. Customers can receive and pay bills
from one point using products from multiple issuers. Merchants can influence and enhance the
consumer experience by providing innovative and time-saving means of doing business.
Merchants can add value to the payment process, for example, by offering discounted prices for
electronic payment.

Merchants can also reduce their costs by receiving electronic payments, which results in
reducing and sometimes eliminating the need for data entry, as well as reducing the error rate
and the time to investigate and correct the data. By increasing and effectively managing cash
flow, merchants may also be able to reduce costs associated with lines of credit.
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Digital Signatures

On October 1, 2000, the Electronic Signatures in National and Global Commerce Act was signed.
This act states that an agreement, contract, or transaction signed electronically is enforceable
in a court of law.

Accordingly, financial services institutions can now legally transact business using electronic
signatures, allowing transactions such as mortgages, funds transfers, opening and closing of
accounts, benefits enrollment, and beneficiary designations to occur in an electronic
environment.

The law defines an electronic signature as "an electronic sound, symbol, or process attached to
or logically associated with a contract or other record and executed or adopted by a person with
the intent to sign the record." Fortunately, the legislation does not attempt to define acceptable

technologies except to indicate that the technologies must be mutually acceptable to the
transacting parties. Since a valid signature can be as simple as a digital image of a signature
(enabled through an electronic pen and pad) or as complex as today's public key infrastructure
(PKI) and associated encryption methods, the technology decision maker must define relevant
business objectives and understand the risks, such as cost and unauthorized use associated with
alternative implementations.

There are possible additional benefits to the implementing organization. These include reduced
transaction timelines, reduction in paper processing costs, facilitation of customer migration to
the Internet as a business channel, and increased online transaction security.

When compared to physical signatures, e-signature technologies are, in general, a more secure
authentication method. Many financial institutions are studying the possible implementation of a
public key infrastructure (PKI) system that will allow them to exchange electronic information
securely with unknown parties.

PKI is the delivery channel for public key cryptography, a method that allows the parties to a
transaction to keep a communication private through the use of a two-part key made up of
public and private components. To encrypt messages, the published public keys of the
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recipients are used. To decrypt the messages, the recipients use their unpublished private keys,
known only to them. Quite simply, if the signer's private key is not compromised, which can
happen by releasing the password or allowing access to the device containing the private key,
a document cannot be digitally signed

What Is Internet Banking?

Internet Banking System is a system that has been developed in order to help clients with the
daily day-to-day transactions. Internet banking systems means that clients can now do banking at
the leisure of their homes.

Also known as online banking, the system allows both transactional and non-transactional
features.

Online banking or internet banking allows customers to conduct financial transactions on a

secure website operated by the retail or virtual bank.
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History

The term online banking was first started in 80’s. The term online became popular in the late '80s
and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system
using a phone line. ‘Home banking’ can also refer to the use of a numeric keypad to send tones
down a phone line with instructions to the bank. Online services started in New York in 1981
when four of the city’s major banks (Citibank, Chase Manhattan, Chemical and
Manufacturers Hanover) offered home banking services using the videotext system. Because
of the commercial failure of videotex these banking services never became popular except in
France where the use of videotex (Minitel) was subsidized by the telecom provider and the UK,
where the Prestel system was used.

The UK’s first home online banking services was set up by the Nottingham Building Society
(NBS) in 1983 .The system used was based on the UK's Prestel system and used a computer,
such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and
television set. The system (known as 'Home link') allowed on-line viewing of statements, bank
transfers and bill payments. In order to make bank transfers and bill payments, a written
instruction giving details of the intended recipient had to be sent to the NBS who set the details
up on the Home link system. Typical recipients were gas, electricity and telephone companies
and accounts with other banks. Details of payments to be made were input into the NBS system
by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice
giving details of the payment was sent to the account holder. BACS was later used to transfer the
payment directly.

Stanford Federal Credit Union was the first financial institution to offer online internet banking
services to all of its members in Oct, 1994. Later on it was adopted by worldwide banks
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Various online service provide by

banking industry in India
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CBS - Core Banking System Components

CBS - Core Banking System

Components Datacenter
Branches
Application Developers

Desktops,
Branch Core-Banking
Servers Application

WAN, OS, Database

Internet
Alternative Internet-Banking
Channels
ATM

Branch User/Admins Network Administrators System Administrators

ELITEX-2008 8
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RETAIL BANKING:-

The Retail banking application is an integration of several functional areas, and enables
customers to:

 Issue Demand Drafts online

 Transfer funds to own and third party accounts

 Credit beneficiary accounts using the VISA Money Transfer, RTGS/NEFT feature

 Generate account statements

 Setup Standing Instructions

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 Configure profile settings

 Use eTax for online tax payment

 Use ePay for automatic bill payments

 Interface with merchants for railway and airline reservations

 Avail DEMAT and IPO services

CORPORATE BANKING:-

The Online SBI corporate banking application provides features to administer and manage
corporate accounts online. The corporate module provides roles such as Regulator, Admin,
Uploader, Transaction Maker, Authorizer, and Auditor. These roles have access to the following
functions:

 Manage users, define rights and transaction rules on corporate accounts

 Access accounts in several branches with a single sign-on mechanism

 Upload files to make bulk transactions to third parties, supplier, vendor and tax collection
authorities.

 Use online transactional features such as fund transfer to own accounts, third party
payments, and draft issues

 Make bill payments over the Internet.

 Authorize, modify, reschedule and cancel transactions, based on rights assigned to the
user

 Generate account statement

 Enquire on transaction details or current balance

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Value added services:

 Tax payments to central and state governments through site to site integration.

 Supply Chain Finance( e-VFS- Electronic Vendor Finance Scheme)

 Direct Debit Facility

 E Collection Facilities for.

 Core Banking Transactions

 Internet Bank transactions for incoming RTGS/NEFT Transactions

 Internet banking transactions for SBI and associate banks

 Debit facility where suppliers can directly debit their customer’s account through
internet banking

PRODUCTS AND SERVICES:-

 E-Ticketing

 SBI E-Tax

 Bill Payment

 RTGS/NEFT

 E-Payment

 Fund Transfer

 Third Party Transfer

 Demand Draft
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 Cheque Book Request

 Account Opening Request

 Account Statement

 Transaction Enquiry

 Demat Account Statement

 Donation

E-TICKETING :-

You can book your railway, air and bus tickets online through OnlineSBI.

To book your train ticket, just log on to irctc.co.in and create an ID there at if you do not have
one. Submit your travel plan and book the ticket(s)-either

 i-ticket (where the delivery of tickets will be made at your address) or

 E-tickets (wherein after successful payment transactions, an e-ticket is generated which

can be printed any time. For an e-ticket, the details of photo identity card will required
to be filled in)

And select State Bank of India in the payment options. You will be redirected to Internet
Banking site of SBI (www.onlinesbi.com). After submitting the respective ID and password, you
can select your account. After a successful debit, Railways will generate the ticket. E-ticket can
be printed by you whereas the i-ticket will be dispatched by IRCTC at the given address. Service
charges @ Rs.10/- per transaction shall be levied in addition to the cost of the ticket.
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Cancellation of E-ticket can be done by logging on to IRCTC's site; refund amount will be
credited to your account directly within 2-3 days. For cancellation of i-ticket, you shall be
required to submit your ticket at a computerized counter of

Railways and on cancellation; the amount shall be credited back to your account.

You can also book your Air ticket through the e-ticketing feature. Logon to Indian Airlines
website to make a payment for an e-ticket through State Bank of India, you need to select SBI as
the payment option. The payment request will be redirected to Internet Banking site. The request
may be processed based on values sent from the airlines website. Once a transaction is
processed, an appropriate response will be sent to airlines site to update the status of the
transaction. You can print the E-ticket immediately.

To book bus tickets to destinations in Karnataka, log on to the KSRTC website. Provide details
about the start and end points of your journey, date of journey and number of tickets. Verify
availability of seats on the selected date and confirm the transaction. Select OnlineSBI to make
the payment. Provide your credentials and select the SBI account that will be debited for the
payment. You are provided a KSRTC reference number for your e-Ticket.

SBI E-TAX:-
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You can pay your taxes online through SBI E-Tax. This facility enables you to pay TDS, Income
tax, Indirect tax, Corporation tax, Wealth tax, Estate Duty and Fringe Benefits tax. Click the e-
Tax link in the home page. You are displayed a page with two links Direct Tax and Indirect Tax.

Click the Direct Tax link. You will be redirected to the NSDL site where you can select an
online challan based on the tax you wish to pay. Provide the PAN, name and address, assessment
year, nature of payment and bank name. On selecting the bank name as SBI and submitting the
form, you will be redirected to the Internet Banking site. After submitting the respective ID and
password, you can select your account for making payment of taxes. After payment is successful
you can print the E-Receipt for the payment. The E-receipt can be printed at a later date also and
the same can be retrieved from: Enquiries > Find Transactions > Status Enquiries > Click on the
respective transaction to print the tax receipt. The Indirect Tax link is used to make Central
Excise and Service Tax payments to Central Board of Excise and ustoms. The online payment
feature facilitates anytime, anywhere payment and an instant E-Receipt is generated once the
transaction is complete. The Indirect Tax payment facility is available to Registered Central
Excise/Service Tax Assessee who possesses the 15 digit PAN based Assessee Code. You can
make CBEC payments using the Indirect Taxes link available in the Payments/Transfers tab.
You need to provide your assessee code as registered with CBEC and select the minor heads
towards which you intend to pay tax. Select the appropriate tax type and enter the tax amount.
Select an account for debiting the total tax amount. You can use any of your transaction accounts
to make the payment. If a payment is successful, CBEC provides a link to generate an E-Receipt
for the payment.

Internet banking customers can pay tax through site to site integration. For government agencies,
which are not Internet-enabled, OnlineSBI offers the Government Tax Payment facility. This
facility is available as a post login feature in the retail and corporate banking sites of the Online
SBI portal.
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Please note that the cut-off time for OLTAS and CBEC payment is 8 P.M. IST. Any transactions
created after the cut off time will be processed after 7 A.M. on the following day.

Bill Payment :-

A simple and convenient service for viewing and paying your bills online.

 No more late payments

 No more queues

 No more hassles of depositing cheques

Using the bill payment you can 'view and Pay various bills online, directly from your SBI
account. You can pay telephone, electricity, insurance, credit cards and other bills from the
comfort of your house or office, 24 hours a day, 365 days a year. Simply logon to
http://www.onlinesbi.com/ with your credentials and register the biller to which you want to pay,
with all the bill details. Once the bill is uploaded by the biller, you can make payment online.
You can see 'how do i' to learn the steps for using the facility.

You can also set up Auto Pay instructions with an upper limit to ensure that your bills are paid
automatically whenever they are due. The upper limit ensures that only bills within the specified
limit are paid automatically, thereby providing you complete control over these
payments.

The e-PAY service is available in various cities across the country and you can now make
payments to several billers in your region.
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RTGS/NEFT :-

You can transfer money from your State Bank account to accounts in other banks using the
RTGS/NEFT service. The RTGS system facilitates transfer of funds from accounts in one bank
to another on a "real time" and on "gross settlement" basis. This system is the fastest possible
interbank money transfer facility available through secure banking channels in India. RTGS
transaction requests will be sent to RBI immediately during working hours post working hours
requests are registered and sent to RBI on next working day. You can also schedule a transaction
for a future date. You can transfer an amount of Rs.1 lac and above using RTGS system.

National Electronic Funds Transfer (NEFT) facilitates transfer of funds to the credit account with
the other participating bank. RBI acts as the service provider and transfers the credit to the other
bank's account.
NEFT transactions are settled in batches based on the following timings

1. 6 settlements on weekdays - at 09:00, 11:00, 12:00, 13:00, 15:00 and 17:00 hrs.

2. 3 settlements on Saturdays - at 09:00, 11:00 and 12:00 hrs.

Please note that all the above timings are based on Indian Standard Time (IST) only.
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In order to transfer the funds to an account with other bank, kindly ensure that the bank branch of
the beneficiary is covered under the RGTS/NEFT payment system. It is recommended that you
choose the Bank/ Branch from the drop down option provided under the link "Add Interbank
beneficiary".

Please exercise care to provide the correct account number and name of the beneficiary.

E-Payment :-

You can pay your insurance premium, mobile phone bills and also you can purchase mutual fund
units by coming from the biller’s website and

selecting state bank of India in the payment option.

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LIC PREMIUM: For paying premium of LIC policy logon to

www.licindia.com and register your policy details. When the premium is due select State Bank
of India in the make payment option.

SBI Mutual FUND: You can invest in the SBI Mutual Fund schemes online. Logon to
www.sbimf.com and select the scheme in which you want to make investment in the payment
option select State Bank of India.

CCAVENUES: Enjoy shopping at the CCAvenue Shopping Mall and purchase from a wide
variety of products and services through CCAvenue Certified Vendors. Make payments for your
purchases using your Internet enabled SBI accounts.

Fund Transfer :-

The Funds Transfer facility enables you to transfer funds within your accounts in the same
branch or other branches. You can transfer aggregating Rs.1 lakh per day to own accounts in the
same branch and
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other branches. To make a funds transfer, you should be an active Internet Banking user with
transaction rights. Funds transfer to PPF account is restricted to the same branch.

Just log on to retail section of the Internet Banking site with your credentials and select the
Funds Transfer link under Payments/Transfers tab. You can see all your online debit and credit
accounts. Select the debit account from which you wish to transfer funds and the credit account
into which the amount is to be credited. Enter the amount and remarks. The remarks will be
displayed in your accounts statement for this transaction. You will be displayed the last five
funds transfer operations on your accounts. On confirming the transaction, you will be displayed
a confirmation page with the details of the transaction and the option to submit or cancel the
funds transfer request. A reference number will be generated for your record.

Third Party Transfer :-

You can transfer funds to your trusted third parties by adding them as third party accounts. The
beneficiary account should be any branch SBI. Transfer is instant. You can do any number of
Transactions in a day for amount aggregating Rs.1lakh.

To transfer funds to third party having account in SBI, you need to add and approve a third party,
you need to register your mobile number in

personal details link under profile section. You will receive a One Time SMS password on your
mobile phone to approve a third party. If you do

not have a mobile number, third party approval will be handled by your branch. Only after
approval of third party, you will be able to transfer funds to the third party. You can set limits for
third party transactions made from your accounts or even set limits for individual third parties.

Demand Draft:-
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The Internet Banking application enables you to register demand drafts requests online. You can
get a demand draft from any of your Accounts (Savings Bank, Current Account, Cash Credit or
Overdraft). You can set limits for demand drafts issued from your accounts or use the bank
specified limit for demand drafts.

You can opt to collect the draft in person at your branch, quoting reference to the transaction. A
printed advice can also be obtained from the site for your record.

Alternatively, you may request the branch to courier it to your registered

Address, and the courier charges will be recovered from you.

If you have any queries, kindly approach your branch, quoting the reference number generated
for the request.
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Cheque Book Request :-

You can request for a cheque book online. Cheque book can be requested for any of your
Savings, Current, Cash Credit, and Over Draft accounts. You can opt for cheque books with 25,
50 or 100 cheque leaves. You can either collect it from branch or request your branch to send it
by post or courier. You can opt to get the cheque book delivered at your registered address or
you can provide an alternate address. Cheque books will be dispatched within 3 working days
from the date of request.

Just log on to retail section of the Internet Banking site with your credentials and select the
Cheque Book link under Requests tab. You can view all your transaction accounts. Select the
account for which you require a cheque book; enter the number of cheque leaves required and
the mode of delivery. Then, submit the same.

Account Opening Request:-

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Online SBI enables you to open a new account online. You can apply for a new account only in
branches where you already have accounts. You should have an INB-enabled account with
transaction right in the branch. Funds in an existing account are used to open the new account.
You can open Savings, Current, Term Deposit and Recurring Deposit accounts of Residents,
NRO and NRE types.

Just log on to retail section of the Internet Banking site with your credentials and select the New
Account link under Requests tab. You can see all types of accounts. Select the account and
account type you wish to open and submit the same. Then, you need to select the branch and
enter the initial amount to open the account. You can select any of your accounts for debiting the
initial amount. Then, submit the transaction. Your new account opening request will be
processed by the branch.

Account Statement:-

The Internet Banking application can generate an online, downloadable account statement for
any of your accounts for any date range and for any account mapped to your username. The
statement includes the transaction details, opening, closing and accumulated balance in the
account.

You can generate the online account statement for any date range or for any month and year. The
account statement can be viewed online, printed or downloaded as an Excel or PDF file. You
also have the option to select the number of records displayed in each page of the statement. The
options are 25, 50, 75, 100 and ALL.
“
“

Transaction Enquiry :-

OnlineSBI provides features to enquire status of online transactions. You can view and
verify transaction details and the current status of transactions. Your VISA transactions can also
be viewed separately. Just log on to retail section of the Internet Banking site with your
credentials and select the Status Enquiry link under the Enquiries tab. You will be displayed all
online transactions you have performed. To view details of individual transactions, you need to
click the Transaction Reference number link. You are displayed the debit and credit account
details, transaction amount, narration and transaction status.

Demat Account Statement :-

Online SBI enables you to view Demat account statement and maintain such accounts. The bank
acts as your depository participant. In the third

Party site, you can mark a lien on your Demat accounts and use the funds to trade on stock using
funds in your SBI savings account.
You can view De mat account details, and generate the following statements: statement of
holding, statement of transactions, statement of billing.

Donation:-

You can make donation to religious and charitable institution by using Internet Banking of SBI.
Simply log on to http://www.onlinesbi.com/ with your credentials and go to Payment and
transfer and click on make donation link. After selecting the debit account select the
religious/charitable institution whom you want to offer donation. After successful payment you
can print an E-receipt for the donation made.
“

CHAPTER-2

REVIEW OF LITERATURE
“

REVIEW OF LITERATURE

INTRODUCTION

Perception is an approximation of reality. Our brain attempts to make sense out of the stimuli to
which we are exposed. This works well when we are about to perceive familiar facts.

Perception can be defined as a process by which an individual select, organize& Interpret stimuli
in a meaningful picture of the world. Perception is the process of selecting, organizing, &
Interpreting or attaching meaning to events happening in environment

G. Walters and B. J. Bergiel (1989)

Characterized Perception as a solid process during which an individual acquires knowledge

about the environment and interprets the information according to his/her needs requirements
and attitudes. Customer perception is an important component of our relationship with our
customers. Customer satisfaction is a mental state which results from the customer’s comparison
of expectations prior to a purchase with performance perceptions after purchase. A customer may
make such comparisons for each part of an offer called’ domain-specific satisfaction’’ or for the
offer in total called ‘‘global satisfaction’ ’Moreover, this mental state, which we view as a
cognitive judgment, is conceived of as falling somewhere on a bipolar continuum bounded at the
lower end by a low level of satisfaction where Expectations exceed performance perceptions
And at the higher end by a high level of satisfaction where Performance perceptions exceed
expectations. Like other industries, Banking and financial services Companies have reached the
Conclusion that the relationship with the customer should not (metaphorically and literally) end
at the bank door. Customer access after the transaction adds value.
“

Uppal & Chawla, (2009) study about “e-delivery channel-based banking services: an empirical
study customer perceptions about e banking services “highlighted about the customer
perceptions about e-banking services in India .the research methodology included survey of 1200
respondents in Ludhiana and respondents included public , private and foreign bank sector .the
present study investigated the customer perceptions regarding the necessity of e-banking
services , bank frauds , future of e- banking , preferences of banking customers regarding banks ,
comparative study of banking services in various groups of banks, preferences regarding the use
of e-channels and the problems faced by e-banking customers .the study depicted that customers
of all bank groups are interested in e-banking services but at the same they face problems like
inadequate knowledge , poor knowledge , lack of infrastructure and difficulty they face in
opening an account .the paper thus framed suitable strategies like customer education, seminars,
proper meetings , proper installation of ATM machines ,proper networking and infrastructure
facilities etc .

El-Sherbini et al. (2007)

Investigated through his study on,” Bank customer Behavior perspectives towards internet
banking services in Kuwait “the customers perspectives of internet banking, their perceived
importance for it, usage patterns and problems rising on its utilization. The paper discussed the
strategic implications of the research findings. Empirical data were gathered from bank
customers in Kuwait to achieve the research objectives. All bank customers in Kuwait were
considered as population of research interest. The results showed the perceived importance of
internet banking services by customers, current and potential use of IB services in Kuwait and
problems perceived by bank customers in using IB. The research paper main hypothesis tested
that top five services that were considered relative important in Kuwait banks were "Review
account balance", "Obtain detailed transactions histories, "Open accounts", Pay bills" and
Transfer funds between own accounts.
“

\Laukkanan ,Sinkkonen and Laukkanen, (2008)

Study on,” Segmenting bank customers by resistance to mobile banking”, highlighted about the
role of self-efficacy in bank customers risk perceptions towards the internet banking .Further , it
demonstrated that psychological barriers are even higher determinants of the resistance than the
usage and value , which are constructs related to ease of use and to the usefulness determining
the acceptance .The research methodology included Analysis of Variance as a tool to analyze the
statistical differences .Measurement development was faced based upon the Consumer resistance
theory

Reeti , Sanjay and Malhotra, (2009)

Investigated about the Customer’s perceptions about banking services in an emerging economy

for which the various determinants affecting the customer perception as well as attitude towards
banking services were predicted through study that was conducted on the respondents taken from
Northern part of India .Major findings depicted that customer perceptions are influenced by the
usage of e-banking services by the kind of account they hold, age , profession , attached high
degree of usefulness to the balance enquiry service among e-banking services .It was also found
that security and truth are the most important factors in affecting their satisfaction levels and
slow transaction problem speed was the most frequent problem faced by majority of Customers.

Malhotra ,Pooja and Singh , (2010)

Study examined various factors affecting the banking services in India .The purpose of the study
was to help in filling the gap in knowledge about Banking Landscape in India. The study utilized
sample of 82 banks of India using the technique of Multiple Regression to explore the
determinants .The study revealed that bankers as well as society perceive that banking services
lag in terms of providing different products and services.
“

OBJECTIVES OF THE STUDY

The main objectives of the study are:

 To understand the concept of Internet banking and importance, to bank as well as

customers.

 To get aware of various aspects of net banking

 To build up SWOT analysis of Internet banking of SBI

 To build up various solutions for drawbacks in net banking

Need of the Study

This study is needed to find out the working of Internet Banking of SBI and its importance to
customer as well as to bank.

SCOPE OF THE STUDY

The topic of the current research relates to the analysis online banking services in India in current
period with special reference to State Bank of India.

The scope would be wide as we can come across the benefits as well as various risks & threats of
e-banking.
“

To gain accurate results for the study, using questionnaire (already used) to know HOW MUCH
THEY ARE SATISFIED WITH THE E-BANKING SEVICES OF SBI BANK. The scope of the
study was limited to the customers of SBI bank & the city of Gorakhpur.

Future scope

The study of this topic will help to get the knowledge about process of internet banking and
usefulness to banking industry. As the study contains the 360 degree information regarding SBI
and its internet banking, Hence the study will lead to new ways to tackle the problems and the
SWOT of SBI in respect of internet banking. This was all about how the project will go ahead
and the findings from it.
“

CHAPTER-3

RESEARCH METHODOLOGY
“

RESEARCH METHODOLOGY

RESEARCH

Research is a process in which the researchers wish to find out the end result for a given problem
and thus the solution helps in future course of action. The research has been defined as “A
careful investigation or enquiry especially through search for new facts in branch of knowledge”

RESEARCH DESIGN

The research design used in this project is Descriptive as well as Analytical in nature the
procedure using, which researcher has to use facts or information already available, and analyze
these to make a critical evaluation of the performance. The project is divided into various
chapters dealing with various issues in the project.

DATA COLLECTION

 Secondary Sources

1. Bank manual for guidelines.

2. Data are collected from the company’s website.

3. Books and journals pertaining to the topic.

4. Help of an already used questionnaire was taken.

“

RESEARCH TYPE – DESCRIPTIVE

Descriptive research, also known as statistical, describes data and characteristics about the
population or phenomenon being studies.

SAMPLE FRAME

Sample frame is the source material or device from which a sample is drawn. It is a list of all
those within a population who can be sampled, and may include individuals, household or
institutions. For my research purpose I havbe selected respondents who are E-banking users of
SBI bank

SAMPLE SIZE:100

Sample frame is the source material or device from which a sample is drawn. It is a list of all
those within a population

RESEARCH TOOL

QUESTIONNAIRE consisting of closed ended question.

A form containing a set of question will be submitted to the respondent to gain statistical
information. Unstructured question in which (unlike in a multiple question) possible answer are
not suggested and the respondent chooses from the given question.
“

CHAPTER-4

DATA ANALYSIS

AND

INTERPRETATION
“

DATA ANALYSIS AND INTERPRETATION

GRAPHICAL REPRESENTATION OF DATA

Q1. On which bank do you depend for your regular E-banking transaction?

( ) No. of People

SBI 60 % (60)

ICICI 33 % (33)

HDFC 5% (5)

OTHER 2% (2)

TOTAL NO. OF PEOPLE 100

“

RESPONSES OF PEOPLE IN %
5% 2%

33% SBI
60% ICICI
HDFC
OTHER

INTERPRETATION

It has been observed that approximately 60% correspondents are using the service of SBI for
their daily transaction, around 33% of people are using ICICI Bank for their transaction and only
5% & 2% of people are using HDFC & other Bank service respectively in Bhubaneswar. It also
shows that SBI have the highest market position in Bhubaneswar as per my sample.
“

Q2. Are you aware of products & services provided by online banking industry?

YES 85% (85)

NO 15% (15)

Total No. of People 100

NO
15%

YES
85%

INTERPRETATION

From the above data it is clear that most of the customers (around 85%) of mahen have the idea
about the product & services of online banks, the rest 15% have the idea about the product they
are using. In this 15% most of the people are from typical rural area (Farmers).
“

Q3. If yes are you aware of the advance products online banking industry?

YES 95%(81)

NO 5% (4)

TOTAL NO. OF PEOPLE 85

% OF PEOPLE

5%

YES
NO
95%

INTERETATION

It is clear that most of the people have the idea about the advance product of banking industary.
Almost all the 95% people who have the idea about the advance product are the user of banking
industary product & service.
“

Q4. Which bank you prefer for taking E-Banking?

85% (85)

SBI

ICICI 7% (7)

HDFC 2% (2)

OTHER 1% (1)

TOTAL NO. OF PEOPLE 100

Sales
2% 1%
12%

SBI
ICICI

85% HDFC
OTHER

INTERPRETATION

According to my sample size 85% of people prefer SBI for E-banking product, but some people
prefer ICICI, HDFC or OTHER Bank for e-banking because they are working with that bank &
it is easier for them to get online support from their bank & it easier for them to provide the
services because it is less as compare to other bank because they are the employee of that bank.
“

Q5. What do you feel about the services providing by various bank in E-Banking sector?

Bad 0% (0)

Satisfactory 2% (2)

Good 55% (55)

Excellent 43% (43)

TOTAL NO. OF PEOPLE 100

CUSTOMER PERCEPTION TOWARDS THE SERVICE PROVIDE

BY SBI IN ADVANCE PRODUCT

0% 2%

43%
BAD

55% SATISFACTORY
GOOD
EXCELLENT
“

INTERPRETATION

From this it is clear that the service provide by various bank in its advance product is good in
between the customer. All of them satisfy with the product provide by various bank. 55% of
people said that the service provide by various bank is good & 43% said it is excellent & just 2%
of people said that it is satisfactory.
“

Q6. Which product of banking industry you have use?

ATM 60

NET BANKING 10

SHOPPING 20

TICKET BOOK 10

PRODUCT

ATM
NET BANKING
SHOPPING
TICKET BOOK

INTERPATATION According to my sample 60% people use ATM product , 10%people

use NET BANKING and 20% people use SHOPPING and rest of people are use for ticket
book
“

Q7. Which features you like most in E-Banking?

LESS PAPER WORK 40

ATTRACTIVE SERVICES 15

TRANSPARENCY 25

FAST PROCESS 20

features

less paper work

attractive services
transparancy
fast process

INTERPRETATION

Most of the people like the less paper work & transparency. It’s easier for people to use the fast
processing in easy and satisfy way.
“

Q.8 Sours of communication (From where customers get the

Information about bank).

a) Advertisement 30
b) Friend 25
c) Family member 35
d) Others 10

Others
d)
10% Advertisement
a)
30% a) Advertisement

Family member b) Friend

c) c) Family member
35% d) Others

Friend
b)
25%

Interpretation:-
As per as my study the family members are the main sources of
Communication about bank and advertisement is other sources. Family members
influence the decision related to taking personal loan.
“

Q.9Factors consider by customers while taking loan.

a) Interest rate 70
b) Scheme 20
c) Duration 8
d) Others 2

c) Duration
8%
d) Others
2% a) Interest rate
b) Scheme
20% b) Scheme
c) Duration
a) Interest rate d) Others
70%

Interpretation:-
When any customers planning for taking personal loan from any bank they
mainly consider the interest rate of the particular bank and they give second
preference to duration & schemes.
“

Q10.Rating of various scheme offerd by defferent bank in e-banking.

a) Good 44
b) Very good 30
c) Average 26
d) Below average 0

below average
average d)
c) 0%
26%
good a) good
a) b) very good
44%
c) average
d) below average
very good
b)
30%

Interpretation:-
According to my study 75% customers are agree that online banking is very
good and very good because of good services, more numbers of scheme.
“

Q11 Mode of services preferred more?

a) online 60
b) offline 40

PREFERENCES

ONLINE
OFFLINE

Interpretation
60% customer prefer online mode while 40% customer like offline services provided by banks.
Because online service is very fast and convenient
“

Q.12 Over all preference on the basis of interest rate, image and scheme in
various banks.
a) SBI 45
b) HDFC 15
c) ICICI 10
d) PNB 30

Preferances

SBI
HDFC
ICICI
PNB

Interpretation:-
45% of customers prefer the SBI bank, 15 % prefer HDFC bank, 10% prefer ICICI
and 30% prefer PNB on the basis of interest rate, image and schemes. The main
reason is that the SBI bank is public sector bank so customers trust on SBI bank
more than other banks.
“

Chapter-5

FINDINGS
“

FINDINGS

 From this project it is found that SBI advance product (E-Banking) having the 1st place in

the market, there is a great opportunity to compete with ICICI Bank & to retain its customer

by fulfilling the requirement of customer in SBI advance product.

 It has been observed that approximately 85% correspondents are using advance product of

banking industry and 15% are not using any type of advance product of banking industry.

 Most of the customers prefer to take E-Banking from SBI. According to my sample size

85% of people prefer SBI for E-banking product, but some people prefer ICICI, HDFC or

OTHER Bank for e-banking because they are working with that bank & it is easier for them

to get online support from their bank & it easier for them to provide the services because it

is less as compare to other bank because they are the employee of that bank.

 From this it is clear that the service provide various bank in its advance product is good in
between the customer. All of them satisfy with the product provide by various bank. 55% of
people said that the service provide by various bank is good & 43% said it is excellent &
just 2% of people said that it is satisfactory.
 According to my sample 60% people use ATM product , 10%people use NET BANKING
and 20% people use SHOPPING and rest of people are use for ticket book
 Most of the people like the less paper work & transparency. It’s easier for people to use the
fast processing in easy and satisfy way.
 As per as my the study the family members are the main sources of
Communication about bank and advertisement is other sources. Family
members influence the decision related to taking personal loan.
 When any customers planning for taking personal loan from any bank they
mainly consider the interest rate of the particular bank and they give second
preference to duration & schemes
“

 According to my study 75% customers are agree that online banking is very

good and very good because of good services, more numbers of scheme

 A respons90% of customers agree that online services is very good & good

Compression to other offline banking services. Because they feel it is very

convenient to use

 45% of customers prefer the SBI bank, 15 % prefer HDFC bank, 10% prefer

ICICI and 30% prefer PNB on the basis of interest rate, image and schemes.

The main reason is that the SBI bank is public sector bank so customers trust

on SBI bank more than other banks.

“

RECOMMENDATIONS AND SUGGESTIONS

Recommendations & Suggestions:-

 Training and awareness among employees:-

It is recommended that State Banking industry should conduct various training programs for
the employees, so that they will get aware with the terms of internet banking. After such
programs they can create awareness amongst the consumers.

 Exchange of information on threats and vulnerabilities at appropriate forums:-

There should be an open end discussion on the threats and vulnerabilities coming across the
functioning of internet banking work by the employees in the various official forums and
meets.

 Build an optimal operating model by understanding which activities to retain

collaborate and outsource:-

There should be clear sight of operations which needs to outsource to other companies, this
will lead to ease in work for employees. Outsourcing operations like, cyber security
department, building IT structure on internet.

 Bank should Create and sustain customer, investor and regulator confidence by
adopting international accounting standards :-

Adopting international standards adds some more star to the glory of any company, banking
industry should impose such standards when it comes to internet banking or virtual banking,
this will enhance the goodwill of various bank among regulator, customers and invertors.

 Bank should anticipate and get prepared for regulatory changes:-

“

Laws regarding IT or cyber laws get change as per the need. SBI should anticipate such kind
of changes and get loaded with various plans and actions.

 Focus on identifying core competence:-

SBI possess some unique characteristics or positive points in it and with the help of them it
can become a leader in market. Bank should identify such points and concentrate to flourish
them more. This can be done with the help of internet banking, as internet banking of SBI is
getting largely accepted by customers.

 Increasing usage of mobile phones is going to revolutionize the banking culture in near
future:-

Mobile banking is also getting popular in the segment of internet banking thus this can add
some more steps to progress for various banks. Bank is into the mobile banking but it is
providing limited features.

 More stress should be given on security concern on internet:-

There are some people who are into unethical practices of hacking of accounts of customers.
This is nothing but the breach in the security of the various banks on internet. There should
be some measures in order to prevent such practices. IT structure should be unbreakable.
“

CONCLUSION

Studying the project we came to know that Internet banking is clearly the way forward for the
banking industary in India. It provides comfort to customers at the same time it provides cost
cutting to banking industary by eliminating physical documentation. Internet banking saves time
of bank as well as those of customers.

Study states that internet banking provides greater reach to customers. Feedback can be
obtained easily as internet is virtual in nature. Customer loyalty can be gain. Personal attention
can be given by bank to customer also quality service can be served.

Bank should know that No system is perfect, however a system of such a type will need to be
very secure. This is a system which holds account details and customers wealth. If such a system
was not trusted and not reliable, then wo banking industry face serious laws and would lose
business.

After studying the SWOT analysis, we came to know various strengths of banking industry such
as quality customer service, greater reach, customer loyalty, easy access to information, 24 hours
access, easy online applications etc. banking industry should put efforts to multiply the number
of strengths. In terms of weakness I come to know some of the major weaknesses they are lack
of awareness of internet banking among the customers, obsolesce of technology related to
security, complicated procedures of availing internet banking facilities, lack of knowledge
among the employees of banking industry. Should banking industry concentrate on the
weaknesses and reduce them to zero.

In the third segment of SWOT analysis of internet banking we dealt with opportunities like 95 %
market of internet market is untapped banking industry,’s path to become first virtual bank. By
encasing such opportunities bank can become the leader in banking sector of India. In the last
“

segment I come to know about various challenges which are in front of SBI, like sameness in IT
infrastructure within various banks, need of various vendor supports for complex technology,
maintaining secured IT infrastructure, alternative mechanism in case of failure of present
security system.

The company can take the advantage of the reputation it has created in the market for itself and
become more competitive

The recommendations and suggestions given, if adopted will improve the position of the
company substantially and optimal profitability coupled with better service and satisfactions for
investors may be achieved.
“

BIBLIOGRAPHY
“

BIBLIOGRAPHY

Books & Reports:-

 SBI Training guide for internet banking

 Annual reports from banking industry

Websites:-

 www.statebankofindia.com

 www.onlinesbi.com

 www.weikipedia.com
“

Questionnaire

Name - _____________________________________

Occupation-__________________________________

Contact Detail -_______________________________

Q.1 On which bank you depend for your E-Banking transaction?

a) SBI
b) ICICI Bank
c) HDFC Bank
d) Other Bank, Specify (_____________)

Q.2 Are you aware of products & services provided by banking industry?

a) YES
b) NO

Q.3 If yes are you aware of the advance products online banking industry?

a) YES
b) NO

Q.4 Which bank you prefer for E-Banking?

a) SBI
b) ICICI Bank
c) HDFC Bank
d) Other Bank, Specify (_____________)
“

Q. 5 Which product of banking industry you have used?

a) ATM
b) ONLINE BANKING
c) SHOPPING
d) TICKET BOOKING

Q.6 What do you feel about the services provides by E-Banking in various bank?
a) Bad
b) Satisfactory
c) Good
d) Excellent

Q.7 which features you like most in e-banking segments of varios bank?
a) Less paper work
b) Attractive services
c) Transparency
d) fast processing

Q.8 Mode of services preferred by customers

ONLINE
OFFLINE
“

Q.9 Factor consider by customer while taking loan.

Interest rate
Schemes
Duration
Other

Q.10 Sours of communication (From where customers get the

Information about bank).

Advertisement
Friend
Family member
Others

Q.11 Rating of various scheme offered by different bank.

Good
Very good
Average
Below average
“

Q.12 Over all preference on the basis of interest rate, image and scheme in
various bank.

SBI
HDFC

ICICI
PNB