CUSTOMER SATISAFACTION TOWRDS E-BANKING

CHAPTER - 2
CONCEPTUAL FRAMEWORK OF
CUSTOMER SATISHFACTION AND
E-BANKING

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INTRODUCTION TO CUSTOMER SATISFACTION:

Creating loyal customers is at the heart of every business. As marketing experts
Don Peppers and Martha Rogers say.

The only value your company will ever create is the value that comes from
customer the ones you have now and once you will have in feature business succeeds
by getting, keeping and growing customer. Customer are the only reason you build
factories, hire employees, schedule meeting, lay fiber –optic lance, or engage in any
business activities. Without customer you don’t have business.

Customer satisfaction is a term frequently used in marketing. It is a measure of

how product and services supplied by a company meet or surpass customer
expectations. Customer satisfaction is defined as “The number of customer or
percentage of total customers who’s reported with experience with firm, its products or
its services exceeds specified satisfaction goals. Here satisfaction means the settlement
of demand, desire and expectations of the customers. Or it is a “customer level of
approval when comparing products perceived performance with his or her
expectations.” Also could refer to discharge, extinguishment or retirement of an
obligation to the acceptance of the obligor or fulfillment of a claim”.

Customer satisfaction is seen as a key performance indicator within business

and is often part of a balanced scorecard. In a comparative market place where
businesses compete for customers, customer satisfaction is seen as a key differentiator
and increasingly has become a key element of business strategy

“Within organization” customer satisfaction ratings can have powerfully

effects. They focus employees on the importance of fulfillment customer expectations.
Furthermore, when these ratings of dip, they warn a problems that can effect sales and
profitability. These metrics quantify an important dynamic. When a brand has loyal
customer, it gains positive word of mouth marketing which is both free and highly
effective.” Therefore, it is essential for business to effective manage customer
satisfaction. To be able to this, firms or organization need reliable and representative
measures of satisfaction.

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Traditional Organizational structure :

p M e o E p R l e t nt
m e

m a an
m gee m e n
na g
C
f rMU
o niSd ldT eO
i ln e
To p

Modern Customer oriented organization chart :

M mEne t
nR t l S
p e o p e
m a n g e m e
FC rMom
U nSatnT a
l ge
i O
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t o p id d le

“In researching satisfaction companies generally ask customer whether their

product or service has met or exceed expectations. Thus expectations are key factor

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behind satisfaction. When customer having high expectations and reality falls short,
they will be disappointed and will likely rate there experience as less then satisfying.

Customer satisfaction survey is the process to monitor the satisfaction quotient

of their people. Customer satisfaction survey is important because it provide marketers
and business owners with a metric that the can use to manage and improve their
business. So customer satisfaction survey help you identify the overall level of
satisfaction and assist with finding your happiest and unhappy customers. Feedback
from a survey gives you the opportunity to follow up with your happiest customers and
unhappy customers.

PURPOSE:

CUSTOMER VALUE:
DEFINITION:

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“Customer value is the satisfaction a consumer feels after making a purchases for
goods or services relative to what she or he must give up to receive them”.

In other words –

It is “the difference between what customers gets from a product, and

what he or she has to give in order to get it . “

CUSTOMER DELIVERED VALUE:-

Customer delivered value is the difference between the total customers value
and total customer cost. Customer value is the bundle of benefits customer except from
given product or services. Total customer cost it is the bundle of costs customer accept
to incur in evaluating, obtaining and using the product.

The two customer can report be being “highly neither satisfied/nor dissatisfied”
for different reason. One may be easily neither satisfied / dissatisfied most of the time
and other might be hard to please but was pleased on this occasion. Company should
also note that manger and sells person can manipulate their ratings on customer
satisfaction. They can especially nice jest before survey. They can also try to exclude
unhappy customer from the survey. Another danger is customer will know that the
company will go out of its way please customer, some customer may express high
dissatisfaction (even if neither satisfied / nor dissatisfied) in order to receive more
concession.

Need of customer satisfaction survey arises due to

following reasons:

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 Rapidly growing organization.

 High or growing turnover rate.
 Excessive tumors.
 Highly competitive industry.
 Planned and recent organization changes.

Important of Customer satisfaction survey:

Here the six important reasons why customer satisfaction survey
necessary or important:

1. Its leading indicator of consumer repurchases intention and loyalty:

Customer satisfaction is the best indicator of how customer likely a customer will
make purchases in the future. That’s way if it’s one of the leading metric business uses
to measure consumer repurchases and customer loyalty.

2. It’s a point of differentiation:

In a competitive marketplace were businesses compete for Customer satisfaction is
seen as a key differentiator.
Business that succeed in these cut-throat environments are the once that make
customer satisfaction is a key element of their business strategy.

3. It’s reduces the customer churn:

An Accenture global customer satisfaction report (2008) found that price is not the main
reason for customer churn, Customer satisfaction is only metric you can use to reduce
customer churn.

4. It reduces negative word of mouth:

To eliminate the negative word of mouth communication you need to measure the
customer satisfaction on ongoing bases. Tracking changes in satisfaction help you
identify if customer are actually happy with you product and services.

Benefits of Customer satisfaction survey:

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 It creates better team work and much improved work process.

 It lead to higher output and superior quality product and services
 It decreases the turnover.
 Reduced overhead and increase customer satisfaction level in inter departmental.
 A good employee feedback survey improves employee attitude and boosts morals.
 It enhances communication and hence helped in team building.

PRINCIPLES GIVEN BY “STEVE SMTH” TOWARDS

CUSTOMER SATISFACTION:

 The goal is to exceed customer expectation.

 The more the employee satisfaction, the more customer satisfaction.
 Customer satisfaction is necessary, but not sufficient how many times satisfy.
 Customer switch brands? Answer a lot.
 All initiative must be derived from defined problems. For instance disneither satisfied
/nor dissatisfied don’t buy.
 Initiative must produce either measurable or conceptual benefits.
 Distinguish between two benefit types.
 Rather than blanket initiatives for everyone. Outline initiative from each level of
management.
 The plan must be resonate with the VP and at least a minority of manager who agree
with the objective and initiative.
 The plan must be clear and congruent.

ATTRACTING CUSTOMERS:

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Today’s customers are becoming harder to please. They are smarter more price
conscious more demanding less forgiving, and they are approached by many more
competitors with equal or better offers.

Companies seeking to expand their profits and sales have to spend

considerable time and resources searching for new customers. To generate leads, the
company develops ads and places them in media that will reach new prospects it sends
direct mail and makes phone calls to possible new prospects it salespeople participate
trade shows where they might find new leads and so on. All this activity produces a list
of suspects. The next task is to identify which suspects are really good prospects by
interviewing them, checking on their financial standing and so on. Then it is time to send
out the salespeople.

MESURING CUSTOMER SATISFACTION:

Organization need to retain existing customer while targeting non customers.
Although the customer centered firm seeks to create huge customer satisfaction that is
to its main goal. If the compact increases customer satisfaction by lowering its practice
or increasing its service, the result may be lower profits.

The company might be to in inverse its profitability by means other than

increased satisfaction, For example, by improving

Manufacturing process or investing more in Research and Development activities.

Measuring customer satisfaction provides an indication of how successful the

organization is at providing products and or services to the market place. Customer
satisfaction is measured at the individual level, but it is almost always reported at on
aggregate level. It can be and often is measure along various dimensions.

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The usual measure of customer satisfaction involves a survey with a set of

statement using a scale. The customer is asked evaluate each statement and inter of
their perception and expectation of performance of the organization being measured.
Their satisfaction is generally measured in a five point scale. Those are as follows…

Very Dissatisfied

Some What Dissatisfied

Neither satisfaction/
nor dissatisfaction

Somewhat Satisfied

E-BANKING:
Very Satisfied

INTRODUCTION:
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E- banking, also known as internet banking, Online-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 would 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 are
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 book, statements,
report loss of credit cards, stop payment on a cheque, advice 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.

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DEFINATION OF E-BANKING:

“Electronic Banking is an Umbrella term for the process by which customer may
perform banking transactions electronically without visiting bank branches, the
following terms all refers to one form or another of electronic banking; Personal
Computer banking, internet banking online banking home banking etc”.

Meaning Of E-Banking
“Electronic Banking refers to the Banking operations that take place through the
Electronic communication system”

Or
“Delivery of Banking Products and services to customers at their offices or at
home by using electronic technology can be termed as E-Banking”.

FEATURES OF E-BANKING

•  Check your account balances, review activity, and access account history
•  Transfer funds between accounts and to other Santander customers accounts
•  Transfer funds to an external checking, savings, or money market savings account at
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another domestic financial institution

•  Set up recurring and future-dated transfers
•  View check images
•  Reorder Checks
•  Pay bills
•  Receive e-Bills and reminders through Bill Pay
•  Online Banking Guarantee Refer to Online Banking Agreement
• Retrieve User ID

Advantages OF E-BANKING:
E banking provides many advantages for banks and customer's .e-banking has
made life much easier and banking much faster for both customers and banks.

Main advantages are as follows.

 It saves time spent in banks

 It provides ways for international banking.
 It provides banking throughout the year 24/7 days from any place have
internet access.
 It provides well-organized cash management for internet optimization
 It provides convenience in terms of capital, labor, time all the resources
needed to make a transaction.
 Taking advantage of integrated banking services, banks may compete in new
markets can get new customers and grow their market share.
 It provides some security and privacy to customers, by using state-of-the-art
encryption and security technologies.

Dis-advantages of E-Banking:

 E-Banking promotes lack of socializing or social contacts

 Hackers may intercept data and defraud customers
 Phone Bill can increases

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 Customer will be more vulnerable to phishing

 Customer are compelled to have computers at home, computer skills
 Easier for customer to mismanage their accounts due to the 24 hours
services that will be available

E - BANKING PRODUCTS AND SERVICES;

TELEPHONE BANKING;

Telephone banking is relatively new electronic banking product. However it is

fully becoming one of the most popular products. Where in a financial institution
provides the banking services to its customer over a telephone. Telephone banking is
convenient and secure banking services offered over telephone to the customer. All
major banks are now using Telephone banking.

The telephone banking involves direct interaction of a customer with a bank consultant
or with a 24/7 automated phone answering system. The
Automated system has a phone keypad response or voice recognition capability. The
security to the telephone banking system is provided by authentication mechanisms
such as passwords. The facilities of telephone banking are somewhat similar to ATM’S.
Following figure shows the working of telephone banking system.

TELEPHONE BANKING SYSTEM OF BANK:

Computer Telephone line of Authentication Mode of

Bank interaction

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Option selection

Balance A/C Transfer of Bill Other

funds
Enquiry Statement Payment Services

The customer dials the bank telephone number dedicated to telephone banking
services. The banking system verifies the authenticity of the customer by asking him/her
to enter relevant authentication details (password, Authorization codes etc). Then the
customer selects the mode of interaction. It may be automatic or direct consultation
with bank personnel. After this the customer chooses required service form the option
selection menu. The necessary transactions are carried out and in the end customer
safely logs out of the system.

INTERNET BANKNG OR ONLINE BANKNG:

Internet banking is a type of E-banking which provides the banks to conduct
banking transaction through a secured internet connection using either local or Global
internet infrastructure. Internet banking is an internet based banking services that allow

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customer to operate their bank accounts from anywhere anytime, eliminating the
restriction imposed by geography and time. It is a platform that enables the customers
to carry out their banking activities from their desktop, aided by the power and
convenience of the internet.

In internet banking the operation such as online payment depositing, information

queries and other operations are done by the banks website.

Internet Banking can provide following services:

 Funds transfers between own account, Third party transfers to accounts, Group
transfers to accounts and interbank transfers to accounts with other banks.
 Request for issue of demand draft, opening of new account, closure of loan
 Payment of insurance premium and credit card dues.
 Online share trading and mutual funds investments.
 Customer duty payment and Tax payment (Income, State, Government).
 Utility bill payments such a Telephone or Electricity bills. Online ticket booking for
travel by road, rail or air.

MOBILE BANKING:
Mobile banking is the buying and selling of goods and services through
handheld devices such as cellular telephone and PDAs, laptop computers, messaging or
page devices and handheld computers such as palmtops, tablet PCs etc. Mobile banking
enables users to access the internet without needing to find a place to plug in. mobile

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banking applies to online financial transaction, shopping or the electronic transfer of

funds using a mobile device. It has the capability and the potential to have all the
benefit of B2C applicable. Mobile banking is based on wireless application protocol
(WAP) technology.

According to web agency, 2001, “mobile banking is the use of information technology
and the communication technology for the purpose of mobile integration of different
value chains and business process and for the purpose of management of business
relationships”. In simple words, Mobile banking means e-banking business process and
models carried out on a mobile terminal.

Basically, three types of mobile banking transactions are carrier based that includes
carriers billing system for purchasing with a wireless device ; credit card based
transaction in which users save their credit card data on their mobile phones and
financial services based transaction which involves transfer of money between accounts
through wireless transactions. So, therefore, mobile banking can be defined as any e
banking activity conducted over wireless network through mobile devices. It is the
exchange of information, goods and services through the use of mobile technology.

Examples of Mobile Banking:

 Airlines and train enquiries.

 Reservation related enquiries.
 Enquiry about airlines tickets.
 Stock market conditions.
 Alerts on handheld devices such as payment of bills, savings banks alerts etc.
 Purchasing movie ticket.
 Hotel booking.

Benefits of Mobile banking:

Mobile banking is simply an e-banking over mobile phones or B2C transactions

by using a mobile phone. The scalability and easy availability and faster speed have

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made mobile banking popularizing and the first choice of mobile users to perform the e-
banking transactions. The benefits of mobile banking are the following;

 Buyers- Buyers can access the online products catalogs and buy the product of
their choice as they can on a computer.
 Companies- Companies can display products on websites and buyers select the
products through the mobile phones and other handheld devices.
 Provides wider global reach.
 Reduces transaction cost.
 Streamline business process.
 Round clock working (24/7), conducting transaction anywhere at any time.
 Reducing time to order.
 Used for delivering time critical as well as emergency information.

Problems of Mobile Banking;

In spite of the fact that there are various advantages of mobile banking, there
are certain limitations also. These problems are stated below;

* Mobile devices offer limited capabilities (e.g. limited display).There capabilities

vary so much between mobile devices so that end user services will need to be
customized according i.e. limited screen size of mobile devices.
* The communication over the air interface between mobile device and network
introduces additional security threats.
* WAP and SMS limited to small number of characters and text.
* Limited bandwidth.
* High cost of establishing mobile and wireless broadband infrastructure.

Electronic payment system (EPS):

E-payment is a service which allows business parties to pay directly via
telecommunication system. Internet shopping may revolutionize retailing by allowing
consumers to sit in their homes and buy an enormous variety of products and services

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from all over the world .Electronic payment is a financial exchange that takes place
online between buyers and sellers. Such an exchange involves the use of digital financial
instrument such as encrypted credit card numbers, electronic cheque or digital that is
backed by a bank or an intermediary, or by a legal tender. It is a method in which
payments are made for online purchase without any physical transfer of cash. The
various factors that lead the financial institutions to make use of electronic payments
are;

 Decreasing technology cost.

 Reduced operational and processing cost.
 Increasing online commerce.

Types of E-payment system:

A work on EFT can be categorized into three parts;

1. Banking and financial payments – It can be of three distinct types;

 Wholesale payments or large payments(e.g. bank to bank transfer)
 Retail payments (e.g. ATM)
 Home banking (e.g. bill payment etc)
2. Retailing payments; which includes credit card (e.g. VISA/Master card); charge
cards such as American Express and debit cards.
3. Online electronic commerce payments
 Token based payment system .It includes e-cash, e- cheques and smart card or
debit card.
 Credit card based payment systems. It includes encrypted credit cards and third
party authorization and numbers (e.g. First Virtual).

Phases in electronic payment system:

EPS in electronic payment system;

1) Registration of payer with issuer and payee with acquirer.

2) Sending of invoice for payment from payee to payer.

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3) Selection of payment method (card based, e-cheque etc.).

4) Payment authorization and confirmation.

Credit card:
A credit card system is a credit system in retail transactions which has a preset
spending limit based on the users credit limit. The user can pay off the entire credit card
balance or pay a minimum amount each billing period. It is plastic money which contains
identifying information about the credit card allotted o the holder by a bank or other
institution. In other words, credit card form VISA, Master card, or any other network
allows you to pay for purchase or services by borrowing from the credit card company.
You then repay by making monthly payments towards the amount borrowed. That is,
you do not have to repay the whole borrowed amount in full at one go.

A credit card payment on the online network can be of three types;

 Payment using plain card information;

 Payment using encrypted credit card details;
 Payment using third party verification.

Advantages of credit card:

 Flexibility
 Accuracy
 Convenience
 Cheaper
 Additional benefits such as insurance cover on purchases, cash back, discounts on
holiday.

Disadvantages of credit card:

 Rules are stricter than debit cards.

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 Inconvenience occurs as a result of lost or stolen cards.

Smart card;
A Smart card is a plastic card of the size of accredit card with an integrated circuit
built into it. A smart card was first produced by Motorola in 1997.It contains an
integrated circuit, a non volatile memory and microprocessor. This card contains
encrypted key and is compared to secret key contained on the user’s processor. ISO
7816 is the international standard for smart cards can contain over 100 times more
information than a magnetic striped plastic card. A smart card contain private user
information such as financial facts, private keys, account information, health insurance
information and soon. It also encrypts digital cash on the chip that can be refilled.

Smart cards can be categorized on the basis of following;

 Integrated circuit (IC) Microprocessor cards; Allow for adding, deleting, or

manipulating information in memory.
 IC memory cards; can store data, but do not have a processor on the card.
 Optical memory cards; Can only store data have a larger memory capacity than
IC memory cards.

Types of smart card;

 Contact cards
 Contactless cards

Benefits of smart card:

I. Smart cards include a microchip as the central processing unit, random access
memory (RAM) and data storage of around 10MB.

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II. Data exchange through smart cards can be seen easily due to its portability and
size and convenience.
III. Smart cards can store and process information and are fully interactive.
IV. It contained stored value which provides users with the ability to make
purchases.
V. Advance smart card contains secret keys and encryption algorithms capable of
performing data encryption.

Debit cards:
A kind of payment card that transfer funds directly from the consumer bank
account to the merchants. A credit card is a way to pay late, a debit card is a way to pay
now. The amount is immediately deducted from your savings account, when you use a
debit card, payment system based on travelers check, paper currency and instant-debit
ATM cards are debit systems where as under credit system category comes check, credit
cards etc.

Advantages of Debit card:

 No need to carry cash all the time.

 It can be used it buy merchandise online or at local stores that accept cards with
the visa or master card logos.
 It can used it withdraw cash at ATMs or at some retail stores at time of purchase.
 Debit card have pre-set spending limits.

Disadvantages of debit card:

 Always keep your records accurate and check each transaction to know your
account balance at all times. If you do not keep your records you can run the risk
of overdrawing your account which will result in bank fees.
 Debit card cannot be used in all situations.
 Some ATM machines charge a fee for their use.

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Electronic funds transfer:

Electronic funds transfers or EFT refers to the computer – based systems
used to perform financial transactions electronically. The transfer of money through
electronic means in the form of digitized data in an automated way is called electronic
funds transfer. The transaction involves credit and debit advices between different
branches of banks. The EDI used for financial transaction is referred as Electronic funds
Transfer. It is a method of moving funds (money) from one organization to another
organization that includes all kinds of money transferring like sale, refund withdrawal,
payment, receipt, deposit, inter – account transfer, etc.

Advantages Electronic Fund Transfer:

 The customer can deposit and withdraw the amount in/ from any branch of the
bank located at different places.
 The facility brings considerable convenience and satisfaction.
 Heavy cash handling and transportation is avoided that minimizes the risk.
 It saves a lot of time as a customer need not spend his / her time in queues.
 Urgent and critical tasks can be timely handled as EFT offers quick and in time
services.

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Consumer Dealer
2. Pay / authorized
Customer Payment
Performance

Buyer Payment Seller shop

1. Deposit 3.Encash

Customer Bank

Automated Teller Machine:

As a part of electronic funds transfer technique, automated teller
machine is now considered to be one of the most convenient ways to handle money
while transacting with bank the ATM network called Shared payment network system
(SNPS) was opened in Mumbai in 1997. The network permits inter- ATM facility
providing one Banks ATM to be used in another bank.

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An automated teller machine is an electronic machine owned by banks

that is operated by the customer to make cash transactions (withdrawals, Deposits, etc)
ATM may be installed at the bank premises or at any convenient places in City. The
machine will be solely under the control of the Bank concerned. The facility cash
transactions with ATM are available 24 for hours a day. Hence this machine is also
regarded as all time Money ATM can dispense currency notes of specified
denominations. To interact with the machine customer is provided with an ATM card
bearing his or her name. The card is actually magnetically coded holding account
information of the card holder that can be read by the ATM. Each card holder will have
personal identification number (PIN) that has to be entered by him or her after inserting
the card in the card reader of the machine.

Generally upon inserting ATM card in the ATMs card slot, the machine initially
checks for valid card and then asks user to enter PIN. A PIN number can be entered
using the number key pad. After checking for valid card, it withdrawn with balance
process the necessary transaction and deliver the cash in the form of currency notes
through output slot.

Function of the various parts of the ATM:

Card Slot: This slot is use to insert or remove the ATM card for every transaction.

Number Key pad: It is used to enter the PIN number

Currency Slot: It is used to dispense the currency notes

Print Slot: It is used to dispense the transaction printouts

Envelope slot: It is used to dispense envelope for depositing the cash or cheques

Deposit slot: It is used to deposit envelope containing cash or cheque instruments.

GENERARL SERVICE IS OFFERD BY AN ATM:

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 Cash withdrawal
 Balance enquiry
 Mini passbook entry
 Fund Transfer
 Deposits
 Mobile Recharge
 LIC premium payments

Advantages of ATM:

 Customer can get the ATM services 24 hours day

 There is no involvement of bank staff will transacting with ATM which provide
much comfort and privacy
 The customer need not go to the Bank for transaction
 Due to the fast and interactive services of ATM customer satisfaction will be
more and turnaround time will be less
 Once installed maintenance cost of the machine is less
 There will be less congestion in Banks and stall will be relieved of the burden

NEFT (National Electronic Fund Transfer):

NEFT is a county wide payment system vacillating one to one fund transfer this
system is used to transfer fund electronically from bank to an individual, firm or
corporate having an account with another bank branch in the country participating in
the scheme.

Banks need to be NEFT enables by the reserve bank of India to participate and make
use of NEFT scheme. Even individuals who do not have a bank account (walk-in
customers) can also deposit cash at the NEFT – Enabled Branches with instruction to
transfer fund using NEFT. Receive funds it is necessary for the beneficiary to have an
account per transitions is limited to rupees 50000/- for cash based remittances.

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The NEFT system takes advantages of the core banking system in banks.
According to this, the settlement of funds between originating and receiving banks take
place centrally at Mumbai whereas the branches participating In NEFT can be located
anywhere in the country. Some banks offer the NEFT facility even through the ATMs.
Apart from personal funds transfer, the NEFT system can also use for a variety of
transaction including payment of credit card due to the card issuing banks. It is
necessary quote the IFSC of the beneficiary card issuing bank to initiate the bill payment
transactions using NEFT.

ADVANTAGES OF NEFT:

 Credit confirmation of the remittances are notifies by SMS or E-mail

 NEFT is cost effective system.
 The remitter need not send the physical cheque or Demand draft to the
beneficiary
 The beneficiary need not visit his / her bank for depositing the paper instruments
 Remitter can initiate the remittances from his home or place of work using the
internet banking also.

RTGS (REAL TIME GROSS SETTALMENT):

RTGS is quick funds transfer mechanism where transfer of money takes place from one
bank to another on Real time and on gross basis. These is the fastest possible money
transfer system through the banking channel, only RTGS enabled banks (through RBI)
can involve in such transfer, participate in RTGS transfer need to supply same type of
details as provided in the NEFT system.

Settlement in real time means payment transaction is not subjected to any waiting
period the transaction is settled as soon as they are processed. Gross settlement means
the transaction is settled on one to one basis without bunching with any other
transaction considering that money transfer takes place in the books of the reserve bank
of India, the payment is taken as final and irrevocable. The beneficiary bank has to credit
the beneficiary is account within two hours of receiving the fund transfer message.

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The RTGS system is mainly is used for large value transaction, the minimum amount to
be remitted through RTGS rupees 100000/- there is no upper ceiling for RTGS
transaction if money cannot be credited due any reason, receiving bank would have to
return the money to the remitting bank within 2 hours. Once the money is received
back by the remitting bank, the original Debit in the customer’s account is reversed.

Benefit of RTGS:

 RTGS system transaction processed continuously

 It is the fastest money transfer system
 It is governed by RBI and hence secured money transfer system
 Customer is guaranteed of proper transaction both at the sending and receiving
ends.

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