CHAPTER – 1

INTRODUCTION

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COMPANY OVERVIEW:
(SBI) is a multinational banking and financial services company based in
India It is a government-owned corporation with its headquarters in
Mumbai, Maharashtra. As of December 2013, it had assets of US$388
billion and .0110 branches. including 190 foreign offices, making it the
largest banking and financial services company in India by assets.
State Bank of India is one of the Big Four banks of along with ICICI Bank,
Punjab National Bank and Bank of Baroda.
The bank traces its ancestry to British India, through the Imperial Bank of
India, to the founding in 1806 of the Bank of Calcutta. making it the
oldest commercial bank in the Indian Subcontinent. Bank of Madras
merged into the other two presidencies banks—Bank of Calcutta and
Bank of Bombay—to form the Imperial Bank of India. which in turn
became the State Bank of India. Government of India owned the
Imperial Bank of India in 1955. with Reserve Bank of India taking a 60%
stake and renamed it the State Bank of India. In 2008, the government
took over the stake held by the Reserve Bank of India.

History of SBI:
The toots of the State Bank of India lie in the first decade of the 19th
century, k% hen the Bank of Calcutta. later renamed the Bank of Bengal,
was established on 2 June 1806. The Bank of Bengal was one of three
Presidency banks, the other two being the Bank of Bombay
(incorporated on 15 April 1840) and the Bank of Madras (incorporated
on 1 July 1843). All three Presidency banks were t,141 teas joint and
were the result of royal charters. These three banks received exclusive
right to issue paper currency till 1861 when, with the Paper Current Act,
the right was taken over by the Government of India. The Presidency
banks amalgamated on 27 January 1921, and the re-organized banking
entity took as its name Imperial Bank of India. The Imperial Bank of India
remained a joint stock company but without Government participation.

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Pursuant to the provisions of the State Bank of India Act of 1955, the
Reserve Bank of India, which is India's central bank, acquired a
controlling interest in the Imperial Bank of India. On 1 July 1955. the
Imperial Bank of India became the State Bank of India. In 2008, the
government of India acquired the Reserve Bank of India's stake in SBI so
as to remove any conflict of interest because the RBI is the country's
banking regulatory authority

Seal of Imperial Bank of India

In 1959. the government p the State Bank of India (Subsidiary Banks)

Act. which made eight state banks associates of SBI. A process of
consolidation began on 13 September 2008. when the State Bank of
Saurashtra merged with SBI.
SBI has acquired local banks in rescues. The first was the Bank of Behar
(est. 1911). which SBI acquired in 1969, together with its 28 branches.
The next year SBI acquired, National Bank of Lahore (est. 1942), which
had 24 branches. Five years later, in 1975, SBI acquired Krishnaram
Baldeo Bank, which had been established in 1916 in Gwalior State. under
the patronage of Maharaja MadhoRaoScindia. The bank had been the
DukanPichadi, a small moneylender, owned by the Maharaja. The new
bank's first manager was Jail N. Broacha. a Parsi. In 1985. SBI acquired
the Bank of Cochin in Kerala. which had 120 branches. SBI was the
acquirer as its affiliate, the State Bank of Travancore, already had an
extensive network in Kerala.

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OPERATIONS:-
SBI provides a range of banking products through its network of
branches in India and overseas, including products aimed at non-
resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices
that are located at important cities throughout India.

DOMESTIC PRESENCE:-
SBI had 14,816 branches in India, as on 31 March 2013, of ve.la ch 9,851
(66%) were in Rural and Semi-urban areas. In the financial year 201243,
its revenue was INR 200,560 Crores (US$ 36.9 billion), out of which
"'domestic operations contributed to 95.35% of revenue. Similarly,
domestic operations contributed to 88.37% of total profits for the same
financial year.

International presence :-
As of 28 June 2013, the bank had offices spread over 34 countries. It has
branches of the parent Moscow, Colombo, Dhaka, Frankfurt, Hong Kong,
Tehran, Johannesburg, London, Los Angeles, Male in the Maldives,
Muscat, Dubai, New York, Osaka. Sydney, and Tokyo. It has offshore
banking units in the Bahamas, Bahrain, and Singapore. and
representative offices in Bhutan and Cape Town. It also has an ADB in
Boston, USA.
The Canadian subsidiary, State Bank of India (Canada) also dates to
1982. It has seven branches four in the Toronto area and three in the
Vancouver area.
SBI operates several foreign subsidiaries or affiliates. In 1990, it
established an offshore bank: State Bank of India (Mauritius). SBI
(Mauritius) has 15 branches in major cities/towns of the country
including Rodrigues.
In 1982, the bank established a subsidiary, State Bank of India
(California), which now has ten branches - nine branches in the state of
California and one in Washington. D.C. The 10th branch was opened in
Fremont, California on 28
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March 2011. The other eight branches in California are located in Los
Angeles. Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and
Bakersfield.

The Israeli branch of the State Bank of India located in Ramat Gan

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the
Indo-Nigerian Merchant Bank And received permission in 2002 to
commence retail banking. It now has five branches in Nigeria.
In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches
throughout the country. In Moscow, SBI owns 60% of Commercial Bank
of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of
PT Bank Indo Monex.
The State bank of India already has a branch in Shanghai and plans to
open one in Tianjin.
In Kent, State Bank of India owns 76% of Giro Commercial Bank, which it
acquired for US$8 million in October 2005.

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ASSOCIATE BANKS:-
SBI has five associate banks; all use the State Bank of India logo, which is
a blue circle, and all use the "State Bank of name, followed by the
regional headquarters' name:
• State Bank of Bikaner & Jaipur
• State Bank of Hyderabad
• State Bank of Mysore
• State Bank of Patiala
• State Bank of Travancore
• State Bank of India
Earlier SBI had seven associate banks, all of which had belonged to
princely states until the government nationalized them between
October 1959 and May 1960. In tune with the first Five Year Plan, which
prioritized the development of rural India, the government integrated
these banks into State Bank of India system to expand its rural outreach.
There has been a proposal to merge all the associate banks into SBI to
create a "mega bank" and streamline the group's operations. The first
step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with 'SBI, reducing the number of associate state
banks from seven to six. Then on 19 June 2009 the SBI board approved
the absorption of State Bank of Indore. SBI holds 98.3% in State Bank of
Indore. (Individuals who held the shares prior to it’s takeover by the
government hold the balance of 1.77 %.)
The acquisition state Bank of Indore added 470 branches to SBI's existing
network of branches. Also, following the acquisition, SBI's total assets
will inch very close to Rs 10 trillion marks (10 billion long scales). The
total assets of SBI and the State Bank of Indore stood at Rs 9,981,190
million as of March 2009. The process of merging of State Bank of Indore
was completed by April 2010, and the SBI Indore branches started
functioning as SBI branches on 26 August 2010.

Non-banking subsidiaries

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Apart from its five associate banks, SBI also has the following non-
banking subsidiaries:

• SBI Capital Markets Ltd

• SBI Funds Management Pvt Ltd
• SBI Factors & Commercial Services Pvt Ltd
• SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
• SBI DFHI Ltd • SBI Life Insurance Company Limited
• SBI General Insurance
In March 2001, SBI (with 74% of the total capital), joined with BNP
Paribas (with 26% of the remaining capital), to form a joint venture life
insurance company named SBI Life Insurance company Ltd. In 2004, 41
DFHI (Discount and Finance House of India) was founded with its
headquarters in Mumbai.

OTHER SBI SERVICE POINTS:

SBI has 27,000+ ATMs and SBI grog ATMs. SBI has become the first bank
to install an ATM at Drass in Jammu and Kashmir Kargil region. This was
the Bank’s 27032nd ATM on 27 July 2012.

LOGO AND SLOGAN

• The logo of the State Bank of India is a blue circle with a small cut in
the bottom that depicts perfection and the small man the common man
- being the center of the bank's business. The logo came from National
Institute of Design (N1D), Ahmedabad and it was inspired by Kankaria
Lake, Ahmedabad.
• Slogans; ' ,'FURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE
WAY" , “A BANK OF THE COMMON MAN”, 'THE BANKER TO INDIAN",
"THE NATION BANKS ON US"

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Employee
SBI is one of the largest employers in the country having 228,296
employees as on 31 March 2013, out of which there were 46,833 female
employees (21%) and 2,402 disabled employees (1%). On the same date,
SBI had 43,550 Schedule Caste (19%) and 16,764 Schedule Tribe (7%)
employee. The percentage of Officers, Assistants and Sub-staff was 35%,
48% and 17% respectively on the same date. Hiring drive: The bank hired
20,682 Assistants in FY 2012-13, from 3 million applicants, for expansion
of the branch network and to mitigate staff shortage, particularly at rural
and semi-urban branches. In the same year. it recruited 847
probationary officers from around 1.7 million candidates who applied for
an officer position.
Staff productivity: As per its Annual Report for FY 2012-13, each
employee contributed to revenues of INR 94.4 million and net fit of NR
0.65 million.

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 Recent Awards and Recognitions

• SBI was ranked as the top bank in India based on tier I capital by The
Banker magazine in a 2014 ranking.
• SBI was ranked 298th in the Fortune Global 500 rankings of the
world's biggest corporations for the year 2012.
• SBI won "Best Public Sector Bank" award in the D&B India's study on
'India's Top Banks 2013'.
• State Bank of India won three IDRBT Banking Technology Excellence
Awards 2013 for "Electronic Payment Systems", "Best use of
technology for Financial Inclusion", and "Customer Management &
Business Intelligence" in the large bank category.
• SBI won National Award for its performance in the implementation of
Prime Minister's Employment Generation Programme (PMEGP)
scheme for the
• Best Online Banking Award, Best Customer Initiative Award & Best
Risk Management Award (Runner Up) by IBA Banking Technology
Awards 2010.

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• SKOCH Award 2010 for Virtual corporation Category for its e-payment
solution
• SBI was the only bank featured in the "top 10 brands of India" list in an
annual survey conducted by Brand Finance and The Economic Times in
2010.
• The Bank of the year 2009, India (won the second year in a row) The
Banker Magazine •
• Best Bank — Large and Most Socially Responsible Ban ness Bank
Awards 2009
• Best Bank 2009 by Business India
• The Most Trusted Brand 2009 by The Economic Time
• SBI was named the 29th most reputed company in world according to
Forbes 2009 rankings
• Most Preferred Bank & Most preferred Home an pro Icier by CNBC
• Visionaries of Financial Inclusion By FIN
• Technology Bank of the Year by IBA Bank Technology Awards
• SBI was 11th most trusted brand in India as per the Brand Trust
Report 2010.

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COMPETITORS
Competitors and other players in the field:-
 Andhra bank
 Allahabad bank
 Punjab National bank
 Dena bank
 Vijaya bank

Top Performing Private Sector Banks:

 HDFC Bank
 ICICI Bank
 AXIS Bank
 Kotak Mahindra Bank
 Centurion Bank of Punjab

Top Performing Foreign Banks :

 City bank
 Standard Chartered
 HSBC Bank
 ABN AMRO Bank
 American Express

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Strength/ Opportunities:
• The growth for SBI in the coming years is likely to be fuelled by the
following factors:
• Continued effort to increase low cost deposit would ensure
improvement in NIMs and hence earnings
• Growing retail & SM thrust would lead to higher business growth.
• Strong Economic growth would generate higher demand for funds
pursuant to higher corporate demand for credit on account of capacity
expansion.

Weakness/Threats
The risk that could ensue to SBI in time to come are as under:

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• SBI is currently operating at a lowest CAR. Insufficient
capital may restrict the growth prospects of the bank going
forward.

• Stiff competition, especially in the retail segment, could

impact retail growth of SBI and hence slowdown in earnings
growth.
• Contribution of retail credit to total bank credit stood at
26%. Significant thrust on growing retail book poses higher
credit risk to the bank.
• Delay in technology up gradation could result in loss of
market shares.
• Management indicated a likely pension shortfall on account
of AS-15 to be close to
Rs5Obn.
• Slowdown in domestic economy would pose a concern
over credit off-take thereby impacting earnings growth.
*

Introduction to Advance Product:

Now a day not all the people have the capacity to full fill their
requirement by their own earning, that's why they need help
from others. For this so many government & private sector
bank provide them money to full fill their requirement, that's
call the Advance Product (loan product) of the bank. All
the banks have so many different types of advance
product as per the requirement of the people or
customers. In Bhubaneswar also there are so many banks
those provide loan to the people for different causes.

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Types of Advance Product

 Home Loan
 Educational Loan
 Car Loan
 Personal Loan
 Property Loan
 Loan Against Shares\Debentures
 Etc.
Now a day a large no. of people are taking loan form different banks. It
helps people to full fill their need and it really easy to repayment the
loan amount with a longer repayment period.

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 SERVICES
SBI Offers following services and products to its customers:
 DOMESTIC TREASURY
 BROKING SERVICES
 REVISED SERVICE CHARGES
 ATM SERVICES
 INTERNET BANKING
 STATE BANK MOBICASH
 E-PAY
 E-RAIL
 SAFE DEPOSIT LOCKER
 MICR CODES
 FOREIGN INWARD REMITTANC


DOMESTIC TREASURY:

 Treasury services are a function of an investment bank which

provides transaction, investment, and information services for chief
financial officers or treasurers. Treasury services concentrates and
invests client money, and provides trade finance and logistics
solutions as well as safeguards, values, clears and services securities
and portfolios for investors and broker-dealers. Treasury Services is a
transaction intensive and system intensive business. This is a source
of risk free fees income for the banks.
The key offerings under Treasury Services include:
o Accounts Receivable service:
o Accounts Payable services:
o Liquidity Management services:
o Reporting Services:
o Trade Finance Services:

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. BROKING SERVICES
We are happy to announce that SBI Capital Markets Ltd. has expanded
its retail broking network to help investors carry out their broking
transactions with confidence. At present the investors can buy/sell
shares at both NSE and BSE through their Retail Broking centres in the
cash market. We furnish the location of these Centres with full
particulars of the contact persons can approach these branches for their
broking needs.

. REVISED SERVICE CHARGES:

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 ATM SERVICES

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STATE BANK NETWORKED ATM SERVICES

State Bank offers you the convenience of over 43,000+ ATMs in India,
the largest network in the country and continuing to expand fast! This
means that you can transact free of cost at the ATMs of State Bank
Group (This includes the ATMs of State Bank of India as well as the
Associate Banks - namely, State Bank of Bikaner & Jaipur, State Bank of
Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank
of Travancore) and wholly owned subsidiary viz. SBI Commercial and
International Bank Ltd., using the State Bank ATM-cum-Debit (Cash Plus)
card.

KINDS OF CARDS ACCEPTED AT STATE BANK ATMs

Besides all cards of State Bank of India, State Bank ATM-Cum-Debit Card
and State Bank International ATM-Cum-Debit Cards following cards are
also accepted at State Bank ATMs:

 STATE BANK CREDIT CARD

 CARDS ISSUED BY OTHER BANKS DISPLAYING MAESTRO, MASTER
CARD, CIRRUS, VISA AND VISA ELECTRON LOGOS
 ALL DEBIT/ CREDIT CARDS ISSUED BY ANY BANK OUTSIDE INDIA
DISPLAYING MAESTRO, MASTER CARD, CIRRUS, VISA AND VISA
ELECTRON LOGOS

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. INTERNET BANKING
Internet banking portal of our bank, enables its retail banking customers
to operate their accounts from anywhere anytime, removing the
restrictions imposed by geography and time. It's a platform that enables
the customers to carry out their banking activities from their desktop,
aided by the power and convenience of the Internet.
Using Internet banking services, you can do the following normal
banking transactions online:

 FUNDS TRANSFER BETWEEN OWN ACCOUNTS.

 THIRD PARTY TRANSFERS TO ACCOUNTS MAINTAINED AT ANY
BRANCH OF SBI
 GROUP TRANSFERS TO ACCOUNTS IN STATE BANK GROUP
 INTER BANK TRANSFERS TO ACCOUNTS WITH OTHER BANKS
 ONLINE STANDING INSTRUCTIONS FOR PERIODICAL TRANSFER FOR
THE ABOVE
 CREDIT PPF ACCOUNTS ACROSS BRANCHES
 REQUEST FOR ISSUE OF DEMAND DRAFT
 REQUEST FOR OPENING OF NEW ACCOUNTS
 REQUEST FOR CLOSURE OF LOAN ACCOUNTS
 REQUEST FOR ISSUE OF CHEQUE BOOK

. STATE BANK MOBICASH

Away from home, balance enquiries can be made and/or money sent to
the loved ones or bills can be paid anytime 24x7!!! That is what State
Bank FreedoM offers - convenient, simple, secure, anytime and
anywhere banking.
1. MOBILE BANKING SERVICE OVER APPLICATION/ WIRELESS
APPLICATION PROTOCOL (WAP)
The service is available on java enabled /Android mobile phones (with or
without GPRS) /i-phones where the user is required to download the
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application on to the mobile handset. The service can also be availed via
WAP on all phones (java/non java) with GPRS connection.

THE FOLLOWING FUNCTIONALITIES ARE AVAILABLE:

 FUNDS TRANSFER (WITHIN AND OUTSIDE THE BANK)

 IMMEDIATE PAYMENT SERVICES (IMPS)
 ENQUIRY SERVICES (BALANCE ENQUIRY/ MINI STATEMENT)
 CHEQUE BOOK REQUEST
 DEMAT ENQUIRY SERVICE
 BILL PAYMENT (UTILITY BILLS, CREDIT CARDS, INSURANCE PREMIUM),
DONATIONS, SUBSCRIPTIONS
 MOBILE /DTH TOP UP
 M COMMERCE (MERCHANT PAYMENTS, SBI LIFE INSURANCE
PREMIUM)

. E-PAY
Bill Payment (e-Pay) will let you to pay your Telephone, Mobile,
Electricity, Insurance and Credit Card bills electronically over our Online
SBI website https://www.onlinesbi.com. Say good-bye to queues: Check
& Pay your bills online, 24 hours a day, over e- Pay. You even get a Cyber
Receipt for your payments done online or scheduled over online SBI!
If your biller presents bills online, you can also give us AutoPay
instructions and we will pay the bills as and when it falls due. The service
is available for select local billers at Ahmedabad, Bangalore, Bhopal,
Bhuvaneshwar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad,
Kolkata, Lucknow, Mumbai, Patna, Thiruvanathapuram. The national
billers like LIC, SBI Cards, and SBI Life Insurance etc. can be paid at any
center across the country.

. E-RAIL
BOOK YOUR RAILWAYS TICKET ONLINE.

The facility has been launched wefIst September 2003 in association

with IRCTC. The scheme facilitates Booking of Railways Ticket Online.
The salient features of the scheme are as under:
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ALL INTERNET BANKING CUSTOMERS CAN USE THE FACILITY.

. SAFE DEPOSIT LOCKER

For the safety of your valuables we offer our customers safe deposit
vault or locker facilities at a large number of our branches. There is a
nominal annual charge, which depends on the size of the locker and the
center in which the branch is located.

. MICR CODES
In MICR technology the information is printed on the instrument with a
special type of ink which is made up of magnetic material. On insertion
of the instrument in the machine, the printed information is read by the
machine. MICR system is beneficial as it minimizes chances of error,
clearing of cheques becomes easy and transfer of funds becomes faster
in order to facilitate operations. For details of MICR branch codes please
click on the link below.
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. FOREIGN INWARD REMITTANCE
 DRAFTS IN INDIAN RUPEES CAN BE PURCHASED FROM EXCHANGE
COMPANIES OR OUR CORRESPONDENTS AND MAILED TO THE
BRANCH WHERE YOU HAVE YOUR ACCOUNT.
 TELEGRAPHIC OR WIRE TRANSFERS CAN BE MADE THROUGH OUR
BRANCHES ABROAD OR OUR CORRESPONDENTS TO BRANCHES
HAVING SWIFT/TT DRAWING ARRANGEMENTS. PLEASE INDICATE
YOUR ACCOUNT NUMBER CLEARLY.
 CHEQUES CAN BE DEPOSITED FOR CREDIT OF YOUR ACCOUNTS.
THESE WILL BE COLLECTED AND CREDITED TO YOUR ACCOUNTS.
 CHEQUES CAN BE TENDERED BY YOU PERSONALLY DURING YOUR
VISIT TO INDIA.
 IF YOUR BRANCH IS SWIFT ENABLED YOU CAN TRANSFER FUNDS
FROM ANYWHERE BY SWIFT.
 FOR SPEEDY CREDIT TO ACCOUNTS FROM GULF, YOU CAN USE SBI
EXPRESS

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A. ONLINE BANKING- AN OVERVIEW

 DEFINITION  Online banking is an electronic payment system that enables customers of a

financial institution to conduct financial transactions on a website operated by the
institution, such as a retail bank, virtual bank, credit union or building society. Online
banking is also referred as internet banking, e-banking, virtual banking and by other terms.

 Online banking or e-banking is an umbrella term for the process by which a customer may
perform banking transactions electronically without visiting a brick-and-mortar institution.

 Online banking is the practice of making bank transactions or paying bills via the internet.
Thanks to technology, and the internet in particular, people no longer have to leave the
house to shop, communicate, or even do their banking.

 FIRST ONLINE BANKING IN INDIA ICICI bank is the first one to have introduced Online-
Banking in 1994 for a limited range of services such as access to account information,
correspondence and, recently, funds transfer between its branches. ICICI is also getting into
e-trading, thus offering a broader range of integrated services to the customer.

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ADVANTAGES Many banks have begun to offer customers the option of online-internet
banking, a practice that has advantages for both all parties involved. The convenience of
being able to access accounts at any time as well as the ability to perform transactions
without visiting a local branch, draw many people to be involved. Some of these advantages
of internet banking but are not limited to, include:

1. Customer’s convenience Direct banks are open for business anywhere there is an internet
connection. They are also 24 hours a day, 365 days a year open while if internet service is
not available, customer services is normally provided around the clock via telephone. Real-
time account balances and information are available at the touch of a few buttons thus,
making banking faster, easier and more efficient. In addition, updating and maintaining a
direct account is easy since it takes only a few minutes to change the mailing address, order
additional checks and be informed for market interest rates.

2. More efficient rates The lack of significant infrastructure and overhead costs allow direct
banks to pay higher interest rates on savings and charge lower mortgage and loan rates.
Some offer highyield checking accounts, high yield certificate of deposits (CDs), and even no-
penalty CDs for early withdrawal. In addition, some accounts can be opened with no
minimum deposits and carry no minimum balance or service fees.

3. Services Direct banks typically have more robust websites that offer a comprehensive set
of features that may not be found on the websites of traditional banks. These include
functional budgeting and forecasting tools, financial planning capabilities, investment
analysis tools, loan calculators and equity trading platforms. In addition, they offer free
online bill payments, online tax forms and tax preparation.

4. Mobility Internet banking also includes mobile capabilities. New applications are
continually being created to expand and improve this capability or smart-phones and other
mobile devices.

5. Transfers Accounts can be automatically funded from a traditional bank account via
electronic transfer. Most direct banks offer unlimited transfers at no cost, including those
destined for outside financial institutions. They will also accept direct deposits and
withdrawals that the customer authorizes such as payroll deposits and automatic bill
payment.

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Ease of use Online accounts are easy to set up and require no more information than a
traditional bank account. Many offer the option of inputting the customer's data online or
downloading the forms and mailing them in. If the customer runs into a problem, he has the
option of calling or e-mailing the bank directly.

7. Environment friendly Internet banking is also environmentally friendly. Electronic

transmissions require no paper, reduce vehicle traffic and are virtually pollution-free. They
also eliminate the need for buildings and office equipment.

 DISADVANTAGES Internet banking seems like an obvious choice to leave the hassles of
traditional money management behind in exchange for it. However, there are potential
problems associated with banking over the internet of which customers may not be aware.
Consumers need to weigh the advantages as well as the disadvantages of internet banking
before signing up. Some of the disadvantages of internet banking include:

1. Bank relationship A traditional bank provides the opportunity to develop a personal

relationship with that bank. Getting to know the people at your local branch can be an
advantage when a customer needs a loan or a special service that is not normally offered to
the public. A bank manager usually has some discretion in changing the terms of customer's
account if the customer's personal circumstances change. They can help customers solve
problems such as reversing an undeserved fee. The banker also will get to know the
customer and his unique needs. If the customer has a business account, this personal
relationship may help if the customer needs capital to expand. It’s easier to get the bank’s
support if there is someone who understands customer's business and vouch for his
operating plan.

2. Transaction issues Sometimes a face-to-face meeting is required to complete complex

transactions and address complicated problems. A traditional bank can host meetings and
call in experts to solve a specific issue. Moreover, international transactions may be more
difficult (or impossible) with some direct banks. If a customer deposits cash on a regular
basis, a traditional bank with a drive-through window may be more practical and efficient.

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3. Service issues Some direct banks may not offer all the comprehensive financial services
such as insurance and brokerage accounts that traditional banks offer. Traditional banks
sometimes offer special services to loyal customers such as preferred rates and investment
advice at no extra charge. In addition, routine services such as notarization and bank
signature guaranteed are not available online. These services are required for many financial
and legal transactions.

4. Security Direct banks are subject to the same laws and regulations as traditional banks
and accounts are protected by the FDIC. Sophisticated encryption software is designed to
protect your account information but no system is perfect. Accounts may be subject to
phishing, hacker attacks, malware and other unauthorised activity. Most banks now make
scanned copies of cleared checks available online which helps to avoid and identify check
fraud. It enables verification that all checks are signed by the customer and that dollar or
euro amounts have not been changed. The timely discovery of discrepancies can be
reported and investigated immediately.

5. Connectivity Another issue is that sometimes it becomes difficult to note whether your
transaction was successful or not. It may be due to the loss of net connectivity in between,
or due to a slow connection, or the bank’s server is down.

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B. DIFFERENT TYPES OF ONLINE BANKING a. CORE BANKING SOLUTION or CBS:  Core
Banking is a banking service provided by a group of networked bank branches where
customers may access their bank account and perform basic transactions from any of the
member branch offices. Core banking is often associated with retail banking and many banks
treat the retail customers as their core banking customers. Businesses are usually managed
via the Corporate banking division of the institution. Core banking covers basic depositing
and lending of money.

 Normal Core Banking functions will include transaction accounts, loans, mortgages and
payments. Banks make these services available across multiple channels like ATMs, Internet
banking, mobile banking and branches.

 The core banking services rely heavily on computer and network technology to allow a
bank to centralise its record keeping and allow access from any location. It has been the
development of banking software that has allowed core banking solutions to be developed.

b. ATM BANKING Computerized machine that permits bank customers to gain access to their
accounts with a magnetically encoded plastic card and a code number. It enables the
customers to perform several banking operations without the help of a teller, such as to
withdraw cash, make deposits, pay bills, obtain bank statements, effect cash transfers. Also
called automated banking machine, automatic till machine, or remote service unit.

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c. DEBIT CARD  Debit cards are normally issued by financial institutions and are extremely
useful because they eliminate the need to carry cash. These cards are not the same as credit
cards. When credit cards are used, the credit card company issues the payment for the
purchase and grant a loan to the cardholder for the purchase that was made.

 Debit cards, on the other hand, fund the purchase immediately out of the cardholder’s
bank account. This means that the account to which the debit card is linked must have
available funds at the time of the purchase. Also, debit cards require a password to be used.
The latter doesn’t require a password to be used. In essence, a debit card is essentially like
using cash to pay for things.

d. CREDIT CARD  Standard-size plastic token, with a magnetic stripe that holds a machine
readable code. Credit cards are a convenient substitute for cash or check, and an essential
component of electronic commerce and internet commerce. Credit card holders (who may
pay annual service charges) draw on a credit limit approved by the card-issuer such as a
bank, store, or service provider (an airline, for example). Cardholders normally must pay for
credit card purchases within 30 days of purchase to avoid interest and/or penalties.

 It couldn't be easier to use a credit card -- just one swipe and anything you want to buy is
yours. But there are a few best practices if you're going to use your credit card responsibly.
Don't Spend beyond Your Means It can be tempting to see a credit card as unlimited, but
you really shouldn't spend beyond your means. If you haven't done so already, make a
budget. Make sure that your credit card spending doesn't exceed the budgeted amount.

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e. DIGITAL WALLET  Nowadays, we find ourselves carrying cold hard cash less and less
because you can just as easily make your purchase with payment cards, and track you’re
spending online. Plus, it’s more secure than carrying $350 to buy the latest iPad (MINI).

 Certain payment or loyalty cards also let you earn rewards or entries to contests, but they
do add up. They make your wallet unnecessarily thick and heavy. Perhaps it is time to swap
the system again; this time, for something that you have always been carrying around: your
smart phone Digital wallets can help take you there. They are smart phone apps that hold
your payment and loyalty card information. Google Wallet and Apple’s Passbook are two of
the more popular ones we often hear about, but if they are not your fancy, there are plenty
of other digital wallets that carry perks and benefits that you may prefer.

f. DIGITAL CASH  Digital Cash acts much like real cash, except that it’s not on paper. Money
in your bank account is converted to a digital code. This digital code may then be stored on a
microchip, a pocket card (like a smart card), or on the hard drive of your computer.

 The concept of privacy is the driving force behind digital cash. The user of digital cash is
assured an anonymous transaction by any vendor who accepts it. Your special bank account
code can be used over the internet or at any participating merchant to purchase an item.
Everybody involved in the transaction, from the bank to the user to the vendor, agree to
recognize the worth of the transaction, and thus create this new form or exchange

 E-PAYMENT APPS FOR ANDROID, IOS AND WINDOWS IN INDIA

Mobikwik , FreeCharge , State Bank Buddy ,

HDFC PayZapp , ICICI Pockets , JioMoney Wallet ,

Ola Money , Airtel Money , BHIM APP

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g. NEFT National Electronic Funds Transfer (NEFT) NEFT is electronic funds transfer system,
which facilitates transfer of funds to other bank accounts in over 63000 bank branches
across the country. This is a simple, secure, safe, fastest and cost effective way to transfer
funds especially for Retail remittances.

 FEATURES & BENEFITS Customers can remit any amount using NEFT Customer intending to
remit money through NEFT has to furnish the following particulars:

 IFSC (Indian Financial System Code) of the beneficiary Bank/Branch.  Full account number
of the beneficiary.  Name of the beneficiary.

 TIMINGS To make it more customer friendly, RBI announced that from 10th July 2017, the
settlement will be on half hourly basis. As announced in the First Bi-monthly Monetary Policy
Statement for 2017-18, additional settlements in the NEFT system at half-hour intervals are
being introduced to enhance the efficiency of the system and add to customer convenience.
The half hourly settlements would speed up. The half hourly settlements would speed up the
fund’s transfer process and provide faster credit to the destination accounts.

 MONDAY TO FRIDAY
8am,8.30am,9am,9.30am,10am,10.30am,11am,11.30am,12pm,12.30pm,1pm,
1.30pm,2pm,2.30pm,3pm,3.30pm,4pm,4.30pm,5pm,5.30pm,6pm,6.30pm and7pm. 
SATURDAY 8am,8.30am,9am,9.30am,10am,10.30am,11am,11.30am,12pm,12.30pm,1pm.

 CHARGES The structure of charges that can be levied on the customer for NEFT is given
below:- a. Inward transactions at destination bank branches (for credit to beneficiary
accounts)–  Free, no charges to be levied on beneficiaries b. Outward transactions at
originating bank branches – charges applicable for the remitter

 For transactions up to Rs 10,000 : not exceeding Rs 2.50 (+ Applicable GST)  For

transactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Applicable GST)  For
transactions above Rs 1 lakh and up to Rs 2 lakh: not exceeding Rs 15 (+ Applicable GST) 
For transactions above Rs 2 lakh: not exceeding Rs 25 (+ Applicable GST)

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h. RTGS The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as
the continuous (real-time) settlement of funds individually on an order by order basis
(without netting). 'Real Time' means the processing of instructions at the time they are
received rather than at some later time. ‘Gross Settlement' means the settlement of funds
transfer instructions occurs individually (on an instruction by instruction basis). Considering
that the funds settlement takes place in the books of the Reserve Bank of India, the
payments are final and irrevocable.

 TIMINGS There is no change in the current existing RTGS timings. Below are the current
RTGS timings. You notice from below that for customers, the cut off timing will be 4.30 PM.
The RTGS service window for customer’s transactions is available to banks from9.00 AM to
4.30 PM on weekdays and from 9.00 AM to 2 PM on Saturdays for settlement at the RBI end.

[Regular Days Including Saturdays, Except 2nd and 4thSaturdays of the Month]Open For
Business 8am, Initial Cut-Off (Customer Transactions) 4.30pm, Final Cut-Off (Inter-Bank
Transactions) 7.45pm and End Of the Day 8pm.

 CHARGES The structure of charges that can be levied on the customer for RTGS is given
below:-  Above Rs. 2 lakh up to Rs. 5 lakh – Rs. 25 + Applicable GST  Above Rs. 5 lakh – Rs.
50 + Applicable GST

i. IMPS Immediate Payment Service (IMPS) is an instant real-time inter-bank electronic funds
transfer system in India. IMPS offer an inter-bank electronic fund transfer service through
mobile phones. Unlike NEFT and RTGS, the service is available 24/7 throughout the year
including bank holidays.

 TIMINGS&BENEFITS  Instant credit to the beneficiary  Available 24x7, throughout the

year including Sundays and bank holidays  Send and receive funds with just the mobile
number and MMID

 CHARGES  Above Rs.1 to Rs. 1 Lakh - Rs.5 + GST  Above Rs. 1 lakh to Rs. 2 Lakh - Rs.15 +
GST

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j. UPI UPI is a payment system that allows you to transfer money between any two parties.
UPI allows you to pay directly from your bank account to different merchants without the
hassle of typing your card details or net banking/wallet password.

 FEATURES

 Cheapest way of money transfer  It makes you free from cash  No need to give details 
Secure  Instant transfer

 TIMINGS&CHARGES  Available 24x7, throughout the year including Sundays and bank
holidays.  Charge is totally free.

k. MOBILE BANKING Mobile banking is the act of doing financial transactions on a mobile
device (cell phone, tablet, etc.). This activity can be as simple as a bank sending fraud or
usage activity to a client’s cell phone or as complex as a client paying bills or sending money
abroad. Advantages to mobile banking include the ability to bank anywhere and at any time.
Disadvantages include security concerns and a limited range of capabilities when compared
to banking in person or on a computer.

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l. E-TICKETING  An electronic ticket (commonly abbreviated as e-ticket) is the digital ticket
equivalent of a paper ticket. The term is most commonly associated with airline issued
tickets. Electronic ticketing for urban or rail public transport is usually referred to as travel
card or transit pass. It is also used in ticketing in the entertainment industry.

 An electronic ticket system is a more efficient method of ticket entry, processing and
marketing for companies in the airline, railways and other transport and entertainment
industries.

m. E-TAX & E-FILING  You can pay your taxes online through E-Tax. This facility enables you
to pay TDS, Income Tax, Indirect Tax, Corporation Tax, Wealth Tax, Estate duty and Fringe
benefit Tax. The process of submitting tax returns over the Internet, using tax preparation
software that has been pre-approved by the relevant tax authority.

 The process of submitting tax returns over the Internet, using tax preparation software
that has been pre-approved by the relevant tax authority, such as the IRS or the Canada
Revenue Agency.

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C. SECURITY ISSUES IN INTERNET BANKING

 INTRODUCTION  The Internet has made banking, shopping, and conducting other
financial transactions online quite convenient. But when it comes to your money, you want
to make sure your transactions are safe. Security of a customer's financial information is very
important, without which online banking could not operate.

 Presently, Internet banking customers only need a computer with access to the Internet to
use Internet banking services. Customers can access their banking accounts from anywhere
in the world. Each customers is provided a login ID and a password to access the service. It is
indeed easy and convenient for customers.

 However, the use of password does not provide adequate protection against Internet
fraud such as phishing. The problem with password is that when it has been compromised,
the fraudsters can easily take full control of online transactions. In such cases, the password
is no longer works as an authentication token because we cannot be sure who is behind the
keyboard typing that password in. However, easy access and convenience should not be at
the expense and mercy of the security of information. This is important in order to ensure
the confidentiality of information and that it is not being manipulated or compromised by
the fraudsters

 In this lesson, we will review strategies you should employ when dealing with money and
the Internet. You will learn how to make sure a website is secure, including checking the SSL
certificate. In addition, you'll learn the steps you need to take to make shopping online a
safe and enjoyable experience.

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 TYPES OF FRAUDS Nowadays, the nature of attacks is more active rather than passive.
Previously, the threats were all passive such as password guessing, dumpster diving and
shoulder surfing. Here are some of the techniques used by the attackers today:-

 Trojan Attack The attacker installed a Trojan, such as key logger program, on a user’s
computer. This happens when users visited certain websites and downloaded programs. As
they are doing this, key logger program is also installed on their computer without their
knowledge. When users log into their bank’s website, the information keyed in during that
session will be captured and sent to the attacker. Here, the attacker uses the Trojan as an
agent to piggyback information from the user’s computer to his backyard and make any
fraudulent transactions whenever he wants.  Man-In-The-Middle Attack Here, the attacker
creates a fake website and catches the attention of users to that website. Normally, the
attacker was able to trick the users by disguising their identity to make it appear that the
message was coming from a trusted source. Once successful, instead of going to the
designated website, users do not realize that they actually go to the fraudster’s website. The
information keyed in during that session will be captured and the fraudsters can make their
own transactions at the same time.  Phishing One of the primary methods a hacker gains
access to account information is through phishing, or tricking the victim into giving up the
information voluntarily. A hacker might send an email or even call, pretending to be a
representative of the bank and informing you about some irregularities with your account.
All you need to do to sort things out is to provide your password or other account
information to verify your identity. If you ever receive a communication that appears to be
from your bank and requests this type of information, contact your bank by phone
immediately. Do not give out account information to a caller, and do not click any links
provided in any e-mails that claim to be from your bank. You should also ensure that any
employees with access to the company’s accounts follow the same procedures.  Key
Loggers Key loggers are malware programs that record keystrokes and other data, allowing a
hacker to capture your password as you enter it. Maintaining up-to-date antivirus suites on
your company computers can prevent these malicious programs from gaining a foothold,
and setting up your network’s firewall to monitor outgoing traffic can help you determine
when an infection occurs. Many key loggers and viruses use email to travel from computer
to computer, so adding anti-virus protection to your company’s email server can help filter
out these attacks.  Spyware Spyware is the number one way that online banking credentials
are stolen and used for fraudulent activities. Spyware works by capturing information either
on your computer, or while it is transmitted between your computer and websites. Often
times, it is installed through fake “pop up “ads asking you to download software. Industry
standard Antivirus products detect and remove software of this type, usually by blocking the
download and installation before it can infect your computer.

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 Viruses Viruses are designed to compromise your computer systems, and allow others to
gain access to your files, etc. This is different than spyware in that a virus may search for
information considered to be of value, where spyware will wait for input or action from
whomever is using the computer. A system that is compromised may be used to attack other
systems, denying people legitimate access to services. An example would be the recent
activities of the group called “Anonymous.” This group took over computer systems around
the world, and used them to launch attacks on websites. These types of attacks are called
“denial of service” attacks. One of the most common scenarios with viruses is where they
will discover financial data such as payroll files, bank account information, and credit card
information. This information is then transferred to criminals who sell it on the black market,
or worse – use it for blackmail. Criminals can get anywhere from pennies to hundreds of
dollars for each piece of information, depending on what it is and how they can exploit it. 
Hacking Hacking works similarly to viruses. A “hacker “uses software to probe for
vulnerabilities, and then uses programming techniques, software utilities, or system
commands to exploit the vulnerability. The primary objective is to gain access to your
system. Once this access is obtained, you can think of it like a burglary – they search for
anything of value and often times leave damage behind. More threatening are those hackers
who simply take control of your system and wait, to see what information becomes available
or what other systems they can gain access to.  Man In The Browser Man in the browser is
a security attack where the perpetrator installs a Trojan horse on a victim’s computer that’s
capable of modifying that user’s Web transactions as they occur in real time. According to
security expert Philipp Guhring, the technology to launch a man in the browser attack is both
high-tech and high priced. Use of the tactic has been limited to financial fraud in most cases,
due to the resources required. Both Firefox and Internet Explorer on Windows have been
successfully targeted.  Identity Theft Identity theft refers to all types of crime in which
someone illicitly obtains and uses another person's personal data through deception or
fraud, typically for monetary gain. With enough personal information about an individual, a
criminal can assume that individual's identity to carry out a wide range of crimes. Identity
theft occurs through a wide range of methods—from very low-tech means, such as check
forgery and mail theft to more high-tech schemes, such as computer spyware and social
network data mining.  Spam Spam is an electronic 'junk mail' or unwanted messages sent
to your email account or mobile phone. These messages vary, but are essentially commercial
and often annoying in their sheer volume. They may try to persuade you to buy a product or
service, or visit a website where you can make purchases; or they may attempt to trick you
into divulging your bank account or credit card details.

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. Banking Network

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State Bank of India is India's largest bank with a network of over 13000
branches and 5 associate banks located even in the remotest parts of
India. State Bank of India (SBI) offers a wide range of banking products
and services to corporate and retail customers.
Online SBI is the Internet banking portal for State Bank of India. The
portal provides anywhere, anytime, online access to accounts for State
Bank's Retail and Corporate customers. The application is developed
using the latest cutting edge technology and tools. The infrastructure
supports unified, secure access to banking services for accounts in over
13,000 branches across India.
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 RTGS/NEFT feature
 Generate account statements
 Setup Standing Instructions
 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
 Pay bill of Visa Credit Card issued by any Bank.
The OnlineSBI 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.
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  Use online transactional features such as fund transfer to own
accounts, third party payments (both Inter and Intra bank), 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

In addition to the above the Internet banking application also provides

the following 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:
o Core Banking Transactions
o Inter Bank Transactions for incoming RTGS/NEFT
Transactions
o Internet Banking Transactions for SBI & Associate Banks
o Direct Debit facility where suppliers can directly debit their
customer’s account through Internet Banking

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 Ratio Analysis

Introduction
The analysis of the financial statements and interpretations of financial
results of a particular period of operations with the help of “ratio” is
termed as “ratio analysis.” Ratio analysis used to determine the financial
soundness of a business concern.
Meaning and Definition
The term “ratio” refers to the mathematical relationship between any
two inter‐ related variables. In other words, it establishes relationship
between two items expressed in quantitative form.
“The term accounting ratio is used to describe significant relationships
which exist between figures shown in a balance sheet and profit and loss
account in a budgetary control system or any other part of the
accounting management.”
Ratio can be used in the form of (1) percentage (2) quotient (3) rates
The table below is showing the calculation of different ratios of State
Bank of India for the recently last five years:

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Page | 43
 Basic Analysis of Ratios of SBI

1‐Operational and Financial Ratios

 =Equity profit /No.of

2‐Earnings per share Equity shares
 In RS.

Ratio Analysis

 =Dividends/No.of
1‐Dividend per share Equity shares
 In Rs.

Comment and interpretation:

 Earnings per share: Higher earnings per share is always better
than a lower ratio because this means the company is more
profitable and has more profit to distribute to its shareholders.
We see on the table that the bank’s earnings per share have fallen
from 206.40 to 145.88 during 2013 to 2014 and it seems that the
bank has not been able to distribute more profit to its
shareholders.
 Dividend per share: Having a growing dividend per share can be a
sign that the company’s management believes that the growth
can be sustained. The table demonstrates that the dividend per
share of the bank for each year has been in a fluctuation stage and
the bank paying different rate of dividend to its shareholders each
year. In 2013 the rate of dividend has been Rs.41.50 per share but
this rate has been reduced to Rs.30.00 per share in 2014.

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2. Profitability Ratios
The term profitability means the profit earning capacity of any business
activity. Profitability Ratios is used to measure the overall efficiency or
performance of a business. Following important profitability ratios are
discussed below:

 =Operating profit/Net
1Operating margin sale*100
 In %

 =Gross profit/net
Ratio Analysis 2Gross profit margin sale*100
 In %

 =Net profit/Net
3Net profit margin sale*100
 In %

Comment and Interpretation:

 Operating margin: Operating profit ratio indicates the operational
efficiency of the firm and is a measure of the firm’s ability to cover
the total operating expenses. The above table illustrates that the
bank having the highest operating margin in 2012 with profit
margin of 17.11% compared to other remaining last 4 years. But it
seems that the bank’s operating margin tends to decline from
17.11% to 13.52% and 10.92% in 2013 and 2014 respectively.
 Gross profit margin: Higher gross profit ratio is an indication that
the firm has higher profitability. During the last five years SBI ‘s
gross profit margin seems to be fair and more profitable in 2012
with gross profit margin of 16.16% and this percentage tends to
reduce gradually from 12.57% to 9.94% during 2013 to 2014. It

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 indicates that the bank was not able to maintain an effective
standard performance in its business in 2014.

 Net profit margin: Net profit margin is the best measure of

profitability and liquidity of the firm. As the net profit ratio of SBI
is not increasing at a satisfying level, there is a fluctuation in
percentage of net profit during the last five years. In 2013 the
bank having adequate return to its owners with net profit margin
of 10.39% but it significantly tends to decrease to 7.03% in 2014
which shows that the bank can’t ensure adequate return to
owners as well as it doesn’t have a good economic condition.

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3. Leverage Ratios
These are the ratios showing proportion of various types of capital to
each other. Following are some of such ratios:

 =Long term
1DebtEquity Ratio liabilities
/Shareholder’s
fund*100
Ratio Analysis 2Owner’s fund  =P.A.T/ Equity*100

3Fixed Asset  =Net sale/Fixed

Asset(Avg)
 In time

Comment and Interpretation:

 Debt-Equity ratio: Debt to equity ratio is a long term solvency
ratio that indicates the soundness of long-term financial policies
of the company. As it shows that the debt- equity ratio of SBI
falling from 12.16% to 11.79% during 2013 to 2014. It is the
danger signal for owners, if the project fails financially, the owners
would lose heavily.
 Owner’s fund: Owner’s fund ratio indicates the profitability of a
firm in relation to the funds supplied by the shareholders or
owners. Owners fund to total fund is quite same as figure in 2013
in comparison to 2014 there is almost near to 7.59% and the
predicted year was 7.81% in the owner’s funds. And the fixed
assets turnover ratio remained constant.

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4. Liquidity Ratios:
Liquidity ratios are useful in obtaining an indication of a firm’s ability to
meet its current liabilities, but it does not reveal how effectively the cash
resources can be managed. To measure the liquidity of a firm, the
following ratios are commonly used:

 =CA/CL
1Current Ratios  Ideal 2:1

Ratio Analysis

2Quick Ratios  =CA‐ Stock & Prepaid

exp/CL
 Ideal 1:1 32

Interpretation and Analysis:

 Current Ratio: As the ideal current ratio is 2:1 this is considered to
be satisfactory. But the above table illustrates that the liquidity
position of the bank does not sound good for the last five years
and the bank may find difficult to adjust its current liabilities
against its current assets. In 2012 the bank having current ratio of
0.65:1 but this rate is gradually decreasing to 0.50:1 and 0.45:1
during 2013 and 2014 respectively. It shows that the bank has not
been able to make its current debt payments.
 Quick ratio: But we see that the bank’s short term solvency is in
better position for the last five years. It shows that the bank
possessing more quick assets than its current liabilities. The table
above demonstrates that the bank’s quick ratio is 13.88:1 in 2014
which exhibiting that quick assets are 13.88 times of its current
liabilities and in 2013 it is having quick ratio of 12.15, which seems
that bank’s liquidity is in better position during the last 2 years
compared to other 3 years.

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Ratio Analysis

5. Payout Ratios
The proportion of earnings paid out as dividends to shareholders,
typically expressed as a percentage. The payout ratio is a key
financial metric used to determine the sustainability of a company’s
dividend payments.

 =Total dividend /Net

1Dividend payout ratio income

Ratio Analysis

2Earning retention ratio  = Total Gross Profits –

Payout ratio

Comment and Interpretation:

 Dividend payout ratio: The ratio highlights the relationship
between payment of dividend on equity share capital and the
profits available after meeting tax and preference dividend. A
consistent trend in this ratio is usually more important than a high
or low ratio. We see that the bank’s dividend paying out ratio is
25.84% in 2011 which indicates that the bank is paying out 25.84%
of its net income to its shareholders. But the bank’s ratio has
fallen to 20.06%, 20.12% and 20.56% in 2012, 2013 and 2014
respectively which seems that the bank could maintain a
consistent trend in its dividend pay out ratio during the last 3
years.
 Earning retention ratio: Earning Retention Ratio or Plowback
Ratio is the ratio that measures the amount of earnings retained
after dividends have been paid out to the shareholders. The table
exhibits that the bank’s retention ratio is consistent in the last 5
years as its paying dividend to its shareholders at a constant rate
during the last five years. During 2013 to 2014 the retention ratio

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 has been 79.44% means that the bank retains 79.44% of its
earnings for the expansion and financial requirements of the bank.

CHAPTER 2

Research methodology

Research methodology is a methodology for collecting all sorts of

information & data pertaining to the subject in question. The objective is
to examine all the issues involved & conduct situational analysis. The
methodology includes the overall research design, sampling procedure &
fieldwork done & finally the analysis procedure. The methodology used
in the study consistent of sample survey using both primary & secondary
data. The primary data has been collected with the help of questionnaire
as well as personal observation book, magazine; journals have been
referred for secondary data. The questionnaire has been drafted &
presented by the researcher himself.

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 Objective of the Study

 The basic and foremost objective is to find out whether people

have account with SBI
 To find out whether banks caters all banking needs of customers
 To sort out the kinds of account people maintain with SBI.
 To staff out the key banking facilities preferred the most.
 To find out recreational facilities provided for the customers
 To make the customer aware about core banking facilities.
 To figure out unnecessary charges due to maintenances of the
lesser amount in their account.
 To know regarding the competitive charges and interest offers to
customers
 To find out the alternative service of other banks
 To sort out the perception of the people about banking service.
 To find out whether recommend this respondent bank to their
relatives and family members.
 To figure out weaknesses of the SBI.
 To sort out the prospective details of the people maintaining
account that consists (Annual income, Marital, Education, statues,
Occupation and Age)

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 SOURCES OF DATA

INTRODUCTION
Generally we can collect data from two sources, primary and
secondary source. Data collected form primary source are known as
primary data and data collected from secondary source are called
secondary data.
Primary data are also known as raw data. Data are collected from
the original source in a controlled or an uncontrolled environment.
Example of controlled environment experimental research was
certain variable are being controlled by the researcher. On the other
hand, data collected thought observation questionnaire survey in a
natural setting an example data obtain in an uncontrolled
environment. Secondary data obtained from secondary sources such
as report, books, journal, document, magazines, the web and more.

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1) SECONDARY DATA
 Source of secondary data of our project is:-
 Internet

2) PRIMARY DATA
A) Research Instrument :

□A structured undisguised questionnaire:‐

Structure undisguised questionnaires are the most commonly
used in research today every responded is posed the same question
same sequence, with the same opportunity of response. In most case
the purpose of the research is clearly stated in an introductory
statement or is an obvious from the question asked. This type of
instrument has advantages of simplicity in administration, tabulation
and analysis; standardize data collection, objectivity; and reliability. The
disadvantage include lack of flexibility in changing question “on the fly”

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B) POPULATION:

 Population Definition :‐
A Population can be defined as including all people or items with the
characteristics one wishes to understand. Because there is rarely
enough time or money to gather information from everyone or
everything in population.The goal becomes finding a representative
sample (or subset) of that population.
Note also that the population from which the sample is drawn
may not be same as the population about which we actually want
information often there is large but not complete overlap between these
two groups due to frame issues etc.
Sometimes they may be entirely separate for instance, we might
study rats in order to get a better understanding of human health or we
might study records from people born in 2008 in order to make
predictions about people born in 2009.

 Population of study is Ahmedabad city.

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 SAMPLING METHOD & SAMPLE SIZE

SAMPLING
A sample is “a smaller collection of units from a population used to
determine truths about that population”.

SAMPLING PROCESS
Sampling process comprises several stages:‐
1. Defining the population of concern.
2. Specifying a sampling frame, a set of items or events possible to
measure.
3. Specifying a sampling method for selecting items or events from
the frame.
4. Determining the sample size.
5. Implementing the sampling size.
6. Sampling and data collecting.
7. Reviewing the sampling process

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  SAMPLING METHODS

(1) Probability Sampling:‐

A Probability Sampling scheme is one in which every unit in

the population has a chance of being selected in the sample and
these probability can be accurately determined.
When every element in the population does not have the
same probability of selection, this is known as an ‘Equal
Probability of selection design.’

o Main types or methods of probability samples are as follows:‐

1. Simple random sample
2. Systematic random sample
3. Stratified random sample
4. Multistage sample
5. Multiphase sample
6. Cluster sample

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 (2) Non‐Probability Sampling:‐
Any sampling method where some elements of population have
no chance of selection (these are sometimes referred to it’s out of
coverage/under covered), or where the probability of selection
cannot be accurately determined. It involves the selection of
elements based on assumptions regarding the population of interest,
which forms the criteria for selection. Hence, because the selection
of elements is non‐random, non probability sampling not allows the
estimation of sampling errors.
Example: we visit every household in a given street, and interview
the first person to answer the Door in any household with more than
one occupant; this is a non‐probability sample, because some people
are more likely to answer the door. (e.g. Unemployed person who
spends most of their time at home is more likely to answer than an
employed house mate who might be at work when the interviewer
calls) and it’s not practical to calculate these probabilities.
Non‐Probability Sampling includes; Accidental sampling, quota
sampling and Purposive sampling. In addition, non‐response effects
may turn any probability design if the characteristics of non‐
response are not well understood, since non‐response effectively
modifies each elements probability of being sampled.
 Types of non probability sampling are as follows:‐
1. Convenience sampling
2. Purposive sample/judgmental sampling
3. Quota
4.

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 Our project is based on Convenience sampling.

 Convenience sampling:‐

‐ Sometimes known as grab or opportunity sampling or accidental

or haphazard sampling.
‐ A type of non‐probability sampling which involves the sample
being drawn from that part of the population which is close to
hand. That is readily available and convenient.
‐ The researcher using such a sample cannot scientifically make
generalized generalization about the total population from this
sample because it would not be representative enough.
‐ In social science research, snowball sampling is a similar
technique, where existing study subject are used to recruit more
subjects into the sample.
‐ Use results that are easy to get.

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 SAMPLING SIZE
 □ Sample size of our project is 200.
Limitation of the study
(1) We are students not trained researchers. Therefore, the
quality of work may have suffered.
(2) A sample size of 200 is not adequate for the population of
Ahmedabad city. However, due to time and financial constraint
this sample size was used.
(3) Secondary data collected from internet has not been verified.
(4) Non co‐ operation from respondents was an issue in
primary data collection.
(5) Advanced statistical technologies have not been used for
analysis.
(6) There was lack of reliable data.

□ Data Analysis:
After data collection, we analyzed customer’s views, ideas and
opinions related to SBI banks and its services.
□ Data Interpretation:
Interpretation of data is done by using statistical tool i.e. bar
graphs, and also using quantitative techniques (by using these
techniques) accurate information is obtained

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 Classification & tabulation of data:
The data thus collected were classified according to the categories,
counting sheets & the summary tables were prepared. The resultant
tables were one dimensional, two dimensional.

 Statistical tools used for analysis:

Out of the total respondents, the respondents who responded logically
were taken into account while going into statistical details & analysis of
data. The tools that have been used for analyzing data & inference
drawing are mainly statistical tools like percentage, ranking, averages,
etc

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 CHAPTER – 3

ANALYSIS AND FINDINGS

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According to my survey 30% of the respondent uses sbi bank account who’s income was
below Rs.1,00,000 within that 10% male(no. of respondent are 3) and 20% female(no. of
respondent are 6). 40% of the respondent uses sbi bank account who’s income was between
Rs.1,00,000 – Rs.2,50,000 within that 30% respondent are male (no. of respondent are 9)
and 10% female( no. of respondent are 3). 30% of the respondent uses sbi bank account
who’s income was between Rs.2,50,000-Rs.4,00,000 within that 23% respondent are male
(no. of respondent are 7) and 7% female( no. of respondent are 2).

CHAPTER-4

Suggestions & Recommendation

 Following are the recommendations from our project:

1 Banking Services:

 SBI must take some steps so that customers can get

access to its banking services easily.
 SBI should provide superior, pro‐active and state‐of‐
the‐art banking services with an attitude of care and
concern for the customers and patrons.
 SBI should bring more facilities in day to day
banking transactions in an advanced manner and
technical way in order that customers should not
waste much time while doing banking transactions.
 SBI customer care should more concern about the
fastest settlement of customer problems.

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