I. II. III. IV. V. VI.
CHAPTER NAME Introduction to central bank of India Products of central bank of India Database & methodology Innovations in banking by products Innovations in banking by branches Conclusion, finding & suggestions Bibliography
This chapter contains the information about Central Bank of India origin, vision,
Established in 1911, Central Bank of India was the first Indian
commercial bank, which was wholly owned and managed by Indians. The establishment of the Bank was the ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank as the 'property of the nation and the country's asset'. He also added that 'Central Bank lives on people's faith and regards itself as the people's own bank'. During the past 95 years of history the Bank has weathered many storms and faced many challenges. The Bank could successfully transform every threat into business opportunity and excelled over its peers in the Banking industry. A number of innovative and unique banking activities have been launched by Central Bank of India and a brief mention of some of its pioneering services are as under:
1921 1924 1926 1929 1932 1962
Introduction to the Home Savings Safe Deposit Scheme to build saving/thrift habits in all sections of the society. An Exclusive Ladies Department to cater to the Bank's women clientele. Safe Deposit Locker facility and Rupee Travelers' Cheque. Setting up of the Executor and Trustee Department. Deposit Insurance Benefit Scheme. Recurring Deposit Scheme.
Subsequently, even after the nationalization of the Bank in the year 1969, Central Bank continued to introduce a number of innovative banking services as under: 1976 1980 1986 1989 1994 The Merchant Banking Cell was established. Central card, the credit card of the Bank was introduced. 'Platinum Jubilee Money Back Deposit Scheme' was launched. The housing subsidiary Cent Bank Home Finance Ltd. was started with its headquarters at Bhopal in Madhya Pradesh. Quick Cheque Collection Service (QCC) & Express Service was set up to enable speedy collection of outstation cheque. Further in line with the guidelines from Reserve Bank of India as also the Government of India, Central Bank has been playing an increasingly active role in promoting the key thrust areas of agriculture, small scale industries as also
medium and large industries. The Bank also introduced a number of Self Employment Schemes to promote employment among the educated youth. Among the Public Sector Banks, Central Bank of India can be truly described as an All India Bank, due to distribution of its large network in 27 out of 28 States as also in 4 out of 7 Union Territories in India. Central Bank of India holds a very prominent place among the Public Sector Banks on account of its network of 3194 branches and 267 extension counters at various centers throughout the length and breadth of the country In view of its large network of branches as also number of savings and other innovative services offered, the total customer base of the Bank at over 25 million account holders is one of the largest in the banking industry. Customers' confidence in Central Bank of India's wide ranging services can very well be judged from the list of major corporate clients such as ICICI, IDBI, UTI, LIC, HDFC as also almost all major corporate houses in the country.
Our vision is to emerge as a strong, vibrant and pro-active bank
and to positively contribute to emerging needs of the economy through harmonization of human, financial and technological resources and effective risk control system.
The authorized Capital of Central Bank of India is
15,000 million equity shares of Rs.10 each & 8,000 million are perpetual non-
000.141.Mumbai Metro Audit/ Inspection/ Inter Branch Reconciliation/ Housekeeping Accounts/ Recovery/ Legal & BIFR/ 022-22831592 022-22026776 022-22043673 022-27580571 022-22023326
. No.New Delhi Zonal Manager . 10 fully paid up.460 equity shares of Rs.000 equity shares of Rs.Kolkata New Initiative Dept/ Planning & Development/ Profitability HRD/ Dept of IT/ Risk Management Tel. Out of which 324.10 issued and 80. General Managers Name Shri G Gupta Shri S Suresh Shri K K Gupta Shri R P Sharma Shri S G Nadgonde Shri A Ghosh Shri G P Chitnis Shri N Natrajan Shri R N Vadivelu Shri R Natarajan Shri S M Deshpande Shri V P Sathe Shri H K Designation Priority Sector/ Rajbhasha/ Operation/ Central Card/ Subsidiaries Credit/ Credit Policy/ Loan Credit Appraisal Zonal Manager . 022-22161091 022-22022048 022-22021553 011-23318964 033-22301270 022-22024601 022-22022565
Audit & Inspection/ House Keeping & 022-66387777 IBR/ General Administration Dept International Division/ Treasury/ MBD/ Dept of IT Planning & Development/ Accounts/ Legal/ Recovery Zonal Manager .cumulative preference shares.
37/2/4. No.: 0755 – 2674037/36/35/34/33 Fax: 0755 – 2552019 Email: email@example.com Tel.in
.Vesuna Shri K A Somayajulu
HRD Zonal Manager . Jail Road Bhopal – 462 011 CHANDIGARH P.in Tel. 13.: 0172 – 2702994/98 Fax: 0172 – 2704047 Email: zmchanzo@centralbank.: 079 – 25503586 P.co.co.Chennai Corporate Office Central Bank of India Chander Mukhi.in BHOPAL 9.: 0562 – 2850154/3424 Fax: 0562 – 2853698/1341 Email: zmagrazo@centralbank. Arera Hills.O. Sector – 17B Chandigarh – 160 017 CHENNAI Tel. Lal Darwaja Fax: 079 – 25505995 Ahmedabad – 380 001 Email: zmahmezo@centralbank. Sanjay Place Agra – 282 002 AHMEDABAD Central Bank Building Tel.co. 58-59 Bank Square. B. No. No. 205. Narman Point Mumbai – 400 021 Tel: 022 – 6638 7777 Zonal Offices 044-28554792
AGRA Block No.
Tel. Netaji Subhash Road Kolkata – 700 001 LUCKNOW P.48/49.: 040 – 24740361/64. 710-712 Mahapathram Road. N. Bank Street Hyderabad – 500 195 KOLKATA Central Bank Building 33. Akash Deep 23. B. Road.: 033 – 22301270/1275/7007 Fax: 033 – 22309864 Email: firstname.lastname@example.org.: 0361 – 22457651/52 Fax: 0361 – 22452154 Email: email@example.com. Guwahati – 781 005 HYDERABAD P. 24611402-05 Fax: 040 – 24742841 Email: zmhydezo@centralbank. 1st Floor D. Central Bank Building Bhangagarh. S. Chennai – 600 008 GUWAHATI G. B.: 0522 – 2611301-4 Fax: 0522 – 2621213 Email: zmluckzo@centralbank. Mumbai – 400 023 MUZAFFARPUR Pawapuri Vihar Building. 10. No. Tel: 0621 – 22251855 Tel: 022 – 22047229/7301/7304 Fax: 022 – 22044720 Email: zmmmzo@centralbank. No. 522.in
Tel.co. Vidhan Sabha Road Lucknow – 226 001
MUMBAI METRO ZONAL OFFICE Standard Building.co.: 044 – 28554792/4692/4620 Fax: 044 – 28551260 Email: zmchenzo@centralbank. Monteith Road Egmore.
Tel.co.co. Nagpur – 440 001 NEW DELHI P. No.: 020 – 26131611-17 Fax: 020 – 26131618 Email: zmpunezo@centralbank. Link House Press Area. 28 Near Bhagwanpur Chowk Muzaffarpur – 842 001 NAGPUR Oriental Building.: 0771 – 2226756. B.N.in
Tel. 317 M. 2nd Floor Kamptee Road.co. 23319268/69 Fax: 011 – 23311332/237 Email: zmdelhzo@centralbank. G. E. H.in
Tel. Pune – 411 001 RAIPUR 1st Floor. Patna – 800 001 PUNE P. Block B Maurya Lok Complex Dak Banglow Road. 3 Bahadurshah Jafar Road. Block ‘C’ Bombay Market. New Delhi – 110 002 PATNA 2nd Floor. 7007. B. 98. G. 2225171 Fax: 0771 – 2234895 Email: zmraipzo@centralbank. No.: 011 – 23318964.in
Tel.: 0712 – 2520361-63 Fax: 0712 – 2520365 Email: firstname.lastname@example.org. Raipur – 492 001
Fax: 0621 – 2251784 Email: zmmuzazo@centralbank.: 0612 – 2226607 Fax: 0612 – 2221898 Email: zmpatnzo@centralbank.
22023661 / 66387799 / 66387826 Fax: 22856187 3. A.22024393 / 22023942 Fax: 22028122 2.22874143 Fax: 022 – 22022617 4. Shri P. Shri Albert Tauro Executive Director Chander Mukhi Nariman Point Mumbai-400 021 Tel: 022 .Directors
Directors of Central Bank of India & their addresses: 1. Shri K. P.: (O) 022 . Daruwalla Chairperson & Managing Director Chander Mukhi Nariman Point Mumbai-400 021 Tel. Subbaraman Executive Director Chander Mukhi Nariman Point Mumbai-400 021 Tel: (O) 022 . Ms H. Mitra Economic Advisor and Joint Secretary
Satya Bahin 89. Thakur Village. Bhattacharya RBI Nominee Director Evershine Millenium Park Apts. Major (Retd) Ved Prakash 204/1 Neb Valley. Kandivili (East) Mumbai – 400101 6. Sector-4. Neb Sarainew Delhi Tel: 011 . Smt. Nizamuddin East. 37/601.K.P) Tel: 0120 – 2774995 9.23018891 / 23014325 Fax: 011 – 23017047 8. New Delhi -110013 Tel: 011 – 23269723 7. Shri Harish Chandhok
. Shri M. Shri Kamal Faruqui A-80.Ministry of Finance Banking Division Jeevan Deep Building New Delhi Tel: 011 – 23745128 5. Vaishali Ghaziabad (U.
Shri C. Indore. Gole Market. Shashtri Nagar. Janpath Branch. Shri Romesh Sabharwal A2/3.20-21. No. K. Flats Peshwa Road. 72 Janpath New Delhi .S.302 001
. Ms. Saket Ext. P. Pareek Central Bank of India.110 001 Tel: 011 – 23321343/23316708 Fax: 011 – 23357934 13.110 001 11. M. P. Manishpuri. 87. Tel: 0731 . Indu Singh Pawar Central Bank of India 18A. Shri N. New Delhi .M.180 004 12. 70. Jammu Tavi Pin . 244. Mirza Ismail Road.B. Jaipur . Puri Central Bank of India.2493152 0731 – 4064828 10.B.
In its 95 years of history. Sir Pherozeshah Mehta was the first Chairman of the Bank. Central Bank of India has launched a number of innovative and unique banking activities. which was wholly owned and managed by Indians. 1980: Centralcard. the credit card of the Bank was Introduced. 1924: An Exclusive Ladies Department to cater to the Bank's women clientele. 1976: The Merchant Banking Cell was established. 1929: Setting up of the Executor and Trustee department. Major among them are: 1921: Introduction of the Home Savings Safe Deposit Scheme to build saving/thrift habits in all sections of the society. 1932: Deposit Insurance Benefit Scheme. 1962: Recurring Deposit Scheme. It was the first Indian commercial bank. 1986: 'Plantinum Jubilee Money Back Deposit Scheme'
.Tel: 0141 . 1926: Safe Deposit Locker facility and Rupee Travellers' Cheques. In 1969. Central Bank of India was nationalized along with 13 other banks.2370333 Fax: 0141 – 2338900
History of Central Bank of India
Sir Sorabji Pochkhanawala established Central Bank of India in 1911.
which is one of the largest in the banking industry.
This chapter contains information about different products offered by the central bank of India for the benefit of its customers. CBI has offered a choice of various deposit schemes with unique features and facilities. 1989: The housing subsidiary Cent Bank Home Finance Ltd. 1994: Quick Cheque Collection Service (QCC) & Express Service were set up to enable speedy collection of Outstation cheques. was started with its headquarters at Bhopal in Madhya Pradesh. Central Bank of India has a large network of 3161 branches and 270 extension counters spread over 27 States and 4 Union Territories. These schemes suit different kinds of banking needs you might have.co. URL: http://www. The Bank has a total customer base of over 25 million account holders.centralbankofindia.
It is also a flexible scheme that allows you to withdraw a part of the deposit amount as and when required. Amount of deposit Period of deposit Rate of interest minimum amount of Rs. 1000/-. Loan/advance facility is available under the scheme as per prevailing rules. The rate of interest shall be the appropriate rate prevailing on the date of the deposit for the period Premature payment so selected. Payment before maturity is available as per prevailing rules. 100/. The rate of interest shall be the appropriate rate prevailing on the date of the deposit for the period Premature payment Loans/advance against deposit so selected.
Khazaana deposit scheme
Khazaana deposit scheme offers you the double benefits of easy liquidity and high returns. minimum period of 30 days and upto a maximum of 120 months. 100/-.Money multiplier deposit certificate
The interest accrued gets added back to the principal giving you an effective interest rate that is higher than the contracted interest rate. Amount of deposit Period of deposit Rate of interest minimum amount of Rs.and multiplies of Rs. minimum period of 6 months and upto a maximum of 120 months. You will be permitted to withdraw upto a
. 5000/.and multiplies of Rs.
Amount of deposit Period of deposit Rate of interest minimum amount of Rs. 1000/-. Loan/advance facility is available under the scheme as per prevailing rules. Loan/advance facility is available under the scheme as per prevailing rules. 5000/.and multiplies of Rs. without affecting the principal amount. The rate of interest shall be the appropriate rate prevailing on the date of the deposit for the period Premature payment Loans/advance against deposit so selected. Amount of deposit Period of deposit Rate of interest minimum amount of Rs.and multiplies of Rs.
Quarterly interest deposit receipt
QIDR provides you quarterly interest without affecting the principal amount.
Monthly interest deposit receipt
The MIDR scheme provides you with monthly interest earnings. The rate of interest shall be the appropriate rate
. open an account for periods ranging from 12 months to 120 months. Payment before maturity is available as per prevailing rules. open an account for periods ranging from 12 months to 120 months. 1000/-. 5000/.maximum of 10 times during the entire period of Loans/advance against deposit deposit.
prevailing on the date of the deposit for the period Premature payment Loans/advance against deposit so selected. Payment before maturity is available as per prevailing rules.
Centrals flexi yield deposit scheme
Under this scheme depositors can avail floating rate of interest. Loan/advance facility is available under the scheme as per prevailing rules. The rate of interest shall be the appropriate rate prevailing on the date of the deposit for the period Premature payment so selected. Loan/advance facility is available under the scheme as per prevailing rules. In case the deposit will be treated as normal deposit and interest will be paid as per our prevailing rates Loans/advance against deposit applicable to normal deposits. Amount of deposit Period of deposit Rate of interest Single deposit of Rs. which is higher than the interest rate on normal term deposits. 1 lac and above. One year and above and upto a maximum of 10 years.
Maximum Rs./private sector) 2) Others have regular and known sources of income. when installments Rate of interest Processing charges Repayment are received from salary.
Objective To provide finance to small and medium traders. Our loans enrich life and enhance lifestyles.
Facility & purpose Eligibility You can avail of the term loan facility at all branches for purchase of consumer durables. 85% of the cost of two wheelers and other Security consumer durables. 10 lacs. Hypothecation of articles/vehicles purchased out of loan.You can avail of easy and convenient loan offers for purposes ranging from housing finance to higher education to purchase of computer. PLR + 2% 1% of the loan amount.100/-. two wheelers and four wheelers.
. 80% of the cost of four wheelers.2 lacs. 36 to 84 equated monthly installments (EMIs). In case f salaried employees. applicant should be income Quantum of loan tax assessee. Maximum Rs. 1) Permanently employed persons (govt. Minimum Rs. 3) For four wheelers.
2 lacs – Rs. 25000 Nil Above Rs. Upto Rs. 2 lacs – PLR Over Rs. Upto Rs.Rs. To meet any personal/domestic expenses of the borrower. Cash credit.Rs.M.2lacs . 5 lacs –PLR + 4% 1) Hypothecation of stocks. Ten times of gross salary subject to a maximum of Rs.1 lac . 500/Above Rs. Rs.Rs.25000 to Rs. Minimum 25% on stocks.5 lacs . 2) E. 5 lacs per borrower.2500/-
Personal Loan – To Employees Of Corporate Clients
Eligibility Purpose Quantum of loan Rate of interest Mode of repayment Processing charges Permanent employees of large corporate clients.2 lacs and upto Rs. PLR + 4% 36 months commencing
monthly after the
instalments month of
.Implemented by Nature of facility Eligibility Maximum limit Margin Rate of interest Security Processing fees
Semi-urban and & urban branches. 1 lac.250/Above Rs 1 lac – Rs. 1% of the loan amount. of land and building. Small and medium traders including retailers and distributors.
per month Quantum of loan Security or more. 20 times net monthly income subject to minimum amount of Rs. Residential house/flat.Cent mortgage
Facility & purpose Eligibility Target group Term loan facility to meet any sort of personal or business expenses.
. Individual singly or jointly. 10 lacs. The property value should be equal to 200% of the loan Insurance amount. traders. flood. by the borrower with usual bank clause for the full Rate of interest Processing charges Repayment value of the property. riots and wherever required against earthquake. professionals or self employed persons etc. 10000/. PLR + 4% 1% of the loan amount. having known sources of net income of Rs. commercial or industrial property situated in metro/urban/semi-urban centers only in the name and possession of the borrower. businessmen. lightning etc. The property will be insured against fire.1.00 lac and maximum of Rs. Loan against mortgage of property situated in metro/urban/semi-urban areas. Advance Cheque signed by the borrower for repaying monthly instalments along with letter of deposit will be obtained.
1000000 upto Rs.00 lacs . Traders/retailers/distributors/commission agents/arhatiyas. 100000
.PLR Over Rs.Cent trade
Facility & purpose Eligibility/Target group Quantum of loan Overdraft limit for business requirements. Copies of sales tax returns. 2.Rs. Upto Rs. 25000 upto Rs. 1000000 2500/Above Rs. 25000 250/Above Rs.00 lacs . 100000 upto Rs. . 200000 upto Rs. .Nil . Financial statements. . 2.2000000 Required details 5000/Application form.Rs. Equitable mortgage of property situated in metro/urban/semi-urban with market value of 200% of overdraft limit and in the name and Insurance Rate of interest possession of the borrower. Copy of sales tax registrations.Rs. 200000 500/Above Rs.PLR + 2% Processing charges Upto Rs. The property will be insured with the usual bank clause for full value of the property.Rs.
Above Rs. .
• CKCC will be provided to any farmer to cater to his short-term credit requirements. particulars of land holding.Credit report from previous bankers/market report. Details of property offered as security with its present valuations. In conformity with the agriculture loan.
Farmers having good track record for past 2
years with our bank as a borrower or depositor and not being defaulter to any credit institution would be considered.
Central kisan credit card
Objectives Loan for farmers on the basis of their holdings for purchasing agricultural inputs including cash Eligibility withdrawals for their production needs. Same rate of interest as are applicable to crop loans and activities allied to agriculture.
CKCC will be issued to farmers in the form
of card-cum-passbook incorporating the name.
. validity period which will serve both as an identity card as well as facilitate recording of Security margin Rate of interest transactions on an ongoing basis. address. borrowing limit.
central card with prior approval/authorization from our system. untapped market segments that previously did not have access to traditional bank card payment products. now accept central card. Internet transactions can also be made through Group Accident Insurance Scheme coverage upto Rs.Central card
It is a unique credit card offering you innumerable facilities & convenience. airlines. Facilities offered by central card:
Our domestic card is accepted all over India and Nepal having more than All retail outlets.
Central Card Electronic
Central card electronic is a new “entry level credit product” for the emerging. Indian railways. departmental stores and grocery stores etc.
Mail order/telephone order.
110000 merchant outlets. restaurants. petrol pumps. 1 lakh. nursing homes. It offers you the freedom to spend at a large number of member establishments. Features:
It is designed for use only at electronic terminals.
hotels. Acceptance at non-
terminalised merchants is not allowed.
p.at all the There is no fear spending over the limit. as only transactions within the Cash withdrawal limit: -Rs. There is zero lost card liability. Globally accepted at merchant establishments displaying the maestro/cirrus
branches of CBI. The card is issued/renewed every two years.Domestic card . -Rs. 400/.
available limits would be authorized.Global card
• • • •
Fees and charges: There is no joining fee. 5000/. Completely safe and secure PIN based card. 24-hour customer call centers are available on India.
. You will get free accident insurance cover upto Rs.p. A nominal fee of Rs.is charged every year in advance. 100000/You will get free lost card insurance cover to the extent of credit limit.is charged for a photo card. 15000/.• • • • • • •
Account information is printed and not embossed on the card. 2500/.m. You will be allowed cheque encashment facility. 50/. An annual fee of Rs. Card will be replaced in seven days.
. upto Rs.m.
• • •
Direct online debit to your savings or current account.
private and joint sector Cos. Existing partnership firms Existing proprietorship firms Individuals & institutions Better cash management Regular computerized MIS/reports Instant liquidity Faster and higher turnover Higher income and profitability
Benefits to customers:
• • • • •
. Itemized billing on your statement/passbook. Replacement card. 6 for balance enquiry
Fees & charges:
Cash Management Services
Who can avail cash management services?
• • • • •
Corporate Public.• • • •
24-hour customer call centers available in India. There is no transaction charge at the ATMs of CBI. * Rs. Transaction charges are levied only at non-central bank maestro. 30 for cash withdrawal * Rs. Zero lost card liability.
leading nationalized banks.25/. 5000/-. Rs. Rs.Rs.per Rs. 100/-. Issued free of charge and payable at par.and Rs. They are encashable at par at all the branches of central bank and other They are valid till encashed. Rs. 500/-.
This chapter contains the information about the objectives of the study and the information upon which the study for the purpose of project is conducted and the limitations faced therein. at all the branches of central bank.
101/-.51/. They are available in denominations of Rs.and Rs.
Central bank gift cheques are ideal gifts for all occasions. 2500/.
Central bank’s travelers’ cheque are available in denominations of Rs. 1000/-. 1/.
. 11/-. Charges Rs.
. The researcher has tried to represents the concept of different sources of Incomes & Investments analysis in this project. articles. papers and the annual report of the bank and through web sites.OBJECTIVES OF THE STUDY
The objectives of the study are based on the concept of Income & Investment Sources. To discuss about the role of Central Bank of India in banking field. The various objectives are discussed as under:
To understand the issue of Income & Investment Sources as practiced by the bank. SECONDARY DATA: The secondary data has been collected from the various books. To know about the benefits of investments to the bank. study the following sources are used: PRIMARY SOURCE: The primary data has been based on the response received from bank manager. To know about the different sources Incomes & Investment of the bank. bank staff related to the Income & Investment Sources.
SOURCES OF DATA COLLECTION
To collect the data for the purpose of the project.
CHAPTER 1 – Introduction Of Central Bank Of India CHAPTER 2 – Products Of Central Bank Of India CHAPTER 3 – Database & Methodology CHAPTER 4 – Innovations In Banking Products CHAPTER 5 – Innovations In Banking Branches CHAPTER 6 – Summary. investment sources.
. The limitations are: First of all main problem is that no any bank was ready to give training.MAIN EMPHASIS OF STUDY:
In this project report the study revealed about Income & Investment Sources of Central Bank of India consisting of income sources. Findings & Suggestions
PRESENTATION OF PROJECT
For the purpose of presentation of the study the following ways have been adopted. The presentations are through: Bar graphs Tables Diagrams
LIMITATIONS OF THE STUDY
During the study work a number of limitations have been arisen which are acknowledged here under.
The respondents whose opinions are analyzed are not willing to disclose the quantum of information they have. So the study cannot be generalized.
. The information that is collected in project report is not adequate.
Due to shorter span of time and resources less information has been considered to analysis the concept of Income & Investment Sources.
E-banking means. payments. computer or magnetic tape to conduct various transactions like cash receipts. to remain isolated from what is happening around. which lead to reduction in cost. efficiency and customer convenience. The growth of e-commerce and Internet has transformed the world into the GLOBAL VILLAGE. developed. Fast development in electronic technology has concerned the computers to take over the bank counters and to convert brick banking into electronic banking. rising consumer expectations and shrinking margins of banks.This chapter contains the different innovations in banking products such as EBanking.”
. Usage of technology by banks is due to challenge of competition. Credit Cards. transfer of funds etc. Internet Banking. “application of electronic technology towards transfer of funds through an electronic terminal.
With the trend of globalization all over the world. Mobile Banking. and enhancement of productivity. it is difficult for any nation whether big or small. ATM. Debit Cards.
Process of E-Banking/ procedure of E-Banking
E-Banking process can be explained with the help of following diagram and explanation as under:
. Customer can perform various banking transactions such as balance enquires.
Features of e banking:
Anywhere any time banking: customers can avail banking facility while sitting at their home/office. from one account to another. using the Internet. Globalization of service: E-Banking has a special feature of globalising bank’s services all over.It is often known as banking on net. Promptness: Another feature of E-Commerce is provides promptness in services. transfer money between accounts. but it’s all done electronically. With the advent of e banking. personal computers or even through mobile phones. and transaction histories. customers are benefited by unlimited accessibility through the network of Automated Teller Machines. It does not involve any physical exchange of money. without having to step to office of the branch. Intense competition: E-Commerce is a product of handling intense competition among various banks. Cash less banking: E-Commerce also provides feature of cash less banking as cash is not require in raw form but electronic cash like debit or credit cards may serve the purpose.
. If all security measures are completed then the transaction is approved accordingly. then processing of information will start on the web. In this step. As soon as password is approved on the server. credit card number will be demanded for online transaction. Next step follows verification of user ID and password by the website server.Log on to website
Verification Of password
Credit Card request
Processing Of information
To make the use of E-Banking user has to go to the World Wide Web and log on to the website.
Advantages of E-Banking:
Importance of E-Banking can be explained from four aspects: Advantages
To banks I. ledger including the use of calculator. Reduction in frauds and misappropriations: Through EBanking frauds and misappropriations can be reduced as inter branch reconciliation is possible through internet.
Benefits to customers
II. Good customer relationship: E-Banking helps in attracting and retaining the customer by properly handling their grievances.
To cust omer Benefits to banks
To Govt. Reduction in paper work: E-Banking helps in eliminating endless paper based bank statements. spreadsheets.e. Global coverage: E-Banking provides global network coverage of bank’s services i. bulky books of accounts.
To merchant Trader
Reduction in cost: E-Banking is helpful to banks by reducing the cost of various transactions as compared to traditional cost by way of ATM’s Telephone banking. through the concept of ‘Anywhere Anytime Banking’.
IV. Saving in time: With the help of E-banking there is no need for bank customers to stand in queue for hours to complete financial transactions. Risk of carrying cash: E-Banking provides the facility of cash less banking which helps in growth of economy.
III. Benefits to government
Transparency in transactions: E-Banking provides transparency in transactions i. Global market: With the help of E-Banking products of our country will get global market to be popularized properly. Anywhere banking: customers can avail any sort of banking services from anywhere around the globe from sitting at anyplace. access to information is possible easily.e. Benefits to merchant traders
Promotion of business: with the help of E-Banking business of merchants traders will be promoted because of increased purchasing power of credit holder. Anytime banking: E-banking provides 24 hours. 365 days services to customers. Prompt services: Customer can avail the services of details regarding their accounts and transactional details instantly. On line purchase: Customer can buy product of bank or invest in any scheme without actually insisting the bank branch but only through online.
Wrong assumption by people: Many people are away from net banking on the assumption that it is more expensive than the traditional method of dealing with bank transactions. They still prefer going to bank to perform transactions. which involves high cost.
Types of E-Banking services
. Immediate settlement: E-Banking helps settlement. In India.
Limitations of E Banking:
Problems of security: Security and privacy aspects are major issue in case of E-Banking transaction. and payment of cash is possible by the customer. Lack of computerization: Lack of computerization and low density of telephone lines is also a bottleneck for online banking. Various sites are not properly locked at to ensure weather customer’s money is safe in cyber world or not. The banks not only have to automate front-end services but also back office services. out of 65000 bank branches. High cost: The infrastructural cost of providing E-Banking facility is very high. Lack of awareness: Another great hindrance is lack of awareness because effective and wide media efforts in publishing Internet banking need to be emphasized. only 5000 branches are computerized. Avoids risks: it helps merchants bankers also as there is no risk of handling cash.
Routine banking transactions can be performed by just punching a few buttons on the mobile. It helps the user to transact various transactions while remaining at home.Automatic Teller Machine (ATM): ATM facility was started in early 1990’s by foreign banks like HSBC. EFT which involves transfer of funds from bank account of one customer to bank account of another customer electronically. City bank. It needs no
. Mobile Banking: Mobile banking provides customer to access their account on mobile phone screen. For the purpose of withdrawing cash from ATM machine. Credit card is a product with the help of which a customer can avail various facilities or buy products/services without making immediate payment and that payment could be made at later stage of time. which provides more security and reduction in overall cost.e.Electronic Fund Transfer (EFT): E-Banking has given a system of electronically transferring funds . Telephone Banking: Tele banking is another main service provide by ebanking Tele banking is a service where banks get various phone calls during their working hours. Electronic Cheques: E-cheque is a system.i. 6. 3. ATM is made to work 24 Hrs a day.ATM Card E-cheque Mobile Banking Telephone Banking EFT
1. This is done through electronic data interchange (EDI).Credit Cards: Credit card is another facility produced by E-Banking. plastic currency and debit cards are used. 2. 4. 5. E-cheque facilitates on line payment.
. Issue of E-cheque is more familiar in various advanced countries.clearance charges.
which has led to increased competition by few players and product innovations.Introduction:
There are rapid changes in the financial services environment. The mobile banking enables the customers to bank anywhere and at any time.
Banks have noticed and availed the opportunity that exists between banking and mobile telephony.
Issues relating to M-Banking
These wireless devices may give services as hand held PC’s. SMS (short messaging services) and GSM(global system mobile)of mobile can be used for banking transactions. Mobile devices are enabled now days to perform many activities which earlier have been available only as internet services. Recent innovations in tele communications have opened up an additional channel for electronic banking.
Banking is due to its userfriendly interface and range of services it offers. • Requesting for providing bank statement. • Sending account balances every time one makes a withdrawal.
Global system mobile (GSM) is not just about voice communications but also supports wireless personal digital assistant and other devices. Few are mentioned here under: • Balance enquiry can be made. • Market research: Proper understanding of specific market is key in the success of mobile banking. SMS tariffs should be lowered in order to capture the markets and to exploits the potential for commercial transactions over mobile device. Research on available payment methods. Players will have to be creative to make users perceive it as beneficial. which helps in finding out if some one else is using your ATM card. The service offerings in SMS banking are numerous and highly cost saving.
. • Cheque clearance alerts are given to customers. just as it supports telephony. • Requesting countermanding cheque payments (stop cheque) • Chequebook request can be made. user habits and key players is required to be done.• Cost saving: SMS offers revenue opportunities for operators by changing SMS into higher value added applications. • Simple to operate: The success of M. Many services and schemes are being piloted and some are already available.
• The data transmission is very slow. Some non-users of mobile banking perceive it to be complicated due to lack of guidance available. security and user friendly interface its make it easy. • M-banking services are not enough versatile.Limitations /problems in M-Banking:
• Possibility of error is higher than in internet banking. cheaper it simple to use. • M-banking services are risky and not secure trials and pilots are still on World Wide Web to developed enhanced security. There is a great opportunity to exploit the combination of fast growing consumer device the mobile phone with the richness of internet protocols that will surpass a similar revolution imitated by pc related banking M-Banking has a lot to offer banks and to its customers. M Banking is not just a service reserved for international banks but for any financial institution wishing to take it. • The information knowledge available related to M-Banking is not sufficient.
. but its success depend upon of variety of services.
According to the instructions. that contains a unique card number and some security information. City bank. On most modern ATMs. Its function is to receive and dispense cash and to handle routine financial transactions. plastic currency and debit cards are used. the terminal reads the tape data to processes. The account number and credit limit of customers are magnetically embedded on a strip of the tape on the back of card. such as an
. the details are displayed on the screen and by checking a few keys of the keyboard the user can direct the computer to carry out the financial transactions. The operation mechanism is that card is inserted into the ATM. ATM is made to work 24 Hrs a day. This is one of the unattended or unmanned devices usually located on or off the bank’s premises. ATM enables user to perform banking transactions by actually interacting with the human teller. the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard with a chip.Introduction:
ATM facility was started in early 1990’s by foreign banks like HSBC. An automated teller machine (ATM) is a computerized telecommunications device that provides the customers of a financial institution with access to financial transactions in a public space without the need for a human clerk or bank teller. which activates the accounts. For the purpose of withdrawing cash from ATM machine.
Security is provided by the customer entering a personal identification number (PIN).
.expiration date or CVC (CVV).
ATMs are known by various other names including automated banking machine.
. money machine. bank machine.
Working of ATM
Insertion of Card into ATM Transmission of Tape data to Processor Activation of account
Actual Transaction Operation by user
Clicking of keys of keyboard
Display of details on screen
ATM will give various options on the screen like: Balance enquiry Mini statement Deposits Cash withdrawals etc. cash machine. in Portugal). Bancomat (in various countries in Europe and Russia). customers can access their bank accounts in order to make cash withdrawals (or credit card cash advances) and check their account balances as well as purchasing mobile cell phone prepaid credit. and Any Time Money (in India). cashpoint. hole-in-the-wall. Multibanco (after a registered trade mark.Using an ATM.
Banks have launched the operation of accepting payments for utility services like electricity and telephone bills etc. Shepherd-Barron was awarded an OBE in the 2005 New Year's Honours List. United Kingdom on 27 June 1967 by Barclays Bank. Various facilities produced by ATMs: Cash withdrawals Personal identification number (PIN) change On line balance enquiry Transfer of funds between accounts linked to one’s card Request for cheque book Request for account statement
The first mechanical cash dispenser was developed and built by Luther George Simjian and installed in 1939 in New York City by the City Bank of New York. which was installed first in Enfield Town in North London. This instance of the invention is credited to John Shepherd-Barron. the history of ATMs paused for over 25 years. The first person to use the machine was the British variety artist and actor Reg
. but removed after 6 months due to the lack of customer acceptance. Banking on the net is only an extension of the ATM and tele banking services. until De La Rue developed the first electronic ATM. although various other engineers were awarded patents for related technologies at the time. Thereafter.
These worked on various principles including radiation and low-coercivity magnetism that was wiped by the card reader to make fraud more difficult. which was retained by the machine. Diebold 10xx and TABS 9000 series. The machine dispensed pre-packaged envelopes containing ten pounds sterling. All were online and issued a variable amount which was immediately deducted from the account. The idea of a PIN stored on the card was developed by the British engineer James Goodfellow in 1965 In 1968 the networked ATM was pioneered in Dallas. The 2984 CIT (Cash Issuing Terminal) was the first true Cashpoint.K. and NCR 5xxx series. A small number of 2984s were supplied to a USA bank.
.The first ATMs accepted only a single-use token or voucher. Cashpoint is still a registered trademark of Lloyds TSB in the U. similar in function to today's machines. In 1995 the Smithsonian's National Museum of American History recognised Docutel and Wetzel as the inventors of the networked ATM. Texas.Varney. the IBM 2984 was designed at the request of Lloyds Bank. ATMs first came into wide UK use in 1973. Notable historical models of ATMs include the IBM 3624 and 473x series. by Donald Wetzel who was a department head at an automated baggage-handling company called Docutel.
thereby preventing the consumer from racking up debt
. but the countries to which they apply are unspecified):
A consumer who is not credit worthy and may find it difficult or impossible to obtain a credit card can more easily obtain a debit card. allowing him/her to make plastic transactions. have revealed numerous advantages and disadvantages to the consumer and retailer alike. When you pay with a debit card. Advantages are as follows (most of them applying only to a some countries. Debit and check cards. Use of a debit card is limited to the existing funds in the account to which it is linked.Introduction:
Debit cards combine the functions of ATM cards and checks. Many banks issue a combined ATM/debit card that looks just like a credit card and can be used in places where credit cards are accepted. as they have become widespread. The money you spend comes out of your checking account immediately. But don't be mistaken -.they are not credit cards. the money is automatically deducted from your checking account.
Unlike personal checks. late fees. thereby making transactions quicker and less intrusive. merchants generally do not believe that a payment via a debit card may be later dishonored. and even attempted but refused transactions by the merchant (some of which may not even be known by the client). a debit card may be used to obtain cash from an ATM or a PIN-based transaction at no extra charge.as a result of its use. and bypassing the requirement to pay a credit card bill at a later date. debit cards are accepted by merchants with less identification and scrutiny than personal checks. Unlike a credit card. which charges higher fees and interest rates when a cash advance is obtained. Like credit cards. Check cards debit funds from the user's account on the spot.
For most transactions. payee name.
The Debit card has many disadvantages as opposed to cash or credit:
Some banks are now charging over-limit fees or non-sufficient funds fees based upon pre-authorizations. thereby finalizing the transaction at the time of purchase. or to write an insecure check containing the account holder's personal information. without agreement as to date. Many merchants mistakenly believe that amounts owed can be "taken" from a customer's account after a debit card (or number) has been presented. amount and
. or fees exclusive to credit cards. or being charged interest. a check card can be used to avoid check writing altogether. other than a foreign ATM fee.
whereas with a credit card. and rejected transactions by some banks. and the consumer will have no recourse. and theft using a signature-based credit transation is equally easy as theft using a signature-based debit transaction. over-the-limit. In many places. When a transaction is made using a credit card. The consumer also has a much shorter time (usually just two days) to report such fraud to the bank in order to be eligible for such a waiver with a debit card.
In some unspecified countries. A thief who obtains or clones a debit card along with its PIN may be able to clean out the consumer's bank account. debit cards offer lower levels of security protection than credit cards. theft of users' PIN codes using skimming devices van be equally easily accomplished with a debit transaction PIN input. amounts not available causing further rejections or overdrafts. and therefore. which is often waived by the bank. the bank's money is being spent. the consumer may be held liable for hundreds of dollars in fraudulent debit transactions. While the holder of a credit card is legally responsible for only a minimal amount of a fraudulent transaction made with a credit card. the bank has a vested interest in claiming its money where there is fraud or a dispute.currency. The bank may fight to void the charges of a consumer who is dissatisfied with a purchase. Theft of the users PIN using skimming devices can be accomplished much easier with a PIN input than with a signature-based credit transaction. as with a credit transation PIN input. However. this time may be up to 60 days. thus causing penalty fees for overdrafts. or who has
. laws protect the consumer from fraud a lot less than with a credit card.
will verify the creditworthiness of the renter using a debit cardThere are currently two ways that debit card transactions are processed: online debit (also known as PIN debit) and offline debit (also known as signature debit). In some unspecified countries. the bank may place a hold on funds much greater than the actual purchase for a fixed period of time. However.otherwise been treated unfairly by the merchant. Until the hold is released. or may be paid at the expense of an overdraft fee if the account lacks any additional funds to pay those items. While debit cards bearing the logo of a major credit card are accepted for virtually all transactions where an equivalent credit card is taken. while other cards are enabled for both kinds of transactions. the consumer has spent his/her own money. car rental agencies require an actual credit card to be used. including checks. or car rental. this isn't the case in other countries. In some countries including the United States and Australia. such as Sweden. is at car rental facilities. But when a debit purchase is made. a major exception (in some unspecified countries only.
In some unspecified coutriesand for certain types of purchases. or at the very least. any other transactions presented to the account. and the bank has little if any motivation to collect the funds. they are often referred to at point of sale as "debit" and "credit" respectively. may be dishonored.
. even though in either case the user's bank account is debited and no credit is involved. lodging.
Some cards are blocked from making either online or offline transactions. such as gasoline.
essentially becoming enhanced automatic teller machine (ATM) cards.
. which alleviates problems with processing lag on transactions that may have been forgotten or not authorized by the owner of the card. such as Canada and Brazil. Overall. the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status.Online debit ("PIN debit" or "debit") Online debit cards require electronic authorization of every transaction and the debits are reflected in the user’s account immediately. Banks in some countries. One difficulty in using online debit cards is the necessity of an electronic authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction. although this is becoming commonplace for all card transactions in many countries. only issue online debit cards.
at the cost of having interest charged. In the case of credit cards.
. It is also different from a charge card (though this name is sometimes used by the public to describe credit cards). A credit card is different from a charge card. the issuer lends money to the consumer (or the user). A credit card is different from a debit card in that it does not remove money from the user's account after every transaction. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. Most credit cards are the same shape and size. which requires the balance to be paid in full each month. In contrast.Introduction:
A credit card is a system of payment named after the small plastic card issued to users of the system. a credit card allows the consumer to 'revolve' their balance. where a charge card requires the balance to be paid in full each month. as specified by the ISO 7810 standard. In contrast.
credit cards allow the consumers to 'revolve' their balance. The cardholder indicates his/her consent to pay. at the cost of having interest charged. When a purchase is made. after which cardholders can use it to make purchases at merchants accepting that card.
. Most credit cards are issued by local banks or credit unions. many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet. Credit cards are issued after an account has been approved by the credit provider. by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a Personal identification number (PIN). the credit card user agrees to pay the card issuer. known as a 'Card/Cardholder Not Present' (CNP) transaction. Also.
Electronic verification systems allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained from a magnetic stripe or chip on the card; the latter system is in the United Kingdom and Ireland commonly known as Chip and PIN, but is more technically an EMV card.
Other variations of verification systems are used by eCommerce merchants to determine if the user's account is valid and able to accept the charge. These will typically involve the cardholder providing additional information, such as the security code printed on the back of the card, or the address of the cardholder. Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect (see Fair Credit Billing Act for details of the US regulations). Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount owed. The credit provider charges interest on the amount owed if the balance is not paid in full (typically at a much higher rate than most other forms of debt). Some financial institutions can arrange for automatic payments to be deducted from the user's bank accounts, thus avoiding late payment altogether as long as the cardholder has sufficient funds.
Interest charges Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid. For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even $1.00 of the
total amount remained unpaid, interest would be charged on the $1,000 from the date of purchase until the payment is received. The credit card may simply serve as a form of revolving credit, or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments. Usually this compartmentalization is the result of special incentive offers from the issuing bank, to encourage balance transfers from cards of other issuers. In the event that several interest rates apply to various balance segments, payment allocation is generally at the discretion of the issuing bank, and payments will therefore usually be allocated towards the lowest rate balances until paid in full before any money is paid towards higher rate balances. Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card or any other credit instrument, or even if the issuing bank decides to raise its revenue.
Advantages: The main advantages are as follows:
Benefits to customers:
Because of intense competition in the credit card industry, credit card providers often offer incentives such as frequent flyer points, gift certificates, or cash back (typically up to 1 percent based on total purchases) to try to attract customers to their programs. Low interest credit cards or even 0% interest credit cards are available. The only downside to consumers is that the period of low interest credit cards is limited to a fixed term, usually between 6 and 12 months after which a higher rate is charged. However, services are available which alert credit card holders when their low interest period is due to expire. Most such services charge a monthly or annual fee.
A credit card's grace period is the time the customer has to pay the balance before interest is charged to the balance. Grace periods vary, but usually range from 20 to 40 days depending on the type of credit card and the issuing bank. Some policies allow for reinstatement after certain conditions are met.
because the issuing bank commits to pay the merchant the moment the transaction is authorized. a credit card transaction is often more secure than other forms of payment. because they discourage theft by the merchant's employees and reduce the amount of cash on the premises. if a customer is late paying the balance. In most cases. with most credit cards there is no grace period if there is any outstanding balance from the previous billing cycle or statement (i. cards are even more secure than cash. each merchant had to evaluate each customer's credit history before extending credit. Prior to credit cards. excluding new transactions. However. Finance charges incurred depend on the grace period and balance. such as checks.Usually. regardless of whether the consumer defaults on the credit card payment (except for legitimate disputes. which are discussed below. there are some credit cards that will only apply finance charge on the previous or old balance.
Benefits to merchants
An example of street markets accepting credit cards For merchants. finance charges will be calculated and the grace period does not apply. That task is now performed by the banks which assume the credit risk. interest is applied on both the previous balance and new transactions). and can result in charges back to the merchant).
The commission is often a percentage of the transaction amount. the bank charges the merchant a commission (discount fee) for this service and there may be a certain delay before the agreed payment is received by the merchant. American Express. plus a fixed fee.For each purchase. American Express and Discover were previously the only card-issuing banks for their respective brands.
Cardholder: The holder of the card used to make a purchase. This bank bills the consumer for repayment and bears the risk that the card is used fraudulently. but as of 2007. the consumer. etc. MasterCard. Independent sales organization: Resellers (to merchants) of the services of the acquiring bank. Card-issuing bank: The financial institution or other organization that issued the credit card to the cardholder.
. Credit Card association: An association of card-issuing banks such as Visa. but in general is the organization that the merchant deals with. and acquiring banks. card-issuing banks. that set transaction terms for merchants. Discover. this is no longer the case. Merchant: The individual or business accepting credit card payments for products or services sold to the cardholder Acquiring bank: The financial institution accepting payment for the products or services on behalf of the merchant. Merchant account: This could refer to the acquiring bank or the independent sales organization.
Features: As well as convenient.
. and other perks (such as rewards schemes in which points earned by purchasing goods with the card can be redeemed for further goods and services or credit card cashback). Credit cards are accepted worldwide. Nabanco. and VisaNet. Nova. Omaha. Transaction processing networks include: Cardnet. and one company may operate multiple networks. charities. which is necessary for both monitoring personal expenditures and the tracking of work-related expenses for taxation and reimbursement purposes. May be operated by an independent company. accessible credit. Paymentech. credit cards offer consumers an easy way to track expenses. NDC Atlanta. and major retailers. Examples of typical affinity partners are sports teams.•
Transaction network: The system that implements the mechanics of the electronic transactions.
The flow of information and money between these parties — always through the card associations — is known as the interchange. professional organizations. universities. repayment arrangement. and get paid a fee or a percentage of the balance for each card issued using their name. Concord EFSnet. TSYS. Affinity partner: Some institutions lend their names to an issuer to attract customers that have a strong relationship with that institution. and are available with a large variety of credit limits.
combining credit card and debit card properties. systems with security holes are usually the result of poor implementations of card acquisition by merchants. but to "reduce it to manageable levels". For example. a website that uses SSL to encrypt card numbers from a client may simply email the number from the webserver to someone who manually processes the card details at a card terminal. the United Kingdom. The low security of the credit card system presents countless opportunities for fraud. limit the amount for which a consumer can be held liable due to fraudulent transactions as a result of a consumer's credit card being lost or stolen. The 3 by 5 mm security chip embedded in the card is shown enlarged in the inset. Naturally. This implies that high-cost low-return fraud prevention measures will not be used if their cost exceeds the potential gains from fraud reduction. and France. The contact pads on the card enable electronic access to the chip. the simplest being copying information from retailers. such as the United States. either online or offline. which are generally used quickly before the cards are reported stolen. Most internet fraud is done through the use of stolen credit card information which is obtained in many ways. Despite efforts to improve security for remote purchases using credit cards. The goal of the credit card companies is not to eliminate fraud.
A smart card. anywhere
.Some countries. This opportunity has created a huge black market in stolen credit card numbers.
card details become human-readable before being processed at the acquiring bank. a security risk is created.
.... credit union or building society. online statements. check links. but traditionally also have some that are application specific.EBPP Funds transfer between a customer's own checking and savings accounts. and applications. cobrowsing. or to another customer's account Investment purchase or sale Loan applications and transactions.g.. such as repayments
o o •
Online banking solutions have many features and capabilities in common. The common features fall broadly into several categories
Transactional (e. performing a financial transaction such as an account to account transfer. new account.features allowing the hosting company to administer the solution across financial institutions
.g. etc. paying a bill.Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank.features allowing the financial institution to manage the online experience of their end users ASP/Hosting Administration . wire transfer.. apply for a loan.)
Electronic bill presentment and payment . chat)
Financial Institution Administration .
as is the case in most secure Internet shopping sites. The Keys for the signature generation and encryption
. Signature based online banking where all transactions are signed and encrypted digitally. TANs can be distributed in different ways. is not considered secure enough for personal online banking applications in some countries. Usually online banking with PIN/TAN is done via a web browser using SSL secured connections. the most popular one is to send a list of TANs to the online banking user by postal letter. The most secure way of using TANs is to generate them by need using a security token. stored in the security token (this is called two-factor authentication or 2FA). used for the login and TANs representing one-time passwords to authenticate transactions. so that there is no additional encryption needed. Basically there exist two different security methods for online banking. These token generated TANs depend on the time and a unique secret.
The PIN/TAN system where the PIN represents a password.Security token devices
Protection through single password authentication.
Cross-site scripting and keylogger/Trojan horses can also be used to steal login information. compiled from suspicious activity reports banks file quarterly. A recent FDIC Technology Incident Report.
. the source of the intrusion is unknown but it occurred during online banking.
There exist several countermeasures which try to avoid attacks. the use of class-3 card readers is a measure to avoid manipulation of transactions by the software in signature based online banking variants. users should use virus scanners and be careful with downloaded software or e-mail attachments.can be stored on smartcards or any memory medium.
Most of the attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. depending on the concrete implementation. lists 536 cases of computer intrusion. Digital certificates are used against phishing and pharming. In 80 percent of the cases. the report states. That adds up to a nearly $16-million loss in the second quarter of 2007.000. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. Two well known examples for those attacks are phishing and pharming. To protect their systems against Trojan horses. with an average loss per incident of $30.
development financing and related activities subject to compliance of statutory and other requirements prescribed by RBI. As per universal banking financial institutions and banks are allowed to undertake all kinds of activities of banking.
. agriculture etc.
Meaning: Universal banking is a multipurpose and multi functional
financial superstore providing both banking and financial services.Khan committee had recommended the concept of universal banking. offshore banking. and related legal acts. Govt. industries. retail banking. A universal bank may undertake multifarious services under one roof.This
Universal banking. R.H. Under the universal banking system the banks do broad based and comprehensive activities. which includes: a) Receiving money on current or deposit accounts and lending of money for trade. and wholesale banking.
Introduction: Universal banking is bank engaged in diverse kind of
banking activities. exports.
credit/debit cards. collection of cheque/bills etc. Therefore in universal banking under one roof. To offer world-class financial services to the clients by using information technology and cross selling. asset securitisation. insurance depository service.b) Mortgage financing.
. other financial services. factory etc. corporate can get loans and avail. To compete with international banks by expanding business beyond the national boundaries. leasing. To take benefit of economies of scale. merchant banking (brokerage. The few objectives of universal banking are as follows: To help in bringing harmony in the role of financial institutions and banks. c) Remittance of funds. project financing infrastructure lending. To increase per customer revenue. d) Corporate advisory services. underwriting new debt and equity shares) foreign exchange operations. To reduce per customer cost. while individuals can bank and borrow. custodial services.
Composition of board: The section 10(A) of B. To the organization: When a bank diversifies its activities as a universal bank it can use its existing expertise in one type of financial service in providing the other types.
Benefits of universal banking
The benefits of universal banking are as follows: Benefits To Organization To Customers To Shareholders
1. it entails less cost in performing all the functions by one entity instead of separate specialized bodies.Act 1949. is presently undertaken by financial institution.
. Act 1949 requires that at least 51% of that total number of directors should have special knowledge and experience.According to RBI guidelines of April 2001. which is not permissible for a bank under section 6(1) of B.R. So. A bank possesses information on the risk characteristics of its clients. financial institutions have an option to convert into a bank provided they ensure compliance with following provisions. This provision has to be complied with constituting the board after transformation from financial institution to a bank. Permissible activities: In case an activity.R. Reserve provisions (CRR/SLR): A financial institution will have to comply with CRR and SLR provisions after its conversion into a universal banking. such activity will have to be stopped after its conversion into a universal banking. which it can use to pursue other activities with the same clients.
When a lender has a stake in the firm he is in a better position to monitor the firm to safeguard his interest. e. This situation is beneficial from investor’s point of view. 3. This way a big bank can reach the remotest client without having to recourse to an agent. b. which sends a good signal about the financial health the firm to the investors. including the banks themselves. appropriate regulation can be devised. in case of project lending to the same firm which has purchased insurance from the bank. A bank can use its instruments in one activity to exploit the other. e.A bank has an existing network of branches.g. The wide range of financial products and services offered by universal banks are preferred by the customers than the specialized banks due to comprehensive service provided by these banks.
. To the customers: Universal banking being a one-stop shops for all varied services. which will ultimately benefit all the participants in the market. To the shareholders: One manifestation of universal banking is a bank holding stakes in a firm. which can acts as shops for selling products like insurance. The main
drawbacks are that:
a. insurance and lending.g. Problem of the bank indulging in too many risky activities. To account for this. Many financial services are interlinked activities. some a lot of transaction costs and increases the speed of economic activity. 2. Universal banking leads to a loss in economies of specialization. All these benefits have to be weighed out against the problems.
too a lot of opportunities are there to be exploited.In spite of these problems. there is a lot of interest expressed by banks and financial institutions in universal banking. Banks mainly the financial institutions are aware of it. and most of the groups have plans to diversify in big way. Even though there might not be profits forthcoming in the short run due to the switching costs incurred in moving to a new business.
. In India.
financial and legal advantages. which govern the branches of foreign banks. These banks are not subject to domestic monetary and fiscal regulations. are: • Deposit taking • Project financing • Syndication of loans • Issuing short-term instruments like negotiable certificates to deposits. Services/functions The important functions or financial services.Introduction: offshore banking refers to the banking business related to
borrowing and lending funds abroad and meeting the special needs of international investors. Rather they are situated in a low tax jurisdiction that provides. These advantages may include strong privacy. Moreover offshore banks are also exempted from the regulations. which offshore banking units can provide. low or no taxation protection against local political or financial instability. • Electronic funds transfer • Foreign exchange
. An offshore bank is a bank located outside the resident country of the depositor. • Carry merchant banking activities in foreign currency denominated bonds.
Banks try to polarize between retail services (which are low cost) and private banking (which tries to bring personalized suite of services to the client).
The main advantages of offshore banking are: Advantages
Economic And Political Stability
Payment of Higher Interest Rates
Special Banking Services
Development Of nation/ Remote areas
.• Letter of credit and trade finance • Investment management and investment custody • Trustee services • Corporate administration Although every bank does not provide each service.
Although. and who fear their assets may be seized or disappear. higher or lower rate loans based on risk and investment opportunities. developed economies with regulated banking system offer same advantages in terms of stability. Disadvantages There are some limitations of offshore banking are as follows:
Payment of higher interest rates: Some of these banks which function at a
lower cost base provide higher interest rates than the legal rates prevailing in their home countries due to lack of government intervention and lower overheads. or who do not pay tax until the tax return is agreed.
Economic and political stability: Offshore banking provides economically
politically stable jurisdictions especially for those resident in areas where there is a risk of political turmoil. This acts as a benefit for individuals who do not pay tax on worldwide income.
Development of remote areas/nation: offshore banking helps even
geographically remote nations to generate investment and create growth in their economies.
Tax benefits: Generally the interest paid by offshore banks is without tax
Special banking services: Certain offshore banks offer special banking
services not offered else where such as anonymous bank accounts.
Developing countries may face financial disturbance: sometimes
developing countries may face problem due to speed at which money can be transferred in and out of their economy. After September 11. by phone or by mail.
Encourages tax evasion: Offshore banks encourages tax evasion by giving Difficult physical access: As offshore banks are often remotely situated
people seeking tax evasion an attractive place to deposit their hidden income. This “hot money” coming from offshore accounts can be definitely increase problems of financial and economic disturbance in developing countries. Access to information can be difficult. however in a global tele communication networks this does not seen to be a big problem as information can be set up on line.Disadvantages
Involved in Crime
Encourages Tax evasion
Difficult Physical access
Involved in crime: Off shore banking has been found associated with the
underground economy and organized crime through money lending.2001 these banks have been accused of helping various organized crime gangs. terrorist groups.
therefore the physical access is difficult.
Given the rising purchasing power of this class. which is mainly focused towards personal sector. branch internet) Multiple customer groups (consumer. there is huge untapped potential for business. It encompasses all institutions that provide a related range of banking services—money deposit. for mobilization and development of their funds.Introduction: The coming up of middle class with substantial purchasing power in India during the last decade has given rise to its desire to spend according to the changing life style. It represents any banking. credit services and some form of financial advice. credit cards. insurance. a ready market.
. Meaning: Retail banking is activity devised in past few years and now used extensively. investment) Multiple channels of distribution (call center. It includes any business that is conducted through branch network. which is not wholesale based. Retail banking today is characterized by three areas: Multiple products (deposits. small business) Need for retail banking Economic prosperity and the consequent increase in the purchasing power of consumer. This has offered the Indian banking system.
Other products Besides there are a number of value added services such as free collection of outstation instrument. declining bank rate leading to decline in spreads unattractive yields on government securities etc. waiver of fee on credit cards and utility services such as payment of water.
Segments in retail banking:
There are three segments in retail banking which included: a. travel abroad) c. frequent reduction in cash reserve ratio resulting in pumping in of liquidity. electricity and phone bills. Decline in interest rates have also contributed to increase retail banking. Loan products (such as housing loans. credit cards and educational loans. Deposit products (convenient deposit schemes such as flexi deposits) b. personal loans for diverse purposes such as medical expenses.
. have all forced banks to be in search of alternative opportunity to deploy their funds. issue of free ATM cards. With the large corporate borrowers having diversified the sources to fund their financial requirements. Technological factors also added to the requirement convenience of using credit cards. concession in service fee in case of remittances. conveyance loans. Retail banking refers to housing loans for purchasing durables. auto loans. Developments in retail banking in India: Commercial banks in India are involving more and more in retail banking as it is now an attractive market segment having lot of opportunities for growth and profit. internet and phone banking anywhere and any time banking has also flood customers into banking. education loans.
The speed of growth of retail banking can be accelerated by growth in banking technology and automation of banking processes.The loan values can average between Rs. innovation. Banks can now use retail as growth trigger.
.1 crore. Although the retail banking offers phenomenal opportunities for growth and profits but how far it is able to lead to growth will depend on the capacity of banks to meet these opportunities profitably. This requires product differentiation.20000 to Rs. product pricing technological up gradation. These loans are of period of 5 to 7 years. There is need for constant innovation to revalidate and upgrade existing internal systems. cost reduction and cross selling. with an exception of housing loan being granted up to 15 years.
and stockbrokers.Wholesale banking is the provision of services by banks to the like of large corporate clients. which is the provision of banking services to individuals. (Wholesale finance means financial services. Wholesale banking contrasts with retail banking.
. underwriting. In essence. institutional customers (such as pension funds and government entities/agencies). mid-sized companies.) Modern wholesale banks are engaged in: finance wholesaling. mergers and acquisitions. insurers. market making. which are conducted between financial services companies and institutions such as banks. wholesale banking services usually involve high value transactions. fund managers. fund management. consultancy. real estate developers and investors. and services offered to other banks or other financial institutions. international trade finance businesses.
This information is based on the primary and secondary data available from different sources. debit cards. offshore banking.This chapter represents a conclusive review of the efforts made since up till about the different innovations by Central Bank of India in banking sector. wholesale banking. To discuss about the role of Central Bank of India in banking field. which are as follows:
• • • •
To understand the various innovations in banking sector by the bank. FINDINGS The Project work is done on basis of certain objectives. To know about the different products of the bank. The innovations of bank are of two types: innovations in products & innovations in branches Innovations in products includes. universal banking.
. The project report summarizes about the facilities of CBI accounts and deposits and also provides the different products. To know about the benefits of innovations of the bank. ATM. E-banking. Various innovations of the bank provide benefits to the various business and Industries in many different ways. retail banking. credit cards & mobile banking whereas innovations in branches includes.
Bank should open their branches in rural area. Processes are established in such a manner that allows the board of director to compliance with the policies of companies. The study reveals about the different types of innovations of the bank. certain suggestions have to be followed by these banks. So. Indian market will provide for high growth market so bank should make strategies to grab such opportunities. which helps the people in many ways.
. These are as follows: Central bank of India has to provide ATM facility to its customers so that the people can get benefit of this facility and withdraw money at any time at any place with this they would not have to face any problem regarding to money. The study presents the different types of products available in the bank for the help of its customers. which the project reveals by making an analysis of the topic.In the light of these objectives the following are the findings that represent the changing environment of Indian economy in global scenario in the wake of liberalization and globalization. Moreover to making efficient central bank of India. The role of board of directors is properly described. we have already discussed about ATM network in each branch. these are the findings. Central bank of India’s branch network should be wider as. Central bank of India has to improve its disclosure policies so that everyone can get easily all information regarding banking policies and other information related to bank.
com www. Principles of banking by AIBA (All India banking associations)
.com Banking Law and Practice by Sharma publications.com www.wikepeadia.com White papers.www.google.com Value notes.com Banknetindia.central bank of india.com Gahoo yoogle.com www.com Finance biz.lycos. Banking theory and practices by kalyani publishers.