2019

PROJECT REPORT
(SUBMITTED FOR THE DEGREE OF B.COM HONOURS IN ACCOUNTING &
FINANCE UNDER THE UNIVERSITY OF CALCUTTA)

TITLE OF THE PROJECT

ONLINE BANKING-A STUDY WITH REFERENCE TO
STATE BANK OF INDIA

SUBMITTED BY
NAME OF THE CANDIDATE: KARINA CHOUDHARY

REGISTRATION NO: 611-1221-0040-16

ROLL NO. : 1611-51-0009

COLLEGE ROLL NO: 864 1125-51-0113

NAME OF THE COLLEGE: BIDHAN CHANDRA COLLEGE , RISHRA

SUPERVISOR BY

NAME OF THE SUPERVISOR: DR. SUBHAJIT GHOSH

NAME OF THE COLLEGE: BIDHAN CHANDRA COLLEGE

MONTH & YEAR OF SUBMISSION

FEBRUARY,2019

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SUPERVISOR’S CERTIFICATE

This is to certify that KARINA CHOUDHARY a student of a B.Com Honours in

the Accounting & Finance of BIDHAN CHANDRA COLLEGE under the University
of Calcutta has worked under my supervision and guidance for his Project
Report with the title ‘ONLINE BANKING – A STUDY WITH REFERENCE TO STATE
BANK OF INDIA.’

The Project Report, Which He Is Submitting Is His Genuine And Original Work
To The Best Of My Knowledge.

Place: Rishra Signature:

Date: Name: DR. SUBHAJIT GHOSH

Designation: HEAD OF COMMERCE DEPARTMENT

Name of the college: BIDHAN CHANDRA

COLLEGE

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STUDENT’S DECLARATION

I Hereby Declare That The Project Work With The Title ‘ONLINE BANKING-A
STUDY WITH REFERENCE TO STATE BANK OF INDIA’ Submitted By Me For The
Partial Fulfilment Of The Degree Of The B.Com Honours In Accounting &
Finance Under The University Of Calcutta Is My Original Work And Has Not
Been Submitted Earlier To Any Other University /Institution For The Fulfilment
Of The Requirement For Any Course Of Study.

I Also Declare That No Chapter Of This Manuscript In Whole Or In Part Has

Been Incorporated In This Report From Any Earlier Work Done By Others Or By
Me. However, Extracts Of Any Literature Which Has Been Used For This Report
Has Been Duly Acknowledged Providing Details Of Such Literature In The
References.

Place: Rishra Signature:

Date: Name: KARINA CHOUDHARY

Registration No: 611-1221-0040-16

Roll no. 1611-51-0009

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ACKNOWLEDGEMENT

This is KARINA CHOUDHARY most Respectfully Submitting My Project Work

Based On The Topic ‘ONLINE BANKING-A STUDY WITH REFERENCE TO STATE
BANK OF INDIA’ For The Course Of B.Com Honours In Accounting & Finance
Under The Rules And Regulations Of The University Of Calcutta .

I Would Firstly Like To Express My Gratitude Towards Our College “BIDHAN

CHANDRA COLLEGE” Which Has Given Me An Opportunity To Do A Project On
“ONLINE BANKING ” And My Supervisor For Having Shown So Much Flexibility
And Guiding In Such A Way That I Were Really Learning The Subject All The
Time. He Helped Me In Deciding The Project Topic. He Showed A Lot Of
Openness In His Approach And I Would Like To Thank Him For His Support In A
Way That Has Lead To Proper And Effective Learning.

Last But Not The Least I Am Grateful To All My Family Members And Friends
For Being By My Side Always. Without Their Help And Motivation It Would
Have Been Impossible To Complete This Project.

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INDEX
Serial no. chapter PAGE NO.

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INTRODUCTION
1
1.1 DEFINITION
I.2 RELEVANCE
I.3 BRIEF SURVEY OF EXISTING LITERATURE
I.4 PROJECT OBJECTIVE
1.5 DATA SOURCE
1.6 TIME FRAME
1.7 METHODOLOGY
1.8 LIMITATION
1.9 CHAPTER PLANNING

ONLINE BANKING
2
2.1 EVOLUTION OF ONLINE BANKING

2.2VARIOUS FORMS OF ONLINE BANKING

2.3FEATURES OF ONLINE BANKING

2.4ADVANTAGES OF ONLINE BANKING

2.5 DISADVANTAGES OF ONLINE BANKING

NATIONAL AND INTERNATIONAL SCENARIO

3.
3.1NATIONAL SCENARIO

3.2 INTERNATIONAL SCENARIO

ONLINE BANKING IN STATE BANK OF INDIA

4.
4.1 STATE BANK OF INDIA : A BRIEF PROFILE

4.2 HISTORY OF STATE BANK OF INDIA

4.3 CUSTOMER BASE IN SBI

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4.4 ONLINE BANKING IS STATE BANK OF INDIA

CUSTOMER’S PERCEPTION ON ONLINE BANKING

5.
FINDINGS
6.
CONCLUSION & RECOMMENDATION
7.
BIBLIOGRAPHY
8.
QUESTIONNARIES
9.

ABSTRACT
Online Banking Also Known As Internet Banking, E-Banking, Or Virtual Banking,
Is An Electronic Payment System That Enables Customers Of A Bank Or Other
Financial Institution To Conduct A Range Of Financial Transactions Through The
Financial Institution's Website. The Online Banking System Will Typically
Connect To Or Be Part Of The Core Banking System Operated By A Bank And Is
In Contrast To Branch Banking That Was The Traditional Way Customers Access
Banking Services.

Objective Of The Study Is To Get An Overall Idea About Online Banking. The
Study Also Analyses The Online Banking Services Of The State Bank Of India
And Also The Growth Of Online Banking Services Of State Bank Of India. In This
Study, I Have Also Tried To Know The Customers’ Perception Of Online
Banking.

Now-A-Days Online Banking

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Has Gained Immense Popularity Among The Customers In India. Customers
Prefer Online Banking For Saving Their Time And Effort As They Do Not Have To
Stand In Long Queues For Depositing And Withdrawing Their Money,
Transferring Money From One Account To Another Etc. They Can Do All These
Sitting In Their Home With The Help Of Online Banking. Some People Do Use
This Facility As They Find Online Banking Unsafe. It Is Concluded From The
Results Of The Study That The Usage Of ATM, Debit Card, Tele-Banking And
Internet Banking Are Perceived As Important And The Use Of These Services Is
Associated With Socio-Economic And Demographic Characteristics Of The
Respondents. Though, Most Of The Customers Prefer Manual Banking Over E-
Banking, The Customers Tend To Use E-Banking / Internet Banking And
Adoption Of E-Banking And Internet Banking Services Among The Bank
Customers Is Significantly Influenced By The Number Of Times Visiting The
Banks As Well As The Number Of Banking Transactions Per Month.

CHAPTER 1
INTRODUCTION
1.1 ONLINE BANKING: CONCEPT
Online Banking Also Known As Internet Banking, E-Banking, Or Virtual Banking,
Is An Electronic Payment System That Enables Customers Of A Bank Or Other
Financial Institution To Conduct A Range Of Financial Transactions Through The
Financial Institution's Website. The Online Banking System Will Typically
Connect To Or Be Part Of The Core Banking System Operated By A Bank And Is
In Contrast To Branch Banking That Was The Traditional Way Customers Access
Banking Services.

To Access A Financial Institution's Online Banking Facility, A Customer With

Internet Access Would Need To Register With The Institution For The Service,

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And Set Up A Password And Other Credentials For Customer Verification. The
Credentials For Online Banking Is Normally Not The Same As For Telephone Or
Mobile Banking. Financial Institutions Now Routinely Allocate Customers
Numbers, Whether Or Not Customers Have Indicated An Intention To Access
Their Online Banking Facility. Customers' Numbers Are Normally Not The Same
As Account Numbers, Because A Number Of Customer Accounts Can Be Linked
To The One Customer Number. The Customer Number Can Be Linked To Any
Account That The Customer Controls, Such As Cheque, Savings, Loan, Credit
Card And Other Accounts.

The Customer Visits The Financial Institution's Secure Website, And Enters The
Online Banking Facility Using The Customer Number And Credentials Previously
Set Up. The Types Of Financial Transactions Which A Customer May Transact
Through Online Banking Usually Includes Obtaining Account Balances And List
Of Latest Transactions, Electronic Bill Payments, And Funds Transfers Between
A Customer's Or Another's Accounts. Most Also Enable A Customer To
Download Copies Of Statements, Which Can Be Printed At The Customer's
Premises (With Some Banks Charging A Fee For Mailing Hardcopies Of Bank
Statements). Some Banks Also Enable Customers To Download Transactions
Directly Into The Customer's Accounting Software. The Facility May Also Enable
The Customer To Order Cheque-Books, Statements, Report Loss Of Credit
Cards, Stop Payment On A Cheque, Advise Change Of Address, And Other
Routine Transactions.

Traditional Banks Offer Many Services To Their Customers, Including Accepting

Customer Money Deposits, Providing Various Banking Services To Customers,
And Making Loans To Individuals And Companies. Compared With Traditional
Channels Of Offering Banking Services Through Physical Branches, E-Banking
Uses The Internet To Deliver Traditional Banking Services To Their Customers,
Such As Opening Accounts, Transferring Funds, And Electronic Bill Payment.

E-Banking Can Be Offered In Two Main Ways. First, An Existing Bank With
Physical Offices Can Also Establish An Online Site And Offer E-Banking Services
To Its Customers In Addition To The Regular Channel. For Example, Citibank Is
A Leader In E-Banking, Offering Walk-In, Face-To-Face Banking At Its Branches
Throughout Many Parts Of The World As Well As E-Banking Services Through
The World Wide Web. Citibank Customers Can Access Their Bank Accounts
Through The Internet, And In Addition To The Core E-Banking Services Such As
Account Balance Inquiry, Funds Transfer, And Electronic Bill Payment, Citibank
Also Provides Premium Services Including Financial Calculators, Online Stock
Quotes, Brokerage Services, And Insurance.

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Bank Customers' Account And Transaction Information Is Stored In A
Database, A Specialized Software That Can Store And Process Large Amounts
Of Data In High Speed. The Function Of The Web Server Is To Interact With
Online Customers And Deliver Information To Users Through The Internet.
When The Web Server Receives A Request Such As An Account Inquiry From
An Online Customer, It Requires An External Web Application Program To
Process The Request. C, Visual Basic, Vbscript, And Java Are Some Of The
Languages That Can Be Used To Develop Web Application Programs To Process
Customer Requests, Interact With The Database, And Generate Dynamic
Responses. Then, The Web Server Will Forward The Response HTML Files To E-
Banking Customers. Several Banks, Such As Nationsbank, Also Use State-Of-
The-Art Imaging Systems, Allowing Customers To View Images Of Checks And
Invoices Over The Internet.

The Main Purpose That Banks Have Been Serving Since Their Inception Is
Keeping Our Money Safe For Us. Along With Keeping Money Safe They Also Let
Us Earn A Certain Amount Of Interest On The Money Deposited With Them.
Traditional Banks Have Been Doing So And The Internet Banking Continues The
Same Function. The Only Difference Is The Way How They Perform Their
Function.

In Today’s World Computers Play An Important Role In The Way World Exists In
General, And Majority Of The Tasks Could Not Be Completed There Were No
Computers. Internet Banking Have Been Quite A Few Years Now But Has Come
Prominent In The Past Year. Internet Banking Offers An Array Of Different
Advantages To The User, Including Year-To-Date Information, The Ability To
Transfer Money From One Account To The Another And To Pay For Bill
Payments Check History ,Reorders Stop Payments, Check Credit Balances And
Statements Complete Online Loan Applications, Secure Interactive Messages
With Staff And Much More.

1.2 RELEVANCE
 Facilitates Introduction Of New Products And Services Quickly And
Successfully
 Helps To Understand Its Customer Needs
 Greater Customer Loyalty

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 Easy Online Application For All Accounts, Including Personal Loan And
Mortgage
 24 Hours Account Access
 Greater Reach To Customers
 Direct Debit Facility
 E Collection Facilities For:
i. E-Ticketing
ii. E-TAX
iii. Bill Payment
iv. E-Payment
v. Fund Transfer
vi. Third Party Transfer
vii. Demand Draft
viii. Cheque Book Request
ix. Account Statement
x. Transaction Enquiry.

1.3 BRIEF SURVEY OF EXISTING LITERATURE

For Getting An Overall Idea On The Topic Of Study, I Have Gone Through A
Minute Study Of The Available Literature, Both Physical And Virtual I.E, With
The Help Of Books, Journals, Periodicals As Well As Different Relevant Research
Networks And Found Some Relevant Literature, Which Are Presented
Underneath:

RBI, INDIA: Banks Have Traditionally Been In The Forefront Of Harnessing

Technology To Improve Their Products, Services And Efficiency. This Report
Explains The Following Topics Related To Internet Banking. Internet Banking –
A New Medium, International Experience, The Indian Scenario, Types Of Risk
Associated With Internet Banking, Technology And Security Standards For

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Internet Banking, Legal Issues Involved In Internet Banking, Regulatory And
Supervisory Concerns.

Amato-McCoy, D: He Observed That Achieving Consumers Trust Regarding

Transaction Is The Key To Expand E-Banking. Customers Are More Worried
About The Security Of Their Password And ID.

Brodie, R.J. et al: He Studies That Many Of Us, Are Possibly Not Aware Of The
Online Services, Banks Are Offering These Days. With Just A Click, All His Dues
Would Have Been Cleared Long Back. However Its Never Too Late. Indian
Banks Are Trying To Make Our Life Easier. Not Just Bills Payments, You Can
Make Investments, Shop Or Buy Tickets And Plan A Holiday At Your Fingertips.
Currently 78% Of The Bank’s Customers Are Registered For Online Banking
Services.

1.4 PROJECT OBJECTIVES

Objective Of My Study Are-
 To Get An Overall Idea About Online Banking. The Study Also Analysis
The Online Banking Services Of The State Bank Of India And Also The
Growth Of Online Banking Services Of State Bank Of India.
 To Study The Customer’s Perception Of Online Banking.
 To Find Out The Major Issues Faced By The Customers While Doing
Online Banking.

1.5 DATA SOURCE:

PRIMARY DATA:
 Customers Survey Through Questionnaires.
 Visiting Internet Banking Service Website.

SECONDARY DATA:

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 Internet Website

1.6 TIME FRAME

The Study Was Conducted On The State Bank Of India. Data Of 2 Financial
Years I.E, From 2015-16 To 2016-17 Were Considered For The Study. Now A
Days Maximum People Said That They Use The Online Banking For Saving Time
And Use ATM And DEBIT CARD Services Of The Online Banking.

1.7 METHODOLOGY

 NATURE OF DATA

Both Primary As Well As Secondary Data Have Been Used For This Study. For
Getting Primary Data A Small Survey Was Conducted On 46 Customers Of SBI
Mahesh Branch , Serampore. The Customers Were Interviewed For Getting The
Required Information From Them. For Getting Secondary Data, The Bank’s
Website And Different Books, Journals, Magazines And Websites Were
Consulted.

 SCOPE OF THE STUDY

The Study Was Conducted On The State Bank Of India. Data Of 2

Financial Year I.E, From 2015-16 To 2016-17 Were Considered For The
Study.

 TOOLS USED

In this study only the basic tools like charts, graphs, tables etc. were used in
this project.

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1.8 LIMITATIONS

1. SMALL SAMPLE SIZE: The Sample-Size Is Limited To Only 46

Customers Of The Bank Due To Time And Resource Constraints.
2. RESTRICTED TIME HORIZON: The Period Of The Study Is Limited
To Three Years And More Focused Results Could Have Been
Obtained If Longer Period Of Time Were Taken For Consideration.
3. LACK OF DATA: As The Project Work Is Done By A Single Person So
The Data Collection Is Limited. If The Work Could Have Been Done
In Group The Data Could Be Collected More Easily. As I Am A
Student The Customers Of The Certain Bank Did Not Want To
Share Their View In My Survey. It Is A Big Difficulty Which I Faced
In My Survey.
4. USED 46 CUSTOMER IN PROJECT: I Have Done Project Of SBI
Branch Only And I Have Survey Its Detail And Forty-Six Customer
Of State Bank Of India Only Bank Is Located In Mahesh Branch.
1.9 PROPOSED CHAPTERISATION

1. Introduction
2. Evolution Of Online Banking
3. National And International Scenario
4. Online Banking In State Bank Of India
5. Customers Perception On Online Banking
6. Findings
7. Conclusions And Recommendations
Bibliography

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CHAPTER - 2
ONLINE BANKING

2.1 EVOLUTION OF ONLINE BANKING

Everything That Is Present And Is In The Shape As We See Today Has Gone
Through A Lot Of Modification Over The Years Whether It Be Goods Or
Services. Everything Has A Long History Of Development And A Long Process Of
Modification Which It The Modern Shape. Similarly Online Banking Has Not
Exactly Few Years Before As We Can See Now. It Has Gone Through A Period Of
Evolution And It Was In Different Shape Than What We See It Today, Its Use
And The Resources Were Different But The Basic Function Was Same Which
Has Been Modified And Facilities Increased But Its Root Comes From 1980s.

The Precursor For The Modern Home Online Banking Services Were The
Distance Banking Services Over Electronic Media From Early 1980s. The Term
‘Online’ Became Popular In The Late ’80s And Referred To The Use Of A

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Terminal, Keyboard And TV (Or Monitor) To Access The Banking System Using
A Phone Line. Online Services Started In NEW YORK In 1981 When Four Of The
City’s Major Bank (Citibank, Chase Manhattan, Chemical And Manufacturers
Hanover) Offered Home Banking Services Using The Videotext System.

The Attraction Of The Bank Today The Online Banking Was Fairly Obvious
Because Of The Following Merits Provided By The Online Banking The Banks:

a) Diminished Transaction Cost

b) Easier Integration Of Services
c) Interacting Marketing Capabilities
d) Other Benefits That Boost Customer List And Profit Margin.

Additionally, Web Banking Services Allowed Institutions To Bundle Services

Into Single Packages, Thereby Increasing Customers And Minimizing Overhead.

While Financial Institutions Took Steps To Implement E-Banking Services In The

Mid-1990s, Many Consumers Were Hesitant To Conduct Monetary
Transactions Over The Web. It Took Widespread Adoption Of Electronic
Commerce, Based On Trailblazing Companies Such As America Online, Amazon
Com And Ebay., To Make The Idea Of Paying For Items Online Widespread. By
2000, 80% Of U.S Banks Offered E-Banking. Customer Use Grew Slowly.

2.2 VARIOUS FORMS OF ONLINE BANKING

 ELECTRONIC BANKING USING A TELEPHONE CONNECTION
i. PHONE BANKING: It is the provision of banking
service using a classic telephone line.

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ii.AUTOMATED TELEPHONE SYSTEM
iii.SMS BANKING: SMS banking uses short text
messages sent through the client’s mobile phone.
iv. GSM SIM TOOLKIT
v. WAP(WIRELESS APPLICATION PROTOCOL)
 ELECTRONIC BANKING USING PERSONAL COMPUTERS
i. HOME BANKING: Home Banking Is A Service That
Enables A Bank Client To Handle His Accounts
From A Computer From A Place Selected In
Advance, At Home Or In The Office.
ii. INTERNET BANKING: Internet Banking Can Be
Used From The Home Or Office, As Well As An
Internet Cafe, Although The Latter Is Not
Recommended For Security Reasons.
iii. MAILING BANKING: Mail Banking Is Another
Electronic Banking Service That Makes It Possible
To Communicate With Bank By Electronic Mail Or
E-Mail.

2.3 FEATURES OF ONLINE BANKING

Various Financial Institutions Have Many Features And Capabilities In
Common But Also Have Some That Are Application Specific. The Features Of
Online Banking Are As Follows:

1) NON-TRANSACTION TASKS THROUGH ONLINE BANKING INCLUDE:

a) Viewing account balances
b) Viewing recent transactions

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c) Downloading bank statements for example PDF format
d) Viewing images of paid cheques
e) Ordering cheque books
f) Downloading periodic account statements
g) Downloading applications for E-banking etc

2) TRANSACT BANKING THROUGH ONLINE BANKING INCLUDE.

a) Funds transfer between the customer’s linked accounts
b) Paying third parties, including bill payments and third party fund
transfers.
c) Investment purchase or sale
d) Loan applications and transactions such as repayments of
enrolments.
e) Credit card applications
f) Register utility billers and make bill payments
g) Financial institution administrative
h) Management of multiple users having varying levels of authority.
i) Transaction approval process

2.4 ADVANTAGES OF ONLINE BANKING

 24 HOUR ACCESSIBILITY : When the bank is closed still we can access

our account and make transactions online. Its a very convenient
alternative for those that can’t get to the bank during normal working
schedule.
 AVAILABILITY OF THE ACCOUNT FROM ANYWHERE: If one is on a
business trip or vacationing away from home we can still be in touch
with our financial data and on our money and can perform financial
transactions.
 MANY FEATURES ARE TYPICALLY AVAILABLE ONLINE: For example, with
just a few click we can apply for cheques, check the progress of our

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transactions and gather other information that may spread out over
different brochures in the local bank.
 SECURITY : Online banking provides a secured platform for monetary
transactions. One just need to make sure that the website or the bank
site used is secured.

2.5 DISADVANTAGES OF ONLINE BANKING

 NOT 100% SECURED: Banks are no means immune. Once our

information is compromised it can take months and years to correct
the damage not to mention possibly costing thousands of dollars as
well.
 STABILITY ISSUE: Some operate completely in cyberspace, without
the benefit of a branch that we can visit if we need be. With no way
to physically check out the operation, one must be sure enough and
do research before giving them any of our money.
 BANK SITES CHANGES: Some companies keep adding new features
on their sites and sometimes people have to re-enter their account
information.
 CUSTOMER SERVICES BELOW STANDARD: Some people prefer to
take to a person face to face if they experience any issues. Although
most major banks provide a dedicated customer service department
specially for online users.
 NOT ALL ONLINE TRANSACTIONS ARE IMMEDIATE: Online banking
is also subject to business day parameters.

One of the main concerns of e-banking is security. Without great confidence in

security, customers are unwilling to use a public network, such as the Internet,
to view their financial information online and conduct financial transactions.
Some of the security threats include invasion of individuals' privacy and theft
of confidential information. Banks with e-banking service offer several
methods to ensure a high level of security: (1) identification and
authentication, (2) encryption, and (3) firewalls . First, the identification of an
online bank takes the form of a known Uniform Resource Locator (URL) or

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Internet address, while a customer is generally identified by his or her login ID
and password to ensure only authenticated customers can access their
accounts. Second, messages between customers and online banks are all
encrypted so that a hacker cannot view the message even if the message is
intercepted over the Internet. The particular encryption standard adopted by
most browsers is called Secure Socket Layer (SSL). It is built in the web browser
program and users do not have to take any extra steps to set up the program.
Third, banks have built firewalls, which are software or hardware barriers
between the corporate network and the external Internet, to protect the
servers and bank databases from outside intruders. For example, Wells Fargog
Bank connected to the Internet only after it had installed a firewall and made
sure the firewall was sufficiently impenetrable.

Source: the annual report of financial transaction.

In a study by IAMAI, it was found that people are not doing financial
transaction on the bank’s internet site because of reasons such as security(38%
%), preference to face-to-face transactions(33%), lack of knowledge about
online transfer(19%), lack of user friendliness(8%), or lack of the facility in the
current bank(2%).

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CHAPTER 3
NATIONAL AND INTERNATIONAL
SCENARIO
3.1 NATIONAL SCENARIO
Indian economy is facing fast growth in the past few years. There has been a
rapid development in infrastructural and business front during the growth
period. Internet adoption among Indians has been increasing over the last one
decade. Indian banking is one such new channel which has become available to
Indian customers. There are various services provided by the banks now-a-days
and the customers are slowly adopting those services. Various banks have
different services but some of them have good internet banking system in
India.

The following graph shows the percentage growth of internet users who use
online banking. It can be seen that in the year 2000, only 18% of the internet
users used online banking. But the in 2016, the percentage increased to 61%.

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Source: The annual report of 2016.
The financial product and services have been available over the internet, which
has thus become an important distribution channel for a number of banks. A
study on the Internet users, conducted by Internet and Mobile Association of
India (IAMAI) found that about 23% of the online users prefer IB as the banking
channel in India, second to ATM which is preferred by 53%.

Source: The annual report of financial product and services.

So, it can be seen that ATM is the most preferred channel for the online
customers.

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The following chart shows the number of ATMs of top 5 banks in India. SBI has
the maximum number of ATMSs in India.

 Products and services offered in India through internet

banking:

1.ACCOUNT SUMMARY: Accounts which are ‘Internet Banking Enabled’ may

be displayed along with the Current Balance, Total Balance, Unclear
Balance and Available Balance etc.

2.OVERDRAFT DETAILS: Limit and Drawing Power for OD Accounts,Repayment

Schedule for Loan Accounts may be viewed.

3.TRANSACTIONS DETAILS: User may view, download and print of the last 14
transactions or for specified period of selected account.

4.ONLINE REQUESTS: User may request for Stop Payment for a particular
Cheque or Range of Cheques in select accounts, Revoke of Stop Paymentof
Cheques already stopped. User may also change his contact no. (phone
no., mobile no., email etc.)

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5.FUNDS TRANSFER BETWEEN OWN ACCOUNTS: User may transfer funds
from one account (with requested transaction facility) to his/her another
account to the extent of fund transfer limit fixed by the bank from time to
time, subject to the available balance, by selecting ‘from’ & ‘to’ accounts.

6.ADDING OF ACCOUNT IN BENEFICIARY LIST : If amounts are frequently

transferred to a particular account, then the facility of adding that account in
beneficiary list will be available by providing a nick name to that account.

7. FUND TRANSFER TO OTHER BENEFICIARY ACCOUNT: User may transfer

fund from his/her account (with requested transaction facility) to any other
third party account, maintained with any of our CBS Branch, to the extent of
fund transfer limit fixed by the bank from time to time, subject to the available
balance, by selecting his/her account and giving either third party’s account
number or selecting a beneficiary.

8.E-PAYMENT FACILITIES: User may use E- Payment facility for payment of

Direct (CBDT) and Indirect (CBEC) taxes by debiting the account online and may
print cyber receipt & challan also.

 Growth of Online Banking in India

Year 2002 2004 2006 2008 2010 2012 2014 2016

Increase% 10 12 15 20 25 32 40 50

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SOURCE: The annual report of percentage change in online banking.

3.2 International Scenario

Internet banking has presented regulators and supervisors worldwide with
new challenges. The Internet, by its very nature reaches across borders and is,
for this reason, engaging the attention of regulatory and supervisory
authorities all over the world.

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Source: The annual report of 2017 highest no. Of

internet users.
 ONLINE BANKING IN DIFFERENT COUNTRIES

 USA: In the USA, the number of thrift institutions and

commercial banks with transactional websites is 1275 or 12%
of all banks and thrifts. Approximately 78% of all commercial
banks with more than $5 billion in assets, 43% of banks with
$500 million to $5 billion in assets, and 10% of the banks under
$500 million in assets have transactional websites. Of the 1275

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thrifts/commercial banks offering transactional internet
banking, 7 could be considered “virtual banks”. 10 traditional
banks have established internet branches or divisions that
operate under a unique brand name. Several new business
process and technological advances such as Electronic Bill
Presentation and Payment (EBPP), handheld access devices
such as Personal Digital Assistants (PDAs), internet telephone
and wireless communication channels and phones in the US
market.
 U.K: Most banks in U.K. are offering transactional services
through a wider range of channels including Wireless
Application Protocol (WAP), mobile phone and T.V. A number
of non-banks have approached the Financial Services Authority
(FSA) about charters for virtual banks operations. There is a
move towards bank establishing portals.
 Australia: Internet banking in this country is offered in two
forms: web-based and through the provision of proprietary
software. Initial web-based products have focused on personal
banking whereas the provision of proprietary software has
been targeted at the business/corporate sector. Online
banking services offered include account monitoring, account
management and financial transactions. Generally, there are
no virtual banks licensed to operate in Australia.
 New Zealand: Major bank offer internet banking services to
customers, operate as a division of the bank rather than a
separate legal entity. Reserve bank of New Zealand applies the
same approach to the online banking activities and the
traditional banking activities. There are however, banking
supervisory regulations that apply only to internet banking.

Internet banking had started as a new technology but now with its vast
facilities it is becoming a part and parcel of life globally. People are accepting it
with open heart but still are sceptic when it comes to their security so we need
to make it secured so that it reaches everybody.

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CHAPTER 4
ONLINE BANKING IN STATE BANK OF
INDIA

4.1 State Bank of India: A Brief Profile

I have decided to do my project work on STATE BANK OF INDIA as it is a

nationalised bank. It is an India-based bank. In addition to banking, the
company with its subsidiary provides a range of financial services like life
insurance, merchant banking, mutual fund, credit card, security trading,
pension fund management etc. It is one of the leading banks of Indian banking
industry.

4.2 History of State Bank Of India

It is the nation’s largest and oldest bank. Tracing its root back some 200 years
to the British East India Company (initially established as the Bank of Calcutta
in 1806). State Bank of India (SBI) has more than 80 offices in nearly 35
countries, including multiple locations in US, Canada, and Nigeria. The bank has
other units devoted to capital markets, fund management, factoring and

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commercial services, credit card, and brokerage services. The Reserve Bank of
India owns about 60% of State Bank of India. The roots of the SBI lie in the first
decade of 19th century, when the Bank of Calcutta, later named as Bank of
Bengal was established on 2 June 1806. The Bank of Bengal was one of the
three Presidency banks, the other two being Bank of Bombay (incorporated on
15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three
Presidency banks were incorporated as joint stock companies and were the
result of the royal chapters. These three banks received exclusive rights to
issue paper currency till 1861 when the Paper Currency Act, the right was
taken over by the Government of India. The Presidency banks amalgamated on
27 January 1921, and the re-organised banking entity took as its name Imperial
Bank of India. The Imperial Bank of India remained a joint stock company but
without Government participation. 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, Imperial Bank of India became the STATE BANK OF INDIA. The
government of India recently 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. The State Bank of India and all its associated
banks are identified by the same blue keyhole logo.

BRANCHES AND ATMS: State Bank of India is India’s largest bank with a
network of over 24000 branches and 5 associate banks located even in the
remotest part of the country. SBI has 59,000+ ATMs and SBI group (including
associate banks) has 59,291 ATMs. SBI has become the first bank to install an
ATM at Drass in the Jammu & Kashmir Kargil region.

Changes brought in by SBI after introduction of Information Technology

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 All SBI banks were connected and ATM’s were launched
 2001- KMPG appointed consultant for preparing IT plan for the bank
 Later on Core banking was proposed by the IT consultancy company
 2002- All branches computerized but on decentralized systems,
there the initiative of core banking took place.
 2008- More than 6500 branches were on Core Banking Solution.
 Internet banking facility for Corporate customers were also
launched.
 All Foreign Offices were brought on Centralised Solution

4.3 Customer Base of State Bank of India

Debit
Card
Holder

27 Crores

Internet
Fin.
Total
Banking
Inclusion Customers
4.6
9.2 42 Crores Crores
Crores

Mobile
Banking

1.15
Crores

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4.4 Online Banking is SBI:

Internet Banking Transactions:

The following graph shows the growth of internet banking of SBI from the year
2015 to 2017. In the year 2015, total amount transacted through internet
banking was Rs.13.31 crores whereas in 2017 it increased to Rs.28.22 crores.

Mobile Banking Transactions:

The following graph shows the growth of mobile banking of SBI from the year
2015 to 2017. In the year 2015, total amount transacted through internet
banking was Rs.130 lacs whereas in 2017 it increased to Rs.238 lacs.

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ATM Transactions:

The following graph shows the growth of ATM transactions of SBI from the
year 2015 to 2017. In the year 2015, total amount transacted through internet
banking was Rs.56.99 crores whereas in 2017 it increased to Rs.81.52 crores.

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Point of Sales (POS) Transactions:

The following graph shows the growth of POS transactions of SBI from the year
2015 to 2017. In the year 2015, total amount transacted through internet
banking was Rs.49 lacs whereas in 2017 it increased to Rs.174 lacs.

So, it is clear from the above data that there has been immense growth in
online banking service of State Bank of India.

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CHAPTER- 5
CUSTOMERS’ PERCEPTION ON ONLINE
BANKING
For getting an overall idea on the customers’ view on online banking, I have
done a survey. I have interviewed a total of 46 customers of the State Bank of
India. The customers are of SBI MAHESH BRANCH,SERAMPORE.

The results or findings of the survey are presented below graphically.

A) DO YOU USE ONLINE BANKING SERVICES?

Total sample : 46 YES: 52% NO: 48%
ANSWER RESPONSE

YES 52

NO 48

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From the survey it is found that most of people are using online banking
facility, for their respective work. From the table it is clear that 52% said yes
and 48% said no, so maximum are people use online banking.

GENDER WISE CLASSIFICATION OF RESPONDENTS:

Total sample : 46 MALE:31% FEMALE:15%

I. MALE: 31 YES: 18 NO: 13

Out of 31 male respondents, 58% use online banking and 42% do not use
online banking, so the survey showed that the maximum customers use online
banking.

II. FEMALE: 15 YES: 4 NO: 11

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Out of 15 female respondents, 73% do not use online banking and 23% use
online banking.

B) DO YOU THINK THAT ONLINE BANKING TRANSACTION IS SAFE?

Total Survey: 46 YES: 30 NO: 16

ANSWER RESPONSE

SAFE 65%

UNSAFE 35%

From this survey we saw that 35% people thought that the online banking
transaction is not safe and 65% people who are mostly youngster thought that
online transaction is safe enough. So maximum customers think that online
transaction is safe.

c) DO YOU PREFER ONLINE BANKING THAN TRADITIONAL BANKING?

Total Survey: 46 YES: 15 NO: 31

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The result shows that customers do use online banking; but they prefer
traditional banking than online banking.

D) USERS OF ONLINE BANKING ON THE BASIS OF AGE:

From this bar chart we can see that, most interested age group in online
banking is 20-30 and 40-50 age group. Maximum numbers of customers do not
use online banking.

E) PREFERENCE OF ONLINE BANKING ON THE BASIS OF INCOME:

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The income group between Rs.30000-60000 is doing online banking as is shown
in the graphical presentation above.

F) PREFERENCE OF ONLINE BANKING ON BASIS OF EDUCATIONAL

QUALIFICATION.

The College passed people mostly use the online banking and some of the
higher educated people use the online banking. And the school passed student
did not use the online banking.

G) WHAT ARE THE REASON BEHING USEING ONLINE BANKING?

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Most people said that the time saving is the main reason for the online
banking. Some people also do the online banking for avoiding standing in
the long queue.

H) USE OF ONLINE BANKING SERVICES

Most people do online banking in the form of ATM CARD AND DEBIT CARD.
Some of the people use the other online features like credit card, electronic
fund transfer, internet banking, and rarely some youngsters use mobile
banking.

I) WHY DO PEOPLE NOT USE ONLINE BANKING?

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Most people said that they don’t use online banking because they did not have
the internet connection at home. Some people said that they don’t use it
because they don’t trust the service and they find this process more complex.

J) WHAT WHOULD ENCOURAGE MORE USE OF ONLINE BANKING?

From the above chart we saw that most people would pay more interest to
online banking is it is made simpler and cleaner.

CHAPTER- 6
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FINDINGS

Findings Of The Study:

 52% of the customers use online banking and 48% person do not use
online banking and the maximum users of online banking are male
customers.

 67% customers do not prefer online banking than traditional banking

but 33% customers say that they prefer online banking. That means
customers do use online banking facilities but prefer to go to the branch
for banking.

 The customers of the age group of 20-30 years and 40-50 years mostly
use online banking.

 The income group between Rs. 30000-60000 per month maximum use
online banking.

 Maximum people said that they use the online banking for saving time.

 Maximum people use ATM and DEBIT CARD service of the online
banking.

 Customers do not use online banking because they do not have internet
banking service at home and they have trust factor involved. They do
not find it much secured to use online services.

CHAPTER- 7
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CONCLUSION AND
RECOMMENDATION

CONCLUSION:

Now-a-days online banking has gained immense popularity among the

customers in India. Customers prefer online banking for saving their time and
effort as they do not have to stand in long queues for depositing and
withdrawing their money, transferring money from one account to another
etc. They can do all these sitting in their home with the help of online banking.
Some people do use this facility as they find online banking unsafe. It is
concluded from the results of the study that the usage of ATM, Debit card,
Tele-banking and Internet banking are perceived as important and the use of
these services is associated with socio-economic and demographic
characteristics of the respondents. Though, most of the customers prefer
manual banking over e- banking, the customers tend to use e-banking /
internet banking and adoption of e-banking and internet banking services
among the bank customers is significantly influenced by the number of times
visiting the banks as well as the number of banking transactions per month.

RECOMMENDATIONS:

In order to increase the users of online banking, banking institutions should try
to strengthen the following cases:

A) Simplify web design services, internet banking.

B) Simplify and shorten the processes to conduct online banking
transactions.

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C) Bank should ensure that online banking is safe and secured for financial
transactions like traditional banking.
D) Bank should organise conference and seminars to educate the
customers regarding the use of online banking as well as security and
privacy of their account.
E) Customer who have lack of knowledge of computer skill, need to be
educated on basic skills required to use the online banking.
F) Bank should ensure that the increased speed of transactions conducted
through electronic system actually save time.
G) Bank must emphasize on cost saving so that online banking can be done
more efficiently with reduce transaction cost.

BIBLIOGRAPHY
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Journals:

Chugh, Vijay. (2014, July 1). 'Master Circular – Mobile Banking Transactions in
India – Operative Guidelines for Banks'. Retrieved March 6, 2015 , from
Reserve Bank of India, http://www.rbi.org.in.

Iyengar, G. Vijayrajan. (2007). 'Payment and Settlement System -New Age

Clearing' . In G. V. Iyengar, Introduction to Banking (pp. 235-249). New Delhi :
EXCEL BOOKS .

The Indian Internet banking Journal, Retrieved from:www.icmrindia.org.

Websites:

www.sbibank.com
www.wikipedia.com
www.banknetindia.com

Questionnaires

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A) DO YOU USE ONLINE BANKING SERVICES?

1. YES
2. NO

B) DO YOU THINK THAT ONLINE BANKING TRANSACTION IS SAFE?

1. safe

2. UNSAFE

C) DO YOU PREFER ONLINE BANKING THAN TRADITIONAL BANKING?

1. YES

2. NO

D) USERS OF ONLINE BANKING ON THE BASIS OF AGE:

1. prefer

2. does not prefer

e) PREFERENCE OF ONLINE BANKING ON THE BASIS OF INCOME:

1. prefer

2. do not prefer
F) PREFERENCE OF ONLINE BANKING ON BASIS OF EDUCATIONAL
QUALIFICATION.

1. prefer

2. do not prefer

G) WHAT ARE THE REASON BEHING USEING ONLINE BANKING?

1. time save

2. avoiding standung in long queue

H) USE OF ONLINE BANKING SERVICES

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1. ATM AND DEBIT CARD

2. NET BANKING AND MOBILE

3. CREDIT CARD AND ELECTRONIC BANKING

I) WHY DO PEOPLE NOT USE ONLINE BANKING?

1. NO ACCESS TO INTERNET

2. NO TRUST

3. DO NOT ENABLE WANT TO DO

4. PREFER TO HAVE PERSONAL HUMAN CONTACT

5. FIND THE PROCESS DIFFICULT

J) WHAT WHOULD ENCOURAGE MORE USE OF ONLINE BANKING?

1. REWARD

2. FREE TRANSACTION

3. SIMPLE SERVICE

4. TIME SAVING

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