A STUDY ON CUSTOMER AWARENESS ON E-BANKING SERVICES AT STATE

BANK OF INDIA, MADURAI

CHAPTER I

E-banking is fast becoming a norm in the developed world, and is being implemented
by many banks in developing economies around the globe. The main reason behind this
success is the numerous benefits it can provide, both to the banks and to customers of
financial services. For banks, it can provide a cost effective way of conducting business
and enriching relationship with customers by offering superior services, and innovative
products which may be customized to individual needs. For customers it can provide a
greater choice in terms of the channels they can use to conduct their business, and
convenience in terms of when and where they can use e- banking.
Over the last decade India has been one of the fastest adopters of information
technology, particularly because of its capability to provide software solution to organiz
ationsaround theworld. This capability has provided a tremendous impetuous to the
domestic banking industry in India to deploy the latest in technology, particularly in the
Internet banking and e-commerce areas. Technology is playing a major role in
increasing the efficiency, courtesy and speed of customer service. An Online Banking
user is expected to perform transactions online such as Checking account balance and
transaction history, Paying bills, Transferring funds between accounts, Requesting
credit card advances, ordering checks, Managing investments and stocks trading.
From a bank‟s perspective, using the internet is more efficient than using other
distribution mediums because banks are looking for an increased customer base.
Moreover Internet delivery offers customized service to suit the needs and the likes of
each user. Mass customization happens effectively through Online Banking. It reduces
cost and replaces time spent on routine errands with spending time on business errands.
Online Banking means less staff members, smaller infrastructure demands, compared
with other banking channels. From the customers‟ perspective, Online Banking
provides a convenient and effective way to manage finances that is easily accessible 24
hours a day, seven days a week. In addition information is up to date. Nevertheless
Online Banking has disadvantages for banks like how to work the technology, set-up
cost, legal issues, and lack of personal contact with customers. And for customers there
are security and privacy issue

`
 1. 1 INDUSTRY ANALYSIS

INTRODCTION OF BANKING

INDUSTRY BANKING:
The word "BANK" is derived from a Latin word 'Bancus' or 'Banque', which means a
bench. In the early days the European moneylenders and moneychangers used to sit on
the benches and exhibit coins of different countries in big heaps for the purpose of
changing and lending money,:
As per Banking Regulation Act 1949 Section 5(b)

"Banking means, accepting for the purpose of lending or investment, of deposits of

money from the public, repayable on demand or otherwise, and withdrawal by cheque,
draft, or otherwise."
The banking industry is and always has been one of the most important aspects of all
industries. The reason being, every other industry needs banks to take part in any
investments or financial movements as a way to better their position in their industries.
The industry analysis will look at how and why the banking industry has been able to
hold this position for so long through the Competitive Land scape. Banking in India has
a long and elaborate history of more than 200 years. The beginning of this industry can
be traced back to1786, when the country‟s first bank, Bank of Bengal, was established.
But the industry changed rapidly and drastically, after the nationalization of banks
in1969. As a result, the public sector banks began experiencing numerous positive
changes and enormous growth. Then came much-talked-about liberalization and
economic reforms that allowed banks to explore new business opportunities and not just
remain constrained to generating revenues from mere borrowing and lending. This
provided the Indian banking scenario a remarkable facelift that only continues to get
better with time. However, even today, despite the foray of foreign banks in the
country, nationalized banks continue to be biggest lenders in the country. This is
primarily due to the size of the banks and the penetration of the networks.

`
 INDIAN BANKING SCENARIO

The Banking industry comprises of segments that provide financial assistance

and advisory services to its customers by means of varied functions such as commercial
banking, wholesale banking,personal banking, internet banking,mobile banking,credit
unions,inv estment banking and the like.

With years, banks are also adding services to their customers. The Indian banking
industry is passing through a phase of customers market. The customers have more
choices in choosing their banks. A competition has been established within the banks
operating in India.
With stiff competition and advancement of technology, the services provided by
banks have become more easy and convenient. The past days are witness to an hour
wait before withdrawing cash from accounts or a cheque from north of the country
being cleared in one month in the south.
Bank of Hindustan, set up in 1870, was the earliest Indian Bank . Banking in
India on modern lines started with the establishment of three presidency banks under
Presidency Bank‟s act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras.
The commercial banking structure in India consists of: Scheduled Commercial
Banks &Unscheduled Banks. Banking Regulation Act of India, 1949 defines Banking
as "accepting, for the purpose of lending or investment of deposits of money from the
public, repayable on demand and withdrawal by cheques, draft, order or otherwise.
"The arrival of foreign and private banks with their superior state-of-the-art technology
based services pushed Indian Banks also to follow suit by going in for the latest
technologies so as to meet the threat of competition and retain customer base.
The evolution of IT services outsourcing in the Indian banks has presently moved on to
the level of Facilities Management (FM). Banks now looking at business process
management (BPM) to increase returns on investment, improve customer relationship
management (CRM) and employee productivity. For, these entities sustaining long-
term customer relationship management (CRM) has become a challenge with almost
everyone in the market with similar products.

`
 CHANGES IN THE STRUCTURE OF BANKS

The financial sector reforms ushered in the year 1991 have been well calibrated and
timed to ensure a smooth transition of the system from a highly regulated regime to a
market economy. The first phase of reforms focused on modification in the policy
framework, improvement in financial health through introduction of various prudential
norms and creation of a competitive environment. The second phase of reforms started
in the latter half of 90s, targeted strengthening the foundation of banking system,
streamlining procedures, upgrading technology and human resources development and
further structural changes. The financial sector reforms carried out so far have made the
balance sheets of banks look healthier and helped them move towards achieving global
benchmarks in terms of prudential norms and best practices.

Technology is expected to be the main facilitator of change in the financial

sector.Implementation of technology solutions involves huge capital outlay. Besides the
heavy investment costs, technology applications also have a high degree of
obsolescence. Banks will need to look for ways to optimize resources for technology
applications. In this regard, global partnerships on technology and skills sharing may
help.

The pressure on capital structure is expected to trigger a phase of consolidation in the

banking industry. Banks could achieve consolidation through differentways. Mergers
between public sector banks or public sector banks and private banks could be the next
logical thing /development to happen as market players tend to consolidate their
position to remain in competition. Public Sector Banks had, in the past, relied on
Government support for capital Augmentation. However, with the Government making
a conscious decision to reduce it's holding in Banks, most Banks have approached the
capital market for raising resources. It is expected that pressures of market forces would
be the determining factor for the consolidation in the structure of these banks. If the
process of consolidation through mergers and acquisitions momentum, that could see
the emergence of a few large Indian banks with international character. There could be
some large national banks and several local level banks
.

`
 ROLE OF THE RESERVE BANK IN THE BANKING SECTOR

The Reserve Bank of India, being the central bank of the country, has numerous
monetary and financial functions to overlook. Even in a liberalized country such as the
United States, the Federal Reserve has similar functions to perform. This implies that
the market mechanism should not be given the sole rein to runs the banking industry
and setting the market rates. The functions of the Reserve Bank which have a direct
bearing on the banking sector are:

1. Financial Supervision

This aspect of the Reserve Bank is under the aegis of a Board for Financial Supervision
(BFS). The objective of the BFS is: “to undertake consolidated supervision of the
financial sector comprising commercial banks, financial institutions and non banking
finance companies.” The functions that come under the above mentioned objectives are:
a. Restructuring of the system of bank inspections.
b. Introduction of off-site surveillance
c. Strengthening of the role of statutory auditors and
d. Strengthening of the internal defences of supervised institutions.
Thus, the BFS does such acts as the supervising financial institutions, consolidated
accounting, looking at legal issues in bank frauds, providing assessments of
nonperforming assets and maintaining a supervisory rating model for banks.

`
 2. Monetary Authority

The Reserve Bank is the monetary authority of the country. This implies that the
Reserve Bank formulates implements and monitors the monetary policy of the country.
The various monetary policies involves the availability of liquidity in the economy the
amount of money supply to the economy), and setting the interest rates in the country.
These rates include the Statutory Liquidity Ratio (SLR), the Cash Reserve Ratio (CRR)
and the Cash Adequacy Ratio (CAR) among others. By this function, the Reserve Bank
maintains price stability in the economy and ensures that cash flow to various
(important) sectors is maintained. In relation to the banking industry, the setting of
interest rates is of utmost importance. This limit prescribes the conduct of the banks in
the economy. It also acts as an entry barrier to the sector.

3. Regulator of the Banking System

Being the regulator of the banking, the Reserve Bank “prescribes a set of broad
parameters from within which the country‟s banking and banking and financial System
functions". The specific aims of financial regulation are usually: a)To enforce
applicable laws.
b) To prosecute cases of market misconduct, such as insider trading.
c) To license providers of financial services.
d) To protect clients, and investigate complaints.
e) To maintain confidence in the financial system.
It is evident from these points that the Reserve Bank does have an amount of control
over the functioning and the conduct of the banks in the sector. The Reserve Bank and
SEBI (Securities and Exchange Bureau of India) thus can even force banks to withdraw
from the sector in the case of occurrence of unfair practices.

`
 Table.1.1

BANKS IN INDIA

`
 COMPANY ANALYSIS

2. COMPANY PROFILE

The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2nd June 1806.
Three years later the bank received its charter and was redesigned as the Bank of
Bengal on 2nd January 1809. The Bank of Bombay on the 15th April 1840 and the
Bank of Madras on 1st July 1843 followed the Bank of Bengal. These three banks were
governed by Royal Charter, which were revised from time to time187. These three
banks received the exclusive right to issue paper currency in 1861 with the Paper
Currency Act, a right they retained until the formation of the Reserve Bank of India.

The business of the banks was initially confined to discounting of bills, keeping cash
accounts, receiving deposits and issuing and circulating cash notes. Loans were
restricted to Rs.1 lakh and the period of accommodation confined to three months only.
With the passing of the Paper Currency Act of 1861, the right of note issue of the
presidency banks was abolished and the Government of India assumed the sole power
of issuing paper currency from 1 March 1862. None of the three banks had till then any
branches although the charters had given them such authority. By 1876, the Bank of
Bengal had eighteen branches including its head office; seasonal branches and sub
agencies, the Banks of Bombay and Madras had fifteen each.

The Presidency Banks Act, which came into operation on 1st May 1876, brought the
three presidency banks under a common statute and the banks involved themselves in
the financing of practically every trading, manufacturing and mining activity in the
subcontinent. But the three banks were rigorously excluded from any business
involving foreign exchange, as it was feared that these banks enjoying government
patronage would offer unfair competition to the exchange banks, which had by then
arrived in India. This exclusion continued till the creation of the Reserve Bank of India
in 1935.

`
 The Presidency Banks of Bengal, Bombay and Madras with their 70 branches were
merged on 27th January 1921 to form the Imperial Bank of India190. They took on the
triple role of a commercial bank, a banker‟s bank and a banker to the government. The
establishment of the Reserve Bank of India as the central bank of the country in 1935
ended the quasi-central banking role of the Imperial Bank. The business of the banks
was initially confined to discounting of bills of exchange or other negotiable private
securities, keeping cash accounts and receiving deposits and issuing and circulating
cash notes. Loans were restricted to Rs. One lakh and the period of accommodation
confined to three months only. The earlier restrictions on its business were removed
and the bank was permitted to undertake foreign exchange business and executor and
trustee business for the first time. The Imperial Bank during the three and a half
decades of its existence recorded an impressive growth in terms of offices, reserves,
deposits, investments and advances, the increase in some cases amounting to more than
six-fold. The lofty traditions of banking which the Imperial Bank consistently
maintained and the high standard of integrity it observed in its operations inspired
confidence in its depositors that no other bank in India could perhaps then equal. When
India attained freedom, the Imperial Bank had a capital base (including reserves) of
Rs.11.85 crore, deposits and advances of Rs.275.14 crore and Rs.72,94 crore
respectively and a network of 172 branches and more than 200 sub offices extending all
over the country.

CORPORATE MISSION & VISION

Vision of State Bank of India

• MY SBI.

• MY CUSTOMER FIRST.

• MY SBI: FIRST IN CUSTOMER SATISFACTION.

`
 Mission of State Bank of India

• We will be prompt, polite and proactive with our customers.

• We will speak the language of young India.

• We will create products and services that help our customers achieve their goals.

• We will go beyond the call of duty to make our customers valued.

• We will be of service even in the remotest part of our country.

• We will offer excellence in service to those abroad as much as we do to those in India.

• We will imbibe state of art technology to drive excellence.

Strengths of State Bank of India

• Largest commercial bank in the country with presence in all time zones of the world.

• Macroeconomic proxy for the Indian Economy.

• Has emerged as a Financial Services Supermarket

• Group holds more than 25 per cent market share in deposits and advances

• Large base of skilled manpower

• SBI Group has more than 115 million customers – Every tenth Indian is a customer.

`
 Values of SBI

The values of State Bank of India are:

• We will always be honest, transparent and ethical.

• We will respect our customers and fellow associates.

• We will be knowledge driven.

• We will learn and we will share our learning.

• We will never take the early way out.

• We will do everything we can to contribute to the community we work in.

• We will nurture pride in India.

Information Technology
The Bank has adopted and is pursuing effectively its IT policy with the Aim of
achieving efficiency in operations, meeting customer and market Expectations and
staying ahead in competition. Thus, the technology initiatives would result in a)
Improved productivity,
b) Greatly reduced time-to-management in MIS,
c) Better risk management,
d) Efficient tracking of NPAs,
e) Better regulatory compliance,
f) Swifter reaction to market changes and customer needs, and
g) Reduction in transaction costs etc., to make the better functioning of SBI.

`
 ORGANISATIONAL STRUCTURE

ORGANISATION STRUCTURE AND MANAGEMENT

The management of the State Bank1 vests in a Central Board of Directors which
Consists of:
• A Chairman and a Vice-Chairman appointed by the Central Government in
consultation with the Reserve Bank of India.
• Two Managing Directors appointed by the Central Board of Directors with
the approval of the Central Government.
• Six directors to be elected in the prescribed manner by the shareholders
other than the Reserve Bank.
• Eight directors to be nominated by the Central Government in consultation
with the Reserve Bank of India to represent territorial and economic
interests in such a manner that not less than two of them have special
knowledge of the working of the cooperative institutions and of rural
economy and the others have experience in commerce, industry, banking
and finance;
• One director to be nominated by the Central Government;
• One director to be nominated by the Reserve Bank; and
• Two directors to be appointed to represent the officers and the staff of the
bank.
appointed as directors of the State Bank of India. Structural changes have been introduced by
the bank in order to re-orient the business according to changing conditions in the market.
One such step, for the first time, was initiated in 1971.In the year 1979, for the second time
the structural changes were implemented. The major organizational change in structure took
place in 1995, by the appointment of Mckinsey Consultants. Through changes were
introduced in strategies, structures, systems etc., in the organizational set up of SBI, as per
recommendations of the consultant committee.

`
 The organization structure of State Bank of India at National Level is shown
in shown in Exhibit.3.1. The Chairman is the Head of the Central Management Committee
who is appointed by the Government of India in consultation with RBI. The Central
Management Committee consisting of two Managing Directors– one belonging to
Corporate Banking and the other to National Banking – and seven Deputy Managing
Directors representing the areas such as Banks, International Banking, Corporate
Development, Finance, Credit, Information Technology, and Information and Management
Audit. Along with the Committee the Chief Vigilance Officer at CGM cadre, will also work
under the Chairman. The Managing Director and Group Executive of the Corporate
Banking are responsible for the banking operations relating to big size companies and
corporations. The Corporate Account Group (CAG) under the leadership of the Managing
Director and Group Executive caters to a majority of top 100 companies/Corporations in
Indian ranked in the order of turnover and market capitalization. The credit sanction of
Rs.100 crore and above per company will fall under the jurisdiction of the managing
director. The National Banking Group is headed by a Managing Director and Group
Executive. This group consists of two distinct net works namely Development Banking and
Personal Banking Network and Commercial Banking Network. About 90 per cent of the
domestic deposits and 84 per cent of the domestic advances account for National Banking.
The State Bank of India has seven Associate Banks and 7 subsidiaries one of them is
Banking Subsidiary and the other six are
Non-Banking subsidiaries. One Deputy Managing Director will monitor the activities of all
Associate Banks and Subsidiaries at the national level. Another Deputy Managing Director
will coordinate and promote International Banking through a net work of 83 overseas
offices spread over in 33 countries covering all time zones. He is responsible for handling
the country‟s foreign trade and related business and providing foreign currency resources to
the Indian companies. The Deputy Managing Director (Corporate Development) is
concerned with the development and growth activities of the bank. He is responsible for
developing new products and schemes from time to time. The Accounting and Finance wing
is headed by a Deputy Managing Director. He is also called Chief Financial Officer. The
compilation of financial data, preparation of financial statement as per the regulations from
time to time and monitoring the performance of the bank on the financial front are his
responsibilities. One Deputy Managing Director will take care of Audit activities. The

`
 Deputy Managing Director, Information Technology is responsible for IT operations in the
Bank. Considering the importance of IT to promote efficiency in banking, this new position
is created in the organization system at the top management level. There is one Chief
Vigilance Officer reporting to the Chairman. The officer will look after the activities
including fraud detection and prevention of frauds. The disciplinary action against errant
officials up to the level of DGM will be taken by this office. The Chief Vigilance Officer
will maintain direct relations with Ministry of Finance, Government of India and Vigilance
Committee of Reserve Bank of India.

The State Bank of India has 14 Local Head Offices, which are also called
„Offices at the Circles‟ located at state head quarters. The heads of all LHOs are directly
responsible to the Chairman of the bank. A model organization chart of a circle is shown in
Exhibit No.3.2. The Circle Office has the jurisdiction of all Modules of the bank attached to
it. The sanctions of above Rs.25 lakh and below Rs.100 croreare processed at the Circle
Office. The Chief General Manager will be assisted by four Circle Officers at the DGM
cadre in the areas of bank development, credit, finance and vigilance. The General Manager
Personal and Development Banking is assisted by four Assistant General Managers (AGMs)
in the areas of administration, personal, development and expansion. The General Manager
Commercial and International Banking is assisted by four AGMs in the areas of premises,
computers, accounts and policy and decision making.

There are 58 Modules operated by the bank. Each module will be headed by Deputy
General Manager. The module organization chart of a Module is presented in Exhibit
No.3.3. The Modules will co-ordinate the activities of the bank through regional offices.
The heads of the regional offices and the branches headed by AGMs will directly report to
the DGM of a Module.

`
 ORGANIZATION CHART AT NATIONAL LEVEL

CHAIRMAN

Corporate centre

Deputy Managing Deputy Managing Director & Chief

Director & Chief Credit Finance Officer
Officer

Deputy Managing
Director & Corporate Deputy Managing Director
Development Officer (Information & Management Audit)

Deputy Managing Civil Vigilance Officer

Director (Information
Technology)

Managing Director & Managing Director Deputy Managing Deputy Managing

Group Executive & Group Executive Director Director & Group
(Corporate Banking) (National Banking) (International Banks) Executive (Associates
Business groups
& Subsidiaries)

`
 ORGANIZATION CHART AT STATE LEVEL

`
 The regional office will be headed by an Assistant General Manager and takes the
responsibility of co-ordination, developing and promoting the bank operations in a
region. All Branch Managers in a region will report directly to the AGM. The functions
such as credit support, sales planning, performance monitoring, general banking,
personnel and HRD and NPA management and recovery are managed at this office. A
model organization chart of regional office is shown in Exhibit No.3.4.

The organization chart of a branch is shown in Exhibit No.3.5. A branch is the first
level office having direct interaction with large number of customers. The branch
manager is the functional head of a branch. He is assisted by managers, officers and
clerks and the size of the staff is based upon the volume of business.

Hence, during pre-nationalization period, the banking was popularly known as class
banking era. The management of risk was very less in SBI as the major focus was on
organizational development and process management. There was strict adherence to
meticulous maintenance of accounts and inward looking approach in transacting the
credit approvals. The post nationalization period was also known as development
banking period.

`
 ORGANIZATION CHART OF A BRANCH

BRANCH MANAGER

Manager Manager Manager Manager Manager

(Deposits) (Advances) (Accounts) (Agriculture) (International
Banking)

Officers Officers Officers Officers Officers

Officers Officers Officers Officers Officers

CORPORATE GOVERNANCE

Corporate Governance facilitates effective management and control of business as this

ensures transparency and integrity in communication. This inturn, enables the
organizations to maintain a high level of business ethics and to optimize the value for
all its stakeholders.

`
 Banks Philosophy on Code of Governance
State Bank of India has complied in all material respects, with the Corporate
Governance Code as per clause 49 of the Listing Agreement with the Stock Exchanges.
The State Bank of India is committed to the best practices in the area of Corporate
Governance. The objectives of Corporate Governance in State Bank of India are:
 To protect and enhance shareholder value.
 To protect the interest of all other stakeholders such as customers,
Employees and society at large.
 To ensure transparency and integrity in communication and to make
Available full, accurate and clear information to all concerned.
 To ensure accountability for performance and customer service and to
achieve excellence at all levels.
 To provide corporate leadership of highest standard for others to
emulate.
Thus, the SBI is well equipped with rendering its products and services to the
Customers at large.

STATE BANK OF INDIA PRODUCTS AND SERVICES

State Bank of India offers a wide range of services in the Personal Banking
Segment which are indexed here.

Term Deposits
SBI provide security, trust and competitive rate of interest. Flexibility in period of term
deposit from 7 days to 10 years. It is affordable low minimum deposit amount with SBI
for a nominal amount of Rs.1, 000 only. Customers can avail a loan/overdraft against
their deposit. SBI provides loan/overdraft up to 90 per cent of their deposit amount at
nominal cost.

Recurring Deposits
Recurring Deposit provides customers the element of compulsion to save at high rates
of interest applicable to Term Deposits along with liquidity to access that savings any
time. Recurring Deposit is flexibility in period of deposit with maturity ranging from 12
months to 120 months. It is low minimum monthly deposit amount. The customer can
start a Recurring Deposit with SBI for monthly instalment of Rs.100 only.

`
 SBI Home Loan
It offers interest rates concessions on Green Homes in accordance with SBI‟s
commitment to Environment protection. The product gives the customers a onetime
irrevocable option to choose one of the three customized combinations of fixed and
floating interest rates and also to choose the order in which the fixed and floating rate
will be availed. The minimum loan amount sanctioned is Rs.5lakh. Its products are
again segregated into different types on the basis of their term of repayment and their
loan package: SBI-Maxgain Home Loans, Realty Home Loans, Home Equity Loans,
NRI Home Loans, Tribal Plus, Gram Niwas, SahyogNiwas, Green Home Loan,
Surakshit Home Loan, Yuva Home Loan, Home Loan Pal. Thus, the bank provides its
customers comfortable repayment obligations – Tenure of the loans equal to the
residual maturity of the original Home Loans.

`
 SBI Car Loan

The bank provides its customers the best car loan schemes with excellent service and
lower costs. A quick view by the customers of similar schemes available with other
banks shows that SBI Car Loans for new and old vehicles offer for the customers.

SBI Education Loan

A term loan granted to Indian Nationals for pursuing higher education in India or
abroad where admission has been secured. All courses having employment prospects
are eligible for getting education loans and they are briefed below.

SBI Loan to Pensioners

The customer can avail of a loan from their branch to meet their personal expenses.
They can avail a loan of up to a maximum of 12 months pension, subject to a ceiling of
Rs.1 lakh. The loan may be repaid over a 5 years and will carry a low interest rate of
13.25 per cent per annum.

SBI Loan against Shares/Debentures

The customers can avail of loans up to Rs.20 lakh against their shares/debentures to
enable them to meet contingencies, personal needs or even for subscribing to rights or
new issue of shares.

SBI Agricultural Loans

The Bank launched the new products, to increase the flow of credit to agriculture sector
in the year 2003-2004. The advances of Agriculture Business Group increased from
Rs.1,360crore in 2003-04 to Rs.34,933 crore in 2006-07 showing an increase of 2468.6
per cent. Agricultural loans are provided for the purchase of assets connected with rural
activities under agriculture, horticulture, plantation, sericulture, animal husbandry,
fisheries etc., where the loan amount is repayable over a period of time exceeding 3
years.

`
 Under this agricultural loan there are other kinds of benefits provided by SBI through
schemes such as the Kisan Credit Card Scheme, Land Development Schemes, Minor
Irrigation Schemes, Farm Mechanisation Schemes, Krishi Plus Scheme for Customised
Hiring of Tractor to Rural Youth, Lead Bank Scheme etc

SBI Industrial Loans

SBI offers working capital finance to meet the entire range of short-term fund
requirements that arise within a corporate day-to-day operational cycle. The SBI
working capital loans can help company in financing inventories, managing internal
cash flows, supporting supply chains, funding production and marketing operations,
providing cash support to business expansion and carrying current assets. The SBI
corporate term loans can support company in funding ongoing business expansion,
repaying high cost debt, technology up gradation, R&D expenditure, leveraging
specific cash streams that accrue into a company, implementing early retirement
schemes and supplementing working capital. Hence, the Bank extends financial
assistance to help agriculturists, industrialists and common man in various modes.

HUMAN RESOURCES
Learning & Development
The bank has taken up several key initiatives to enthuse and motivate the employees to
perform better so as to achieve the Bank‟s growth plans. As part of the initiative it has
taken up a „Leadership pipeline‟ initiative with the objective of grooming the officials
from the level of Scale-IV up to GM for future leadership positions. Services of reputed
institutions like ISB/Duke University/IIMs have been engaged for the purpose. Further,
the Bank has gone in for accreditation of one of the training institutions for training of
debt recovery agents to facilitate the future appointments of recovery agents. As the
Accreditation process is mandatory for the recovery agents.

Personnel Management
To foster team spirit amongst the employees and to motivate them to excel
in customer service the bank has set up the Performance Linked Incentive
Scheme which also helped the Bank in exploiting the new emerging

`
 business opportunities to achieve the Bank‟s growth plans. The Bank has also
gone for contract employment, on cost to company basis, of specialists like
Chartered Accountants, Law Officers, Statisticians, Economists, Customer
Relation Executives, Credit Analysts etc. to take care of Bank‟s growing
needs to face competition.

The Bank also revised the Family Pension Scheme for the family pensioners of
the Bank retrospectively from the 1st May 2005. The pension fund has been
separated from the Banks‟ liability after obtaining necessary approval from the
Board of Trustees. The fund will be managed by the Treasury Dept. of SBI for
better returns.

HRMS Project
The Bank has implemented leveraging Technology in employee management area for
automation of its HR process through SAP-ERP-HRMS software. A centralized
database of all employees across SBI is now available where salary processing for 2.05
lakh employees across SBI and pension processing of approximately 1 lakh SBI/IBI
pensioners has been centralized. The bank also introduced a variety of services like
online request submission and viewing of data etc. to all the employees of the Bank on
an online „real time‟ basis, which will increase efficiency in HR operations and help the
management in making employee related decisions faster.

Recruitment
To meet the requirement of skilled manpower and to tap the emerging business
opportunities the bank has recruited 66 Specialist Management Executives with
qualification of CA/ICWA/MBA (Finance, Marketing) during the year. Also the bank
has inducted 7 Special Technical Executives with B.E. /B.Tech qualification in the
fields of Chemical, Mechanical, Electrical, Metallurgical Engineering appointed for
manning consultancy cells in Circles. Further, 917 Probationary Officers and 118 other
Specialist Officers have been recruited during FY 2011-12. This will take care of the
Bank‟s requirements of officers in operations and specialized areas and helps in
reducing the age profile of staff but will also provide an opportunity for greater
mobility and marketing thrust across the Bank to achieve its growth plans. Besides

`
 these the bank has also been successfully holding online examination for promotion
from JMGS I to MMGS II, all promotion exercises in respect of officers up to the grade
of Deputy Managing Director.

Training
The bank is making continuous efforts to impart knowledge, to develop skills and also
to re-orient the attitude of its employees and to keep pace with the changing business
environment. The banks network of providing training to its employees consists of 4
apex level colleges viz. State Bank Staff College, Gurgaon; State Bank Staff College,
Hyderabad; State Bank Institute of Rural Development and State Bank Institute of
Information and Communication Management and over 50 training centres located
across the country. The bank also provides on-site training to its employees working in
the branches under the visiting faculty scheme.

Support Systems and Internal Communication System

Adequate support systems have been provided by the bank to its employees for proper
flow of information to them. The employees are also informed about the achievements
in the business. The media used for internal communication includes: The SBI Monthly
Review, Gurukula, SBI Economic Newsletter, and Choyanika

Industrial Relations
In view of garnering good and excellent relationships with the members of both the
Staff and Officers Federations the State Bank of India sorted out various industrial
relations issues through their consistent support and healthy dialogue/discussions
during the year. It also enhanced the limits under various staff loan schemes and other
initiatives for providing better facilities / incentives to the employees, in order to create
better industrial relations environment in the Bank.

Human Resources Management Solutions (HRMS)

The bank has set up a centralized platform for the processing and payment of salary of
all the employees of SBI, SBP, SBM & SBH. It further introduced the automation of
centralized Provident Fund related services to augment faster settlement of terminal
benefits.

`
 Strategic Training Unit (STU)
The banks Strategic Training Unit (STU) has been fully operationalized on 5th April
2010. It has undertaken a number of initiatives during the year 2011-12 to increase the
efficiency and effectiveness of the Bank‟s training system. Some of the major
initiatives in this regard are as follows:
1. Over 2 lakh (96.7 per cent of Bank‟s staff strength) employees were trained at 5 ATIs
and 47 SBLCs.
2. State Bank Training Management System has been operationalized for creating a
comprehensive database and tracking of training of all employees.
3. E-learning through HRMS portal has been expanded to over 213 courses and about
83% of the staff are now registered on the portal.
4. Leadership Development Programmes were organized for Top Executives and Senior
Management.
5. Research studies by the Bank officials were recognized by various outside
publications/agencies like Bancon, ICRIER, IBFA.

E-BANKING

Electronic banking is one of the truly widespread avatars of E-commerce over the
world. Various authors define E-Banking differently but the most definition depicting
the meaning and features of E-Banking are as follows:
1. Banking is a combination of two, Electronic technology and Banking.
2. Electronic Banking is a process by which a customer performs banking Transactions
electronically without visiting their banks.
3. E-Banking denotes the provision of banking and related service through Extensive use of
information technology without direct recourse to the bank by the customer.

`
 NEED FOR E-BANKING

One has to approach the branch in person, to withdraw cash or deposit a cheque or
request a statement of accounts. In true Internet banking, any inquiry or transaction is
processed online without any reference to the branch (anywhere banking) at any time.
Providing Internet banking is increasingly becoming a "need to have" than a "nice to
have" service. The net banking, thus, now is more of a norm rather than an exception in
many developed countries due to the fact that it is the cheapest way of providing
banking services. Banks have traditionally been in the forefront of harnessing
technology to improve their products, services and efficiency. They have, over a long
time, been using electronic and telecommunication networks for delivering a wide
range of value added products and services. The delivery channels include direct dial –
up connections, private networks, public networks etc. and the devices include
telephone, Personal Computers including the Automated Teller Machines, etc. With the
popularity of PCs, easy access to Internet and World Wide Web (WWW), Internet is
increasingly used by banks as a channel for receiving instructions and delivering their
products and services to their customers. This form of banking is generally referred to
as Internet Banking, although the range of products and services offered by different
banks vary widely both in their content and sophistication.

E-BANKING PRODUCTS

Automated Teller Machine (ATM)

These are cash dispensing machine, which are frequently seen at banks and other
locations such as shopping canters and building societies. Their main purpose is to
allow customer to draw cash at any time and to provide banking services where it
would not have been viable to open another branch e.g. on university campus. An
automated teller machine or automatic teller machine (ATM) is a computerized
telecommunications device that provides a financial institution's customers a method of
financial\ transactions in a public space without the need for a human clerk or bank

`
 teller. On most modern ATMs, the customer identifies him or herself by inserting a
plastic ATM card with a magnetic stripe or a plastic smartcard with a chip that contains
his or her card number and some security information, such as an expiration date or
CVC (CVV). Security is provided by the customer entering a personal identification
number (PIN).Using an ATM, customers can access their bank accounts in order to
make cash withdrawals (or credit card cash advances) and check their account balances.
Many ATMs also allow people to deposit cash or checks, transfer money between their
bank accounts, pay bills, or purchase goods and services. Some of the advantages of
ATM to customers are:-
• Ability to draw cash after normal banking hours
• Quicker than normal cashier service
• Complete security as only the card holder knows the PIN
• Does not just operate as a medium of obtaining cash.
• Customer can sometimes use the services of other bank ATM’s.

Tele banking or Phone Banking

Telephone banking is relatively new Electronic Banking Product. However it is fastly

becoming one of the most popular products. Customer can perform a number of
transactions from the convenience of their own home or office; in fact from anywhere
they have access to phone,
Customers can do following:-

• Check balances and statement information

• Transfer funds from one account to another.

• Pay certain bills

• Order statements or cheque books

• Demand draft request

.

This facility is available with the help of Voice Response System (VRS). This system
basically, accepts only TONE dialed input. Like the ATM customerhas to follow
particular process, initially account number and telephone PIN are fed forthe process to
start. Also the VRS system provides the users within additional facilities such as

`
 changing existing password with the new desired, information about new products,
current interest rates etc.

Mobile Banking

Mobile banking comes in as a part of the banks initiative to offer multiple channel banking
providing convenience for its customer. A versatile multifunctional, free service that is
accessible and viewable on the monitor of mobile phone. Mobile phones are playing great
role in Indian banking- both directly and indirectly. They are being used both as banking and
other channels.

Internet Banking

The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions have
used powerful computer networks to automate million of daily transactions; today, often the
Only paper record is the customer‟s receipt at the point of sale. Now that their customers are
connected to the Internet via personal computers, banks envision similar advantages by
adopting those same internal electronic processes to home use. Banks view online banking as
a powerful “value added” tool to attract and retain new customers while helping to eliminate
costly paper handling and teller interactions in an increasingly competitive banking
environment.

Types of internet banking

Understanding the various types of Internet banking will help examiners assess the risks
involved. Currently, the following three basic kinds of Internet banking are being employed
in the marketplace.

• Informational

This is the basic level of Internet banking. Typically, the bank has marketing information
about the bank‟s products and services on a stand-alone server. The risk is relatively low, as
informational systems typically have no path between the server and the bank‟s internal
network.

`
 This level of Internet banking can be provided by the banks or outsourced. While the risk to a
bank is relatively low, the server or web site may be vulnerable to alteration. Appropriate
controls therefore must be in place to prevent unauthorized alterations to the bank‟s server or
web site

• Communicative

Interaction between the bank‟s system and the customers. The interaction may be
limited to electronic mail, account enquiry, loan applications, or static file updates
(name and address change). Because these servers may have a path to the bank‟s
internal networks, the risk is higher with this configuration than within formational
systems.Appropriatecontrolsneedtobeinthe place to prevent, monitor, and alert manage
ment of any unauthorized attempt to access the bank‟s internal networks and computer
systems. Virus controls also become much more critical in this environment.

• Transactional

This level of Internet banking allows customers to execute transactions. Since a path
typically exists between the server and the bank or outsourcer‟s internal network, this is
the highest risk architecture and must have the strongest controls. Customer
transactions can include accessing accounts, paying bills, transferring funds etc.

ADVANTAGES OF INTERNET BANKING

• Convenience

Unlike your corner bank, online banking sites never close, they‟re available 24 hours a day,
seven days a week, and they‟re only a mouse click away.

• Ubiquity

If you‟re out of state or even out of the country when a money problem arises, you can log
on instantly to your online bank and take care of business, 24\7.

`
 • Transaction speed

Online bank sites generally execute and confirm transactions at or quicker than ATM
processing speeds.

• Efficiency
You can access and manage all of your bank accounts, including IRA‟s, CDs, even
securities, from one secure site.

• Effectiveness
Many online banking sites now offer sophisticated tools, including account aggregation,
stock quotes, rate alert and portfolio managing program to help you manage all of your
assets more effectively. Most are also compatible with money managing programs such
as quicken and Microsoft money.

DISADVANTAGES OF INTERNET BANKING

• Start-up may take time

In order to register for your bank‟s online program, you will probably have to provide ID and
sign a form at a bank branch. If you and your spouse wish to view and manage their assets
together online, one of you may have to sign a durable power of attorney before the bank will
display all of your holdings together.

• Learning curves

Banking sites can be difficult to navigate at first. Plan to invest some time and\or read the
tutorials in order to become comfortable in your virtual lobby.
• Bank site changes
Even the largest banks periodically upgrade their online programs, adding new features in
unfamiliar places. In some cases, you may have to re-enter account information

`
 INTERNET BANKING VERSUS TRADITIONAL BANKING

In spite of so many facilities that Internet banking offers us, we still seem to trust our
traditional method of banking and is reluctant to use online banking. But here are few
cases where Internet banking will turn out to be a better option in terms of saving your
money.' Stop payment' done through Internet banking will not cost any extra fees but
when done through the branch, the bank may charge you Rs 50 per cheque plus the s
ervice tax. Through Internet banking, you can check your transactions at any time of the
day, and as many times as you want to. On the other hand, in a traditional method, you
get quarterly statements from the bank and if you request for a statement at your
required time, it may turn out to be an expensive affair. The branch may charge you
Rs25per page,which includesonly 30transactions.Moreover,the bank branch would t
ake eight days to deliver it at your doorstep. If the fund transfer has to be made out
station, where the bank does not have a branch, the bank would demand outstation
charges. Whereas with the help of online banking, it will be absolutely free for you. As
per the Internet and Mobile Association of India's report on online banking 2006,"There
are many advantages of online banking. It is convenient, it isn't bound by operational
timings, there are no geographical barriers and the services can be offered at a
miniscule cost."

`
CHAPTER III

DATA ANALYSISANDINTERPRETATION

Reason for Choosing the E-banking services:

The table shows the classification of the respondents based on choose the E-banking services.
Table 1
Reason for Choosing the E-banking services

Reason for Choosing E- No of

S.No banking service Respondents Percentage(%)

1 Convenience to use 78 26

2 Time savings 142 47

3 Money savings 69 23%

4 Others 11 4%

Total 300 100%

Source: primary data

The above table shows that out of 300 respondents, 142 respondents choose the E-banking services are
used Time savings that is 47%, 78 respondents choose the E-banking services are used Convenience to use that
is 26%, 69 respondents choose the E-banking services are used Money savings that is 23%, 11 respondents
choose the E-banking services are used Others that is 4%, The opinion is clearly shown in the chart given
below.

Table 2.

`
 Choose the E-banking services

Use of E-banking services of the respondents:

The table shows the classification of the respondents based on Use of E-banking services

Table 3
Use of E-banking services

S.No Use of E-banking services No of Respondents Percentage(%)

1 Any one E-banking services 250 83

2 Any two E-banking services 35 12

3 All three E-banking services 15 5

Total 300 100

Source: primary data

The above table shows that out of 300 respondents, 250 respondents have used any one E-banking
services that is 83%, 35 respondents have used any two services that is 12%, 15 respondents have used all three
E- banking that is 5%, The opinion is clearly shown in the chart given below.

`
Table 4.

Use the E-banking services of the respondents

`
 Table 4 (1)

Use the E-banking services of the respondents

S.No Use E-banking services No of Respondents Percentage(%)

1 ATM 150 60

2 Mobile banking 20 8

3 Internet banking 80 32

Total 250 100

Source: primary data

The above table shows that out of 250 respondents, 150 respondents have used only one services of
ATM that is 60%, 80 respondents have used only one services of Internet banking that is 32%, 20 respondents
have used only one services of Mobile banking that is 8%.
Use the E-banking services of the respondents

S.No Use E-banking services No of Respondents Percentage(%)

1 ATM & Mobile 7 20

2 ATM & Net 22 63

3 Mobile & Net 6 17

Total 35 100
Source : Primary data

he above table shows that out of 35 respondents, 22 respondents have used two services of ATM & Net
that is 63%, 7 respondents have used two services of ATM & Mobile that is 20%, 6 respondents have used two
services of Mobile &Net banking that is 17%,

Age of the Respondent :

`
 In any study Age is an important demographic characteristic of the respondents that affects opinion. The
table shows the classification of the respondents based on age.

Table 5
Age of the respondents

No of
S.No Age group Respondents Percentage(%)

1 Below – 20 12 4

2 20-25 92 31

3 26-35 95 32

4 36-50 81 27

5 Above-50 20 7

Total 300 100

Source: primary data

The above table shows that out of 300 respondents 95 respondents were age 26-35 that is 32%, 92
Respondents less than 26 years age that is 31%, 81 respondents were 36-50 years age that is 27%, 20
respondents were Above 50years age that is 7%, 12 respondents were Below 20 years age that is 12%. The
opinion is clearly shown in the chart given below.

CHI-SQUARE ANALYSIS
Chi-square test-case I:

The customers‟ age wise classification and the use of e-banking they prefer were cross-
tabulated from 300 respondents. A cross tabulation with a chi-squared test requested from the
computer package. The output is shown below in the table.

Table 6
Age vs use of e-banking Cross tabulation

`
 usee-banking

Total
Regularly Rarely Frequently

age below20 Count 0 8 4 12

% within use e-banking .0% 6.7% 3.4% 4.0%

20-25 Count 17 46 29 92
% within use e-banking 26.6% 38.7% 24.8% 30.7%

26-35 Count 24 28 43 95
% within use e-banking 37.5% 23.5% 36.8% 31.7%

36-50 Count 17 37 27 81

% within use e-banking 26.6% 31.1% 23.1% 27.0%

Above 50 Count 6 0 14 20

% within use e-banking 9.4% .0% 12.0% 6.7%

Total Count 64 119 117 300

% within use e-banking 100.0% 100.0% 100.0%

100.0%

Source: primary data

The cross tabulation shows the number of respondents falling into each cell, that is, the combination of
one age category with one use of e-banking category.

Null hypothesis H01: There is no association between age of respondents and using e-banking services
frequently.

Alternate hypothesis HA1: There is association between age of respondents and using thee-banking
services frequently.

Table 7
Chi-square tests for Age vs use of e-banking

Chi-Square Tests

`
 Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 28.118a 8 .000

Likelihood Ratio 37.288 8 .000
Linear-by-Linear Association .152 1 .697
N of Valid Cases 300
S.No Occupation No of Respondents Percentage(%)

Chi-Square Tests
Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 28.118a 8 .000

Likelihood Ratio 37.288 8 .000
Linear-by-Linear Association .152 1 .697
N of Valid Cases 300
Source: Results computed through spss package

Interpretation:

The „p‟ value, that is pearson chi-square test reads a significant level of 0.000 at 5% level of significance. This
value of being less than the significance level of 0.05, the null hypothesis is rejected. Hence, there is association between the age
of respondents and using .the e-banking services frequently

Occupation of the respondents :

In any study Occupation is an important demographic characteristic of the respondents that affects opinion. The table shows the
classification of the respondents based on Occupation .

Table 8

Occupation of the respondents

`
 1 Business man/women 69 23

2 Government employee 51 17

3 Private employee 127 42

4 Student 11 4

5 Professional 35 12
Source:
primary data
6 House wife 7 2
The above
Total 300 100 table shows
that out of 300 respondents, 127 respondents were Private employee that is 42%, 69 respondents were Business man/women that is
23%, 51 respondents were Government employee hat is 17%, 35 respondents were Professionals that is 12 %. 11 respondents were
student that is 4 %. 5 respondents were House wife that is 2 %. The opinion is clearly shown in the chart given below.

Inference:

Among the 300 respondents 127 were Private employee that is 42%

KRUSKAL WALLIS TEST

The Kruskal–Wallis one-way analysis of variance by ranks (named after William Kruskal and W.
Allen Wallis) is a non-parametric method for testing whether samples originate from the same distribution.
It is used for comparing more than two samples that are independent, or not related. The parametric
equivalent of the Kruskal-Wallis test is the one-way analysis of variance (ANOVA). When the Kruskal-
Wallis test leads to significant results, then at least one of the samples is different from the other samples.
The test does not identify where the differences occur or how many differences actually occur. It is an
extension of the Mann–Whitney U test to 3 or more groups. Since it is a non-parametric method, the
Kruskal–Wallis test does not assume a normal distribution, unlike the analogous one-way analysis of
variance. Kruskal–Wallis is also used when the examined groups are of unequal size (different number of
participants).
Ho6: There is no significant difference in the ranks given by the respondents of different occupation dimensions of workers to the
opening of e-banking account services for convenience(24 hours).

HA6: There is significant difference in the ranks by the respondents of different occupation dimensions of workers to the opening
of e-banking account services for convenience(24 hours)

Table 9

Convenience(24 hours) vs occupation

OCCUPATION N MEAN Z VALUE P VALUE

DIMENSIONS OF RANK
WORKERS
CONVENIENCE(24 Businessman/woman 69 143.64
hours) Government employee 51 136.47
Private employee 127 157.63
Student 11 173.14 5.564 .351
Professional 35 151.70

`
 House wife 7 149.50
Total 300
Source: Resulted computed through spss package.

As the computed p value is more than the assumed value of 0.05, the above null hypothesis is accepted. Hence, there is no
significant difference in the ranks assigned by respondents having different occupation dimensions of worker . The mean rank
given by the respondents having the number of Government employee is 7 , with the lowest mean rank of 136.47, is followed by
mean rank given by respondents having number of Business man/woman is 69 ,with the mean rank of 143.64,is followed by
mean rank given by respondents having number of House wife is 7, with the mean rank of 149.50, is followed by mean rank
given by respondents having number of professional is 35, with mean rank of 151.70, is followed by mean rank given by
respondents having number of private employee is 127,with mean rank of 157.63, is followed by mean rank given by respondents
having number of house wife is 5, with mean rank of 165.50, is followed by mean rank given by respondents having number of
student is 11, with mean rank of 173.14 . Hence, occupation dimensions of workers to the opening of e-banking account services
for convenience(24 hours) are most preferred by Government employee.

FACTOR ANALYSIS:

Factor analysis, a Multivariate interdependence statistical technique is a data reduction tool. Factor analysis removes redundancy
or duplication from a set of correlated variables. It is helpful in representing correlated variables with a smaller set of “derived”
variables. Factors are formed that are relatively independent of one another. The present researcher has applied the factor analysis
for the Specify your opinion about the problems you have met while using e-banking services

Details of input data and variables:

As the first step, sample respondents 300 in number were requested to state to what an extent they agree or disagree with the 17
statements. To measure the degree of preference of the ATM with each of these 17 statements, likert type 5 point numerical scale
was use. Strongly agree carrying score 5, agree the score of 4, neither agree (or) disagree carrying the score 3, Disagree the score
of 2 and Strongly disagree the score of 1.

Details of statistical calculation and decisions:

Testing for sampling adequacy:

The appropriateness of the factor model is tested before extracting the factors. The test statistics for sphercity based on a chi-
square transformation of the determinant of the correlation matrix. Another useful statistics is the Kaiser-Meyer-OlKin (KMO)
test of sampling adequacy. Small values of the KMO statistics indicate that the correlation between pair of variables cannot be
explained by other variables and that factor analysis may not be appropriate. Generally, a value greater than 0.5 is desirable.

The correlation matrix was examined carefully and the two tests, viz., Bartlett‟s test of sphercity and Kaiser-Meyer-Olkin
were undertaken to test if it was judicious to proceed with factor analysis in the present study.
H0: The factor analysis is not valid.
HA: The factor analysis is valid

KMO and Bartlett's Test

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .626

Bartlett's Test of Sphericity Approx. Chi-Square 1258.833

Df 136
Sig. .000

The significance (0.000) is less than the assumed significance value (0.05). so the null hypothesis H0 is
rejected, the alternate hypothesis H1 is accepted, and hence the factor analysis is valid, next, one may look at
the KMO co-efficient to cross check Bartlett‟s test. It can be seen (0.626) is more than 0.5, so one agrees with

`
 Bartlett‟s test that the factor analysis is valid.

Extraction of factor: Principal Component Analysis(PCA)

There are two main stage in factor analysis as the first stage, principal component analysis was used for the
initial extraction of the factors. PCA is a technique for forming a set of new variables that are linear
combination of the original set of variables. The new variables are called „Principal Component or factors.

Total Variance Explained

Extraction Sums of Squared
Com Initial Eigenvalues Loadings Rotation Sums of Squared Loadings
pone % of % of % of
nt Cumulative Cumulative Cumulative
Total Variance % Total Variance % Total Variance %

1 3.663 21.550 21.550 3.663 21.550 21.550 2.981 17.538 17.538

2 2.098 12.344 33.894 2.098 12.344 33.894 2.323 13.667 31.205
3 1.727 10.156 44.049 1.727 10.156 44.049 1.575 9.267 40.473
4 1.377 8.099 52.148 1.377 8.099 52.148 1.543 9.075 49.548
5 1.199 7.051 59.199 1.199 7.051 59.199 1.505 8.851 58.399
6 1.183 6.958 66.158 1.183 6.958 66.158 1.319 7.759 66.158
7 .971 5.710 71.867
8 .936 5.506 77.373
9 .762 4.480 81.853
10 .592 3.481 85.334
11 .522 3.070 88.404
12 .488 2.871 91.276
13 .391 2.299 93.575
14 .312 1.838 95.413
15 .312 1.833 97.246
16 .260 1.532 98.778
17 .208 1.222 100.000

The Principle Component Analysis is used for initial extraction of factors. The Eigen value more than one
was considered for the information of new principal components. The Factor I explained with variance
17.538 and Eigen value 2.981. The Factor II explained with variance 13.667 and Eigen value 2.32. The
Factor III explained with variance 9.267 and Eigen value 1.575. The Factor V explained with variance 8.851
and Eigen value 1.505.The Factor VI explained with variance 7.759 and Eigen value 1.319.

`
 Rotated Component Matrixa
Component

1 2 3 4 5 6
No printing statement
.773

Out of order
.772

Card get locked

.748

Mutilated notes
.700

Insufficient of cash machine

.589

Changing password .813

Power cut .772

No safe and secure .720

User friendly .515

Difficulty using other banks ATM .688

centre

Slow process .698

Waiting in long queue .660

Fresh card .855

Expiry date .543

Fee charged .713

Table exhibits the rotated factor loadings for the 17 statements(variables) have been reduced to six factors,
namely F1,F2,F3,F4,F5,and F6. These six factors with suitable names are given below:
Extraction Method: Principal Component Analysis.
F1- Incomplete process.
Rotation Method:
F2- Changing Varimax with Kaiser Normalization.
password.
F3- Inconvenience.
F4-Inadequate services.
F5-Fresh card.
a. Rotation
F6-Fee charged.converged in 10 iterations.
The factors and variables within those factors are presented in the following tables( )

`
 Table 10
FACTOR 1: INCOMPLETE PROCESS

S.No Reason/Variables Factor1 Eigen value Percentage

variance
1 No printing statement .773
2 Out of order .772
3 Card get locked .748
2.981 17.538
4 Mutilated notes .700
5 Insufficient of cash machine .589

Source: Results computed through SPSS.

The Five factors have been loaded on factor-1, The factor is named as Incomplete process on the
basis of loading. The Eigen value for the above Factor 1 was 2.981, and the percentage variance was
17.538.

Table 11
FACTOR 2- CHANGING PASSWORD

S.No Reason/Variables Factor1I Eigen value Percentage

variance
1 Changing password .813

2 Power cut .772

2.323 13.667
3 No safe and secure .720

4 User friendly .515

Source: Results computed through SPSS.

The Four factors have been loaded on factor-2, The factor is named as Changing password on the
basis of loading. The Eigen value for the above Factor 2 was 2.323, and the percentage variance was
13.667.

`
 Table
FACTOR 3-INCONVENIENCE

S.No Reason/Variables Factor1II Eigen value Percentage

variance

1 Difficulty using other .688 1.575 9.267

banks ATM centre

Source: Results computed through SPSS

The one factors have been loaded on factor-3, The factor is named as Inconvenience on the basis
of loading. The Eigen value for the above Factor 3 was 1.575, and the percentage variance was 9.267.

Table 12
FACTOR 4- INADEQUATE SERVICES

S.No Reason/Variables Factor1V Eigen value Percentage

variance

1 Slow process .698

1.543 9.075
2 Waiting in long queue .660

Source: Results computed through SPSS

The two factors have been loaded on factor-4, The factor is named as Inadequate services on the
basis of loading. The Eigen value for the above Factor 4 was 1.543, and the percentage variance was 9.075.

`
 Table 13
FACTOR 5- FRESH CARD

S.No Reason/Variables Factor V Eigen value Percentage

variance

1 Fresh card .855

2 Expiry date .543 1.505 8.851

Source: Results computed through SPSS

The two factors have been loaded on factor-5, The factor is named as Fresh card on the basis of
loading. The Eigen value for the above Factor 5 was 1.505, and the percentage variance was 8.851.

Table 14
FACTOR 6- FEE CHARGED

S.No Reason/Variables Factor VI Eigen value Percentage

variance

1 Fee charged .713 1.319 7.759

Source: Results computed through SPSS

The one factors have been loaded on factor-6, The factor is named as Fee charged on the basis of
loading. The Eigen value for the above Factor 6 was 1.319, and the percentage variance was 7.759.

`
 Table 15
RESPONDENTS ARE MOSTLY FACING THE HIGH PROBLEMS OF ATM WITH MENTIONED THE HIGH LOADING OF
VARIABLES ARE GIVEN BELOW

Factor Name of extracted Selected Factor loading

factor statement(variable)

F1 Incomplete process Card get locked 0.748

F2 Changing password Changing password 0.813

F3 Inconvenience Difficulty using other 0.688

banks ATM center

F4 Inadequate services Slow process 0.698

F5 Fresh card Fresh card 0.855

F6 Fee charged Fee charged 0.713

It is evident from the table that the statement ,Card get locked with factor loading of 0.748, Changing
password with factor loading of 0.813, Difficulty using other banks ATM center with factor loading of
0.688, Slow process with factor loading of 0.698, Fresh card with factor loading of 0.855, Fee charged with
factor loading of 0.173, are the statements with the higher loading factors of F1,F2,F3,F4,F5,and F6
respectively. Therefore, these are the identified six variables, which carry greater influence over the relative
factors that the respondents are mostly facing the high problems of ATM.

ATTITUDE - Likert five point scaling techniques

Attitude is a behavioural disposition which is part of the structure of human perception It is an enduring
organisation of motivational, emotional, perceptual and cognitive processes with respect to some
aspects of the individual‟s world. It is an enduring system of one‟s belief, feeling and action
tendencies. Scaling is the extension of measurement. It is the process of placing respondents in
continuum. This attitude scale is used to identify the level of satisfaction of the respondents used by ATM,
Mobile banking, Internet banking

`
 ATM
High IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII

Medium IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII

IIII III IIII IIII IIII IIII IIII IIII IIII III IIII IIII IIII IIII IIII IIII
I I

IIII III
I

IIII III IIII IIII IIII IIII I

I
Low

TALLY MARK SHEET

Level of satisfaction No of respondents Percentage

High 55 22

Medium 164 65

Low 31 13

Total 250 100

Out of 250 respondents, 164 (65%) have medium level attitude towards ATM services, 55(22%) have High
level attitude towards ATM services. 31(13%) have low level attitude towards ATM services.
Mobile banking
High IIII

Medium IIII IIII I

Low I

TALLY MARK SHEET

Level of satisfaction No of respondents Percentage

High 3 20

Medium 11 73

Low 1 7

Total 15 100

Out of 15 respondents, 11 (73%) have medium level attitude towards Mobile banking services,3(20%) have
High level attitude towards Mobile banking services. 1(7%) have low level attitude towards Mobile banking
services.

`
 Internet banking
High IIII I
Medium IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII
IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII
IIII IIII
IIII IIII IIII IIII IIII IIII I
Low

TALLY MARK SHEET

Level of satisfaction No of respondents Percentage

High 6 17

Medium 26 74

Low 3 9

Total 35 100

Out of 35 respondents, 26 74%) have medium level attitude towards Internet banking services, 6(17%) have High level attitude
towards Internet banking services. 3(9%) have low level attitude towards Internet banking services.

Suggesstions:

To the bank:

 Much need to be done in the areas of creating awareness about the availability of electronic banking products and
services, how they operate and their benefits. Banks should organize public exhibitions and talk shows and make
products accessible to all customers.

 The bank should come forward with more meaningful advertisements and awareness campaigns to create awareness
among customer‟s regarding e-banking services and to make e-banking popular among the entire age and income group.

 Banks should try to win customers confidence by providing adequate security to transaction. If the problems comes in
the banks should ensure that at no time should service case as a result of network problem.

 The bank staff must know all the facilities of e-banking so they can say about

the e-banking facilities to the customer properly, so the researcher suggest be properly trained regarding this scientific
advancement.

 The bank should come forward with more advertisements through the flex in the bank so the customers may easily
understand how to operate e-banking services at the counter of all banks.

 The customer may not be charged for using the ATM more than 3 times.

To the customer:

 Don‟t use in public browsing centres/ shared computers.

 Don‟t create password which can be easily guessed by others.

To the Government.

 Governments should provide adequate regulatory framework that will ensure customer protection and security transaction.

 Government compel educational institutions to introduce e-banking as a special subject in depth with practical knowledge.

`
 CONCLUSION

The usage of E-banking is all set to increase among the service class. The service class
at the moment is not using the services thoroughly due to various hurdling factors like
in security and fear of hidden costs etc. So banks should come forward with measures
to reduce the apprehensions of their customers through awareness campaigns and more
meaningful advertisements to make E-banking popular among all the age and income
groups. Further, with increasing consumer demands, banks have to constantly think of
innovative customized services to remain competitive. E-Banking is an innovative tool
that is fast becoming a necessity. It is a successful strategic weapon for banks to
remain profitable in a volatile and competitive marketplace of today. In future, the
availability of technology to ensure safety and privacy of e-transactions and the RBI
guidelines on various aspects of internet banking will definitely help in rapid growth of
internet banking in India .

`
BIBLIOGRAPHY

Hand note on Problem-Centered Summer Internship Projects (SIP)

and Business Consultancy Projects(BCP): New Research Paradigms,
Oswald A. J. Mascarenhas, S. J., Ph.D

Jordon, Natarajan, “Banking Theory, Law and Practice”, Himalaya

Publications, 19th Edition, pp501-516

Jayaragavan Itengar,“Introduction to Banking”, Excel Books, First

Edition, New Delhi, pp220-233