“ Internet Banking Of State Bank Of India

Chapter I Introduction to Project The chapter describes the basic premise of the project. It also sets forward the path in which the project was planned and is being completed. Background Graduated in BBA as the background, and as a student of Fourth Semester MBA with specialization in Finance and Marketing, I was searching for a project area which should go along with my career in Finance division of banking industry and utilizes most of my Finance skills and knowledge. So it was narrowed down to the study of Internet Banking of State Bank Of India. Objectives The main objectives of the study are: • To understand the concept of Internet banking and importance, to bank as well as customers. • To get aware of various aspects of net banking • To build up SWOC analysis of Internet banking of SBI

“ Internet Banking Of State Bank Of India

• To build up various solutions for drawbacks in net banking

Scope of study The study is made taking consideration of whole State Bank of India. With reference to experience availed at Amravati camp branch.

Need of the Study This study is needed to find out the working of Internet Banking of SBI and its importance to customer as well as to bank.

Data Collection The data is to be collected from Personal Development Manager of SBI, Mr.Yadao Mohod, and by the official website of State Bank Of India and Reserve Bank of India. The project is divided into various chapters dealing with various issues in the project. There are in total seven chapters.

“ Internet Banking Of State Bank Of India

The title of each chapter is shown below:
Chapter I contain Introduction to Project, Chapter II contain Company Profile Chapter III contain History of Internet Banking Chapter IV contains working of internet banking in SBI Chapter V SWOC analysis Chapter VI contain the Recommendations and Suggestions Chapter VII will be Conclusion

Future scope

“ Internet Banking Of State Bank Of India The study of this topic will help to get the knowledge about process of internet banking and usefulness to banking industry. This was all about how the project will go ahead and the findings from it. Hence the study will lead to new ways to tackle the problems and the SWOC of SBI in respect of internet banking. As the study contains the 360 degree information regarding SBI and its internet banking. The next chapter deals with the Company Profiles Chapter 2 INTERNET BANKING 4 .

The other is to embrace the new religion with messianic fervor and go out to proclaim the millennium. births and deaths… all of it most readily interpreted as the inevitable result of the technological revolution that is in the process of merging telephones. behind this bland public exterior there is a seething world of innovation. While most consumers see the news papers. destined to redefine the world of communications: 5 . very possible. the same magazines and listen to the same radio programs. Internet:INTRODUCTION: There is a sea change in the media world. I welcome you to the new emerging world of the Info-High-Way. televisions in to a single all singing. change all of our lives more than we can imagine some day There are 2 ways you can respond to this 1 is to panic. which may mean simply curling up in a corner and wishing that it would all go away. acquisition. global partnership and divorces. all dancing magic kit that will. computers.“ Internet Banking Of State Bank Of India The chapter describes in brief about INTERNET BANKING.

it is seeds of Internet were sown in the ashes of the world war Having bombed the cities of Hiroshima and Nagasaki. If one strand on the fish net broke the net would still be functional. After spending many agonizing 6 . And one of the most important strategic problems was. the Rand Corporation. This means that if even one chain in the middle were blown up. communication networks were connected to each in a private fashion. US military was forced to provide the answer to the question – What if someone bombed the USA? So for many years after the war. But. “What if the network was not built like a chain but like a fish net?” he said.“ Internet Banking Of State Bank Of India HISTORY: It is said that necessity is the mother of invention. After a lot of ideas were put up and knocked down.a rand “thinker” hit upon an idea.in sort of chains: somewhat like an electricity line to your home. And true. the whole network would collapse.“How would us authorities communicate with each other in the aftermath of a nuclear attack?” computers were already there. Paul baron. most of the US military research concentrated on ways and means to survive the nuclear holocaust. Then in the 1960’s the problem was taken by America’s foremost military think tank.

university of Utah. gateways servers which connect the users to the rest of the network (of computers). university of California in Los Angeles and Santa Barbara. and. connecting four American research organizations. the first net was created and called ARPANET. But. This has fuelled an unparalleled growth in the number of Internet users. Well before the end of the decade. By then. as fate would have it was rejected. servers which host information in them. and Stanford research institute. he came up with 11-volume report for the pentagon. Internet as a communication medium and as a repository of information has caught the imagination of computer users. the communication network over which data actually flows. The subscribers may have access to all or any of the following services depending upon the type of connection that one has subscribed for: 7 . VARIOUS PARTS OF INTERNET: - The Internet is made up of terminal computers through which subscribers access the net. young engineers were impressed by the idea and worked on it. Internet offers its users a variety of services.“ Internet Banking Of State Bank Of India hours over it.

“ Internet Banking Of State Bank Of India 1) E-Mail 2) World Wide Web (WWW) 3) File Transfer Protocol (FTP) 4) Telnet 8 .

such as electronic bill presentment and payment (allowing customers to receive and pay bills on a bank’s Web site). Such services include traditional ones. The computer server that lies at the heart of a virtual bank may be housed in an office that serves as the legal address of such a bank.” “branchless.” or “Internet-only” bank. Virtual banks may offer their customers the ability to make deposits and withdraw funds via ATMs or other remote delivery channels owned by other institutions. thus. or at some other location. Internet banking refers to the use of the Internet as a remote delivery channel for banking services. A second alternative is to establish a “virtual. The impact of E-transaction and authentication issues in banking 9 . 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 offer Internet banking in two main ways. and new banking services. such as opening a deposit account or transferring funds among different accounts.“ Internet Banking Of State Bank Of India The net banking. An existing bank with physical offices can establish a Web site and offer Internet banking to its customers as an addition to its traditional delivery channels.

Internet connection speed. This objective is now reaching beyond the financial services industry into non-electronic business segments. there is an increased awareness of the benefits of using online transaction processing. The number of adults using PC banking is also growing. transactional Web sites have more than doubled each year for the past six years. thereby fueling the thought that all business should be electronically facilitated. This growth is a reflection of the fact that over the past few years. such as the building supply industry.. 10 . Furthermore.500 in 2000. growing from one in 1995 to nearly 2. this growth is likely to continue to climb as the number of Internet users. According Federal Deposit Insurance Corp.“ Internet Banking Of State Bank Of India It's hardly great news that there has been tremendous growth in the use of the Internet and other electronic to facilities the to process financial transactions. financial leaders have been considering various ways in which to allow their customers to transact business using the Internet. With this growth. and the number of transactional Web sites continues to increase.

by offering discounted prices for electronic payment.5 trillion in 2005. Customers can receive and pay bills from one point using products from multiple issuers. for example.“ Internet Banking Of State Bank Of India Gartner predicts that worldwide business-to-business (B2B) ecommerce will total $3. have the largest customer base. only 30 percent of the Internet-capable households were using some form of Internet banking. Banks have traditionally been the trusted agents. Online financial activity had a slower start. and have received the initial benefits from electronic commerce. During 2000.6 trillion by 2003 and $8. Merchants can add value to the payment process. but has had steady growth. Merchants can influence and enhance the consumer experience by providing innovative and time-saving means of doing business. 11 . Value has begun a steady migration to the ends of the value chain. indicating that there is tremendous room for increased use. The e-Commerce Value Chain Consider that the consumer and the merchant are on either ends of the electronic commerce value chain. from 6 million users in 1998 to 27.5 million users in 2000. with the authentication network and transaction processor (bank) in the middle.

“ Internet Banking Of State Bank Of India Merchants can also reduce their costs by receiving electronic payments. as well as reducing the error rate and the time to investigate and correct the data. which results in reducing and sometimes eliminating the need for data entry. merchants may also be able to reduce costs associated with lines of credit. 12 . By increasing and effectively managing cash flow.

opening and closing of accounts. allowing transactions such as mortgages. financial services institutions can now legally transact business using electronic signatures. benefits enrollment. 2000. contract. Accordingly. and beneficiary designations to occur in an electronic environment. the Electronic Signatures in National and Global Commerce Act was signed. This act states that an agreement. funds transfers.“ Internet Banking Of State Bank Of India Digital Signatures On October 1. 13 . or transaction signed electronically is enforceable in a court of law.

such as cost and unauthorized use associated with alternative implementations. the technology decision maker must define relevant business objectives and understand the risks. These include reduced transaction timelines. the legislation does not attempt to define acceptable technologies except to indicate that the technologies must be mutually acceptable to the transacting parties." Fortunately. There are possible additional benefits to the implementing organization.“ Internet Banking Of State Bank Of India The law defines an electronic signature as "an electronic sound. reduction in paper processing costs. Since a valid signature can be as simple as a digital image of a signature (enabled through an electronic pen and pad) or as complex as today's public key infrastructure (PKI) and associated encryption methods. 14 . and increased online transaction security. facilitation of customer migration to the Internet as a business channel. or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record. symbol.

a method that allows the parties to a transaction to keep a communication private through the use of a two-part key made up of public and private components. the recipients use their unpublished private keys. which can happen by releasing the password or allowing access to the device containing the private key. if the signer's private key is not compromised. known only to them.“ Internet Banking Of State Bank Of India When compared to physical signatures. To decrypt the messages. Many financial institutions are studying the possible implementation of a public key infrastructure (PKI) system that will allow them to exchange electronic information securely with unknown parties. the published public keys of the recipients are used. e-signature technologies are. To encrypt messages. PKI is the delivery channel for public key cryptography. Quite simply. a document cannot be digitally signed 15 . in general. a more secure authentication method.

“ Internet Banking Of State Bank Of India What Is Internet Banking? 16 .

“ Internet Banking Of State Bank Of India Internet Banking System is a system that has been developed in order to help clients with the daily day-to-day transactions. the system allows both transactional and non-transactional features. Internet banking systems means that clients can now do banking at the leisure of their homes. Also known as online banking. Online banking or internet banking allows customers to conduct financial transactions on a secure website operated by the retail or virtual bank History 17 .

Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidized by the telecom provider and the UK. ‘Home banking’ can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. keyboard and TV (or monitor) to access the banking system using a phone line. Chase Manhattan. Chemical and Manufacturers Hanover) offered home banking services using the videotext system. where the Prestel system was used.“ Internet Banking Of State Bank Of India The term online banking was first started in 80’s. Online services started in New York in 1981 when four of the city’s major banks (Citibank. 18 . The term online became popular in the late '80s and referred to the use of a terminal.

electricity and telephone companies and accounts with other banks. Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in Oct.“ Internet Banking Of State Bank Of India The UK’s first home online banking services was set up by the Nottingham Building Society (NBS) in 1983 . BACS was later used to transfer the payment directly. In order to make bank transfers and bill payments. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. Typical recipients were gas. such as the BBC Micro.The system used was based on the UK's Prestel system and used a computer. The system (known as 'Home link') allowed on-line viewing of statements. Later on it was adopted by worldwide banks 19 . a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Home link system. 1994. or keyboard (Tandata Td1400) connected to the telephone system and television set. Details of payments to be made were input into the NBS system by the account holder via Prestel. bank transfers and bill payments.

State bank of India:20 .“ Internet Banking Of State Bank Of India Chapter 3 Company Profile The chapter describes the Company profile of State Bank Of India which was taken for the study of project.

Some facts and figures SBI Share in Deposits & Advances SBI Share in Deposits & Advances SBI SBI 18% 18% SBI Share in Foreign Exchange SBI Share in Foreign Exchange 21 SBI SBI 35% 35% . Canada. including multiple locations in the US. The bank has other units devoted to capital markets. and brokerage services. factoring and commercial services.000 branches within India. and Nigeria. The Reserve Bank of India owns about 60% of State bank of India. credit cards. where it also owns majority stakes in six associate banks. fund management. the bank operates more than 15. Tracing its roots back some 200 years to the British East India Company (and initially established as the Bank of Calcutta in 1806). State Bank of India (SBI) has more than 80 offices in nearly 35 other countries.“ Internet Banking Of State Bank Of India State bank of India is the nation’s largest and oldest bank.

“ Internet Banking Of State Bank Of India (Receipts and payments on behalf of Government of India (Receipts and payments on behalf of Government of India and other provincial Governments ) and other provincial Governments ) SBI Share in Government Transactions SBI Share in Government Transactions SBI SBI 60% 60% 22 .

“ Internet Banking Of State Bank Of India History of State bank of India:- 23 .

SBI has been working on reigning in its branch network. As part of that effort. Canada.36 billion and total assets of $104. The government-controlled bank--the Indian government maintains a stake of nearly 60 percent in SBI through the central Reserve Bank of India--also operates the world's largest branch network. Nepal.000 employees. with seven international subsidiaries in the United States. Nigeria. SBI has been forced to revamp its operations since competition was introduced into the country's commercial banking system. and more than 50 branch offices in 30 countries. SBI reported revenue of $10. with more than 13. Long an arm of the Indian government's infrastructure. staffed by nearly 220. reducing its payroll. SBI has been rolling out its own network of automated teller machines. and securities brokering sectors. SBI is also present worldwide.“ Internet Banking Of State Bank Of India State Bank of India (SBI) is that country's largest commercial bank.500 branch offices throughout India. In 2003. SBI also has taken advantage of the deregulation of the Indian banking sector to enter the. as well as developing anytime-anywhere banking services through Internet and other technologies. and the United Kingdom. agricultural. 24 .81 billion. assets management. and industrial development policies. and strengthening its loan portfolio. Mauritius. Bhutan. In addition.

in some cases. Originally established to serve the city's interests. if only to serve the needs and interests of the British imperial government and of the European trading houses doing business there. The introduction of Western-style banking instituted deposit savings accounts and. the bank was granted a charter to serve all of Bengal in 1809. 25 . The creation of a national banking system began at the beginning of the 19th century. which became legal currency within the Bengali region. This right enabled the bank to establish a solid financial foundation.“ Internet Banking Of State Bank Of India The establishment of the British colonial government in India brought with it calls for the formation of a Western-style banking system. building an interest-free capital base. it was also the country's first joint stock company. The Bank of Bengal also received the right to issue its own notes. Called the Bank of Calcutta. in Calcutta. investment services. becoming the Bank of Bengal. The first component of what was later to become the State Bank of India was created in 1806.

“ Internet Banking Of State Bank Of India

The spread of colonial influence also extended the scope of government and commercial financial influence. Toward the middle of the century, the imperial government created two more regional banks. The Bank of Bombay was created in 1840, and was soon joined by the Bank of Madras in 1843. Together with the Bank of Bengal, they became known as the "presidency" banks. All three banks were operated as joint stock companies, with the imperial government holding a one-fifth share of each bank. The remaining shares were sold to private subscribers and, typically, were claimed by the Western European trading firms. These firms were represented on each bank's board of directors, which was presided over by a nominee from the government. While the banks performed typical banking functions, for the Western firms and population and members of Indian society, their main role was to act as a lever for raising loan capital, as well as help stabilize government securities.


“ Internet Banking Of State Bank Of India

The charters backing the establishment of the presidency banks granted them the right to establish branch offices. Into the second half of the century, however, the banks remained singleoffice concerns. It was only after the passage of the Paper Currency Act in 1861 that the banks began their first expansion effort. That legislation had taken away the presidency banks' authority to issue currency, instead placing the issuing of paper currency under direct control of the British government in India, starting in 1862. Yet that same legislation included two key features that stimulated the growth of a national banking network. On the one hand, the presidency banks were given the responsibility for the new currency's management and circulation. On the other, the government agreed to transfer treasury capital backing the currency to the banks--and especially to their branch offices. This latter feature encouraged the three banks to begin building the country's first banking network. The three banks then launched an expansion effort, establishing a system of branch offices, agencies, and sub-agencies throughout the most populated regions of the Indian coast, and into the inland areas as well. By the end of the 1870s, the three presidency banks operated nearly 50 branches among them.

“ Internet Banking Of State Bank Of India

The rapid growth of the presidency banks came to an abrupt halt in 1876, when a new piece of legislation, the Presidency Banks Act, placed all three banks under a common charter--and a common set of restrictions. As part of the legislation, the British imperial government gave up its ownership stakes in the banks, although they continued to provide a number of services to the government, and retained some of the government's treasury capital. The majority of that, however, was transferred to the three newly created Reserve Treasuries, located in Calcutta, Bombay, and Madras. The Reserve Treasuries continued to lend capital to the presidency banks, but on a more restrictive basis. The minimum balance now guaranteed under the Presidency Banks Act was applicable only to the banks' central offices. With branch offices no longer guaranteed a minimum balance backed by government funds, the banks ended development of their networks. Only the Bank of Madras continued to grow for some time, supplied as it was by the influx of capital from development of trade among the region's port cities.


although for the time being was excluded from the foreign exchange market.“ Internet Banking Of State Bank Of India The loss of the government-backed balances was soon compensated by India's rapid economic development at the end of the 19th century. and particularly foreign banks authorized to exchange currency. seeing the rise of cash-crop farming. By the beginning of the 20th century. the Indian government had outgrown its colonial background and now required a more centralized banking institution. and widespread industrial development. 29 ." At the same time. a mining industry. The growth of the banking sector. The building of a national railroad network launched the country into a new era. The three presidency banks took active roles in financing this development. single and centralized banking institution. India's banking industry boasted a host of new arrivals. and the development of indigenous banks. in turn created a need for a larger "bankers' bank. the Imperial Bank of India. These factors led to the decision to merge the three presidency banks into a new. The banks also extended their range of services and operations.

the Imperial Bank of India appeared to inaugurate a new era in India's history--culminating in its declaration of independence from the British Empire. despite its role in the government financial structure remained independent of the government. the commission rejected this idea and instead recommended that the Imperial Bank be transformed into a purely commercial banking institution. At the same time. Passage of the new legislation did not occur until 1935. the Imperial Bank. That bank took over all central banking functions.“ Internet Banking Of State Bank Of India Created in 1921. drafting a new bill in 1927. while acting as a bankers' bank for the growing Indian banking sector. 30 . In 1926. a government commission recommended the creation of a true central bank. carried on its own commercial banking operations. While some proposed converting the Imperial Bank into a central banking organization for the country. which. however. The Imperial Bank took on the role of central bank for the Indian government. The government took up the commission's recommendations. with the creation of the Reserve Bank of India.

At the same time. 31 . In 1951. By then. the Imperial Bank was nationalized and then integrated with other existing governmentowned banking components. in 1955. Despite the loss of its role as a government banking office. the new government launched its first Five Year Plan. or SBI. As part of that process.“ Internet Banking Of State Bank Of India The Imperial Bank then converted to full commercial status. such as currency exchange and trustee and estate management. The lack of a banking infrastructure in these regions led the government to develop a state-owned banking entity to fill the gap. the Imperial Bank retained its position as a bankers' bank. The result was the creation of the State Bank of India. from which it had previously been restricted. targeting in particular the development of the country's rural areas. India had achieved its independence from Britain. particularly in areas where the Reserve Bank had not yet established offices. which accordingly allowed it to enter a number of banking areas. the Imperial Bank continued to provide banking services to the Reserve Bank.

Indore. as well as the three original head offices inherited from the presidency bank era. Jaipur. by the early 1990s. acting as a motor for India's industrial and agricultural development that was to transform it into one of the world's largest financial networks. Saurashtra. Mysore. government-controlled banks. That position was expanded at the end of the decade.“ Internet Banking Of State Bank Of India The new state-owned bank now controlled more than one-fourth of India's total banking industry. Hyderabad. As such the Banks of Bikaner. 32 . the State Bank counted nearly 15.000 branches and offices throughout India. Patiala. Yet the State Bank now began an era of expansion. In the early 1960s. the State Bank's network already contained nearly 500 branches and sub-offices. giving it the world's single largest branch network. and Travancore became subsidiaries of the State Bank. Following the 1963 merger of the Bikaner and Jaipur banks. their seven remaining subsidiaries were converted into associate banks. Indeed. when new legislation was passed providing for the takeover by the State Bank of eight regionally based.

gave SBI new prominence as the country's leading bank.“ Internet Banking Of State Bank Of India SBI played an extremely important role in developing India's rural regions. providing the financing needed to modernize the country's agricultural industry and develop new irrigation methods and cattle breeding techniques. The nationalization of the banking sector itself. as well as pork and poultry industries. 33 . particularly on a local level. and backing the creation of dairy farming. an event that occurred in 1969 under the government led by Indira Gandhi. where it provided credit coverage and development assistance to villages. The bank also provided backing for the development of the country's infrastructure.

34 . the company launched another subsidiary. Then in the early 1990s. SBI added subsidiaries SBI Factors and Commercial Services. SBI Capital Markets. By the mid-1980s. In 1972. and then launched institutional investor services.“ Internet Banking Of State Bank Of India Even as it played a primary role in the Indian government's industrial and agricultural development policies. SBI Home Finance. for example. in collaboration with the Housing Development Finance Corporation. in 1986. the bank began offering merchant banking services. the bank's merchant banking operations had grown sufficiently to support the creation of a dedicated subsidiary. The following year. SBI continued to develop its commercial banking operations.

000. to help it restructure its operations. such as foreign exchange trading. the bank hired consulting group McKinsey & Co. SBI also stepped up its international trade operations. an effort that helped SBI develop a new corporate culture focused more on profitability than on social and political policy. Yet years as a government-run institution had left SBI bloated--the civilservant status of its employees had encouraged its payroll to swell to more than 230. In the early 1990s. and international banking. export credit. nor incentive for controlling costs. SBI was now forced to brace itself for the arrival of a new wave of competitors eager to enter the fastgrowing Indian economy's commercial banking sector. McKinsey then led SBI through a massive restructuring effort that lasted through much of the decade and into the beginning of the next. as well as corporate finance. the Indian government kicked off a series of reforms aimed at deregulating the banking and financial industries. The bureaucratic nature of the bank's management left little room for personal initiative. In 1994.“ Internet Banking Of State Bank Of India SBI was allowed to dominate the Indian banking sector for more than two decades. 35 .

anywhere" banking access. then teaming up with GE Capital to issue its own credit card. Into the 1990s. SBI responded by launching an ambitious technology drive. it had not even automated its information systems. In 1995 the bank set up a new subsidiary. in the meantime. By 2002.“ Internet Banking Of State Bank Of India SBI had long been present overseas. and elsewhere. rolling out "anytime. rolling out its own ATM network.. SBI Commercial and International Bank Ltd. the bank began cross-linking its banking network with its ATM network and Internet and telephone access. the bank had succeeded in networking its 3. the United States. Back home. SBI had yet to establish an automated teller network. indeed. China. The bank also extended its international network into new markets such as Russia. and South Africa. to back its corporate and international banking services. operating some 50 offices in 34 countries. SBI began addressing the technology gap that existed between it and its foreign-backed competitors. In the early 2000s. including full-fledged subsidiaries in the United Kingdom.000 most profitable branches. 36 .

and also initiating securities brokering services. almost entirely through voluntary retirement in a country where joblessness remained a decided problem.000 at the end of 2003. SBI continued its technology rollout. SBI also adopted new human resources and retirement policies. launching its own line of banc assurance products. By the beginning of 2004. the bank had become an aggressor into new territories. In a twist. boosting the number of networked branches to more than 4. 37 . 1809: The bank receives a charter from the imperial government and changes its name to Bank of Bengal.000. SBI promised to remain a central figure in the Indian banking sector as it entered its third century.“ Internet Banking Of State Bank Of India The implementation of new technology helped the bank achieve strong profit gains into the early years of the new century. helping trim its payroll by some 20. In the meantime. SBI appeared to be well on its way to meeting the challenges offered by the deregulated Indian banking sector. Key Dates: 1806: The Bank of Calcutta is established as the first Westerntype bank.

Imperial Bank of India. is formed. which then becomes a primary factor behind the country's industrial. 1921: The presidency banks are merged to form a single entity. which. 1955: The nationalization of Imperial Bank of India results in the formation of the State Bank of India. 1843: Another sister bank is formed: Bank of Madras. 1972: SBI begins offering merchant banking services. 1876: The creation of Central Treasuries ends the expansion phase of the presidency banks. and the three banks open nearly 50 branches among them by the mid1870s. which had the right to issue currency in their regions. 1969: The Indian government establishes a monopoly over the banking sector. together with Bank of Bengal and Bank of Bombay become known as the presidency banks. Bank of Bombay. and rural development. 1861: The Presidency Banks Act takes away currency issuing privileges but offers incentives to begin rapid expansion.“ Internet Banking Of State Bank Of India 1840: A sister bank. 38 . 1986: SBI Capital Markets is created. agricultural.

39 .000 branches in a massive technology implementation. 2004: A networking effort reaches 4. are launched as part of SBI's stepped-up international banking operations.000 branches. 1998: SBI launches credit cards in partnership with GE Capital. 2002: SBI networks 3.“ Internet Banking Of State Bank Of India 1995: SBI Commercial and International Bank Ltd.

• Traditional procedures were evolved over decades • Very few changes were brought in those procedures as per the need of time.“ Internet Banking Of State Bank Of India Chapter IV Internet banking at State Bank of India The chapter describes the facts about working of internet banking in state bank of India. Where SBI was? • In early 1990’s more than 7000 branches were using traditional manual procedures. • These manual procedures were inherited from the Imperial Bank. 40 .

KMPG appointed consultant for preparing IT Plan for the Bank. • Later on Core banking proposed by the IT consultancy company.“ Internet Banking Of State Bank Of India • In that time. there the initiative of core banking took place • 2008.more than 6500 branches (95% of business) on Core Banking Solution (CBS) 41 . Changes brought in Information Technology by SBI:• In the next decade internet facility was provided for individuals • All SBI branches were connected and ATM’S were launch • 2001 . or we can say that for backhand operations purpose. • 2002 – All branches computerized but on decentralized systems. RECONCILLATION & FUND SETTLEMENT PROCESS. mainframe or mini computers were used for MIS.

Tata & reliance which are making the system errorless and provide high speed. • Multiple Technologies to support the networking infrastructure – Leased lines. Dial-up. Reliance. CDMA & VSAT CBS .“ Internet Banking Of State Bank Of India • Internet Banking facility for Corporate customers were also launched in early 2008 • More Interfaces developed with e-Commerce & other sites through alternate channels like ATM & Online Banking • All Foreign Offices were brought on Centralized Solution • Large network is playing the role of backbone for connectivity across the country • Multiple Service Providers are providing the links – BSNL.Core Banking System Components 42 . MTNL.

onlinesbi.Core Banking System Components Datacenter Application Developers Core-Banking Application WAN. Branch Servers Alternative Channels Branch User/Admins Network Administrators ELITEX-2008 System Administrators 8 Chapter 5 Services provided by SBI internet banking Chapter deals with the information related to various services an products of SBI internet banking Online SBI (www. Database Internet-Banking ATM Desktops. Internet OS.“ Internet Banking Of State Bank Of India Branches CBS .com) 43 .

000 branches across India. online access to accounts for State Bank’s Retail and Corporate customers. and enables customers to:   Issue Demand Drafts online Transfer funds to own and third party accounts 44 . The application is developed using the latest cutting edge technology and tools. secure access to banking services for accounts in over 11. The infrastructure supports unified.“ Internet Banking Of State Bank Of India State Bank of India is India’s largest bank with a branch network of over 11000 branches and 6 associate banks located even in the remotest parts of India. State Bank of India (SBI) offers a wide range of banking products and services to corporate and retail customers. RETAIL BANKING:The Retail banking application is an integration of several functional areas. OnlineSBI is the Internet banking portal for State Bank of India. The portal provides anywhere. anytime.

Admin. Uploader. Transaction Maker. These roles have access to the following functions:  Manage users. RTGS/NEFT feature Generate account statements Setup Standing Instructions Configure profile settings Use eTax for online tax payment Use ePay for automatic bill payments Interface with merchants for railway and airline reservations        Avail DEMAT and IPO services CORPORATE BANKING:The OnlineSBI corporate banking application provides features to administer and manage corporate accounts online. and Auditor. define rights and transaction rules on corporate accounts 45 .“ Internet Banking Of State Bank Of India  Credit beneficiary accounts using the VISA Money Transfer. Authorizer. The corporate module provides roles such as Regulator.

“ Internet Banking Of State Bank Of India  Access accounts in several branches with a single sign-on mechanism Upload files to make bulk transactions to third parties.Electronic Vendor Finance Scheme) Direct Debit Facility E Collection Facilities for: Core Banking Transactions 46     . Supply Chain Finance( e-VFS. and draft issues Make bill payments over the Internet. reschedule and cancel transactions. modify. supplier. vendor and tax collection authorities. third party payments. Use online transactional features such as fund transfer to own accounts. Authorize. based on rights assigned to the user Generate account statement Enquire on transaction details or current balance       Value added services:  Tax payments to central and state governments through site to site integration.

“ Internet Banking Of State Bank Of India  Internet Bank transactions for incoming RTGS/NEFT Transactions Internet banking transactions for SBI and associate banks Debit facility where suppliers can directly debit their customer’s account through internet banking   PRODUCTS AND SERVICES:• • • • • • • • • E-Ticketing SBI E-Tax Bill Payment RTGS/NEFT E-Payment Fund Transfer Third Party Transfer Demand Draft Cheque Book Request Account Opening Request Account Statement Transaction Enquiry Demat Account Statement Donation 47 • • • • • .

After a successful debit. the details of photo identity card will required to be filled in) • And select State Bank of India in the payment options. an e-ticket is generated which can be printed any time.onlinesbi.co. To book your train ticket. For an e-ticket. Railways will generate the ticket. You will be redirected to Internet Banking site of SBI (www. E-ticket can be printed by you whereas the i-ticket will be dispatched by IRCTC at the given address. Service 48 .com). After submitting the respective ID and password. just log on to irctc. air and bus tickets online through OnlineSBI.“ Internet Banking Of State Bank Of India 1) E-TICKETING :- You can book your railway. you can select your account. Submit your travel plan and book the ticket(s)-either • i-ticket (where the delivery of tickets will be made at your address) or E-tickets (wherein after successful payment transactions.in and create an ID there at if you do not have one.

Logon to Indian Airlines website to make a payment for an eticket through State Bank of India. You can print the E-ticket immediately. you shall be required to submit your ticket at a computerized counter of Railways and on cancellation. an appropriate response will be sent to airlines site to update the status of the transaction. Cancellation of E-ticket can be done by logging on to IRCTC's site. To book bus tickets to destinations in Karnataka. date of journey and number of tickets. you need to select SBI as the payment option.per transaction shall be levied in addition to the cost of the ticket. log on to the KSRTC website. The request may be processed based on values sent from the airlines website. refund amount will be credited to your account directly within 2-3 days. For cancellation of iticket. The payment request will be redirected to Internet Banking site.10/. Once a transaction is processed. the amount shall be credited back to your account. Verify availability of seats on the selected date and confirm the 49 .“ Internet Banking Of State Bank Of India charges @ Rs. Provide details about the start and end points of your journey. You can also book your Air ticket through the e-ticketing feature.

Wealth tax. You are provided a KSRTC reference number for your e-Ticket. assessment year. you can select your account for making payment of taxes. Select OnlineSBI to make the payment. name and address. 2) SBI E-TAX:- You can pay your taxes online through SBI E-Tax. Income tax. Indirect tax. After payment is successful you can print the E-Receipt 50 . Provide your credentials and select the SBI account that will be debited for the payment. Provide the PAN. nature of payment and bank name. You are displayed a page with two links Direct Tax and Indirect Tax. Click the Direct Tax link. After submitting the respective ID and password. This facility enables you to pay TDS. Click the eTax link in the home page. you will be redirected to the Internet Banking site. On selecting the bank name as SBI and submitting the form. You will be redirected to the NSDL site where you can select an online challan based on the tax you wish to pay. Corporation tax.“ Internet Banking Of State Bank Of India transaction. Estate Duty and Fringe Benefits tax.

“ Internet Banking Of State Bank Of India for the payment. You can make CBEC payments using the Indirect Taxes link available in the Payments/Transfers tab. Internet banking customers can pay tax through site to site 51 . Select the appropriate tax type and enter the tax amount. The Indirect Tax link is used to make Central Excise and Service Tax payments to Central Board of Excise and Customs. anywhere payment and an instant E-Receipt is generated once the transaction is complete. CBEC provides a link to generate an E-Receipt for the payment. If a payment is successful. You need to provide your assessee code as registered with CBEC and select the minor heads towards which you intend to pay tax. The online payment feature facilitates anytime. The Indirect Tax payment facility is available to Registered Central Excise/Service Tax Assessee who possesses the 15 digit PAN based Assessee Code. Select an account for debiting the total tax amount. The E-receipt can be printed at a later date also and the same can be retrieved from: Enquiries > Find Transactions > Status Enquiries > Click on the respective transaction to print the tax receipt. You can use any of your transaction accounts to make the payment.

365 days a year. OnlineSBI offers the Government Tax Payment facility. electricity. This facility is available as a post login feature in the retail and corporate banking sites of the Online SBI portal. You can pay telephone.M. credit cards and other bills from the comfort of your house or office.“ Internet Banking Of State Bank Of India integration. IST. Please note that the cut-off time for OLTAS and CBEC payment is 8 P. For government agencies. 52 . insurance.M. • • • No more late payments No more queues No more hassles of depositing cheques Using the bill payment you can 'view and Pay various bills online. 24 hours a day. which are not Internetenabled. on the following day. directly from your SBI account. Bill Payment :- 3) A simple and convenient service for viewing and paying your bills online. Any transactions created after the cut off time will be processed after 7 A.

with all the bill details. You can also set up Auto Pay instructions with an upper limit to ensure that your bills are paid automatically whenever they are due. The upper limit ensures that only bills within the specified limit are paid automatically. The e-PAY service is available in various cities across the country and you can now make payments to several billers in your region. 4) RTGS/NEFT :- You can transfer money from your State Bank account to accounts in other banks using the RTGS/NEFT service. You can see 'how do i' to learn the steps for using the facility. Once the bill is uploaded by the biller.“ Internet Banking Of State Bank Of India Simply logon to http://www.com/ with your credentials and register the biller to which you want to pay. The 53 . you can make payment online.onlinesbi. thereby providing you complete control over these payments.

11:00. 13:00. You can transfer an amount of Rs. You can also schedule a transaction for a future date. National Electronic Funds Transfer (NEFT) facilitates transfer of funds to the credit account with the other participating bank. 3 settlements on Saturdays .1 lac and above using RTGS system.at 09:00. NEFT transactions are settled in batches based on the following timings 1. 15:00 and 17:00 hrs. This system is the fastest possible interbank money transfer facility available through secure banking channels in India.“ Internet Banking Of State Bank Of India RTGS system facilitates transfer of funds from accounts in one bank to another on a "real time" and on "gross settlement" basis. 54 .at 09:00. 11:00 and 12:00 hrs. 12:00. RTGS transaction requests will be sent to RBI immediately during working hours post working hours requests are registered and sent to RBI on next working day. RBI acts as the service provider and transfers the credit to the other bank's account. 2. 6 settlements on weekdays .

In order to transfer the funds to an account with other bank. It is recommended that you choose the Bank/ Branch from the drop down option provided under the link "Add Interbank beneficiary". LIC PREMIUM: For paying premium of LIC policy logon to 55 . kindly ensure that the bank branch of the beneficiary is covered under the RGTS/NEFT payment system. Please exercise care to provide the correct account number and name of the beneficiary.“ Internet Banking Of State Bank Of India Please note that all the above timings are based on Indian Standard Time (IST) only. mobile phone bills and also you can purchase mutual fund units by coming from the biller’s website and selecting state bank of India in the payment option. 5) E-Payment :- You can pay your insurance premium.

SBI Mutual FUND: You can invest in the SBI Mutual Fund schemes online. Logon to www.licindia.“ Internet Banking Of State Bank Of India www.com and select the scheme in which you want to make investment in the payment option select State Bank of India. 6) Fund Transfer :- The Funds Transfer facility enables you to transfer funds within 56 . When the premium is due select State Bank of India in the make payment option. Make payments for your purchases using your Internet enabled SBI accounts. CCAVENUES: Enjoy shopping at the CCAvenue Shopping Mall and purchase from a wide variety of products and services through CCAvenue Certified Vendors.sbimf.com and register your policy details.

Enter the amount and remarks. you will be displayed a confirmation page with the details of the transaction and the option to submit or cancel the funds transfer request. You can see all your online debit and credit accounts. A reference number will be generated for your record. 7) Third Party Transfer :- 57 . Funds transfer to PPF account is restricted to the same branch. Select the debit account from which you wish to transfer funds and the credit account into which the amount is to be credited. The remarks will be displayed in your accounts statement for this transaction. You will be displayed the last five funds transfer operations on your accounts. you should be an active Internet Banking user with transaction rights. On confirming the transaction.“ Internet Banking Of State Bank Of India your accounts in the same branch or other branches.1 lakh per day to own accounts in the same branch and other branches. To make a funds transfer. Just log on to retail section of the Internet Banking site with your credentials and select the Funds Transfer link under Payments/Transfers tab. You can transfer aggregating Rs.

1lakh. You can set limits for demand drafts issued from 58 . The beneficiary account should be any branch SBI. Transfer is instant. Current Account. Only after approval of third party. You can get a demand draft from any of your Accounts (Savings Bank.“ Internet Banking Of State Bank Of India You can transfer funds to your trusted third parties by adding them as third party accounts. You can do any number of Transactions in a day for amount aggregating Rs. You can set limits for third party transactions made from your accounts or even set limits for individual third parties. third party approval will be handled by your branch. Cash Credit or Overdraft). you will be able to transfer funds to the third party. If you do not have a mobile number. You will receive a One Time SMS password on your mobile phone to approve a third party. you need to register your mobile number in personal details link under profile section. 8) Demand Draft :- The Internet Banking application enables you to register demand drafts requests online. you need to add and approve a third party. To transfer funds to third party having account in SBI.

You can opt to 59 . Alternatively. quoting the reference number generated for the request. A printed advice can also be obtained from the site for your record. kindly approach your branch. Current. You can either collect it from branch or request your branch to send it by post or courier. you may request the branch to courier it to your registered address. Cash Credit. 50 or 100 cheque leaves. You can opt to collect the draft in person at your branch. If you have any queries.“ Internet Banking Of State Bank Of India your accounts or use the bank specified limit for demand drafts. quoting a reference to the transaction. and the courier charges will be recovered from you. and Over Draft accounts. You can opt for cheque books with 25. 9) Cheque Book Request :- You can request for a cheque book online. Cheque book can be requested for any of your Savings.

Select the account for which you require a cheque book. You can view all your transaction accounts. Cheque books will be dispatched within 3 working days from the date of request. Just log on to retail section of the Internet Banking site with your credentials and select the Cheque Book link under Requests tab.“ Internet Banking Of State Bank Of India get the cheque book delivered at your registered address or you can provide an alternate address. You should have an INB-enabled account with transaction right in the branch. submit the same. Funds in an existing account are used to open the new account. 10) Account Opening Request:- OnlineSBI enables you to open a new account online. You can apply for a new account only in branches where you already have accounts. You can 60 . Then. enter the number of cheque leaves required and the mode of delivery.

The statement includes the transaction details. You can see all types of accounts. Select the account and account type you wish to open and submit the same. submit the transaction. Your new account opening request will be processed by the branch. Current. You can select any of your accounts for debiting the initial amount. NRO and NRE types. Just log on to retail section of the Internet Banking site with your credentials and select the New Account link under Requests tab. 61 .“ Internet Banking Of State Bank Of India open Savings. Then. you need to select the branch and enter the initial amount to open the account. Then. downloadable account statement for any of your accounts for any date range and for any account mapped to your username. 11) Account Statement :- The Internet Banking application can generate an online. Term Deposit and Recurring Deposit accounts of Residents.

50. 75. Your VISA transactions can also be viewed separately. You can view and verify transaction details and the current status of transactions. You also have the option to select the number of records displayed in each page of the statement. closing and accumulated balance in the account. 12) Transaction Enquiry :- OnlineSBI provides features to enquire status of online transactions. 100 and ALL.“ Internet Banking Of State Bank Of India opening. To view details of individual transactions. Just log on to retail section of the Internet Banking site with your credentials and select the Status Enquiry link under the Enquiries tab. The options are 25. You can generate the online account statement for any date range or for any month and year. you need to click the Transaction Reference 62 . The account statement can be viewed online. You will be displayed all online transactions you have performed. printed or downloaded as an Excel or PDF file.

You are displayed the debit and credit account details. You can view Demat account details.“ Internet Banking Of State Bank Of India number link.com/ 63 with your credentials and go to Payment and . In the third party site. you can mark a lien on your Demat accounts and use the funds to trade on stock using funds in your SBI savings account. transaction amount. and generate the following statements: statement of holding. Simply log on to http://www. statement of transactions. narration and transaction status 13) Demat Account Statement :- OnlineSBI enables you to view Demat account statement and maintain such accounts. 14) Donation:- You can make donation to religious and charitable institution by using Internet Banking of SBI. statement of billing.onlinesbi. The bank acts as your depository participant.

Chapter 6 SWOC analysis of SBI’s internet banking 64 . After selecting the debit account select the religious/charitable institution whom you want to offer donation. After successful payment you can print an E-receipt for the donation made.“ Internet Banking Of State Bank Of India transfer and click on make donation link.

“ Internet Banking Of State Bank Of India The chapter describes Strengths. opportunities. Strengths:• • • • • • • • • Greater reach to customers Quicker time to market Ability to introduce new products and services quickly and successfully Ability to understand its customers’ needs Customers are given access to information easily across any location Greater customer loyalty Easy online application for all accounts. challenges of State Bank of India. Weaknesses. • Lack of knowledge is found regarding internet banking in employees of SBI 65 . • Procedure for applying for id and password for using services related to internet banking takes time. including personal loans and mortgage 24 hours account access Quality customer service with personal attention Weaknesses:• Lack of awareness among the existing customers regarding internet banking • Obsolesce of technology take place very soon specially in terms of security on internet.

• Core competency can be achieved in terms of banking if focus is made on awareness of internet banking st • Can become 1 virtual bank of India.“ Internet Banking Of State Bank Of India • Implementation of newer technology is little bit complicated • Employees needs training to obtain knowledge regarding Ibanking Opportunities:• Approximately 95% of customers are not using internet banking. • Concentration of various services should be made using internet banking Challenges:• Maintaining Business Edge over competitors in the context of sameness in IT infrastructure • Multiple vendor support is necessary for working of highly complex technology • Maintaining secured IT infrastructure for business operations • Alternative must be there in case of failure of system Chapter 7 Recommendations and Suggestions 66 .

• Exchange of information on threats and vulnerabilities at appropriate forums:There should be an open end discussion on the threats and vulnerabilities coming across the functioning of internet banking work by the employees in the various official forums and meets. so that they will get aware with the terms of internet banking. After such programmes they can create awareness amongst the consumers. • Build an optimal operating model by understanding which activities to retain collaborate and outsource:- 67 .“ Internet Banking Of State Bank Of India The chapter gives recommendations and suggestions to SBI. Recommendations & Suggestions:• Training and awareness among employees:It is recommended that State Bank of India should conduct various training programmes for the employees.

this will enhance the goodwill of SBI among regulator. • Bank should Create and sustain customer. this will lead to ease in work for employees. SBI should anticipate such kind of changes and get loaded with various plans and actions. cyber security department. • Focus on identifying core competence:- 68 . • Bank should anticipate and get prepared for regulatory changes:Laws regarding IT or cyber laws get change as per the need. customers and invertors. SBI should impose such standards when it comes to internet banking or virtual banking. building IT structure on internet.“ Internet Banking Of State Bank Of India There should be clear sight of operations which needs to outsource to other companies. Outsourcing operations like. investor and regulator confidence by adopting international accounting standards :Adopting international standards adds some more star to the glory of any company.

“ Internet Banking Of State Bank Of India SBI possess some unique characteristics or positive points in it and with the help of them it can become a leader in market. as internet banking of SBI is getting largely accepted by customers. Chapter 8 69 . Bank should identify such points and concentrate to flourish them more. • More stress should be given on security concern on internet:There are some people who are into unethical practices of hacking of accounts of customers. • Increasing usage of mobile phones is going to revolutionize the banking culture in near future:Mobile banking is also getting popular in the segment of internet banking thus this can add some more steps to progress for SBI. Bank is into the mobile banking but it is providing limited features. IT structure should be unbreakable. There should be some measures in order to prevent such practices. This can be done with the help of internet banking. This is nothing but the breach in the security of the SBI on internet.

Study states that internet banking provides greater reach to customers. Internet banking saves time of bank as well as those of customers. greater reach. 24 hours access. Customer loyalty can be gain. After studying the SWOC analysis. Feedback can be obtained easily as internet is virtual in nature. however a system of such a type will need to be very secure. This is a system which holds account details and customers wealth. easy access to information. then SBI would face serious laws and would lose business. we came to know various strengths of SBI such as quality customer service. Personal attention can be given by bank to customer also quality service can be served.“ Internet Banking Of State Bank Of India Conclusion The chapter gives conclusion for the project Conclusion:Studying the project we came to know that Internet banking is clearly the way forward for the State Bank of India. It provides comfort to customers at the same time it provides cost cutting to SBI by eliminating physical documentation. Bank should know that No system is perfect. If such a system was not trusted and not reliable. 70 . customer loyalty.

lack of knowledge among the employees of SBI. By encashing such opportunities bank can become the leader in banking sector of India. complicated procedures of availing internet banking facilities. SBI should put efforts to multiply the number of strengths. In the third segment of SWOC analysis of internet banking we dealt with opportunities like 95 % market of internet market is untapped. if adopted will improve the position of the company substantially and optimal 71 .“ Internet Banking Of State Bank Of India easy online applications etc. need of various vendor supports for complex technology. alternative mechanism in case of failure of present security system. SBI’s path to become first virtual bank. maintaining secured IT infrastructure. In the last segment I come to know about various challenges which are in front of SBI. like sameness in IT infrastructure within various banks. SBI should concentrate on the weaknesses and reduce them to zero. The company can take the advantage of the reputation it has created in the market for itself and become more competitive The recommendations and suggestions given. obsolesce of technology related to security. In terms of weakness I come to know some of the major weaknesses they are lack of awareness of internet banking among the customers.

Bibliography 72 .“ Internet Banking Of State Bank Of India profitability coupled with better service and satisfactions for investors may be achieved.

com www.com www.com www.google.weikipedia.statebankofindia.onlinesbi.com 73 .“ Internet Banking Of State Bank Of India Books :• SBI Training guide for internet banking Websites:• • • • www.

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