IMPACT OF INTERNET

BANKING OON CUSTOMER

SATISFACTION
State Bank of India

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 INDEX

The title of each chapter is shown below:

Chapter I Introduction to Project,

Chapter II Company Profile

Chapter III Working of internet banking in SBI Theriotical Framework

Chapter IV Data analysis

Chapter V The Recommendations and Suggestions

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 Chapter 1

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.

Internet Banking of State Bank of India

The chapter describes in brief about INTERNET BANKING

Internet:

INTRODUCTION

There is a sea change in the media world. While most consumers see the news papers, the same magazines and
listen to the same radio programs, behind this bland public exterior there is a seething world of innovation,
acquisition, global partnership and divorces, 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, computers,
televisions in to a single all singing, all dancing magic kit that will, very possible, 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 comer and
wishing that it would all go away. The other is to embrace the new religion with messianic fervor and go out to
proclaim the millennium. I welcome you to the new emerging world of the Info-High-Way, destined to redefine
the world of communications:

HISTORY

It is said that necessity is the mother of invention. And true, it is seeds of Internet were sown in the ashes of the
world war

Having bombed the cities of Hiroshima and Nagasaki, US military was forced to provide the answer to the
question - What if someone bombed the USA? So for many years after the war, most of the US military
research concentrated on ways and means to survive the nuclear holocaust. And one of the most important
strategic problems was- "How would us authorities communicate with each other in the aftermath of a nuclear
attack?" computers were already there. But, communication networks were connected to each in a private
fashion-in sort of chains: somewhat like an electricity line to your home. This means that if even one chain in
the middle were blown up, the whole network would collapse.

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Then in the 1960's the problem was taken by America's foremost military think tank, the Rand Corporation.
After a lot of ideas were put up and knocked down, Paul baron- a rand "thinker" hit upon an idea. "What if the
network was not built like a chain but like a fish net?" he said. If one strand on the fish net broke the net would
still be functional. After spending many agonizing hours over it, he came up with 11-volume report for the
pentagon. But, as fate would have it was rejected. By then, young engineers were impressed by the idea and
worked on it. Well before the end of the decade, the first net was created and called ARPANET, connecting
four American research organizations- university of Utah, university of California in Los Angeles and Santa
Barbara, and Stanford research institute.

Internet as a communication medium and as a repository of information has caught the imagination of computer
users. This has fuelled an unparalleled growth in the number of Internet users.

VARIOUS PARTS OF INTERNET

The Internet is made up of terminal computers through which subscribers access the net; gateways servers
which connect the users to the rest of the network of computers); servers which host information in them; and,
the communication network over which data actually flows. Internet offers its users a variety of services. The
subscribers may have access to all or any of the following services depending upon the type of connection that
one has subscribed for:

1) E-Mail
2) World Wide Web (WWW)
3) File Transfer Protocol (FTP)
4) Telnet

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. Internet banking refers to the use of the Internet
as a remote delivery channel for banking services. Such services include traditional ones, such as opening a
deposit account or transferring funds among different accounts, and new banking services, such as electronic
bill presentment and payment (allowing customers to receive and pay bills on a bank's Web site). Banks offer
Internet banking in two main ways. 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. A second alternative is to
establish a "virtual," "branchless," or "Internet-only" bank. 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, or at some other location.
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. The impact of E-transaction and authentication issues in
banking. It's hardly great news that there has been tremendous growth in the use of the Internet and other
electronic facilities to process financial transactions. According to the Federal Deposit Insurance Corp.,
transactional Web sites have more than doubled each year for the past six years, growing from one in 1995 to
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nearly 2,500 in 2000. This growth is a reflection of the fact that over the past few years, financial leaders have
been considering various ways in which to allow their customers to transact business using the Internet. This
objective is now reaching beyond the financial services industry into non-electronic business segments, such as
the building supply industry. Furthermore, this growth is likely to continue to climb as the number of Internet
users, Internet connection speed, and the number of transactional Web sites continues to increase. The number
of adults using PC banking is also growing. With this growth, there is an increased awareness of the benefits of
using online transaction processing, thereby fueling the thought that all business should be electronically
facilitated.

Gartner predicts that worldwide business-to-business (B2B) ecommerce will total $3.6 trillion by 2003 and $8.5
trillion in 2005. Online financial activity had a slower start, but has had steady growth, from 6 million users in
1998 to 27.5 million users in 2000. During 2000, only 30 percent of the Internet-capable households were using
some form of Internet banking, 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, with the authentication network and transaction processor (bank) in the middle. Banks have traditionally
been the trusted agents, have the largest customer base, and have received the initial benefits from electronic
commerce. Value has begun a steady migration to the ends of the value chain. Customers can receive and pay
bills from one point using products from multiple issuers. Merchants can influence and enhance the consumer
experience by providing innovative and time-saving means of doing business. Merchants can add value to the
payment process, for example, by offering discounted prices for electronic payment.

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

Digital Signatures

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

The law defines an electronic signature as "an electronic sound, symbol, 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." Fortunately, the legislation does not attempt to define acceptable technologies except to indicate that
the technologies must be mutually acceptable to the transacting parties. Since a valid signature can be as simple

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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, the technology decision maker must define
relevant business objectives and understand the risks, such as cost and unauthorized use associated with
alternative implementations. There are possible additional benefits to the implementing organization. These
include reduced transaction timelines, reduction in paper processing costs, facilitation of customer migration to
the Internet as a business channel, and increased online transaction security.

When compared to physical signatures, e-signature technologies are, in general, a more secure authentication
method. 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. PKI is the
delivery channel for public key cryptography, 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. To
encrypt messages, the published public keys of the recipients are used. To decrypt the messages, the recipients
use their unpublished private keys, known only to them. Quite simply, if the signer's private key is not
compromised, which can happen by releasing the password or allowing access to the device containing the
private key, a document cannot be digitally signed

What is internet banking ?

Internet Banking System is a system that has been developed in order to help clients with the daily day-to-day
transactions. Internet banking systems means that clients can now do banking at the leisure of their homes. Also
known as online banking, the system allows both transactional and non-transactional features. Online banking
or internet banking allows customers to conduct financial transactions on a secure website operated by the retail
or virtual bank. Online banking is one of the e-banking services relatively a new channel and is an umbrella
term for the process by which a customer may perform banking transactions electronically without visiting a
brick-and-mortar institution. The fast-paced technology has affected almost all industries including banking
industry. Banking environment has undergone tremendous changes due to the infusion of innovative practices
like Internet banking throughout the world, and India is no exception to this. Globalisation of Indian economy
during the 1990s has also contributed to Internet banking. To implement various recommendations forwarded
by the committees in connection with the banking reforms, the Indian government emphasised the need for
implementing the online banking in the banking sector.

The need for deploying Internet banking in India has been very strong, considering that

(a) a significant proportion of the urban population in India today is employed in the information technology
industry and so they have easy access to the Internet

(b) there is a huge expatriate Indian workforce engaged in various professional pursuits around the world.

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Most of the banks in India have introduced customer friendly online banking facility with advanced security
features to protect customers against cybercrime. Almost 57 per cent of Indian respondents using the Internet
prefer banking online and use other financial services due to hassle-free easy access and time-saving feature of
online banking. At the same time, online banking exposed customers to unforeseen frauds. Reserve Bank of
India (RBI) has suggested that banks introduce two-stage authentication to ensure security of transactions.
Online banking is mainly designed by both private and public sector banks to achieve two objectives. The first
objective is to increase convenience of the customers by fulfilling the customers’ requirements such as online
viewing of account details, statement information, payment of bills online, money transfer, applying for
accounts and e-clearance such as rent, loan payment and so on. The second objective is to reduce cost of
operation. The present study is aimed at studying the total customer satisfaction with online banking. Though
customer satisfaction is multidimensional and has been widely studied in various contexts, the available
literature is very scant about customer satisfaction in online banking, especially in India. This study aims at
examining the factors that may influence users to adopt Internet banking. The impact of awareness of service,
security, knowledge and quality of Internet connection, cost and time savings, keenness to change, perceived
usefulness, perceived ease of use, perceived enjoyment, trust, customer attitude towards using computer and
adoption intention are sought to determine the level of users’ acceptance and customer satisfaction towards
Internet banking. For instance, if the security, perceived usefulness and trust on banks website are high, then
customer satisfaction will also be high. Online banking has numerous advantages, and at the same time, certain
limitations, such as phishing, identity theft, and so on, which keep away customers to use Internet banking
services.

The technological innovation of electronic channel of service delivery has brought in a level playing field for
businesses by eliminating geographical, regulatory, and industrial barriers. In the words of Balachandher et al.,
this revolution in the market place has set in motion a revolution in the banking sector for the provision of a
payment system that is compatible with the demands of the electronic marketplace. According to Awad, there
are four electronic commerce activities internet users perform. These activities require a banking relationship
and are: shopping, banking, investing, and online electronic payment for Internet services. The enormous
increase of the internet is changing the way businesses interact with consumers as most businesses are now
conducted using the internet. It is this introduction of e-commerce as a means of payment that has urged banks
to take a leap from the traditional banking services, offering a service strongly through the medium of internet,
which has come to be known as internet banking or e-banking. Existing literature on internet banking in India
indicates that despite its growing use and adoption by many banks, no significant effort has been made to
understand whether the customers whom the technology is meant for are satisfied or not and what are the
demographic characteristics of the ones who have adopted the technology. Internet banking is an electronic
payment system that enables customers of a financial institution to conduct financial transactions on a website
operated by the institution, such as a retail bank, virtual bank, credit union or building society. Online banking
is also referred as Internet banking, e-banking, virtual banking and by some other terms. This new channel has
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added a new dimension to the concept of customer satisfaction and how it can be affected in a positive way. All
organizations exist and strive to become an integral part of the lives of their customers and therefore always
strive harder to keep satisfying their customers through better channels of delivering their offerings. There are
many factors which have an impact on customer satisfaction, one of the most important being service quality.
Due to the varying nature of the products offered in manufacturing sector and in the services sector the
definition and measurement of service quality, it was seen could not be the same for both. Especially, in the
present era, with the emergence of internet as a major channel of service delivery, the need for a scale to
measure the service quality in electronic media of services was felt strongly. Hence, service quality was taken
up by the research scholars specifically in terms of the e-services which lead to the development of various
models that helped in measuring e-service quality in the services sector. Various models of e-service quality
have come up as a result of this.

History

The term online banking was first started in 80's. The term online became popular in the late '80s and referred
to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. 'Home
banking can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the
bank. Online services started in New York in 1981 when four of the city's major banks (Citibank, Chase
Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotext system.
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, where the Prestel
system was used.

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

Background

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As a student of Fifth Semester B.Com , 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

• To build up various solutions for drawbacks in net

• 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. To add to the existing knowledge in the electronic banking field of study. To help the banks and
policy makers have a better understanding of the internet banking dimensions and their contributions towards
customer satisfaction. Especially since not much research has been done in this regard in India which has
become the hub of e-banking development after the recent demonetization by the present government, enabling
people to go cashless and enhance a digi economy.

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.

Future scope

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

Research limitations

The research has contributed to an understanding of the importance of various dimensions that internet banking
service quality comprises of and how the impact customer satisfaction. The paper lays a foundation to future
research which must not be limited to one geographical area of India but should take into study the other areas
where internet banking is widely being adopted given the new economy scenario of India.

Methodology: An exploratory survey with the help of a Likert based questionnaire was conducted to
investigate the impact of Internet Banking service quality on customer satisfaction in New Delhi. Judgmental
and convenience sampling was used and various kinds of internet banking customers were approached in New
Delhi. Data were collected from a sample of 194 internet banking customers.

Chapter 2

Company Profile

The chapter describes the Company profile of State Bank Of India which was taken

for the study of project.

State bank of India:

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

State Bank of India (SBI) is that country's largest commercial bank. The government-controlled bank--the
Indian govemment maintains a stake of nearly 60 percent in SBI through the central Reserve Bank of India--
also operates the world's largest branch network, with more than 13,500 branch offices throughout India,
staffed by nearly 220,000 employees. SBI is also present worldwide, with seven international subsidiaries in the
United States, Canada, Nepal, Bhutan, Nigeria, Mauritius, and the United Kingdom, and more than 50 branch
offices in 30 countries. Long an arm of the Indian government's infrastructure, agricultural, and industrial
development policies, SBI has been forced to revamp its operations since competition was introduced into the
country's commercial banking system. As part of that effort, SBI has been rolling out its own network of
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automated teller machines, as well as developing anytime anywhere banking services through Internet and other
technologies. SBI also has taken advantage of the deregulation of the Indian banking sector to enter the, assets
management, and securities brokering sectors. In addition, SBI has been working on reigning in its branch
network, reducing its payroll, and strengthening its loan portfolio. In 2003, SBI reported revenue of $10.36
billion and total assets of $104.81 billion.

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

The spread of colonial influence also extended the scope of government and commercial financial influence.
Toward the middle of the century, the imperial govemment 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.

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
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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.

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.

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

Created in 1921, 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. The Imperial Bank took on the role of central bank for
the Indian government, while acting as a bankers' bank for the growing Indian banking sector. At the same
time, the Imperial Bank, which, despite its role in the government financial structure remained independent of
the govemment, carried on its own commercial banking operations. In 1926, a government commission
recommended the creation of a true central bank. While some proposed converting the Imperial Bank into a
central banking organization for the country, the commission rejected this idea and instead recommended that
the Imperial Bank be transformed into a purely commercial banking institution. The government took up the
commission's recommendations, drafting a new bill in 1927 Passage of the new legislation did not occur until

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1935, however, with the creation of the Reserve Bank of India. That bank took over all central banking
functions.

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

The new state-owned bank now controlled more than one-fourth of India's total banking industry. That position
was expanded at the end of the decade, when new legislation was passed providing for the takeover by the State
Bank of eight regionally based, government-controlled banks. As such the Banks of Bikaner, Jaipur, Indore,
Mysore, Patiala, Hyderabad, Saurashtra, 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. In the early 1960s, the State Bank's network already contained nearly 500 branches and sub-offices, as
well as the three original head offices inherited from the presidency bank cra. Yet the State Bank now began an
era of expansion, 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. Indeed, by the early 1990s, the State Bank counted nearly
15,000 branches and offices throughout India, giving it the world's single largest branch network.

The new state-owned bank now controlled more than one-fourth of India's total banking industry. That position
was expanded at the end of the decade, when new legislation was passed providing for the takeover by the State
Bank of eight regionally based, government-controlled banks. As such the Banks of Bikaner, Jaipur, Indore,
Mysore, Patiala, Hyderabad, Saurashtra, 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. In the early 1960s, the State Bank's network already contained nearly 500 branches and sub-offices, as
well as the three original head offices inherited from the presidency bank cra. Yet the State Bank now began an
era of expansion, 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. Indeed, by the early 1990s, the State Bank counted nearly
15,000 branches and offices throughout India, giving it the world's single largest branch network.

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

12
techniques, and backing the creation of dairy farming, as well as pork and poultry industries. The bank also
provided backing for the development of the country's infrastructure, particularly on a local level, where it
provided credit coverage and development assistance to villages. The nationalization of the banking sector
itself, an event that occurred in 1969 under the government led by Indira Gandhi, gave SBI new prominence as
the country's leading bank.

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

SBI was allowed to dominate the Indian banking sector for more than two decades. In the early 1990s, the
Indian government kicked off a series of reforms aimed at deregulating the banking and financial industries.
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. 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 230,000. The
bureaucratic nature of the bank's management left little room for personal initiative, nor incentive for
controlling costs. In 1994, the bank hired consulting group McKinsey & Co. to help it restructure its
operations. McKinsey then led SBI through a massive restructuring effort that lasted through much of the
decade and into the beginning of the next, an effort that helped SBI develop a new corporate culture focused
more on profitability than on social and political policy. SBI also stepped up its international trade operations,
such as foreign exchange trading, as well as corporate finance, export credit, and international banking.

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

13
The implementation of new technology helped the bank achieve strong profit gains into the early years of the
new century. SBI also adopted new human resources and retirement policies, helping trim its payroll by some
20,000, almost entirely through voluntary retirement in a country where joblessness remained a decided
problem. By the beginning of 2004, SBI appeared to be well on its way to meeting the challenges offered by the
deregulated Indian banking sector. In a twist, the bank had become an aggressor into new territories, launching
its own line of banc assurance products, and also initiating securities brokering services. In the meantime, SBI
continued its technology rollout, boosting the number of networked branches to more than 4,000 at the end of
2003. SBI promised to remain a central figure in the Indian banking sector as it entered its third century.

Key Dates:

1806: The Bank of Calcutta is established as the first Western type bank.

1809: The bank receives a charter from the imperial government and changes its name to Bank of Bengal.

1840: A sister bank, Bank of Bombay, is formed.

1843: Another sister bank is formed: Bank of Madras, which, together with Bank of Bengal and Bank of
Bombay become known as the presidency banks, which had the right to issue currency in their regions.

1861: The Presidency Banks Act takes away currency issuing privileges but offers incentives to begin rapid
expansion, and the three banks open nearly 50 branches among them by the mid-1870s.

1876: The creation of Central Treasuries ends the expansion phase of the presidency banks.

1921: The presidency banks are merged to form a single entity, Imperial Bank of India.

1955: The nationalization of Imperial Bank of India results in the formation of the State Bank of India, which
then becomes a primary factor behind the country's industrial, agricultural, and rural development

1969: The Indian government establishes a monopoly over the banking sector.

1972: SBI begins offering merchant banking services. 1986: SBI Capital Markets is created.

1995: SBI Commercial and International Bank Ltd. are launched as part of SBI's stepped-up international
banking operations. 1998: SBI launches credit cards in partnership with GE Capital.

2002: SBI networks 3,000 branches in a massive technology implementation 2004: A networking effort reaches
4,000 branches.

14
 Chapter 3

Internet banking at State Bank of India

(THEORETICAL FRAMEWORK)

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

• Traditional procedures were evolved over decades

• Very few changes were brought in those procedures as per the need of time.

• In that time, mainframe or mini computers were used for MIS, RECONCILLATION & FUND
SETTLEMENT PROCESS, or we can say that for backhand operations purpose.

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 - KMPG appointed consultant for preparing IT Plan for the Bank. • Later on Core banking proposed by
the IT consultancy company.

• 2002 - All branches computerized but on decentralized systems, there the initiative of core banking took
place • 2008- more than 6500 branches (95% of business) on Core Banking Solution (CBS)

• 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

15
• Multiple Service Providers are providing the links - BSNL, MTNL, Reliance, Tata & reliance which are
making the system errorless and provide high speed.

• Multiple Technologies to support the networking infrastructure - Leased lines, Dial-up, CDMA & VSAT

CBS - Core Banking System Components

Datacenter Application Developers

Branches

Desktops,

Branch Servers

Core-Banking Application

WAN

OS, Database

Internet

Alternative Channels

Internet Banking

Branch User/Admins

(Network Administrators

System Administrators

ELITE X-2008

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.onlinesbi.com)

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.

16
OnlineSBI is the Internet banking portal for State Bank of India The portal provides anywhere, anytime, online
access to accounts for State Bank's Retail and Corporate customers. The application is developed using the
latest cutting edge technology and tools. The infrastructure supports unified, secure access to banking services
for accounts in over 11,000 branches across India.

RETAIL BANKING:

The Retail banking application is an integration of several functional areas, and enables customers to:

· Issue Demand Drafts online • Transfer funds to own and third party accounts • Credit beneficiary accounts
using the VISA Money

Transfer, RTGS/NEFT feature

• Generate account statements

• Setup Standing Instructions

• Configure profile settings

• Use e Tax for online tax payment

• Use ePay for automatic bill payments

• Interface with merchants for railway reservations

• Avail DEMAT and IPO services and airline

CORPORATE BANKING:

The OnlineSBI corporate banking application provides features to administer and manage corporate accounts
online. The corporate module provides roles such as Regulator, Admin, Uploader, Transaction Maker,
Authorizer, and Auditor. These roles have access to the following functions:

• Manage users, define rights and transaction rules on corporate accounts.

• Access accounts in several branches with a single sign-on mechanism.
• Upload files to make bulk transactions to third parties, supplier, vendor and tax collection authorities.
• Use online transactional features such as fund transfer to own accounts, third party payments, and draft
issues · Make bill payments over the Internet.
• Authorize, modify, reschedule and cancel transactions, based on rights assigned to the user · Generate
account statement
• Enquire on transaction details or current balance

Value added services:

17
 • Tax payments to central and state governments through site to site integration
• Supply Chain Finance e-VFS- Electronic Vendor Finance Scheme)
• Direct Debit Facility

E Collection Facilities for:

• Core Banking Transactions

• Internet Bank transactions for incoming RTGS/NEFT Transactions

• Upload files to make bulk transactions to third parties supplier, vendor and tax collection authorities.

• Use online transactional features such as fund transfer to own accounts, third party payments, and draft issues
· Make bill payments over the Internet

• Authorize, modify, reschedule and cancel transactions, based on rights assigned to the user · Generate
account statement

• Enquire on transaction details or current balance

• 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

18
• Donation

E-TICKETING :

You can book your railway, air and bus tickets online through OnlineSBI.

To book your train ticket, just log on to irctc.co.in and create an ID there at if you do not have one. 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, an e-ticket is generated which can be printed any
time. For an e-ticket, the details of photo identity card will required to be filled in) And select State Bank of
India in the payment options. You will be redirected to Internet Banking site of SBI (www.onlinesbl.com).
After submitting the respective ID and password, you can select your account. After a successful debit,
Railways will generate the ticket. E-ticket can be printed by you whereas the i-ticket will be dispatched by
IRCTC at the given address. Service charges @ Rs.10/- per transaction shall be levied in addition to the cost of
the ticket. Cancellation of E-ticket can be done by logging on to IRCTC's site; refund amount will be credited
to your account directly within 2-3 days. For cancellation of iticket, you shall be required to submit your ticket
at a computerized counter of Railways and on cancellation; the amount shall be credited back to your account.

You can also book your Air ticket through the e-ticketing feature. Logon to Indian Airlines website to make a
payment for an e-ticket through State Bank of India, you need to select SBI as the payment option. The
payment request will be redirected to Internet Banking site. The request may be processed based on values sent
from the airlines website. Once a transaction is processed, an appropriate response will be sent to airlines site to
update the status of the transaction. You can print the E-ticket immediately.

To book bus tickets to destinations in Karnataka, log on to the KSRTC website. Provide details about the start
and end points of your journey, date of journey and number of tickets. Verify availability of seats on the
selected date and confirm the transaction. Select OnlineSBI to make the payment. Provide your credentials and
select the SBI account that will be debited for the payment. You are provided a KSRTC reference number for
your e-Ticket.

SBI E-TAX:

You can pay your taxes online through SBI E-Tax. This facility enables you to pay TDS, Income tax, Indirect
tax, Corporation tax, Wealth tax, Estate Duty and Fringe Benefits tax. Click the eTax link in the home page.
You are displayed a page with two links Direct Tax and Indirect Tax.

19
Click the Direct Tax link. You will be redirected to the NSDL site where you can select an online challan based
on the tax you wish to pay. Provide the PAN, name and address, assessment year, nature of payment and bank
name. On selecting the bank name as SBI and submitting the form, you will be redirected to the Internet
Banking site. After submitting the respective ID and password, you can select your account for making
payment of taxes. After payment is successful you can print the E-Receipt for the payment. 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.

The Indirect Tax link is used to make Central Excise and Service Tax payments to Central Board of Excise and
Customs. The online payment feature facilitates anytime, anywhere payment and an instant E-Receipt is
generated once the transaction is complete. The Indirect Tax payment facility is available to Registered Central
Excise/Service Tax Assessee who possesses the 15 digit PAN based Assessee Code. You can make CBEC
payments using the Indirect Taxes link available in the Payments/Transfers tab. You need to provide your
assessee code as registered with CBEC and select the minor heads towards which you intend to pay tax. Select
the appropriate tax type and enter the tax amount. Select an account for debiting the total tax amount. You can
use any of your transaction accounts to make the payment. If a payment is successful, CBEC provides a link to
generate an E-Receipt for the payment.

Internet banking customers can pay tax through site to site integration. For government agencies, which are not
Internetenabled, OnlineSBI offers the Govemment Tax Payment facility.

This facility is available as a post login feature in the retail and corporate banking sites of the Online SBI portal.

Please note that the cut-off time for OLTAS and CBEC payment is 8 P.M. IST. Any transactions created after
the cut off time will be processed after 7 A.M. on the following day.

Bill Payment :

A simple and convenient service for viewing and paying your bills online.

• 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, directly from your SBI account. You can pay
telephone, electricity, insurance, credit cards and other bills from the comfort of your house or office, 24 hours
a day, 365 days a year Simply logon to http://www.onlinesbi.com/ with your credentials and register the biller
to which you want to pay, with all the bill details. Once the bill is uploaded by the biller, you can make
payment online. You can see 'how do i' to leam the steps for using the facility.

20
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,
thereby providing you complete control over these payments.

The e-PAY service is available in various cities across the country and you can now make payments to several
billers in your region.

RTGS/NEFT:

You can transfer money from your State Bank account to accounts in other banks using the RTGS/NEFT
service. The RTGS system facilitates transfer of funds from accounts in one bank to another on a "real time"
and on "gross settlement" basis.

India

This system is the fastest possible interbank money transfer facility available through secure banking channels
in India. 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. You can also schedule a transaction for a future
date. You can transfer an amount of Rs.1 lac and above using RTGS system.

National Electronic Funds Transfer (NEFT) facilitates transfer of funds to the credit account with the other
participating bank. RBI acts as the service provider and transfers the credit to the other bank's account.

NEFT transactions are settled in batches based on the following timings

1. 6 settlements on weekdays - at 09:00, 11:00, 12:00, 13:00, 15:00 and 17:00 hrs.

2. 3 settlements on Saturdays - at 09:00, 11:00 and 12:00 hrs.

Please note that all the above timings are based on Indian Standard Time (IST) only.

In order to transfer the funds to an account with other bank, kindly ensure that the bank branch of the
beneficiary is covered under the RGTS/NEFT payment system. It is recommended that you choose the
Bank/Branch from the drop down option provided under the link "Add Interbank beneficiary".

Please exercise care to provide the correct account number and name of the beneficiary.

E-Payment :

You can pay your insurance premium, 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.

21
LIC PREMIUM: For paying premium of LIC policy logon to www.licindia.com and register your policy
details. When the premium is due select State Bank of India in the make payment option

SBI Mutual FUND: You can invest in the SBI Mutual Fund schemes online. Logon to www.sbimf.com and
select the scheme in which you want to make investment in the payment option select State Bank of India.

CCAVENUES: Enjoy shopping at the CCAvenue Shopping Mall and purchase from a wide variety of products
and services through CCAvenue Certified Vendors. Make payments for your purchases using your Internet
enabled SBI accounts.

Fund Transfer :

The Funds Transfer facility enables you to transfer funds within your accounts in the same branch or other
branches. You can transfer aggregating Rs.1 lakh per day to own accounts in the same branch and other
branches. To make a funds transfer, you should be an active Internet Banking user with transaction rights.
Funds transfer to PPF account is restricted to the same branch.

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 see all your online debit and credit accounts. Select the debit account
from which you wish to transfer funds and the credit account into which the amount is to be credited. Enter the
amount and remarks. 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. On confirming the transaction, you will be
displayed a confirmation page with the details of the transaction and the option to submit or cancel the funds
transfer request. A reference number will be generated for your record.

Third Party Transfer :

You can transfer funds to your trusted third parties by adding them as third party accounts. The beneficiary
account should be them as third party accounts. The beneficiary account should be any branch SBI. Transfer is
instant. You can do any number of Transactions in a day for amount aggregating Rs. 1 lakh.

To transfer funds to third party having account in SBI, you need to add and approve a third party, you need to
register your mobile number in personal details link under profile section. You will receive a One Time SMS
password on your mobile phone to approve a third party. If you do not have a mobile number, third party
approval will be handled by your branch. Only after approval of third party, you will be able to transfer funds to
the third party. You can set limits for third party transactions made from your accounts or even set limits for
individual third parties.

Demand Draft :

22
The Internet Banking application enables you to register demand drafts requests online. You can get a demand
draft from any of your Accounts (Savings Bank, Current Account, Cash Credit or Overdraft). You can set limits
for demand drafts issued from your accounts or use the bank specified limit for demand drafts.

You can opt to collect the draft in person at your branch, quoting a reference to the transaction. A printed
advice can also be obtained from the site for your record.

Alternatively, you may request the branch to courier it to your registered address, and the courier charges will
be recovered from you.

If you have any queries, kindly approach your branch, quoting the reference number generated for the request.

Cheque Book Request :

You can request for a cheque book online. Cheque book can be requested for any of your Savings, Current,
Cash Credit, and Over Draft accounts. You can opt for cheque books with 25, 50 or 100 cheque leaves. You can
either collect it from branch or request your branch to send it by post or courier. You can opt to get the cheque
book delivered at your registered address or you can provide an alternate address. 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. You can view all your transaction accounts. Select the account for which you require a
cheque book; enter the number of cheque leaves required and the mode of delivery. Then, submit the same.

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 should have an INB-enabled account with transaction right in the branch.
Funds in an existing account are used to open the new account. You can open Savings, Current, Term Deposit
and Recurring Deposit accounts of Residents, NRO and NRE types, Deposit accounts of Residents, 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. You can see all types of accounts. Select the account and account type you
wish to open and submit the same. Then, you need to select the branch and enter the initial amount to open the
account. You can select any of your accounts for debiting the initial amount. Then, submit the transaction. Your
new account opening request will be processed by the branch.

Account Statement :

The Internet Banking application can generate an online, downloadable account statement for any of your
accounts for any date range and for any account mapped to your username. The statement includes the
transaction details, opening, closing and accumulated balance in the account.

23
You can generate the online account statement for any date range or for any month and year. The account
statement can be viewed online, printed or downloaded as an Excel or PDF file. You also have the option to
select the number of records displayed in each page of the statement. The options are 25, 50, 75, 100 and ALL.

Transaction Enquiry :

OnlineSBI provides features to enquire status of online transactions. You can view and verify transaction
details and the current status of transactions. Your VISA transactions can also be viewed separately. Just log on
to retail section of the Internet Banking site with your credentials and select the Status Enquiry link under the
Enquiries tab. You will be displayed all online transactions you have performed. To view details of individual
transactions, you need to click the Transaction Reference number link. You are displayed the debit and credit
amount, narration and account details, transaction transaction status

Demat Account Statement :

OnlineSBI enables you to view Demat account statement and maintain such accounts. The bank acts as your
depository participant. 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.

You can view Demat account details, and generate the following statements: statement of holding, statement of
transactions, statement of billing.

Donation:

You can make donation to religious and charitable institution by using Internet Banking of SBI. Simply log on
to http://www.onlinesbi.com/ with your credentials and go to Payment and transfer and click on make donation
link. After selecting the using Internet Banking of SBI. Simply log on to http://www.onlinesbi.com with your
credentials and go to Payment and transfer and click on make donation link. 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.

24
 Chapter 4

(DATA ANALYSIS)

Last five years data analysis of State Bank of India

Financial Highlights 2016-2020

Rs. In Crore FY 2016 FY FY 201 FY F FY 2018Y FY FY 2019 FY FY 2020

2016(Unmerged) 017(Unmerged)7 2018 2019 2020
(Unmerged) (Unmerged)
Deposits 17,30,722 20,44,751 27,06,343 29,11,386 32,41,621
Advances 14,63,700 15,71,078 19,34,880 21,85,877 23,25,290
Investments 5,75,652 7,65,990 10,60,987 9,67,022 10,46,955
Total Assets 23,57,617 27,05,966 34,54,752 36,80,914 39,51,394
Interest Income 1,63,998 1,75,518 2,20,499 2,42,869 2,57,324
Interest Expenses 1,06,803 1,13,659 1,45,646 1,54,520 1,59,239
Net Interest Income 57,195 61,860 74,854 88,349 98,085
Non-Interest Income 27,845 35,461 44,601 36,775 45,221
Total Operating 85,040 97,321 1,19,454 1,25,124 1,43,306
Income
Staff Expenses 25,114 26,489 33,179 41,055 45,715
Overhead Expenses 16,669 19,983 26,765 28,633 29,459
Total Operating 41,782 46,473 59,943 69,688 75,174
Expenses
Operating Profit 43,258 50,848 59,511 55,436 68,133
Total Provisions 33,307 40,364 66,058 54,574 53,645
Net Profit 9,951 10,484 -6,547 862 14,488

BALANCE SHEET 2016-2020

Rs. in crore FY FY FY FY FY
2016(unmerged)1 2017(unmerged)1 20182018 20192019 2020
6(Unmerged) 6nmerged)
CAPITAL & LIABILITIES
Capital 776 797 892 892 892
Reserves & Surplus 1,43,498 1,87,489 2,18,236 2,20,021 2,31,115
Deposits 17,30,722 20,44,751 27,06,343 29,11,386 32,41,621
Borrowings 3,23,345 3,17,694 3,62,142 4,03,017 3,14,656
Other Liabilities & Provisions 1,59,276 1,55,235 1,67,138 1,45,597 1,63,110

25
TOTAL LIABILITIES 23,57,618 27,05,966 34,54,752 36,80,914 39,51,394
ASSETS
Cash & Bank Balances with Reserve Bank of India 1,29,629 1,29,629 1,50,397 1,76,932 1,66,736
Balances with banks and money at call & short notice 37,838 37,838 41,501 45,558 84,361
Investments 5,75,652 7,65,990 10,60,98 9,67,022 10,46,955
7
Advances 14,63,700 15,71,078 19,34,88 21,85,877 23,25,290
0
Fixed Assets 10,389 10,389 39,992 39,198 38,439
Other Assets 1,40,408 1,40,408 2,26,994 2,66,328 2,89,614
TOTAL ASSETS 23,57,618 27,05,966 34,54,75 36,80,914 39,51,394
2

Chapter 5

Recommendations and Suggestions

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, so
that they will get aware with the terms of internet banking. After such programmes they can create awareness
amongst the consumers.

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.

Build an optimal operating model by understanding which activities to retain collaborate and outsource:

There should be clear sight of operations which needs to outsource to other companies, this will lead to ease in
work for employees. Outsourcing operations like, cyber security department, building IT structure on internet.

Bank should Create and sustain customer, investor and regulator confidence by adopting international
accounting standards :

Adopting international standards adds some more star to the glory of any company, SBI should impose such
standards when it comes to internet banking or virtual banking, this will enhance the goodwill of SBI among
regulator, customers and invertors.

Bank should anticipate and get prepared for regulatory changes:

26
Laws regarding IT or cyber laws get change as per the need SBI should anticipate such kind of changes and get
loaded with various plans and actions.

Focus on identifying core competence:

SBI possess some unique characteristics or positive points in it and with the help of them it can become a leader
in market. Bank should identify such points and concentrate to flourish them more. This can be done with the
help of internet banking, as internet banking of SBI is getting largely accepted by 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.

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. This is nothing but
the breach in the security of the SBI on internet. There should be some measures in order to prevent such
practices. IT structure should be unbreakable.

SWOC analysis of SBI's internet banking

The chapter describes Strengths, Weaknesses, opportunities, challenges of State Bank of India.

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, including personal loans and mortgage

• 24 hours account access

• Quality customer service with personal attention

27
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.

• Procedure for applying for id and password for using services related to internet banking takes time.

• Lack of knowledge is found regarding internet banking in employees of SBI

• Implementation of newer technology is little bit complicated

• Employees needs training to obtain knowledge regarding banking

Opportunities:

• Approximately 95% of customers are not using internet banking.

• Core competency can be achieved in terms of banking if focus is made on awareness of internet banking

• Can become 1" virtual bank of India.

• 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.

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. Internet banking saves time of bank as well as those of customers.

28
Study states that internet banking provides greater reach to customers. Feedback can be obtained easily as
internet is virtual in nature. Customer loyalty can be gain. Personal attention can be given by bank to customer
also quality service can be served. Bank should know that No system is perfect, however a system of such a
type will need to be very secure. This is a system which holds account details and customers wealth. If such a
system was not trusted and not reliable, then SBI would face serious laws and would lose business. After
studying the SWOC analysis, we came to know various strengths of SBI such as quality customer service,
greater reach, customer loyalty, easy access to information, 24 hours access, easy online applications etc. SBI
should put efforts to multiply the number of strengths. In terms of weakness I come to know some of the major
weaknesses they are lack of awareness of internet banking among the customers, obsolesce of technology
related to security, complicated procedures of availing internet banking facilities, lack of knowledge among the
employees of SBI. SBI should concentrate on the weaknesses and reduce them to zero. In the third segment of
SWOC analysis of intemet banking we dealt with opportunities like 95 % market of internet market is
untapped, SBI's path to become first virtual bank. By encashing such opportunities bank can become the leader
in banking sector of India. 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, need of various vendor supports for complex
technology, maintaining secured IT infrastructure, alternative mechanism in case of failure of present security
system. 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, if adopted will improve the position of the
company substantially and optimal profitability coupled with better service and satisfactions for investors may
be achieved.

29