A PROJECT ON

“A Study On Internet Banking System Of SBI”

Submitted to

University Of Mumbai for Partial Completion of The Degree of

Bachelor in Commerce (Account and Finance)
Semester VI (2023-24)
Under The Faculty of Commerce
Submitted By

Karan Chintaman Durge

Roll No.97
Under The Guidance Of
Mr. Chandan Devadasini

K.M. AGRAWAL COLLEGE OF ARTS, COMMERCE AND SCIENCE

KALYAN ADDRESS: - GANDHARE. PADGHA RD.
KALYAN (W) 421301.DIS-THANE

1
 A PROJECT ON
“A Study On Internet Banking System Of SBI”
Submitted to

University Of Mumbai for Partial Completion of The Degree Of

Bachelor In Commerce (Account and Finance)

Semester VI (2023-24)
Under The Faculty of Commerce
Submitted By

Karan Chintaman Durge

Roll No.97
Under The Guidance Of

Mr. Chandan Devadasini

K.M. AGRAWAL COLLEGE OF ARTS, COMMERCE AND SCIENCE

KALYAN ADDRESS: - GANDHARE. PADGHA RD.
KALYAN (W) 421301.DIS-THANE

2
 K.M. AGRAWAL COLLEGE OF ARTS, COMMERCE AND SCIENCE
KALYAN ADDRESS: - GANDHARE. PADGHA RD.
KALYAN (W) 421301.DIS-THANE

CERTIFICATE

This is to certify that Mr. Karan Chintaman Durge, Roll No. 97 has worked and duly
completed her project work for the degree of Bachelor in Account and Finance under the
faculty of commerce in the subject of Account and Finance and her project is entitled,
“A Study On Internet Banking System Of SBI” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that
no part of it has been submitted previously for any degree of diploma of any University.

It is her own work and facts reported by her personal findings and investigation

Project Guide/ Internal Examiner: External Examiner:

Mr. Chandan Devadasini
Seal of
college

Course Coordinator: Self Financing In charge

Mr. Mahendra Pandey Mr. Sujeet Singh

Principal
Dr Anita Manna
Date _____________

3
 DECLARATION BY LEARNER

I the undersigned Karan Chintaman Durge, here by, declare that the work embodied

in this project work titled “A Study On Internet Banking System Of SBI” forms
my own contribution to the research work carried out under the guidance of
Mr. Chandan Devadasini is a result of my own research work and as not been
previously submitted to any other University for any other Degree / Diploma to this or any
other University.

Wherever reference has been made to previous work of others, it has been clearly indicated
as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic’s rules and ethical conduct.

Name & signature of the learner

Karan Chintaman Durge

Roll No. 97

Certified By

Name & signature of the Guiding

Mr. Chandan Devadasini

4
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this project.

I would like to thank my Principal, Dr. Anita Manna for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Coordinator Mr. Mahendra Pandey for his moral support
and guidance.
I would also like to express my sincere gratitude towards my project guide Mr. Chandan
Devadasini whose guidance and care made the project successful.

I would like to thank College Library, for having provided various reference books and magazines
related to my project.

Lastly, I would like to thank each and every person who directly and indirectly helped me in the
completion of the project especially my parents and peers who supported me throughout my
project.

Signature of Student

5
A STUDY ON INTERNET BANKING SYSTEM OF SBI

OBJECTIVES

 To study the Information Technology in view of research study

 To study the use of Information technological means in the
system
 To study the feedback of the past transaction system
 To study the existing transaction system
 To study the all-dependent parameters
 To study the work culture of customer, employee and
management
 To study the feedback of the existing transaction system
 To study the service provided by the system in view of
customer relation
 To study the view of management, employee and customers
review
 To study the Software Engineering in view of research work

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 EXECUTIVE SUMMARY

• Chapter No. 1: Introduction

In this chapter Selection and relevance of the problem, historical
background of the problem, brief profile of the study area, definition/s
of related aspects, characteristics, different concepts pertaining to the
problem etc. can be incorporated by the learner.

• Chapter No. 2:Research Methodology

This chapter will include Objectives, Hypothesis, Scope of the
study, limitations of the study, significance of the study, Selection of the
problem, Sample size, Data collection, Tabulation of data, Techniques
and tools to be used, etc. can be incorporated by the learner.

• Chapter No. 3:Literature Review

This chapter will provide information about studies done on the
respective issue. This would specify how the study undertaken is
relevant and contribute for value addition in information/ knowledge/
application of study area which ultimately helps the learner to undertake
further study on same issue.

• Chapter No. 4: Data Analysis, Interpretation and Presentation

This chapter is the core part of the study. The analysis pertaining
to collected data will be done by the learner. The application of selected
tools or techniques will be used to arrive at findings. In this, table of
information’s, presentation of graphs etc. can be provided with
interpretation by the learner.

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• Chapter No. 5: Conclusions and Suggestions
In this chapter of project work, findings of work will be covered
and suggestion will be enlisted to validate the objectives and
hypotheses.

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 INDEX

Chapter no. Particulars

1. INTRODUCTION OF BANK
2.
HISTORY OF BANK
3.
INTRODUCTION OF SBI
4.
HISTORY OF SBI
5.
REVIEWS OF LITERATURE
6.
RESEARCH METHODOLOGY OF THE STUDY

7.
DATA SOURCE
8.
DATA ANALYSIS
9. SWOT ANALYSIS
10. RECOMMENDATIONS AND SUGGESTIONS
11. CONCLUSION
12. BIBLIOGRAPHY
13. QUESTIONNAIRE

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 Abstract.

This paper documents online banking trends, behaviors and expectations of

Indian consumers and banks. It is based on internet banking system of State
Bank of India in Abernathy. While banks view online banking essentially as a
technology solution, it is a relatively new area for Indian consumers and not
yet self-supporting. Being a savings-based culture still, Indian consumers are
cautious about their financial assets. They are also relatively recent entrants to
internet-based services. Design of these systems must therefore be based on an
understanding of these users’ outlook and priorities through task centric,
security assured and service-oriented solutions minus the technological
challenges. Design lessons suggest viewing online banking not just as a
convenience alone anymore but beyond it, to provide service, simplicity and
security. This will create satisfied online banking customers and therefore
profitability for the bank.

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 WHAT IS BANK?

Banks are financial institutions that perform deposit and lending functions.
There are various types of banks in India and each is responsible to perform
different functions.

The bank accepts deposits from the public at a considerably lower rate,
known as the deposit rate, and lends money at a much higher rate, known as the
lending rate. The fundamental duties of banks are nearly identical, however, the
types of persons with whom each sector or type deals may vary. In India, modern
banking originated in the late eighteenth century. The 'Bank Of Calcutta,' founded
in 1806 and currently known as the 'State Bank Of India,' is the country's oldest
profit-oriented bank. In India, there are currently 34 banks, with 12 public
sector banks and 22 private sector banks. Banks have aided the country's
economic development and developed a culture of saving among its citizens. Let's
have a look at the different types of banks in India.

THE FOLLOWING ARE THE FUNCTIONS OF INDIAN BANKS:

 Acceptance of deposits from the public

 Provide demand withdrawal facility

 Lending facility

 Transfer of funds

 Issue of drafts

 Provide customers with locker facilities

 Dealing with foreign exchange

11
 Banks are divided into several sorts. The following are the different
types of banks in India:

1. Central Bank

2. Cooperative Banks

3. Commercial Banks

4. Regional Rural Banks (RRB)

5. Local Area Banks (LAB)

6. Specialized Banks

7. Small Finance Banks

8. Payments Banks

1. Central Bank :
Our country's central bank is the Reserve Bank of India. Each country has a central
bank that oversees all of the country's other financial
institutions. The central bank's principal role is to serve as the government's bank
and to oversee and regulate the country's other banking institutions. The functions of
a country's central bank are listed below:

 assisting other financial institutions

 Issuing money and enforcing monetary policies

 The financial system's supervisor

In other words, the country's central bank is also known as the banker's bank
because it assists other banks in the country and runs the country's financial system
under the supervision of the Government.

12
 2. Cooperative Banks :

 These banks are governed by a law enacted by the state government. They provide
short- term loans to agriculture and related industries.

 Cooperative banks' principal purpose is to enhance social welfare by providing

low- interest loans.

 They are arranged in a three-tiered system.

 State Cooperative Banks, Tier 1 (State Level) (regulated by RBI, State Govt, NABARD)

 The RBI, the government, and the National Bank for Agriculture and Rural
Development (NABARD) all contribute to the project's funding. After then, the
money is allocated to the general population.

 These banks are subject to CRR and SLR concessions. (SLR: 25%, CRR: 3%)

 The state owns the company, and the senior management is chosen by the members.

 Central/District Cooperative Banks, Tier 2 (District Level)

 Tier 3 (Village Level) – Agriculture (Primary) Cooperative Banks.

3. Commercial Banks:
 The Banking Companies Act of 1956 established the company.

 They function on a commercial basis, with profit as their primary goal.

 They are owned by the government, state, or any private company and have a
unified structure.

 They look after all sectors, from rural to urban.

 Unless the RBI directs otherwise, these banks do not charge concessional interest rates.

 These banks' primary source of funds are public deposits.

 Commercial banks are further classified into three types:

13
 Public sector banks are those in which the government or the country's central bank
owns the majority of the stock.

 Banks in the private sector are those in which a private entity, an individual, or a
group of people owns the majority of the stock.

 Foreign Banks – This category includes banks with headquarters in other nations
and branches in the United States.

Commercial Banks in India (Public Sector Banks)

Punjab National Bank (PNB)

Indian Bank

State Bank of India

Canara Bank

Union Bank of India

Indian Overseas bank

UCO Bank

Bank of Maharashtra

Punjab and Sind Bank

Bank of India

Central Bank of India

Bank of Baroda Gujarat

14
 4. Regional Rural Banks (RRB):

 These are unique types of commercial banks that lend to agriculture and the
rural economy at a reduced rate.

 RRBs were founded in 1975 and are governed by the 1976 Regional Rural Bank Act.

 RRBs are 50/50 joint ventures between the federal government and state
governments (15%), as well as a commercial bank (35 percent ).

 Between 1987 and 2005, 196 RRBs were established.

 From 2005 forward, the government began merging RRBs, bringing the total
number of RRBs to 82.

 A single RRB cannot open branches in more than three districts that are
geographically connected.

5. Local Area Banks (LAB) :

 In India, it was first introduced in 1996.

 The private sector organizes these.

 Local Area Banks' primary goal is to make a profit.

 Local Area Banks are governed by the 1956 Companies Act.

 There are now just four Local Area Banks in existence, all of which are located in
South India.

6. Specialized Banks

 Certain banks exist just to serve a certain purpose. Specialized banks are the name
for several types of financial institutions. These are some of them:

 SIDBI (Small Industries Development Bank of India) - SIDBI can provide a loan for
a small-scale enterprise or business. With the support of this bank, small businesses
can get current technology and equipment.

15
  Export and Import Bank (EXIM Bank) - EXIM Bank stands for Export and Import
Bank. This type of bank can provide loans or other financial help to foreign
countries that are exporting or importing goods.

 NABARD (National Bank for Agricultural and Rural Development) – People can
resort to NABARD for any type of financial support for rural, handicraft, village,
and agricultural development.

 Other specialist banks exist, each with a unique function to play in the financial
development of the country.

7. Small Finance Banks:

This sort of bank, as the name implies, provides loans and financial help to micro
industries, small farmers, and the unorganized sector of society. The country's
central bank oversees these institutions.

The following is a list of our country's small finance banks:

AU Small Finance Equitas Small Finance Jana Small Finance Bank Northeast Small Finance
Bank Bank Bank
Capital Small Finance Fincare Small Finance Suryoday Small Finance Ujjivan Small Finance
Bank Bank Bank Bank
Esaf Small Finance Utkarsh Small Finance
Bank Bank

8. Payments Banks:
The Reserve Bank of India conceptualized the payments bank, a newly developed
form of banking. People who have a payment bank account can only deposit up to
Rs.1,00,000/- and cannot apply for loans or credit cards through this account.
Payment banks provide services such as internet banking, mobile banking, ATM
card issuance, and debit card issuance.

16
 The following is a list of our country's few payment banks:

 Airtel Payments Bank

 India Post Payments Bank

 Fino Payments Bank

 Jio Payments Bank

 Paytm Payments Bank

 NSDL Payments Bank

17
 INTRODUCTION OF INTERNET
BANKING

Internet Banking, also known as net-banking or online banking, is an electronic

payment system that enables the customer of a bank or a financial institution to
make financial or non-financial transactions online via the internet. This service
gives online access to almost every banking service, traditionally available through a
local branch including fund transfers, deposits, and online bill payments to the
customers.

Internet banking can be defined as a facility provided by banking and

financial institutions, that enable the user to execute bank related transactions
through Internet. The biggest advantage of Internet banking is that people can
expend the services sitting at home, to transact business. Due to which, the account
holder does not have to personally visit the bank. With the help of Internet banking
many transactions can be executed by the account holder. When small transactions
like balance inquiry, record of recent transaction, etc. are to be processed, the
Internet banking facility proves to be very handy. The concept of Internet banking
has thus become a revolution in the field of banking and finance.

Internet banking can be accessed by any individual who has registered

for online banking at the bank, having an active bank account or any financial
institution. After registering for online banking facilities, a customer need not visit
the bank every time he/she wants to avail a banking service. It is not just
convenient but also a secure
18
method of banking. Net banking portals are secured by unique User/Customer IDs
and passwords.

Banks have traditionally been in the forefront of harnessing technology

to improve their products, services and efficiency. They have, over a long time, been
using electronic and telecommunication networks for delivering a wide range of
value-added products and services. The delivery channels include direct dial – up
connections, private networks, public networks etc. and the devices include
telephone, Personal Computers including the Automated Teller Machines, etc. With
the popularity of PCs, easy access to Internet and World Wide Web (WWW),
Internet is increasingly used by banks as a channel for receiving instructions and
delivering their products and services to their customers. This form of banking is
generally referred to as Internet Banking, although the range of products and
services offered by different banks vary widely both in their content and
sophistication.

Broadly, the levels of banking services offered through internet can be categorized

in to three types:

(i) The Basic Level Service is the banks’ websites which disseminate information
on different products and services offered to customers and members of public in
general. It may receive and reply to customers’ queries through e-mail.

(ii) In the next level are Simple Transactional Websites which allow customers to submit

their instructions, applications for different services, queries on their account

balances, etc., but do not permit any fund-based transactions on their accounts.

(iii) The third level of Internet banking services are offered by Fully Transactional
Websites

which allow the customers to operate on their accounts for transfer of

funds, payment of different bills, subscribing to other products of the bank and to
transact purchase and sale of securities, etc. The above forms of Internet banking
services are offered by traditional banks, as an additional method of serving the
customer or by new banks, who deliver banking services primarily through Internet
or other electronic delivery channels as the value-added services. Some of these
banks are known as ‘virtual’

19
banks or ‘Internet only’ banks and may not have any physical presence in a country
despite offering different banking services.

From the perspective of banking products and services being offered

through Internet, Internet banking is nothing more than traditional banking services
delivered through an electronic communication backbone, viz, Internet. But, in the
process it has thrown open issues which have ramifications beyond what a new
delivery channel would normally envisage and, hence, has compelled regulators
world over to take note of this emerging channel. Some of the distinctive features of
internet-banking are:

1. It removes the traditional geographical barriers as it could reach out to customers

of different countries / legal jurisdiction. This has raised the question of jurisdiction

of law / supervisory system to which such transactions should be subjected.

2. It has added a new dimension to different kinds of risks traditionally associated

with banking, heightening some of them and throwing new risk control

challenges.

3. Security of banking transactions, validity of electronic contract, customers’

privacy, etc., which have all along been concerns of both bankers and supervisors
have assumed different dimensions given that Internet is a public domain, not
subject to control by any single authority or group of users.

4. It poses a strategic risk of loss of business to those banks who do not respond in
time, to this new technology, being the efficient and cost-effective delivery
mechanism of banking services.

5. A new form of competition has emerged both from the existing players and new
players of the market who are not strictly banks.

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.

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 HISTORY OF INTERNET BANKING

The concept of Internet banking has been simultaneously evolving

with the development of the world wide web. Programmers working on banking
data bases came up with ideas for online banking transactions, sometime during the
1980s. The creative process of development of these services were probably sparked
off after many companies started the concept of online shopping. The online
shopping promoted the use of credit cards through Internet. Many banking
organizations had already started creating data ware housing facilities to ease their
working staffs. The development of these databases was widely used during the
development of ATM’s.

Sometime in 1980s, banking and finance organizations in Europe and

United States started suggestive researches and programming experiments on the
concept of ‘home banking’. Initially in the 80’s when computers and Internet were
not so well- developed, ‘home banking’ basically made use of fax machines and
telephones to facilitate their customers. The widespread of Internet and
programming facilities created further opportunities for development of home
banking.

Sometime in 1980s, banking and finance organizations in Europe and

United States started suggestive researches and programming experiments on the
concept of ‘home banking’. Initially in the 80’s when computers and Internet were
not so well- developed, ‘home banking’ basically made use of fax machines and
telephones to facilitate their customers. The widespread of Internet and
programming facilities created further opportunities for development of home
banking.
21
 The first online banking service in United States was introduced,
in October 1994. The service was developed by Stanford Federal Credit Union,
which is a financial institution. The online banking services are becoming more and
more prevalent due to the well-developed systems. Though there are pros and cons
of electronic cash, it has become a revolution that is enhancing the banking sector.

Special Features of Internet Banking

Here are some of the best features of internet banking:

 Provides access to financial as well as non-financial banking services

 Facility to check bank balance any time

 Make bill payments and fund transfer to other accounts

 Keep a check on mortgages, loans, savings a/c linked to the bank account

 Safe and secure mode of banking

 Protected with unique ID and password

 Customers can apply for the issuance of a cheesebox

 Buy general insurance

 Set-up or cancel automatic recurring payments and standing orders

 Keep a check on investments linked to the bank account

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 Services Available through the Internet Banking
Once a customer is registered for online banking, he/she can log-in to the
respective online banking portal of his/her bank using the issued User-ID and
password.

Services Available on the Internet Banking Portals

Account Balance Check View Bank Statements NEFT & RTGS Fund Transfer

IMPS Fund Transfer Utility Bill Payment Start a Deposit

Open/Close a Fixed Deposit Make Merchant Payments Issuance of Cheque Book

Start Investments Buy General Insurance Recharge Prepaid Mobile/DTH

Check Mortgages, Loans Set-up/Cancel Automatic Payments Manage/Change Account Details

Book Online Tickets Buy/Sell on E-Commerce Platforms Invest and Conduct Trade

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Advantages of Internet Banking

Given below are some advantages/benefits of Internet Banking available

for all the users-

24×7
Availability

Convenience
Non-
of initiating
financial
financial
Transactions
transactions
Advantages
of Internet
Banking

Proper Track
Quick and
of
Secure
Transactions

1.24×7 Availability:

Internet banking, unlike usual banking hours, is not time-bound. It is available 24×7
throughout the year. Most of the services available online are not time-restricted.
Users can check their bank balance, account statements and make fund transfers
anytime instantly.

24
2. Convenience of initiating financial transactions:

Internet banking is largely preferred because of the convenience that it provides

while fund transfer and bill payments. Registered users can use almost all the
banking services without having to visit the bank and standing in queues. Financial
transactions such as paying bills and transferring funds between accounts can easily
be performed anytime as per the convenience of the user.

3. Proper Track of Transactions:

Acknowledgement slips are provided by the bank after transactions which have a
high possibility of getting misplaced. However, with internet banking, it becomes
very easy to track the history of all the transactions initiated by the user.
Transactions and fund transfers made online are organized in the ‘Transaction
History’ section along with other details such as payee’s name, bank account
number, the amount paid, the date and time of payment, and remarks.

4. Quick and Secure:

Net banking users can transfer funds between accounts instantly, especially if the
two accounts are held at the same bank. Funds can be transferred via NEFT, RTGS
or IMPS as per the user’s convenience. One can also make bill payments, EMI
payments, loan and tax payments easily. Moreover, the transactions, as well as the
account, are secured with a password and unique User-ID.

5. Non-financial Transactions:

Besides fund transfer, internet banking allows the users to avail non-financial
services such as balance check, account statement check, application for issuance of
cheque book, etc.

25
Types of Fund Transfers using Internet Banking

As we have already discussed, there are three types of fund transfers which
can be made using net-banking. Let us understand more-

NEFT
National Electronic Fund Transfer (NEFT) is a payment system which allows
one-to- one fund transfer.

 Using NEFT, individuals and corporates can transfer funds electronically

from any bank branch to any individual or corporate with an account with
any other bank branch in the country.
 NEFT service is available 24×7 on internet banking. But it is a time-
restricted service at the bank branch.
 Usually, NEFT transfer is successfully completed within 30 minutes.
Nonetheless, the time can even stretch to 2-3 hours or might be completed in
just 10 minutes.

RTGS

Real-Time Gross Settlement (RTGS) is a continuous settlement of funds

individually on an order-by-order basis.

 This payment system ensures that the receiver’s account gets credited with
the funds almost immediately and not after a certain duration, as is the case
with other payment modes like NEFT.
 RTGS transactions are tracked by the RBI, thereby successful transfers are
irreversible. This method is majorly used for large value transfers.
 The minimum amount to be remitted through RTGS is 2 lakhs. There is no
cap on the maximum amount for transfer via RTGS.
 Like NEFT, RTGS is also available online 24×7.

26
IMPS

Immediate Payment System (IMPS) is another payment method that transfers

funds in real-time.

 IMPS is used to transfer funds instantly within banks across India via
mobile, internet and ATM, which is not only safe but also economical both
in financial and non-financial perspectives
 IMPS is an inexpensive mode of fund transfer. Other fund transfer mediums
such as NEFT and RTGS charge significantly higher than IMPS
 It does not require details like account number, IFSC code, etc. Funds can be
transferred via IMPS just with the mobile number of the beneficiary

How to Register for Internet Banking?

Every account holder has to register for an online banking service at his/her
respective bank to get access. Most of the banks provide a net-banking log-in kit as
and when you apply for a new account. To start using net-banking, follow these
steps-

1. Download the application form from your bank’s official website, fill the
same and take out a print. You can also visit the bank directly and fill the
application form for net-banking
2. Submit the application form at the bank
3. After verification, you will receive a unique User ID and password using
which you can log-in to internet banking

27
 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 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 an Indian multinational, public sector

banking and financial services statutory body headquartered in Mumbai,
Maharashtra. SBI is the 43rd largest bank in the world and ranked 221st in the
Fortune Global 500 list of the world's biggest corporations of 2020, being the only
Indian bank on the list It is a public sector bank and the largest bank in India with a
23% market share by assets and a 25% share of the total loan and deposits market

28
 The bank descends from the Bank of Calcutta, founded in 1806 via the
Imperial Bank of India, making it the oldest commercial bank in the Indian
subcontinent. The Bank of Madras merged into the other two presidency banks in
British India, the Bank of Calcutta and the Bank of Bombay, to form the Imperial
Bank of India, which in turn became the State Bank of India in 1955. The
Government of India took control of the Imperial Bank of India in 1955, with
Reserve Bank of India (India's central bank) taking a 60% stake, renaming it State
Bank of India.

HISTORY OF STATE BANK OF

INDIA
The roots of State Bank of India lie in the first decade of the 19th
century when the Bank of Calcutta later renamed the Bank of Bengal, was
established on 2 June 1806. The Bank of Bengal was one of three Presidency banks,
the other two being the Bank of Bombay (incorporated on 15 April 1840) and the
Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were
incorporated as joint stock companies and were the result of royal charters. These
three banks received the exclusive right to issue paper currency till 1861 when, with
the Paper Currency Act, the right was taken over by the Government of India. The
Presidency banks amalgamated on 27 January 1921, and the re-organized banking
entity took as its name Imperial Bank of India. The Imperial Bank of India remained
a joint-stock company but without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955,

the Reserve Bank of India, which is India's central bank, acquired a controlling
interest in the Imperial Bank of India. On 1 July 1955, the Imperial Bank of India
became the State Bank of India. In 2008, the Government of India acquired the
Reserve Bank of India's stake in SBI so as to remove any conflict of interest because
the RBI is the country's banking regulatory authority.

29
 In 1959, the government passed the State Bank of India (Subsidiary
Banks) Act. This made eight banks that had belonged to princely states into
subsidiaries of SBI. This was at the time of the First Five Year Plan, which
prioritized the development of rural India. The government integrated these banks
into the State Bank of India system to expand its rural outreach. In 1963 SBI merged
State Bank of Jaipur (est. 1943) and State Bank of Bikaner (est.1944).

SBI has acquired local banks in rescues. The first was the Bank of
Bihar (est. 1911), which SBI acquired in 1969, together with its 28 branches. The
next year SBI acquired National Bank of Lahore (est. 1942), which had 24 branches.
Five years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been
established in 1916 in Gwalior State, under the patronage of Maharaja Madho Rao
Scindia. The bank had been the Dukan Pichai, a small moneylender, owned by the
Maharaja. The new bank's first manager was Jall N. Broacha, a Parsi. In 1985, SBI
acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the
acquirer as its affiliate, the State Bank of Travancore, already had an extensive
network in Kerala.

There was, even before it actually happened, a proposal to merge all

the associate banks into SBI to create a single very large bank and streamline
operations.

The first step towards unification occurred on 13 August 2008 when

State Bank of Saurashtra merged with SBI, reducing the number of associate state
banks from seven to six. On 19 June 2009, the SBI board approved the absorption of
State Bank of Indore, in which SBI held 98.3%. (Individuals who held the shares
prior to its takeover by the government held the balance of 1.7%.)

The acquisition of State Bank of Indore added 470 branches to SBI's

existing network of branches. Also, following the acquisition, SBI's total assets
approached 10 trillion. The total assets of SBI and the State Bank of Indore were
9,981,190 million as of March 2009. The process of merging of State Bank of Indore
was completed by April 2010, and the SBI Indore branches started functioning as
SBI branches on 26 August 2010. On 7 October 2013, Arundhati Bhattacharya
became the first woman to be appointed Chairperson of the bank. Mrs. Bhattacharya
received an extension of two years of service to merge into SBI the five remaining
associate banks.
30
SERVICES PROVIDED BY SBI OF 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.
„Online SBI‟ 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:

Retail banking offers bank accounts and basic financial services to

individual consumers. These services can include checking and savings accounts,
loans, credit cards, cash deposits, withdrawals, and more. Retail banks make money
by loaning

your deposited funds out with interest and charging you various account fees.

31
The Retail banking application is an integration of several functional areas, and

enables customers to:

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 e-Pay for automatic bill payments

Interface with merchants for railway and airline reservations

Avail DEMAT and IPO services.

32
CORPORATE BANKING :

Corporate banking is a subset of business banking that involves a range of banking

services that are offered only to corporate. The services include the provision of
credit, cash management facilities, etc.

SBI CORPORATE BANKING :

The Online SBI corporate banking application provides features to administer and
manage corporate accounts online. The corporate module provides roles such as
Regulator, Admin, Up loader, Transaction Maker, Authorizer, and Auditor. These
roles have access to following :

33
 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

34
VALUE ADDED SERVICES:

SBI offers a wide range of Value-Added Services to enhance banking services and
customer support. Major value-added services offered at SIB are SIB Pure Gold,
Green Pin, Education Fee Collection, Mobile Banking, BBPS, Any Branch Banking,
Internet Banking, Demit Services, PAN Service Agency (PSA), Online Trading
National Pension System.

Marketing
& sales

Product
Logal & IP
VALUE stratergy
ADDED
SERVICES

Human
Finance
Resource

35
Internet banking transactions for SBI and associate banks

Debit facility where suppliers can directly debit their customer’s account through internet
banking .

PRODUCTS & 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
 Demit Account Statement

E-TICKETING :

36
 You can book your railway, air and bus tickets online through Online
SBI. 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 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 be 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.onlinesbi.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 i- ticket, 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 airline’s 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 „Online
SBI‟ 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 e-Tax link in the home

37
page. You are displayed a page with two links Direct Tax and Indirect Tax. 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 Assesses who possesses the 15-digit PAN based
Assesses Code. You can make CBEC payments using the Indirect Taxes link
available in the Payments/Transfers tab. You need to provide your assesses 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 Internet-enabled, „Online SBI‟
offers the Government Tax Payment facility.

38
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 learn the steps
for using the facility. 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. This system is the fastest possible interbank
money transfer facility available through secure banking 85 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

39
lack 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.
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.

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.

40
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.

41
CC Avenue:

Enjoy shopping at the CC Avenue Shopping Mall and purchase from a

wide variety of products and services through CC Avenue Certified Vendors. Make
payments for your purchases using your Internet enabled SBI accounts.

One of the major advantages of using Avenue payment gateway is that it

supports multiple currencies. Which allows you to accept payments not only in INR
but also in USD, EURO, etc. However, there are lot of wrong information exist on
their website and it seems that they do not update their website frequently. So, we
suggest you to talk to their sales executives before going for multi-currency option.

42
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.

43
THIRD PARTY TRANSFER

You can transfer funds to your trusted third parties by adding 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.1lakh. 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.

44
DEMAND DRAFT

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.

45
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.

46
ACCOUNT OPENING REQUEST

Online SBI‟ 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.

ACCOUNT STATEMENT

47
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. 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.

TRANSACTION ENQUIRY

Online SBI‟ 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 account details,
transaction amount, narration and transaction status.

48
DEMAT ACCOUNT STATEMENT

Online SBI‟ enables you to view Demit 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 Demit accounts and use the funds to trade on stock
using funds in your SBI savings account. You can view Demit 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. Reputed institutions who have registered under Vyapaar or Vistaar
variants of CINB can make use of the State Bank collect facility for collection of
donations.

49
TYPES OF RISKS ASSOCIATED WITH INTERNET BANKING

A major driving force behind the rapid spread of i-banking all over the world is its
acceptance as an extremely cost-effective delivery channel of banking services as
compared to other existing channels. However, Internet is not an unmixed blessing
to the banking sector. Along with reduction in cost of transactions, it has also
brought about a new orientation to risks and even new forms of risks to which banks
conducting i- banking expose themselves. Regulators and supervisors all over the
world are concerned that while banks should remain efficient and cost effective, they
must be conscious of different types of risks this form of banking entails and have
systems in place to manage the same. An important and distinctive feature is that
technology plays a significant part both as source and tool for control of risks.
Because of rapid changes in information technology, there is no finality either in the
types of risks or their control measures. Both evolve continuously. The thrust of
regulatory action in risk control has been to identify risks in broad terms and to
ensure that banks have minimum systems in place to address the same and that such
systems are reviewed on a continuous basis in keeping with changes in technology.
In the following paragraphs a generic set of risks are discussed as the basis for
formulating general risk control guidelines.

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OPERATIONAL RISK:

Operational risk, also referred to as transactional risk is the most

common form of risk associated with i-banking. It takes the form of inaccurate
processing of transactions, non-enforceability of contracts, compromises in data
integrity, data privacy and confidentiality, unauthorized access / intrusion to bank’s
systems and transactions etc. Such risks can arise out of weaknesses in design,
implementation and monitoring of banks’ information system. Besides inadequacies
in technology, human factors like negligence by customers and employees,
fraudulent activity of employees and crackers / hackers etc. can become potential
source of operational risk. Often there is thin line of difference between operational
risk and security risk and both terminologies are used interchangeably.

SECURITY RISK:

Internet is a public network of computers which facilitates flow of data / information

and to which there is unrestricted access. Banks using this medium for financial
transactions

51
must, therefore, have proper technology and systems in place to build a secured
environment for such transactions.

Security risk arises on account of unauthorized access to a bank’s

critical information stores like accounting system, risk management system,
portfolio management system, etc. A breach of security could result in direct
financial loss to the bank. For example, hackers operating via the Internet, could
access, retrieve and use confidential customer information and also can implant
virus. This may result in loss of data, theft of or tampering with customer
information, disabling of a significant portion of bank’s internal computer system
thus denying service, cost of repairing these etc. Other related risks are loss of
reputation, infringing customers’ privacy and its legal implications etc. Thus, access
control is of paramount importance. Controlling access to banks’ system has become
more complex in the Internet environment which is a public domain and attempts at
unauthorized access could emanate from any source and from anywhere in the world
with or without criminal intent. Attackers could be hackers, unscrupulous vendors,
disgruntled employees or even pure thrill seekers. Also, in a networked environment
the security is limited to its weakest link. It is therefore, necessary that banks
critically assess all interrelated systems and have access control measures in place in
each of them

52
 In addition to external attacks banks are exposed to security risk from
internal sources e.g., employee fraud. Employees being familiar with different
systems and their weaknesses become potential security threats in a loosely
controlled environment. They can manage to acquire the authentication data in order
to access the customer accounts causing losses to the bank. Unless specifically
protected, all data / information transfer over the Internet can be monitored or read
by unauthorized persons. There are programs such as ‘sniffers’ which can be set up
at web servers or other critical locations to collect data like account numbers,
passwords, account and credit card numbers. Data privacy and confidentiality issues
are relevant even when data is not being transferred over the net. Data residing in
web servers or even banks’ internal systems are susceptible to corruption if not
properly isolated through firewalls from Internet.

The risk of data alteration, intentionally or unintentionally, but

unauthorized is real in a networked environment, both when data is being
transmitted or stored. Proper access control and technological tools to ensure data
integrity is of utmost importance to banks. Another important aspect is whether the
systems are in place to quickly detect any such alteration and set the alert. 5Identity
of the person making a request for a service or a transaction as a customer is crucial
to legal validity of a transaction and is a source of risk to a bank. A computer
connected to Internet is identified by its IP (Internet Protocol) address. There are
methods available to masquerade one computer as another, commonly known as ‘IP
Spoofing’. Likewise, user identity can be misrepresented. Hence, authentication
control is an essential security step in any e-banking system. Non- repudiation
involves creating a proof of communication between two parties, say the bank and
its customer, which neither can deny later. Banks’ system must be technologically
equipped to handle these aspects which are potential sources of risk.

SYSTEM ARCHITECTURE AND DESIGN

Appropriate system architecture and control is an important factor in

managing various kinds of operational and security risks. Banks face the risk of
wrong choice of technology, improper system design and inadequate control
processes. For example, if access to a system is based on only an IP address,
any user can gain access by
53
 masquerading as a legitimate user by spoofing IP address of a genuine user.
Numerous protocols are used for communication across Internet. Each protocol is
designed for specific types of data transfer. A system allowing communication with
all protocols, say HTTP (Hyper Text Transfer Protocol), FTP (File Transfer
Protocol), telnet etc. is more prone to attack than one designed to permit say, only
HTTP.

Choice of appropriate technology is a potential risk banks face.

Technology which is outdated, not scalable or not proven could land the bank in
investment loss, a vulnerable system and inefficient service with attendant
operational and security risks and also risk of loss of business.

Many banks rely on outside service providers to implement,

operate and maintain their e-banking systems. Although this may be necessary
when banks do not have the requisite expertise, it adds to the operational risk. The
service provider gains access to all critical business information and technical
systems of the bank, thus making the system vulnerable. In such a scenario, the
choice of vendor, the contractual arrangement for providing the service etc., become
critical components of banks’ security. Bank should educate its own staff and over
dependencies on these vendors should be avoided as far as possible.

Not updating bank’s system in keeping with the rapidly changing technology,
increases operational risk because it leaves holes in the security system of the bank. Also,

54
staff may fail to understand fully the nature of new technology employed. Further, if
updating is left entirely at customers’ end, it may not be updated as required by the
bank. Thus, education of the staff as well as users plays an important role to avoid
operational risk. These include access control, use of firewalls, cryptographic
techniques, public key encryption, digital signature etc.

REPUTATIONAL RISK

Reputational risk is the risk of getting significant negative public opinion,

which may result in a critical loss of funding or customers. Such risks arise from
actions which cause major loss of the public confidence in the banks' ability to
perform critical functions or impair bank-customer relationship. It may be due to
banks’ own action or due to third party action.

55
 The main reasons for this risk may be system or product not working to
the expectations of the customers, significant system deficiencies, significant
security breach (both due to internal and external attack), inadequate information to
customers about product use and problem resolution procedures, significant
problems with communication networks that impair customers’ access to their funds
or account information especially if there are no alternative means of account access.
Such situation may cause customer- discontinuing use of product or the service.
Directly affected customers may leave the bank and others may follow if the
problem is publicized.
Other reasons include losses to similar institution offering same type
of services causing customer to view other banks also with suspicion, targeted
attacks on a bank like hacker spreading inaccurate information about bank products,
a virus disturbing bank’s system causing system and data integrity problems etc.

Possible measures to avoid this risk are to test the system before
implementation, backup facilities, contingency plans including plans to address
customer problems during system disruptions, deploying virus checking,
deployment of ethical hackers for plugging the loopholes and other security
measures.

It is significant not only for a single bank but also for the system as a
whole. Under extreme circumstances, such a situation might lead to systemic
disruptions in the banking system as a whole. Thus, the role of the regulator
becomes even more important as not even a single bank can be allowed to fail.

LEGAL RISK

56
 Legal risk arises from violation of, or non-conformance with laws, rules,
regulations, or prescribed practices, or when the legal rights and obligations of
parties to a transaction are not well established.

Given the relatively new nature of Internet banking, rights and obligations
in some cases are uncertain and applicability of laws and rules is uncertain or
ambiguous, thus causing legal risk.

Other reasons for legal risks are uncertainty about the validity of some
agreements formed via electronic media and law regarding customer disclosures and
privacy protection. A customer, inadequately informed about his rights and
obligations, may not take proper precautions in using Internet banking products or
services, leading to disputed transactions, unwanted suits against the bank or other
regulatory sanctions.
In the enthusiasm of enhancing customer service, bank may link their
Internet site to other sites also. This may cause legal risk. Further, a hacker may use
the linked site to defraud a bank customer.
If banks are allowed to play a role in authentication of systems such as
acting as a Certification Authority, it will bring additional risks. A digital certificate
is intended to ensure that a given signature is, in fact, generated by a given signer.
Because of this, the certifying bank may become liable for the financial losses
incurred by the party relying on the digital certificate.

57
MONEY LAUNDERING RISK

As Internet banking transactions are conducted remotely banks

may find it difficult to apply traditional method for detecting and preventing
undesirable criminal activities. Application of money laundering rules may also be
inappropriate for some forms of electronic payments. Thus, banks expose
themselves to the money laundering risk. This may result in legal sanctions for
noncompliance with “know your customer” laws.

To avoid this, banks need to design proper customer identification and

screening techniques, develop audit trails, conduct periodic compliance reviews,
frame policies and procedures to spot and report suspicious activities in Internet
transactions.

CROSS BORDER RISKS

Internet banking is based on technology that, by its very nature, is

designed to extend the geographic reach of banks and customers. Such market
expansion can extend beyond national borders. This causes various risks.

58
 It includes legal and regulatory risks, as there may be uncertainty about
legal requirements in some countries and jurisdiction ambiguities with respect to the
responsibilities of different national authorities. Such considerations may expose
banks to legal risks associated with non-compliance of different national laws and
regulations, including consumer protection laws, record-keeping and reporting
requirements, privacy rules and money laundering laws.

If a bank uses a service provider located in another country, it will be

more difficult to monitor it thus, causing operational risk. Also, the foreign-based
service provider or foreign participants in Internet banking are sources of country
risk to the extent that foreign parties become unable to fulfill their obligations due to
economic, social or political factors.

Cross border transaction accentuates credit risk, since it is difficult to

appraise an application for a loan from a customer in another country compared to a
customer from a familiar customer base. Banks accepting foreign currencies in
payment for electronic money may be subjected to market risk because of
movements in foreign exchange rates.

59
STRATEGIC RISK

This risk is associated with the introduction of a new product

or service. Degree of this risk depends upon how well the institution has addressed
the various issues related to development of a business plan, availability of sufficient
resources to support this plan, credibility of the vendor (if outsourced) and level of
the technology used in comparison to the available technology etc.

For reducing such risk, banks need to conduct proper survey, consult
experts from various fields, establish achievable goals and monitor performance.
Also, they need to analyses the availability and cost of additional resources,
provision of adequate supporting staff, proper training of staff and adequate
insurance coverage. Due diligence needs to be observed in selection of vendors,
audit of their performance and establishing alternative arrangements for possible
inability of a vendor to fulfil its obligation. Besides this, periodic evaluations of new
technologies and appropriate consideration for the costs of technological
upgradation are required.

60
OTHER RISKS

Traditional banking risks such as credit risk, liquidity risk, interest rate risk
and market risk are also present in Internet banking. These risks get intensified due
to the very nature of Internet banking on account of use of electronic channels as
well as absence of geographical limits. However, their practical consequences may
be of a different magnitude for banks and supervisors than operational, reputational
and legal risks. This may be particularly true for banks that engage in a variety of
banking activities, as compared to banks or bank subsidiaries that specialize in
Internet banking

 Credit risk :

Is the risk that a counter party will not settle an obligation for full value,
either when due or at any time thereafter. Banks may not be able to properly
evaluate the credit worthiness of the customer while extending credit through remote
banking procedures, which could enhance the credit risk. Presently, banks generally
deal with more familiar customer base. Facility of electronic bill payment in Internet
banking may cause credit risk if a third-party intermediary fails to carry out its
obligations with respect to payment. Proper evaluation of the creditworthiness of a
customer and audit of lending process are a must to avoid such risk. Another facility
of Internet banking is electronic money. It brings various types of risks associated
with it. If a bank purchases e-money

61
from an issuer in order to resell it49 to a customer, it exposes itself to credit risk
in the event of the issuer defaulting on its obligation to redeem electronic money.

 Liquidity Risk :

arises out of a bank’s inability to meet its obligations when they

become due without incurring unacceptable losses, even though the bank may
ultimately be able to meet its obligations. It is important for a bank engaged in
electronic money transfer activities that it ensures that funds are adequate to cover
redemption and settlement demands at any particular time. Failure to do so, besides
exposing the bank to liquidity risk, may even give rise to legal action and
reputational risk. Similarly, banks dealing in electronic money face interest rate risk
because of adverse movements in interest rates causing decrease in the value of
assets relative to outstanding electronic money liabilities. Banks also face market
risk because of losses in on-and-off balance sheet positions arising out of
movements in market prices including foreign exchange rates. Banks accepting
foreign currency in payment for electronic money are subject to this type of risk.

Risk of unfair competition: Internet banking is going to intensify the

competition among various banks. The open nature of Internet may induce a few
banks to use unfair practices to take advantage over rivals. Any leaks at network
connection or operating system etc., may allow them to interfere in a rival bank’s
system.
Thus, one can find that along with the benefits, Internet banking carries
various risks for bank itself as well as banking system as a whole. The rapid pace of
technological innovation is likely to keep changing the nature and scope of risks
banks face. These risks must be balanced against the benefits. Supervisory and
regulatory authorities are required to develop methods for identifying new risks,
assessing risks, managing risks and controlling risk exposure. But authorities need to
keep in consideration that the development and use of Internet banking are still in
their early stages, and policies that hamper useful innovation and experimentation
should be avoided. Thus, authorities need to encourage banks to develop a risk
management process rigorous and comprehensive enough to deal with known risks
and flexible enough to accommodate changes in the type and intensity of the risks.

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TECHNOLOGY AND SECURITY STANDARDS FOR INTERNET BANKING

The Internet has provided a new and inexpensive channel for banks to
reach out to their customers. It allows customers to access banks’ facilities round the
clock and 7 days a week. It also allows customers to access these facilities from
remote sites/home etc. However, all these capabilities come with a price. The highly
unregulated Internet provides a less than secure environment for the banks to
interface. The diversity in computer, communication and software technologies used
by the banks vastly increases the challenges facing the online bankers. In this
chapter, an effort has been made to give an overview of the technologies commonly
used in Internet banking. An attempt has been made to describe concepts, techniques
and technologies related to privacy and security including the physical security. The
banks planning to offer Internet banking should have explicit policies on security.
An outline for a possible framework for security policy and planning has also been
given. Finally, recommendations have been made for ensuring security in Internet
banking.

Technologies

63
Computer networking & Internet

The purpose of computer networking is sharing of computing resources and

data across the whole organization and the outside world. Computer Networks can
be primarily divided into two categories based on speed of data transfers and
geographical reach. A Local area network (LAN) connects many servers and
workstations within a small geographical area, such as a floor or a building. Some of
the common LAN technologies are 10 MB Ethernet, 100 MB Ethernet, 1GB
Ethernet, Fiber Distributed Data Interface (FDDI) and Asynchronous Transfer
Mode (ATM). The data transfer rates here are very high. They commonly use
broadcast mode of data transfer. The Wide Area Network (WAN), on the other
hand, is designed to carry data over great distances and are generally point-to-point.
Connectivity in WAN set-up is provided by using dial-up modems on the Public
Switched Telephone Network (PSTN) or leased lines, VSAT networks, an
Integrated Services Digital Network (ISDN) or T1 lines, Frame Relay/X.25
(Permanent Virtual Circuits), Synchronous Optical Network (SONET), or by using
Virtual Private Networks (VPN) which are software-defined dedicated and
customized services used to carry traffic over the Internet. The different topologies,
technologies and data communication protocols have different implications on
safety and security of services.

To standardize on communications between systems, the International

Organization of Standards developed the OSI model (the Open System
Interconnection Reference Model) in 1977. The OSI breaks up the communication
process into 7 layers and describe the functions and interfaces of each layer. The
important services provided by some of the layers are mentioned below. It is
necessary to have a good understanding of these layers for developing applications
and for deploying firewalls (described later). Application Layer: Network
Management, File Transfer Protocol, Information validation, Application-level
access security checking. Session Layer: establishing, managing and terminating
connections (sessions) between applications Transport Layer: Reliable transparent
transfer of data between end points, end to end recovery & flow control. Network
Layer: Routing, switching, traffic monitoring and congestion control, control of
network connections, logical channels and data flow. Data Link Layer: Reliable
transfer of data across physical link and control of flow of data from one machine to

64
another.

Protocols:

The data transmission protocol suite used for the Internet is known as the
Transmission Control Protocol/Internet Protocol (TCP/IP). The Internet is primarily
a network of networks. The networks in a particular geographical area are connected
into a large regional network. The regional networks are connected via a high speed
“back bone”. The data sent from one region to another is first transmitted to a
Network Access Point (NAP) and are then routed over the backbone. Each computer
connected to the Internet is given a unique IP address (such as 142.16.111.84) and a
hierarchical domain name (such as cse.iitb.ernet.in). The Internet can be accessed
using various application-level protocols such as FTP (File Transfer Protocol),
Telnet (Remote Terminal Control Protocol), Simple Mail Transport Protocol
(SMTP), Hypertext Transfer Protocol (HTTP). These protocols run on top of
TCP/IP. The most innovative part of the Internet is the World Wide Web (WWW).
The web uses hyperlinks, which allow users to move from any place on the web to
any other place. The web consists of web pages, which are multimedia pages
composed of text, graphics, sound and video. The web pages are made using
Hypertext Markup Language (HTML). The web works on a client-server model in
which the client software, known as the browser, runs on the local machine and the
server software, called the web server, runs on a possibly remote machine. Some of
the popular browsers are Microsoft Internet Explorer and Netscape Navigator.

With the popularity of web, organizations find it beneficial to provide access

to their services through the Internet to its employees and the public. In a typical
situation, a component of the application runs (as an ‘applet’) within the browser on
user’s workstation. The applet connects to the application (directly using TCP/IP or
through web server using HTTP protocols) on the organization’s application and
database servers. These servers may be on different computer systems. The web-
based applications provide flexible access from anywhere using the familiar
browsers that support graphics and multimedia. The solutions are also scalable and
easy to extend.

65
BANKING PRODUCTS:

Internet Banking applications run on diverse platforms, operating systems and use
different architectures. The product may support centralized (bank wide) operations
or branch level automation. It may have a distributed, client server or three tier
architectures based on a file system or a DBMS package. Moreover, the product
may run on computer systems of various types ranging from PCs, open (Unix based)
systems, to proprietary main frames. These products allow different levels of access
to the customers and different range of facilities. The products accessible through
Internet can be classified into three types based on the levels of access granted:
Information only systems:

General-purpose information like interest rates, branch locations, product features,

FAQs, loan and deposit calculators are provided on the bank’s web (WWW) site.
The sites also allow downloading of application forms. Interactivity is limited to a
simple form of ‘e- mail’. No identification or authentication of customers is done
and there is no interaction between the bank’s production system (where current data
of accounts are kept and transactions are processed) and the customer. Electronic
Information Transfer System: These systems provide customer specific information
in the form of account balances, transaction details, statement of account etc. The
information is still largely ‘read only’. Identification and authentication of customer
takes place using relatively simple techniques (like passwords). Information is
fetched from the Bank’s production system in either the batch mode or offline. Thus,
the bank’s main application system is not directly accessed.

Fully Transactional System:

These systems provide bi-directional transaction capabilities. The bank allows

customers to submit transactions on its systems and these directly update customer
accounts. Therefore, security & control system need to be strongest here.
Application architecture A computer-based application may be built as a monolithic
software, or may be structured to run on a client–server environment, or even have
three or multi-tiered architecture.

66
A computer application typically separates its 3 main tasks:

interactions with the user, processing of transactions as per the business rules, and
the storage of business data. The three tasks can be viewed as three layers, which
may run on the same system (possibly a large, proprietary computer system), or may
be separated on to multiple computers (across the Internet), leading to three-tier or
multi-tier architecture. These layers can be briefly described as follows:

1. Presentation Layer:

This layer is responsible for managing the front-end devices, which include
browsers on personal computers, Personal Digital Assistants (PDAs), mobile
phones, Internet kiosks, Web TV etc. The presentation layer takes care of user
interface related issues like display details, color, layout, image etc. It also has
important responsibilities in user authentication and session management activity.

2. Application layer:

It contains the business logic (for processing of data and transactions) and necessary
interfaces to the data layer. It processes requests from the presentation layer,
connects to the data layer, receives and processes the information and passes results
back to the presentation layer. It is responsible for ensuring that all the business
rules are incorporated in the software. The issues of scalability, reliability and
performance of the services to a great extent depend upon the application layer
architecture.

3. Data Layer:

The data layer uses a database package to store, retrieve and update application data.
The database may be maintained on one or multiple servers. A database package also
supports back-up and recovery of data, as well as logging of all transactions. .

REGULATORY AND SUPERVISORY CONCERNS

Banking on the Internet provides benefits to the consumer in terms of convenience,

and to the provider in terms of cost reduction and greater reach. The Internet itself
however is not a secure medium, and thus poses a number of risks of concern to
regulators and supervisors of banks and financial institutions. World over, regulators
and supervisors are still evolving their approach towards the regulation and
supervision of Internet banking.

67
Regulations and guidelines issued by some countries include the following.

1. Requirement to notify about web site content

2. Prior authorization based on risk assessment made by external auditors

3. On-site examination of third-party service providers

4. Off-site policing the perimeters to look for infringement.

5. Prohibition on hyperlinks to non-bank business sites

6. Specification of the architecture

In some countries supervisors have followed a ‘hands-off’ approach to regulation of

such activities, while others have adopted a wait and watch attitude. This chapter
suggests approaches to supervision of Internet banking activities, drawing upon the
best international practices in this area as relevant to the Indian context.

Broad regulatory framework

It would be necessary to extend the existing regulatory framework over banks to
Internet banking also. Such an approach would need to take into account the
provisions of both the Banking Regulation Act 1949 and the Foreign Exchange
Management Act, 1999.

1. Only such banks which are licensed and supervised in India and have a physical
presence here should be permitted to offer Internet banking products to residents of
India.

2. These products should be restricted to account holders only and should not be
offered in other jurisdictions.

3. The services should only offer local currency products and that too by entities
who are part of the local currency payment systems.

4. The ‘in-out’ scenario where customers in cross border jurisdictions are offered
banking services by Indian banks (or branches of foreign banks in India) and the
‘outing’ scenario where Indian residents are offered banking services by banks
operating in cross-border jurisdictions are generally not permitted and this approach
should be carried over to Internet banking also.

68
5. The existing exceptions for limited purposes under FEMA i.e., where resident
Indians have been permitted to continue to maintain their accounts with overseas
banks etc., would however be permitted transactions.

6. Overseas branches of Indian banks would be permitted to offer Internet banking

services to their overseas customers subject to their satisfying, in addition to the host
supervisor, the home supervisor in keeping with the supervisory approach outlined
in87 the next section.

7. This extension of approach would apply to virtual banks as well. Thus, both banks
and virtual banks incorporated outside the country and having no physical presence
here would not, for the present, be permitted to offer Internet services to Indian
depositors.

69
 LITERATURE REVIEW

E-banking is an innovation when new information technologies

merge into traditional banking services. Operating costs minimization and revenue
maximization are the major drivers that boost banking services (Sannes, 2001;
Ripstein, 2002). E-banking service is basically a self-service by customers, so for
banks, it requires less resources and lower transaction and production costs
(Southard and Siau, 2004; Witman and Poust, 2008). A study about the e-banking
over 1999–2006 shows that the application of e-banking can improve banks’
performance in terms of the growth in assets, reduction in operating expenses and
portfolio enhancement (Dandapani et al., 2008). Even in 1990s, Israel (1996)
emphasizes that creating virtual banking will not only create a new service delivery
channel, but also lead to value creation to both banks and customers (Hwang et al.,
2007; Murphy, 2007). Amato McCoy (2005) further argues that customers will be
attracted to e-banking when the advanced e-banking services like

70
e-transfer and e-bill options are available. Through interviewing banks in a small
island and examining their e-banking websites from 2004 to 2006, Jenkins (2007)
indicates that those banks were using e-banking as an assurance to their customers to
maintain a competitive quality of service.

The retention and expansion of relationships with relative older and lower IT
awareness customers(Wu et al., 2006). E-banking in developing countries grows
rapidly in the past decade (Akinci et al., 2004). Their research indicates that for
consumers’ attitudes and adoption towards e-banking, there were significant
differences between the two groups, e-banking users and non-e-banking users, with
respect to demographic profiles, attitudinal properties and preferences for service
delivery channels. For instance, in China, there were only 6000 computers
connected to the internet with 40,000 internet users in 1995, but there were 10.2
million internet-connected computers and 26.5 million internet users nationwide by
the end of June 2001 (Zhao, 2002). Lu et al. (2005) reveals that one of the key
strategic responses of banks in China before joining WTO was to develop e-banking
to a more competitive environment, even under the current condition of lack of
practical customer credit system.

Joseph and Stone (2003) investigated the customer perception of the

impact of technology on service delivery in the banking sector. According to the
findings of this research, high scores on the ability to deliver service via technology
appear to be correlated with high satisfaction with services deemed most important
to customers. Hence, availability of internet banking services appears to be very
important for banks for customer satisfaction and retention. However, availability of
internet banking services itself is not a sufficient factor to increase customer
satisfaction. User friendliness of the internet banking services appears to be an
important factor for customers to use these services.

Kenneth B. Y., David H. W., Claire L., Randall B, (2010) "Offline and

online banking - where to draw the line when building trust in e-banking?",

Traditional service quality builds customer trust in the e-banking service. The size and
reputation of the bank was found to provide structural assurance to the customer but not

71
in the absence of traditional service quality. Web site features that give
customers confidence are significant situation normality cues.

Agarwal R., Rastogi S., Mehrotra A., (2009), “Customers‟ perspectives regarding
e-banking in an emerging economy”

Determining factors affecting customer perception and attitude towards and

satisfaction with e-banking is an essential part of a bank's strategy formulation
process in an emerging economy like India. To gain this understanding in respect of
Indian customers, the study was conducted on respondents taken from the northern
part of India. The major findings depict that customer are influenced in their usage
of e-banking services by the kind of account they hold, their age and profession,
attach highest degree of usefulness to balance enquiry service among e-banking
services, consider security & trust most important in affecting their satisfaction level
and find slow transaction speed the most frequently faced problem while using e-
banking.

Khan M. S., Mahapatra S. S., (2009), “Service quality evaluation in internet

banking: an empirical study in India”

Demographic analysis of data reveals that gender is hardly a bias for use and
evaluation of service quality of i-banking in most of the cases across various
categories of customers. A valid mathematical model is proposed to assess the
overall service quality using regression analysis. The results show that customers are
satisfied with quality of service on four dimensions such as reliability, accessibility,
privacy/security, responsiveness and fulfilment, but least satisfied with the 'user-
friendliness' dimension. The empirical findings not only priorities different
parameters but also provide guidelines to bankers to focus on the parameters on
which they need to improve. The analysis showed that three variables (relative
benefits, propensity to trust and structural assurances) had a significant effect on
initial trust in mobile banking. Also, the perception of initial trust and relative
benefits was vital in promoting personal intention to make use

72
of related services. However, contrary to our expectation, the reputation as a firm
characteristic’s variable failed to attract people to mobile banking.

Hani A. Al Haliq& Ahmad A. Al Muhurta(2016) This research aims to

examine the extent of consumer loyalty with electronic saving money (e-keeping
money) benefits in the Saudi keeping money area and to address issues with nature
of administrations by concentrating on the accompanying: (i) simplicity of utilize;
(ii) data security and unwavering quality and its part in affecting client reception of
electronic administrations;
(iii) the instruments of checking and control over these administrations. The
examination utilized scientific and enlightening approach, gathering essential
information through an overview. It inspected different parts of electronic
administrations gave by banks in Saudi Arabia to reveal more insight into these
administrations and client desires, while additionally considering present day thinks
about in this field as optional information. The outcomes demonstrate that Saudi
banks have prevailing with regards to accomplishing noteworthy consumer loyalty
by enhancing their electronic administrations, encouraging electronic exchanges,
enhancing handling execution and improving the particulars of electronic
administrations. Also, they have accomplished successful correspondence with their
clients and in addition the speed of applications. Notwithstanding, there is a
nonattendance of mindfulness and direction for clients about the e-managing an
account framework. The consequences of this examination prompt to a few
proposals for enhancing the electronic administrations gave by banks in Saudi
Arabia to upgrade consumer loyalty.

73
 RESEARCH METHODOLOGY

http://www.sbi.co.in/.../digital/internet-banking

Research methodology is the way to find out the result of given problem on a
specific matter or problem that is also referred as research problem. In methodology
researcher uses different criteria for solving the given research problem.

RESEARCH DESIGN

It is descriptive research it is concluded to obtain certain aspects of online banking

system.

RESEARCH PROBLEM:

The study analysis the consumer awareness and satisfaction level of online banking
system of SBI bank in Ambernath Consumers are keener about their satisfaction and
in increasing stiff competitive and ruthless market lead the two about their
satisfaction . Consumer satisfaction is an important tool in each Industry. So
therefore, it is necessary for the online banking system to know which aspects to
measure and identify the different tools for the satisfying and retaining their
customers for achieving long term profit.

74
SCOPE OF STUDY

Without a sound and effective banking system in India it cannot have a healthy
economy. The banking system of India should not only be hassle free but it should
be able to meet new challenges posed by the technology and any other external and
internal factors The information system is paramount concern to the banks in today’s
business environment. The business of cooperative bank has increased
phenomenally in recent years due to the sharp increase in numbers of urban co-
operative banks. This exponential growth of Cooperative Banks in India is attributed
mainly to their much better local reach, personal interaction with customers, and
their ability to catch the nerve of the local clientele. A software development
methodology refers to the framework that is used to structure, plan, and control the
process of developing an information system. Each of the available methodologies
and techniques are best suited to specific kinds of projects, based on various
technical, organizational and available resources. With reference to above relevant
information the main objective is to study the induction of IT tools in urban
cooperative bank in light of software engineering concept.

75
DATA SOURCE:

The data is collected from both the sources that is primary source and secondary Source.

Primary data: -

The questionnaire is prepared on the basis of research objective. After doing survey
the data is analyzed in graphical form.

Secondary data:-

Secondary data is an information readily available from somewhere. The secondary

data is also used in research which is from books, internet, websites and others.

LIMITATIONS OF RESEARCH

1. The sample size has been restricted to 64 respondents only.

2. The time of research was limited so certain factors has not been touched.

3. The study is limited to online banking system of SBI bank only in Ambernath.

SAMPLE DESIGN AND SIZE:

Sample design:-

Random Sampling is used for the research purpose. This is the most popular method
which is normally followed to collect research data. The technique provides every
element or a unit an equal chance of being selected in the sample. It is useful for
selecting a small homogenous group.
Sample Unit;-

Sampling unit implies that who are respondents and they are of Ambernath.

Sample Size:-

Sample size is 64 respondents.

TECHNIQUE AND TOOL:

Diagrams and tables are used to describe online banking system of SBI Bank of
Ambernath. The tools used for the purpose of analysis is simple percentage with the
help of pie chart the data is interpreted and analyzed.

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DATA ANALYSIS AND INTERPRETATION
The analysis of data is the most skilled task in the research process. It calls for the
researcher's own judgement and skill. Analysis means a critical examination of the
assembled and grouped data for studying the characteristics of the object under
study. A correct analysis need familiarity with the background of the Survey and all
the stages of research.

Age:

Analysis: In the above showing pie chart 15.8% of responder are between age
group of 15-20 68.3% responder are between in the age group of 20-25 7.9%
responder are between age group of 25-30 and 30-35.

Gender:

77
Analysis: In the above showing pie chart 86.1% responder are Male and 13.9%
responder are Female.

Occupation ?

Analysis: In the above showing pie chart 37.6 responder are Student 31.7%
responder Self Employed 21.8% responder are Salaried Employed and 8.9%
responder are Business/Professional.

Do you have Bank Account ?

Analysis: In the above showing pie chart 84.2% responder says Yes 9.9%
responder says May be ands.9% of responder says No.

78
 what do you prefer ?

Analysis: In the above showing pie chart 50.5% responder prefer Online Banking
21.8% responder prefer offline banking 19.9% responder prefer Hybrid (both) and
7.9% responder prefer As per the time Availability & Convenience .

Do you feel internet banking is secured ?

Analysis: In the above showing pie chart 74.3% responder says yes 5% responder
says No and 20.8% responder says May be.

79
Why do you prefer Internet Banking ?

Analysis: In the above showing pie chart 50.5% responder strongly supports More
services are available online 18.8% responder supports Better and faster services
8.9% responder supports Safe & Secure transactions 5% responder convenient &
Hassle free and 18.8% All of the above.

How Long have you been using online banking ?

Analysis: In the above showing pie chart 50.5% responder using online banking
from last 6 months 31.7% responder using online banking from last 6 months to 1.5
years 5.9% responder using online banking from 2-5 years and 12.9% responder
using online banking

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Do You Visit Your Bank Per Month ?

Analysis: In the above showing pie chart 58.4% responder visits bank per month
25.7% responder says May be and 15.8% responder does not visit bank per month.

What is the most important reason you opened an internet bank a/c ?

Analysis: In the above showing pie chart 34.7% responder says curiosity 22.8%
responder says Safe and Secure 11.9% responder says Convenient 24/7 services and
30.7% responder says All of the above

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Have you Perform any of the following activities online?

Analysis: In the above showing pie chart 27.7% responder perform Tax filing 35.6%
responder perform Purchased / sold financial product 17.8% responder perform
Payments of bills and utilities 18.8% responder perform neither of these activities
online.

Which banking services do you used to offer by your internet bank ?

Analysis: In the above showing pie chart 31.7% responder uses calculate loan
information 27.7% responder uses Online bill payments 22.8% responder uses Check
balance online 17.8% responder uses Download Personal bank transaction activity

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What was the most important reason that you choose particular bank as your
internet bank ?

Analysis: In the above showing pie chart 60.4% responder are in favor with Brand
Name of Bank and 39.6% Says that I have a traditional bank account with same bank.

Does your bank allow you to deposits online hassle - free ?

Analysis: In the above showing pie chart 50.5% responder says Yes 10.9% responder
says No and 38.6% responder says May be.

83
Do you prefer using credit cards online through net banking ?

Analysis: In the above showing pie chart 46.5% responder prefer using credit cards
online through net banking 17.8% responder does not prefer using credit cards
online through net banking ? and 35.6% responder says May be.

Are you fully satisfied by the facility provided by the internet banking ?

Analysis: In the above showing pie chart 49.5% responder are satisfied by the facility
provided by the internet banking 16.8% responder are Not satisfied by the facility
provided by the internet banking and 33.7% responder says May be.

84
SWOT analysis of SBI's internet banking

Strength:
 Greater reach to customers.
 Quicker time to market.
 Ability to introduce new products and services quickly and successfully.
 Ability to understand its customer’s needs.
 Customers are given access to information easily across any location.
 Greater customer loyalty .

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 .
 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 Internet -banking .

85
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 .
 Concentration of various services should be made using internet banking .

Threats:

 Minting Business edge over competitors in the context of sameness in

IT infrastructure .
 Alternative must be there in case of failure of system.
 Maintaining secured IT infrastructure for business operations.
 Multiple vendor support is necessary for working of highly complex technology.

86
Recommendations and Suggestions

• It is recommended that SBI should conduct various training programmes for

employee so that they will get aware about the term internet banking after such
programmes they can create awareness among customers

• Exchange of information on threats and vulnerabilities at appropriate forums .

• Bank should create and sustain customer , investor and regulator confidence by
adopting international accounting standards.

• Should focus on identifying core competencies.

• Bank should anticipate and get prepared for regulatory changes .

• Increasing usage of mobile phone is going to revolutionize the banking culture in near
future .

• More stress should be given on security concern on internet .

87
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. 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 customers 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 customer wealth ,if such a system
is not rusted or not reliable, then SBI would face serious laws and would lose
business.

After studying scow analysis, we came to know various strengths of SBI such as
quality customer services, greater reach , customer loyalty etc.SBI should put efforts
to multiply the no . of strengths " The establishment of the multidisciplinary high
level standing committee to review the legal and technological requirements of e-
banking on a continual basis and recommendations of appropriate measures as and
when necessary, would really be a panacea for legal clarifications as and when they
arise. The key in such future and further deliberations would be to encourage banks
towards innovation and where necessary or required evolve new practices and
customs to complement the banking laws in force from time to time. The SBI can
take the advantage of the reputation it has created in the market for itself and
become competitive .

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 Bibliography

BOOK

SBI Training guide for internet banking

WEBSITES

http://www.statebankofindia.com/

http://www.onlinesbi.com/

wikipedia.com

http://www.google.com/

QUESTIONNAIRE

1. Do you have bank account ?

 Yes
 No

2. What do you prefer ?

 Online banking only

 Offline banking only
 Hybrid ( Both)
 As per time availability & convenience

3. Do you feel internet banking is secured ?

 Yes
 No
 Maybe
 Can’t say

4. why do you prefer Internet Banking ?

 More services are available online

 Better and faster services
 Safe & secure transactions
 Convenient & hassle free
 All of Above

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5. How long have you been using online banking?

 Less than 6 months

 6 months - 1.5 years
 2 - 5 years

6. Do you visit your bank per month ?

 Yes
 No
 Maybe

7. How frequently do you use an ATM per month?

 1
 2
 4
 More than 5 times

8. What is the most important reason you opened an internet bank ac ?

 Curiosity
 Safe & secure
 Convenient (24*7 services, anywhere connectivity)

9. Have you performed any of the following activities online ?

 Tax Filing
 Purchased / sold financial product
 Payment of bills & utilities
 Cash & financial transaction

10. Are you fully satisfied by the facility provided by the internet banking ?

 Yes
 No
 Maybe

90