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Banks are going under rapid transformation in response to the forces of competition,
efficiency in operations, cost reduction, management of assets and liabilities, risk
management, anytime and anywhere banking.
Bankers are increasingly aware of the importance of electronic banking for their
survival, growth and development. The technology has totally transformed the way of
business. The following table depicts a comparison between old and new
competencies. [1]
Table: 4.1 E-Banking: A Comparison Between Old and New Competencies [1]
Old Competencies New Competencies
1. Ability to operate in well-defined
and stable environment.
Ability to operate in ill-defined and
ever changing environment.
2. Capacity to deal with repetitive
straightforward and concrete work
process.
Capacity to deal with routine and
abstract work process.
3. Ability to operate in a supervised
work environment.
Ability to handle decisions and
responsibilities.
4. Isolated work. Group and interactive work.
5. Ability to operate within narrow
Geographical and time horizons.
Ability to operate within expanding
Geographical and time horizons.
Market Components of E-banking
The configuration for a e-banking system depends upon the strategic objectives,
operating system, website, scope, scale, equipment, technology, security requirements
and internal control measures adopted. [2]
4.1 Introduction to Public and Private Sector Banks
For the purpose of this study the public sector bank chosen is State Bank of India and
the private sector bank chosen is HDFC Bank Ltd., both are introduced below:
4.1.1 State Bank of India
The evolution of State Bank of India can be traced back to the first decade of the 19th
century. It began with the establishment of the Bank of Calcutta, in Calcutta, on June
2nd
, 1806. The bank was redesigned as the Bank of Bengal, three years later, on
January 2nd, 1809. It was the first ever joint-stock bank of the British India,
established under the sponsorship of the Government of Bengal. Subsequently, the
Bank of Bombay (established on April 15th, 1840) and the Bank of Madras
(established on July 1st, 1843) followed the Bank of Bengal. These three banks
dominated the modern banking scenario in India, until when they were amalgamated
to form the Imperial Bank of India, on January 27th
, 1921.
An important turning point in the history of State Bank of India is the launch of the
first Five Year Plan of independent India, in 1951. The Plan aimed at serving the
Indian economy in general and the rural sector of the country, in particular. Until the
Plan, the commercial banks of the country, including the Imperial Bank of India,
confined their services to the urban sector. Moreover, they were not equipped to
respond to the growing needs of the economic revival taking shape in the rural areas
of the country. Therefore, in order to serve the economy as a whole and rural sector in
particular, the All India Rural Credit Survey Committee recommended the formation
of a state-partnered and state-sponsored bank.
The All India Rural Credit Survey Committee proposed the takeover of the Imperial
Bank of India, and integrating with it, the former state-owned or state-associate banks.
Subsequently, an Act was passed in the Parliament of India in May 1955. As a result,
the State Bank of India (SBI) was established on July 1st, 1955. This resulted in
making the State Bank of India more powerful, because as much as a quarter of the
resources of the Indian banking system were controlled directly by the State. Later on,
the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled
the State Bank of India to make the eight former State-associated banks as its
subsidiaries, and now only 6 of them exist.
The State Bank of India emerged as a leader, with its operations carried out by the
480 offices comprising branches, sub-offices and three Local Head Offices, inherited
from the Imperial Bank. Instead of serving as mere repositories of the community's
savings and lending to creditworthy parties, the State Bank of India catered to the
needs of the customers, by banking purposefully. The bank served the heterogeneous
financial needs of the planned economic development.
Vision:
“To be amongst most trusted power utility company of the country by providing
environment friendly power on most cost effective basis, ensuring prosperity for its
stakeholders and growth with human face.”
Mission:
• To ensure most cost effective power for sustained growth of India.
• To provide clean and green power for secured future of countrymen.
• To retain leadership position of the organisation in Hydro Power generation,
while working with dedication and innovation in every project we undertake.
• To maintain continuous pursuit for cost effectiveness enhanced productivity
for ensuring financial health of the organization, to take care of stakeholders
aspirations continuously.
• To be a technology driven, transparent organization, ensuring dignity and
respect for its team members.
• To inculcate value system all cross the organization for ensuring trustworthy
relationship with its constituent associates & stakeholders.
• To continuously upgrade & update knowledge & skill set of its human
resources.
• To be socially responsible through community development by leveraging
resources and knowledge base.
• To achieve excellence in every activity we undertake.
Branches:
The corporate center of SBI is located in Mumbai. In order to cater to different
functions, there are several other establishments in and outside Mumbai, apart from
the corporate center. The bank boasts of having as many as 14 local head offices and
57 Zonal Offices, located at major cities throughout India. It is recorded that SBI has
about 13000 branches, well networked to cater to its customers throughout India.
ATM Services:
SBI provides easy access to bank accounts to its customers through more than 21000
ATMs in India. The Bank also facilitates the free transaction of money at the ATMs
of State Bank Group, which includes the ATMs of State Bank of India as well as the
Associate Banks - State Bank of Bikaner & Jaipur, State Bank of Hyderabad, etc. You
may also transact money through SBI Commercial and International Bank Ltd by
using the State Bank ATM-cum-Debit (Cash Plus) card.
Subsidiaries:
The State Bank Group includes a network of six banking subsidiaries and several non-
banking subsidiaries. Through the establishments, it offers various services including
merchant banking services, fund management, factoring services, primary dealership
in government securities, credit cards and insurance. The six banking subsidiaries are:
1. State Bank of India (SBI)
2. State Bank of Bikaner and Jaipur (SBBJ)
3. State Bank of Hyderabad (SBH)
4. State Bank of Mysore (SBM)
5. State Bank of Patiala (SBP)
6. State Bank of Travancore (SBT)
The State Bank of India, the country’s oldest bank and a premier in terms of balance
sheet size, number of branches, market capitalization and profits is today going
through a significant phase of change and transformation; the two hundred year old
public sector behemoth is today stirring out of its public sector legacy and moving
with an agility to give the private and foreign banks a run for their money.
The bank is entering into many new businesses with strategic tie ups - Pension Funds,
General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale
Merchant Acquisition, Advisory Services, and Structured Products etc. Each one of
these initiatives is having a huge potential for growth.
Chairman : Pratip Chaudhari
Managing Director : Hemant G. Contractor;
Diwakar Gupta and
A. Krishna Kumar
E-banking: www.sbionline.com
Table 4.2: SBI-Capital Structure (FY 2011-2012)
From
Year
To
Year
Class Of
Share
Authorized
Capital
Issued
Capital
Paid Up
Shares
(Numbers)
Paid Up
Face
Value
Paid Up
Capital
2011 2012 Equity
Share
5,000.00 671.13 671044838 10 671.04
2010 2011 Equity
Share
5,000.00 635.08 634998991 10 635.00
2009 2010 Equity
Share
1,000.00 634.97 634882644 10 634.88
2008 2009 Equity
Share
1,000.00 634.97 634880222 10 634.88
2007 2008 Equity
Share
1,000.00 631.56 631470376 10 631.47
2006 2007 Equity
Share
1,000.00 526.30 526298878 10 526.30
2005 2006 Equity
Share
1,000.00 526.30 526298878 10 526.30
2004 2005 Equity
Share
1,000.00 526.30 526298878 10 526.30
Source: www.sbi.co.in
Financial Information
Table 4.3: SBI-Profit and Loss Account (FY 2011-2012)
Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Income
Operating income 1,19,208.98 95,525.58 85,909.36 74,880.76 56,821.55
Expenses
Material consumed - - - - -
Manufacturing expenses - - - - -
Personnel expenses 16,974.04 14,480.17 12,754.65 9,747.31 7,785.87
Selling expenses 206.63 257.88 224.05 251.23 173.23
Adminstrative expenses 19,375.25 15,702.33 11,029.66 7,361.98 5,970.47
Expenses capitalised - - - - -
Cost of sales 36,555.92 30,440.38 24,008.35 17,360.52 13,929.57
Operating profit 19,422.68 16,217.24 14,578.54 14,604.94 10,962.90
Other recurring income 1,024.79 1,065.14 1,051.15 894.26 901.33
Adjusted PBDIT 20,447.47 17,282.39 15,629.69 15,499.20 11,864.23
Financial expenses 63,230.37 48,867.96 47,322.48 42,915.29 31,929.08
Depreciation 1,007.17 990.50 932.66 763.14 679.98
Other write offs - - - - -
Adjusted PBT -43,790.06 -32,576.07 -32,625.45 14,736.06 -20,744.83
Tax charges 6,341.37 5,709.54 6,166.62 6,115.12 3,929.20
Adjusted PAT 11,730.15 8,283.03 9,176.51 9,124.18 6,718.08
Non-recurringitems -44.15 -912.68 -10.46 -2.95 11.04
Other non cash adjustments 21.28 - - - -
Reported net profit 11,707.29 7,370.35 9,166.05 9,121.23 6,729.12
Earnings before
appropriation
11,713.34 7,370.69 9,166.39 9,121.57 6,729.46
Equity dividend 2,348.66 1,905.00 1,904.65 1,841.15 1,357.66
Preference dividend - - - - -
Dividend tax 296.49 246.52 236.76 248.03 165.87
Retained earnings 9,068.19 5,219.17 7,024.99 7,032.38 5,205.94
Source: www.sbi.co.in
Table 4.4: SBI-Balance Sheet (FY 2011-2012)
Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Sources of Funds
Owner's fund
Equity share capital 671.04 635.00 634.88 634.88 631.47
Share application
money
- - - - -
Preference share capital - - - - -
Reserves & surplus 83,280.16 64,351.04 65,314.32 57,312.82 48,401.19
Loan Funds
Secured loans - - - - -
Unsecured loans - 9,33,932.81 8,04,116.23 7,42,073.13 5,37,403.94
Total - 9,98,918.86 8,70,065.43 8,00,020.82 5,86,436.60
Uses of Funds
Fixed assets
Gross block 14,792.33 13,189.28 11,831.63 10,403.06 8,988.35
Less: revaluation
reserve
- - - - -
Less: accumulated
depreciation
9,658.46 8,757.33 7,713.90 6,828.65 5,849.13
Net block 5,133.87 4,431.96 4,117.72 3,574.41 3,139.22
Capital work-in-
progress
332.68 332.23 295.18 263.44 234.26
Investments 3,12,197.61 2,95,600.57 2,85,790.07 2,75,953.96 1,89,501.27
Net Current Assets
Current assets, loans
& advances
53,113.02 43,777.85 35,112.76 37,733.27 44,417.03
Less: current
liabilities &
provisions
80,915.09 1,05,248.39 80,336.70 1,10,697.57 83,362.30
Total net current assets -27,802.08 -61,470.54 -45,223.94 -72,964.30 -38,945.27
Miscellaneous
expenses not written
- - - - -
Total 2,89,862.08 2,38,894.22 2,44,979.03 2,06,827.50 1,53,929.48
Source: www.sbi.co.in
Awards
Awards & recognition received by the Bank during the Year 2011-12:
• State Bank Of India Has Been Adjudged The Best Bank 2009 By Business
India (August-2009).
• SBI ranked as No.1 in the 4Ps B & M & ICMR Survey on India’s Best
Marketed Banks (August-2009). [3]
4.1.2 HDFC Bank Ltd.
HDFC Bank Ltd. is a part of HDFC group which includes 8 companies, i.e., HDFC
Ltd., HDFC Bank Ltd., HDFC Life, HDFC Securities, HDFC Mutual Fund, HDFC
Reality, HDFC ERGO and HDB Financial Services.
The Housing Development Finance Corporation Limited (HDFC Ltd.) was amongst
the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to
set up a bank in the private sector, as part of RBI's liberalisation of the Indian banking
industry in 1994. The bank was incorporated in August, 1994 in the name of 'HDFC
Bank Limited’, with its registered office at Mumbai in India. The bank commenced its
operations as a scheduled commercial bank in January, 1995.
In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a private sector
bank promoted by Bennett, Coleman & Co. / Times Group). With this, HDFC bank
and Times bank became the first two private banks in the New Generation Private
Sector Banks to have gone through a merger. In 2008, RBI approved the
amalgamation of Centurion Bank of Punjab with HDFC Bank. With this, the Deposits
of the merged entity became Rs. 1,22,000 crore, while the Advances were Rs. 89,000
crore and Balance Sheet size was Rs. 1,63,000 crore.
Vision:
“To become a world-class Indian bank.”
Mission:
To be "A World Class Indian Bank", by benchmarking against international standards
and best practices in terms of product offerings, technology, service levels, risk
management and audit & compliance.
The objective is to build sound customer franchises across distinct businesses so as to
be a preferred provider of banking services for target retail and wholesale customer
segments and to achieve a healthy growth in profitability, consistent with the Bank's
risk appetite; by ensuring the highest levels of ethical standards, professional
integrity, corporate governance and regulatory compliance.
Branches & ATM Services:
Today, the bank boasts of as many as 3062 branches and over 10999 ATMs across
India.
Chairman : C. M. Vasudev
Managing Director : Aditya Puri
E-banking: www.hdfcbank.com
Table 4.5 HDFC Bank-Capital Structure (FY 2011-2012)
From
Year
To
Year
Class
Of
Share
Authorized
Capital
Issued
Capital
Paid Up
Shares
(Nos.)
Paid
Up
Face
Value
Paid
Up
Capital
2011 2012 Equity
Share
550.00 469.34 2346688270 2 469.34
2010 2011 Equity
Share
550.00 465.23 465225684 10 465.23
2009 2010 Equity
Share
550.00 457.74 457743272 10 457.74
2008 2009 Equity
Share
550.00 425.38 425384109 10 425.38
2007 2008 Equity
Share
550.00 354.43 354432920 10 354.43
2006 2007 Equity
Share
450.00 319.39 319389608 10 319.39
2005 2006 Equity
Share
450.00 313.14 313142408 10 313.14
Source: www.hdfcbank.com
Financial Information
Table 4.6: HDFC Bank-Profit and Loss Account (FY 2011-2012)
Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Income
Operating income 32,539.11 24,393.60 19,958.76 19,770.72 12,354.41
Expenses
Material consumed - - - - -
Manufacturing expenses - - - - -
Personnel expenses 3,399.91 2,836.04 2,289.18 2,238.20 1,301.35
Selling expenses 152.48 158.95 83.12 108.68 114.73
Adminstrative expenses 5,146.73 4,552.96 4,936.73 4,583.86 2,247.48
Expenses capitalised - - - - -
Cost of sales 8,699.12 7,547.95 7,309.02 6,930.74 3,663.56
Operating profit 8,850.41 7,460.57 4,863.44 3,928.87 3,803.73
Other recurring income -103.98 - 17.72 - 43.04
Adjusted PBDIT 8,746.43 - 4,881.17 - 3,846.77
Financial expenses 14,989.58 9,385.08 7,786.30 8,911.10 4,887.12
Depreciation 542.52 497.41 394.39 359.91 271.72
Other write offs - - - - -
Adjusted PBT -6,785.66 -2,421.92 4,486.77 -5,342.14 -1,312.07
Tax charges 2,606.80 1,892.86 1,340.99 1,054.92 690.90
Adjusted PAT 5,165.58 3,927.22 2,944.68 2,240.75 1,589.48
Non-recurring items 1.51 -0.82 4.02 4.19 0.70
Other non cash adjustments -2.12 -2.65 -0.93 -0.59 -0.06
Reported net profit 5,164.97 3,923.75 2,947.77 2,244.35 1,590.12
Earnings before appropriation 11,339.21 8,456.55 6,403.33 4,818.98 3,522.15
Equity dividend 1,009.08 767.62 549.29 425.38 301.27
Preference dividend - - - - -
Dividend tax 163.70 124.53 91.23 72.29 51.20
Retained earnings 10,166.43 7,564.40 5,762.81 4,321.31 3,169.68
Source: www.hdfcbank.com
Table 4.7: HDFC Bank-Balance Sheet (FY 2011-2012)
Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Sources of Funds
Owner's fund
Equity share capital 469.34 465.23 457.74 425.38 354.43
Share application
money
0.30 - - 400.92 -
Preference share
capital
- - - - -
Reserves & surplus 29,455.04 24,914.04 21,064.75 14,226.43 11,142.80
Loan Funds
Secured loans - - - - -
Unsecured loans 2,46,706.45 2,08,586.41 1,67,404.44 1,42,811.58 1,00,768.60
Total 2,76,631.12 2,33,965.67 1,88,926.93 1,57,864.31 1,12,265.83
Uses of Funds
Fixed assets
Gross block 5,930.24 5,244.21 4,707.97 3,956.63 2,386.99
Less: revaluation
reserve
- - - - -
Less: accumulated
depreciation
3,583.05 3,073.56 2,585.16 2,249.90 1,211.86
Net block 2,347.19 2,170.65 2,122.81 1,706.73 1,175.13
Capital work-in-
progress
- - - - -
Investments 97,482.91 70,929.37 58,607.62 58,817.55 49,393.54
Net Current Assets
Current assets, loans
& advances
21,721.64 14,601.08 5,955.15 6,356.83 4,402.69
Less: current
liabilities &
provisions
37,431.87 28,992.86 20,615.94 22,720.62 16,431.91
Total net current
assets
-15,710.23 -14,391.78 -14,660.79 -16,363.79 -12,029.22
Miscellaneous
expenses not written
- - - - -
Total 84,119.87 58,708.23 46,069.63 44,160.49 38,539.45
Notes:
Book value of
unquoted
investments
- - - - -
Market value of
quoted investments
- - - - -
Contingent liabilities 8,83,985.32 5,88,550.98 4,87,176.37 4,14,533.93 5,99,928.79
Number of equity
shares outstanding
(Lacs)
23466.88 4652.26 4577.43 4253.84 3544.33
Source: www.hdfcbank.com
Awards
Awards & recognition received by the Bank during the Year 2011-12:
• MD received the Asian Banker Best Bank in India Award at a function on March 23rd
,
2012 at Singapore. Mr. Puri is flanked by Mr. Emmanuel Daniel, CEO, The Asian
Banker, on his right and Mr.Philippe Paillart, Chairman, Advisory Council.
• UTI Mutual Fund CNBC TV 18 Financial Advisor Awards 2011 - Best Performing
Bank - Private.
• Asian Banker International Excellence in Retail Financial Services Awards 2012 on
Best Retail Bank in India, Best Bancassurance, Best Risk Management.
• 5th Loyalty Summit award on Customer and Brand Loyalty.
• Skoch foundation 2012, on SHG/JLG linkage programme.
• ICAI Awards 2011on Excellence in Financial Reporting. [4]
4.2 Comparative Study on SBI and HDFC Bank
This research study is focusing on e-banking usage pattern and marketing or
promotional activities of its products to increase bank’s customer database and its
business or income, with special reference to State Bank of India (SBI) and HDFC
Bank. Same has been analysed and studied is given below:
4.2.1 E-Banking Process and Features Comparison
Banks are systematic and a banker is committed towards work. The process, policies,
procedures, everything in a bank is documented, as per the guidelines of various
regulatory bodies, like, RBI, BCSBI, etc.
Also, the standard time taken for processing a loan file or opening a bank account is
also defined, which varies from one bank to another, basis paper formalities or
respective bank’s internal process. This is called as the ‘Turn Around Time’ (TAT) in
banking terms. This TAT is used for two major purposes, firstly, in calculating an
employee’s productivity and secondly, in giving better and faster service to the
customer.
During the research period, SBI and HDFC Bank, leading banks in their respective
sectors, has been studied on various parameters, as shown in the below mentioned
Table 4.8.
Table 4.8: E-Banking Process and Features: Comparison between SBI and
HDFC Bank
S.
No.
Parameter SBI HDFC
1. Customer Service -
Process and TAT
All type of customer
Request, Query,
Complain is raised on the
“Customer Management
System Utility”.
Complains are dealt on a
maximum TAT of 3
days.
For Request and Query,
the TAT is not defined.
All type of customer
Request, Query,
Complain is raised on the
“Customer Relationship
Management Utility”, for
which the TAT is
minimum of 3 days and
maximum of 5 days.
It can also be assigned to
the respective department
authorized person, in
specific cases.
2. TAT for Registration
of Net-Banking
The “Net-Banking Kit”
with User Name and
Password is issued
instantly to the user, but
its activation takes a day
time.
It is immediate, through
“One Time Password
(OTP) Generation”, for
which customer’s mobile
number updation is
necessary.
3. Site Address of Bank
and for Net-Banking
Bank’s site address:
www.sbi.co.in
For Net-Banking:
www.onlinesbi.co.in
For Bank and Net-
Banking the site address
is:
www.hdfcbank.com
For Mobile-Banking,
specifically the site is
designed with same
features of Net-Banking,
which is with less pixels,
therefore quick service.
The site address is:
www.m.hdfcbank.com
Charges for:
Net-Banking
Registration
Zero Zero
Mobile-Banking
Registration**
Zero Zero
Third Party Transfer Zero Rs. 10/- per NEFT
Transaction and Rs, 25/-
per RTGS Transaction,
and
Zero Rupees for Fund
Transfer in Internal
Bank’s Account
Biller Registration Zero 1/- Rupee per biller
E-mail Id
Registration
Not Applicable Zero
Mobile Number
Registration
Not Applicable Not Applicable
Fixed Deposit /
Recurring Deposit
Booking
Zero Zero
Cheque Book
Request
Zero for the 1st time
request in a year, and
after that it is Rs. 2/- per
leaf.
Zero for 1st Fifty (50)
requests for Saving
Account and for 1st
Hundred (100) requests
for Current Account in a
Quarter.
After this it is Re. 1/- per
leaf.*
4
Demand Draft Rs. 1.50/- per 1000 Rs.
And Rs. 10/- extra for
cash handling
Minimum Rs. 20/-, and
then Rs. 5/- addition on
increase of 100 rupees
after Rs. 1000/-
6. Contest Not conducting any such
contest
Conducts contests for
customers to provoke
them for the usage of
“Net-Banking” and
“Mobile-Banking”.
Other Features of Net-Banking:
Account Balance
Availability
Yes Yes
Account Statement From 2005 onwards Last 5 years
Accessibility to the
Existing Loan
Account(s)
Yes Yes
Application for Other
Loans
Yes Yes
Application for
Credit Card
Yes Yes
Application for
Insurance
Yes Yes
Application for
Demat
Yes Yes
7.
Application for
Mutual Funds
Yes Yes
* Depends on the Account Type
** Mobile Banking Registration can also be done through Net-Banking, Tele-
Banking, ATM and Branch visit
It is found that HDFC Bank’s TAT is more defined, short and in detail compared to
that of SBI’s. The customer service process is also well designed by the central team
of HDFC bank and not by SBI. Also, for mobile banking users, separate website is
designed which is quickly and easily accessible on the mobile applications.
But, as far as the charges are concerned, SBI is charging less compared to HDFC
Bank. For example, biller registration in SBI is free of cost, but is chargeable in
HDFC Bank. Similarly, for Demand Draft request and Third Party Transfer
transactions, HDFC Bank is charging higher than SBI. Same was also identified
during survey, when majority of the respondents said that “additional fees, hidden
charges, processing fees and transactional fees are higher in private sector banks as
compared to public sector banks”.
Other product features are same in both the banks, viz; account balance availability,
accessibility to the existing loan accounts and applying for other loans, credit cards,
insurance, demat and mutual funds; Except that HDFC Bank is only providing the
bank statement of last 5 years, whereas, SBI is providing the same from 2005 year
onwards.
4.2.2 HDFC Bank leads in E-Transactions and SBI in Value [5]
The Indian active online audience is growing at the rate of approximately 30 percent
annually. In addition, there has been a consistent rise in the number of visitors on
banking websites in the past twelve months. However, a remarkable fact reveals that
the online banking category has grown more rapidly than the growth of the active
internet users in India. The online banking category has grown by 35 % in 2010 year
over 2009 year. A significant percentage of these users are from the non-metros.
According to Bank Statistics monthly report released by RBI in the FY 2009-10,
HDFC Bank stands at number one position when it comes to number of e-transactions
taking place in India, while SBI is ahead in terms of value of transactions.
One reason can be HDFC bank’s e-banking experience is pleasant, especially while
carrying out e-transactions. Also, less transaction value per transaction also shows
that HDFC banking is used more by individuals rather than corporate customers.
Table 4.9: SBI and HDFC Bank: E-Transaction and Value Comparison
Bank Name July 2010 Transaction
(Nos.)
July 2010 Value
(in Crore Rupees)
HDFC Bank 27,09,766 18,252
SBI 26,07,379 22,330
Source: www.trak.in ; Posted by Arun Prabhudesai on September 3rd
, 2010
India’s leading online audience and ad measurement platform has released a custom
research report on Online Banking in India. It has been studied that the user activity
on the websites of both public and private sector banks. The online properties of
HDFC Bank marginally dominated State Bank of India.
HDFC Bank also sees the highest incidence of repeat visits by a user in a month (7
visits) and also sees the maximum average time spent by a user followed by the State
Bank of India (5 visits).
It has also been analysed that while users spend maximum time on HDFC Bank's
sites, they spend comparatively much lower time on SBI's site; this could also mean
“ease of site navigation”, that is, the quick download speeds or ease of transactions
facilitated by the SBI site.
Users with income more than 5 lakhs drive 33% usage on “User activity”, peak is
around noon time, online banking websites indicating the growing adoption during the
course of the day by salaried class and professionals.
According to Amit Bhartiya, GM - ViziSense, “Given reduced transactional costs and
higher reach through online banking, banks have been highly successful in getting a
significant chunk of their urban user base to engage with their online properties.
Higher adoption of online banking would fuel rapid growth of ecommerce and online
payments in India”.
4.2.3 Mobile-Banking: Most Popular Bank and Service
Mobile banking in India is set to explode approximately millions of urban Indians,
who use their mobile phones to access banking services. The number of transactions
using mobile banking in India has gone up by 68.86% while the amount has increased
by 102.65% taking into consideration the period from August 2011 to May 2012.
As of May 2012, the total number of mobile banking transactions stood at 33,46,743
while the amount transacted was at Rs 28654.54 lakhs. The amount transacted saw a
minor slump of 3.7% in January 2012 from December 2012, while the number of
transactions increased by 6.13% in the same period. Similarly, the number of
transaction declined by 1.6% in February 2012 from January 2012, while the amount
transacted grew by 2.62% in the same period.
There was a significant jump in March 2012 from February 2012, with respect to both
the number of transactions and the amount transacted. August 2011 saw Rs 13646.43
lakhs being transacted, the lowest amount transacted during this period, while May
2012 saw Rs 28654.54 lakhs being transacted, the maximum amount being transacted
during this period. [6]
Table: 4.10 Mobile Banking Transactions in India
Chart: 4.1: Mobile Banking Transactions in India
Table 4.11: Usage of E-Banking Services
Usage Unique Users (in Millions)
Used mobile banking 43.70
Account balance availability 39.97
Transaction History 28.15
Cheque book Request 21.06
Payment reminders 20.92
Status of Cheque book 19.11
Mobile banking is popular among the Rs. 1 to 5 lakhs per annum income group with
almost 60% of mobile banking users falling in this income bracket and majorly
preferred by younger generation.
Most Popular Bank:
ICICI bank maintains its position as country’s biggest private lender on mobile screen
with 17.75 million users. HDFC bank accounts for second with 9.1 million
subscribers followed by State Bank of India with 6.13 million.
4.3 RBI’s Role in Facilitating E-Commerce and Online
Transactions in India
Internet Businesses are sustainable in India only when the volumes of online
transactions in India go up, which in turn happens only when Internet Banking, Debit
Card usage and proliferation of Credit Cards happen. It is important as it not just
directs e-commerce websites, but also Internet Industry would grow along with that,
as both are inter-dependent.
The volume of online transactions determines how mature the Internet user base is of
the country. And therefore the fate of Internet Industry lies in the hands of Reserve
Bank of India by ensuring facilitation of usage credit/debit cards and internet banking
facilities by all scheduled banks in India.
Banking Websites Attract Users to Internet:
Major banking websites in India (SBI, HDFC Bank, ICICI Bank and Axis Bank)
attract over 16.25 million unique visitors each month. That probably would be a small
percentage of total bank’s user base, but going by that number means:
• If India has 35 million Internet users in country, a whopping 46% of internet
users frequent bank websites;
• It would be still 27% if internet user base is considered to be 60 million and
yet it is a significant number.
• Every 4th user of Internet is a someway related to bank. This is just
considering the top banks in India.
Conclusion
Banking happens to be an industry with highest data handling content. Rapid
development of e-banking capabilities carries risk as well as benefits. The major
challenge faced by the banks is to protect the falling margins due to the impact of
competition. Falling in profit requires increase in the volume of transaction which
could be increased only by exploiting the advantages of technology and by providing
sound customer based services.
SBI and HDFC Bank are compared on their e-banking product and service features
and internal processes. It is found that HDFC Bank’s TAT is more defined, short and
in detail. Also, for mobile banking users, separate website is designed which is
quickly and easily accessible on the mobile applications. But, as far as the charges are
concern, SBI is charging less compared to HDFC Bank, for biller registration, SBI is
not charging, but HDFC Bank is, similarly for Demand Draft request and Third Party
Transfer transaction, HDFC Bank is charging higher than SBI. Rest all features are
same, except that HDFC Bank is only providing the bank statement of last 5 years,
whereas, SBI is providing the same from 2005 year onward.
The online banking category has grown more rapidly than the growth of the active
internet users in India. The online banking category has grown by 35 % in 2010 year
over 2009 year. According to Bank Statistics monthly report released by RBI in the
FY 2009-10, HDFC Bank stands at number one position when it comes to number of
e-transactions taking place in India, while SBI is ahead in terms of value of
transactions. It has also been analysed that while users spend maximum time on
HDFC Bank's sites, they spend comparatively much lower time on SBI's site; this
could also mean “ease of site navigation”, that is, the quick download speeds or ease
of transactions facilitated by the SBI site.
The most recent mode of banking through internet is mobile banking, which is also
gaining the popularity with time. The number of transactions using mobile banking in
India has gone up by 68.86% while the amount has increased by 102.65% taking into
consideration the period from August 2011 to May 2012. The most popular banking
service availed through mobile banking is “Account Balance Availability”, followed
by “Transaction History” and “Cheque Book Request”. ICICI bank maintains its
position as country’s biggest private lender on mobile screen with 17.75 million users.
HDFC bank accounts for second with 9.1 million subscribers followed by State Bank
of India with 6.13 million.
Internet Businesses would be sustainable in India only when the volumes of online
transactions in India go up, which in turn happens only when Internet Banking, Debit
Card usage and proliferation of Credit Cards happen. It is important as it not just
would direct e-commerce websites, but also Internet Industry would grow along with
that, as both are inter-dependent.
Online travel, Matrimony services, etc. many other industries’ growth is also
dependent on the banking industry. When the volumes of Online Transactions are
higher, there would be more Online Travel Bookings, Movie Tickets, e-commerce
websites sell products and consumers opt for Paid accounts on Matrimony Services.
The volume of online transactions determines how mature the Internet user base in
country is. And therefore the fate of Internet Industry lies in the hands of Reserve
Bank of India by ensuring facilitation of usage credit / debit cards & internet banking
facilities by all scheduled banks in India.
Reference:
1. Kaushal, R., (2012), Chapter 7: Impact of E-Banking on Operational
Performance of Banks, Impact of e-banking on operational performance and
service quality of banking sector in India, pp 198-199, Punjabi University,
Patiala
2. Retrieved on November 25th
, 2012 from http://ithandbook.ffiec.gov/it-
booklets/e-banking/introduction/e-banking-components.aspx
3. Retrieved on May 4th, 2011 from http://www.sbi.co.in/
4. Retrieved on June 22nd, 2011 from http://www.hdfcbank.com/
5. Retrieved on January 13th
, 2013 from
http://www.globalmoneyportal.com/hdfc-bank-laads-in-a-transactions-sbi-in-
valua-a60116.html
6. Retrieved on December 13th, 2012 from http://times-of-india-
4u.blogspot.in/2012/12/times-of-india-4u_13.html