MC DONALD'S and KFC Comparative Analysis

PROJECT REPORT

ON

COMPETITIVE ANALYSIS OF ONLINE BANKING

FOR

STATE BANK OF INDIA (SBI)&

INDUSTRIAL CREDIT & INVESTMENTCORPORATION OF INDIA BANK (ICICI)

ByPRITI BHAKATROLL NO. 204

In Partial fulfillment for the award of the degreePost Graduate Diploma in Management

2013-15

New Delhi Institute of Management50(B&), 60, Tughlakabad Institutional Area, New Delhi-110062

E-mail: [email protected] Website: www.ndimdelhi.org

PROJECT REPORT ON

http://www.ndimdelhi.org/

Competitive Analysis of E-Banking for SBI & ICICI Bank

COMPETITIVE ANALYSIS OF ONLINE BANKING

FOR

&

BY

PRITI BHAKATROLL NO. - 204

In Partial fulfillment for the award of the degreePost Graduate Diploma in Management

2012-14

New Delhi Institute of Management50(B&), 60, Tughlakabad Institutional Area, New Delhi-110062

E-mail: [email protected] Website: www.ndimdelhi.org

New Delhi Institute of Management Page 2

http://www.ndimdelhi.org/

PROJECT REPORT ON

Competitive Analysis of E-Banking

For

State Bank of India (SBI)&

Industrial Credit & Investment Corporation of India Bank (ICICI)

Under the Supervision

Of

Prof. Dr. GAURI MODWEL

Submitted By: Submitted to: Priti Bhakat Prof. Dr. Gauri Modwel

DECLARATION

New Delhi Institute of Management

I, Priti Bhakat, student of New Delhi Institute of Management, Batch (2013- 2015),

declare that each and every part of the Project Report on ‘Competitive Analysis of

E-Banking for State Bank of India (SBI) & ICICI Bank’ that I have submitted is

original.

I was in contact with my faculty guide Prof. Dr. Gauri Modwel and have contacted

for discussing on the project.

Date of project submission: ____________________.

(Priti Bhakat)

Faculty Mentor’s Comments:

_________________________________________________________________________________________

_________________________________________________________________________________________

_________________________________________________________________________________________

_____________________.

Date:____________________.

(Prof. Dr. Gauri Modwel)


PREFACE

Today’s business environment demands that managers possess a wide range of

Knowledge, skills and competencies as well as sound understanding of

management processes and functions. Managers need to be able to make best use

of their time and talents, and of other people’s, and to work with and through

others to achieve corporate objectives. They also need to demonstrate a full

understanding of business environment and of their organizations key resources-

its people, finance and information amongst these key resources. The people factor

is considered to be the most valuable asset for any organization. These people i.e.

the employees of the organization are the internal customers of that organization

who are as important as the external customers.

Earlier businesses were conducted with a sole objective of earning profits. But now

due to intense competition and changing market trends the focus of the

organizations has shifted to customer satisfaction; satisfaction of both internal and

external customers. External customers can be satisfied by providing them what

they want in a product. To satisfy the internal customers, organizations adopt the

method of providing the ‘quality of life’.


ACKNOWLEDGEMENT

Final year project is one of the most vital and active part of the curriculum of

management students, I take this opportunity to express my gratitude to all the

people who have guided and helped me directly or indirectly in the course of

completion of my project.

I feel immense pleasure to express a deep sense of gratitude to NDIM who has

given me an opportunity to do my final year’s final project& I would also thankful

to my Faculty Guide “Prof. Dr. Gauri Modwel”. Her valuable suggestions,

encouragement, contribution of time, counsel and for coordinating the project work

has helped me to complete my project successfully. This project would not have

been possible without his help.

A heartfelt thanks to the many respondents surveyed whose ideas, critical insights

and suggestions have been invaluable in the preparation of this report. Last but by

no means the least I would like to convey my special thanks to my friends for

helping and supporting me throughout my project work.

“With all sincere Regards and Thanks”

Priti Bhakat.


TABLE OF CONTENTSTitle Page No.

1. EXECUTIVE SUMMARY 1

2. INTRODUCTION 2

3. INDUSTRY PROFILE 4

3.1 Banking in India 4

3.2 History 5

3.3 Nationalization 9

3.4 Liberalization 9

3.5 Types of Bank 10

4. INTRODUCTION TO E-BANKING 12

4.1 Advantages of Internet Banking Facilities 15

4.2 Drivers of Change 15

4.3 Emerging Challenges 16

4.4 Main Concerns in Internet Banking 17

4.5 Strategies to be Adopted by Indian Banks 18

5. THE GLOBAL E-BANKING SCENARIO 20

6. INDIAN E-BANKING SCENARIO 23

7. SWOT ANALYSIS OF E-BANKING 25

8. COMPANY PROFILE 26

8.1 Industry Profile of State Bank of India (SBI) 26

8.2 Company Profile of State Bank of India (SBI) 29

8.3 Product Portfolio 30

8.4 Procedure of Opening an E-Banking A/C in SBI 31

8.5 Industry Profile of ICICI Bank 35

8.6 Company Profile of ICICI Bank 36

8.7 Product Portfolio 38

8.8 Procedure of Opening an E-Banking A/C in ICICI Bank 40

9. OBJECTIVE OF THE PROJECT 42


10. KEY RESPONSIBILITIES 43

10.1 Stages of the Project 43

11. RESEARCH METHODOLOGY 44

11.1 Meaning 44

11.2 Research Design 44

11.3 Sampling Design 44

11.4 Data Collection Methods 45

12. DATA ANALYSIS AND INTERPRETATIONS (GRAPHICALLY)

47

13. FINDINGS 57

14. MAJOR LEARNING 58

15. LIMITATIONS AND CONSTRAINTS FACED 59

16. RECOMMENDATIONS & SUGGESTIONS 60

17. CONCLUSIONS 61

18. BIBLIOGRAPHY 62

ANNEXURE


1. EXECUTIVE SUMMARY

E-banking is a global component in the economy. The role of banks has been and

continues to be shaped by a number of mega trend the globalization of financial

markets, the rise of non bank competitors, the ongoing evolution and

implementation of new technologies, and deregulation and disintermediation (i.e.,

the movement away from the middleman role played by banks between depositors

and lenders).

The purpose of this report is to provide a straightforward approach to understand

the E-banking services provided by the two banks and how they are different from

each other which make one bank the best from the other. An effort is made to

understand the expectations of the customers with the two banks.

This report has all the details covering the level of E-banking services provided by

the ICICI and SBI Bank to its customers.

It includes the research on the customer’s expectations and requirements of E-

banking services of the bank. The research is basically done on the comparative

analysis of E-banking services of ICICI and SBI bank. It is done to know that

which bank is better in providing the e banking services. I have reviewed various

literatures on the net pertaining to the SBI & ICICI bank. Through the data analysis

it was found that allover the E-banking service of SBI bank is the best as compared

to ICICI bank. The SBI Bank has more customer satisfaction than the other banks.

Through a small sample size also it was revealed and proved that the public sector

bank that is SBI Bank is at a developing and progressing side than the ICICI Bank.

The customers were more positive in their approach. Making this kind of report

created enthusiasm and interest in this topic.


2. INTRODUCTION

Today’s business environment demands that every businessman possess a wide

range of knowledge, skills and competencies as well as sound understanding of

management processes and functions. Managers need to be able to make best use

of their time and talents and of other people’s, and to work with and through others

to achieve corporate objectives. They also need to demonstrate a full understanding

of business environment and of their organization’s key resources. Its people,

finance and information amongst these key resources, the people factor is

considered to be the most valuable asset for any organization. These people i.e.

employees of the organization are the internal customers of that organization who

are as important as the external customers.

Earlier business was conducted with a sole objective of earning profits. But now

due to intense competition and changing market trends the focus of the

organizations has shifted to customer satisfaction; satisfaction of both internal and

external customers. External customers can be satisfied by providing them what

they want in a product.

Satisfaction is the persons feeling of pleasure or disappointment resulting from

comparing a product perceived performance in relation to his/her expectation. If

the performance falls short of expectation the customer is dissatisfied. If the

performance matches the expectation the customer is satisfied. If the performance

exceeds the expectation the customer is highly satisfied or delighted. Many

companies are aiming for high satisfaction level because there are many customers

who switch between one or more brands in order to maximize their satisfaction

level.


Therefore,

• A customer is the most important person ever in any company.

• A customer never depends on company, but the company depends on him.

• A customer is the person who brings company his wants.

• A customer is not an interruption to marketers work; he is the purpose of it.

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. For the past three decades India's banking system has several

outstanding achievements to its credit. The most striking is its extensive reach. It is

no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian

banking system has reached even to the remote corners of the country. This is one

of the main reasons of India's growth process.


3. INDUSTRY PROFILE

3.1. BANKING IN INDIA

Banking in India originated in the first decade of 18th century with The General

Bank of India coming into existence in 1786. This was followed by Bank of

Hindustan. Both these banks are now defunct. The oldest bank in existence in India

is the State Bank of India being established as "The Bank of Bengal" in Calcutta in

June 1806. A couple of decades later, foreign banks like Credit Lyonnais started

their Calcutta operations in the 1850s. At that point of time, Calcutta was the most

active trading port, mainly due to the trade of the British Empire, and due to which

banking activity took roots there and prospered. The first fully Indian owned bank

was the Allahabad Bank, which was established in 1865.

By the 1900s, the market expanded with the establishment of banks such as Punjab

National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of

which were founded under private ownership. The Reserve Bank of India formally

took on the responsibility of regulating the Indian banking sector from 1935. After

India's independence in 1947, the Reserve Bank was nationalized and given

broader powers.

A bank has been described as an institution engaged in accepting deposits and

granting loans. It is the institution which deals in money and credit. It can also be

described as an institution which borrows idle resources, makes fund available to

those who need it and helps in cheap remittance of money from one place to

another. In the modern time term bank is used in wider term. Now it does not refer

only to particular place of lending and depositing money but it also acts as an agent

which looks after the various financial problems of its customers.


3.2. HISTORY

At the end of late-18th century, there were hardly any banks in India in the modern

sense of the term. At the time of the American Civil War, a void was created as the

supply of cotton to Lancashire stopped from the Americas. Some banks were

opened at that time which functioned as entities to finance industry, including

speculative trades in cotton. With large exposure to speculative ventures, most of

the banks opened in India during that period could not survive and failed. The

depositors lost money and lost interest in keeping deposits with banks.

Subsequently, banking in India remained the exclusive domain of Europeans for

next several decades until the beginning of the 20th century.

At the beginning of the 20th century, Indian economy was passing through a

relative period of stability. Around five decades have elapsed since the India's First

war of Independence, and the social, industrial and other infrastructure have

developed. At that time there were very small banks operated by Indians, and most

of them were owned and operated by particular communities. The banking in India

was controlled and dominated by the presidency banks, namely, the Bank of

Bombay, the Bank of Bengal, and the Bank of Madras - which later on merged to

form the Imperial Bank of India, and Imperial Bank of India, upon India's

independence, was renamed the State Bank of India. There were also some

exchange banks, as also a number of Indian joint stock banks. All these banks

operated in different segments of the economy. The presidency banks were like the

central banks and discharged most of the functions of central banks. They were

established under charters from the British East India Company. The exchange

banks, mostly owned by the Europeans, concentrated on financing of foreign trade.

Indian joint stock banks were generally undercapitalized and lacked the experience


and maturity to compete with the presidency banks, and the exchange banks. There

was potential for many new banks as the economy was growing. Lord Curzon had

observed then in the context of Indian banking: "In respect of banking it seems we

are behind the times. We are like some old fashioned sailing ship, divided by solid

wooden bulkheads into separate and cumbersome compartments."

Under these circumstances, many Indians came forward to set up banks, and many

banks were set up at that time, a number of which have survived to the present

such as Bank of India and Corporation Bank, Indian Bank, Bank of Baroda, and

Canara Bank.

The Bank of Bengal, which later became the State Bank of India

The first bank in India, though conservative, was established in 1786. From 1786

till today, the journey of Indian Banking System can be segregated into three

distinct phases. They are as mentioned below:

· PHASE I - Early phase from 1786 to 1969 of Indian Banks

· PHASE II - Nationalization of Indian Banks and up to 1991

· PHASE III - Indian Financial & Banking Sector Reforms after 1991.

PHASE I:


The General Bank of India was set up in the year 1786. Next came Bank of

Hindustan and Bengal Bank.

The East India Company established

Bank of Bengal (1809),

Bank of Bombay(1840) and

Bank of Madras (1843) as independent units and called it Presidency

Banks.

These three banks were amalgamated in 1920 and Imperial Bank of India was

established which started as private shareholders banks, mostly Europeans

shareholders. During the first phase the growth was very slow and banks also

experienced periodic failures between 1913 and 1948. There were approximately

1100 banks, mostly small. To streamline the functioning and activities of

commercial banks, the Government of India came up with The Banking

Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as

per amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was vested

with extensive powers for the supervision of banking in India as the Central

Banking Authority. During those day’s public has lesser confidence in the banks.

As an aftermath deposit mobilization was slow. Abreast of it the savings bank

facility provided by the Postal department was comparatively safer. Moreover,

funds were largely given to the traders.

PHASE II:

Government took major steps in this Indian Banking Sector Reform after

independence. In 1955, it nationalized Imperial Bank of India with extensive

banking facilities on a large scale especially in rural and semi-urban areas. Second

phase of nationalization Indian Banking Sector Reform was carried out in 1980


with seven more banks. This step brought 80% of the banking segment in India

under Government ownership.

The following are the steps taken by the Government of India to Regulate Banking

Institutions in the Country:

· 1949: Enactment of Banking Regulation Act.

· 1955: Nationalization of State Bank of India.

· 1959: Nationalization of SBI subsidiaries.

· 1961: Insurance cover extended to deposits.

· 1969: Nationalization of 14 major banks.

· 1971: Creation of credit guarantee corporation.

· 1975: Creation of regional rural banks.

· 1980: Nationalization of seven banks with deposits over 200 crores.

After the nationalization of banks, the branches of the public sector bank India

raised to approximately 800% in deposits and advances took a huge jump by

11,000%.Banking in the sunshine of Government ownership gave the public

implicit faith and immense confidence about the sustainability of these institutions.

PHASE III

This phase has introduced many more products and facilities in the banking sector

in its reforms measure. In 1991, under the chairmanship of M Narasimham, a

committee was set up by his name which worked for the liberalization of banking

practices.

The country is flooded with foreign banks and their ATM stations. Efforts are

being put to give a satisfactory service to customers. Phone banking and net

banking is introduced. The entire system became more convenient and swift. The

financial system of India has shown a great deal of resilience. It is sheltered from


any crisis triggered by any external macroeconomics shock as other East Asian

Countries suffered. This is all due to a flexible exchange rate regime, the Foreign

Reserves are high, the capital account is not yet fully convertible, and banks and

their customers have limited foreign exchange exposure.

3.3. NATIONALIZATION

By the 1960s, the Indian banking industry has become an important tool to

facilitate the development of the Indian economy. At the same time, it has emerged

as a large employer, and a debate has ensued about the possibility to nationalize the

banking industry. Indira Gandhi, the-then Prime Minister of India expressed the

intention of the GOI in the annual conference of the All India Congress Meeting in

a paper entitled "Stray thoughts on Bank Nationalization." The paper was received

with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI

issued an ordinance and nationalized the 14 largest commercial banks with effect

from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of

India, described the step as a "masterstroke of political sagacity." Within two

weeks of the issue of the ordinance, the Parliament passed the Banking Companies

(Acquition and Transfer of Undertaking) Bill, and it received the presidential

approval on 9th August, 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980.

The stated reason for the nationalization was to give the government more control

of credit delivery. With the second dose of nationalization, the GOI controlled

around 91% of the banking business of India.

After this, until the 1990s, the nationalized banks grew at a pace of around 4%,

closer to the average growth rate of the Indian economy.


3.4. LIBERALIZATION

In the early 1990s the then Narasimha Rao government embarked on a policy of

liberalization and gave licenses to a small number of private banks, which came to

be known as New Generation tech-savvy banks, which included banks such as UTI

Bank(now re-named as Axis Bank) (the first of such new generation banks to be

set up), ICICI Bank and HDFC Bank. This move, along with the rapid growth in

the economy of India, kick started the banking sector in India, which has seen

rapid growth with strong contribution from all the three sectors of banks, namely,

government banks, private banks and foreign banks.

The next stage for the Indian banking has been setup with the proposed relaxation

in the norms for Foreign Direct Investment, where all Foreign Investors in banks

may be given voting rights which could exceed the present cap of 10%,at present it

has gone up to 49% with some restrictions. The new policy shook the Banking

sector in India completely. Bankers, till this time, were used to the 4-6-4 method

(Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new wave ushered

in a modern outlook and tech-savvy methods of working for traditional banks. All

this led to the retail boom in India. People not just demanded more from their

banks but also received more.

3.5. TYPES OF BANK

Banks' activities can be divided into retail banking, dealing directly with

individuals and small businesses; business banking, providing services to mid-

market business; corporate banking, directed at large business entities; private

banking, providing wealth management services to High Net Worth Individuals

and families; and investment banking, relating to activities on the financial

markets. Most banks are profit-making, private enterprises. However, some are


owned by government, or are non-profits. Central banks are normally government

owned banks, often charged with quasi-regulatory responsibilities, e.g. supervising

commercial banks, or controlling the cash interest rate. They generally provide

liquidity to the banking system and act as Lender of last resort in event of a crisis.

3.5.1 Nationalized Banks in India

Banking System in India is dominated by nationalized banks. The nationalization

of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister.

The major objective behind nationalization was to spread banking infrastructure in

rural areas and make available cheap finance to Indian farmers. Fourteen banks

were nationalized in 1969.

Before 1969, State of India (SBI) was only public sector bank in India. SBI was

nationalized in 1955 under the SBI Act of 1955. The second phase of

nationalization of Indian banks took place in the year 1980. Seven more banks

were nationalized with deposits over 200 crores.

3.5.2Private Banks in India

All the banks in India were earlier private banks. They were founded in the pre-

independence era to cater to the banking needs of the people. But after

nationalization of banks in 1969 public sector banks came to occupy dominant role

in the banking structure. Private sector banking in India received a fillip in 1994

when Reserve Bank of India encouraged setting up to private banks as part of its

policy of liberalization of the Indian Banking Industry. Housing Development

Finance Corporation Limited (HDFC) 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.

Private Banks have played a major role in the development of Indian banking

industry. They have made banking more efficient and customer friendly. In the


process they have jolted public sector banks out of complacency and forced them

to become more competitive.

4. INTRODUCTION TO E-BANKING

“Online Banking – A Global Way to Bank!”

Today we are in the era of globalization. Multinational organizations worldwide

have adopted globalization as their first strategic choice. Advancement in

technology has facilitated globalization too. Same holds true for banking industry.

Technological advancement, changes and innovations have always leveraged the

standards of mankind. It has given new dimensions to society. It has also altered

the way services can be offered. Information Technology has been a major driving

force of economies worldwide during the last 2 decades. Its impact has been

readily felt in banking industry also. With the invention of computer, operations

and database management became quite handy. When ARPANET project of

Defense Academy of US began, a new technology was born with the advent of

internet. The two technological breakthroughs – computers and internet has

radically changed the way world can interact and business could be done.

Metamorphosis and clubbing of these technologies gave rise to the growth of ITES

(Information Technology enabled Services) across the globe. There has been a

marked improvement particularly in the area of maintenance, storage, availability

and transfer of data. The world has literally shrunk to become a "global village".

IT has played a crucial role in the financial services. Internet has proved a magic

wand for financial services and products, banking in particular. Banking sector has

been early adopter of technology to offer latest modes for transacting business.

Banks have transformed themselves and are offering services through internet.

From computerization to networking to ATMs and now E-banking, banks have


moved up the value chain. This phenomenon of offering services through internet

is referred as internet banking. The current article discusses internet banking in

India and focuses upon key challenges before banking industry.

Online Banking Systems in India and the features available with different banks

across India. If you look into the modern age of banking, Online Banks or net

banking made things much easier for the people and saves lot of time. The

traditional way of standing in the queue and filling up all the forms, now it’s no

hassle for making any transaction with the banks. Every bank has their own

features and some banks still not having the more advanced features like

transferring money to any banks across India, easy registration for net banking, etc.

The Internet banking is changing the banking industry and is having the major

effects on banking relationships. Even the Morgan Stanley Dean Witter Internet

research emphasized that Web is more important for retail financial services than

for many other industries. Internet banking involves use of Internet for delivery of

banking products & services. It falls into four main categories, from Level 1 -

minimum functionality sites that offer only access to deposit account data - to

Level 4 sites - highly sophisticated offerings enabling integrated sales of additional

products and access to other financial services- such as investment and insurance.

In other words a successful Internet banking solution offers

Exceptional rates on Savings, CDs, and IRAs

Checking with no monthly fee, free bill payment and rebates on ATM

surcharges

Credit cards with low rates


http://www.bromoney.com/

Easy online applications for all accounts, including personal loans and

mortgages

24 hour account access

Quality customer service with personal attention

Electronic Banking is an umbrella term for the process by which a customer

may perform banking transactions electronically without visiting a brick-and-

mortar institution.

The following terms all refer to one form or another of electronic

banking: personal computer (PC) banking, Internet banking, virtual banking,

online banking, home banking, remote electronic banking, and phone banking. PC

banking and Internet or online banking is the most frequently used designations. It

should be noted, however, that the terms used to describe the various types of

electronic banking are often used interchangeably.

Electronic banking is an activity that is not new to banks or their customers. Banks

having been providing their services to customers electronically for years through

software programs. These software programs allowed the user’s personal computer

to dial up the bank directly. In the past however, banks have been very reluctant to

provide their customers with banking via the Internet due to security concerns.

Today, banks seem to be jumping on the bandwagon of Internet banking. Why is

there a sudden increase of bank interests in the Internet? The first major reason is

because of the improved security and encryption methods developed on the

Internet. The second reason is that banks did not want to lose a potential market

share to banks that were quick to offer their services on the Internet. Many

of the banks like ICICI, HDFC, IndusInd, IDBI, Citibank, Global Trust


Bank (GTB), Bank of Punjab and UTI were offering E-banking services. Based on

the above statistics and the analysts’ comments that India had a high growth

potential for E-banking the players focused on increasing and improving their E-

banking services. As a part of this, the banks began to collaborate with functions

online.

Why is there a sudden increase of bank interests in the Internet? The first major

reason is because of the improved security and encryption methods developed on

the Internet. The second reason is that banks did not want to lose a potential market

share to banks that were quick to offer their services on the Internet.

4.1. ADVANTAGES OF INTERNET BANKING FACILITY

Advantages previously held by large financial institutions have shrunk

considerably. The Internet has leveled the playing field and afforded open access to

customers in the global marketplace. Internet banking is a cost-effective delivery

channel for financial institutions. Consumers are embracing the many benefits

of Internet banking. Access to one’s accounts at anytime and from any location via

the World Wide Web is a convenience unknown a short time ago. Thus, a bank’s

Internet presence transforms from ‘brouchreware’ status to ‘Internet banking’

status once the bank goes through a technology integration effort to enable the

customer to access information about his or her specific account relationship. The

six primary drivers of Internet banking includes, in order of primacy are:

Improve customer access

Facilitate the offering of more services

Increase customer loyalty

Attract new customers


Provide services offered by competitors

Reduce customer attrition

4.2. DRIVERS OF CHANGE

Advantages previously held by large financial institutions have shrunk

considerably. The Internet has leveled the playing field and afforded open access to

customers in the global marketplace. Internet banking is a cost-effective delivery

channel for financial institutions. Consumers are embracing the many benefits of

Internet banking. Access to one's accounts at anytime and from any location via the

World Wide Web is a convenience unknown a short time ago. Thus, a bank's

Internet presence transforms from 'brouchreware' status to 'Internet banking' status

once the bank goes through a technology integration effort to enable the customer

to access information about his or her specific account relationship. The six

primary drivers of Internet banking includes, in order of primacy are:

Improve customer access

Facilitate the offering of more services

Increase customer loyalty

Attract new customers

Provide services offered by competitors

Reduce customer attrition

4.3. EMERGING CHALLENGES


Information technology analyst firm, the Meta Group, recently reported that

"financial institutions who don't offer home banking by the year 2000 willbecome

marginalized." By the year of 2002, a large sophisticated and highly competitive

Internet Banking Market will develop which will be driven by

Demand side pressure due to increasing access to low cost electronic

services.

Emergence of open standards for banking functionality.

Growing customer awareness and need of transparency.

Global players in the fray

Close integration of bank services with web based E-commerce or even

disintermediation of services through direct electronic payments (E-

Cash).

More convenient international transactions due to the fact that the

Internet along with general deregulation trends, eliminate geographic

boundaries.

Move from one stop shopping to 'Banking Portfolio' i.e. unbundled

product purchases.

Certainly some existing brick and mortar banks will go out of business. But that's

because they fail to respond to the challenge of the Internet. The Internet and it's

underlying technologies will change and transform not just banking, but all aspects

of finance and commerce. It represents much more than a new distribution

opportunity. It will enable nimble players to leverage their brick and mortar


presence to improve customer satisfaction and gain share. It will force lethargic

players who are struck with legacy cost basis, out of business-since they are unable

to bring to play in the new context.

4.4. MAIN CONCERNS IN INTERNET BANKING

In a survey conducted by the Online Banking Association, member institutions

rated security as the most important issue of online banking. There is a dual

requirement to protect customers' privacy and protect against fraud.

BankingSecurely: Online Banking via the World Wide Web provides an overview

of Internet commerce and how one company handles secure banking for its

financial institution clients and their customers. Some basic information on the

transmission of confidential data is presented in Security and Encryption on the

Web. PC Magazine Online also offers a primer: How Encryption Works. A multi-

layered security architecture comprising firewalls, filtering routers, encryption and

digital certification ensures that your account information is protected from

unauthorized access:

Firewalls and filtering routers ensure that only the legitimate Internet users

are allowed to access the system.

Encryption techniques used by the bank (including the sophisticated public

key encryption) would ensure that privacy of data flowing between the

browser and the Infinity system is protected.

Digital certification procedures provide the assurance that the data you

receive is from the Infinity system.

4.5.STRATEGIES TO BE ADOPTED BY INDIAN BANKS


Internet banking would drive us into an age of creative destruction due to non-

physical exchange, complete transparency giving rise to perfectly electronic

market place and customer supremacy. The question to be asked right now is

"What the Indian Banks should do" Whatever is the strategy chosen and options

adopted, certain key parameters would determine the bank's success on web:

1. For long term success, a bank may follow:

Adopting a webs mindset

Catching on the first mover's advantage

Recognizing the core competencies

Ability to deal multiplicity with simplicity

Senior Management initiative to transform the organization from inward to

outward looking

Aligning roles and value propositions with the customer segments ·

Redesigning optimal channel portfolio

Acquiring new capabilities through strategic alliances.

2. The above can be implemented in four steps:

Familiarizing the customer to new environment by demo version of software

on bank's web site. This should contain tour through the features which are

to be included. It will enable users to give suggestions for improvements,

which can be incorporated in later versions wherever feasible.


Second phase provides services such as account information and balances,

statement of account, transaction tracking, mail box, check book issue, stop

payment, financial and customized information.

The third phase may include additional services such as fund transfers, DD

issue, standing instructions, opening fixed deposits, intimation of loss of

ATM cards.

The last step should include advanced corporate banking services like third

party payments, utility bill payments, establishment of L/Cs, Cash

Management Services etc. Enhanced plan for the customers in future can

include requests for demand drafts and pay orders and many more to bring in

the ultimate in banking convenience.

5. THE GLOBAL E-BANKING SCENARIO

The banking industry is expected to be a leading player in e-business. While the

banks in developed countries are working primarily via Internet as non-branch

banks, banks in the developing countries use the Internet as an information

delivery tool to improve relationship with customers.

In early 2001, approximately 60 percent of e-business in the UK was concentrated

in the financial services sector, and with the expected 10-fold increase of the

British e-business market by 2004, the share of the financial services will further

increase. Around one fifth of Finish and Swedish bank customers are banking

online, while in the US, according to UNCTAD, online banking is growing at an

annual rate of 60 percent and the numbers of online accounts are expected to reach

15 million by 2003.Banks have established an Internet presence with various

objectives. Most of them are using the Internet as a new distribution channel.


Financial services, with the use of Internet, may be offered in an equivalent

quantity with lower costs to the more potential customers.

There may be contacts from each corner of the world at any time of day or night.

This means that banks may enlarge their market without opening new branches.

The banks in the US are using the Web to reach opportunities in three different

categories: to market information, to deliver banking products and services, and to

improve customer relationship.

In Asia

The major factor restricting growth of E-banking is security, in spite of several

countries being well connected via Internet. Access to high-quality E-banking

products is an issue as well. Majority of banks in Asia are just offering basic

services compared with those of developed countries. Still, E-banking seems to

have a future in Asia. According to McKinsey survey, E-banking will succeed if

the basic features, especially bill payment, are handled well. Bill payment was the

most popular feature, cited by 40 percent of respondents of the survey. However,

providing this service would be difficult for banks in Asia because it requires a

high level of security and involves arranging transactions with a variety of players.

In India

Approximately one percent of high and middle-income group banking customers

conducted banking on the Internet in 2000 compared to 5 to 6 percent in Singapore

and South Korea. In 2001, a Reserve Bank of India survey revealed that more than

20 major banks were either offering E-banking services at various levels or

planned to do so in the near future. Some of the private banks included ICICI

Bank, HDFC Bank, IndusInd Bank, IDBI Bank, Citibank, Global Trust Bank,

Bank of Punjab and UTI Bank.


In the same year, out of an estimated 0.9 million Internet user base, approximately

17 percent were reported to be banking on the Internet. The above statistics reveal

that India does have a high growth potential for E-banking. The banks have already

started focusing on increasing and improving their E-banking services. As a part of

this, the banks have begun to collaborate with various utility companies to enable

the customers to perform various functions online. In 2001, over 50 percent of the

banks in the US were offering E-banking services.

However, large banks appeared to have a clear advantage over small banks in the

range of services they offered. Some banks in the US were targeting their Internet

strategies towards business customers. Apart from affecting the way customers

received banking services; E-banking was expected to influence the banking

industry structure. The economics of E-banking was expected to favor large banks

because of economies of scale and scope, and the ability to advertise heavily.

Moreover, E-banking offered entry and expansion opportunities that small banks

traditionally lacked.

In Europe

The Internet is accelerating the reconfiguration of the banking industry into three

separate businesses: production, distribution and advice. This reconfiguration

is being further driven by the Internet, due to the combined impact of:

1) The emergence of new, more focused business models.

2) New technological capabilities that reduces banking relationship and

transaction costs.

3) High degree of uncertainty over the impact that new entrants will have on

current business models.

Though E-banking in the Europe is still in the evolutionary stage, it is very clear

that it is having a significant impact on traditional banking activities. Unlike in


the US, though large banks in the Europe have a competitive edge due to their

ability to invest heavily in new technologies, they are still not ready to embrace

E-banking. Hence, medium-sized banks and start-ups have an important role to

play on the E-banking front if they can take concrete measures quickly and

effectively.

6. INDIAN E-BANKING SCENARIO

The Reserve Bank of India constituted a working group on Internet Banking. The

group divided the internet banking products in India into 3 types based on the

levels of access granted. They are:

i) Information Only System: General purpose information like interest rates,

branch location, bank products and their features, loan and deposit calculations are

provided in the banks website. There exist facilities for downloading various types

of application forms. The communication is normally done through e-mail. There

is no interaction between the customer and bank's application system. No

identification of the customer is done. In this system, there is no possibility of any

unauthorized person getting into production systems of the bank through internet.

ii) Electronic Information Transfer System: The system provides customer-

specific information in the form of account balances, transaction details, and

statement of accounts. The information is still largely of the 'read only' format.

Identification and authentication of the customer is through password. The

information is fetched from the bank's application system either in batch mode or

off-line. The application systems cannot directly access through the internet.

iii) Fully Electronic Transactional System: This system allows bi-directional

capabilities. Transactions can be submitted by the customer for online update. This

system requires high degree of security and control. In this environment, web


server and application systems are linked over secure infrastructure. It comprises

technology covering computerization, networking and security, inter-bank payment

gateway and legal infrastructure

As per the international report the banking transactions on a brick and mortar

banking costs around $ 1.1. While through ATM it costs around $ 0.27 and just 1

percent of over the counter banking in case of Internet banking. Statistics such as

these have woken the Indian Banking Industry. Thus, the Indian banking system is

seeing a fabulous change in the quality of service provided by them. Technology is

the root of this change, which is implemented by the banks’ to win more business

from customers. Almost all the private sector banks are moving towards e-enabling

their existing products. HDFC Bank and ICICI Bank have taken a lead in

introducing E-banking in India. Internet banking starts from migrating existing

products to the net. This started initially with simple functions such as getting

information about interest rates, checking account balances and computing loan

eligibility. Then the services were extended to online bill payment, transfer of

funds between accounts and cash management services for corporate. Recently,

banks started setting up payment gateways for B2B and B2Ctransactions. This is to

facilitate payment for e-commerce transactions by directly debiting bank accounts

or through credit cards. Banks can earn a commission based income, on the

transaction or sale value resulting in higher other income. This could be more than

the revenues they can generate from credit card transactions. Private sector banks

have leveraged the Internet effectively in taking away the customers from public

sector banks and significantly increased their revenue potential. Internet banking is

just one manifestation of these banks’ technological capabilities. They have a

complete automation, an electronic customer database, real time transaction

processing capabilities and the latest technological platforms. Management of

these banks is very focused in using technology as a key competitive tool. The


capability of the management is also visible in terms of their profitability. Among

the private sector banks HDFC Bank and ICICI Bank have excellent returns on

equity compared to their peers in the industry.

7. SWOT ANALYSIS OF E-BANKING:

A SWOT Analysis is an effective tool which can be used to examine the issues

which will directly affect the success of alternative delivery mechanisms. In my

opinion, the SWOT analysis is as follows:

Strengths:

Customer access to information 24 hours per day.

Timely access to information.

The ability to offer a customer more than one method of retrieving information.

Sophisticated technology systems will help to make a banking institute "future-

proof."

Diversity helps capture different types of markets.

The ability to cut internal costs due to advanced technology.

Increased efficiency due to automation.

Increased accuracy of banking transactions.

Weaknesses:

High price of service.

Continual altering of customer wants and needs.

Hostile feelings of employees due to possible pending lay-offs due to

automation.


Multiple options for the customer.

Initial investment in technology will be expensive.

Opportunities:

The ability to obtain a larger customer base.

Global expansion. This is an enormous market, which will be a great opportunity

in the future.

The ability to take advantage of the growing popularity of Internet banking.

Threats:

Continual changing technology.

Uncertainty of the banking industry.

Competition from "lower price" operations.

Possible failure of product due to non-acceptance of customer.

General competitiveness of the banking industry.

After reviewing this internal analysis, an aggressive strategy as well as a

diversification strategy is recommended. In other words, according to the SWOT

analysis, the online banking or E-banking industry should diversity by adding this

new technology. The results of the focus groups and survey influence this decision.

8. COMPANY PROFILE

8.1. INDUSTRY PROFLE OF STATE BANK OF INDIA (SBI)

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 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later,

on 2 January 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 15 April 1840) and the Bank of Madras

(established on 1 July 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 27 January 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 take-over 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 1 July

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.


The State Bank of India emerged as a pacesetter, 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.

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 10000 branches, well networked to cater to its customers throughout

India.

ATM Services

SBI provides easy access to money to its customers through more than 8500 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, State

Bank of Indore, 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 eight 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 eight banking subsidiaries are:

State Bank of Bikaner and Jaipur (SBBJ)

State Bank of Hyderabad (SBH)

State Bank of India (SBI)

State Bank of Indore (SBIR)

State Bank of Mysore (SBM)

State Bank of Patiala (SBP)

State Bank of Saurashtra (SBS)

State Bank of Travancore (SBT)

8.2.COMPANY PROFILE OF STATE BANK OF INDIA (SBI)

State Bank of India is an India-based bank. In addition to banking, the Company,

through its subsidiaries, provides a range of financial services, which include life

insurance, merchant banking, mutual funds, credit card, factoring, security trading,

pension fund management and primary dealership in the money market. It operates

in four business segments: Treasury, Corporate/Wholesale Banking, Retail

Banking and Other Banking Business. The Treasury segment includes the

investment portfolio and trading in foreign exchange contracts and derivative

contracts. The Corporate/Wholesale Banking segment comprises the lending

activities of Corporate Accounts Group, Mid Corporate Accounts Group and

Stressed Assets Management Group. The Retail Banking segment consists of

branches in National Banking Group, which primarily includes personal banking

activities, including lending activities to corporate customers having banking

relations with branches in the National Banking Group.


8.3. PRODUCT PROFILE

Personal Banking

SBI Term Deposits SBI Loan For Pensioners

SBI Recurring Deposits Loan Against Mortgage Of Property

SBI Housing Loan Loan Against Shares & Debentures

SBI Car Loan Rent Plus Scheme

SBI Educational Loan Medi-Plus Scheme

Other Services

Agriculture/Rural Banking

NRI Services

ATM Services

Demat Services

Corporate Banking

Internet Banking

Mobile Banking

International Banking

Safe Deposit Locker

RBIEFT

E-Pay

E-Rail

SBI Vishwa Yatra Foreign Travel Card

Broking Services

Gift Cheques

SBI offers Corporate and Retail Internet Banking Products and Other Value Added

Services-:


E-Ticketing

Bill Payment

eZtrade@sbi

RTGS/NEFT

E-Payment

Fund Transfer

Third Party transfer

Demand Draft

Cheque Book Request

Account opening request

Demat Account Statement

8.4. PROCEDURE FOR OPENING AN E-BANKING A/C IN SBI BANK

If a person having an account on SBI then it would be easier for you open an E-

banking account, just by going and meeting your bank manager, he will give a

form, just fill up and after few day you will be link to E-banking.

General Information

1. You should register for ‘OnlineSBI’ with the branch where you maintain the

account.

2. If you maintain accounts at more than one branch, you need to register at each

branch separately.

3. Normally OnlineSBI services will be open to the customer only after he

acknowledges the receipt of password.

4. We invite you to visit your account on the site frequently for transacting

business or viewing account balances. If you believe that any information relating


to your account has a discrepancy, please bring it to the notice of the branch by

email or letter.

5. In a joint account, all account holders are entitled to register, as users of

‘OnlineSBI’, but transactions would be permitted based on the account operation

rights recorded at the branch.

6. All accounts at the branch whether or not listed in the registration form, will be

available on the ‘OnlineSBI’. However the applicant has the option to selectively

view the accounts on the ‘OnlineSBI’.

Security:

1. The Branch where the customer maintains his account will assign:

a)User-id

b)Password

2. The User-id and Password given by the branch must be replaced by UserName

and Password of customer’s choice at the time of first log-on. This is mandatory.

3. Bank will make reasonable use of available technology to ensure security and to

prevent unauthorized access to any of these services. The ‘OnlineSBI service is

VERISIGN certified which guarantees, that it is a secure site.

It means that

You are dealing with SBI at that moment.

The two-way communication is secured with 128-bit SSL encryption

technology, which ensures the confidentiality of the data during

transmission.

4. These together with access control methods designed on the site would afford a

high level of security to the transactions you conduct. SBI will soon be

implementing PKI/Digital Signature.


5. You are welcome to access ‘OnlineSBI’ from anywhere anytime. However, as a

matter of precaution, customers may avoid using PCs with public access.

6. There is no way to retrieve a password from the system. Therefore if a customer

forgets his password, he must approach the branch for re-registration.

Bank’s terms:

All requests received from customers are logged for backend fulfillment and

are effective from the time they are recorded at the branch.

Rules and regulations applicable to normal banking transactions in India will

be applicable mutatis mutandis for the transactions executed through this

site.

The OnlineSBI service cannot be claimed as a right. The bank may also

convert this into a discretionary service anytime.

Dispute between the customer and the Bank in this service is subject to the

jurisdiction of the courts in the Republic of India and governed by the laws

prevailing in India.

The Bank reserves the right to modify the services offered or the Terms of

service of ‘OnlineSBI’. The changes will be notified to the customers

through a notification on the Site.

Customer’s obligations:

The customer has an obligation to maintain secrecy in regard to Username &

Password registered with the Bank. The bank presupposes that login using

valid Username and Password is a valid session initiated by none other than

the customer.


Transaction executed through a valid session will be construed by SBI to

have emanated from the registered customer and will be binding on him /

her.

The customer will not attempt or permit others to attempt accessing the

‘OnlineSBI’ through any unlawful means.

Dos’ & Don’ts’:

The customer should keep his/her ID and password strictly confidential and

should not divulge the same to any other person. Any loss sustained by the

customer due to non-compliance of this condition will be at his/her own risk

and responsibility and the Bank will not be liable for the same in any

manner.

The customer is free to choose a password of his own for OnlineSBI

services. As a precaution a password that in is generic nature, guessable or

inferable personal data such as name, address, telephone member, driving

license, date of birth etc. is best avoided. Similarly it is a good practice to

commit the password to memory rather than writing it down somewhere.

It may not be safe to leave the computer unattended during a valid session.

This might give access to your account information to others.

8.5. INDUSTRY PROFILE OF ICICI BANK

ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian

financial institution, in 1994. Four years later, when the company offered ICICI

Bank's shares to the public, ICICI's shareholding was reduced to 46%. In the year

2000, ICICI Bank offered made an equity offering in the form of ADRs on the

New York Stock Exchange (NYSE), thereby becoming the first Indian company

and the first bank or financial institution from non-Japan Asia to be listed on the


NYSE. In the next year, it acquired the Bank of Madura Limited in an all-stock

amalgamation. Later in the year and the next fiscal year, the bank made secondary

market sales to institutional investors.

With a change in the corporate structure and the budding competition in the Indian

Banking industry, the management of both ICICI and ICICI Bank were of the

opinion that a merger between the two entities would prove to be an essential step.

It was in 2001 that the Boards of Directors of ICICI and ICICI Bank sanctioned the

amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries,

ICICI Personal Financial Services Limited and ICICI Capital Services Limited,

with ICICI Bank. In the following year, the merger was approved by its

shareholders, the High Court of Gujarat at Ahmedabad as well as the High Court of

Judicature at Mumbai and the Reserve Bank of India.

Present Scenario

ICICI Bank has its equity shares listed in India on Bombay Stock Exchange and

the National Stock Exchange of India Limited. Overseas, its American Depositary

Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). As of

December 31, 2008, ICICI is India's second-largest bank, boasting an asset value

of Rs. 3,744.10 billion and profit after tax Rs. 30.14 billion, for the nine months,

that ended on December 31, 2008.

Branches & ATMs

ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank

has 1,420 branches and about 4,644 ATMs. Talking about foreign countries, ICICI

Bank has made its presence felt in 18 countries - United States, Singapore,

Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and

representative offices in United Arab Emirates, China, South Africa, Bangladesh,


Thailand, Malaysia and Indonesia. The Bank proudly holds its subsidiaries in the

United Kingdom, Russia and Canada out of which, the UK subsidiary has

established branches in Belgium and Germany.

8.6.COMPANY PROFILE OF ICICI BANK

CICI Bank Limited (the Bank) is a banking company engaged in providing a range

of banking and financial services, including commercial banking and treasury

operations. It operates under four segments: retail banking, wholesale banking,

treasury and other banking. The Bank’s subsidiaries include ICICI Prudential Life

Insurance Company Limited, ICICI Lombard General Insurance Company

Limited, ICICI Trusteeship Services Limited, ICICI Prudential Pension Funds,

Management Company Limited, ICICI Home Finance Company Limited and

ICICI Securities Limited.

Products and Services

ICICI Bank is the one-stop shop for all your forex needs.

Whether your destination is Paris, Mauritius or enchanting Rome, ICICI Bank

offers the best of both worlds! We buy and sell the following:

ICICI Bank Travel Card: ICICI Bank Travel Card has made travel abroad

convenient and safe. Available in US Dollars, Australian Dollars, Canadian

Dollars, Swiss Francs, Euro and Pound Sterling, the international traveler is in fact

spoilt for choice.

Features of this power-packed Travel Card:

Replacement Card


SMS alerts for every transaction

Online access

Card enabled for Internet transactions

Travelers Cheques: When you travel abroad, you can opt for Travelers Cheques

(TCs) as an alternative to cash. These are cheques issued to you that offer you the

safety and security you need when on the move.

Unlike cash, if your traveler’s Cheques are lost or stolen they can be replaced

within 24 hours, virtually anywhere in the world by most banks, service

establishments and even by a large number of merchants. In fact, TCs are

considered the safest form of currency. In addition, they make it easier for you to

budget, track and control your travel expenses.

Travelers Cheques are recognized worldwide. In the U.S they can be used like cash

at retail locations, hotels and restaurants. Outside the U.S they can be used like

cash at many locations, or exchanged for local currency at banks, currency

exchanges, and travel service locations.

We offer you American Express Travelers Cheques in the following currencies:

United States Dollar, Great British Pound, Euro, Australian Dollars, Canadian

Dollars and Japanese Yen.

Travelers’ Cheques offer the following features:

Accepted at numerous merchants for shopping

Signature-based security

Replacement of TCs within 24 hours across the world

Easier for you to budget, track and control your travel expense

Foreign Currency: Foreign Currency is issued to customers travelling to another

country for leisure, business, education or any other purpose. According to FEMA


guidelines, the maximum amount of currency that can be availed of for any

purpose of travel is the equivalent of USD 3,000 We buy and sell most currencies,

so wherever you are travelling, don't think twice before visiting ICICI Bank for

your Forex needs.

8.7. PRODUCT PROFILE

Personal Banking

Deposits

Loans

Cards

Investments

Insurance

Demat Services

Wealth Management

NRI Banking

Money Transfer

Bank Accounts

Investments

Property Solutions

Insurance

Loans

Business Banking

Corporate Net Banking


Cash Management

Trade Services

FXOnline

SME Services

Online Taxes

Custodial Services

ICICI offers Corporate and Retail Internet Banking Products and Other Value

Added Services-:

Balance enquiry and statement

Transfer fund online

Card to card fund transfer

Use debit card online

Prepaid mobile recharge

Subscribe for mobile banking

Link bank account to ATM

Lock / activate debit cards /ATM

Request a cheque book

Stop payment

8.8. PROCEDURE FOR OPENING AN E-BANKING A/C IN ICICI

BANK

ICICI Bank Online Banking Services provide the largest private bank in India right

here at your desktops. Banking becomes a pleasure as the transactions and services

become instant with ICICI Bank online Internet banking. The services provided are

totally secure and unique. These cover online account transactions and operations,


credit card and account applications and payments, share trading and investments

through mutual funds, bill payments, statement generation and a virtual demo of

each service.

Role of customer when using E-banking

You can access ICICIBank.com only by using your User ID and Password.

During the first login attempt, it is mandatory to change both passwords -

login and transaction – which would have been mailed to you by the bank.

If you forget your password, you will have written to us using the "Email

Us" option. The Bank will then issue a new password and send it to your

mailing address as per our records. Kindly check with your branch that this

address is updated.

Make sure no one can see the account login name or password you are

entering when you log on to ICICIBank.com.

Logout of ICICIBank.com before moving on to other Websites.

Before leaving the PC please "close" the browser.

Do not write your ICICIBank.com login name or password anywhere.

Do not leave your login name and password such that someone sitting at

your computer could see them.

Never reveal your ICICIBank.com login name and password to anyone (no

representative of ICICI Bank will ever ask you for your ICICIBank.com

password).

Notify ICICI Bank immediately if you notice any unusual account activity.


Keep all documents that include your account information in a secure

location.

When you login you can view the date and time of your last log in.

9. OBJECTIVE OF THE PROJECT

To gain the knowledge of products and services offered by SBI and ICICI

Bank respectively.

To identify the perception of consumer about their banks with comparison to

other banks.

To identify the perception of consumers about E-banking offered by SBI and

ICICI Bank.

To know the preferences of consumers upon public sector bank and private

sector bank.

Recommendations to increase customer satisfaction level.

Because of the following reasons, I prefer this project work to get the

knowledge of the banking system.

Banking is an essential industry.


It is where we often wind up when we are seeking a problem in financial

crisis and money related query.

Banking is one of the most regulated businesses in the world.

Banks remain important source for career opportunities for people.

It is vital system for developing economy for the nation.

Banks can play a dynamic role in delivery and purchase of consumer

durables.

10.KEY RESPONSIBILITIES

Data collection

Data validation

Data compilation

Data Analysis

Learn and understand customer-client relationship

10.1. STAGES OF THE PROJECT

There are multiple Stages of project which are explained as follows:

Firstly, the main task is to collect data from the respondent through personal

interviews, Questionnaire, Internet, Journals of Axis Bank.

After collecting data the next step is to validate the data. The fields’that were

left out or missing were checked for the errors.

The next step is to complete data. The data collected in the form of

questionnaire was directly entered in to the excel sheets.

Surveying with the help of questionnaire and the gathering the required

information.


Data analysis is also one of the stages. Analysis of data is a process of

inspecting, clearing, transforming and modeling data with the goal of

highlighting useful information, suggesting conclusion and recommendation.

11.RESEARCH METHODOLOGY

11.1. MEANING

Research Methodology is a way to systematically study & solve the research

problems. If a researcher wants to claim his study as a good study, he must clearly

state the methodology adopted in conducting the research so that it may be judged

by the reader weather the methodology of work done is sound or not.

The Research Methodology here includes:-

1. Research design

2. Sampling design

3. Data collection method

4. Analysis and interpretation of Data

11.2. RESEARCH DESIGN

The present study is descriptive in nature, as it seeks to describe ideas and insight

and to bring out new relationships. Research design is flexible enough to provide

opportunity for considering different aspects of problems under study. It helps in

bringing into focus some inherent weakness in enterprise regarding which in depth

study can be conducted by management.


Thetype of research design used by me is Qualitative research here I focused on

the understanding & expectations of the respondents. A major chunk of my

research was based on the conclusive research design.

11.3. SAMPLING DESIGN

A ‘sample design’s a definite plan for obtaining a sample from a given population.

It refers to the technique or the procedure the researcher would adopt in selecting

items for the sample. The corporate sea being very fast, it becomes impossible

constraints. Therefore, the study has been narrowed down to a represented sample

to make the study more manageable.

Sampling Method Adopted

In this study I have applied Non Random Sampling Technique. In this sampling I

have asked them that in which bank do they have an account and do they use

online banking and then I made them to fill the questionnaire.

Sample Size

The sample size of my project is limited to 60 only.

11.4. DATA COLLECTION METHOD

As the primary sampling unit represents a cluster of units based on geographical

are. The geographical area chosen for individual customer was at New Delhi,

Gurgaon and Noida. It was collected by formal and informal talks and through

filling up the questionnaire prepared.


Primary Data Collection:

Primary Data is the first hand information collected directly from the respondents.

The data collection for this study was done in the following manner.

Through personal interviews:

A rigid procedure was followed and we were seeking answers to many

preconceived questions through personal interviews.

Through questionnaire:

I had prepared a questionnaire for collecting information about the project.

Information to find out the customer services and complaints found out through

Questionnaires.

Secondary Data Collection:

The data in the secondary source is already published and is in the form of

government publication, census, personnel record, and client history and service

records.

My source of data collection is also through the secondary data available

from the site of SBI & ICICI banks.

12.DATA ANALYSI AND INTERPRETATIONS (GRAPHICALLY)

Q 1. What is your Age Grp.?

Factors Response20 – 25 2126 – 30 25


31 – 35 1135 Above 3

21; 35%

25; 42%

11; 18%

3; 5%

What is your Age Grp.?20 – 25 26 – 30 31 – 35 35 Above


INTERPRETATIONAmong 60 respondent, 21 (35%) are under 20-25 age grp., 25 (42%) are

under 26-30 age grp., 11 (18%) are under 31-35 age grp., 21 (35%) are above

35 age grp.

Q 2. What is your Occupation?

Factors ResponseBusiness 7

Govt. Employee 9Pvt. Employee 31

Student 5Professionals 8

7; 12%

9; 15%

31; 52%

5; 8%

8; 13%

What is your Occupation?Business Govt. Employee Pvt. Employee Student Professionals


INTERPRETATIONAmong 60 respondent, 7 (12%) are Businessman, 9 (15%) are Govt.

Employee,31 (52%) are Pvt. Employee, 5 (8%) are Student and 8(13%) are

Professionals.

Q 3. Which bank do you have an account?

SBI ICICI

23; 38%

37; 62%

Which bank do you have an account?SBI ICICI


23

INTERPRETATIONAmong 60 respondents, 23 (38%) respondents have an account in SBI and 37

(62%) respondents have an account in ICICI Bank.

37

Q 4. Which type of account you are having?

Factors SBI ICICISavings 17 21Current 1 0Demat 5 16

Savings Current Demat

Which type of account you are having?

SBI ICICI


INTERPRETATIONAmong 60 respondents, 17 respondents have Savings Accounts in SBI and

21 respondents have Savings Account in ICICI Bank, 1 respondent have

Current Account in SBI and no one has Current Account in ICICI Bank, and

5 respondents have Demat Account in SBI and 16 respondents have Demat

Account in ICICI Bank.

Q 5. Are you aware of E-banking?

Factors SBI ICICIYes 20 37No 3 0

SBI

ICICI

Are you aware of E-banking?Yes No


INTERPRETATIONAmong 23 respondents from the total 60 respondents who has an account in

SBI, 20 respondents are aware of the E-banking facilities offered by SBI and

3 are not, and among 37 respondents from the total 60 respondents who has

an account in ICICI Bank, all the respondents i.e. 37 respondents are aware

of the E-banking facilities offered by ICICI Bank.

Q 6. Du you use E-banking?

Factors SBI ICICIYes 17 25No 3 12

SBI

ICICI

Du you use E-banking?Yes No


INTERPRETATIONAmong 20 respondents from the total 23 respondents who are aware of the E-

banking facilities offered by SBI, 17 respondents uses E-banking and 3 don’t

use E-banking, and among 37 respondents who all are aware of the E-

banking facilities offered by ICICI Bank, 25 respondents uses E-banking and

12 respondents don’t use E-banking offered by ICICI Bank.

Q 7. How you induced to the E-banking services?

Factors SBI ICICIEasy & Quick 14 15Advertisement 1 4Brand Name 0 2

Reference 2 4

Easy & Quick Advertisement Brand Name Reference

How you induced to the E-banking services?

SBI ICICI


INTERPRETATIONAmong 17 respondents from the total 20 respondents who usesE-banking

facilities offered by SBI, 18 respondents uses it because it is Easy &Quick,

1respondent uses because of Advertisement, no one uses it because its Brand

Name and 2 respondents uses it due to reference from others, where as

among 25 respondents from the 37 respondents who uses E-banking facilities

offered by ICICI Bank, 15 respondents uses it because it is Easy & Quick, 4

respondents uses it because of Advertisement, 2 respondents uses it because

its Brand Name and 4 respondents uses it due to reference from others.

Q 8. How many times (within 10 days)you do transaction through E-banking?

No of Transactions SBI ICICI1 3 82 5 93 6 3

More than 3 3 5

1 2 3 More than 30123456789

10

How many times (within 10 days) you do transaction through E-banking?

SBI ICICI

Q 9. What is your purpose of using E-banking?


INTERPRETATIONAmong 17 respondents from the total 20 respondents who uses E-banking of

SBI, 3 do transaction for 1 time, 5 do transaction for 2 times, 6 do transaction

for 3 times and 3 do transaction for more than 3 times, where as among 25

respondents from the 37 respondents who uses E-banking of ICICI Bank, 8

do transaction for 1 time, 9 do transaction for 2 times, 3 do transaction for 3

times and 5 do transaction for more than 3 times.

Factors SBI ICICIOnline Fund Transfer 5 7

Bill Payment 4 6Account Information 5 5

Online Recharge 3 7

Online Fund Transfer Bill Payment Account Information Online Recharge

What is your purpose of using E-banking?

SBI ICICI

Q 10. How much you are satisfied with your E-banking facilities?



facilities offered by SBI, 5 respondents uses it for Online Fund transfer, 4

respondents uses it for Bill Payment, 5 respondents uses it for Account

Information and 3 respondents uses it for Online Recharge, where as among

25 respondents from the 37 respondents who uses E-banking facilities

offered by ICICI Bank, 7 respondents uses it for Online Fund transfer, 6

respondents uses it for Bill Payment, 5 respondents uses it for Account

Information and 7 respondents uses it for Online Recharge.

Factors SBI ICICINot Satisfied 0 0Less Satisfied 2 2

Satisfied 3 6More Satisfied 5 10Very Satisfied 7 7

Not Satisfied Less Satisfied Satisfied More Satisfied Very Satisfied

How much you are satisfied with your E-banking facilities?

SBI ICICI

13. FINDINGS



facilities offered by SBI, none of them are Not Satisfied, 2 respondents are

Less Satisfied, 3 respondents are Satisfied, 5 respondents are More Satisfied

and 7 respondents are Very Satisfied, where as among 25 respondents from

the 37 respondents who uses E-banking facilities offered by ICICI Bank,

none of them are Not Satisfied, 2 respondents are Less Satisfied, 6

respondents are Satisfied, 10 respondents are More Satisfied and 7

respondents are Very Satisfied.

In the users ratio ICICI Bank has less number of customers of E-banking

account than the SBI Bank.

Most of the people have their accounts in ICICI Bank compared to SBI.

The services used by most of the customers are checking the current balance

of their account, online recharge, online fund transfer and bill payment.

Most of the people feel safe while disclosing their details on net.

Almost all the people are aware of the E-banking facilities offered by

different banks.

Most of the people uses E-banking on regular basis.

The most important factor that the people consider while opening an online

bank account is convenience & easy and quick.

The best e-bank service is provided by the SBI Bank.

The people who works in private sector organization, uses E-banking the

most, and they prefers ICICI Bank E-banking Services

Most of the respondents are More Satisfied with the E-banking System of

SBI and ICICI Bank.


14. MAJOR LEARNINGS

Knowledge regarding the basic system of E-banking.

Knowledge regarding preferences by the customers.

Procedures of E-banking System.

Facilities of E-banking System.

Do & Don’s regarding E-banking.

How to use E-banking.

Terms & Conditions involving E-banking.

Knowledge and awareness about company’s product and services, industry,

competitors etc.

Types of accounts both the bank offers and its features.

Money transfer mechanisms such as RTGS (Real Time Gross Settlement)

and NEFT (National Electronic Funds Transfer).

Communication while filling up the questionnaires dealing with different

people for getting the information.


15. LIMITATIONS AND CONSTRAINTS FACED

Time Limitation.

Though every – “precaution has taken due to large data and complex

calculations there may be chances of error.

Some of the person was not so responsive.

Possibility of error in data collection.

Possibility of error in analysis of data due to small sample size.

Geographical Locations.

Sample size was limited to 60 respondents only and it may not adequately

represent the whole customers.

It was tough to get of Questionnaire filled as people avoid due to lack of

time.


16. RECOMMENDATIONS & SUGGESTIONS

The banks should advertise more of the E-banking services.

They should reduce their service charge so that more number of customers

can use it.

ICICI Bank should know the reason that why its e-bank is not progressing.

There should be customer satisfaction by providing plans on E-banking

services.


17.CONCLUSION

E-banking is a global component in the economy. The role of banks has been and

continues to be shaped by a number of mega trend the globalization of financial

markets, the rise of non bank competitors, the ongoing evolution and

implementation of new technologies, and deregulation and disintermediation (i.e.,

the movement away from the middleman role played by banks between depositors

and lenders).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 purpose of this report was to provide a straightforward approach to understand

the E-banking services provided by the two banks and how they are different from

each other which make one bank the best from the other. An effort is made to

understand the expectations of the customers with the two banks.

Atlast I want to conclude that the best E-banking service is provided by the SBI

Bank while comparing it with the ICICI Bank. That means the public sector bank

is progressing thanthe private sector bank. This is a great achievement for the bank

and for the nation. The respondents took keen interest in filling the questionnaires

and made my research fruitful. Banks should also look for increasing their online

services.


18.BIBLIOGRAPHY

Books:

1. E-banking in India

2. Money & Banking

Internet sites

www.sbibank.com

www.icicibank.com

www.wikipedia.com

www.ehow.com

www.nseindia.com

www.moneycontrol.com

www.indianbank.net


http://www.indianbank.net/

http://www.moneycontrol.com/

http://www.nseindia.com/

http://www.ehow.com/

http://www.wikipedia.com/

http://www.icicibank.com/

http://www.sbibank.com/

ANNEXURE


QUESTIONNAIRE

Name:-

Address:-Phone No:- Email - Q 1. What is your Age Grp.?

Factors Response20 – 2526 – 3031 – 35

35 AboveQ 2. What is your Occupation?

Factors ResponseBusiness

Govt. EmployeePvt. Employee

StudentProfessionals

Q 3. Which bank do you have an account?SBI ICICI Bank

Q 4. Which Type of account you are having?Factors SBI ICICISavingsCurrentDemat

Q 5. Are you aware of E-Banking?Factors SBI ICICI

YesNo

Q 6. Du you use E-Banking?Factors SBI ICICI

YesNo


Q 7. How you induced to the E-Banking services?Factors SBI ICICI

Easy & QuickAdvertisementBrand Name

ReferenceQ 8. How many times (within 10 days) you do transaction through E-

Banking? No of Transactions SBI ICICI

12345

More than 5Q 9. What is your purpose of using E-Banking?

Factors SBI ICICIOnline Fund Transfer

Bill PaymentAccount Information

Online RechargeQ 10. How much you are satisfied with your E-Banking facilities?

Factors SBI ICICINot SatisfiedLess Satisfied

SatisfiedMore SatisfiedVery Satisfied

Your suggestions, if any, for improving customer services at online.……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

Thank You,We Value Your Response


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