Chapter 1Introduction

• INTRODUCTION

In the post-crisis environment characterized by lower growth, tighter capital, ever fiercer competition and closer regulation banking organizations worldwide need to make significant changes to their business model, cost base and operations to drive a recovery in return on equity. At the same time, they need to keep pace with rapid ongoing change affecting the customers and societies they deal with, amid ongoing shifts in demographics and the global balance of economic power and the arrival of the digital economy. However, they can respond with new technologies, which are redefining consumers’ behavior and expectations towards their banks, and creating opportunities for banks and new non-banking entrants. Today, these

converging trends have put banks at a historical inflexion point: a moment where they can take decisive steps to transform for the new environment, or risk losing revenues, relevance and returns. For many, change is not a matter of choice. Bank profitability is low, and markets are changing in ways that threaten to disinter mediate banks from their customers, or replace them altogether. While the latest wave of technology is part of the challenge, it can also help deliver the solution. Banks can harness the new technologies to tackle underlying cost and quality issues in their business and simultaneously drive a permanent uplift in financial performance, meet the competitive threat from new entrants, and provide customers with the new service experiences they now demand.

For banks, this means that customer relationships are increasingly digital; they will need to provide their services across the new channels and devices customers use, and rethink their service propositions to create relationships in an omni channel era. In a connected world information flows and service provision are real time, banks need to digitize and automate many of their processes. As a result, banks need to look to their core systems, the workhorses of account and ledger processing, which for many banks are complex and old legacy systems that restrict agility to adapt to rapid technology change.

However, emerging technologies such as cloud, and a maturing landscape of suppliers, provide banks with the opportunity to develop new operating models to meet these challenges. For banks buying in expert services and processing offers an opportunity for a similar revolution in flexibility and efficiency. The opportunities for banks that get this right are large. As customers increase the use of their digital and mobile channels commerce is going on-line, banks have the opportunity not just to take a larger share of consumer payments, but to grow deep, trusted digital relationships. Technology is also driving down the transaction and distribution costs of financial services, this provides an opportunity to reach the hundreds of millions of potential customers currently excluded from the financial system at the same time as the spending power and incomes of this segment are growing. Computers are getting more sophisticated. They have given banks a potential they could only dream about and have given bank customers high expectations. The changes that new technologies have brought to banking are enormous in their impact on officers, employees, and customers of banks. Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than even before – thus creating new bases of competition. Rapid access to critical information and the ability to act quickly and effectively will distinguish the successful banks of the future. The bank gains a vital competitive advantage by having a direct marketing and accountable customer service environment and new, streamlined business processes. Consistent

management and decision support systems provide the bank that competitive edge to forge ahead in the banking marketplace.

• OBJECTIVES

The objectives are-

• To examine the development of the Banking Policies and E-banking system at branch level and understand the changes occurring in it.

• To appreciate the role of technology in increasing the convenience of customers and improving banking operations.

• To study the different banking policies and their effects on rural as well as urban branches.

• To analyze how cost for each banking transaction is changed after using technology in banking sector.

• SCOPE

• To find the technologies used in banks at present state for day to day working and for their customer satisfaction.

• To find out the best mode of alternative business channel used by customers in banking such as ATM, mobile banking, SMS banking, E-banking etc.

Chapter 2LITERATURE REVIEW

LITERATURE REVIEW

The technological development in the banking sector began with the use of Advanced Ledger Posting Machines (ALPM) in the 1980s and nowadays banks are using core banking solution (CBS) for providing better services to their customers. Over the years several studies have been conducted both at the industry and academic level to examine the impact of IT on Banking productivity and profitability. Information Technology and the Communication Networking Systems have revolutionized the functioning of banks and other financial institutions all over the world. Reserve bank of India has played an important role in implementation of information technology in banking sector. Various researchers have also contributed in this regard.

Dos et al. [1993] studied statistical correlation between IT spending and performance measures such as profitability or stock’s value. It is found that there is an insignificant correlation between IT spending and profitability measures, implying thereby that IT spending is unproductive.

Brynjolfsson and Hitt [1996] however, cautioned that these findings do not account for the economic theory of equilibrium which implies that increased IT spending does not imply increased profitability. More recent firm level studies, however, point a more positive picture of IT contributions towards productivity. These findings raise several questions about mis-

measurement of output by not accounting for improved variety and quality and about whether IT benefits are seen at the firm level or at the industry level. Such issues have been discussed in detail by Brynjolfsson [1993] and to a lesser extent by Brynjolfsson and Hitt [1996].

The study conducted by Gotlieb, and Denny [1993], is one of the studies that deals with the impact of IT on banking productivity per se. Computerization is one of the factors which improves the efficiency of the banking transactions. They concluded that higher performance levels have been achieved without corresponding increase in the number of employees. Also, it has been possible for Public Sector Banks and Old Private Banks to improve their productivity and efficiency by using IT.

Ananthakrishnan G. (2005) described customer’s services in the banks. The discriminating customer’s expectations have begun to change in terms of quality and service. With the advent of computers and ATMs, the gap between the customers and the banking personnel is widening. Unless a change of heart occurs, even the largest banks will find it hard to survive on their assumed false glory. Banks which take care to see the reality and react early will survive and prosper, while those who continue the traditional path will find their market share eaten away. Nowadays customers are no longer willing to wait in long queues or tolerate arrogant behavior of the employees. As applicable to banking, “customer service” may be defined as the ability to satisfy the customer’s requirements and needs to the fullest extent and be able to replicate this on an on-going basis.

A study conducted by Mishra A. K. examined the reasons for the satisfaction of the customers with the services rendered by the Urban Cooperative Banks. The author described that, urban cooperative banks are operating in a more competitive environment and therefore, the need to take care of customer requirements has become more important. The branches of UCBs must cater to the betterment of the customers. They should also improvise on their own image, customer satisfaction and their profits. The time norms for specific business transactions should be displayed prominently in the banking hall so that it attracts the customers’ attention. The author also raised some points which can be a plus point for UCBs to impress & attract their customers. These points are: effective board of management, efficient employees/staff, cordial personalized services, proper guidance, provision of loan facilities, good systems, computer systems, prompt services, good work culture, convenient timings, proper clearing services for outstation cheques and demand drafts, split hour facilities, Sunday working day, discounting facilities for outstation cheques, and good location of the bank.

Uppal R. K. described that in the post-LPG (Liberalization, Privatization and

Globalization) era and Information Technology (IT) era, transformation in Indian banks is taking place with different parameters and the curves of banking services are dynamically altering the face of banking, as banks are stepping towards e-banking from traditional banking. The paper empirically analyzes the quality of e-banking services in the changing environment. With different statistical tools such as weighted average method and ranking, the paper concludes that most of the customers of e-banks are satisfied with the different e-channels and their services, but the lack of awareness is a major obstacle in the spread of e-banking services. The paper also suggests some measures to make e-banking services more effective in the future.

Chapter 3ORGANIZATIONAL PROFILE

3.1. BANK OF MAHARASHTRA

Bank of Maharashtra is a major public sector bank in India. It is headquartered at Pune, Maharashtra. Government of India holds 85.21% of the total shares. The bank has 15 million customers across the length and breadth of the country served through more than 1825 branches. It has largest network of branches by any public sector bank in state of Maharashtra. The current base rate of a bank is 10.40%. For core banking solution, bank of Maharashtra uses B@NCS-24 software which means Branch automation network control system. The financials of Bank of Maharashtra for FY 2012-13 are- Total Income increased by Rs.2325.42 Crore to Rs.12850.85 Crore recording growth of 22.09% over FY 2012-13. Total Deposits up by 23.81% to Rs.116803.09 Crore as at 31.03.2014. Gross Advances increased by 18.29% to Rs.90368.67 Crore as at 31.03.2014. Total Business increased by 21.34 % to Rs.207171.76 Crore as at 31.03.2014. The bank is going up due to its facilities and services also because of their customers.

3.2. History

The Bank was founded by a group of visionaries led by the late V. G. Kale and late D. K. Sathe and registered as banking company on 16 September 1935 at Pune with an authorized capital of Rs. 1 million, and began business on 8 February 1936. After nationalization in 1969, the bank expanded rapidly. The bank attained autonomous status in 1998. As a result, the bank has limited interference of Government bureaucracy in its decision making process and internal affairs. Shri Sushil Muhnot is the new Chairman and Managing Director of bank of Maharashtra from 2013.

3.3. Boards of Directors

Shri Sushil MuhnotChairman & Managing Director

Shri R. Athmaram Executive Director

Shri R. K. Gupta Executive Director

Shri. Ateesh Singh Director - Government Nominee

Shri. Ramadev Saydiwal Workmen Employee Director

Shri Sanjeev Jain Part Time Non-Official Director

Shri G. Sreekumar Director - RBI Representative

Shri Premchandra Amolakchand Sethi Shareholder Director

3.4. Milestones in the journey for nation building

1935 : Registered as banking company.

1936 : commenced operations on 08-02-1936 in pune.

1938 : second branch of the bank was opened at Fort, Bombay.

1940 : Third branch came up at Deccan Gymkhana, Pune.

1944 : Status as Scheduled Bank obtained.

1946 : Deposits crossed Rs. 1 crore mark. Formed fully owned subsidiary, The Maharashtra Executor & Trustee Company. First branch outside Maharashtra opened in Hubli (karnataka).

1949 : Expansion to AP, Hyderabad branch opened.

1963 : Expansion to Goa, Panji branch opened.

1966 : Expansion to MP, Indore branch opened and Entered in Gujarat, Baroda branch opened.

1969 : nationalized alongwith 13 other Banks. Also entry in Delhi by opening Karolbagh branch.

1974 : Deposits base crossed Rs. 100 crore mark.

1976 : Marathwada Grameena Bank, first RRB established.

1978 : New Head office building inaugurated by Honorable Prime Minister of India Shri. Morarji Desai. And Deposits crossed the figure of Rs. 500 crores.

1979 : “Mahabank Agricultural Research and Rural Development Foundation”, registered as a public trust, was established for undertaking research and extension work and to provide more extensive services to farmers.

1985 : 500th branch in Maharashtra state was opened at the hands of the Prime Minister, Mrs Indira Gandhi at Nariman point, Mumbai. First Advanced Ledger Posting Machine (ALPM) was installed at the branch. Also Golden Jubilee year Celebrations launched at the hands of Dr. Manmohan Singh, Governor RBI.

1986 : Thane Grameena Bank sponsored.

1987 : The 1000th branch of the Bank was inaugurated at Indira vasahat, Bibwewadi, Pune.

1991 : “Mahabank Farmer Credit Card” was launched. Entered in to Domestic Credit card Business. Main Frame Computer installed. Became member of the SWIFT.

1995 : Diamond Jubilee Celebrations – Dr. C Rangarajan the RBI Governor was the Chief Guest. Deposits crossed Rs. 5000 crore mark.

1996 : Moved into “A” category from earlier “C” category. Autonomy obtained.

2000 : Deposits crossed Rs. 10,000 crore mark.

2004 : Public issue of shares – 24% owned by Public. Listed in BSE and NSE.

2005 : Bancassurance and mutual fund distribution business started.

2006 : Crossed total business level of Rs. 50,000 crore. Branch CBS Project started.

2009 : Entered in to 75th year of dedicated service to the nation. Also adopted 75 underdeveloped villages for integrated overall development.

2010 : 100% CBS of branches achieved total Business crossed Rs one lakh crore. Opened 76 branches in the Platinum Year taking the total to 1506. New initiatives like Mahachetana, opening of E-lounges in Pune, Mumbai & Delhi, Micro Asset Recovery cells were implemented.

2011 : First SHG Branch opened in Pune. Bank sponsored Maharashtra Gramin Bank achieved 100 % CBS in record 77 days. 77th anniversary of Foundation Day celebration at the hands of Honorable Finance Minister, Shri Pranab Mukherjee dedicating 5 specialized branches to SHGs and opening of 5 Mid-Corporate branches on the occasion.

2012 : Honorable Union Finance Minister Shri P Chidambaram inaugurates the Bank’s 1624 th

branch at Rajgambiram. In September 2012 Bank’s total business crossed Rs. 1,50,000 crore and reached the level of Rs. 1,51,320 crore. Bank of Maharashtra awarded “Best Banker- customer Friendliness” for 2012 by The Sunday Standard. Received on the Dun & Bradstreet-Polaris

Financial Technology Banking Award 2012 as Best Public Sector Bank under the category “Asset Quality”.

3.5. Vision, Mission & Social responsibility

• Vission

To be a vibrant, forward looking, techno-savvy, customer centric bank serving diverse sections of the society, enhancing shareholders’ and employees’ value while moving towards global presence.

• Mission

• To ensure quick and efficient response to customer expectation.

• To innovate products & services to cater to diverse sections of society.

• To adopt latest technology on a continuous basis.

• To build proactive, professional and involved workforce.

• To enhance the shareholders wealth through best practices and corporate governance.

• To enter international arena through branch network.

• To be a vibrant, forward looking, techno-savvy, customer centric bank serving diverse sections of the society, enhancing shareholders & employees value while moving toward global presence.

• Social Responsibility

• Bank of Maharashtra donates Food, Water and Medical kits under CSR activities to Malingaon.

• Bank of Maharashtra sponsors 87th Sammelan 2014 to be organized by Maharashtra

Sahitya Parishad. Shri.R.Athmaram Executive Director of the Bank handed over a sponsorship cheque of Rs.3, 00,000/-(Rupees Three Lakhs) to Shri. Vijay Kolte, President.

• Bank of Maharashtra has donated Rs. 2.00 lakhs to Shri Apang Vikas Mandal aswad. The Mandal runs a Residential School for special children named as Jeevan Vardhini Matimand Nivasi Vidyalaya in Dive, Dist. Pune. The donated amount will be used for the construction of School building.

• Bank of Maharashtra Contributed Rs. 251.00 lakhs towards Chief Minister’s Relief Fund (Drought - 2013) for Drought Relief.

• Ceiling fan donated by Branch manager Loni (Varud) Branch, Amravati Zone to Zila Parishad Girls Primary School Yevda as a part of CSR activity. Bank has donated Rs.15000/- to improve hygiene and basic amenities to 551 Govt. primary schools.

• Bank's Rural Development Centres at Hadapsar and Bhigwan are undertaking vaious developmental activities for the benefit of the famers vi. Lab to Land project, reuse / rehabilitation of Saline Soil and advice on scientific use of inputs for optimum results.

• The Mahabank Agricultural Research and Rural Development Foundation (MARDEF) is active in socio-economic development of villages by encouraging farmers to take diversified activities like dairy, EMU farming, goat rearing, grape cultivation, horticulture and scientific use of various inputs like fertilizers etc. The foundation assists farmers, especially small and marginal farmers, in receiving timely bank credit.

• The Bank has established Five Mahabank Self Employment Training Institutes (MSETI), one each at Pune, Aurangabad, Nagpur, Nasik and Amravati. These provide training to rural youth and women for self employment. A total of 4605 candidates have been trained by the institutes so far.

• The Mahabank Vidarbha Shetkari Jagruti Abhiyan, a joint effort of Bank of Maharashtra and Hanuman Vyayam Prasarak Mandal has reached out to more than 5750 Farmers in distress in six districts of Vidarbha through counselling and training sessions.

3.6. Technologies used in Bank of Maharashtra

• E-Banking/Net banking.

• Online payments.

• MAHA fast pay.

• E-payment of taxes.

• MAHA e-trade for online trading.

• Funds transfer both inter-bank and intra-bank.

• ATM services.

• Online shopping.

• Online recharges.

• Online reservation etc.

• To withdraw money.

• Completely safe and secure.

• Mobile/Phone banking.

• Balance enquiry.

• Funds transfer both inter-bank and intra-bank.

• View of mobile banking transaction log.

• Synchronization of accounts and beneficiaries.

• Foreign currency exchange rates.

• SMS banking.

• Balance enquiry.

• SMS alert for various things.

• Changing pins.

3.7. Branch Profile

Bank of Maharashtra’s Arni branch started on 25th August 2012. The manager of Bank is Mr. Ankur

Gupta and cashier Mr. M. F. Dafode, and 5 other employees i.e. staff. The branch is located in Shri Swami

Samarth complex, Uttam Talkies compound, Near Bus Stand, Arni-445103. Since it is a new branch so

there is a lot scope for increment. There were total 103 customers of net banking till dated 25 th July 2014.

The following table shows changes in deposits, Total business & Advances.

As on March 13 As on March 14 Increase by

Total Deposits(RS) 5,31,00,000 11,93,00,000 6,62,00,000

Total Business(RS) 7,21,00,000 16,28,00,000 9,07,00,000

Total Advances(RS) 1,90,00,000 4,34,00,000 2,44,00,000

NPA Nil Nil Nil

Table 1: changes in deposits, Total business & Advances of BOM, Arni.

Chapter 4THEORETICAL CONCEPTS

• BANKING TECHNOLOGY

• E-banking

Online banking is an electronic payment system that enables customers of a financial institution to conduct financial transactions on a website operated by the institution, such as a retail bank, virtual bank, credit union or building society. Online banking is also referred as Internet banking, e-banking, virtual banking and by other terms.

To access a financial institution's online banking facility, a customer with Internet access would need to register with the institution for the service, and set up some password (under various names) for customer verification. Financial institutions now routinely allocate customers numbers (also under various names), whether or not customers have indicated an intention to access their online banking facility. Customers' numbers are normally not the same as account numbers, because a number of customer accounts can be linked to the one customer number. The customer can link to the customer number any account which the customer controls, which may be cheque, savings, loan, credit card and other accounts. Customer numbers will also not be the same as any debit or credit card issued by the financial institution to the customer.

To access online banking, a customer would go to the financial institution's secured website, and enter the online banking facility using the customer number and password previously setup. Some financial institutions have set up additional security steps for access to online banking, but there is no consistency to the approach adopted.

• ATM (Automated teller machine)

An automated teller machine or automatic teller machine(ATM), also known as an automated banking machine (ABM), cash machine, cashpoint, cash line, or colloquially hole in the wall is an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions without the need for a human cashier, clerk or bank teller. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN). Using an ATM, customers can access their bank deposit or credit accounts in order to make a variety of transactions such as

cash withdrawals, check balances, or credit mobile phones. If the currency being withdrawn from the ATM is different from that in which the bank account is denominated the money will be converted at an official exchange rate. Thus, ATMs often provide the best possible exchange rates for foreign travellers, and are widely used for this purpose.

USES

• Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc.)

• Printing bank statements

• Updating passbooks

• Cash advances

• Cheque Processing Module

• Paying (in full or partially) the credit balance on a card linked to a specific current account.

• Transferring money between linked accounts (such as transferring between checking and savings accounts)

• Deposit currency recognition, acceptance, and recycling.

• Loading monetary value into stored value cards

• Adding pre-paid cell phone / mobile phone credit.

• Purchasing => Postage stamps, Lottery tickets, Train tickets, Concert tickets, Movie tickets, Shopping mall gift certificates, Gold

• Donating to charities

• Mobile Banking

Mobile banking is a system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or tablet.

Mobile banking differs from mobile payments, which involve the use of a mobile device to pay for goods or services either at the point of sale or remotely, analogously to the use of a debit or credit card to effect an EFTPOS payment.

The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. Mobile banking has until recently (2010) most often been performed via SMS or the mobile web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the mobile device. A recent study (May 2012) by Mapa Research suggests that over a third of banks have mobile device detection upon visiting the banks' main website. A number of things can happen on mobile detection such as redirecting to an app store, redirection to a mobile banking specific website or providing a menu of mobile banking options for the user to choose from.

• SMS Banking

The earliest mobile banking services were offered over SMS, a service known as SMS banking. SMS banking services are operated using both push and pull messages. Push messages are those that the bank chooses to send out to a customer's mobile phone, without the customer initiating a request for the information. Typically push messages could be either Mobile marketing messages or messages alerting an event which happens in the customer's bank account, such as a large withdrawal of funds from the ATM or a large payment using the customer's credit card, etc.

Another type of push message is One-time password (OTPs). OTPs are the latest tool used by financial and banking service providers in the fight against cyber fraud. Instead of relying on traditional memorized passwords, OTPs are requested by consumers each time they want to perform transactions using the online or mobile banking interface. When the request is received the password is sent to the consumer’s phone via SMS. The password is expired once it has been used or once its scheduled life-cycle has expired.

Pull messages are those that are initiated by the customer, using a mobile phone, for obtaining information or performing a transaction in the bank account. Examples of pull

messages for information include an account balance enquiry, or requests for current information like currency exchange rates and deposit interest rates, as published and updated by the bank. The bank’s customer is empowered with the capability to select the list of activities (or alerts) that he/she needs to be informed. This functionality to choose activities can be done either by integrating to the internet banking channel or through the bank’s customer service call Centre.

The convenience of executing simple transactions and sending out information or alerting a customer on the mobile phone is often the overriding factor that dominates over the skeptics who tend to be overly bitten by security concerns.

As a personalized end-user communication instrument, today mobile phones are perhaps the easiest channel on which customers can be reached on the spot, as they carry the mobile phone all the time no matter where they are. Besides, the operation of SMS banking functionality over phone key instructions makes its use very simple. This is quite different from internet banking which can offer broader functionality, but has the limitation of use only when the customer has access to a computer and the Internet. Also, urgent warning messages, such as SMS alerts, are received by the customer instantaneously; unlike other channels such as the post, email, Internet, telephone banking, etc. on which a bank's notifications to the customer involves the risk of delayed delivery and response.

The SMS banking channel also acts as the bank’s means of alerting its customers, especially in an emergency situation; e.g. when there is an ATM fraud happening in the region, the bank can push a mass alert (although not subscribed by all customers) or automatically alert on an individual basis when a predefined ‘abnormal’ transaction happens on a customer’s account using the ATM or credit card. This capability mitigates the risk of fraud going unnoticed for a long time and increases customer confidence in the bank’s information systems.

• ONLINE PAYMENTS

Payments are an indispensable part of our daily transactions, be it a consumer to a business, a business to a consumer or a business to a business. Payments raise the GDP of a country thus it is mandatory that the payment systems of the country are “safe, secure, sound, efficient, accessible and authorize,” as states the mission statement of the Reserve Bank of India’s publication on Payment Systems in India (2009–12). The Reserve Bank of India continually strives towards ensuring the smooth progress of the payments system. In India it is the BPSS (Board for Regulation of Payment and Settlement Systems) which is in charge of regulating these systems. India has multiple payments and settlement systems. RBI Still continues to evolve new payment methods and slowly revamping the payments and settlement capability in India. India supports a variety of electronic payments and settlement system, both Gross as well as Net settlement systems.

The Gross systems is

• Real Time Gross Settlement (RTGS)

The Net settlement systems are;

• ECS - Credit

• ECS - debit

• Credit cards and Debit cards

• National Electronic Funds Transfer (NEFT)

• Immediate Payment Service

The Reserve Bank of India is doing its best to encourage alternative methods of

payments which will bring security and efficiency to the payments system and make the whole process easier for banks. The Indian banking sector has been growing successfully, innovating and trying to adopt and implement electronic payments to enhance the banking system. Though the Indian payment systems have always been dominated by paper-based transactions, e-payments are not far behind. Ever since the introduction of e-payments in India, the banking sector has witnessed growth like never before.

In the case of India, the RBI has played a pivotal role in facilitating e-payments by making it compulsory for banks to route high value transactions through Real Time Gross Settlement (RTGS) and also by introducing NEFT (National Electronic Funds Transfer) which has encouraged individuals and businesses to switch to electronic methods of payment. With the changing times and technology so have changed the methods of payments in India. E-payments in India have been growing at a fast rate of 60% over the last 3 years.

• Electronic Payment and Settlement Systems in India

Due to the efforts of the RBI and the BPSS now over 75% of all transaction volume are in the electronic mode, including both large-value and retail payments. Out of this 75%, 98% come from the RTGS (large-value payments) whereas 2% come from retail payments. This means consumers have not yet accepted this as a regular means of paying their bills and still prefer conventional methods. Retail payments if made via electronic modes are done by ECS (debit and credit), EFT and card payments.

• Electronic Clearing Service (ECS Credit)

It is known as “Credit-push” facility or one-to-many facility. This method is used mainly for large-value or bulk payments where the receiver’s account is credited with the payment from the institution making the payment. Such payments are made on a timely-basis like a year, half a year, etc. and used to pay salaries, dividends or commissions. Over time it has become one of the most convenient methods of making large payments.

• Electronic Clearing Services (ECS Debit)

It is known as many-to-one or “debit-pull” facility. This method is used mainly for small value payments from consumers/ individuals to big organizations or companies. It eliminates the need for paper and instead makes the payment through banks/corporates or government departments. It facilitates individual payments like telephone bills, electricity bills, online and card payments

and insurance payments. Though easy this method lacks popularity because of lack of consumer awareness.

• National Electronic Funds Transfer (NEFT)

NEFT is a facility provided to bank customers to enable them to transfer funds easily and securely on a one-to-one basis. It is done via electronic messages. In order to speed up the transactions there are up to 6 transactions in one day. Even though it is not on real time basis like RTGS (Real Time Gross Settlement), NEFT facilities are available in 30,000 bank branches all over the country and work on a batch mode. NEFT has gained popularity due to it saving on time and the ease with which the transactions can be concluded. This reflects from the fact that 42% of all electronic transactions in the 2008 financial year were NEFT transactions.

Currently, NEFT operates in hourly batches - there are twelve settlements from 8:00 AM to 6:30 PM on week days and six settlements from 8 AM to 1 PM on Saturdays.

Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time. As of 2013, all transactions initiated before 5 PM will be settled on same day. No Transaction on weekly holidays and public holidays.

• Credit cards and Debit cards

India is one of the fastest growing countries in the plastic money segment. Already there are 130 million cards in circulation, which is likely to increase at a very fast pace due to rampant consumerism. India’s card market has been recording a growth rate of 30% in the last 5 years. Card payments form an integral part of e-payments in India because customers make many payments on their card-paying their bills, transferring funds and shopping. Ever since Debit cards entered India, in 1998 they have been growing in number and today they consist of nearly 3/4th of the total number of cards in circulation.

Credit cards have shown a relatively slower growth even though they entered the market one decade before debit cards. Only in the last 5 years has there been an impressive growth in the number of credit cards- by 74.3% between 2004 and 2008. It is expected to grow at a rate of about 60% considering levels of employment and disposable income. Majority of credit card purchases come from expenses on jewelry, dining and shopping.

Another recent innovation in the field of plastic money is co-branded credit cards, which combine many services into one card-where banks and other retail stores, airlines, telecom companies enter into business partnerships. This increases the utility of these cards and hence

they are used not only in ATM’s but also at Point of sale (POS) terminals and while making payments on the net.

• Real-time gross settlement

The acronym 'RTGS' stands for real time gross settlement. The Reserve Bank of India maintains this payment network. RTGS system is a funds transfer mechanism where transfer of money takes place from one bank to another on a 'real time' and on 'gross' basis. This is the fastest possible money transfer system through the banking channel. Settlement in 'real time' means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. 'Gross settlement' means the transaction is settled on one to one basis without bunching with any other transaction. Considering that money transfer takes place in the books of the Reserve Bank of India, the payment is taken as final and irrevocable.

Fees for RTGS vary from bank to bank. RBI has prescribed upper limit for the fees which can be charged by all banks both for NEFT and RTGS. Both the remitting and receiving must have core banking in place to enter into RTGS transactions. Core Banking enabled banks and branches are assigned an Indian Financial System Code (IFSC) for RTGS and NEFT purposes. This is an eleven digit alphanumeric code and unique to each branch of bank. The first four letters indicate the identity of the bank and remaining seven numerals indicate a single branch. This code is provided on the cheque books, which are required for transactions along with recipient's account number.

RTGS is a large value (minimum value of transaction should be 2,00,000) funds transfer system whereby financial intermediaries can settle interbank transfers for their own account as well as for their customers. The system effects final settlement of interbank funds transfers on a continuous, transaction-by-transaction basis throughout the processing day. Customers can access the RTGS facility between 9 am to 4:30 pm (Interbank up to 6:30 pm) on weekdays and 9 am to 2:00 pm (Interbank up to 3:00 pm) on Saturdays. However, the timings that the banks follow may vary depending on the bank branch. Time Varying Charges has been introduced w.e.f. 1 October 2011 by RBI. The basic purpose of RTGS is to facilitate the transactions which need immediate access for the completion of the transaction.

Banks could use balances maintained under the cash reserve ratio (CRR) and the intra-day liquidity (IDL) to be supplied by the central bank, for meeting any eventuality arising out of the real time gross settlement (RTGS). The RBI fixed the IDL limit for banks to three times their net owned fund (NOF).

The IDL will be charged at 25 per transaction entered into by the bank on the RTGS platform. The marketable securities and treasury bills will have to be placed as collateral with a margin of five per cent. However, the apex bank will also impose severe penalties if the IDL is not paid back at the end of the day. No Transaction on weekly holidays and public holidays.

• Immediate Payment Service (IMPS)

Immediate Payment Service (IMPS) is an initiative of National Payments Corporation of India (NPCI). It is a service through which money can be transferred immediately from one account to the other account, within the same bank or accounts across other banks. Upon registration, both the individuals are issued an MMID (Mobile Money Identifier) Code from their respective banks. This is a 7 digit numeric code. First four digits represents bank and last three digits are serial number. To initiate the transaction, the sender in his mobile banking application need to enter the registered mobile number of the receiver, MMID of the receiver and amount to be transferred. Upon successful transaction, the money gets credited in the account of the receiver instantly. This facility is available 24X7 and can be used through mobile banking application. Some banks have also started providing this service through internet banking profile of their customers. Though most banks offer this facility free of cost to encourage paperless payment system, ICICI bank and Axis bank charge for it as per their respective NEFT charges.

Nowadays, money through this service can be transferred directly also by using the receiver's bank account number and IFS code. In such case, neither the receiver of the money needs to be registered for mobile banking service of his bank, nor does he need MMID code. IMPS facility differs from NEFT and RTGS as there is no time limit to carry out the transaction. This facility can be availed 24X7 and on all public and bank holidays including RBI holidays.

• IFSC code

IFSC stands for Indian Financial system code useful for electronic funds settlement systems such as RTGS, NEFT and IMPS. This is an eleven digit alphanumeric code and unique to each branch of bank. The first four letters indicate the identity of the bank and remaining seven numerals indicate a single branch. This code is provided on the cheque books, which are required for transactions along with recipient's account number.

• Security aspects of banking transactions

Banks are developing alternative channels of delivery like ATM, telebanking, remote access, internet banking etc., Some questions that need to be answered are , how can one trust these channels, our personal data and transactions which are driven by technology. Are they reliable and accurate? Is there a way out to independently validate the integrity of information? If we analyze, why the lack of trust exists, we realize that the primary issues center on the following aspects of information security:

• Authentication and identity of user: The act of verifying the identity of a user. How to recognize the person dealing on the net? Can one be sure of his or her identity?

• Confidentiality: How can one be sure that the information transmitted has not been intercepted or viewed by any other party in transit?

• Integrity: How can one ensure that the information sent, received or stored has not been tampered with the modified at any time?

• Non-Repudiation: What is the guarantee that a particular transaction or action took place? Would this hold the tests of court of law?

Following are the kind of frauds that can happen in the emerging banking scenario-• Mail Spoofing: Sending wrong information to bank customers as if it is from authentic

bank sources.• Web Spoofing: Diverting the customers of a bank to an exactly duplicated forged web

site and impersonating those customers on real bank site.• Attacking the User Computer: To take control of that machine.• Attacking a Bank’s Server: To take control of that machine.• Media tapping: Recording the whole transactions of a bank, or customer etc. and

replaying the same for their advantage.• Denying Service: Though the server is available, making it not able to render service, by

poisoning the Network Infrastructure.

There are some prevention mechanisms to minimize the frauds, by using public key infrastructure (PKI). The PKI assures confidentiality, authenticity, and integrity of information. 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 customer’s privacy and protect it against fraud. 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.

Chapter 5RESEARCH METHODOLOGY

• RESEARCH PROCESS

To find out customer needs and their satisfaction by using net banking facility of bank of Maharashtra from Arni branch. The process is as follows-

Figure 1: Research Process

Problem identification

The first step of research is to understand the problem. It is most important stage in applied research as poorly defined problems will not yield useful results. It is rightly said that “a problem well defined is half-solved “Poorly defined problem cause confusion and do not allow the researcher to develop a good research design.

Research Objectives

There should be some objectives related to the problem after defining the problems. After defining objectives, there should be the plan developed for gathering the information.

Research design

Research design is a path for market research project. It is procedure for gaining the information required to solve research problem.

• SOURCE OF DATA

• Secondary data:-

Secondary data can be obtained internally i.e. within the organization. This includes information of customers those using net banking etc.

Under Secondary sources, we tapped information from internal & external sources. We made use of Internet such as search engine w ww .goog l e.co m , www.bankofmaharashtra.in etc. and external

sources including brochures, records n so on.

• Primary data:-

It consists of original collection of data gathered for a specific purpose. It contains questionnaire. Methods for Collecting Primary Data are-

• Observation method

• Survey method

• Personal interview

• Telephonic interview

• Mail survey

• Experimental survey

• Panel survey

Design of Questionnaire

It contains set of question which can be answered by respondent. This questionnaire contains question that can be open ended and close ended.

• RESEARCH DESIGN:

Descriptive research design has been used.

Descriptive or statistical research: provides data about the population or universe being studied. But it can only describe the "who, what, when, where and how" of a situation, not what caused it. Therefore, descriptive research is used when the objective is to provide a systematic description that is as factual and accurate as possible. It provides the number of times something occurs, or frequency, lends itself to statistical calculations such as determining the average number of occurrences or central tendencies. There are three main types of descriptive methods: observational methods, case-study methods and survey methods.

For the purpose of study survey method was used.

Research Plan:

• Data sources:• Primary Data: This data has been collected from net banking customers of Bank of

Maharashtra from Arni branch.• Secondary Data: This data has been collected from Internet, Bank records and Earlier

Reports.

• Research Approaches:Type of research approaches used is: Survey Research.

Surveys represent one of the most common types of quantitative, social science research. In survey research, the researcher selects a sample of respondents from a population and administers a standardized questionnaire to them. The questionnaire, or survey, can be a written document that is completed by the person being surveyed, an online questionnaire, a face-to-face interview, or a telephone interview. Using surveys, it is possible to collect data from large or small populations.

• Research Instruments:Questionnaires (open and closed end questions have been used)

• Interviews• Schedules

4. Contact Methods:

• Personal Interactions with net banking customers of Bank of Maharashtra.

• SAMPLING PLAN:

Sampling Technique: - Nonprobability Convenience Sampling

Non probability can be used when demonstrating that a particular trait exists in the population. It can also be used when the researcher aims to do a qualitative, pilot or exploratory study. It can be used when randomization is impossible like when the population is almost limitless.

For the research purpose convenience sampling was used. It can be defines as a statistical method of drawing representative data by selecting people because of the ease of their volunteering or selecting units because of their availability or easy access.

The advantages of this type of sampling are the availability and the quickness with which data can be gathered. The disadvantages are the risk that the sample might not represent the population as a whole, and it might be biased by volunteers. It is also called accidental sampling.

• Sampling Unit:- net banking customers of Bank of Maharashtra from Arni branch.

• Sampling Frame:- net banking customers of Bank of Maharashtra, Arni branch.

• Sample Size:- 10

• Limitations of the study:

• The time duration for this project was only for a period of 60 days.• The study was limited to the capabilities and willingness of the net banking users in

appropriately answering the questions and information given by them may be correct or may not be correct.

Chapter 6DATA ANALYSIS

ANDINTERPRETATION

6.1. Data analysis

Data Analysis is the process of systematically applying statistical and/or logical techniques to describe and illustrate, condense and recap, and evaluate data. Various analytic procedures “provide a way of drawing inductive inferences from data and distinguishing the signal from the noise present in the data”. While data analysis in qualitative research can include statistical procedures, many times analysis becomes an ongoing iterative process where data is continuously collected and analyzed almost simultaneously. Indeed, researchers generally analyze for patterns in observations through the entire data collection phase. The form of the analysis is deter-mined by the specific qualitative approach taken (field study, content analysis, oral history, biography) and the form of the data (field notes, documents, audiotape and videotape). An essential component of ensuring data integrity is the accurate and appropriate analysis of research findings. Improper statistical analyses distort scientific findings, mislead casual readers, and may negatively influence the public perception of research. Integrity issues are just as relevant to analysis of non-statistical data as well.

6.2. Questionnaires

• Why did you felt need for net banking?

Analysis- 50% of respondents were said that for easy or fast transaction they felt need for net banking. 30% felt need for bill payments, online shopping, money transfer and making recharges. And remaining 20% were felt need for their convenience purpose.

Interpretation – As technology is growing fast so each and every one felt need of using net banking. Also it is very convenient, saves time, easy to use like one can do banking operations by sitting at home only. So there is need for using net banking.

• With bank of Maharashtra’s e-banking, which different banks e-banking facility you used?

Bank Name Number of respondents

State bank of India 8

Bank of India 4

Union bank of Maharashtra 1

Central bank of India 3

Table 2: Different banks e-banking facility

Analysis – Total there were 10 respondents. As shown in above table, there are 8 respondents who use net banking of State Bank of India. 4 respondents use net banking of Bank of India, 3 are using net banking of central bank of India and a single respondent is user of Union bank of Maharashtra. Here there are respondents who use more than one banks net banking facility. But more respondents are users of State bank of India.

Interpretation – There are a lot people who all are having their accounts in more than one bank. It is need of a day. So they take benefits of it and use services provided by these banks. With prior to the Bank of Maharashtra, State Bank of India is the next preferable bank for net banking. From this it reflects that services provided by State bank of India are more convenient to people, also it is trusted bank for them. In this way as per the requirements of respondents they use net banking facility of different banks.

• For which function you used E-banking facility of Bank of Maharashtra?

Functions % of using functionsFunds transfer 70%

Recharges 50%

Online shopping 40%

Bill payment 50%

Reservations 50%

Any other 20%

Table 3: Different functions of E-banking facility of BOM

Figure 2: Percentage of respondents for different functions of e-banking.

Analysis: As shown above, there are 70% of respondents who uses net banking for transfer of funds, 50% used for making various recharges, 40% avail benefit of net banking for online shopping, for bill payments as well as for doing reservations the respondents are 50% who are using net banking. And lastly 20% of respondents use net banking for any other purpose.

Interpretation: Transferring of funds is of two types. One is inter-bank transfer and other one is intra-bank transfer. People find it more convenient by use of net banking so they mostly do this function also for saving time, easy transfer with security and for their suitability they prefer funds transfer online. 50% people use net banking for making recharges because today it’s need. People don’t get time for physically go and make recharge even sometimes they don’t remember when their pack gets expired. So online recharge give different benefits to people by use of net banking. Online shopping is preferable by most of people because of its home delivery in less time period, products quality, lots of varieties n so on functionalities. There are some people who bother to buy online because of security

reason and also some feels whatever we actually feel by toughing product itself, we can’t get that by just looking to it. Talking about bill payments it is one of the important functions to be performed. Here more respondents are between age group 25-45, so they have their business or services. For that they their self pays various bills therefore they use net banking facility. 50% of people use net banking for making reservations of bus, train, airlines n so on. Instead of standing in queue for long hours they find it more convenient to pay and book tickets online.

• Which kind of alternate business channels you use?

Alternate business channels % of respondents

Mobile banking 60%

SMS banking 30%

ATM 100%

Any other 20%

Table 4: Alternate business channels used by respondents

Figure 3: Percentage of Alternative business channels used by Respondents.

Analysis: As shown above, there are 60% of respondents who uses mobile banking for various banking operations. 30% use SMS banking which can be done by sending n receiving of messages, 100% of respondents commonly use ATM as compulsory channel of

business and lastly 20% of respondents use any other alternative channel.

Interpretation: With net banking, todays emerging services are Mobile banking and SMS banking which are growing very faster. Since mobile can be accessed at any time and at any place, respondents are choosing it as their business channel. The functions that are there in net banking are in mobile phone also so people are referring mobile banking. Only 30% of respondents using SMS banking because of some reasons such as lack of awareness, lack of proper knowledge, different codes for different operations which creates some complexity and so on. Another channel is ATM which is used by almost each and every respondent. The main purpose of using it is one can withdraw cash up to a certain limit at any place and at any time. Instead of putting or handling cash with ourselves it’s better to carry a single card. This shows that people are really moving towards technology though there are many who still not feel comfortable of using it but there are many who adopted the change.

• What are the Constraints faced by you in e-banking facility of Bank of Maharashtra?

Constraints % of respondents

Speed 60%

Security 30%

Services 50%

Any other 20%

Table 5: Constraints faced by respondents

Figure 4: Constraints faced by Respondents.

Analysis: As shown above, there are some constraints faced by respondents when using net banking facility of bank of Maharashtra. 60% of respondents are facing the problem of speed, 30% of respondents facing problem in terms of security, 50% are facing problem in service of net banking of Bank of Maharashtra and lastly there are 20% of respondents who are facing problem in some other factor.

Interpretation: With lot benefits of e-banking, there are some constraints faced by respondents. Some are in terms of speed, in terms of security, in terms of services and any other. Respondents feel that speed is major constraint which they have to face. After that the service is also one of the barriers for them. Some people bother about security because it is all about money transactions and there are many hackers who already there in the market. These constraints can be a feedback for organization, it reflects the areas where organization has to improve and fulfill the need of their customers.

•Give suggestions for improvement or suggest more features you needed in e-banking facility of Bank of Maharashtra.

Analysis: There are different responses for this question by respondents. Many of them said that they want android based or smart phones supporting application for mobile banking. Many had said about speed of services, they want improvement in that. Some respondents require all seven day banking facility in a week. Few want more functions in net banking and one respondent talked about the call center for customers.

Interpretation: Bank of Maharashtra doesn’t have mobile banking for android or smart phones. They provide this service for java based phones only. But now days there are very few people who use java based phones, almost everyone have smartphones. So it is a very important suggestion towards improvement. This shows that, in the competitive World Bank of Maharashtra somewhere lags behind. The other factor to be considered is about availability of services to all days in a week. People require this because it can’t be said when and where they get need of banking services. Some respondents need more functions for their easy use in net

banking of Bank of Maharashtra.

• Give your personal view about service of e-banking facility of bank of Maharashtra.

Parameters No. of respondents % of respondents

Best 3 30%

Good 4 40%

Satisfied 2 20%

Poor 1 10%

Total 10 100%

Table 6: Personal view of respondents about net banking facility

Figure 5: Personal view of respondents about net banking facility.

Analysis: As shown in above table, 30% of respondents rated online banking facility of Bank of Maharashtra as best, 40 % rated it as good service, 20% rated it as satisfied service and only 1% rated it as poor.

Interpretation: Most of respondents feel service of Bank of Maharashtra is between good and satisfied. Very few rated as best, this happens because there are various factors which need to be improve. People cannot satisfied with only one bank’s net banking so they move to others and use more than one bank’s net banking at same time.

6.3. Comparing Different banks technology

Parameters BOM SBI ICICI

Funds transfer yes yes yes

IMPS yes yes yes

Balance Enquiry yes yes yes

Open a fixed deposits online

yes yes yes

Credit card service no yes yes

Mobile recharges via SMS

no yes yes

Missed call balance enquiry

no yes yes

Card to card transfer no yes no

Tax payment through ATM

yes no no

Bill payment through ATM

no no yes

E-locker no no yes

Mobile banking for Java based phones Smartphones Smartphones

Table 7: Comparison of different technological services for three banks

Analysis: Above table compares technological services for three banks namely Bank of Maharashtra, State bank of India and ICICI bank. The services which are present in all three banks are funds transfer inter-bank as well as intra-bank, immediate mobile payment services, balance enquiry and opening fixed deposits online. The services which are not there in Bank of Maharashtra but are in other banks are credit card service, mobile recharges via SMS and missed call balance enquiry. State bank of India is only one who provides card to card transfer for ATM. Bank of Maharashtra provides service of tax payments through ATM. Bill payment through ATM and E-locker facility is provided by ICICI bank. And lastly mobile banking application of Bank of Maharashtra is support to java based phones only, and for other two banks it is smartphone or android supported application.

Interpretation: There are various common features or services for all three banks. As compared with others Bank of Maharashtra is somewhat lagging behind in technological services. The services those are present for other banks giving them advantages to grow faster. From this it can be said that there requires a lot improvement in Bank of Maharashtra’s technological aspect. In BOM there is no mobile banking application for smartphones which is one of reason that affecting its overall growth.

6.4. ATM transactions for last three months

No. of outstanding cards as at the end

of month

No. of transactions (Actual)

Amount of transactions (Rs.

million)February 2014 4344322 3778727 9682.77March 2014 4521222 4182923 10980.67April 2014 4572622 3909719 10349.87

Increase/decrease for March 2014

176900 404196 1297.9

Increase/decrease for April 2014

51400 -273204 -630.8

Table 8: debit card transactions of bank of Maharashtra.

Figure 6: debit card transactions of bank of Maharashtra for three months

Analysis: Above shown the different transactions of debit card of bank of Maharashtra for three months. Number of the outstanding cards for February 2014 was 4344322 and as on march 2014 it becomes 4521222. The number of cards increase in one month is 176900. Also for the month April it becomes 4572622 increases by 51400. The number of transactions actually happened for month February is 3778727, for month March it is 4182923 that is increases by 404196. The number of actual transactions for month April is 3909719 which is decrease by 273204 from last month.

Interpretation: As we are seeing the number of cards user are getting larger and larger. In a single month it is going to rise by 176900 cards which is larger growth. As number of cards increase the transactions through them get increase and amount of transactions also get changed. These all are dependent to each other. This shows market is growing and banks are making more customers by providing better services.

6.5. National electronic funds transfer of Bank of Maharashtra

Total outward debits Received inward creditsNo. of

transactionsAmount (Rs.

million)No. of

transactionsAmount (Rs.

million)April 2014 567251 24072.75 916703 43055.35May 2014 553691 27548.01 998525 39296.34

Increase/decrease for May 2014

-13560 3475.26 81822 -3759.01

Table 9: National electronic funds transfer of Bank of Maharashtra

Figure 7: debit and credit NEFT of bank of Maharashtra for two months

Analysis: As shown above, the total outward debit is less as compared with total inward credit. For the total outward debit number of transactions for month April is 567251 and for month May is 553691. The transactions are lower by 13560. Similarly for the inward credit number of transactions for month April is 916703 and for month May is 998525. The transactions are increase by 81822.

6.6. Real time gross settlement of Bank of Maharashtra

Total outward debits Received inward credits

No. of transactions

Amount (Rs. billion)

No. of transactions

Amount (Rs. billion)

April 2014 89593 386.77 65237 377.59May 2014 93905 308.53 66974 284.77

Increase/decrease for May 2014

4312 -78.24 1737 -92.82

Table 10: Real time gross settlement of Bank of Maharashtra

Figure 8: debit and credit RTGS of bank of Maharashtra for two months

Analysis: As shown above, the total outward debit is increase as compared with total inward credit. For the total outward debit number of transactions for month April is 89593 and for month May is 93905. The transactions are increases by 4312. Similarly for the inward credit number of transactions for month April is 65237 and for month May is 66974. The transactions are increase by 1737.

Chapter 7

LEARNING OUTCOMES OF PROJECT

ANDCONTRIBUTION TO HOST

ORGANIZATION

• LEARNING OUTCOME OF PROJECT

• This project helped to understand the need for innovations in banking to create greater value for customers and enhanced efficiency for the banks.

• Analyzed the changes occurring in the Indian banking sector and how these changes are likely to influence the way banking will be done in the future and to what degree is bank using proven technologies to enhance performance.

• This project helped to find effectiveness of the systems that are being used in banks.

• While the SIP, experienced the actual workings of bank of Maharashtra with respect to banking technologies and practical exposure of project title, which added value to my knowledge.

• CONTRIBUTION TO HOST ORGANIZATION

This project will help bank of Maharashtra to get information about their services regarding banking technology, help in customer relationship management and also useful for improvements and better services.

The research conducted was among the customers of bank of Maharashtra so this project gives different views of customers, their satisfaction and dissatisfaction also help to

know areas where bank can perform well.

Chapter 8OBSERVATIONS

ANDFINDINGS

8.1. OBSERVATIONS

• To survive in the competition the information and communication technology significantly contributed to the exponential growth and profit of financial institutions worldwide. Technology is the key to move towards providing integrated banking services to customers.

• The simplification of work procedures and automation of data processing enabled banks to increase their operations without additional cost towards transaction processing and manpower. This enabled bank to expand their business with available infrastructure thereby reducing the cost.

• The introduction of information technology, enabled value added services, issuing letter of credit, financial guarantees to the customer, portfolio management, custodial services and risk control services to the customers increased the revenue of the banks through non-fund activities.

• Availability of a wide range of inquiry facilities, assisting the bank in business development and follow up.

• There are immediate replies to customer queries without reference to ledger keeper as terminals are provided to managers and chief managers.

• Fast and up to date information transfer enabling speedier decisions by interconnecting computerized branches and controlling offices.

• Use of ATM and E-banking reduces cost seven times from that of manual handling.

• The cost of maintaining IT services has become major item of revenue expenditure. The personnel and hardware depreciation forms major part of the cost to bank. In view of this, the banks are under pressure not only to stay in competition with other banks but develop additional innovative services to maintain profitability of banks.

8.2. FINDINGS

• 50% of the respondents felt need of net banking for the sake of their convenience, easy transaction and time saving. Others felt need for money transfer, online shopping, online recharges etc.

• With the net banking facility of Bank of Maharashtra, 80% of respondents use net banking of State bank of India.

• 70% of Respondents used net banking facility for funds transfer within inter-banks and intra-banks. With this prior facility they also do reservations, pay bills online, make recharges and do online shopping.

• 100% respondents have ATM cards and they use it as an alternate channel of business. It shows that ATM is the best channel of business. As compared with this there are less number of respondent who use mobile banking and SMS banking.

• Speed of the services is the main constraint faced by the respondents in net banking of Bank of Maharashtra. Security and services are also constraints faced by some other respondents.

• E-banking facility of Bank of Maharashtra needs to improve. The scope of improvement are - development of android based application for mobile banking, speed of services, adding of some more features in e-banking, 24*7 call center facility for customers queries and availability of seven day service facility in a week.

• The overall service facility of bank of Maharashtra is good and satisfied instead of excellent and best. The bank needs to improve.

• Comparing services of bank of Maharashtra with other banks, State bank of India and ICICI banks are on the top. All banks have some unique facility that other don’t have. Some facilities are common for every bank.

• Card to card transfer via ATM is the service provided by State bank of India only.

• One can pay taxes through ATM in Bank of Maharashtra only.

• Bill payments through ATM and e-locker facility are available only in ICICI bank.

• The total Number of outstanding ATM cards as at the end of month April 2014 was 4572622. The number of actual transactions happened in month April are 3909719. And the amount of transaction was Rs. 10349.87 million.

• In the total outward debits for national electronic funds transfer (NEFT) on May 2014, the numbers of transactions were 553691 of amount Rs. 27548.01 million.

• In the total inward credit for national electronic funds transfer (NEFT) on May 2014, the numbers of transactions were 998525 of amount Rs. 39296.34 million.

• In the total outward debits for Real time gross settlement (RTGS) on May 2014, the numbers of transactions were 93905 of amount Rs. 308.53 billion.

• In the total inward credit for Real time gross settlement (RTGS) on May 2014, the numbers of transactions were 66974 of amount Rs. 284.77 billion.

Chapter 9CONCLUSION, SUGGESTIONS

ANDLIMITATIONS

9.1. CONCLUSION

After conducting an extensive research on E-banking services of Bank of

Maharashtra in Arni region, it can be concluded that bank provides various different services which are giving benefits to its customers. Because of various emerging technologies the working of banks as well as of their customers is simplified. Rather than going in a bank customers are able to do almost every banking operations from anywhere, anytime and anyplace. The speed of transactions is also increased. The simplification of work procedures and automation of data processing enabled banks to increase their operations without additional cost towards transaction processing and manpower. This enabled bank to expand their business with available infrastructure thereby reducing the cost. Use of ATM and E-banking reduces cost seven times from that of manual handling. Comparing with other banks, Bank of Maharashtra growing very fast and has stand in competitive world of banking.

9.2. SUGGESTIONS

• The focus of bank should be for increasing its net banking customer which will give it long term as well as short term benefit. This bank will do for it sure. It can be done by making some awareness among people, conducting different workshops on E-banking if

they are lacking in knowledge.

• The bank has to concentrate on its technological services. More functions or services should be added in e-banking. This will need proper planning and a good team.

• The central branch should hire intelligent software engineers for its application development department from which a newer technology will generate and more features can be added to existing.

• The name of Bank of Maharashtra is well known among population as it is nationalized bank. Thus it can help to increase customer base. By introducing new schemes for customers they can get benefited. With a name and proper promotion strategy the bank can build huge base.

9.3. LIMITATIONS

•The secondary data available was limited.

•Accuracy of interpretation is dependent upon availability of data.

•Some of information is confidential in nature hence its non-availability limited scope of project.

•The time duration for this project was only for a period of 60 days which was short duration.

•The study was limited to the capabilities and willingness of the net banking users in appropriately answering the questions and information given by them may be correct or may not be correct.

Chapter 10REFERENCES

REFERENCES

Reference books

• Macmillan: “Electronic Banking and Information technology”.

• Chawala and Sondhi: “Research Methodology concepts and cases”.

Websites

• http://www.bankofmaharashtra.in accessed on 2nd June-14

• http://www.sbi.co.in accessed on 30th June-14

• http://www.rbi.in accessed on 5h June-14

• http://www.wikipedia.com accessed on 5th June-14

APPENDICES

Questionnaire

• Your name - ________________________________________.

• Why did you felt need for net banking?

_________________________________________________________________________________________________________________________________________.

• With BOM’s E-banking, which different banks E-banking facility you used? ____________________________________________________________________.

• For which function you used E-banking facility of bank of Maharashtra?

• Funds transfer d. Bill payment

• Recharges e. Reservations

• Online shopping f. Any other

• Which kind of alternate business channels you used?

• Mobile banking c. ATM

• Sms banking d. Any other

• What are the constraints faced by the customers of E-banking of bank of Maharashtra?

• Speed c. Service

• Security d. any other

• Give suggestions for improvement or suggest more features you needed in E-banking facility of bank of Maharashtra.

_________________________________________________________________________________________________________________________________________.

• Give your personal view about service of E-banking facility of bank of Maharashtra.

_________________________________________________________________________________________________________________________________________.