INTRODUCTION TO THE STUDY

Definition
As per Section 5(b) of the Banking Regulation Act, 1949, "banking" means the
accepting, for the purpose of lending or investment, of deposits of money from
the public, repayable on demand or otherwise, and withdraw-able by cheque,
draft, and order or otherwise.
History Of Banking In India
The origin of western type commercial Banking in India dates back to the 18th
century. The story of banking starts from Bank of Hindustan established in 1770
and it was first bank at Calcutta under European management. From Bank of
Hindustan in 1770, the evolution of banking in India can be divided into three
different periods as follows:
Phase I: Early phase of primitive Indian banks to Nationalization of Banks in 1969
Phase II: From Nationalization of India banks in 1969 up to advent of
liberalization and banking reforms in 1991
Phase III: From Indian Financial and Banking Sector Reforms 1991 onward
In 1786 General Bank of India was set up. Since Calcutta was the most active
trading port in India, mainly due to the trade of the British Empire, it became a
banking center. Three Presidency banks were set up under charters from the
British East India Company- Bank of Calcutta, Bank of Bombay and the Bank of
Madras. These worked as quasi central banks in India for many years.
The Bank of Calcutta established in 1806 immediately became Bank of Bengal.
In 1921 these 3 banks merged with each other and Imperial Bank of India got
birth. Imperial Bank of India was later renamed in 1955 as the State Bank of
India. Thus, State bank of India is the oldest Bank of India.
Next came Allahabad Bank which was established in 1865 and working even
today. The oldest Public Sector Bank in India having branches all over India and

serving the customers for the last 145 years is Allahabad Bank. Allahabad bank
is also known as one of Indias Oldest Joint Stock Bank. However, the Oldest
Joint Stock bank of India was Bank of Upper India established in 1863 and failed
in 1913.
The first Bank of India with Limited Liability to be managed by Indian Board was
Oudh Commercial Bank. It was established in 1881 at Faizabad. This bank failed
in 1958. The first bank purely managed by Indians was Punjab National Bank,
established in Lahore in 1895. The Punjab national Bank has not only survived till
date but also is one of the largest banks in India. However, the first Indian
commercial bank which was wholly owned and managed by Indians was Central
Bank of India which was established in 1911. So, Central Bank of India is called
India First Truly Swedish bank.
Types of Banks
The focus of banking is varied, the needs diverse and methods different. Thus,
we need distinctive kinds of banks to cater to the above-mentioned complexities.
Deposit-taking institutions take the form of commercial banks, which accept
deposits and make commercial, real estate, and other loans. There are also
mutual savings banks, which accept deposits and make mortgage and other
types of loans. Another type is credit unions, which are cooperative organizations
that issue share certificates and make member (consumer) and other loans.
The banking industry can be divided into following sectors, based on the clientele
served and products and services offered:
1.
2.
3.
4.
5.
6.

Retail Banks
Commercial banks
Cooperative banks
Investment Banks
Specialized banks
Central banks
Retail Banks

Retail banks provide basic banking services to individual consumers. Examples

include savings banks, savings and loan associations, and recurring and fixed
deposits. Products and services include safe deposit boxes, checking and
savings accounting, certificates of deposit (CDs), mortgages, personal, consumer
and car loans.
Commercial Banks
Banking means accepting deposits of money from the public for the purpose of
lending or investment. Commercial Banks provide financial services to
businesses, including credit and debit cards, bank accounts, deposits and loans,
and secured and unsecured loans. Due to deregulation, commercial banks are
also competing more with investment banks in money market operations, bond
underwriting, and financial advisory work. Commercial banks in modern capitalist
societies act as financial intermediaries, raising funds from depositors and
lending the same funds to borrowers. The depositors claims against the bank,
their deposits, are liquid, meaning banks are expected to redeem deposits on
demand, instantly.
Banks claims against their borrowers are much less liquid, giving borrowers a
much longer span of time to repay money owed banks. Because a bank cannot
immediately reclaim money lent to borrowers, it may face bankruptcy if all its
depositors show up on a given day to withdraw all their money.
There are two types of commercial banks, public sector and private sector banks.
Public Sector Banks:
Public sectors banks are those in which the government has a major stake and
they usually need to emphasize on social objectives than on profitability.

Private sector banks:

Private sector banks are owned, managed and controlled by private promoters
and they are free to operate as per market forces.
Investment Banks:
An investment bank is a financial institution that assists individuals, corporations
and governments in raising capital by underwriting and/or acting as the client's
agent in the issuance of securities. An investment bank may also assist
companies involved in mergers and acquisitions, and provide ancillary services
such as market making, trading of derivatives, fixed income instruments, foreign
exchange, commodities, and equity securities.
Investment banks aid companies in acquiring funds and they provide advice for a
wide range of transactions. These banks also offer financial consulting services
to companies and give advice on mergers and acquisitions and management of
public assets.
Cooperative Banks:
Cooperative Banks are governed by the provisions of State Cooperative
Societies Act and meant essentially for providing cheap credit to their members.
It is an important source of rural credit i.e., agricultural financing in India.
Specialized Banks:
Specialized banks are foreign exchange banks, industrial banks, development
banks, export-import banks catering to specific needs of these unique activities.
These banks provide financial aid to industries, heavy turnkey projects and
foreign trade.

RBI (Reserve Bank of India)

The Reserve Bank of India is India's central banking institution, which controls
the monetary policy of the Indian rupee. It commenced its operations on 1 April
1935 during the British Rule in accordance with the provisions of the Reserve
Bank of India Act, 1934. The original share capital was divided into shares of 100
each

fully

paid,

which

were

initially

owned

entirely

by

private

shareholders. Following India's independence on 15 August 1947, the RBI was

nationalised on 1 January 1949.
The RBI plays an important part in the Development Strategy of the Government
of India. It is a member bank of the Asian Clearing Union. The general
superintendence and direction of the RBI is entrusted with the 21-member
Central Board of Directors: the Governor, 4 Deputy Governors, 2 Finance
Ministry representatives, 10 government-nominated directors to represent
important elements from India's economy, and 4 directors to represent local
boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of
these local boards consists of 5 members who represent regional interests, and
the interests of co-operative and indigenous banks.
The bank is also active in promoting financial inclusion policy and is a leading
member of the Alliance for Financial Inclusion (AFI).
The bank is often referred to by the name Mint Street.

History
19351950
The Reserve Bank of India was founded on 1 April 1935 to respond to economic
troubles

after

the First

World

War. The

Reserve

Bank

of

India

was

conceptualized based on the guidelines presented by the Central Legislative

Assembly passed these guidelines as the RBI Act 1934. RBI was conceptualized
as per the guidelines, working style and outlook presented by Dr B R
Ambedkar in his book. It was titled The Problem of the Rupee Its origin and its
solution and presented to the Hilton Young Commission. The bank was set up

based on the recommendations of the 1926 Royal Commission on Indian

Currency and Finance, also known as the HiltonYoung Commission. The
original choice for the seal of RBI was The East India Company Double Mohur,
with the sketch of the Lion and Palm Tree. However it was decided to replace the
lion with the tiger, the national animal of India. The Preamble of the RBI
describes its basic functions to regulate the issue of bank notes, keep reserves to
secure monetary stability in India, and generally to operate the currency and
credit system in the best interests of the country. The Central Office of the RBI
was established in Calcutta (now Kolkata), but was moved to Bombay (now
Mumbai) in 1937. The RBI also acted as Burma's central bank, except during the
years of the Japanese occupation of Burma (194245), until April 1947, even
though Burma seceded from the Indian Union in 1937. After the Partition of
India in 1947, the bank served as the central bank for Pakistan until June 1948
when the State Bank of Pakistan commenced operations. Though set up as a
shareholders bank, the RBI has been fully owned by the Government of
India since its nationalization in 1949.
19501960
In the 1950s, the Indian government, under its first Prime Minister Jawaharlal
Nehru, developed a centrally planned economic policy that focused on the
agricultural sector. The administration nationalized commercial banks and
established, based on the Banking Companies Act of 1949 (later called the
Banking Regulation Act), a central bank regulation as part of the RBI.
Furthermore, the central bank was ordered to support economic plan with loans.
19601969
As a result of bank crashes, the RBI was requested to establish and monitor a
deposit insurance system. It should restore the trust in the national bank system
and was initialized on 7 December 1961. The Indian government found funds to
promote the economy and used the slogan "Developing Banking". The
government of India restructured the national bank market and nationalized a lot

of institutes. As a result, the RBI had to play the central part of control and
support of this public banking sector.
19691985
In 1969, the Indira Gandhi-headed government nationalized 14 major commercial
banks. Upon Gandhi's return to in 1980, a further six banks were
nationalized. The regulation of the economy and especially the financial sector
was reinforced by the Government of India in the 1970s and 1980s. The central
bank became the central player and increased its policies for a lot of tasks like
interests, reserve ratio and visible deposits. These measures aimed at better
economic development and had a huge effect on the company policy of the
institutes. The banks lent money in selected sectors, like agri-business and small
trade companies.
The branch was forced to establish two new offices in the country for every newly
established office in a town. The oil crises in 1973 resulted in increasing inflation,
and the RBI restricted monetary policy to reduce the effects.
19851991
A lot of committees analysed the Indian economy between 1985 and 1991. Their
results had an effect on the RBI. The Board for Industrial and Financial
Reconstruction, theIndira Gandhi Institute of Development Research and
the Security & Exchange Board of India investigated the national economy as a
whole, and the security and exchange board proposed better methods for more
effective markets and the protection of investor interests. The Indian financial
market was a leading example for so-called "financial repression" (Mackinnon
and Shaw). The Discount and Finance House of India began its operations on
the monetary market in April 1988; the National Housing Bank, founded in July
1988, was forced to invest in the property market and a new financial law
improved the versatility of direct deposit by more security measures and
liberalisation.

19912000
The national economy contracted in July 1991 as the Indian rupee was
devalued. The currency lost 18% relative to the US dollar, and the Narsimham
Committee advised restructuring the financial sector by a temporal reduced
reserve ratio as well as the statutory liquidity ratio. New guidelines were
published in 1993 to establish a private banking sector. This turning point should
reinforce the market and was often called neo-liberal. The central bank
deregulated bank interests and some sectors of the financial market like the trust
and property markets. This first phase was a success and the central
government forced a diversity liberalisation to diversify owner structures in 1998.
The National Stock Exchange of India took the trade on in June 1994 and the
RBI allowed nationalized banks in July to interact with the capital market to
reinforce their capital base. The central bank founded a subsidiary company
the Bharatiya Reserve Bank Note Mudran Private Limitedon 3 February 1995
to produce banknotes.
Since 2000
The Foreign Exchange Management Act from 1999 came into force in June
2000. It should improve the item in 20042005 (National Electronic Fund
Transfer). The Security Printing & Minting Corporation of India Ltd., a merger of
nine institutions, was founded in 2006 and produces banknotes and coins.
The national economy's growth rate came down to 5.8% in the last quarter of
20082009 and the central bank promotes the economic development.

Public sector bank

A bank in which the government holds a major portion of the shares is known as
public sector bank. Say for example, SBI is public sector bank. The government
holding in this bank is 58.60%. Similarly PNB is a public sector bank. The
government holds a stake of 58.87%. Usually, in public sector banks,
government holdings are more than 50 per cent. Nationalized banks are public
sector banks. In nationalized banks the government controls the bank. Some
examples are SBI, PNB etc.
There

are

currently

27 public

sector banks

in India out

of

which

19

are nationalized banks and 6 are SBI and its associate banks, and rest two
are IDBI Bank and Bharatiya Mahila Bank, which are categorized as other public
sector banks. There are total 93 commercial banks in India.
List of public sector bank:
1. State Bank of India
State Bank of India (SBI) is an Indian multinational, public sector banking
and financial services company. It is a government-owned corporation with
its headquarters in Mumbai, Maharashtra. As of 2014-15, it had assets of Rs.
20.480 trillion (US$300 billion) and more than 14,000 branches, including
191 foreign offices spread across 36 countries, making it the largest banking
and financial services company in India by assets. The company is ranked
232nd on the Fortune Global 500 list of the world's biggest corporations as of
2016.
2. Allahabad Bank
Allahabad Bank is a nationalized bank with its headquarters in Kolkata, India.
It is the oldest joint stock bank in India. On 24 April 2014, the bank entered
into its 150th year of establishment. It was founded in Allahabadin 1865.
3. Andhara Bank

Andhra Bank is a medium-sized public sector bank (PSB) of India, with a

network of 2803 branches, 4 extension counters, 38 satellite offices and
3636 automated teller machines (ATMs) as of 31 Mar 2016. During 201112,
the bank entered the states of Tripura and Himachal Pradesh. The bank now
operates in 25 states and three Union Territories. Andhra Bank has its
headquarters in Hyderabad, India.
4. Bank of India
Bank of India is commercial bank with headquarters in Mumbai,
Maharashtra, India. Founded in 1906, it has been government owned since
nationalization in 1969. Bank of India has 4828 branches as on 31 December
2013, including 56 offices outside India, which includes five subsidiaries, five
representative offices, and one joint venture.
5. Bank of Baroda
Bank of Baroda is an Indian state-owned banking and financial services
company headquartered in Vadodara (earlier known as Baroda) in Gujarat,
India. It is the second largest bank in India, next to State Bank of India. Its
headquarters is in Vadodara, it has a corporate office in the Bandra Kurla
Complex in Mumbai. Bank of Baroda is one of the Big Four banks of India,
along with ICICI Bank, State Bank of India and Punjab National Bank.
6. Bank of Maharashtra
Bank of Maharashtra is a major public sector bank in India. Government of
India holds 81.61% of the total shares. The bank has 15 million customers
across the length and breadth of the country served through 1895 branches
as of 5 April 2016. It has largest network of branches by any public sector
bank in the state of Maharashtra.

7. Canara Bank
Canara Bank is an Indian state-owned bank headquartered in Bangalore,
Karnataka. It was established at Mangalore in 1906, making it one of the
oldest banks in the country. The government nationalized the bank in 1969.

As of November 2015, the bank had a network of 5784 branches and more
than 9153 ATMs spread across India. The bank also has offices abroad in
London, Hong Kong, Moscow, Shanghai, Doha, Bahrain, South Africa, Dubai,
and New York.
8. Central Bank of India
Central Bank of India, a government-owned bank, is one of the oldest and
largest commercial banks in India. It is based inMumbai which is the financial
capital of India and capital city of state of Maharashtra. The bank has 4700
branches, 5000 ATM's and 4 extension counters across 27 Indian states and
three Union Territories.
9. Corporation Bank
Corporation Bank is a public sector banking company headquartered in
Mangalore, India. The bank has pan-India presence with 8,000 functional
units comprising 2200 branches, 1800+ ATMs and 3,000 branchless
banking units as of 30 January 2015.
10. Dena Bank
Dena Bank headquartered in Mumbai, is owned by the Government of India,
and as per latest data the total branch network stands at 1,773 and plans to
open 404 new branches in FY 2015-16. The bank was founded in 1938 and
the Indian government nationalized it in 1969.
11. Indian Bank
Indian Bank is an Indian state-owned financial services company established
in 1907 and headquartered in Chennai, India. It has 20,140 employees, 2565
branches and is one of the top performing public sector banks in India. It has
overseas branches in Colombo and Jaffna in Sri Lanka, and in Singapore,
and 223 correspondent banks in 71 countries. Since 1969 the Government of
India has owned the bank.
12. Indian Overseas Bank

Indian Overseas Bank is a major public sector bank based in Chennai

(Madras), with about 3700 domestic branches, including 1150 branches
in Tamil Nadu, 3 extension counters, and eight branches and offices
overseas as of 30 September 2014.
13. Oriental Bank of Commerce
Oriental Bank of Commerce is an India-based bank established in Lahore
(then the city of British India, and currently in Pakistan), is one of the public
sector banks in India.
14. Punjab & Sindh Bank
Punjab & Sind Bank is a government-owned bank (79.62%), with
headquarters in New Delhi. Of its 1466 branches spread throughout India,
623 branches are in Punjab state.
15. Punjab National Bank
Punjab National Bank is an Indian multinational banking and financial
services company. It is a state-owned corporation based inNew Delhi, India.
Founded in 1894, the bank has over 6,968 branches and over
9,656 ATMs across 764 cities. It serves over 80 million customers.
16. Syndicate Bank
Syndicate Bank is one of the oldest and major commercial banks of India. It
was founded by T M A Pai, Upendra Pai and Vaman Kudva. At the time of its
establishment, the bank was known as Canara Industrial and Banking
Syndicate Limited. The bank, along with 13 major commercial banks of India,
was nationalised on 19 July 1969, by the Government of India. The Bank is
headquartered in Manipal, Karnataka, India
17. UCO Bank
UCO Bank formerly United Commercial Bank, established in 1943 in Kolkata,
is a major government-owned commercial bank of India. During FY 2013-14,
its total business was Rs. 4.55 lakh crore.

18. Union Bank of India

Union Bank of India is one of the largest government-owned banks of India
(the government owns 63.44% of its share capital). It is listed on the Forbes
2000, and has assets of USD 13.45 billion. All the bank's branches have
been networked with its 6909 ATMs as on 30 September 2015.
19. United Bank of India
United Bank of India is an Indian government-owned financial services
company headquartered in Kolkata, West Bengal, India. Presently the bank
has a three-tier organizational setup consisting of its Head office in Kolkata,
35 Regional offices and 2005 branches spread all over India.
20. Vijaya Bank
Vijaya Bank is a fastest growing Public Sector Bank with its Corporate Office
in Bangalore, Karnataka, India. It is one of the nationalised banks in India.
The Bank offers a wide range of financial products and services to the
customers through its various delivery channels. The Bank has a network of
1900 branches (August 2016) throughout the country and over 3500
customer touch points including 1651 ATMs.

Private sector bank

Private Sector Banks are those Banks where the management is controlled by
Private individuals and Government does not have any say in the management
of these banks maximizing profit is the basic motto. A public sector bank also
looks for funding developmental work in the country as the government has a
majority share in it. The first objective would always be to make profit.
Every organization whether private or public is here to make profits so that it
could justify their existence. But public sector banks involve public also. Public
here means common people like us.

Initially all the banks in India were private banks, which were founded in the preindependence era to cater to the banking needs of the people. In 1921, three
major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras, merged
to form Imperial Bank of India. In 1935, the Reserve Bank of India (RBI) was
established and it took over the central banking responsibilities from the Imperial
Bank of India, transferring commercial banking functions completely to IBI. In
1955, after the declaration of first-five year plan, Imperial Bank of India was
subsequently transformed into State Bank of India (SBI). Following this, occurred
the nationalization of major banks in India on 19 July 1969. The Government of
India issued an ordinance and nationalized the 14 largest commercial banks of
India, including Punjab National Bank (PNB), Allahabad Bank, Canara Bank,
Central Bank of India, etc. Thus, public sector banks revived to take up leading
role in the banking structure. In 1980, the GOI nationalized 6 more commercial
banks, with control over 91% of banking business of India. In 1994, the Reserve
Bank Of India issued a policy of liberalization to license limited number of private
banks, which came to be known as New Generation tech-savvy banks. Global
Trust Bank was, thus, the first private bank after liberalization; it was later
amalgamated with Oriental Bank of Commerce (OBC). Then Housing
Development Finance Corporation Limited (HDFC) became the first (still existing)
to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set
up a bank in the private sector. At present, Private Banks in India include leading
banks like ICICI Banks, ING Vysya Bank, Jammu & Kashmir Bank, Karnataka
Bank, Kotak Mahindra Bank, SBI Commercial and International Bank, etc.
Undoubtedly, being tech-savvy and full of expertise, 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.
List of private banks

1.

Axis Bank

12.

Karnataka Bank

2.

Bandhan Bank

13.

IndusInd Bank

3.

Catholic Syrian Bank

14.

Jammu and Kashmir Bank

4.

City Union Bank

15.

Karur Vysya Bank

5.

Dhanlaxmi Bank

16.

Kotak Mahindra Bank

6.

DCB Bank

17.

Lakshmi Vilas Bank

7.

Federal Bank

18.

Nainital Bank

8.

HDFC Bank

19.

RBL Bank

9.

HSBC Bank

20.

South Indian Bank

10.

ICICI Bank

21.

Yes bank

11.

IDFC Bank

22.

Citi Bank

23.
24.
25.

26. INTRODUCTION TO THE TOPIC

27.
28. Online banking (OLB) 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.
29.
30. 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. The password for online banking is normally not the same as
for telephone banking.
31.
32. 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.
33.
34. 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.
35.
36. 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.
37.

38.
39.
40. Definition Of E-Banking
41. Electronic Banking in simple terms means it does not involve any physical
exchange of money but it's all done electronically, from one account to
another, using the Internet. Internet Banking is just like normal banking,
with one big exception. You don't have to go to the bank for transactions.
Instead you can access your account anytime and from any part of the
world and do so when you have the time, and not when the bank is open.
For busy executives, students, and homemakers e-banking is a virtual
blessing.
42.
43. Electronic banking also known as electronic funds transfer (EFT) is simply
the use of electronic means to transfer funds directly from one account to
another rather than by cheque or cash. You can use electronic funds
transfer to:

Have your paycheck deposited directly into your bank or credit union check
Withdraw money from your checking account from an ATM machine with a

personal identification number (PIN) at your convenience, day or night.

Instruct your bank or credit union to automatically pay certain monthly bills from

your account, such as your auto loan or your mortgage payment.

Have the bank or credit union transfer funds each month from your checking

account to your mutual fund account.

Have your government social security benefits check or your tax refund

deposited directly into your checking account.

Buy groceries, gasoline and other purchases at the point-of sale, using a check

card rather than cash, credit or a personal check.

Use a smart card with a prepaid amount of money embedded in it for use instead
of cash at a pay phone, expressway road toll, or on college campuses at the

library's photocopy machine or bookstores.

Use your computer and personal finance software to coordinate your total
personal financial management process, integrating data and activities related to

your income, spending, saving, investing, recordkeeping, bill-paying and taxes,

along with basic financial analysis and decision making.
44.
45. Evolution Of E-Banking
46. E-banking came into being in UK and USA in 1920s. It became
prominently popular during 1960s through electronic funds transfers and
credit cards. The concept of web-based banking came into existence in
Europe and USA in the beginning of 1980s. It has been estimated that
around 40 percent of banking transaction would be done through Net.
47.
48. Banks And The World Wide Web
49. In the 1990s banks realized that the rising popularity of the World Wide
Web gave them an added opportunity to advertise their services. Initially
they used the Web as another brochure without interaction with the
customer. Early sites featured pictures of the bank's officers or buildings
and provided customers with maps of branches and ATM locations phone
numbers to call for further information and simple listings of products.
50.
51. Interactive Banking On The Web
52. Wells Fargo was the first U.S. bank to add account services to its website
in 1995. Other banks quickly followed suit. That same year Presidential
became the first bank in the United States to open bank accounts over the
Internet. According to research by Online Banking Report by the end of
1999, less than 0.4% of households in the U.S. were using online banking.
At the beginning of 2004, some 33 million U.S. households (31% of the
market) were using one form or another of online banking. Five years later
47% of Americans were banking online according to a survey by Gartner
Group. Meanwhile in the UK e-banking grew its reach from 63% to 70% of
Internet users between 2011 and 2012.
53.
54. Research Methodology

55. Research Methodology includes the two sources of data:

Primary Data:
Primary data collected through survey by questionnaire structured methods with

1
2

limited number of respondents

Though sample method by 100 random customers.
Research Design
Sample Size 100
Sampling Method Convenient Sampling Method
Secondary Data:
Secondary data collected through various portal of website and reference books
56.
57.
58. E-Banking In India
59. In India e-banking is of fairly recent origin. The traditional model for
banking has been through branch banking. Only in the early 1990s there
has been start of non-branch banking services. The good old manual
systems on which Indian Banking depended upon for centuries seem to
have no place today.
60. The credit of launching internet banking in India goes to ICICI Bank.
Citibank and HDFC Bank followed with internet banking services in 1999.
Several initiatives have been taken by the Government of India as well as
the Reserve Bank to facilitate the development of e-banking in India. The
Government of India enacted the IT Act, 2000 with effect from October 17,
2000 which provided legal recognition to electronic transactions and other
means of electronic commerce.
61.
62. The Reserve Bank is monitoring and reviewing the legal and other
requirements of e-banking on a continuous basis to ensure that e-banking
would develop on sound lines and e-banking related challenges would not
pose a threat to financial stability. A high level Committee under
chairmanship of Dr. K.C. Chakrabarty and members from IIT, IIM, IDRBT,
Banks and the Reserve Bank prepared the IT Vision Document- 2011-17
for the Reserve Bank and banks which provides an indicative roadmap for
enhanced usage of IT in the banking sector.

63.
64. To cope with the pressure of growing competition Indian commercial
banks have adopted several initiatives and e-banking is one of them. The
competition has been especially tough for the public sector banks as the
newly established private sector and foreign banks are leaders in the
adoption of e-banking. Indian banks offer to their customers following ebanking products and services:
65.

Automated Teller Machines (ATMs)

Internet Banking
Mobile Banking
Phone Banking
Tele-banking
Smart Cards
Doorstep Banking
Electronic Fund Transfer
66.
67. The History Of E-Banking
68.
69. Electronic banking, or e-banking, is the term that describes all transactions
that take place among companies, organizations, and individuals and their
banking institutions. First conceptualized in the mid-1970s, some banks
offered customers electronic banking in 1985. However, the lack of
Internet users, and costs associated with using online banking, stunted
growth. The Internet explosion in the late-1990s made people more
comfortable with making transactions over the web. Despite the dot-com
crash, e-banking grew alongside the Internet.
70.
71. While financial institutions took steps to implement e-banking services in
the mid-1990s, many consumers were hesitant to conduct monetary
transactions over the web. It took widespread adoption of electronic
commerce, based on trailblazing companies such as America Online,
Amazon.com and eBay, to make the idea of paying for items online

widespread. By 2000, 80 percent of U.S. banks offered e-banking.

Customer use grew slowly. At Bank of America, for example, it took 10
years to acquire 2 million e-banking customers. However, a significant
cultural change took place after the Y2K scare ended.
72.
73. In 2001, Bank of America became the first bank to top 3 million online
banking customers, more than 20 percent of its customer base. In
comparison, larger national institutions, such as Citigroup claimed 2.2
million online relationships globally, while J.P. Morgan Chase estimated it
had more than 750,000 online banking customers. Wells Fargo had 2.5
million online banking customers, including small businesses. Online
customers proved more loyal and profitable than regular customers. In
October 2001, Bank of America customers executed a record 3.1 million
electronic bill payments, totaling more than $1 billion. In 2009, a report by
Gartner Group estimated that 47 percent of U.S. adults and 30 percent in
the United Kingdom bank online.
74.
75. Importance Of E-Banking In Business
76.
77. Businesses rely on efficient and rapid access to banking information for
cash flow reviews, auditing and daily financial transaction processing. Ebanking offers ease of access, secure transactions and 24-hour banking
options. From small start-up companies to more established entities, small
businesses rely on e-banking to eliminate runs to the bank and to make
financial decisions with updated information. In an information-driven
business climate, companies who do not use e-banking are at a
competitive disadvantage.
78.

Activity Review
79. Business owners, accounting staff and other approved employees can
access routine banking activity such as deposits, cleared checks and

wired funds quickly through an online banking interface. This ease of

review helps ensure the smooth processing of all banking transactions on
a daily basis, rather than waiting for monthly statements. Errors or delays
can be noted and resolved quicker, potentially before any business impact
is felt.

Productivity
80. E-banking leads to productivity gains. Automating routine bill payments,
minimizing the need to physically visit the bank and the ability to work as
needed rather than on banking hours may decrease the time involved in
performing routine banking activities. Additionally, online search tools,
banking actions and other programs can allow staff members to research
transactions and resolve banking problems on their own, without
interacting

with

bank

employees.

In

some

cases,

month-end

reconciliations for credit card transactions and bank accounts can be

automated by using e-banking files.

Lower Banking Costs

81. Banking

relationships

and

costs

are

often

based

on

resource

requirements. Businesses that place more demands on banking

employees and need more physical assistance with wire transfers,
deposits, research requests and other banking activities often incur higher
banking fees. Opting for e-banking minimizes business overhead and
banking expenses.

Reduced Errors
82. Utilizing e-banking reduces banking errors. Automation of payments, wires
or other consistent financial activities ensures payments are made on time
and may prevent errors caused by keyboard slips or user error.
Additionally, opting for electronic banking eliminates errors due to poor
handwriting or mistaken information. In many cases, electronic files and
daily reviews of banking data can be used to double or triple check vital
accounting data, which increases the accuracy of financial statements.

Reduced Fraud

83. Increased scrutiny of corporate finances through audits and anti-fraud

measures requires a high level of visibility for all financial transactions.
Relying on e-banking provides an electronic footprint for all accounting
personnel, managers and business owners who modify banking activities.
E-banking offers visibility into banking activities, which makes it harder for
under-the-table or fraudulent activities to occur.
84.
85.
86.
87.
88. Usage Of E-Banking
89. The rise in the e-commerce and the use of internet in its facilitation along
with the enhanced online security of transactions and sensitive information
has been the core reason for the penetration of online banking in everyday
life. According to the latest official figures from the office of National
Statistics ( ONS 2007) indicate that subscriptions to the internet has grown
more than 50% from 25 million in 2005 to 45 million in 2007 in India. It has
also been estimated that 60% of the population in India Use internet in
their daily lives. The fundamental shift towards the involvement of the
customer in the financial service provision with the help of the technology
especially internet has helped to reduce the costs of financial institutions
as well as helped clients to use the service at anytime and from virtually
anywhere with access to an internet connection. The use of electronic
banking has removed personnel that facilitate the transactions and has
placed additional responsibilities on the customers to transact with the
service. The computerization of the banking operations has made
maximum impact on:

Internal Accounting System

Customer service
Diversification of system
90.

91. Impact of E-Banking On Traditional Services

92. One of the issues currently being addressed is the impact of e-banking on
traditional banking players. After all, if there are risks inherent in going into
e-banking there are other risks in not doing so. It is too early to have a firm
view on this yet. Even to practitioners the future of e-banking and its
implications are unclear. It might be convenient nevertheless to outline
briefly two views that are prevalent in the market.
93. The view that the Internet is a revolution that will sweep away the old
order holds much sway. Arguments in favor are as follows-E-banking
transactions are much cheaper than branch or even phone transactions.
This could yesterdays competitive advantage - a large branch network into a comparative disadvantage, allowing e-banks to undercut bricks-andmortar banks. E-banks are easy to set up so lots of new entrants will
arrive. Old-world systems cultures and structures will not encumber these
new entrants. Instead, they will be adaptable and responsive. E-banking
gives consumers much more choice. Consumers Will be less inclined to
remain loyal-banking will lead to an erosion of the endowment effect
currently enjoyed by the major UK banks.
94. Deposits will go elsewhere with the consequence that these banks will
have to fight to regain and retain their customer base. This will increase
their cost of funds, possibly making their business less viable. Lost
revenue may even result in these banks taking more risks to breach the
gap.
95. Portal providers are likely to attract the most significant share of banking
profits. Indeed banks could become glorified marriage brokers. They
would simply bring two parties together e.g. buyer and seller, payer and
payee.
96. The products will be provided by mono lines experts in their field.
Traditional banks may simply be left with payment and settlement
business even this could be cast into doubt. Traditional banks will find it
difficult to evolve. Not only will they be unable to make acquisitions for

cash as opposed to being able to offer shares, they will be unable to

obtain additional capital from the stock market. This is in contrast to the
situation for Internet firms for whom it seems relatively easy to attract
investment.
97. There is of course another view which sees e-banking more as an
evolution than a revolution. E-banking is just banking offered via a new
delivery channel. It simply gives consumers another service (just as ATMs
did). Like ATMs, e-banking will impact on the nature of branches but will
not remove their value.
98. Experience in Scandinavia (arguably the most advanced e-banking area in
the world) appears to confirm that the future is clicks and mortar banking.
Customers want full service banking via a number of delivery channels.
The future is therefore Martini Banking (any time, any place anywhere
anyhow).Traditional banks are starting to fight back. The start-up costs of
an e-bank are high. Establishing a trusted brand is very costly as it
requires significant advertising expenditure in addition to the purchase of
expensive technology (as security and privacy is the key to gaining
customer approval). E-banks have already found that retail banking only
becomes profitable once a large critical mass is achieved. Consequently
many e-banks are limiting themselves to providing a tailored service to the
better off nobody really knows which of these versions will triumph. This is
something that the market will determine. However, supervisors will need
to pay close attention to the impact of e-banks on the traditional banks for
example by surveillance of:

strategy
customer levels
earnings and costs
advertising spending
margins
funding costs
Merger opportunities and threats, both in the UK and abroad
99.
100. Impact of Modern Electronic Banking Services

101.

Technology has been one of the most important factors for the

development of the nation. Information and communications are significant

part in the field of technology which is used for accessing, processing,
storage and dissemination of information electronically.
102.

Banking industry is growing rapidly with understanding the

requirements of customer by offering technological services like ATMs,

online banking, telephone banking, and mobile banking and so on.
103.
104.

This growth has been strongly supported by the development in the

field of technology. With the development of information technology, the

world has become a global village and it has brought a revolution in the
banking industry.
105.
106.

Bank customers are becoming very demanding and it is the

extensive use of technology that enables banks to satisfy adequately the

requirement of customers. Further the banking sector reforms and
introduction of e-banking has made very structural changes in service
quality, managerial decisions, operational performance, profitability and
productivity of the banks.
107.
108.

E-banking is one of the emerging trends in the banking and is

playing a unique role in strengthening the banking sector and improving

service quality. It has enabled the banks to handle the payments
electronically and inter-bank settlement faster and in large volumes.
Customers can view the accounts, get account statements, transfer funds,
purchase drafts by just making a few key punches.
109.

Availability of ATMs and plastic cards, EFT, electronic clearing

services, internet banking, mobile banking and phone banking to a large

extent avoid customers going to branch premises and has provided a
wider range of services to the customers.
110.

111.

Electronic Based Modern Banking Services

112.

Use of advanced technology has led to the shift from traditional

banking methods to modern banking methods. Currently, the most

common and useful technology based banking methods are online
banking Mobile banking, Video banking, Telephone banking, ATMs, Plastic
money and so on

Online Banking
113.

It empowers customers to conduct financial banking transactions

on a secure website which can be operated by a retail, virtual bank, credit

union or building society. It makes banking faster and easy.
114.

The following are transactional and non transactional applications

of online banking services.

115.

Transactional

Bill payments and wire transfers to third parties

Fund transfer between customer's transactional and savings account
Sale and purchase of investments
Applications and transactions for loans and enrollment repayments
116.
117.

Non-transactional

Analyzing recent transactions

Downloading bank statements
Viewing paid Cheques
Financial Institution Administration
Portfolio Management of multiple users at different authority levels
Transaction approval process
Mobile Banking
118.

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 mobile phone or personal digital assistant. It is used for
performing through mobile device such as a mobile phone or a Personal
Digital Assistant (PDA), banking activities such as:
Balance checks
Account details
Portfolio management Account transactions Payments and investments

119.

Its main objectives are:

Building customer relationships

Reducing cost and gaining revenue Promotion of banking organization brand

Personalization of banking experience

Video Banking
120.

It is used for conducting banking transactions or consultations

through a remote video connection. It can be performed over purpose built

banking transaction machines similar to Automated Teller Machines (ATM)
or through bank branches enabled with video conferencing.
121.

Video banking improves the following banking activities:

Customer authentication Cash and cheque deposits

Cash and coin withdrawals
Account transfers and bill payments
Processing new accounts and loans Bank consultations and enquiries
122.
123.

Telephone Banking
124.

It is a bank service provided by financial institutions allowing its

customers to conduct banking transactions over the telephone. Institutions

which provide banking services exclusively over telephone are called
Phone Banks. They use special technology to modernize the customer by
providing bank and account related information over a telephone.
125.

Benefits of Telephone Banking

Automated phone answering system Phone keypad response resources Voice

recognition capability
Enables to provide solution to the customer
Helping the service provider to making good relation with the customer
126.

Features of Telephone Banking

Account balance information List of latest transactions Electronic bill payments

Funds transfer between customer accounts Loan and account applications
Purchase and redemption of investments Cheque book orders
Debit or credit card replacements. Requests such as change of address
ATM (Automated Teller Machine)

127.

ATMs are electronic machines, which are operated by a customer

himself to deposit or to withdraw cash from bank. For using an ATM, a

customer has to obtain an ATM card from his bank. The ATM card is a
plastic card, which is magnetically coded. It can be easily read by the
machine.
128.

Advantages of ATM

ATM provides 24 hours service

It gives convenience to bank's customers It reduces the workload of bank's staff
It provide service without any error
It is very beneficial for travelers
It may give customers new currency notes It provides privacy in banking
transactions
Today customer can also deposit their without visiting to the bank through ATM
machine by just swiping ATM card and providing valid password
129.

Facilities of ATM

Cash withdrawals Cash deposits

Balance enquiry or checking the balance in the bank account
Request for statement of account
Change of personal identification number (PIN)
Cheque book request
Transfer of funds from one account to another account
Other facilities like bill payments
130.

Plastic money
131.

Plastic Money is a must need of our busy life. Today plastic money

is the best alternative of the cash. It is also safer to traveling with a plastic
money card than cash. Today it is very easy to carry money without having
a lot of cash or gold. This is a new idea of present life-style which has
made money transition so easy that anybody can carry it with him or her in
a pocket.
132.

Benefits of Plastic Money are:

Purchasing
Power Time Saving
Additional Safety

Credit Limits
Emergency need
Additional features
Electronic Payment System
133.

Electronic Payment is a financial exchange that takes place online

between buyers and sellers. The content of this exchange is usually some
form of digital financial instrument that is backed by a bank or an
intermediary, or by a legal tender.
134.

Benefits of Electronic Payment System

Speed
Convenience
Efficiency
Reduced costs
Increased customer base
No third party involvement
Cash less transaction
Electronic Data Interchange
135.

Electronic data interchange is an automated system of business-to-

business data exchange. Two primary areas of EDI are data interchange
and electronic funds transfer used among banks.
136.

Benefits of Electronic Data Interchange

Improved accuracy
Better logistics management and increased
productivity
Improved delivery of goods and services
Migration from paper to electronic transactions
Faster response time and Customer service improvement
137.
138.

2.7 BENEFITS OF E-BANKING

139.

To the Customer:

Anywhere Banking no matter wherever the customer is in the world. Balance

enquiry, request for services, issuing instructions etc. from anywhere in the world
is possible.
Anytime Banking Managing funds in real time and most importantly, 24 hours a
day, 7days a week.

Convenience acts as a tremendous psychological benefit all the time.

Brings down Cost of Banking to the customer over a period a period of time.
Cash withdrawal from any branch / ATM
On-line purchase of goods and services including online payment for the same.
140.

To the Bank:

Innovative, scheme address competition and present the bank as technology

driven in the banking sector market.
Reduces customer visits to the branch and thereby human intervention.
Inter-branch reconciliation is immediate thereby reducing chances of fraud and
misappropriation.
Online banking is an effective medium of promotion of various schemes of the
bank, a marketing tool indeed.
Integrated customer data paves way for individualized and customized services.
141.
142.
143.

2.8 Features of Electronic Banking

Easy Electronic Fund transfer facility.

Better efficiency in Customer relationship management.
Making the Payments of bills like electricity, telephone bills, and mobile recharge.
It introduces virgin & innovative banking products & services.
It can view of balance of accounts and statements.
E-banking can bring doorstep services.
Balance and transaction history search.
Transaction history export.
Order mini statements.
Mobile banking.
Pay anyone payments Multi Payments.
SMS banking services.
144.
145.

2.9 Limitations Of E Banking

Problems of security:
146.

Security and privacy aspects are major issue in case of E-Banking

transaction. Various Sites are not properly locked at to ensure weather

customer's money is safe in cyber world or not.

High cost:
147.

The infrastructural cost of providing E-Banking facility is very high.

148.

The banks not only have to automate front-end services but also

back office services, which involve high cost.

149.

Lack of awareness:
150.

Another great hindrance is lack of awareness because effective

and wide media efforts in publishing Internet banking need to be

emphasized.

Lack of computerization:
151.

Lack of computerization and low density of telephone lines is also

a bottleneck for online banking. In India, out of 65000 bank branches, only
5000 branches are computerized.

Wrong assumption by people:

152.

Many people are away from net banking on the assumption that it is

more expensive than the traditional method of dealing with banking

transaction. They still prefer to going to bank to perform transaction.

Lack of Trust:
153.

Many of the people have a lack of trust in computer transaction or

online transaction because of theft or stealing money through hacking of

account.
154.

155.

STATE BANK OF INDIA

156.

State Bank of India (SBI) is an Indian multinational, public

sector banking and financial services company. It is a government-owned

corporation with its headquarters in Mumbai, Maharashtra. As of 2014-15,
it had assets of Rs. 20.480 trillion (US$300 billion) and more than 14,000
branches, including 191 foreign offices spread across 36 countries,
making it the largest banking and financial services company in India by
assets. The company is ranked 232nd on the Fortune Global 500 list of
the world's biggest corporations as of 2016.
157.

The bank traces its ancestry to British India, through the Imperial

Bank of India, to the founding, in 1806, of the Bank of Calcutta, making it

the oldest commercial bank in the Indian Subcontinent. Bank of
Madras merged into the other two "presidency banks" in British
India, Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of
India, which in turn became the State Bank of India in 1955. Government
of India owned the Imperial Bank of India in 1955, with Reserve Bank of
India (India's Central Bank) taking a 60% stake, and renamed it the State
Bank of India. In 2008, the government took over the stake held by the
Reserve Bank of India.
158.

State Bank of India is a banking behemoth and has 20% market

share in deposits and loans among Indian commercial banks.

159.
160.

History

161.

The roots of the State Bank of India lie in the first decade of the

19th century, when the Bank of Calcutta, later renamed the Bank of
Bengal, was established on 2 June 1806. The Bank of Bengal was one of
three

Presidency

banks,

Bombay (incorporated

on

the
15

other
April

two

being

the Bank

of

1840)

and

the Bank

of

Madras (incorporated on 1 July 1843). All three Presidency banks were

incorporated as joint stock companies and were the result of royal

charters. These three banks received the exclusive right to issue paper
currency till 1861 when, with the Paper Currency Act, the right was taken
over by the Government of India. The Presidency banks amalgamated on
27 January 1921, and the re-organized banking entity took as its
name Imperial Bank of India. The Imperial Bank of India remained a joint
stock company but without Government participation.
162.

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

the Reserve Bank of India, which is India's central bank, acquired a

controlling interest in the Imperial Bank of India. On 1 July 1955, the
imperial Bank of India became the State Bank of India. In 2008, the
Government of India acquired the Reserve Bank of India's stake in SBI so
as to remove any conflict of interest because the RBI is the country's
banking regulatory authority.
163.

In 1959, the government passed the State Bank of India

(Subsidiary Banks) Act. This made SBI subsidiaries of eight that had
belonged to princely states prior to their nationalization and operational
take-over between September 1959 and October 1960, which made eight
state banks associates of SBI. This acquisition was in tune with the first
Five Year Plan, which prioritized the development of rural India. The
government integrated these banks into the State Bank of India system to
expand its rural outreach. In 1963 SBI merged State Bank of Jaipur (est.
1943) and State Bank of Bikaner (est.1944).
164.

SBI has acquired local banks in rescues. The first was the Bank of

Bihar (est. 1911), which SBI acquired in 1969, together with its 28
branches. The next year SBI acquired National Bank of Lahore (est.
1942), which had 24 branches. Five years later, in 1975, SBI acquired
Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior
State, under the patronage of Maharaja Madho Rao Scindia. The bank
had been the Dukan Pichadi, a small moneylender, owned by the

Maharaja. The new bank's first manager was Jall N. Broacha, a Parsi. In
1985, SBI acquired the Bank of Cochin in Kerala, which had 120
branches. SBI was the acquirer as its affiliate, the State Bank of
Travancore, already had an extensive network in Kerala.
165.

The new logo of the SBI was actually the aerial view of the

Kankaria Lake in Ahmedabad, Gujrat on 1 October 1971 and was

designed by Shekhar Kammat.
166.

There has been a proposal to merge all the associate banks into

SBI to create a "mega bank" and streamline the group's operations.

167.

The first step towards unification occurred on 13 August 2008

when State Bank of Saurashtra merged with SBI, reducing the number of
associate state banks from seven to six. Then on 19 June 2009 the SBI
board approved the absorption of State Bank of Indore. SBI holds 98.3%
in State Bank of Indore. (Individuals who held the shares prior to its
takeover by the government hold the balance of 1.7 %.)
168.

The acquisition of State Bank of Indore added 470 branches to

SBI's existing network of branches. Also, following the acquisition, SBI's

total assets will inch very close to the Rs. 10 trillion marks (10 billion long
scales). The total assets of SBI and the State Bank of Indore stood at Rs.
9,981,190 million as of March 2009. The process of merging of State Bank
of Indore was completed by April 2010, and the SBI Indore branches
started functioning as SBI branches on 26 August 2010.
169.

On 7 October 2013, Arundhati Bhattacharya became the first

woman to be appointed Chairperson of the bank.

170.
171.

Operations

172.

SBI provides a range of banking products through its network of

branches in India and overseas, including products aimed at non-resident

Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are
located at important cities throughout India.
173.
174.

Domestic presence

175.

SBI has 18,354 branches in India. In the financial year 201213, its

revenue was Rs. 2.005 trillion (US$30 billion), out of which domestic
operations contributed to 95.35% of revenue. Similarly, domestic
operations contributed to 88.37% of total profits for the same financial
year.
176.

Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion

launched by Government in August 2014, SBI held 11,300 camps and

opened over 3 million accounts by September, which included 2.1 million
accounts in rural areas and 0.88 million accounts in urban areas.
177.
178.

International presence

179.

As of 201415, the bank had 191 overseas offices spread over 36

countries having the largest presence in foreign markets among Indian

banks.[6] It

has

branches

in

Singapore,

Moscow, Colombo, Dhaka,

Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male

in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It
has offshore

banking units

in

the

Bahamas

and

Bahrain,

and

representative offices in Myanmar, Bhutan and Cape Town.SBI has 7 retail

banking branches in Singapore.The Canadian subsidiary SBI Canada
Bank (previously State Bank of India (Canada)) also dates to 1982. It has
six branches, four in the Toronto area and two in the Vancouver area.SBI
operates several foreign subsidiaries or affiliates.In 1990, it established an
offshore bank: State Bank of India (Mauritius). SBI (Mauritius) has 15
branches in major cities/towns of the country including Rodrigues.

180.

SBI

Sri

Lanka

now

has

three

branches

located

in Colombo, Kandy and Jaffna. The Jaffna branch was opened on 9

September 2013. SBI Sri Lanka, the oldest bank in Sri Lanka, celebrated
its 150th year in Sri Lanka on 1 July 2014.
181.

In 1982, the bank established a subsidiary, State Bank of India,

which now has ten branchesnine branches in the state of California and
one in Washington, D.C. The 10th branch was opened in Fremont,
California on 28 March 2011. The other eight branches in California are
located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San
Diego, Tustin and Bakersfield.
182.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981

as the IndoNigerian Merchant Bank and received permission in 2002 to

commence retail banking. It now has five branches in Nigeria.
183.

In Nepal, SBI owns 49% of SBI Nepal (State Bank in Nepal) share

with Nepal Government owing the rest and SBI NEPAL has branches
throughout the country in each and every city as banking has become the
major part of daily life for Nepalese people.In Moscow, SBI owns 60%
of Commercial Bank of India, with Canara Bank owning the rest.In
Indonesia, it owns 76% of PT Bank Indo Monex.The State Bank of India
already has a branch in Shanghai and plans to open one in Tianjin.
184.

In Kenya, State Bank of India owns 76% of Giro Commercial Bank,

which it acquired for US$8 million in October 2005.In January 2016, SBI
opened its first branch in Seoul, South Korea following the continuous and
significant increase in trade due to theComprehensive Economic
Partnership Agreement signed between New Delhi and Seoul in 2009.
185.
186.

Associate banks

187.

SBI now has one associate bank, down from the eight that it

originally acquired in 1959. All use the State Bank of India logo, which is a

blue circle, and all use the "State Bank of" name, followed by the regional
headquarters' name:

State Bank of Patiala (founded 1917)

State Bank of Mysore (founded 1913)

State Bank of Bikaner & Jaipur (founded 1963)

State Bank of Hyderabad (founded 1941)

State Bank of Travancore (founded 1945)

Bharatiya Mahila Bank(founded 2013)

188.
The banks which are merged are:

State Bank of Saurashtra (merged 2008)

State Bank of Indore (merged 2010)

189.

The negotiations for merging of 5 associate banks State Bank of

Bikaner

and

Mysore, State

Jaipur, State
Bank

Bank
of

of

Hyderabad, State

Patiala and State

Bank

Bank

of
of

Travancore and Bharatiya Mahila Bank by acquire their businesses

including assets and liabilities with SBI started in 2016. The merger of
these six subsidiaries was approved by Union Cabinet on 15 June
2016. The State Bank of India and all its associate banks are identified by
the same blue keyhole logo. The State Bank of India wordmark usually
has one standard typeface, but also utilises other typefaces.
190.

191.

Non-banking subsidiaries

192.

Apart from its five associate banks, SBI also has the following non-

banking subsidiaries:

SBI Capital Markets Ltd

SBI Funds Management Pvt Ltd

SBI Factors & Commercial Services Pvt Ltd

SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI DFHI Ltd

SBI Life Insurance Company Limited

SBI General Insurance

193.

In March 2001, SBI (with 74% of the total capital), joined with BNP

Paribas (with 26% of the remaining capital), to form a joint venture life
insurance company named SBI Life Insurance company Ltd. In 2004, SBI
DFHI (Discount and Finance House of India) was founded with its
headquarters in Mumbai.
194.

Other SBI service points

195.

As of 31 March 2016, SBI has 49,577 ATMs & SBI group (including

associate banks) has 58,541 ATMs.

196.

197.

Online products and services provided by SBI Bank

1. Payments and Transfer

a)

Fund transfer
Transfer funds within your own accounts
Transfer funds to third party account held in the same bank
Make an Inter-bank funds transfer to any account held in any bank
including State Bank Group
Pay any VISA credit card bill
Transfer funds to religious and charitable institutions
Record standing instructions to transfer a fixed amount at a
scheduled frequency for a period not exceeding one year
Transfer funds to NRE PIS accounts to facilitate online trading

198.
b) RTGS/NEFT
199.

Minimum / Maximum amount for RTGS / NEFT

200.

ype
203.

TGS
206.
N

transactions under Retail Internet Banking

201.
Minimum
202.
204.
207.

Maxi

Rs. 2 Lakhs

mum
205.
Rs.

No Minimum

10 Lakhs
208.
Rs.

EFT

10 Lakhs

209.
210.
211.
Type
214.
RTGS
217.
NEFT

Minimum / Maximum amount for RTGS / NEFT

transactions under Corporate Internet Banking
212.
Minimu
213.
Maximum
m
215.

Rs.2

Lakhs
218.

216.

Rs.50 lakhs for

Vyapaar and
No

Minimum

Rs.500 crores for Vistaar

219.
Rs.50 lakhs for
Vyapaar and
Rs.500 crores for Vistaar

220.

221.
c)

Credit card (VISA)

222. Credit Card (Visa) Bill Pay is a special service that allows you to
transfer money online from your SBI account to any VISA Credit Card
issued in India. Credit Card (Visa) Bill Pay is so quick, simple and a
convenient alternative to Demand Drafts, cheques or pay orders. Credit
Card (Visa) Bill Pay is an online service and requires an Internet Banking
enabled account with State Bank of India. To use the service just log on
to OnlineSBI.com using the Internet Banking Username and Password,
provided by State Bank of India. If you have registered yourself for the
Internet Banking service, you can use the service. You only need to
register the Payee name and card number before transferring funds
online. OnlineSBI is a secure and safe channel to pay bill of any VISA
credit card. But to ensure that Payee registrations are authenticated, we
will send a high security password to your mobile phone. Registration is
complete only when the system verifies your identify with this password.
Hence you need to register your mobile number with us. If you do not
have a mobile phone/number your branch can approve the beneficiary.

223.
d)

IMPS
224. Immediate Payment Service (IMPS) is an instant interbank
electronic fund transfer service through mobile phones. It is also being
extended through other channels such as ATM, Internet Banking, etc.
Mobile Money Identification Number (MMID) is a seven digit number of
which the first four digits are the unique identification number of the bank
offering IMPS. The facility is available to all registered users of OnlineSBI
having transaction rights on one or more accounts.

225.
226.

227.
2. E-Deposit
a) E-TDR/e-STDR
228. As a general rule the minimum tenure for a term deposit is 7
days and the maximum is 10 years. However Both TDR and STDR are
bound by the following minimum and maximum tenures. Minimum tenure
is 7 days for TDR and 180 days for STDR and Maximum tenure is 3650
days for TDR and STDR. You can open a term deposit with a nominal
amount of Rs.1000/- , however minimum & maximum amount limit may
vary for different product codes.
229.
b)

e-TDR/e-STDR under Tax Saving Scheme

230. The minimum tenure for a Term deposit under Tax Saving Scheme
is 5 years and maximum is 10 years. The interest rates vary from time to
time. You can open a term deposit with a minimum amount of Rs.1000/- ,
and the maximum amount that can be deposited under the scheme is
Rs. 1.5 lac in a financial year. The name(s), mode of operation and
home branch of newly generated deposit a/c will be same as in debit a/c,
from which term deposit a/c is funded. However in case of Joint Accounts
only the first holder shall be eligible for deduction from income under
section 80C of Income Tax Act.

231.
c)

e-SBI Flexi Deposit

232. SBI Flexi Deposit offers flexibility in choosing the deposit amount
within the minimum and maximum limits per financial year. The Minimum
deposit amount is Rs. 5,000/- per Financial Year. Higher amounts in
multiples of Rs. 500/- may be deposited with minimum of Rs. 500/- at any
one instance. Deposits can be made anytime during a month and any
number of times. The Maximum deposit amount is Rs.50,000/- in a
Financial Year. Penalty for default in payment of minimum deposit will be

Rs. 50/- per financial year. The minimum period of deposit is 5 years and
maximum is 7 years.
d)

SBI Annuity Deposit

233. Under this scheme, a lump sum amount is deposited by a customer
who is repaid to the customer over a period in equated monthly
installment which comprises part of principle amount and interest on the
reducing principle amount as well. Using the scheme customer can have
fixed monthly amount against his one-time deposit. Payment will start on
anniversary date of the month. If date is non-existent (29th, 30th and
31st), it will be paid on 1st day of next month. In Annuity deposit, as part
of the principle and interest on reducing principle is paid in installments
over a period of time hence at maturity date, the maturity amount
remains 0 (Zero). The Minimum deposit amount for Annuity deposit is
based on minimum monthly annuity Rs. 1000 for the relevant period. i.e
for 3 yrs, minimum deposit amount will be Rs. 36,000. The maximum
amount limit through Internet Banking will be the same as applicable for
Fund Transfer within own account (See Enquiries - > Transaction limit /
Charges). The Annuity deposit is available for 3 yrs / 5 yrs / 7 yrs and 10
yrs.

234.
e)

e-Recurring Deposit
235. The period of deposit shall be minimum 12 months and maximum
120 months. The minimum amount of monthly installment shall be Rs
100. The amount of installment and number of installment cannot be
changed after opening of the account. Maturity amount or the amount
payable before maturity will be transferred only to the debit account from
which the first was funded.

236.

3. Smart cards
a)

Gift Card
237. The State Bank Gift Card, issued in association with VISA
International, is the product which gives the comfort of convenience and
wide acceptability and also unlimited options for the beneficiary to
choose. State Bank Gift Card is a Pre-paid Card. It is usable at all VISA
enabled

Merchant

Establishments

and

POS

or

e-Commerce

transactions. It is a better substitute for Gift Vouchers sold by many retail

houses as its use is not restricted to any particular Merchant
Establishment/ Point of Sale.
238.
b) State Bank virtual card
239. State Bank Virtual Card, also known as Electronic Card or e-Card,
is a limit Debit Card created for ecommerce transactions. It provides an
easy and secure way of transacting online without providing the Primary
Card/Account information to the merchant. Virtual Cards can be used at
any merchant location accepting MasterCards / Visa Cards online,
without any difference from a regular plastic card.
240.
c)

Smart Payout Card

241. You can top up a Smart Payout card for a minimum of Rs.100 and a
maximum of Rs.10000. There is a card issuance charge. The card is
valid for 10 (Ten) Years from the date of issue.

242.
4. State Bank collect
243.
It is a multi-online payment portal which enables the banks
customer to pay different payments at one place.
244.
245.

5. Bill payment
a) OnlinePay:
246. Using SBI e-PAY you can 'see and pay' your various bills online,
directly from your SBI Account. You can pay telephone, electricity,
insurance, credit card and other bills - from the comfort of your home or
office. You also get an electronic acknowledgment for every bill paid by
you using e-PAY.
247.
b)

AutoPay:
248. You can also set up AutoPay instructions with an upper limit to
ensure that your bills are paid automatically whenever they are due. The
upper limit ensures that only bills within the specified limit are paid
automatically, thereby providing you complete control over these
payments. The e-PAY service is available in various cities across the
country and you can now make payments to several billers in your
region.

249.
6. Western Union Service
250.

Bank has decided to phase out the cash transactions in respect of

Western Union at the close of business hour on 30th September, 2016 and
process only ABMT-Online transactions with effect from the 1st October,
2016. The remittance channel would thus, be only through ABMT (INB) route
for Western Union on or after 1st October, 2016.
251.
252.

State Bank of India is the Principal Agent of Western Union

Financial Services for paying inward remittances deposited in overseas

offices/ locations of Western Union. This arrangement is governed by MTSS
guidelines of Reserve Bank of India, which are as follows:
253.

Only personal remittances shall be allowed under this arrangement.

Donations/contributions to charitable institutions/trusts, trade related

remittances, remittance towards purchase of property, investments or

credit to NRE Accounts shall not be made through this arrangement.
A cap of USD 2500 has been placed on individual remittance under the
scheme. Amounts up to Rs.50,000/- may be paid in cash to a beneficiary
in India. Any amount exceeding this limit shall be paid by means of
account payee cheque/ demand draft/ payment order, etc. or credited
directly to the beneficiary's bank account only. However, in exceptional
circumstances, where the beneficiary is a foreign tourist, higher amounts
may be disbursed in cash.
254.
Only 30 remittances can be received by a single individual beneficiary
under the scheme during a calendar year.
255.
7. NPS contribution
256.

New Pension System for every Citizen was introduced from 1st

May 2009 by the Pension Fund Regulatory and Development Authority to

provide old age pension security to citizens in the age group of 18-60. A brief
detail of the Scheme (Tier I & Tier II) is as below:

NPS is a voluntary Pension System of Pension Fund Regulatory and

Development Authority (PFRDA) open to all citizens in the age group
of 18-60 years.

The Scheme is operative from 01.05.2009.

The objective is to provide old age pension; reasonable market based

returns over long term

Bank designated branches i.e. Point of Presence-Service Provider

(POP-SP) accept the application form and get the subscribers
registered with Central Record keeping Agency (CRA) for generation
of the Permanent Retirement Account Number (PRAN).

The PRAN will be quoted in all future transactions.

There are two models i.e. Tier I and Tier II.

Tier-I account is where you contribute your savings for retirement into
a non-withdrawable account till you reach 60 years and draw pension

for the rest of your life.

257.
258.
259.
260.
261.
262.
8. Power Jyoti fee collection (PUL)
263.

Collection of funds from all branches of SBI to Power Jyoti Current

Account with MIS. Educational Institutions/other bodies for fee/fund collection

of donation as well. A remitter can send fund under the scheme without
having an account with SBI. Transactions permitted in cash transfer and
clearing.
264.
9. Loan against shares
265.

Leverage your investments in shares for loans to meet unforeseen

expenses!! Avail of loans up to Rs.20.00 lacs against your shares to enable

you to meet contingencies, personal needs or even for subscribing to rights
or new issue of shares.
266.
267.

This facility is available to our existing individual customers

enjoying a past satisfactory relationship with SBI and maintaining their

DEMAT Account with SBI Cap Sec. It is offered as an Overdraft or Demand
Loan. Loan can only be availed in single name. Loan will be permitted for
subscribing to rights or new issue of shares against the security of existing
shares. Loan will not be sanctioned for (i) speculative purposes {ii) intercorporate investments or (iii) acquiring controlling interest in company /
companies. To be liquidated in maximum period of 30 months through a
suitable reducing DP program. Overdraft / Demand Loan with the Repayment
program maximum 30 months. You will need to provide a margin amount of
50% of the prevailing market prices of the shares being offered as security.

Pledge of the demat shares against which loan is sanctioned. 650 bps above
Base Rate i.e., 16.35% p.a. currently.
268.

269.

HDFC Bank

270.

HDFC Bank is an Indian banking and financial services company

headquartered in Mumbai, Maharashtra. It has about 76,286 employees

including 12,680 women and has a presence in Bahrain, Hong Kong and
Dubai. HDFC Bank is the second largest private bank in India as
measured by assets. It is the largest bank in India by market capitalization
as of February 2016. It was ranked 69th in 2016 BrandZ TM Top 100 Most
Valuable Global Brands.
271.
272.

History

273.

In 1995 HDFC Bank was incorporated, with its registered office

in Mumbai, India. Its first corporate office and a full service branch at
Sandoz House, Worli was inaugurated by the then Union Finance
Minister, Dr. Manmohan Singh.
274.

As of June 30, 2016, the Banks distribution network was at 4,541

branches and 12,013 ATMs.

275.
276.

Acquisitions

277.

HDFC Bank merged with Times Bank in February, 2000. This was

the first merger of two private banks in the New Generation Private Sector
Banks category. In 2008, Centurion Bank was acquired by HDFC Bank.
HDFC Bank Board approved the acquisition of CBoP for Rs. 9,510 crore
in one of the largest mergers in the financial sector in India.
278.

279.

Listings and shareholdings

280.

The equity shares of HDFC Bank are listed on Bombay Stock

Exchange and the National Stock Exchange of India. Its American

Depository Shares are listed on NYSE and the Global depository
receipts are listed on the Luxembourg Stock Exchange where two GDRs
represent one equity share of HDFC Bank.
281.
282.

Shareholders (as of 31 December-2015)

283.

284.

Promoter Group (HDFC)

holding
285.
21.57

286.

Foreign Institutional Investors (FII)

%
287.

32.40

288.
290.

Individual shareholders
Bodies Corporate

%
289.
291.

8.5%
07.50

292.

Insurance companies

%
293.

05.38

Mutual Funds/UTI

%
295.

8.65

NRI/OCB/Others

%
297.

00.29

298.

Financial Institutions/Banks

%
299.

2.75

300.

ADS/GDRs

%
301.

18.78

294.
296.

Share

%
302.
303.

CSR Activities

304.

HDFC Bank has taken several steps as a part of their Corporate

Social Responsibility. It has collaborated with several NGOs to assist in its

activities.
305.

306.

Objective

307.

Activities

nitiativ
e
308.

309.

Provide

310.

Conducts training for

ustain

empowerment to

occupational skills, credit

able

the rural section of

counseling, capacity

Livelih

the country,

building program,

ood

especially women.

sustainable livelihood

311.

312.

Financial

initiative
313.
Rural financial

inanci

literacy in 600

literacy programs under the

al

schools across

aegis of RBI.

Literac

Andhra Pradesh

y
314.

and Odisha.
315.
Aim to

316.

Friends Union for

ducati

making every child

Energizing Lives (FUEL),

on

literate with quality

cover 100 children under

education.

Jayaprakash Narayan
Memorial Trusts Vidya and

317.

raining

320.

318.

Aimed at

Child Program.
319.
ETASHA, support

formal training and

SGBS Trust, tied up with

development of

Hope Foundation

youth
321.
Focused on

322.

Partnered with

ommu

sustainable

Watershed Organization

nity

development with

Trust (WOTR), promote rain

Initiativ

economic growth

water harvesting, blood

es

donation campaigns

323.
324.

Online products and services provided by HDFC Bank

1. NetBanking

325.

HDFC Bank offers you a comprehensive range of transactions

across multiple products through its NetBanking channel. So just log in to

NetBanking and conduct 200+ transactions from the comfort of your home or
office.
326.
327.

You can check your Account Balance, book Fixed and Recurring

Deposits, Download A/c Statement up to 5 years, pay your Bills, Recharge

your Mobile/ DTH connection, and much more in a secure environment.
328.
329.

NetBanking is an incredibly convenient and powerful tool, letting

you do everything you want with your accounts at the click of a mouse. It is
Real Time, giving you up-to-the-second details on your account. All you need
to do is Log in using your Customer ID and IPIN (NetBanking password).
330.
331.

Your Customer ID is mentioned on your account statement/ account

welcome letter/ chequebook. (Current account / HUF customers can obtain

this from the branch). You can re-generate your IPIN online in 3 easy steps.
332.
333.
334.

Some of the transactions you can do through NetBanking are:

Check your account balances and download 5 year account statement

in 5 formats, instantly
Book Fixed Deposit / Recurring Deposit
Pay Utility Bills
View your Credit Card details and pay your Credit Card Bills
Recharge your Prepaid Mobile & DTH Connections
Invest in Mutual Funds Online
Book IRCTC Tickets online
Purchase a Gift Card
Pay your Taxes online
Update your PAN Details online
View your Tax Credit Satement (Form 26 AS)
Request for a Demand Draft/ Chequbook

Request Stop Payment of a Cheque/ Hotlist you Debit Card/ Credit

Card
View your Loan details
Apply for IPO
Request for Debit Card PIN Regeneration
Register for Third Party Transfer
Transfer funds between accounts within HDFC Bank and other Bank
Accounts.

335.
336.
337.
338.
339.
340.
341.

You can buy Life / General Insurance plans conveniently

through NetBanking
342.
343.

Life Insurance

344.

Ensure a financially secured future for yourself and your loved ones

through

Protection,

Health

&

Retirement

and

Investment

solution

on NetBanking from HDFC life:

345.
Protection Plans
HDFC Life Click 2 Protect Plus Plan
HDFC Life Group Credit Protect Insurance Plan (Single Premium Term
Plan)
346.
Health Plans:
HDFC Life Cancer Care Plan
HDFC Life Health Assure Plan
HDFC Life Easy Health
347.
Children's Plans:
HDFC Life YoungStar Udaan
HDFC SL YoungStar Super Premium

348.
Retirement Plans:
HDFC Life New Immediate Annuity Plan
HDFC Life Personal Pension Plus
HDFC Life Guaranteed Pension Plan
349.
Saving & Investment Plans :
HDFC Life Click2Invest Plan
HDFC Life Sampoorn Samridhi Plus
HDFC Life Sanchay
HDFC Life Super Income Plan
HDFC Life ProGrowth Plus
HDFC SL ProGrowth Super II
HDFC SL ProGrowth Flexi
HDFC Life Sampoorn Nivesh
HDFC Life Super Savings Plan
HDFC Life Smart Woman Plan
HDFC SL Crest
350.

Also Renew your existing HDFC Life policy through NetBanking.

351.
352.

General Insurance

353.

You can now secure yourself, your family and your assets from the

comfort of your home or office. You can avail Motor, Health, Travel, Critical
Illness, Home, Two Wheeler and Personal Accident Insurance through HDFC
Bank NetBanking in 3 easy steps & get your policy copy instantly. You can
also avail 3 & 12 month EMI facility to pay your premium.
354.
355.

Purchase Life / General Insurance in 3 simple steps

through NetBanking

Click on Insurance tab, and select General or Life Insurance option, as

required.
Select the type of Insurance, view the premium amount and confirm to

make the payment

Get instant Confirmation

356.

2. Credit banking NetBanking

357.

Access your HDFC Bank Credit Card account online using

NetBanking and view all your account information quickly and easily. Manage
your Credit Card transactions, pay your Credit Card bills and track your
reward points, which you can redeem for some great offers.
358.
359.

Listed below are the online features you enjoy with your Credit

Card:
360.
361.

View:

Account Information
Unbilled Transactions
Credit Card Statements (up to last 6 months)

362.
363.

Request for:

Credit Card Payments

Autopay Registration
Autopay De-registration
Registration of New Card
De-registration of Card
Statement on E-mail
Credit Card ATM Pin

364.
365.

Your account information shows you:

Your total cash and credit limits

Your billed and unbilled transactions
Your payment due date
The reward points you have earned on your card

366.

This helps you monitor your Credit Card transactions and know

when your Credit Card bills are due for payment. You can see your reward
points and enjoy the benefits they offer.
367.

3. Email Statement
368.
As a savings or current account holder you can receive your
account statements via email.
369.
370.

The features of Email Statements are:

For a Savings account you will get monthly Email Statements.

For a Current account you can get daily, weekly or monthly Email

Statements.
Email Statements will follow a staggered cycle, based on the date of

account opening.
If you are in the Imperia, Preferred or Classic program you will receive a
combined Email statement for all accounts (across Savings, Current and
Fixed Deposits) linked to your Primary Customer ID.

371.
372.

The benefits of Email statements are:

They are FREE.

No more paper, no more physical statements.
Even if you are registered for hold mails, you can get Email Statements.
Youll get information on new products and mandatory information online.

373.
4. Loan Accounts Online
374.
What can you access?

Loan Summary

Transaction History

Loan Account Details

Provisional Interest Statement

Welcome Letter

Repayment Schedule

Interest Rate Change

Query/Feedback

375.

376.

These are the following information that you can see in loan

account online:

Instalment loan summary including loan account no, loan amount, tenure
& product.

EMI status & details of last 9 transactions for respective Loan Account.

EMI, due date, future principal, remaining tenor, loan maturity date,
overdue EMI & overdue charges (if any).

Account holder name details including, address, PAN No.

Provisional Interest Statement generation for all linked accounts.

Welcome letter giving Loan Amount and EMI start date details.

Repayment Schedule

Interest rate change details for flexible loan products.

Separate query/feedback module for resolving customer queries related to

loans.

377.
378.