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CERTIFICATE
This is to certify that the dissertation report title IMPACT OF
COMPUTERIZATION & E-BUSINESS ON BANKING SECTORS A STUDY OF
S.B.I submitted by MONIKA GUPTA enrollment no. 07100500336 during
semester IV of MBA program (Batch 2007-09) embodies original work done by
her.
Signature of faculty guide:
Name:
Destination:
(MONIKA GUPTA)
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ACKNOWLEDGEMENT
I acknowledge my heartiest thanks to all the persons who helped me in preparing this
report.
I am deeply incepted to Mr N.N. Pandey for providing me an opportunity to
take my project that suggested and guided me throughout the project.
This project was a great experience for me. As it made me aware about the
professional culture that exists in an organization, about the market, qualities required
to work and how to deal with the customers.
I am heartily indebted for the co-ordination of all staff who gave their valuable
time in listening me and provide information, which are important for project & without
whom my project would not have been completed.
In last I am thankful to all my friends and my parents who provided me all his
experience and encouraged me constantly to complete this tired project.
[RICHA YADAV]
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CANDIDATE DECLARATION
I Richa Yadav of M.B.A, Department of Management Studies,
Institute Of Management Studies hereby declares that all theinformation facts and figure presented in this report are based on my
individual work.
This project is my original work and it has not been presented
elsewhere.
RICHA YADAV
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EXECUTIVE SUMMARY
STATEMENT OF RESEARCH
IMPACT OF COMPUTERIZATION & E-BUSINESS ON BANKING SECTORS A
STUDY OF S.B.I.
OBJECTIVE OF RESEARCH
Evaluate the advantages off core banking
benefits to customers of SBI
RESEARCH METHODOLOGY:
Exploratory research.
INSTRUMENT USED: -
DIRECT INTERACTION
TELEPHONIC INTERVIEW
DATA COLLECTION PROCESS/FIELD WORK
Secondary sources
* primary sources
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EXECUTIVE SUMMARY
This project was undertaken in SBI in 4th semester for the partial fulfillment of Master
of Business Administration from INSTITUTE OF MANAGEMENT STUDIES. The
main objective of the project is to analyses the IMPACT OF COMPUTERIZATION &
E-BUSINESS ON BANKING SECTORS A STUDY OF S.B.I.
Research was done through customers feedback survey, personal interview, and
telephonic interview. Research was done in SBI bank. Survey was done through
questionnaire with those who visited these customer service points of SBI.
Although most of the account holders are satisfied with the services of SBI but
problems that Account holders are facing like, ATM failure, low speed of money
transaction than ICICI and HDFC.
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INDEX
SERIAL N0. CONTENT PAGE NO.
1. INTRODUCTIONa)Industry Overviewb)Company
Overview
7-1617-36
2. Objectives 37-38
3. review Literature 39-40
4. Researchmethodology
41-46
5. Interpretation of
data
47-63
6. Recommendation 64-65
7. Conclusion 66-69
8. Bibliography 70-71
9. Annexure 72-74
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INTRODUCTION
INTRODUCTION TO INTERNET BANKING
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The Internet banking is changing the banking industry and is having the major effects
on banking relationships. Even the Morgan Stanley Dean Witter Internet research
emphasized that Web is more important for retail financial services than for many other
industries. Internet banking involves use of Internet for delivery of banking products &
services. It falls into four main categories, from Level 1 - minimum functionality sites
that offer only access to deposit account data - to Level 4 sites - highly sophisticated
offerings enabling integrated sales of additional products and access to other financial
services- such as investment and insurance. In other words a successful Internet
banking solution offers
Exceptional rates on Savings, CDs, and IRAs
Checking with no monthly fee, free bill payment and rebates on ATM surcharges
Credit cards with low rates
Easy online applications for all accounts, including personal loans and mortgages
24 hour account access
Quality customer service with personal attention
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DRIVERS OF CHANGE
Advantages previously held by large financial institutions have shrunk considerably.
The Internet has leveled the playing field and afforded open access to customers in the
global marketplace. Internet banking is a cost-effective delivery channel for financial
institutions. Consumers are embracing the many benefits of Internet banking. Access
to one's accounts at anytime and from any location via the World Wide Web is a
convenience unknown a short time ago. Thus, a bank's Internet presence transforms
from 'brouchreware' status to 'Internet banking' status once the bank goes through a
technology integration effort to enable the customer to access information about his or
her specific account relationship. The six primary drivers of Internet banking includes,
in order of primacy are:
Improve customer access
Facilitate the offering of more services
Increase customer loyalty
Attract new customers
Provide services offered by competitors
Reduce customer attrition
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INDIAN BANKS ON WEB
The banking industry in India is facing unprecedented competition from non-traditional
banking institutions, which now offer banking and financial services over the Internet.
The deregulation of the banking industry coupled with the emergence of new
technologies, are enabling new competitors to enter the financial services market
quickly and efficiently.
Indian banks are going for the retail banking in a big way. However, much is still to be
achieved. This study which was conducted by students of IIML shows some interesting
facts:
Throughout the country, the Internet Banking is in the nascent stage of development
(only 50 banks are offering varied kind of Internet banking services).
In general, these Internet sites offer only the most basic services. 55% are so called
'entry level' sites, offering little more than company information and basic marketing
materials. Only 8% offer 'advanced transactions' such as online funds transfer,
transactions & cash management services. Foreign & Private banks are much
advanced in terms of the number of sites & their level of development.
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EMERGING CHALLENGES
Information technology analyst firm, the Meta Group, reported that "financial institutions
who don't offer home banking by the year 2000 will become marginalized." By the year
of 2002, a large sophisticated and highly competitive Internet Banking Market was
develop which was be driven by
Demand side pressure due to increasing access to low cost electronic services.
Emergence of open standards for banking functionality.
Growing customer awareness and need of transparency.
Global players in the fray
Close integration of bank services with web based E-commerce or even
disintermediation of services through direct electronic payments (E- Cash).
More convenient international transactions due to the fact that the Internet along
with general deregulation trends eliminates geographic boundaries.
Move from one stop shopping to 'Banking Portfolio' i.e. unbundled product
purchases.
Certainly some existing brick and mortar banks will go out of business. But that's
because they fail to respond to the challenge of the Internet. The Internet and its
underlying technologies will change and transform not just banking, but all aspects of
finance and commerce. It represents much more than a new distribution opportunity. It
will enable nimble players to leverage their brick and mortar presence to improve
customer satisfaction and gain share. It will force lethargic players who are struck with
legacy cost basis, out of business-since they are unable to bring to play in the new
context.
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MAIN CONCERNS IN INTERNET BANKING
In a survey conducted by the Online Banking Association, member institutions rated
security as the most important issue of online banking. There is a dual requirement to
protect customers' privacy and protect against fraud. Banking Securely: Online
Banking via the World Wide Web provides an overview of Internet commerce and how
one company handles secure banking for its financial institution clients and their
customers. Some basic information on the transmission of confidential data is
presented in Security and Encryption on the Web. PC Magazine Online also offers a
primer: How Encryption Works. A multi-layered security architecture comprising
firewalls, filtering routers, encryption and digital certification ensures that your account
information is protected from unauthorized access:
Firewalls and filtering routers ensure that only the legitimate Internet users are
allowed to access the system.
Encryption techniques used by the bank (including the sophisticated public key
encryption) would ensure that privacy of data flowing between the browser and the
Infinity system is protected.
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BANKING SOFTWARE
Banking software portfolio
When it comes to banking software, one size does not fit all. Each business partner of
Strategic Information Technology (SIT) has their own approach. Our most successful
banking partners are visionaries. They've taken a unique approach to the market and
have leveraged Portfolio Plus banking software to be successful. They've also
adapted to the realities and pressures of the markets they serve. That is key. Without
this adaptability they would not be successful. Portfolio Plus, with its Plug-In Banking
software architecture enables an environment in which it is easy to adapt.
BANKING SOFTWARE A TOOL FOR GROWTH
Portfolio Plus is based on Plug-In Banking architecture. What does this mean? We
could answer with pages of technical jargon (and we'll gladly offer those details to you
when you're ready), but suffice to say, from a business perspective, the Plug-In
Banking architecture allows you to purchase exactly what you need to begin and
then add components and scalability accelerators, at a later date. The net result is
you get to start with a low capital outlay and increase your banking software
investment in proportion to your success.
Adaptable Software + Adaptable Vision = Market Success
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INDIA MARKET
Table 1 provides a summary of five key issues facing India's banking sector.
Issues Facing the Indian Banking Sector
Issue Description
Competition The Indian banking sector is highly competitive, with both private and
public institutions competing
across a range of financial products. Much of this competition stems
from the growth of the individual
consumer as a force in the marketplace. Private banks were the most
aggressive at servicing this
segment and forced the concept of customer service into the fore.
Public banks, with their huge
workforces and antiquated technologies, were slow to react to the
challenge of the private banks. This
is slowly changing as the public sector banks begin to make the
investments necessary to compete on a more equal footing.
Youth
population
Strong economic growth and liberalization have helped create more
opportunities for wealth creation.
India enjoys a favorable demographic position with a large young,
employed population. These young
people are not averse to taking loans, and their rising income levels
make them more attractive
targets for banks. The private banks excelled in penetrating and
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marketing to these customers, and
this has helped drive retail lending.
Margin
pressures
Although growth prospects are generally good, retail margins are
increasingly under pressure,
especially in housing and auto finance. Banks are trying to diversify
through other products such as
credit cards and personal loans, but competition is fierce. The cost of
deposits has also been going up
in the face of competition from the mutual fund and insurance
industries. On the corporate side, things
look a little better, with higher margins and low nonperforming loans
(NPLs). However, intense
competition is forcing margins down, and there are concerns that a
rise in NPLs could hurt profitability.
Government
Securities
Beyond the more traditional banking services, all Indian banks are
required to keep a minimum of 25%
of their net deposits in government securities. Many banks operate
significantly above these levels,
and although some . private banks, for example . are keen to reduce
these positions, others are
reluctant to do so. The profitability of these treasury operations has
been relatively predictable, but the
low margins and risk of rate rises are of concern.
Foreign institutions
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institutions Foreign players are getting more aggressive in India and have
expanded both organically and through acquisition. HSBC and ING
have made investments in domestic firms, and many others are
waiting for opportunities to do so. Foreign investment limits have
been raised, but there are still restrictions on market entry. If the
government ever elects to privatize the public banks, foreign players
would likely be keen to take stakes. A growing foreign presence is of
great concern to local players . foreign players such as Standard
Chartered have proven themselves to be formidable competitors, as
evidenced by their success in credit cards.
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COMPANY
PROFILE
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HISTORY OF STATE BANK OF INDIA
The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.
Three years later the bank received its charter and was re-designed as the Bank of
Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British
India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840)
and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three
banks remained at the apex of modern banking in India till their amalgamation as the
Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence
either as a result of the compulsions of imperial finance or by the felt needs of local
European commerce and were not imposed from outside in an arbitrary manner to
modernize India's economy. Their evolution was, however, shaped by ideas culled
from similar developments in Europe and England, and was influenced by changes
occurring in the structure of both the local trading environment and those in the
relations of the Indian economy to the economy of Europe and the global economic
framework.
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ESTABLISHMENT
The establishment of the Bank of Bengal marked the advent of limited liability, joint-
stock banking in India. So was the associated innovation in banking, viz. the decision
to allow the Bank of Bengal to issue notes, which would be accepted for payment of
public revenues within a restricted geographical area. This right of note issue was
very valuable not only for the Bank of Bengal but also its two siblings, the Banks of
Bombay and Madras. It meant an accretion to the capital of the banks, a capital on
which the proprietors did not have to pay any interest. The concept of deposit banking
was also an innovation because the practice of accepting money for safekeeping (and
in some cases, even investment on behalf of the clients) by the indigenous bankers
had not spread as a general habit in most parts of India. But, for a long time, and
especially upto the time that the three presidency banks had a right of note issue,
bank notes and government balances made up the bulk of the investible resources of
the banks.
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The three banks were governed by royal charters, which were revised from time to
time. Each charter provided for a share capital, four-fifth of which were privately
subscribed and the rest owned by the provincial government. The members of the
board of directors, which managed the affairs of each bank, were mostly proprietary
directors representing the large European managing agency houses in India. The rest
were government nominees, invariably civil servants, one of whom was elected as the
president of the board.
Group Photograph of Central Board (1921)
BUSINESS
The business of the banks was initially confined to discounting of bills of exchange or
other negotiable private securities, keeping cash accounts and receiving deposits and
issuing and circulating cash notes. Loans were restricted to Rs. one lakh and the
period of accommodation confined to three months only. The security for such loans
was public securities, commonly called Company's Paper, bullion, treasure, plate,
jewels, or goods 'not of a perishable nature' and no interest could be charged beyond
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a rate of twelve per cent. Loans against goods like opium, indigo, salt woollens,
cotton, cotton piece goods, mule twist and silk goods were also granted but such
finance by way of cash credits gained momentum only from the third decade of the
nineteenth century. All commodities, including tea, sugar and jute, which began to be
financed later, were either pledged or hypothecated to the bank. Demand promissory
notes were signed by the borrower in favour of the guarantor, which was in turn
endorsed to the bank. Lending against shares of the banks or on the mortgage of
houses, land or other real property was, however, forbidden.
Indians were the principal borrowers against deposit of Company's paper, while the
business of discounts on private as well as salary bills was almost the exclusive
monopoly of individuals Europeans and their partnership firms. But the main function
of the three banks, as far as the government was concerned, was to help the latter
raise loans from time to time and also provide a degree of stability to the prices of
government securities.
OLD BANK OF BENGAL
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CONCEPT AND ORIGIN OF CORE
BANKING
SBI adopts core banking system and its benefits
Our Bureau
Mr. A.K. Purwar (left), Chairman, State Bank of India, with Mr. S. Ramadorai, Chief
Executive Officer & Managing Director, TCS, at a press conference in Mumbai
MUMBAI, OCT. 20
STATE Bank of India was targeting a 15 per cent reduction in transaction costs by
March 2006 , with the help of Tata Consultancy Services.
Over 250 branches of the country's biggest lender went live , on the centralized core-
banking system (CBS) implemented by TCS, SBI's prime systems integrator for the
core-banking and trade finance technology solutions.
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By March 2005, 2,000 branches across the country was brought under the CBS,
covering 60 per cent of the bank's business. By 2006, the bank covered 90 per cent
of the business under the CBS.
"One of the biggest benefits from moving to the core-banking system is that the
transaction costs will be sufficiently reduced, by around 15 per cent to begin with, but
much more in due course ", said Mr. A.K. Purwar, Chairman, State Bank of India,
addressing a press conference in 2006.
The CBS solution set being implemented includes Banks from Financial Network
Solutions, Eximbills from China Systems interfaced to each other and the existing
legacy solution.
After the full implementation, the CBS would be capable of handling 100 million
customers, 1 00,000 users and 25 million transactions a day, officials said.
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.
STATE BANK OF INDIA
The State Bank of India (www.sbi.co.in) was created in July 1955 with the objective
Of extending banking services across the newly established Republic of India. It is the
Successor to the Imperial Bank of India, which traces its origins to the Bank of
Bengal, Set up by the East India Company and the British Government in 1806. In
1959, the Seven banks that had been previously associated with the princely states
under the British Raj became associate banks under the State Bank of India.
SBI and these seven associate banks constitute the largest financial group in
the country, with a Combined market share of approximately 25%.
The State Bank of India Group has controlling interest in the seven associate banks
Ranging from 75% to 100%. These banks have a combined network of 5,100
Branches and 1,070 ATMs. The seven institutions are:
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of Indore
State Bank of Mysore
State Bank of Patiala
State Bank of Saurashtra
State Bank of Travancore
SBI Group has a total domestic network of 13,984 branches and 8,500
fully Networked ATMs. It provides a wide range of financial services for
individuals and corporate entities and has an international presence through 173
overseas offices. A life insurance subsidiary was established in 2001 with Cardiff
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SA (BNP Paribas Group) as well as a credit card subsidiary, which is run as a
joint venture with GE Capital.
EXISTING CORE SOLUTION
Before we discuss the core banking system replacement, it is useful to briefly
Describe the system the bank is looking to replace. In the early 1990s, SBI made the
Decision to computerize its branches and standardize on a common banking solution.
It implemented a distributed branch-based core solution called Bandmaster from
Kindle Banking Systems, now part of Missy PLC. SBI and six of its associate banks
Used this system, while the seventh used a homegrown system.
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THE APPROACH
BUSINESS DRIVERS
Replacing the branch-based banking system was an acknowledged necessity driven
By a number of factors. One of the most salient was that each branch was run as an
Independent operation. Customers were customers of only one branch and could not
Bank freely at any SBI branch. To permit customers to do so required building
connectivity across the branches and moving them onto a common solution.
Even more ambitious was the desire to run all eight banks on a unified technology
platform extending across the entire organization.
SBI found itself under increasing pressure from smaller, aggressive private banks, led
By HDFC and ICICI Bank, that had implemented modern, flexible core solutions from
Their inception and were free of any legacy issues. This gave them a clear advantage
Over SBI and served as a stark reminder of the work SBI needed to do. More broadly,
The Indian banking sector was changing and SBI was not well equipped to adapt. On
The other hand, with SBI's size and legacy, if the bank could become a more nimble,
Technologically savvy player, it would be in a powerful position to dominate the local
Market.
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SYSTEM DRAWBACKS
When SBI computerized its branches in the early 1990s, it set up individual LANs at
The branches, rolled out the new Bank master system, and trained the staff on its use
And maintenance. The branches were not networked, and each had its own
Database. The Bank master system was customized to meet the particular
Requirements of each branch. Over the years, the branches further customized these
Individual systems and built a myriad of applications and processes to supplement the
Existing functionality. In essence, each branch did its own front- and back-office
operations, which led to little consistency across the organization.
Processes within the branch were effective but still highly manual and paper based.
There was little straight-through processing and thus little insight into
inefficiencies and where errors might be hiding. A major drawback to this system
was the time-consuming nature of accomplishing a variety of simple tasks, from
closing the books to servicing customer requests. In addition to these business
issues, there were challenges on the technology front. For example, development
work, application maintenance, and upgrades often occurred at the branch and could
not be managed centrally. Rolling out a common application or even implementing
common policies .security, for example. Was often a time-consuming process.
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NEW BUSINESS CULTURE
The very nature of the existing technology systems determined, to a great degree, the
Business processes, culture, and work habits of the institution. It ingrained behavior
patterns into the staff that were both positive and negative. On the one hand,
the independence of the branches led to an entrepreneurial spirit and an ability to
adapt to local conditions. On the other hand, a lack of central control led to
inefficiencies of scale. Governance was an overarching issue, especially where IT,
treasury, or financial accounting was concerned.
Perhaps most significant was the simple reality that system isolation meant
that customers were only customers of an individual branch, and this breed a
business culture anathema to the goals of a large, national financial institution.
Branch operations. Start of day, end of day, and so forth. were run independently, and
processes or activities that could be centralized and managed elsewhere were
repeated within each and every branch.
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IMPLEMENTING THE SOLUTION
SBI has a history of adapting to change. From the computerization of the early 1990s
to the current period, rarely has the bank enjoyed a period when the status quo has
been acceptable. In addition, the bank is very top driven.
Following the signing of the contract with TCS, teams from both organizations were
formed. The first job of the bank's team was to come up with a gap document, which
was presented to the TCS team. This allowed TCS to begin the necessary
development work, as significant customization was required. While the core solution
was from FNS, the final solution is more accurately a hybrid, incorporating millions of
lines of new code from TCS.
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SOLUTION CUSTOMIZATION
As part of the arrangement with FNS, TCS got the rights to modify the source code as
necessary. Before the customization could take place, however, a few
significant changes had to be made. One example relates to some of the
fundamental fields within the FNS application. The sizes of the bank number, general
number, and user number fields were inadequate to meet the needs of SBI.
While this issue sounds trivial, it required TCS to go through the entire code,
assess the impact, and make sweeping changes to the base FNS code including
architectural components.
Once these technical changes were made, TCS had to undertake the
functional customization. This was a reflection of SBI's own policies, practices,
and products. Two examples are worth noting. At SBI, a majority of transactions
have to be authorized by another officer (maker/checker concept) or individual
within the bank; thus, each transaction must go through two people before it takes
effect. This simple policy required massive customization, and the challenge was
to meet this requirement while keeping the network load low. The second example
relates to the bank's requirement that the branches be able to continue to function,
albeit with a limited transaction set, in the event of a network outage or
connectivity not being available to the host. In the event of a problem, the branches
operate as normal and transactions are stored in a local server to be posted to the
central server once connectivity is restored. The solution is also optimized to operate
across a variety of network solutions including leased lines, dial-up lines, and
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VSAT
Additional modifications were made in specific business areas to handle the volumes
and complexities of the branch-based cash, check, and clearing operations. Changes
also had to be made in terms of defining new products and in the interest calculation,
as well as to the foreign exchange operations, because of the specific reconciliation
requirements of SBI.
Many of the changes eliminated manual entry at the branches and streamlined
processes. For example, the bank wanted to provide a batch facility to process
transactions, which was not necessary with the previous system. A final change
to note related to reporting. The core banking system provides for the
generation of reports at the end of the day, but some branches required online
reports or delivery before the end of the day. In some cases, individual branches
were allowed to generate custom reports, enabling them to function more
autonomously.
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THE IMPLEMENTATION
As of December 1, 2005, 6,611 out of 13,984 branches (47%) were running on the
core banking system. Of these, 2,549 are SBI branches, while the remaining 4,062
come from the associate banks. Four of the associate banks . State Bank of Patiala,
State Bank of Travancore, State Bank of Indore, and State Bank of Saurashtra . are
now completely on the new core banking platform. For the initial rollout, SBI
Group runs eight separate databases with eight instances of the core banking
platform. The long-term vision is to merge these onto a single platform, ideally
with a single database, although the technical feasibility of having nearly 14,000
branches on a single database is still to be determined.
Before we discuss the process of bringing branches onto the core system, it
is important to note that the implementation team also had to build interfaces
to a myriad of systems. These include everything from the State Bank Electronic
Payment System (STEPS) to standalone systems such as those for diamond
financing operations in some branches.
Building interfaces, however, is only one part of the implementation process.
The main body of work relates to bringing SBI Group's vast network of branches onto
the core system. To do so required the adoption of a factory approach,
employing an assembly-line process to facilitate the rapid migration of branches.
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PILOT BRANCHES
Because of the size and breadth of SBI's operations, it was necessary to minimize the
complexity of the migration process by grouping the operations around common
business areas. Ten pilot branches were chosen to represent the different types
of business. The representative branch was the largest and most complex from
an operational standpoint, so as to include all the possible functionality required
for lesser operations of a similar type. The first pilot branch went live in August 2003,
and by October 2005, seven pilots had been completed.
Although the remaining three pilots have not been contractually completed, TCS has
already finished customizing the solution and it is ready for rollout in all SBI branches.
The pilot system was useful in the initial stages of the project because it
provided invaluable experience for the implementation team and allowed for a
carefully managed rollout.
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Key Core Banking Project Benefits Realized to Date
Business Benefit Description
Technology A large, scalable technology infrastructure for the future
Standardization of platforms
Ability to easily introduce new applications such as a
planned payment gateway
Improved IT governance
Process Streamlining of processes across the group and a
significant reduction in manual activities
Multi channel, centralized view of accounts and
transactions across customer relationships
(This "single view" of the customer will be available once
the planned deduplication process
is completed.)
Broader range of products and faster time to market
For corporate customers, an interface to the ERP system
and also direct interfaces to the SWIFT
and RTGS systems (The system also provides the ability to
view the online status of corporate
Transactions.)
Improved customer response time and a single-window
concept within the branch
Reduction in processing time, errors, fraud, and
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corruption
Ability to create centralized processing resources and
groups around areas such as credit
processing, liability settlement, treasury, and trade finance
operations
Overall The SBI Group now has a single platform for group-level
consolidation of SBI and its associate
banks.
A common platform allows the group to realize synergies
and economies of scale.
Customers can build loyalty to SBI as an integrated entity,
as opposed to their branch. This
anytime/anywhere banking makes SBI a formidable
competitor because of its enormous
domestic reach.
SBI branches are now channels and focus on value-
added activities around sales and customer
service. Noncore tasks and processes have been removed,
and new services such as the
Grahak Mithra meeter-greeter have been introduced to
assist customers.
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OBJECTIVE OF
RESEARCH
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OBJECTIVE OF RESEARCH
There are two main objective of carrying out this study.and they are
Evaluate the advantages of core banking
Benefits to customers of SBI.
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REVIEW LITERATURE
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some researchers in the
field of e-banking have been engaged in quantifying the current provision of
electronic services by the banks, from an innovation and marketing point of view
(Daniel, 1999; Scruggs and Nam, 2002). Liao and Cheung (2002), Sathye (1999) and
Yan and Paradi (1998) have explored the perception of customers about e-banking or
adoption of the Internet as a services delivery channel. Others such as King and Liou
(2004) and Harden (2002) compared e-channel with other channels. Some strategic
issues such as outsourcing of e-banking initiative have been discussed by Cantoni
and
Rossignoli (2000), or competitive advantage of e-banking by Griffiths and Finlay
(2004), but the area of strategic organisational issues of e-banking has generally not
been covered adequately by the current body of literature. This paper is aimed at
helping to bridge this gap.
This paper consists of four main parts. In the first part, the papers context in current
literature will be presented. In the second part, the research framework will be
described briefly. The third part is the statistical analysis and discussions. The final
part provides a summary of the results and a discussion on the implications of the
research. The statistical analyses performed for this phase of the research are similar
to those applied by Han and Noh (1999-2000).
Critical Success
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RESEARCH
METHODOLOGY
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RESEARCH METHODOLOGY
For any project or work analysis it is important to in depth, the pattern
adopted for research to analyze the results correctly. In fact research is an art of
scientific investigation.
A most common meaning of research is A SEARCH FOR
KNOWLEDGE.It is a process by which we found hidden facts. So, the present study
or methodology has been based on field study as well as on Questionnaire. The fieldstudy is based on interview and also a Questionnaire is filled by 100 account holders.
So, according to their response of Management and Employees analysis can be
done.
RESEARCH DESIGN
I have used the STRATIFIED RESEARCH DESIGN (STRATIFIED SAMPLING) .In
this sampling design the population divided into several sub-populations that are
individually more homogeneous than the total population (the different sub population
are called strata) and then we select items from each stratum to constitute a sample.
Since each stratum is more homogeneous than the total population, we are able to
get more precise estimates for each stratum and by estimating more accurately each
of the components parts, than we get better estimate of the whole.
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UNIVERSE AND SAMPLE
(SAMPLE SIZE)
1. I had prepared one common Questionnaire for both sides Management &customers.
2. The universe of the study is constituted by the account holders and SBI staff 100members was taken up to conduct the study.
3. In my survey I have administered questionnaire among 100 members from (bothemployees and customers) and those were asked to put tick appropriate optionmentioned in the questionnaire.
DATA COLLECTION
PRIMARY DATA
Primary data are those, which are collected afresh and for the first timeand thus happen to be original in character. Through there are many ways of
collecting primary data all have not been used are:
Questionnaires
Observation
Informal Talks
Direct Interviews
SECONDARY DATA
Secondary data are not originally collected but rather obtained frompublished sources. These data collected through literature, Office orders, circularsReports, Journals & Magazines, Articles, and Company Policy Manuals & throughWebsite of the company by Internet.
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PROCESSING AND TABULATION
The collected data were edited in order to ensure that all the required
information had been gathered and irrelevant information removed. After editing thedata were classified in the form of tables. The questionnaire was launched with a view
of examining and evaluating the scheme of various aspects of the scheme in vogue.
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IN THIS STUDY
In this study, we examine the transformation of the State Bank of India, which
is currently engaged in the largest centralized core banking system rollout ever
Attempted.
BRIEF DESCRIPTION OF THE SOLUTION
The State Bank of India is implementing a turnkey, centralized core banking solution,
Heavily customized to the bank's requirements. The solution includes retail and
Corporate banking modules,trade finance, and a general ledger.
The focus of this study is on the core banking system rollout, which is slated
to involve 13,984 branches. These include the branches of SBI as well as its
seven associate banks. While each of the eight banks will initially run its own instance
of the core solution, the vision is to eventually consolidate all eight onto a single,
common platform.
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SITUATION OVERVIEW
India has become accepted as the offshore location of choice for a range of
Technology and back-office functions. What is less well known, however, is the quiet
Transformation occurring within India's own financial sector. Although the banking
Industry is still a reflection of the country's nascent state of development, remarkable
projects are being undertaken that can provide lessons for countries all across
the world, particularly in developing economies such as China, Indonesia, or Brazil.
One project in particular is that of the State Bank of India.
A few numbers highlight the scale of this project: This core solution will be
responsible for running 13,984 standalone branches, handling a wide variety of
Business lines across the entire country. The solution will have to handle more than
100 million customers, 120+ million accounts, and more than 25 million daily
Transactions. The solution will have to scale to levels well beyond this as SBI
Continues to grow its customer base.
This project is much more than just a technology implementation and has
Necessitated a massive transformation across people, systems, processes, and
Governance. Although the project is still a few years from completion, the
changes have already been significant. It should be noted that this project must be
viewed in the right context. SBI is a giant public-sector institution with all the
problems and challenges that come with this moniker. It operates in a developing
economy the size of a continent, and thus comparisons with Western institutions or
those of developed economies in Asia are not appropriate. The project is remarkable
for what it is and the lessons it offers similar institutions around the world.
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Interpretation of Data
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Q1. ARE YOU USING INTERNET BANKING?
TOTAL SAMPLE SIZE 100
0
10
20
30
40
50
60
70
YES NO
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YES 70%
NO 30%
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Q2. WHY ATM IS BENEFICIAL FOR YOU?
0
10
20
30
40
50
60
70
24 X 7
GLOBLE ACCESS
FOST PROCESSING
FREE BANKSTATEMENT
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TOTAL SAMPLE SIZE 100
24 x 7 61%
GLOBAL ACCESS 12%
FAST PROCESSING 09%
FREE BANK STATEMENT 18%
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Q3. DO YOU THINK ABOUT SECURITY LEVEL OF COREBANKING?
0
510
15
20
25
30
35
40
45
50
HIGH
LOW
VERY HIGH
VERY LOW
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TOTAL SAMPLE SIZE 100
HIGH 45%
LOW 30%
VERY HIGH 10%
VERY LOW 15%
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Q4. WHICH AGE GROUP IS USING CORE BANKINGAT MOST?
0
10
20
30
40
50
60
70
BELOW 25
BELOW 35
BELOW 45
ABOVE 45
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TOTAL SAMPLE SIZE 100
BELOW 25 60%
BELOW 35 20%
BELOW 45 10%
ABOVE 45 10%
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Q5. WHAT DO YOU THINK ABOUT COREBANKING SERVICES OF SBI?
0
5
10
1520
25
30
35
4045
50
VERY GOOD
GOOD
POOR
VERY POOR
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TOTAL SAMPLE SIZE 100
VERY GOOD 45%
GOOD 35%
POOR 10%
VERY POOR 10%
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Q6. WHICH BANKS DO YOU THINK HAVEFASTEST SERVICE?
0
10
20
30
40
50
60
SBI
HDFC
ICICI
HSBC
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TOTAL SAMPLE SIZE 100
SBI 52%
HDFC 28%
ICICI 15%
HSBC 05%
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Q7. FACTOR WHICH YOU CONCEDER IS BEST INSBI?
0
5
10
1520
25
30
35
40
45
50
FAST TRANSACTION
ATM
SECURITY
LOAN SERVICE
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TOTAL SAMPLE SIZE 100
FAST MONEY TRANSACTION 30%
GOOD ATM 45%
SECURITY 15%
LOAN SERVICE 10%
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Q8. HOW LONG YOU ARE USING SBI COREBANKING SERVICES?
0
5
1015
20
25
3035
40
LESS THAN 1 YEAR
2 YEARS
3 YEARS
4 YEARS
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TOTAL SAMPLE SIZE 100
LESS THAN 1 YEAR 10%
2 YEAR 25%
3 YEAR 35%
4 YEAR 30%
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RECOMMANDATIONS
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RECOMMENDATIONS
1. Massive programmers of training are required for employees.
2. After training period performance rating must be published.
3. Regarding the maintenance of ATM SBI should be aware.
4. Reduce the transaction cost on withdrawal by other banks ATM.
5. ATM service must be implemented in rural areas.
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CONCLUSION
\\
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CONCLUSION
The State Bank of India, the countrys largest commercial lender, has increased the
size of its minimum term note (MTN) programmed to $5 billion from the earlier $2
billion. The net interest income (NII) of private banks for the January-March quarter is
seen rising 40-50% and in case of public sector banks, the increase is likely to be 15-
20%, according to an earnings poll of seven brokerages.
State Bank of India is the largest bank in India. It is also, measured by the number
of branch offices and employees, the largest bank in the world. It recently
celebrated its 200th anniversary. It has an asset base of $126 billion and is a
regional banking behemoth. It is a nationalized bank with the Reserve Bank of India
having a 60% stake which is likely to be reduced.
One of the biggest benefits from moving to the core-banking system is that the
transaction costs will be sufficiently reduced, by around 15 per cent to begin
with, but much more in due course ", said Mr A.K. Purwar, Chairman, State
Bank of India,
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LIMITATIONS
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LIMITATIONS
1. Due to less time period it is not possible for me to gather all the information.
2. Biasedness is there.
3. Being a student it is not possible for me to spend a lot of money on a project.
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BIBLIOGRAPHY
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BIBLIOGRAPHY
BOOKS REFERRED:-
1. Managing Indian Banks: challenges ahead= vasant c joshi and vinay v
joshi/sage publications.
2. Practical Banking Advances=Bedi H.L& Hardikar V.K\UBSPD Publishers and
distributors,2001 edition.
INTERNET:-
www.SBI.com
www.sbi.co.in
www.bankersindia.com
www.google.com
http://www.airtelive.com/http://www.airtelive.com/http://www.relianceinfo.com/http://www.bankersindia.com/http://www.bankersindia.com/http://www.google.com/http://www.google.com/http://www.bankersindia.com/http://www.relianceinfo.com/http://www.airtelive.com/8/2/2019 Impact of Computerization & E-business on Banking Sectors a Study of s.b.i
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ANNEXURE
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QUESTIONNAIRE
CUSTOMERS NAME: - ______________________
ACCOUNT HOLDERS PROFILE
(a) Age ( in year)
25-35 35-45 45-55 55 andabove
(b) Educational background
10+2 Graduate P.G. Professional degree
(c) Income slab
1-1.5 Lacks 1.5-2.5 lacks 2.5-3.5 lacks 3.5 andabove
1- Are you using internet banking?
Yes No
2- Why ATM is beneficial for you?
24 X 7 Global Access
Fast processing Free bank statement
3- Do you think about security level of core banking?
High Low
Very High Very Low
4- Which age group is using core banking at most?
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Below 25 Below 35
Below 45 Above 45
5- What do you think about core banking services of SBI?
Very Good Good
Poor Very Poor
6- Which banks do you think have fastest service?
SBI HDFC ICICI HSBC
7- Factor which you conceder is best in SBI?
Fast money transaction Good ATM Services
Security Loan services
8- How long you are using SBI core banking services?
Less then 1 year 2 years
3 years 4 years