A PROJECT REPORT ON ONLINE BANKING

SUBMITTED BY CHANDNI SONI

ROLL NO.45 T.Y.B.COM(FINANCIAL MARKETS) SEMESTE V (2013-2014) PROJECT GUIDE: SHRUTI CHAVARKAR
SUBMITTED TO

UNIVESITY OF MUMBAI ACADEMIC YEAR (2013-2014)

S.K.SOMAIYA COLLEGE OF ARTS, COMMERCE& SCIENCE, VIDYANAGAR, VIDYAVIHAR MUMBAI:400077

ACKNOWLEDGEMENT
The urge and need to complete this project was not possible without the helping hands that are the kind of co-operation & support from the people. I take this opportunity to thanks all those who play a major role in the completion of the project. I would like to express gratitude to my guide PROF. SHRUTI CHAVARKAR for his involvement in my project and timely assessment that provided me inspiration & valued guidance throughout my study. I owe my debt to our coordinator PROF.SHRUTI CHAVARKAR for giving me an opportunity to present a creative in the form of project work. I must specially record my thanks to my family members and all my friends for their constant help and assistance.

Objectives of study The main objectives of the study are: To understand the concept of internet banking and importance ,to bank as well as customers To get various aware of net banking. To build up SWOC analysis of internet banking of sbi To build up various solutions for drawbacks in net banking.

Internet banking History

Internet banking is used widely by masses, and has numerous benefits to offer. Nowadays, all banks provide online banking facility to their customers as an added advantage. Gone are the days, when one had to transact with a bank which was only in his local limits. Online banking has opened the doors for all customers, to operate beyond boundaries. Nowadays, people are so busy in their work lives, that they don't even have time to go to the bank for conducting their banking transactions. Internet banking enable people to carry out most of their banking transactions using a safe website, which is operated by their respective banks. It provides many features and functions to their customers, and enables them to view their account balance, transfer money from their account to another account (be it in their respective bank or any other bank), view their account summary, etc. In this procedure, many financial transactions can be carried out by simply utilizing a computer with an Internet connection. The necessary things that a person needs for using online banking are, an active bank account with balance in it for transactions, debit or a credit card number, customer's user ID, bank account number, the Internet banking PIN number, and a PC with access to the web. People using Internet banking are certainly benefited by the online services their respective banks are providing them with. The primary reason why it is so famous and mostly used is that, customers are allowed to bank at non-working hours. Banks create their banking interfaces and websites in a viewable and user-friendly manner, which enable customers to conduct their financial transactions with ease. If they are stuck in any process while performing their online transactions, banks have another helpful facility that is 'phone banking', wherein customers can call the bank's toll-free number and get assistance in completing their transactions. Electronic bill payment, viewing and downloading financial records, and money transfers are some of the general transactions which the customers generally carry out. All online banking services, provided by some banks, are free of cost. When a customer views the bank's website, there are many options available, but to execute those transactions, he would obligatorily need to log into his virtual account. Without logging in, he won't be allowed to carry out any kind of the transactions. Initially, when he opens an account with the bank, the bank gives a welcome kit which contains important documents that include the checkbook; a document on which the customer's user ID, online banking password, phone banking password, and account number is embedded. The kit also contains some other confidential data, the credit or debit card, and the card details. The website will prompt the user to enter the necessary details like the Internet banking password and account number, and then will display his account information. In this stage, he can carry out all functions that are available on the website. With regards to the password authentication and encryption, high security is maintained, as there is a chance of hackers getting unauthorized access to the customer's account and performing malpractices. However, banks keep their online security systems up-to-date to prevent such scenarios. Moreover, banks also suggest their customers to keep on changing passwords periodically. They also implement some security measures like using unique login IDs,

transaction codes, using two passwords, security tokens which generate automatically changing passwords, etc. The Internet banking facilities provided by banks differ from bank to bank, and country to country. To know all online banking services and processes, one has to thoroughly refer to the guides which were made available in the welcome kit. Moreover, proper care has to be taken regarding the confidential documents as, Internet banking frauds are on an increase. Read more at Buzzle: http://www.buzzle.com/articles/what-is-internet-banking. Internet banking is used widely by masses, and has numerous benefits to offer. Nowadays, all banks provide online banking facility to their customers as an added advantage. Gone are the days, when one had to transact with a bank which was only in his local limits. Online banking has opened the doors for all customers, to operate beyond boundaries. Nowadays, people are so busy in their work lives, that they don't even have time to go to the bank for conducting their banking transactions. Internet banking enable people to carry out most of their banking transactions using a safe website, which is operated by their respective banks. It provides many features and functions to their customers, and enables them to view their account balance, transfer money from their account to another account (be it in their respective bank or any other bank), view their account summary, etc. In this procedure, many financial transactions can be carried out by simply utilizing a computer with an Internet connection. The necessary things that a person needs for using online banking are, an active bank account with balance in it for transactions, debit or a credit card number, customer's user ID, bank account number, the Internet banking PIN number, and a PC with access to the web. People using Internet banking are certainly benefited by the online services their respective banks are providing them with. The primary reason why it is so famous and mostly used is that, customers are allowed to bank at non-working hours. Banks create their banking interfaces and websites in a viewable and user-friendly manner, which enable customers to conduct their financial transactions with ease. If they are stuck in any process while performing their online transactions, banks have another helpful facility that is 'phone banking', wherein customers can call the bank's toll-free number and get assistance in completing their transactions. Electronic bill payment, viewing and downloading financial records, and money transfers are some of the general transactions which the customers generally carry out. All online banking services, provided by some banks, are free of cost. When a customer views the bank's website, there are many options available, but to execute those transactions, he would obligatorily need to log into his virtual account. Without logging in, he won't be allowed to carry out any kind of the transactions. Initially, when he opens an account with the bank, the bank gives a welcome kit which contains important documents that include the checkbook; a document on which the customer's user ID, online banking password, phone banking password, and account number is embedded. The kit also contains some other confidential data, the credit or debit card, and the card details. The website will prompt the user to enter the necessary details like the Internet banking password and account number, and then will display his account information. In this stage, he can carry out all functions that are available on the website.

With regards to the password authentication and encryption, high security is maintained, as there is a chance of hackers getting unauthorized access to the customer's account and performing malpractices. However, banks keep their online security systems up-to-date to prevent such scenarios. Moreover, banks also suggest their customers to keep on changing passwords periodically. They also implement some security measures like using unique login IDs, transaction codes, using two passwords, security tokens which generate automatically changing passwords, etc. The Internet banking facilities provided by banks differ from bank to bank, and country to country. To know all online banking services and processes, one has to thoroughly refer to the guides which were made available in the welcome kit. Moreover, proper care has to be taken regarding the confidential documents as, Internet banking frauds are on an increase.

What is internet banking Internet banking system is a system that has been developed in order to help clients with the day to day transactions. Internet banking system means that the clients can now do banking at the leisure through the home. Also known as online banking, the system allows both transactional and non -transactional features. Online banking or internet banking allows customers to conduct financial transactions on secure web site operated by the retail or virtual bank

HISTORY OF SBI BANK:The evolution of State Bank of India can be traced back to the first decade of the19th century. It began with the establishment of the Bank of Calcutta in Calcutta,on 2 June 1806. The bank was redesigned as the Bank of Bengal, three yearslater, on 2 January 1809. It was the first ever jointstock bank of the British India,established under the sponsorship of the Government of Bengal. Subsequently,the Bank of Bombay (established on 15 April 1840) and the Bank of Madras(established on 1 July 1843) followed the Bank of Bengal.An important turning point in the history of State Bank of India is the launch of thefirst Five Year Plan of independent India, in 1951. The Plan aimed at serving theIndian economy in general and the rural sector of the country, in particular. Untilthe Plan, the commercial banks of the country, including the Imperial Bank of India,confined their services to the urban sector. Moreover, they were not equipped torespond to the growing needs of the economic revival taking shape in the ruralareas of the country. Therefore, in order to serve the economy as a whole andrural sector in particular.The All India Rural Credit Survey Committee proposed the take over of theImperial Bank of India, and integrating with it, the former state-owned or state-associate banks. Subsequently, an Act was passed in the Parliament of India inMay 1955. As a result, the State Bank of India (SBI) was established on 1 July1955. This resulted in making the State Bank of India more powerful, because asmuch as a quarter of the resources of the Indian banking system were controlleddirectly by the State. Later on, the State Bank of India (Subsidiary Banks) Act waspassed in 1959.The State Bank of India emerged as a pacesetter, with its operations carried out bythe 480 offices comprising branches, sub offices and three Local Head Offices,inherited from the Imperial Bank. Instead of serving as mere repositories of thecommunity's savings and lending to creditworthy parties, the State Bank of Indiacatered to the needs of the customers, by banking purposefully

theReserve Bank of India. The Presidency banksamalgamated on27 January 1921, and the reorganized banking entity took as itsnameImperial Bank of India. The Imperial Bank of India continued to remain a jointstock company.Pursuant to the provisions of the State Bank of India Act (1955), theReserve Bank of India, which isIndia's central bank, acquired a controlling interest in the ImperialBank of India. On30 April 1955the Imperial Bank of India became the State Bankof India.In 1959 the Government passed the State Bank of India (SubsidiaryBanks) Act, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries. OnSept 13, 2008,State Bank of Saurashtra,one of its Associate Banks, merged with State Bank of India

Associate banks:There are six associate banks that fall under SBI, and together these six banksconstitute the State Bank Group. All use the same logo of a blue keyhole and allthe associates use the "State Bank of" name followed by the regionalheadquarters' name. Originally, the then seven banks that

became the associatebanks belonged toprincely statesuntil the government nationalized them in 1959.In tune with the first Five Year Plan, emphasizing the development of rural India,the government integrated these banks into State Bank of India to expand its ruraloutreach. There has been a proposal to merge all the associate banks into SBI tocreate a "mega bank" and streamline operations. The first step along these linesoccurred in September 2008 whenState Bank of Saurashtramerged with StateBank of India, which reduced the number of state banks from seven to six. State Bank of Indore State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore

Growth:State Bank of India has often acted as guarantor to theIndian Government, mostnotably duringChandra Shekhar 's tenure asPrime Minister of India. With morethan 11,111 branches and a further 6500+ associate bank branches, the SBI hasextensive coverage. State Bank of India has electronically networked all of itsbranches under Core Banking System(CBS). The bank has one of the largestATM networks in the region. More than 8500 ATMs across India. The State Bank of India has had steady growth over its history, though it was marred by theHarshad Mehtascam in 1992. In recent years, the bank has sought to expand its overseasoperations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in theFortune Global 500rating and various other rankings. Group companies: SBI Capital Markets Ltd SBI Mutual Fund(A Trust) SBI Factors and Commercial Services Ltd SBI DFHI Ltd SBI Cards and Payment Services Pvt Ltd SBI Life Insurance Co. Ltd-Bancassurance(Life Insurance)

 SBI Funds Management Pvt Ltd SBI Canada

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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. thedecision 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 noteissue 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 thebanks, a capital on which the proprietors did not have to pay any interest.The concept of deposit banking was also an innovation because thepractice of accepting money for safekeeping (and in some cases, even investmenton behalf of the clients) by the indigenous bankers had not spread as a generalhabit in most parts of India. But, for a long time, and especially upto the time thatthe three presidency banks had a right of note issue, bank notes and governmentbalances made up the bulk of the investible resources of the banks.The three banks were governed by royal charters, which were revised from time totime. Each charter provided for a share capital, four-fifth of which were privatelysubscribed and the rest owned by the provincial government. The members of theboard of directors, which managed the affairs of each bank, were mostlyproprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whomwas elected as the president of the board.

Business
:-The business of the banks was initially confined to discounting of bills of exchangeor other negotiable private securities, keeping cash accounts and receivingdeposits and issuing and circulating cash notes. Loans were restricted to Rs.onelakh and the period of accommodation confined to three months only. The securityfor such loans was public securities, commonly called Company's Paper, bullion,treasure, plate, jewels, or goods 'not of a perishable nature' and no interest couldbe charged beyond a rate of twelve per cent. Loans against goods like opium,indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods werealso granted but such finance by way of cash credits gained momentum only fromthe third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated tothe bank.

Major change in the conditions:A major change in the conditions of operation of the Banks of Bengal, Bombayand Madras occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue of the presidency banks was abolished and theGovernment of India assumed from 1 March 1862 the sole power of issuing paper currency within British India. The task of management and circulation of the newcurrency notes was conferred on the presidency banks and the Governmentundertook to transfer the Treasury balances to the banks at places where thebanks would open branches. None of the three banks had till then any branches(except the sole attempt and that too a short-lived one by the Bank of Bengal atMirzapore in 1839) although the charters had given them such authority. But assoon as the three presidency bands were assured of the free use of government

Subsidiaries: The State Bank Group includes a network of eight banking subsidiaries andseveral non-banking subsidiaries. Through the establishments, it offers variousservices including merchant banking services, fund management, factoringservices, primary dealership in government securities, credit cardsThe eight banking subsidiaries are: 11.State Bank of Bikaner and Jaipur (SBBJ)12.State Bank of Hyderabad (SBH)13.State Bank of India (SBI)14.State Bank of Indore (SBIR)15.State Bank of Mysore (SBM) 16.State Bank of Patiala (SBP)17.State Bank of Saurashtra (SBS)18.State Bank of Travancore (SBT)

Company profile State bank of india

 Products
1. Personal Banking: SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme

2. Other Services: Agriculture/Rural Banking NRI Services ATM Services Demat Services Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Yatra Foreign Travel Card Broking Services Gift Cheques

Services provided by sbi internet banking State Bank of India is Indias largest bank with a branchnetwork of over 11000 branches and 6 associate banks locatedeven in the remotest parts of India. State Bank of India (SBI) offers a wide range of banking products and services to corporateand retail customers.OnlineSBI is the Internet banking portal for State Bank of India.The portal provides anywhere, anytime, online access toaccounts for State Banks Retail and Corporate customers. Theapplication is developed using the latest cutting edge technologyand tools. The infrastructure supports unified, secure access to banking services for accounts in over 11,000 branches acrossIndia. RETAIL BANKING:The Retail banking application is an integration of severalfunctional areas, and enables customers to: Issue Demand Drafts online Transfer funds to own and third party accounts Credit beneficiary accounts using the VISA MoneyTransfer, RTGS/NEFT feature Generate account statements Setup Standing Instructions Configure profile settings Use eTax for online tax payment Use ePay for automatic bill payments Interface with merchants for railway and airlinereservations Avail DEMAT and IPO services CORPORATE BANKING:The OnlineSBI corporate banking application provides featuresto administer and manage corporate accounts online. Thecorporate module provides roles such as Regulator, Admin,Uploader, Transaction Maker, Authorizer, and Auditor. Theseroles have access to the following functions: Manage users, define rights and transaction rules oncorporate accounts Access accounts in several branches with a single sign-onmechanism Upload files to make bulk transactions to third parties,supplier, vendor and tax collection authorities.

Use online transactional features such as fund transfer toown accounts, third party payments, and draft issues Make bill payments over the Internet. Authorize, modify, reschedule and cancel transactions, based on rights assigned to the user Generate account statement Enquire on transaction details or current balance Value added services : Tax payments to central and state governments through siteto site integration. Supply Chain Finance( e-VFS- Electronic Vendor FinanceScheme) Direct Debit Facility E Collection Facilities for: Core Banking Transactions