study of customer awareness and preferences towards neft fund transfers with special focus on...

8/12/2019 Study of Customer Awareness and Preferences Towards NEFT Fund Transfers With Special Focus on Dombivli (Eas

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CHAPTER 1

INTRODUCTION

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INTRODUCTION

In this modern era due to the various inventions and technological advancements, our life

has become very smooth and easy. Today we all can do most of our day to day work at

the click of a button. Thanks to technology. Many organizations too have applied latest

technology to operate efficiently. The advanced technologies have not only helped the

organizations to operate efficiently, but also to benefit the society. The new advanced

technology is not only limited to any one particular industry or sector, but to all the

industries and sectors.

Then in such a scenario how can banks stay away? These days even the banks have

adopted latest technologies to operate better and serve its clients in a better way. One ofsuch technologies is lectronic !und Transfer "!T#. In India !T can be classified into$

%!T

&T'(

)(

In the further chapters lets discuss about the above mentioned technologies in detail so

that we can get to know more about the above mentioned systems and a brief overview

about the Indian bank.

1.1 Indian Bank Profile

1.1.1 A premier bank owned by !e "o#ernmen of India

Indian bank was established on *+thugust *-/ as part of the (wadeshi movement.

(ince then it is now serving the nation with a team of over 00, dedicated staff. It is a

premier bank owned by the 'overnment of India. Indian bank head office is situated in

)hennai. Its total business as on 1*.1.0- crossed &s. *, 02, 2*1 )rores. 3ank4s

Operating 5rofit increased to &s. 0, 006.61 )rores as on 1*.1.0-. The %et 5rofit

increased to &s. *, 02+.10 )rores as on 1*.1.0-. The Indian 3ank has successfully

implemented )ore 3anking (olution ")3(# in all */+ branches.

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International 5resence

Indian bank has branches not only in India, but also outside India. Its overseas branchesare in $in%apore and Colombo including a !oreign )urrency 3anking 7nit which is

situated in )olombo. In addition to that Indian bank has 02 Overseas )orrespondent

banks in / countries.

1.1.& Di#er'ified bankin% a(i#iie') * $+b'idiary (ompanie'

long with the normal banking functions Indian bank has also diversified in various

banking activities. It has incorporated 1 subsidiary companies namely$

Indbank Merchant 3anking (ervices 8td.

Indbank 9ousing 8td.

Indfund Management 8td.

1.1.* Indbank ,er(!an Bankin% $er#i(e' -d.

Indbank Merchant 3anking $er#i(e' 8imited "Indbank# was incorporated in the year*-6- as a subsidiary of Indian 3ank. Indbank is engaged in

Merchant 3anking$ Indbank is a )ategory * Merchant 3anker registered with (ecurities

:change 3oard of India "(3I# undertaking assignments under various capacities like

8ead Manager, )o;Manager, dvisor, rranger etc. for public issues and private

placement. It also takes assignments for ac


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dvisory (ervices$ dvisory services include valuation of shares = other financial

instruments, syndication of loans, acerivatives = Aholesale >ebt Market (egments of %( for both retail and institutional

investors and in cash segment of 3(.

>epository 5articipant ctivities$ Indbank is a (3I registered >epository 5articipant

with %ational (ecurities = >epository 8imited "%(>8# and is governed by the

>epositories ct *--B, (3I ">epositories = 5articipants# &egulations, *--B and

circulars issued by (3I and %(>8 from time to time.

>istribution of Mutual !und and other Investment products$ s a part of broking,

Indbank distributes Mutual !und and investment products and is registered with the

ssociation of Mutual !unds of India "M!I# for distribution of Mutual !und products.

Online Trading$ To enable the customer to trade from anywhere under Internet based

trading system, Indbank has launched a powerful and user friendly online trading facility

which is completely safe and secure. The facility is designed to provide you an e:pedient

and paperless trading e:perience.

1.1. Ind/+nd ,ana%emen -d.

Indian 3ank Mutual !und "I3M!# was formedas a trust during *-- sponsored by Indian

3ank with a corpus of &s. 0+ lakhs. The schemes of I3M! were managed by trust during

the years *--;*--2. To comply with the (3I "M!# &egulations, *--1, Indfund

Management 8td. "I!M8#, the sset Management )ompany was formed during Canuary

*--2 as a wholly owned subsidiary of Indian 3ank with a paid up capital of &s.+ crores.

(ince Canuary *--2, the schemes of I3M! are being managed by I!M8. I3M! launched

*0 close;ended schemes and raised &s.B0/.* crore. Out of the *0 schemes - schemes

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were redeemed on maturity dates. Three schemes, i.e., Ind %avratna, Ind (helter and Ind

Ta: (hield schemes were transferred to Tata Mutual !und during %ovember 0*.

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1.1.0 A fron r+nner in 'pe(iali'ed bankin%

Indian is a front runner in specialised banking. It has - !ore: uthorised branches

inclusive of * (pecialised Overseas 3ranch at )hennai e:clusively for handling fore:

transactions arising out of :port, Import, &emittances and %on &esident Indian

business. part from that Indian bank has * (mall (cale Industries 3ranch, e:tending

finance e:clusively to ((I units.

1.1. -eader'!ip in R+ral De#elopmen

Indian bank being a responsible bank is not only focusing on the urban parts of the

country but also e:tending an immense support to the rural parts of the country to help

them develop. Indian bank is pioneer in introducing (elf 9elp 'roups and !inancial

Inclusion 5ro@ect in the country. It is ward winner for :cellence in gricultural

8ending from 9onorable 7nion Minister of !inance. Indian bank has also bagged the

3est 5erformer ward for Micro;!inance activities in Tamil %adu and 7nion Territory of

5uducherry from %3&>. part from these it has established / specialized e:clusive

Microfinance branches called DMicrosateE across the country to cater the needs of the

urban poor through (9' "(elf 9elp 'roup#C8' "Coint 8iability 'roup# concepts. It has a

special window for Micro finance viz., Micro )redit Fendras are functioning in 22

&ural(emi 7rban branches. Indian bank is harnessing I)T "Information and

)ommunication Technology# for &ural >evelopment and Inclusive 3anking. Indian bank

has a provision of technical assistance and pro@ect reports in griculture to entrepreneurs

through gricultural )onsultancy and Technical (ervices ")T(#.

1.1.2 A pioneer in inrod+(in% !e lae' e(!nolo%y in Bankin%

Indian bank has been a pioneer in introducing the latest technology. Indian bank has

*G )ore 3anking (olution ")3(# 3ranches. Its business is *G 3usiness

)omputerized. That is the reason it works operates efficiently. Indian bank has *B6

)enters throughout the country covered under Hnywhere 3anking4. It has -BB connected

utomated Teller Machines "TM# in 0B citiestowns. Indian bank provides a 02/

service through 2 TMs under shared network. It is leader in Internet and Tele

3anking (ervices to all )ore 3anking customers. It provides ;payment facility for

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corporate customers. The other services provided by Indian 3ank are )ash Management

(ervices, >epository (ervices, &euter (creen, Telerate, &euter Monitors, >ealing (ystem

provided at Overseas 3ranch, )hennai. Indian bank has launched I3 )redit )ard.

1.1.3 4i'ion5To ake bankin% e(!nolo%y o !e (ommon man.

1.1.6 ,i''ion5To be a (ommon man7' bank o pro#ide all finan(ial 'er#i(e'

under one roof

at an affordable cost

in a fair and transparent manner to all our customers

1.1.18 -o%o5

1.& Naional Ele(roni( /+nd Tran'fer 9NE/T:

1.&.1 Inrod+(ion5

%ational lectronic !und Transfer "%!T# is an online system for transferring funds of

Indian financial institutions "especially banks#. This facility is used mainly to transfer

funds below &s. *, , .

The &eserve 3ank of India has instructed banks that they should not use &eal Time 'ross

(ettlement "&T'(# for amounts below &s. * lakh "* thousand#. The new rule came into

effect on * Canuary 0/. !or small transactions, &3I has asked banks to offer %ational

lectronic !und Transfer "%!T# which provided TJ and TJ* settlement system

"depending on the time a customer gives instruction to the bank for transferring the fund#.

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Individuals, firms or )orporates maintaining accounts with a bank branch can transfer

funds using %!T. ven such individuals, firms or )orporates who do not have a bank

account "walk in customers# can also depositcash at the branch with instructions totransferfundsusing %!T. separate Transaction )ode "%o. +# has been allotted in the%!T system to facilitate walk;in customers to deposit cash and transfer funds to a

beneficiary. (uch customers have to furnish full details including complete address,

telephone number etc.%!T, thus, facilitates originators or remitters to initiate fundstransfer transactions even without the need for having a bank account. %!T is a credit;

push system i.e. transactions can be originated only to transfer funds to the beneficiary.

(o a transaction cannot be originated to receive funds from another account.

%!T can also be used to transfer funds from or to a %on;&esident Indian "%&I# or %on;

&esident :ternal "% accounts in the country. This, however, is sub@ect to

applicability of provisions of the !oreign :change Management ct, 0 "!M#.

%!T system can be used only for remitting Indian &upees between the participating

bank branches in the country.

%!T is on net settlement basis. It involves B settlement cycles a day -$ am, **$ am,

*0 noon, *$ pm, 1. pm and +$ pm. Thus if a customer has given instruction to its

bank to transfer money through %!T to another bank in the morning hours, money

would be transferred the same day, but if the instruction is given later during the day,

money would be transferred ne:t day.

%!T is available in B0, branches of -2 banks in India "out of /+, bank

branches#. %!T is available only in *+ locations where &3I has its clearing house.

There is no minimum value for %!T.

1.&.& ;orkin% of NE/T 'y'em5

(tep*$ n individualfirmcorporate intending to originate or transfer funds through

%!T has to fill an application form giving details of the beneficiary "like, name of the

beneficiary, name of the bank branch where the beneficiary has an account, I!() of the

beneficiary bank branch, account type and account number#. The application form will be

available at the originating bank branch. The originator authorizes the branch to debit

hiher account and remit specified amount to the beneficiary. )ustomers en@oying net

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banking facility offered by their bankers can initiate the funds transfer re


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respective banks. The details are also available on the website of &eserve 3ank of India

at http$www.rbi.org.inscriptsneft.asp:.

If the issue is not resolved satisfactorily, the %!T 9elp >esk "or )ustomer !acilitation

)entre of &eserve 3ank of India# at %ational )learing )ell, &eserve 3ank of India,

Mumbai may be contacted through e;mailor by addressing correspondence to the

'eneral Manager, &eserve 3ank of India, %ational )learing )entre, !irst !loor, !ree

5ress 9ouse, %ariman 5oint, Mumbai;20*.

1.&.* Pro(e''in% or $er#i(e' (!ar%e' for NE/T ran'a(ion'5

&eserve 3ank of India had waived the processing or service charges for member banks

till March 1*, 0*. ccordingly, member banks participating in %!T need not pay any

processing or service charges to &eserve 3ank of India. !urther, processing or service

charges to be levied by the member banks from their customers have also been

rationalized by &eserve 3ank of India as under$

a# Inward transactions at destination bank branches "for credit to beneficiary accounts#

- !ree, no charges to be levied from beneficiaries.

b# Outward transactions at originating bank branches "charges for the remitter#

-!or transactions up to &s. * lakh L charges not e:ceeding &s. +.

- !or transactions of &s. * lakh and above L charges not e:ceeding &s. 0+.

There is no value limit for individual transactions. The receiving branch acknowledges

every transaction it receives after crediting the beneficiary4s account. The

acknowledgement particulars reach the remitting branch as an inward message on >ay 1

of the !T processing cycle. The remitting branch will, therefore, have preciseinformation as to when the beneficiary4s account was credit.

It is not necessary for all branches to have computer systems. 3ranches can send the

remittance details to their service branch in paper format "the copies of the !T

pplication !orms submitted by the remitting customers accompanied by a &emittance

(croll#. The service branch will make data entry and transmit the funds transfer

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http://www.rbi.org.in/scripts/neft.aspxhttp://rbi.org.in/scripts/Bs_RbiEmailMaster.aspx?name=nefthelphttp://rbi.org.in/scripts/Bs_RbiEmailMaster.aspx?name=nefthelphttp://www.rbi.org.in/scripts/neft.aspxhttp://rbi.org.in/scripts/Bs_RbiEmailMaster.aspx?name=nefthelp


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information electronically to local %)). 3ut, if a branch has computer facility, it can

transmit funds transfer information electronically to its service branch either on a floppy

or through a network. This would minimize the data entry work at service branch.

ach participating bank has to identify a branch at the respective center to act as the link

point for transmitting all outward messages and receiving all inward messages. The

(ervice 3ranchMain 3ranches of banks who have been coordinating the che


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remitting bank within 0 hours. Once the money is received back by the remitting bank,

the original debit entry in the customers account is reversed.

The &T'( service window for customers transactions is available from -$ hours to

*6$ hours on week days and from -$ hours to *2$1 hours on (aturdays for

settlement at the &3I end. 9owever, the timings that the banks follow may vary

depending on the customer timings of the bank branches.

The 5rocessing )harges(ervice )harges for &T'( transactions are as follows$

a. Inward transactions$ !ree, no charge is levied.

b. Outward Transactions$

&s. *lakh to &s. +lakh$ &s. 0+; per transaction

&s. +lakh and above$ &s. +; per transaction.

The remitting customer has to furnish the following information to a bank for affecting a

&T'( remittance$

*. mount to be remitted.

0. 9isher account number which is to be debited.

1. %ame of the beneficiary account.

2. %ame of the beneficiary customer.

+. ccount number of the beneficiary customer.

B. (ender to receiver information, if any.

/. The I!() number of the receiving branch.

(ince India is such a huge country and the banks in India have such a wide network, so

all the bank branches in India are not &T'( enabled. s on >ecember 1*, 06, more

than +0, bank branches are &T'( enabled. The list of such branches is available on

&3I website www.rbi.org.in(cripts3sNview&T'(.asp:

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(ome banks with internet banking facility provide remittance transaction tracking

service. Once the funds are credited to the account of the beneficiary bank, the remitting

customer gets a confirmation from his bank either by an e;mail or by a short message on

the mobile. In case of non;credit or delay in credit to the beneficiary account, the remitter

can contact hisher bankbranch. If the issue is not resolved satisfactorily, the )ustomer

(ervice >epartment of &3I may be contacted at ;

The )hief 'eneral Manager,

&eserve 3ank of India,

)ustomer (ervice >epartment,

*st!loor, mar 3uilding, !ort, Mumbai; 2 *.

On a typical day, &T'( handles about B, transactions a day for an appro:imatevalue of &s. 0, / billion.

1. Ele(roni( Clearin% $er#i(e 9EC$:

1..1 Inrod+(ion5

lectronic )learing (ervice ")(# is a mode of electronic funds transfer from one bank

account to another bank account using the services of a )learing 9ouse. This is normally

for bulk transfers from one account to many accounts or vice;versa. This can be used

both for making payments like distribution of dividend, interest, salary, pension, etc. by

institutions or for collection of amounts for purposes such as payments to utility

companies like telephone, electricity, or charges such as house ta:, water ta:, etc or for

loan installments of financial institutionsbanks or regular investments of persons.

1..& Type' of EC$5

There are two types of )( called )( ")redit# and )( ">ebit#. )( ")redit# is used

for affording credit to a large number of beneficiaries by raising a single debit to an

account, such as dividend, interest or salary payment. )( ">ebit# is used for raising

debits to a number of accounts of customersaccount holders for crediting a particular

institution.

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1..* ;orkin% of EC$ Credi $y'em5

)( payments can be initiated by any institution "called )( user# that have to make

bulk or repetitive payments to a number of beneficiaries. They can initiate the

transactions after registering themselves with an approved clearing house. )( users also

have to obtain the consent as also the account particulars of the beneficiary for

participating in the )( clearings. The )( users bank is called as the sponsor bank

under the scheme and the )( beneficiary account holder is called the destination

account holder. The destination account holders bank or the beneficiarys bank is called

the destination bank. The beneficiaries of the regular or repetitive payments can also

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%o value limit on the amount of individual transactions has been prescribed under the

scheme. &3I has deregulated (ervice )harges to be levied by sponsor banks.

1.. Ad#ana%e' of EC$ Credi $y'em5

*# dvantages to the ultimate beneficiary$

a# The end beneficiary need not make fre


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1..0 ;orkin% of EC$ Debi $y'em5

It is a scheme under which an account holder with a bank can authorize an )( user to

recover an amount at a prescribed fre


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c# voids chances of frauds due to fraudulent access to the paper instruments and

encashment.

d# &ealize the payments on a single date instead of fractured receipt of payments.

1# dvantages to 3anks$

a# 3anks handling )( get freed of paper handling.

b# 5aper handling also creates lot of pressure on banks as they have to encode the

instruments, present them in clearing, monitor their return and follow up with the

concerned bank and customers.

c# In )( banks simply get the mandate particulars relating to their customers. ll they need

to do is to match the account particulars like name, ac number and debit the accounts.

d# Aherever the details do not match, they have to return it back, as per the procedure.

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CHAPTER &RE$EARCH

,ETHODO-O">#, Mail

Transfer "MT#, Telegraphic Transfer "TT#, 5ay Order "5O# and checks etc. !or each such

transaction, the bank used to charge some commission. It was a means of revenue

generation to bank. fter !T system4s implementation the commission charges for the

transactions were reduced. long with this a customers4 view is also taken regarding their

behavior towards implementation of !T through a


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&.* Re#iew of -iera+re

In this modern era due to the various inventions and technological advancements, our life

has become very smooth and easy. Today we all can do most of our day to day work at

the click of a button. Thanks to technology. Many organizations too have applied latest

technology to operate efficiently. The advanced technologies have not only helped the

organizations to operate efficiently, but also to benefit the society. The new advanced

technology is not only limited to any one particular industry or sector, but to all the

industries and sectors.

Then in such a scenario how can banks stay away? These days even the banks have

adopted latest technologies to operate better and serve its clients in a better way. One of

such technologies is lectronic !und Transfer "!T#. My degree being 3) encouraged

me to take up implementation of !T as the dissertation topic.

The article DThe 8iability of 3anks in electronic fund transfer transactionE authored by

lgudah and !ayyad inspired me to select this topic for my dissertation. Their thesis

discusses the liability of banks in electronic fund transfer "!T# transactions under the

3ritish and the 7nited (tates law. It covers banks4 liability in lectronic !und Transfer at

the 5oint Of (ale "!T5O(#, utomatic Teller Machines "TM# and home and office

banking. In the absence of 3ritish legislation in this area, an analogy is made with the

traditional methods of payment. n attempt is also made to e:tract the applicable rules

from the general principles of law and the banking practice. The discussion, under the

7nited (tates law, relies on analyzing the lectronic !und Transfer ct of *-/6 and

rticle 2 of the 7niform )ommercial )ode, which concern banks4 liability in consumer

and commercially based !T transactions.

nalyzing consumer preference is perceived as cornerstone of a successful marketing

strategy. )onsumer preference is the mental and emotional processes and the observable

behaviour of consumers during searching purchasing and post consumption of a product

and service "3atra = Fazmi, 02#. (imilarly ngel "et al, *--# refers consumer

behaviour as the action and decision process of people who purchase goods and services

for personal consumption.

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%ow this suggested me to also include the customer4s perception towards this system of

funds transfer implemented by banks, so that it will help the funds transfer


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&.2 $amplin% ,e!od

The present research has used convenient sampling method to collect data through a pre;

tested e

sample of + respondents representing different age, gender, income group and family

size was taken for the present research. lso a few banks were visited.

&.6 $o+r(e' of Daa

The data to be collected for the purpose of study is divided into two bases$

5rimary (ource$ The data has been collected directly from respondent with the help ofstructured


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CHAPTER *

INDU$TR< PRO/I-E

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INDU$TR< PRO/I-E

*.1 Hi'ory of Bankin% in India

Aithout a sound and effective banking system in India it cannot have a healthy economy.

The banking system of India should not only be hassle free but it should be able to meet

new challenges posed by the technology and any other e:ternal and internal factors. !or

the past three decades Indias banking system has several outstanding achievements to its

credit. The most striking is its e:tensive reach. It is no longer confined to only

metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even

to the remote corners of the country. This is one of the main reasons of India4s growth

process.The governments regular policy for Indian bank since *-B- has paid rich dividends with

the nationalization of *2 ma@or private banks of India. %ot long ago, an account holder

had to wait for hours at the bank counters for getting a draft or for withdrawing his own

money. Today, he has a choice. 'one are days when the most efficient bank transferred

money from one branch to other in two days. %ow it is simple as instant messaging or

dialing a pizza. Money has become the order of the day.

The first bank in India, though conservative, was established in */6B. !rom */6B till

today, the @ourney of Indian 3anking (ystem can be segregated into three distinct phases.

They are as mentioned below$

arly phase from */6B to *-B- of Indian 3anks

%ationalization of Indian 3anks and up to *--* prior to Indian banking sector &eforms.

%ew phase of Indian 3anking (ystem with the advent of Indian !inancial = 3anking

(ector &eforms after *--*.

To make this write;up more e:planatory, I prefi: the scenario as 5hase I, 5hase II and

5hase III.

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*.1.1 P!a'e I

The 'eneral 3ank of India was set up in the year */6B. %e:t came 3ank of 9industan

and 3engal 3ank. The ast India )ompany established 3ank of 3engal "*6-#, 3ank of

3ombay "*62# and 3ank of Madras "*621# as independent units and called it 5residency

3anks. These three banks were amalgamated in *-0 and Imperial 3ank of India was

established which started as private shareholders banks, mostly uropeans shareholders.

In *6B+ llahabad 3ank was established and first time e:clusively by Indians, 5un@ab

%ational 3ank 8td. was set up in *6-2 with headuring the first phase the growth was very slow and banks also e:perienced periodic

failures between *-*1 and *-26. There were appro:imately ** banks, mostly small. To

streamline the functioning and activities of commercial banks, the 'overnment of India

came up with The 3anking )ompanies ct, *-2- which was later changed to 3anking

&egulation ct *-2- as per amending ct of *-B+ "ct %o. 01 of *-B+#. &eserve 3ank of

India was vested with e:tensive powers for the supervision of banking in India as the

)entral 3anking uthority.

>uring those days, public had lesser confidence in the banks. s an aftermath deposit

mobilization was slow. breast of it the savings bank facility provided by the 5ostaldepartment was comparatively safer. Moreover, funds were largely given to traders.

*.1.& P!a'e II

'overnment took ma@or steps in this Indian 3anking (ector &eform after independence.

In *-++, it nationalized Imperial 3ank of India with e:tensive banking facilities on a

large scale especially in rural and semi;urban areas. It formed (tate 3ank of India to act

as the principal agent of &3I and to handle banking transactions of the 7nion and (tate

'overnments all over the country.

(even banks forming subsidiary of (tate 3ank of India was nationalized in *-B on *-th

Culy, *-B-, ma@or process of nationalization was carried out. It was the effort of the then

5rime Minister of India, Mrs. Indira 'andhi. *2 ma@or commercial banks in the country

were nationalized.

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(econd phase of nationalization Indian 3anking (ector &eform was carried out in *-6

with seven more banks. This step brought 6G of the banking segment in India under

'overnment ownership.

The following are the steps taken by the 'overnment of India to &egulate 3anking

Institutions in the )ountry$

*-2-$ nactment of 3anking &egulation ct.

*-++$ %ationalization of (tate 3ank of India.

*-+-$ %ationalization of (3I subsidiaries.

*-B*$ Insurance cover e:tended to deposits.

*-B-$ %ationalization of *2 ma@or banks.

*-/*$ )reation of credit guarantee corporation.

*-/+$ )reation of regional rural banks.

*-6$ %ationalization of seven banks with deposits over 0 crore.

fter the nationalization of banks, the branches of the public sector bank India rose to

appro:imately 6G in deposits and advances took a huge @ump by **,G. 3anking in

the sunshine of 'overnment ownership gave the public implicit faith and immense

confidence about the sustainability of these institutions.

*.1.* P!a'e III

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

reforms measure. In *--*, under the chairmanship of M %arasimham, a committee was

set up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their TM stations. fforts are being put

to give a satisfactory service to customers. 5hone banking and net banking is introduced.

The entire system became more convenient and swift. Time is given more importance

than money.

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

crisis triggered by any e:ternal macroeconomics shock as other ast sian )ountries

suffered. This is all due to a fle:ible e:change rate regime, the foreign reserves are high,

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the capital account is not yet fully convertible, and banks and their customers have

limited foreign e:change e:posure.

*.& Naionali>aion of Bank' in India

The nationalization of banks in India took place in *-B- by Mrs. Indira 'andhi, the then

prime minister. (he nationalized *2 banks then. These banks were mostly owned by

businessmen and even managed by them. The banks that were nationalized then were$

)entral 3ank of India

3ank of Maharashtra

>ena 3ank

5un@ab %ational 3ank

(yndicate 3ank

)anara 3ank

Indian 3ank

Indian Overseas 3ank

3ank of 3aroda

7nion 3ank

llahabad 3ank

7nited 3ank of India

7)O 3ank

3ank of India

3efore the steps of nationalization of Indian 3anks, only (tate 3ank of India "(3I# was

nationalized. It took place in Culy *-++ under the (3I ct of *-++. %ationalization of

(even (tate 3anks of India "formed subsidiary# took place on *- thCuly, *-B.

The (tate 3ank of India is Indias largest commercial bank and is ranked one of the top

five banks worldwide. It serves - million customers through a network of -,

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branches and it offers ;; either directly or through subsidiaries ;; a wide range

of banking services.

The second phase of nationalization of Indian banks took place in the year *-6. (even

more banks were nationalized with deposits over 0 crores. Till this year, appro:imately

6G of the banking segments in India were under 'overnment ownership.

*.* $(!ed+led Commer(ial Bank' in India

The commercial banking structure in India consists of$

(cheduled )ommercial 3anks in India

7nscheduled 3anks in India

(cheduled 3anks in India constitute those banks which have been included in the (econd

(chedule of &eserve 3ank of India "&3I# ct, *-12. &3I in turn includes only those

banks in this schedule which satisfy the criteria laid down vide section 20 "B# "a# of the

ct. The scheduled commercial banks in India comprise of (tate bank of India and its

associates "6#, nationalized banks "*-#, foreign banks "2+#, private sector banks "10#, co;

operative banks and regional rural banks.

P(cheduled banks in IndiaP means the (tate 3ank of India constituted under the (tate

3ank of India ct, *-++ "01 of *-++#, a subsidiary bank as defined in the (tate 3ank of

India "(ubsidiary 3anks# ct, *-+- "16 of *-+-#, a corresponding new bank constituted

under section 1 of the 3anking )ompanies "c


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categorized as public sector banks and private sector banks. !oreign banks are part of

private sector banks.The ma@or differentiating parameter that distinguishes banks fromeach other banks in the Indian banking is the level of service that is offered to the

customer. )urrently, India has -B scheduled commercial banks "()3s# ; 0/ public sector

banks "that is with the 'overnment of India holding a stake#, 1* private banks "these do

not have government stakeK they may be publicly listed and traded on stock e:changes#

and 16 foreign banks. They have a combined network of over +1, branches and

*/, TMs. ccording to a report by I)& 8imited, a rating agency, the public sector

banks hold over /+ percent of total assets of the banking industry, with the private and

foreign banks holding *6.0G and B.+G respectively.

*.0 ,a=or Reform' and Iniiai#e'

(ome of the ma@or reform initiatives in the last decade that have changed the face of the

Indian banking are$

Interest &ate >eregulation;Interest rates on deposits and lending have been deregulated

with banks en@oying greater freedom to determine their rates.

'overnment e


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/i%+re *.1 Bankin% 'r+(+re in India

30

Reserve bank of India

Scheduled banks

Commercial banks Co-operative banks

RRBForeignbanks

UrbanCB

RuralCB

Public sectorbanks

Private sectorbanks


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31


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CHAPTER

DATA ANA-


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ANA-


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0. Most preferred means of transfer of funds by %on;!T method.

Table .& ,ean' of Non)E/T Tran'fer

!reemand >raft 0+ +

Mail Transfer 1 B

Telegraphic Transfer 1 B

)heemand >raft ">># mode of funds transfer whilw using

%on;!T method.

%e:t most preffered method is )he


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1. &eason for using %on;!T

Table .* Rea'on for +'in% Non)E/T

!re


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2. wareness of !T

Table . Awarene'' of E/T

!re


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+. Information about !T

Table .0 $o+r(e of Informaion

!re


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B. 7se of !T

Table . U'e E/T

!re


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/. !T means of !und Transfer

Table .2 E/T ,ean' of /+nd Tran'fer

!re


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6. &eason for using !T system for funds transfer

Table .3 ;!y prefer E/T

!re


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-. Technical Fnowledge of !T

Table .6 Te(!ni(al know !ow

!re


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*. 5reference for !T or %on;!T

Table .18 Preferen(e for E/T?Non)E/T

!re


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**. !reisagree 1 B

Total + *

/i%+re .11 /re@+en(y of Tran'fer of /+nd' afer Implemenaion ofE/T

Analy'i'5Table 2.** and 2.** shows$

1BG of the respondents agreed that their fre


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*0. )onvenience

Table .1& E/T (on#enien !an Non)E/T

!reisagree 0 2

Total + *

/i%+re .1& E/T (on#enien !an Non)E/T

Analy'i'5Table 2.*0 shows the convenience of respondents with !T and %on;!T

00G (trongly gree to the statement that !T is convenient than %on;!T.

22G agreed to this ststement.

1G said cant say or its same.

%obdy (trongly >isagreed with this statement.

Inerpreaion5the table 2.*0 and the figure 2.*0 shows that 22G of the respondents feel

that the !T system of funds transfer is more convenient than the %on;!T system. 00G

of the respondents strongly agreed to this statement. %ot a single respondent strongly

disagreed to this though 2G of the respondents disagreed.

44


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CHAPTER 0

/INDIN"$

$U""E$TION AND

CONC-U$ION

45


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/INDIN"$

0.1 /indin%' from !e $e(ondary Daa5

>oing something new which we have not done earlier, like taking up a new pro@ect,reading a new book or e:perimenting something new gives us a lot to learn. Ae get to

know many new things which we did not know earlier. Thus this time I too got to learn

many things during my pro@ect. My findings are as given below.

)harges for the funds transfer prior to implementation of !T system or when the funds

are transferred without using !T$

%on;!T means of transfer are as follows$

>emand Transfer ">>#.

Mail Transfer "Mail Transfer#.

Telegraphic Transfer "TT#.

)he


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Table 0.1 9Indian Bank:

mount "I% Outstation

>>MTTT "I%

35O

"5ay Order# "I%

7p to +; 1; 1;

+* L *, 1; 1;

*, * L +, 1; 1;

+, * L *, 1; 1;

*, * L *, , &s. 1 per thousand with a

minimum of &s. 1;

&s. 1 per thousand with a

minimum of &s. 1;

bove &s. *, , &s. 0.B; per thousand with a

minimum of &s. 1;

&s. *.+; per thousand with a

minimum of &s. 1;

Table 0.& 9IN" 4y'ya Bank:

mount "I% Outstation

>>5OTT "I%

7p to *, ; +;

*,* L +, ; &s. 0.+; per &s. *,; or part thereof sub@ect to a

minimum of &s. +;.

+, * L 0,,; &s. 0; per &s. *,; or part thereof sub@ect to the

minimum of &s.*0+;

bove &s. 0,, &e *; per &s. *,; or part thereof sub@ect to the

minimum of &s. 2; = ma: &s. B;

The above charges in the table is applicable only to the account holders of those banks.

Those who do not have account in those banks, are charged *.+ times of the charges

mentioned above in the public sector banks and private banks it varies from bank to bank.

nother method of funds transferring is through che


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Table 0.* 9Indian Bank:

mount "I% )harges "I%

7p to *, ; +; per che


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we could not get the e:act figures. 3ut from the bank staff we got the information that

compared to earlier transactions the volume of transactions has increased.

0.& /indin%' from !e @+e'ionnaire5

There are as many as 10G people who have not transferred funds prior to implementation

of !T or have still not used !T.

+G of the respondents use >emand >raft to transfer funds while using %on;!T

method. !ollowed by )he


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00G of the respondents strongly agreed and 22G agreed to the statement !T is more

convenient than the %on;!T means of transfer.

More respondents in the age group of 0*;B years use !T than in the age group of less

than 0 years and more than B years. Therefore !T usage is dependent on the age

group.

!T usage is not dependent on the gender of the respondents. 3oth male and female use

it e


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notable point was that only 20G of the respondents said that their fund transfer

transactions have increased after the implementation. In a country of *.* billion

population, this number is


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BIB-IO"RAPH OT9&( NNNNNNNNNNNNNNNNN"58( (5)I!Q#

I%)OM 5& %%7M "I% $

38OA * 8F9 *;0 8F9 0;2 8F9 3OR 2 8F9

>O QO7 9R 3%F ))O7%T?

Q( %O

>O QO7 T&%(!& !7%>( TO OT9& ))O7%T(?

Q( %O

UE$TIONNAIRE

*. 9R QO7 T&%(!&&> !7%>( TO OT9& ))O7%T( 5&IO& TO

IM58M%TTIO% O! !T (Q(TM?

Q( %O

0. A9I)9 M%( O! T&%(!& O! !7%>( QO7 5&!& MO(T TO 7( !O&

T&%(!&&I%' !7%>( AIT9O7T !T?

>M%> >&!T MI8 T&%(!&

T8'&59I) T&%(!& )97 %

56


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1. A9T I( T9 &(O% !O& 7(I%' T9 5&!&&> M%( M&F>

3OR?

7(& !&I%>8Q (I8Q ))((I38

)9&'( OT9&( %

2. & QO7 A& O! T9 !T (Q(TM? "I! %O (FI5 T9 %ST 7(TIO%#?

Q( %O

+. 9OA >I> QO7 'T TO F%OA 3O7T !T?

%A(55&( = M'I%( QO7& 3%F (T!!

I%T&%T OT9&( %

B. >O QO7 7( !T (Q(TM !O& T&%(!&&I%' !7%>(? "I! %O, (FI5 T9 %ST 0

7(TIO%(#?

Q( %O

/. I! Q(, A9I)9 M%( O! !T !7%>( T&%(!& QO7 7(?

%!T &T'( %

6. A9Q >O QO7 5&!& TO 7( !T (Q(TM?

TIM (RI%' >R%)> T)9%O8O'Q

7(& !&I%>8Q %

-. >O QO7 F%OA 9OA T9 !T (Q(TM AO&F( T)9%I)88Q

Q( %O

*. I! 3OT9 !T (Q(TM %> %O%;!T (Q(TM I( RI838 !O& T&%(!&

O! !7%>(, A9I)9 O% AI88 QO7 5&!&?

!T %O%;!T

57


58/58

**. IM58M%TTIO% O! !T 9( M> M T&%(!& !7%>( MO& O!T%

T9% &8I&?

(T&O%'8Q '&

'&

)%4T (Q

>I('&

(T&O%'8Q >I('&

*0. I !I%> !T MO& )O%RI%I%T T9% %O%;!T(Q(TM O! !7%>

T&%(!&?

(T&O%'8Q '&

'&

)%4T (Q

>I('&

(T&O%'8Q >I('&

study of customer awareness and preferences towards neft fund transfers with special focus on...

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