Journal of Management and Science, Special Issue 4, Feb-2018 ISSN 2250-1819 / e-ISSN 2249-1260
JOURNAL OF MANAGEMENT AND SCIENCE
A International Level Quarterly Journal on Journal of Management and Science
Published by Non Olympic Times
Journal of Management and Science, Special Issue 4, Feb-2018 ISSN 2250-1819 / e-ISSN 2249-1260
Special Issue 4 (Feb-2018) JOURNAL OF MANAGEMENT AND SCIENCE
Sl.No. Contents Page No. Artificial Intelligence in Banking 01 Dr.K.Umadevi, Dr.M.Prakash 001-002
Artificial Intelligence Could be the Future of Banking 02 Dr. P.Shanthini 003-005
Banking on the Cloud 03 J.Vinodhini ,Mrs.Kalaimani, Sruthi Gopalakrishnan . 006-008
Banking on the Cloud 04 M.Manidayanand . 009-015
IS Cloud Banking IS Banking in Clouds 05 Dr. P. Suganya, Mr. I. Abishake . 016-018
A Study on Corporate Governance Practices in Commercial Banks 06 Dr. Mutharasi. M, 019-027
Digital Banking in India: Challenges and Opportunities 07 Dr.P.B.Banudevi , P.Dhanya . 028-031
Digital Payments in India – A Disruption 08 Dr.R.Rupa, 032-035
Disruption of Banking Sector 09 S.Dhivya 036-038
Emerging Digital Transformation and Artificial Intelligence in Banking 10 Sector - Current Scenario Ms.P.Janani 039-041
Expanded ATM Capabilities 11 G.Baby Cellin, S.Divya Bharathi, 042-045
Grievance Redressal Mechanism-Opinion Study 12 Dr.S.Valli Devasena, 046-050
A Study of Customer Satisfaction towards Housing Loans in Select Private 13 Sector Banks in Coimbatore District Dr. B.Sivakumar, N.S.Lissy, 051-053
Impression if Information Technology in Banking Sector 14 V.Priyanka 054-058
Readers may send popular articles of topical interest in English to the editor email address ([email protected])
Journal of Management and Science, Special Issue 4, Feb-2018 ISSN 2250-1819 / e-ISSN 2249-1260
Sl.No. Contents Page No. A Study on Customers Awareness and Stratification towards Internet Banking 15 in Semi – Urban Areas of Coimbatore City. Mrs.R.Sudha, Mrs. X.Catherine Arputha Divya, Mrs.M.Kovarthini 059-064
Mobile Bank in the Transformation in Banking System 16 Mrs.R.Saranya., V.S.Prabhu., 065-070
New Digital Gateways for Payments 17 Dr.V.Abirami, Yashoda R Ganesh 071-075
A Study on Non-Performing Assets of Banking Sectors in India 18 Dr.D.Vijayalakshmi , Srihari Ramesh, Shenbagadevi.G 076-080
Payments Innovations 19 Prof. A.V. Ravi 081-084
Empowerment of Women Employees in Nationalized Bank in Chennai 20 M.Vishvabharathi. 085-087
Readers may send popular articles of topical interest in English to the editor email address ([email protected])
Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
Artificial Intelligence in Banking
Dr.K.Umadevi Dr.M.Prakash Associate Professor & Course Coordinator–PG, Associate Professor, School of Commerce, CMS College of Science and School of Commerce, CMS College of Science and Commerce, Commerce Coimbatore. Coimbatore.
INTRODUCTION AI is the branch of Computer Science concerned with making computers behave like humans. The term was Traditional banking has three distinct components coined in 1956 by John Mc Carthy at the Massachusetts namely. Capital, Deposits and Loans. The pillars of Institute of Technology. traditional banking (Deposits and Loans) rest upon the foundation of capital. All banks must have access to Need for AI in Banking capital, which is leveraged with deposits and then Reduce costs prudently converted in to loans that generate jobs and Increase workforce productivity economic growth. Now, Banking is a rapidly changing Increase efficiency industry and the biggest paradigm shift that has occurred Wealth management for the masses is the move to digital only banks. Customer support / help desk – An end to the waiting in line. STATEMENT OF THE PROBLEM Identify opportunities in data that would be otherwise missed The banks need to analyse services and Personalized communication at scale. answer the following questions. Improve the ability to compete with perks. Do they really “Know “ their customers Increasing standing as an innovative company
Is the “Product Channel” fit for their customers? In recent years, if AI has impacted one industry more than Are they providing multi-channel experience? any other, it is the Banking industry. Are they making a genuine effort for „Relationship
Building‟? Characteristics of AI Do their customers have enough „Confidence‟ and Reasoning : The ability to solve problems through „Trust‟ in them? logical deduction.
OBJECTIVES OF THE STUDY Knowledge : The ability to represent knowledge about the world. 1. To understand the need for Artificial Intelligence in Banking Planning : The ability to set and achieve goals. 2. To identify the Artificial Intelligence applications in Banking. Communication : The ability to understand written and spoken language. METHODOLOGY Perception : The ability to deduct things about the world This study is descriptive in nature and secondary data has from visual images, sounds and other sensory inputs. been collected from published sources and internet. AI Specification Limitation of the study Game playing – Programming computers to play games Any limitation pertaining to the descriptive study is bound against human opponents. to be applicable to this study as well. Expert System – Programming computers to make Meaning of Artificial Intelligence [AI] decision in real life situations e.g. help doctors diagnose The theory and development of computer systems able to diseases based on symptoms. perform tasks normally requiring human intelligence such as visual perception, speech recognition, Decision Making Natural language –Programming computers to and Translation between languages. understand natural human languages.
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Natural Networking- System that simulate intelligence Customer recommendations by attempting to reproduce the types of physical It is based on using the data from the past about users and connections that occur in animal brains. / or various offerings from a bank like credit card plans, investment strategies, fund etc., to make the most Robotics – Programming computers to see and hear and appropriate recommendation to the user based on their reach to other sensory stimuli. performance and the user‟s history.
AI applications in Banking CONCLUSION AI is the blend of three advanced technologies- machine learning, natural language processing and cognitive One of the key values of the banking industry has been its computing. The concept of AI is to simulate the “Customer Focused” mindset, but in the new era, the intelligence of humans into artificial machines with the trend is moving to being “Customer Centric”. This is help of sophisticated machine learning and natural because advances on technology & communication, language processing algorithms. combined with an explosive growth in data & information, have given rise to an even more empowered AML Pattern Detection & aware global customer. With this change in customer Anti-money laundering refers to a set of procedures, laws dynamics the banking industry has an opportunity to or regulations designed to stop the practice of generating develop an improved customer engagement strategy. income through illegal actions. Union budget 2018 brought fourth many announcements. Chat bots. But an unexpected, albeit a significant one, was regarding AI based automated chat systems simulate human chats the establishment of a national programme to direct without any human interventions. Chat bolts are efforts in the area of AI. Now, this is a Welcome initiative extensively used in the banking industry to revolutionize the customer relationship management(CRM) at personal REFERENCES level. [1]. Management Information System-Aman Jindal Algorithmic trading [2]. www.hhrjournal.org/ Plenty of hedge funds across the globe are using high end [3]. https://gomedici.com/the-role-of-ai-technologies-in- system to deploy AI model which learn by taking input humanizing-digital-banking/ from several sources of variation in financial markets and [4]. Finanicalbrand.com sentiments about the entity to make investment decisions [5]. businesstoday.in on the fly. [6]. economictimes.indiatimes.com [7]. https://thefinancialbrand.com/69154/ai-banking-financial- artificial-intelligence-trends-uses/banking-to-look-out-for- Fraud detection in-next- It is the one of the key areas in banking sector where AI systems have excelled the most.
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
Artificial Intelligence Could be the Future of Banking
Dr. P.Shanthini, Assistant Professor, Department of B.Com Banking and Insurance Dr. N. G. P. Arts and Science College (Autonomous)
Abstract : Artificial Intelligence (AI), the ability of a improvements in the field of artificial intelligence. digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings. AI is Artificial Intelligence has several applications in the frequently applied to the project of developing systems Banking Industry: endowed with the intellectual processes characteristic of The five key applications of artificial intelligence in the humans, such as the ability to reason, discover meaning, Banking industry that will revolutionize the industry in generalize, or learn from past experience. the next 5 years.
Artificial Intelligence (AI) is being used across the AML Pattern Detection financial services industry, and is becoming more popular Anti-money laundering (AML) refers to a set of in customer - facing digital channels. AI involves ‗the procedures, laws or regulations designed to stop the ability of machines to emulate human thinking, reasoning practice of generating income through illegal actions. In and decision - making. As well as being driven by most cases, money launderers hide their actions through a consumer demand and a need to cut costs, AI is emerging series of steps that make it look like money that came in financial services as banks enjoy better access to from illegal or unethical sources are earned legitimately. improved technology and lower costs for processing tools and data storage than ever before. Chat bots Chat bots are artificial intelligence based automated chat Artificial intelligence is the blend of three advanced systems which simulate human chats without any human technologies – machine learning, natural language interventions. They work by identifying the context and processing and cognitive computing. The concept of emotions in the text chat by the human end user and Artificial Intelligence is to simulate the intelligence of respond to them with the most appropriate reply. With humans into artificial machines with the help of time, these chat bots collect massive amount of data for sophisticated machine learning and natural language the behaviour and habits of the user and learns the processing algorithms. The prime motive for the idea of behaviour of user which helps to adapts to the needs and transferring the intelligence from humans to machines is moods of the end user.Chat bots are already being to overcome the very barrier of human intelligence: extensively used in the banking industry to revolutionize scalability. There‘s always a limit to the speed with which the customer relationship management at personal level. humans can perform the given tasks. Artificial intelligence looks to overcome this very challenge with Algorithmic trading human intelligence by transferring the human intelligence Plenty of Hedge funds across the globe are using high end to cognitive machines with supreme computational systems to deploy artificial intelligence models which capabilities. learn by taking input from several sources of variation in financial markets and sentiments about the entity to make Artificial Intelligence and its relevance to Banking investment decisions on the fly. Reports claim that more In recent years, if Artificial Intelligence has impacted one than 70% of the trading today is actually carried out by industry more than any other, it‘s the Banking industry. automated artificial intelligence systems. Most of these For organizations working in the banking industry, it has hedge funds follow different strategies for making high become increasingly crucial to keep up with competition, frequency trades (HFTs) as soon as they identify a trading and increase their standing as an innovative company. opportunity based on the inputs. Most of the major banks across the globe are shifting from rule based software systems to artificial intelligence Fraud detection based systems which are more robust and intelligent to the Fraud detection is one of the fields which has received anti-money laundering patterns. Over the coming years, massive boost in providing accurate and superior results these systems are only set to become more and more with the intervention of artificial intelligence. It‘s one of accurate and fast with the continuous innovations and the key areas in banking sector where artificial
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intelligence systems have excelled the most. Starting from avatars or robots. the early example of successful implementation of data 10. An example of this is AI for playing many analysis techniques in the banking industry is the FICO videogames. Falcon fraud assessment system, which is based on a neural network shell to deployment of sophisticated deep Disadvantages of Artificial Intelligence learning based artificial intelligence systems today, fraud 1. Can cost a lot of money and time to build, rebuild, detection has come a long way and is expected to further and repair. Robotic repair can occur to reduce time grow in coming years. and humans needing to fix it, but that'll cost more money and resources. Customer recommendations 2. It's questionable: is it ethically and morally correct Recommendation engines are a key contribution of to have androids, human-like robots, or recreate artificial intelligence in banking sector. It is based on intelligence, a gift of nature that shouldn't be using the data from the past about users and/ or various recreated? This is a discussion about AI that's offerings from a bank like credit card plans, investment popular in the days. strategies, funds, etc. to make the most appropriate 3. Storage is expansive, but access and retrieval may recommendation to the user based on their preferences not lead to connections in memory as well as and the users‘ history. Recommendation engines have humans could. been very successful and a key component in revenue 4. They can learn and get better with tasks if coded to, growth accomplished by major banks in recent times. but it's questionable as to if this can ever become as good as humans can do such. Since the development of the digital computer in the 5. They cannot work outside of what they were 1940s, it has been demonstrated that computers can be programmed for. programmed to carry out very complex tasks—as, for 6. They could never, or, at least, seemingly never example, discovering proofs for mathematical theorems or with our technological perceptions, receive playing chess—with great proficiency. Still, despite creativity that humans have. continuing advances in computer processing speed and 7. This can prevent sympathizing with emotions for memory capacity, there are as yet no programs that can human contact, such as in being nurses. match human flexibility over wider domains or in tasks 8. This can also reduce wisdom can understanding. requiring much everyday knowledge. On the other hand, 9. This can prevent common sense occurring. Even if some programs have attained the performance levels of coded with common sense and to learn, it seems human experts and professionals in performing certain hard for them to get as much common sense that specific tasks, so that artificial intelligence in this limited humans could. sense is found in applications as diverse as medical 10. Robots, with them replacing jobs, can lead to diagnosis, computer search engines, and voice or severe unemployment, unless if humans can fix the handwriting recognition. unemployment with jobs AI can't do or severely change the government to communism. Advantages of Artificial Intelligence 1. AI would have a low error rate compared to CONCLUSION: humans, if coded properly. They would have incredible precision, accuracy, and speed. In the modern era of the digital economy, technological 2. They won't be affected by hostile environments, advancements are no longer a luxury for the thus able to complete dangerous tasks, explore in organizations, but a necessity to outsmart their space, and endure problems that would injure or competitors and business growth. With the technological kill us. advancements in the recent times, the impact of Machine 3. This can even mean mining and digging fuels that Learning (ML) and Artificial Intelligence (AI) are very would otherwise be hostile for humans. critical than ever before. In order to be successful and 4. Replace humans in repetitive, tedious tasks and in making an impact, the banks and financial institutions many laborious places of work. need to make machine learning and artificial intelligence 5. Predict what a user will type, ask, search, and do. an expansion of their big data and data analytics They can easily act as assistants and can approach. The machine learning technology is used in recommend or direct various actions. most banking and finance industry because the proper 6. An example of this can be found in the smart implication of technology can give the outstanding result phone. and significant improvement can be seen in terms of 7. Can detect fraud in card-based systems, and replacing legacy system and developed enterprise. The possibly other systems in the future. machine learning technology helped the banking and 8. Organized and manages records. Finance sector in taking company‘s decision making, 9. Interact with humans for entertainment or a task as improving customer experience, increasing the backend
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
and frontend staff efficiency. Machine learning [3]. C. Sampada,, et al, "Adaptive Neuro-Fuzzy Intrusion applications have the ability to understand the need of Detection Systems", Proceedings: International each individual customer by analyzing the previous Conference on Information Technology: Coding and account activity and help the customer to make better Computing (ITCC‟04),2004. product selection offered by banking & financial service [4]. Daniel E.O.‟Leary Artificial Intelligence and Expert System in Accounting Databases: Survey and companies. Extensions‖, Expert Systems with Applications, vol-3, 1991. REFERENCES: [5]. Fatai Adesina Anifowose, Safiriyu Ibiyemi Eludiora, ―Application of Artificial Intelligence in Network [1]. N Ramesh, C Kambhampati, JRT Monson, PJ Drew, Intrusion Detection‖, World Applied Programming, Vol ―Artificial intelligence in medicine‖, 2004. (2), No (3), March 2012. [2]. Charles Weddle, Graduate Student, Florida State University ―Artificial Intelligence and Computer Games‖, unpublished.
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
Banking on the Cloud
J.Vinodhini Mrs.Kalaimani Assistant Professor Assistant Professor CSI Bishop Appasamy College of Arts and Science CSI Bishop Appasamy College of Arts and Science [email protected] Sruthi Gopalakrishnan Student – III B.Com (CA) CSI Bishop Appasamy College of Arts and Science
Abstract Banks are seeking to transform their products banking with the same bank .cloud banking enables the offerings, channels and consumer service to reflect the consumer and bank to move on to paperless transactions demands of the changing consumer-connected, impatient, with a host of benefits such as any times and saves time, empowered and demanding services that meet their Anywhere, instant cash, error free documentation, individuals and social needs. For this, banks need to empowering of consumers, transfer of money in moments. integrate business processes with advanced analytical Cloud banking generates carbon credits. Cloud computing capabilities driving continuous refinements to processes, is used by most of the banks, but not commonly for core service and product in real-time. Cloud banking generates services, mainly due to risk concerns. Moving core carbon credits. Cloud computing is used by most of the services to the cloud could help banks focus on their banks, but not commonly for core services, mainly due to primary mission and save money, but it comes with risk concerns. An attempt is made to study the benefits of significant challenges. Smaller banks will lead the cloud based banking infrastructure, hurdles to banking on transition of core services to the cloud as they are cloud adoption, waves of cloud adoption by banks, cloud positioned to make the largest relative gains. security in banking, and the current problems of banking on cloud. BENEFITS OF CLOUD BASED BANKING INFRASTRUCTURE:- INTRODUCTION Cloud based services have been driving efficiency and The „digital ecosystem‟ surrounding a bank today is cost reduction across industries for quite some time now. exploding at a pace never seen before. The reason for this In banking, however, the transaction towards cloud is two-fold. First, consumers are leading the way, forcing storage and access has not been met with the same banks to offer what they want. Secondly, with consumers enthusiasm due to various reasons- risk management embracing a mobile lifestyle and socializing on digital being one of the primary explanations. Some of the platforms, they expect banks to connect with them on the important points under the cloud based banking same platforms. Banks are seeking to transform their infrastructure are as follows:- products offerings, channels and consumer service to reflect the demands of the changing consumer-connected, Cloud-based banking infrastructure provides efficiency impatient, empowered and demanding services that meet into decision-making and policy implementation:- their individuals and social needs. For this, banks need to With remote access to the information regarding new integrate business processes with advanced analytical implementations and internal changes, the cloud brings capabilities driving continuous refinements to processes, efficiency in providing access to all involved parties in a service and product in real-time. These tectonic shifts, single format and place to securely and effectively which include facets such as mobile banking through evaluate the matter. near-field communication (NFC) or mobile wallets and geo-localization, will define the banking experience over Allow banks to choose where they want to run systems:- the next 5 to 10 years. Banks are increasingly relying the Cloud technology enables banks to quickly scale power of the cloud to achieve their objectives and manage processing capacity up or down in order to react to current market challenges. These shifts are occurring in changes in customer demand, as BI along with cloud‟s phase, sometimes in parallel, through distinct adoption flexibility advantage that allows banks to choose where curves in process and complexity. they want to run systems.
CLOUD BANKING:- Cloud embraces the team based collaborative culture of modern organizations:- In cloud banking the entire banking process could be done In addition, the cloud embraces the team-based through the cloud, especially if both buyer and seller are collaborative culture of modern organisations, where the
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
value of team-work has been given a high esteem. With industry can make changes to the traditional state of the regard to the transformation of the way people work workforce, management in a sphere untouched by modern nowadays from standard workplace –bassed-9-to-5 jobs to employment trends remote and personalized schedules, cloud in the banking
Over the coming years, an increasing number of financial Issues concerning the management of data institutions will certainly be turning towards the cloud in including security, data breach reporting and the realization of broader opportunities it brings in ensuring that new obligations soon to come into comparison to owning data centres. effect such as privacy by design and default can be effectively met in a public cloud environment and SEVEN HURDLES TO BANKING ON Difficulties in establishing a complaint termination CLOUD ADOPTION:- and exit regime in a public context.
The seven hurdles to cloud adoption are as follows:- THREE WAVES OF CLOUD ADOPTION Difficulties in understanding whether the use of a BY BANKS:- specific public cloud technology enables a “criteria” or “important” operational function of a Banks are increasingly relying on the power of the cloud bank. to achieve their objectives and manage current market Uncertainty as to what amounts to effective challenges. The shifts are occurring in phase, sometimes supervision and oversight of a public cloud service in parallel, through distinct adoption curves in process and provider, and its supply chain. complexity. The three waves of cloud adoption are as Practical constraints in enabling regulators to have follows:- effective oversight of regulated activities depend on the public cloud technology. TAKING NON -CORE OPERATION TO THE Adapting internal risk frameworks to a new CLOUD:- technology environment that accounts for Adoption of cloud models generally has the greatest additional risk that may arise in a public cloud impact in the parts of the value chain where there is context. minimal differentiation. Cloud computing can provide Issues concerning the location of data including banks with new-lower costs operating models thanks to transferring the data outside the European greater automation, virtualization and massive scale-out economic area. And access to data by law option with the ability to outsource a number of non-core enforcement authorities. activities. These cloud services can be also be extended to
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activities such as check clearing, credit card processing, and avoiding public internet connections. Major threats to procurement and HR processes. cloud security include data breaches, data loss, account hijacking, service traffic hijacking, insecure application SINGLE –TENANT PRIVATE CLOUDS ENSURE program interfaces, and poor choice of cloud storage SECURITY:- providers and shared technology that can compromise Today, banks are still reluctant to entrust sensitive cloud security. customer and financial data to third- party public cloud services providers. Data privacy and regulations also CURRENT PROBLEMS OF BANKING ON prohibit storage and processing of customer data outside CLOUD:- national borders. Banks are also wary of the potential Disparate systems need integration. threats such as breach of privacy due to brief outages in Need to upgrade software periodically ATM operation, fraud monitoring or credit card Need to be BASEL II and IFRS complaint. processing. However present days banks have proved to Need to adopt to regulatory requirements. be more willing to incorporate single tenant cloud Scalability issue solutions into their core banking activities. Cloud models Risk a major issue. that are being executed at different levels of the Software costs and implementation costs going up technology stack range from Infrastructure as service, via and so are support costs. software as a service, and platform as a service. Banks also have costs in IT staff and maintaining
hardware, software and network. SOCIAL MEDIA TO TRANSFORM CONSUMER
BANKING:- Core banking products such as checking accounts are CONCLUSION:- increasingly undifferentiated. The real differentiation lies in the pricing and bundling for consumers. Some banks In this paper it is concluded that, Banks around the world might locate their product engines in a cloud, while are flocking to digital tools and new technologies both to retaining a unique and sophisticated bundling capability meet higher customer expectations and to respond more that pulls together and combines cloud-based components quickly to their changing environments. One of the most in responsive, collaborative and dynamic bundles relevant beneficial technology adoptions has been the move to to specific consumers. Cloud – enabled digital wallets cloud based technology platforms and financial carrying a range of different services on smartphones is applications. another high-potential area, although this will require agreements with various Telco‟s over customer REFERENCE: ownership. [1]. W. Smith. (2014, April) Cloud hosting - a dream come CLOUD SECURITY IN BANKING:- true. Cloud Computing Service. [2]. T. Ristenpart, E. Tromer, and H. Shacham. (2009, November) Exploring information leakage in third-party compute clouds. CCS09. [3]. G. Felloni and G. Laura, Genoa and the history of finance: A series of firsts?, B. Glauco, Ed. Brigati Glauco, November 2004. http://www.giuseppefelloni.it/en/ghf_index.php [4]. . E. Cohen, Athenian Economy and Society: A Banking Perspective, P. U. Press, Ed. Printed on University Press, 1997. http://press.princeton.edu/titles/5125.html [5]. F. Heichelheim, An ancient economic history: from the paleolithic age to the migrations of the Germanic, Slavic and Arabic nations. Sijthoff, 1964, no. v. 2. [6]. A. Weiss, “Computing in the clouds,” netWorker - Cloud computing: PC functions move onto the web archive, vol. 11, pp. 16–25, 2007. Cloud security is the protection of data stored online from [7]. D. Milojicic, “Cloud computing: Interview with russ theft, leakage and deletion. Methods of providing cloud daniels and franco travostino,” IEEE Internet security include firewalls, penetration testing, Computing, vol. 5, pp. 7–9, 2008. obfuscation, tokenization, virtual private networks (VPN)
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
Banking on the Cloud
M.Manidayanand, M.Com, M.Phil, M.B.A,(PhD), Assistant Professor, School of Commerce and International Business, Dr.G.R.Damodaran College of Science, Civil Aerodrome Post, Coimbatore-641 014.
Abstract A number of banks are now adopting cloud targeting in the next few years. Due to this type of technologies to fulfill their varied purposes. Virtually business needs, cloud services must be similar with a every business sector today is betting big on cloud “silver bullet”. There are many advantages that cloud computing More so, given the benefits it promises and the provides for banks as customers. First of all, cost savings, way it changes how technology is delivered and using cloud-servers instead of personal servers, will save consumed by the end user in an enterprise. Cloud a lot of money. Moreover, cloud provides: usage-based computing helps banks to transform their business billing, business continuity, business agility, green IT. processes and enhance their ability to grow in new sectors This document provides a beneficial insight into how or regions without the time and cost burdens involved cloud computing can be used in the banking industry, with establishing a physical presence. Like most other various business models associated with it and the sectors, banks and financial services companies too can problems faced by the banking industry in adopting this benefit from the fact that cloud computing helps to create technology. a more flexible, agile business model to meet the growing business needs in a dynamic and competitive landscape. Keywords: Cloud computing, Banking, Business model, Hybrid cloud Cloud computing helps banks to transform their business processes and enhance their ability to grow in new sectors INTRODUCTION or regions without the time and cost burdens involved with establishing a physical presence. It helps to create Cloud computing today encompasses every vertical in the new markets and services to differentiate from market across sectors. Organizations are adopting competition and improve the ways customers' access and innovative cloud apps to support their everyday business use the bank's products and services. Banks will have a operations. To drive growth and innovation in banking, it much better ability to provide consistent service to is increasingly necessary to dramatically leapfrog the customers across branches, geographies and also integrate competition using IT and business model transformation. a plethora of disjoint customer information and analytics. The dramatic changes taking place in banking require new Cloud technology offers business models for delivering ways to maximize profitability and returns. Cloud innovative client experiences, effective collaboration, technology offers secure deployment options that can help upgraded speed to market and enhanced IT efficiency. It banks develop new customer experiences, enable effective is an evolutionary result of the improvements in digital collaboration and improve speed to market all while networks and computing speed over the last decades. increasing IT efficiency. Banks that take advantage of Banks are already widely using cloud computing for non- cloud computing are better positioned to respond to core and non-critical uses, such as human resources, e- economic uncertainties, interconnected global financial mail, customer analytics, customer relationship systems and demanding customers. They can use management, and development and testing (88% of information to enhance customer segmentation techniques surveyed EU-based financial institutions were already and to develop more focused services that are aligned using cloud based services by June 2015),2 while a few with customer needs. Banks also can optimize their smaller banks either have transferred or are in the process channel investments and differentiate themselves through of transferring entire core services (treasury, payments, customer service excellence. Perceived cost savings, ease retail banking, enterprise data etc.) to the cloud of scaling-in and scaling-out, faster time to-market for (U.S.based Independence Bancshares, Tunisia-based deploying systems, virtualization of enterprise-wide data Zitouna Bank, U.K.-based My Community Bank, and as a service, enterprise technology standardization, and Australia‟s ME Bank, for example). This brief looks into the ability to access data and applications on the move are the relationship between banks and technology; presents all critical consideration factors that can drive financial an overview of the cloud model; outlines the model‟s services firms to adopt cloud computing. There are benefits, costs and risks; discusses risk management countless opportunities for financial services firms to strategies; and predicts what the near future holds for leverage the benefits of cloud computing by migrating a cloud computing in banking. Banks are an important variety of applications to the cloud. Non-core applications segment of business area that cloud computing is
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
and such business processes as recruiting, billing and points was how much they could reduce their cost organization wide travel management can and should footprint. In fact, by migrating from Lotus Notes to easily move to the cloud. A number of infrastructure Microsoft 365 for email, they experienced a cost operations, such as data center management, data storage reduction of $7 to 8 million, as well as a reduction in the and disaster recovery, should also move to a cloud after a amount of IT staff time needed to manage it. Capital one thorough evaluation of different vendors offerings and is also benefitting from cost reductions enabled by the based on the flexibility of cloud vendors in documenting cloud. The company went from managing and paying for contract. Because of its expanded computing power and eight data centers to 2014 to a planned three by 2018. capacity, a cloud can store information about user Cost savings, coupled with the rapid improvements the preferences, which can enable product or service cloud can bring to an organization, means IT customization. The context driven Variability provided organizations within banks are quickly shifting from using cloud computing makes it possible for banks to being seen as a cost center to an innovation center. And personalize customer interactions and adapt to subtle because cloud applications are accessible from any changes, which leads to a more user-centric experience. location, organizations like World Bank find that their employees are now more productive. A connected OVERVIEW workforce means employers get more for their investment in each employee. Banks may have various reasons for migrating to the cloud, but the main reason applications. A pivotal The fact is, the cloud is no less secure than on-premise stumbling block for huge investments in new technologies infrastructure. It‟s simply a matter of leveraging the right has always been the capital expenditure needed for tools those built for the cloud. But what companies have advance infrastructure. With cloud computing, various tried to do instead is apply their on-premise security tools financial institutions only have to budget for functional the ones they‟ve heavily invested in and become expenses and wage for the services they use. This makes comfortable with to their new cloud environments. Since it effortless and more cost effective to test new these tools aren‟t built for the data security in cloud applications on the cloud versus prevailing conventional computing, they simply can‟t catch everything. Unlike in infrastructures. No cloud computing services model is an on-premise world where there is a defined perimeter to customary to meet all the technology requirements for protect, in the cloud, there is no perimeter. That means the every financial organization. Banks should develop and threat landscape becomes unbounded, so the best way to preserve an application portfolio consisting of both cloud add security is by leveraging continuous security and on- ground applications. While endorsements in monitoring. With continuous monitoring, no anomalous legacy systems are supposed to continue, cloud based behavior goes unnoticed, giving banks the same level of services are ideal for recent business fields. Cloud-based visibility and protection (if not more) as they had on services are expected to provide the edge of both premise. minimum investments in enforcing business strategies and faster turnaround time for product and service The private cloud is the first step towards cloud contribution. computing, and it is here that the most critical applications of the enterprise will be hosted for quite Banks are racing to take advantage of the opportunities some time. The private cloud emerges stronger than the and manage the risks that the digital economy creates. To public cloud because it grants banks control over their IT do so, they will need computing platforms that provide while providing reduced complexity, increased flexibility, greater agility at lower cost. As global head of Goldman and all other benefits associated with cloud computing. Sachs‟s technology division, Don Duet has led the Private clouds have emerged as the hot favorite of the development and execution of the firm‟s private-cloud banking industry also because in a financial environment strategy, as well as its thinking about opportunities in the where applications are critical and governed by stringent public cloud. “None of this marks a sudden or abrupt shift user industry compliance, they can provide high security. in strategy for the firm. It‟s always been about making They ensure that no data is lost or misplaced and also continual progress,” he says. In this edited interview provide the flexibility of control in order to modify conducted by McKinsey‟s James Kaplan at Goldman resource configuration according to demand. Since private Sachs‟s headquarters in New York, Duet discusses the clouds are deployed within an organization's firewall, the firm‟s use of a private-cloud infrastructure the challenges threat of security breaches is obviated. The company's IT and risks it faced in conceiving of and launching the infrastructure can be moved onto a single private network platform almost a decade ago and the benefits the firm is using a virtual private network (VPN) with ease and faster realizing through this technology.When von Friedberg access. made her case for the cloud at World Bank, one of her
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SECURITY STRENGTHS IN CLOUD and rather led most banks to start building mini 'private' COMPUTING infrastructure clouds. To reduce this risk, the management of the infrastructure that underpins these computing Security is one of the biggest arguments used against the environments needs to move away from complex IT actual cloud computing system. However, cloud provisioning requests to the presentation of a series of computing systems are often safer than mainframe standardized services. Through the use of standardized systems managed at the local level, at least for small and processes and workflows, implementation risk is medium companies (banks). This may list the strengths of minimized, while established change management cloud computing systems: private cloud, data practices are supported. Reaching this state is the centralization, multi-factor authentication, sharing beginning of the journey to the cloud. security, economy of scale and others. Private cloud is probably the most important argument in favor of using CLOUD SECURITY cloud computing systems by organizations (banks). An interesting comparison is between the current situation of internet banking and cloud computing. Security issues were also an inhibitor to adoption of internet banking [1] (about mid 90's), which can be considered a precursor of cloud computing. Similarly, as cloud computing providers who continue to address market concerns relating to safety, economy and convenience of cloud computing will become a commonplace like online banking and other online financial transactions today.
Although cloud computing is not a new concept for banks, this sector has been slow in adopting the technology. The key concerns are that such deployment MODELS models could lead to an environment sprawl and a lack of Cloud service models offer financial organization the control in terms of change management. This can further option to move from a capital-intensive way to a more lead to security risks, reliability issues and a lack of malleable business model that minimize operational wage. effective business continuity planning. A lack of core The key to achievement lies in choosing the right cloud application solutions has delayed the process further. services model to meet business needs. In this section we From the public cloud standpoint, the issues are around review various models for cloud computing services, regulation, location, liability and recoverability in the functions and deployment. cloud. These are some of the reasons that have slowed down the adoption and deployment of cloud computing
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Cloud Service Models: Business Process-as-a-Service Infrastructure-as-a-Service (IaaS) This cloud model (BPaaS) the cloud is used for standard business processes allows businesses to buy those resources as a fully such as billing, payroll, or human resources. BPaaS outsourced service rather than purchasing servers, combines all the other service models with process software, data center space or network equipment. Cloud expertise. Deployment Models
Software-as-a-Service (SaaS) A cloud service provider There are three ways service providers most commonly manage the business software and related data and users deploy clouds: access the services and data via their web browser. Number of software that can be delivered this way include Private clouds. The cloud infrastructure is operated accounting ,CRM ,ERP, invoicing, human resource uniquely for a specific organization. It may be governed management, content management, and service desk by the company or a third party and may prevail inside or management. outside the premises. This is the most impregnable of all cloud choice. Platform-as-a-Service (PaaS) A cloud service provider offers a complete platform for application, interface, and Public clouds. The cloud infrastructure is made attainable database development, storage, and testing. This allows to the common public or a large industry group and is businesses to streamline the development, maintenance governed by an organization that trades cloud services. and support of custom applications, lowering IT costs and minimizing the need for hardware, software, and hosting Hybrid clouds. The cloud infrastructure is consist of two environments. or more clouds (private or public) that remain sole entities but are associated in order to administer services. CLOUD OPERATING MODELS
Choosing the right cloud services delivery model is Virtual captives: Virtual captives have a dedicated pool determining the appropriate operating model for the of resources or centers to help with cloud operations and required mix of resources and assets. We have identified meet demand. This operating model is a good alternative three operating models for cloud services: to a complete outsourcing approach.
Staff augmentation: Financial firms can gain cloud Outsourcing vendors: This approach uses offshore expertise by hiring people with the right skill sets from centers, facilities, and people from a third party vendor to service vendors. The additional staff can be housed in the handle cloud operations. The model combines resources firm„s existing offshore captive center. This operating and investments to cater to cloud services for multiple model allows for flexibility and lets firms choose the best banks. resource for each specific requirement.
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ADVANTAGES infrastructure using a web browser or customized clients Cost Savings: Business sharpness is determined by the regardless of location and time, advancement of such cost an organization incurs. There are a few self-service- interfaces has started taking shape. based, and perceptually cost effective public cloud computing solutions. Low-cost price plans advertised by CHALLENGES public cloud vendors have inspired IT departments to gain The Cloud computing technologies adoption continues to an insight into costs, resource allocation models and the gain momentum across a wide range of banking services. variety of cloud models, including public, private and Aside from all the positive spin around cloud computing hybrid. Billing is a non-core process for banks, and technologies, a reliable, trusted, standard model of cloud outsourcing it to a less expensive mediator allows them to computing that will enable faster rates and higher levels route their capital into core technology-based functions. of adoption is still a long way off, with relatively limited Scalability: If well designed, cloud solutions empower progress being made in that regard in the past year. When banks to meet customer demands and scale quickly, a bank moves into cloud computing, there are two prime dynamic provisioning of computing resources, will save challenges that must be addressed: business users and IT experts from engineering the systems for peak loads. Banks can tackle the challenges of Security-The confidentiality and security of commercial security and data privacy by devising a hybrid cloud and personal data and mission-critical applications is where precise data can reside on a private cloud and preeminent. Banks cannot allow the danger of a security computing power can be available on a public cloud. breach. Despite economic strain for business to cut down These private and public clouds can be integrated in a charges and fervent assurances from cloud computing virtual private network to forge a single scalable hybrid technology providers, security remains a top barrier to cloud. cloud technology acceptance. Ultimately, for cloud computing to gain full acceptance within the banking Time to market: With cloud computing, time to market services sector, cloud services must be harmlessly can be curtailed from months to weeks or days, depending integrated into existing security platforms and processes. on the size of a bank. A self-service based, on-demand and real-time monitored cloud helps by: • Phasing out Regulatory and compliance-Customers are basically procurement delays for computing hardware and software responsible for the security and integrity of their own data, even when it is govern by a service provider. Accelerating computing power for when current Conventional service providers are subjected to external applications need to deal with peak loads •Eradicating the audits and security certifications. A cloud computing capital and time investment for procuring hardware for provider who ignores to undergo this evaluation are proof of concept work . signaling that customers can only use them for the most superficial activities .Many banking mangers require that Data Virtualization: Data virtualization is the assimilation financial data for banking consumers stay in their native of data from multiple and diverse sources across the country. Certain compliance arrangements require that enterprise or external sources for the on-demand data not to be mixed with other data such as on shared consumption by a wide range of applications in a servers or databases. As a result banks must have a fair virtualized manner. Many mandates in context with the understanding of where their data is stored in the cloud. regulations and performance of banks require a data virtualization strategy. This strategy can be used to Security issues which cloud clients should advert are. provide a single source of reference data, such as security Privileged user access: There dwell sensitive data that is master data. Also, risk and analytics calculations rely on processed outside the organization inherent risk of many different types and sources of data, including security of data because outsourced services bypass the relational and semi-structured XML. Combining such physical and logical IT controls. discordant data from public and private domains is a test. Accordingly, accessing that data from a single virtual Regulatory compliance: Customers are responsible for the source would drive scores of data consolidation within security of their data. Traditional service providers are banks. subjected to external audits and security certifications. Data location: When users use the cloud, they have no Mobility: Many of today„s corporate world techno savvy knowledge about the hosted data. Distributed data storage workers want to access risk and analytics reports while is a main reason of cloud providers that can cause lack of they are on the move. They see the benefits of accessing control and that is risky for customers. the internet on their smart phones and I pad‟s, instantly even in remote locations. Likewise, they want similar Data segregation: As cloud is typically in a shared interfaces for banking services-specific applications. And environment in that data can be shared. So there is the since a cloud facilitates users to access systems and danger for data loss. Is encryption available at all phases,
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and were these encryption patterns designed and tested by while also maintaining the security and confidentiality of experienced professionals. their data. Banks need to adopt practical approach to security and data privacy in the cloud. Most banks Recovery: It is very essential to recover the data when segment data with different levels of sensitivity, from low some problem occurs and creates failure. So the main level (published widely with no restrictions) to ultra question arises here is that can cloud provider restore data secure (only accessible by top decision makers). In the completely or not, this issue can cause a stalemate in same way, banks will need to implement their cloud to security. Investigative support: Cloud technology have similar and appropriate security. Banking services services are difficult to investigate, because logging and organizations are starting to adopt cloud computing data for multiple customers may be co-located and may technologies in a number of fields, in particular for also be spread across an ever-changing set of hosts and mobile applications, innovation testing and micro- data centers. banking.
Long-term viability: Ideally, cloud computing provider Mobile banking: Banks are now offering mobile will never go broke or get acquired by a larger company applications to online banking customers and partners for with maybe new policies. But clients must be sure their checking balance, order new cheque books or stop data will remain available even after such an event. In the payment orders. New service R&D: Banking services early phases of cloud computing adoption, it is expected Organizations are also increasingly advancing the that banks will own and operate the cloud themselves with computing power that cloud services offer for research service providers playing more vital role in increasing and development and testing of new services prior to any ownership and control of the cloud infrastructure as cloud attempt at going into production. Micro banking: Another computing matures and more rigorous controls become trend emerging in developing countries of cloud services available. whereby micro banks are running their entire business on cloud computing. FUTURE ADVANCEMENT CONCLUSION
Continued advancement of cloud computing within the banking sector will require vendors and banks to overcome its challenges together. When planning cloud computing initiatives in the near future, banks should choose service and delivery models that best match requirements for operational flexibility, cost efficiency, and pay-as-you-use models. Banks should adopt a progressing evolutionary approach towards cloud computing services, examining each project based on the type of applications and nature of the data. Lower risk projects may include customer relationship management and enterprise content management. Higher risk projects will involve core business functional systems such as wealth management or core banking. In the long term banks will have an application portfolio mix of on- premise and cloud-based services delivered across a combination of private, hybrid, and public cloud- based deployment models with the share of cloud services gradually increasing in the service mix. Private clouds are expected to increasingly become the deployment model for cloud services among banks, giving financial institutions full control through ownership and operations of their cloud systems.
In the coming times, Financial Services firms will REFERENCES typically leverage Hybrid Cloud architecture to realize benefits (cost, speed, and efficiency) while balancing [1]. GartnerIncorporation,http://www.gartner.com/. requirements (security, compliance, quality of service) [2]. www.sapient.com/content/dam/sapient/.../GM_Cloud_C across various business functions. A hybrid cloud model omputing.pdf enables banks to garner the benefits of cloud computing [3]. Adelman, Rachel. ―‗Such Stuff as Dreams Are Made
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On„: God„s Footstool in the Aramaic Targumim and [8]. Kelly, John D. ―Seeing Red: Mao Fetishism, Pax Midrashic Tradition. Paper presented at the annual Americana, and the Moral Economy of War. In meeting for the Society of Biblical Literature, New Anthropology and Global Counterinsurgency, edited by Orleans, Louisiana, November 21–24, 2009. John D. Kelly, Beatrice Jauregui, Sean T. Mitchell, and [4]. Choi, Mihwa. ―Contesting Imaginaires in Death Rituals Jeremy Walton, 67–83. Chicago: University of Chicago during the Northern Song Dynasty. PhD diss., University Press, 2010. of Chicago, 2008. [9]. Kossinets, Gueorgi, and Duncan J. Watts. ―Origins of [5]. Cicero, Quintus Tullius. ―Handbook on Canvassing for homophily in an Evolving Social Network. American the Consulship. In Rome: Late Republic and Principate, Journal of Sociology 115 (2009): 405–50. Accessed edited by Walter Emil Kaegi Jr. and Peter White. Vol. 2 February 28, 2010. Doi: 10.1086/599247. of University of Chicago Readings in Western [10]. Kurland, Philip B., and Ralph Lerner, Eds. The Civilization, edited by John Boyer and Julius Kirshner, Founders„Constitution. Chicago: University of Chicago 33–46. Chicago: University of Chicago Press, 1986. Press, Lattimore, Richmond, Trans. The Iliad of Homer. [6]. Originally published in Evelyn S. Shuckburgh, trans., Chicago: University of Chicago Press, 1951. The Letters of Cicero, vol. 1 (London: George Bell & Sons, 1908). [7]. García Márquez, Gabriel. Love in the Time of Cholera. Translated by Edith Grossman. London: Cape, 1988.
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IS Cloud Banking IS Banking in Clouds
Dr. P. Suganya Mr. I. Abishake Assistant Professor, CMS College of Science and Commerce, Department of Commerce –PG, Coimbatore CMS College of Science and Commerce, Coimbatore
Abstract: The banking industry is facing unprecedented computing providers. As the number of cloud computing changes, especially cloud storage and data centre have providers is smaller than the banks, absence of efficient facilitated in understanding the technology shifts in many regulation and competitions, banks could end up in a sectors especially in the banking industry.Now a days, situation where the providers dominate, and thus increase Control is in customer’s hands, rather than the bank. prices or renegotiate contracts to the banks. Cloud Customers aredriving force for the new emerging business services take a standardized form of raw computing models. Their use of technologywith the changes in social power, so if the transition is planned and managed well, and dynamic household leads to huge business the low asset specificity can keep switching costs low, transformation. Banks are in position to react to this new thus improving banks’ bargaining power. customer-driven environment with innovation in business models, operations and IT. Cloud computing is used to BASIS OF CLOUD COMPUTING: store data on an external server, accessed via the Internet. SERVICE AND DEPLOYMENT MODELS It is defined as convenient, ubiquitous, on-demand network access to a shared pool of configurable Banking companies however do not hold any computer computing resources e.g., networks, servers, storage, scientists and programmers which influence the applications, and services that is an evolutionary result in corporates to develop cloud computing service and digital networks and computing speed over the last deployment models. decades. Cloud Service Models The paper aims to provide a means of understanding SaaS (Software as a Service) –This model provides about cloud banking, exploring the available models, service through Internet and there is no need of any prior associated risks, regulations and also challenges while Installations, but the users have to pay a minimum amount moving to cloud technology. for this services across from any part of the world.
INTRODUCTION: PaaS (Platform as a Service)–This model runs on its Database software, physical servers and web servers that th In early and mid-20 century, Banking activities are are basically known as platforms which allows to deploy manual, Then they rely upon on in-house mainframes and onto the cloud on their own or acquired applications server farms for data processing gradually in 90’s PC’s without having to build it from scratch. interact with the mainframes, replacing the older terminal technology and accessed external networks through LaaS(Infrastructure as a Service)–It includes Internet, e-mail, online banking brings flexibility and infrastructure such as disk drives, servers, networks, speedy transactions to customers at low cost. The greater Domain servers, email servers etc., on LaaS on demand transparency in online banking and the digital economy allows consumers to use operating system and associated lead to greater competition between banks. software without paying any hefty fees for license.
What does the future of cloud computing holds? Cloud Deployment Models It is a strategic decision whether or not to move services On the other hand, when moving to core services to the to the cloud, like other outsourcing decision involves cloud, banks have four deployment models such as: about comparing control with transaction costs, detailing and risks. Usually banks know what the costs and risks Private cloud-A private сlоudinfrаѕtruсturе is are in traditional environment and do not know with рrоviѕiоnеdforеxсluѕivеuѕе by a singleоrgаnizаtiоn certainty what the transaction costs for using cloud whichсоmрriѕes of multiple buѕinеѕѕ units. It is adopted computing in core services would be. But the changes in for its reliability, реrfоrmаnсе,inсrеаѕеd security and technology have made cloud computing cheaper and ѕеrviсе. One Example for this is deployment model readily available and still the terms of the transactions in implemented in Federal government by Los Alamos the long run will be heavily influenced by cloud National Laboratory, which allows researchers, to access
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and utilizeѕеrvеrѕon demand. Data security: Data protection is a crucial element that warrants scrutiny. Community cloud- This is a type of deployment model in Banks are reluctant to buy assurance from vendors with which the cloud is рrоviѕiоnеdforеxсluѕivеuѕеby a the fear of losing data confidentiality of customers. In the community of users with similar needs and concerns E.g., existing model firewalls owned by banks protects the Banks, Trading firms etc. sensitive information. In cloud model, Service providers are responsible for securing data and banks are in position Public cloud - The public cloud implies use by multiple to rely on them for data security. unrelated users. It shall be owned, ореrаtеd and mаnаgеd, by a business, асаdеmiс, or government оrgаnizаtiоn, or Data availability and recovery: some combination ofthem. It еxiѕtѕ on the рrеmiѕеѕ ofthe For business applications, there are stringently followed cloud рrоvidеr itself. agreements by operational teams. They support in Data Replication Known еxаmрlе of this is the Trеаѕurу Department, System monitoring which hаѕmoved itswеbѕitеTrеаѕurу.gоv to a public Appropriate clustering and Fail over сlоud. The site also inсludеѕ social media аttributеѕ like Maintenance Face book, YouTubeandTwitterwhich аllоwѕ for rарid Capacity and performance management and еffесtivе communication with соnѕtituеntѕ. Disaster recovery
Hybrid cloud- This is a deployment model which contains The damage and impact could be severe, if any of the the composition of two or more of the above models that above services is under- served by a cloud provider. is unique but are bound together by technology. Capabilities of banks: BENEFITS OF CLOUD COMPUTING IN The platform and infrastructure of banks are still in its BANKS infancy, despite of multiple cloud providers.With cloud computing to interface between suppliers and multiple With the advent of this technology, cost of computation, groups of service customers, it demand expertise in scalable infrastructure, content of storage and delivery is procurement, risk assessment and service negotiation reduced significantly. But the two key advantages are: areas- that many banks are only modestly equipped to handle Cost reduction: There are number of attribute which lower its costs. Regulation and Compliance restrictions: Billing model is pay as per usage There are government regulations that do not allow infrastructure is not purchased thus lowering customer’s personal information and other sensitive maintenance information to be physically located outside the country. Compared to traditional computing Initial expense In this situation, cloud providers need to setup a storage and recurring expenses are much low. site exclusively within the country to comply with regulations. Having such an infrastructure may not always Large the storage capacity: Storage and maintenance of be feasible and is a big challenge for cloud providers. large volumes of data becomes real due to massive infrastructure offered by cloud providers. Unexpected Success factors for implementing cloud: spikes of workload can also be managed efficiently and When considering to adopt cloud solutions for services, effectively, since there is dynamic scalability in the cloud. banks should partner to gain expertise. Therefore, cloud service providers should have Flexibility: One of the important features in cloud computing is it stresses on getting 1. A clear defined cloud strategy applicationsappropriate building blocks necessaryto 2. Banks should be cautious about making significant changing business conditions. investments in cloud computing until tangible benefits are available. As a first step, cloud CHALLENGES OF CLOUD COMPUTING providers should explain the costs and implications of migrating existing banking applications and IN BANKS: infrastructure to the cloud. 3. For cloud initiatives, banks need service level There are still remain some concerns in cloud computing agreements (SLAs) that link billing to consistent despite of its growing influence. The common opinion is system performance benefits overweigh the drawbacks and model is worth 4. Banks may need to keep sensitive data within exploring. Some challenges are: firewalls to fulfil local regulations and client
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confidentiality requirements [2]. National Institute of Standards and Technology 5. Demonstrable return on investment. (2011). http://nvlpubs.nist.gov/nistpubs/Legacy/SP/nistspecialpu blication800-145.pdf CONCLUSION: [3]. National Institute of Standards and Technology. (2011). http://dx.doi.org/10.6028/NIST.SP.800-145 Though cloud requires technology it is difficult to predict [4]. Darrow, B. (2016).Pst, Amazon Cloud Is Not Really when and how banks will move core services to cloud. New to Banks. Fortune Magazine http://goo.gl/UEVi8l Large banks are in transition onto cloud step by step, [5]. ENISA. (2016). Secure Use of Cloud Computing in the diving deeper into its application areas such as Customer Finance Sector Good practices and recommendations. https://goo.gl/txcRKd analytical, Customer relationship management, somepayments, all the while cautiously and continuously assessing trade- offs. Ultimately, we need not wait longer to watch the banks tripping to clouds.
REFERENCES:
[1]. Kotabe, M. Mol, M. (2009). Outsourcing and financial performance: A negative curvilinear effect. Journal of
Purchasing and Supply Chain Management. http://goo.gl/zKKbS1
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A Study on Corporate Governance Practices in Commercial Banks
Dr. Mutharasi. M, Assistant Professor at Jain University, Bangalore.
Abstract: If we will look at the society we live in, we other in banking industry. would see that if there would be no rules regulating the behavior of the people, providing the rights and In the context of India, presently the magnitude of restrictions then society may break down and it could lead Corporate Governance is quite enormous. Good Corporate to chaos and anarchy. As there would be no rules, there Governance is a source of competitive advantage and would be no violations and penalty too. Due to these critical and social progress. The Corporate Governance in reasons, there is a need for governance in society at large banking sector is particularly important in less developed which is done mostly by government and due to such countries like India because economic development and reasons; there are watchdogs which regulate the growth is dependent to a large extent on well-functioning, governance of companies and financial institutions too. stable and sound managed banking system. The concept The term “governance” means control and corporate of „corporate governance‟ is not an end; it‟s just a governance is governing or controlling the corporate beginning towards growth of company, banks and bodies i.e. ethics, values, principles, morals. Governance, financial institutions for long term prosperity. in general terms means “the process of decision-making and the process by which decisions are implemented (or Keywords: corporate governance, regulations, banking not implemented), involving multiple actors. Good sector, transparency, composition of board governance is one which is accountable, transparent, responsive, equitable and inclusive, effective and INTRODUCTION efficient, participatory and which is consensus oriented and which follows the rule of law. “Corporate governance Corporate governance is an age old concept which is concerned with set of principles, ethics, values, morals, provides for a set of transparent relationships between an rules regulations, & procedures etc. Corporate governance institutions management, its board, shareholders and other establishes a system whereby directors are entrusted with stakeholders. Corporate governance is gaining center duties and responsibilities in relation to the direction of stage in the recent times due to failure of corporate and the company‟s affairs. For effective corporate governance, wide dissatisfaction among the people with the way its policies need to be such that the directors of the corporate works and hence became a widely discussed company should not abuse their power and instead should topic worldwide. Corporate Governance is now understand their duties and responsibilities towards the recognized as a paradigm for improving competitiveness company and should act in the best interests of the and enhancing efficiency and thus improving investors‟ company in the broadest sense. confidence and accessing capital. Now corporate governance has become a more dynamic concept and a Bank and Financial Institutions are the backbone of the not a mere static one Corporate Governance was brought economic sector of any country. The healthy economic in limelight through series of corporate failures such as condition of a nation is depicted through the sound Enron and World Corn. These companies collapsed functioning of its banks. Banks form a crucial link of a because of the corporate mis-governance and unethical country‟s economic sector hence they are universally practices they indulged in. Satyam scandal in India is also regulated industry and their well-being is imperative for the case of corporate mis-governance. Satyam case the economy. Working of banks is different from other exposed the complete lack of accountability in the corporate in many important respects, and that makes company and raised questions on corporate governance corporate governance of bank not only different but also practices of the country. critical. Hence corporate governance is conceptually different for banks. If a corporate fails, the fall outs can be In a service industry like banking, corporate governance restricted to the stakeholders, but if a bank fails, the relates to the manner in which the business and affairs of impact can spread rapidly through other banks with individual banks are directed and managed by their board potentially serious consequences for the entire financial of directors and senior management. It also provides system and the macro economy. Regulations, guidelines through which the objectives of the institutions are set, the and corporate governance are complementary to each strategy for attaining them is determined and the
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performance of the institution is monitored. Every major customers, communities and at last towards governance industrialized country as well as the Organization for and it needs to serve its responsibilities at the best at all Economic Co-Operation and Development and the World aspects. Bank has made efforts in recent years to refine their views on how large industrial corporations should be organized Need for corporate governance in banking system: and governed. Academics in both law and economics Banks are important catalysts for economic reforms, have also been intensely focused on corporate including corporate governance practices. Because of the governance. Oddly enough, in spite the general focus on systemic function of banks, the incorporation of corporate this topic, very little attention has been given to the governance practices in the assessment of credit risks corporate governance of bank. pertaining to lending process will encourage the corporate sector in turn to improve their internal corporate Definitions of corporate governance governance practices, importance of implementing Cadbury Committee (U.K.), 1992 has defined modern corporate governance standards is conditioned by corporate governance as: the global tendency to consolidation in the banking sector “Corporate governance is the system by which and a need in further capitalization. It is of crucial companies are directed and controlled. It importance therefore that have strong corporate encompasses the entire mechanics of the governance practices. Banks just like any other functioning of a company and attempts to put in organization are incorporated entities. As a result of place a system of checks and balances between which, the primary requirements of corporate governance the shareholders, directors, employees, auditor and apply to them as any other incorporated entity. Added to the management.” this certain features that are very specific to banks, adds The Institute of Company Secretaries of India has on to the importance of Corporate Governance issues in defined corporate governance as: banks. “Corporate Governance is the application of best Management practices, Compliance of law in true Among other features, the most important one is the fact letter and spirit and adherence to ethical standards that banks form an integral part of the economy of the for Effective Management and distribution of country, and any failure in a bank might have a direct wealth and discharge of social Responsibility for bearing on the financial health of the country. Banks, help sustainable development of all stakeholders”. in channelizing the people‟s saving. The capital structure of bank is unique in two ways. First, banks tend to have History &need of corporate governance very little equity relative to other firms. Second, banks‟ Corporate governance concept emerged in India after the liabilities are largely in the form of deposits, which are second half of 1996 due to economic liberalization and available to creditors/depositors on demand, while their deregulation of industry and business. With the changing assets often take the form of loans that have longer times, there was also need for greater accountability of maturities. The second important driver of a good companies to their shareholders and customers. The report corporate governance stems from their funding patterns. of Cadbury Committee on the financial aspects of Banks, by their basic definition are highly leveraged corporate Governance in the U.K. has given rise to the financial institutions, with the equity capital of the debate of Corporate Governance in India. The “corporate shareholders being reduced to a miniscule proportion of governance concept” dwells in India from the Arthshastra loan capital in the form of borrowing and deposits of time instead of CEO at that time there were kings and deposits from customers of the bank. As a result of this, subjects. Today, corporate and shareholders replace them the stakeholders in banks, (mainly the depositors and but the principles still remain same, unchanged i.e. good lenders) have a rightful claim of accountability from the governance.20th century witnessed the glossy of Indian banks and their boards.The third important element in the Economy due to liberalization, globalization, and Corporate Governance structure relates to the control privatization. Indian economy for the 1st time here was function. It is imperative to discuss the same in brief. together with world economy for product, capital and lab Control functions in banks deal with internal frauds as our market and which resulted into world of well as external frauds. The former relates to situations capitalization, corporate culture, business ethics which where the banks own personnel indulge in corrupt and was found important for the existence of corporation in unethical practices. Finally, failing to comply with the world market place. stipulated norms can be one of the challenging issues of Corporate Governance framework. With Banks being Need for corporate governance arises due to separation of under intense watch of the central bank as well as other management from the ownership. For a firm success, it regulatory bodies, it is a common observation, that most needs to concentrate on both economic and social aspect. failures (crashes) in banks have occurred due to It needs to be fair with producers, shareholders, customers compliance failure situations. With a lot of reports and etc. It has various responsibilities towards employees, norms, being introduced (The Basel II norms being the
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latest of them), failure to adhere to the regulatory norms Asian roundtable on corporate governance (2006) have never reduced. identifies corporate governance that affects Asian banks and finds that banking sector in many Asian jurisdictions BASEL II Recommendation: The Basel Committee on do not have, in place, sufficient institutional infrastructure Banking Supervision is a committee, of banking necessary for effective enforcement of the corporate supervisory authorities, established by the Central Bank governance of the corporate policy framework. The Governors of the G10 developed countries in 1975. The members of the Task Force believe that Asian banks play Committee in 1988 introduced the Concept of Capital a dominant role in regional finance due to the immature Adequacy framework, known as Basel Capital Accord, capital markets, and Asian policy makers should be aware with a minimum capital adequacy of 8 %. It also issued a that sound corporate governance of banks cannot be consultative document titled “The New Basel Capital developed effectively without tackling institutional Accord” in April 2003, to replace the 1988 Accord, which constraints and weaknesses. The Task Force recommends re-enforces the need for capital adequacy requirements that Asian banking supervisors should take the lead to under the current conventions. This accord is commonly improve corporate governance of banks in Asia. known as Basel II and is currently under finalization. Basel II is based on three pillars: Pati (2006) explains that policy framework for corporate governance has been developed lately in India and for Pillar 1 – Minimum Capital Requirements banking it is still evolving. For Indian banking the RBI Pillar 2 – Supervisory Review Process has taken the sole responsibility of framing policy in this Pillar 3 – Market Discipline regard. The Standing Committee on International Enhancing Corporate Governance in Banks Financial Standards and Codes which was set up in 1999 to bring common financial standards in line with The Basel committee had issued, in August 1999, a international practices constituted an advisory committee guidance paper entitled “Enhancing Corporate on corporate governance under the chairmanship of R.H. Governance for Banking Organizations” to supervisory Patil.The sub-committee submitted its report in 2001; and authorities worldwide to assist them in promoting the in this report it has been observed that since most of the adoption of sound corporate governance practices by Indian companies belong to the “insider” model of East banks in their countries. Asia i.e. dominance of family/promoter ownership and control, it is essential to bring quick reforms in LITERATURE REVIEW corporates/banks/financial institutions/public sector enterprises to make them more autonomous and
professional. Furthermore, as a part of strengthening the Levine(2004), discusses two special attributes of banks functioning of their boards, banks should appoint a risk that make them special in practice: greater opaqueness management committee of the board in addition to the than other industries and greater government regulation. three other board committees viz., audit, remuneration These attributes weaken many traditional governance and appointment committees. mechanisms. Next, the study reviews emerging evidence on which government policies enhance the governance of According to Cocris&Ungureanu (2007) banks are banks and draws tentative policy lessons. In sum, he special and their corporate governance systems are of concludes that the existing work suggests that it is major importance because banks have a critical position important to strengthen the ability and incentives of in the development of economies due to their major role private investors to exert governance over banks rather in running the financial system. The authors report that than relying excessively on government regulators. sound corporate governance system of banks increases the
efficiency of firms and also enhances the credibility of the Arun and Turner (2004) discuss the corporate banking industry, which has positive economic effects governance of banking institutions in developing and countries that adopt regulation on forcing the economies. Based on a theoretical discussion of the disclosure of accurate, comparable information about corporate governance of banks, authors suggest that banks tend to have better developed banks. These policies banking reforms can only be fully implemented once a enhance the operations and governance of banks. The prudential regulatory system is in place. An integral part authors opine that banks, nowadays, respond to tight of banking reforms in developing economies is the regulation through mechanisms such as financial privatization of banks; so the corporate governance innovation, securitization, globalization and new reforms may be a prerequisite for the successful technologies, if these responses are managed adequately, divestiture of government ownership. Furthermore, they may have stimulating effects on the governance of authors opine that the increased competition resulting banks. from the entrance of foreign banks may improve the corporate governance of developing-economy banks.
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Chahine and Safieddine (2009) provide new insights audit committee, compensation committee and into the effect of corporate governance in emerging nominating corporate governance committee in place, markets by examining the banking system in Lebanon. disclosing the information and recognizing their duty to This research shows that board characteristics influence establish corporate governance procedures that will serve bank conduct and performance. Using a sample of 749 to enhance shareholder value. firm years of unbalanced panel data on the banking industry in Lebanon from 1992 to 2006, this paper shows OBJECTIVES OF THE STUDY that bank performance, as measured by Return on Assets and the Return on Equity, have a positive association with 1. To study the reasons for the written code of board size. It also identifies a quadratic relationship Corporate Governance in the Indian commercial between bank performance and board independence as banks both Return-on-Assets and Return-on-Equity first 2. To assess the availability of corporate Governance decrease and then increase in direct proportion to the policies in commercial banks of India increased percentage of outside directors on the board. 3. To study the various issues taken into account in This study sheds some light on the differential impact of the code of conduct for the corporate Governance corporate governance on firm performance across of Indian commercial banks industries and countries. It concentrates on banks in 4. To understand the code of conduct for independent developing countries that are generally known to suffer directors from high asymmetric information and where concerns 5. To offer suggestions for the improvement of about safety and soundness remain. Hence, it contributes Corporate Governance policies in the Indian to the existing debate on appropriate regulations for an commercial banks. effective and stable financial system in the Arab World After reviewing the available literature and understanding SCOPE OF THE STUDY the complexity of corporate Governance in banks, it has been observed that no detailed study has been done to Topical Scope: The topical scope of the present study is analyze the Corporate Governance Policies in the banking confined to the“A study on corporate governance sector in India in the light of various committees‟ practices in commercial banks” recommendations which were appointed in India in the recent decade. Thus, there arises a need to make an in- Analytical Scope: The analytical scope of the present depth analysis of Corporate Governance practices of the study is confined to the scope, objectives, issues, commercial banks operating in India. importance and practices of corporate governance in banks STATEMENT OF THE PROBLEM Geographical Scope: The present study is confined to the The special nature of banking institutions necessitates a corporate practices of Banks in India. broad view of corporate governance where regulation of banking activities is required to protect depositors. In METHODOLOGY developed economies, protection of depositors in a deregulated environment is typically provided by a system The data used for the study is secondary data comprising of prudential regulation, but in developing economies of official websites, journals, magazines and articles. such protection is undermined by the lack of well-trained Since the data is secondary, it is more dependable and supervisors, inadequate disclosure requirements, the cost reliable. The primary data is supplementary. of raising bank capital and the presence of distributional cartels. Due to special nature of the activities carried on by the banks, they face a lot of problems as far as the area RESEARCH DESIGN of corporate governance is concerned. Also, in the Indian scenario, due to the peculiar nature of bank holdings there Important issues in corporate governance are a lot of embedded conflicts. There exists a doubt as to There are several important issues in corporate what standard should be applied while enforcing governance and they play a great role, all the issues are corporate governance in banks. Central banks play an inter related, interdependent to deal with each other. The important role in this regard. As far as best corporate issues are as follows: governance practices for banks are concerned, they may realize that the times are changing, establishing an 1. Value based corporate culture: For any effective, capable and reliable board of directors, organization to run in effective way, it needs to establishing a corporate code of ethics by the banks for have certain ethics, values. Long run business themselves, considering establishing an office of the needs to have based corporate culture. Value based chairman of the board, having an effective and operating corporate culture is good practice for corporate
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governance. It is a set of beliefs, ethics, principles the banking system, which are critical to the proper which are inviolable. functioning of the banking sector and economy as a 2. Holistic view: This holistic view is more or less whole. The OECD (The Organization of Economic godly, religious attitude which helps in running Cooperation) principles define corporate governance as organization. It is not easier to adopt it, it needs involving “a set of relationships between a company‟s special efforts and once adopted it leads to management, its board, its shareholders, and other developing qualities of nobility, tolerance and stakeholders. Corporate governance also provides the empathy. structure through which the objectives of the company are 3. Compliance with laws: Those companies which set, and the means of attaining those objectives and really need progress, have high ethical values and monitoring performance are determined. Good corporate need to run long run business they abide and governance should provide proper incentives for the board comply with laws of Securities Exchange Board of and management to pursue objectives that are in the India (SEBI), Foreign Exchange Regulation Act, interests of the company and its shareholders and should Competition Act 2002, Cyber Laws, and Banking facilitate effective monitoring. Laws etc. 4. Disclosure, transparency, and accountability: From a banking industry perspective, corporate Disclosure, transparency and accountability are governance involves the manner in which the business important aspect for good governance. Timely and and affairs of banks are governed by their boards of accurate information should be disclosed on the directors and senior management, which affects how they matters like the financial position, performance etc. function .The functions involve: 5. Corporate Governance and Human Resource Management: Each individual staff and employee Set corporate objectives; in an organization should be given best Operate the bank‟s business on a day-to-day basis; opportunities to prove their worth and these can be Meet the obligation of accountability to their done by Human Resource Department. Thus in shareholders and take into account the interests of Corporate Governance, Human Resource has a other recognized stakeholders; great role. Align corporate activities and behavior with the 6. Innovation: Every Corporate body needs to take expectation that banks will operate in a safe and risk of innovation i.e. innovation in products, in sound manner, and in compliance with applicable services and it plays a pivotal role in corporate laws and regulations; and governance. Protect the interests of depositors. 7. Necessity of Judicial Reform: There is necessity of judicial reform for a good economy and also in Importance of Corporate Governance for Banks today‟s changing time of globalization and Corporate governance is a key element in improving the liberalization. Withthe changing scenario and fast economic efficiency of a bank. Good corporate growing competition, the judiciary needs to bring governance also helps ensure that corporations take into reforms accordingly. It needs to speedily resolve account the interests of a wide range of constituencies, as disputes in cost effective manner. well as of the communities within which they operate. 8. Globalization helping Indian Companies to become Further, it ensures that their Boards are accountable to the global giants based on good governance: In today‟s shareholders. Sound corporate governance also age of competition and due to globalization our contributes to the protection of depositors of the bank and several Indian Corporate bodies are becoming permits the supervisor to place more reliance on the global giants which are possible only due to good bank‟s internal processes. In this regard, supervisory corporate governance. experience underscores the importance of having the 9. Lessons from Corporate Failure: Failure can be appropriate levels of accountability and checks and both internal as well as external whatever it may balances within each bank. Moreover, sound corporate be, in good governance, corporate bodies need to governance practices are especially important in situations learn from their failures and need to move to the where a bank is experiencing problems, or where path of success. significant corrective action is necessary, as the supervisor may require the board of directors‟ substantial CORPORATE GOVERNANCE IN BANKS involvement in seeking solutions and overseeing the IN INDIA implementation of corrective actions.
Broad Canvass of Corporate Governance guidelines Role of RBI in Promoting Corporate Governance: for Banks: The growing competitiveness and interdependence Effective corporate governance practices are essential to between banks and financial institutions in local and achieving and maintaining public trust and confidence in foreign markets have increased the importance of
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corporate governance and its application in the banking II. Role and functions: sector. Corporate governance in banks can be achieved The independent directors shall: through a set legal, accounting, financial and economic Help in bringing an independent judgment to bear on rules and regulations. To make sure that the competence the Board‟s deliberations and integrity in banking sector is maintained, the need for bring an objective view in the evaluation of the uniform standards of the concept of governance in private performance of board and managementscrutinize the and public sector is emphasized. The regulatory performance of management in meeting agreed goals framework implemented by the central bank can affect the and objectives and monitor the reporting of overall wellbeing of banking sector. performance safeguard the interests of all stakeholders, particularly Debut of Corporate Governance in Indian banks: the minority shareholders Keeping in viewall the recommendations and the cross- Balance the conflicting interest of the stakeholders country experience, the Reserve Bank initiated several measures to strengthen the corporate governance in the III. Duties: Indian banking sector. Indian banking system consists of The independent directors shall: Public/Private sector banks having a basic difference Undertake appropriate induction and regularly update between them as far as the Reserve Bank‟s role in and refresh their skills governance matters relevant to banking is concerned. The Strive to attend all meetings of the Board of Directors current regulatory framework ensures, by and large, and of the Board committees of which he is a uniform treatment of private and public sector banks. In member regard to governance aspects of banking, the Reserve keep them well informed about the company and the Bank prescribed its policy framework for the private external environment in which it operates sector banks. It also suggested to the Government the Report concerns about unethical behavior, actual or same framework for adoption, as appropriate, consistent suspected fraud or violation of the company‟s code of with the legal and policy imperatives in PSBs as well. conduct or ethics policy Hence the endeavor is to maintain uniformity in policy Not disclose confidential information, including prescriptions to the best possible extent for all types of commercial secrets, technologies, advertising and banks. sales promotion plans, unpublished price sensitive
information, unless such disclosure is expressly Since role of Independent Directors form the basis for approved by the Board or required by law. effective implementation of corporate governance in banks, it is necessary to reproduce the code of conduct prescribed under SCHEDULE IV [section 149(7)] as IV. Manner of appointment: prescribed in Companies Bill 2012 for the guidance to the The appointment of independent director(s) of the companies. These are reproduced from the Companies‟ company shall be approved at the meeting of the bill 2012. shareholders. The appointment of independent directors shall be Code for independent directors formalized through a letter of appointment, which The Code is a guide to professional conduct for shall set out: independent directors. Adherence to These standards by The terms and conditions of appointment of independent directors and fulfillment of their independent directors shall be open for inspection at responsibilities in a Professional and faithful manner will the registered office of the company by any member promote confidence of the investment community, during normal business hours. particularly minority shareholders, regulators and The terms and conditions of appointment of companies in the institution of independent directors. independent directors shall also be posted on the company‟s website. I. Guidelines of professional conduct: An independent director shall: V. Re-appointment: Uphold ethical standards of integrity and probity The re-appointment of independent director shall be on act objectively and constructively while exercising the basis of report of performance evaluation. his duties exercise his responsibilities in a bona fide manner in VI. Resignation or removal: the interest of the company The resignation or removal of an independent director Not abuse his position to the detriment of the shall be in the same manner as is provided in sections company or its shareholders 168 and 169 of the Act. Assist the company in implementing the best An independent director who resigns or is removed corporate governance practices. from the Board of the company shall be replaced by a
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new independent director within a period of not more nationalized banks are required to form a committee than one hundred and eighty days from the date of consisting of minimum three directors (all independent such resignation or removal, as the case may be. and non-executive directors) from amongst the Board of Where the company fulfils the requirement of Directors to examine and certify that none of these independent directors in its Board even without directors disqualify for being “Fit and proper”. Moreover, filling the vacancy created by such resignation or in some banks directors are also exposed to high level of removal, as the case may be, the requirement of training to fine tune their expert domains to enable them replacement by a new independent director shall not to more effectively contribute to the governance of banks. apply. The Corporate Governance systems have evolved over a period of time to cover all types of banks to develop a VII. Separate meetings: sound and strong financial system. After the Corporate The independent directors of the company shall hold Governance System is established in banks, there could be at least one meeting in a year, without the attendance conspicuous change in the quality of governance. of non-independent directors and members of management; SEBI Guidelines on corporate Governance in Banks: All the independent directors of the company shall The Securities and Exchange Board of India (SEBI) had strive to be present at such meeting; constituted a Committee on Corporate Governance and The meeting shall: circulated the recommendations to all stock exchanges for Review the performance of non-independent directors implementation by listed entities as part of the listing and the Board as a whole; agreement vide SEBI‟s circular SMDRP/Policy/CIR- Review the performance of the Chairperson of the 10/2000 dated February 21, 2000. However it had at that company, taking into account the views of executive time exempted body corporates such as public and private directors and non-executive directors; sector banks, financial institutions, insurance companies and those incorporated under separate statute. SEBI has Assess the quality, quantity and timeliness of flow of now suggested to RBI to consider issuing appropriate information between the company management and guidelines to banks and financial institutions so as to the Board that is necessary for the Board to ensure that all listed companies would have uniform effectively and reasonably perform their duties. standards of corporate governance. As requested by SEBI,
it has now been proposed that the SEBI Committee‟s VIII. Evaluation mechanism: guidelines may be taken up for adoption by those The performance evaluation of independent directors commercial banks listed in stock exchanges so that they shall be done by the entire Board of Directors, can harmonize their existing corporate governance excluding the director being evaluated. requirements with the requirements of SEBI, wherever On the basis of the report of performance evaluation, considered appropriate. On a review by RBI of the it shall be determined whether to extend or continue existing corporate governance requirements in banks, it is the term of appointment of the independent director. observed that many of the recommendations in regard to the following stand implemented in banks and may not Setting „Fit and proper‟ criteria for Directors of require further action towards implementation in respect banks: of these guidelines for the present: It may be useful to distinguish the issue of the composition of the Board from the „fit and proper‟ status Optimum combination of executive and non- of individual non-executive directors and chief executive directors in the Board executives. The Directors should be from professional areas such as accountancy, banking, economics, finance, Pecuniary relationship or transactions of the non- executive directors vis-à-vis the bank agriculture, etc. But it does not specify the extent or degree of professionalism or expertise required in regard Independent Audit Committees, their constitution, to that area. Hence, it is left to the good faith of the chairmanship, power, roles, responsibilities, conduct shareholders to elect directors from the various specified of business, etc. areas with qualifications and experience that is Remuneration of Directors (in case of private sector appropriate to the bank. In regard to PSBs, such good banks) faith is expected when directors are nominated by the Periodicity /number of board meetings Government. In the case of non-executive directors not Disclosure by management to the board about the satisfying the „fit and proper‟ criteria, there is a prescribed conflict of interest due process to be followed by the RBI to disqualify such Information to shareholders regarding directors, which includes opportunities to be heard. appointment/re-appointment of directors, Continuing surveillance of “Fit and Proper” criteria is Maintenance of office by non-executive Chairman. maintained on continuous basis. Under these provisions, Reviewing with the management by the Audit
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Committee of the board. SUGGESSIONS Financial statements before submission to the Board, focusing primarily on: With a view to further improving the Corporate o Any changes in accounting policies and Governance standards in banks, the following measures practices, are now recommended for implementation. o Major accounting entries based on exercise of judgment by management, In the interest of the shareholders, the private sector o Qualifications in draft audit report banks and public sector banks which have issued o Significant adjustments arising out of audit, shares to the public may form committees on the compliance with accounting standards, same lines as listed companies under the o Compliance with stock exchange and legal Chairmanship of a non-executive director to look into requirements concerning financial statements, redressal of shareholders' complaints. and the going concern assumption. All listed banks may provide un-audited financial results on half yearly basis to their shareholders with Best Practices of Banking System in Corporate summary of significant developments. Governance: Good governance can be built based on the business It is also suggested that, the corporate governance practices adopted by the board of directors and practices in the banking and financial sector in India management. Many bank failures in the past have been should improve for best investment policies, appropriate attributed to inadequate and insufficient management internal control systems, better credit risk management, which enabled the banks to accept low quality assets and better customer service and adequate automation in order assume additional risks that extend beyond the level to achieve excellence, transparency and maximization of appropriate for the banks‟ capacity. Important stakeholder‟ value and wealth. commandments for ensuring corporate governance in banks are: CONCLUSION Banks shall realize that the times are changing Banks shall establish an Effective, Capable and Banks and financial sector being a highly service oriented Reliable Board of Directors sector, making corporate governance effective is a great Banks shall establish a Corporate Code of Ethics for challenge. Due to the special nature of the activities themselves carried on by the banks, they face a lot of problems as far Banks shall consider establishing an office of the as the area of corporate governance is concerned. In the Chairman of the Board Indian scenario, due to the peculiar nature of bank Banks shall have an effective and Operating Audit holdings there are a lot of embedded conflicts. The trend Committee, Compensation Committee and in the world of targeting governance practices in the Nominating/ Corporate Governance Committee banking sector to be at the cutting edge of prevailing Banks shall consider Effective Board Compensation practices worldwide is a significant step in the right Banks shall disclose the information direction and should continue to be so in the future as well Banks shall recognize that duty is to establish India has one of the best Corporate Governance legal Corporate Governance Procedures that will serve to regimes but poor implementation.Corporate Governance enhance shareholder value is a mission intended to create strong fundamentals for the banks. With changing dimensions of corporate Recent steps taken by Banks in India for Corporate governance practices banks need to transform into much Governance are: more dynamic and forceful entities setting a broad vision Introduction of non-executive members on the Board for the future. Many investment banks, commercial banks Constitution of various Committees like Management and financial institutions across the globe had to file Committee, Audit Committee, Investor‟s Grievances bankruptcy petitions and vanished from the market. The Committee, ALM Committee etc. reasons are definitely a focus on achieving short term Gradual implementation of prudential norms as business goals often ignoring the long term goals of the prescribed by RBI organization. The philosophy of Corporate Governance Introduction of Citizens Charter in Banks spells out the long term sustainability with strong Implementation of “Know Your customer” (KYC) fundamentals. concept.
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REFERENCES [5]. A.P. Pati, Does Corporate Governance Matter in Indian Banking? Policy Implication on the Performance, (Indian Institute of Capital Markets) 9th Capital Markets [1]. Romero, Alberto, G. (2003), The need for Corporate Conference Paper, 2006. Available at SSRN: Governance in Averting banking Crises -Lessons from http://ssrn.com/abstract = 877810, accessed on7 the Banco Latino Crisis, speech, KPMG Banking November 2013 Seminar in the Dominican Republic, (2003). [6]. http://www.oecd.org/corporate/ca/corporategovernancepr [2]. http://ssrn.com/abstract=1090291, accessed on 7 Nov. inciples/31557724.pdf 2013. [7]. http://www.nfcgindia.org/ipe-report.html [3]. T.G. Arun, and J.D. Turner, Corporate Governance of [8]. Basel Committee on Banking Supervision (BCBS) Banks in Developing Economies: Concepts and Issues, Enhancing Corporate Governance for Banking Corporate Governance: An International Review, 12 (3), Organisations. Switzerland: Bank for International 371-377, 2004, Available at SSRN: Settlements http://ssrn.com/abstract = 557319, surfed on 7thNov. 2013. [4]. Asian Roundtable on Corporate Governance (2006), Policy Brief on Corporate Governance of Banks in Asia, www.oecd.org, accessed on 10 November, 2013.
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Digital Banking in India: Challenges and Opportunities
Dr.P.B.Banudevi P.Dhanya Head of the Department Assistant Professor Department of Commerce Finance Department of Commerce with Professional Accounting Dr.N.G.P.Arts and Science College (Autonomous) Dr.N.G.P.Arts and Science College (Autonomous) Coimbatore-48 Coimbatore-48
Abstract Financial sector plays a vital role in the applications. Digital Banking is a web-based service that economic development of a country. Banking is the facilitates the banks authorized customers to access their helping hand of an economy. A strong and healthy account information. It permits the customers to log on to banking system is vital requirement for economic the banks website with the help of bank’s issued prospects and growth. Indian banking industry, today is identification and personal identification number (PIN). observing an IT revolution. The execution of internet in The banking system verifies the user and provides access banking organizations has modernized the banks. to the requested services, the range of products and Implementing the digital banking approach has benefited service offered by each bank on the internet differs widely both the consumers as well as banks. Considering the in their content. Tremendous progress took place in the benefits, the banks all over the world have implemented field of technology which has reduced the world to a the digital banking and banking organizations in India are global village and it has brought remarkable changes in no exception. The competition among the banks has led to the banking industry. the rising total banking computerization in the Indian banking industry. Digital Banking is a generic term REVIEW OF LITERATURE encompassing internet banking, telephone banking, mobile banking etc. Through digital banking the bank A.J.Joshua, Moli P (2014), in this study majority of the wants to introduce the core concept of IT based Enabled respondents has computer and internet access and they are Services (ITES). The digital banking services are carried also mostly proficient in using them. The users of internet out only upon the customer, and these digital banking banking, tele banking and mobile banking are in general services would fully incorporate with the core banking found to be spending more hours using computers and solution that is already in usage. The objective of the internet than non-users of these services. The hours of present paper is to examine and analyze the progress computer usage, the frequency of internet usage and hours made by digital banking in India. of internet browsing were found to be significantly higher among users as compared to non-users of technology Keywords: Digital Banking, Information Technology, enabled banking self-service. It concludes that banks can Mobile Banking, IT based Enabled Services. target those customers whose usage of computers, internet and other technology products are relatively on the higher INTRODUCTION side.
Information Technology has become a necessary tool in Trivedi & Patel (2015) analysed the problems faced by today’s organizations. Banks today works in a highly customers while using digital banking facilities in India. It liberalized, privatized, globalized and a competitive observed that most of the customers know about the environment. IT has introduced new business model. It is digital banking services offered by their bank. The study increasingly playing an important role in civilizing the found that there is a notable difference between different services in the banking industry. Indian banking industry problems identified while using digital banking services. has witnessed a tremendous developments due to It also found that some problems affect more and some sweeping changes that are taking place in the information problems affect less in use of banking services. It technology. Digital Banking refers to a system allowing finalized that all the reasons are not equally accountable individual customers to perform banking activities at off- for not using digital banking services. bank sites such as home, office and other locations via internet based secured networks. Internet or online Haq & Khan (2016) analysed the challenges and banking through traditional banks enable customers to opportunities in the Indian Banking sector. The study perform all routine transactions, such as account transfers, showed that only 28 per cent banking clients were using balance inquiries, bill payments and stop-payment digital banking after evaluating the population requests, and some even offer online loan and credit card characteristics. It found that there was no significant
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relationship in between age and use of cyber banking. It recognition to electronic transactions and other means of also depicted that there is no relation in between gender electronic commerce. The Reserve Bank is monitoring and the adoption of internet banking. It experimented that and reviewing the legal and other requirements of digital qualification in terms of education and income of the banking on a continuous basis to ensure that it would respondents were playing significant role in the develop on sound lines and its related challenges would acceptance of online banking. The study suggested that it not pose a threat to financial stability. According to report is the need of time that financial literacy of the users of RBI in Jan 2017, there are 196079 ATM and 1337310 should be increased through various programs which point of sale devices in India. should be run by banks to increase the awareness of internet banking. To cope with the pressure of growing competition, Indian commercial banks have adopted several initiatives and Vijay and Rajkumar (2017), has specify that users were digital banking is one of them. The competition has been inclined by factors such as quick direct access, ease of especially tough for the public sector banks, as the newly use, anytime anywhere banking, status symbol, safety and established private sector and foreign banks are leaders in security. The influence of the factors varied from the type the adoption of digital banking. Indian banks offer to their of users. Consumers have different levels of competency customers following digital banking products and in digital banking usage. More the consumers felt about services: their competency in handling internet banking, more was their frequency in usage of internet banking. Moderate Automated Teller Machines and novice of digital banking users had relatively lesser Internet Banking levels of usage satisfaction. Mobile Banking Phone Banking OBJECTIVES OF THE STUDY Tele banking
Electronic Clearing Services
1. To study the current status of financial innovations in Electronic Clearing Cards
Indian banking sector. Smart Cards
2. To identify various digital banking services/products Door Step Banking
adopted by India. Electronic Fund Transfer 3. To study the challenges faced in digital banking. 4. To study the opportunities available in digital CHALLENGES IN DIGITAL BANKING banking. Security Risk: The problem related to the security has DIGITAL BANKING become one of the major concerns for banks. A large group of customers refuses to opt for digital banking Digital Banking is the term that signifies and facilities due to uncertainty and security concerns. encompasses the entire sphere of technology initiatives According to the IAMAI Report, 47% of internet users that have taken place in the banking industry. Digital are not using digital banking in India because of security Banking is a general term refers to making use of concerns. So it’s a big challenge for marketers and makes electronic channels through telephone, mobile phones, consumers satisfied regarding their security concerns, internet etc. for delivery of banking services and products. which may further increase the online banking use.
The concept and scope of digital banking is still in the transitional stage. Digital Banking has broken the barriers The Trust Factor: Trust is the biggest hurdle to online of branch banking. banking for most of the customers. Conventional banking is preferred by the customers because of lack of trust on CURRENT STATUS OF DIGITAL the online security. They have a perception that online transaction is risky due to which frauds can take place. BANKING IN INDIA While using digital banking facilities lot of questions arises in the mind of customers such as: Did transaction Digital Banking has become an integral part of banking go through? Did I push the transfer button once or twice? system in India. The concept of digital banking is of Trust is among the significant factors which influence the fairly recent origin in India. Till the early 90‟s traditional customers’ willingness to engage in a transaction with model of banking i.e. branch based banking was web merchants. prevalent, but after that non-branch banking services were started. The credit of launching digital banking in India Customer Awareness: Awareness among consumers goes to ICICI Bank. Citibank and HDFC Bank followed about the digital banking facilities and procedures is still with digital banking services in 1999. The Government of at lower side in Indian scenario. Banks are not able to India enacted the IT Act, 2000 which provided legal disseminate proper information about the use, benefits
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and facility of internet banking. Less awareness of new to the maximum extent is essential to achieve and technologies and their benefits is among one of the most maintain high service and efficiency standards while ranked barrier in the development of digital banking. remaining cost effective and delivering sustainable return to shareholders. Privacy risk: The risk of disclosing private information & fear of identity theft is one of the major factors that OPPORTUNITIES IN DIGITAL BANKING inhibit the consumers while opting for digital banking services. Most of the consumers believe that using online Untapped Rural Markets: Contributing to 70% of the banking services make them vulnerable to identity theft. total population in India is a largely untapped market for According to the study consumers’ worry about their banking sector. In all urban areas banking services entered privacy and feel that bank may invade their privacy by but only few big villages have the banks entered. So that utilizing their information for marketing and other the banks must reach in remaining all villages because secondary purposes without consent of consumers. majority of Indian still living in rural areas.
Strengthening the public support: In developing Multiple Channels: Banks can offer so many channels to countries, e-finance initiatives have been the result of access their banking and other services such as ATM, joint efforts between the private and public sectors. If the Local branches, Telephone/mobile banking, video public sector does not have the necessary resources to banking etc. to increase the banking business. implement the projects it is vital that joint efforts between public and private sectors along with the multilateral Competitive Advantage: The benefit of adopting digital agencies like the World Bank, be developed to enable banking provides a competitive advantage to the banks public support for e-finance related initiatives. over other players. The implementation of digital banking is beneficial for bank in many ways as it reduces cost to Availability of Personnel services: In present times, banks, improves customer relation, increases the banks are to provide several services like social banking geographical reach of the bank etc. with financial possibilities, selective up gradation, computerization and innovative mechanization, better Increasing Internet Users & Computer Literacy: To customer services, effective managerial culture, internal use digital banking it is very vital or initial requirement supervision and control, adequate profitability, strong that people should have knowledge about internet organization culture etc. technology so that they can easily adopt the digital
banking services. The fast increasing internet users in Implementation of global technology: There is a need to India can be a very big opportunity and banking industry have an adequate level of infrastructure and human should enact this opportunity to attract more internet users capacity building before the developing countries can to adopt digital banking services. Table shows evidence of adopt global technology for their local requirements. In increasing number of internet users in India. developing countries, many consumers either do not trust or do not access to the necessary infrastructure to be able Worthy Customer Service: Worthy customer services to process e-payments. are the best brand ambassador for any bank for growing
its business. Every engagement with customer is an Non- Performing Assets (NPA): Nonperforming assets opportunity to develop a customer faith in the bank. are another challenge to the banking sector. Vehicle loans While increasing competition customer services has and unsecured loans increases N.P.A. which terms 50% of become the backbone for judging the performance of banks retail portfolio was also hit due to upward banks. movement in interest rates, restrictions on collection practices and soaring real estate prices. Internet Banking: It is clear that online finance will
pickup and there will be increasing convergence in terms Competition: The nationalized banks and commercial of product offerings banking services, share trading, banks have the competition from foreign and new private insurance, loans, based on the data warehousing and data sector banks. Competition in banking sector brings mining technologies. Anytime anywhere banking will various challenges before the banks such as product become common and will have to upscale, such up positioning, innovative ideas and channels, new market scaling could include banks launching separate digital trends, cross selling ad at managerial and organizational banking services apart from traditional banking services. part this system needs to be manage, assets and contain risk. CONCLUSION
Handling Technology: Developing or acquiring the right With the time, the concept of digital banking has got technology, deploying it optimally and then leveraging it attention in the Indian context. Most of the banks have
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already implemented the digital banking facilities, as [2]. ICICI Bank Website, “ICICI bank launches Pocket by these facilities are beneficial to both i.e. banks as well as ICICI bank”, Accessed January 25, consumers. The banks are facing many challenges and 2015,http://www.icicibank.com/aboutus/article/icicibank many opportunities are available with the banks. Many -launches-pockets-by-icicibank.html [3]. Business Today, “Now, Access Your SBI Account via financial innovations like ATMs, credit cards, RTGS, Twitter”, Accessed January 12, 2016, debit cards, mobile banking etc. have completely changed http://businesstoday.intoday.in/story/now-access-your- the face of Indian banking. Thus, there is a paradigm shift sbi-account-via-twitter/1/204918.html from the seller's market to buyer's market in the industry [4]. Prema C, “A framework for understanding consumer and finally it affected at the bankers level to change their perceived characteristics of Digital Banking as predictors approach from “conventional banking to convenience of its adoption”, Indian Journal of Marketing, Vol. 41, banking” and “mass banking to class banking”. The shift No. 2, (2016): pp. 46-53. has also increased the degree of accessibility of a common [5]. Kuisma T, Laukkanen T and Hiltunen M, “Mapping the man to bank for his variety of needs and requirements. In reasons for resistance to internet banking: A means-end approach”, International Journal of Information years to come, digital banking will not only be acceptable Management, Vol. 27 No. 2, (2015): pp. 75–85. mode of banking but will be preferred mode of banking.
REFERENCES
[1]. IBA Website, “Online Tax Accounting System”, Accessed January 20, 2015, http://www.iba.org.in/oltas.asp
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Digital Payments in India – A Disruption
Dr.R.Rupa, M.Com., M.Phil., MBA., PGDCA., Ph.D Associate Professor SCMS School of Technology and Management SCMS Campus, Prathap nagar Muttom, Aluva, Cochin – 683 106 Email: [email protected] [email protected]
DIGITAL PAYMENTS IN INDIA – A DISRUPTION most secure digital payment mode. It uses the 12-digit The Digital India programme is a flagship programme of unique Aadhaar identification number to allow bank-to- the Government of India with a vision to transform India bank transactions at PoS. AEPS services include balance into a digitally empowered society and knowledge enquiry, cash withdrawal, cash deposit, and Aadhaar to economy. “Faceless, Paperless, Cashless” is one of Aadhaar fund transfers. professed role of Digital India. Digital payment is a way of payment which is made through digital modes. In USSD digital payments, payer and payee both use digital modes USSD banking or *99# Banking is a mobile banking to send and receive money. It is also called electronic based digital payment mode. USSD Stands for payment. No hard cash is involved in the digital Unstructured Supplementary Service Data based mobile payments. All the transactions in digital payments are banking. Linked to merchant’s bank account and used via completed online. It is an instant and convenient way to mobile phone on GSM network for payments up to Rs make payments. As part of promoting cashless 5,000 per day per customer. USSD banking is as easy as transactions and converting India into less-cash society, checking our mobile balance. This service can be used for various modes of digital payments are available. many financial and non-financial operations such as checking balance, sending money, changing MPIN and Major new digital payment modes in India getting MMID. The *99# code works as a bridge between UPI apps our telecom operator’s server and our bank’s server. It UPI or unified payment interface is a payment mode uses our registered mobile number to connect with our which is used to make fund transfers through the mobile bank account. Hence, dial *99# with our registered app. Customer can transfer funds between two accounts number only. RBI has also set a maximum charge of Rs. using UPI apps. The customer will have to register for 2.5 per operation. mobile banking to use UPI apps. Currently, this service is only available for android phone users. UPI app had to be Cards downloaded and create a VPA or UPI ID. It is not Cards are provided by banks to their account holders. mandatory to use the UPI app from our bank to enjoy UPI These have been the most used digital payment modes till service. UPI apps are a faster solution to send money now. Many of us use cards for transferring funds and using VPA or even IFSC and account number. But they making digital payments. Credit cards, debit cards and have some limitations also. The United Payments prepaid cards are the main types of cards. Interface (UPI) envisages being a system that powers multiple bank accounts onto a single mobile application Credit cards are issued by banks and some other platform (of any participating bank). entities authorized by RBI. These cards give you the ability to withdraw or use extra money. Credit cards AEPS are used for domestic as well as international AEPS is an Aadhaar based digital payment mode. The payments. term AEPS stands for Aadhaar Enabled Payment Service. Customer needs only his or her Aadhaar number to pay to Debit cards are issued by the bank where you have any merchant. AEPS allows bank to bank transactions. It our account. You can use these cards for the money means the money you pay will be deducted from our in our account. The payments you make with these account and credited to the payee’s account directly. cards debit from our account and credit immediately Aadhaar number has to be linked to the bank account to to the payee’s account. You can use these cards to use AEPS. Unlike Debit cards and USSD, AEPS does not make payments to one bank account to another. have any charges on transactions. The good thing about AEPS is that it doesn’t need our signature, bank account These are linked to an individual’s bank account. details or any password. It uses the fingerprint as a This can be used at shops, ATMs, online wallets, password. No one can forge the fingerprints, thus it is the
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micro-ATMs, and for e-commerce purchases. Debit 2. There is a big risk of data theft associated with the cards have overtaken credit cards in India. In digital payment. Hackers can hack the servers of the December 2015, there were more than 630 million bank or the E-Wallet and easily get our personal debit cards as compared to 22.75 million credit cards. information. They can use this information to steal money from our account. Prepaid cards are another type of cards which you 3. Using the digital payment modes, we have all our use to pay digitally. It is similar to a gift card; money with us always which can result in customers can make purchases using funds available overspending. on the card – and not on borrowed credit from the bank. It can be recharged like a mobile phone Factors affecting the future of digital payments: recharge, up to a prescribed limit. 1. Digital revolution: It has provided an easy way to go for digital payments. India has more than 100 crore E-Wallets active mobile connections and more than 22 crore E-wallet or mobile wallet is the digital version of our smartphone users as of March 2016. The reach of physical wallet with more functionality. Online wallets mobile network, Internet and electricity is also are used via the internet and through smartphone expanding digital payments to remote areas. This will applications. Money can be stored on the app via recharge surely increase the number of digital payments. by debit or credit cards or netbanking. Consumer wallet 2. Government’s support: The government is supporting limit is Rs 20,000 per month or Rs 100,000 per month digital payments a lot. It has reduced some taxes and after KYC. The merchant wallet limit is Rs 50,000 per announced incentives for digital payments. It has month after self-declaration, and Rs 100,000 after KYC launched Lucky Grahak Yojna for customers verification. These E-Wallets also give additional and Digi Dhan Vyapar Yojna for shopkeepers. Due to cashback offers. Some of the most used E-wallets are the announcement of incentives and waivers, more State bank buddy, ICICI Pockets, Freecharge, Paytm etc. people are showing interest in digital payments. 3. Three years ago, India began transferring government Advantages of Digital Payments benefits directly into recipients’ bank accounts in 43 1. Digital payments are easy and convenient. All we of its 686 districts. The program, known as the Direct need is our mobile phone or Aadhaar number or a Benefit Transfer (DBT), was envisioned as a digital card to pay. UPI apps and E-Wallets made digital revolution for government transfers. payments easier. 4. Designed to replace traditional schemes with cash 2. With digital payment modes, we can pay from transfer-based ones, DBT is built on a technological anywhere anytime. platform linking bank accounts, unique identification 3. Government has announced many discounts to numbers and mobile phone numbers. It was seen as a encourage digital payment like 0.75% discounts on means to further the government’s anti-poverty fuels and 10% discount on insurance premiums of agenda in an efficient manner – by plugging leakages government insurers. and fixing errors of exclusion in the short run, and by 4. With digital payments our spending are bringing all such transactions into one common automatically recorded in our passbook or inside account in the long run. our E-Wallet app. This helps to maintain our record, track our spendings and budget planning. Future of Digital Payments: 5. Digital payments have less risk because without The future of digital payments is very bright. India is MPIN, PIN or our fingerprint no transaction can be experiencing a remarkable growth in digital payments. In done. But it is advised that to block the card or call 2015-16, a total of Rs. 4018 billion transacted through the helpline of E-wallet to suspend the wallet mobile banking as compared to Rs. 60 billion in 2012-13. account to prevent anyone from using digital The percentage of the digital payments through other payment apps. modes is also increasing in a significant speed.
Drawbacks of Digital Payments: The digital payments have aimed to ease the transfer of Every coin has two sides so as the digital payments. funds across India, especially in rural communities, and Despite many advantages, digital payments have a few more importantly, seek to facilitate a behavioral change drawbacks also. towards the greater adoption of cashless services. As 1. As most of the digital payment modes are based on such, the digital payments industry is fast becoming a mobile phone, the internet and cards. These modes highly attractive destination for foreign investors keen to are somewhat difficult for non-technical persons such establish a foothold in India. as farmers, workers etc.
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Multiple factors and parallel institutional and behavioral most popular application, now integrating a payments trends seem to be powering India’s transition towards a button, digital payments is sure to further explode. less-cash economy. The rapid penetration of smartphones and spread of internet connectivity on mobiles, digital payment services provided by non-banking institutions and the rise of the fintech sector, consumer expectations of one-touch payments, and progress in regulatory governance and tax breaks, have altogether shaped India’s payments landscape in favor of digital solutions.
Within months of its launch Google Tez is already processing the same number of digital transactions as the The new WhatsApp Payments feature, which allows users country's fourth largest lender, Axis Bank, and has to send and receive money, has started rolling out widely resulted in unified payment interface (UPI) transactions to Android users. And India is among the first markets to increasing about eight times. So with WhatsApp, India's get the new service. The payment feature has been built
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using India's Unified Payment Interface (UPI), currently $200 billion, of which mobile is still at just $10 billion in offered by 71 banks and hence encompassing almost financial year 2018 (estimated)," investment banking firm every person with a bank account in India. Although Credit Suisse said in a recent report, adding, "Payment WhatsApp Payments started with ICICI Bank, several integration into popular apps in India will drive the digital banks like Axis Bank, HDFC Bank, ICICI Bank, State payment market in India to $1 trillion over the next five Bank of India and Yes Bank have since been included, years. Digital payments in India are soaring on the back of and more may get included future. the entry of global tech giants that are acting as aggregators for retail transactions." WhatsApp being the most popular messaging platform today enjoys over 250 million monthly active users. REFERENCES: According to sources cited by The Economic Times, the National Payments Corp of India (NPCI), which manages [1]. //economictimes.indiatimes.com/articleshow/52899821.c the UPI protocol, did not allowed a full-scale launch of ms?utm_source=contentofinterest&utm_medium=text&u WhatsApp Payments because of its large user base. It tm_campaign=cppst instead preferred a phased rollout to allow time for both [2]. //economictimes.indiatimes.com/articleshow/62937881.c the app and bank platforms to adjust to a sudden spike in ms?utm_source=contentofinterest&utm_medium=text&u volumes. tm_campaign=cppst [3]. //economictimes.indiatimes.com/articleshow/62989133.c
ms?utm_source=contentofinterest&utm_medium=text&u Moreover, with pretty much everyone with a smartphone tm_campaign=cppst in India already on WhatsApp, convenience becomes [4]. Global Payments 2015: A Healthy Industry Confronts another major advantage for its payments feature. Disruption Transferring money to contacts becomes terrifically [5]. http://www.cgap.org/blog/digital-social-payments-india- simple and quick as you can perform the action from can-challenges-be-overcome within the messaging service-just ensure that you are [6]. https://economictimes.indiatimes.com/industry/banking/f using the latest version (2.18.46) of WhatsApp-without inance/banking/why-whatsapps-entry-into-banking- the need to download another app or even open multiple arena-could-change-indian-banking- forever/articleshow/62937881.cms windows on our phone. All we have to do is tap on the [7]. https://upipayments.co.in/digital-payment/ attachment button in any open chat and then hit on the [8]. https://www.businesstoday.in/current/economy- payment button. politics/whatsapp-payments-digital-payments- market/story/270780.html For users who rely more on digital transactions for [9]. https://www.india-briefing.com/news/growth-of-digital- various purposes, WhatsApp Payments in its current form payments-systems-in-india-14797.html/ will not be enough. Then there is the big question of [10]. https://www.thehindubusinessline.com/opinion/columns/ fraudulent transactions on WhatsApp. The messaging c-p-chandrasekhar/what-they-dont-tell-you-about-digital- service has been a haven for spam letters and the payments/article9455432.ece [11]. Report “India’s Digital Payments Future” that was payments feature could now enable fraudulent published in February 2017. transactions by duping uninformed users. If WhatsApp can address these issues, it might end up disrupting the market a second time round.
CONCLUSION
Digital payments in India, already witnessing unprecedented activity since the government's surprise demonetisation announcement in 2016, is likely to take a great leap forward with the entry of WhatsApp Payments. "Digital payments in India currently aggregate less than
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Disruption of Banking Sector
S.DHIVYA Research Scholar - Commerce Dr. N.G.P. Arts and Science College Coimbatore.
Abstract The banking industry in India has a huge METHODOLOGY USED canvas of history, which covers the traditional banking practices from the time of Britishers to the reforms The study is based on secondary data. The sources of period. Therefore, banking in India has been through a secondary data include banking books, annual reports of long journey. Today banking is known as innovative RBI, Internet (websites) and research papers etc. banking. The use of technology has brought a revolution in the working style of the banks. Information STRUCTURE OF INDIAN BANKING Technology has had a positive impact on substitutes for traditional funds movement services. With networking SECTOR and interconnection new challenges are arising related to security privacy and confidentiality to transactions. In this Today, role of banking industry is very important as one paper, an attempt is made to explain the changing of the leading and mostly essential service sector. banking scenario. The study also identifies the challenges Banking Industry in India functions under the sunshade of and opportunities for the Indian banking sector in Reserve Bank of India - the regulatory central bank. changing banking scenario. Banking industry mainly consists of
Keywords: Networking, IT, Internet Security, Global Commercial banks Banking, NPA Co-operative banks
The commercial banking structure in India consists of INTRODUCTION: Scheduled commercial banks
The traditional functions of banking are limited to accept Unscheduled bank deposit and to give loans and advances. Today banking is known as innovative banking. Current banking sector has Scheduled commercial banks constitute those banks come up with a lot of initiatives that oriented to provide a which have been included in the second schedule of better customer services with the help of new Reserve Bank of India (RBI) Act, 1934. For the purpose technologies. Indian banking sector today has the same of assessment of performance of banks, the RBI sense of excitement and opportunity that is evidence in categories them as public sector banks, old private sector the Indian economy. In the competitive banking world banks, new private sector banks and foreign banks. improvement day by day in customer services is the most useful tool for their better growth. Bank offers so many THE COMMERCIAL BANKING changes to access their banking and other services. Banks STRUCTURE IN INDIA play an important role in the economic development of developing countries. Economic development involves CHALLENGES FACED BY BANKING SECTOR investment in various sectors of the economy. In normal banking, the banks perform agency services for their NOT MAKING ENOUGH MONEY customers and helps economic development of the Despite all of the headlines about banking profitability, country. Bank arranges foreign exchange for the business banks and financial institutions still are not making transactions with other countries. Banking sectors are not enough return on investment, or the return on equity, that simply collecting funds but also serve as a guide to the shareholders require. customer about the investment of their money. CONSUMER EXPECTATIONS OBJECTIVES OF THE STUDY These days it‟s all about the customer experience, and many banks are feeling pressure because they are not To explain the changing banking scenario delivering the level of service that consumers are To identify the challenges for the banking sector demanding, especially in regards to technology. To study the opportunities for the banking sector
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INCREASING COMPETITION FROM FINANCIAL culture, and other facets of the industry. TECHNOLOGY COMPANIES Financial technology (FinTech) companies are usually REGULATORY PRESSURE start-up companies based on using software to provide Regulatory requirements continue to increase, and banks financial services. The increasing popularity of FinTech need to spend a large part of their discretionary budget on companies is disrupting the way traditional banking has being compliant, and on building systems and processes been done. This creates a big challenge for traditional to keep up with the escalating requirements. banks because they are not able to adjust quickly to the changes – not just in technology, but also in operations,
DISRUPTION IN BANKING SECTOR GLOBAL BANKING Today, in banking sector customers are more value It is practically and fundamentally impossible for any oriented in their services because they have alternative nation to exclude itself from world economy. Therefore, choices in it. So that each and every bank have to take for sustainable development, one has to adopt integration care about fulfilling customers satisfaction. process in the form of liberalization and globalization as India spread the red carpet for foreign firms in 1991. The TO PROVIDE SEVERAL PERSONNEL SERVICES impact of globalization becomes challenges for the Today, it is demanded that banks are to provide several domestic enterprises as they are bound to compete with services for which they have to expand their service, global players. The foreign banks operating in India, social banking with financial possibilities, becomes a major challenge for nationalised and private computerisation and innovative mechanization, better sector banks. These banks are large in size, technically customer services, internal supervision and control, advanced and having presence in global market, which adequate profitability, strong organisation culture etc. gives more and better options and services to Indian Therefore banks must be able to provide complete traders. personal service to the customers who comes with expectations. MANAGING TECHNOLOGY Developing or acquiring the right technology, deploying it COMPETITION optimally and then leveraging it to the maximum extent is The nationalized banks and commercial banks have the essential to achieve and maintain high service and competition from foreign and new private sector banks. efficiency standards while remaining cost effective and Competition in banking sector brings various challenges delivering sustainable return to shareholders. Early before the banks such as product positioning, innovative adopters of technology acquire significant competitive ideas and channels and new market trends. Banks are advantages. Managing technology is therefore, a key restricting their administrative folio by converting challenge for the Indian Banking Sector. manpower into machine power.ie, banks are decreasing manual powers and getting maximum work done through OTHER CHALLENGES machine power. Skilled and specialised manpower is to be Development of skill of bank personnel utilised and result oriented targeted staff will be Customer awareness and satisfaction appointed. Changing needs of customers
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Lack of common technology standards for CONCLUSION mobile banking Manpower planning etc. Indian banks are trust worthy brands in Indian market, therefore these banks must utilise their brand equity as it OPPORTUNITY is a valuable asset for them. The paper discusses the various challenges and opportunities like transparency, RURAL AREA CUSTOMERS growth in banking sector, global banking, managing Contributing to 70% of the total population in India is a technology etc. Banks are striving to combat the largely untapped market for banking sector. In all urban competition. The competition from global banks and areas, banking services entered but only few big villages technological innovation has compelled the banks to have the banks entered. So that the banks must reach in rethink their policies and strategies. Finally the banking remaining all villages because majority of Indian still sector will need to master a new business model by living in rural areas. building management and customer services. Banks should contribute intensive efforts to render better GOOD CUSTOMER SERVICES services to their customer. Nationalized and commercial Good customer services are the best brand ambassador for banks should overcome the challenges and to get any bank for growing its business. Every engagement advantage of opportunities in changing banking scenario. with customer is an opportunity to develop a customer faith in the bank. While increasing competition, customer REFERENCES services has become the backbone for judging the performance of banks. [1]. Levesque, T. and Mcdougall, 1996. “Determinants of customer satisfaction in retail banking” International INTERNET BANKING journal of Bank Marketing pp 12-20. It is clear that online finance will pick up and there will be [2]. Uppal, R.K. 2007. „Banking services and IT‟ New increasing convergence in terms of product offerings, century publications, New Delhi. banking services, share trading, insurance, loans based on [3]. Niti Bhasin, 2007, “Banking development in India 1947 the data warehousing and data mining technologies. to2007”, Century publication, Delhi 110005. [4]. Zhao, T, Casu, B. and Ferrari, A. 2008. “Deregulation Anytime anywhere banking will become common and and Productivity Growth: A study of the Indian will have to upscale. Such upscaleing could include banks commercial banking industry”, International journal of launching separate internet banking services apart from Business Performance Management pp318-343. traditional banking services. [5]. Goyal, K.A. and Joshi, V. 2011. “Mergers in banking industry of India: some emerging issues”, Asian journal OFFERING VARIOUS CHANNELS of Business and Management Sciences. pp157-165 Banks can offer so many channels to access their banking [6]. Fernando, A.C 2011. “Business Environment” Noida: and other services such as ATM, Local branches, Dorling Kindersley(India) Pvt. Ltd pp549-553 Telephone/Mobile banking, Video banking etc. to [7]. WWW.indiatoday.com [8]. WWW.wikiepedia.com increase the banking business. [9]. WWW.moneyindia.com
PRODUCT DIFFERENTIATION Apart from traditional banking services, Indian Banks must adopt some product innovation so that they can compete in gamut of competition
EXPANSION Expansion of branch size in order to increase market share is another opportunity to combat competitors. Therefore Indian nationalised and commercial banks must spread their wings towards global markets as some of them have already done it.
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Emerging Digital Transformation and Artificial Intelligence in Banking Sector - Current Scenario
Ms.P.Janani Assistant Professor Department of Commerce Banking and Insurance Dr. N. G. P Arts and Science College Mail.ID- [email protected]
Abstract The year of disruptions on a global scale and the Artificial Intelligence is to simulate the intelligence of events of last year – most notably India’s demonetization humans into artificial machines with the help of drive makes the banking and financial sectors to witness sophisticated machine learning and natural language the most changes in banking sector of Indian economy. processing algorithms. The prime motive for the idea of Looking at the scenario in India, on one hand are transferring the intelligence from humans to machines is traditional banks that are still encumbered by legacy to overcome the very barrier of human intelligence: systems and processes. On the other, a global, digital scalability. There’s always a limit to the speed with which India has entered an age of innovation with the adoption humans can perform the given tasks. Artificial of updated technology. Nevertheless, despite their legacy intelligence looks to overcome this very challenge with systems, our Indian banks are leading the digital human intelligence by transferring the human intelligence transformation by constantly reinventing their business to to cognitive machines with supreme computational stay ahead in this age of digital hyper-connectivity. The capabilities. world of Banking and Finance is changing more than ever, with Artificial Intelligence (AI) being the front- Let’s take two examples to better understand the concept runner in bringing a change in the banking industry. of artificial intelligence: Consider a scenario where the task is to map inputs to Keywords: Artificial Intelligence, Transformation, outputs following a well-defined logical path. Let’s Technology, Robot, Banking. take an example of producing the product of two given numbers. Today, any computer can beat any INTRODUCTION human in this task in terms of speed and accuracy. This is the class of problems for which the software th Artificial intelligence (AI) has the potential to transform revolution took place in the late 19 century and is an both front office and back office operations with its self- integral part of everyone’s life. improving programs. The brilliance of AI has already Now let’s take another scenario in which the mapping been evident in the enhanced customer experiences and of inputs to outputs is not very well defined. Consider seamless, differentiated services on digital channels. It has an example where the task is to identify whether an also helped in creating advanced security measures by image has a dog or a cat in it. It’s safe to say that integrating with banking infrastructure. The use of most of the humans will easily outperform computers intelligent digital assistants is now common in some of in this task. the more developed banking markets like US, Japan and Hong Kong. In India also these facilities are transformed These are scenarios where artificial intelligence is in many banks. The self-learning capabilities of these focusing on, to simulate the mapping of inputs to outputs programs help them get better with every subsequent as it happens in a human brain which makes very difficult interaction. tasks for computers like image recognition, sarcasm detection, voice recognition, etc. seamlessly easy for even OBJECTIVE an 8-year old kid. Currently, the application of AI in the financial service sector is at a still to witness a number of 1. The main objective of the study is the find the changes in the way communications, customer service, digital transformation in banking sector. recruitment and wealth management takes place across 2. To find the technologies used in banking sector. the industry. For example, today stock trading and investing happens mainly on personal skills and divine AI in Financial Services luck. But in future we will be able to manage wealth with Artificial intelligence is the blend of three advanced the help of sentiment analysis, crowd sourced research technologies – machine learning, natural language and algorithms. Various AI solutions have already been processing and cognitive computing. The concept of implemented in banking across various areas like core
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banking, operations efficiency, customer facing services processing, image recognition, deep learning, speech and analytics. With the onset of AI, banking will no recognition and emotions. This was later picked up a longer be just apps, websites or physical branches but a number of start-ups with a view to create business value. whole new experience. New category leaders will appear by 2020, which will be marked as the inflection point for Artificial Intelligence. Emerging Technologies and Artificial Intelligence This will be followed by rise in new leaders and the To stay ahead of the technology curve in the consolidation of laggards. industry, Bank has made sure to leverage emerging technologies across its range of services. We are all Our Indian banks, currently using an AI-based solution pervasive even when it comes to the range of data developed by Chapdex, the winning team from its first connectivity. Solutions like our Mobile Banking App, AI hackathon. “The solution essentially scans cameras based On Chat has been developed for customers who installed in the branch and captures the facial expressions enjoy good connectivity. Customers who struggle with of the customers and immediately reports whether the limited connectivity issues have LITE App and m – site to customer is happy or sad … this is real-time or near real- avail banking services, whereas customers with no time feedback.”The bank will now build a dashboard that connectivity or feature phones have missed call will gauge the effectiveness of representatives or tellers commerce, SMS/ Toll Free Banking at their service. based on customer feedback added. From a customer chatbot perspective, Bank has launched an AI-powered Advantages And Disadvantages Of Information chat assistant that addresses customer enquiries instantly Technology In Banking and helps them with everyday banking tasks just like a bank representatives. The bank’s customers can get Advantages information on its products and services instantaneously. Online Banking/ Convenient Payments It removes the need to search, browse or call and becomes Many banks have integrated advanced information smarter as it learns through its customer interactions. technology systems to improve their customer service. Today, it is effortless to withdraw money or make a Robotic Software purchase using a Credit card or smartphone with a simple A kind of software generally focused on automating tap; this saves customers from wasting time lining up in office work and bank deploy this technology, which banks or from carrying a lot of cash. emulates human actions to automate and perform repetitive, high-volume and time-consuming business Fast Credit tasks. Software robots have reduced the response time to The technology used in banks helps in the gathering of customers by up to 60 percent and increased accuracy to financial details and credit scores about each customer, 100 percent thereby sharply improving the bank’s the information gathered can be used when a customer productivity and efficiency. It has also enabled the bank’s applies for credit in that bank. employees to focus more on value-added and customer- related functions. Software robots now perform more than Disadvantages 1 million banking transactions per working day. software robots at Bank are configured to capture and interpret Money Laundering information from systems, recognize patterns and run Cases of online money laundering are on the rise, and this business processes across multiple applications to execute has exposed many online users to the predators. activities, including data entry and validation, automated formatting, multi-format message creation, text mining, Security workflow acceleration, reconciliations and currency Banking security has improved significantly, however, so exchange rate processing among others. The bank has has hacking expertise. If your information is connected to created the software robotics platform mostly in-house, the internet, there is always the possibility it may get leveraging AI features such as facial and voice hacked. recognition, natural language processing, machine learning and bots among others. That implementation of Adoption software robotics will herald a transformational change in Today, the applications of AI are ubiquitous ranging from the Indian banking industry. It should be noted that data analytics to a number of tools like software testing, robotic software is by no means new, and is a staple in face detection, optical character recognition. AI is already large white collar work environments – including being implemented across a number of service sectors many US banks. That being applications one way or including advertising and targeting, banking, finance, another from the outside. media, navigation, aerospace, agriculture and genetics. In 1990, big techs concentrated on research in the AI industry enhancing its scope to natural language
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Mobile App technology the primary AI use-case at Indian banks today, with all Mobile app technology involves three broad categories for four banks investing in conversational apps – mostly customers they are as follows: focused on customer service. In some cases, like in Bank, we have also seen the use of AI-powered smart cameras Category 1: It involves FAQs, which are simple that captures facial expressions of customers to offer real- questions that you may want to ask your bank executive time feedback on their experiences. for which there are simple, structured answers. You ask the queries and the chatbot will give you the correct CONCLUSION response, and it learns along the way. The banks seem to be competing with each other to Category 2: It involves financial transactions, wherein launch their AI solutions and stay ahead in the technology you can make fund transfers from person-to-person, pay adoption curve. While none of the banks quantified an your bills or recharge your mobile phone bills using investment figure, it’s evident that a large percentage of queries. the digital transformation budget is being geared toward AI and related technologies and they spend is only going Category 3: It involves helping people discover new to increase in the future. features. These are simple how-to tasks such as how to reset your ATM pin, which is a bit more evolved and is REFERENCES: like interacting with your bank executive. [1]. AI application in the top 4 Indian Banks “The intent is to provide 24×7 assistance, instant www.techemergence.com/ai-applications-in-the-top-4- gratification and convenience to our customers in an indian-banks/ intuitive and native way.” [2]. AI applications in Banking to look out for in next 5 years https://www.analyticsvidhya.com/blog/2017/04/5 Chatbots at Indian Banks [3]. Wikipedia and Bank Management- S. Arunajatesan and Commercial banks in India, in collaboration with fintech S. Radhakrishnan startups, are using AI to improve the customer experience, reduce costs and improve efficiency. Chatbots seems to be
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Expanded ATM Capabilities
G.Baby Cellin, S.Divya Bharathi, Assistant professor, III B.COM (C.A), Department of Commerce, Bishop Appasamy College of Arts and Science, Bishop Appasamy College of Arts and Science, Coimbatore - 18. Coimbatore - 18. [email protected] [email protected]
ABSTRACT ATMs exist in a world like this. After more well as customers. ATM is the back bone of retail banking than thirty years, they have become an endemic part of sector. The word “machine” in the term “ATM machine” our banking culture. For many people, the only contact is certainly redundant, but widely used. The ATM is an they now have with their bank is through an ATM. For automatic banking machine (ABM) which allows bankers, ATMs, along with all of the other customer customer to complete basic transactions without any help service channels, may seem to be merely a necessary cost of bank representatives. There are two types of automatic of serving their customers. We’re all familiar with the teller machines (ATMs). The basic one allows the traditional ATM functions: cash withdrawal, transfers, customer to only draw cash and receive a report of the deposits, statements and the like. These ATM functions account balance. Another one is a more complex machine automate branch teller activities from which they were which accepts the deposit, provides credit card payment derived and have a value in speed and convenience for facilities and reports account information. customers. But to truly unlock the value of an ATM, we must look closer at the user experience and the type of HISTORY OF AUTOMATED TELLER services that could be delivered. Some of the strategies MACHINE (ATM): that we should consider include: improving customer interaction; integrating ATMs with the bank's other ATM was invented by john-shepherd-barron.the world’s customer channels; expanding the ATM transaction set; first ATM was installed in a branch of Barclays in the and taking advantage of location based services. We have northern London borough of Enfield, in 1967. a the technology and the experience to transform the ATM mechanical cash dispenser was developed and built by into a customer-focused channel for value added services, Luther George simian and installed in 1939 in newyork by greater customer retention and improved bank profits. the city bank of newyork. The first person to use the machine was regvarney of “on the buses” frame, a British INTRODUCTION TO ATM television program me from the 1960’s the idea of a PIN stored on the card was developed by the British engineer Automated teller machine (ATM) is a computerized john rose in 1965. The modern, networked ATM was telecommunications device that provides the customers of invented in Dallas, Texas, by downwetzel in 1968.notable a financial institution or bank with access to financial historical models of ATMs include the IBM 3624 and transactions in a public space without the need for a 473x series, and NCR5XXX series. human clerk or bank teller 24 hours a day. ATMs play a vital role in facilitating the banking services to banks as
BLOCK DIAGRAM OF AUTOMATED TELLER MACHINE (ATM)
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
The Automatic telling machine consists of mainly two Output Devices: input devices and four output devices that are; Speaker Display Screen Input Devices: Receipt Printer Card reader Cash Depositor Keypad
INPUT DEVICES:
Card Reader: The card reader is an input device that reads data from a card .The card reader is part of the identification of your particular account number and the magnetic strip on the back side of the ATM card is used for connection with the card reader. The card is swiped or pressed on the card reader which captures your account information i.e. the data from the card is passed on the host processor (server). The host processor thus uses this data to get the information from the card holders. Automatic Teller Machine keypad
OUTPUT DEVICES: Speaker: The speaker provides the audio feedback when the particular key is pressed. Display Screen: The display screen displays the transaction information. Each steps of withdrawal is shown by the display screen. A CRT screen or LCD screen is used by most of ATMs. Automatic Teller Machine Card Reader
Keypad: The card is recognized after the machine asks further details like your personal identification number, withdrawal and your balance enquiry Each card has a unique PIN number so that there is little chance for some else to withdraw money from your account. There are separate laws to protect the PIN code while sending it to host processor. The PIN number is mostly sent in encrypted from. The key board contains 48 keys and is interfaced to the processor. Automatic Teller Machine LCD Display
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Receipt Printer: the money. The duty of the cash dispenser is to count each The receipt printer print all the details recording your bill and give the required amount. withdrawal, date and time and the amount of withdrawn and also shows balance of your account in the receipt. If in some cases the money is folded, it will be moved another section and becomes the reject bit. All these Cash Dispenser: actions are carried out by high precision sensors. A complete record of each transaction is kept by the ATM machine with help of an RTC device.
ATM NETWORKING: The internet service provider (ISP) also plays an important role in the ATMs. This provides communication between ATM and host processors. When the transaction is made, the details are input by the card holder. This information is passed on to the host processor by the ATM Machine. The host processor checks these details with authorized bank. If the details are matched, Automatic Teller Machine Cash Dispenser the host processor sends the approval code to the ATM
machine so that the cash can be transferred. Cash dispenser is a heart of the ATM. This is a central system of the ATM machine from where the required money is obtained. From this portion the user can collect
Automatic Teller Machine Networking
EXPANDED AUTOMATED TELLER MACHINE increasing. The growth of ATMs in Western countries and (ATM): other advanced countries has reached at a mature stage. ATM is a revolutionary concept to execute a single However; there is a lot of scope of growth of ATM software application in the entire ATM network. The industry in developing countries like India. In India, ATM ATM technology has developed to such an extent that industry is growing at an exponential rate. So to say, some ATMs can memorize consumer preferences as per ATM has brought a self service revolution. ATMs were their past transactions, behavior, and tailor services introduced to the Indian banking industry during 1987 by accordingly. In many cases, ATMs have internet scope HSBC Bank in Mumbai. which facilitates two way communications with live agents, provide biometric options, and have the ability to Since many banks still operate proprietary networks, the demonstrate personalized advertisements. Maintenance of increasing number of banking customers is likely to spur web enabled ATMs are easy. These ATMs can be quickly ATM growth.”ATM technology was used to reach the connected to central monitoring system of vendors. customers at a lower initial and transaction cost with Within two decades, ATM technology development is hassle free services. As per an interaction with senior happening at an alarming rate. Gone are the days when general managers (South Asia channel partners and customers were limited to only withdrawing cash from strategic alliance), ATM segment witnessed a growth rate ATM’s. of 30% since last 5 years in India. ATM terminals in India will be expected to grow at a compounded average growth GROWTH OF THE INDUSTRY: rate of 25% between 2011 and 2015. There is now service As per the Global ATM Market and Forecasts to 2016, the providers take the responsibility of identification of ATM maximum growth of ATMs is happening in Asia pacific installation site, connectivity and power arrangement, region. India and Indonesia are having one fourth of the negotiation with landlords, and finishing the interiors of number of ATMs, and china is accounted for half of the ATM site. Now there is a trend in India, to outsource New ATMs. Worldwide growth of ATMs is steadily ATM functions and activities like; ATM selection and
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Installations, site up keeping, card issuance and Request for new cheque book management, transaction processing, field services, and Transfer funds between accounts within the same provide technology solutions to connect ATMs by service Bank providers. Pay your Utility bills Make other payments too NATIONAL FINANCIAL SWITCH (NFS): The first ATM in India was set up in 1987 by HSBC in CONCLUSION Mumbai.[2] In the following twelve years, about 1500
ATMs were set up in India. In 1997, the Indian Banks' Based studies on the ATM we hereby conclude that ATM Association (IBA) set up Swadhan, the first network of is the easiest way of depositing and withdrawing money. shared ATMs in India. It was managed by India Switch Transactions are possible any time, that’s why in India Company (ISC) for five years, and allowed cardholders to some people call ATM as “all time money”. If ATM withdraw cash from any ATM in the network, for a fee if machines are connected to internet then it is possible to do they did not have an account with the bank that owned the transactions from anywhere. 24 hours days and 365 days a ATM. In 2002, the network connected over 1000 ATMs year. With security ATM improving it has now become a of the 53 member banks of the association. The network safe mode of transaction. Hence it can be concluded that was capable of handling 250,000 transactions per day, but ATM is safe, fast, realizable, convenient, excisable and only 5000 transactions, worth about 100,000, took place any time money machine. each day.
After the contract with ISC expired, IBA failed to find a REFERENCES: bidder to manage the operationally uneconomical network, and shut it down on 31 December 2003.After the [1]. http://www.bankexamstoday.com/2017/03/national- financial-switch-gateway-of.html collapse of Swadhan, Bank of India, and Union Bank of [2]. https://www.google.co.in/search?rlz=1C1RLNS_enIN69 India, Indian Bank, United Bank of India and Syndicate 8IN698&biw=1113&bih=698&tbm=isch&sa=1&ei=PIG Bank formed an ATM-sharing network called Cash MWtKgAoW- Tree. And Canara Bank also created such networks. In 0ASQioiIDw&q=period+features+functionalities+of+at August 2003, the IDRBT announced that it would be m+as+image&oq=period+features+functionalities+of+at creating the National Financial Switch (NFS) to link m+as+image&gs_l=psy- together the country's ATMs in a single network. ab.3...2310.3960.0.4400.7.7.0.0.0.0.229.1206.0j2j4.6.0.... Citibank, the Industrial Development Bank of 0...1c.1.64.psy-ab..1.0.0....0.26jt2U- India, Standard Chartered Bank and Axis Bank formed a 6kk4#imgdii=hKPrY0B3hF6q6M:&imgrc=JafEuCjfioF CQM: similar network called Cash net. Punjab National Bank. [3]. https://poseidon01.ssrn.com/delivery.php?ID=10507811 7027007083027080084080087064030064049034070049 OBJECTIVES OF NFS: 0970920961120651040650941260950500000060420100 It aims to interconnect all the ATM’s in the country 5105302409603002907901609101908003502003309611 and facilitate easy banking to the users.NFS connects 5105094068122024073056062046025027095088065115 the ATM of member banks under a single network. 0950980170121061200910860250090891180970920960 The user or the customer need not avail the use of his 00026111020092&EXT=pdf core/ home bank for transactions. Since all the ATM [4]. https://www.elprocus.com/automatic-teller-machine- types-working-advantages/ of the member banks are connected, the customer can [5]. https://www.slideshare.net/search/slideshow?searchfrom use any ATM other than that of his specified bank. =header&q=innovations+in+atm+in+india The banks without ATM network but which can [6]. https://www.businessinsider.in/Bank-tellers-are-in- provide core banking facilities with 24x7 services can danger-of-extinction-as-the-ATM-of-the-future-takes- join the NFS through a sponsor bank. The objective over/articleshow/59130284.cms behind such a move is to enable the non-scheduled [7]. https://www.google.co.in/search?q=evolution+of+atm&r cooperative banks and other regional rural banks lz=1C1RLNS_enIN698IN698&source=lnms&sa=X&ve (RRB) to access the wide network of ATMs in the d=0ahUKEwj8gMy2s7XZAhUBHJQKHaYgDR8Q_AU country, enabling the customers of such bank to ICSgA&biw=1113&bih=747&dpr=1 [8]. https://www.google.co.in/search?rlz=1C1RLNS_enIN69 access banking services through any ATM of a 8IN698&q=national+financial+switch+architecture&sa= connected bank. X&ved=0ahUKEwiI3JPFqLXZAhVHkZQKHSnYCi4Q ADVANTAGES OF ATM 1QIIpAEoAA&biw=1113&bih=698 Quick Cash Withdrawal [9]. https://www.google.co.in/search?rlz=1C1RLNS_enIN69 Anyone Can Have Bank Card 8IN698&q=first%20atm%20in%20world&ved=0ahUKE Account balance inquiry wjKtP- DmbXZAhWBN5QKHVBOBxYQsKwBCGooAjAG&b
Details of recent transactions iw=1034&bih=747 Deposit cash / cheque
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Grievance Redressal Mechanism-Opinion Study
Dr.S.Valli Devasena, Assistant Professor, Department of Commerce, Mother Teresa Women’s University, Research & Extension Centre, Madurai-19
Abstract Customers not only look for a high-quality redressal, consumer courts etc. The same has also been product and access to great services, they want to be made possible on account of leaps that information treated well. No matter what industry they are in, technology has taken over the last one decade with customers expect great service, but in the banking information on the above channels being available widely. industry, it is especially important. This is because Banking penetration through use of technology and the customers want to feel supported and as if their increase in number of non face –to –face transactions adds transactions facility is really there to help them reach their a different dimension to the customer care paradigm. goals. Hence, banks should make sure that their business is using technology in a way that helps, not hinders, the REVIEW OF LITERATURE customer experience. John Brooks,45 former President and Chairman of the INTRODUCTION council of the chartered institute of bankers, London states : “Customer care is emerging as a critical factor in The Banking sector in India has experienced a rapid the banking industry and banks are fully conscious of the transformation. With the entry of private players into need for attaining international standards of service.” retail banking and with multi-nationals focusing on the individual consumer in a big way, the banking system P.V. Anantha Bhaskar56 opined that receiving customer underwent a phenomenal change. Technology played a complaints listening to the grievances patiently and key role in providing this multi-service platform. The solving problems are important areas of customer service. entry of private players combined with new RBI guidelines forced nationalized banks to redefine their core V.K. Gupta57 stated that as a part of managing customer banking strategy. And technology was central tothis relationship, banks have to provide greater value to the change. Today banks have to look much beyond just customer through enhanced customisation in products, providing a multi-channel service platform for its services and establishing an internal mechanism in the customers. There are other pressing issues that banks need bank to recognise customer’s right to get speedy, timely to address in order to chalk-out a roadmap for the future. and satisfactory redress of grievances.
IMPORTANCE OF THE STUDY K. Santi Swarup58 stated that for delivering quality service, it is imperative to have customer orientation as a Banking is essentially a service oriented industry and no culture in the bank. Customer orientation builds long service is deemed complete unless it is accompanied by term relationship resulting in customer satisfaction and satisfaction of the people who avail the service. Customer cash flows to the banks. satisfaction and customer protection are the hallmarks of 64 banking service. Regulators and supervisors across the K.V. Bhaskara Rao has suggested initiatives to reorient financial world have built policy edifices on strong banks outlook towards customer service. They are: foundations of consumer protection and customer service. In this context, it is indeed a commendable initiative on 1. Pursuit of total quality management at operational the part of the bank to train the employee to focus on units. customer service and reward exemplary service rendered 2. Multiple platforms for redressal of grievances. by employees. The bank will reach even greater heights in 3. Continued training for the staff focusing on customer customer service while simultaneously enhancing the service. skills of personnel in this area. Attributes of customer service have changed over the years. Customers are more STATEMENT OF THE PROBLEM aware, there is a predominance of masses seeking tangible action to ensure that their rights as customers are upheld. Customer retention is one of the main priorities for banks More importantly, customers are becoming increasingly today. With the entry of new players and multiple aware of Banking Ombudsman schemes, legal channels of channels, customers have become more discerning and
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less 'loyal' to banks. Given the various options, it is now banks’ customers and bank employees by means of possible to open a new account within minutes. Or for that interview schedule and questionnaire. matter shift accounts within a couple of hours. This makes it imperative that banks provide best levels of service to Sampling Design ensure customer satisfaction. The customer is interested The study aims at analysing the attitude of customers of in how he/she can benefit from the bank and its products. State Bank of India in Madurai city branches with regard That's why it becomes necessary for a bank to its services. differentiate its products from the others. Some of the ways in which differentiation can be introduced are The customers of State Bank of India in Madurai city through specialization, new products, and increasing branches are large in number and hence a comprehensive theadded value. While banks have to ensure product list of customers could not be prepared. Moreover, the list superiority and operational excellence, the biggest of customers of each branch could be obtained only from challenge today is to establish customer intimacy without the bank managers. They should not reveal the names of which the other two are meaningless. customers due to their obligations to maintain the confidentiality of customers’ accounts as per sec.13 of Banking is essentially a service oriented industry and no Banking Company (Acquisition and Transfer of service is deemed complete unless it is accompanied by undertakings) Act, 1970. Therefore, a sample of 50 satisfaction of the people who avail the service. Customer customers from each branch was selected by applying a satisfaction and customer protection are the hallmarks of non-probability random sampling method. Equal banking service. Regulators and supervisors across the importance is given to all branches irrespective of size, financial world have built policy edifices on strong volume of business and so on. In total 650 customers foundations of consumer protection and customer service. consist of sample customers. In this context, it is indeed a commendable initiative on the part of the bank to train the employee to focus on Geographical Area of the Study customer service and reward exemplary service rendered The study covers the whole area of Madurai city only by employees. where the branches of the State Bank of India are situated. They are Amman Sannadhi Branch, Arasaradi Branch, OBJECTIVES OF THE STUDY Commercial Tax Complex, Madurai Agricultural Development Bank Branch, Madurai city Branch, To know whether the bank customer aware of Pasumalai Branch, Personal Banking Branch, Tallakulam Ombudsman Scheme and its purpose and to analyses Branch, Vinayaganagar Branch, West Tower Branch, whether complaints are lodged and redressed Railway Station Branch and Madurai Main Branch. effectively or not Analysis of the Study To offer suggestions and conclusions Opinion on the successfulness of Ombudsman Scheme SCOPE OF THE STUDY Ombudsman Scheme is a complaint redressal mechanism available for customers when they are not satisfied with
the remedial measures of the Branch Manager on the This study covers the customer services rendered by State complaint received. Table 1 shows the opinion of bank Bank of India in Madurai city. As the study is an employees on the success or failure of the Ombudsman empirical study to identify the attitude of the customers scheme. towards the services rendered by the banker, the study has been focused towards customers who are the recipient of TABLE 1 Opinion on the Success of Ombudsman services and bank employees who are the agencies of Scheme delivery of services. As such, it has been projected from No. of the point of view of bank employees and from the point of Opinion Percentage Employees view of bank customers. It is analysed with reference to Strongly agree 100 42 customers and employees attitude. The State Bank of India in Madurai city consists of 13 branches. The study Agree 100 42 was undertaken on the customers and Bank employees of No opinion 24 10 13 branches only. Disagree 4 1 Strongly disagree 12 5 METHODOLOGY Total 240 100 Source: Primary Data.
The present study is an empirical one based on survey Table 1 reveals that majority of the bank employees, that method. Data were collected from both primary and is 42 per cent, strongly agreed that Ombudsman scheme secondary sources. The primary data were collected from was successful.
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CUSTOMER COMPLAINTS drop a written complaint in the box whenever he feels he Most business institutions are more concerned with is not satisfied with the service provided. Table 4 shows keeping old customers happy rather than getting new the opinion of bank employees on the availability of the customers. In order to retain customers, the bank suggestions/complaint boxes. employee must work harder on managing individual customer relationship. Hence the customers should be TABLE 4 Opinion on the Availability of given a chance to express their views either orally or in Complaint/Suggestion Box written form. If the complaints are written, they must be Opinion No.of Employees Percentage handed over to the bank. Table 2 shows the opinion of Yes 232 97 bank employees regarding whether they have meetings for No 8 3 receiving customer’s complaints. Total 240 100 Source: Primary Data. TABLE 2 Opinion of Bank Employees about Holding of Meetings It is evident from Table 4 that 97 per cent of the bank Opinion No.of Employees Percentage employees agreed on the existence of complaint Yes 208 87 box/suggestion box in their branch premises. No 32 13 Total 240 100 Opinion on Existence of Customer Service Committee Source: Primary Data. Today, businesses are following customer driven business strategy to optimise profitability, revenue and customer Table 2 reveals that 87 per cent bank employees opined satisfaction. To achieve effectiveness, there must be a that the bank holds meetings to discuss the customers’ customer service committee to recognize the customers’ grievances and 13 per cent bank employees differed on perspective, do offer excellent service, rectify mistakes, that point. and develop teams spirit, bring about a harmonious relationship with the customers. Opinion about Display of Higher Officials Address for Grievances Table 5 shows whether customer service committee exists Building enduring relationship requires a bank or not. commitment to provide high-quality service, which is reliable, empathic, and responsive. One of such things is TABLE 5 Opinion on the Existence of Customers Service displaying higher officials’ addresses to customers for Committee redressal when they are not satisfied with the actions of Opinion No.of Employees Percentage the branch manager. Hence, the researcher attempted to Yes 200 83 know whether bank displays the addresses of higher No 40 17 officials for redressal of complaints, other than branch Total 240 100 manager. Table 3 shows the opinion of the bank employee Source: Primary Data. in this regard. Table 5 reveals that 83 per cent bank employees agree that TABLE 3 Opinion about the Display of High Officials the bank has constituted customer service committee at Addresses for Redressal of Complaints their branch levels while 17 per cent bank employees Opinion No.of Employees Percentage disagree. Yes 212 88 No 28 12 Opinion on Complaints Received Total 240 100 Complaints are the written expression of the customers’ Source: Primary Data. dissatisfaction with the services provided by the bank employees. It is inferred from Table 3 that 88 per cent bank employees opined that the bank displays the addresses of The bank employees’ opinion on whether they have higher officials for redressal of complaints and 12 per cent received any complaint or not is given in Table 6 bank employees opined that the bank does not display the addresses of higher officials for redressal of complaints. TABLE 6 Opinion on whether Complaints are taken up Opinion No. of Employees Percentage Opinion on the Availability of Suggestion Yes 156 65 Box/Complaint Box No 84 35 It is not possible for all the customers to wait for a day to Total 240 100 give a written complaint. Suggestion box/complaint box Source: Primary Data. is a gift to the customer to solve this problem. He can just
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Table 6 shows that 65 per cent of the bank employees Opinion on whether Complaints are Redressed received complaints/suggestions from their customers. Customers expect that complaints they have lodged must And 35 per cent bank employees did not receive any be redressed as early as possible and satisfactorily. Table complaint from customers. 9 shows the opinion of bank employees regarding whether complaints are redressed promptly or not. Opinion on the Occasions on which Complaints Received TABLE 9 Opinion on whether Complaints are Redressed How frequent the complaints are received is an important Opinion No. of Employees Percentage factor that determines the quality of the service of the Yes 151 97 service provider. Hence an attempt is made by the No 5 3 researcher to know the occasions on which complaints are Total 156 100 received. Table 7 shows the fact in this regard. Source: Primary Data.
TABLE 7 Occasions on which Complaints Received Table 9 reveals that 97 per cent bank employees opined Occasions No.of Employees Percentage that complaints are redressed and 3 per cent bank Many 20 13 employees deny that. Few 56 36 Rarely 80 51 SUGGESTIONS Total 156 100 Source: Primary Data. Recognition of service quality as a competitive weapon is relatively a recent phenomenon in the Indian Banking Table 7shows that 13 per cent of the bank employees sector. Prior to the liberalisation era the banking sector in view that they have received complaints on many India was operating in a protected environment and was occasions. 36 per cent of them received complaints on a dominated by nationalised Banks. Banks at that time did few occasions and 51 per cent received complaints very not feel the need to pay attention to service quality issues rarely from customers. and they assigned very low priority to identification and satisfaction of customer needs. Major Issues of Complaints Lodged The present day customer is becoming more and CONCLUSION demanding. He wants all the services under one roof and expects to save time while doing business. He wants the Customers vary in their expectations and attitudes and transaction to be as simplified as possible and demand belong to wide socio-economic and cultural backgrounds. gentle behaviour of staff and so on. So when he has not The gap between the expectations of customers and their received due attention on these areas, he expresses his fulfillment is the root cause of grievances which affects views in the form of complaints. the image of the bank. To overcome this situation, there should be an effective monitoring mechanism and Table 8 shows the issues/areas relating to which bank constant vigil over the services provided to customers. employees receive complaints. Since they have a wide choice of services and multiplicity of products they are more conscious of convenience and TABLE 8 Major Issues of Complaints Lodged cost, safety and speed, respect and quality, courtesy and Issues No. of Percentage elegance. State Bank of India has to be very careful in Employees responding to the needs of their customers in an intensely Staff behaviour 7 5 competitive and rapidly changing environment. Operational 72 46 Physical faculties 27 17 REFERENCES Procedural rigidities 50 32
Total 156 100 [1]. H.G. Rindani and L.G. Ramesh, “Business Source: Primary Data. Communications and Customer Relationship”, The Indian Institute of Bankers, Mumbai, 2000. Table 8 reveals that 5 per cent of the bank employees [2]. P.V. Anantha Bhaskar, “Customer Service in Banks”, opined that the complaint is due to staff behaviour, 46 per IBA Bulletin, August 2004, p.9. cent bank employees opined that it is due to operational [3]. V.K. Gupta, “Legal Rights of Customers to Get Prompt area, 17 per cent opined that it is due to physical faculties and Satisfactory Redressal of Grievances”, IBA Bulletin, of the bank, and 32 per cent opined that it is due to August 2004, p.14. procedural rigidities. [4]. K. Santi Swarup, “Customer Service in Banks”, IBA Bulletin, August 2004, p.17. [5]. K.V. Bhaskara Rao, “Customer Service in Banks”,
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Banking Finance, January 2006, Vol.XIX, No.1, p.8. [10]. Biswa N. Bhattacharyya, “Marketing Management and [6]. R. Neelamegam, “Institutional Financing to Small Scale Innovators in the Light of Liberalisation”, Prajnan, Industries”, Ph.D., Thesis Submitted to Madurai Kamaraj Vol.20, No.5, 1991, p.419-425. University, Madurai, 1983 [11]. Valariee A. Zeithaml and Mary Jo Bitner, Building [7]. M.P.Ranade, “Marketing of Deposit and Allied Service to Customer Relationship through Segmentation and Non-Resident”, BMP, Ph.D., Thesis Submitted to NIBM, Retention Strategies, Service Marketing, McGraw Pune, 1985. Hill, 1996, pp.169-199. [8]. Eugene W. Anderson, Daes, Furness and Donald R. [12]. A.M. Sadare, “Competency Building for Improving Lehmann, “Customer Satisfaction, Market Share and Customer Service in Banks”, Banking and Finance, Profitability: Findings from Sweden”, Journal of Vol.17, No.8, August 2004, pp.19-21 Marketing, Vol.58, July 1994, pp.53-66. [9]. R.M. Chidambaram, “Promotional Mix for Bank Marketing”, IBA Bulletin, Vol.16, No.3, March 1991, pp.24-26.
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A Study of Customer Satisfaction towards Housing Loans in Select Private Sector Banks in Coimbatore District
Dr. B.Sivakumar, M.Com., M.Phil., PGDCA., N.S.Lissy, M.Com., M.Phil., MBA., MBA.,MBA., Ph.D., Assistant Professor, HOD, Assistant Professor, Department of Commerce CA Department of Commerce CA VLB Janakiammal College of Arts and Science, VLB Janakiammal College of Arts and Science, Coimbatore. Coimbatore. Email id: [email protected] Email id: [email protected]
ABSTRACT: House is the most important of life. recent years. India has initiated so many housing reform Everybody wants to own a home. Person gets shelter in that has taken many forms and manifestations the home to take rest and feel comfortable. Many private characterized by the reduction in social allocation, banks and financial institutions give loan for home to the cutbacks in public funding and promotion of a real estate people who want to own a home. To attract customers, culture in close partnership between the state and private banks provide housing loans at cheaper rate. Currently sectors. Mortgage financing markets can play an banks offer cheapest loan for homes, as a gesture of important role in stimulating affordable housing markets customer friendly attitude. The present study was and improving housing quality in many countries. undertaken with the intent to investigate after examining Unfortunately, these are still in infancy in India. the literature reviewed and noticed that their exit gap in terms of customer perception towards the housing loan FACTORS CONSIDERED WHILE disturbed by banks. Accordingly, the problem of the study TAKING A HOUSING LOAN focuses on customer views towards the housing loan schemes of the bank. An attempt has also been made for Customers have become aware about the various the study of banks delivery and disturbancement of loan options/plans of housing loans offered by the banks, lending to customer satisfaction. This section explains the thanks to their media campaigns. Although some factors research methods procedures and analytical frame work of are more important than others, there are certain factors the present study.The research methods have been which should be considered before financing the housing designed to fit main objectives of the study. Since not loan. These are much research work has been done in the area of housing 1. Rate of Interest loans provided by various private sector banks from 2. Types of interest rate: fixed or floating customer satisfaction and point of view, it was decided to 3. Tenure/repayment period undertake one such study is Coimbatore District. It was 4. Down payment/ percentage of amount given as decided to 5 Private Sector banks are namely. AXIS, loan HDFC, ICICI, KVB, LVB. So that the customer 5. Calculation of interest: Daily/Monthly/Yearly satisfaction towards Housing loans can be under taken. 6. Processing fee/administration fee 7. Time taken to process the loan Keywords: Customer Satisfaction, Housing Loan, Private 8. Prepayment penalty Sector Banks. 9. Foreclosure penalty 10. Requirement of a guarantor INTRODUCTION 11. Freebies offered 12. Other considerations House, is centre and domestic device for mankind’s moral and substance development ever since the dawn of REVIEW OF LITERATURE civilazation. Housing is one of the most important that we human beings need. Adequate housing is essential for John (2007) in his study on “A Research study of human survival with dignity. There are many things that customer preferences in the Housing loan market”. The we would find difficult, if not impossible to do without Mortagage Experience of Greek Bank Customers good-quality housing. Housing shortage is a universal proposed to study the customers attitude towards the phenomenon. It is more acute in developing countries. possibility of obtaining housing loans, the customers use The housing scenario has become more critical in India in
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of information sources, the choice criteria used by LIMITATIONS OF THE STUDY customers in choosing a financial institution and a housing loan. The main limitations are:- This study is limited only to Coimbatore District NEED FOR THE STUDY Getting the information from the investors are not an easy job as they find no time to spare with and also The research methods procedures and analytical frame they felt reluctant work of the present study. The research methods have been designed to fit main objectives of the study. Since ANALYSIS AND INTERPRETATION not much research work has been done in the area of This chapter has been analysed by taking in to primary housing loans provided by various private sector banks data which have been collected from their respondents in from customer satisfaction and point of view, it was selected from the respondents in selected areas of decided to undertake one such study is Coimbatore Coimbatore District. District. It was decided to 5 Private sector banks are namely. AXIS, HDFC, ICICI, KVB, LVB. So that the FREQUENCY TABLE customer satisfaction towards housing loans can be under 1.Personal Details: taken. No.of Percentage Respondents Male 26 52 OBJECTIVES OF THE STUDY Gender Female 24 48 Below 30 To study the customer satisfaction towards Housing 04 08 Years loans. 30 to 40 14 28 To study the various factors affecting the customers Years Age satisfaction towards Housing loans private sector 41 to 50 26 52 banks. Years To assess the satisfaction of housing loans in Above 50 06 12 Coimbatore District. Years Upto HSC 13 26 RESEARCH METHODOLOGY UG 12 24 Education PG 09 18
Professional 05 10 Period of the study: Others 11 22 The period of study for the study was a course of 4 Private 28 56 months. Employee Govt. 08 16 Study Area Occupation Employee The study is undertaken in Coimbatore District. It is Agriculture 03 06 popularly known as Manchester of south India, situated in House Wife 04 14 the western part of Tamil Nadu which is well known for Others 07 14 educational institutions, textile industry, upcoming IT Martial Married 44 88 Sectors. Thus Coimbatore District is chosen for the study. Status Unmarried 06 12 Total 50 100 Data source Source: Primary Data
Primary data have been collected by the interview The table it reveals that, 88% of the respondents were schedule. Secondary data were collected from books, Married and 12% of the respondents were Un married. journals and websites.
2.Customer Housing Loan Profile: Sample Frame Private Sector It was observed that using 50 respondents are considered No. of Respondents Percentage Banks from housing loan customers in various places of HDFC 10 20 Coimbatore District. KVB 25 50 AXIS 04 08 Tools Applied ICICI 10 20 Frequency percentage was applied for the purpose of the LVB 01 02 study. Total 50 100 Source: Primary Data
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From the table, it reveals that, 50% of the respondents 7. 34% of the respondents were period of housing loan were housing loan from KVB, 20% of the respondents from 10 years. were housing loan from ICICI Bank and other 20 8. 34% of the respondents were repayment of housing respondents were housing loan from HDFC. (Majority of loan from cash. the respondents 50% of respondents were housing loan 9. 30% of the respondents were range of EMI amount from LVB). from Rs.5,001 to Rs.8,000 10. 28% of the respondents were satisfied. 3.Period of Loan: Period of No. of Percentage SUGGESTIONS: Housing Loan Respondents They are the following customer satisfaction towards Below 5 years 07 14 housing loan suggestions are as follows: 10 years 17 34 Housing schemes and process of passing loan 15 years 15 30 should be easy to make the people understand 20 years 07 14 Rate of interest should be competitive with other Above 20 years 04 08 financial institutions. Total 50 100 Proper credit appraisal of the customer should be Source: Primary Data done. Pen more number of branches in different cities 4.Repayment of loan: and tap the rural area. Repayment of housing No. of Percentage Counter facility should be provided in all banks to loan Respondents help the customers. Cash 19 38 To attract more customers banks should make Cheque 16 16 process of loan repayment easy. Repayment Online 10 20 Loan passing should be quicker by like private of loan Banking sector banks. ECS 04 08 File processing charges should be eliminated in the Other form 09 18 banks. Upto 14 28 Rs.2,000 CONCLUSION Rs.2,001 to 07 14 Now a day customers’ expectations are the major Range of Rs.5,000 challenges faced by the employees of banking services in EMI Rs.5,001 to 15 30 India. The improvement of quality of service delivery is a Rs.8,000 vital concern for banking services. Quality of service Above 14 28 delivery is increasingly being seen as a key strategic Rs.8,000 differentiator within the financial services sector. The Satisfied 14 28 interest rate is lower in private banks but services are not Highly 10 20 up to the mark. The appearance of banks also becomes Satisfied Overall very important for the present generation and private Moderate 07 14 satisfaction banks put their complete efforts on this, which is lacking Dissatisfied 06 12 in private sector banks. Highly 13 26 Dissatisfied REFERENCES Total 50 100 Source: Primary Data [1]. Innovative Journal of Business and Mangement : Journal homepage: http//:www.innovative FREQUENCY TABLE: journal.in/index.php/ijbm sep.2013 1. 52% of the respondents were Male. [2]. Journal of Housing Economics 10, 176-209 (2001) at 2. Majority of the respondents 52% were under the age http://www.idealibrary.com group of 41 to 50 years [3]. Intrnational Journal of current research academic review ISSN: 2347-3215 Volume2 November 1 (January, 2014) 3. Majority of the respondents were Professional. pp.30-40 www.ijcrar.com 4. 56% of the respondents were occupation from Private [4]. Global Journal of Research in social sciences Vol.1, Employees No.1, June 06, 2015 www.gpcpublishing.com ISSN: 5. Majority of the respondents 88% of the respondents 2455-751X were Married. [5]. Midas Touch International Journal of Commerce, 6. Majority of the respondents 50% of the respondents Management and Technology, Volume 3, No.1 &2 were housing loan from KVB. January & February 2015, ISSN: 2320-7787
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Impression if Information Technology in Banking Sector
V. Priyanka Assistant Professor Department of Banking and Insurance Dr.N.G.P.Arts and Science College, Coimbatore
Abstract : Information technology has been of great “Accepting for the purpose of lending and investment, essence in banking system. It refers to the acquisition, deposits of money from the public repayable on demand processing, storage and dissemination of all types of or otherwise and withdraw able by cheque, draft, order or information using computer technology and otherwise”. Institutions which deals in money and telecommunication systems. Information technology credit.An intermediary, which handles other people‟s architecture is an integrated framework for acquiring and money both for their advantage and to its own profits.A evolving IT to achieve strategic goals. These technologies financial institution that links the flow of funds from are used for the input, storage, processing and savers to the users.Plays an important role in the economy communication of information. Information technology of any country as they hold the saving of the public. includes additional equipment, software, firmware and similar procedures, services etc. Recent developments of OBJECTIVES OF BANKING banking sector in India are done through Internet, (SWIFT), (ATM), Cash dispensers, Electronic clearing To make an account of evolution of present day service, Bank Net, Chip card, Phone banking, Tele- banking in India banking, Internet banking, Mobile banking, Anywhere To evaluate the interventions of state in banking banking, Voice mail, E-banking Etc., The basic need of sector over years Information Technology in Banking Sector isto Meet the To appraise the entry of foreign banks Internal Requirements, Effective Data Handling, Prolongingthe services to Customer, Creative Support for Banking environment has become highly competitive New Product Development, End-user Development of the today. To be able to survive and grow in the changing Non-technical Staff thatenhances the banking industry. market environment banks are going for the latest Emerging trends of information technology in banking technologies, which is being perceived as an „enabling sector are Outsourcing, Integration, Distinctive Edge, IT resource‟ that can help in developing learner and more as Profit Centre, Prospering in Down Market. Challenges flexible structure that can respond quickly to the are faced by Indian banking sector which is to meet dynamics of a fast changing market scenario. It is also customer expectations on service and facilities offered by viewed as an instrument of cost reduction and effective the bank, Customer retention etc. The study examines communication with people and institutions associated various relevant issues related to the impact created by IT with the banking business. Information Technology in banking sector andrecommends the safeguarding enables sophisticated product development, better market measures to have a privacy and confidentiality of data‟s, infrastructure, implementation of reliable techniques for and implementation of other Cyber lawsproperly. This control of risks and helps the financial intermediaries to will ensure the developmental of IT in the banking reach geographically distant and diversified markets. industry. Information technology refers to the acquisition, processing, storage and dissemination of all types of Key Words: Information Technology, Internet Banking, information using computer technology and Mobile Banking. telecommunication systems. Information technology architecture is an integrated framework for acquiring and INTRODUCTION evolvingIT to achieve strategic goals. These technologies are used for the input, storage, processing and A system of trading money which: provides a safe place communication of information. Information technology to save excess cash, known as deposits. Supplies liquidity includes ancillary equipment, software, firmware and to the economy by loaning this money out to help similar procedures, services etc. Modern high throughput businesses grow and to allow consumers to purchase technologies are providing vast amounts of the sequences, consumer products, homes, cars etc. Section 5 (b) of the expression and functional data for genes and protein. One Banking Regulation Act 1949 defines “Banking” as of the most difficult challenges is turning this enormous
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pool of information into useful scientific insight and novel created by IT for banking sector. therapeutic products. This auspicious technology To provide Guidelines that is Followed & Focused influences the banking industry, mainly in the following for Effective Implementation of IT in Banking three aspects: Sector.
Technology is influencing competition and the degree RECENT DEVELOPMENTS OF BANKING of contestability in banking: Due to the development of SECTOR IN INDIA technology, bank‟s superiority in information is deteriorated. Entry barrier have been declining, new INTERNET competitor have emerged. Some financial products and Internet is a networking of computers. In this marketing services have become more transparent and commodities, message can be transferred and received worldwide. The customer show willing to unbundled the demand for data can be sent and received in any part of the world. In financial products and services, all these lead to a more no time, internet facility can do many a job for us. It competitive market environment. Due to lowered entry includes the following: and exist and deconstruction, for some sub-financial This net can work as electronic mailing system. markets, contestability in banking is also raised.
It can have access to the distant database, which Technology influence Economy of scale: Competitive may be a newspaper of foreign country. pressure force banks to lower their cost. Bank seeks to get We can exchange our ideas through Internet. We economy of scale in bank procession instead of being a can make contact with anyone who is a linked with big bank. Bank seeks to secure the optimal business internet. structure, and secure the competitive imperative of economy of scale. There are other options to get economy On internet, we can exchange letters, figures/ diagrams of scale, including joint venture and confederation of and music recording. Internet is a fast developing net and financial firms. Small firms also can get economy of scale is of utmost important for public sector undertaking, by outsourcing, i.e. buy in economy of scale. Education Institution, Research Organization etc.
Technology influence the economics of delivery: SOCIETY FOR WORLDWIDE INTER- Technology has a major impact on the way banking and BANKFINANCIAL TELECOMMUNICATIONS financial services are delivered. A wide range of (SWIFT) alternative delivery mechanism becomes available, SWIFT, as a co-operative society was formed in May Internet, ATM these Reduces the dependence on the 1973 with 239 participating banks from 15 countries with branch network as a core delivery mechanism. With the its headquarters at Brussels. It started functioning in May development of technology, the financial systems are 1977. RBI and 27other public sector banks as well as 8 substantially over-supplied with delivery system through foreign banks in India have obtained the membership of a duplication of network, bank has to change their the SWIFT. SWIFT provides have rapid, secure, reliable delivery strategy, rationalize their branch network and cost effective mode of transmitting the financial strategy, and widen the range of delivery option. Banking messages worldwide. At present more than 3000 banks industry has been taking advantage of the following 22 are the members of the network. To cater to the growth in Technology Products: (1). Net Banking; (2). Credit Card messages, SWIFT was upgrade in the 80s and this version Online; (3). One View; (4). InstaAlerts; (5). Mobile is called SWIFT-II. Banks in India are hooked to SWIFT- Banking; (6). Net Safe; (7). e-Monies Electronic Fund II system. SWIFT is a method of the sophisticated Transfer; (8). Online Payment of Excise & Service Tax; message transmission of international repute. This is (9). Phone Banking; (10). Bill Payment (11). Shopping highly cost effective, reliable and safe means of fund (12). Ticket Booking; (13). Railway Ticket Booking transfer. through SMS; (14). Prepaid Mobile Recharge; (15). Smart Money Order; (16). Card to Card Funds Transfer; (17). This network also facilitates the transfer of message Funds Transfer (eCheques); (18). Anywhere Banking; relating to fixed deposit, interest payment, debitcredit (19). Internet Banking; (20). Mobile Banking; (21). statements, foreign exchange etc. Bank@Home (i) Express Delivery; (22). Cash on Tap: (ii) This service is available throughout the year, 24 Normal Delivery. hours a day This system ensure against any loss of mutilation OBJECTIVES OF THE STUDY: against transmission. It serves almost all financial institution and To analyse how IT creates a major impact on banking selected range of other users. industry.
To study the requirements and recent developments
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AUTOMATED TELLER MACHINE (ATM) the city to the other, Quick settlement of transactions and ATM is an electronic machine, which is operated by the advices, Improvement in customer service withdrawal of customer himself to make deposits, withdrawals and other funds is possible from any member branch, Easy transfer financial transactions. ATM is a step in improvement in of data and other statements t RBI, Useful in foreign customer service. ATM facility is available to the exchange dealings, Access to SWIFT through Bank net is customer 24hours a day. The customer is issued an ATM easily possible. card. This is a plastic card, which bears the customer‟s name. This card is magnetically coded and can be read by CHIP CARD this machine. Each cardholder is provided with a secret The customer of the bank is provided with a special type personal identification number (PIN). When the customer of credit card which bears customer‟s name, code etc. The wants to use the card, he has to insert his plastic card in credit amount of the customer account is written on the the slot of the machine. After the card is a recognized by card with magnetic methods. The computer can read these the machine, the customer enters his personal magnetic spots. When the customer uses this card, the identification number. After establishing the credit amount written on the card starts decreasing. The authentication of the customers, the ATM follows the customer has to deposit cash in his account for re-use of customer to enter the amount to be withdrawn by him. the card. Again the credit amount is written on the card by After processing that transaction and finding sufficient magnetic means. balances in his account, the output slot of ATM give the required cash to him. When the transaction is completed, PHONE BANKING the ATM ejects the customer‟s card. Customers can now dial up the bank‟s designed telephone number and he by dialling his ID number will be able to CASH DISPENSERS get connectivity to bank‟s designated computer. The Cash withdrawal is the basic service rendered by the bank software provided in the machine interactive with the branches. The cash payment is made by the cashier or computer asking him to dial the code number of service teller of the cash dispenses is an alternate to time saving. required by him and suitably answers him. By using The operations by this machine are cheaper than manual Automatic voice recorder (AVR) for simple queries and operations and this machine is cheaper and fast than that transactions and manned phone terminals for complicated of ATM. The customer is provided with a plastic card, queries and transactions, the customer can actually do which is magnetically coated. After completing the entire non-cash relating banking on telephone: Anywhere, formalities, the machine allows the machine the Anytime. transactions for required amount. TELE-BANKING ELECTRONIC CLEARING SERVICE Tele banking is another innovation, which provided the In 1994, RBI appointed a committee to review the facility of 24 hour banking to the customer. Tele-banking mechanization in the banks and also to review the is based on the voice processing facility available on bank electronic clearing service. The committee recommended computers. The caller usually a customer calls the bank in its report that electronic clearing service-credit clearing anytime and can enquire balance in his account or other facility should be made available to all corporate bodies / transaction history. In this system, the computers at bank Government institutions for making repetitive low value are connected to a telephone link with the help of a payment like dividend, interest, refund, salary, pension or modem. Voice processing facility provided in the commission, it was also recommended by the committee software. This software identifies the voice of caller and Electronic Clearing Service-Debit clearing may be provides him suitable reply. Some banks also use introduced for pre-authorized debits for payments of telephonic answering machine but this is limited to some utility bills, insurance premium and instalments to leasing brief functions. This is only telephone answering system and financing companies. RBI has been necessary step to and not Tele-banking. Tele banking is becoming popular introduce these schemes, initially in Chennai, Mumbai, since queries at ATM‟s are now becoming too long. Calcutta and New Delhi. INTERNET BANKING BANK NET Internet banking enables a customer to do banking Bank net is a first national level network in India, which transactions through the bank‟s website on the Internet. It was commissioner in February 1991. It is communication is a system of accessing accounts and general information network established by RBI on the basis of on bank products and services through a computer while recommendation of the committee appointed by it under sitting in its office or home. This is also called virtual the chairmanship of the executive director T.N.A. Lyre. banking. It is more or less bringing the bank to your Bank net has two phases: Bank net-I and Bank net-II. The computer. In traditional banking one has to approach the Applications of Bank Net are the message of banking branch in person, to withdraw cash or deposit a cheque or transaction can be transferred in the form of codes from request a statement of accounts etc. but internet banking
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has changed the way of banking. Now one can operate all sources but also from within the banks. Banks are looking these type of transactions on his computer through to retail segment as the future market places for sales website of bank. All such transactions are encrypted; efforts. Having full-fledged information of existing using sophisticated multi-layered security architecture, customer is the key for this purpose. The emergences of including firewalls and filters. One can be rest assured data requirement and an appropriate architecture to that one‟s transactions are secure and confidential. support the same are significant issues to be handled in this regard. MOBILE BANKING Mobile banking facility is an extension of internet GUIDELINES TO BE FOLLOWED& banking. The bank is in association with the cellular FOCUSED FOR EFFECTING service providers offers this service. For this service, mobile phone should either be SMS or WAP enabled. IMPLEMENTATION OF IT IN BANKING These facilities are available even to those customers with SECTOR only credit card accounts with the bank. At corporate level to meet the challenges, various initiated NEED OF INFORMATION TECHNOLOGY (IT) IN have been taken and implementation is process beside up BANKING SECTOR gradation of data centre facilities: Since the early nineties, each Indian bank has done some IT improvement effort. The first and foremost compulsion Centralization of functions is the fierce competition. While deciding on the required Inward clearing data uploading and processing Check architecture for the IT consideration is given to following book issues MIS-On-Line Monitoring/ Generation of realities. statement by controlling offices Audit from the remote location Sending mails and statement of accounts to Meeting Internal Requirements customers & completion of non-mandatory field in newly The requirements of the banks are different individually opened accounts. depending upon their nature and volume of business; Single Window System focus on a particular segment, spread of branches and a Revised Account opening from for capturing like. Many a time‟s banks to have the required complete customer/ Account data as per CBS information but it isscattered. The operating units seldom requirement. know the purpose of gathering the information by their Call centre for customers. higher authorities. Customer Relationship Management (CRM) Application. Effective in Data Handling Data Warehousing. As stated earlier the banks have most of the needed data To facilitate successful implementation of the but are distributed. Further the cost of collection of data above initiative, intensive efforts are to be and putting the same to use is prohibitively high. The undertaken by all of us on following issues: accuracy and timeliness of data generation becomes the Completion of correct MIS details in all accounts causalities in the process. Best of the intentions on and SRM‟s computerization are wished away because there is non- Customer / Account data completion / correction. visible reduction in cost/ efforts/ time required for the Customer-ID crystallization. required data gathering. Aggressive marketing of Internet Banking & Debit Card products to increase share of delivery Extending Customer Services channels transaction. Addressing to rising customer‟s expectations is significant Skill up gradation & increase in awareness of all particularly in the background of increased competition. staff member. In case bank A is unable to provide the required service at Strict compliance of Circular & Guidance available a competitive price and in an accurate manner with speed. online (CBSINFO) / Messages issued through There is always a bank IT at its next-door waiting to hire scrolling ticker on login page. Present slowdown in the customer. Awareness of customers about the rollover must be put to full use to have concrete availability of services and their pricing as also available action on these fronts. options have brought into sharp focus the issue of customer satisfaction. CONCLUSION Creative Support for New Product Development It has become necessary for the banks to vitalize the Information Technology enables sophisticated product process of product development. Marketing functionaries development, better market infrastructure, implementation needs a lot of information not only from the outside of reliable techniques for control of risks and helps the
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financial intermediaries to reach geographically distant REFERANCES and diversified markets. Internet has significantly influenced delivery channels of the banks. Internet has [1]. Bimil Jalan, “Strengthening Indian Banking and Finance emerged as an important medium for delivery of banking – Progress and Prospects”, the Bank Economist products and services. Information, communication and Conference, India, 2002. networking, achieving inter branch connectivity, moving [2]. Reddy, Y.V. (1998) “Financial Sector Reforms: Review towards Real Time gross settlement (RTGS) environment and Prospects”. RBI Bulletin, December. the forecasting of liquidity by building real time [3]. Reddy, Y.V.(2000), Monetary and Financial Sector Reforms in India, A Central Banker‟s Perspective, UBS databases, The shift from traditional banking to e-banking Publishers, New Delhi. is changing customer‟s expectations. With the globalization trends world over it is difficult for any nation big or small, developed or developing, to remain isolated from what is happening around. For a country like India, which is one of the most promising emerging markets in India.
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A Study on Customers Awareness and Stratification towards Internet Banking in Semi – Urban Areas of Coimbatore City.
Mrs.R. Sudha, Mrs. X.Catherine Arputha Divya Assistant Professor, Assistant Professor, Department of Commerce BPS &CM Department of Commerce BPS &CM Sri Krishna Arts and Science College, Sri Krishna Arts and Science College, Coimbatore. Coimbatore. [email protected], [email protected]
Mrs.M.Kovarthini Assistant Professor, Department of Commerce BPS &CM Sri Krishna Arts and Science College, Coimbatore.
ABSTRACT: The research is focused on examining the In recent years, the banking industry around the world has customer satisfaction towards internet banking in semi been undergoing a rapid transformation. Today customers urban areas of Coimbatore district. The present study is expect highest quality services from banks which, is mainly based on primary data which has been collected fulfilled, could result in significantly improved customer through issue of questionnaire to 16`0 respondents satisfaction level. Internet technology holds the potential residing in semi urban areas of Coimbatore district by to fundamentally change banks and the banking industry. adopting convenient sampling method. The statistical An extreme view speculates that the internet will destroy tools like simple percentage analysis; chi-square & old models of how bank services are developed and average score analysis applied to the analysis and delivered. The widespread availability of internet banking interpreted the collected data. From the analysis, it is is expected to affect the mixtures of financial services ascertaining that customer‟s usage of internet banking can produced by banks, the manner in which bank produces be knows through friends, relatives or through bank these services and the resulting the customer service of employees. The finding helps us to know about the the bank. Banking through internet has emerged as a internet banking and the uses as it minimize the work of strategic resource for achieving higher efficiency, control customer in doing person to person banking without any of operations and finding may change as the use of waste of time and energy from the place where you are. internet become more widespread. Customer satisfaction Also able to know the use of internet banking in different is defined as “The number of customer, or percentage of sector of our country likewise in industries, institute etc. total customers, whose reported experience with a firm, its product, or its services exceed specified satisfaction Keywords: Internet banking - Customer - Satisfaction. goals”
INTRODUCTION Internet Banking means a kind of self-help financial services provided by the bank for its clients by the Bank are said to be the heart of the financial structure in medium of internet, including account information the world. It plays vital role in economic development of inquiry, account transfers and online payments etc. Online nation. It is a system of trading money which provides a Banking is the practice of making bank transactions or safe place to excess cash as deposits and supplies liquidity paying bills via the internet. Thanks to the technology and to the economy by loaning this money out to the needed internet in particular that no one has to leave the house at business men for the growth of business and customer. It all. One can shop online, communicate online and now is one of the oldest services in India. Internet banking one can even do banking online. Online banking allows provides a speedier, faster and reliable service to the account information, transaction information, instant fund customer for which they are relatively happy. Cost of transfer, cheques collection across cities and pay bills internet banking form a fraction of costs through with the click of a mouse. conventional methods.
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Some of the distinctive features of Internet Banking The study was done with the idea of analyzing people‟s are: knowledge about internet banking facility, provided by almost every bank in Coimbatore. It was done mainly to 1. It removes the traditional geographical barriers as it know what people think about internet banking and its can reach out to customers of different countries / growth in the country. As India is all set to move towards legal jurisdiction. This has raised the question of cashless economy internet banking will play a major role jurisdiction of law / supervisory system to which such in the move. Customer satisfaction towards banking transactions should be subjected. facilities keeps changing and internet banking can be the 2. It has added a new dimension to different kinds of future of India‟s banking service. risks traditionally associated with banking, heightening some of them and throwing new risk It removes the traditional geographical barriers for control challenges. customer. 3. It is simple to open and easy to operate. The customer can access their account anytime and 4. It poses a strategic risk of loss of business to those from any part of the world, due to new innovative and banks who do not respond in time to this new convenient facility it attracts new customer who are technology, being the efficient and cost effective using traditional banking so far. delivery mechanism of banking services. It facilitates the offering of more services because 5. A new form of competition has emerged both from this is internet based services which is time saving the existing players and new players of the market and customer can access and regulate their account. who are not strictly banks. This facility have zero fee, so no monthly payment are required to forfeit for availing this service, free of STATEMENT OF THE PROBLEM charge bill reimbursement and refund on ATM surcharge. The use of technology forms the backbone for better Simple online submissions facilities for personal result in banking industry. Today‟s banking situation account, loans and credit. demands continuous innovation in order to meet the earning and aspirations of the ever demanding customers. Due to self-access system it reduce customer attrition and Hence banks need to roll out new products and services increase customer loyalty, high-tech technical quickly and effectively using the latest technological advancement in the form of intrusion detection system to equipment. The development of technology and the virus control equipment‟s have made internet banking adoption of internet by all industries remove a time, system. distance and communication constraint that brings the world under a single roof. Banking industry, no doubt, OBJECTIVES OF THE STUDY with the use of latest technology and adoption of internet banking, they are rendering quick services to their To find out the answer for questions raised above, the customers. One of the main benefits that bank derives following objectives were framed for the study, from electronic banking products and service is the To study the socio-economic profile of the delivery with improved efficiency and effectiveness of customer using the internet banking services. their operations, so that more transaction can be processed To find out the source of awareness on internet faster and more conveniently. The customer on the other banking services. hand enjoy the benefit of quick service delivery, reduced To know the customer satisfaction and to analyze frequency of going to banks physically and reduced cash the variables influencing customer satisfaction on handling, which will give rise to higher volume of internet banking services. turnover. Though, customers are enjoying the benefits of internet banking in one aspect, they are also facing some problems during their interaction with the machines. RESEARCH METHODOLOGY The expectation and idea of people differ from one another. After the demonetization the usage of internet Area of the study: banking is increased rapidly all over the period of time. Area studies are interdisciplinary fields of research and Here the main problem of this survey is to know the scholarship pertaining to particular geographical, various factors which are essential and important to know national/federal, or cultural regions. The study was the need of internet banking which will make banking conducted semi urban areas within the limits of process easier. Hence this study titled as “A study on Coimbatore city. awareness and satisfaction internet banking among the customers in semi urban areas of Coimbatore city”.
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Sample design: increasingly becoming a “need to have” than a “nice to In this research simple random sampling method is used have” service. to collect information form the respondents. Customers of both public and private sector banks are selected Rajpreet, KaurJassalet. (2013) This paper aims to randomly. explains about the reason behind the security breaches and the participation of both customers and the banks to Method of data collection: enable the hackers or crackers to access others network. Both primary and secondary data‟s are used for the study. The present study aims to find various types of flaws in Primary data was directly collected from the internet the security of online banking those results in loss of banking users with the help of questionnaires & money of account holders and financial institutions. secondary data were collected from the various Security breaches are not only because of banks faults and newspapers and magazines. banks inadequate police but customers are equally responsible for it, because customer‟s awareness Sapling: regarding security is equally important. This is done through preparing questionnaires which is collected from the customer directly by the researcher to ANALYSIS AND INTERPERTATION find the percentage of satisfaction by customers in internet banking. Questionnaire contains question relating The study was confined to internet banking users in semi to customer awareness on internet banking service, factor urban areas of Coimbatore city. The target population for influencing to adopt the internet banking service, the study was to be 160. This constituted various people satisfaction on online services and problem faced. This from different walks of life. A detailed analysis is framed questionnaire has been issued to customers of both represented through the following tools, public & private sector banks that are located in Coimbatore district by issuing and collecting directly Percentage analysis from the respondents the filled questionnaire. Chi - square analysis Average score analysis Sample size: From the total population who make use of internet Table showing the data‟s of percentage analysis banking, due to time constraints only 160 respondents PROFILE OF have been selected on convenient random sampling CUSTOMERS method to evaluate the customer satisfaction in internet Demographic banking. Number (N) Percentage % variables
Age 32 (Mean) 100 Tools used for the study: Male 122 76 Simple percentage analysis Female 38 24 Chi – square analysis No schooling / Average score analysis 20 12 Sign only
Up to Middle LIMITATION OF THE STUDY 86 54 school The analysis was made within Coimbatore city High school 32 20 only. Under The time period for the project was limited to just Graduation and 31 19 three months. above
Small business 31 19 REVIEW OF LITERATURE owner Employee 26 16 Divya Singhal and V. Padhmanabhan, (Dec 2008) “A Housewives 19 12 study on customer perception towards internet banking: Daily wage / Identifying major contributing factor”, Internet banking is 17 11 casual labour becoming is increasingly becoming popular because of Domestic worker 13 8 convenience and flexibility. The present paper explores Part time the major factors responsible for internet banking based 13 9 employed on respondents‟ perception on various internet Professional applications. The study employs primary data as well as 11 7 secondary data. Secondary data was collected from workers different published source. Primary data was collected by structured survey. Thus, providing internet banking is
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CHI –SQUARE ANALYSIS H1: There is a significant relationship between Hypothesis personal variable and study variable of internet H0: There is no significant relationship between banking personal variable and study variable of internet banking Degree of Accepted/ S.no Variables P value X2 value freedom Rejected
1 Gender and awareness of internet baking 4 9.488 10.24 Rejected
2 Age and awareness of internet banking 12 21.026 1.56 Accepted Educational qualification and factors influence 3 15 24.996 46.23 Rejected on usage of internet banking Occupation and factors influence on usage of 4 9 16.919 9.465 Accepted internet banking Monthly income and average cost perceived in 5 15 24.996 75.69 Rejected internet banking Type of account holder and purpose of using 6 5 11.071 11.3 Rejected internet banking Annual saving of a customer of a bank and 7 12 21.026 49.50 Rejected customer satisfaction Level of significance: 5%
Interpretation: saving of a customer of a bank and customer From the above table it can inferred that, satisfaction. In serial number 1: The chi square value is more than the table value. Hence the null hypothesis is rejected. AVERAGE SCORE ANALYSIS There is a significant relationship between gender and awareness level of respondents. Factors High Satis Neutr Dissati Highly Tot In serial number 2: The chi square value is less than ly fy al sfy Dissati al the table value. Hence the null hypothesis is accepted. Satis sfy Sco fy re There is no significant relationship between age and Convenie 120 116 51 40 10 2.2 awareness level of respondents. nt In serial number 3: The chi square value is more than Perceive 130 100 36 42 16 2.1 the table value. Hence the null hypothesis is rejected. d cost There is a significant relationship between Transacti 155 104 48 28 13 3.3 Educational qualification and factors influence on on speed usage of internet banking. Risk free 140 120 39 42 8 2.3 In serial number 4: The chi square value is less than Security 90 96 96 40 6 2.2 the table value. Hence the null hypothesis is accepted. Promotio 115 112 42 38 16 2.1 There is no significant relationship between nal Occupation and factors influence on usage of internet Services 100 116 63 28 16 3.0 banking Availabil 140 144 42 30 7 2.4 ity In serial number 5: The chi square value is more than the table value. Hence the null hypothesis is rejected. There is a significant relationship between Monthly INTERPRETATION income and average cost perceived in internet It is clear from the above table out of total respondents banking. taken for the study, majority of the respondents „Highly In serial number 6: The chi square value is more than Satisfied‟ with transaction speed and services offered by the table value. Hence the null hypothesis is rejected. internet banking, majority of the respondents „Satisfied‟ There is a significant relationship between Type of with various services offered by the internet banking, account holder and purpose of using internet banking. majority of the respondents „Neutral‟ with availability of In serial number 7: The chi square value is more than internet banking anywhere, majority of the respondents the table value. Hence the null hypothesis is rejected. are „Dissatisfied‟ with convenience, secured and risk free There is a significant relationship between annual services, majority of the respondents „Highly Dissatisfied‟
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with cost perceived and promotional activities of internet The processing speed should be increased for fast use banking. of all service.
The result inferred that majority of the respondents stated CONCLUSION „Highly Satisfy‟ with transaction speed and various services offered in internet banking. Now a day, Due to increase in competition, customer satisfaction is considered to be the most important think in FINDING, SUGGESTIONS AND banking industry. So the bankers are in the position to apt CONCLUSIONS to the information technology to change the way of FINDINGS OF PERCENTAGE ANALYSIS: service to attract customers and increase their satisfaction level. This study gives information about internet banking Most of the customers were male and their services methodology, design and validation of questionnaire and factor analysis were used to enhance Majority of the customers belongs to the age Group the reliability of findings. of 25 – 35 years.
Most of the customers were under graduates. Most of the customers were employee. REFERENCES: Majority of the customer hold savings account in a [1]. Abukhzam M and Lee A (2010), “Factors Affecting bank Bank Staff Attitude Towards E-Banking Adoption in Most of the customers have an annual savings below Libya”, EJISDC, Vol. 42, No. Rs.1,00,000/- [2]. Alam Mahtab and Ankita M. Soni (2012). Customer Most of the customers came to know about online satisfaction of internet banking and theory of big push: banking through advertisement. An analytical study with special reference to Most of respondents have recommended about use of [3]. Selected customers in Vadodara city. Ninth AIMS online banking to friends, relatives and their International Conference on [4]. Management, 941-947. association. [5]. Calisir F. and Gumussoy, C. A., (2008), “Internet Most of the respondents having internet banking banking versus other banking channels: Young facility in their private sector banks. consumers‟ view”, International Journal of Information Majority of the respondents used their internet Management, Vol.28, pp. 215-221. banking facility weekly. [6]. Centeno, C. (2004), “Adoption of Internet services in Most of the respondents are used internet banking for the Acceding and Candidate Countries, lessons from the the purpose of online bill payment and fund transfers. Internet banking case”, Telematics and Informatics, Vol.21, pp. 293-315. [7]. Cooper R G (1997), “Examining Some Myths About FINDINGS OF CHI-SQUARE ANALYSIS: New Product Winners”, in R Katz(Ed.), The Human Side Majority of the personal factors like gender, age, of Managing Technological Innovation, pp. 550-560, educational qualification and occupational status of Oxford. the respondents have directly influence on the study [8]. Daniel E (1999), “Provision of Electronic Banking in the factors like awareness level, factors influenced and UK and Republic of Ireland”, International Journal of purpose of using internet banking facility. Bank Marketing, Vol. 17, No. 2, pp. 72-82. [9]. Durkin, M., Jennings, D., Mulholland G. and Worthington, S. (2008), Key influencers and inhibitors FINDINGS OF AVERAGE SCORE ANALYSIS: on adoption of the Internet for banking, Journal of Majority of the respondents stated „Highly Satisfy‟ Retailing and Consumer Services, Vol.15, pp. 348-357. with transaction speed and various services offered in [10]. Geetha K.T. and Malarvizhi “Acceptance of E- internet banking. Banking among Customers (An Empirical Investigation in India)”, Journal of Management and Science Volume SUGGESTIONS 2. The bank must provide more advertisement in rural [11]. Guerrero, M. M., Egea, J. M. O. and Gonzalez, M. V. areas so that the common people also can of online R. (2007), “Application of the latent class regression methodology to the analysis of Internet use for banking banking. transactions in the European Union”, Journal of Business The bank employees should maintain good and Research, Vol.60, pp. 137-145. cordial relationship with their customers. [12]. Himani Sharma (2011), “Bankers‟ Perspectives on E- The banks must provide frequent updates of their Banking and Its Challenges: Evidence from North India” online banking services to customers. The IUP Journal of Bank Management, Vol. X, No. 4, The procedure for usage of online banking must be in 2011. a simple mode so that a common man can make easy [13]. Kuisma T, Laukkanen T and Hiltunen M (2007), “Mapping the Reasons for Resistance to Internet use of it. Banking: A Means-End Approach”, International Journal
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of Information Management, Vol. 27, No. 2, pp. 75-85. [17]. Nath R, Paul S and Monica P (2001), “Bankers‟ [14]. Kaleem A and Ahmad S (2008), “Bankers‟ Perceptions Perspectives on Internet Banking”, e-Service Journal, of Electronic Banking in Pakistan”, Journal of Internet Vol. 1, No. 1, pp. 21-36. Banking and Commerce, Vol. 13, No. 1. [18]. Sathya M (1999), “Adoption of Internet Banking by [15]. Liao Z and Cheung M T (2002), “Internet-Based E- Australian Consumers: An Empirical Investigation”, Banking and Consumer Attitudes: An Empirical Study”, International Journal of Bank Marketing, Vol. 17, No. 7, Information & Management, Vol. 39, No. 4, pp. 283- pp. 324-334. 295. [19]. Suganthi B and Balachandran P (2001), “Internet [16]. Nancy B, Lockett A, Winklhofer H and Christine E Banking Patronage: An Empirical Investigation of (2001), “The Adoption of Internet Financial Services: A Malaysia”, Journal of Internet Banking and Commerce, Qualitative Study”, International Journal of Retail and Vol. 6, No. 1. Distribution Management, Vol. 29, No. 8, pp. 390-398.
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Mobile Bank in the Transformation in Banking System
Mrs.R.Saranya.,MBA.,M.Phil. V.S.Prabhu., MBA.,M.Phil., Asst. Professor, Asst.Professor, Dept of Management Studies, Dept of Management Studies, NIFT-TEA college of Knitwear Fashion, NIFT-TEA college of Knitwear Fashion, Mudalipalayam, Tirupur-641606. Mudalipalayam, Tirupur-641606.
Abstract: Retail Marketing has undergone a high-tech payment systems. Mobile payments a reanatural evolution makeover over the past few years. Typically slow to react e-payment scheme s that will facilitate mobile commerce. to technological change, retail banks are finally A mobile payment or m-payment may be defined, for our recognizing the benefits it provides to consumers as well purposes, as any payment.Where a mobile device is used as the cost savings it gives the firm. One of banking‟s to initiate, authorize and confirm an exchange of financial initial forays into technology was the introduction of the value in return for goods and services. Mobile devices now ubiquitous automatic, or ATM, as an alternative to may include mobile phones, PDAs, wireless tablets and human bank tellers. Today, ATMs can handle all sorts of any other device that connect to mobile common banking transactions in addition to cash telecommunication network and make it possible for withdrawals, such as accepting deposits, transferring payments to be made. The realization of mobile payments balances or paying bills. With the advent of mobile will make possible new and unforeseen ways of devices and the popularity of the app economy, these convenience and commerce. Unsuspected technological financial institutions are now transitioning to mobile innovations are possible. Music, video on demand, banking. The increased prevalence of mobile phones location based services identifiable through mobile provides exciting opportunities for the growth of mobile handheld devices – procurement of travel, hospitality, banking (m-banking). This paper reviews the emerging entertainment and other uses are possible when mobile research literature on banking. It presents a classification payments become feasible and ubiquitous. Mobile framework for m-banking research based on 65 m- payments can become a complement to cash, cheques, banking papers published between 2000 and mid-2010 in credit cards and debit cards. It can also be used for Information Systems (IS), technology innovation, payment of bills (especially utilities and insurance management, and marketing journals, and major IS premiums) with access to account-based payment conferences. These papers are classified into five main instruments such as electronic funds transfer, Internet categories: m-banking overview and conceptual issues, banking payments, direct debit and electronic bill Features & Benefits of Mobile Banking, Current presentment. Several mobile payment companies and operating practices of commercial banks, Mobile initiatives in EU have failed and many have been banking/payment practices in Indian Commercial Banks discontinued. In Europe and North America with few and Challenges in India strategic, legal and ethical issues. exceptions such as Austria, Spain and Scandinavian It is expected that the comprehensive list of references countries the development of mobile payments has not and assessments presented in this paper will provide a been successful. However, mobile payment services in useful anatomy of young m-banking literature to anyone Asia have been fairly successful especially in South who is interested in m-banking and help stimulate further Korea, Japan and other Asian countries (e.g., Mobile interest. Suica, Edy, Moneta, Octopus, and GCash). NTT DoCoMo has 20 million subscribers and 1.5 million of INTRODUCTION: them have activated credit card functionality in Japan. There are 100,000 readers installed in Japan. The main Three billion people are expected to own mobile phones difference between successful implementations of mobile in the globe by 2012.More than 500 million people are payment services in the Asia Pacific region and failure in expected to have mobile phones in India. Mobile Europe and North America is primarily attributed to the commerce is a natural successor to electronic commerce. „payment culture‟ of the consumers that are country- The capability to pay electronically coupled with a web specific. site is the engine behind electronic commerce. Electronic commerce has been facilitated by Automatic Teller In this paper we present an overview of the mobile Machines (ATMs) and shared banking networks, debit technology landscape and address the concomitant issues and credit card systems, electronic money and stored that arise with the introduction of mobile payment value applications and electronic bill presentment and services.
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Mobile Banking Nature and Importance: outstanding loan repayment dates, dates for the payment of monthly installments or simply tell them that a bill has A mobile payment service in order to become acceptable been presented and is up for payment. in the market as a mode of payment the following conditions have to be met: The customers can then check their balance on the phone Simplicity and Usability: The m-payment application and authorize the required amounts for payment. The must be user friendly with little or no learning curve to the customers can also request for additional information. customer. The customer must also be able to personalize They can automatically view deposits and withdrawals as the application to suit his or her convenience. they occur and also pre- schedule payments to be made or cheques to be issued. Similarly, one could also request for Universality: M-payments service must provide for services like stop cheque or issue of a cheque book over transactions between one customer to another customer one‟s mobile phone. There are number of reasons that (C2C), or from a business to a customer (B2C) or between should persuade banks in favor of mobile phones. They businesses (B2B). The coverage should include domestic, are set to become a crucial part of the total banking regional and global environments. Payments must be services experience for the customers. Also, they have the possible in terms of both low value micro-payments and potential to bring down costs for the bank itself. high value macro payments. Through mobile messaging and other such interfaces, Interoperability: Development should be based on banks provide value added services to the customer at standards and open technologies that allow one marginal costs. Such messages also bear the virtue of implemented system to interact with other systems. being targeted and personal making the services offered more effective. They will also carry better results on Security, Privacy and Trust: A customer must be able to account of better customer profiling. Yet another benefit trust a mobile payment application provider that his or her is the anywhere/anytime characteristics of mobile credit or debit card information may not be misused. services. A mobile is almost always with the customer. As Secondly, when these transactions become recorded such it can be used over a vast geographical area. The customer privacy should not be lost in the sense that the customer does not have to visit the bank ATM or a branch credit histories and spending patterns of the customer to avail of the bank‟s services. Research indicates that the should not be openly available for public scrutiny. Mobile number of footfalls at a bank‟s branch has fallen down payments have to be as anonymous as cash transactions. drastically after the installation of ATMs. As such with Third, the system should be foolproof, resistant to attacks mobile services, a bank will need to hire even less from hackers and terrorists. This may be provided using employees as people will no longer need to visit bank public key infrastructure security, biometrics and branches apart from certain occasions. With Indian passwords integrated into the mobile payment solution telecom operators working on offering services like architectures. money transaction over a mobile, it may soon be possible for a bank to offer phone based credit systems. This will Cost: The m-payments should not be costlier than existing make credit cards redundant and also aid in checking payment mechanisms to the extent possible. A m-payment credit card fraud apart from offering enhanced customer solution should compete with other modes of payment in convenience. The use of mobile technologies is thus a terms of cost and convenience. win-win proposition for both the banks and the bank‟s customers. The banks add to this personalized Speed: The speed at which m-payments are executed communication through the process of automation. For must be acceptable to customers and merchants. instance, if the customer asks for his account or card balance after conducting a transaction, the installed Cross border payments: To become widely accepted the software can send him an automated reply informing of m-payment application must be available globally, word- the same. These automated replies thus save the bank the wide. need to hire additional employees for servicing customer needs. Advantages of Mobile Banking: A very effective way of improving customer service could COMMERCIAL BANKS PRACTICES IN INDIA AN be to inform customers better. Credit card fraud is one OVERVIEW such area. A bank could, through the use of mobile Activities and Primary Functions of Commercial technology, inform owners each time purchases above a Banks Deposit Acceptance: Being a short term credit certain value have been made on their card. This way the dealer, the commercial banks accept the savings of owner is always informed when their card is used, and public in the form of following deposits: Fixed term how much money was taken for each transaction. deposits, Current A/c deposits, Recurring deposits, Similarly, the bank could remind customers of Saving A/c deposits, Tax saving deposits, Deposits
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for NRIs, Lending Money. A second major function governments. Therefore, any mobile banking must be is to give loans and advances and thereby earn inexpensive enough to be attractive for the end-customer interest on it. This function is the main source of over existing methods. income for the bank. Overdraft facility: Permission to a current A/c holder of withdrawal more than to what Regulatory Challenges: Although the RBI is supportive he has deposited. Loans & advances: A kind of of mobile banking in India, there are many regulations secured and unsecured loans against some kind of that are being put into place: security. Discounting of bill of exchange: in case a person wants money immediately, he/she can present i) Restricted to Financial Institutions: The guidelines the B/E to the respective commercial bank and can state that only existing financial institutions and get it discounted. Cash credit: Facility to withdraw a banks are allowed to offer mobile banking. Although certain amount of money on a given security. the guidelines cover Microfinance Institutions Secondary Functions of Commercial Banks Agency (MFIs), significant economies of scale cannot be functions: Bank pays on behalf of its customers as an achieved by these due to existing large fixed costs. agent and gets paid fee for agency functions such as: For a very inexpensive solution, it would have been Payment of taxes, bills Collection of funds through more effective to allow non-profit organizations or bills, cheques etc. Transfer of funds, Sale-purchase of evangelical organizations to build their own MFI shares and debentures, Collection/Payment of without being encumbered by large existing dividend or interest, Acts as trustee & executor of infrastructure. properties Forex Transactions, General Utility ii) Rupee Transactions: All transactions must be done Services: locker facility, Credit Creation: It is one of only in India‟s national currency, the rupee. While the most outstanding functions of commercial banks. this may not be a threat in the beginning, this may A bank creates credit on the basis of its primary pose a constraint for interoperability between Indian deposits. It further lends the money which people has mobile payments and the world. Also, it excludes deposited with the bank also charge interest on this providers from the lucrative remittance market in money, which is much higher than what it actually India and limits areas from which mobile operators pays to depositor. Thus bank generates money for can be profitable. itself. List of Abbreviations AML Anti Money iii) Existing Account Holders: The guidelines also state Laundering CDMA Code Division Multiple Access that only those having a valid bank account would be GPRS General Packet Radio Service GSM Global allowed mobile banking. This limits the full potential System for Mobile IDS Intruder Detection System of mobile banking to extend micro-credit and bring IRDA Infrared Data Association ISO International banking to the large number of unbanked customers Standards Organization ( Sometimes also written as in India. Demographic Challenges: India has 18 International Organization for Standardization) IVR official languages which are spoken across the Integrated Voice Response KYC Know Your country. The state governments also are dictated to Customer MNO Mobile Network Operator mPIN correspond in their regional language for official Mobile Personal Identification Number MPFI Mobile purposes. Additionally, two-thirds of the population Payment Forum of India NFC near Field in India is illiterate, creating difficulties in communication. OTP One Time Password PCI-DSS deployment of mobile banking solutions. For a pan- Payment Card Industry Data Security Standard PIN Indian mobile banking solution, this will be Personal Identification Number RFID Radio cumbersome to overcome. Frequency Identification SIM Subscriber Identity Module SMS Short Messaging Service USSD Transaction Services Model For Mobile Banking Unstructured Supplementary Service Data WAP Wireless Application Protocol
CHALLENGES WITH ADOPTION OF MOBILE BANKING Economic Challenges: The rural population in India is spread across 600,000 villages, each with a low transaction value. Profitability can only be achieved by large volumes, requiring significant initiative from financial institutions. Unlike the very successful M-PESA of South Africa, whose model has been very successful due to the lack of alternative payments in South Africa, India does possess some infrastructure in the forms of postal payments, reasonable transport and local
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Security issues in mobile banking Mobile banking have storage capacity. If we take internet banking it is realized two zones, one is the handset held by the user and the that there are powerful computer systems and well other is the bank zone. Literature shows that possibility of defined complex encryption process to ensure the security threat exists for transaction of payment using security. Mobile device have low computational capacity mobile device. and hence we are unable to apply complex cryptographic system .Due to advancement in technology, it is now A mobile banking and Security issue with WAP (Wireless necessary to provide end-to-end security. It means that if Application Protocol) WAP is used for communication user uses his/her mobile device for mobile banking then between devices like digital mobile phones, internet, PDA the data transacted are secure at the bank end and not at etc. Through WAP customer can realize more the user end, thus leaving the data vulnerable to attacks. It functionality of internet banking. Encryption process is was noted that it is difficult to provide end to end security currently used for secure data transmission between bank through WAP. The reason is that the data is not encrypted and users but the problem is that this encryption process is at gateway during the switching of protocol process, not good enough for the protection of sensitive data which leads to security concern for mobile banking in between bank and customer. The reason is that security WAP. methods require more powerful computing and high
ISSUES AND RISK
Authentication Risks and Issues: current status of their account. But all customers of the One of the authentication method used in mobile banking bank are not ready to use this service because of some is the login method. However PINS authentication security issues. They are not ready to adopt the mobile method is an old method and many security issues such as banking systems as it brings inconvenience to the users password and id theft were discovered in this method. In assuming that it cannot prevent direct or indirect attacks such cases, the secret may be revealed and this results in .The security mechanism adopted by the banks face many customer‟s distrust on the security service company. Bank security issues like being attacked by unauthorized users follows some security mechanisms in mobile banking. which is of highest priority in terms of security. If the While the customers and the banks are bound to each device gets stolen then the hackers or unauthorized other. This security mechanism is done by identifying the persons may find the password from the log files or saved customer‟s phone number, SIM card number, pin number draft files. Many customers save their password in their etc. Customer likes to use the mobile banking technology mobile or they may keep the password under auto fill because of its mobility as they can access the bank settings of the form, this loophole can be easily used by anywhere and in any situation. They can transfer their the unauthorized person. Uneducated people are less money from one account to another account faster in a aware of these issues and thus leading to loss of trust by user-friendly environment. And also they can check the customers.
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
Authentication Model: There are two types of services provided to the customer which are as follows: i) The bank provides the service directly to the customer ii) Banks share their facility to 3rd party service provider
Bank provides the service directly to the customer Architecture
If a mobile bank customer wishes to process the transaction, for example, transaction of money from one account to another account he/she must first authenticate themselves to the bank server through firewall. And the security application at the server has to verify the user through password or pin number and the server allows the This is a setup which shows the Internet web server, customer to do transactions .In this method, there are database, application server and firewall at the bank‟s some security issues such as server failure, system crash, side. The above architecture is an example of mobile and malevolent intrusion. These are serious problems and banking service handled directly by the bank. In this will not make the server come back in normal form. So application, server plays an important role to provide many banks do not prefer this method. services to the customer. The database will be accessed by transactions both from the bank and from mobile device.
Banks share their facility to 3rd party service provider
Familiar banks outsource their facility to 3rd party unknown 3rd party. And also customers need to pay extra architecture i.e. handling mobile banking customer charge for their service. service to 3rd party service provider. This service provider may lie close to the bank geographically or it may be in This is a list of issues that need to improve by the 3rd party other country. They handle the customer through mobile service. or internet. They are responsible for secure transaction Network Security& Control and management of the customer data. This method also Parental Controls has authentication issues as they follow the same Customer Privacy & Informed permission authentication method like verifying the pin or password Liability rd with the database and it also involves 3 party server. Fraud Prevention (or)Authentication There is no trust in securing the data of customers such as Interoperability (or) Standardization bank account details and customer addresses as they are Data Access & Use managed by 3rd party service provider. So customer feels Financial Risks (or) Reward no security to share their password and details to the
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SMS based Mobile banking SMS based mobile banking is CONCLUSION: a convenient and easy way for accessing bank but there are end-to-end security problems. These problems exist in Study shows mobile handset operability is an important SMS, GPRS protocols and security issues for transaction issue in mobile banking, due to availability of various of money. Today, most of the banks in the world offer handset models i.e supporting different type of technology SMS based mobile banking. If we take any mobile in the market. To resolve it service providers i.e. banks banking system we can realize that customers also interact must coordinate with mobile handset manufacturers so with databases, files and important records through that all handsets irrespective of manufacturer and mobile phone. In developing countries like Bangladesh technology (GSM or CDMA) become compatible with SMS banking is gaining popularity because of low cost single mobile banking technology. Majority customers and low bandwidth requirement. The main advantages of perceived „privacy and security‟ a critical issue. Here SMS are the simplicity and easiness to use. Due to plain banks are advised to educate customers on this issue to text property, SMS is not suitable for authentication. So raise their awareness. Especially for the customers‟ lacking of privacy, integrity and security are the main worries like losing money if once mobile handset is lost issues involve in SMS banking. SMS banking is useful for (substantial number of respondents worried about it). small consumer and for small merchant. SMS banking is Secondly banks and telecom operators are suggested to also useful for travelers because customer can buy ticket draft comprehensive joint policy regarding security & for buses and trains easily and in urgent situations without privacy so that customers can be assured at both banks going to the respective stations. and telecom operator‟s levels while doing mobile banking. „Standardization‟ is another major issue as lack SMS encryption: As default data format for SMS is of standardization of mobile banking services in the plaintext. Currently end to end encryption is not available. country resulted in increased complexity while using The only encryption involved at base transceiver station mobile banking services (especially when using mobile and SMS bank server during transmission. The encryption banking services of multiple banks). algorithm used is A5 which is proven to be defenseless. SMS Spoofing Attack: The most dangerous attack in SMS REFERENCES banking is spoofing attack where attacker can send messages on network by manipulating sender‟s number. [1]. Suoranta M (2003) Adoption of mobile banking in Due to spoofing attack, most of the organizations are not Finland. Doctoral thesis, Jyva skyla, Finland, adopting mobile banking through SMS. [2]. Weisbaum H (2015) why has Mobile banking growth stalled? Blame Hackers. Virus Attacks in mobile banking: There are more than [3]. Marous J (2015) Has Mobile Banking Usage Reached a fifty thousand different types of computer viruses, internet Plateau? The Financial Brand. malicious program and Trojans. Software like Trojan [4]. Mishra V, Bisht SS (2013) Mobile banking in a horses can easily take up password on the web browser or developing economy: A customer-centric model for policy formulation. Telecommunications Policy 37: 503- any cached information on operating system. Malicious 514. codes are written for remote communication. Zeus Trojan [5]. Devadevan V (2013) Mobile Banking in India – Issues targeted mobile bank users. Zitmo has been used by and Challenges. International Journal of Emerging attackers to defect SMS banking. Zeus is commonly used Technology and Advanced Engineering 3: 516-520. to steal mobile transaction authentication number or [6]. Muhammad Bilal,Ganesh Sankar,“Trust & Security password. issues in Mobile banking and its effect on Customers, School of Computing, Blekinge Institute of Technology, Risk with Digital Signature: To reduce hardware cost, SE-371 79 Karlskrona Sweden, 2011. designer may prefer digital signature. Digital signature is [7]. T. Wilson, ― Malicious mobile ode, Internet Business, pp. 52-3, Feb.1999. efficient that‟s why most companies are interested in [8]. Suoranta, M., “Adoption of mobile banking in Finland”, digital signature for authentication. It is founded that Jyväskylä Studies in Business and Economics, 28, 2003. digital signature is computational intensive. With [9]. Mas, I., “Realizing the Potential of Branchless Banking: unsigned values for example date, amount, they differed Challenges Ahead”, In: Focus Note 50. Consultancy from transaction to transaction. So a signed template can Group to Assist the Poor (CGAP), Washington, D.C., be used with several unsigned values like date, amount 2008. etc.
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
New Digital Gateways for Payments
Dr.V.Abirami Yashoda R Ganesh Professor in Management Ph.D Research Scholar -Management Dr. N.G.P. Arts and Science College Dr. N.G.P. Arts and Science College Coimbatore Coimbatore
Abstract Payments are at the centre of everyday banking. This article summarizes the key online payment trends in However, the payments industry is in the midst of 2017 that are redefining the industry and making things dynamic change. The existing system is being outdated more comfortable for consumers. and the ecosystem is evolving rapidly. New, innovative and non-rational competitors will be increasing their INTRODUCTION: market share to up to 10 per centof overall revenue by 2020. These trends have given rise to the importance of The adoption of new mode of payment mode are on the providing aseamless, customer centric payment rise with instruments such as wallets, card and mobile experience – to assist in remaining front of mind for becoming the mainstream. A disruptive mix of consumer consumers. – behavioral changes and emerging technologies create huge opportunities in the payment industry. Since the In the last few years we have witnessed the growth of the birth of ecommerce, global card payments have been the ‘financial wellness’ movement championed by various technological backbone of a rapidly expanding market. startups in the banking sector. Innovative payment Such unprecedented technological innovation and rapidly platforms offer customer centric solutions which offer a changing business needs has resulted in an increasingly user-friendly purchasing process, with seamless checkout demanding regulatory landscape. Increasing numbers of solutions with not multiple steps in checkout and fields to payment vehicles and Internet-enabled devices are coming fill out. Merchants look for solutions with fast on to market, requiring businesses to process on multiple boarding, with dead-simple integration process, channels. This is omnichannel retail. innovative technology and responsive customer support by which the startups are increasingly offering better, REDEFINING THE INDUSTRY: faster and more securely than with traditional banks. The online payment industry is witnessing fast A generation ago, a consumer would visit Main Street to improvements in technology that are making it simple to fulfill all of one’s shopping needs and undoubtedly pay in transfer funds and accept payments. In 2017, these cash. A lot has changed since then. The arrival of personal developments have become more efficient and common. computers in homes and the launch of companies, such as This article summarizes the key online payment trends in Amazon, Flipkart, Snapdeal, Alibaba Group and eBay, in 2017 that are redefining the industry and making things the 2010s acquainted consumers to the new concept of more comfortable for consumers. shopping online. The popularization of smart phones within the last decade then introduced consumers to Cash is Passe anytime, anywhere commerce. The world over cash payments, ATM and cheque usage is declining as digital payments are becoming more popular. Improved security measures and convenience are likely to This is because online payments offer more value, be the key drivers of growth of digital payments in mature control, and convenience in this digitalized world and emerging markets. Technology has reinvented compared to cash. Consumers can store their account commerce. It changed what consumers expect to information and preferences securely so that they can experience in physical retail and foodservice outlets. It personalize and automate payments anytime, anywhere opened the door to new ways of engaging with brands when they wish to buy anything. across the path to purchase. It altered the role the payments industry plays in the transaction. Stemming Other advantages are you can manage your budgets and from this week’s Money20/20 event, the below takes a finances more efficiently and control your expenses. deep dive into three of the most impactful technology- Vendors are boosting this trend by offering extended driven trends reshaping payments. services and offers that are customized for customers’ needs and location. The online payment industry is witnessing fast improvements in technology that are making it simple to Mobile Payments are in transfer funds and accept payments. In 2017, these Mobile payments are not yet completely dominant but developments have become more efficient and common.
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they are making fast inroads thanks to the availability of smartphone users opine they would like to have loyalty Near Field Communication (NFC) smartphones. Apps are schemes on their devices and merchants see the benefit of offering friendlier interfaces and shops are using MCX offering them the same. readers or NFC-powered POS terminals to encourage consumers to use their mobile phones to make convenient Another benefit is sellers get insightful data on customer payments. behavior as well as effective ways to convey their messages to their patrons. It is a win-win for all as A recent survey reveals that a good percentage of customers reap the benefits of being loyal to their shoppers used their mobile phones for holiday shopping preferred brand and payment companies can offer faster and have downloaded their favorite retailers’ apps on their and more secure payment methods that do not violate data devices. Brands like Facebook, Google, Samsung, and ownership or consumer privacy. Apple are capitalizing on this trend by making use of payment services that enable their customers to use their Advanced Payment Features smartphones to make payments. Payment providers look to serve consumers in multiple commerce channels by expanding their capabilities to Smartwatch Payments are the Next Big Thing make use of reliability testing, quicker product If you thought mobile payments are revolutionary, development, application program interfaces (APIs), and technology has already gone one up with smartwatch cloud-based data warehousing. These technologies help payments. You can now simply tap or wave your NFC- payment companies to compare consumer spends and powered smartwatch over a POS machine at the shop to minimize risk and fraud. make the payment. So the smartwatch is not just fashionable and trendy, it has become payable too. Strategic Alliances Besides smartwatches, other wearables such as the Lyle & Merchants need to fully support their customers through Scott bPay jacket, bPay Band, and the Jawbone UP4 can their decision cycle which consists of searching, store your debit or credit card data. evaluating, buying, paying, and brand loyalty. They also need to track buyers across various shopping channels Mobile Apps Dominate like mobile and online. To help merchants’ needs, Mobile apps are changing the manner in which consumers payment providers are looking to expand their products buy and pay for services and products. Domino’s Pizza by forming alliances with cloud-based applicators, data reports that 35% of its global sales are through mobile analytics specialists, app developers, and digital apps, Groupon says 50% of its transactions are on mobile, innovators to offer integrated payment solutions. Thus, it and Taco Bell informs that two million users downloaded has become important to form technological and strategic its mobile application. The advantages of mobile apps are partnerships to stay relevant and competitive. more payment options, tracking, coupons, accuracy, personalization, and speed. Blockchain Technology is Gaining Ground Blockchain is the key technology behind Bitcoin and Contextual Commerce is the Trend many established financial institutions like Capital One, The integration of mobile devices, apps, and social media Citi Ventures, and Visa are investing in Chain, a is revolutionizing the manner in which consumers pay for blockchain services provider. This technology is services and products. Sellers are boosting their becoming important and can impact the entire financial conversion rates by making the purchase process simpler, industry because it has the capability to offer convenient engaged, and more relevant for consumers. The customer and secure online payments to users. Among its many is already present on their app or website and is ready to benefits is the capability to analyze and process a huge buy, so why drive them away to another seller? This is the amount of digital data. The technology can significantly reason Pinterest, Twitter, and Facebook are making good improve cash management in banks and make the process use of the impulse buy button to tempt customers and more transparent. It can reduce the time needed for the ensure merchants get faster payments. Smart sellers are settlement window to just a few hours from days and also focusing on commerce, context and convenience to boost eliminate risk. their sales. Subscription Services are Becoming Popular Integration of Mobile Payments with Loyalty The e-commerce arena is witnessing the growing Merchants and payment companies are integrating popularity of subscription services such as the Dollar payment services with loyalty features to differentiate Shave Club. Therefore, it is not surprising that their offerings. Starbucks has hitched its loyalty scheme enterprising companies like Adobe and Microsoft have with its payment app. Consumers get loyalty points when successfully adopted the subscription model. The reason they use their mobile device to pay for their coffee and for this trend is Millennials prefer the various pricing they can track their points easily. A good percentage of models offered by subscription and they can also stay
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connected across the multiple devices they use in their transactions compared to just $235 billion in 2014. daily life. The launch of new debit and credit cards that utilize cryptography, like EuroPay, MasterCard and Visa, EMV Usage has resulted in decreased fraudulent activity. These EMV stands for ‘Europay, MasterCard, and Visa’ and cards detect modified transactions and require a pin these companies are issuing new credit cards for added protection. For merchants that accept chip with embedded microprocessor chips. These secure cards cards, counterfeit fraud fell 26% in January compared have become mandatory in the US and consumers can to last year. make safer payments as this technology makes it more Mobile wallet brands such as Paytm, Google wallet, difficult to steal data. However, it will take time for the PhonePe, Amazon payment and FreeCharge, offer credit card companies to ensure all their cards have the services including online payment, online ticket secure embedded microprocessor chip. booking, online gifts, cashback offers, various coupons and loyalty cards. The market is predicted to Big Data Benefits reach $142 billion by 2020. Big data crunching is throwing up predictive analytics Bitcoin’s digital currency is growing at incredible that is enabling companies to offer more relevant rates, with more than $1.46 trillion in circulation as of discounts, promotions, coupons, and deals to their loyal June 1, 2016. Blockchain, a permission-less, customers by reviewing their purchase history and distributed database technology for managing and shopping habits. Consumers are indicating that they prefer recording transactions, could help banks reduce the to be offered loyalty program rewards inside a mobile confusion and cost of numerous complex processes. wallet. This trend has been successfully exploited by enterprising brands like Starbucks and Kohl’s and more The Top 20 Digital Wallets in India: companies are expected to follow them. 1) Airtel Money: With the Airtel Money app, users can easily recharge Beacons and Sensors prepaid accounts or pay postpaid bills. You can also shop This technology is having a big impact on the payment online if your digital wallet has cash loaded in it. It’s also industry. This is because companies are using it to attract extremely safe as every transaction or payment you make customers with quick sales offers when they visit their requires a secret 4-digit mPin. area. Another benefit is consumers can make purchases and pay more quickly without even stepping inside a 2) Citi MasterPass: store. They can also make advance payments, for Citi MasterPass, a free digital wallet, helps make example, they can order and pay for a pizza on their way checking out while online shopping a speedier process. home. The impact of beacons and sensors is expected to Once you’ve stored all your payment and shipping details grow with more widespread adoption of the Internet of in your Citi Wallet, simply click on the MasterPass button Things. and it will take care of the rest.
Few important adoptions of next gen payments: 3) Citrus Pay: Mobile is the new standard for consumers to make Citrus Pay, one of the top e-wallets in India, it offers a purchases. Numerous threats that have affected traditional Citrus wallet for customers as well as payment solutions payment systems, coupled with new technology, have led to businesses. With a strong base of 800 million to the development of different payment processing customers, it has definitely earned its spot as one of the technologies that are more convenient and secure. It’s best mobile wallets in India. crucial your business is prepared to enter the next generation of payments as the strength of cash vanishes in 4) Ezetap: this digital world. Ezetap, a Bangalore based digital payment solution founded in 2011, offers business owners solutions to Due to its ease of use, mobile payments are preferred accept card payments via electronic devices. It also send by consumers. It’s predicted that within the next year, customers e-receipts through an SMS or email. half of today’s smartphone users will use mobile payments as their preferred method for transactions. 5) Freecharge: About 10% of Americans don’t carry any cash at all Freecharge, one of the most famous names right now and of Americans that do carry cash, the average when it comes to digital payment in India, has been amount is less than $20. It’s predicted that by 2019, known to target the youth in all their promotions. With fewer than 25% of all in-store purchases will be cash- equivalent amount of coupons given for every recharge based transactions. you make, it’s a great option to save while paying your The market for mobile payments is growing quickly. bills online. By 2019, it is expected to be worth $720 billion in
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6) HDFC PayZapp: making online payments available to a wide population. HDFC PayZapp, making digital payment in India simplified with one click payments, is one of the top 14) Mswipe: online wallets in India. Users can easily compare flight Mswipe, the first mobile point-of-sales solution in India and hotel tickets and even buy music or pay bills with the was founded in 2012. They don’t exactly offer an app, but app. Simple connect your debit/credit card once they do provide a machine that can be attached to your and forget to worry about making payments. mobile device to accept card payments. This may not be a digital wallet app but it does support going cashless. 7) ICICI Pockets: While you might find a Pocket card redundant, 15) Ola Money: considering you’re opting for an e-wallet app to avoid Ola Money, launched in 2015, is a digital wallet in India using a card, they do have a pretty neat wallet app. It’s offered by Ola. While it’s majorly being used to make VISA powered and can be used on any Indian website, or payments for Ola cab rides, making cashless traveling a to transfer money to email ids, WhatsApp contacts, and dream come true, it can also be used to buy groceries or also just tap and pay your friends easily. flight tickets and much more.
8) JioMoney: 16) Oxigen: JioMoney, launched recently in 2016 by Jio, is a digital Oxigen, a FinTech company founded in July 2004, is one payment app. With JioMoney, one can receive great of the major providers of digital payment in India. Along discounts and offers. Users can also bookmark their with making online purchases and paying bills, you can frequently visited retailers so shopping can be made also send gift cards to your dear ones. quicker than usual. 17) PayMate: 9)Juspay: PayMate, founded in 2006 by Ajay Adiseshann, launched JusPay Safe is a payment browser with over 650+ PayPOS in 2012, an app for small businessowners to transactions in a day. They offer a browser with which receive payments conveniently via debit cards and credit users can make payments quickly via cards with 2 clicks. cards and also process electronic transactions.
10) LIME: 18) Paytm: LIME, launched by AXIS in 2015, was the first mobile Paytm, launched in 2010, is currently the largest mobile app in India to integrate wallets, shopping, payments, and wallet app in India. With payments via Paytm being banking. Apart from the usual features like making accepted almost everywhere, it’s hard not to simply payments, they also let you analyze what you spend. With switch to it completely. From paying mobile bills to a cool feature that rounds up all your change and invest in buying movie tickets, there’s almost nothing you can’t do a deposit and a shared wallet tool, they’ve definitely with Paytm. earned their spot in the top list of mobile wallets in India. 19) PayUmoney: 11) Mobikwik: PayUmoney, a part of PayU India, is a free payment Mobikwik is a Gurgaon based e-wallet payment system in gateway solution for merchants to collect payments from India that helps its users store their money. Founded in customers via debit/credit cards or net banking, and more. 2009 by Bipin Singh and UpasanaTaku, this digital wallet They also offer SMS and email invoicing for merchants enables users to recharge, pay bills, and make third-party that do not have a website. purchases with one tap. 20) State Bank Buddy: 12) MomoeXpress: State Bank Buddy, a product of State Bank of India, is an MomoeXpress, a Bangalore based digital wallet in India, online wallet in India that’s available in 13 languages. claims to have the fastest checkout system. Though Users (non SBI account holders too) can send money via they’re only available in Bangalore, they have a wide Facebook, or to other bank accounts, book hotels or range of solutions they offer to residents on the city. From movie tickets and much more! paying for your rickshaw ride to salons & spas, there are over 3000 outlets available at your disposal. ULTIMATE PAYMENT TRENDS:
13) MoneyonMobile: Trend 1: Cross-channel payments MoneyOnMobile, authorized by the Reserve Bank of The boundaries between the online world and the offline India, enables users to buy goods, products, and services world are blurring; cross-channel payments are a clear from registered merchants. It’s a multilingual app that trend in 2017 and this is backed up by the evolution of reaches remote areas of the country to millions of users mPOS terminals into SmartPOS terminals. At the same
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time, mobile payments are also becoming ever more is always a factor. Regardless of regulatory standards, popular. Merchants such as Starbucks, Walmart and Kohl what is needed most is for everyone involved to work on in the USA or suppliers including Payback and Orange improving security, while also keeping in mind user Cash have already realized that mobile payments are of friendliness. It is fundamentally to be expected that strategic importance in bridging the gap between the real new technical approaches such as voice, fingerprint or world and the digital world. facial recognition, which combine security with user friendliness, will be increasingly introduced. Trend 2: Seamless checkout Payment evolution is still going strong in the online area CONCLUSION: too. Payment processes must become quicker or fade into the background completely – and they must be done with Improved security measures and convenience are likely to the user’s mobile device. Card-on-file solutions like be the key drivers of growth of digital payments in mature Amazon and Uber or Masterpass solutions are being used and emerging markets. Technology has reinvented more and more by end customers, enabling them to commerce. It changed what consumers expect to complete the payment process with very few clicks, or experience in physical retail and foodservice outlets. It even none at all. The focus is on a smooth shopping opened the door to new ways of engaging with brands experience with an uncomplicated and seamlessly across the path to purchase. It altered the role the integrated payment process. payments industry plays in the transaction. Stemming from this week’s Money20/20 event, the above takes a Trend 3: Internationalization deep dive into three of the most impactful technology- The trend towards internationalization in online retail will driven trends reshaping payments. continue unabated. While digital goods suppliers have been focusing on internationalization for a long time These strategic trends will interact to cause some pretty already, the trend has only just begun to be felt strongly in interesting changes in our markets across the coming physical goods retail. However, for both areas it is years, driven above all by the absolute necessity to restore important not just to offer international payment processes sanity to the cost-benefit calculations around compliance. such as credit cards or PayPal, but to also take into It will be regulatory pressures, not technology drivers, account local features; payment processes which have that shape most decisions in the next few months but we been established within a certain region and are popular understand how to make effective use of new technology there should be supported. Risk management and fraud in responding to those pressures so that’s all good. Here’s detection must also be adapted according to regional to another great year in the world of secure electronic circumstances. Technical approaches such as voice and transactions! fingerprint recognition will set new security standards REFERENCES: Trend 4: Security The guidelines on this published by the EBA (Electronic [1]. https://www.totalprocessing.com/blog/13-trends-in-the- Banking Authority) by order of the EU call for strong 2017-online-payment-market/ two-factor authentication for all payment transactions. [2]. https://blog.wirecard.com/5-ultimate-payment-trends- Only a few exceptions are allowed. If this framework is will-play-huge-role-2017/ adhered to, it will have a huge impact on internet [3]. https://www.sumhr.com/digital-wallets-india-list-online- payments and will require every transaction to be payment-gateway/ authorized by the customer in two ways. Payment security
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A Study on Non-Performing Assets of Banking Sectors in India
Dr.D.Vijayalakshmi Srihari Ramesh Prof., MBA, Anna University - Coimbatore. Student, MBA, Anna University - Coimbatore. [email protected] [email protected]
Shenbagadevi.G Student, MBA, Anna University - Coimbatore. [email protected] Rathnavel Subramaniam Institute of Management Studies
Abstract : Every 4 hours, 1 bank staffer held for fraud. (NPAs) and nowadays these are one of the major concerns On an average, at least one banker is caught and punished for banks in India. Withal the complete elimination of for involvement in fraud every four hours, an analysis of such losses is not possible, but banks can always aim to data compiled by the Reserve Bank of India has keep the losses at an inferior level. revealed. For a developing country like India, a strong banking sector is necessary. Due to the rise in NPAs (Non According to RBI, term loans on which interest or - performing -Assets), the Indian banking sector is facing installment of principal remains overdue for a period of a serious issue. There seems to be no unanimity in the more than 90 days from the end of a particular quarter is proper policies to be followed in resolving this problem. called a Non-performing Asset. Non-performing Asset NPAs reflect the performance of banks. A high level of (NPA) has come forth since over a decade as an alarming NPAs suggests high probability of a large number of threat to the banking industry in our country sending credit defaults that affect the profitability and Net-worth distressing signals on the sustainability and durability of of banks and also erodes the value of the asset. NPAs the affected banks. The positive results of the chain of affect the liquidity and profitability, in addition to posing measures affected under banking reforms by the threat on quality of asset and survival of banks. The Government of India and RBI in terms of the two problem of NPAs is not only affecting the banks but also Narasimhan Committee Reports in this contemporary the whole economy. In fact high level of NPAs in Indian period have been neutralized by the ill effects of this banks is nothing but a reflection of the state of health of surging threat. Despite various correctional steps the industry and trade. It is necessary to trim down NPAs administered to solve and end this problem, concrete to improve the financial health in the banking system. An results are included. It is a sweeping and all pervasive attempt is made in this paper to understand NPA, the virus confronted universally on banking and financial status and trend of NPAs in Indian Scheduled commercial institutions too. The severity of the problem is however banks, the factors contributing to NPAs, reasons for high actually suffered by Nationalized Banks, followed by the impact of NPAs on Scheduled commercial banks in India SBI group, and all the Indian Financial Institutions. and recovery of NPAS through various channels. OBJECTIVES OF THE STUDY INTRODUCTION To study the status of Non-performing Assets of Before the period of economic liberalization in 1991, Indian Banks. quality of asset was not a prime concern in Indian banking To examine the causes for NPAs in banking sectors. sector. Instead of this, it focused on achieving goals such To study the impact of NPAs on Banks. as development of rural areas, opening wide networks, To make appropriate suggestions to avoid future priority sector lending, higher employment generation, NPAs. etc. Although the primitive function of banks are to lend funds as loans to various sectors such as agriculture, METHODOLOGY industry, personal loans, housing loans etc., Accepting deposit involves no risk, since it is the banker who are For our study, we have considered Non-performing indebted to repay the deposit, whenever it is demanded. Assets in scheduled commercial bank which includes On the other hand lending always involves much risk public sector banks, private sector banks and foreign because there is no certainty of repayment. But in recent banks which are listed in the Second Schedule of the times the banks have become very cautious in extending Reserve Bank of India Act, 1934. The study is based on loans. The reason being mounting non-performing assets secondary data. The paper discusses the conceptual
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framework of NPA and it also highlights the current LIMITATION OF THE STUDY status and impact of NPA on these banks during the period of 5 years i.e. from 2013 to 2018. Several reputed The study of non-performing assets of is limited to the research journal including research paper and articles has Indian Banks and till the end of the year 2017-2018. been used by the researchers. Moreover, RBI Report on Reasons for NPAs and Management of NPAs are Trend and Progress of Banking in India for various years, changing with the time. websites and a book on banking has been referred during The study is done in the present environment the study. without foreseeing future developments.
MAGNITUDE OF NPAS (Table – 1)
Indian banks' gross non-performing assets (NPAs) or bad Like SBI, most of the other PSBs' also managed to arrest loans stood at Rs 8.40 lakh crore as on 30 September the rise in bad loans during the quarter. The trend may be 2017. On quarter, the pile has grown only marginally - by an indication that the bad loans at these banks may be 1.31 percent from Rs 8.29 lakh crore as on 30 June 2017. peaking. However, it has to be seen whether the trend will A report in Reuters 3 months had put the figure at Rs 9.5 sustain over the next few quarters. However, gross NPAs lakh crore, including restructured loans, quoting RBI data of some private banks have risen significantly. Yes Bank's obtained through an RTI query. Taking note of the bad loans doubled from Rs 1,364 crore in June quarter to alarming bad loan situation, the government had before 2 Rs 2,720 crore and Axis Bank's widened by 24 percent to months announced a Rs 2.11 lakh crore bank Rs 27,402 crore from Rs 22,031 crore during the same recapitalization plan to help state-run banks to come out period. In five years, by March 2017, gross NPAs of all of the mess. As much as 90 percent of these sticky assets state-owned banks, barring five, have been in double are on the books of government-owned banks. A break-up digits. These five banks are Vijaya Bank (6.6%), State of the NPAs shows that 21 PSBs, or public sector banks, Bank of India (6.9%), Indian Bank (7.5%), Syndicate saw their bad loans remaining flat at Rs 7.33 lakh crore Bank (8.5%) and Canara Bank (9.6%). Two banks now compared with June 2017 figures while that of 17 private have more than 20% gross NPAs—Indian Overseas Bank banks surged by 10.5 percent to Rs 1.06 lakh crore in (22.5%) and IDBI Bank Ltd (21.3%) and five, more than September from Rs 96,201 crore. Industry leader, State 15%. They are Central Bank of India (17.9%), Uco Bank Bank of India which tops the NPA chart, has managed to (17.1%), Bank of Maharashtra (16.9%), Dena Bank restrict the rise in bad loans in the September quarter as it (16.3%) and United Bank of India (15.5%). marginally declined from Rs 1.88 lakh crore in June quarter to Rs 1.86 lakh crore in the September quarter.
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(Table – 2)
The above figure portrays the trend of Gross NPA of higher levels than those in other countries has of late, PSB( Public Sector Banks ) in rupee crore for the period attracted the attention of the public. The Indian banking of 5 years i.e. from 2013-14 to 2017-18. The x-axis system had acquired a large quantum of NPAs, which can represents the years whereas y-axis represents the rupee be termed as legacy NPAs. NPAs seem to be growing in crore of NPA. We can observe here that the Gross of NPA public sector banks over the years. For public sector has been showing upward trend beginning from 2013-14 banks, the gross bad loan ratio could be as much as to 2017-18.In India, the NPAs that are considered to be at 14.2% by March 2018, from 11.4%.
(Table – 3)
The above figure portrays the trend of Gross NPA Private Bank, after peaking in 2014 (3.8%) it has been Sector Banks in rupee crore for the period of 5 years i.e. progressively coming down (2.6% in 2017). Similarly, from 2013-14 to 2017-18. The x-axis represents the years DCB Bank’s net NPAs peaked at 1% of its loan book in whereas y-axis represents the rupee crore of NPA. We can 2015 and it has managed to contain it at 0.8% in the past observe here that the Gross of NPA has been showing two years. For J&K Bank, it has been a progressive upward trend beginning from 2013-14 to 2017-18. Last deterioration—from 1.6% in 2015 to 3% in 2016 and, five years’ net NPA graph of private banks is a mirror finally, 5.5% in 2017. image of their gross NPAs. For Axis Bank, it rose from 0.3% in 2012 to 0.7% in 2016 and zoomed to 2.3% in Causes of NPA’s 2017. The trajectory for ICICI Bank is 0.7% in 2012, 1% Diversification of funds to unrelated in 2014, 3% in 2016 and 5.5% in 2017. For Dhanlaxmi business/fraud.
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Lapses due to diligence. Redirecting funds from the good projects to the bad Business losses due to changes in ones. business/regulatory environment. As investments got stuck, it may result in it may Lack of morale, particularly after government result in unemployment. schemes which had written off loans. In the case of public sector banks, the bad health of Global, regional or national financial crisis which banks means a bad return for a shareholder which results in erosion of margins and profits of means that government of India gets less money as companies, therefore, stressing their balance sheet a dividend. Therefore it may impact easy which finally results into non-servicing of interest deployment of money for social and infrastructure and loan payments. (For example, the 2008 global development and results in social and political financial crisis). cost. The general slowdown of entire economy for Investors do not get rightful returns. example after 2011 there was a slowdown in Balance sheet syndrome of Indian characteristics the Indian economy which resulted in the faster that is both the banks and the corporate sector has growth of NPAs. stressed balance sheet and causes halting of the The slowdown in a specific industrial segment, investment-led development process. therefore, companies in that area bear the heat and NPAs related cases add more pressure to already some may become NPAs. pending cases with the judiciary. Unplanned expansion of corporate houses during boom period and loan taken at low rates later being Steps taken by government to eradicate NPAs serviced at high rates, therefore, resulting into In the year 1991, Narsimham committee recommended NPAs. many reforms to tackle NPAs. Some of them were Due to mal-administration by the corporate, for implemented. example, willful defaulters. The Debt Recovery Tribunals (DRTs) – 1993 Due to miss-governance and policy paralysis Credit Information Bureau – 2000 which hampers the timeline and speed of projects, Lok Adalats – 2001 therefore, loans become NPAs. For example Compromise Settlement – 2001 Infrastructure Sector. SARFAESI Act – 2002 Severe competition in any particular market ARC (Asset Reconstruction Companies) segment. For example Telecom sector in India. Corporate Debt Restructuring – 2005 Delay in land acquisition due to social, political, 5:25 rule – 2014 cultural and environmental reasons. Joint Lenders Forum – 2014 A bad lending practice which is a non-transparent Strategic debt restructuring (SDR) – 2015 way of giving loans. Asset Quality Review – 2015 Due to natural reasons such as floods, droughts, Sustainable structuring of stressed assets (S4A) – disease outbreak, earthquakes, tsunami etc. 2016 Cheap import due to dumping leads to business Insolvency and Bankruptcy code Act-2016 loss of domestic companies. For example steel Pubic ARC vs. Private ARC – 2017 sector in India. Bad Banks – 2017
Impacts of NPAs Solutions Apart from the government precautions, the The problem of NPAs in the Indian banking system is one following are some strategies by which banks can curtail of the foremost and the most formidable problems that non-performing assets to a great extent: had impacted the entire banking system. Higher NPA ratio trembles the confidence of investors, depositors, Recovery camps: Bank personnel can jointly approach lenders etc. It also causes poor recycling of funds, which the defaulting borrowers for repayment at a place and in turn will have a deleterious effect on the deployment of time convenient to both the parties. These are more suited credit. The non-recovery of loans affects not only the to small loans. Normally the borrowers who had availed further availability of credit but also financial soundness small loans will be more in number in rural and semi of the banks. urban areas rather than urban and metro centers. As such, Lenders suffer lowering of profit margins. the banks instead search areas rather than urban and metro Stress in banking sector causes less money centers. As such, the banks instead of conducting the available to fund other projects, therefore, negative recovery camps at their branches, they usually conduct impact on the larger national economy. such recovery camps in centers like panchayat board Higher interest rates by the banks to maintain the offices, court buildings, government department buildings profit margin. etc such recovery camps so that the borrowers find it
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convenient to attend the recovery camps. objective of facilitating the banks and financial institutions for speedy recovery of dues in cases where the Preference of claims: Banks should expeditiously and loan amount is Rs. 10 lakhs and above. The time limit properly claim indemnity from organizations like Deposit envisaged under the act is not being adhered to in Insurance and Credit Guarantee Corporation called disposing off the suits because of inadequate DICGC, Export Credit Guarantee Corporation called infrastructure and a shortage of recovery personnel with ECGC, Credit Guarantee Fund Trust for small scale the DRTs. industries, Insurance Companies etc and invoke Government/other personal guarantees to recover loan CONCLUSION: dues and reduce non-performing assets. Growing NPAs is one of the biggest problems that the Technical write off: Normally banks decide writing off Indian banks are facing today. NPAs reflect the overall small loans which have become bad and the recovery is performance of the banks. The money locked up in NPAs not at all possible in those accounts under any has a direct impact on the profitability of the bank as circumstances on account of the facts that the borrower Indian banks are highly dependent on income from might have been expired; he has no means to repay the interest on funds lent. A high level of NPAs suggests high loan at any cost and there may be huge losses in respect of probability of a large number of credit defaults that affect the properties etc. This is for the sole purpose of servicing the profitability and liquidity of banks. If the concept of such non-performing accounts. NPAs is taken very lightly it would be dangerous for the banking sector. Due diligence and utmost care must be One time settlement scheme: To reduce the absolute taken by the branch managers before sanctioning the amount of non-performing assets, Government of India loans to the clients. The government should also make along with Reserve Bank of India announced onetime more provisions for the faster settlement of pending cases settlement schemes periodically for the past few years. and also it should reduce the mandatory lending to When the borrowers are alive and when the borrowers are priority sector as this is the major problem creating an farmers, small entrepreneurs etc and they find it very area. So the problem of NPA needs lots of serious efforts difficult to pay their dues for various reasons like bad otherwise NPAs will keep killing the profitability of health and fall in their business ventures, however, they banks which is not good for the growing Indian economy have the inclination to repay their debts to the banks, this at all. type of practice is very much helpful to the borrowers and the lending institutions. REFERENCES
Suit filing: Filing of a suit is taken up as a last resort [1]. https://indianmoney.com/articles/what-is-the-main- when all other remedies to recover non-performing assets cause-for-an-increase-in-non-performing-assets-of-banks fail. Banks can initiate recovery proceedings with or [2]. https://www.clearias.com/non-performing-assets-npa/ without intervention of the courts of law. To Expedite the [3]. http://www.firstpost.com/business/bank-npa-trend-in-7- process; banks should be alert and proactive in all stages charts-bad-loans-at-state-run-banks-may-be-peaking- of the proceedings. i.e. preparation of plaint, service of select-private-peers-see-rise-4218813.html summons, written statements, trial of the suit, obtaining [4]. http://www.livemint.com/Opinion/TmNoZgpiuiYV2QS decree copy, praying for interim relief, execution of mxQOy8N/Its-official-Indian-banks-health-will- worsen.html decrees, attachment of the property, arrest of the [5]. http://www.thehansindia.com/posts/index/Civil- defendants, if needed etc. Services/2017-10-11/Understanding-the-NPAs-and- their-impact/332611. Debt recovery tribunals: The debt recovery tribunal act was passed by Indian Parliament in 1993 with the
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Payments Innovations
Prof. A.V. Ravi HOD – Dept. of Commerce Bishop Appasamy College of Arts & Science Coimbatore-18. [email protected]
ABSTRACT: A payment is the trade of value from one Direct Deposit party to another for goods, or services, or to fulfill a legal Cash obligation. The payments system provides financial online payments (eg Paypal) institutions and their customers a variety of ways to transfer funds, but the goal is essentially the same in all Credit Cards: cases to move money from one individual or business to As a global payment solution, credit cards are the most another in a reliable, secure, low cost, and convenient common way for customers to pay online. Merchants can manner.A popular payment method in countries with low reach out to an international market with credit cards, by credit card and banking penetration, mobile payments integrating a payment gateway into their business. Credit offer a quick solution for customers to purchase on card users are mostly from the North America and ecommerce websites. This paper is an attempt to find out Europe, with Asia Pacific following suit. the various mode of payments and the new innovation in payments. Mobile Payments A popular payment method in countries with low credit INTRODUCTION: card and banking penetration, mobile payments offer a quick solution for customers to purchase on ecommerce A payment is the trade of value from one party (such as a websites. Mobile payments are also commonly used on person or company) to another for goods, or services, or donation portals, browser games, and social media to fulfill a legal obligation. networks such as dating sites, where customer can pay with SMS. Majority of mobile payments are done in the Payment can take a variety of forms. Barter, the exchange Asia Pacific, with 64 million users expected by the year of one good or service for another, is a form of payment. 2016. The most common means of payment involve use of money, cheque, or debit, credit or bank transfers. Bank Transfers Payments may also take complicated forms, such Customers enrolled in an internet banking facility can do as stock issues or the transfer of anything of value or a bank transfer to pay for online purchases. A bank benefit to the parties. In US law, the payer is the party transfer assures customers that their funds are safely used, making a payment while the payee is the party receiving since each transaction needs to be authenticated and the payment. In trade, payments are frequently preceded approved first by the customer’s internet banking by an invoice or bill credentials before a purchase happens.
Public Policy Objectives for the PaymentSystem: E-wallets We trust financialinternediariesto hold and transfer funds Ane-wallet stores a customer’s personal data and funds, in a safe and secure manner to meet the needs of which are then used to purchase from online stores. commerce. The payments system provides financial Signing up for ane-wallet is fast and easy, with customers institutions and their customers a variety of ways to required just to submit their information once for transfer funds, but the goal is essentially the same in all purchases. Additionally, e-wallets can also function in cases: to move money from one individual or business to combination with mobile wallets through the use of smart another in a reliable, secure,lowcost, and convenient technology such as NFC (near field communication) manner. devices. By tapping on an NFC terminal, mobile phones can instantly transfer funds stored in the phone. TYPES OF PAYMENT: credit cards Prepaid Cards Mobile payments An alternative payment method, commonly used by Bank transfer minors or customers with no bank accounts. Prepaid cards E-wallets come in different stored values for customers to choose Prepaid Cards from. Online gaming companies usually make use of
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prepaid cards as their prefered payment method, with THE THINGS NEED TO CONSIDER virtual currency stored in prepaid cards for a player to use WHEN CHOOSING A PAYMENT for in-game transactions. Some examples of prepaid cards are Mint, Ticket surf, Paysafecard, and Telco Card. It METHOD FOR BUSINESS INCLUDE: appears that age rather than income is the trait that affects the adoption of prepaid cards, according to Troy Land’s Customer preference research. Choosing a payment method your customers prefer will make them more likely to pay you on time. The most Direct Deposit common payment method is through electronic credit and Direct deposits are when customers instruct their banks to debit cards. For example, there has been a 42% growth in pull funds out of their accounts to complete online Paywave and other tap-and-go accounts and 74% of all payments. Customers usually inform their banks on when MasterCard in-store transactions are now contactless. funds should be pulled out of their accounts, by setting a schedule through them. A direct deposit is a common Risk : payment method for subscription-type services such as For example, cash has a higher risk of theft since it online classes or purchases made with high prices. doesn’t go directly into your bank account. There's also more risk of mistakes. Cash Fiat, or physical cash, is a payment method often used for Privacy : physical goods and cash-on-delivery transactions. Paying Different payment methods are more private. For with cash does come with several risks, such as no example, credit cards automatically record transactions. guarantee of an actual sale during a delivery, and theft. Some customers might prefer to pay cash for certain There are different types of payment methods to choose goods and services, such as medication, for privacy from. But by understanding how each one functions, and reasons. knowing who your target audiences are (particularly, where they are located), can help you decide which Service fees : payment methods to integrate. If you need help on setting For example, EFTPOS and credit card providers often your business up with appropriate types of payment charge service fees. methods. Transaction costs : Online payment: e.g. the bank may charges a cost for each transaction. Online payment refers to money that is exchanged electronically. Typically, this involves use of computer Reliance on electrical and telecommunications networks, the internet and digital stored value systems. infrastructure : When you collect a payment over the internet, you are For example, EFTPOS uses electricity and needs access to accepting an online payment. Online payment usually is a phone network. These payment methods can be the transaction that results in transfer of monetary funds unavailable if these systems go down. from the customer bank or credit card account to your bank account.
INNOVATION MADE IN PAYMENT:
1. PAYTM
PayTM is one of the best digital wallets to make payments. It allows you to add your Credit/Debit cards and link your bank account to it. Make use of QR code to send and receive payments easily. PayTM mobile wallet
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allows you to buy movie tickets, online mobile recharge, pay electricity bills and more from your mobile. It is available for Android, iOS, and Windows Mobile Phone.
2. Mobikwik Mobikwik is another versatile & secure app that allows you to pay or transfer money using the mobile number. It allows you to make mobile recharge and pay bills in seconds. Use Mobikwik mobile wallet and buy anything online with good discounts. Making bill payments, mobile recharge, shopping and more has become easy with Mobikwik mobile wallet. It is available for Android, iOS and Windows Phone.
3. FreeCharge FreeCharge e-Wallet allows you to add credit and debit cards which make it easy to make payments. It is the TRENDS WHICH ARE CHANGING fastest growing digital payment platform allowing you to PAYMENT INNOVATION: pay electricity bills, mobile and DTH recharge and more. Use FreeCharge mobile wallet and avoid long queues. It The payment industry in itself keeps on evolving with the makes us easy to make online and digital payments ever changing consumer sentiments and the needs of the securely using mobile. FreeCharge is available businesses. Innovations in this space is thus a continuous for Android, iOS and Windows Phone. process, while the adoption of each of new development takes its own pace to penetrate, here are 5 such trends 4. State Bank Buddy which are changing the way India pays State Bank Buddy by State Bank of India is the first Indian mobile wallet available in 13 Indian languages. Shift to Mobile Using this sending money, asking reminders to clear dues, In February 2016, a report by Counterpoint Research instant bill payments and more from your mobile.Sate stated that India has become the second largest Bank Buddy mobile wallet helps you to do so by linking smartphone market in the world with 220 million your credit or debit cards to it. It allows you to load smartphone users. Thus, it does make economic sense for amount into your wallet and make payments to your businesses to have a mobile first/mobile ready platform. contacts on phone book. It is available Payment system providers are now offering ready-to- for Android and iOS integrate development kits for mobile app companies to deliver a native payment experience. 5. HDFC PayZapp PayZapp from HDFC Nabk is available to customers of Wallets & Banking Apps all banks and allows you to make payments with just a Savvy consumers are now even ditching their credit/debit single click. Make payments easily by adding credit or cards when it comes to making a purchase online, all debit card details. Your card details are safe with the bank thanks to wallet and banking apps which allow swift and no need to worry about that. PayZapp mobile wallet checkout experience. In fact at EBS we have already does three security checks for every transaction. It is integrated a number of mobile wallets & banking apps to available for Android and iOS. allow companies to provide this experience.
Top Payment Gateways in India – 2017 List Wallet &PoS Integration A payment gateway is an online service provided by Another notable development that is happening with the software companies in collaboration with financial service onset of the wallet adoption is the usage of these providers like Visa and Master Card that enables a instruments beyond the digital space. Restaurants, brick website to accept electronic payments. In India payment and mortar stores which depend upon PoS systems for gateways are offered by private banks like ICICI Bank, payment collection can also give wallet users an option to HDFC Bank and Yes Bank, along with international use the same instead of swiping their bank cards. players like Paypal. A payment gateway comprises of a secured encrypted connection created between your web Government Support portal and the commercial bank. It enables a business to Also, to keep up with the pace of the global economy, the get money into it’s chosen bank account through different Government too is pushing out policies to encourage a channels like credit card, debit card, internet banking, movement towards a cashless society. This is happening prepaid cards and mobile wallets through various initiatives: Payment banks, Bharat Bill
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Payment Services, proposal to do away with surcharge / REFERNCES: convenience fees, etc. [1]. Agarwal, Sumit, Sujit Chakravorti, and Anna Lunn Contactless Payments (2010), “Why Do Banks Reward Their Customers to Payments via NFC is a development that has already Use Their Credit Cards,” Federal Reserve Bank of come into practice. However now contactless payment is Chicago Working Paper, WP-2010-19. the next step, where in a tangible scenario customers can [2]. Chakravorti, Sujit and Victor Lubasi (2006), “Payment make payments by flashing their card at the terminal. Instrument Choice: The Case of PrepaidCards,” Federal Reserve Bank of Chicago Economic Perspectives [3]. Dhingra Sanjay, (2011), Measuring IT Effectiveness in CONCLUSION: Banks of India for Sustainable Development, BVICAM’s, International Journal of Information Merchants can reach out to an international market with Technology, credit cards, by integrating a payment gateway into their [4]. Jain M. &.Popli G.S., Role of Information Technology business. Credit card users are mostly from the North in the development of Banking Sector in India, RBI America and Europe, with Asia Pacific following suit. Annual Report. [5]. Sharma M.C.,Role of Information Technology in Indian Mobile payments are also commonly used on donation Banking Sector, International Journal portals, browser games, and social media networks such inMultidisciplinary and Academic Research as dating sites, where customer can pay with SMS. Online [6]. Sreelatha T and Chandra Sekhar, (2012), Role of payment usually is the transaction that results in transfer Technology in Indian Banking Sector, IJMBS, 2(4). of monetary funds from the customer bank or credit card [7]. Connolly, Sean and Joanna Stavins (2015), “Payment account to your bank account. from the above paper we Instrument Adoption and Use in the United States, got an idea of payments mode and its innovation in recent 2009–2013,” Federal Reserve Bank of Boston Research trend. Data Reports, 15-6.
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Empowerment of Women Employees in Nationalized Bank in Chennai
M.Vishvabharathi. Research Scholar Mother Teresa Women’s University, Research and Extension Center, Madurai.
INTRODUCTION Mankidy, (2000) point out some women employees feel that these constraints are intensified by being forced to Bank job is a very attractive one for women since it is one adopt the behaviour of the successful manager or officer of the high paying jobs and carries some status. There has which has been established by men. They argue that been a marked increase in women‟s employment in the women could find their own strategies which would financial sector since the 1950s, in both public sector achieve the result. One way of improving prospects for companies and private foreign-controlled banks. Despite women could be to restructure the work, for example with this increase, women are still concentrated at the clerical flexible working hours, part-time job assignments, split level, and the general picture is changing only very location positions performed partly at home, and job slowly. Women officers in banks are a recent sharing. phenomenon, which has become a little more significant. The highest percentage of women is in the clerical cadre McChanic (2000) analyses the employed married women in all the rural, semi-urban, urban and all India level and men, and housewives found few differences in followed by sub-ordinate category. At urban metropolitan satisfaction between marital, parental and employment level it is 8.78% and helped to raise the all India average roles. Although, theoretical work has suggested that a to 6.48%. variety of job characteristics impact family life, Hughes and his co-workers observed that the direct relationship REVIEW OF LITERATURE between job characteristics and marital tensions and companionship was weak. Khalequke & Chowdhury (1999) viewed about the Job satisfaction is the single most sought after attribute of the Meera Desai (2006) says that the working group of employment relationship. The most important element of employment of woman has emphasized that a policy of job satisfaction is job security. promotion of woman‟s employment has to go hand in hand with the broader social policy of strengthening Kamala Srinivasan (1999) states 50% of women women‟s participatory roles and empowerment in complained that extra work is always shunted to women. increasing their dignity. They also complained about sexual harassment from colleagues, managers, or customers. Women also felt STATEMENT OF THE PROBLEM dissatisfied that they were not sent out for training. Some obstacles arise from women‟s specific difficulties in The progress and prosperity of an organization depends demanding promotion - because promotions are linked upon the effective utilization of human resources which in with transfers; or they have difficulties in working late; or turn improves the level of output, productivity and because women shy away from responsibility having a building healthy, organizational relations. Job satisfaction low opinion of their own abilities and a negative attitude of Workers is an important aspect which helps or leads to to accepting recognition. achieve the above targets. In order to make a Worker to satisfy with his job, the management must provide the Anitha Sharma’s (1999) revealed that women constitute primary and secondary needs to a Worker. a big segment of India‟s total population. However their share India‟s total employment has not been in proportion The main importance of this study is to study and to to their total employment has not been in proportion to evaluate is to the various factors which lead to their total population. This has been due to the lack of empowerment of Women employees of Nationalized modernization and due status in the society. But it is Banks, Madras. The endeavour in it is concerned on hoped that the decade of the 90‟s will have for reaching drawing of job satisfaction Working condition, how effects on the level of modernization and the existing Women among bank employees and thus achieving the status of women. goal of better utilization of the work force this study aims
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Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
to prove the above analysis fact. Table 1 Educational Qualification of the women respondents OBJECTIVES OF THE STUDY No. of Sl.No. Qualification Percentage Respondents To analyse the extent of Economic Independence variation from growth opportunity of the respondents and 1 Up to H.S.C 20 15 to offer suggestions and conclusions. 2 U.G 81 68
METHODOLOGY 3 P.G 19 17 TOTAL 120 100 The study primarily depends on primary data and data Sources: - Primary Data Compiled were collected based on survey method. The survey is conducted among the sample respondents. To elicit the Table 1 clearly shows that the educational qualification opinion of the respondents‟ interview schedule was used. of women employees in banking sector. 68 percent of women employees completed Under Graduates level, 17 Sampling Design percent of women employees completed Post Graduates The study was conducted in Chennai which includes and 15 percent of women employees‟ educational Kodambakkam, Saidapet, and T.Nagar. There 16 qualification is up to Higher Secondary level. Nationalized Banks in these areas and have 56 branches in total. Among these branches 120 women 2. Income Distribution of the Respondents employees are selected based on proportionate random Table 2 Income Distribution of the Respondents sampling method. Sample respondents are selected SI. No. Income No. of Percentage from all nationalized banks and more weightage is Respondents given to Bank which has more number of branches in the selection of samples. 1 Below 30,000 68 57 Analysis of the study Above 30,000 52 43 Economic empowerment is the capacity of women and 2 men to participate in, contribute to and benefit from TOTAL 120 100 growth processes in ways which recognise the value of Sources: - Primary Data Compiled their contributions, respect their dignity and make it possible to negotiate a fairer distribution of the benefits of Table 2 depicts the income of the respondents. Around 57 growth. Economic empowerment increases women‟s percent of the respondents earned below 30,000 and the access to economic resources and opportunities including remaining 43 percent of the respondents earned above jobs, financial services, property and other productive 30,000. assets, skills development and market information. t test Null Hypothesis: There is no significant different The economic empowerment depends on economic between economic independent of family with respect to independence depends which leads to growth opportunity. the opportunity for growth and development. In this paper the researcher aimed to analyse whether the economic independence of women bank employees lead Table 3 ‘t’ Test for Significance Difference between them into opportunity growth and development. Economic Independent and Grow Opportunity. Economic No. of Table Mean S.D „t‟ Value In this paper the profile of the respondents are- Independent Respondent Value educational qualification wise and income wise classification are given and ‘t’ Test is applied to assess Yes 102 2.1176 .649 .62 1.96 for significance difference between economic independent No 18 2.222 .73 2 and Growth Opportunity and development.
1.Educational Qualification of the Respondents Since the calculated value t‟ is less than table value t‟, it is so accepted the Null hypothesis at 5% level of Table 1shows the educational qualification of women significance. Hence there is no significance difference respondents. between economic independent in family worker related towards the growth of opportunity. So Hypothesis is accepted.
86 Special Issue on Disruptions in Banking Sector in the Current Scenario
Journal of Management and Science | ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue No.4 | Feb’2018
SUGGESTIONS AND CONCLUSION [3]. Maeeche Sherwari (1984), “Creating more Jo for Female Workers”, Kurukshedra - A Journal On Rural Development. Women‟s economic empowerment is a prerequisite for [4]. Shree Manju K. and Munirathna Naidu (1993), sustainable development and pro-poor growth. Achieving “Employment of Women in India” in Indian Journal of women‟s economic empowerment requires sound public Socialism policies, a holistic approach and long-term commitment [5]. Mahandra Devi S. and Vijay Mahajan (2003), and gender-specific perspectives must be integrated at the “Employment and Unemployment,” Eonomic and design stage of policy and programming. Women must Political Weekly. have more equitable access to assets and services; [6]. Uma Rani (2003), “Women‟s Employment in the infrastructure programmes should be designed to benefit Japaneses Economy”, Economic and Political Weekly. both men and women
REFERENCES
[1]. Heges J.N. and J.K. Barbett (1972), “Working Women and the Decision of Household tools,” Monthly Working Review . [2]. Gulati L. (1975), “Ocupational Distribution of Working Women - Weekly.
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