A Project Report On “AN ANALYSIS ON ELECTRONIC PAYMENT SYSTEM AND ITS PROBLEMS” Submitted for partial fulfillment of award of Master of Business Administration (MBA) Submitted by: ANKITA SRIVASTAVA Fourth Semester (MBA 2009-11) Dayanand Academy of Management Studies, Kanpur Under the able Supervision of: MR. SHWET SAXENA HOD (MBA) Dayanand Academy of Management Studies, Kanpur (GAUTAM BUDDH TECHNICAL UNIVERSITY, LUCKNOW) INDEX: TABLE OF CONTENTS TopicsPage No. Declaration 4 Certificate from the Institute 5 Preface 6 Industry Introduction 7-25 * Introduction of Banking7-9 * Key Findings 10 * Key Issues And Facts Analyzed 11 Key Players Analyzed 12 * Technology In Banking 13 * The Tipping Point 14 * Pressing Issues 15-16 * Redefining Objectives 17-22 * Evolving It 22-25 Introduction of E-Commerce Payment System 26-41 * E-Commerce Payment System 26 * Credit Cards And Smart Cards 27-29 * Electronic Bill Presentment And Payment 29-31 * Electronic Payment Schemes 32-33 * Payment Protocol Models 33-36 * Electronic Commerce Payments 36-41 Related Work 41-42 Top 10 Players in Banking & Finance 43-52 Objective of Study/Need of Study 53-55 Contribution To The Academics 53 * Contribution To The Industry 54 * Contribution To The Society 55 Research Methodology 56-59 Limitations 59 Data Presentation 60-71 Findings and Suggestions 72 Conclusion 73 Bibliography 74 Annexure (Questionnaire) 75-78 DECLARATION I Ankita Srivastava the student of Dayanand Academy of Management Studies, Kanpur studying in MBA hereby declare that the work done by me in project titled “AN ANALYSIS ON ELECTRONIC PAYMENT SYSTEM AND ITS PROBLEMS” is original and completed to the best of my knowledge and belief.
No copy of it has been submitted to any other University for award of any other degree/diploma/fellowship or on similar title. Ankita Srivastava CERTIFICATE FROM THE INSTITUTE PREFACE Final research project is an attempt to provide the student a practical input and exposure to the real world situation in which he/she has to work in future. My research project report on “A Study on Electronic Payment System and Its Problems” was an attempt in this regard. The research project report has thoroughly revised & made up to date.
The contents have been strengthened up date & modified to improve clearly & arouse enthusiastic interest in the subject of finance. Figures, chart, diagram, models, tables etc. Liberally used to easily understand the complex thing. The extract of the work is presented in this report under various heading that includes Industry profile, research objective, research design, data collection method, Sampling design, analysis and interpretation, results, conclusion and suggestions. Lastly Mr. Shwet Saxena who has allotted me this project work of skilful labor.
ANKITA SRIVASTAVA INDUSTRY INTRODUCTION When we talk about the future, it is necessary to have a time horizon in mind. The Committee felt, it would be rather difficult to visualize the landscape of banking industry say, 20 years hence due to the dynamic environment. While Government of India brought out India Vision 2020, the Committee is of the view that the pace of changes taking place in the banking industry and in the field of Information Technology would render any attempt to visualize the banking scenario in 2020, inconceivable. The entire financial services sector may undergo a dramatic transformation.
It was, therefore, felt that we should set our goals for the near future say, for 5-10 years hence and appropriately call this exercise “Banking Industry – Vision 2010”. Indian Banking system has played a crucial role in the socio-economic development of the country. The system is expected to continue to be sensitive to the growth and development needs of all the segments of the society. The banking system that will evolve will be transparent in its dealings and adopt global best practices in accounting and disclosures driven by the motto of value enhancement for all stakeholders.
It is expected that the Indian banking and finance system will be globally competitive. For this the market players will have to be financially strong and operationally efficient. Capital would be a key factor in building a successful institution. The banking and finance system will improve competitiveness through a process of consolidation, either through mergers and acquisitions through strategic alliances. Technology would be the key to the competitiveness of banking and finance system.
Indian players will keep pace with global leaders in the use of banking technology. In such a scenario, on-line accessibility will be available to the customers from any part of the globe; ‘Anywhere’ and ‘Anytime’ banking will be realized truly and fully. At the same time ‘brick and mortar’ banking will co-exist with ‘on-line’ banking to cater to the specific needs of different customers. Corporate governance in banks and financial institutions would assume greater importance in the coming years and this will be reflected in the composition of the Boards of Banks.
This “Indian Banking Sector Analysis (2010-2011)”, report provides extensive research and objective analysis on the growing banking industry, their product quality, and their services in India. This report helps clients to analyze the leading-edge opportunities critical to the success of the banking Industry in India. Detailed data and analysis helps an investor, financial service providers, and global banking players navigate the evolving market of banks in India. KEY FINDINGS * The nationalized banks have more branches than any other types of banks in India. Investments of scheduled commercial banks (SCBs) also saw an increase in crore. * India’s retail-banking assets are expected to grow at the very high rate a year over the next four years. * Retail loan to drive the growth of retail banking in future. * Housing loan account for major chunk of retail loan. KEY ISSUES AND FACTS ANALYZED * What does the competitive market landscape look like for the Indian Banking Industry? * How the services drive the Banking Sector in India? * How demographic factors, personalized loans and credit quality programs drive the market? What are the various opportunities and challenges of this industry? * How the banks vary according to their regional set ups? * How did the banks deploy their credits across sector? * Strategies that are being adopted by global players for retail banking. KEY PLAYERS ANALYZED This study provides an overview, key facts and several numbers of players like Punjab National Bank, HDFC Bank, UTI Bank, ICICI Bank, Kotak Mahindra Bank, Citibank HSBC. The financial sector in India has become stronger in terms of capital and the number of customers.
It has become globally competitive and diverse aiming, at higher productivity and efficiency. Exposure to worldwide competition and deregulation in Indian financial sector has led to the emergence of better quality products and services. Reforms have changed the face of Indian banking and finance. The banking sector has improved manifolds in terms of capital adequacy, asset classification, profitability, income recognition, provisioning, exposure limits, investment fluctuation reserve, risk management, etc. TECHNOLOGY IN BANKING The new face of Banking:
An industry that’s tightly protected by regulations has finally opened up. But this has introduced many new challenges. Here’s a look at how technology can help overcome these challenges and address the new set of issues associated with modern day banking. by Anil Patrick R The Banking sector in India has experienced a rapid transformation. Just about a decade back this sector was limited to the sarkari (read nationalized) and co-operative banks. Then came the multi-national banks, but these were confined to serving an elite few.
One could regard the past as the ‘medieval ages’ in the banking industry, wherein every branch of the same bank acted as an independent information silo, and multi-channel banking (ATMs, Net-Banking, tele-banking, etc) was almost non-existent. “Banks are increasingly facing sliding margins and fierce competition. It is imperative to increase volumes and reduce operational costs” – K. P. Padmakumar, Chairman, Federal Bank THE TIPPING POINT The opening up of the Indian banking sector to private players acted as ‘the tipping point’ for this transformation.
The deregulatory efforts prompted many financial institutions (like HDFC and ICICI) and non-financial institutions enter the banking arena. With the entry of private players into retail banking and with multi-nationals focusing on the individual consumer in a big way, the banking system underwent a phenomenal change. Multi-channel banking gained prominence. For the first time consumers got the choice of conducting transactions either the traditional way (through the bank branch), through ATMs, the telephone or through the Net. Technology played a key role in providing this multi-service platform.
The entry of private players combined with new RBI guidelines forced nationalized banks to redefine their core banking strategy. And technology was central to this change. PRESSING ISSUES Today banks have to look much beyond just providing a multi-channel service platform for its customers. There are other pressing issues that banks need to address in order to chalk-out a roadmap for the future. Here are the top three concerns in the mind of every bank’s CEO. Customer retention: Customer retention is one of the main priorities for banks today.
With the entry of new players and multiple channels, customers have become more discerning and less ‘loyal’ to banks. Given the various options, it is now possible to open a new account within minutes. Or for that matter shift accounts within a couple of hours. This makes it imperative that banks provide best levels of service to ensure customer satisfaction. Cost pressures: Cost pressures come into play when banks are not able to afford the cost of a certain service or initiative although they want to or need to have it in place.
This is primarily because the cost structure at the backend is not efficient enough to offer that kind of service to the marketplace. As Gunit Chadha, MD & CEO, IDBI Bank puts it, “In today’s world of narrowing margins, a serious look at costs is definitely an imperative. ” Increased competition: The entry of new players into the banking space is leading to increased competition. A recent example would be of Kotak Mahindra Finance Limited (KMFL)—a financial services company focused on investment consulting, auto finance, insurance, etc—morphing into Kotak Bank. Many other such players are waiting on the sidelines.
Technology makes it easier for any company with the right channel infrastructure and money reserves to get into banking. This has been one of the major reasons behind this kind of competition from players who do not have a banking background. Kotak Bank overcame the initial costs of setting up its own ATM network by getting into a sharing agreement with UTI bank. New entrants with strategies such as these make the banking game tougher. REDEFINING OBJECTIVES To cope with cost pressures and increased competition as well as to retain existing customers, banks have started venturing into newer territories.
This is one of the main reasons why banks are focused on retail banking in a big way. The main advantage of getting into retail banking is that the risks involved are lesser in this segment. There are lower Non Performing Assets (NPAs) in retail banking. This is one of the reasons why loans such as those for housing, automotive, etc are being touted by banks like never before. Credit cards and debit cards are another focus area for banks. With this banks have redefined their business priorities. They are now focused on: * Cost reduction * Product differentiation Customer-centric services Although the ways in which banks implement these vary, the underlying objectives remain the same. COST REDUCTIONS Reduced costs basically translate to higher profit margins. If banks can reduce costs, it can go a long way in increasing profits. The focus is on increasing the profit margins by cutting costs where it matters—on the operations side. Banks have woken up to the fact that they need to get into shape fast in order to handle competition. “Banks have been increasingly facing sliding margins and fierce competition.
It is imperative for them to increase the volumes and reduce the cost of operations,” says K. P. Padmakumar, Chairman, Federal Bank. DIFFERENTIATION The customer is interested in how he/she can benefit from the bank and its products. That’s why it becomes necessary for a bank to differentiate its products from the others. Some of the ways in which differentiation can be introduced are through specialization, new products, and increasing the added value. Specialization basically means that the bank gets involved only in selected areas.
For example, the bank might be getting involved only in housing finance. Or, it could be limiting its services just for corporate banking clients. Another way to specialize could be by handling just specific sets of portfolios. Banks can differentiate themselves by adding new products to their range of services. This will provide the bank with better yields per contact. Increasing the added value of products is another way of differentiation for banks. Operational excellence is also a key factor in effective differentiation from the competition.
CUSTOMER-CENTRIC MODEL Indian banks have realized that it no longer pays to have a ‘transaction-based’ operating model. This has led to the development of a relationship oriented model of operations focusing on customer-centric services. While banks have to ensure product superiority and operational excellence, the biggest challenge today is to establish customer intimacy without which the other two are meaningless. “In the financial world, product superiority does not last long as it is relatively easy to copy products.
So, the real strength comes from operational excellence and understanding the customer and developing rapport with him,” says Gunit Chadha. In this context, it is very important that banks identify and understand customer needs. This will help banks in tailoring their products according to customer needs. It also helps in new business opportunities like cross-selling and ‘up selling,’ which takes cues from customer aspirations and transaction patterns. Customer relationships have to be managed in the best possible manner. This will ensure that the customer comes back to the bank.
In addition to good customer retention rates, it will also provide better income generation capability. This is because a major chunk of income of most banks comes from existing customers, rather than from new customers. “The cost of transactions over channels like ATMs and the Internet are lower than doing it through the branches” – Rangesh Nayar, Country Manager-Financial Services Sector, IBM IT is pivotal IT is central to banking. This is one of the major reasons why new private and multi-national banks have been able to survive, thrive, and adapt in an increasingly competitive space.
These banks were able to leverage on low-cost channels such as ATMs and Net banking to the optimum levels contributing to reduced operating costs. Banks have realized that shifting customer access to lower cost channels can help bring down operating costs. “These channels are used not only to improve customer service but also to divert traffic from the branches. It is a fact that the cost of transactions over these channels is lower than doing this through the branches,” says Rangesh Nayar, Country Manager-Financial Services Sector, IBM.
But this does not mean that branch banking is obsolete. Rather, banks are reinventing their business models to offer new financial services through its branches. EVOLVING IT Banks are looking at newer ways to make a customer’s banking experience more convenient, efficient, and effective. They are using new technology tools and techniques to identify customer needs and are offering tailor-made products to match them. Centralized operations and process automation using core banking applications and IP-based networks improve efficiency and productivity levels tremendously.
Core banking applications help a bank to shift from ‘branch banking’ to ‘bank banking. ‘ This basically means that a customer will be treated as a bank’s customer than just the customer of a particular branch which was the case earlier. Also, IP-based networks lets a bank offer multiple services over the same network, resulting in costs savings. CRM solutions, if implemented and integrated correctly, can help significantly in improving customer satisfaction levels. Data warehousing can help in providing better transaction experiences for customers over different transaction channels.
This is made possible because data warehousing helps bring all the transactions coming from different channels under a common roof. Data mining helps banks analyze and measure customer transaction patterns and behavior. This can help a lot in improving service levels and finding new business opportunities. Risk Assessment is another area where technology can play a major role. “Using technology, banks are able to better assess risks like interest risks, liquidity risks, FOREX risks, etc. The other driver for using IT is that banks can reduce costs and educe the time to market,” says Rangesh Nair, Country Manager-Financial Services Sector, IBM. With the emergence of various channels for (retail) banking, pundits all over have been predicting the end of traditional branch banking, at least in the metros and other upwardly urban areas. But despite the benefits offered by other technologies in terms of lower costs or better reach, it looks like branch banking is very much here to stay. The reason: Branch banking itself is undergoing a transformation. Traditionally, banks used their retail outlets to provide services to the individual customer.
Now with ATMs, Net banking, and Tele-banking replacing traditional service channels, banks are more focused on enhancing customer value through branches. They are using their existing network of branches to advice on and sell new financial instruments like consumer loans, mutual funds, etc. They are also using branches to inform and educate customers about other, more efficient channels to conduct common transactions like cash withdrawal or balance checks. The interesting trend is that customers are using all the available channels instead of settling for just one. ‘The biggest challenge is to establish customer intimacy’ The main points to be kept in mind while investing in IT are: * A well defined Return on Technology investment * A visible addition to customer value * Improvement of operational efficiencies leading to customer convenience and cost savings E-COMMERCE PAYMENT SYSTEM An e-commerce payment system facilitates the acceptance of electronic payment for online transactions. Also known as a sample of Electronic Data Interchange (EDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking.
In the early years of B2C transactions, many consumers were apprehensive of using their credit and debit cards over the internet because of the perceived increased risk of fraud. Recent research shows that 90% of people in the India still do not shop online because they do not trust online payment systems. However, 54% do believe that it is safe to shop online which is an increase from 26% in 2010. There are numerous different payments systems available for online merchants. These include the traditional credit, debit and charge card but also new technologies such as digital wallets, e-cash, mobile payment and e-checks.
Another form of payment system is allowing a 3rd party to complete the online transaction for you. These companies are called Payment Service Providers (PSP). CREDIT CARDS AND SMART CARDS Over the years, credit cards have become one of the most common forms of payment for e-commerce transactions. In North America almost 90% of online B2C transactions were made with this payment type. Turban goes on to explain that it would be difficult for an online retailer to operate without supporting credit and debit cards due to their widespread use.
Increased security measures such as the use of the card verification number (CVN) which detects fraud by comparing the verification number on the printed on the signature strip on the back of the card with the information on file with the cardholder’s issuing bank. Also online merchants have to comply with stringent rules stipulated by the credit and debit card issuers (Visa and MasterCard this means that merchants must have security protocol and procedures in place to ensure transactions are more secure.
This can also include having a certificate from an authorized certification authority (CA) who provides PKI infrastructure for securing credit and debit card transactions. Despite this widespread use in North America, there are still a large number of countries such as China, India and Pakistan that have some problems to overcome in regard to credit card security. In the meantime, the use of smartcards has become extremely popular. A Smartcard is similar to a credit card; however it contains an embedded 8-bit microprocessor and uses electronic cash which transfers from the consumers’ card to the sellers’ device.
A popular smartcard initiative is the VISA Smartcard. Using the VISA Smartcard you can transfer electronic cash to your card from your bank account, and you can then use your card at various retailers and on the internet. There are companies that enable financial transactions to transpire over the internet, such as PayPal. Many of the mediaries permit consumers to establish an account quickly, and to transfer funds into their on-line accounts from a traditional bank account (typically via ACH transactions), and vice versa, after verification of the consumer’s identity and authority to access such bank accounts.
Also, the larger mediaries further allow transactions to and from credit card accounts, although such credit card transactions are usually assessed a fee (either to the recipient or the sender) to recoup the transaction fees charged to the mediary. The speed and simplicity with which cyber-mediary accounts can be established and used have contributed to their widespread use, although the risk of abuse, theft and other problems—with disgruntled users frequently accusing the mediaries themselves of wrongful behavior—is associated with them. ELECTRONIC BILL PRESENTMENT AND PAYMENT
Electronic bill presentment and payment (EBPP) is a fairly new technique that allows consumers to view and pay bills electronically. There are a significant number of bills that consumers pay on a regular basis, which include: power bills, water, oil, internet, phone service, mortgages, car payments etc. EBPP systems send bills from service providers to individual consumers via the internet. The systems also enable payments to be made by consumers, given that the amount appearing on the e-bill is correct. The original EBPP method is a direct withdrawal from a bank account through a bank such as Scotia bank.
Other service providers such as Rogers Communications and Aliant additionally, accept major credit cards within the bill payment sections of their websites. Telpay Incorporated offers “Telpay for Business”, a software application that allows businesses to import electronically presented bills, pay them and store the presented image for audit purposes. The biggest difference between EBPP systems and the traditional method of bill payment is that of technology. Rather than receiving a bill through the mail, writing out and sending a check, consumers receive their bills in an email, or are prompted to visit a website to view and pay their bills.
Three broad models of EBPP have emerged. These are: Consolidation, where numerous bills for any one recipient are made available at one Web site, most commonly the recipient’s bank. In some countries, such as Australia, New Zealand and Canada, the postal service also operates a consolidation service. The actual task of consolidation is sometimes performed by a third party and fed to the Web sites where consumers receive the bills. The principal attraction of consolidation is that consumers can receive and pay numerous bills at the one location, thus minimizing the number of login IDs and passwords they must remember and maintain.
Biller Direct, where the bills produced by an organization are made available through that organization’s Web site. This model works well if the recipient has reasons to visit the biller’s Web site other than to receive their bills. In the freight industry, for example, customers will visit a carrier’s Web site to track items in transit, so it is reasonably convenient to receive and pay freight bills at the same site. Direct email delivery, where the bills are emailed to the customer’s inbox. This model most closely imitates the analog postal service.
It is convenient, because almost everyone has email and the customer has to do nothing except use email in order to receive a bill. Email delivery is proving especially popular in the B2B market in many countries. Major providers of outsourced bill production services have developed facilities to process bills through consolidation, biller direct and email delivery services, thus enabling major billers to have all their bills, paper and electronic, processed through the one service. Niche service providers in many countries provide one or two of these models, but generally do not integrate with paper bill production.
ELECTRONIC PAYMENT SCHEMES Dr Phillip M. Hallam-Baker World Wide Web Consortium. This paper presents a framework for discussion of electronic payment schemes. A comprehensive index of such schemes and a brief overview of their relationship to the framework is provided. The framework consists of two axes, the levels of abstraction at which the protocol is analyzed and the payment model considered. POLICY The semantics of the payment scheme. This includes refunds policies, and the liabilities incurred by customers, merchants and financial institutions. DATA FLOW The requirements for storage of data by and communications between the parties.
This includes not only the data flows for payments themselves but also for refunds, account enquiries and settlement. MECHANISM The methods by which the necessary security requirements for messages and stored data are achieved. All three abstraction levels are tightly coupled since policy makes requirements of data flow and data flow makes requirements of mechanism. PAYMENT PROTOCOL MODELS CASH Cash consists of a token which may be authenticated independently of the issuer. This is commonly achieved through use of self authenticating tokens or tamper proof hardware. CHEQUE
Cheques are payment instruments whose validity requires reference to the issuer. CARD Card payment schemes provide a payment mechanism through the existing credit card payment infrastructure. Such schemes have many structural similarities to cheque models except that solutions are constrained by that structure. A key feature of card payment systems is that every transaction carries insurance. LIST OF INTERNET PAYMENTS SCHEMES AND PROPOSALS The following list was compiled with the aid of indices maintained by the World Wide Web Consortium, Cornell, SIRENE, IBM, AT&T Bell Labs, and the Home Page of the www-buyinfo mailing list.
Additional payments schemes may be announced via a fill in form. These announcements may be viewed in immoderate form. ANONYMOUS INTERNET MERCANTILE PROTOCOL, ANONYMOUS CREDIT CARDS AT&T BELL LABS A card model protocol which implements a policy which balances strong guarantees of confidentiality with the needs of law enforcement. A formal approach is employed with comprehensive details of mechanism and data flow. BANKNET ELECTRONIC BANKING SERVICE MARKETNET Full electronic banking service offers ability to write cheques. Uses PKCS envelope formats. BARCLAYNET HYPERLINK “http://www. barclaycard. co. uk/barclay. tm”BARCLAYCARD An electronic mall runs by one of the world’s largest credit card companies. Preventing disclosure of the credit card number to the merchant is thus superfluous and a simple secure socket communication mechanism to prevent eavesdropping is sufficient. CAFE Cash based scheme with strong guarantees of anonymity. Backed by a 13 member European consortium. E-CASH DIGICASH Anonymous digital cash. Few details are given about the specific scheme employed but voluminous archives of papers by the company’s founder, David Chaum are provided. Mark Twain Bank has deployed this scheme. ELECTRONIC COMMERCE PAYMENTS
ELECTRONIC CHEQUE FINANCIAL SERVICES TECHNOLOGY CONSORTIUM A cheque scheme designed to provide an upgrade path from the existing cheque system. GREEN COMMERCE FIRST VIRTUAL First Virtual’s Green Commerce payments model is one of the first payments schemes to become established on the internet. The major novel feature of this scheme is its `satisfaction guaranteed’ policy which protects customers from dishonest merchants by allowing them an unconditional right to refuse payment for individual items. A statistical mechanism is used to identify over frequent use of this option and exclude habitual non-payers.
Identification of customers is via an email call back loop scheme. INTERNET KEYED PAYMENT PROTOCOLS(IKP) IBM (ZURICH & WATSON LABS) A card based model of payment which mainly addresses the questions of data flow and mechanism. Public key cryptography is used to ensure the privacy of a customer’s card number and PIN number and provide non-reputability. IKP has three options,, 1KP, 2KP and 3KP in which the acquirer alone, acquirer and merchant and acquirer merchant and customer respectively have a public key. CHECKFREE Company provides various payments schemes on a number of models. FBOI :FIRST BANK OF INTERNET
Novel payments system employs ATM cards and PGP. Provides strong guarantees which prevent loss of money by the bank. Protection for the customer is less apparent. LETSYSTEMS LET Systems presents a novel policy view in the radical tradition of Northern England. A system of local currencies is proposed and a pilot project in Manchester, England described. NETBILL CARNEGIE MELLON UNIVERSITY INI An implementation of a cheque payment model employing a symmetric key cryptography mechanism based on Kerberos. NETCASH/NETBANK SOFTWARE AGENTS, INC. Policy allows transactions for free but a charge of 2% is levied for transfers into or out of the system.
Used to implement a scheme by Chaum Nexus Bucks and by the Phantom Exchange MILLICENT DEC (SYSTEMS RESEARCH CENTER) A payments protocol with a scrip based variant of a cheque model. MONDEX Cash scheme based on a hardware “purse” device. This provides the portability and network independence of physical coin. SECURE COURIER NETSCAPE A card payment scheme based upon public key technology built on the Secure Sockets Layer protocol. SECURE ELECTRONIC PAYMENT PROTOCOL MASTERCARD MasterCard sponsored payments protocol based upon the IBM IKP protocol. Developed in association with IBM, Netscape, Cyber Cash and GTE Corp.
SECURE INTERNET PAYMENT SERVICE CYBERCASH An established payments scheme employing public key cryptography to protect the customers authentication data and provide non-reputability. STORED VALUE CARD VISA A planned cash scheme based on hardware device permitting purchases. VISHNU HEWLETT-PACKARD LABS BRISTOL A mechanism for cheque/card based payment. Employs a Differ Holliman based cryptographic mechanism which permits novel data flow optimizations. RELATED WORK XIWT Another National Information Infrastructure consortium. This one provides a comprehensive breakdown of the requirements for electronic cash.
ELECTRONIC MONEY AND MONEY IN HISTORY ROY DAVIES Two articles on the history of money with a well designed annotated index. The First International Conference on Electronic Commerce University of Texas at Austin, Austin — October 30-31 1995 FURTHER WORK Provision is made for unlisted schemes to be registered. At present no facilities are provided to provide alternative analysis according to taxonomy of their choice such as performance or to provide comment on a particular proposal. TOP 10 PLAYERS IN BANKING & FINANCE * State Bank of India * HDFC bank * Citibank * ICICI Bank * Punjab National bank UTI Bank * Hongkong & Shanghai Banking Corp. * Kotak Mahindra Bank * Sundaram Bank * Oriental Bank of Commerce A brief detail of these private banks is as follows: THE STATE BANK OF INDIA The State Bank of India, the country’s oldest Bank and a premier in terms of balance sheet size, number of branches, market capitalization and profits is today going through a momentous phase of Change and Transformation – the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an ability to give the Private and Foreign Banks a run for their money.
The bank is entering into many new businesses with strategic tie ups – Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc – each one of these initiatives having a huge potential for growth. HDFC | |
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI’s liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of ‘HDFC Bank Limited’, with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. |
Currently has a nationwide network of 1,780 Branches and 5,318 ATM’s in 833 Indian towns and cities. HDFC Bank marked the beginning of its services in the year 1995 with setting a loud and clear message that it wants to become a “World-class Indian Bank”. It always believed in winning the hearts of its customers with quality products and services. It is the sole reason why today HDFC has been able to achieve both national and international acclaim. CITIBANK COMMITMENT TO INDIA: * Established in the year 1902 in Kolkata Is the largest foreign direct investor in financial services in India with a total capital commitment of over USD 4 Billion in its onshore banking and financial services business, its principal and alternate investment program * As promoter-shareholder, Citi has played a leading role in establishing important market intermediaries with depositories, credit bureaus, clearing and payment institutions * Operates 42 full-service Citibank branches in 30 cities and over 450 ATMs across the country * Employer of choice to over 8,000 people and indirect employer to more than 20,000 others * Is the largest taxpayer in India among international financial institutions? ICICI BANK ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution, in 1994. ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank has 1,420 branches and about 4,644 ATMs.
Talking about foreign countries, ICICI Bank has made its presence felt in 18 countries – United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The Bank proudly holds its subsidiaries in the United Kingdom, Russia and Canada out of which, the UK subsidiary has established branches in Belgium and Germany. PUNJAB NATIONAL BANK (PNB) The Punjab National Bank or PNB is one of the well known commercial and banking institutions in India. It is the second largest government owned and regulated commercial bank in the country and offers specialized solutions and financial services in a number of sectors. Around 37 million customers are served by the bank on an average basis. The customized facilities and services make it a trusted name in the domain of banking.
Punjab National Bank was registered under the Indian Companies Act on 19 May in the year 1894 and its first office was set up at Anarkali Bazaar in Lahore. Since then, the bank has become a great name in the field of banking and is very much preferred by the customers for the wide range of its services. AXIS BANK Axis Bank was formed as UTI when it was incorporated in 1994 when Government of India allowed private players in the banking sector. The bank was sponsored together by the administrator of the specified undertaking of the Unit Trust of India, Life Insurance Corporation of India (LIC) and General Insurance Corporation ltd. and its subsidiaries namely National insurance company ltd. the New India Assurance Company, the Oriental Insurance Corporation and United Insurance Company Ltd. However, the name of UTI was changed because of the disagreement on terms and conditions of the bank authority over certain stipulations including royalty charged over the name from UTI AMC. The bank also wanted to have a new name from its pan-Indian as well as international business perspective. So from July 30, 2007 onwards the UTI bank was named as Axis Bank. HSBC HSBC’s origins in India date back to 1853, when the Mercantile Bank of India was established in Mumbai. The Bank has since, steadily grown in reach and service offerings, keeping pace with the evolving banking and financial needs of its customers.
In India, the Bank offers a comprehensive suite of world-class products and services to its corporate and commercial banking clients as also to a fast growing personal banking customer base. KOTAK MAHINDRA BANK Kotak Mahindra Bank is one of India’s leading financial private banking institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial services include commercial banking, stock broking, mutual funds, life insurance and investment banking. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a private financial institution to a bank. ORIENTAL BANK OF COMMERCE
Oriental Bank of Commerce India was established in the year 1943 on 19th February in Lahore. After partition, Oriental Bank of Commerce shifted its Registered Office from Lahore to Amritsar paying every rupee to its departing customers. Oriental Bank of Commerce was nationalized on 15th April in 1980. Then OBC bank had 307 branches with Rs. 282. 61 crore as deposits and as advance Rs. 152. 69. OBC has a network of 530 branches and 505 ATM’s spread throughout India, out of which 490 branches offer centralized banking solutions. OBJECTIVE OF STUDY/NEED OF STUDY CONTRIBUTION TO THE ACADEMICS Banking is one of the most important career choices among students because it is well paid, secure and high status career.
Though it may appear that these jobs are meant for commerce/economics students but the fact is that majority of bank officers are from different streams of education like Arts, Science and others. The all round demands for professionals has made banks: Public Sector, Foreign and Multinational to recruit more and more MBA graduates, CAs and CFAs to enhance efficiency. Nevertheless bright graduates from any subject can get entry in the Public sector Banks through an All India Examination conducted themselves by banks. CONTRIBUTION TO THE INDUSTRY To understand the issues and constraints faced by a product manager in re-naming or withdrawing a Banking service or product from the market.
To understand the issues and constraints faced by marketers with regard to deciding on a suitable brand name or any brand extension for banking service. To appreciate the importance of customer interaction and understanding the behavior of the target customer segment. CONTRIBUTION TO THE SOCIETY The importance of banks in Indian economy has been very commendable in generating employment and thus eliminating poverty. Further, it also affected the following – * Changed the age old perception of poor agriculture based country to a rising manufacturing based country. * Effected better higher education facilities especially in technical fields. Ensured fair competition amongst market players. * Dissolved the concept of monopoly and thus neutralized market manipulation practices. * Increased access to essential items. * Increased production opportunities. * Lowered prices of essential items. * Increased value of human capital. * Improved social life of the middle class Indian. * Decreased the percentage of people living below the poverty line in India. RESEARCH METHODOLOGY “RESEARCH IS AN ART OF SCIENTIFIC INVESTIGATION OR ENQUIRY, ESPECIALLY THROUGH SEARCH FOR NEW FACTS IN ANY BRANCH OF KNOWLEDGE. ” RESEARCH DESIGN A research design is a framework or blueprint for conducting the research project.
It specifies the details of the procedures necessary for obtaining the information needed to structure and/or solve research problem. We can classify research design into two general types: * Exploratory research * Conclusive research * Exploratory research: Exploratory research is one type of research design, which has its primary objective the provision of insights into, and comprehension of, the problem situation confronting the researcher. * Conclusive research: Conclusive research is designed to assist the decision maker in determining evaluating and selecting the best course of action to take in a given situation. Conclusive research can be further divided into two types:- * Descriptive * Experimental The research design used in this project is a DESCRIPTIVE DESIGN.
Descriptive study as the name implies is designed to describe something-for example the characteristics of users of a given product, the degree to which the product use the varies with income, age, etc SAMPLING TECHNIQUE USED This research has used convenience sampling technique. 1) Convenience sampling technique: Convenience sampling is used in exploratory research where the researcher is interested in getting an inexpensive approximation of the truth. As the name implies, the sample is selected because they are convenient. SAMPLE SIZE For the study, a sample size of 100 has been taken into consideration. METHODOLOGY AND SOURCES OF DATA COLLECTION Research will be based on two sources: 1. Primary data 2. Secondary data 1) PRIMARY DATA:
On asking, Are any application form available on your bank’s website: 68% gave response in “Yes” that application form available on their bank’s website, while 32% gave response in “No”. Q. 5 If Yes! How does you submit it? EVALUATION: From the survey it was found that amongst all respondents: a) 57% of the respondents like to submit their application form In-Person. b) 36% of the respondents like to submit their application form Online. c) 5% of the respondents like to submit their application form by Mail. d) 2% of the respondents like to submit their application form by any Other Option. Q. 6 Does Your bank verifies the legitimacy of your application form you have submitted? EVALUATION:
On asking, does your bank verify the legitimacy of its customers while providing loans: Majority of the persons 94% views that their bank verifies the legitimacy of its customers while providing loans and 6% were in “No” in their views. Q. 7 In your opinion, what is the main issue with the electronic payment system? EVALUATION: On asking, what is the main issue with the electronic payment system in their opinion, responses were as follows: 38% of the respondents view that Transaction is the main issue with the electronic payment system. 27% view that Reputation, 20% view that Compliances, 11% view that Strategy and 4% view that any other option is the main issue with the electronic payment system. Q. 8 What is included on your bank’s website? EVALUATION: