Chapter 1 INTRODUCTION

Banks and financial institutions are the backbone of the economy of the country. Implementation of Information Technology and communication networking has brought revolution in the functioning of the banks and the financial institutions. For the sound implementation of Information Technology in banks and financial institutions, necessary legal support is a must. Legal issue relating to electronic transactions processing at banks is very much and there was a need to address them by amending some of the existing Acts and introduction to new act. Necessary legislative support is essential to protect the interests as much of the customers as of the banks in several areas relating to electronic banking and payment system. This is specially required to establish the credibility of Electronic Clearing System and Electronic Funds Transfer schemes based on the electronic massage transfer schemes based on the electronic massage transfer.
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THE USE OF INFORMATION TECHNOLOGY TO TRANSFORM THE BANKING SECTOR IN DEVELOPING NATIONS
Information technology (IT) is increasingly becoming an invaluable and powerful tool driving development, supporting growth, promoting innovation, and enhancing competitiveness. Emerging information technology offers opportunities for developing nations to leapfrog earlier stages of development. It is also important to note that with an increasinglyglobal environment less limited by time or distance, nations around the world need to get connected and join the global networked community. Otherwise, they may fall further behind and the gap they have with the developed world could get wider. Additionally, there isgrowing evidence that information technology is becoming an increasingly powerful toolwhen used as part of an overall development strategy coupled with partnerships between governments, business, and civil society (World Bank, 2003).

Information and communication technology coupled with knowledge management holdmuch potential for propelling the development process (Okpaku, 2003). The vital roleinformation and communication technology is playing is felt across many industries andsectors, affecting both economic development and growth at large in many societies. The resulting implications have had a major role in transforming such sectors and have affectedthe economic-development process in developing nations.The banking sector is an example in which information-technology infrastructures have had implications on the economicdevelopment of many nations in the developing world. It is important to note that thebanking industry was one of the very first to utilize information technology back in the1960s, and has thus a record of influencing the development process through the technology.

There are many examples of information-technology applications in the banking sectorthat have helped build new markets and fuel the economy. For example, automated tellermachine (ATM) technology adoption has increased community efficiency, which led to areduction in costs, improvement of quality, and increase in the added value to customers.

However, some of the implementations of information technology in the banking sector in the context of developing nations are often hindered by a number of challenges, including(but not limited to) lack of stability of the legislation, weak financial sector, poor technological infrastructure, and relatively small Internet and computer penetration (Gurau, 2002).

In recent years, developing nations are increasingly investing in building up and improvingtheir technology infrastructure. For example, Nigeria is investing heavily in building itstechnology infrastructure. Among the areas they focus on are electronic commerce, electronic banking, and electronic learning (Akpan, 2003). Despite the potential of information technology to contribute to development, other factors, such as forming a community of users, are vital in order to realize potential role of information technology and take advantage of the opportunities created. In that respect, there is a need for the policies that enable the much-needed framework that can help realize the benefits of information technology across different sectors. For example, the World Bank has developed a range of lending instruments to support governments in activities in the telecommunications, Internet,information technology, postal, and broadcasting sectors as well as ICT applications in other sectors (World Bank, 2003). Moreover, the International Finance Corporation (IFC) provides long-term financing for private providers of information and communicationsinfrastructure and services in developing countries, and invests with a focus on buildingsuccessful information technology businesses in emerging markets (World Bank, 2003).There are a number of ways in which information technology is transforming the bankingsector to enable development. It enables access to
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information, loans, and microcreditfor poor farmers in rural communities. An example could be drawn from the case of theGrameen Bank, which was founded in 1976 in Bangladesh. The problem prevailing at thetime was the virtual impossibility of the poor in rural Bangladesh to obtain the necessarycredit from banks to start businesses and work to improve their socioeconomic conditions.

The solution provided by the Grameen Bank was that it reversed some of the conventionalbanking practice by removing the need for collateral and created a banking system based on a mutual trust, accountability, participation and creativity. With the growing success of the model, more diversified operations were introduced in an attempt to improve the overall economic performance of the country (Haqqani, 2003). The role of information technology in the case of the Grameen Bank could be felt through its 68 different informationmanagement centres, each providing computer access to three of the banks branches; 10of the 15 zone offices have Internet access. The success of the bank could be measuredthrough the 1 billion U.S. dollars it lent to over 2 million borrowers, virtually becomingthe best-known microcredit program in the world; a model that is now replicated in50 countries. According to a number of studies conducted by the World Bank, about 50% of the borrowers of the bank managed to get out of the poverty bracket, with more expectedto follow suit (Haqqani, 2003). The model of the bank rendered the average householdincome of its members 25% higher than that of non-members. Another example could be drawn from the Grameen family of organizations that serves women at the village level in Bangladesh. Villagers, mostly women, eligible for microcredit,are given loans to purchase mobile phones (Village Phones). They subsequently provide telephone services for the villagers in their community, and through such services they earn enough money to repay the Grameen Bank loan. Each operator expects to earn more than1,000 U.S. dollars per year in comparison to the countrys average of 380 U.S. dollars.

The implications and added value of this project include remarkably reducing the costof making a call for the rural community, who used to travel to nearby cities prior tothe provision of such services. Also, owning mobile phones empowers rural women andthem with economic independence and a more prominent role in their community. It is important to note that the use of information technology represents a platformfor business and socioeconomic development. The speed, direction, and determinants of information technology infrastructure directly influence productivity, cost effectiveness, and competitiveness in industries (Antonelli, 1991). Technology can be used as a means toan end and not an end in itself; if so it could leverage and improve the developmental processof a nation, let alone a developing nation, if the infrastructure is enabled and effectively used(Kamel, 1998). However, between the north and the south, alternatively labelled developedand developing nations, there is a gap between those who have access to the Internet(information) and those who do not, also known as haves and have-nots (Kamel, 2001).

Such a growing digital divide between the haves and have-nots already existed before theInternet evolution and has grown further, attracting increasing attention and awareness tothe problem and spurring several initiatives and projects. There are a number of factors that are contributing to this divide. Segmented Internet Accessibility along social class and educational capabilities is a significant one. Statistics show that almost 10% of the worlds population now has access to the Internet. However,] the majority are concentrated in the north, that is, in the developed world. There are,though, some changes in the global Internet, where, for the first time, Europe has the highestnumber of Internet users, followed by the Asia Pacific region. But the digital divide betweendeveloped and developing nations is still wide, although some studies indicate some signsof improvement.

IMPORTANCE OF HAVING INFORMATION TECHNOLOGY

Importance of having Information Technology With the increasing importance of Information Technology in the present age, a lot of companies are realizing the importance of outsourcing the work related to this aspect and concentrating only on their core processes instead of employing a full-fledged IT department on the company premises itself.

Assigning the IT-related work to external sources provides many cost related benefits and also helps to build a better rapport with the customers. For better understanding of this point, a list has been compiled below: Economy in Operations: There is a great degree of economy in operations for the company as instead of employing a number of employees and investing in building up of a whole new department, the same work can be completed at a cheaper rate by outsourcing it to small and new companies. They are willing to work at low costs and provide up-tothe-mark work due to rising competition in the market related to this fielddoes not have to spend time and money in the recruitment and training processes as the same work can be done by outside sources that specialize in this field.

If the company has a few people employed in the IT department, it is completely dependent on them for all IT-related work. During the absence of these persons, it becomes very difficult for the company to find suitable replacements. There is no benefit of choosing the best possible option which is there when the same work is outsourced. In the case of in-house employees performing IT work, the company is completely reliable on them and at their mercy. The company to whom the work has been outsourced provides a wide range of experts who are the best in the field. This
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lends a degree of professionalism.Flexibility: Outsourcing the work to other companies provides flexibility for the company as they can call upon these companies and assign work whenever required. They need not be employed full-time. BENEFITS OF INFORMATION TECHNOLOGY Operational excellence The use technology for efficiency doing things Wright in the least amount of time, with the fewest number of errors, and so on. Major Business Initiatives The use of technology to support initiatives such as customer relationship management, enterprises resources planning, sales for automation, and supply change management. Supply change management (SCM) An IT system that supports supply chain management activities by automating the tracking of inventory and information among business processes and across companies.

Customer relationship management (CRM) CRM consists of the processes a company uses to track and organize its contacts with its current and prospective customers. CRM software is used to support these processes; information about customers and customer interactions can be entered, stored and accessed by employees in different company departments. Sales force automation (SFA) system Automatically tracks all the steps in the sales process.
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ROLE OF EXPERTS SYSTEM IN BANKING

Financial Institutions and Banks are continuously searching for new ways to use technology to deliver increasing number of products and services to their customers on one hand, on the other putting technology in use for problem solving and decision support. Expert system represent in the major areas that have found promising and strategic role in majority of the banks and financial institutions. Banks in the USA and Canada are developing or investing expert system for commercial applications although there are few known expert system currently in use but the future will see emergence of expert system in to the computing environment of the corporate world. Expert system is a computer program designed to model the knowledge and experience of human experts. This expertise is the key ingredient used for solving complicated problems or assessing or evaluating a plan or proposal. Thus expert systems are well suited to services organizations. They can emulate the intricate through process of experts and make the expertise available to less performing the type of tasks of highly aid experts. Experts system does not replace people but assists them to be more effective typically they are advice giving or decision support systems. The finance domain can clearly benefit from the application of experts system technology. The benefits thus derived could be listed as follows: Increase in speed of complex task accomplishment. System reduced a 3-hour system configuration task to 15 minutes. Increased quantity Reduced errors Decrease personnel required Canons Optex camera lens designed system has made scarce highly skilled lens designers, 12 times more productive. Reduced cost Reduced training time
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CORE BANKING SOLUTIONS

Core banking solution is designed on a customer centric, completely web based paradigm. The multi-lingual, multicurrency CRM-enabled core banking solution addresses the end-to-end requirements of banks. Based on open systems, this extensively parameter sable solution comes with comprehensive out-of-the-box features and packs several unique features like 24*7 operations, STP, workflow, multiple delivery channel support and the e-extensibility tool kit-all to deliver unparalleled value to banks. Core banking solution is fully multichannel alertsenabled and facilities banks customers through their channel of choice.

FUNCTIONAL OVERVIEW

Core banking solution offers comprehensive retail, corporate and trade finance features-all in a highly secure and reliable environment.

RETAIL BANKING

Core banking solution supports product management and account management for the full range of retail banking products such as savings, current/checking, overdraft,
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revolving overdraft, term deposits and all types of retail loans [personal loans, auto loans and mortgages.

CORPORATE BANKING

Core banking solution provides comprehensive product management and account management for corporate banking products such as commercial loans, syndications [participation], securitization, term loans, demand loans, overdrafts, nonperforming asset management, limit management, debt consolidation through replacements, collateral management, interest rate management and loan modelling.

TRADE FINANCE

Core banking solution offers powerful trade finance features covering business areas like bills (foreign and inland), documentary credits/letter credit, pre-shipment credits, bank guarantees, forward contracts and foreign remittances among others.

COMMON MODULES

Core banking solutions offers extensive common modules which include support for clearing (including electronic and RTGS), standing instructions, general ledger, signature display and management, document tracking, limits and collateral management, delinquency management and the whole range of day to day and year end reports. Core banking solution has the capability of interfacing with various

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payment gateways, anti-money laundering solutions, regulatory reporting systems, statements management and distribution systems and consolidation packages.

ROLE OF INFORMATION TECHNOLOGY IN BANKING SECTOR

Banking environment has become highly competitive today. To be able to survive and grow in the changing market environment banks are going for the latest technologies, which is being perceived as an enabling resource that can help in developing learner and more flexible structure that can respond quickly to the dynamics of a fast changing market scenario. It is also viewed as an instrument of cost reduction and effective communication with people and institutions associated with the banking business.

The Software Packages for Banking Applications in India had their beginnings in the middle of 80s, when the Banks started computerizing the branches in a limited manner. The early 90s saw the plummeting hardware prices and advent of cheap and inexpensive but high powered PCs and Services and banks went in for what was called Total Branch Automation (TBA) packages.

The middle and late 90s witnessed the tornado of financial reforms, deregulation globalizationetc.coupled with rapid revolution in communication technologies and evolution of novel concept of convergence of communication technologies, like internet, mobile/cell phones etc.

Technology has continuously played on important role in the working of banking institutions and the services provided by them. Safekeeping of public money, transfer of money, issuing drafts, exploring investment opportunities and lending drafts, exploring investment being provided.
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Information Technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products and services.

The customers can view the accounts; get account statements, transfer funds and purchase drafts by just punching on few keys. The smart cards i.e., cards with micro processor chip have added new dimension to the scenario. An introduction of Cyber Cash the exchange of cash takes place entirely through Cyber-books. Collection of Electricity bills and telephone bills has become easy.

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The upgradeability and flexibility of internet technology after unprecedented opportunities for the banks to reach out to its customers. No doubt banking services have undergone drastic changes and so also the expectation of customers from the banks has increased greater.

IT is increasingly moving from a back office function to a prime assistant in increasing the value of a bank over time. IT does so by maximizing banks of proactive measures such as strengthening and standardizing banks infrastructure in respect of security, communication and networking, achieving inter branch connectivity, moving towards Real Time gross settlement (RTGS) environment the forecasting of liquidity by building real time databases, use of Magnetic Ink Character Recognition and Imaging technology for cheque clearing to name a few. Indian banks are going for the retail banking in a big way

The key driver to charge has largely been the increasing sophistication in technology and the growing popularity of the Internet. The shift from traditional banking to ebanking is changing customers expectations.

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E-Banking:

E-banking made its debut in UK and USA 1920s. It becomes prominently popular during 1960, through electronic funds transfer and credit cards. The concept of webbased baking came into existence in Europe and USA in the beginning of 1980.

In India e-banking is of recent origin. The traditional model for growth has been through branch banking. Only in the early 1990s has there been a start in the nonbranch banking services. The new private sector banks and the foreign banks are handicapped by the lack of a strong branch network in comparison with the public sector banks. In the absence of such networks, the market place has been the emergence of a lot of innovative services by these players through direct distribution strategies of non-branch delivery. All these banks are using home banking as a key pull factor to remove customers away from the well entered public sector banks.

Many banks have modernized their services with the facilities of computer and electronic equipments. The electronics revolution has made it possible to provide ease and flexibility in banking operations to the benefit of the customer. The ebanking has made the customer say good-bye to huge account registers and large paper bank accounts. The e-banks, which may call as easy bank offers the following services to its customers: Credit Cards/Debit Card/smart card ATM E-Cheques
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 EFT (Electronic Funds Transfer) DE MAT Accounts Mobile Banking Telephone Banking Internet Banking EDI (Electronic Data Interchange)

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SMART CARDS

It is a standard plastic card, except that it contains a micro-processor and a storage unit. It can hold a lot of information about the card holder, including digital certificates. It can be used in all banking transactions. It can also be used as an Electronic Purse in to which monetary value has been loaded. Full range of cash management and foreign exchange services are available over the Net to corporate users through the use of smart cards. Smart Card sometimes called stored-value, have a specific amount of credit embedded electronically in the card. A credit card with a built in micro-processor and memory is used for identification or financial transaction. When inserted into a reader, it transfers data to and from a central computer. It is more secure than a magnetic stripe card and can be programmed to self-destruct if thewrong password is entered too many times. As a financial transaction card, it can be loaded with digital money and used like a travellers cheque, except that variable amounts of money can be spent until the balance is zero. These cards make the transaction fast, easy and convenient.
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CREDIT CARD

Credit is a privilege and a convenience. Credit lets you charge a meal on a credit card, pay for an appliance on an instalment plan, and take out a loan to buy a house, or pay for schooling. Credit allows you to make a purchase without ready cash. A credit card enables you to buy things now and pay for them later. You get credit by promising to pay in the future for something you receive in the present. Credit usually costs something, and what is borrowed must be paid back. Credit can be defined as a small plastic card that allows its holder to buy goods and services on credit to pay at fixed intervals through the cards issuing agency. Carrying a lot of cash on you can be cumbersome, risky and sometimes, you run short of it, just when you most need it. Credit card is the smart solution to these problems. It is a convenient and safe alternative for cash. Besides, it says things about you. Most people associate a credit card with a prestige, which it most certainly bestows on you, but more importantly, it says that you have taken the onus of being responsible-to be extended credit! So During 1914, oil companies in the USA issued the first credit card to their customers to purchase gas, oil, accessories etc. at the gas stations. Thereafter, local department stores, airlines and railway companies also started issuing their own credit cards.

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Benefits of credit cards:

Convenient, hassle-free shopping : When you use a credit card to make a purchase, you dont have to carry a lot of cash, pay by check ,or present additional identification. A credit card also simplifies and speeds up catalog ordering and currently is virtually the only way to make interest purchases.

Emergency help: Credit cards are the ultimate financial security blanket. They can get you through nearly any emergency situation.

Easier budgeting: With a credit card, you can make purchases and pay them off on a schedule that fits your budget. Credit cards also allow you to take advantages of sales and special offers.

Security: If you lose cash, it can be used by anyone. If you lose a credit card and report the loss to the cards issuer before it is used, the issuer cannot hold you responsible for any responsible for any unauthorized charges. If a thief uses your card before you report it missing, the most you will owe is $50. Travel expenses: Youll find that a credit card is almost essential for renting a car, purchasing an airplane ticket, or booking a hotel room. Whether youre across town or on another continent, a credit card is the universal guarantee of your good financial standing. And if you need cash, you can get it at ATMs or bank around the World that accepts your credit card.

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Drawbacks: Greed: Just because you have credit being extended to you doesnt mean that you should go on a rampage! Use your card with discretion and caution. Remember, it is an extremely expensive way to borrow money! View it as a convenient and safe way to carry cash, a timely help in an emergency or taking advantage of an opportunity that you would have otherwise lost out on, like an investment!

Tendency to overspend: Cardholder responsible for loss and misuse of his card till after 24 hours of reporting loss. Might lead to profligacy which ends up in huge debts.

GOING GLOBAL

A credit card which can be used to pay for products and services worldwide- a global card- makes travel abroad, whether on business or vacation, a pleasure. There is no need to carry travellers cheques or foreign currency any more. Guidelines recently introduced in India allow institutions to issue a single credit card that can be used to pay for products and services all over the world (over 200 countries at present) and to settle the accounts in Indian rupees. This is a vast improvement over the previous system which allowed a few select cardholders to repay the outstanding amount in dollars only, while the regular credit cards were valid additionally only in NEPAL and BHUTAN. However, the use of global cards is still governed by RBI guide lines on Foreign Exchange permitted for official and personal trips.

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DEBIT CARD

A Debit cards are also known as check cards. Debit cards look like credit cards or ATM (automated teller machine) cards, but operate like cash or personal cheques. Debit cards are different from credit cards. While a credit card is a way to pay later, a debit card is a way to pay now. When you use a debit card, your money is quickly deducted from your checking or savings account. Debit cards are accepted at many locations, including grocery stores, retail stores, gasoline stations, and restaurants. You can use your card anywhere merchants display your cards brand name or logo. They offer an alternative to carrying a cheque book or cash.

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TWO TYPES OF DEBIT CARD On-Line Debit Cards

These cards usually are enhanced ATM (automated teller machine) cards which work the same as they would in an ATM transaction. It is an immediate electronic transfer of money from your bank account to the merchants bank account. To access your account at a store terminal, you must punch in your personal identification number (PIN), as you would at an ATM. The system checks your account to see if it has enough money available to cover the transaction. Off-Line Debit Cards

These cards usually look like a credit card and resemble a credit card transaction. The merchants terminal reads your card, identifies it as a debit rather than a credit card and creates a debit against your bank account. However, instead of debiting your account immediately, it stores the debit for processing laterusually within 23days.Most, but not all, transactions are verified to see if there are adequate funds. Instead, of using a PIN number, the customer must sign a receipt, a she or she would be with a credit card.

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The On-Line and Off-Line distinction may not matter to you unless: Your financial institution charges transactions or monthly fees. You prefer the security of a PIN required transaction. You prefer that both options not be on one card.

DIFFERENCE BETWEEN A DEBIT CARD ANDA CREDIT CARD

Its the difference between debit and credit. Debit means subtract. When you use a debit card, you are subtracting your money from your own bank account. Debit cards allow you to spend only what is in your bank account. It is a quick transaction between the merchant and your personal bank account.

Credit is money made available to you by a bank or other financial institution, like a loan. The amount the issuer allows you to use is determined by your credit history, income, debts, and ability to pay. You may use the credit with the understanding that you will repay the amount, plus interest if you do not pay in full each month. You will receive a monthly statement detailing your charges and payment requirements.

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AUTOMATED TELLER MACHINE (ATM)

ATM is a device; that allows customers who have an ATM card to perform routine banking transactions without interacting with a human teller. ATMs are currently becoming popular in India that enables the customer to withdraw their money 24 hours a day, 7 days in a week. The simplest ATM allows a customer to withdraw cash up to specified amount by operating the machine via a magnetic card to a host computer.

Updating of operations can be either off-line or on-line. In addition to cash withdraws, ATMs can handle deposits and enquiries, arrange loans and insurance, arrange the buying and selling of stocks and customers on different savings and investment schemes. Terminals can be special task terminals such as cash deposit terminal or statement printer terminal or full function terminals which can perform all the tasks.
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An ATM is operated through the customers magnetic card. A personal identification code allotted to a customer is magnetically needed by the ATM. When this identity is established, he is allowed to carry out the operations. Generally 3 tracks are used for transaction processing: Track 1 for account code any bank code Track 2 for credit card (shop centres) Track 3 for debit cards purchaser/ATM card)

In the case of cash deposits, ATMs can issue a receipt to the customer acknowledgement receipt of the cash. Cash withdraws can be made only in specified denominations. An ATM could handle as many 5000 cash transactions without needing replenishment of notes or journal paper.

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ADVANTAGES OF AUTOMATIC TELLER MACHINE:-

ATMs also called 24-hours tellers are electronic terminals which gives consumer the opportunity to bank at almost any time, like withdraw cash, make deposits or transfer funds accounts, a personal identification number. Some ATM charge a usage fee for these services, with a higher fee for consumer, who has an account at their institution.

If a fee is charged, it must be revealed on the terminal screen or on a sign next to the screen. In addition to cash with drawls, ATMs can handle deposits and enquiries, arrange loans and insurance and arrange the buying and selling of stocks and advice customers on different savings and investment schemes.

The invention of the Automated Teller Machines or ATMs have made banking more convenient as people would not have to go inside the bank and wait for tellers to help them. In addition to this, people can also access these ATMs all day long and they are located in various locations such as the mall or parks, which save time since people would not have to go to the bank in case they run out of cash.

However, using these machines has some risks. People who use them are not given the same security they would usually get when they are inside a bank. Fortunately, there are some steps people can take which can give them a certain level of security as they withdraw their hard earned money.

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E-CHEQUES SYSTEM

Electronic cheques are another form of Electronic tokens. They are designed to accommodate the many individuals and entities that might prefer to pay on credit or through some mechanism other than cash. Once registered, a buyer can then contact sellers of goods and services. To complete a transaction, the buyer sends a check to the seller for a certain amount of money. These checks may be sent using Email or other Transport methods. When deposited, the cheque authorises the transfer of account balances from the account against which the cheque was drawn to the account to which the cheque was deposited. This method has been deliberately designed to work in the manner conventional cheques work .

Advantages of Electronic cheques: 1. Similar to traditional cheques. This eliminates the need for customer education 2. Since Electronic cheques use conventional encryption than Public and private keys as in cash, Electronic cheques are much faster. 3. The risk is taken care of by the accounting server, which will guarantee that the cheque would be honoured

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ELECTRONIC FUNDS TRANSFER (EFT)

Electronic funds transfer (EFT) is the electronic exchange, transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems. The term covers a number of different concepts: Cardholder-initiated transactions, where a cardholder makes use of a payment card Direct deposit payroll payments for a business to its employees, possibly via a payroll service bureau
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 Direct debit payments, sometimes called electronic checks, for which a business debits the consumer's bank accounts for payment for goods or services Electronic bill payment in online banking, which may be delivered by EFT or paper check Transactions involving stored value of electronic money, possibly in a private currency Wire transfer via an international banking network Electronic Benefit Transfer In 1978 the U.S. Congress passed the Electronic Funds Transfer Act to establish the rights and liabilities of consumers as well as the responsibilities of all participants in EFT activities in the United States.

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DEMAT ACCOUNT

The term "demat", in India, refers to a dematerialized account for individual Indian citizens to trade in listed stocks or debentures in electronic form rather than paper, as required for investors by the Securities and Exchange Board of India (SEBI). In a demat account, shares and securities are held electronically instead of the investor taking physical possession of certificates. A demat account is opened by the investor while registering with an investment broker (or sub-broker). The demat account number is quoted for all transactions to enable electronic settlements of trades to take place. Access to the demat account requires an internetpassword and a transaction password. Transfers or purchases of securities can then be initiated. Purchases and sales of securities on the demat account are automatically made once transactions are confirmed and completed.
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MOBILE BANKING

Mobile banking (also known as M-Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). Mobile banking and Mobile payments are often, incorrectly, used interchangeably. The two terms are differentiated by their service provider-to-consumer relationship; financial institution-to-consumer versus commercial institution-to-consumer for mobile banking and payments, respectively. Mobile Banking involves using mobile devices gain to access financial services. Mobile payments on the other hand may be defined as the use of mobile devices to pay for goods or services either at the point of purchase or remotely. The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999.

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INTERNET:-

INTRODUCTION: There is a sea change in the media world. While most consumers see the news papers, the same magazines and listen to the same radio programs, behind this bland public exterior there is a seething world of innovation, acquisition, global partnership and divorces, births and deaths all of it most readily interpreted as the inevitable result of the technological revolution that is in the process of merging telephones, computers, televisions in to a single all singing, all dancing magic kit that will, very possible, change all of our lives more than we can imagine some day There are 2 ways you can respond to this 1 is to panic, which may mean simply curling up in a corner and wishing that it would all go away. The other is to embrace the new religion with messianic fervor and go out to proclaim the millennium. I welcome you to the new emerging world of the Info-High-Way, destined to redefine the world of communications:

HISTORY: It is said that necessity is the mother of invention. And true, it is seeds of Internet were sown in the ashes of the world war Having bombed the cities of Hiroshima and Nagasaki, US military was forced to provide the answer to the question What if someone bombed the USA? So for many years after the war, most of the US military research concentrated on ways and means to survive the nuclear holocaust. And one of the most important strategic problems was- How would us authorities communicate with each other in the aftermath of a nuclear attack? computers were already there. But, communication networks were connected to each in a private fashion- in sort of chains: somewhat like an electricity line to your home. This means that if even one chain in the middle were blown up, the whole network would collapse.
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VARIOUS PARTS OF INTERNET: The Internet is made up of terminal computers through which subscribers access the net; gateways servers which connect the users to the rest of the network (of computers); servers which host information in them; and, the communication network over which data actually flows. Internet offers its users a variety of services. The subscribers may have access to all or any of the following services depending upon the type of connection that one has subscribed for: 1) E-Mail 2) World Wide Web (WWW) 3) File Transfer Protocol (FTP) 4) Telnet

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WHAT IS INTERNET BANKING?

Internet Banking System is a system that has been developed in order to help clients with the daily day-to-day transactions. Internet banking systems means that clients can now do banking at the leisure of their homes. Also known as online banking, the system allows both transactional and nontransactional features. Online banking or internet banking allows customers to conduct financial transactions on a secure website operated by the retail or virtual bank.

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HISTORY: The term online banking was first started in 80s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. Home banking can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the citys major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotext system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidized by the telecom provider and the UK, where the Prestel system was used. The UKs first home online banking services was set up by the Nottingham Building Society (NBS) in 1983 .The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as 'Home link') allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Home link system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly. Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in Oct, 1994. Later on it was adopted by worldwide banks.

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ELECTRONIC BANKING

The growth of internet and e-commerce is dramatically changing everyday life with the world-wide-web and e-commerce transforming the world into a digital global village. Customers and users have become netizen, and these are people who expect everything to happen at the click of the mouse. In this new digital marketplace banks and financial institutions are not lagging behind and have started providing service electronically over the Internet. These types of service provided by the banks on Internet, called e-banking, lower the transaction cost, add value to the banking relationship and empower customers. The study investigated the response of the bank customers regarding the working of e-banking as compared to manual banking system. Electronic Banking is an integrated Internet Banking that empowers the financial organization to extend the existing bouquet of services andprocess in to the Internet age. E-Banking presents a single face to the customer by consolidating multiple services on to a common platform, thus doing away with the need to maintain diverse online applications. E-Banking is the result of systematic analysis of the business and technology needs of financial institution and has evolved in to a truly global institutions in providing a secure online platform, capable of integrating with multiple back end process systems. E-Banking utilizes a Single Platform MultipleComponents framework and comes packaged with a ready suite of web components for servicing banking needs across. Retail Banking Corporate Banking Private Banking Mutual Funds and Equities Trading

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HOW ELECTRONIC BANKING WORKS Net banking makes it easy to transfer ones money from one branch in a particular city to any other branch in other city. One can open a FD account via the net. One needs to provide data regarding the amount and term of the deposit and also the branch in which the account is to be opened. One can order for an issue of demand draft or a bankers cheque. However, the draft can be delivered only to the customers address and not to any other third party. One can inquire on the balance of ones savings, current and FD account and also on the tax deducted at source of ones FD account for the current and previous financial year. One can give instructions over the net for stopping payment on cheques. You can request for a cheque book via the internet, which will take three days to come. One can view all the transactions completed on an account for a specified period and get a copy via e-mail. E-Banking has component based modular architecture and is built on open standards. The solution leverages industry standard protocols and methodologies to seamlessly interface with multiple back office systems and enable banks to offer single point access to various products and services.

ELECTRONIC-BANKING FUNCTIONALLY

E-Banking the Internet Banking solution empowers financial institutions to address complex challenges through a ready suite of web applications in various banking areas.

Corporate:International and domestic fund transfers, account transfers Trade finance; Documentary credits/Letters of credit, bank guarantees Cash management: single/bulk payments, collections, cash pooling Forex requests
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Retail:Electronic bill presentment and payments (EBPP): Bill reception, Bill payments (online and scheduled) Credit card payment Loan: Application and status monitoring Account services: Cheque book request, card re-issue request

Trading:Online trading: Mutual funds, Equity, Bonds Portfolio Management

Information services:Customer statements Alerts News Reports

These powerful business services are designed to meet the requirements of any virtual bank. E-Banking provides a comprehensive set of functionality that enables financial institutions to deliver to their customers, products and services that traditionally were only available by visiting the branch in person.

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BENEFITS OF E-BANKING:

To the Customer: Anywhere Banking no matter wherever the customer is in the world. Balance enquiry, request for services, issuing instructions etc., from anywhere in the world is possible. Anytime Banking Managing funds in real time and most importantly, 24 hours a day, 7days a week. Convenience acts as a tremendous psychological benefit all the time.Brings down Cost of Banking to the customer over a period a period of time.Cash withdrawal from any branch / ATM. On-line purchase of goods and services including online payment for the same. To the Bank: Innovative, scheme, addresses competition and present the bank as technology driven in the banking sector market Reduces customer visits to the branch and thereby human interventionInter-branch reconciliation is immediate thereby reducing chances of fraud band misappropriation. On-line banking is an effective medium of promotion of various schemes of the bank, a marketing tool indeed.
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Impact of IT on the Service Quality:

The most visible impact of technology is reflected in the way the banks respond strategically for making its effective use for efficient service delivery. This impact on service quality can be summed up as below: With automation, service no longer remains a marketing edge with the large banks only. Small and relatively new banks with limited network of branches become better placed to compete with the established banks, by integrating IT in their operations.

The technology has commoditizing some of the financial services. Therefore the banks cannot take a lifetime relationship with the customers as granted and they have to work continuously to foster this relationship and retain customer loyalty.

The technology on one hand serves as a powerful tool for customer servicing, on the other hand, it itself results in depersonalizing of the banking services. This has an adverse effect on relationship banking. A decade of computerization can probably never substitute a simple or a warm handshake.

In order to reduce service delivery cost, banks need to automate routine customer inquiries through self-service channels. To do this they need to invest in call centers, kiosks, ATMs and Internet Banking today require IT infrastructure integrated with their business strategy to be customer centric.

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Impact of IT on Banking System: The banking system is slowly shifting from the Traditional Banking towards relationship banking. Traditionally the relationship between the bank and its customers has been on a one-to-one level via the branch network. This was put into operation with clearing and decision making responsibilities concentrated at the individual branch level. The head office had responsibility for the overall clearing network, the size of the branch network and the training of staff in the branch network. The bank monitored the organizations performance and set the decision making parameters, but the information available to both branch staff and their customers was limited to one geographical location.

TRADITIONAL BANKING SECTOR:

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The modern bank cannot rely on its branch network alone. Customers are now demanding new, more convenient, delivery systems, and services such as Internet banking have a dual role to the customer. They provide traditional banking services, but additionally offer much greater access to information on their account status and on the banks many other services. To do this banks have to create account information layers, which can be accessed both by the bank staff as well as by the customers themselves.

The use of interactive electronic links via the Internet could go a long way in providing the customers with greater level of information about both their own financial situation and about the services offered by the bank.

THE NEW RELATIONSHIP ORIENTED BANK

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Impact of IT on Privacy and Confidentiality of Data: Data being stored in the computers is now being displayed when required on through internet banking mobile banking, ATMs etc. all this has given rise to the issues of privacy and confidentially of data are:

The data processing capabilities of the computer, particularly the rapid throughput, integration, and retrieval capabilities, give rise to doubts in the minds of individuals as to whether the privacy of the individuals is being eroded.

So long as the individual data items are available only to those directly concerned, everything seems to be in proper place, but the incidence of data being cross referenced to create detailed individual dossiers gives rise to privacy problems.

Customers feel threatened about the inadequacy of privacy being maintained by the banks with regard to their transactions and link at computerized systems with suspicion.

Aside from any constitutional aspect, many nations deem privacy to be a subject of human right and consider it to be the responsibility of those who concerned with computer data processing for ensuring that the computer use does not revolve to the stage where different data about people can be collected, integrated and retrieved quickly. Another important responsibility is to ensure the data is used only for the purpose intended.

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INFORMATION AGE TECHNOLOGIES AND DEVELOPMENT Introduction: Through the emergence of computer technologies the Bank has was supported its borrowing members with individual systems that related to specific functions or services within individual institutions. The current evolution of information technologies requires a sector and macro view in which information technology is a major factor in the future of social and economic growth. This policy statement provides guidance in this novel area constantly in evolution. Furthermore, because of this constant shift, this statement must be seen as an initial starting point; the Bank on a regular basis, should upgrade this policy in order to assure its relevance and value. Historically, the Bank has been engaged in the financing of information systems as they relate to the institutional strengthening of borrowers and executing agencies of projects and programs. The demand for this support has been driven up consistently over the years by the cost saving attributes of automation. Typical borrowers have been the public institutions engaged in the production of services such as utilities, tax collection, pensions etc. The Bank's presence as financier of computers and computer systems will continue through time regulated by the particular sectoral polices associated with each project. Given this, it should be clear from the outset that this policy statement refers to the new set of investment opportunities that emerge with the Internet, and to the future application of information networks in the region. Areas of Action In consideration of the focus and scope of this policy to the areas that constitute the information revolution, Bank action will be mainly directed at the following areas:

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1. Support of national efforts to define and implement a national strategy for information age technologies and development; 2. support for the establishment of the regulatory and policy framework for the information age technologies and development sector; 3. analyses of the information infrastructure needs of the region as a whole including integration components; 4. support for national information infrastructure investment planning; 5. lending for the building of information infrastructure on a national and regional basis; 6. support for the development of the information-producing sector; 7. lending to support the use of information technology to enhance the efficiency and coverage of public social services, and; 8. lending to increase the access of low income citizens to the empowering elements of the information revolution.

Definitions For purposes of this policy, the following definitions apply: Information Age Technologies (IAT) Refer to a broad set of independent technologies that when considered together constitute an information network. An information network is composed of its basic infrastructure: computer, communication links, and switching nodes, and the information content that is stored and transported by the basic infrastructure. Information. A structural and supporting element of economic, social, and natural systems. Information permits the efficient and smooth function of these systems. Information
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failures produce chaotic outcomes and unpredictable volatility and decay. This is seen, for example, in genetic information where failure produces uncontrollable and random outcomes. From another perspective, information is shaping as a major factor of production, in a category with land, labour, capital and energy.

Information network. A structure connecting different locations by means of telecommunications and Information System computing resources for transporting, storing, and processing information. Information Age Technologies and Development. Is the application of IAT to all the traditional sectors that fulfil the Bank's development objectives with its borrowing member countries, as well as a set of new activities which are unique to the information technology sector and that have proven as new vehicles for social and economic furtherance. . An organized set of entities providing a societal capability that is based on the use of information. This capability, which provides measurable benefits to society, encompasses people, institutions, policies, processes, incentives, data, information technology and information infrastructure. Information Technology. The main vehicle for creating, collecting, transmitting, displaying, and storing information. This includes hardware, software media and networks.

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INFORMATION INFRASTRUCTURE.
The articulated presence of both telecommunication networks and strategic information systems required to create widespread access to communications and information services. The information infrastructure is commonly local in domain. Often a national system can be made either independently of local systems or as a conglomerate of independent systems. Typical strategic systems include, among others, systems for education, banking, public health and financial management. Information Content. A given set of information and data that serves a specific purpose. Information Content is the commodity that provides value in use to information systems including global and national networks. In other words, when a user activates a network, he or she derives value from its use by the consumption of the content that resides in the information system. Multimedia. A category of information capable of carrying through an information network all the data to support video and sound. Multimedia applications vary from movies to news to the capability to support live reporting from faraway locations or to carry out twoway video conferencing. Archiving of video content is also an application of multimedia technologies. High Capacity Backbone These are the main trunk lines of the information network. These lines are often optic fibre since this is the most efficient medium in practical existence today. Network Access Points (NAPs). Along with the High Capacity Backbone, the information infrastructure requires substantial investment in the digital switches and routers which move messages
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among users. NAPs enable multiple regional and national Internet Service Providers (ISPs) to interconnect and exchange each others traffic, providing an essential piece of the network infrastructure. Internet Service Provider (ISP). A communication business who handles the exchange of messages among local users internally, but who send messages destined for users outside of the local ISP service area to a Network Access Point. Given the rapid change of the scope and coverage of IAT in all sectors of the economy, these definitions should be taken as an initial approach to the subject. It is expected that from time to time, definitions will have to be upgraded in order to avoid conceptual limitations. OBJECTIVES The main purpose of the Bank's participation in the field of IAT focuses on the recognition that this new field has a positive impact in development programs. Hence the Bank's presence is justified herein as a Bank activity and sector for the only purpose of increasing the efficiency and effectiveness of social and economic development programs. More precisely, the broad objectives of the Bank's effort in this area are:

Increase opportunities for human capital formation and for lifelong learning; increase the efficiency of all markets by providing a new and more accessible medium for carrying out the communications needed for production and commerce;

increase the access for low income individuals to information capable of empowering them with new avenues for better lives and improved welfare;

increase the coverage of social services to more localities and more people; make governments more efficient, accountable, and transparent;
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increase the participation of citizens and citizen organizations in the processes of democratic regimes;

increase the effectiveness of economic reforms; provide better communications among citizens, watch agents and public and private organizations for enhanced monitoring and surveillance of the environment;

reduce the distance between economic agents at the national level and between national and foreign; and,

create a complete new industry offering employment to individuals of different levels of skills.

BASIC PRINCIPLES The following broad principles will guide the Bank in establishing priorities for action: First, the Bank should consistently emphasize the urgency and importance of the early adoption of a national priority to facilitate the growth of IAT. This is required if countries are to gain an international competitive position, and to realize the gains a country or region can derive from the information revolution. Second, the Bank will use its "convoking power" to organize both national and regional discussions on key issues in the transition to an information economy. It is essential that public and private sector entities cooperate closely on the development of information technology infrastructure, networks and applications. It is equally important that there be a broad social consensus behind each nation's course of action. Third, the Bank will promote and support the design of the institutional and regulatory framework for the telecommunications sector. In this effort, the Bank will acknowledge the prospects for regional integration through IAT. In doing so it will cooperate with both the International Telecommunications Union and its regional
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affiliate, CITEL, while recognizing that the issue of information networking goes far beyond the traditional voice telephony sector. Fourth, the Bank will focus on equity in the development of the region's information infrastructure. Private markets will provide much of the needed investment, but the Bank will intervene strategically through its financial support to ensure that information access is extended as quickly as possible to poor, remote and marginalized populations. Fifth, the Bank will be attentive to opportunities for regional cooperation in the design of the continent's information infrastructure and in the sharing of information and applications which can be run over such a network. Promoting the integration of the communications network in the region will be a major contribution toward the goal of overall regional economic integration. Sixth, the Bank will promote sharing information and applications among countries, establishing "virtual networks" in such areas as education, health, governance, environment, agriculture, finance, etc. Seventh, the Bank will work closely with the borrowing member countries to take advantage of new information technologies to improve the quality, scope, efficiency and effectiveness of public services. Eighth, the Bank will work to ensure that its projects are designed to take full advantage of the cost-saving and efficiency-enhancing potentials of the new technologies. Ninth, the Bank will seek to integrate its information technology strategy with its strategy for science and technology including many aspects of university and private research. Tenth, investment decisions will be market-driven with the private sector playing a key role in the decision making process, and, there will be maximum flexibility to
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enter into the financing of projects in this sector regardless of the type of ownership. This implies that the Bank will be willing to finance public, private, and mixed enterprises or ventures when they are market oriented and financially viable. Guarantees for this type of investment will be within the current Bank's scope, either public or private. Fields of Activity The Bank encourages governments, in their development planning, to take into account the increasing importance of IAT in the modernization of many facets of the country. In support of such priorities the Bank is willing to consider requests for financial support for the following activities: National Dialogue and Consensus Building on Information technology. Because of the far-reaching implications of the information technology revolution for all aspects of political, social and economic development, the Bank will support countries willing to undertake a broad internal exploration of the information technology issue in order to identify their particular information needs and to mobilize a broad consensus on the route to be followed. To this aim the Bank, with its technical assistance resources, will consider funding studies, seminars, and promotion activities directed at the formulation of a national consensus and strategy. Support the Creation of a Policy Environment Friendly to Information Intensive Development. The Bank recognizes the role of an appropriate regulatory framework in all sectors, consequently, support will be given to the deployment of a regulatory framework in the information and communications sectors. The Bank will also make available its policy-based lending instruments to assist in the execution of reforms. The Bank will also sponsor research and studies seeking to increase the coverage of information networks. Planning at the National and Regional Level. The Bank will support the development of the region's institutional capability to coordinate the interests of users, suppliers,
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and governments through the design of planning frameworks. This is relevant because national information networks need to be interconnected into broader national, regional and global networks. Furthermore, given the way information networks are built and operated across borders and continents, it is evident that regional networks are vehicles of economic and knowledge-based integration. Infrastructure Needs Assessment. To better understand the demand for information infrastructure, the Bank will support studies to determine the investment requirements to provide the countries of the region with high capacity carriers and to develop an action plan to address markets in each country.

Lending for Information Infrastructure. While it is expected that the private sector will provide the overwhelming bulk of the financial resources needed to build the information infrastructure of the region, there are several key areas where Bank participation is likely to be needed. To this aim, the Bank will target its interventions carefully on strategically important investments where there is an obvious public benefit to be obtained by Bank support. Specifically, the Bank's lending in the infrastructure area should give initial attention to two basic areas: extending the basic broadband backbone (satellite based links, and fiber optic trunks, and network switching equipment), and financing access to information networks by the poor and remote citizens.

Extending the Main Network Backbone. Given the diversity of the countries of the region, the Bank should be ready to fund the most appropriate technology in support of the development of a minimum network backbone. While in some countries, a satellite base approach combined with existing coaxial networks could be the appropriate initial architecture, other countries with larger markets could find other technologies more appropriate. In this regard, the growing convergence of voice and data
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communications networks is creating a need for very high-capacity multimedia networks as the essential infrastructure for the digital age. In this context, the Bank should be attentive to possible opportunities to integrate major trunk line investment components to other forms of lending. Fibre optic lines for example, can often be incorporated into other forms of infrastructure development financed by the Bank. In many instances, fiber trunk lines can be laid inside natural gas pipelines and along high-tension wires carrying electricity obtaining synergies that enhance the financial and economic return of traditional infrastructure projects. The Bank will also consider developing a special program to finance the infrastructure connections needed to provide Internet II access for major universities. To complement the main network backbone, the Bank will consider funding for investment in the digital switches and routers which move messages among users. Network Access Points (NAPs) enable multiple regional and national Internet service providers to interconnect and exchange each others traffic, providing an essential piece of the network infrastructure.

Financing Access to Information Networks by the Poor and Remote Citizens. The Bank will support investments that broaden the access of poorer and remote members of society to information networks. Seeking financial sustainability, the Bank will support innovative approaches that require minimum subsidies and that rely in user charges to operate. Among these, the model of "shared use" is gaining popularity in developing countries due to the fact that the cost of the network and hardware is shared by users, hence spreading access and costs more broadly. The core of a shared use system, the "community information center", provides a community site delivering local content and access to a variety of services that have value in use to citizens.

Supporting the Information-Producing Sector. The Bank will promote and provide funding for, the development of local small enterprises engaged in the production of local content including systems and programs to facilitate the exchange of information for: commerce and trade, health, education,
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agriculture, manufacturing; civil society organizations, entertainment, sports, financial transactions and marketing of securities, empowerment of citizens, environment, underprivileged groups and indigenous groups. Using Information Technology to Improve the Scope and Quality of Public Services. The Bank grants priority to improving the capacity of the public sector to use information effectively as a development resource. Beyond helping our borrowers deal with problems in current systems, the Bank will also intensify its work on pioneering projects which demonstrate the potential for the use of information systems to improve public services. Areas that appear likely to receive attention are: education networks; health delivery systems (telemedicine); social security; small business development extension; local government services; democratic processes and governance; environment; tax collection; agricultural and rural development, and; human services.

Support of Virtual Networks. The Bank will support the formation of "Virtual Networks" or "communities of interest". These networks consist of individuals and organizations who share interests and expertise in a given sector, who are linked together electronically in communication networks which facilitate both the exchange of ideas and information on a given problem or sector.

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Technical Cooperation The Bank may provide technical cooperation in the information technology area for: 1. Supporting national and regional plans, feasibility studies, and detailed project planning. The purpose of this IDB cooperation is to promote the transfer of the best possible planning and technologies as well as to support the creation of the proper regulatory environment for the sector. 2. Improving the organization of and operation of public and private establishments and selecting and training qualified personnel. 3. Improving the access of the population to the benefits derived from the presence of information network (Internet) services with local and valuable content for the daily life of citizens. 4. Assisting in the rationalization of information age industries, placing emphasis on the regulation and integration of the owners of information and communications networks.

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Chapter: 2

RESEARCH METHODOLOGY Research Methodology includes the two sources of data:

1. Primary Data: Personal Interview

2. Secondary Data: Internet

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OBJECTIVES OF THE STUDY

The study has got certain objective to be fulfilled. The main objectives are:

To study the use of information technology in banking sector. To analyse the role of I.T in banking sector. To check the impact of I.T on service quality. To understand the privacy and confidentity of data provided by I.T. To study the role of E-banking.

LIMITATIONS OF THE STUDY

This Study is limited to: The study is conducted only one bank. (public sector bank). The interview was taken from one bank managers namely: SBI bank.

STATEMENT OF THE PROBLEM Study on information technology in banking sector.

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Chapter:3 BANK PROFILE

State Bank of India is an India-based bank. As of March 31, 2012, the Bank had a network of 20,193 branches, including 5,096 branches of its five associate banks. In addition to banking, the Company, through its various subsidiaries, provides a range of financial services, which include life insurance, merchant banking, mutual funds, credit card, factoring, security trading, pension fund management, custodial services, general insurance (non-life insurance) and primary dealership in the money market.

Its segments include Treasury, which includes investment portfolio and trading in foreign exchange contracts and derivative contracts; Corporate/Wholesale Banking, which comprises lending activities of Corporate Accounts Group, Mid Corporate Accounts Group and Stressed Assets Management Group; Retail Banking, which comprises of branches in National Banking Group, which includes personal banking activities, including lending activities to corporate customers, and Other Banking Business.

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INTERVIEW QUESTIONNAIRE

1.Tell me about scope of information technology in banking sector? Answer: I.T sector is a very important and vital role to maintain banking transaction, budget monitor cost, business plan, cash flow and networking, unified messaging system and back office.

2. What are the advantage and disadvantage of informational technology? Answer: there is no disadvantage only advantages are there for smooth functioning of bank department through I.T sector.

3.What are the types of I.T services? Answer: Information technology is a broad term which encompasses computer hardware, networking, computer security applications, internet and web technologies, and application software development.

4. Is there any separate department for informational technology? Answer: Yes, we have separate department of information technology.

5.What are your qualifications as an IT project manager? Answer: Employers may look for the following: (i) . PMP Certified or Prince 2 certified Project Manager. (ii). Bachelors Degree or higher in Engineering, Technology or related field.
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(iii). Minimum 10 years of project management or IT Management. (iv). Minimum 10 years experience coordinating and/supporting IT Businessprocesses.

6. How do you keep yourself updated with technology, considering that technology today is enhanced almost every day? Answer: we have a separate information technology department. Latest updated the research of I.T department on banking sector and to analysis with other banking I.T sectors and there activity.

7. What kind of attitudes do you find it difficult to work with? How do you handle people with the particular attitude? Answer: smooth functioning of I.T department, it is not difficult and people attitude are to get service urgently and services are provided urgently.

8. Have you planed and implemented additions and major modifications to your companys IT infrastructure. Describe your contribution to these processes? Answer: we have planned and implemented and additional and major modification as A-finware and B- host and both less consuming and bath are flexible.

9. Tell me the procedures you took for implementing network security? Answer: I.T department has provided back office to protect network security.

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10. Describe the maintenance and administration practices that you utilized to ensure the corporate VOIP/WAN/IT network effective performance? Answer: to maintain network effective performance of I.T is being maintenance day down time and handover on Saturday to Monday and Monday being closed is the loss for bank.

11. Have you upgraded the companys telephony or email system to VOIP or unified messaging system. Describe the process and the factors for choosing the new systems? Answer: yes, the company is upgraded with telephonic and e-mail system to VOIP through unified messaging system.

12. Describe a situation in which you had to perform one of the following troubleshooting procedure, system backup and failure recovery? Answer: To avoid troubleshooting situation company has adopted back office procedure.

13. What IT tracking software you used to monitor/maintain remote systems? Answer: For I.T tracking software VIPRO has been given contract to monitor, maintain and remote system.

14. Have you interacted with customers or internal clients on a daily basis? What level of help desk support you provided to resolve IT-related issues?
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Answer: Yes, customers are interacted regularly on daily basis for net banking if not logging. Help desk provides services for net sites. The customers are provided services to resolves their problems with in minimum of 24 hours and maximum 48 hours.

15. Have you been responsible for the budget of the IT systems of the company? Tell us how you monitored costs, business plan and cash flow? Answer: The budget of the bank through I.T system to monitor costs, business plan and cash flow is responsible is based on I.T department.

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RECOMMENDATION

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CONCLUSION

On the basis of the above survey we can conclude that as an on the basis of a sample of these 60 participants or members we can conclude that the Indian customers as compared to the western trend do not rely more on the innovative services through electronic medium or we can say services related to Banking and IT. But the trend shows that as and when these kind of services are getting more and more popular, they are gradually being accepted by the Indian customers who otherwise do not prefer to use extra services with a myth of paying more or some say its hard getting adjusted with new changes so they prefer to go on with t e same trends for years but the coming generation is surely not going to accept the same trends. Now a day we see more and more teenagers using Debit Cards thus making them more popular as it is a kind of card which will offer services only till you have balance in your Bank account So finally I would like to conclude that in India, as a developing economy these kinds of innovative IT and Banking Services will be welcomed by more and more people, they get educated about the new products and their utilities. The IT and Banking products which are expected to hit the Indian market in the coming years, are like Advanced Core Banking Solutions, Centralized Data Monitoring System (partly existing), Storage Area Management, Innovative Software for Banking assistance and security, etc. and as far as customers are concerned products like payments through mobile phones, anywhere and everywhere Banking, and other customer friendly services.

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BIBLIOGRAPHY 1. http://www.mbaknol.com/business-finance/role-of-information-technology-itin-the-banking-sector/ 2. http://webspace.qmul.ac.uk/pmartins/mallick.pdf 3. http://www.docstoc.com/docs/15875696/Role-of-IT-in-banking 4. http://opinion-corner.net/2011/05/information-technology-banking-sector/ 5. http://wiki.answers.com/Q/Use_of_information_technology_in_the_banking_ sector

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