CHAPTER-1 INTRODUCTION I.

T REVOLUTION IN INDIAN BANKING It was in June 1999 that an information technology revolution actually appeared in the India banking sector when the world of information technology seemed to be wide open with introduction of Indian Financial Net. This Indian Financial Net included a wide area satellite based network, which used very Small Aperture Terminals technology, was jointly set up by the Reserve Bank of India and Institute for Development and Research in Banking Technology. The Indian Financial Network initially comprised only the public sector banks but was later on opened up for participation by other categories of members including foreign banks as well.

It was the payment system, which was the first segment of banking system, benefited a lot from the introduction of the new technology. This segment being the lifeline of a bank was later on fully mechanized with introduction of Automated Teller Machines. This facility was further enhanced by the Internet facility, which has also significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products & services.

ABOUT THE REPORT TITLE OF THE STUDY The present study is titled as a project report on

INDIAN BANKING IN THE WAKE OF I.T. REVOLUTION the present study is made with special reference to IDBI BANK.

OBJECTIVES OF THE STUDY: The following are the objectives of the present study: To study about the banking services provided by bank. To study about new innovations brought in bank. To study about the customer satisfaction by using these services.

PERIOD OF THE STUDY: The period of the present study is from June 2012 to September 2012.

LIMITATIONS OF THE STUDY: The present study has got all the limitations of the case study method.

 DATA AND METHODOLOGY: For the purpose of present study both primary and secondary data are used. Primary data are collected from IDBI BANK. Secondary data are collected from books and websites.

CHAPTER LAYOUT OF THE STUDY: The present study is arranged as follows: Chapter 1 An Introduction: Gives an introduction to the title and to the report. Chapter 2 deals with profile of the concerned institution. Profile History, growth and development of that institution. Chapter 3 deals with theoretical view of the table. Chapter 4 deals with topic under study. Chapter 5 summarizes the result of the study.

CHAPTER-2 PROFILE OF IDBI BANK

HISTORY

IDBI Bank Ltd.is an Indian financial service company headquartered Mumbai, India. RBI categorised IDBI as an "other public sector bank". It was established in 1964 by an Act of Parliament to provide credit and other facilities for the development of the fledgling Indian industry. It is currently 10th largest development bank in the world in terms of reach with 1514 ATMs, 923 branches including one overseas branch at DIFC, Dubai and 621 centers including two overseas centres at Singapore & Beijing.IDBI BANK, which is owned by the Indian Government.IDBI Bank is on a par with nationalized banks and the SBI Group as far as government ownership is concerned.It is one among the 26 commercial banks owned by the Government of India.The Bank has an aggregate balance sheet size of Rs. 2,53,378 crore as on March 31, 2011. IDBI Bank's operations during the financial year ended March 31 , DEVELOPMENT

To meet emerging challenges and to keep up with reforms in financial sector, IDBI has taken steps to reshape its role from a
4

development finance institution to a commercial institution. IDBI attained the status of a limited company viz. INDUSTRIAL DEVELOPMENT BANK OF INDIAN LTD" (IDBIL). Subsequently, the Reserve Bank of India (RBI) issued the requisite notification on 30 September 2004 incorporating IDBI as a 'scheduled bank' under the RBI Act, 1934. Consequently, IDBI, formally entered the portals of banking business as IDBIL from 1 October 2004. The commercial banking arm, IDBI BANK, was merged into.

In March 2008, IDBI Bank entered into a joint venture with Federal Bank and Fortis Insurance International to form IDBI Fortis Life Insurance, of which IDBI Bank owns 48 percent. The company ended the year with over 300 Cr in premiums as on 31 March 2009.The name of IDBI Fortis Life Insurance is now changed to IDBI Federal Life Insurance Co Ltd.Government of India now owns 70.52% stake in IDBI Bank. Hence IDBI Bank is also referred as 'The New Age Government owned Bank'

It has bought 10% stake in upcoming commodity bourse Universal Commo-dity Exchange (UCX) for Rs 10 crore, the bank's top official said. The deal was completed recently. RM Malla, chairman and MD of IDBI Bank, confirmed that the bank had picked up 10% in what will become the country's sixth commodity futures exchange. "The idea behind acquiring equity is to push agriculture loans through this venture," said Malla. "The other advantage is IDBI will be the only bank among the promoters and therefore all transactions of the exchange will be routed through IDBI breakthrough initiative in customer service was taken by IDBI Bank
5

(branded as 'Customer Delight Campaign' when it removed many of the charges from its retail banking services. This step has created a wave in banking industry and put the bank on a developmental pedestal never seen before. Some of the charges waived are- ATM-cum-Debit card annual charges, Transaction charges on other banks' ATMs, Demand Draft/Pay Order charges, RTGS/NEFT charges, Cheque book issuance and utilization charges and many more other charges.It was the winner in two categories in Dun & Bradstreet's Polaris Software Banking Awards 2011It has now a network of 977 branches, 661 centres and 1547 ATMs as on April 18, 2012. The 977th branch is located at Kagal near Kolhapur in Maharashtra.

GROWTH

Savings account strategy not ideal: IDBI bank had waived off all Savings account (SA) related fees in 2QFY2011 to attain higher growth in SA deposits. While this strategy led to substantial traction in saving accounts for the bank in 2QFY2012, we believe, post the savings rate deregulation, it is likely to attract all the wrong kind of customers. The strategy is more oriented towards drawing retail customers with low savings balances and higher servicing cost. On the other hand, interestsensitive urban-centric customers with higher savings balances are likely post the de-regulation to move to new private banks offering higher savings rates. This is exacerbated by the fact that unlike other PSU banks, IDBIs relatively newer network is
6

also more skewed towards metro and urban areas (two-third of total branches), exposing the same to elevated competitive intensity especially from private banks. Notably, in 3QFY2012, the bank in fact experienced the highest decline in savings balances qoq of 7.2%. At present, IDBI Bank is unlikely to discontinue its zero cost SA product, nor is a hike in savings rate, especially in the less than `1 lakh category on the anvil. The bank plans to have about 1,050- 1,070 branches by end-FY2013 (933 as on 3QFY2012).

Asset quality concerns remain an overhang:

The banks exposure to stressed sectors specifically Power (15.0% of overall exposure, primarily to IPPs), Iron and steel (9.3% of overall exposure), Telecom (7.2% of overall exposure) and Textile (4.3% of overall exposure) have led to high NPAs for the bank lately. The banks restructured book at 6.1% of the overall advances is on the higher end as compared to ~4.5% for the PSU universe. The banks exposure to companies expected to be restructured using the CDR route in 4QFY2012 stands at ~`500cr (excluding Air India)

The banks outstanding telecom exposure is majorly to incumbent operators, while in metals segment, it is mainly to the larger corporates and management

does not expect material further delinquencies. About `1,500cr of power exposure is expected to come up for commissioning in FY2013, where management expects some restructuring and NPV losses. Overall, the management expects about `400-500cr run-rate of net additions to GNPAs per quarter going forward (excluding write-offs).

CHAPTER-3

THEORETICAL VIEW I.T REVOLUTION IN INDIAN BANKING

Technology is a boon to several industries in the post modern world, and the banking industry is another one to benefit from the multi dimensional efficiency levels of technology. Technology banks helps in the process of clarity, simplicity and efficiency in complex banking processes, also reaches out for something superior and a wider range of customers. Services provided through the means of computers, mobiles and other

telecommunication mediums have also added upon the benefits and multitude of tasking for the banks. The importance of technology in the banking sector has made banking a very easy affair.

The introductions of ATMs, internet banking and phone banking are all the outcomes of the technological modifications. Banking has definitely improved from just being somewhere one had to rush every now and then to keep a tally of their accounts and to deposit and withdraw cash, to something which is so easy and efficient that it does not at all seek for added attention. Electronic banking has also emerged as one of the most efficient delivery
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channel for the banking industry. Information technology of IT revolution has essentially changed the face of the world and the economic, financial and social status has taken a giant leap from what it used to be previously. The financial operations are very fast and reliable and that has eventually resulted into strengthening the banking sector.

The importance of technology has eventually contributed a lot in the way of cost reduction for the customers and has offered a varied number of products and services. Thus costs cuttings have a direct effect influencing the profit margins therefore resulting into a thriving business sector. Technology henceforth, is the main reason of development and growth of the banking sector. Apart from all this, technology aids the adept security measure for the banking houses in order to secure the customer confidentialities and monetary details. Giant business houses have their important papers, documents and passwords stored up in the banks which are taken care of by the highly sensitive and skillful technological security devices. Evolution of technology in Indian banking The technological development in banking can be traced as follows:1960 - Mechanized banking introduced. 1970 Introduction of computer based banking industry. 1980 Introduction of computer-linked communication based banking.
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Advent of computer technology has created a major impact on working of banks. The computerization and subsequent

development in history of Indian banks can be traced back to 1966 when Indian Bankers Association (IBA) along with exchange banks association signed first wage settlement with the unions, which accounted for the use of IBM or ICT accounting machines for interbranch reconciliation etc. A committee on computerization and mechanization was appointed by RBI in 1983 under chairmanship of Dr. C. Rangrajan recommended that computerization and installation of Advanced Ledger Posting Machines (ALPM) at branch, regional and head offices of banks will bring around a new era in banking. Narsimhan Committee in 1991 paved way for reform phase in banking.

Saraf

Committee

was

constituted

by

RBI

in

1994

that

recommended the use of Electronic Fund Transfer System (EFT), introduction of electronic clearing services and extension of Magnetic Ink Character Recognition (MICR) beyond metropolitan cities and branches. Today in every aspect of our life we are using information technology to make our life comfortable. Due to IT revolution various new technologies are introduced in production and service sector. As Banking and Insurance sector are based on the consumer data base, Banking and Insurance sector are also affected by this and IT tools are introduced for the better performance and faster growth rate.

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IT in Banking Introduction:

In the five decades since independence, banking in India has evolved through four distinct phases. During Fourth phase, also called as Reform Phase, Recommendations of the Narasimham Committee (1991) paved the way for the reform phase in the banking. Important initiatives with regard to the reform of the banking system were taken in this phase, entry of new banks resulted in a shift in the ways of banking in India. The growing competition, growing expectations led to increased awareness amongst banks on the role and importance of technology in banking. With arrival of foreign and private banks with superior technology pushed Indian banks to fallow the latest technology to meet the growing competition and retain their customer base. Now Indian banking industry is in the mid of IT revolution. 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 servers and banks went in for what was called Total Branch Automation (TBA) Packages. Information Technology has basically been used under
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two different avenues in Banking. One is Communication and Connectivity and other is Business Process Reengineering. 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.

The New Era The 21st century will bring about an all-embracing convergence of computing, communications, information and knowledge. This will radically change the way we live, work, and think. The growth of high speed networks, coupled with the falling cost of computing power, is making possible applications undreamed of in the past. Voice, data, images, and video may now be transferred around the world in micro-seconds. This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers. All over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidlychanging environment. It is clear that this new technology is changing the banking industry forever. Banks with the ability to invest and integrate information technology will become dominate in the highly competitive global market. Bankers are convinced that

13

investing in IT is critical. Its potential and consequences on the banking industry future is enormous.

Technology and Banks Transformation Computers are getting more sophisticated. They have given banks a potential they could only dream about and have given bank customers high expectations. The changes that new technologies have brought to banking are enormous in their impact on officers, employees, and customers of banks. Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before - thus creating new bases of competition. Rapid access to critical information and the ability to act quickly and effectively will distinguish the successful banks of the future. The bank gains a vital competitive advantage by having a direct marketing and accountable customer service environment and new, streamlined business processes. Consistent management and decision support systems provide the bank that competitive edge to forge ahead in the banking marketplace.

BANKING SECTOR REFORMS IN INDIA

The banking system has undergone significant change during last 17 years. There have been new banks new instruments, new windows, new opportunities & along with all new challenges. Prior to1991, commercial banks in India were functioning in a highly regulated environment, there was insufficiency in the functioning of banks, and productivity and profitability was low. In true with the liberalization & privatizations wave sweeping across the world, the
14

Government of India decided to review the banking policies in early 1990s. With this background in view the Narsimha Committee worked out the road map banking sector reforms. The successful implementation its various recommendations have given a new dynamism to the banking sector since 1992.

AN ASSESSMENT OF TECNOLOGICAL REFORMS

In recent years for improving the functioning and for providing better customer services technological infrastructure in Banking Sector has been updated. It was done to understand the need of hour. For a long time Indian Banks faced or very little competition and operated in protected economy. So no long term policy or perspective for banking sector was formulated. But now in the changing scenario when well computerized foreign banks are coming to compete with the nationalized banks then introduction of technological changes have become very much necessary but in our country the main agents affecting the introduction of new technology have been unions, managements and the workforce

But

these

attitudes

and

strategies

of

Unions

Vis--vis

computerization have begun to change especially since the 1980s Management in many banks has been able to convince workers and unions that such changes are beneficial for employees enhance job security and improve employment conditions. So the last decade seen several technological agreements or Computerization agreements along with routines collective bargaining technology.
15

agreements

which

contain

clauses

related

to

The Reserve Bank of India installed its first computer in 1968 and a larger one in 1979. But the united commercial bank, the Standard Chartered Bank, Lloyds Bank and others had installed payrolls had been computerized fairly earlier. In 1983 two major banking unions- The All India Bank Employees Association (AIBEA) and National Confederation of Banking Employees (NCBE) signed an agreement with the Indian Banks Association (IBA) representing 58 bank managements. The unions wished to maintain surveillance of the process and to protect job prospectus in banking sector. This agreement paved a way for individual banks to make their own computerization agreement. But in March 1987 the new agreements was signed. This agreement allowed for an extension of new technology in both the operations computerized and equipment used but protection of existing staff and prospects for future staff was taken into consideration. Taking advantages of the openness clause in1983 and1987 agreements, some of the AIBEAs own affiliates agreed to the installation of ATM and fax machines. So a comprehensive policy was completely absent.

STRATEGIES FOR AWARENESS IN RURAL AND SEMI-URBAN AREAS OF INDIA

The concept and idea of banking especially e-banking has been completely modernized & revolutionized in the recent times. As a matter of fact, this idea has already been completely implemented in advanced countries.
16

Indian Banking system has remained static, traditional and noncompetitive. But at the of globalization, Indian Banking authorities and custodians of course government also, should take such steps and policies which may completely overhaul the structure of Indian Banking so that it may well fit in the cosmopolitan network of Banking. One very important sad feature of Indian Banking has been that it has completely ignored the rural and semi-urban areas to spread the concept and services of banking especially EBanking.

FOLLOWING ARE THE MAIN SUGGESTIONS WITH RESPECT TO E-BANKING IN INDIA

At the very outset it can be suggested that in order to spread EBanking in rural and semi-urban areas, education with respect to banking should be given to the rural people. The main problem can be of finance and then creating the banking educational institutions. The government can take up the responsibility of finance.

Second important suggestion to make E-Banking more versatile, especially in rural and semi-urban areas is to make banking services more frequent and also free in the initial stages. Another main suggestion about E-Banking is to make aware the rural masses about loan and deposit facilities.

Another workable and practical suggestion with respect to EBanking is that technical banking experts should be invited from
17

advanced countries to arrange group discussions and workshops and seminars in India.

IMPACT OF COMPUTERIZATION

The basic impacts of such technological changes are: Decline in employment level. Increase in workload. Pressure for flexibility. Changes in job contents. Loss of Union power. Changes in pay scale. Changes in information and control. Changes in health and safety conditions.

Decline in Employment level

The introduction of new technology and its expansion the growth of new jobs have dwindled. There has been a reduction in rate of recruitment in the nationalized banks. VRS schemes have been introduced to lessen the number of workers.

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Increase in workloads

Most of the employees in insurance as well as banking industry have experienced serious strain and heavy workloads.

Computerization coupled with non recruitment of retired staff, has led to tremendous increase in workloads.

Pressure for flexibility

Computer technology demands functionally multiskilled workers rather than specialists. Only professionals and specialists benefit from strategy and others have either to leave the station or to pot another job. Changes in job contents

A change in the methodology of work has affected the content of work as well as skills needed by employees. In places where the skill level of the workers is high, such changes tend to strengthen the tendency towards the integration of planning and production tasks. But lower levels of skill seemed to be trend towards polarization of skills. Some of the employees are of the view that work has become monotonous. But some other suggests such technological changes have no doubt increased efficiency but decreased the feeling of teamwork.

Loss of Union Power

Many banks tend to early retirement of employees and does not contain early recruitment of employees which has led to insecurity.
19

There is no strong Union Power to stop this problem or to raise such issues. The employees are forced to take VRS in some of the banks.

Change in Pay Scale

The nationalized banks like State Bank Of India, State Bank of Patiala, Punjab and Sind Bank, Punjab National Bank etc., have provided special training to equip employees to deal with new type of work related to new technological changes. The employees get allowances per month for their work done.

Changes in information and control

With the advancement of technology management has total control over all information. Profits, costs etc. are under secret codes. Now employees are being watched and their work capabilities are judged directly. No doubt it has increased the efficiency but now working staff always work under strains. A strenuous work may commit some mistakes and lose the job or get punishment accordingly.

Changes in Health and Safety Conditions

Some specific health and safety problems have been shown to arise from the introduction of computer based equipments e.g.:
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Visual Display Units may cause a number of health problems if they are operated continuously eg: eye problems varicose veins, headache and skin problems, reproductive problems i.e.

Miscarriages, birth defects, low sperm counts etc. None of the bank employees had been given any health training.

Banks face a serious challenge. The basic structure of the bank is increasingly in conflict with the changing product, delivery, and service needs of the customers The future belongs to financial service providers not traditional banks. The vast majority of large banks, will create value networks. Doing so presents tremendous challenges. Banks will have to first develop a comprehensive distribution system that will enable customers to touch them at multiple points. Banks must also create performance measurement systems to assure the mix products and services they offer are beneficial to both the customer and the bank. They must determine whether to deploy new technologies themselves or with other service providers. Nevertheless, technology alone will not solve issues or create advantages. This technology needs to be integrated in an organization, with the change management issues linked to people resisting new concepts and ideas. It also needs to support a clearly defined and well communicated business strategy.

There

is

probability

of

huge

increase

in

employment

opportunities. A number of web-sites are coming up on insurance, a few financial magazines exclusively devoted to insurance and also a few training institutes being set up hurriedly. In the
21

insurance sector various new tools are coming to facilitate the business. E-crm, E-insurance leading a new way for the development of this sector it leads to increase in the employment opportunity in future. Technology has opened up new markets, new products, new services and efficient delivery channels for the banking industry. Online electronics banking, mobile banking and internet banking are just a few examples.

The IT revolution has set the stage for unprecedented increase in financial activity across the globe. The progress of technology and the development of world wide networks have significantly reduced the cost of global funds transfer. It is information technology which enables banks in meeting such high expectations of the customers who are more demanding and are also more techno-savvy compared to their counterparts of the yester years. They demand instant, anytime and anywhere banking facilities. It is information technology which enables banks in meeting such high

expectations of the customers who are more demanding and are also more techno-savvy compared to their counterparts of the yester years.

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CHAPTER-4 REPORT ANALYSIS INDIAN BANKING IN THE WAKE OF I.T. REVOLUTION - A STUDY. IMPORTANCE OF BANKS IN THE INDIAN ECONOMY:

The banking system which constitutes the core of the financial sector plays a critical role in transmitting monetary policy impulses to the entire economic system. Money and finance is an important and necessary factor for economic development. Though finance is by no means a substitute for real resources, it has a crucial role in the economic development of the country. The segment of capital and money market dealing with lending and borrowing of funds, essentially for short-term purposes, is represented by commercial banking institutions. The importance of commercial banks in the process of economic development has been recognized by all. The commercial banks play an important role in all economies. The role becomes more important in planned or developing economies like India. Banking Industry is the blood vascular system of our economy. In a country like India, constitutionally committed to socialistic pattern of society- banks have important role to play i.e. in the reduction of regional disparities, which is an important objective of the economic planning. The structure of the Indian Banking System has undergone numerous changes since Independence.

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STRUCTURE OF INDIAN BANKING SYSTEM: The banking system occupies an important place in a nations economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. In India though money market is still characterized by the existence of both the organized and the unorganized segments, institutions in the organized money market have grown significantly and are playing an increasingly important role. Amongst the institutions in the organized sector of the money market, commercial banks and commercial co-operative banks have been in existence for the past several decades.

COMPUTERSATION

IN

BANKS:

Banking which forms a core industry of any economy should be growth oriented. Computerization is a positive step to bank growth. With the aid of computers, the bank work can be done faster. Not only the present workload can be reduced to a great extent but also the bank can expand its working area with the same manpower. Computerization in banking sector dates back to 1963 when Life Insurance Corporation introduced computers for maintenance and processing of insurance policies. It was in 1975, when the working group on customers services headed by T.R. Vardarchay suggested introduction of modern technology in specific banking areas to improve the customers services. It was as a result of changing banking scenario in India
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that these recommendations were made i.e. with nationalization of 14 major banks in1969 and subsequent explosion of banks region wise and service wise the need for varied information system was realized i.e. house keeping and control and macro level information for policy formulation and control by central banking authority. However, despite such a multi dimensional growth, mechanization was still unknown in the industry in general.

COMPUTERIZATION IN NEW PRIVATE SECTOR/FOREIGN BANKS:

After the liberalization of the Indian economy, a few new private sector banks were set up. The main agenda of these banks is to provide better services to the customer who can afford it. Their approach can be termed as cherry picking banking, which aims at the customers. Their perception is also strategically different. They view the customers as financial partners rather than custodians of their customers moneya shift from custodianship to

companionship. To achieve the goals these banks eliminated the constraint of time and distance by expanding from eight to twenty four and reducing the distance from infinity to near zero.

To achieve the above objectives, these banks introduced a high level of automation right from inception. All the branches were computerized from inception to insure efficient on-line transaction processing. Processors were developed to attain the highest level of customer satisfaction. High speed computer mediated communication networks were set up to reduce the communication cycle time. Staff was carefully selected to play the role of business
25

facilitators rather than processing clerks and accountants. Employees attended to the customer proposal and problems, while computer processed all the transactions and displayed the options and assisted the employees by providing customized solutions.

INFORMATION TECHNOLOGY AND INDIAN BANKS:

With the development of information technology, the world has become a global village and it has brought a revolution in the banking industry. The banks appear to be on fast track for I.T. based products and and services. electronic The data technology processing of has

telecommunications

accelerated changes. The integration of information system with communication technology and innovative applications to product manufacturing, design and control.

The new technology has radically altered the traditional ways of doing banking business. Increasingly, the customers in retail sector are doing business with their banks from the comfortable confines of their homes or offices.

IDBI BANK:

IDBI Bank commenced operations in November 1995. Its corporate mission is to provide Quality Banking services to its clientele. To this end, the Bank has equipped itself with state- ofthe- art- technology for its products and services. It has also built up a team of dedicated professionals with a strong customer service orientation.
26

BRANCH NETWORK:

The bank has a carefully planned programme of enhancing its reach by expanding its branch network and supplementing it with offsite ATMs. The broad strategy is to cover adequately most of the important locations in the country relevant to the Banking business offsite ATMs are also proving an effective way to tap scientific target audiences. In 1992-2000, the percentage growth rate was 50%, 28.21% branches were located in semi-urban areas.

INFORMATION TECHNOLOGY:

The Bank has been conceived on a high technology platform and has been amongst the few banks which have, by using the current technology recorded substantial efficiency gains and succeeded in bringing down transacting costs. The Bank has invested substantially in harnessing switching technology, which enables linking of ATMs of different Banks, which will be pioneering introduction of smart card technology.

Corporate Banking

In its continuing endeavor to effectively meet the requirements of different Groups of Corporate Clients, IDBI Bank Ltd. has organised its Corporate Banking Wing based on client's turnover besides creating a separate specialized cell and Group
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each to cater to Corporates in Film Sector and Infrastructure Sector respectively. Based on scale, Corporates with turnover of more than Rs. 100 crores but up to Rs. 500 crore are looked after by Mid Corporate Group (MCG) while Corporates with turn over of more than Rs. 500 crore are looked after by Large Corporate Group (LCG). However, as sated earlier, with a view to effectively manage the peculiar requirements of Film Finance, a specialized cell has been set up in LCG to cater to Corporates in Film Sector regardless of their turnover.

Special focus for Infrastructure Financing

Further, considering the significance of the infrastructure sector in the countrys development, a specialized Group, namely Infrastructure Corporate Group (ICG) has been created which deals with Corporates from infrastructure, Industries accorded infrastructure status by RBI, regardless of their turn over. Since inception in 1964 [formerly as Industrial Development Bank of India], IDBI Bank has been assigned to play a distinctive role in the promotion of industrial development of the country. It has provided financial assistance towards setting up of industrial estates. Being a prominent player in financing infrastructure projects, IDBI Bank actively participates in addressing policy-related issues in various forums including the Committees constituted by the Government of India. Finalization of model Power Purchase Agreement and Model
28

Concession Agreement in road sector are some of the significant contributions made by IDBI Bank in the development of this sector. It has financed landmark first-of-its-kind projects in the infrastructure sector such as Independent power project, fixed and mobile telecom, port, road and airports in India. The policy makers have identified power, telecom, ports (both sea and airports), roads, transportation and urban infrastructure facilities as infrastructure sector and are providing impetus for the growth in these sectors, Reserve Bank of India has accorded infrastructure status to select sectors, credit to which is classified as financing to Infrastructure sector. These three Groups in the Bank cater to the requirement of financial assistance as also provide other services like Deposits products to Clients from Corporate sector.

Phone Banking

At IDBI Bank, they endeavor to raise the bar to meet the rising requirements of our customers, by providing quality products and services to suit varied banking needs. Our Phone Banking service is yet another, technology and customer centric step in that direction. IDBI Bank Phone Banking service enables you to access authentic, instantaneous information on your account balances and transactions. The service is available totally free of cost round the clock, 365 days a year. To view the different services that are available through our Phone Banking facility, click here.
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Account Alerts

IDBI Bank's new Account Alert service gives you all this and more. With Account Alert, your bank account transaction information will be delivered to you automatically, wherever you are. No more visiting the bank branch or ATM to check routine things like account balances, cheque clearance, verification of ATM transactions, bill payment verifications, etc. Account Alerts allows you to monitor filely any type of activity on your accounts, and be notified by e-mail or cell phone SMS as and when they are executed.

NRI SERVICES

Being an NRI (non-resident Indian) and privy to special benefits and privileges in India, its only but natural to expect world class levels be it banking or any other service.

While they offer basic NRI banking products like Non Resident Rupee Checking Account, Non Resident Rupee Term Deposits and Foreign Currency Non Resident Deposit, they realize that your requirements are manifold. Hence, they provide seasoned banking professionals to handle your queries and offer value added services. The value-added services we provide range from answers to online tax and foreign exchange related queries and needs with special emphasis on FEMA guidelines issued by The Reserve Bank of India from time to time. Their International Debit Card is designed to offer the convenience
30

of accessing the funds with us from any ATM and also pay for purchases from any merchant establishments across the world. We can avail of our advanced funds transfer facility to transfer funds from our account to that of our family members' account held with any IDBI branch across India. Their other services, such as providing free nomination and mandate facility enables hassle free banking operations to family member authorized by you to operate the account. They provide high-end solutions such as high yielding foreign exchange products, wealth management and insurance For more information on our NRI-centric banking solutions, follow the links below. Non-Resident External (NRE)

Repatriable account for your investment needs Access your account anytime, anywhere with Internet Banking Shop at more than 8.3 million locations and withdraw funds in 140 countries . Non-Resident Ordinary (NRO)

An account for your local income and expenses Access your account at more than 250 ATM's across the country Pay your bills in India from anywhere in the world

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FCNR

Retain your funds in foreign currency No exchange risk Earn attractive returns on your funds .

DEPOSITS

IDBI Bank has made a foray into the overseas markets to leverage its domestic banking strengths to offer competing products internationally. The Bank's first international branch has been set up at the Dubai International Financial Centre (DIFC), Dubai. IDBI Bank's DIFC Branch which is regulated by the Dubai Financial Services Authority (DFSA) provides a range of corporate banking services including extending of foreign currency loans to Indian Corporates (ECBs), foreign currency loan syndication and trade finance products for meeting the foreign currency

requirements of Indian clients. The Branch also serves as the nodal point for IDBI Bank for raising foreign currency resources. The Category I branch offers the following products & services:-

Accepting Deposits

Accepting deposits from high net worth individuals, corporate, trusts etc. in currencies other than AED.

32

Raising Foreign Currency Bonds including Perpetual Tier I and Upper Tier II capital.

Providing Credit to corporate in currencies other than AED for meeting their funding requirements

To Indian Corporates for their funding requirements for their overseas venture

o o

Participate in Loan syndications originating in the region. Provide trade finance products & services to support India's trade with UAE and other countries.

Arranging deals in credit / investment

Advising on financial products/ credits.

DYNAMIC CURRENCY CONVERSION

Dynamic Currency Conversion (DCC) is a facility which will enable International MasterCard Cardholders (cards issued outside India) to transact using their cards in their home currency at our ATMs.

Dynamic Currency Conversion (DCC) is an optional service provided to International Cardholders by merchant establishments, or at ATMs. It allows the cardholder, the option
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to pay in either their home currency (in the currency where the customers' account is maintained) or the currency of the country they are visiting. In a nutshell, card holder gets to know instant, real-time currency conversion to their home currency while they pay for goods and services, withdraw cash through ATMs with their Debit / Credit card.

The DCC facility would enable these Cardholders, while withdrawing cash from IDBI Bank ATMs, to view the transaction amount in their home currency and know upfront the foreign currency amount to be debited to their account. They will also get a transaction slip mentioning the amount withdrawn in that currency. Thus, this service reduces the hassle of reconciliation of entries in the account statement and helps them to manage their card account effectively. It is to be noted that the amount will be dispensed by the ATMs in INR only.

This facility is currently rolled out on select ATMs (list attached) on a pilot basis and will be rolled out on all our ATMs in a phased manner by the end of June 2011. Such DCC service has already been provided by our Bank in the merchant acquiring (ME) business.

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MSME Finance

MSME Finance takes care of the funding needs of Micro, Small and Medium enterprises. Keeping in view the specific requirements of these units, IDBI Bank has introduced a range of attractive products. The products are designed to cater to various segments among MSME borrowers. The Bank has the products that cater to all the stakeholders in a value-chain viz., the vendors, the manufacturers as well as the dealers. In addition there are tailor-made products for special category of borrowers such as Practitioners, Transport, and Professionals & Self-employed etc. With a view to make business easy for the Micro and Small Enterprises (MSEs), the Bank has introduced collateral free loans . The Bank not only offers finance to its MSME customers but also takes care of their all banking needs under one roof with full range of other banking products and services. The Bank is in constant endeavor to introduce new products with a view to offer wide array of solutions to the MSME units

IDBI BANK SME PRODUCTS:

Sulabh Vyapar/ Business Solutions (Loan for traders/Service Sector)

Dealer Finance/ Dealer Solutions Vendor Financing/ Vendor Solutions Funding under CGFMSE (Collateral Free Loans)
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Loans to Small Road & Water Transport Operators Finance to Medical Practitioners Loans to Professionals & Self-employed Lending Against the Security of Future Credit Card Receivables Laghu Udhyami Credit Cards (LUCC) Property Power (Loan Against Property) SME Smart Line of Credit

IDBI Bank Cash Card

IDBI Bank brings for the Corporates an easy solution for their employees for salary Disbursement & other Reimbursements IDBI Bank Cash Card. The corporate opting for IDBI Bank Cash Card can give this card to their employees for getting their Salary Disbursed and the employees are not required to open an account with the bank for this. Now, Individuals can also apply for the IDBI Bank Cash Card & can avail the services offered with this product. Individuals need not be the customer of the Bank.

The IDBI Bank Cash Card allows the corporate employees/ Individual to use this card to make purchases at merchant establishment in India and it can also be used to withdraw cash from IDBI Bank ATMs & all shared network ATMs in India.

Features:

Visa Flag Card Can be used to make purchases at over 5.5 lacs merchant establishment in India. It can also be used to withdraw
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cash from the large network of IDBI Bank ATMs and over 60,000 Visa / Plus ATMs in India.

Can be used more than once. The card can be used to make repeated purchases / withdrawals till the specified value on the card have been spent.

This card is available to IDBI Bank & non IDBI Bank Customers (Corporates as well as Individual).

This card can be loaded for any amount up to Rs. 50,000/- per card per month as per the instructions from the Corporate/ Individual. This card is valid for a period of 2 years from the date of issue.

IDBI

BANK

GIFT

CARD

Presenting the perfect gift to your near and dear ones wasnt so easy until now. IDBI Bank brings to you the perfect gift for every occasion - the new IDBI Bank Gift Card. Be it a birthday, weddings, anniversaries, festivals or achievements, the IDBI Bank Gift Card gives your special one complete freedom to choose gifts from their favourite stores across India.

The IDBI Bank Gift Card allows your loved one to purchases goods and services at over 4.70 lac merchant establishments in India that accept Visa cards. No heartaches of being bound to specific stores with gift vouchers.

What's more, the Gift Card can be used more than once giving you
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the flexibility to shop at will from different stores and at different times.

Features: The IDBI Bank Gift Card comes packed with a host of features:

No hassles of opening an account with us. Instant card, sold over the counter Accepted at over 4.70 lac shops that accept Visa cards across India

Usable more than once, till the value on the card is exhausted Pre-wrapped and ready for gifting Sold in different denominations to suit your needs

Royale Account

The IDBI Bank Royale Account has been designed to make banking services more convenient for esteemed customers. This new service guarantees you as our privileged customer elaborate and personalized service of the highest order. For all the banking requirements a dedicated relationship manager would be attached to the account.

With the Royale Account comes the Platinum Debit Card that provides enhanced daily cash withdrawal limit. This lifetime free debit card provides you privileges, which span lifestyle pursuits like shopping, dining and travel.
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Features of IDBI Royale Account:

Zero balance Power Plus account for the any family member Free Locker (Size: 5x6x19) or 50% discount in other locker rentals. Free outward RTGS. Free outward NEFT. Higher limit of cash withdrawal from any bank ATM. (with Platinum).

Higher Limit for Point of sale. Free demand draft within network. Free pay order No statement charges. Doorstep banking. Events to be held twice a year DVD of movies/ songs. Mobile alerts (Stock alerts/Daily NAV alert) Business magazine Free Passbook facility available at home branch for account holders (individuals)

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CHAPTER-5 CONCLUSION

Information Technology Revolution is entirely the way banking business is done and has considerably widened the range of products and increased the expectations and demands of the customers. Risk Management, Asset Liability Management, Innovation, Securitisation, Relationship Banking and Environment Management are some of the new buzzwords which have emerged in todays banking scene. In the banking sector, technology has become one of the biggest drivers of change. Technology is making 24 hours a day banking, all seven days in a week a reality in facilitating the highest service levels. There will be a shift from Brick and Mortar branches to Click and Portal banking. Adoption of technology will help banks to become more responsive and flexible to the customers needs and more efficient in the management of resources. These changes and challenges require totally new set of skills for competing in the future.
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Information Technology has made the banking services faster, more efficient, and more economical. Its impact can be seen on the efficiency of banks, productivity, profitability, employment, psychology of customers. The internet is taking banks in the directions other than loans and deposits. With the introduction of Information Technology, banking in India will never be the same again.

In India around 73% of the bank branches are located in rural and semi-urban areas. In the country, as a whole, only 10% of the branches of the public sector banks are fully computerized and 22% are partially computerized. But on the other hand, some new private sector banks are fully computerized and they are launching a gateway to facilitate intra-bank transfer to funds through Internet. They are bringing banking services to the very door step. Especially HDFC Bank LTD, ICICI Bank LTD, GTB LTD, Citibank are very active on this front and concentrating on Internet and ECommerce to offer their clientele a whole range of products under one roof. Their net profits are much more worse than other rival banks.

Some new private sector banks like Bank of Punjab LTD, IDBI LTD, UTI LTD, IndusInd BANK LTD. are fully computerized and they are providing services like ATMs, Online services and they are not lagging behind in any way. Recently, they have started to penetrate in semi-urban and rural sector of India. Their profits, branch network is on the increasing trend.

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Most public sector banks have hundreds of branches without computers and inter bank connectivity is a distant possibility. But some have started moving in this direction. SBI plans to invest $200 millions on technology over the next two years. Other public sector banks too have started spending on Information

Technology. According to Ways India, a software company with core strengths in Internet banking products, each public sector bank will spend about $50 million over the next five years. But these are the plans, and no public sector bank seems to be in a position right now to make a serious foray into Internet banking. The gap regarding the productivity, profitability, and customers psychology of Internet using banks, fully computerized and partially computerized banks is widening. New Private Sector Banks have leveraged the Internet effectively in taking away the customers from public sector banks and significantly increased their revenue potential. Internet banking is just one manifestation technology capabilities of these banks.

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