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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 hasalso significantly influenced delivery channels of the banks.
Internet has emerged as an important medium for delivery of
banking products & services.
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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.
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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.
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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
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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, chairmanand 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
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(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 and1547 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, IDBI‟s relatively newer network is
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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 bank‟s 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 bank‟s restructured book at 6.1% of the overall
advances is on the higher end as compared to ~4.5% for the PSU
universe. The bank‟s exposure to companies expected to be
restructured using the CDR route in 4QFY2012 stands at ~`500cr
(excluding Air India)
The bank‟s outstanding telecom exposure is majorly to incumbent
operators,
while in metals segment, it is mainly to the larger corporates and
management
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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).
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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 avaried 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 confidentialitiesand 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. Â 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 inter-
branch 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 ITrevolution 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 NarasimhamCommittee (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 inbanking. 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 startedcomputerizing 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 tofind a technological solution to meet the challenges of a rapidly-
changing 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
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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 moreconveniently 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. Consistentmanagement 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
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Government of India decided to review the banking policies in
early 1990‟s. 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 BankingSector 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-à-vis
computerization have begun to change especially since the 1980‟sManagement 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 agreements which contain clauses related to
technology.
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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 prospectusin 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. Takingadvantages of the „openness‟ clause in1983 and1987 agreements,
some of the AIBEA‟s 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.
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Indian Banking system has remained static, traditional and non-
competitive. 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 E-
Banking.
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 E-
Banking in rural and semi-urban areas, education with respect to
banking should be given to the rural people. The main problem canbe 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 bankingservices 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 E-
Banking is that technical banking experts should be invited from
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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 beenintroduced 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 workersrather 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 suchtechnological 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.
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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 typeof 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 punishmentaccordingly.
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 largebanks, 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 determinewhether 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 businessstrategy.
There is a 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
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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 infinancial 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 demandinstant, 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 importantand 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 commercialbanks 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- bankshave 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 nation‟s
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 theinstitutions 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 1963when Life Insurance Corporation introduced computers for
maintenance and processing of insurance policies.
It was in 1975, when the working group on customer‟s services
headed by T.R. Vardarchay suggested introduction of modern
technology in specific banking areas to improve the customer‟s
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. Theyview the customers as financial partners rather than custodians of
their customer‟s money- a 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
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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 services. The technology of
telecommunications and electronic data processing has
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- of-
the- art- technology for its products and services. It has also built
up a team of dedicated professionals with a strong customer
service orientation.
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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-urbanareas.
INFORMATION TECHNOLOGY:
The Bank has been conceived on a high technology platform and
has been amongst the few banks which have, by using the currenttechnology 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 country‟s development, a specialized Group, namelyInfrastructure 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 thecountry. 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
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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 whichis 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 inthat 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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NRI SERVICES
Being an NRI (non-resident Indian) and privy to special benefits
and privileges in India, it‟s 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
Account Alerts
IDBI Bank's new Account Alert service gives you all this and
more. With Account Alert, your bank account transactioninformation 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.
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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 insuranceFor 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 countryPay your bills in India from anywhere in the world
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FCNR
Retain your funds in foreign currencyNo 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
o Accepting deposits from high net worth individuals, corporate,
trusts etc. in currencies other than AED.
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o 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
o To Indian Corporates for their funding requirements for their
overseas venture
o Participate in Loan syndications originating in the region.o 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 issuedoutside 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 foreigncurrency 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. Inaddition 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 allbanking 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 accountwith 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 merchantestablishment 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 wasn‟t 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 attachedto 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 thecustomers. Risk Management, Asset Liability Management,
Innovation, Securitisation, Relationship Banking and Environment
Management are some of the new buzzwords which have
emerged in today‟s 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 aweek 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 customer‟s 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 thebranches 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, Citibankare very active on this front and concentrating on Internet and E-
Commerce 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, IDBILTD, 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 customer‟s
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 manifestationtechnology capabilities of these banks.