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81
CHAPTER- 4
GROWTH AND EXTENT OF ELECTRONIC BANKING
SERVICES IN INDIA
4.1 E-banking Services through Websites of the Banks
4.2 Sample Description
4.3 Sample Period
4.4 Key Electronic Banking services
4.5 Analysis of Electronic Banking Services
4.6 Conceptual Framework of ATM's
4.7 Kinds of ATMs
4.8 Reasons for Adoption of ATMs for the Customers and the Banks
4.9 Growth of Onsite and Offsite ATMs in Indian Banking Sector
4.9.1 Onsite and Offsite ATMs of Nationalized banks
4.9.2 Onsite and Offsite ATMs of SBI Group
4.9.3 Onsite and Offsite ATMs of Old Private Sector Banks
4.9.4 Onsite and Offsite ATMs of New Private Sector Banks
4.9.5 Onsite and Offsite ATMs of Foreign Banks
4.10 Percentage of ATMs to Branches
4.10.1 Nationalized Banks
4.10.2 State Bank Group
4.10.3 Old Private Sector Banks
4.10.4 New Private Sector Banks
4.10.5 Foreign Banks
82
CHAPTER-IV
GROWTH AND EXTENT OF ELECTRONIC BANKING
SERVICES IN INDIA
A number of services are being offered through electronic banking. It is quite
difficult to measure the extent of such services, but an effort has been made by
classifying these services into two categories. Firstly, to judge the impact of e-banking
through different websites, services being offered by the banks have been categorized
into informational and transactional services. Secondly, the extent of these services has
been measured through ATM services offered by the banks. The study takes into
consideration all the public, private, SBI and nationalized banks to know the extent of e-
banking services. Hence, the chapter is divided into two parts: Part-I analyzes the extent
of e-banking through website analysis; and Part-II throws light upon the growth of ATM
industry in India. The data for the purpose of this study relates to the period 2003-04 to
2007-08.
Part-I
4.1 E-banking Services through Websites of the Banks
The website technology has totally transformed the banking business. The
success of Internet banking depends upon the well designed website of a bank. It needs
to be informative and functional. So, the basic aim of a website is to make the electronic
banking services more functional, desirable, accessible and consumer friendly. Internet
banking can be provided by the banks in two ways. Firstly, an existing bank with its
physical offices can establish a website and offer the internet banking services as an
additional delivery channel. Secondly, the facility of e-banking can be provided solely
through the internet without having any physical office. The following diagram
highlights that accessibility, speed, navigability and content are the important factors
which make a website effective in its use.
83
Figure 4.1
Website Quality Assessment Model
Source: Mirando and Cortes (2006)
It is evident from the above diagram, if the website is easily accessible by its
users, it can increase its quality. The speed of a website enables its users to make their
transactions within a reasonable time. The linking of the website with another page is
called navigability. Each page of the website should be self-sufficient and provide link to
the main contents. Poor web design will result into loss of users. Further, content means
that website must have that required potential which satisfies the need of the customers.
The website of a bank carries various features like product information, services
provided, information on location, contacts of the bank, history of the bank, security
issues, information regarding operation of different services, and details of various
transactions. On the basis of these features, a website can be classified into two
categories:
a) Informational websites
b) Transactional websites
(a) Informational Websites:
Informational websites provide the general information about the bank and its
products. On such websites, customers can access all kinds of information but they
cannot transact.
(b) Transactional Websites:
These websites enable the customers to conduct any transaction through the
website of the bank. The website provides a wide range of services to the customers.
These services are classified into wholesale banking, retail e-banking services, personal
banking, etc. Some retail and wholesale e-banking services are commonly offered by all
84
the financial institutions on their websites. The banks offer retail services like account
management, bill payment , new account opening, investment/ brokerage services, loan
application and approval, account aggregation, etc. Wholesale services include cash
management, small business loan applications, business to business payments, employee
benefit/ pension administration, etc. However, the services provided through
transactional websites are more risky than informational websites. The reason being that
transfer of money is involved in it. So, the following measures are effective to curtail
such a risk:
• Security control for safeguarding customer information.
• Liability for unauthorized transactions.
• Losses from fraud, if the institution fails to verify the identity.
• Security from violation of rules and regulations.
The present study is based upon two considerations; firstly, only those banks which
are providing services through transactional websites have been selected for the study;
and secondly, the extent to which these services are being provided by the banks. The
purpose of this chapter is to fill significant gaps related to electronic banking in India.
For the fulfillment of gap, a survey was conducted on the websites of banks to determine
the number of electronic banking services provided by the banks. To study the extent of
e-banking services, an attempt has been made to conduct ranking of electronic banks, so
that an approach can be developed to assess which of the banks are providing qualitative
services to the customers.
4.2 Sample Description
This section describes the sample of the study. The sample consists of 45 banks
operating in India after 31 March, 2006. The banks were selected on the following basis:
1. Both Public (Nationalized and SBI group) and Private (new and old) sector banks
have been taken into account.
2. Only the banks operating as on 31st March, 2006 have been considered. The banks
which merged in other banks are, therefore, not included.
3. Further, only the banks with transactional websites have been analysed. Banks
having informational websites are not taken into consideration.
4. Electronic banking services mainly include retail services offered to customers.
5. The websites of certain banks could not be found, and hence, are treated as non-
electronic banks.
85
4.3 Sample Period
To study the extent of electronic banking services the banks from both the public
and private sectors have been selected on the basis of their transactional websites. The
websites of banks were explored during the month of June, 2008 to analyze the extent of
e-banking services and products offered by various banks. The websites of all these
banks were analyzed during this period. In India, as there is no special type of reporting
requirement for electronic banks and no compiled data is available for this purpose, so an
attempt has been made to conduct the analysis of bank websites within a stipulated
period of time. In addition, personal contact was also made with bank employees to
know about the services provided by various banks. Table 4.1 provides the details about
the number of public and private sector banks taken up for the study. The table reveals
that out of the 50, 28 banks are from the public sector and the remaining 22 banks
represent the private sector. The table further explains that only 45 banks are providing
electronic banking services which include 27 public sector banks and 18 private sector
banks. It is pertinent to note that only those banks have been considered for the studies
which are providing transactional website services to their customers. The banks
providing only informational websites have not been taken into account.
Table 4.1
Number of Electronic banks
Bank Number of Banks Number of
Electronic Banks
Private Sector Banks
New
Old
22
7
15
18
7
11
Public Sector Banks
SBI
Nationalised
Other Public Sector
28
8
19
1
27
8
18
1
All 50 45
86
4.4 Key Electronic Banking Services
For the purpose of extent of e-banking services, 48 services have been
considered. These have been divided into four major categories, i.e., internet banking,
phone banking, mobile banking, and ATM. Table 4.2 give a brief description of these
services.
Table 4.2
Key Electronic Banking Services
Service
Code
Electronic Banking
Services
Definition
1 Balance enquiry and
statement
Check out transaction in bank account with a
real time balance.
2 Transaction history Check out past transaction from the date of
account opening.
3 Online transfer of funds Transfer of funds to any bank account of that
particular bank or any other bank.
4 Card to card fund transfer Transfer of funds having visa, debit card
holders or credit card holders.
5 Pre paid mobile recharge Recharge pre-paid mobile online anywhere,
anytime in a few minutes.
6 Buy and sell Mutual Fund Online buying and selling of mutual fund.
7 Send money order anytime Get it door delivered to any destination in
India.
8 Open Fixed deposit and
Recurring deposit
Apply online to fixed deposit and recurring
deposit.
9 Request of Cheque book The cheque is delivered on the address upon
request.
10 Stop Payment request Issue instructions to stop payment of a
particular cheque.
11 Request of Debit cards Apply online ATM/Debit card.
12 Monthly Bank account
statement by E-mail
Free statement of bank account on e-mail
address.
13 Reissue and upgrade of
ATM/Debit Card
Get ATM / debit card reissued or upgrade
current ATM/ Debit Card.
87
14 Link bank account to
ATM/Debit Card
Link multiple bank accounts to a single
ATM/ Debit Card.
15 Renewal/ premature
closure of FD/ RD
Renew current FD account or request its
premature closure.
16 Deactivate/ Activate ATM/
Debit Card
Activate/deactivate ATM/ Debit Card.
17 Change Password Change of log-in password and transaction
password.
18 Demat holdings Provide to demat account details and
transactions.
19 Loan Details View details related to loan account like type
of loan, date of sanction, date of maturity,
rate of interest.
20 Interest rate updates Know rate of interest on deposit and loan
scheme.
21 Bills Payment Paying of bills of utility (electricity and
telephone), bank credit, mobile bills,
insurance premium.
22 Online shopping Pay e-shopping bills through internet
banking.
23 Ticket Booking Booking of railway or air-ticket online.
24 Mobile Top-up Recharge pre paid mobile anytime,
anywhere by log in to internet banking.
25 Share Trading Trade in security market online, through the
unique three-in-one account that integrate
banking, broking and demat account.
26 Online tax payments Online payment of service tax, income tax,
central excise duty.
27 Convert to EMI Converting any transaction above Rs.2000
on a credit card into easy EMI. EMI
repayments are easiest and provide tenure
ranging between 3 to 24 months.
28 Online loans Get loans as fast as you click.
88
29 Customer Correspondence E-mail correspondence between customer
and bank for transaction queries.
30 Demonstration of I-
banking
Provide demonstration of internet banking
services on banks website
31 Corporate Internet Banking Internet banking services to corporate
customers
Phone Banking Services
32 Enquire your Account
balance
Get the details of savings, current and fixed
deposit account balance.
33 Statement of Account Get cheque book or latest account statement
delivered at your door step.
34 Request for Fund Transfer Transfer money from one account to
another. Both accounts must be linked to
customer ID.
35 Stop cheque payment
instructions
Stop payment of a single cheque or series of
cheques, 24 hours a day.
36 Mobile Banking
Registration
Get registration for mobile banking through
phone banking.
37 Latest Interest and
Exchange Rates
Get latest interest rates on deposits and
foreign exchange rates by talking to phone
banker.
Mobile Banking Services
38 Account Balance Get information of updated balance without
using internet or phone banking.
39 Making Payment Make payment of all bills via mobile
banking.
40 Details of credit card
balance
Knowing the credit card balance without
making a phone call or logging on the
internet.
41 Loan Information Mobile banking for loans avails for loan
documents via mobile phone.
42 I-Mobile All internet banking transactions can be done
on mobile phone.
89
43 Purchase and Redemption
of Mutual Fund units
Buying, selling and redemption of mutual
fund units.
44 Last three transactions One can check the balance of last three
transactions.
ATMs
45 24 hours access to Cash Any time withdrawal of cash.
46 Transfer fund between
accounts
Transfer of funds from one account to
another account in the same branch.
47 View account balances and
mini statement
Can view minimum last three transactions
and current balance.
48 Pin change option Change the personal identification number
of ATM/ debit card.
4.5 Analysis of Electronic Banking Services:
Each bank offers a variety of e-banking services varying from balance inquiry to pin
change option. The following table exhibits the electronic banking services offered by all
the banks under study in percentages.
90
Table 4.3
Transactional Services O
ffered by Electronic Banks
(Per cent of banks offering electronic services)
Public Sector Banks
Private Sector Banks
Service
Code
Electronic Banking Services
All
Banks
All
Nationalized
SBI
Group
All
New
Old
1
Bal
ance
enq
uiry
and
sta
tem
ent
100.
0 10
0.0
100.
0 10
0.0
100.
0 10
0.0
100.
0
2
Tra
nsac
tion
hist
ory
10
0.0
100.
0 10
0.0
100.
0 10
0.0
100.
0 10
0.0
3
Onl
ine
tran
sfer
of
fund
s 97
.7
100.
0 10
0.0
100.
0 94
.4
100.
0 90
.9
4
Car
d to
car
d fu
nd tr
ansf
er
11.1
11
.1
15.7
0.
0 11
.1
28.5
0.
0
5
Pre
paid
mob
ile r
echa
rge
20.0
25
.9
36.8
0.
0 11
.1
28.5
0.
0
6
Buy
and
sel
l Mut
ual F
und
13.3
11
.1
15.7
0.
0 16
.6
42.8
0.
0
7
Send
mon
ey o
rder
any
tim
e 8.
8 0.
0 0.
0 0.
0 11
.1
28.5
0.
0
8
Ope
n Fi
xed
depo
sit a
nd R
ecur
ring
depo
sit
33.3
29
.6
42.1
0.
0 38
.8
85.7
9.
0
9
Req
uest
of
cheq
ue b
ook
88.8
10
0.0
100.
0 10
0.0
72.2
10
0.0
54.5
10
Stop
Pay
men
t req
uest
46
.6
40.7
57
.8
0.0
55.5
85
.7
36.3
11
Req
uest
of
Deb
it ca
rds
15.5
14
.8
21.0
0.
0 16
.6
42.8
0.
0
12
Mon
thly
Ban
k ac
coun
t sta
tem
ent b
y
E-m
ail
75.5
10
0.0
100.
0 10
0.0
38.8
71
.4
18.8
13
Rei
ssue
and
upg
rade
of
AT
M/d
ebit
card
8.8
0.0
0.0
0.0
22.2
57
.1
0.0
(Con
td.)
91
14
Lin
k ba
nk a
ccou
nt to
AT
M/D
ebit
Car
d
8.8
0.0
0.0
0.0
22.2
57
.1
0.0
15
Ren
ewal
/ pre
mat
ure
clos
ure
of F
D/
RD
15.5
14
.8
21
0.0
16.6
42
.8
0.0
16
Dea
ctiv
ate/
Act
ivat
e A
TM
/ Deb
it
Car
d
11.1
0.
0 0.
0 0.
0 27
.7
71.4
0.
0
17
Cha
nge
Pas
swor
d 95
.5
100.
0 10
0.0
100.
0 88
.8
100.
0 81
.8
18
Dem
at h
oldi
ngs
26.6
22
.2
31.5
0.
0 33
.3
42.8
27
.2
19
Loa
n D
etai
ls
26.6
22
.2
31.5
0.
0 33
.3
28.5
36
.3
20
Inte
rest
rat
e up
date
s 26
.6
22.2
31
.5
0.0
33.3
42
.8
27.2
21
Bill
Pay
men
t 64
.4
59.2
84
.2
100.
0 72
.2
100.
0 54
.5
22
Onl
ine
shop
ping
24
.4
18.5
21
.0
12.5
33
.3
57.1
18
.1
23
Tic
ket B
ooki
ng
37.7
40
.7
15.7
10
0.0
33.3
42
.8
27.2
24
Mob
ile T
op-u
p 15
.5
18.5
26
.3
0.0
11.1
28
.5
0.0
25
Shar
e T
radi
ng
26.6
29
.6
42.1
0.
0 22
.2
42.8
9.
0
26
Onl
ine
tax
paym
ents
66
.6
96.2
94
.7
100.
0 22
.2
28.5
18
.1
27
Con
vert
to E
MI
2.2
0.0
0.0
0.0
5.5
14.2
0.
0
28
Onl
ine
loan
s 11
.1
7.4
10.5
0.
0 16
.6
28.5
9.
0
29
Cus
tom
er C
orre
spon
denc
e 95
.5
100.
0 10
0.0
100.
0 88
.8
100.
0 81
.8
30
Dem
onst
ratio
n of
I-ba
nkin
g
66.6
77
.7
68.4
10
0.0
50.0
71
.4
36.3
31
Cor
pora
te I
nter
net B
anki
ng
42.2
37
.0
52.6
0.
0 50
.0
57.1
45
.4
Tab
le 4
.3 (
Con
td.)
92
Phone Banking Services
32
Enq
uire
you
r A
ccou
nt b
alan
ce
40.0
37
.0
52.6
0.
0 44
.4
71.4
27
.2
33
Stat
emen
t of
Acc
ount
37
.7
33.3
47
.3
0.0
44.4
71
.4
27.2
34
Req
uest
for
Fun
d T
rans
fer
20.0
18
.5
26.3
0.
0 22
.2
42.8
9.
0
35
Stop
che
ques
Pay
men
t ins
truc
tions
22
.2
22.2
31
.5
0.0
22.2
57
.1
0.0
36
Mob
ile B
anki
ng R
egis
trat
ion
17.7
22
.2
31.5
0.
0 11
.1
14.2
9.
0
37
Lat
est I
nter
est a
nd E
xcha
nge
Rat
es
15.5
7.
4 10
.5
0.0
27.7
42
.8
18.1
Mobile Banking Services
38
Acc
ount
Bal
ance
53
.3
40.7
57
.8
0.0
72.2
85
.7
63.6
39
Mak
ing
Paym
ent
11.1
7.
4 10
.5
0.0
16.6
42
.8
0.0
40
Det
ails
of
cred
it ca
rd b
alan
ce
13.3
14
.8
21.0
0.
0 11
.1
28.5
0.
0
41
Loa
n In
form
atio
n
6.6
0.0
0.0
0.0
16.6
28
.5
9.0
42
I-M
obile
2.
2 0.
0 0.
0 0.
0 5.
5 14
.2
0.0
43
Purc
hase
and
Red
empt
ion
of M
utua
l
Fund
uni
ts
4.4
0.0
0.0
0.0
11.1
28
.5
0.0
44
Las
t thr
ee tr
ansa
ctio
ns
53.3
40
.7
57.8
0.
0 72
.2
85.7
63
.6
ATMs
45
24 h
ours
acc
ess
to C
ash
100.
0 10
0.0
100.
0 10
0.0
100.
0 10
0.0
100.
0
46
Tra
nsfe
r fu
nd b
etw
een
acco
unts
10
0.0
100.
0 10
0.0
100.
0 10
0.0
100.
0 10
0.0
47
Vie
w a
ccou
nt b
alan
ces
and
min
i
stat
emen
t
100.
0 10
0.0
100.
0 10
0.0
100.
0 10
0.0
100.
0
48
Pin
chan
ge o
ptio
n 10
0.0
100.
0 10
0.0
100.
0 10
0.0
100.
0 10
0.0
Tab
le 4
.3 (
Con
td.)
93
E-banking provides a number of services at the doorstep of customers which is
otherwise not possible. These services are provided through bank websites. Table 4.3
shows that e-banking services are offered to the customers in the form of internet
banking services, phone banking, mobile banking and ATM services. Internet banking
services are provided to a large extent by all the banks. The most common services
among internet banking are balance inquiry and transaction history. All the banks are
offering these two services. Apart from these, ATM services are also offered by all the
banks. These include 24 hours access to cash, transfer fund between accounts, view
account balances & mini statement and pin change option.
Among other services, most of the banks offer simple transaction of e- banking
which includes online transfer of funds (97.7 per cent), change password (95.5 per cent),
customer correspondence (95.5 per cent), request of cheque book (88.8 per cent), bill
payment (64.4 per cent), and monthly bank account statement by e-mail (75.5 per cent).
However, the services like online tax payments (66.6 per cent), demonstration of I-
banking (66.6 per cent), stop payment request (46.6 per cent) and corporate internet
banking (42.2 per cent) should also be provided by all the internet banks are having less
adoption in all the banks
Other internet banking services which are less offered include open fixed deposit
and recurring deposit (33.3 per cent), ticket booking (37.7 per cent), demat holdings
(26.6 per cent), loan details (26.6 per cent), interest rate updates (26.6 per cent), share
trading (26.6 per cent), request of debit cards (15.5 per cent), renewal / premature closure
of FD (15.5 per cent), mobile top-up (15.5 per cent), buy and sell mutual fund (13.3 per
cent), card to card fund transfer (11.1 per cent), online loans (11.1 per cent), send money
order anytime (8.8 per cent), reissue and upgrade of ATM/ debit card (8.8 per cent), link
bank account to ATM/ debit card (8.8 per cent) , convert to EMI (2.2 per cent). So, from
the above analysis, it is clear that there are number of internet banking services, but the
banks are providing only a few.
As far as phone banking is concerned, it has been found that 40% banks provided
‘enquire your account balance’ and 37.7% banks offered ‘statement of account’ services
during the period under study. These services are offered in a limited manner by the
banks because the customers can avail such services through ATM also. The banks
consider that providing the same services through two different modes, i.e., phone
banking as well as ATM means extra financial burden only. The other phone banking
94
services availed less by the customers include ‘stop cheques payment instruction’
(22.2%), ‘request for fund transfer’ (20%), ‘mobile banking registration’ (17.7%) and
‘latest interest & exchange rates’(15.5%). In mobile banking services, 53.3% banks
provide ‘account balance & last three transaction services’. Services like ‘details of
credit card balance’ (13.3%), ‘making payment’ (11.1%), ‘loan information’ (6.6%),
‘purchase and redemption of mutual fund units’ (4.4%) and ‘Internet mobile’ (2.2%) are
offered to a limited extent by all the banks.
The ‘online transfer of fund’ facility is provided by all the banks under study but
to a varying degree, i.e., 100 per cent in the case of both the public and new private
sector banks, 94.4 per cent in private sector banks, 90.9 per cent in old private sector
banks, and 100 per cent in SBI and nationalised banks case. As far as ‘online bill
payment’ is concerned 72.2 per cent private sector banks and 59.2 per cent public sector
banks are offering this facility which comprises of 54.5 per cent old private sector banks
and all new private sector banks, and in the public sector all banks of SBI group and 84.2
per cent of nationalized banks are offering it. Similarly, the facility of ‘request for cheque
book’ through e-banking is provided by 72.2 per cent private sector banks comprising
54.5 per cent old private sector banks and 100.0 per cent new private sector banks.
However, all the nationalized and SBI group banks in the public sector are offering the
‘request for cheque book’ services. As far as ‘password change services’ are concerned
88.8 per cent private sector banks and 100.0 per cent public sector banks are providing
them. ‘Customer correspondence services’ are offered by 100 per cent public sector
banks and 88.8 per cent private sector banks. Similarly the ‘monthly bank account
statement by e-mail’ is provided by 100 per cent public sector banks and 88.8 per cent
private sector banks. As many as 96 per cent of public sector banks offer ‘online tax
payment’ and 30 per cent offer ‘share trading’ as compared to 22.2 per cent each in the
case of private sector banks.
However, the private sector banks leading in number of services like ‘buy and
sell mutual fund’ (16.6%) , ‘request of debit cards’ (16.6%), ‘reissue and upgradation of
ATM/ debit cards’ (22.2%) , ‘activate/ deactivate ATM/ debit cards’ (27.7%) , ‘demat
holding’(33.3%) , ‘loan details’ (33.3%), ‘online loans’ (16.6%) etc. In all these services
the share of public sector banks is very less. In the case of all the phone banking and
mobile banking services, private sector banks are leading except in details of credit card
(14.8%) in case of public sector . It is pertinent to note that not even a single bank of
SBI group providing either phone banking or mobile banking services during the period
95
under study. This shows that having the largest asset based structure in public sector
banks, still the State Bank of India and its subsidiaries are not offering phone and mobile
banking services. The reason being that these banks are having large number of branches
and the cost of IT is very high. Even if the banks have started adopting the e-banking
services but the rate of adoption by all these branches is very slow.
There are number of services where public sector banks are leading. These
include ‘monthly banks account statement by e-mail’, ‘change password’, ‘ticket
booking’, ‘share trading’, ‘online tax payment’, ‘customer correspondence’, and
‘demonstration of I- banking’. The research shows that as compared to private sector
banks, public sector banks are offering more services for the social welfare of public
rather than business-oriented and profit making. The service like tax payment increases
the government revenue on one hand, and fulfils the corporate social responsibility on
the other.
All the banks are at different stages of offering e-banking services so the extent
of services is also different. In order to acquire the new customers as well as to retain the
existing one, banks are very much cautious about E-banking services. Banks should
develop such kind of services through which customer can transact from anywhere,
anytime. In some of the services like balance enquiry, transaction history, transfer of
funds online, ATM services; all the banks are offering excellent services to the
customers. Banks are also offering these services according to their suitability like
differentiation between corporate customers and retail customers. But such
differentiation is only in case of offering internet banking services. However mobile
banking services, phone banking services and ATM services are offered in the same
manner to all kind of customers. It is worthwhile to note that banks should encourage
existing and new customers in order to make e-banking services popular among
customers. But all the services are not offered in the same extent by all the banks. Banks
lag behind in offering the services such as demat holding, loan details, interest rate
updates, share trading, buying and selling of mutual fund, request for the debit cards etc.
As the electronic banking services are recently started by all the banks, so banks can
expand these services so as to make the customer more satisfied
A part from balance enquiry, transaction history, ATM services ; private sector
banks are offering more advanced electronic banking services like online shopping,
online loans, demat holding, loan details, mobile top-up, buy and sell of mutual fund,
card to card transfer , mobile banking, phone banking services to its customers. However
96
public sector banks are leading private sector in fund transfer, online bill payment,
request for cheque book, online tax payment, share trading, customer correspondence
and monthly bank account statement. All the banks are trying their best to offer
electronic banking services, so that customers can easily cope up with new technology
products.
Figure 4.2 Range of Electronic Banking Services
0 20 40 60 80 100 120
Balance enquiry and statement
Transaction history
Transfer funds online
Card to card fund transfer
Prepaid mobile recharge
Buy and sell Mutual Fund
Send money order anytime
Open Fixed deposit and Recurring deposit
Request of Cheque book
Stop Payment request
Request of Debit cards
Monthly Bank account statement by E-mail
Reissue and upgrade of ATM/debit card
Link bank account to ATM/debit Card
Renewal/ premature closure of FD/ RD
Deactivate/ Activate ATM/ debit card
Change Password
Demat holdings
Loan Details
Interest rates updates
Bills Payment
Online shopping
Ticket Booking
Mobile Top-up
Share Trading
Online tax payments
Convert to EMI
Online loans
Customer Correspondence
Demonstration of I-banking
Corporate Internet Banking
Phone banking Services
Enquire your Account-balance
Statement of Account
Request for fund Transfer
Stop cheque Payment instructions
Mobile banking Registration
Latest Interest and Exchange Rates
Mobile Banking Services
Account Balance
Making Payment
Details of credit card balance
Loan Information
I-Mobile
Purchase and Redemption of Mutual Fund units
Last three transaction
ATM’s
24 hours access to Cash
Transfer fund between accounts
View account balances and mini statement
Pin change option
123456789101112131415161718192021222324252627282930313233343536373839404142434445464748
Series1
97
The banks offer wide range of electronic banking services from balance enquiry
to pin change option. Figure 4.1 depicts the range of electronic banking services offered
to the customers.
Table 4.4
Bank-wise Electronic Banking Services
In this section an attempt has been made to rank the electronic banking services
on the basis of extent of electronic banking services. Table 4.4 shows the electronic
banking services offered by different banks along with the name used by banks for these
services. Table 4.5 shows the extent of electronic banking services and ranks of e-
banking services on the basis of extent of e-banking services.
Electronic
Banks
Service
Code
State Banks
and its
Subsidiaries
Name of
Internet
Banking
Services
Electronic Banking Services
1 State Bank of India
OnlineSBI 1,2,3,9,12,17,21,22,23,26,29,30,45,46,47,48
2 State Bank of Bikaner and Jaipur
SBBJOnline
1,2,3,9,12,17,21,23,26,29,30,45,46,47,48
3 State Bank of Hyderabad
OnlineSBH 1,2,3,9,12,17,21,26,29,30,45,46,47,48
4. State Bank of Indore
OnlineSBIndore 1,2,3,9,12,17,21,26,29,30,45,46,47,48
5. State Bank of Mysore
OnlineSBM 1,2,3,9,12,17,21,26,29,30,45,46,47,48
6 State bank of Patiala
OnlineSBP 1,2,3,9,12,17,21,26,29,30,45,46,47,48
7. State Bank Saurashtra
OnlineSBS 1,2,3,9,12,17,21,26,29,30,45,46,47,48
8. State bank Travancore
OnlineSBT 1,2,3,9,12,17,21,26,29,30,45,46,47,48
Nationalized Banks 9. Allahabad Bank ALLNET 1,2,3,8,9,12,15,17,21,26,29,31,45,46,47,48 10. Andhra Bank ABINFI-net 1,2,3,9,17,21,23,26,29,31,45,46,47,48 11. Bank of Baroda i-bob 1,2,3,9,12,17,20,21,26,32,34,38,44,45,46,47
,48 12. Bank of India Star Connect 1,2,3,9,12,17,18,20,21,25,26,29,30,31,45,46
,47,48 13. Bank of
Maharastra Maha Connect 1,2,3,5,8,9,10,11,12,17,19,20,21,24,25,26,2
8,29,30,32,33,34, 35,36,38,44,45,46,47,48
98
14. Canara Bank CNet-banking 1,2,3,5,8,9,10,11,12,17,19,20,21,24,25,26, 28,29,30,31,32,33,34,35,36,38,44,45,46, 47, 48
15. Central Bank of India
CBI net banking 1,2,3,9,12,17,21,26,29,32,33,38,44,45,46, 47,48
16. Corporation Bank
Corp Net 1,2,3,4,5,9,10,11,12,17,21,22,26,29,30,31, 32,33,36,38,39,40, 45,46,47,48
17. Dena Bank Dena Connect 1,2,3,5.6,9,17,18,24,26,29,30,31,32,33,36, 38,40,45,46,47,48
18. Indian Bank India Net Bank 1,2,3,5,9,10,11,17,21,25,23,26,29,31,32,33,35,38,44,45,46,47,48
19. Indian Overseas Bank
E-See Banking 1,2,3,9,17,19,21,22,25,29,30, 45,46,47,48
20. Oriental Bank of Commerce
i-banking 1,2,3,9,10,17,21,26,29,32,33,35,38,44,45,46,47,48
21 Punjab National Bank
Internet Banking
1,2,3,4,5,8,9,10,12,17,21,22,24,25,26,29,30,31,32,33,34,35,36, 37,38,40,44,45,46,47,48
22 Syndicate Bank Syndicate E-Banking
1,2,3,9,10,17,18,19,20,21,23,26,28,29,30,45,46,47,48
23 Uco Bank Uco e-banking 1,2,3,6,8,9,10,12,17,19,21,26,29,30,45,46,47,48
24 Union Bank of India
Union e-banking retail
1,2,3,8,9,10,12,15,17,18,,21,25,26,29,30,31,45,46,47,48
25 United Bank of India
UBI Internet Banking
1,2,3,9,17,18,26,29,30,31,38,39,44,45,46, 47,48
26 Vijaya Bank V net Banking 1,2,3,8,9,10,15,17,19,26,29,30,45,46,47,48 IDBI Bank 27
New Private
Sector Banks
BANKAWAY 1,2,3,4,5,6,8,9,10,12,15,17,18,20,21,22,23,24,25,26,29,30,32, 33,34,35,36,37,38,39,40,44,45,46,47,48
28 ICICI Bank INFINITY 1,2,3,4,5,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35,36,37,38,39,40,41,42,44,45,46, 47,48
29 HDFC Bank Net Banking 1,2,3,4,5,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35,36,37,38,39,40,41,43,44,45,46, 47,48
30 Kotak Mahindra Bank
Internet Banking
1,2,3,6,8,9,10,11,12,13,14,15,16,17,18,20,21,22,25,29,30,31,32,33,34,35,37,38,43,44, 45,46,47,48
31 Indusind Bank IndusNet 1,2,3,6,8,9,10,12,13,14,16,17,21,29,38,44, 45,46,47,48
32. Axis Bank iConnect 1,2,3,9,10,12,17,18,21,22,23,29,30,31,32,3,38,39,44,45,46,47,48
33. Yes bank Yes@ccess 1,2,3,6,8,9,17,21,29,30,45,46,47,48 34. Development
Credit Bank 1,2,3,8,9,10,16,17,21,29,32,33,35,38,44,45,
46,47,48
99
Old private
Sector Bank
35. Bank of Rajasthan
RajBank@Net service
1,2,3,9,17,18,21,23,25,29,45,46,47,48
36. City Union Bank
OnlineCub.net 1,2,3,9,17,21,29,32,33,34,45,46,47,48
37. Dhanluxmi Bank
Web Banking 1,2,17,29,32,33,37,38,44,45,46,47,48
38. Federal Bank Fed Net 1,2,3,9,10,12,17,18,20,21,22,23,29,31,32, 33,37,38,44,45,46,47,48
39. Ing Vyasa Bank mi-b@nk 1,2,3,8,9,10,12,17,19,21,29,30,31,45,46,47,48
40. J & K Bank Net Banking 1,2,3,9,17,20,29,38,44,45,46,47,48 41. Karnataka Bank Money Clicktm 1,2,3,9,10,17,18,19,20,21,22,23,26,29,30,31
,38,44,45,46,47,48 42 Karur Vyasa
Bank Internet Banking
1,2,3,17,19,29,30,31,38,41,44,45,46,47,48
43 South Indian Bank
Sibernet Retail 1,2,3,8,9,10,12,17,19,21,26,29,30,31,45,46,47,48
44 Tamilnadu Mercantile Bank
X 38,44,45,46,47,48
45. Catholic Syrian Bank
X 38,44,45,46,47,48
46 SBI Commercial and International Bank
N.A
47. Lakshmi Vilas Bank
N.A
100
Table 4.5
Ranking of Electronic Banks on the Basis of Extent of Electronic Banking Services
Electronic Banks Extent (in Per cent) Rank
A Public Sector banks
SBI Group
1 State Bank of India 33.33 14
2 State Bank of Bikaner and Jaipur 31.25 15
3 State Bank of Hyderabad 31.25 15
4. State Bank of Indore 31.25 15
5. State Bank of Mysore 31.25 15
6 State Bank of Patiala 31.25 15
7. State Bank Saurashtra 31.25 15
8. State Bank Travancore 31.25 15
Nationalized Banks
9. Allahabad Bank 33.33 14
10. Andhra Bank 29.17 16
11. Bank of Baroda 41.67 10
12. Bank of India 37.5 12
13. Bank of Maharastra 62.5 6
14. Canara Bank 64.5 5
15. Central Bank of India 35.4 13
16. Corporation Bank 56.25 7
17. Dena Bank 45.8 9
18. Indian Bank 45.8 9
19. Indian Overseas Bank 31.25 15
20. Oriental Bank of Commerce 37.5 12
21 Punjab National Bank 64.5 5
22 Syndicate Bank 39.5 11
23 Uco Bank 37.5 12
24 Union Bank of India 41.67 10
25 United Bank of India 35.4 13
101
26 Vijaya Bank 33.33 14
27 IDBI Bank 75 3
B. Private Sector Banks
New private Sector Banks
28 ICICI Bank 95.8 1
29 HDFC Bank 93.7 2
30 Kotak Mahindra Bank 70.8 4
31 Indusind Bank 41.67 10
32. Axis Bank 48 8
33. Yes Bank 29.16 17
34. Development Credit Bank 39.5 11
Old Private Sector Bank
35. Bank of Rajasthan 29.16 17
36. City Union Bank 29.16 17
37. Dhanluxmi Bank 27 18
38. Federal Bank 48 8
39. Ing Vyasa Bank 35.4 13
40. J & K Bank 27 18
41. Karnataka Bank 48 8
42 Karur Vyasa Bank 31.25 15
43 South Indian Bank 37.5 12
44 Tamilnadu Mercantile Bank 12.5 19
45. Catholic Syrian Bank 12.5 19
46 SBI Commercial and International
Bank
N.A N.A
47. Lakshmi Vilas Bank N.A N.A
102
Table 4.6
Extent of Electronic Banking Services among Top Ten Ranks
Name of Bank Category Rank Category
ICICI Bank New private Sector 1 95.8 HDFC Bank New private Sector 2 93.7 IDBI Bank Other public sector Bank 3 75 Kotak Mahindra Bank New private Sector 4 70.8 Punjab National Bank Nationalized 5 64.5 Canara Bank Nationalized 5 64.5 Bank of Maharastra Nationalized 6 62.5 Corporation Bank Nationalized 7 56.2 Federal Bank Old private Sector 8 48
Axis Bank New private Sector 8 48
Karnataka Bank Old private Sector 8 48
Dena Bank Nationalized 9 45.8
Indian Bank Nationalized 9 45.8
Union bank of India Nationalized 10 41.67
Table 4.6 shows the extent of e-banking services. It is found that ICICI Bank
offers as high as 95.8 per cent e-banking services, followed by HDFC Bank with 93.7
per cent of e-banking services. So, the top two positions of e-banking services are
acquired by new private sector banks. Third position is acquired is by a public sector
bank, viz. IDBI offering 75 per cent of services. Fourth position is again acquired by a
new private sector bank, viz. Kotak Mahindra offering 70.8 per cent of services. Fifth
rank is shared by Punjab National Bank and Canara Bank offering 64.5 per cent of
services. Sixth position is acquired by Bank of Maharashtra with 62.5 per cent services,
seventh by Corporation Bank with 56.25 per cent and eighth rank is shared by three
banks jointly with 48.00 per cent of each service, i.e., Federal Bank, Karnataka Bank and
Axis bank. Out of these three banks, two banks are old private sector banks and one is a
new private sector bank. Ninth position is jointly shared by Dena Bank and Indian Bank
with 45.8 per cent services. Both are nationalized banks. Tenth rank is bagged by Union
Bank of India with 41.67 per cent services which is a nationalized one. The analysis
depicts that new private sector banks and nationalized banks have provided e- banking
services. Old private sector banks and SBI banks are in the early stage of development
and introduction of early e-banking to their customers.
103
PART-II
Extent of ATM Services In India
4.6 Conceptual Framework of ATM's
In the world of banking, the developments in information technology had an
enormous effect in development of more flexible payment methods and more user-
friendly banking services. Online banking and other electronic payment systems are new
and the development and diffusion of these technologies by financial institutions is
expected to result in a more efficient banking system. This technology offers to the
institutions an alternative or non-traditional delivery channels through which banking
products and services can be delivered to customers more conveniently and economically
without diminishing the existing service levels. However the entry of private sector has
posed the challenge of competitive environment to the public sector banks in India.
These private sector banks have brought with them the advanced banking technology
with alternate delivery channels such as Phone Banking, Mobile banking, Internet
Banking, Automated Teller Machines (ATM) etc. Out of all these e-banking services, the
ever demanding and fulfilling the requirement of the customers is automated teller
machines. So the efforts of the banks are to manufacture and install as much ATM’s
which could serve its services to the entire customers of the nation, be it rural people or
urban people. To suit the needs of rural people, an additional security device innovations
are being made in the form of using camera inside the ATM which could compare the
records with thumb impression (Bio-Metric) of the client for identification.
(Murali, 2006).
The ATM industry consists of multitude of activities which is a major cause of
making e-banking a 24 hours service. In fact, electronic banking is profitable and
possible due to services of ATMs. Because this service provides immense help to the
customers in withdrawing cash from anywhere, anytime. The management of ATM
includes loading of ATM with cash, arranging of money with bank with which cash is
loaded, service of car that delivers cash if it is offsite situated, providing insurance for all
areas such as theft of cash from ATM. Due to large expense involved in setting and
situating an ATM at a particular place, these services are now days offered by
independent service providers like privately owned ATMs. The following is a list of
businesses involved with ATMs.
104
Table 4.7
Companies Involved in the Business of ATM
Manufacturers These companies physically build ATM.
Lock Manufacturers Companies that develop the advance locking
systems that store cash in the machines
Software Companies These companies help the customers to tell ATM
what he wants to do. The software encrypted and
processes all the required information.
Paper products All the ATM provides a physical receipt.
Service personnel They provide maintenance and mal-functioning
of machines.
Insurance Companies These companies provide insurance coverage for
damage of machines etc.
Vault cash
Management companies
These companies take over the responsibility of
delivering and stocking cash in ATM machines.
Independent service
Operators
They offer all ATM management services and
offer day to day management services.
Sponsoring Financial institutions An ATM must be sponsored by financial
institution to be granted access to network.
Now days due to the high cost involved in installing the ATM machines, these
services are provided by privately owned institutions. By sponsoring a privately owned
ATM, financial institution takes the full responsibility of non-bank location ATM. These
financial institutions bears all the risks associated with installation of ATM, placing the
machine and including risks of frauds. So all the privately owned ATM must have a
sponsoring institution that carries such risk related to fraud, theft and cash
mismanagement
105
4.7 Kinds of ATM
The first ATM to be installed in India was by HSBC in 1987 at Mumbai. There
are different kinds of ATMs used by the banks for the customers. Table 4.8 shows the
kinds of ATM according to location, links, card insertion and loading of cash.
Figure 4.3
Source: Compiled from Murali 2006
(A) Onsite and Offsite ATMs
ATMs which are situated at the premises of the bank are known as onsite ATMs and
the one that are located at some busy places are known as offsite ATMs like food worlds,
railway station, bus stops, shopping malls, petrol pumps etc.
(B) Stand alone and Net-worked
ATMs which are not linked to the hub of the bank to which it belongs are stand alone
ATMs. But these ATMs are not popular now a days.Net-worked ATM on the other hand
are those which are linked to the branch and also linked to the branches across the
country means a customer of a particular bank can withdraw money from any branch of
of any bank at any city.
(C) Dip-card and Motorized
Where the customer is required to dip the card and take it back to do the transaction is
known as dip card. The sensors of the machine identifies the customer and greets him
with the voice. On the other hand, motorized ATMs are very prevalent among all. In this
the customer insert the card in the machine and takes it back when the transaction is
over. In some machines immediately the card is taken back whereas in some machines
the card automatically comes out when cash is withdrawn.
KINDS OF
ATM
LOCATION
LINKS
CARD
INSERTION
ON SITE
OFFSITE
STAND
ALONE
NET
WORKED
DIP CARD
MOTORISE
D
LOADING
OF CASH
FRONT
BACK
106
(D) Front and Back
Cash has to be regularly loaded in the ATM machines. In the front loading the door of
the ATM compartment is closed and cash is loaded where as in back loading, it is done
behind the ATM and a message is displayed that “please wait for sometime. Some
services are being carried on”.
4.8 Reasons for Adoption of ATM for the Customers and the Banks
Figure 4.4
Table 4.9 shows the reason for adoption of ATM for the customers and the banks.
The services availed through ATMs are convenient for the customers as it is available 24
hours. Further customer can withdraw cash from any branch of any bank at any city. Not
only the money can be withdrawn but multiple services are available like balance
enquiry, pin change option, receipt of last three transactions etc. From the bank point of
view, the cost of installing an ATM is much less than setting up of a branch. Further, it
provides wider choice for the bank to advertise their products through ATM and less
cash handling is required. So ATM is beneficial from both customer and bank point of
view.
4.9 Growth of Onsite and Offsite ATM in Banking Sector
Number of ATMs in India is growing day by day. There is a tremendous growth
in the ATM after the adoption of electronic banking by public and private sector banks.
To study the growth of ATMs, it has been divided in to five categories, i.e., Nationalized
banks, SBI group, Old private sector banks, New private sector banks and Foreign banks.
It has been further classified in to onsite ATMs and offsite ATMs. The data has been
compiled from 2004-05 to 2007-08. For each onsite and offsite ATMs, growth to
BENEFITS OF ATM’S
24*7 availability of ATM across all over the country
Cost of setting ATM is much lower than setting a branch
With networked ATMs ,customers can withdraw from any branch of any bank at any city
Fewer burdens on staff for cash withdrawal
No queue standing (less time required)
Wider choice with the bank to advertise their products through ATM
Multiple services available in addition to cash withdrawal
Less hassle in handling cash
CUSTOMER’S PERSPECTIVE BANKS PERSPECTIVE
107
previous year has been calculated. The tables from 4.11 to 4.15 shows the onsite and
offsite growth of ATMs.
4.9.1 Onsite & Offsite ATM of Nationalized banks
Table 4.8
Year Onsite ATM Growth Offsite ATM Growth
2004-05 3205 ---- 1567 ---
2005-06 4812 50.14 2353 50.15
2006-07 6634 37.86 3254 38.29
2007-08 8320 25.41 5034 54.70
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to
2007-08
The above table consists of the onsite and offsite ATM’s of nationalized banks
which shows a tremendous growth from 2004 onwards. Onsite ATMs of the nationalized
banks have shown a three-fold increase, it was merely 3205 in 2004-05 and increased to
8320 in 2007-08, however there is a decline in the growth of these ATMs from 50.14 per
cent in 2005-06 to 25.41 per cent to 2007-08. Offsite ATMs of nationalized banks have
registered a growth of 54.70 per cent in 2007-08. So, growth of onsite ATM of
nationalized banks is more.
Figure 4.5
Growth of Onsite and Offsite ATMs of Nationalized Banks
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2004-05 2005-06 2006-07 2007-08
Onsite ATM
Offsite ATM
108
4.9.2 Onsite and Offsite ATM of SBI Group
Table 4.9
Year Onsite ATM Growth Offsite ATM Growth
2004-05 1548 ---- 3672
2005-06 1775 14.66 3668 -0.1
2006-07 3655 105.91 2786 -24.04
2007-08 4582 25.36 3851 38.22
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to
2007-08
As far as SBI and its subsidiaries are concerned, the onsite ATMs’ have increased
from 1548 to 4582 showing a three-fold increase. The growth rate increased
tremendously from 14.66 per cent in 2005-06 to 105.91 per cent in 2006-07. But, it
again, declined to 25.36 per cent in 2007-08. Due to the large asset base structure the SBI
banks’ share of onsite ATMs is also high. Regarding the offsite ATMs the growth
declined by -0.1 per cent in 2005-06 to -24.04 per cent in 2006-07. It was only in 2007-
08 that this share increased to 38.22 per cent. So, growth of offsite ATMs shows a
downward trend, while onsite ATMs show an upward trend.
Figure 4.6
Growth of Onsite and Offsite ATMs of SBI Banks
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2004-05 2005-06 2006-07 2007-08
Onsite ATM
Offsite ATM
109
4.9.3 Onsite and Offsite ATM of Old Private Sector Banks
Table 4.10
Year Onsite ATM Growth Offsite ATM Growth
2004-05 800 --- 441
2005-06 1054 31.75 493 11.79
2006-07 1104 4.74 503 2.02
2007-08 1436 30.07 664 32
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to
2007-08
Table 4.10 shows the onsite and offsite ATM’s of old private sector banks. Old
private sector banks provide limited e-banking services. Their share of ATMs is also not
so high. In the year 2006-07, there was a great decline in their share and it was merely
4.74 per cent. Similarly, offsite ATMs also declined from 11.79 per cent in 2005-06 to
2.02 per cent in 2006-07 but again increased to 32 per cent.
Figure 4.7
Growth of Onsite and Offsite ATM of Old Private Sector Banks
0
200
400
600
800
1000
1200
1400
1600
2004-05 2005-06 2006-07 2007-08
Onsite ATM
Offsite ATM
4.9.4 Onsite and Offsite ATM of New Private Sector Banks
Table 4.11
Year Onsite ATM Growth Offsite ATM Growth
2004-05 1883 --- 3729 ---
2005-06 2255 19.75 3857 3.43
2006-07 3154 39.86 5038 30.61
2007-08 3879 22.98 5988 18.85
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to
2007-08
110
Table 4.11 shows onsite and offsite ATMs of new private sector banks. New
private sector banks constitute the major role in providing electronic banking services.
These banks have recorded 19.75 per cent growth in 2005-06, 39.86 per cent in 2006-07
and 22.98 per cent in 2007-08. But the offsite growth of these banks is maximum as
suggested by the number of ATMs i.e., 5988 in 2007-08. There has been a growth of
only 3.43 per cent in 2005-06, 30.61 per cent in 2006-07, and 18.85 per cent in 2007-08
in the number of ATMs. Nationalized banks are having the largest share of onsite ATMs
while new private sector banks are having the greatest share of offsite ATMs.
Figure 4.8
Growth of Onsite and Offsite ATM of New Private Sector Banks
0
1000
2000
3000
4000
5000
6000
7000
2004-05 2005-06 2006-07 2007-08
Onsite ATM
Offsite ATM
4.9.5 Onsite and Offsite ATM of Foreign Banks
Table 4.12
Year Onsite ATM Growth Offsite ATM Growth
2004-05 218 579
2005-06 232 6.42 648 11.01
2006-07 249 7.32 711 9.72
2007-08 269 8.03 765 7.59
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to
2007-08
Foreign banks play a vital role in Indian banking sector but their number of onsite
and offsite ATMs is very less, so their growth rate was as very low as 6.42 per cent in
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2005-06 which increased to 8.03 per cent in 2007-08. Offsite growth was merely 7.59
per cent in 2007-08.
Figure 4.9
Growth of Onsite and Offsite ATM of Foreign Banks
0
100
200
300
400
500
600
700
800
900
2004-05 2005-06 2006-07 2007-08
OnsiteATM
Offsite ATM
4.10 Per cent age of ATMs to Branches
The following data shows the per cent of ATM to total branches in Indian Banking
Sector from the period 2004-05 to 2007-08
4.10.1 Nationalized banks
Table 4.13
Year Branches ATM Per cent
2004-05 33627 4772 14.19
2005-06 34012 7165 21.06
2006-07 35636 9888 27.74
2007-08 37775 13355 35.35
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to
2007-08
Table 4.13 reveals that nationalized banks have the maximum number of
branches, i.e., 37775 in 2007-08 and also the ATMs i.e., 13355. With an increase in the
number of branches of these banks, the share of ATMs to branches has also been
increasing. It was 14.19 per cent in 2004-05 and gradually increased up to 35.35 per cent
inn 2007-08 over the study period. The results shows that nationalized banks increased
branches by nearly 4000 but number of ATM increased by 9000. So banks focused more
on new modes of electronic banking rather than opening more branches.
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4.10.2 State Bank Group
Table 4.14
Year Branches ATM Per cent
2004-05 13661 5220 38.2
2005-06 13831 5443 39.35
2006-07 14030 6441 45.9
2007-08 15105 8433 55.82
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 Table 4.14 depicts that banks in the SBI group are having equivalent share of
ATMs to branches. The proportion of ATMs to number of branches is gradually
increasing. It was 38.20 per cent in 2004-05 and increased to 55.82 percent in 2007-08.
So, the share of ATMs constitutes half of the share of branches. It shows that the SBI
group is not only focusing on its number of branches but ATM’s also.
4.10.3 Old Private Sector Banks:
Table 4.15
Year Branches ATM Per cent
2004-05 4511 1241 27.5
2005-06 4566 1547 33.88
2006-07 4606 1607 34.88
2007-08 4450 2100 47.19
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08
The number of branches of old private sector banks decreased rapidly during the
period from 2004-05 to 2007-08. These were 4511 in 2004-05 and 4450 in 2007-08. But
the number of ATMs showed an upward trend increasing from 1241 to 2100.
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4.10.4 New Private Sector Banks
Table 4.16
Year Branches ATM Per cent
2004-05 1685 5612 333.05
2005-06 1950 6112 313.43
2006-07 2497 8192 328.07
2007-08 3825 9867 279.91
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08
Table 4.16 reflects the branches and ATMs of new private sector banks. New
private sector banks are leading banks in providing the services of electronic banking.
They were having 1685 branches and 5612 ATMs in 2004-05, thus having a percentage
share of 333 per cent. In 2007-08, number of ATMs increased to 9867; and the number
branches were 3825 only. So, this is the sector where number of ATMs exceeds the
number of branches as these banks offer wide range of electronic banking services to
customers.
4.10.5 Foreign Banks
Table 4.17
Year Branches ATM Per cent
2004-05 242 797 329.33
2005-06 259 880 339.76
2006-07 273 960 351.64
2007-08 277 1034 373.28
Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08
Table 4.17 mentions that foreign banks are also play a vital role for their
customers in providing the e-banking services. These banks have very less number of
branches in India merely 277 in 2004-05 and having 1034 ATM by the end 2007-08.
As the technology is developing due to the competition and demand from the
customer for the electronic banking, every bank is more focusing on the increase of
modern techniques to provide the satisfaction to the customers. By using the information
drawn from the survey of bank websites during June 2008, it was found that banks are
offering electronic banking services in one form or other. Private sector banks lead the
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public sector banks in adoption of electronic banking services. First two ranks were
acquired by private sector banks. Most of other ranks were held by nationalized banks
except two banks of old private sector and one of other public sector bank. ICICI and
HDFC banks offer a wide range as well as more advanced services to customers. Some
of banks are making their efforts to provide more services to the customers and rest of
banks are at the introduction and development stage of providing electronic banking
services.
All the banks are making continuous effort to improve the ATM services because
this is the service due to which electronic banking services are growing in India. Every
bank is making a lot of steps in improving their ATM services because this is the most
demanding and required e-banking service. But installation of the machine involves high
cost of capital so the banks now a days are networking their machines together for the
common benefit of all their customers who can use their cards in any of them.