A
SYNOPSIS REPORT
ON
A STUDY ON ROLE OF IT IN BANKING SECTOR
AT
HDFC BANK LIMITED
Submitted
By
MOHD ABDUL RAHMAN
H.T.NO: 1302-20-672-059
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE
OF
MASTER OF BUSINESS ADMINISTRATION
Department of Business Administration
AURORA’S PG COLLEGE
RAMANTHAPUR
(Affiliated to Osmania University)
2020-2022
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Aurora’s PG College (MBA), Ramanthapur
Department of Management
SYNOPSIS
Title of the Project : A STUDY ON ROLE OF IT IN
BANKING SECTOR
Student Name : MOHD ABDUL RAHMAN
Hall Ticket Number : 1302-20-672-059
Signature of the Student :
Signature of the Guide :
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INDEX
. No. CONTENTS Page No
1 INTRODUCTION
2 NEED FOR THE STUDY
3 OBJECTIVES OF THE STUDY
4 SCOPE OF THE STUDY
5 RESEARCH METHODOLOGY
6 REVIEW OF LITERATURE
7 PROPOSED OUTCOMES
8 LIMITATIONS OF THE STUDY
9 CHAPTERISATION
BIBLIOGRAPHY
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1.1 INTRODUCTION
India is a developing country. Nowadays many people are interested to invest in
financial markets especially on equities to get high returns, and to save tax in honest way.
Equities are playing a major role in contribution of capital to the business from the beginning.
Since the introduction of shares concept, large numbers of investors are showing interest to
invest in stock market.
In an industry plagued with skepticism and a stock market increasingly difficult to
predict and contend with, if one looks hard enough there may still be a genuine aid for the Day
Trader and Short Term Investor.
The price of a security represents a consensus. It is the price at which one person
agrees to buy and another agrees to sell. The price at which an investor is willing to buy or sell
depends primarily on his expectations. If he expects the security's price to rise, he will buy it; if
the investor expects the price to fall, he will sell it. These simple statements are the cause of a
major challenge in forecasting security prices, because they refer to human expectations. As we
all know firsthand, humans expectations are neither easily quantifiable nor predictable. If prices
are based on investor expectations, then knowing what a security should sell for (i.e.,
fundamental analysis) becomes less important than knowing what other investors expect it to sell
for. That's not to say that knowing what a security should sell for isn't important--it is. But there
is usually a fairly strong consensus of a stock's future earnings that the average investor cannot
disprove
Fundamental analysis and technical analysis can co-exist in peace and complement
each other. Since all the investors in the stock market want to make the maximum profits
possible, they just cannot afford to ignore either fundamental or technical analysis.
INFORMATION TECHNOLOGY IN BANKING SECTOR:
Banking industry is a backbone of Indian financial system and it is afflicted by many
challenging forces. One such force is revolution of information technology. In today's era,
technology support is very important for the successful functioning of the banking sector.
Without IT and communication we cannot think about the success of banking industry, it has
enlarged the role of banking sector in Indian economy. For creating an efficient banking
system, which can respond adequately to the needs of growing economy, technology has a
key role to play. In past 10years, banks in India have invested heavily in the technology such
as Tele banking, mobile banking, net banking, ATMs, credit cards, debit cards, electronic
payment systems and data warehousing and data mining solutions, to bring improvements in
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quality of customer services and the fast processing of banking operation. Heavy investments
in IT have been made by the banks in the expectation of improvement in their performance.
But important in the performance depends upon, differences in the deployment, use and
effectiveness of IT.
Information technology in banking sector refers to the use of sophisticated information and
communication technologies together with computer science tenable banks to offer better
services to its customers in a secure, reliable and affordable manner and sustain competitive
advantage over other banks. The significance of technology is greatly felt in the financial
sector in view of the competitive advantage for banks resulting in the efficient customer
service. In the development of Indian Economy, Banking sector plays a very important and
crucial role. With the use of technology there had been an increase in penetration,
productivity and efficiency. It has not only increased the cost effectiveness but also has
helped in making small value transactions viable. Electronic delivery channels, ATMs,
variety of cards, web based banking, and mobile banking are the names of few outcomes of
the process of automation and computerization in Indian banking sector
Banking environment has become highly competitive today. To be
able to survive and grow in the changing market environment banks are going for the latest
technologies, which is being perceived as an ‘enabling resource’ that can help in developing
learner and more flexible structure that can respond quickly to the dynamics of a fast
changing market scenario. It is also viewed as an instrument of cost reduction and effective
communication with people and institutions associated with the banking business.
The Software Packages for Banking Applications in India had their beginnings in the middle
of 80s, when the Banks started computerizing the branches in a limited manner. The early 90s
saw the plummeting hardware prices and advent of cheap and inexpensive but high powered
PC’s and Services and banks went in for what was called Total Branch Automation (TBA)
packages. The middle and late 90s witnessed the tornado of financial reforms, deregulation
globalization etc. coupled with rapid revolution in communication technologies and evolution
of novel concept of convergence of communication technologies, like internet, mobile/cell
phones etc. Technology has continuously played on important role in the working of banking
institutions and the services provided by them. Safekeeping of public money, transfer of
money, issuing drafts, exploring investment opportunities and lending drafts, exploring
investment being provided. 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
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markets. Internet has significantly influenced delivery channels of the banks. Internet has
emerged as an important medium for delivery of banking products and services.
NEED OF THE STUDY
The banking system is slowly shifting from the Traditional Banking towards relationship
banking. Traditionally the relationship between the bank and its customers has been on a one-to-
one level via the branch network. This was put into operation with clearing and decision making
responsibilities concentrated at the individual branch level. The head office had responsibility for
the overall clearing network, the size of the branch network and the training of staff in the branch
network. The bank monitored the organization's performance and set the decision making
parameters, but the information available to both branch staff and their customers was limited to
one geographical location.
SCOPE OF THE STUDY
The study covers the services offered
r by Banks to the customers by the use of technology.
More specifically latest technological delivery channels, namely ATM/Debit card, Credit
card, Internet Banking, Mobile Banking etc. have been take n up for the purpose of study.
This project is an analytical study based on random sampling to ascertain the usage and
satisfaction level and customer attitude towards these channels. The study also gives an
idea of rendering secure, 24X7X365 E-banking services at a lower cost without
compromising with the quality thereby resulting in the widening of customer base
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OBJECTIVES OF THE STUDY
The objective of this project is to deeply analyze our Banking Sector for investment
purpose by monitoring the growth rate and performance on the basis of historical data.
The main objectives of the Project study are:
To study the role of technology in banks.
To determine the technology in banks used by customers.
To analyses the banking innovations after computerization of banks in India.
To study the overall growth of Indian Economy which is growing at a fast pace.
Detailed analysis of Banking Sector which is gearing towards international standards
Analyze the impact of qualitative factors on industry’s and company’s prospects
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RESEARCH METHODOLOGY
Secondary research was conducted to review the present status of E Banking
1.5.1 Type of Research
Descriptive:
Descriptive research includes surveys and fact finding enquiries of kinds.
Fundamental:
The information and data for the research can be collected through primary and secondary
sources i.e. published articles, journals, newspapers, reports, books and websites. Data has
been collected from the websites of the Reserve Bank of India and also taken from various
committee reports submitted to Government of India on Financial Inclusion.
1.5.1 Area of Research
. to study the awareness and satisfaction level of the customers of HDFCBANK LIMITED
compared with other banks
1.5.2 Data Collection Methods
Primary Data
The study is conducted by using questionnaire, the study depended on primary data.
Secondary Data
Secondary data is collected from the books and surveys
1.5.3 Research Instrument
All analysis is done by using basic graphical presentations.
1.5.4 Questionnaire Design
Questionnaire design is a multistage process that requires attention to many details at once.
Designing the questionnaire is complicated because surveys can ask about topics in varying
degrees of detail, questions can be asked in different ways, and questions asked earlier in a
survey may influence how people respond to later questions. Researchers also are often
interested in measuring change over time and therefore must be attentive to how opinions or
behaviors have been measured in prior surveys.
Surveyors may conduct pilot tests or focus groups in the early stages of questionnaire
development in order to better understand how people think about an issue or comprehend a
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question. Pretesting a survey is an essential step in the questionnaire design process to
evaluate how people respond to the overall questionnaire and specific questions.
For many years, surveyors approached questionnaire design as an art, but substantial research
over the past thirty years has demonstrated that there is a lot of science involved in crafting a
good survey questionnaire. Here, we discuss the pitfalls and best practices of designing
questionnaires.
1.5.5 Sampling Procedure
A simple random sampling method (Convenience sampling) is used to collect data from
respondents.
1.5.6 Sample Size
Primary data is collected from 100 respondents.
1.5.7 Statistical Tools:
The study depends on primary data. The data collected were systematically tabulated,
analyzed, interpreted and presented in this report. Tables are used for the analysis of the
collected data. The data is also neatly presented with the help of pie charts. Percentages and
averages are used to represent the data.
1.5.8 Sample Design
Sufficient care has been taken to select the sample respondents. For this purpose, simple
random sampling was used to select the respondents. The present study relied on primary
data collected through administering a structured Interview Schedule and Questionnaire.
1.5.9 Period of Study
Based on the availability of data, the period of study has been confined to fifteen years from
2017-2021. All the websites of the banks and voice of managers have been explored during
this period.
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REVIEW OF LITERATURE
Palani and Yasodha P. (Apr 2012)
The research paper is focused on customer’s perceptions on mobile banking offered by Indian
Overseas Bank and it also focuses on the various drivers that drive mobile banking
consumers.. The results of this study showed that gender, education and income of the
consumers play an important role in usage of mobile banking. Most of the researches are
focused on the acceptance of the mobile banking technology due to which not much research
has been conducted on people. The research reveals that if skills can be upgraded among the
consumers there will be greater willingness on the part of consumers toward the use of
Mobile banking. Some the factors like security trust, gender, education, religion, and price
can have minimal effect on consumer mindset towards Mobile banking compared to the other
factors.
Thakur, Rakhi; Srivastava, Mala. (2013)
The paper studies the factors influencing the adoption intention of mobile commerce.
Perceived usefulness, perceived ease of use and social influence are found to be significant
dimensions of technology adoption readiness to use mobile commerce while facilitating
conditions were not found to be significant. The results of the research study also indicate the
perceived credibility risk defined by security risk and privacy risk are significantly associated
with behavioral intention in negative relation, which indicates that security and privacy
concerns are important in deterring customers from using mobile commerce. This research
study developed an integrated model for behavioral intention towards financial innovations.
Practical implications of this study is one of the few empirical studies which have
investigated the adoption of mobile commerce in India, which is considered one of the fastest
growing countries in terms of mobile usage. The study relates to inclusion of both utilitarian
and credibility aspect of adoption intention. It gives an empirical basis on which mobile and
banking companies can base their mobile payments marketing strategy.
Kumar, Reji G; Rejikumar, G; Ravindran, D Sudharani.
This research paper examines the factors influencing the continuance decisions of the early
adopters of m-banking services in Kerala, India. The study used constructs adopted from
Technology Acceptance Model along with constructs of perceived service quality, perceived
credibility and perceived risk to empirically establish the influence on satisfaction and
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continuance usage intentions. The study confirmed that after adoption of the technology, the
customer finds satisfaction in the quality parameters of the service. Perceptions about the
risks involved in m-banking had adverse impact on service quality and satisfaction.
Kalaiarasi, H &Srividya, V. 3 (Jul-Sep 2012)
Mobile banking as a new channel to the existing banking channels provides convenient and
cost efficient banking services anytime anywhere. It is observed that, though India has strong
potential for mobile banking only 5% of mobile subscribers are registered users of mobile
banking. Attracting the new customers may not be easy than retaining the existing mobile
banking customers 2009). Hence the current research focuses on the factors influencing
actual usage of mobile banking services. The results shows that, Indians mobile banking
usage is influenced by ease of mobile banking technology, its suitability to the user’s lifestyle
and the benefits like mobility and mobile transactions. However customer’s perception
towards security of mobile transactions and privacy fears demotivates actual usage.
TenkasiTaluk&Devasena, S Valli, (Jan 2012)
Banking system is the backbone of the economy and Information Technology (IT) in turn has
become the backbone of banking activities. Technology, which was playing a supportive role
in banking, has come to the forefront with the ever-increasing challenges and requirements.
Technology to start with was a business enabler and now has become a business driver. The
Banks cannot think of introducing a financial product without IT support. Be it customer
service, transactions, remittances, audit, marketing, pricing or any other activity in the Banks,
IT plays an important role not to complete the activity with high efficiency but also has the
potential to innovate and meet the future requirements. The Banking Sector was early adopter
of technology and in that way set an example to the other industries the need to opt for
automation for taking full advantage in operational efficiency.
Laukkanen &Tommie (2007).
The aim of the paper is to explore and compare customer value perceptions in internet and
mobile banking. The results indicate that customer value perceptions in banking actions differ
between internet and mobile channels. The findings suggest that efficiency, convenience and
safety are salient in determining the differences in customer value perceptions between
internet and mobile banking. By understanding how and what kind of value different service
channels provide for customers service providers are better enabled to create actions to
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enhance internet and mobile banking adoption. The contribution of the paper lies in achieving
a more profound understanding on consumer value perceptions to internet and mobile
banking.
Goswami, Divakar; Raghavendran, Satish. (2009)
The research is conducted to determine the potential that mobile banking provides for both
the banks and the mobile carriers. After the secondary research the report gives an insight
into the best-practices based on a critical evaluation of partnership models. Banks and mobile
carriers have tested these waters timidly, and many of the resulting offerings were expensive
to the banks and mobile carriers and less than enticing to their customers. This report weeds
out ineffective partnering models that companies stumble into on their way to developing
mobile-banking and identifies the keys to successful partnerships.
Dr. Vinod Kumar Gupta RenuBagoria&NehaBagoria .
This research paper try s to identify and investigate the various factors which influence the
customer’s decision to use a specific form of mobile banking and specially focus on the
evaluation of SMS-based mobile banking in India. The study also plans to connect the gap of
research in the acceptance of mobile banking among the customers. The main challenges
involved in the adoption of mobile banking are related to the Positive and Negative factors
which influence the adoption of SMS-based mobile banking .Second challenge is Focused on
the adoption of mobile banking services by customers and usage of mobile banking in India.
Third is related to the different Technologies behind Mobile Banking. The study has its own
limitations but the implications and conclusion from the results can provide practical
recommendations to the banking areas and banking industries. It can also provide directions
for further work
Shastri R.V, (March, 2003)
“Recent trends in Banking Industry‖ IT emergence, Charted Financial Analyst, ( in this
article stated that liberalization policy and intense competition keeps every banker on his
toes. Implementation of Information Technology (IT) helps for maintaining proper accounts
especially in decision making process. He also stated that facilities like ATM, anywhere
banking, Internet and mobile banking have imported customer service which in turn helps for
better customer relations management. He also explained the challenges faced by banks
because of IT implementation like employment problem and security concerns. He suggested
that the customer delight is the primary goal of all future IT initiatives.
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Prabhakar Rao Ch. (Jan, 2004).
Indian banking in 2010‖ IBA Bulletin Special Issues, in this study discussed about the
revolutionary changes that witnessed in the financial sector around the world. He stated that
net worked branches. ATMs, technology-based payment and settlement system, technology
vision of RBI, floating rate of interest have changed the Indian banking sector. He concluded
that brick and mortar bank branches will disappear and customers will be able to operation
their accounts through electronic devices.
Arora. K. (2003)
Highlighted the significance of bank transformation. Technology has a definitive role in
facilitating transactions in the banking sector and the impact of technology implementation
has resulted in the introduction of new products and services by various banks in India.
Brett (I997)
Studied the changing in old money structure into E-Money. Now days the banks are
providing different cards (Smart Card, Credit & Debit Cards) to their customers.
Thomas et al.(2002)
Stated that although technology opens up new dimensions of scope and timing but it
creates the possibility for crimes to be committed very quickly. Technology provides
benefits for banks but it worsens traditional banking risks. As the amount of products
and services offered by technology grows rapidly, consumers are more and more
concerned about security and privacy issues. The banking industry has declared
information privacy and security to be major obstacles in the development of consumer
electronic commerce. Continuous vigilance and revisions will be essential as the scope
of technology on banking increases. However, the ease with which capital can
potentially be moved between banks and across borders in a technology environment pose
a greater sensitivity to economic policy management.
O’Leary et al.(1989)
Two issues come to mind when banks talk about security. They are privacy and security,
controlling who gets access to the bank’s computer system and its programs, and what time to
access it. Studies regarding technology on banking examined barriers such as,security,
privacy, and trust of Web system (Rotchanakitumnuai and Speece,2003).To be more
precise, lack of privacy andsecurity were found to be significant obstacles to the adoption of
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technology on banking services(Sathye,1999). Challenges ontechnology is inevitable,
therefore care must be taking in since itsnegative effect can cause the bank billions of
money.Breaches of security and disruptions to the system's availability can damage a bank's
reputation;this can potentially affect other technologybanking services and its usage
(Schechter, 2002)
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3.1 INTRODUCTION TO THE INDUSTRY
A bank is a financial institution that accepts deposits and channels those deposits into
lending activities. Banks primarily provide financial services to customers while enriching
investors. Government restrictions on financial activities by banks vary over time and
location. Banks are important players in financial markets and offer services such as
investment funds and loans. In some countries such as Germany, banks have historically
owned major stakes in industrial corporations while in other countries such as the United
States banks are prohibited from owning non-financial companies. In Japan, banks are
usually the nexus of a cross-share holding entity known as the keiretsu. In France,
bancassurance is prevalent, as most banks offer insurance services (and now real estate
services) to their clients.
Introduction
India’s banking sector is constantly growing. Since the turn of the century, there has been a
noticeable upsurge in transactions through ATMs, and also internet and mobile banking.
Following the passing of the Banking Laws (Amendment) Bill by the Indian Parliament in
2012, the landscape of the banking industry began to change. The bill allows the Reserve
Bank of India (RBI) to make final guidelines on issuing new licenses, which could lead to a
bigger number of banks in the country. Some banks have already received licences from the
government, and the RBI's new norms will provide incentives to banks to spot bad loans and
take requisite action to keep rogue borrowers in check.
Over the next decade, the banking sector is projected to create up to two million new jobs,
driven by the efforts of the RBI and the Government of India to integrate financial services
into rural areas. Also, the traditional way of operations will slowly give way to modern
technology.
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3.2COMPANY PROFILE
HDFC Bank Ltd is a major Indian financial services company based in Mumbai. The Bank
is a publicly held banking company engaged in providing a wide range of banking and
financial services including commercial banking and treasury operations. The Bank at present
has an enviable network of 2201 branches and 7110 ATMs spread in 996 cities across India.
They also have one overseas wholesale banking branch in Bahrain, a branch in Hong Kong
and two representative offices in UAE and Kenya. The Bank has two subsidiary companies,
namely HDFC Securities Ltd and HDB Financial Services Ltd. The Bank has three primary
business segments, namely banking, wholesale banking and treasury. The retail banking
segment serves retail customers through a branch network and other delivery channels. This
segment raises deposits from customers and makes loans and provides other services with the
help of specialist product groups to such customers. The wholesale banking segment provides
loans, non-fund facilities and transaction services to corporate, public sector units,
government bodies, financial institutions and medium-scale enterprises. The treasury segment
includes net interest earnings on investments portfolio of the Bank. The Bank's ATM network
can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro,
Plus/Cirrus and American Express Credit/Charge cardholders. The Bank's shares are listed on
the Bombay Stock Exchange Limited and The National Stock Exchange of India Ltd. The
Bank's American Depository Shares (ADS) are listed on the New York Stock Exchange
(NYSE) and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock
Exchange.
HDFC Bank Ltd Was incorporated on August 30, 2094 by Housing
Development Finance Corporation Ltd. In the year 2094, Housing Development Finance
Corporation Ltd was amongst the first to receive an 'in principle' approval from the Reserve
16
Bank of India to set up a bank in the private sector, as part of the RBI's liberalization of the
Indian Banking Industry. HDFC Bank commenced operations as a Scheduled Commercial.
PROPOSED OUTCOMES
The bank needs to give awareness to customers about internet banking. Most of the
customers are feeling risk in E- banking so the banking industry needs to eliminate those
risks. Technology today has become integral to the business of banking; it is difficult to
envision one without the other. However as with other resources it has costs attached to
it and with substantial investments in IT infrastructure business leaders will have to seek
answers to whether the infrastructure is being used optimally.
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LIMITATIONS OF THE STUDY
My research has several limitations. This study was primarily limited by small sample
size. The sample size could have been expanded. More contact between the researcher
and respondents may have increased participation. A greater depth of information may
have been obtained by conducting focus group. The respondents may have had a
better understanding on CIBIL based on the questions included on the questionnaires.
My methodology has included surveying or interviewing individuals involved with the
respondents. The study could have added important qualitative data and greater insight
into the respondents’ thoughts and opinion
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CHAPTERISATION
CHAPTER -1 - INTRODUCTION
This chapter includes the introduction of the topic, need, scope, objectives of the study,
Project limitations and methodology of the study.
CHAPTER - 2 REVIEW OF LITERATURE
This chapter includes the theoretical background and articles written by different authors and
brief explanation of the topic.
CHAPTER - 3 - INDUSTRY PROFILE & COMPANY PROFILE
CHAPTER - 4 - DATA ANALYSIS AND INTERPRETATION
This chapter includes the comparative analysis of the financial statements of the five years
data and it also includes the interpretation based on the study.
CHAPTER - 5 – SUMMARY AND CONCLUSION
This chapter includes the overall summary of the project and the conclusion based on the
study during the period.
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BIBLIOGRAPHY
Reports
Ahmad, K., “Bankers’ perception of electronic banking in Pakistan”, Journal of internet
banking and commerce, April 2008
Aladwani, A.M., “Online banking:A field study of drivers, development challenges And
expectations”, International Journal of information Management .
Agboola A. A ., “Electronic payment systems and Tele banking Services in Nigeria”,
Journal of Internet Banking and commerce
Eyadat, M. and Kozak, S., “The role of Information Technology in the profit and cost
efficiency improvements of the banking sector”, Journal of Academy of Business and
Economics,
WEBSITES
www.banknetindia.com
www.bharatbook.com
http://www.banknetindia.com/
https://www.bankingfinance.in
www.icicibank.com
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