1.

INTRODUCTION

Finance and banking is the life blood of trade, commerce and industry. Now-days, banking sector acts as the
backbone of modern business. Development of any country mainly depends upon the banking system. A
bank is a financial institution which deals with deposits and advances and other related services. It receives
money from those who want to save in the form of deposits and it lends money to those who need it. The
banking is one of the most essential and important parts of the human life. In current faster lifestyle peoples
may not do proper transitions without developing the proper bank network. The banking System in India is
dominated by nationalized banks.

Banking in India, in the modern sense, originated in the last decades of the 18th century. The largest bank,
and the oldest still in existence, is the State Bank of India (S.B.I). The bank descends from the Bank of
Calcutta, also known as the Bank of Bengal founded in 1806, via the Imperial Bank of India, making it the
oldest commercial bank in the Indian subcontinent. State Bank of India (SBI) is an Indian multinational,
public sector banking and financial services company. The State Bank of India, popularly known as SBI, is
one of the leading banks in India. The State Bank of India is India's largest commercial bank. The bank has
been striving sincerely to adhere to the efforts of providing utmost customer satisfaction to the best possible
extent.

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 2. HISTORY OF BANKING SYSTEM IN INDIA

The first bank of limited liability managed by Indians was Oudh Commercial Bank founded in 1881.
Subsequently, Punjab National Bank was established in 1894. Swadeshi movement, which began in 1906,
encouraged the formation of a number of commercial banks. Banking crisis during 1913-1917 and failure of
588 banks in various parts of the country during the decade ended 1949 underlined the need for regulating
and controlling commercial banks. The Banking Companies Act was passed in February 1949, which was
subsequently amended to read as Banking Regulation Act, 1949. This Act provided the legal framework for
regulation of the banking system in India.

The largest bank - Imperial Bank of India - was nationalised in 1955 and renamed as State Bank of India,
followed by formation of its 7 Associate Banks in 1959. With a view to bringing commercial banks into the
mainstream of economic development with definite social obligations and objectives, the Government of
India issued an ordinance on 19 July 1969 acquiring ownership and control of major banks in the country.
Six more commercial banks were nationalised from April 1980.1
As certain rigidities and weaknesses were found to have developed in the banking system during the late
eighties, the Government of India felt that these had to be addressed to enable the financial system to play its
role in ushering in a more efficient and competitive economy Accordingly, a high-level Committee on the
Financial System (CFS) was set up on 14 August 1991 to examine all aspects relating to the structure,
organization, functions and procedures of the financial systems. Based on the recommendations of the
Committee (Chairman: Shri M.Narasimham), a comprehensive reform of the banking system was introduced
in 1992-93.
Globally, the story of banking has much in common, as it evolved with the moneylenders accepting deposits
and issuing receipts in their place. Banking was fairly varied and catered to the credit needs of the trade,
commerce, agriculture as well as individuals in the economy.2
The pre- independence period was largely characterised by the existence of private bank organised as joint
stock companies. Most banks were small and had private shareholding of the closely held variety. They were
largely localised and many of them failed. The period beginning from 1967 to 1991 was characterised major
development.3

1
https://www.researchgate.net/publication/260869341_a_study_of_banking_sector_in_india_and_overview_of_performance_of_i
ndian_banks_with_reference_to_net_interest_margin_and_market_capitalization_of_banks [accessed May 10 2018]
2
https://www.onlinegk.com/business-and-economics/history-of-indian-banking
3
https://allgovtjobsindia.in/history-banking-india-origin-development-banking-india-bank-exam-study-material/
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 2.1 IMPORTANCE FOR ESTABLISHMENT OF BANKING SYSTEM

Before the establishment of banks, the financial activities were handled by money lenders and individuals.
At that time the interest rates were very high. Again there were no security of public savings and no
uniformity regarding loans. So as to overcome such problems the organized banking sector was established,
which was fully regulated by the government. The organized banking sector works within the financial
system to provide loans, accept deposits and provide other services to their customers. The following
functions of the bank explain the need of the bank and its importance:
1. To provide the security to the savings of customers.
2. To control the supply of money and credit
3. To encourage public confidence in the working of the financial system, increase savings speedily and
efficiently
4. To avoid focus of financial powers in the hands of a few individuals and Institutions.
5. To set equal norms and conditions (i.e. rate of interest, period of lending etc) to all types of
customers.4

4
https://www.researchgate.net/publication/260869341_a_study_of_banking_sector_in_india_and_overview_of_performance_of_i
ndian_banks_with_reference_to_net_interest_margin_and_market_capitalization_of_banks [accessed may 10 2018].

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 3. STRUCTURE OF INDIAN BANKING SYSTEM

Reserve Bank of India (RBI)

The country had no central bank prior to the establishment of the RBI. The RBI is the supreme monetary and
banking authority in the country and controls the banking system in India. It is called the Reserve Bank’ as it
keeps the reserves of all commercial banks.

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Scheduled & Non –scheduled Banks
A scheduled bank is a bank that is listed under the second schedule of the RBI Act, 1934. In order to be
included under this schedule of the RBI Act, banks have to fulfill certain conditions such as having a paid up
capital and reserves of at least 0.5 million and satisfying the Reserve Bank that its affairs are not being
conducted in a manner prejudicial to the interests of its depositors. Scheduled banks are further classified
into commercial and cooperative banks. Non- scheduled banks are those which are not included in the
second schedule of the RBI Act, 1934. At present these are only three such banks in the country. 5

Commercial Banks
Commercial banks may be defined as, any banking organization that deals with the deposits and loans of
business organizations.Commercial banks issue bank checks and drafts, as well as accept money on term
deposits. Commercial banks also act as moneylenders, by way of installment loans and
overdrafts.Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and
time deposit. These institutions are run to make a profit and owned by a group of individuals.

Scheduled Commercial Banks (SCBs):

Scheduled commercial banks (SCBs) account for a major proportion of the business of the scheduled banks.
SCBs in India are categorized into the five groups based on their ownership and/or their nature of operations.
State Bank of India and its six associates (excluding State Bank of Saurashtra, which has been merged with
the SBI with effect from August 13, 2008) are recognised as a separate category of SCBs, because of the
distinct statutes (SBI Act, 1955 and SBI Subsidiary Banks Act, 1959) that govern them. Nationalised banks
and SBI and associates together form the public sector banks group IDBI ltd. has been included in the
nationalised banks group since December 2004. Private sector banks include the old private sector banks and
the new generation private sector banks- which were incorporated according to the revised guidelines issued
by the RBI regarding the entry of private sector banks in 1993.6
Foreign banks are present in the country either through complete branch/subsidiary route presence or
through their representative offices.

Types of Scheduled Commercial Banks

Public Sector Banks

These are banks where majority stake is held by the Government of India. Examples of public sector banks
are: SBI, Bank of India, Canara Bank, etc.

5
http://myimsv2.imsindia.com/2016/05/28/banking-structure-in-india/
6
http://www.yourarticlelibrary.com/banking/indian-banking-system-structure-and-other-details-with-diagrams/23495
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Private Sector Banks
These are banks majority of share capital of the bank is held by private individuals. These banks are
registered as companies with limited liability. Examples of private sector banks are: ICICI Bank, Axis bank,
HDFC, etc.

Foreign Banks
These banks are registered and have their headquarters in a foreign country but operate their branches in our
country. Examples of foreign banks in India are: HSBC, Citibank, Standard Chartered Bank, etc

Regional Rural Banks

Regional Rural Banks were established under the provisions of an Ordinance promulgated on the 26th
September 1975 and the RRB Act, 1976 with an objective to ensure sufficient institutional credit for
agriculture and other rural sectors. The area of operation of RRBs is limited to the area as notified by GoI
covering one or more districts in the State.
RRBs are jointly owned by GoI, the concerned State Government and Sponsor Banks (27 scheduled
commercial banks and one State Cooperative Bank); the issued capital of a RRB is shared by the owners in
the proportion of 50%, 15% and 35% respectively.7

Type of
Commercial Major Shareholders Major Players
Banks
SBI, PNB, Canara Bank, Bank of
Public Sector Government of India Baroda, Bank of India, etc
Banks
ICICI Bank, HDFC Bank, Axis
Private Sector Private Individuals Bank, Kotak Mahindra Bank, Yes
Banks Bank etc.
Standard Chartered Bank, Citi
Foreign Banks Foreign Entity Bank, HSBC, Deutsche Bank,
BNP Paribas, etc.
Central Govt, Andhra Pradesh Grameena Vikas
Regional Rural Concerned State Govt and Sponsor Bank in the Bank, Uttranchal Gramin Bank,
Banks ratio of 50 : 15 : 35 Prathama Bank, etc.
8

7
Ibid 5
8
Ibid 6
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 PUBLIC SECTOR BANK
4. STATE BANK OF INDIA

State Bank of India (SBI) is an Indian multinational, public sector banking and financial services
company.State Bank of India (SBI) is the country's largest commercial bank, in terms of assets, deposits, and
employees.9

Owned by the Indian government, it offers a range of general banking services from loans and advances to
corporates and individuals in India and abroad. Because it is state-owned, SBI is the preferred banker for
most public sector corporations. SBI, along with its associate banks, offers micro-financing to entities such
as self-help groups in rural areas that would otherwise have no access to formal credit channels. Through its
subsidiaries and joint ventures, SBI offers financial services such as investment banking, brokerage services,
asset management and insurance

The bank traces its origin to the first decade of the 19th century. Later on, it was merged with the Imperial
Bank. In the year 1955, the Government of India nationalized the Imperial Bank along with the Reserve
Bank of India. Ever since that time, the bank acquired its present name that is SBI.

The bank has been striving sincerely to adhere to the efforts of providing utmost customer satisfaction to the
best possible extent. The SBI has presence all over India with 16,000 branches. Not only this, the bank has
made its roots secured internationally as well. At present, SBI has 131 branches in 32 countries all over the
world.10

Before 1969, State Bank of India (SBI) was the only public sector bank in India. SBI was nationalized in
1955 under the SBI Act of 1955.

9
https://www.paisabazaar.com/sbi-bank/
10
https://www.ijser.org/researchpaper/a-study-on-modern-systems-of-sbi-with-special-reference-to-pallavaram-branch.pdf
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 4.1 HISTORY OF STATE BANK OF INDIA

The roots of the State Bank of India lie in the first decade of the 19th century, when the Bank of Calcutta
later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three
Presidency banks, the other two being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of
Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock
companies and were the result of royal charters. These three banks received the exclusive right to issue paper
currency till 1861 when, with the Paper Currency Act, the right was taken over by the Government of India.
The Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity took as its
name Imperial Bank of India. The Imperial Bank of India remained a joint stock company but without
Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India's
central bank, acquired a controlling interest in the Imperial Bank of India. On 1 July 1955, the imperial Bank
of India became the State Bank of India. In 2008, the Government of India acquired the Reserve Bank of
India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking
regulatory authority.11

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made SBI subsidiaries
of eight that had belonged to princely states prior to their nationalization and operational takeover between
September 1959 and October 1960, which made eight state banks associates of SBI. This une with the first
Five Year Plan, which prioritised the development of rural India. The government integrated these banks
into the State Bank of India system to expand its rural outreach.

Although SBI's origins date back to the 19th century, it was formally established post-independence on July
1, 1955 through the implementation of SBI Act, 1955. Upon its formal establishment, the bank took over the
assets of the Imperial Bank of India, which was formed in 1921 with the amalgamation of three banks --
Bank of Bengal, Bank of Bombay and Bank of Madras. State Bank of India went public in 1993 issuing 1.24
crore shares priced at Rs 100 each; the Government continues to be the majority owner.12

11
https://www.rbi.org.in/scripts/FAQView.aspx?Id=87
12
http://excellcareeronline.com/meterials/437126443246.
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 4.2 FUNCTION OF STATE BANK OF INDIA

The functions of SBI can be grouped under two categories, viz., the Central Banking functions and ordinary
banking functions.

A. Central Banking Functions:

The SBI acts as agent of the RBI at the places where the RBI has no branch. Accordingly, it renders the
following functions:
(1) Banker to the government
(2) Banker to banks in a limited way
(3) Maintenance of currency chest
(4) Acts as clearing house
(5) Renders promotional functions

(1) Banker to the Government: The SBI functions as the banker to the central and state governments. It
receives and pays money on behalf of the governments. Especially it renders the following functions as
directed by the RBI in this regard.
(a) Collection of charges on behalf of the government e.g. collection of tax and other payments
(b) Grants loans and advances to the governments
(c) provides advises to the government regarding economic conditions, etc.,

(2) Banker's Bank: Commercial Banks have accounts with SBI. When the banks face financial shortage,
the SBI provides assistance to them as it is considered a big brother in the banking industry. It discounts the
bills of the other commercial banks. Due to the functions on this line the SBI is considered in a limited sense
as the banker's bank.

(3) Currency Chest: The RBI maintains currency chests at its own offices. But RBI Offices are situated
only in big cities. SBI, buy its wide network of branches operate in urban as well as rural areas. RBI
therefore, in such places keeps money at currency chests with SBI.
Whenever needs arise, the currency is withdrawn from these chests under proper accounting and reporting to
RBI. Presently RBI entrust currency chest to other Public Sector Banks and a few Private Sector Banks also.

(4) Acts as Clearing House: In all the places, where RBI has no branch, the SBI renders the functions of
clearing house. Thus, it facilitates the inter bank settlements. Since, all the banks in such places have
accounts with SBI; it is easy for the SBI, to act as clearing house.

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(5) Renders Promotional Functions: State Bank of India also renders various promotional functions. It
provides various facilities to the following priority sectors:

(i) Agriculture
(ii) Small - Scale Industries
(iii) Weaker sections of the society
(iv) Co-operative sectors
(v) Small – traders
(vi) Unemployed Youth
In this respect SBI is like any other commercial bank.

B. General Banking Functions

Besides the above specialized functions, the SBI renders the following functions under Section 33 of the
Act.
1. Accepting deposits from the public under current, savings, fixed and recurring deposit accounts.
2. Advancing and lending money and opening cash credits upon the security of stocks, securities, etc.
3. Drawing, accepting, discounting, buying and selling of bills of exchange and other negotiable instruments.
4. Investing funds, in specified kinds of securities.
5. Advancing and lending money to court of wards with the previous approval of State Government.
6. Issuing and circulating letters of credit.
7. Offering remittance facilities such as, demand drafts, mail transfers telegraphic transfers, etc.
8. Acting as administrator, executor, trustee or otherwise.
9. Transacting pecuniary agency business on commission stocks.
10. It operates Public Provident Fund Accounts for the general public.
11. It operates Non-Resident External Accounts and Foreign Currency Accounts.
12. Promotes Export through Export Credit. Provides Project Export Finance.
13. Provides Merchant Banking Facilities.
14. Promotes housing finance through "SBI Home Finance Ltd ".
15. Offers community services Banking. It provides grants to many socially relevant research projects
undertaken by various universities and academic institutions in the country.
16. The State Bank may with the sanction of the Central Government, enter into negotiations for acquiring
the business of any other Banking Institutions.13

13
http://www.preservearticles.com/2012033129485/what-are-the-main-functions-of-state-bank-of-india.html
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 5. PRIORITY SECTORS OF SBI

Priority Sector Lending is an important role given by the Reserve Bank of India (RBI) to the banks for
providing a specified portion of the bank lending to few specific sectors like agriculture and allied activities,
micro and small enterprises, poor people for housing, students for education and other low income groups
and weaker sections.. This is essentially meant for an all round development of the economy as opposed to
focusing only on the financial sector.14

Categories of Priority Sector

The broad categories of priority sector for all scheduled commercial banks are as under:

(i) Agriculture and Allied Activities (Direct and Indirect finance): Direct finance to agriculture shall
include short, medium and long term loans given for agriculture and allied activities directly to individual
farmers, Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) of individual farmers without limit and
to others (such as corporate, partnership firms and institutions) up to Rs. 20 lakh, for taking up
agriculture/allied activities.
Indirect finance to agriculture shall include loans given for agriculture and allied activities as specified in
Section I, appended.
This distinction between direct and indirect agriculture is dispensed with. Instead, the lending to agriculture
sector has been re-defined to include (i) Farm Credit (which will include short-term crop loans and
medium/long-term credit to farmers) (ii) Agriculture Infrastructure and (iii) Ancillary Activities,

(ii) Small Scale Industries (Direct and Indirect Finance): Direct finance to small scale industries (SSI)
shall include all loans given to SSI units which are engaged in manufacture, processing or preservation of
goods and whose investment in plant and machinery (original cost) excluding land and building does not
exceed the amounts specified in Section I, appended.
Indirect finance to SSI shall include finance to any person providing inputs to or marketing the output of
artisans, village and cottage industries, hand-looms and to cooperatives of producers in this sector.

(iii) Small Business / Service Enterprises: shall include small business, retail trade, professional & self-
employed persons, small road & water transport operators and other service enterprises as per the definition
given in Section I and other enterprises that are engaged in providing or rendering of services, and whose
investment in equipment does not exceed the amount specified in Section I, appended.
14
https://www.researchgate.net/publication/260869341_a_study_of_banking_sector_in_india_and_overview_of_performance_of_i
ndian_banks_with_reference_to_net_interest_margin_and_market_capitalization_of_banks
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(iv) Micro Credit : Provision of credit and other financial services and products of very small amounts not
exceeding Rs. 50,000 per borrower to the poor in rural, semi-urban and urban areas, either directly or
through a group mechanism, for enabling them to improve their living standards, will constitute micro credit.

(v) Education loans: Education loans include loans and advances granted to only individuals for
educational purposes up to Rs. 10 lakh for studies in India and Rs. 20 lakh for studies abroad, and do not
include those granted to institutions;

(vi) Housing loans: Loans up to Rs. 28 lakh in metropolitan cities where population is above 10 lakh and
Rs. 20 Lakh at other center s for construction/purchase of a dwelling unit per family provided total cost of
the unit in metropolitan centres and at other centres does not exceed Rs. 35 Lacs and Rs. 25 Lacs
respectively. (excluding loans granted by banks to their own employees) and loans given for repairs to the
damaged houses of individuals up to Rs.5 lakh in metropolitan centres and Rs. 2 Lakh at other centres.
Investments by banks in securitised assets, representing loans to agriculture (direct or indirect), small scale
industries (direct or indirect) and housing, shall be eligible for classification under respective categories of
priority sector (direct or indirect) depending on the underlying assets, provided the securitised assets are
originated by banks and financial institutions and fulfill the Reserve Bank of India guidelines on
securitisation.

(vii) Under Weaker Sections : Priority sector loans to the following borrowers are considered under
Weaker Sections category:-
(a) Small and marginal farmers;
(b) Artisans, village and cottage industries where individual credit limits do not exceed `50,000;
(c) Beneficiaries of Swarnajayanti Gram Swarozgar Yojana (SGSY), now National Rural Livelihood
Mission (NRLM);
(d) Scheduled Castes and Scheduled Tribes;
(e) Beneficiaries of Differential Rate of Interest (DRI) scheme;
(f) Beneficiaries under the Scheme for Rehabilitation of Manual Scavengers (SRMS);
(g) Loans to Self Help Groups;
(h) Loans to distressed farmers indebted to non-institutional lenders;
(i) Loans to distressed persons other than farmers not exceeding `50,000 per borrower to prepay their debt to
non-institutional lenders;
(j) Loans to individual women beneficiaries up to `50,000 per borrower. (L) also called or known as priority
sector advancement (PSA);

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 5.1 SBI PERSONAL FINANCE

The customers can benefit from the banking relationship with State Bank of India to meet their financial
needs be it buying a home, car or education. The bank also provides an ‘EMI Calculator’ to enable the
customers to calculate the amount of their monthly repayments.

Home Loan: Home loan is provided under different categories depending upon the requirement and
eligibility of the borrower. The Interest on home loan for loan amount of Rs.30 lakhs and below can be
availed with a fixed or floating interest rate option. Floating interest rate is linked to MCLR.
Concessional interest rates are available for women, in case they are sole or co-applicants as long as they are
also sole or co-owners of the property for which home loan is availed. Concessional interest rate on auto
loans is also available for women. Read more about SBI Home Loan

Education Loans: State Bank of India provides educational loans for studying in India or abroad. These
loans come with a moratorium period and the repayment commences generally after one year of completion
of course. The interest rates are linked to MCLR (Marginal Costs of Funds based Lending rate) and have a
reset period of 1 year. In most schemes, girl students are given a concession of 0.50% on the usual lending
rate. A further concession of 1% for full tenure of the loan is provided if interest is serviced promptly during
the moratorium period. Check more information about SBI Education Loan

Personal Loans: The amount of loan sanctioned is based on the Net Monthly Income (NMI) of the
borrower. The NMI/EMI ratio should not exceed 50. That is if the NMI is Rs. 10,000 then the EMI should
not be more than Rs. 200. The bank charges processing fee on personal loans in the range of 2-3% and the
same is deducted from the amount sanctioned. There are no pre-closure or pre-payment charges in case
interest is charged on floating rate basis. The maximum loan amount is capped at Rs.15 lakhs. The loan
tenure generally ranges from 24 months to 60 months i.e. 5 years.

Loan against Property: State bank of India also provides loan against mortgage residential or commercial
property. The amount of loan that can be availed under the scheme is a minimum of Rs. 10 lakhs to a
maximum of Rs. 7.5 crores. The amount of loan is determined based on the value of the property and the net
monthly income of the borrower. The loan tenure ranges from 5 years to 15 years.Also read about SBI Loan
against property

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Loan against Securities: State Bank of India provides loan or overdraft facility against debentures, shares
or government bonds for meeting personal or business contingencies. Loan against debentures and shares
can be availed up to a maximum Rs. 20 lakhs and is repayable within 30 months. The loan is provided
against pledge of shares or debentures.

Gold Loans: Gold loan is provided against pledge of gold ornament and ranges from Rs. 20,000 to Rs.20
lacs. A margin of 25% is maintained by SBI when granting a gold loan. The facility is provided in form of
loan or overdraft.15

15
https://www.paisabazaar.com/sbi-bank/
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 6. MODERNISATION OF BANKING SYSTEM

The technological changes with the advent of computers and mobile phones have brought in enormous
changes in the functioning of banking operations. The modern systems have paved way for banking to be a
customer friendly environment.The modern systems which are available to the customers of a bank today for
easy funds transfer and other banking operations are given below.

ATM (Automatic Teller Machine):

An automated teller machine is an electronic telecommunications device that enables the customers of a
financial institution to perform financial transactions without the need for a human cashier, clerk or bank
teller. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic
stripe or a plastic smart card with a chip that contains a unique card number and some security information
such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal
identification number (PIN). Using an ATM, customers can access their bank deposit or credit accounts in
order to make a variety of transactions such as cash withdrawals, check balances, or credit mobile phones. If
the currency being withdrawn from the ATM is different from that in which the bank account is
denominated the money will be converted at an official exchange rate. Thus, ATMs often provide the best
possible exchange rates for foreign travelers, and are widely used for this purpose.

Debit Card:
ATM card is a plastic payment card that provides the cardholder electronic access to their bank account at a
financial institution. Some cards may bear a stored value with which a payment is made, while most relay a
message to the cardholder's bank to withdraw funds from a payer's designated bank account. The card, where
accepted, can be used instead of cash when making purchases.

Credit Card:
A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for
goods and services based on the holder's promise to pay for them. The issuer of the card creates a revolving
accountand grants a line of credit to the consumer (or the user) from which the user can borrow money for
payment to a merchant or as a cash advance to the user.

GCC (Green Channel Counter):

It is a counter manned by a Teller where a Transaction Processing Device (TPD), similar to a PoS machine,
is attached to the terminal. Customers can swipe their Debit Card, select a particular transaction and enter the
amount and the PIN. Postauthentication, the transaction gets transferred to the Teller’s terminal who

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entersdenominations of cash to be paid / received, then pays / receives cash and completes the transaction.
The Customer is provided with a printed receipt generated from TPD. This receipt is much smaller than
traditional voucher. Moreover, as only one receipt is printed per transaction, there is zero paper
wastage.Three types of transactions have been enabled through this facility they are Cash Deposits, Cash
Withdrawals and Funds Transfer. Customers can use the Green Channel Counter without queues and without
taking the token. They may simply walk up to the Counter, Swipe their card and execute the transaction.

GRC (Green Remit Card):

Green Remit Card is a simple Magstripe based card without PIN. The product is targeted to facilitate Non-
Home Cash Deposit Transactions to be routed through Green Channel Counter (GCC)/ Cash Deposit
Machine (CDM). All customers (remitters), particularly non-account holders, who want to remit money to a
SBI bank account at regular interval of time, can get G C. Card would be mapped to the particular
beneficiary account (Has to be an SBI account).16

E-Banking:
E-Banking refers to electronic banking, wherein the entire operations are done by the customer through his
computer system by using a code, which maintains secrecy of transactions. The customer will be instructing
the banker through the computer with regard to transfer, investment and repayment of loans or appreciation
of different payments. By this, the use of cheques is very much minimized and the customer will be able to
contact the banker or his particular branch from any part of the world, even while he is flying or on a sea
voyage.

Mobile Banking:
The Mobile Banking Application is available for java, Blackberry, Android, i- phones and Windows mobile
phones. The service can also be availed via WAP on all phones with GPRS connection. The following
services can be availed through the Mobile Banking application and WAP:

1. Funds transfer (within and outside the bank)

2. Immediate Payment Services (IMPS)
3. Enquiry services (Balance enquiry/ Mini statement)
4. Demat Account Services
5. Requests (Cheque book request/Generate OTP)
6. Bill Pay (Utility bills, credit cards, Insurance premium), Donations, Subscriptions

16
http://www.iracst.org/ijcbm/papers/vol3no42014/9vol3no4.

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 7. Top up / Recharge (Mobile /DTH)17

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https://www.ijser.org/researchpaper/A-STUDY-ON-MODERN-SYSTEMS-OF-SBI.
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 7. CONCLUSION

Banking plays a rather remarkable role in Indian Economy. India is not only the world’s largest independent
democracy, but also a prominent, emerging economic giant. Without a sound and effective banking system,
no country can ever have a health economy.
Banking has the prime, foremost and most significant share in shaping up Indian Economy. India's Banking
System has no longer confined to only the metropolitans, but have reached even to the remote corners of the
country.

 The banks help in mobilising savings through network of branch banking.

 The ultimate savings of people result in capital formation which forms the basis of economic
development.
 The banks finance the industrial sector. they not only provide finance for industry but also help in
developing the capital market for India.

Banks promote entrepreneurship by underwriting the shares of new and existing companies. Most
importantly, Banks finance education loans for a larger significant population. People in developing
countries being poor and having low incomes do not possess sufficient financial resources for higher
education. banks help in creating demand for consumer goods by providing loans to consumers for the
purchase of items as houses, scooters, fans, refrigerators, etc. In this way, they also help in raising the
standard of living of the people in developing countries.
The banks help the large agricultural sector by providing finance directly to agriculturists for the marketing
of their produce, for the modernisation and mechanisation of their farms, for providing irrigation facilities
and also for developing their land.
To draw a conclusion, we can infer that modern economies have developed essentially by making optimum
and foremost use of the credit availability in their systems.

India has a far way to go and Indian banks should come forward to play a leading role in this process. The
role of banks has been predominantly essential, but it is going to be influentially paramount in the future.

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Roll No. 08
B.A LL.B