CONTENTS

CHAPTER - 1

INTRODUCTION

 Introduction of Mobile Banking

 Meaning of Mobile Banking

 Services of Mobile Banking

 Purpose of Mobile Banking

CHAPTER - 2

RESEARCH DESIGN

 Operational Definitions

 Statement of the problem

 Objectives of the study

 Scope of the study

 Limitations of the study

CHAPTER - 3

PROFILE

 Industry profile

 Company profile

 Vision & Mission of the company

 Objectives of the company

 Board of Directors

CHAPER - 4

ANALYSIS AND INTERPRETATION OF DATA

 Trends of Mobile Banking

 Technologies available for Mobile Banking

 Calcification of Mobile Banking services

 Mobile Banking in Indian Overseas Bank

 Mobile Banking Architecture

 Challenges of Mobile Banking

 Analysis
CHAPTER - 5

PRACTICAL FINDINGS OF THE TOPIC

 Findings & Suggestions

 Questionnaire

 Conclusion

 Bibliography
CHAPTER – 1

INTRODUCTION OF MOBILE BANKING

After Internet Banking, Mobile Banking or M-Banking has become the buzz word in
the industry. It’s a fact that Internet Banking has given a boost and has shown a
successful way to consider it as a good alternative procedure against physical branch
banking. Now where ever you are, you can access your bank account and you can do lot
more things like checking your account balance, transfer money to some other account,
pay your utility bills online and so on, just by comfortably sitting at your home or office.
But, the technical disadvantage of Internet Banking is, you have to have internet
connectivity and a computer. Definitely it’s not a big hindrance in US or Europe or in the
other developed countries, but if one considers the developing economies, then it’s a
genuine problem and more specifically in the tier II cities.

And here Mobile Banking comes into the picture to address the basic limitation of
Internet Banking. If we only consider Asian developing countries, the availability of
mobile connectivity is really huge. Where one may not find out a landline telephone or an
internet connection, but still in those remote places getting mobile connectivity is not a
major issue today.
 So, Mobile Banking has given the traditional banking a newer look “Anywhere
Banking”. Now you don’t need a PC or a laptop with internet connectivity, just you need
your cell phone with you. Considering the Asian economy countries like China, India and
Korea have seen the mobile boom in last one decade. A projected value of mobile
connectivity in India shows that it will touch 180 Million subscribers by the end of 2008,
where it was pegged at around 2 Million in the year 2000. In Korea, more than 70% of
the entire population is carrying mobile devices.

The biggest advantage Mobile Banking provides to the banks is that it helps to cut
down the costs as it’s even more economic than providing tele-banking facilities where
banks have to keep hundreds of tele-callers. Additionally, Mobile Banking helps banks to
upgrade the quality of services and nature of customer relationship management. Using
Mobile Banking, banks can communicate to the defined cluster of clients. The offers can
be customized and this personalization can give the banking industry a huge mileage,
even at a lower cost. Again, using the same mobile channels, banks can up-sell and cross-
sell their highly complex financial products to the specific set of customers which can be
coupled with the selling strategies of Credit Cards, home loans and Personal Loans etc.
On the contrary, the service providers can also accrue more business by providing the
Mobile Banking services to their clients. Countries like Japan, Korea or Singapore where
the mobile connectivity has already reached its saturation, the service providers can make
handsome business by providing additional banking services to the same static client
base.

In the services front, different banking services can be provided, depending upon the
banking regulations in respective countries which may include Account Balance Enquiry,
Account Statement Enquiry, Credit/Debit Alerts, Bill Payment Alerts, Cheque Book
Requisition, Transaction History, Minimum Balance Alerts, Fund Transfer Facilities, etc.
Mobile Banking activities can be categorized in two different manners.

1. By the Nature of Service: It can be any of the two, either Enquiry Based or
Transaction Based. For example, Account Balance Enquiry or a Cheque Book
Requisition can be the good examples of Enquiry Based Services where a Fund Transfer
or a Bill Payment is a Transaction Based activity.

2. Depending on the Originator: Again there can be two different types of services;
Push and Pull, depending on the nature of the originator. A Push based service is from the
Bank to the Client and vice versa. For example, Bill Payment Alert can be a Push based
service, when getting Recent Account History is a Pull based one.

In different countries, Mobile Banking has already gained its popularity. For example, in
the South Korean market LG Telecom teamed up with Kookmin Bank to provide their
Mobile Banking services in 2004 and since then they have seen a nice and steady growth.
In India, Reliance Infocomm has started providing Mobile banking services to ICICI
Bank and HDFC Bank through their R-World environment.

The Mobile Banking services will become more popular once the availability of the smart
phones or PDA phones shall increase as Smart Phones come with larger screens and
bigger memory size. In the application development front, both J2ME and BREW have
done excellent work and industry expects by the year 2012, more than 80% of the mobile
handsets will be able to run stand alone Mobile Banking applications and that time it will
be “Anywhere Banking” in real sense.
 Meaning of Mobile Banking

Mobile Banking is a service that allows to do banking transactions through mobile

phone without making call, using the SMS / WAP.

The term Mobile Banking is also known as M-Banking, mbanking, SMS Banking. It
is a quit popular method of banking that fits in well with a busy, technologically oriented
lifestyle.

Mobile Banking is defined as follows “Mobile Banking refers to provision and

availment of banking and financial services with the help of mobile telecommunication
devices. The scope of offered services may include facilities to conduct bank
transactions, to a administer accounts and to access customised information”

A more involved type o mobile banking allows the use to lay into his or her account
from a cell phone and then use the phone to make payments, check balances, transfer
money between accounts, notify the bank of a lost or stole credit card, stop payment on a
check, receive a new PIN, view a monthly statement, among other transactions. This type
of banking is meant to the more convenient for the consumer than having to physically go
into a bank, log on from their home computer or make a phone call while all of this is
true, some are concerned about the security of Mobile Banking.

Mobile Banking Services

Mobile banking can offer services such as the following:

Account Information

1. Mini-statements and checking of account history

2. Alerts on account activity or passing of set thresholds

3. Monitoring of term deposits

4. Access to loan statements

5. Access to card statements

6. Status on cheque, stop payment on cheque

7. Ordering check books

8. Balance checking in the account

9. Recent transactions

10. Due date of payment (functionality for stop, change and deleting of payments)

11. PIN provision, Change of PIN and reminder over the Internet

12. Blocking of lost or stolen cards

Payments, Deposits, Withdrawals, and Transfers

1. Domestic and international fund transfers

2. Micro-payment handling

3. Mobile recharging
 4. Commercial payment processing

5. Bill payment processing

6. Peer to Peer payments

7. Withdrawal at banking agent

8. Deposit at banking agent

Purpose of Mobile Banking

1) To bring banking services to the door steps of the customer.

2) To save the time of travelling and do the banking transactions sitting at

home.

3) To avoid standing in banks to do bank transactions.

4) To do the banking transactions in time without any risk.

5) To do the banking transactions from anywhere in the world.

6) To do the banking transactions at any time.

CHAPTER – 2
Research Design
Operational Definitions

 Mobile Banking is defined as follows

“Mobile Banking refers to provision and availment of banking and financial services
with the help of mobile telecommunication devices. The scope of offered services may
include facilities to conduct bank transactions, to a administer accounts and to access
customised information”

 "Going Mobile. Local executive carves niche as national

expert on fast-growing banking-industry technology trend" - Scott Olson, Indianapolis
Business Journal (IBJ)

Statement of the Problem

The analysis of the Mobile Banking services provided like, balance enquiry, fund
transfer, last few transactions, cheque paid status, etc. and the technologies like Interactive
Voice Response (IVR), Short Messaging Service (SMS), Wireless Access Protocol (WAP),
Standalone Mobile Application clients , used by Indian Overseas Bank.

Objectives of the study

1. To study about Mobile Banking services provided by Indian Overseas Bank.

2. To study public awareness towards the Mobile Banking.

3. To know what are the technologies available in Mobile Banking system,

 4. To study about the challenges for Mobile Banking.

5. To know the different steps for registering Mobile Banking.

6. To know how Mobile Banking works.

7. To know what are the things required for Mobile Banking.

8. To know the customer satisfaction level with Mobile Banking.

Scope of the study

1. The scope of the study here was confined for the Bellary city only.

2. The data is purely based on the secondary data collected

from internet and journals.

3. The scope is limited to drawn conclusions from analysis and

interpretation of the primary and secondary data o the Indian overseas Bank.

4. The study covers the modern technologies available for the

mobile banking.

Limitations of the study

1. The study is based on the date given by the officials and

reports of the bank.

2. The study is mainly based on the secondary data provided

by the bank. So it is subject to the limitations of the secondary data.

3. The Non-availability o relevant information is one of the

limitations.
 4. The facts and figures given are approximate but not
appropriate.

Methodology of the Research

Sources of Data

There are two types of data collection methods which are being collected methods which
are being used in this research.

 Primary Data
 Secondary data

1) Collection of primary data

Primary data is that type of data which includes the first hand information which is
being collected from the respondent’s trough observation or through direct
communication with respondent’s in one form or another form the survey & interviews
are conducted to get the primary data.

The primary data for this research are collected from

 Direct interaction
 Observation
 Customer interview
 Questionnaire etc.

2) Collection of Secondary data:

 Secondary data means data that are already available i.e., they refer to the data which
have already been collected and analyzed by some one else, when the research utilized
the secondary data, when he has to look into various sources from where he can obtain
them.

Here in this research, I collected the secondary data from the books, journals,
news papers, magazines, internet etc.

CHPTER – 3

PROFILE
INDUSTRY PROFILE

INDIAN BANKING SECTOR

Banking in India has its origin as early as the Vedic period. It is believed that the
transition from money lending to banking must have occurred even before Manu, the great
Hindu jurist, who has devoted a section of his work to deposits and advances and laid down
rules relating to rates of interest. During the mogul period, the indigenous bankers played a
very important role in lending money and financing foreign trade and commerce. During the
days of the East India Company, it was the turn of agency houses to carry on the banking
business. The General Bank of India was the first joint stock Bank to establish in the year
1786. The others which followed were the Bank of Hindustan and the Bengal Bank. The
bank of Hindustan is reported to have continued till 1906 while the other two failed in the
meantime. In the first half of the 19th century the East India Company established three
banks; the Bank of Bengal in 1809, the Bank of Bombay in 1840 and Bank of Madras in
1843. These three banks also known as Presidency Banks, were independent units and
functioned well. Theses three banks were amalgamated in 1920 and a new bank, the
Imperial Bank of India was established on 27th January 1921. With the passing of the State
Bank of India Act in 1955 the newly constituted State bank of India. The Reserve Bank
which is the Central Bank was created in 1935 by passing Reserve Bank Act 1934. In the
wake of the Swadeshi Movement, a number of banks with Indian management were
established in the country namely, Punjab National Ltd, Bank of India Ltd, Canara Bank
Ltd, On July 19,1969, 14 major banks of the country were nationalised and in 15th April
1980 six more commercial private sector banks were also taken over by the government.
Today the commercial banking system in India may be distinguished into

Banking System In India

Introduction

The reserve Bank of India (RBI) is India’s central Bank. Though public sector banks,
numerous private, currently dominate the banking industry and foreign banks exits. India’s
government- owned banks dominate the market. Their performance has been mixed, with a
few being restructured, and in some the government either already has reduces its
ownership.

Banking

India has an extensive banking network, in both urban and rural areas. All large Indian
banks are nationalized, and all Indian financial institutions are in the public sector.

Private and Foreign Banks

The RBI has granted operating approval to few privately owned domestic banks; of
these many commenced banking business. Foreign banks operate more than 150 branches in
India. The entry of foreign banks is based on reciprocity, economic and political bilateral
relations. An inter-departmental committee approves applications for the entry and
expansion.

RBI Banking

The Reserve bank of India is the central banking institution. It is the sole authority for
issuing bank notes the supervisory body for banking operations in India. It supervises and
administers exchange control and banking regulations and administers the government’s
monetary policy. It is also responsible for granting licenses for new bank branches. 25
foreign banks in India have full banking licenses. Several licenses for private bank are been
approved. Deposit fairly broad banking coverage nationwide, the financial system remains
inaccessible to the poorest people in India.

Indian Banking System

The banking system has three tires. These are the scheduled Commercial Banks; the
Regional Rural Banks, which operate in rural, not covered by the scheduled banks; and the
Co-Operative and special purpose rural banks.

Scheduled and Non Scheduled Banks

There are approximately 80 scheduled commercial banks, Indian and foreign; almost
200 Regional Rural banks; more than 350 central Co-Operative banks, 20 land development
banks; and a number of primary agriculture credit societies. In terms of business, the public
sector banks, namely the State Bank Of India and the nationalized banks, dominate the
banking sector.

Indian Banking may be distinguished into:

Public Sector Banks :

Among the Public Sector Banks in India, United Bank of India is one of the 14 major
banks which were nationalised on July 19, 1969. Its predecessor, in the Public Sector Banks,
the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz.
Comilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla Union
Bank Ltd. (1922) and Hooghly Bank Ltd. (1932).
1. State bank of India and its associated banks called the State Bank Group.

2. 20 nationalised banks

3. Regional Rural Banks mainly sponsored by public Sector Bank

Private Sector banks :

The first Private Bank in India to receive an in principle approval from the Reserve
Bank of India was Housing Development Finance Corporation Limited, to set up a bank in
the private sector banks in India as part of the RBI's liberalisation of the Indian Banking
Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office
in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995.
Private Banking sector can be classified as

1. Old generation private banks

2. New generation private banks

3. Foreign banks in India

4. Scheduled Co-operative Banks

5. Non-scheduled Bank
Co-operative Sector

The Co operative banks in India started functioning almost 100 years ago. Co operative
Banks in India are registered under the Co-operative Societies Act. The cooperative bank is
also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and
Banking Laws (Co-operative Societies) Act, 1965.

1. State Co-operative Banks

2. Central Co-operative Banks

3. Primary Agriculture Credit Societies

4. Land Development Banks

5. Urban Co-operative Banks

6. Primary Agricultural Development Banks

7. Primary Land Development Banks

8. State Land Development Banks

Development Banks

1. Industrial Finance Corporation of India (IFCI)

2. Industrial Development Bank of India (IDBI)

3. Industrial Credit and Investment Corporation of India (ICICI)

4. Industrial Investment Bank of India (IIBI)

5. Small Industries Development Bank of India (SIDBI)

6. SCICI Ltd.
 7. National Bank for Agriculture and Rural Development (NABARD)

8. Export Import Bank of India

9. National Housing Bank

Regional Rural Banks In India

SBI has 30 Regional Rural Banks in India known as RRBs. The rural bank of SBI is
spread in 13 states extending from Kashmir to Karnataka and Himachal Pradesh to North
East. The total number of SBIs Regional Rural Banks in India branches is 2349 (16%). Till
date in rural banking in India, there are 14,475 rural banks in the country of which 2126
(91%) are located in remote rural areas.
Apart from SBI, there are other few banks which functions for the development of the rural
areas in India. Few of them are as follows.

1. Haryana State Cooperative Apex Bank Limited

2. NABARD

3. Sindhanur Urban Souharda Co-operative Bank

4. United Bank of India

5. Syndicate Bank

Foreign Banks In India :

Foreign Banks in India always brought an explanation about the prompt services to
customers. After the set up foreign banks in India, the banking sector in India also become
competitive. Some of them are

1. ABN-AMRO Bank
 2. Abu Dhabi Commercial Bank

3. Bank of Ceylon

4. Citi Bank

5. China Trust Commercial Bank

6. Deutsche Bank

7. HSBC

8. JPMorgan Chase Bank

9. Standard Chartered Bank

Present Banking Scenario in India

With years, banks are also adding services to their customers. The Indian banking
industry is passing through a phase of customers market. The customers have more choices
in choosing their banks. A competition has been established within the banks operating in
India.

With stiff competition and advancement of technology, the services provided by banks
have become more easy and convenient. The past days are witness to an hour wait before
withdrawing cash from accounts or a cheque from north of the country being cleared in one
month in the south.

With the credibility of the Indian banking system on a high, a number of Indian banks
are now leveraging it to expand overseas. State Bank of India, the country’s largest bank has
acquired 76 per cent stake in a Kenyan bank, Giro Commercial Bank, for US$ 7 million.
Canara Bank is helping Chinese banks recover their huge non-performing assets (NPA).
 To meet the challenges of going global, the Indian banking sector is implementing
internationally followed prudential accounting norms for classification of assets, income
recognition and loan loss provisioning. The scope of disclosure and transparency has also
been raised in accordance with international practices. India has complied with almost all the
Core Principles of Effective Banking Supervision of the Basel Committee. Some Indian
banks are also presenting their accounts as per the U.S. GAAP. The roadmap for adoption of
Basel II is under formulation.

The use of technology has placed Indian banks at par with their global peers. It has also
changed the way banking is done in India. ‘Anywhere banking’ and ‘Anytime banking’ have
become a reality. The financial sector now operates in a more competitive environment than
before and intermediates relatively large volume of international financial flows.

Growth Statistics

Scheduled Commercial Banks (SCBs) in India are categorized into five different groups
according to their ownership and / or nature of operation. These bank groups are

(i) State Bank of India and its associates

(ii) Other nationalised banks

(iii) Regional rural banks

(iv) Foreign banks

(v) Other Indian SCBs (in the private sector)

The banking sector witnessed strong growth in deposits and advances during the year
2004-05. As of March 2005, the number of commercial banks stood at 289. The aggregate
deposits of SCBs increased from US$ 331 billion in March 2004 to US$ 374 billion in
March 2005; credit increased from US$ 185 billion to US$ 242 billion; and investments
swelled from US$ 149 billion to US$ 162 billion.

Net domestic credit in the banking system has witnessed a steady increase of 17.5 per
cent from US$ 445 billion on January 21, 2005 to US$ 523 billion on January 20, 2006. The
growth in net domestic credit during the current financial year up to January 20, 2006 was
14.4 per cent.

Nationalised banks were the largest contributors to total bank credit at 47.8 per cent as
of September 2005. While foreign banks' contribution to total bank credit was low at 6.7 per
cent, the contribution of State Bank of India and its associates accounted for 23.8 per cent of
the total bank credit. Credit extended by other SCBs stood at 18.9 per cent.

The some of the technology driven services & benefits rendered by these banks
are:

1. ATM (Automated Teller Machine or Any Time Money) services :It’s a services

which enables the customers to transact their banking operations like deposits or
withdrawals, balance enquiry, statements, market information, product information,
requests etc round the clock.

2. Debit Cards & Credit Cards: An excellent tool for banking operations. A card

which is enabled with some of the services like ‘VISA’ or ‘MASTERS’ of

‘MAESTRO’ etc and which could be used in any ATM’s across the all the places
available and also all the bank ATM’s. The same could be used in any of the
merchant establishments.

3. Internet Banking: Banking at the comfort of customer’s work place. It could be

office, home or anywhere. Money could be transferred to anyone, any place, any time
within the bank network and also out side the bank network. Some of the utilities of
 internet banking are like account details, balance enquiry, transaction view, money
transfer, request or orders, banks or banking information, market information etc.

4. Phone Banking: Over phone some of the requirements can be met and visiting the

bank could be avoided. The uses of phone banking are balance enquiry, orders,
requests, particular transaction details, information etc. Some of the banks use call
centers for this services.

5. Anywhere Banking or Multiple Branch Access: This is an excellent service offered

by some of the banks which enables the customers to do their banking transaction in
any place, in any branch of their respective bank. All the banking transactions
possible through a base branch is also extended to all the branches through
networking and the there by creating a ease in banking transactions. A new invention
of anywhere cheque or at-par cheque has resulted in more comfort, speed and
feasibility.

6. Mobile Banking: Banking on mobile phones. A mobile phone could be used as a tool

for receiving information regarding any credits or debits in the account through
messages. Any request could be made or any information may be asked for over
mobile phones also.

7. Foreign Exchange: Foreign remittances are made much easier, faster, safer and

simpler. There are many ways and means of making foreign remittances or foreign
money exchange.

Value Added Services:

Value added services like auto sweep in facility ( balance exceeding a certain limit the
excess balance would be swept to a different deposit account giving higher benefit to
customers), lesser cost in transaction ( reduced cost in funds remittances), Electronic Data
Conformation machine in merchant establishments ( ease in shopping, hotel payments,
petrol pumps, ticket booking etc.). Utility services (telephone bill payments, insurance
premium, electricity bill payment etc.). Quick and easier financing, insurance, share trading
and demat services. Third party product assistance and selling ( mutual funds, infrastructure
bonds, government bonds, gold etc.).

FUNCTIONS AND IMPORTANCE’S OF BANKS:

The importance of banks in the modern economy cannot be denied. Banks play a significant
role in the economic development. Banks perform a number of functions. They are:

1. Banks mobilize the small scattered and ideal savings of the people, and make them
available for productive purpose. In the sort, they aid the process of capital
formation.

2. By accepting the savings of the people, banks provide safety and security to the
surplus money of the depositors.

3. Banks provide a convenient and economical method of payment. The cheque system
introduced by banks is convenient form making payments. Again the use of cheque
economies the time and trouble involved in settlement of business obligations.

4. Banks provide a convenient and economical means of transfer of funds from one
place to another. Banks drafts are commonly used for remittances of funds from one
place to another.

5. Banks helps the movement of capital from regions where it is no very useful to
regions where it can be more usefully employed, by moving funds, banks increases
the utility of funds. Again by moving funds from one place to another, banks
contribute to the economic development of backward regions.
6. Banks influence the rates of interest in the money markets. Through the supply of
money (i.e. bank money or bank deposits) banks expert a powerful influence on the
interest rates in the money market.

7. Banks help trade and commerce industry and agriculture by meeting their financial
requirements. But for the financial assistance provided by the banks, the pace of
growth of trade and commerce industry and agriculture would have been very slow.

8. Banks direct the flow of funds into production channels. While lending money, they
discriminate in favor of essential activities and against non essential activities. Thus
they encourage the development of right types of activities which the society desires.

9. Banks always make it a point to help the industries, the prudent, the punctual and the
honest and discourage the dishonest, the spendthrift, the gambler the lair and the
knave (i.e. the rouge). Thus banks act as public conservators of commercial virtues.

10. Banks serves as the best financial intermediaries between the saver (i.e. the
depositors or lenders) and the investor (i.e. the borrowers or the entrepreneurs).
 COMPANY PROFILE

BANKING IN MADRAS

Madras had a head start in modern banking in 1843 with the opening
of the bank of madras which subsequently spauned more joint stock
banks. In 1906 wave of swadeshi joint stock banks by Indians Indian bank
founded is 1907 was 1st among them, this bank would help not only
Indians overseas but also contribute to promotes the India’s trade and
commerce with Burma. He lunched the 1st exchange bank by an Indian in
1936 named in Indian overseas bank.

Different Branches of Indian overseas bank:

Old Head office of Indian overseas bank:

The bank moved its head quarters into in 1958 was called Ameer Bagh
and originally belonged to the Nawab’s of carnatic. A regency style
building. It was also housed the banks training school in 1993.

New head office of Indian overseas bank:

 It is inaugurated in 1964, chairman M.ct.Muthiah declared at the time
of the inauguration building. “The building symbolized out past
performance, our present confidence and our optimism of the future”.
Another significant aspect of this building was the provision of a drive-in-
counter with television facilities at its cathedral branch.

First Branches

Indian overseas Bank operation bank operation on February 10 , 1937

in karaikud branch (1937)

 Madras Branch (Chennai) (1937)

 Penang Branch (Chennai) (1937)

 Rangoon Branch (nov.1937) in Burma

 Kuala Lumpur Branch (1938) in Malaysia

 Singapore Branch (1941)

 Colombo Branch (1941)

 Ipob Branch (1938)

 Hong Kong Branch (1955)

 Bangkok Branch (1946) New Branch (1969)

 Klang Branch (1947) and Tamilnadu Branch

Early Indian Branches

 Fort Bombay Branch (1941)

 Calcutta Branch (1946)

  Ahmadabad Branch (1958)

 Amritsar Branch (1960)

 Bombay Main Branch (1962)

Pre-nationalization era (1947-69)

During the period, IOB expanded its domestic activities and enlarged
its international banking operations. As early as in 1957, the Bank
established a training center which has now grown into a Staff College at
Chennai with 9 training centers all over the country.

IOB was the first Bank to venture into consumer credit. It introduced
the popular Personal Loan scheme during this period.

In `1964, the Bank made a beginning in computerization in the areas of

inter-branch reconciliation and provident fund accounts.

In 1968, IOB established a full-fledged department to cater exclusive to

the needs of the Agriculture sector.

At the time of Nationalisation (1969)

IOB was one of the 14 major banks that was nationalized in 1969.

On the eve of Nationalisation in 1969, IOB had 195 branches in India with
aggregate deposits of Rs. 67.70 Crs. Advances of Rs. 44.90 Crs.

Post-Nationalisation era (1969-1992)

In 1973, IOB had to wind up its five Malaysian branches as the

Banking law in Malaysia prohibited operation of foreign Government
owned banks. This led to creation of United Asian Bank Berhad in which
IOB had 16.67% of the paid up capital.

In the same year Bharat Overseas Bank Ltd was created in India with
30% equity participation from IOB to take over IOB’s branch at Bangkok
in Thailand.

In 1977, IOB opened its branch in Seoul and the Bank opened a Foreign
Currency Banking Unit in the free trade zone in Colombo in 1979.

The Bank has sponsored 3 Regional Rural Banks viz, Puri Gramya
Bank, Pandyan Grama Bank, Dhenkanal Gramya Bank
The Bank setup a separate Computer Policy and Planning Department
(CPPD) to implement the program of computerization, to develop
software packages on its own and to impart training to staff members in
this field.

Post Reform Period – unprecedented developments

(1992 & after)

IOB entered Web site during the month of February 1997.

IOB got autonomous status during 1997-98.

IOB had the distinction of being the first Bank in Banking Industry to
obtain ISO 9001 Certification for its Computer Policy and Planning
Department from Det Norske Veritas (DNV), Netherlands in September
1999, This Certification covers Design, Development, Implementation and
Maintenance of software developed in-house, procurement and supply of
hardware and execution of turnkey projects.

IOB started STAR services in December 1999 for speedy realization of

outstation cheques. Now the Banks has 14 STARS centers and one
Controlling Centre for providing this service.
During 1999, IOB started tapping the potential of internet by enabling
ABB card holders in Delhi to pay their telephone bills by just logging on to
MTNL wed site and by authorizing the Bank to debit towards the
telephone bills.

A Voluntary Retirement Scheme was introduced in the Bank on the lines

of IBA package with Boards approval. The scheme was offered to
Officers/Employees from December 15, 2000.

The Bank made a successful debut in raising capital from the public
during the financial year 2000-01, despite a subdued capital market. The
issue opened on September 25, 2000 for raising Rs. 111.20 crore and
was oversubscribed by 1.87 times. The issue closed on September 29,
2000 - on the earliest closing day. The allotment was made in October
2000. Consequent to the public issue, the share of the Government in the
Bank’s capital came down to 75%. The shares of the Bank have been
listed on the Madras stock Exchange (Regional), Stock Exchange at
Mumbai and the National Stock Exchange of India Ltd.

IOB bagged the NABARD’s award for credit linking the highest number of
Self Help Groups for 2000-2001 among the Banks in Tamil Nadu. IDRBT
(Institute for Development and Research in Banking Technology)
conferred the Best Award under Banking Technology to IOB. The award
was given for the innovative use of banking applications on INFINET
(Indian Financial Network) for the year 2001. Mobile banking under SMS
technology implemented in Ahmedabad and Baroda. Pilot run of Phase I
of the Internet Banking commenced covering 34 branches in 5
Metropolitan centers. IOB was one among the first to join Reserve Bank of
Indian’s negotiated dealing system for security dialing online.

The Bank has finali8sed an e-commerce strategy and has developed the
necessary internet banking modules in-house. For the first time a Total
Branch Automation package developed in-house has been customized in
one of the Overseas Branches of the Bank.

Most software developed in-house.

IOBNET connects Central Office with all Regional Office.

The Bank has paid a maiden dividend of 10% p.a for 2000-01, followed by
12% during 2001-02.

Performance during 2006-2007

Operating Profit improved to Rs.794 crore.

Net profit up by 81% at RS. 416 crore.

Owned funds rose to Rs. 1460 crore from Rs. 1133 crore.

Profit per Employee rose to RS. 1.70 lac from Rs. 93,000.

Ratio of operating profit to average working funds went up from 1.78% to

1.99%.
Return on Assets leaped from 0.65% to 1.01%.

EPS up from RS. 5.18 to RS.9.35.

Domestic Net Interest Margin improved to 3.14% as of March 2003.

Business per Employee improved to Rs.204 lakh from Rs.175 lakh.

Capital Adequacy Ratio improved from 10.82% to 11.30%.

The Bank’s global deposits stood at Rs.36699 Crore and global gross
advances stood at Rs. 17447 crore.

Domestic Deposits grew by 14.03% (System -12.20%). Domestic deposits

grew by Rs.4770 crore to RS.35717 crore.

Domestic Advances grew by 16.28% (System – 15.45%). Net domestic

advances grew by Rs.2281 crore to close at Rs. 16,068 crore.

Deposits and advances growth has been above that of the system for
most part of the financial year.

Priority Sector lending continues to be significantly higher at 42.9%

(Norm 40%).

Agriculture Business Consultancy Services (ABCS) has been making

steady progress in offering consultancy services for hi-tech agricultural
projects with a special thrust on projects for wasteland development, dry
land horticulture, herbal / medicinal plants cultivation, food processing
and setting up of cold storages.

Housing finance has been extended to the tune of Rs. 591 crore under
direct housing finance during the year. Special Housing Finance Divisions
have been set up at various branches throughout India for giving a push
to housing finance.

During 2002-03, the Bank had sanctioned educational loans to the tune
of RS. 143 crore under Bank’s Vidya Jyothi Educational loan scheme
benefiting 7021 students.

The Bank has issued 1.45 lakh Kisan Credit Cards during 2002-03 and as
of March 2003 the total number of cards in circulation being 4.12 lac
cards.

Under Micro Credit 13,802 Self Help groups were credit linked during the
year and till March 2003, 30899 Self Help groups were credit linked.

Weaker section credit was 10.8% of net bank credit (norm 10%).

Banks credit to women constitutes 5.5% of the net bank credit against
the stipulated norm of 3%.

Sakthi IOB Chidambaram chettiar memorial trust was formed by the

Management of the Bank, Officers Association and Workmen Union in
1995. The objective of the trust is to vaocational training. The trust has
so far trained 1331 women in various job oriented courses like tailoring,
nursing, retail management, computer and secretarial practice and
screen printing.

Under Prime Minister’s Rozgar Yojana (PMRY), 6443 borrowers were

assisted to the tune of Rs. 33.40 crore.
The bank continues to lay emphasis on retail credit and mobilization of
low / no cost deposits through efficient and quick customer service and
expansion of the client base horizontally.

IOB has developed over the years an array of products to meet the
specific needs of customers especially the retail segment.

Personal loans for purchase of consumer durables continue to be a

popular retail product of the Bank.

A new credit scheme “Shubh Yatra” was introduced to provide loans to

those who undertake foreign travel for tourism, employment and medical
treatment.

Another scheme “Sanjeevini” was designed to extend loans to Medical

Practitioners, hospitals, etc. for expansion and equipments.

The Bank has recently launched a new product in alliance with Life
Insurance Corporation of India – IOB Chiranjeevi Bima Yojana. This
provides the customer the benefit of life insurance cover. The Bank as a
Corporate Agent markets the life policies of Life Insurance Corporation of
India and non-life products of National Insurance Company at select
branches.

IOB Akshay is another product that provides loan against life policies of
LIC and other private insurance companies approved by IRDA.
Another product introduced by the Bank is “Money Home”. This provides
a fast track channel of remittances from the USA to India to benefit our
customers.

All the 3 Regional Rural Banks sponsored by the Bank recorded profits in
2002-2003.
Pandyan Grama Banks has been adjudged the best and Dhenkanal
Gramaya Bank ranked 7 among 196 RRBs in a private survey on banking.

Foreign exchange turnover of the Bank amounted to Rs.18, 494 crore in

2002-03, as compared to Rs. 15.244 crore during 2001-02, giving a
growth rate of over 21%. Higher growth in forex business has been
achieved despite the appreciation of the rupee, global recession and
deceleration in Precious Mental business, owing to volatile gold price in
the international market.

Export Credit stood at Rs. 1,160 crore as on 31st March 2003.

The new Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act 2002 (SARFAESI) empowers Banks
to take series of actions to enforce securities charged to the Bank, which
were not available earlier. 1830 notices involving an amount of Rs.
499.92 crore have been issued till March 2003 by the Bank under the
SARFAESI Act was RS. 23.74 Crore involving 645 accounts up to March
2003.

Net NPA ratio down to 5.23% from 6.32%.

The Bank has lead responsibility in 12 districts in Tamilnadu State and
one district in Kerala State. The Bank is also the convener of State Level
Banker’s Committee for Tamilnadu State.

As of March 2003, IOB had 1427 branches in India and 6 branches

overseas. Besides the Bank had 243 Extension Counters. IOB has
specialized branches to cater to the exclusive needs of Commercial &
Industrial credit (the branch has received ISO 9002 certification),
Industrial finance, Small Scale industries, hi-tech agriculture and foreign
exchange. The bank is a depository participant. To meet the needs of
investors in the capital market the bank has two exclusive offices one at
Mumbai and the other at Chennai. The Bank opened its first Asset
Recovery Management Branch in Chennai on 21st February 2003. It would
focus on recovery of dues under DRT cases of Chennai (Metro) and (Non-
Metro) Regions of the Bank. 544 branches have been totally
computerized and 883 branches have been partially computerized as of
March 2003. In all 1427 branches have been brought under
computerization i.e. 100% of the bank’s branch network as of March 2003
is covered under computerization. 100 Automated Teller machines (ATM)
in-operation, 42 centers are linked under Any Branch Banking (ABB)
covering 293 branches.

The Bank’s house magazine in Hindi “VANI” got the first prize in the Hindi
House Journal competition conducted by Reserve Bank of India for the
year 2000-2001.

PRESENT PERFORMANCE OF INDIAN OVERSEAS BANK

 Indian Overseas Bank is started 1937. Indian Overseas Bank is
one of the youngest among the 14 nationalized Banks, at present the net
profit of the Bank crossed Rs. 1000 crores in Net Profit. With strong
performance of fundamentals and supportive staff. It sustained and
diversified growth in the future in tradition set by its founder.

 Total Business Rs. 1,16,668 crores.

 Net profit Rs. 1008.43 crores.

 The number of branches 1800

 Bank was ranked 484 among top 1000 banks in the world by the
‘The Banker’ a unit of financial times of London during 2004-05
based on the strength of its tier I capital.

 The Bank has been named the most efficient user of capital by a
KPMG Survey .

 Return of equity highest among Banks at 29.11%.

 Indian Overseas Bank has been ranked 2nd in terms of

profitability and 6th in overall ranking among 123 Asian

Commercial Banks by a study by the Chinese university of Hong
Kong.

 Indian Overseas Bank has been ranked 2nd in profitability and 4th

in overall performance among all banks in India by business

world (2006).

 Banks rating has been upgraded to BBB-Stable by standard and

Poor’s on par with the sovereign rating for India.
 So, this bank is completed 70 years i.e, 1937-2007. Indian Overseas
Bank is well experienced Bank.

Different Services of IOB

Indian Overseas Bank was one of the earliest banks in India to provide organized training
for its staff. In 1953 established the training centers.

1) Indian Overseas Bank introduced the computerized in India a mainframe computer

called the unit recorders machine to process inter branch reconciliation and provident
funds accounts in 1964. The Bank has nearly 350 ATMs of tie up with pao ATMs of
other banks. Launched the International Debit VISA Cards and International credit
VISA cards.

2) The Bank had set up a agricultural credit department even before nationalization for
implementing socially relevant schemes such as priority sector lending. The bank has
in its fold over 12.50 lakh formers with outstanding credit of Rs.8,099 crores as on
March 2007. The Bank has sponsored three Regional Rural banks (Puri Gramya,
Pandya Gramya, Dhinkanal Gramya Bank)
 3) Hindi promotion-official languages department was established in 1974 for
implementing the official language Act 1963. Bilingual software are used for use of
Hindi in computers.

4) This Bank also promoting the sports much before nationalisation when cricket and
ball badminton team were formed in 1964. After nationalization the bank has full
time team in Basket Ball, Hockey, Volley Ball, badminton etc.

5) The Bank role in community services takes many forms covering cultural religious,
Medical Education & Relief Activities.

Vision of the bank

“To Emerge as the most competitive Bank in the Industry”

Objective of bank:

To enable women in the lower strata of society to equip themselves

with the essential skills and knowledge required for embarking on a
career of their choice.

IOB and Society:

 IOB has been committed to and involved in various social causes, the
most prominent being women empowerment – the Sakthi IOB
Chidambaram Chettiar Memorial Trust and IOB’s Promotion of the
Agricultural Seed Bank.

The Sakthi IOB Chidambaram Chettiar Memorial Trust is a public charity

trust initiated by the Bank and its Staff Representative organizations in
February 1996 in memory of Shri M.Ct.M.Chidambaram Chettiar, the
founder of IOB.

Annual reports
Balance Sheet of Indian Overseas
------------------- in Rs. Cr. -------------------
Bank
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 544.80 544.80 544.80 544.80 544.80

Equity Share Capital 544.80 544.80 544.80 544.80 544.80

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 1,888.57 2,510.17 3,327.59 4,197.90 5,396.59

Revaluation Reserves 141.82 122.47 117.97 113.97 1,209.57

Net Worth 2,575.19 3,177.44 3,990.36 4,856.67 7,150.96

Deposits 44,241.24 50,529.32 68,740.41 84,325.58 100,115.89

Borrowings 590.68 736.63 2,896.23 6,353.65 6,548.28

Total Debt 44,831.92 51,265.95 71,636.64 90,679.23 106,664.17

Other Liabilities & Provisions 3,407.94 4,914.43 6,629.82 6,323.84 7,258.26

Total Liabilities 50,815.05 59,357.82 82,256.82 101,859.74 121,073.39

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Assets

Cash & Balances with RBI 4,175.44 3,077.96 4,686.11 9,124.23 5,940.44
Balance with Banks, Money at
778.52 629.28 4,293.19 1,217.09 4,981.46
Call
Advances 25,205.19 34,756.20 47,060.29 60,423.84 74,885.27

Investments 19,014.72 18,952.28 23,974.47 28,474.71 31,215.44

Gross Block 819.56 865.33 1,000.13 1,102.80 2,352.74

Accumulated Depreciation 375.05 419.40 509.20 569.11 655.95

Net Block 444.51 445.93 490.93 533.69 1,696.79

Capital Work In Progress 7.84 11.80 19.73 24.88 13.07

Other Assets 1,188.84 1,484.35 1,732.11 2,061.29 2,340.93

Total Assets 50,815.06 59,357.80 82,256.83 101,859.73 121,073.40

Contingent Liabilities 4,849.95 9,658.91 15,846.11 24,173.83 31,016.27

Bills for collection 5,268.43 6,321.79 8,427.48 10,215.01 10,839.82

Book Value (Rs) 44.67 56.08 71.08 87.05 109.06

 Profit & Loss account of ------------------- in Rs. Cr. -------------------
Indian Overseas Bank
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Interest Earned 3,951.05 4,406.28 5,832.07 7,968.25 9,641.40

Other Income 799.56 728.21 862.76 1,075.46 1,713.07

Total Income expenditure 4,750.61 5,134.49 6,694.83 9,043.71 11,354.47

Interest expended 2,095.53 2,339.10 3,271.27 5,288.79 6,771.81

Employee Cost 843.46 893.57 931.07 949.68 1,271.84

Selling and Admin Expenses 452.13 390.63 465.80 419.34 737.99

Depreciation 46.74 55.34 61.12 75.10 100.94

Miscellaneous Expenses 661.39 672.52 957.14 1,108.46 1,146.10

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Operating Expenses 1,453.46 1,455.40 1,604.61 1,610.73 2,307.20

Provisions & Contingencies 550.26 556.66 810.52 941.85 949.67

Total Expenses 4,099.25 4,351.16 5,686.40 7,841.37 10,028.68

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit for the Year 651.36 783.34 1,008.43 1,202.34 1,325.79

Extraordionary Items 0.00 0.00 0.00 0.00 0.00

Profit brought forward 0.00 0.00 0.00 0.00 0.00

Total 651.36 783.34 1,008.43 1,202.34 1,325.79

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 148.36 161.51 191.22 203.96 286.82

Corporate Dividend Tax 0.00 0.00 0.00 0.00 0.00

Per share data (annualised)

Earning Per Share (Rs) 11.96 14.38 18.51 22.07 24.34

Equity Dividend (%) 24.00 26.00 30.00 32.00 45.00

Book Value (Rs) 44.67 56.08 71.08 87.05 109.06

Appropriations

Transfer to Statutory Reserves 503.00 621.83 371.65 409.16 1,029.30

Transfer to Other Reserves 0.00 0.00 445.56 589.22 9.67

Proposed Dividend/Transfer to Govt 148.36 161.51 191.22 203.96 286.82

Balance c/f to Balance Sheet 0.00 0.00 0.00 0.00 0.00

Total 651.36 783.34 1,008.43 1,202.34 1,325.79

BOARD OF DIRECTORS

(AS ON 31.03.2010)

Shri.S.A Bhat - Chairman & Managing Dirctor

Shri.G.Narayanan - Executive Director

Shri.Y.L.Madan - Executive Director

Dr. Vinita Kumar - GOI Nominee Director

Smt. Chitra Chandramouliswaran - RBI Nominee Director

Shri Natesan Sridaran - Workmen Employee Director

Shri.M.Ravindra vikram - Nominated by the GOI (Chartered
Accountant category )

Shri.B.V.Appa Rao - Nominated by the GOI

Shri Ashok Kumar Bhargava - Shareholder Director

Dr. Chiranjib Sen - Shareholder Director

Shri.A.Vellayan - Shareholder Director

Shri.K.Sundar Rajan - Deputy General Manager & Board

Secretary

CHAPTER – 4

ANALYSIS AND INERPRETAION OF THE DATA

Classifying Services
Simplest way to classify these services depending on the originator of
a service session is the 'Push/Pull' nature. 'Push' is when the bank sends
out information based upon an agreed set of rules, for example your
banks sends out an alert when your account balance goes below a
threshold level. 'Pull' is when the customer explicitly requests a service or
information from the bank, so a request for your last five transactions
statement is a Pull based offering.

Second way to categorize the mobile banking services, by the nature

of the service, gives us two kind of services – Transaction based and
Enquiry Based. So a request for your bank statement is an enquiry
based service and a request for your fund's transfer to some other
account is a transaction-based service. Transaction based services are
also differentiated from enquiry based services in the sense that they
require additional security across the channel from the mobile phone to
the banks data servers.

Based upon the above classifications, we arrive at the following

taxonomy of the services listed before.

Push Based Pull Based

* Fund Transfer
* Bill Payment
Transactio
* Other financial
n Based
services like share
trading.
Enquiry * Credit/Debit * Account Balance
 Based Alerts. Enquiry
* Minimum * Account Statement
Balance Alerts Enquiry.
* Bill Payment * Cheque Status
Alerts Enquiry.
* Cheque Book
Requests.
* Recent Transaction
History.

Technologies Enabling Mobile Banking

Technically speaking most of these services can be deployed using

more than one channel. Presently, Mobile Banking is being deployed
using mobile applications developed on one of the following four
channels.

1. IVR (Interactive Voice Response)

2. SMS (Short Messaging Service)
2. WAP (Wireless Access Protocol)
4. Standalone Mobile Application Clients

I. Interactive Voice Response

IVR or Interactive Voice Response service operates through pre-
specified numbers that banks advertise to their customers. Customer's
make a call at the IVR number and are usually greeted by a stored
electronic message followed by a menu of different options. Customers
can choose options by pressing the corresponding number in their
keypads, and are then read out the corresponding information, mostly
using a text to speech program.

Mobile banking based on IVR has some major limitations that they can
be used only for Enquiry based services. Also, IVR is more expensive as
compared to other channels as it involves making a voice call which is
generally more expensive than sending an SMS or making data transfer
(as in WAP or Standalone clients).

II. SMS (Short Messaging Service)

SMS uses the popular text-messaging standard to enable mobile
application based banking. The way this works is that the customer
requests for information by sending an SMS containing a service
command to a pre-specified number. The bank responds with a
reply SMS containing the specific information.

For example, customers of the Bank can get their account

balance details by sending the keyword 'BAL' and receive their
balance information again by SMS. Most of the services rolled out by
major banks using SMS have been limited to the Enquiry based
ones. However there have been few instances where even
transaction-based services have been made available to customer
using SMS. One of the major reasons that transaction based
services have not taken of on SMS is because of concerns about
security and because SMS doesn't enable the banks to deliver a
 custom user interface to make it convenient for customers to
access more complex services such as transactions.

The main advantage of deploying mobile applications over SMS

is that almost all mobile phones, including the low end, cheaper
ones, which are most popular in countries like India and China are
SMS enabled.

III. WAP (Wireless Access Protocol)

WAP uses a concept similar to that used in Internet banking.
Banks maintain WAP sites which customer's access using a WAP
compatible browser on their mobile phones.

WAP sites offer the familiar form based interface and can also
implement security quite effectively. The banks customers can now
have an anytime, anywhere access to a secure reliable service that
allows them to access all enquiry and transaction based services
and also more complex transaction like trade in securities through
their phone. A WAP based service requires hosting a WAP gateway.
Mobile Application users access the bank's site through the WAP
gateway to carry out transactions, much like internet users access a
web portal for accessing the banks services.

IV. Standalone Mobile Application

Standalone mobile applications are the ones that hold out the
most promise, as they are most suitable to implement complex
banking transactions like trading in securities. They can be easily
 customized according to the user interface complexity supported by
the mobile. In addition, mobile applications enable the
implementation of a very secure and reliable channel of
communication. One requirement of mobile applications clients is
that they require to be downloaded on the client device before they
can be used, which further requires the mobile device

V. to support one of the many development environments like J2ME or

BREW. J2ME is fast becoming an industry standard to deploy mobile
applications and requires the mobile phone to support Java.

The major disadvantage of mobile application clients is that the

applications needs to be customized to each mobile phone on which
it might finally run.

MOBILE BANKING IN INDIAN OVERSEAS BANK

Indian Overseas Bank provides SMS & WAP technology based service.

I. SMS technology based service.

Meaning of SMS banking.

SMS Banking which allows customers to do banking activities from their mobile phone
using SMS Technology. IOB's mobile banking keeps its valued customers updated with their
bank account details and enables them to request for their account information and make
request to the status of cheque presented.

SMS Banking service works on all GSM / CDMA mobile phones that support SMS
technology. The CDMA mobile phone service provider should have activated the SMS
facility for you to avail of our Mobile Alerts.

No PIN is required to enquire on accounts.

Procedure account balance enquiry.

Format: BAL<space><Account Nickname> to +919551099007

<Account Nickname> = SB+<Your Account Number>

<Account Nickname> = CD+<Your Account Number> etc..

e.g. BAL<space>SB1234 to +919551099007

Account Nickname: Logon to customer website and verify the account nickname for your
list of accounts.

List of SMS Pull Services:

Enquiry:
Balance Enquiry <Service Code> <Acct. Nickname>
Last few transactions <Service Code> <Acct. Nickname>
Cheque Paid Status <Service Code> <Acct. Nickname> <cheque number>
List of Service Codes:

Enquiry

Service Name Service Code Sample Request

Balance Enquiry BAL BAL SB1

Last few transactions LTX LTX SB1

Cheque Paid Status CPS CPS SB1 123456

The procedure of applying for SMS Banking.

It is a very easy process. Visit our https://www.iobnet.mobi from your desktop browser.
This will open the customer module where you can click on the "How to Register?" and
download the form, fill the details and just walk in to your nearest branch or apply for the
Mobile Banking service by duly filling the Mobile Banking application form in the branch.

II. Mobile Application based Mobile Banking.

Mobile Application based Mobile banking required J2ME Mobile Banking Application.

1) Pre-requisites for J2ME Mobile Banking Application

You need to have a Java-enabled handset. Your mobile phone & phone number needs to
be registered for 'J2ME Mobile Banking.

2) Installation of J2ME Mobile Banking Application

Step-1. The customer receives an SMS Message while registered to 'J2ME Mobile
 Banking'. You will receive an SMS from the bank with the download URL for 'J2ME
Mobile Banking'.
Step-2. Click on the link in the message.
Step-3. A Web page will prompt you to click on link to download the application.
Step-4. The application starts downloading to your mobile.
Step-5. The message 'Application Untrusted, Continue?' will appear as this is 3rd party
software Application for your phone... Choose 'Yes' and continue.
Step-6. You will be prompted to choose Phone Memory or Mobile Memory for installing
the application. Choose as per your choice and click 'OK'.
Step-7. This will install the application automatically and the 'J2ME Mobile Banking'
IOB icon will appear in the Applications or Games menu (depending on your phone
model).

3) Activation of J2ME Mobile Banking Application

The customer is required to activate his/her 'J2ME Mobile Banking Application' from the
handset. The user is not able to see the Login menu unless the application is activated.
The user is required to activate the application before login. Once application is activated
user can use login menu to login to the system.

4) login to J2ME Mobile Banking Application

Click on the IOB J2ME Application IOB Mobile icon in your mobile phone's
'Application' folder. Select the GPRS / SMS channel to chose the channel to make your
bank transactions. Type in your User Name and your existing PIN to log into IOB J2ME
Mobile Banking.
5) logout of J2ME Mobile Banking Application?

At any stage, while browsing through J2ME Mobile Banking Application you can logout
by clicking on the Main Menu > Logout option.

Procedure for Registering for Mobile Banking

Step 1: Log on to http://www.iobnet.mobi (Internet Connection Required)

Step 2: Click "How to Register" in homepage. Goto Question No.3 Please click "Click
Here" Hyperlink
Step 3: Download and Print the Application form and submit it to your branch where your
account is associated with.
Step 4: Customer to submit the Address Proof along with the registration form to the Branch
where he is maintaining an account.
Step 5: On successful registration, you will receive two SMS. (Below are the samples)

1) Dear [Customer Name],

Welcome to Mobile Banking. Please visit http://www.iobnet.mobi from your web browser.
Your User Id is [User_Id] and pin will be sent by post. Once you receive pin, please change
User Id and pin for security purpose. Thanks. IOB

2) Welcome to Mobile Banking.

You can download J2ME application from http://www.iobnet.mobi/j2me. For GPRS enabled
phone you can visit http://www.iobnet.mobi. Thanks - IOB
Step 8: Mobile Banking MPIN will be sent to your above registered Address within 3
working days.
Step 9: Once you receive MPIN. Please visit http://www.iobnet.mobi Enter your valid
[user_id] and [MPIN].
Step 10: Start using Mobile Banking Facility.
Step 11: For more information, please visit www.iobnet.mobi

Indian Overseas Bank Tips on use of Mobile Banking

Do's and Don't to Secure your Mobile Phone

 Never connect your mobile phone through an unsecured Wi-Fi connection available
in public places such as airports etc.

 Don't open every SMS / MMS as it may contain viruses, especially from unknown
sources.

 Never accept offers such as called tunes or dialer tunes from unknown sources.

 Try and avoid using Bluetooth in public places, as someone can access your
confidential data / information.

 Never open / download emails or attachments from unknown sources.

  Be careful about the websites you are browsing. If it does not sound authentic, do
not download anything from it.

 Change your PIN periodically

 Observe the padlock symbol on the bar of the browser to ensure that the site is
running in secure mode.

Tips on the Use of PIN

 Always choose unique PIN numbers only.

 Avoid choosing PIN that are obvious birthdays and telephone numbers, etc.

 Destroy the PIN mailer after memorizing or changing the PIN after first usage.

 Your PIN should be 4-digits number.

 Do not use a PIN that contains part of your account number.

 Do not disclose your Mobile Banking PIN to anybody, not even to a Bank
employe

HOW MOBILE BANKING IS DELIVERED?

From a technology viewpoint, mobile banking is delivered in three main ways:

1) Messaging-based, predominantly SMS but also USSD

2) Mobile Internet Browser
3) Downloadable application (typically Java)
1) Messaging-based Mobile Banking

This is currently the most popular method of mobile banking and the easiest to deploy
from the financial institution’s point of view. SMS text is by far the predominant mobile
phone technology in use for mobile banking messaging.

Messaging is used to alert bank customers of account balances, overdraft limits and for
notification of important transactions, such as payments

There have been few instances where even transaction-based services have been offered
via SMS. However, one of the major reasons that SMS based transaction services have not
achieved much traction is security because is acknowledged to be not secure. The main
advantage of SMS mobile banking applications is that almost all mobile phones can use
SMS.

There are a number of banks which have implemented or have plans to deploy secure
messaging where the consumer is required to download an application to the phone that
manages the secure transmission of messages between the two parties.

SMS Banking Overview

In order to avail the services mentioned above, a user subscribing to a wireless carrier
sends an SMS with a predefined code to the bulk service provider’s number.

Fig 1: SMS banking architecture

2) Mobile
Internet
Browser

Banks
have
deployed
mobile
internet and
WAP
websites since the late 1990s but consumer adoption hasonly been significant in recent years
as a result of faster mobile broadband networks, cheaper or flat rate data network tariffs and
more advanced mobile handsets such as smart phones.

Most mobile internet banking website users will have access to mini statements and
balance enquiries atthe base level and more advanced services including payment
instructions and bill payments.
 The advantages of using a browser based service include security – no information is left
on the phone, and from the viewpoint of rapid rollout, the browser is the universal
application on smart phones and no special download is required. In addition, if the mobile
site mimics the online site, then users will be very familiar with operation.

3) Downloadable Application

A development of recent years has been the downloadable application that offers bank
customers a selection of banking services through a single application delivered by the bank
to the consumer’s mobile phone. The application is mainly based on Java or Brew-based.
The application can be easily customised depending on the user interface complexity
supported by the mobile. In addition, mobile applications enable a very secure environment.
The main disadvantage of downloadable application clients is that the applications need to
be customised for each different device model.

Services that are available through a typical downloadable application include balance
account statements, bill payment, funds transfer and an ATM locator.

Fig 2: Secure Network Architecture for mobile banking application

 In the above diagram the 2-way SSL link between the service provider and between the
mobile banking application and the service provider and also between the service provider
and the wireless carrier ensures confidentiality of data. The email message sent by the bank
is PGP encrypted and signed in order to ensure confidentiality and integrity of data.

Challenges for a Mobile Banking

Key challenges in developing a sophisticated mobile banking application are :

Handset operability

There are a large number of different mobile phone devices and it is a big challenge for
banks to offer mobile banking solution on any type of device. Some of these devices support
J2ME and others support a WAP browser, or only SMS.
The desire for interoperability is largely dependent on the banks themselves, where installed
applications(Java based or native) provide better security, are easier to use and allow
development of more complex capabilities similar to those of internet banking while SMS
can provide the basics but becomes difficult to operate with more complex transactions.

There is a myth that there is a challenge of interoperability between mobile banking

applications due to perceived lack of common technology standards for mobile banking. In
practice it is too early in the service lifecycle for interoperability to be addressed within an
individual country, as very few countries have more than one mobile banking service
provider. In practice, banking interfaces are well defined and money movements between
banks follow the IS0-8583 standard. As mobile banking matures, money movements
between service providers will naturally adopt the same standards as in the banking world.

Security

Security of financial transactions, being executed from some remote location and
transmission of financial information over the air, are the most complicated challenges that
need to be addressed jointly by mobile application developers, wireless network service
providers and the banks' IT departments.

The following aspects need to be addressed to offer a secure infrastructure for financial
transaction over wireless network :

1. Physical part of the hand-held device. If the bank is offering smart-

card based security, the physical security of the device is more
important.

2. Security of any thick-client application running on the device. In

case the device is stolen, the hacker should require at least an
ID/Password to access the application.
 3. Authentication of the device with service provider before initiating a

transaction. This would ensure that unauthorized devices are not

connected to perform financial transactions.

4. User ID / Password authentication of bank’s customer.

5. Encryption of the data being transmitted over the air.

6. Encryption of the data that will be stored in device for later / off-line

analysis by the customer.

Scalability & Reliability

Another challenge for the banks is to scale-up the mobile banking infrastructure to handle
exponential growth of the customer base. With mobile banking, the customer may be sitting
in any part of the world (true anytime, anywhere banking) and hence banks need to ensure
that the systems are up and running in a true 24 x 7 fashion. As customers will find mobile
banking more and more useful, their expectations from the solution will increase. Banks
unable to meet the performance and reliability expectations may lose customer confidence.
There are systems such as Mobile Transaction Platform which allow quick and secure
mobile enabling of various banking services

Application distribution

Due to the nature of the connectivity between bank and its customers, it would be
impractical to expect customers to regularly visit banks or connect to a web site for regular
upgrade of their mobile banking application. It will be expected that the mobile application
itself check the upgrades and updates and download necessary patches (so called "Over The
Air" updates). However, there could be many issues to implement this approach such as
upgrade / synchronization of other dependent components.
Personalization

It would be expected from the mobile application to support personalization such as :

1. Preferred Language
2. Date / Time format
3. Amount format
4. Default transactions
5. Standard Beneficiary list
6. Alerts

ANALYSIS

1. INTRODUCTION
In this chapter the focus is on analysis of data that has been collected from the
respondents. It is imperative that the data before being analysed has to be processed
 in order that the analysis leads in findings and conclusion in tune with the objectives
of the study.

The research by using various tools and tables to attempts to describe and analyse
the data into form that is easily comparable as well as understandable.

No. of respondents: 50

CHART – 1
The table shows the number of respondents using Mobile Banking on Age basis.
 NO. OF
RESPONDE PER
SL.No. AGE NTS CENTAGE
1 20-30 10 20%
2 30-40 20 40%
3 40-50 12 24%
4 50-60 5 10%
5 60-above 3 6%
TOTAL 50 100%

Interpretation:

The above graph shows that 30-40 aged persons using mobile banking mostly i.e. 40% &
the above 60 aged person’s uses less i.e. only 6%, because they are not aware of Mobile
Banking.

CHART – 2
The following table shows the respondents satisfaction towards Mobile Banking.
 NO. OF
PARTICULAR RESPONDEN PER
SL.NO S TS CENTAGE
Fully
1 satisfied 12 24%
2 Satisfied 28 56%
Partly
3 Satisfied 8 16%
Not
4 Satisfied 2 4%
TOTAL 50 100%

30

25

20

15 NO. OF RESPONDENTS

10 PER CENTAGE

0
Fully Satisfied Partly Not
satisfied Satisfied Satisfied

Interpretation:

The above graph shows that 12(24%) respondents are fully satisfied, 28(56%)
respondents are satisfied , 8(16%) respondents are partly satisfied, but only 2(4%)
respondents are not satisfied because they are not flexible to technology,

CHART - 3
The following table shows the respondents opinion about the Mobile Banking security.
 SL.NO. PARTICULAR NO.OF PERCENTAGE
S RESPONDENTS
1. Full security 30 60%
2. Average security 11 22%
3. Less security 9 18%
TOTAL 50 100%

Interpretation:

The above graph shows that 30 (60%) respondents feel Mobile Banking is fully secure,
11 (22%) respondents feel it as average secure, 9 (18%) respondents feel it as less secure.

CHART - 4
The following table shows number of respondents using different Mobile Banking
technology.
 SL.NO PARTICULAR NO.OF PERCENTAGE
S RESPONDENTS
1. SMS 12 24%
2. WAP 26 52%
3. IVR 4 8%
4. SMA 8 16%
TOTAL 50 100%

Interpretation:

The above graph shows 12 (24%) respondents are using SMS technology, 26 (56%)
respondents are using WAP technology, 4 (8%) respondents are using IVR technology, 8
(16%) respondents are using SMA technology.

CHART - 5
The following table shows that by whom the respondents are influenced to use Mobile
Banking.
 SL.NO PARTICULAR NO.OF PERCENTAGE
S RESPONDENTS
1. Friends 22 44%
2. Relations 13 26%
3. Advertisement 11 22%
4. Others 4 8%
TOTAL 50 100%

Interpretation:

The above graph shows that 22 (44%) respondents are influenced from friends to use
Mobile Banking, 13 (26%) respondents are influenced from relations, 11 (22%) respondents
are influenced from advertisement, 4 (8%) respondents are influence from other source.
CHAPTER – 5

Findings

1) Mobile Banking opens new vistas for providing efficient, economic & quality
services to the customers.

2) The increased speed of response to requirements under Mobile Banking will lead to
greater consumer satisfaction and handling a number of transactions at a lesser time.

3) Adult are mostly using Mobile Banking compared to others.

4) Technologies like GSM (Global System for Mobile) mobile with GPRS (General
Pocket Radio Service) and J2ME mobile banking application are required for Mobile
Banking.

5) It is helpful to the old and busy people to do the transactions by sitting at home or
office or from any place.

6) There are people tech-no-haters who do not want to getting adjusted with new
technologies.

7) Mobile Banking is a time saving process.

Suggestions

1) The company should give clear information about the security measures of Mobile
Banking and they should explain the importance of PIN number to the customer.
 2) It is difficult for rural people to adopt for new technology hence necessary steps have
to be taken to educate them.

3) All the required technologies will not be present in every mobile hence it has to be
made flexible for the convenience of customers.

4) Awareness program has to be taken so that everybody uses Mobile Banking services.

5) They should explain all terms and conditions to the customers well in advance so
there will be no misleading or misunderstandings between the customers and the
company people.

6) The company people should explain the procedure of using Mobile Banking.

7) Full security should be provided.

QUESTIONNAIRS
Kindly fill up the following questionnaire.
1)Name:

2)Educational Level

□ PUC

□ Graduation

□ Post-Graduation
 □ Professional

□ others (please specify). . . . . . . .

3)Age

□ 20-30

□ 31-40

□ 41-60

□ Above 60

4)Occupation

□ Employed

□ Private Sector

□ Public Sector

□ Self employed

□ Business

□ Profession (CA/Lowyer/Dector/Other)
 □ Not employed

□ Retired

5)Annual income & Savings

A. Annual Income (in Rs.)

□ Less than 1 lakh

□ 1 – 2 lakhs

□ 2 - 3.5 lakhs

□ 3.5 - 5 lakhs

□ More than 5 lakhs

B. Annual savings (in Rs.)

□ Less than 10, 000

□ 10, 001 to 20, 000

□ 20, 001 to 30, 000

□ 30, 001 to 40, 000

□ 40, 001 & above

6)Do you have a bank account?

□ Yes

□ No

7)In which bank do you have account?

□ IOB

□ SBI

□ ICICI

□ Others

8)Are you aware of Mobile Banking?

□ Yes

□ No

9)From whom you came to know about Mobile Banking?

□ Friends

□ Relations
 □ Advertisement

□ Others

10)Are you doing banking transactions in mobile?

□ Yes

□ No

11)Which technology your using?

□ IVR

□ SMS

□ WAP

□ SMA

12)State reason behind choosing Mobile Banking?

□ Time saving

□ Reduce paper work

□ Flexibility
 □ Others

13)Are you satisfied with this service?

□ Fully satisfied

□ Satisfied

□ Partly satisfied

□ Not satisfied

14)Is Mobile Banking a time saving process?

□ Yes

□ No

15)Is Mobile Banking secure?

□ Full security

□ Average security

□ Less security
 Conclusion

While mobile banking certainly brings us much convenience and allows us to save more
time there are numerous disadvantages and even risks in using this service. For instance, like
emails, text messages aren't encrypted. So if you sign up for regular account balance checks
via text message, your information is being transmitted in a way that makes it vulnerable to
interception. Besides, most cell phones don't come standard with anti-virus protection even
if they have the capacity to browse the internet. Some phones aren't even compatible with
the anti-virus software available and there are known cases in which people were unable to
put anti-virus software registered to them on corporate cell phones. And to crown it all,
banks don't offer the same level of protection for cell phone banking that they do for online
or in person transactions.
 BIBLIOGRAPHY

News papers, Magazines,

INETERNET

www.google.com

www.iob.in

www.moneycontrol.com