UNIVERSITY OF PUNE PROJECT ON: MOBILE BANKING WITH RESPECT TO: STATE BANK OF INDIA

PROJECT BY: NEHA BAVISKAR T.Y.BCOM DIV: A ROLL NO: 06

BANKING & FINANCE 2011-2012 PROJECT GUIDE PROF. - MR.S.N TUPE B.Y.K (SINNAR) COLLEGE OF COMMERCE COLLEGE ROAD NASHIK 422005

ACKNOWLEDGEMENT

I have pleasure in successful completion of this work titled: MOBILE BANKING with respect to STATE BANK OF INDIA. The special environment at B.Y.K. College of Commerce, Nashik that always supports educational activities, facilitated my work on this project. I acknowledge the support, and encouragement, extended for this study by Principal Dr. Dhanesh Kalal. I greatly appreciate the motivation and understanding extended for the project work, by Mr. and the staff of the STATE BANK OF INDIA who responded

promptly and enthusiastically to my requests for frank comments despite their congested schedule. I am indebted all of them, who did the best to bring improvements through their suggestions. I am very much thankful to PROF. - MR.S.N TUPE for his encouragement and guidance for this project work. It would not have been possible for me to complete this work without his suggestions on every part of this work. I acknowledge the authors, whose works gave me insight and information related to this subject. I am thankful to Library staff and Administrative staff of BYK College who directly, or indirectly, have all been helpful in one way or another. I thank my Mother who encouraged me to extend my reach with her help and support; I have been able to complete this work.

INDEX Sr. No. 1. Name Introduction Page No.

2.

Organizational Profile

3.

Overview of State Bank of India

4.

Branch Level Analysis

5.

Data Analysis and Interpretation

6.

Conclusions

7.

Annexure

8.

Bibliography

INTRODUCTION

IMPORTANCE OF PROJECT WORK  Project work is a unique opportunity for every student to prove his talent and skills.  Through the Project Report it makes the students apply their knowledge by survey and develop their personality.  It is helpful for the students to understand the linkage with Business, Trade, Banking, Industry, etc.


It increases the practical knowledge of the students.

OBJECTIVES OF PROJECT WORK  To learn about Mobile Banking  To study role of Mobile Banking in India  To study about the technologies enabling Mobile Banking  To study the challenges and features of Mobile Banking  To study about the Mobile Banking services  To study the trends in Mobile Banking  To study the advantages as well as the disadvantages of Mobile Banking.

RESEARCH METHODOLOGY

Meaning of Research Research is a systematic structure of investigation undertaken in order to discover new facts. It provides a structure for decision making. Research is an inseparable part of human knowledge. Research is a way of thinking. Today s research becomes important activity in overall social life. Methodology is essential to perform any research activity. Method means system or order. Method means way of doing something. Research methodology provides a framework, to conduct a research. Methodology is the series of steps followed to attain the objectives of the social research. It is the line of steps followed to obtain the objectives of the social research. It is the line of action designed in such a way so that the researcher is able to collect the proper data and draw a right conclusion. It includes steps by the researcher right from the beginning to the conclusion and recommendations of the project work. To collect information regarding this subject a proper guidance from the person who are concerned with this, is necessary. For collecting information, I used following techniques of data collection. 1. Observation 2. Interview method

OBSERVATION Observation becomes a scientific tool for the researcher to the extend that it serves a formulated research purpose, is planned systematically, is related to more general theoretical propositions, is recorded systematically and is subjected to check and control on validity and reliability. Many types of data sought by the social scientists can be obtained through direct observations. One great asset of the observational technique is that it is possible to record behavior as it occurs. Observation is not merely something or activity or situation but it is watching, closely and systematically with the purpose of understanding and obtaining the information about the world around you. Advantages of observation technique are its simplicity, direct, ritualistic study, greater accuracy and therefore data can be more dependable.

THE INTERVIEW METHOD Interview is one of the important and powerful tools for data collection in social research. It is a verbal method of collecting special data. It is direct method of enquiry. The person who is interpreting is called interviewer and the person who gives information is called interviewee and respondent. It is a method where there are direct dialogues between more than one people. It is face to face contact and collecting information totally depends upon skill of interviewer. It is not only the words spoken but mutter gestures, facial expression, moderation of voice, rate of speech, etc. This technique is used for collecting direct information which becomes possible for researchers to arrive at conclusion.

ORGANIZATIONAL PROFILE

DEFINITION OF BANK "Banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise. "Banking Company" means any company which transacts the business of banking in India. Explanation. Any company which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause

IMPORTANCE OF BANK Banks play very important role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. Although banks create no new wealth but their borrowing, lending and related activities facilitate the Process of production, distribution, exchange and consumption of wealth. In this way they become very effective partners in the process of economic development. Today, modern banks are very useful for the utilization of the resources of the country. The banks are mobilizing the savings of the people for the investment purposes. The savings are encouraged and saving rate increases. If there would be no banks then a great portion of a capital of the country would remain idle. A bank as a matter of fact is just like a heart in the economic structure and the Capital provided by it is like blood in it. As long as blood is in circulation the organs will remain sound and healthy. If the blood is not supplied to any organ then that part would become useless. So if the finance is not provided to Agriculture sector or industrial sector, it will be destroyed. Loan facility provided by banks works as an incentive to the producer to increase the production

EVOLUTION OF BANK As most of you would, no doubt, be aware, the indigenous system of banking had existed in India. For many centuries, and catered to the credit needs of the economy of that time. The famous Kautilya Arthashastra, which is ascribed to be dating back to the 4th century BC, contains references to creditors and lending. For instance, it says If anyone became bankrupt, debts owed to the state had priority over other creditors. Similarly, there is also a reference to Interest on commodities loaned (PRAYOG PRATYADANAM) to be accounted as revenue of the state. Thus, it appears that lending activities were not entirely unknown in the medieval India and the concepts such as priority of claims of creditors and commodity lending were established business practices. During the period of modern history, however, the roots of commercial banking in India can be traced back to the early eighteenth century when the Bank of Calcutta was established in June 1806 which was renamed as Bank of Bengal in January 1809 mainly to fund General Wellesleys wars. This was followed by the establishment of the Bank of Madras in July 1843, as a joint stock company, through the reorganization and amalgamation of four banks viz., Madras Bank, Carnatic Bank, Bank of Madras and the Asiatic Bank. This bank brought about major innovations in banking such as use of joint stock system, conferring of limited liability on shareholders, acceptance of deposits from the general public, etc. The Bank of Bombay, the last bank to be set up under the British Raj pursuant to the Charter of the then British East India Company, was established in 1868, about a decade after the Indias first war of independence. The three Presidency Banks, as these were then known, were amalgamated in January 1921 to form the Imperial Bank of India, which acquired the three-fold role: of a commercial bank, of a bankers bank and of a banker to the government. It is interesting to note here that merger of banks and consolidation in the banking system in India, is not as recent a phenomenon as is often thought to be, and dates back to at least 1843 and the process, of course, still continues. With the formation of the Reserve Bank of India in 1935, some of the central banking functions of the Imperial Bank were taken over by the RBI and subsequently, the State Bank of India, set up in July 1955, assumed the other functions of the Imperial Bank and became the successor to the Imperial Bank of India.

RESPONSIBILITIES OF BANK COMMERCIAL FINANCING The commercial financing model in Indian banking can be broadly categorized into project finance and working capital finance. These two segments form the pivot around which banks operate. PROJECT FINANCE Banks offer long term and short terms loans to business houses, corporations to set up their projects. These loans are disbursed after the approval from the banks core credit validating committee. In India, there are 11 national level land 46 state level financial and investment institutions that cater to long term funding requirements of the industry. The project finance segment is highly competitive with various players offering innovative schemes to entice corporate. WORKING CAPITAL In order to meet the diverse needs and requirements of the business community, banks offer working capital funds to corporate. Working capital finance is specialized line of business and is largely dominated by the commercial banks. The Indian banking saw dramatic changes in the last decade or so ever since the advent of liberalization and Indias integration with the world economy. These economic reforms and the entry of private players saw nationalized banks revamp their service and product portfolio to incorporate new, innovative customer-centric schemes. The Indian banking finally woke up to the surging demands of the ever-discerning Indian consumer. The need to become highly customer focused (generated by high competitive levels) forced the slow-moving public sector banks to adopt a fast track approach. Taking a leaf out of the private sector banks, the public sector banks too went for major image changes (including corporate brand building exercises) and customer friendly schemes. These customer friendly programs included revamping of the product and service portfolio by introducing new product & service schemes (like credit cards, hassle-free housing loan schemes, educational loans and flexi-deposit schemes) integration of the branch network by using advance networking technology and customer personalization programs (through ATMs and anytime banking etc.). Many banks have started capitalizing on the recent stock market surge by adding (Initial Public Offering) IPO financing options and schemes in their product mix.

PRINCIPLES OF BANK The Indian banking has come from a long way from being a sleepy business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending). The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization. The Indian banking can be broadly categorized into nationalized, private banks and specialized banking institutions. The Reserve Bank of India acts as a centralized body monitoring any discrepancies and shortcoming in the system. It is the foremost monitoring body in the Indian financial sector. The nationalized banks (i.e. government-owned banks) continue to dominate the Indian banking arena. Industry estimates indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that have started their operations here. Under the ambit of the nationalized banks come the specialized banking institutions. These co-operatives, rural banks focus on areas of agriculture, rural development etc., unlike commercial banks these co-operative banks do not lend on the basis of a prime lending rate. They also have various tax sops because of their holding pattern and lending structure and hence have lower overheads. This enables them to give a marginally higher percentage on savings deposits. Many of these cooperative banks diversified into specialized areas (catering to the vast retail audience) like car finance, housing loans, truck finance etc. In order to keep pace with their public sector and private counterparts, the co-operative banks too have invested heavily in information technology to offer high-end computerized banking services to its clients.

STRUCTURE OF BANKING

NEW GENERATION BANKING

He liberalize policy of Government of India permitted entry to private sector in the banking, the industry has witnessed the entry of nine new generation private banks. The major differentiating parameter that distinguishes these banks from all the other banks in the Indian banking is the level of service that is offered to the customer. Verify the focus has always been centered around the customer understanding his needs, preempting him and consequently delighting him with various configurations of benefits and a wide portfolio of products and services. These banks have generally been established by promoters of repute or by high value domestic financial institutions. The popularity of these banks can be gauged by the fact that in a short span of time, these banks have gained considerable customer confidence and consequently have shown impressive growth rates. Today, the private banks corner almost four per cent share of the total share of deposits. Most of the banks in this category are concentrated in the high-growth urban areas in metros (that account for approximately 70% of the total banking business). With efficiency being the major focus, these banks have leveraged on their strengths and competencies viz. Management, operational efficiency and flexibility, superior product positioning and higher employee productivity skills. The private banks with their focused business and service portfolio have a reputation of being niche players in the industry. A strategy that has allowed these banks to concentrate on few reliable high net worth companies and individuals rather than cater to the mass market. These well-chalked out integrates strategy plans have allowed most of these banks to deliver superlative levels of personalized services. With the Reserve Bank of India allowing these banks to operate 70% of their businesses in urban areas, this statutory requirement has translated into lower deposit mobilization costs and higher margins relative to public sector banks.

OVERVIEW OF STATE BANK OF INDIA

VISION OF THE STATE BANK OF INDIA A "corporate vision" concretely describes how a company sees itself in the future, and therefore must be realistic and attainable. In the current age of rapid change, a corporate vision is of a more medium-term nature. The SBI Group, make a clear distinction between a "corporate mission" and "corporate vision." They define "management philosophy" as a company's longterm values and raison dtre that do not change easily because of top management shifts or market changes. In contrast, a "corporate vision" concretely describes how a company sees itself in the future. In the current age of rapid change, a corporate vision is of a more medium-term nature. THE SBI GROUP S FIVE MANAGEMENT PHILOSOPHIES TO HAVE SOUND ETHICAL VALUES We shall undertake judgments on actions based not on whether they violate the law or profit the company, but on whether or not they are socially justifiable. In the book entitled "Zen of Vegetable Roots (Caigentan)," which is a collection of social teachings that was written by Hong Ying Ming during the era of the Ming Dynasty it is written, "Virtue is the foundation of a business." TO BE FINANCIAL INNOVATOR Bringing financial innovations to the forefront of the financial industry, capitalizing on new opportunities emerging via the Internet and developing financial services that further profit customers TO AIM AT BECOMING A NEW INDUSTRY CREATOR Becoming the leader in creating and growing pivotal 21st-century industry TO CARRY OUT SELF-EVOLUTION Continuing to be a company that evolves of its own volition through formation of an organization that flexibly adapts to changes in the operating environment and a corporate DNA composed of "Ingenuity" and "Self-transformation" TO FULFILL SOCIAL RESPONSIBILITY Ensuring each company in the SBI Group carries out its social and economic responsibilities to all stakeholders and society.

HISTORY OF STATE BANK OF INDIA

State Bank of India is one of the very prominent banking service providers in India, which could even be ranked number one in the customer satisfaction. The bank was introduced by the name of Imperial Bank of India in 1921by associating three imperial banks, including bank of Bengal, bank of Bombay (Mumbai these days), bank of madras (Chennai these days). And finally in 1955 the name had been changed to the State bank of India, The bank is having one of the proficient names in the field of Indian banking system; the bank is the very prominent service provider in India and abroad with its 8 subsidiaries and 23,300 branches along with around 100000 ATM machines, this is so called the widest and largest banking network all over India. The State Bank of India is one of the very pre established bank in India and is the only bank in India which is having collision with the Western union money transfer, which is having the responsibility of cash transfer worldwide in between several countries. The social profile of State Bank of India has also grown up in the Nahik city and the reason behind this is the several of social schemes by the bank itself, which includes Clean Nashik Green Nashik campaign in 2003, in which around 30,000 plants, had been planted and conserved in the surveillance of State bank of India. Also the organization of several of the events in Nashik itself which introduces the common public to the banking system and even to the services of State Bank of India. Truly speaking the State Bank of India is having the similar name and fame in banking sector as LIC is having in Insurance and TATA is having in Automobiles and Steel in India. The purpose of comparison is not to bring the moral down of others but it is to retrospect the leaders of their prospective fields and undoubtedly The State Bank of India is the Market leader when it is about Banking.

SERVICE PROFILE OF SBI Service profile The services of state Bank of India are always a matter of consideration for the people of India and this is the reason why the bank is having so vast range of services associated with it. The State bank of India is the institution which is working very hard for achieving the customer satisfaction through molding its policies towards the customers interest. For example as making home is one of the very common desire of each and every middle class family and thus the bank had molded the home loan policy in such a way so that the home loan is available to the customers @ 4%, which is first time in India. The few main services of the State Bank of India are listed below.  Core Banking  Internet Banking.  International Money Transfer.  International ATM cum Debit Card.  SBI Yatra Card  Mobile Banking. The detailed information about these services is mentioned as follows. Core Banking: Core banking is the facility which has-been started by State Bank of India in the year 2000which was very new and innovative concept for Indian banks those days, this service includes fund transfer at a very high rate and within few minutes to any of the bank or branch within India. Internet Banking: Internet banking is one of the concept pioneered by State Bank of India in 2007 which had enabled the customers to access their accounts by the use of Internet, this service had enabled the customers to go for online shopping and share trading and even for fund transfer.

International Money Transfer: Money transfer between the banks is always a matter of due importance and when it comes to international money transfer its a severe issue, to cope up with this kind of problem the State bank of India is in accord with Western Union money transfer, which will be helpful to the NRIs to transfer the money to the country and even collect that.

International ATM cum Debit Card: The service of ATM is again an innovation brought in Indian sub continent by State Bank of India and the other banks had introduced it later the card is having a specific magnetic strip which possess the detail of account of the card holder this card can internationally being used for the money withdrawal and as the Debit Card to pay the bills by one single access.

SBI Yatra Card: The India railways is having the largest rail line network worldwide and it is the second largest mean to carry passengers from one place to other so its obvious having queues at Ticket Reservation counters, to cope up with this the SBI had launched Yatra Card, by which a passenger can book Ticket from anywhere using internet.

Mobile Banking: It was a dream of Mr. Dheeru Bhai Ambani pioneer of Reliance that every single Indian have his or her own mobile, thus by watching the importance of mobile phones SBI had launched the Mobile Banking which is just like home banking or any where banking.

Bank Name: State Bank of India Branch Name: RA&SECC, NASIK Address: 2ND FLOOR, SUYOJIT CITY CENTRE, NASIK, 422002 Contact No: (0253) 2578860-1 IFSC Code: SBIN0010518 Fax No: Email: sbi.10518@sbi.co.in Branch Timings: Monday to Friday (10:00am: 3:00pm)
Saturday (10am: 12:30pm) Working Days: Monday to Saturday Toll-Free Number: 1800112211(toll free from BSNL/MTNL) or 18004253800 (BSNL toll free no.)

Branch Code: 10518 Swift Code: No RTGS: Yes

Internet banking: Yes Core banking: No Mobile Banking: Yes ATM(s): Yes

FUNCTIONS OF STATE BANK OF INDIA The State Bank of India acts as an agent of the Reserve Bank of India and performs the following functions: Borrows money:- The Bank borrows money from the public by accepting deposits such as current account deposits, fixed deposits and savings deposits. Lends money:- It lends money to merchants and manufacturers for short periods. It also lends to farmers and co-operative institutions. It lends mostly on the security of easily realizable commodities like rice, wheat, cotton, oil-seeds, cloth, gold and government securities. The Bank can lend against agricultural bills up to a maximum period of fifteen months and incase of other bills up to a maximum period of six months. Banker s Bank:-The State Bank of India acts as the bankers bank. In discharging this responsibility, the bank provides loans to commercial bank when required and also rediscount their bill. Government s Bank:- The State Bank of India also acts as the agent of the Reserve Bank of India. As an agent, the State Bank of India maintains the treasuries of the State Government. The Bank also manages the debts floated by the State Governments. Remittance:- The State Bank of India facilitates remittance of money from one place to another. It also helps in the transfer on the funds of the State and Central Government. Functions as Central Bank:- The State Bank of India performs the functions of a Central Bank. Subsidiary functions:- The State Bank performs various subsidiary services also. It collects checks, drafts, bill of exchange, dividends interest, salaries and pensions on behalf of its customers. It purchases and sells securities on behalf of its customer. It receives valuables and documents for safe custody and maintains safe deposit vaults.

BRANCH LEVEL ANALYSIS

INTRODUCTION TO MOBILE BANKING

Mobile Banking (also known as M-Banking, m-banking, SMS Banking, etc.) is a term used for performing balance checks, account transactions, payments, etc., via a mobile device such as a mobile phone. It was Internet Banking, which ushered in a new era in banking convenience by bringing the entire operations to the computer, and now mobile banking promises to take it to the next level. Internet Banking helped give the customers anytime access to their banks. Customers could check out their account details, perform transactions like transferring money to other accounts, and pay their bills, sitting in the comfort of their homes and offices. However, the biggest limitation of Internet Banking is the requirement of a PC with an Internet connection, not a big obstacle if we look at the US and the European countries, but definitely a big barrier if we consider most of the developing countries of Asia like India and China. Mobile Banking addresses this fundamental limitation of Internet Banking, as it reduces the customer requirement to just a mobile phone. Mobile usage has seen an explosive growth in most of the Asian economies like India, China and Korea. The main reason that Mobile Banking scores over Internet Banking is that it enables 'Anywhere Anytime Banking'. The last time that technology had a major impact in helping banks service their customers was with the introduction of the Internet banking. Internet Banking helped to give the customer's anytime access to their banks. Customer's could check out their account details, get their bank statements, perform transactions like transferring money to other accounts and pay their bills sitting in the comfort of their homes and offices. Mobile usage has seen an explosive growth in most of the Asian economies like India, China and Korea. In fact Korea boasts about a 70% mobile penetration rate

and with its tech-savvy populace has seen one of the most aggressive rollouts of mobile banking services. Still, the main reason that Mobile Banking scores over Internet Banking is that it enables Anywhere Banking'. Customers now don't need access to a computer terminal to access their banks, they can now do so on the go when they are waiting for their bus to work, when they are traveling or when they are waiting for their orders to come through in a restaurant. The scale at which Mobile banking has the potential to grow can be gauged by looking at the pace users are getting mobile in these big Asian economies. According to the Cellular Operators' Association of India (COAI) the mobile subscriber base in India hit 40.6 million in the August 2004. In September 2004 it added about 1.85 million more. The explosion as most analysts say, is yet to come as India has about one of the biggest untapped markets. China, which already witnessed the mobile boom, is expected to have about 300 million mobile users by the end of 2004. South Korea is targeted to reach about 42 million mobile users by the end of 2005. All three of these countries have seen gradual roll-out of mobile banking services, the most aggressive being Korea which is now witnessing the roll-out of some of the most advanced services like using mobile phones to pay bills in shops and restaurants. Mobile banking has been at the threshold of a revolution for some time. While many operators, as well as banks, had introduced mobile banking applications, it never became popular due to security concerns. The number of people using mobile banking services has jumped from under 10,000 to 120,000 in two years. While the trend is growing, lack of awareness of services, apart from perceived security issues, are inhibiting faster take-off. There is yet another reason why the service will not spread like wild fire - the credit environment. RBI has been tightening the banks, which have been offering unsecured and secured loans with minimal or no customer verification. With RBI tightening liquidity, personal loan defaults have reached 9% and banks will be very wary of giving you a credit card on the mobile. Though RBI has specified norms for the banks to provide secure technology and ensure 'confidentiality, integrity, authenticity and non-reputability', security

remains a major concern as well as a hurdle. However, with a few precautions and safety measures, users can have a safer m-banking experience. The m-PIN, which is issued by the bank, should be memorized and the PIN-mailer destroyed immediately. Change your m-PIN regularly and do not share it with anyone. The PIN is valid only for the corresponding phone number, which means users cannot access their accounts using other hand-sets. Thus, in case of a loss/theft of mobile phone, inform the mobile phone operator as well as the bank to block the banking application. Similarly, you should also inform the bank, if you change your handset or SIM card.

Reserve Bank of India has set-up the Mobile Payments Forum of India (MPFI), a 'Working Group on Mobile Banking' to examine different aspects of Mobile Banking (M-banking). The Group had focused on three major areas of M-banking, i.e., (i) technology and security issues, (ii) business issues, and (iii) regulatory and supervisory issues.

Each stake-holder group has the following expectations: a) To meet the following expectations of Consumer: y Personalized service y Minimal learning curve y Trust, privacy and security y Ubiquitous - anywhere, anytime and any currency y Low or zero cost of usage y Interoperability between different network operators, banks and devices y Anonymity of payments like cash

y Person to person transfers b) To meet the following expectations of Merchant: y Faster transaction time y Low or zero cost in using the system y Integration with existing payment systems y High security y Being able to customize the service y Real time status of the mobile payment service y Minimum settlement and payment time c) To meet the following expectations of Telecom Network Providers: y Generating new income by increase in traffic y Increased Average Revenue Per User (ARPU) and reduced churn (increased loyalty) y Become an attractive partner to content providers d) To meet the following expectations of Mobile Device Manufacturers: y Large market adoption with embedded mobile payment application y Low time to market y Increase in Average Revenue Per User (ARPU) e) To meet the following expectations of Banks: y Network operator independent solutions y Payment applications designed by the bank y Exceptional branding opportunities for banks

y Better volumes in banking - more card payments and less cash transactions y Customer loyalty f) To meet the following expectations of Software & Technology Providers: y Large markets g) To meet the following expectations of Government: y Revenue through taxation of m-payments y Standards There are lots of evidences that not only big cities are using mobile banking, but even thousands of people from rural areas across 12 states are also likely to get their social security pension and wages paid under the National Rural Employment Guarantee Act (NREGA) Scheme with the help of mobiles over the coming few months. Bharti Airtel, too, is in the process of tying-up with two leading banks to extend its mobile remittance services to rural areas, according to its President (Mobile Services), Sanjay Kapoor. Airtel has already partnered with the Indian Farmers' Fertilizers Cooperative Limited (IFFCO) to set up IFFCO Kisan Sanchar Limited in Rajasthan. Under this initiative, the cooperative department will provide mobile hand-sets to farmers at marginal price through its out-lets in the rural areas. These hand-sets would be loaded with green SIM cards, which will flash daily updates on agricultural practices and weather forecasts free of cost. Enthusiasm for mobile banking services 66% of respondents in the survey considered that mobile banking provides an excellent opportunity to enhance existing customer service. International factors European and Asia-Pacific regions are considerably ahead of the US in terms of mobile banking provision only 10% of US banking organizations taking part in the study currently offer mobile banking against 57% in Europe

EXPECTED GROWTH
With STATE BANK OF INDIA 34% of banks (globally) currently offering mobile services to customers, an additional 32% of respondents plan to offer mobile services in the next 12-24 months. 53% of US banks expect to be offering mobile services in the next 12-24 months, giving potential parity to mobile service provision across the globe by 2010 (see Figure 1) The suggestion of considerable momentum for mobile banking over the next two years should be received warmly by mobile providers and bankers alike. The ratio of mobile banking users, i.e. customers adopting mobile services remains modest, but is predicted to grow over the next two years with 58% of banks currently Offering mobile banking expecting that at least 1 in 10 customers will be using mobile banking by 2010. However this growth will not come without modification of existing processes: Our challenges are all based on standardization measures with regard to browsers, Security demands and operator tariff systems.

Mobile Banking users

0% 0% Banks offering Mobile Banking (SBI) 34%

Others 66%

A MOBILE BANKING CONCEPTUAL MODEL Mobile banking is defined as: "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 and stock market transactions, to administer accounts and to access customized information."According to this model Mobile Banking can be said to consist of three inter-related concepts:
y y y

Mobile Accounting Mobile Brokerage Mobile Financial Information Services

Most services in the categories designated Accounting and Brokerage are transaction-based. The non-transaction-based services of an informational nature are however essential for conducting transactions - for instance, balance inquiries might be needed before committing a money remittance. The accounting and brokerage services are therefore offered invariably in combination with information services. Information services, on the other hand, may be offered as an independent module. The lifespan of all good ideas can be broken into five phases: concept, prototype, pilot, pre-production, commercial deployment. Few ideas ever reach the stage of commercial deployment, because they are just not viable, or have been ill conceived or badly deployed. For some or other reason, mobile banking has been over-saturated with concepts and to some degree with prototypes. The idea of utilising the phone for financial transactions are so obvious that every man and his dog have developed a new concept or have submitted a patent somewhere. Everyone of them believing that they have stumbled on the ultimate approach. The reality is that very few of these ever progress past the rudimentary prototype

stage. And it is actually quite easy to demonstrate simple mobile banking functionality in a prototype environment. Some of the challenges that often have not even been identified and hence solved are issues related to integration, regulatory/legal and usability.

MOBILE BANKING SERVISES PROVIDED BY STATE BANK OF INDIA

The Mobile banking services offered by SBI are as following: Account Information              Mini-statements and checking of account history Alerts on account activity or passing of set thresholds Monitoring of term deposits Access to loan statements Access to card statements Mutual funds / equity statements Insurance policy management Pension plan management Status on cheque, stop payment on cheque Ordering check books Balance checking in the account Recent transactions Due date of payment (functionality for stop, change and deleting of payments)  PIN provision, Change of PIN and reminder over the Internet  Blocking of (lost, stolen) cards Payments, Deposits, Withdrawals, and Transfers         Domestic and international fund transfers Micro-payment handling Mobile recharging Commercial payment processing Bill payment processing Peer to Peer payments Withdrawal at banking agent Deposit at banking agent

Especially for clients of SBI in remote locations, it will be important to help them deposit and withdraw funds at banking agents, i.e., retail and postal outlets that turn cash into electronic funds and vice versa. A specific sequence of SMS messages provided by SBI will enable the system to verify if the client has sufficient funds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When depositing money, the merchant receives cash and the system credits the client's bank account or mobile wallet. In the same way the client can also withdraw money at the merchant: through exchanging sms to provide authorization, the merchant hands the client cash and debits the client's account.

Adapting to Requirements of Core Target Groups

Banks, today, are increasingly confronted with technology-savvy customers who are often on the move. As the Manager of State Bank of India, puts it: Todays customers want to organize banking transactions while on the move, irrespective of opening hours. State Bank of India is responding to this development by introducing mobile services. Core target groups of Mobile Banking are often divided in three categories: a) The Youngsters: the segment of 14-18 years old youth has acquired an important role in the growth of mobile telecommunications and related services. This group is technology-savvy and willing to experiment with innovative products and services. The youngsters, often on the move, demand ubiquitous, anytime service. Though the youngsters as a group are hardly relevant for banks from a financial perspective, they represent the prospective clientele of tomorrow and need to be cultivated in the middle to long-term marketing strategy of the banks. b) The Young Adults: Also this segment is thought to be technology- and innovation friendly. Though this group too is financially not very strong, many members of this group are known to be involved in stock market activities. Further, this group can be expected to enter in short to medium-run a professional carrier so that it needs to be cultivated in order to retain customers of this agegroup even after they enter professional lives. c) The Business People: this group of customers, generally in the age-group of 26-50 years, is thought to be the most important one for Mobile Banking. Members of this group are generally well educated and economically well-off. They need to be professionally often on the move and carry mobile devices to ensure accessibility. For this reason they are ideal candidates to use services offered via mobile devices. From the banks perspective this group is particularly attractive on account of its relative economic prosperity and the need for financial services, e.g. home loans for young families. In order to fulfill the requirements of these customer groups banks tend to look at Mobile Banking as a promising option. However, these services also have their own utility for the banks.

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. 2. 3. 4. IVR (Interactive Voice Response) SMS (Short Messaging Service) WAP (Wireless Access Protocol) Standalone Mobile Application Clients

1. IVR (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). One way to enable IVR is by deploying a PBX system that can host IVR dial plans. Banks looking to go the low cost way should consider evaluating Asterisk , which is an open source Linux PBX system Asterisk, due to its open source nature has caught on in a big way and is being sold as an PBX solutions by quite a few companies commercially. However there has been considerable noise on multiple Asterisk related forums over the stability of Asterisk based systems. Companies planning to use Asterisk for their IVR

solutions should certainly do a rigorous evaluation of its capabilities before committing their long term future on it.

2. 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 HDFC Bank in India can get their account balance details by sending the keyword HDFCBAL' 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. For instance, customers of the Bank of Punjab can make fund transfer by sending the SMS TRN(A/c No)(PIN No)(Amount)'. 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 one's, which are most popular in countries like India and China are SMS enabled. An SMS based service is hosted on a SMS gateway that further connects to the Mobile service providers SMS Centre. There are a couple of hosted IP based SMS gateways available in the market and also some open source ones like Kannel .

MOBILE SERVICE CENTRE

3. 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. Bank of America offers a WAP based service channel to its customers in Hong Kong. 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. The following figure demonstrates the framework for enabling mobile applications over WAP. The actualy forms that go into a mobile application are stored on a WAP server, and served on demand. The WAP Gateway forms an access point to the internet from the mobile network.

4. STANALONE MOBILE APPLICATION CLIENTS

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 to support one of the many development environments like J2ME or Qualcomm's 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. J2ME ties together the API for mobile phones which have the similar functionality in what it calls 'profiles'. However, the rapid proliferation of mobile phones which support different functionality has resulted in a huge number of profiles, which are further significantly driving up development costs. This scale of this problem can be gauged by the fact that companies implementing mobile application clients might need to spend as much as 50% of their development time and resources on just customizing their applications to meet the needs of different mobile profiles. Out of J2ME and BREW, J2ME seems to have an edge right now as Nokia has made the development tools open to developers which has further fostered a huge online community focused in developing applications based on J2ME. Nokia has gone an additional mile by providing an open online market place for developers where they can sell their applications to major cellular operators around the world. BREW on the other hand has seen limited popularity among the developer community, mostly because of the proprietary nature of its business and because of the steep prices it charges for its development tools.

STATE BANK OF INDIA- MOBILE BANKING SERVICE

Away from home, balance enquiries can be made and/or money sent to the loved ones or bills can be paid anytime 24x7!!! That is what State Bank Freedom offers -convenient, simple, secure, anytime and anywhere banking.

1. Mobile Banking Service over Application/ Wireless Application Protocol (WAP) The service is available on java enabled /Android mobile phones (with or without GPRS) where the user is required to download the application on to the mobile handset. The service can also be availed via WAP on all phones (java/non java) with GPRS connection.  The following functionalities are available:  Funds transfer (within and outside the bank)  Interbank Mobile Payment Services (IMPS)  Enquiry services (Balance enquiry/ Mini statement)  Cheque book request  Demat Enquiry Service  Bill Payment (Utility bills, credit cards, Insurance premium), Donations, Subscriptions  Mobile Top up  M Commerce (Top up of Tatasky, BigTV, SunDirect, DishTV, DigitalTV and Videocon d2h connections, SBI life insurance premium) Business Rules  All Current/ Savings Bank Account holders in P segment are eligible.  Transaction limit per customer per day is Rs.50,000/- with a calendar month limit of Rs.2,50,000/ All customers can avail the Service irrespective of their telecom service provider.

 The Service is free of charge. SMS/GPRS cost will be borne by the customer.

2. Mobile Banking Service over SMS:

The service is available on all phones (java/non java) with/without GPRS connection. No need to download the application. Ordinary SMS charges are applicable. The following functionalities are available:  Enquiry Services (Balance Enquiry/Mini Statement)  Mobile Top up  DTH Top up/ recharge  IMPS- Mobile to Mobile Transfer  Change MPIN

Business Rules  All Current/ Savings Bank Account holders in P segment are eligible.  Transaction limit per customer per day is Rs.1,000/- with a calendar month limit of Rs.5,000/ All customers can avail the Service irrespective of telecom service provider.  The Service is free of charge. SMS cost will be borne by the customer.  As a matter of abundant precaution, Customers are requested to delete all the messages sent to the number 9223440000, once the response for their request has been received.

3. Mobile Banking Service over USSD (Unstructured Supplementary Service Data)

The service is available on all phones (java/non java) with/without GPRS connection. No need to download the application. The following functionalities are available:  Enquiry Services (Balance Enquiry/Mini Statement)  Mobile Top up  Funds Transfer (within Bank)

Business Rules  All Current/ Savings Bank Account holders in P segment are eligible.  Transaction limit per customer per day is Rs.1,000/- with a calendar month limit of Rs.5,000/ The Service is available for subscribers of select telecom operators only.  The Service is free of charge. USSD session charges will be borne by the customer.  The service is session based and requires a response from the user within a reasonable time.

ADVANTAGES OF MOBILE BANKING

The biggest advantage that mobile banking offers to banks is that it drastically cuts down the costs of providing service to the customers. For example an average teller or phone transaction costs about $2.36 each, whereas an electronic transaction costs only about $0.10 each. Additionally, this new channel gives the bank ability to cross-sell up-sell their other complex banking products and services such as vehicle loans, credit cards etc. For service providers, Mobile banking offers the next surest way to achieve growth. Countries like Korea where mobile penetration is nearing saturation, mobile banking is helping service providers increase revenues from the now static subscriber base. Also service providers are increasingly using the complexity of their supported mobile banking services to attract new customers and retain old ones.  User experience of browsing the internet from a mobile device is familiar and offers a rich UI experience.  Allows end user to access corporate association.  Secure connection can be established on most of the mobile browsers.

DISADVANTAGES OF MOBILE BANKING

 Many non-standards variables including handsets, browsers and operating system.  Inconsistent user experience due to varying connection speed and different handset.  User needs to have a data plan, which may be a barrier to adoption among price sensitive demographics.  No offline (out of the coverage) capability.

MARKETING FOR MOBILE BANKING

Mobile banking is poised to become the big killer mobile application arena. However, Banks going mobile the first time need to tread the path cautiously. The biggest decision that Banks need to make is the channel that they will support their services on. Mobile banking through an SMS based service would require the lowest amount of effort, in terms of cost and time, but will not be able to support the full breath of transaction-based services. However, in markets like India where a bulk of the mobile population users' phones can only support SMS based services, this might be the only option left. On the other hand a market heavily segmented by the type and complexity of mobile phone usage might be good place to roll of WAP based mobile applications. A WAP based service can let go of the need to customize usability to the profile of each mobile phone, the trade-off being that it cannot take advantage of the full breadth of features that a mobile phone might offer. Mobile application standalone clients bring along the burden of supporting multiple mobile device profiles. According to the Gartner Group, a leading wireless computing consulting organization, mobile banking services will have to support a minimum of 50 different device profiles in the near future. However, currently the best user experience, depending on the capabilities of a mobile phone, is possible only by using a Standalone client. Mobile banking has the potential to do to the mobile phone what E-mail did to the Internet. Mobile Application based banking is poised to be a big m-commerce feature, and if South Korea's foray into mass mobile banking is any indication, mobile banking could well be the driving factor to increase sales of high-end mobile phones. Nevertheless, Bank's need to take a hard and deep look into the mobile usage patterns among their target customers and enable their mobile services on a technology with reaches out to the majority of their customers.

CHALLENGES FACED BY SBI FOR 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 WAP browser or only SMS. Initial interoperability issues however have been localized, with countries like India using portals like R-World to enable the limitations of low end java based phones, while focus on areas such as South Africa have defaulted to the USSD as a basis of communication achievable with any phone. 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 banks 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 CIOs and CTOs of 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:       Preferred Language Date / Time format Amount format Default transactions Standard Beneficiary list Alerts

Features of Mobile Commerce

Mobile Commerce is characterized by some unique features that equip it with certain advantages against conventional forms of commercial transactions, including Electronic Commerce: i) Ubiquity: Ubiquity means that the user can avail of services and carry out transactions largely independent of his current geographic location (the anywhere features). ii) Immediacy: Closely related to the feature of ubiquity is the possibility of realtime availment of services (the anytime feature). This feature is particularly attractive for services that are time-critical and demand a fast reaction, e.g. stock market information. iii) Localization: Positioning technologies, such as the Global Positioning System (GPS), allow companies to offer goods and services to the user specific to his current location. LBS can thus cater to consumers needs and wishes for localised content and services. iv) Instant connectivity: Ever since the introduction of the General Packet Radio Service (GPRS) mobile devices are constantly online, i.e. in touch with the network (the always-on feature). This feature brings convenience to the user, as time-consuming dialup or boot processes are not necessary. v) Pro-active functionality: Mobile Commerce opens, by the virtue of its ability to be immediate, local and personal, new avenues for business. The user may choose the products, and services, which he wants to be kept informed about. The Short Message Service (SMS) can be used to send brief text messages to customers ensuring that the right (relevant) information is provided to the user at the right place, at the right time. vi) Simple authentication procedure: Mobile devices function with an electronic chip called Subscriber Identity Module (SIM). The SIM is registered with the network operator and the owner is thus unambiguously identifiable.

Employment of Mobile Technologies in the Banking Sector

A cornerstone of Mobile Commerce is built by Mobile Banking, the availment of bank-related financial services via mobile devices. It comprises of services in the field of accounting, brokerage and financial information. Mobile Banking is increasingly being employed by many banks around the world to generate additional revenues, reduce costs or to increase customer satisfaction, often with very promising results. For instance, the utilization of transaction-based MFS of Finland-based Nordea bank grew by 30% in 2004.The number of Frances Socit Gnrale customers using mobile services crossed the mark of one million in year 2004, registering an impressive growth of nearly 200% vis--vis 2003. These facts point toward a positive shift in the customer perception of Mobile Banking. On the other hand, technological developments like Universal Mobile Telecommunications System (UMTS) have provided a new platform for realistic mobile applications. Unlike in the past, when banks offering mobile services suffered a severe setback due to lack of customer interest and unripe technologies, the time seems to be now ripe for (re-)launching mobile services. Mobile Banking is usually defined as carrying out banking business with the help of mobile devices such as mobile phones or PDAs [8; 11]. The offered services may include transaction facilities as well as other related services that cater primarily to informational needs revolving around financial activities. Considering these factors we can define Mobile Banking as following: Mobile Banking refers to provision and availment of bank-related financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information. Mobile Banking, as defined above, includes a wide range of services. These services may be categorized as following: Mobile Accounting Mobile Accounting is sometimes characterized as transaction-based banking services that revolve around a bank account and are availed using mobile devices

.Not all Mobile Accounting services are however necessarily transaction-based. A more precise definition of Mobile Accounting would therefore characterize it as availment of account-specific banking services of non-informational nature. Mobile Accounting services may be divided in two categories to differentiate between services that are essential to operate an account and services that are essential to administer an account. Mobile Brokerage Brokerage, in the context of banking- and financial services, refers to intermediary services related to the bourse, e.g. selling and purchasing of stocks. Mobile Brokerage can be thus defined as transaction based, mobile financial services of non-informational nature that revolve around a securities account. Mobile Brokerage, too, may be divided in two categories to differentiate between services that are essential to operate a securities account and services that are essential to administer that account. Mobile Financial Information Mobile Financial Information refers to non-transaction based banking- and financial services of informational nature. Mobile Financial Information services include subsets from both banking and financial services and are meant to provide the customer with anytime, anywhere access to information .The information may either concern the bank and securities accounts of the customer or it may be regarding market developments with relevance for that individual customer. The information may be customized on the basis of preferences given by the customer and sent with a frequency decided by him. The information should be provided, ideally, on both, pull and push basis. Information services are an integral part of Mobile Accounting and Mobile Brokerage but they may also be offered as a stand-alone, independent module, i.e. Mobile Financial Information can be offered without offering Mobile Accounting or Mobile Brokerage but vice versa is not feasible.

TRENDS IN MOBILE BANKING

The advent of the Internet has revolutionized the way the financial services industry conducts business, empowering organizations with new business models and new ways to offer 24x7 accessibility to their customers. The ability to offer financial transactions online has also created new players in the financial services industry, such as online banks, online brokers and wealth managers who offer personalized services, although such players still account for a tiny percentage of the industry. Over the last few years, the mobile and wireless market has been one of the fastest growing markets in the world and it is still growing at a rapid pace. According to the GSM Association and Ovum, the number of mobile subscribers exceeded 2 billion in September 2005, and now exceeds 2.5 billion (of which more than 2 billion are GSM). According to a study by financial consultancy Celent, 35% of online banking households will be using mobile banking by 2010, up from less than 1% today. Upwards of 70% of bank center call volume is projected to come from mobile phones. Mobile banking will eventually allow users to make payments at the physical point of sale. "Mobile contactless payments will make up 10% of the contactless market by 2010.

Many believe that mobile users have just started to fully utilize the data capabilities in their mobile phones. In Asian countries like India, China, Bangladesh, Indonesia and Philippines, where mobile infrastructure is comparatively better than the fixed-line infrastructure, and in European countries, where mobile phone penetration is very high (at least 80% of consumers use a mobile phone), mobile banking is likely to appeal even more.

This opens up huge markets for financial institutions interested in offering value added services. With mobile technology, banks can offer a wide range of services to their customers such as doing funds transfer while travelling, receiving online updates of stock price or even performing stock trading while being stuck in traffic. According to the German mobile operator Mobilcom, mobile banking will be the "killer application" for the next generation of mobile technology. Mobile devices, especially smart phones, are the most promising way to reach the masses and to create stickiness among current customers, due to their ability to provide services anytime, anywhere, high rate of penetration and potential to grow. According to Gartner, shipment of smart phones is growing fast, and should top 20 million units (of over 800 million sold) in 2006 alone. In the last 4 years, banks across the globe have invested billions of dollars to build sophisticated internet banking capabilities. As the trend is shifting to mobile banking, there is a challenge for CIOs and CTOs of these banks to decide on how to leverage their investment in internet banking and offer mobile banking, in the shortest possible time. The proliferation of the 3G (third generation of wireless) and widespread implementation expected for 20032007 will generate the development of more sophisticated services such as multimedia and links to m-commerce services.

STATE BANK OF INDIA THE LEADING BANK FOR MOBILE BANKING

MOBILE BANKING IN THE WORLD

This part of the mobile commerce is very popular in countries where most of their population is unbanked. Countries like Sudan, Ghana and South Africa received this new commerce very well. In Latin America countries like Uruguay, Paraguay, Argentina, Brazil, Venezuela, Colombia, Guatemala and recently Mexico started with a huge success. In Colombia was released with Redeban.In Iran banks like Parsian, Tejarat, Mellat, Saderat, Sepah, edbi and bankmelli offer this service. Guatemala has the support of Banco industrial. Mexico released the mobile commerce with Omnilife,Bancomer and a private company(MPower Ventures). Kenya's Safaricom (Part of the Vodafone Group) has had the very popular M-Pesa Service - mainly used to transfer limited amounts of money, but has been increasingly used to pay utility bills. Zain in 2009 launched their own mobile money transfer business known as ZAP in Kenya and other African countries

DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS AND INTERPRETATION

Data is the very important aspect of a research report because the data is the only thing from which the analysis and findings could be made; this is the reason why the data is being collected for the purpose of the research study. The study can be made easier through the collection of data and while collecting it the data can be reformed and furnished like this so that meaningful information can be withdrawn from it. The question are framed as according to the respondents, the information gathered from the questionnaire is being used in the forms of pictorial representation and in tabular form thus the data representation is done in the form of pie chart, and graphs.

 Percentage number of account holders in Nashik city

Bank A/C holder Non Bank A/C holder

80% 20%

 Awareness level for Mobile banking in Nashik City is

Awareness Level Aware Unaware 40% 60%

 Awareness level for SBI Mobile Banking in Nashik city is SBI Mobile Banking Aware Unaware 60% 40%

 Current preference level for Banking system in Nashik city is Preference Counter Banking Internet Banking Mobile Banking Cant say 50% 25% 20% 05%

Helpfulness of Mobile Banking in Profession of the users in Nshik city is Professional helpfulness Helpful Unhelpful Cant say 60% 30% 10%

CONCLUSIONS

Conclusions

Mobile Banking, as has been demonstrated, has gained non-negligible relevance for banks today. Developments in the banking sector, e.g. increased competition on account of technological developments coupled with the process of globalization have produced new challenges for banks. Mobile Banking presents an opportunity for banks to retain their existing, technology-savvy customer base by offering value-added, innovative services. It might even help attracting new customers. Further, Mobile Banking presents a chance to generate additional revenues. Its main contribution, however, can be expected to take place in the strategic field as it is all set to become an instrument of differentiation. Many banks recognize this threat and are already taking preventive measures by introducing mobile services. The foremost significance of Mobile Banking would therefore be of a defensive nature. Instead of providing a positive differentiation, Mobile Banking would be employed to thwart negative differentiation vis--vis rivals. Mobile Banking seems to possess the potential to become one of the widely spread and accepted application in the field of Mobile Commerce, particularly in the backdrop of its high acceptance across commercially important sections of the society. We may expect to see Mobile Banking go into the footsteps of Online Banking, i.e. to become a standard service offered by every bank worth its name.

Webliography

1. wikipedia.org/wiki/State_Bank_of_India

2. www.sbici.com/briefhistory

3. www.iloveindia.com/finance/bank/...banks/state-bank-of-india

4. wikipedia.org/wiki/Mobile_banking

5. www.sbi.co.in/user.htm?action=viewsection&lang=0&id=

0,1...

6.

www.tutorial-reports.com/mobile/mobile-banking

7. www.sbici.com/briefhistory

Bibliography

1. Kotler. Philip Marketing Management, 2003 revised edition

2. Compilation of Service Marketing provided by DBA

3. Kothari, C.R. Research Methodology,2007

Questionnaire from the point of view of Customers using Mobile Banking Service:
Name:Profession:Age:In which bank you hold account with:-

 Does your bank provide Mobile Banking service? Yes No

 Do you use the Mobile banking facility provided by your bank? Yes No

 If you are aware of Mobile banking then frequently how do you perform your banking transaction? By personally visiting the bank Through Mobile

 Do you find that doing transaction through Mobile banking is more comfortable? Yes No

 How are you introduced to the concept Mobile Banking? By the bank you already had an account with Whether any other Bank approached you and Informed about it. Such a services offered by them. Whether you were Already aware of it.  How much safe you feel Mobile Banking is? Fully safe Unsafe Safer to some extent

 Are you aware of Different types of risk that are involved in while doing transaction through Mobile Banking? Yes No

 Do you regularly changes your password of login IDs? Yes No

 Do you think that Traditional Banking System must be replaced by Mobile Banking? Yes No

Questionnaire from the point of view of Banks

Name of the Bank:Branches:-

 Does your bank provide Mobile Banking? Yes No

 Before providing Mobile Banking facilities does your bank provide any training for your employees? Yes No

 Do you face any problem while implementing Mobile Banking? Yes No

If yes type of problem faced by you? Technical Problem Administrative Problem Any other

 Is there an increase in number of customers after introducing Mobile Banking? Yes No

 Do you face any resistance from your employees while implementing Mobile Banking system? Yes No

If yes extend of resistance Less Very Little  Do all the employees in your bank like the change of adapting to Mobile Banking system? Yes No More

 How many customer of your bank uses Mobile Banking? 10 30% 30 50% 50 70%  How do you convince your customer to use Mobile Banking facility? 70 90% 90 & above

 What kinds of facilities do you provide to your customer to ensure safety of their transaction?

EXECUTIVE SUMMARY The last time that technology had a major impact in helping banks service their customers was with the introduction of the Internet banking. Internet Banking helped to give the customer's anytime access to their banks. Customer's could check out their account details, get their bank mobile phone banking is the domain of a lucky few with constantly changing customer preferences and a greater emphasis placed on mobility, it could soon become a mainstream ability. Mobile-phone owners currently have access to mobile banking but choose not to utilise it. This is predicated to change by 2014, when 45 percent of users will actually use it. Advancing technologies will enable mobile banking to become a convenient and quick way for consumers to check their balance as well as pay for goods. "Mobile banking is quickly moving from infancy to commonplace, which will help separate the winners from losers in banks' ability to attract and keep technology-loving consumers." "Consumers are hungry for the 'always-on' and 'real time' ability to monitor and manage their money, and mobile banking serves that need better than any other." One of the factors driving the mobile banking surge is the increased usage of smart-phones, such as the iPhone, as well as the race between phone companies to develop the basic thin-client capabilities dubbed "wrapper applications" designed to integrate financial services into mobile online sites. It will also work in tandem with online banking, with mobile banking being used as a "remote control" and ''online'' as a detailed form of control panel for more complex transactions. By 2014, the percentage of people using mobile banking will equate to approximately 99 million US adults conducting mobile banking transactions at least once per year. 52 percent of these customers are reckoned to be using smartphones. "Mobile banking is quickly becoming an essential consumer capability," said Mark Schwanhausser, Financial Services Channels Analyst speaking to Cellular News.

"Just as the iPod changed the music industry and their business models, our data shows that iPhone users are changing the banking industry by leading the way in monitoring and managing finances through mobile devices." Mobile banking is a credible channel, but usage in developed markets will remain low IT spending on mobile banking is continuing, but it is not the highest priority channel Mobile bakings greatest opportunity involves serving the needs of the unbanked Retail banks and technology vendors must be prepared to play the long game. MARKET OPPORTUNITY Mobile banking has struggled in Europe and North America: will this change in 2011/12? The difficult economic climate is refocusing the attention of consumers to their personal finances Mobile banking devices and interfaces have thankfully improved, thereby enhancing the user experience After multiple false starts, the mobile banking ecosystem is entering its next phase of development in 2011 Catering to the unbanked will have a positive influence on the growth of mobile banking. Assessing the mobile banking market opportunity in developing regions Investment programs have been launched to stimulate mobile banking services in developing countries. Charting the emergence of mobile banking services in developing countries Other operators are seeking to mirror the success of MPESA Serving the unbanked in developed regions is also a natural fit for mobile banking services Mobile banking services will replace traditional remittance flow methods Summarizing the market opportunity for mobile banking IMPACTS ON BANKS In 2011, mobile banking features in the channel strategy plans of most retail banks Mobile banking channel is not a high priority channel for IT investment in 2011. Retail banks must be willing to play the long game in order to achieve decent revenues Banks will need to prepare themselves for inevitable operational and technological impacts Banks must ensure they make adequate security provisions for mobile banking services Banks will have to share revenues from mobile services with others in the ecosystem statements, perform transactions like transferring money to other accounts and pay their bills sitting in the comfort of their homes and offices.