WHAT IS NET BANKING

NET BANKING

Are you still banking with your local bricks and mortar bank? Thinking about going to a 100% online banking institution? Its a decision many people are making as an increasing number of people become internet savvy, but how do you know if its the right decision for you? An increasing amount of financial products are being offered online, in order to give consumers the flexibility of handling their banking needs twenty four hours a day, seven days a week. Online banking wasnt meant to change peoples money habits, but instead, is there to give you the option of bypassing the constraints of local bank hours, helping you save on fees, and skipping much of the paper based record keeping of traditional banking. Online banks are often able to provide higher interest to savings account holders and lower fees to their account holders. This is due to an online bank having lower operating overhead through operating online rather than in an establishment.

Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society. Most of the attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also be used to steal login information. A method to attack signature based online banking methods is to manipulate the used software in a way, that correct transactions are shown on the screen and faked transactions are signed in the background. A recent FDIC Technology Incident Report, compiled from suspicious activity reports banks file quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of 2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states. The most recent kind of attack is the so-called Man in the Browser attack, where a Trojan horses permits a remote attacker to modify the destination account number and also the amount.

OVERVIEW
Online banking is convenient, allowing you to pay your bills from the comfort of your own home while skipping the expense of postage. But is online banking safe, and are there disadvantages to working with your finances online? Before you jump into the Internet banking craze, find out a little more about the benefits and risks of banking on the World Wide Web.

AN INTRODUCTION
With cybercafs and kiosks springing up in different cities access to the Net is going to be easy. Internet banking (also referred as e banking) is the latest in this series of technological wonders in the recent past involving use of Internet for delivery of banking products & services. Even the Morgan Stanley Dean Witter Internet research emphasised that Web is more important for retail financial services than for many other industries.

Internet banking is changing the banking industry and is having the major effects on banking relationships. Banking is now no longer confined to the branches were one has to approach the branch in person, to withdraw cash or deposit a cheque or request a statement of accounts. In true Internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. Providing Internet banking is increasingly becoming a "need to have" than a "nice to have" service. The net banking, thus, now is more of a norm rather than an exception in many

developed countries due to the fact that it is the cheapest way of providing banking.

Internet Banking facility, lets you to manage your finances in the comfort of your home or your office as per your convenience. It is a SelfService Channel, which is available 24 hours a day and 365 days a year in an absolutely simple, friendly but secured environment.

A mere touch of a button or click of a mouse makes you accessible to a host of Banking Services, called Fingertip Banking. You can carryout your banking transactions safely and with total confidentiality by enjoying online banking without wasting your time or losing your peace of mind.

Unlike PC banking, Internet banking does not require proprietary software or access to a private network. Any customer who has arranged their own Internet access facilities can participate. One effect of the trend towards Internet banking is to level the playing field so that even smaller financial institutions can offer the type of sophisticated services customers would normally expect only from a large bank. According to the new report, more than 22 million customers logged in to accounts at the top 10 US banks during the first quarter, a 29 percent jump from the same period last year. In the first quarter, about 4.6 million people used online bill payment services offered by country's top 10 banks. The use of these services rose 37 percent compared with the same period last year. Growth of broadband access and marketing strategies of the abn have led to the increase in the online banking transactions in US. ComScore Networks has done a research study and has reported that online banking and bill payment are among the Internet's fastest-growing applications. An American study conducted last year by Booz-Allen projects that by the year 2000, 16 million US households will be using Internet banking. While these numbers do not appear to be significant as compared to the total population, each Internet user is projected to be 50-250% more profitable than the average banking customer. It is expected that these Internet customers will be some of the banking systems most profitable customers representing close to 30% of all retail banking profits. The study projects that by 1999, 1,500 banks will have Internet Web sites

and at least 500 of these banks will be offering full-fledged Internet banking services. The impact of a growing selection of Internet banking alternatives will likely be to turn such service into a commodity. All banks on the Internet will have the same geography, hours of operation and, presumably, equivalent service levels. Some will attempt to compete on price. Others will attempt to compete by developing and offering new and different products. Banking sector is the backbone of economy and every single business entity. The whole economic system and the business have built their structures on the foundations of banking. Even for some reasons banking system collapses the whole economy would go down with it. As in the current market situation, the banking sector is in a slump and has suffered great losses and gone into mergers and acquisitions. Therefore economy, all over the globe, is suffering greatly; people are experiencing pay cuts and unemployment. A bank is basically a financial institution which is licensed by a government. A bank is involved in many activities ranging from borrowing and lending money to playing a major role in financial markets and offers various financial services such as investment funds. The origin of banking dates back to centuries. From the earlier days, banking has existed in one from or another. Banks functions by conducting checking or current accounts for customers, collecting checks deposited to customers' current accounts and paying checks drawn by customers on the bank. Banks undertakes the function of borrowing of money by accepting term deposits, funds deposited on current accounts, issuing debt securities such as banknotes and bonds. Banks undertake the function of lending of money by making installment loans, making advances to customers on current accounts and investing in marketable debt securities. Coming

to the economic role that a bank plays, it issues money in the form of banknotes and current accounts. Banks act as both collection and paying agents for customers therefore it helps in settlement of payments. Because banks lend money they help in credit quality improvement. So think for a second, what would happen to the economic setup if the banks just stop working. Banks also play many commercial roles. They issue banknotes which are promissory notes issued by a banker and are payable to bearer on demand. They process payments through internet banking and telegraphic transfer. Banks also issues drafts and checks They accept money on term deposit and lend money through overdraft and installment loan. Banks guarantees, performance bonds and securities underwriting commitments and they also provide documentary and standby letters of credit for trade financing. They also act as safe keeper of documents and other items in safe deposit boxes They carry out currency exchange. They are called 'financial supermarket' because they are a place for the sale, distribution or brokerage of unit trusts, insurance and similar financial products. There are many channels through which a bank operates such as video and telephone banking, branches, ATM, mail, online banking and now with mobile banking as well. Banks are of different types depending on the type of function they are carrying out. The bank dealing with the deposits and loans is called a commercial bank. The ones dealing with services to mid-market business is known as business banking. The banks that are directed to providing services to individuals are called private banks. The banks that are located in other areas with low regulations and taxes are

known to be carrying out offshore banking. When it is based on the Islamic principles it is called Islamic banking. With the advancement in technology, like other things, banks have also gone online. Online banks have become a great blessing for everyone dealing with a bank. An internet bank is one which offers its customers all the services online. They do not have to get out of the chair to make a financial transaction. They can do it just with a click of the computer mouse. Internet banks are very convenient, fast, effective and efficient. In short, a complete package just a click away. A customer does pay some bank charges for this facility. For the online banking customer, the convenience factor rates high. No longer does a person have to wait for the bank statement to arrive in the mail to check account balances. One can check the balance every day just by logging onto one's account. In addition to checking balances and transactions, one can catch discrepancies in the account right away and deal with them swiftly. The best part is that this can be done anywhere! As long as one has Internet access, one can practice online banking. Since bills are paid online, the necessity of writing checks, affixing postage and posting the payment in the mail is eliminated. Once the amount is entered and the payee is checked off, the funds are automatically deducted from the payer's choice of account. Since the cost to the bank is minimal, the cost to the consumer, in many cases, is also minimal. While there is usually a fee for online banking, it can be extremely low. Those who partake in online banking all agree it's worth every penny. Not having to spend all Saturday morning standing in a crowded bank line is

justification for most. It can even pay for itself since costs like postage and ATM fees are reduced. Online banking also eliminates paper waste, which is a plus not only for those who have to handle all the paper work, but also for the environment. Of course, there are also cons. Security is always an issue with Internet transactions. Although information is encrypted, and the chances of your account being hacked are slim, it happens. Banks pay big bucks to install high tech firewalls. Chances are your money is in good hands. You're also missing the personal service. No smiling teller or representative hands you a receipt. Instead, except for what's printed into your account, all the paperwork is up to you. Always print copies of important transactions. If you have to deposit cash or checks, you'll still have to spend time at the ATM. unless a payment to you is directly deposited, this is one thing you'll always have to handle manually

Definition:A system allowing individuals to perform banking activities at home, via the internet. Some online banks are traditional banks which also offer online banking, while others are online only and have no physical presence. Online banking through traditional banks enable customers to perform all routine transactions, such as account transfers, balance inquiries, bill payments, and stop-payment requests, and some even offer online loan and credit card applications. Account information can be accessed anytime, day or night, and can be done from anywhere. A few

online banks update information in real-time, while others do it daily. Once information has been entered, it doesn't need to be re-entered for similar subsequent checks, and future payments can be scheduled to occur automatically. Many banks allow for file transfer between their program and popular accounting software packages, to simplify record keeping. Despite the advantages, there are a few drawbacks. It does take some time to set up and get used to an online account. Also, some banks only offer online banking in a limited area. In addition, when an account holder pays online, he/she may have to put in a check request as much as two weeks before the payment is due, but the bank may withdraw the money from the account the day that request is received, meaning the person has lost up to two weeks of interest on that payment. Online-only banks have a few additional drawbacks: an account holder has to mail in deposits (other than direct deposits), and some services that traditional banks offer are difficult or impossible for onlineonly banks to offer, such as traveler's checks and cashier's checks.

Features
Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific. The common features fall broadly into several categories

Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.)
o

Electronic bill presentment and payment - EBPP

Funds transfer between a customer's own checking and savings accounts, or to another customer's account

o o

Investment purchase or sale Loan applications and transactions, such as repayments

Non-transactional (e.g., online statements, check links, co browsing, chat)

o

Bank statements

Financial Institution Administration Support of multiple users having varying levels of authority Transaction approval process Wire transfer

Features commonly unique to Internet banking include

Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.

BRIEF PROFILE OF HDFC:-

FULL NAME: Housing Development Finance Corporation LOGO:

BRANCHES: 2000 Branches

HEADQUARTERS: ADD: Ramon house, 169, Backbay reclamation, H.T.Parekh marg, Churchgate, Mumbai - 400020.

1.1 INTRODUCTION

HDFC Bank Limited (BSE: 500180, NSE: HDFCBANK, NYSE: HDB) is a major Indian financial services company based in India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,725 branches and over 5,000 ATMs, in 780 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion. For the fiscal year 2010-11, the bank has reported net profit of 3,926.30 crore (US$875.56 million), up 33.1% from the previous fiscal. Total annual earnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$5.41 billion) in 2010-11.

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

HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team determined to accomplish the vision of becoming a world-class Indian bank. HDFC bank business philosophy is based on four core values - Customer Focus, Operational Excellence, Product Leadership and People. We believe that the ultimate identity and success of our bank will reside in the exceptional quality of

our people and their extraordinary efforts. For this reason, we are committed to hiring, developing, motivating and retaining the best people in the industry. It is one of the Big Four banks of India, along with State Bank of India, ICICI Bank and Punjab National Bankits main competitors.

HDFC Bank Limited Type Public BSE: 500180 Traded as NSE: HDFCBANK NYSE: HDB Industry Founded Headquarters Area served Key people Banking Financial services August 1994 Mumbai, India Worldwide Aditya Puri (MD) Deepak parekh(Chairman) Finance and insurance Banking Banking Banking Banking Management

Investment Products Commercial Retail Private Asset

Mortgages Credit Cards 24,628.38 Revenue crore

(US$5.49 billion) (2011)

Operating income

7,885.28

crore

(US$1.76 billion) (2011) 4,017.69 crore million)

Profit

(US$895.94 (2011)

Total assets Total equity Employees Website

$53.670 billion (2010) $6.787 billion (2010) 51,888 (2010) HDFCBank.com

HISTORY
HDFC Bank was incorporated in 1994 by Housing Development Finance

Corporation Limited (HDFC), India's largest housing finance company. The Bank started operations as a scheduled commercial bank in January 1995 under the RBI's liberalisation policies.

Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,000 crore and net advances of about Rs.89,000 crore. The balance sheet size of the combined entity is more than Rs. 1,63,000 crore. 1994 The Bank was Incorporated on 30th August. HDFC Bank was the first private sector bank to be authorised by the Central Board of Direct Taxes (CBDT) as well as the Reserve Bank of India for collection of direct tax. We, at present, provide this facility through 322 branches.

BUSINESS FOCUS
HDFC Bank deals with three key business segments. - Wholesale Banking Services, Retail Banking Services, Treasury. It has entered the banking consortia of over 50 corporates for providing working capital finance, trade services, corporate finance, and merchant banking. It is also providing sophisticated product structures in areas of foreign exchange and derivatives, money markets and debt trading and equity research. Wholesale banking services Blue-chip manufacturing companies in the Indian corp. to small & mid-sized corporates and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital

finance, trade services, transactional services, cash management, etc. The bank is also a leading provider for its to corporate customers, mutual funds, stock exchange members and banks. Retail banking services HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Mastercard Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2009, the bank had a total card base (debit and credit cards) of over 13 million. The Bank is also one of the leading players in the merchant acquiring business with over 70,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is positioned in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc. Treasury Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. These services are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.

CUSTOMERS IN BANKS
When we talk about customer service, we tend to think it as a very simple issue of customer satisfaction. However its very complex issue because customers in banks comes from all walks of life: From poorest to richest Youngest to oldest Illiterate to highly educated Sweeper to Chief Executive Individual to Corporate People from all regions, religion, caste, age, service, profession etc People from different background, culture, temperament and ego level.

All customers from different backgrounds have different expectations. Unless the service standards fit to each persons expectations, he will not be satisfied. Therefore one has to understand each type of customer thoroughly to be able to provide customer specific services.

CHAPTER -1 INTRODUCTION

BRIEF PROFILE:

FULL NAME: Housing Development Finance Corporation LOGO:

BRANCHES: 2000 Branches

HEADQUARTERS: ADD: Ramon house, 169, Backbay reclamation, H.T.Parekh marg, Churchgate, Mumbai - 400020.

1.1 INTRODUCTION

HDFC Bank Limited (BSE: 500180, NSE: HDFCBANK, NYSE: HDB) is a major Indian financial services company based in India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,725 branches and over 5,000 ATMs, in 780 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion. For the fiscal year 2010-11, the bank has reported net profit of 3,926.30 crore (US$875.56 million), up 33.1% from the previous fiscal. Total annual earnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$5.41 billion) in 2010-11.

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

HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team determined to accomplish the vision of becoming a world-class Indian bank. HDFC bank business philosophy is based on four core values - Customer Focus, Operational Excellence, Product Leadership and People. We believe that the ultimate identity and success of our bank will reside in the exceptional quality of

our people and their extraordinary efforts. For this reason, we are committed to hiring, developing, motivating and retaining the best people in the industry. It is one of the Big Four banks of India, along with State Bank of India, ICICI Bank and Punjab National Bankits main competitors.

HDFC Bank Limited Type Public BSE: 500180 Traded as NSE: HDFCBANK NYSE: HDB Industry Founded Headquarters Area served Key people Banking Financial services August 1994 Mumbai, India Worldwide Aditya Puri (MD) Deepak parekh(Chairman) Finance and insurance Banking Banking Banking Banking Management

Investment Products Commercial Retail Private Asset

Mortgages Credit Cards 24,628.38 Revenue crore

(US$5.49 billion) (2011)

Operating income

7,885.28

crore

(US$1.76 billion) (2011) 4,017.69 crore million)

Profit

(US$895.94 (2011)

Total assets Total equity Employees Website

$53.670 billion (2010) $6.787 billion (2010) 51,888 (2010) HDFCBank.com

HISTORY
HDFC Bank was incorporated in 1994 by Housing Development Finance

Corporation Limited (HDFC), India's largest housing finance company. The Bank started operations as a scheduled commercial bank in January 1995 under the RBI's liberalisation policies.

Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,000 crore and net advances of about Rs.89,000 crore. The balance sheet size of the combined entity is more than Rs. 1,63,000 crore. 1994 The Bank was Incorporated on 30th August. HDFC Bank was the first private sector bank to be authorised by the Central Board of Direct Taxes (CBDT) as well as the Reserve Bank of India for collection of direct tax. We, at present, provide this facility through 322 branches.

BUSINESS FOCUS
HDFC Bank deals with three key business segments. - Wholesale Banking Services, Retail Banking Services, Treasury. It has entered the banking consortia of over 50 corporates for providing working capital finance, trade services, corporate finance, and merchant banking. It is also providing sophisticated product structures in areas of foreign exchange and derivatives, money markets and debt trading and equity research. Wholesale banking services Blue-chip manufacturing companies in the Indian corp. to small & mid-sized corporates and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital

finance, trade services, transactional services, cash management, etc. The bank is also a leading provider for its to corporate customers, mutual funds, stock exchange members and banks. Retail banking services HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Mastercard Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2009, the bank had a total card base (debit and credit cards) of over 13 million. The Bank is also one of the leading players in the merchant acquiring business with over 70,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is positioned in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc. Treasury Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. These services are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.

CUSTOMERS IN BANKS
When we talk about customer service, we tend to think it as a very simple issue of customer satisfaction. However its very complex issue because customers in banks comes from all walks of life: From poorest to richest Youngest to oldest Illiterate to highly educated Sweeper to Chief Executive Individual to Corporate People from all regions, religion, caste, age, service, profession etc People from different background, culture, temperament and ego level.

All customers from different backgrounds have different expectations. Unless the service standards fit to each persons expectations, he will not be satisfied. Therefore one has to understand each type of customer thoroughly to be able to provide customer specific services.

1.2 REVIEW OF LITERATURE:

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 does 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 Indian banking has finally worked up to the competitive dynamics of the new Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization. Banks that employ IT solutions are perceived to be futuristic and proactive players capable of meeting the multifarious requirements of the large customer base. Private banks have been fast on the uptake and are reorienting their strategies using the internet as a medium the internet has emerged as the new and challenges frontier of marketing with the conventional medium. It introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalization The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire

system became more convenient and swift. Time is given more importance than money.

The banking sector credit scheme envisages the development of the and the people belonging to the section such as small and marginal farmers, landless labourers, and artisans who suffer from financial problems. The present research study is based on the role of rural banking sector as well as the problem of the banking sector in rural areas. S.M. Patel in his study A case study of repayment of crop loan and causes of their non-payment in Maharashtra State, investigated into the position of repayment of crop loan in the Panvel Taluka of kolaba District in Maharashtra State. The study considered that whether education and age of the head of the family as a member of the co-operative society is related to the repaying capacity for crop loan and found no relationship existing between these and repayment crop loan. The size of land holding of the member of the society was found to be having significant relationship with repaying capacity. H.P. Singh in his study on overdues in co-operatives, studied the volume of overdues in co-operative credit Societies and Identified the major factors responsible for high overdues in such societies. The study covers 34 villages of Community Development Block of Bhivpuri in Agra District of Uttar Pradesh State.

According to K.N. Subramanyam, proper monitoring the use of rural credit is vital. The diversified activities of our banks have not yet emerged as viable economic propositions for the weaker section in the rural areas. The marginal

farmers, rural artisans and other weaker sections like Scheduled cast scheduled Tribes are yet to reap the full benefit of the availability of rural credit.

As per seventh five year plan (1985-1990) it is highlighted that the major problem faced by the lending institution particularly the co-operative, is the most unsatisfactory level of overdues the ratio of overdue to demand is around 40 to 42 percent in the case of co-operative and 47% in the case of regional rural banks. Accordingly the health of agricultural credit institutions, both Co-operative and RRBs are in a very sad state in several parts of the country. The planning commission regrefully admits willful default and overdue are mounting in a number of states including some co-operatively progressive states like Maharashtra and Gujarat by writing off agricultural loans and providing subsidies out of the states exchequer, if this trend is not reversed and if banks are reduced to institutions providing grants rather than recycling scares resources to get the maximum benefits for the country as a whole the banking system will be unable to provide more credit to meet the growing needs of the farmers. C.Dodhich in his study on Overdues in farm co-operatives credit: A study of Rajasthan attempted to identify the socio-economic factors influencing repayment of co-operative dues in Rajasthan and came to the conclusion that willful defaulters falls in the category of high caste groups, better educated persons, with large holding and borrowing heavily. They are also members of the managing committee.

1.3 OBJECTIVE
To understand the importance of customer services in banks To have a brief study on the banking structure of India To study about the various services in banks To study the methods adopted by the banks to provide better services to the customer. To examine the efficiency of credit provided by the banks. To study the position of overdue of banking sector in Indian economy. To analyze the different scenarios and reach of Banking System in Indian Economy. These objectives would prove themselves to carry on this study with a scientific line outlook it is necessary to formulate a few hypothesis based on the information available on the efficiently of the banking sector in bringing about rural development in a country.

CHAPTER-2 - RESEARCH AND METHODOLOGY

2.1 METHODOLOGY

Credit provided by banks in rural areas play a major prerequisites for the healthy economic growth of a country. The economic significance of any development programmes cannot be assessed with out proper reference to its rural credit. In this study efforts are made to examine in detail the role of banking sector in rural development of the country the objective with which this study is taken up and the methods by which the secondary data is required to be collected are discussed in this chapter

2.2 SCOPE

Though this study is purely explorative in nature, it cannot be denied that it could be of numerous uses to researchers and enthusiasts. The most important among them are. It would pare the way for the growth of similar studies in the area of banking

sector. It would create awareness among bankers about the needs and importance of

rural credit. Finally it can be used as a basic for numerous scientific an innovative studies

on rural development in the days a heads.

2.3 STATEMENT

Till date no specific research study has been made on the banking sectors in relation to the current scenario and services provided by government banks. Therefore a study of banking sector with respect to rural areas in India becomes worthwhile to promote the socio-economic conditions of people in India and strengthen the banking system in rural areas. Hence the present research study concentrate on the factors resulting in such problems in detail and would also try to solved these grave problem concerning the rural people through various types of credit schemes.

2.4 HYPOTHESIS

H0 = Banking System Of India in the last century. H1 = Banking System of India on present day. A study on universal banking in India with respect to Mumbai region is under taken to see whether the reach of our banking systems And its current coverage and future age is commercially viable or not after considering all the necessary factors.

2.5 METHODS OF STUDY

Though this study is purely fact finding in nature, a lot of secondary data are required for its successful completion hence it is necessary to explain in details the methods by which these data are sought to be collected (excluding diagram and graph).