CHAPTER- 4 GROWTH AND EXTENT OF ELECTRONIC BANKING SERVICES IN INDIA 4.1 E-banking Services through Websites of the Banks 4.2 Sample Description 4.3 Sample Period 4.4 Key Electronic Banking services 4.5 Analysis of Electronic Banking Services 4.6 Conceptual Framework of ATM's 4.7 Kinds of ATMs 4.8 Reasons for Adoption of ATMs for the Customers and the Banks 4.9 Growth of Onsite and Offsite ATMs in Indian Banking Sector 4.9.1 Onsite and Offsite ATMs of Nationalized banks 4.9.2 Onsite and Offsite ATMs of SBI Group 4.9.3 Onsite and Offsite ATMs of Old Private Sector Banks 4.9.4 Onsite and Offsite ATMs of New Private Sector Banks 4.9.5 Onsite and Offsite ATMs of Foreign Banks 4.10 Percentage of ATMs to Branches 4.10.1 Nationalized Banks 4.10.2 State Bank Group 4.10.3 Old Private Sector Banks 4.10.4 New Private Sector Banks 4.10.5 Foreign Banks 81
CHAPTER-IV GROWTH AND EXTENT OF ELECTRONIC BANKING SERVICES IN INDIA A number of services are being offered through electronic banking. It is quite difficult to measure the extent of such services, but an effort has been made by classifying these services into two categories. Firstly, to judge the impact of e-banking through different websites, services being offered by the banks have been categorized into informational and transactional services. Secondly, the extent of these services has been measured through ATM services offered by the banks. The study takes into consideration all the public, private, SBI and nationalized banks to know the extent of e- banking services. Hence, the chapter is divided into two parts: Part-I analyzes the extent of e-banking through website analysis; and Part-II throws light upon the growth of ATM industry in India. The data for the purpose of this study relates to the period 2003-04 to 2007-08. Part-I 4.1 E-banking Services through Websites of the Banks The website technology has totally transformed the banking business. The success of Internet banking depends upon the well designed website of a bank. It needs to be informative and functional. So, the basic aim of a website is to make the electronic banking services more functional, desirable, accessible and consumer friendly. Internet banking can be provided by the banks in two ways. Firstly, an existing bank with its physical offices can establish a website and offer the internet banking services as an additional delivery channel. Secondly, the facility of e-banking can be provided solely through the internet without having any physical office. The following diagram highlights that accessibility, speed, navigability and content are the important factors which make a website effective in its use. 82
Figure 4.1 Website Quality Assessment Model Source: Mirando and Cortes (2006) It is evident from the above diagram, if the website is easily accessible by its users, it can increase its quality. The speed of a website enables its users to make their transactions within a reasonable time. The linking of the website with another page is called navigability. Each page of the website should be self-sufficient and provide link to the main contents. Poor web design will result into loss of users. Further, content means that website must have that required potential which satisfies the need of the customers. The website of a bank carries various features like product information, services provided, information on location, contacts of the bank, history of the bank, security issues, information regarding operation of different services, and details of various transactions. On the basis of these features, a website can be classified into two categories: a) Informational websites b) Transactional websites (a) Informational Websites: Informational websites provide the general information about the bank and its products. On such websites, customers can access all kinds of information but they cannot transact. (b) Transactional Websites: These websites enable the customers to conduct any transaction through the website of the bank. The website provides a wide range of services to the customers. These services are classified into wholesale banking, retail e-banking services, personal banking, etc. Some retail and wholesale e-banking services are commonly offered by all 83
the financial institutions on their websites. The banks offer retail services like account management, bill payment, new account opening, investment/ brokerage services, loan application and approval, account aggregation, etc. Wholesale services include cash management, small business loan applications, business to business payments, employee benefit/ pension administration, etc. However, the services provided through transactional websites are more risky than informational websites. The reason being that transfer of money is involved in it. So, the following measures are effective to curtail such a risk: Security control for safeguarding customer information. Liability for unauthorized transactions. Losses from fraud, if the institution fails to verify the identity. Security from violation of rules and regulations. The present study is based upon two considerations; firstly, only those banks which are providing services through transactional websites have been selected for the study; and secondly, the extent to which these services are being provided by the banks. The purpose of this chapter is to fill significant gaps related to electronic banking in India. For the fulfillment of gap, a survey was conducted on the websites of banks to determine the number of electronic banking services provided by the banks. To study the extent of e-banking services, an attempt has been made to conduct ranking of electronic banks, so that an approach can be developed to assess which of the banks are providing qualitative services to the customers. 4.2 Sample Description This section describes the sample of the study. The sample consists of 45 banks operating in India after 31 March, 2006. The banks were selected on the following basis: 1. Both Public (Nationalized and SBI group) and Private (new and old) sector banks have been taken into account. 2. Only the banks operating as on 31 st March, 2006 have been considered. The banks which merged in other banks are, therefore, not included. 3. Further, only the banks with transactional websites have been analysed. Banks having informational websites are not taken into consideration. 4. Electronic banking services mainly include retail services offered to customers. 5. The websites of certain banks could not be found, and hence, are treated as nonelectronic banks. 84
4.3 Sample Period To study the extent of electronic banking services the banks from both the public and private sectors have been selected on the basis of their transactional websites. The websites of banks were explored during the month of June, 2008 to analyze the extent of e-banking services and products offered by various banks. The websites of all these banks were analyzed during this period. In India, as there is no special type of reporting requirement for electronic banks and no compiled data is available for this purpose, so an attempt has been made to conduct the analysis of bank websites within a stipulated period of time. In addition, personal contact was also made with bank employees to know about the services provided by various banks. Table 4.1 provides the details about the number of public and private sector banks taken up for the study. The table reveals that out of the 50, 28 banks are from the public sector and the remaining 22 banks represent the private sector. The table further explains that only 45 banks are providing electronic banking services which include 27 public sector banks and 18 private sector banks. It is pertinent to note that only those banks have been considered for the studies which are providing transactional website services to their customers. The banks providing only informational websites have not been taken into account. Table 4.1 Number of Electronic banks Number of Bank Number of Banks Electronic Banks Private Sector Banks 22 18 New Old Public Sector Banks 7 15 28 7 11 27 SBI Nationalised Other Public Sector 8 19 1 8 18 1 All 50 45 85
4.4 Key Electronic Banking Services For the purpose of extent of e-banking services, 48 services have been considered. These have been divided into four major categories, i.e., internet banking, phone banking, mobile banking, and ATM. Table 4.2 give a brief description of these services. Table 4.2 Key Electronic Banking Services Service Electronic Banking Definition Code Services 1 Balance enquiry and Check out transaction in bank account with a statement real time balance. 2 Transaction history Check out past transaction from the date of account opening. 3 Online transfer of funds Transfer of funds to any bank account of that particular bank or any other bank. 4 Card to card fund transfer Transfer of funds having visa, debit card holders or credit card holders. 5 Pre paid mobile recharge Recharge pre-paid mobile online anywhere, anytime in a few minutes. 6 Buy and sell Mutual Fund Online buying and selling of mutual fund. 7 Send money order anytime Get it door delivered to any destination in India. 8 Open Fixed deposit and Recurring deposit Apply online to fixed deposit and recurring deposit. 9 Request of Cheque book The cheque is delivered on the address upon request. 10 Stop Payment request Issue instructions to stop payment of a particular cheque. 11 Request of Debit cards Apply online ATM/Debit card. 12 Monthly Bank account statement by E-mail Free statement of bank account on e-mail address. 13 Reissue and upgrade of ATM/Debit Card Get ATM / debit card reissued or upgrade current ATM/ Debit Card. 86
14 Link bank account to Link multiple bank accounts to a single ATM/Debit Card ATM/ Debit Card. 15 Renewal/ premature Renew current FD account or request its closure of FD/ RD premature closure. 16 Deactivate/ Activate ATM/ Activate/deactivate ATM/ Debit Card. Debit Card 17 Change Password Change of log-in password and transaction password. 18 Demat holdings Provide to demat account details and transactions. 19 Loan Details View details related to loan account like type of loan, date of sanction, date of maturity, rate of interest. 20 Interest rate updates Know rate of interest on deposit and loan scheme. 21 Bills Payment Paying of bills of utility (electricity and telephone), bank credit, mobile bills, insurance premium. 22 Online shopping Pay e-shopping bills through internet banking. 23 Ticket Booking Booking of railway or air-ticket online. 24 Mobile Top-up Recharge pre paid mobile anytime, anywhere by log in to internet banking. 25 Share Trading Trade in security market online, through the unique three-in-one account that integrate banking, broking and demat account. 26 Online tax payments Online payment of service tax, income tax, central excise duty. 27 Convert to EMI Converting any transaction above Rs.2000 on a credit card into easy EMI. EMI repayments are easiest and provide tenure ranging between 3 to 24 months. 28 Online loans Get loans as fast as you click. 87
29 Customer Correspondence E-mail correspondence between customer and bank for transaction queries. 30 Demonstration of I- Provide demonstration of internet banking banking services on banks website 31 Corporate Internet Banking Internet banking services to corporate customers Phone Banking Services 32 Enquire your Account Get the details of savings, current and fixed balance deposit account balance. 33 Statement of Account Get cheque book or latest account statement delivered at your door step. 34 Request for Fund Transfer Transfer money from one account to another. Both accounts must be linked to customer ID. 35 Stop cheque payment Stop payment of a single cheque or series of instructions cheques, 24 hours a day. 36 Mobile Banking Get registration for mobile banking through Registration phone banking. 37 Latest Interest and Get latest interest rates on deposits and Exchange Rates foreign exchange rates by talking to phone banker. Mobile Banking Services 38 Account Balance Get information of updated balance without using internet or phone banking. 39 Making Payment Make payment of all bills via mobile banking. 40 Details of credit card Knowing the credit card balance without balance making a phone call or logging on the internet. 41 Loan Information Mobile banking for loans avails for loan documents via mobile phone. 42 I-Mobile All internet banking transactions can be done on mobile phone. 88
43 Purchase and Redemption of Mutual Fund units Buying, selling and redemption of mutual fund units. 44 Last three transactions One can check the balance of last three transactions. ATMs 45 24 hours access to Cash Any time withdrawal of cash. 46 Transfer fund between Transfer of funds from one account to accounts another account in the same branch. 47 View account balances and mini statement Can view minimum last three transactions and current balance. 48 Pin change option Change the personal identification number of ATM/ debit card. 4.5 Analysis of Electronic Banking Services: Each bank offers a variety of e-banking services varying from balance inquiry to pin change option. The following table exhibits the electronic banking services offered by all the banks under study in percentages. 89
Table 4.3 Transactional Services Offered by Electronic Banks (Per cent of banks offering electronic services) Service Electronic Banking Services Public Sector Banks Private Sector Banks Code All Banks All Nationalized SBI Group All New Old 1 Balance enquiry and statement 100.0 100.0 100.0 100.0 100.0 100.0 100.0 2 Transaction history 100.0 100.0 100.0 100.0 100.0 100.0 100.0 3 Online transfer of funds 97.7 100.0 100.0 100.0 94.4 100.0 90.9 4 Card to card fund transfer 11.1 11.1 15.7 0.0 11.1 28.5 0.0 5 Pre paid mobile recharge 20.0 25.9 36.8 0.0 11.1 28.5 0.0 6 Buy and sell Mutual Fund 13.3 11.1 15.7 0.0 16.6 42.8 0.0 7 Send money order anytime 8.8 0.0 0.0 0.0 11.1 28.5 0.0 8 Open Fixed deposit and Recurring deposit 33.3 29.6 42.1 0.0 38.8 85.7 9.0 9 Request of cheque book 88.8 100.0 100.0 100.0 72.2 100.0 54.5 10 Stop Payment request 46.6 40.7 57.8 0.0 55.5 85.7 36.3 11 Request of Debit cards 15.5 14.8 21.0 0.0 16.6 42.8 0.0 12 Monthly Bank account statement by E-mail 75.5 100.0 100.0 100.0 38.8 71.4 18.8 13 Reissue and upgrade of ATM/debit card 8.8 0.0 0.0 0.0 22.2 57.1 0.0 (Contd.) 90
Table 4.3 ( Contd.) 14 Link bank account to ATM/Debit Card 8.8 0.0 0.0 0.0 22.2 57.1 0.0 15 Renewal/ premature closure of FD/ RD 15.5 14.8 21 0.0 16.6 42.8 0.0 16 Deactivate/ Activate ATM/ Debit Card 11.1 0.0 0.0 0.0 27.7 71.4 0.0 17 Change Password 95.5 100.0 100.0 100.0 88.8 100.0 81.8 18 Demat holdings 26.6 22.2 31.5 0.0 33.3 42.8 27.2 19 Loan Details 26.6 22.2 31.5 0.0 33.3 28.5 36.3 20 Interest rate updates 26.6 22.2 31.5 0.0 33.3 42.8 27.2 21 Bill Payment 64.4 59.2 84.2 100.0 72.2 100.0 54.5 22 Online shopping 24.4 18.5 21.0 12.5 33.3 57.1 18.1 23 Ticket Booking 37.7 40.7 15.7 100.0 33.3 42.8 27.2 24 Mobile Top-up 15.5 18.5 26.3 0.0 11.1 28.5 0.0 25 Share Trading 26.6 29.6 42.1 0.0 22.2 42.8 9.0 26 Online tax payments 66.6 96.2 94.7 100.0 22.2 28.5 18.1 27 Convert to EMI 2.2 0.0 0.0 0.0 5.5 14.2 0.0 28 Online loans 11.1 7.4 10.5 0.0 16.6 28.5 9.0 29 Customer Correspondence 95.5 100.0 100.0 100.0 88.8 100.0 81.8 30 Demonstration of I-banking 66.6 77.7 68.4 100.0 50.0 71.4 36.3 31 Corporate Internet Banking 42.2 37.0 52.6 0.0 50.0 57.1 45.4 91
Table 4.3 ( Contd.) Phone Banking Services 32 Enquire your Account balance 40.0 37.0 52.6 0.0 44.4 71.4 27.2 33 Statement of Account 37.7 33.3 47.3 0.0 44.4 71.4 27.2 34 Request for Fund Transfer 20.0 18.5 26.3 0.0 22.2 42.8 9.0 35 Stop cheques Payment instructions 22.2 22.2 31.5 0.0 22.2 57.1 0.0 36 Mobile Banking Registration 17.7 22.2 31.5 0.0 11.1 14.2 9.0 37 Latest Interest and Exchange Rates 15.5 7.4 10.5 0.0 27.7 42.8 18.1 Mobile Banking Services 38 Account Balance 53.3 40.7 57.8 0.0 72.2 85.7 63.6 39 Making Payment 11.1 7.4 10.5 0.0 16.6 42.8 0.0 40 Details of credit card balance 13.3 14.8 21.0 0.0 11.1 28.5 0.0 41 Loan Information 6.6 0.0 0.0 0.0 16.6 28.5 9.0 42 I-Mobile 2.2 0.0 0.0 0.0 5.5 14.2 0.0 43 Purchase and Redemption of Mutual Fund units 4.4 0.0 0.0 0.0 11.1 28.5 0.0 44 Last three transactions 53.3 40.7 57.8 0.0 72.2 85.7 63.6 ATMs 45 24 hours access to Cash 100.0 100.0 100.0 100.0 100.0 100.0 100.0 46 Transfer fund between accounts 100.0 100.0 100.0 100.0 100.0 100.0 100.0 47 View account balances and mini statement 100.0 100.0 100.0 100.0 100.0 100.0 100.0 48 Pin change option 100.0 100.0 100.0 100.0 100.0 100.0 100.0 92
E-banking provides a number of services at the doorstep of customers which is otherwise not possible. These services are provided through bank websites. Table 4.3 shows that e-banking services are offered to the customers in the form of internet banking services, phone banking, mobile banking and ATM services. Internet banking services are provided to a large extent by all the banks. The most common services among internet banking are balance inquiry and transaction history. All the banks are offering these two services. Apart from these, ATM services are also offered by all the banks. These include 24 hours access to cash, transfer fund between accounts, view account balances & mini statement and pin change option. Among other services, most of the banks offer simple transaction of e- banking which includes online transfer of funds (97.7 per cent), change password (95.5 per cent), customer correspondence (95.5 per cent), request of cheque book (88.8 per cent), bill payment (64.4 per cent), and monthly bank account statement by e-mail (75.5 per cent). However, the services like online tax payments (66.6 per cent), demonstration of I- banking (66.6 per cent), stop payment request (46.6 per cent) and corporate internet banking (42.2 per cent) should also be provided by all the internet banks are having less adoption in all the banks Other internet banking services which are less offered include open fixed deposit and recurring deposit (33.3 per cent), ticket booking (37.7 per cent), demat holdings (26.6 per cent), loan details (26.6 per cent), interest rate updates (26.6 per cent), share trading (26.6 per cent), request of debit cards (15.5 per cent), renewal / premature closure of FD (15.5 per cent), mobile top-up (15.5 per cent), buy and sell mutual fund (13.3 per cent), card to card fund transfer (11.1 per cent), online loans (11.1 per cent), send money order anytime (8.8 per cent), reissue and upgrade of ATM/ debit card (8.8 per cent), link bank account to ATM/ debit card (8.8 per cent), convert to EMI (2.2 per cent). So, from the above analysis, it is clear that there are number of internet banking services, but the banks are providing only a few. As far as phone banking is concerned, it has been found that 40% banks provided enquire your account balance and 37.7% banks offered statement of account services during the period under study. These services are offered in a limited manner by the banks because the customers can avail such services through ATM also. The banks consider that providing the same services through two different modes, i.e., phone banking as well as ATM means extra financial burden only. The other phone banking 93
services availed less by the customers include stop cheques payment instruction (22.2%), request for fund transfer (20%), mobile banking registration (17.7%) and latest interest & exchange rates (15.5%). In mobile banking services, 53.3% banks provide account balance & last three transaction services. Services like details of credit card balance (13.3%), making payment (11.1%), loan information (6.6%), purchase and redemption of mutual fund units (4.4%) and Internet mobile (2.2%) are offered to a limited extent by all the banks. The online transfer of fund facility is provided by all the banks under study but to a varying degree, i.e., 100 per cent in the case of both the public and new private sector banks, 94.4 per cent in private sector banks, 90.9 per cent in old private sector banks, and 100 per cent in SBI and nationalised banks case. As far as online bill payment is concerned 72.2 per cent private sector banks and 59.2 per cent public sector banks are offering this facility which comprises of 54.5 per cent old private sector banks and all new private sector banks, and in the public sector all banks of SBI group and 84.2 per cent of nationalized banks are offering it. Similarly, the facility of request for cheque book through e-banking is provided by 72.2 per cent private sector banks comprising 54.5 per cent old private sector banks and 100.0 per cent new private sector banks. However, all the nationalized and SBI group banks in the public sector are offering the request for cheque book services. As far as password change services are concerned 88.8 per cent private sector banks and 100.0 per cent public sector banks are providing them. Customer correspondence services are offered by 100 per cent public sector banks and 88.8 per cent private sector banks. Similarly the monthly bank account statement by e-mail is provided by 100 per cent public sector banks and 88.8 per cent private sector banks. As many as 96 per cent of public sector banks offer online tax payment and 30 per cent offer share trading as compared to 22.2 per cent each in the case of private sector banks. However, the private sector banks leading in number of services like buy and sell mutual fund (16.6%), request of debit cards (16.6%), reissue and upgradation of ATM/ debit cards (22.2%), activate/ deactivate ATM/ debit cards (27.7%), demat holding (33.3%), loan details (33.3%), online loans (16.6%) etc. In all these services the share of public sector banks is very less. In the case of all the phone banking and mobile banking services, private sector banks are leading except in details of credit card (14.8%) in case of public sector. It is pertinent to note that not even a single bank of SBI group providing either phone banking or mobile banking services during the period 94
under study. This shows that having the largest asset based structure in public sector banks, still the State Bank of India and its subsidiaries are not offering phone and mobile banking services. The reason being that these banks are having large number of branches and the cost of IT is very high. Even if the banks have started adopting the e-banking services but the rate of adoption by all these branches is very slow. There are number of services where public sector banks are leading. These include monthly banks account statement by e-mail, change password, ticket booking, share trading, online tax payment, customer correspondence, and demonstration of I- banking. The research shows that as compared to private sector banks, public sector banks are offering more services for the social welfare of public rather than business-oriented and profit making. The service like tax payment increases the government revenue on one hand, and fulfils the corporate social responsibility on the other. All the banks are at different stages of offering e-banking services so the extent of services is also different. In order to acquire the new customers as well as to retain the existing one, banks are very much cautious about E-banking services. Banks should develop such kind of services through which customer can transact from anywhere, anytime. In some of the services like balance enquiry, transaction history, transfer of funds online, ATM services; all the banks are offering excellent services to the customers. Banks are also offering these services according to their suitability like differentiation between corporate customers and retail customers. But such differentiation is only in case of offering internet banking services. However mobile banking services, phone banking services and ATM services are offered in the same manner to all kind of customers. It is worthwhile to note that banks should encourage existing and new customers in order to make e-banking services popular among customers. But all the services are not offered in the same extent by all the banks. Banks lag behind in offering the services such as demat holding, loan details, interest rate updates, share trading, buying and selling of mutual fund, request for the debit cards etc. As the electronic banking services are recently started by all the banks, so banks can expand these services so as to make the customer more satisfied A part from balance enquiry, transaction history, ATM services ; private sector banks are offering more advanced electronic banking services like online shopping, online loans, demat holding, loan details, mobile top-up, buy and sell of mutual fund, card to card transfer, mobile banking, phone banking services to its customers. However 95
public sector banks are leading private sector in fund transfer, online bill payment, request for cheque book, online tax payment, share trading, customer correspondence and monthly bank account statement. All the banks are trying their best to offer electronic banking services, so that customers can easily cope up with new technology products. Figure 4.2 Range of Electronic Banking Services 1 2 3 4 5 6 7 8 9 10 111213 141516 17 18 1920212223 24 25262728 2930 31 32 33343536 37 38394041 42 43 44 45 464748 Pin change option View account balances and mini statement Transfer fund between accounts 24 hours access to Cash ATM s Last three transaction Purchase and Redemption of Mutual Fund units I-Mobile Loan Information Details of credit card balance Making Payment Account Balance Mobile Banking Services Latest Interest and Exchange Rates Mobile banking Registration Stop cheque Payment instructions Request for fund Transfer Statement of Account Enquire your Account-balance Phone banking Services Corporate Internet Banking Demonstration of I-banking Customer Correspondence Online loans Convert to EMI Online tax payments Share Trading Mobile Top-up Ticket Booking Online shopping Bills Payment Interest rates updates Loan Details Demat holdings Change Password Deactivate/ Activate ATM/ debit card Renewal/ premature closure of FD/ RD Link bank account to ATM/debit Card Reissue and upgrade of ATM/debit card Monthly Bank account statement by E-mail Request of Debit cards Stop Payment request Request of Cheque book Open Fixed deposit and Recurring deposit Send money order anytime Buy and sell Mutual Fund Prepaid mobile recharge Card to card fund transfer Transfer funds online Transaction history Balance enquiry and statement Series1 0 20 40 60 80 100 120 96
The banks offer wide range of electronic banking services from balance enquiry to pin change option. Figure 4.1 depicts the range of electronic banking services offered to the customers. Table 4.4 Bank-wise Electronic Banking Services In this section an attempt has been made to rank the electronic banking services on the basis of extent of electronic banking services. Table 4.4 shows the electronic banking services offered by different banks along with the name used by banks for these services. Table 4.5 shows the extent of electronic banking services and ranks of e- banking services on the basis of extent of e-banking services. Service Electronic Name of Electronic Banking Services Code Banks State Banks and its Subsidiaries Internet Banking Services 1 State Bank of OnlineSBI 1,2,3,9,12,17,21,22,23,26,29,30,45,46,47,48 India 2 State Bank of Bikaner and SBBJOnline 1,2,3,9,12,17,21,23,26,29,30,45,46,47,48 Jaipur 3 State Bank of OnlineSBH 1,2,3,9,12,17,21,26,29,30,45,46,47,48 Hyderabad 4. State Bank of OnlineSBIndore 1,2,3,9,12,17,21,26,29,30,45,46,47,48 Indore 5. State Bank of OnlineSBM 1,2,3,9,12,17,21,26,29,30,45,46,47,48 Mysore 6 State bank of OnlineSBP 1,2,3,9,12,17,21,26,29,30,45,46,47,48 Patiala 7. State Bank OnlineSBS 1,2,3,9,12,17,21,26,29,30,45,46,47,48 Saurashtra 8. State bank OnlineSBT 1,2,3,9,12,17,21,26,29,30,45,46,47,48 Travancore Nationalized Banks 9. Allahabad Bank ALLNET 1,2,3,8,9,12,15,17,21,26,29,31,45,46,47,48 10. Andhra Bank ABINFI-net 1,2,3,9,17,21,23,26,29,31,45,46,47,48 11. Bank of Baroda i-bob 1,2,3,9,12,17,20,21,26,32,34,38,44,45,46,47,48 12. Bank of India Star Connect 1,2,3,9,12,17,18,20,21,25,26,29,30,31,45,46,47,48 13. Bank of Maharastra Maha Connect 1,2,3,5,8,9,10,11,12,17,19,20,21,24,25,26,2 8,29,30,32,33,34, 35,36,38,44,45,46,47,48 97
14. Canara Bank CNet-banking 1,2,3,5,8,9,10,11,12,17,19,20,21,24,25,26, 28,29,30,31,32,33,34,35,36,38,44,45,46, 47, 48 15. Central Bank of India CBI net banking 1,2,3,9,12,17,21,26,29,32,33,38,44,45,46, 47,48 16. Corporation Bank Corp Net 1,2,3,4,5,9,10,11,12,17,21,22,26,29,30,31, 32,33,36,38,39,40, 45,46,47,48 17. Dena Bank Dena Connect 1,2,3,5.6,9,17,18,24,26,29,30,31,32,33,36, 38,40,45,46,47,48 18. Indian Bank India Net Bank 1,2,3,5,9,10,11,17,21,25,23,26,29,31,32,33, 35,38,44,45,46,47,48 19. Indian Overseas E-See Banking 1,2,3,9,17,19,21,22,25,29,30, 45,46,47,48 Bank 20. Oriental Bank i-banking 1,2,3,9,10,17,21,26,29,32,33,35,38,44,45,46 of Commerce 21 Punjab National Bank Internet Banking,47,48 1,2,3,4,5,8,9,10,12,17,21,22,24,25,26,29,30, 31,32,33,34,35,36, 37,38,40,44,45,46,47,48 22 Syndicate Bank Syndicate E- Banking 1,2,3,9,10,17,18,19,20,21,23,26,28,29,30,45,46,47,48 23 Uco Bank Uco e-banking 1,2,3,6,8,9,10,12,17,19,21,26,29,30,45,46,4 7,48 24 Union Bank of India Union e- banking retail 1,2,3,8,9,10,12,15,17,18,,21,25,26,29,30,31, 45,46,47,48 25 United Bank of India UBI Internet Banking 1,2,3,9,17,18,26,29,30,31,38,39,44,45,46, 47,48 26 Vijaya Bank V net Banking 1,2,3,8,9,10,15,17,19,26,29,30,45,46,47,48 27 IDBI Bank BANKAWAY 1,2,3,4,5,6,8,9,10,12,15,17,18,20,21,22,23,2 New Private Sector Banks 4,25,26,29,30,32, 33,34,35,36,37,38,39,40,44,45,46,47,48 28 ICICI Bank INFINITY 1,2,3,4,5,7,8,9,10,11,12,13,14,15,16,17,18,1 9,20,21,22,23,24,25,26,27,28,29,30,31,32,3 3,34,35,36,37,38,39,40,41,42,44,45,46, 47,48 29 HDFC Bank Net Banking 1,2,3,4,5,7,8,9,10,11,12,13,14,15,16,17,18,1 9,20,21,22,23,24,25,26,27,28,29,30,31,32,3 3,34,35,36,37,38,39,40,41,43,44,45,46, 47,48 30 Kotak Mahindra Bank Internet Banking 1,2,3,6,8,9,10,11,12,13,14,15,16,17,18,20,2 1,22,25,29,30,31,32,33,34,35,37,38,43,44, 45,46,47,48 31 Indusind Bank IndusNet 1,2,3,6,8,9,10,12,13,14,16,17,21,29,38,44, 45,46,47,48 32. Axis Bank iconnect 1,2,3,9,10,12,17,18,21,22,23,29,30,31,32,3, 38,39,44,45,46,47,48 33. Yes bank Yes@ccess 1,2,3,6,8,9,17,21,29,30,45,46,47,48 34. Development 1,2,3,8,9,10,16,17,21,29,32,33,35,38,44,45, Credit Bank 46,47,48 98
Old private Sector Bank 35. Bank of Rajasthan 36. City Union Bank 37. Dhanluxmi RajBank@Net 1,2,3,9,17,18,21,23,25,29,45,46,47,48 service OnlineCub.net 1,2,3,9,17,21,29,32,33,34,45,46,47,48 Web Banking 1,2,17,29,32,33,37,38,44,45,46,47,48 Bank 38. Federal Bank Fed Net 1,2,3,9,10,12,17,18,20,21,22,23,29,31,32, 33,37,38,44,45,46,47,48 39. Ing Vyasa Bank mi-b@nk 1,2,3,8,9,10,12,17,19,21,29,30,31,45,46,47, 48 40. J & K Bank Net Banking 1,2,3,9,17,20,29,38,44,45,46,47,48 41. Karnataka Bank Money Clicktm 1,2,3,9,10,17,18,19,20,21,22,23,26,29,30,31,38,44,45,46,47,48 42 Karur Vyasa Internet 1,2,3,17,19,29,30,31,38,41,44,45,46,47,48 Bank Banking 43 South Indian Sibernet Retail 1,2,3,8,9,10,12,17,19,21,26,29,30,31,45,46, Bank 44 Tamilnadu Mercantile Bank 45. Catholic Syrian Bank 46 SBI Commercial and International Bank 47. Lakshmi Vilas Bank 47,48 X 38,44,45,46,47,48 X 38,44,45,46,47,48 N.A N.A 99
Table 4.5 Ranking of Electronic Banks on the Basis of Extent of Electronic Banking Services Electronic Banks Extent (in Per cent) Rank A Public Sector banks SBI Group 1 State Bank of India 33.33 14 2 State Bank of Bikaner and Jaipur 31.25 15 3 State Bank of Hyderabad 31.25 15 4. State Bank of Indore 31.25 15 5. State Bank of Mysore 31.25 15 6 State Bank of Patiala 31.25 15 7. State Bank Saurashtra 31.25 15 8. State Bank Travancore 31.25 15 Nationalized Banks 9. Allahabad Bank 33.33 14 10. Andhra Bank 29.17 16 11. Bank of Baroda 41.67 10 12. Bank of India 37.5 12 13. Bank of Maharastra 62.5 6 14. Canara Bank 64.5 5 15. Central Bank of India 35.4 13 16. Corporation Bank 56.25 7 17. Dena Bank 45.8 9 18. Indian Bank 45.8 9 19. Indian Overseas Bank 31.25 15 20. Oriental Bank of Commerce 37.5 12 21 Punjab National Bank 64.5 5 22 Syndicate Bank 39.5 11 23 Uco Bank 37.5 12 24 Union Bank of India 41.67 10 25 United Bank of India 35.4 13 100
26 Vijaya Bank 33.33 14 27 IDBI Bank 75 3 B. Private Sector Banks New private Sector Banks 28 ICICI Bank 95.8 1 29 HDFC Bank 93.7 2 30 Kotak Mahindra Bank 70.8 4 31 Indusind Bank 41.67 10 32. Axis Bank 48 8 33. Yes Bank 29.16 17 34. Development Credit Bank 39.5 11 Old Private Sector Bank 35. Bank of Rajasthan 29.16 17 36. City Union Bank 29.16 17 37. Dhanluxmi Bank 27 18 38. Federal Bank 48 8 39. Ing Vyasa Bank 35.4 13 40. J & K Bank 27 18 41. Karnataka Bank 48 8 42 Karur Vyasa Bank 31.25 15 43 South Indian Bank 37.5 12 44 Tamilnadu Mercantile Bank 12.5 19 45. Catholic Syrian Bank 12.5 19 46 SBI Commercial and International N.A N.A Bank 47. Lakshmi Vilas Bank N.A N.A 101
Table 4.6 Extent of Electronic Banking Services among Top Ten Ranks Name of Bank Category Rank Category ICICI Bank New private Sector 1 95.8 HDFC Bank New private Sector 2 93.7 IDBI Bank Other public sector Bank 3 75 Kotak Mahindra Bank New private Sector 4 70.8 Punjab National Bank Nationalized 5 64.5 Canara Bank Nationalized 5 64.5 Bank of Maharastra Nationalized 6 62.5 Corporation Bank Nationalized 7 56.2 Federal Bank Old private Sector 8 48 Axis Bank New private Sector 8 48 Karnataka Bank Old private Sector 8 48 Dena Bank Nationalized 9 45.8 Indian Bank Nationalized 9 45.8 Union bank of India Nationalized 10 41.67 Table 4.6 shows the extent of e-banking services. It is found that ICICI Bank offers as high as 95.8 per cent e-banking services, followed by HDFC Bank with 93.7 per cent of e-banking services. So, the top two positions of e-banking services are acquired by new private sector banks. Third position is acquired is by a public sector bank, viz. IDBI offering 75 per cent of services. Fourth position is again acquired by a new private sector bank, viz. Kotak Mahindra offering 70.8 per cent of services. Fifth rank is shared by Punjab National Bank and Canara Bank offering 64.5 per cent of services. Sixth position is acquired by Bank of Maharashtra with 62.5 per cent services, seventh by Corporation Bank with 56.25 per cent and eighth rank is shared by three banks jointly with 48.00 per cent of each service, i.e., Federal Bank, Karnataka Bank and Axis bank. Out of these three banks, two banks are old private sector banks and one is a new private sector bank. Ninth position is jointly shared by Dena Bank and Indian Bank with 45.8 per cent services. Both are nationalized banks. Tenth rank is bagged by Union Bank of India with 41.67 per cent services which is a nationalized one. The analysis depicts that new private sector banks and nationalized banks have provided e- banking services. Old private sector banks and SBI banks are in the early stage of development and introduction of early e-banking to their customers. 102
PART-II Extent of ATM Services In India 4.6 Conceptual Framework of ATM's In the world of banking, the developments in information technology had an enormous effect in development of more flexible payment methods and more userfriendly banking services. Online banking and other electronic payment systems are new and the development and diffusion of these technologies by financial institutions is expected to result in a more efficient banking system. This technology offers to the institutions an alternative or non-traditional delivery channels through which banking products and services can be delivered to customers more conveniently and economically without diminishing the existing service levels. However the entry of private sector has posed the challenge of competitive environment to the public sector banks in India. These private sector banks have brought with them the advanced banking technology with alternate delivery channels such as Phone Banking, Mobile banking, Internet Banking, Automated Teller Machines (ATM) etc. Out of all these e-banking services, the ever demanding and fulfilling the requirement of the customers is automated teller machines. So the efforts of the banks are to manufacture and install as much ATM s which could serve its services to the entire customers of the nation, be it rural people or urban people. To suit the needs of rural people, an additional security device innovations are being made in the form of using camera inside the ATM which could compare the records with thumb impression (Bio-Metric) of the client for identification. (Murali, 2006). The ATM industry consists of multitude of activities which is a major cause of making e-banking a 24 hours service. In fact, electronic banking is profitable and possible due to services of ATMs. Because this service provides immense help to the customers in withdrawing cash from anywhere, anytime. The management of ATM includes loading of ATM with cash, arranging of money with bank with which cash is loaded, service of car that delivers cash if it is offsite situated, providing insurance for all areas such as theft of cash from ATM. Due to large expense involved in setting and situating an ATM at a particular place, these services are now days offered by independent service providers like privately owned ATMs. The following is a list of businesses involved with ATMs. 103
Table 4.7 Companies Involved in the Business of ATM Manufacturers Lock Manufacturers Software Companies Paper products Service personnel Insurance Companies Vault cash Management companies Independent service Operators Sponsoring Financial institutions These companies physically build ATM. Companies that develop the advance locking systems that store cash in the machines These companies help the customers to tell ATM what he wants to do. The software encrypted and processes all the required information. All the ATM provides a physical receipt. They provide maintenance and mal-functioning of machines. These companies provide insurance coverage for damage of machines etc. These companies take over the responsibility of delivering and stocking cash in ATM machines. They offer all ATM management services and offer day to day management services. An ATM must be sponsored by financial institution to be granted access to network. Now days due to the high cost involved in installing the ATM machines, these services are provided by privately owned institutions. By sponsoring a privately owned ATM, financial institution takes the full responsibility of non-bank location ATM. These financial institutions bears all the risks associated with installation of ATM, placing the machine and including risks of frauds. So all the privately owned ATM must have a sponsoring institution that carries such risk related to fraud, theft and cash mismanagement 104
4.7 Kinds of ATM The first ATM to be installed in India was by HSBC in 1987 at Mumbai. There are different kinds of ATMs used by the banks for the customers. Table 4.8 shows the kinds of ATM according to location, links, card insertion and loading of cash. Figure 4.3 KINDS OF ATM LOCATION LINKS CARD INSERTION LOADING OF CASH ON SITE OFFSITE STAND ALONE NET WORKED DIP CARD MOTORISE D FRONT BACK Source: Compiled from Murali 2006 (A) Onsite and Offsite ATMs ATMs which are situated at the premises of the bank are known as onsite ATMs and the one that are located at some busy places are known as offsite ATMs like food worlds, railway station, bus stops, shopping malls, petrol pumps etc. (B) Stand alone and Net-worked ATMs which are not linked to the hub of the bank to which it belongs are stand alone ATMs. But these ATMs are not popular now a days.net-worked ATM on the other hand are those which are linked to the branch and also linked to the branches across the country means a customer of a particular bank can withdraw money from any branch of of any bank at any city. (C) Dip-card and Motorized Where the customer is required to dip the card and take it back to do the transaction is known as dip card. The sensors of the machine identifies the customer and greets him with the voice. On the other hand, motorized ATMs are very prevalent among all. In this the customer insert the card in the machine and takes it back when the transaction is over. In some machines immediately the card is taken back whereas in some machines the card automatically comes out when cash is withdrawn. 105
(D) Front and Back Cash has to be regularly loaded in the ATM machines. In the front loading the door of the ATM compartment is closed and cash is loaded where as in back loading, it is done behind the ATM and a message is displayed that please wait for sometime. Some services are being carried on. 4.8 Reasons for Adoption of ATM for the Customers and the Banks Figure 4.4 BENEFITS OF ATM S CUSTOMER S PERSPECTIVE BANKS PERSPECTIVE 24*7 availability of ATM across all over the country With networked ATMs,customers can withdraw from any branch of any bank at any city Cost of setting ATM is much lower than setting a branch Fewer burdens on staff for cash withdrawal No queue standing (less time required) Multiple services available in addition to cash withdrawal Wider choice with the bank to advertise their products through ATM Less hassle in handling cash Table 4.9 shows the reason for adoption of ATM for the customers and the banks. The services availed through ATMs are convenient for the customers as it is available 24 hours. Further customer can withdraw cash from any branch of any bank at any city. Not only the money can be withdrawn but multiple services are available like balance enquiry, pin change option, receipt of last three transactions etc. From the bank point of view, the cost of installing an ATM is much less than setting up of a branch. Further, it provides wider choice for the bank to advertise their products through ATM and less cash handling is required. So ATM is beneficial from both customer and bank point of view. 4.9 Growth of Onsite and Offsite ATM in Banking Sector Number of ATMs in India is growing day by day. There is a tremendous growth in the ATM after the adoption of electronic banking by public and private sector banks. To study the growth of ATMs, it has been divided in to five categories, i.e., Nationalized banks, SBI group, Old private sector banks, New private sector banks and Foreign banks. It has been further classified in to onsite ATMs and offsite ATMs. The data has been compiled from 2004-05 to 2007-08. For each onsite and offsite ATMs, growth to 106
previous year has been calculated. The tables from 4.11 to 4.15 shows the onsite and offsite growth of ATMs. 4.9.1 Onsite & Offsite ATM of Nationalized banks Table 4.8 Year Onsite ATM Growth Offsite ATM Growth 2004-05 3205 ---- 1567 --- 2005-06 4812 50.14 2353 50.15 2006-07 6634 37.86 3254 38.29 2007-08 8320 25.41 5034 54.70 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 The above table consists of the onsite and offsite ATM s of nationalized banks which shows a tremendous growth from 2004 onwards. Onsite ATMs of the nationalized banks have shown a three-fold increase, it was merely 3205 in 2004-05 and increased to 8320 in 2007-08, however there is a decline in the growth of these ATMs from 50.14 per cent in 2005-06 to 25.41 per cent to 2007-08. Offsite ATMs of nationalized banks have registered a growth of 54.70 per cent in 2007-08. So, growth of onsite ATM of nationalized banks is more. Figure 4.5 Growth of Onsite and Offsite ATMs of Nationalized Banks 9000 8000 7000 6000 5000 4000 Onsite ATM Offsite ATM 3000 2000 1000 0 2004-05 2005-06 2006-07 2007-08 107
4.9.2 Onsite and Offsite ATM of SBI Group Table 4.9 Year Onsite ATM Growth Offsite ATM Growth 2004-05 1548 ---- 3672 2005-06 1775 14.66 3668-0.1 2006-07 3655 105.91 2786-24.04 2007-08 4582 25.36 3851 38.22 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 As far as SBI and its subsidiaries are concerned, the onsite ATMs have increased from 1548 to 4582 showing a three-fold increase. The growth rate increased tremendously from 14.66 per cent in 2005-06 to 105.91 per cent in 2006-07. But, it again, declined to 25.36 per cent in 2007-08. Due to the large asset base structure the SBI banks share of onsite ATMs is also high. Regarding the offsite ATMs the growth declined by -0.1 per cent in 2005-06 to -24.04 per cent in 2006-07. It was only in 2007-08 that this share increased to 38.22 per cent. So, growth of offsite ATMs shows a downward trend, while onsite ATMs show an upward trend. Figure 4.6 Growth of Onsite and Offsite ATMs of SBI Banks 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2004-05 2005-06 2006-07 2007-08 Onsite ATM Offsite ATM 108
4.9.3 Onsite and Offsite ATM of Old Private Sector Banks Table 4.10 Year Onsite ATM Growth Offsite ATM Growth 2004-05 800 --- 441 2005-06 1054 31.75 493 11.79 2006-07 1104 4.74 503 2.02 2007-08 1436 30.07 664 32 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 Table 4.10 shows the onsite and offsite ATM s of old private sector banks. Old private sector banks provide limited e-banking services. Their share of ATMs is also not so high. In the year 2006-07, there was a great decline in their share and it was merely 4.74 per cent. Similarly, offsite ATMs also declined from 11.79 per cent in 2005-06 to 2.02 per cent in 2006-07 but again increased to 32 per cent. 1600 1400 1200 Figure 4.7 Growth of Onsite and Offsite ATM of Old Private Sector Banks 1000 800 600 Onsite ATM Offsite ATM 400 200 0 2004-05 2005-06 2006-07 2007-08 4.9.4 Onsite and Offsite ATM of New Private Sector Banks Table 4.11 Year Onsite ATM Growth Offsite ATM Growth 2004-05 1883 --- 3729 --- 2005-06 2255 19.75 3857 3.43 2006-07 3154 39.86 5038 30.61 2007-08 3879 22.98 5988 18.85 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 109
Table 4.11 shows onsite and offsite ATMs of new private sector banks. New private sector banks constitute the major role in providing electronic banking services. These banks have recorded 19.75 per cent growth in 2005-06, 39.86 per cent in 2006-07 and 22.98 per cent in 2007-08. But the offsite growth of these banks is maximum as suggested by the number of ATMs i.e., 5988 in 2007-08. There has been a growth of only 3.43 per cent in 2005-06, 30.61 per cent in 2006-07, and 18.85 per cent in 2007-08 in the number of ATMs. Nationalized banks are having the largest share of onsite ATMs while new private sector banks are having the greatest share of offsite ATMs. Figure 4.8 Growth of Onsite and Offsite ATM of New Private Sector Banks 7000 6000 5000 4000 3000 Onsite ATM Offsite ATM 2000 1000 0 2004-05 2005-06 2006-07 2007-08 4.9.5 Onsite and Offsite ATM of Foreign Banks Table 4.12 Year Onsite ATM Growth Offsite ATM Growth 2004-05 218 579 2005-06 232 6.42 648 11.01 2006-07 249 7.32 711 9.72 2007-08 269 8.03 765 7.59 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 Foreign banks play a vital role in Indian banking sector but their number of onsite and offsite ATMs is very less, so their growth rate was as very low as 6.42 per cent in 110
2005-06 which increased to 8.03 per cent in 2007-08. Offsite growth was merely 7.59 per cent in 2007-08. Figure 4.9 Growth of Onsite and Offsite ATM of Foreign Banks 900 800 700 600 500 400 300 OnsiteATM Offsite ATM 200 100 0 2004-05 2005-06 2006-07 2007-08 4.10 Per cent age of ATMs to Branches The following data shows the per cent of ATM to total branches in Indian Banking Sector from the period 2004-05 to 2007-08 4.10.1 Nationalized banks Table 4.13 Year Branches ATM Per cent 2004-05 33627 4772 14.19 2005-06 34012 7165 21.06 2006-07 35636 9888 27.74 2007-08 37775 13355 35.35 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 Table 4.13 reveals that nationalized banks have the maximum number of branches, i.e., 37775 in 2007-08 and also the ATMs i.e., 13355. With an increase in the number of branches of these banks, the share of ATMs to branches has also been increasing. It was 14.19 per cent in 2004-05 and gradually increased up to 35.35 per cent inn 2007-08 over the study period. The results shows that nationalized banks increased branches by nearly 4000 but number of ATM increased by 9000. So banks focused more on new modes of electronic banking rather than opening more branches. 111
4.10.2 State Bank Group Table 4.14 Year Branches ATM Per cent 2004-05 13661 5220 38.2 2005-06 13831 5443 39.35 2006-07 14030 6441 45.9 2007-08 15105 8433 55.82 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 Table 4.14 depicts that banks in the SBI group are having equivalent share of ATMs to branches. The proportion of ATMs to number of branches is gradually increasing. It was 38.20 per cent in 2004-05 and increased to 55.82 percent in 2007-08. So, the share of ATMs constitutes half of the share of branches. It shows that the SBI group is not only focusing on its number of branches but ATM s also. 4.10.3 Old Private Sector Banks: Table 4.15 Year Branches ATM Per cent 2004-05 4511 1241 27.5 2005-06 4566 1547 33.88 2006-07 4606 1607 34.88 2007-08 4450 2100 47.19 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 The number of branches of old private sector banks decreased rapidly during the period from 2004-05 to 2007-08. These were 4511 in 2004-05 and 4450 in 2007-08. But the number of ATMs showed an upward trend increasing from 1241 to 2100. 112
4.10.4 New Private Sector Banks Table 4.16 Year Branches ATM Per cent 2004-05 1685 5612 333.05 2005-06 1950 6112 313.43 2006-07 2497 8192 328.07 2007-08 3825 9867 279.91 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 Table 4.16 reflects the branches and ATMs of new private sector banks. New private sector banks are leading banks in providing the services of electronic banking. They were having 1685 branches and 5612 ATMs in 2004-05, thus having a percentage share of 333 per cent. In 2007-08, number of ATMs increased to 9867; and the number branches were 3825 only. So, this is the sector where number of ATMs exceeds the number of branches as these banks offer wide range of electronic banking services to customers. 4.10.5 Foreign Banks Table 4.17 Year Branches ATM Per cent 2004-05 242 797 329.33 2005-06 259 880 339.76 2006-07 273 960 351.64 2007-08 277 1034 373.28 Source: Data Compiled from Trends and Progress Report of RBI from 2004-05 to 2007-08 Table 4.17 mentions that foreign banks are also play a vital role for their customers in providing the e-banking services. These banks have very less number of branches in India merely 277 in 2004-05 and having 1034 ATM by the end 2007-08. As the technology is developing due to the competition and demand from the customer for the electronic banking, every bank is more focusing on the increase of modern techniques to provide the satisfaction to the customers. By using the information drawn from the survey of bank websites during June 2008, it was found that banks are offering electronic banking services in one form or other. Private sector banks lead the 113
public sector banks in adoption of electronic banking services. First two ranks were acquired by private sector banks. Most of other ranks were held by nationalized banks except two banks of old private sector and one of other public sector bank. ICICI and HDFC banks offer a wide range as well as more advanced services to customers. Some of banks are making their efforts to provide more services to the customers and rest of banks are at the introduction and development stage of providing electronic banking services. All the banks are making continuous effort to improve the ATM services because this is the service due to which electronic banking services are growing in India. Every bank is making a lot of steps in improving their ATM services because this is the most demanding and required e-banking service. But installation of the machine involves high cost of capital so the banks now a days are networking their machines together for the common benefit of all their customers who can use their cards in any of them. 114