...Impact of Information Technology on Service Competence In Indian Banking Industry Mrs. Punitha Sahaya Mary Francis Assistant Professor, MBA Dept., St. Xavier’s Catholic College of Engineering, Chunkaankadai, Nagercoil. punithaf2007@rediffmail.com, Mobile: 9942432809 INTRODUCTION The 21st century will bring about an all-embracing convergence of computing, communications, information and knowledge. This will radically change the way we live, work, and think. The growth of high speed networks, coupled with the falling cost of computing power, is making possible applications undreamed of in the past. Voice, data, images, and video may now be transferred around the world in micro-seconds. This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers. All over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidly-changing environment. It is clear that this new technology is changing the banking industry forever. Banks with the ability to invest and integrate information technology will become dominate in the highly competitive global market. Bankers are convinced that investing in IT is critical. Its potential and consequences on the banking industry future is enormous...
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...Article :Emerging Trends in Banking – Challenges and Opportunities Abstract Today banking is known as innovative banking. Information technology has given rise to new innovations in the product designing and their delivery in the banking and finance industries, customer services and customer satisfaction are their prime work. One of the most significant areas where IT has had a positive impact so on substitutes for traditional funds movement services. With the advent of electronic banking electronic funds transfer and other Similar products funds transfer within time frames which would have appeared impossible a few years age. With networking and inter connection new challenges are arising related to security privacy and confidentiality to transactions. Finally the banking sector will need to master a new business model by building management and customer services with a variety of products and controlled cost to stay in the long run. Key words: E-Banking, ATM ,Internet Security, NPA, CRR, Introduction:- The traditional functions of banking are limited to accept deposits and to give loans and advances. Today banking is known as innovative banking. Information technology has given rise to new innovations in the product designing and their delivery in the banking and finance industries, customer services and customer satisfaction are their prime work. Current banking sector has come up with a lot of initiatives that oriented to providing a better customer services...
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...Banking in India From Wikipedia, the free encyclopedia Jump to: navigation, search Structure of the organised banking sector in India. Number of banks are in brackets. Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1770; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. Contents [hide] * 1 History * 2 Post-Independence * 3 Nationalisation * 4 Liberalisation * 5 Adoption of banking technology * 6 Further reading * 7 References * 8 External links | [edit] History Merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that issues stock and requires...
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... Robust asset growth • Total Indian banking sector assets has reached USD1.5 trillion in FY12 from USD1.3 trillion in FY10, with 73 per cent of it being accounted by the public sector Growing lending and deposit • Total lending and deposits have increased at CAGR of 22.8 per cent and 21.2 per cent, respectively, during FY06-13 and are further poised for growth, backed by demand for housing and personal finance • Higher ATM penetration Total number of ATMs in India have increased to 1,04,500 in 2012 and is further expected to double over the next two years, thereby taking the number of ATMs per million population from 85, at present, to about 170 • Rising rural penetration With the help of Financial Inclusion Plan (FY10-13), the banking connectivity in India increased more than threefold to 211,234 villages in 2013 from 67,694, at the beginning of the plan period Source: Planning Commission, Aranca Research Note: ATM - Automated Teller Machine FY13 • Robust demand Growing demand Increase in working population and growing disposable incomes will raise demand for banking and related services Housing and personal finance are expected to remain key demand drivers Rural banking is expected to witness growth in the future • Innovation in services Mobile, Internet banking and extension of facilities at ATM stations to improve operational efficiency Vast un-banked population highlights scope for innovation in delivery ...
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...Innovations and Inclusive Growth A Case of Banking Industry in India Kiran Kumar Kakarlapudi Background and Motivation India has entered high growth trajectory with the initiation of economic reforms in the early 1990s with a policy shift towards free market economy.1 While on the growth front, the economy has performed considerably well, on the other hand the issue of distributional effects of growth has gained momentum in the academic and policy environment. Thus, in the eleventh and twelfth five year plans, emphasis has been laid to achieve sustainable economic growth with inclusive development (Singh, 2011). The empirical evidences on India’s growth pattern show that, the fantabulous growth performance, to a large extent, is driven by high growth in the service sector which has grown at 8.1 percent per annum during 1990-91 to 2007-08. Similarly, the share of service sector Gross Domestic Product (GDP) has increased from less than half to 68 percent in 2007-08 (Acharya, 2008). 2 The insights from the studies on service sector growth in India reveal that the spurt in the service growth is driven by the rapid growth of business services (which include Information Technology), communication services, financial services, hotels and restaurants, and trade (distribution) services, which is facilitated by the advent and rapid diffusion of information technology (Gordon and Gupta, 2004; Banga, 2005; Verma, 2006; Eichengreen and Gupta, 2010).3 Further, it has been argued that, rapid...
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...Introduction Indian banking system has emerged as a vibrant sector in the Indian economy. Strong regulatory mechanism, inherent strength in the economy, and progressive policy framework which supports, nurtures, and helps in growing the financial institutions. Indian financial services industry is dominated by the banking sector that contributes significantly to the level of economic activity. The banking structure in India is broadly classified into public sector banks, private sector banks and foreign banks. The public sector banks continue to dominate the banking industry, in terms of lending and borrowing, and it has widely spread out branches which help greatly in pooling up of resources as well as in revenue generation for credit creation. The role of banks in accelerating economic development of the country has been increasingly recognized since the nationalization This facilitated the rapid expansion of banking in terms of its geographical reach covering rural India, in turn leading to significant growth in deposits and advances. Eventually, however, the government used banking sector to finance its own deficit by frequently increasing cash reserve ratios (CRR) and statutory liquidity ratio (SLR). Deregulation of the Indian financial system in 1991 followed by various financial sector reforms during the period 1990 through 1998 led to a major restructuring of the Indian banking industry. India has entered high growth trajectory with the initiation of economic reforms...
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...analyze the role of information technology (IT) in the Indian banking industry. Indian banks are investing heavily in the technologies such as automated teller machine (ATMs), net banking, mobile banking, tele -banking, credit cards, debit cards, smart cards, call centers, CRM, data warehousing etc. It is essential to evaluate the impact of information technology on the performance of Indian banks in terms of extended value added services and customer satisfaction thereby. Foreign banks and Private sector banks which took more IT initiative, were found to be more efficient and more competent force than public sector banks in India. Based on the article, technological innovations have enabled the industry to open up efficient delivery channels. It is said that IT has helped the banking industry to deal with the challenges the new economy poses. The study examines the views of banking customers on the implementation of IT in banks. According to the author, private and foreign banks use more IT-related banking services than public sector banks. Keywords and Abbreviations: Awareness level, Banking sector, Customer Satisfaction, ITeS, Security ATM – Automated Teller Machines / Any Time Money CBS – Core Banking Solution IAM – Investment and Assets Management CRM – Customer Relationship Management GRC – Governance Risk and Compliance IDRBT - Institute for Development and Research in Banking Technology INFINET - Indian FInancial NETwork ITeS –...
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...April - June 2014, Available at: www.paperpublications.org An Analysis of Indian Banking Industry with Special Reference to ICICI Bank Sana Samreen Abstract: The last decade has seen many positive developments in the Indian banking sector. The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related government and financial sector regulatory entities, have made several notable efforts to improve regulation in the sector. The sector now compares favorably with banking sectors in the region on metrics like growth, profitability and non-performing assets (NPAs). However, improved regulations, innovation, growth and value creation in the sector remains limited to a small part of it. The cost of banking intermediation in India is higher and bank penetration is far lower than in other markets. India’s banking industry needs to strengthen itself significantly In this paper, I have mainly focused on the overall analysis of the banking industry through framework like Porter’s five forces model. I have also concentrated upon the various developments being done in the industry along with recognizing the upcoming challenges as well as the opportunities to reap the profits even in troubled waters. Keywords: Indian banking industry, Porters five force model, market regulation. I. Introduction The Indian banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories...
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...change in Indian banking: Technology effect vs catch-up effect Name: Gajanan S Ghadlinge Roll No. 18, MMS-I Document Information: | Title: | Productivity growth and efficiency change in Indian banking:Technology effect vs catch-up effect | Author(s): | Lakshmi Kumar, Institute for Financial Management and Research (IFMR), ChennaiD. Malathy, Department of Humanities and Social Sciences, IIT Madras, Chennai, andL.S. Ganesh, Department of Management Studies, IIT Madras, Chennai, India | Citation: | Surender Kumar, (2006) "A decomposition of total productivity growth: A regional analysis of Indian industrial manufacturing growth", International Journal of Productivity and Performance Management, Vol. 55 Iss: 3/4, pp.311 - 331 | Publisher: | Journal of Advances in ManagementResearch Vol. 7 No. 2, 2010pp. 194-218#Emerald Group Publishing Limited0972-7981DOI 10.1108/09727981011084995 | Abstract: | Purpose– The purpose of this paper is to understand the influence of technology change in the banking sector by employing data envelopment analysis (DEA) and also to determine the change in total factor productivity (TFP) and its components, namely technical change and technical efficiency change.Design/methodology/approach– The DEA method has been used to assess the efficiency of the entire banking sector and the bank groups. The purpose has been to investigate TFP change and its components’ (obtained using Malmquist index) influence on the growth in the banking sector...
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...Transformation is taking in Indian banks from all verticals, and subtle and not – so – subtle makeovers in banking products are dynamically altering the face of banking. The research paper focuses on the way transformation is affecting the banking sector and the way use of IT products have changed the face of banking in India. It reveals current environment of the banking industry; the factors that have brought changes in the industry; and the way these changes have contributed to the development of banking. This paper concludes that financial market has turned into a buyer’s market. Banks are have now bloomed into one-stop Supermarkets. Their focus is shifting from mass Banking to Class banking with introduction of value added and customized products. Technology now allows banks to create what looks like a branch in a business building’s lobby without having to hire manpower for manual operations. These branches are working on the concept of 24 X 7 working made possible due to Tele banking, ATMs, Internet Banking, Mobile Banking and E - banking. This technology driven delivery channels are used to reach maximum customers at lower cost and in most efficient manner. The beauty of these banking innovations is that it puts both banker and customer in a win-win situation. The need of an hour is to design a system to promote marginal efficiency of investment in technology and widen the gap between marginal benefits and marginal cost involved in Banking transformation with special reference...
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...countries, the banking sector has been the dominant element in the country’s financial system. The sector has performed the key functions of providing liquidity and payment services to the real sector and has accounted for the bulk of the financial intermediation process. Besides institutionalizing savings, the banking sector has contributed to the process of economic development by serving as a major source of credit to households, Government, business and weaker sectors of the economy like village and small scale industries and agriculture. In recent times, Indian banking industry has swiftly introduced innovative banking technologies in banking services. The current study attempts to measure and compare the effect of the introduction of new technologies through electronic-banking on the service quality, and profitability of banks, and to assess the impact of changing from the traditional means to the electronic banking on the customers and on the banks as well. The study is qualitative and quantitative in nature investigating different objectives which determine the performance of banks mainly in terms of profitability and convenience. PURPOSE OF RESEARCH The purpose of this research is to find the changes that took place in banking sector after information technology was introduced in it. The paper shows the role played by banking sector in the economy and the affect after IT took over it. It further explains the benefits and challenges of newly emerged e-banking services....
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...ABSTRACT Recent reports on banking sector often indicate that India is slowly but surely moving from a regime of `large number of small banks' to `small number of large banks'. The aim of this paper is to probe into the various motivations for mergers and acquisitions in the Indian Banking sector. Thus, literature is reviewed to look into the various motivations behind a banks’ merger/ acquisition event. The paper also takes us through the international mergers & acquisitions scenario comparing it with the Indian scene. Given the increasing role of the economic power in the turf war of nations, the paper looks at the significant role of the state and the central bank in protecting customer’s interests vis-à-vis creating players of international size. While, gazing at the mergers & acquisitions in the Indian Banking Sector both from an opportunity and as imperative perspectives, the paper also glances at the large implications for the nation. INTRODUCTION Generally speaking a bank is an institution dealing in money. The origin of the word bank is traced to the Italian ‘banca’, ‘banc’ or ‘banque’, which means a bench. It is stated that in Middle Ages the European money changers and moneylenders displayed their coins on their benches and conducted their business. Hence the term bank refers to the bench on which the business of money changing and money lending was conducted. Hence, the term banking is defined as accepting for the purpose of lending or investment, of...
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...Being Five Star in Productivity Roadmap for Excellence in Indian Banking Being Five Star in Productivity: Roadmap for Excellence in Indian Banking A The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest–value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit www.bcg.com. Federation of Indian Chambers of Commerce and Industry (FICCI) is India’s apex chamber representing over 500 industry associations and over 2,50,000 business units — small, medium and large — employing around 20 million people. FICCI works closely with Central and state governments and regulatory bodies for policy change. Indian Banks’ Association (IBA) is the premier service organization of the banking industry in India. Its members comprise of almost all the Public, Private, Urban co– operative and Foreign banks having offices in India, developmental financial institutions, federations, merchant banks, housing finance corporations...
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...CHAPTER-1 INTRODUCTION TO INDIAN BANKING SYSTEM: OBJECTIVE- Here our main objective is to analyse the impact of mergers and acquisition in banking sector in India. We will try to find out from the experience of US and EU how Indian banking sector will respond if some major players merge together. In this report we will create a situation in which five big players in banking sector merge together and we will analyse the effect of merger on Indian Banking sector. In the past three decades, India's banking system has earned several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to metropolises or cities in India. In fact, Indian banking system has reached even to the remote corners of the country.1 This is one of the main aspects of India's banking growth story. The first banks were Bank of Hindustan (1770- 1829) and The General Bank of India, established 1786 and since defunct. The largest bank, and the oldest still in existence, is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. The Government...
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...Enticed by the reform of Indian banking sector in the early 1990s and further slowdown in the economy as a result of global financial crisis in late 2000s, the current study analyzes the performance of Indian banks using data envelopment analysis. The performance is measured in terms of technical efficiency, returns-to-scale, and Malmquist productivity index for a sample of 33 banks, consisting of 19 public sector and 14 private sector banks during the period spanning 1995-96 to 2009-10. The jackknifing analysis, followed by the dummy variable regression model is used to identify the outlier and its possible impact on overall efficiency trends. Findings reveal that efficiency scores are robust in the sense that the inclusion of outlier does not affect the overall efficiency trends. The public sector bank is faintly doing better than the private sector banks in terms of (i) technical efficiency since 2003-04 and (ii) scale efficiency from 2000-01 onwards. There is growing tendency of public banks operating under increasing returns to scale, implying that substantial gains could be obtained from altering scale via either internal growth or consolidation in the sector. The difference in the Total Factor Productivity (TFP) change between these two types of banks is found to be statistically significant in favour of public sector banks. The technological change has been the dominating source of productivity growth, whereas, the contribution of pure efficiency change and scale change...
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