BHEL Industrial Systems Group

Customer Satisfaction towards RTGS & NEFT facilities

INTRODUCTIONINDUSTRY PROFILE

INDIAN BANKING: MILESTONE & A ROAD AHEADWith the Indian economy moving on to a high growth trajectory, consumption levels soaring and investment riding high, the Indian banking sector is at a watershed. Further, as Indian companies globalize and people of Indian origin increase their investment in India, several Indian banks are pursuing global strategies. The industry has been growing faster than the real economy, resulting in the ratio of assets of commercial banks to GDP increasing to 92.5 per cent. The Indian banks have also been doing exceptionally well in the financial sector with the price-to-book value being second only to china, according to a report by Boston Consultancy Group.1.1 PRE-INDEPENDENCE BANKING SCENARIO IN INDIAIn India, the ancient Hindu Scriptures refer to the money lending activities in the Vedic period. During the Ramayana and Mahabharata eras, banking had become full-fledged business activity and during the Manu Smriti period which followed the Vedic period and Epic age, the business of banking was carried on by the members of the Vaish Community. Banking is different from money lending but two terms have in practice been taken to convey the same meaning. Banking has two important functions to perform, one of accepting deposits and other of lending money or investment of funds. During the Moguls period, metallic money was issued and the indigenous bankers added one more line of money changing to their already profitable business. They started exchanging money circulating in one part of the country with the money current in another part of the country making good margin for them.The English traders, who came to India in the 17th century, established some contracts with the indigenous bankers by borrowing funds from them in 1786. The English Agency House had established the Bank of Bengal at Calcutta with the advent of modern banking conducted on western lines, the indigenous bankers lost further importance.

The English House Agency in Calcutta and Bombay were the bankers to the East India Company and the European merchants in India. They had no capital of their own and depend mainly on deposits from the public for finance. These agency houses failed as they combined banking with trading. Among the earliest banks in established in India, were the Bank of Bengal (1806), Bank of Bombay (1840) and Bank of Madras (1843).

These banks were also known as "presidency banks". In 1860 the concept of limited liability was introduced in banking. These banks (presidency banks) were allowed to issue notes to a limited extent, but this right was taken over by the government in 1862. In view of limited liability, several joint stock banks were floated.The swadeshi movement which started in the early 1900s gave stimulus to the growth of indigenous joint Stock Banks.In 1921, the 3 presidency banks were merged to form the Imperial Bank of India. During 1900 and 1950, the Indian joint stock banks specialized in providing short term credit, for trade in the form of cash-credit and over draft facilities, foreign exchange business, remained the monopoly of foreign banks. Between 1900 and 1925 many banks failed due to various reasons. The Central Banking Enquiry Committee was constituted in 1929; it gave the reasons for the failure of banks such as Insufficient capital, Poor liquidity of assets, Combination of non-banking activities with banking activities, Irrational credit policy & incompetent and Inexperienced directors.

It gave wide power to RBI to regulate, supervise and develop the banking systems. During 1950 to 1969 two important developments took place, first, the all India Rural Credit Survey Committee, which examined the issue of credit availability at the rural areas, recommended the creation or a state partnered sponsored bank entrusted with the task of opening branches in the rural areas.

Accepting this recommendation, the State Bank of India Act was passed in 1955 and the Imperial Bank of India was renamed as State Bank of India. Later in 1959 the State Bank of India (Subsidiary Bank) Act was passed enabling SBI, to take over 8 princely state associated banks as the subsidiaries; these banks were State Bank of Bikaner, State Bank of Hyderabad, State Bank of Indore ,State Bank of Jaipur, State Bank of Mysore, Bank of Patiala, State Bank of Saurashtra and Bank of Travancore.Secondly the need about wider diffusion of banking facilities and to change the uneven distributive pattern of bank lending was realized. The scheme of social control over banks was announced in the parliament in December 1967. The National Credit Control Council was set up in 1968 to assess the demand for bank credit from various sector of the economy and to determine their respective priorities in allocation.1.2 POST-INDEPENDENCE DEVELOPMENTS IN BANKING SECTOROn the eve of independence in August 1947, there were 648 commercial banks, comprising 97 scheduled and 551 non scheduled banks. Development in banking sector is divided into two separate groups namely pre-nationalize period and post nationalize period:1.2.1 PRE-NATIONALIZATION PERIODThe year 1969 was a landmark in the history of commercial banking in India. In July of that year, the government nationalized 14 major commercial banks of the country. In April 1980, government nationalized 6 more commercial banks. In 1951, when the First Five Year Plan (1951 - 56) was launched, the development of rural India was accorded the highest priority. The All India Rural Credit Survey Committee recommended. the creation of a State - partnered and State, sponsored bank by taking over the Imperial Bank of India and integrating with it, the former State - owned or State - associated banks. Accordingly, an Act was passed in the Parliament in May 1955 and the. State Bank of India was constituted on July 1, 1955. Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959 enabling the State Bank of India to take over eight former States - associated banks as its subsidiaries. During the pre-nationalization period, the industrial sector claimed the lion's share in bank credit. Within the industry, the large - scale sector cornered the bulk of credit and the share of small - scale industries was marginal. There were many reasons for the dominance of large industrial companies in the banking sector. A disturbing feature of the pre-nationalization banking policy was the negligible share of agricultural sector in bank credit. This share hovered around 2 per cent of total commercial bank credit. The privately owned commercial banks were neither interested nor geared to meet the risky and small credit requirements of the farmers. Similarly, the share of other non-industrial sectors in bank credit was also low. Since the commercial banks were under the control of big industrialists, the lendable funds of the banks were sometimes used to finance socially undesirable activities like hoarding of essential commodities.1.2.2 POST NATIONALIZATION PERIODAs already noted, leading commercial banks of the country were nationalized in 1969 with the following objectives in view:

To break the ownership and control of banks by a few business families.

To prevent concentration of wealth and economic power.

To mobilize savings of the masses from every nook and corner of the country.

To pay greater attention to the credit needs of the priority sectors like agriculture and small industries.

The post nationalization period witnessed a remarkable expansion in the banking and financial system. The biggest achievement of nationalization was the reallocation of sectoral credit in favour of agriculture, small industries and exports which formed the core of the priority sector. Within agriculture, credit for the procurement of food grains (food credit) was a major item. Other agricultural activities preferred for credit included poultry farming, dairy and piggeries. Certain other sectors of the economy which also received attention for credit allocation were: professionals and self employed persons, artisans and weaker sections of society. Conversely, there was a sharp fall in bank credit to large scale industries. However, the share of small scale industry registered an upward trend.

Nationalization of commercial banks was a mixed blessing: After nationalization there was a shift of emphasis from industry to agriculture. The country witnessed rapid expansion in bank branches, even in rural areas. Branch expansion programme led to mobilization of savings from all parts of the country. Nationalized banks were able to pay attention to the credit needs of weaker sections, artisans and self - employed. However, bank nationalization created its own problems like excessive bureaucratization, red tapism and disruptive tactics of trade unions of bank employees.1.3 CURRENT ISSUES IN INDIAN BANKINGDespite substantial improvements in the banking sector, some issues have to be addressed over time as the reform process is entrenched further. The discussion on banking developments revolves around on a wide range of issues like:

Overall redrawing of boundaries between the State ownership of financial entities and private sector ones.

Public sector character of the banking sector and efficiency.

Dilution of the government stake and its impact on the performance of the banking sector.

Corporate governance in banks and other segments of the financial system.

Transparency of policies and practices of monetary and financial agencies and accountability.

Prudential requirements of market participants together with comprehensive and efficient oversight of the financial system.

Maintenance of best practices in accounting and auditing, as also collection, processing and dissemination of symmetric and detailed information to meet the market needs.

Relevance of Development Finance Institutions (DFIs).The commonality among these concerns has given rise to a wide recognition and acceptance of having a set of international standards and best practices that every systemically important country should strive to foster and implement. Financial sector reforms, introduced in the early 1990s in a gradual and sequenced manner, were directed at the removal of various deficiencies from which the system was suffering. The basic objectives of reforms were to make the system more stable and efficient so that it could contribute in accelerating the growth process.

In response to reforms, the Indian banking sector has undergone radical transformation during the 1990s. Reforms have altered the organizational structure, ownership pattern and domain of operations of institutions and infused competition in the financial sector. The competition has forced the institutions to reposition themselves in order to survive and grow. The extensive progress in technology has enabled markets to graduate from outdated systems to modem market design, thus, bringing about a significant reduction in the speed of execution of trades and transaction costs.

With the increasing integration of various segments of financial markets, the distinctions between banks and other financial intermediaries are also getting increasingly blurred. Another important aspect of reforms in the financial sector has been the increased participation of financial institutions, especially banks, in the capital market. These factors have led to increased inter - linkages across financial institutions and markets. While increased inter - linkages are expected to lead to increased efficiency in the resource allocation process and the effectiveness of monetary policy, they also increase the risk of contagion from one segment to another with implications for overall financial stability. This would call for appropriate policy responses during times of crisis. Increased inter - linkages also raise the issue of appropriate supervisory framework.

Banking sector reforms in India are grounded in the belief that competitive efficiency in the real sectors of the economy will pot realize its full potential unless the banking sector was reformed as well. Thus, the principal objective of banking sector reforms was to improve the allocative efficiency of resources and accelerate the growth process of the real sector by removing structural deficiencies affecting the performance of banks.

In India, while the banking system continues to play a predominant role, it is significant to note that, as a result of various reform measures, the relative significance of financial markets has increased. This augurs well for the overall stability of the financial system. The East Asian crisis has also underlined the need for a balanced financial system wherein financial markets also play an important role in providing necessary liquidity, especially during times of crisis. Banking system also requires liquidity in times of stress, which only deep and liquid financial markets can provide.

1.4 TYPES OF E-PAYMENTS1. Electronic Clearing Service (ECS Credit)

2. Electronic Clearing Service (ECS Debit)

3. Credit & Debit Cards

4. National Electronic Funds Transfer (NEFT)

5. Real Time Gross Settlement (RTGS)1.5 NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT)NEFT is a facility provided to bank customers to enable them to transfer funds easily and securely on a one-to-one basis. It is done via electronic messages. In order to speed up the transactions there are up to 6 transactions in one day. Even though it is not on real time basis like RTGS (Real Time Gross Settlement), NEFT facilities are available in 30,000 bank branches all over the country and work on a batch mode. NEFT has gained popularity due to it saving on time and the ease with which the transactions can be concluded. This reflects from the fact that 42% of all electronic transactions in the 2014 financial year were NEFT.

National Electronic Funds Transfer (NEFT) NEFT is electronic funds transfer system, which facilitates transfer of funds to other bank accounts in over 63000 bank branches across the country. This is a simple, secure, safe, fastest and cost effective way to transfer funds especially for Retail remittances.1.5.1 FEATURES OF NEFT

Customers can remit any amount using NEFT Customer intending to remit money Through NEFT has to furnish the following particulars: IFSC (Indian Financial System Code) of the beneficiary Bank/Branch

Full account number of the beneficiary

Name of the beneficiary.1.5.2 BENEFITS OF NEFT

NEFT is an electronic funds transfer process used in India that allows users to easily transfer money in a very short time. The NEFT process has numerous associated advantages for both business and individuals. A couple of these benefits are listed here below:SECURE AND EFFICIENTThe NEFT process is highly efficient and it allows seamless movement of money or transfer from a certain bank to the next. Furthermore, the entire process is regarded as highly secure. This means there are fewer chances of errors occurring during the whole process.

LOW COSTThe other benefit that has many people considering NEFT as their main technique of transferring money is the low cost it charges. In fact, the costs involved during the NEFT process are much lesser compared to when you make demand drafts or pay orders. Hence, many small businesses in India are now using NEFT due to its economical nature.HIGHLY RELIABLE

NEFT is highly reliable and this is attributed to the fact the Indian reserve bank is the main coordinating agency of this process. This greatly reduces any likelihood of discrepancy when making financial transactions between various banks. That is the reason NEFT transactions cannot be revoked, since it has a high accuracy level.ELIMINATES DELAYS

NEFT transactions are designed to eliminate the normal delays associated with fund movements in general. This is because all transactions are quickly settled within one day from the start of the transaction. This means your customers or clients will get their money on time once it has been sent to their respective accounts.

Since the entire NEFT process is completely paperless, it helps lessen the need to cut trees for producing paper. Hence, NEFT is environmentally friendly. Furthermore, it is also risk free since fund transfers are processed and immediately settled within one day.1.6 REAL TIME GROSS SETTLEMENT (RTGS) SYSTEMRTGS is a fund transfer systems where transfer of money or securities takes place from one bank to another on a real time and on gross basis. Settlement in real time means payment transaction is not subjected to any waiting period. The transaction is settled on one to one basis without bunching or netting with any other transaction. Once processed, payments are final and irrevocable. This was introduced in 2004 and settles all inter-bank payments and customer transactions above 2 lakhs.

The development of RTGS systems started as a response to the growing awareness of the need for sound risk management in large-value funds transfer systems. RTGS systems offered a powerful mechanism for limiting settlement and systemic risks in the inter-bank settlement process, because these risks effect final settlement of individual funds transfers on a continuous basis during the processing day. In addition, RTGS can also contribute to the reduction of settlement risk in securities and foreign exchange transactions by providing a basis for Delivery-Versus-Payment (DVP) or Payment-Versus-Payment (PVP) mechanisms. An understanding of RTGS is thus essential when considering risk management in payment and settlement systems.

The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is Rs. 2 lakh. The maximum limit is Rs. 10 lakh per day.The RBI first implemented the RTGS in March 2004 as a major technology based electronic funds transfer system across the country. The RTGS infrastructure is critical in facilitating the orderly settlement of payment obligations.

In August 2013, the RTGS saw 62.10 lakh transactions (including customer transactions, inter-bank transactions and inter-bank clearing) aggregating to Rs. 67,55,735 crore.

1.6.1 FEATURES OF RTGS A modular component structure to meet individual country requirements and for flexibility in growth and expansion as needs arise. Final and irrevocable settlement of funds transfers continuously in real-time. Centrally located queuing of payments that are held awaiting availability of funds. Automatic gridlock resolution. Complete monitoring of account balances for both the Central Bank and participating institutions. Credit and intra-day liquidity management facilities. Maintenance of a statistical database with query and reporting facilities. Payment entry and processing using standard SWIFT message formats.

A multi-currency and multi-lingual system.

Secure payment and message transmission using the SWIFT services & secure interactive communication for monitoring & queue management.

Operational reliability with backup and contingency arrangements.

Complete audit trail, recovery and reporting facility.

1.6.2 BENEFITS OF RTGS Hassle-free high value settlement: Elimination of collection through physical H/V clearing.

Eliminates Settlement Risk & Systemic Risk

Speed: Guaranteed and fast settlement of transactions.

High Liquidity: Lower of interest costs.

Reduces paper work and improves efficiency.

1.6.3 ABILITY TO LIMIT PAYMENT SYSTEM RISKRTGS systems can contribute substantially to limiting payment system risks. With their continuous intraday final transfer capability, RTGS systems are able to minimize or even eliminate the basic interbank risks in the settlement process. More specifically, RTGS can substantially reduce the duration of credit and liquidity exposures. To the extent that sufficient covering funds are available at the time of processing, settlement lags will approach zero and so the primary source of risks interbank funds transfers can be eliminated. Once settlement is effected, the receiving ban can credit the funds to its customers, use them for its own settlement purposes in other settlement systems or use them in exchange for assets immediately without facing the risk of the funds being revoked. This capability also implies that, if an RTGS system were linked to other settlement systems, the real-time transfer of irrevocable and unconditional funds from the RTGS system to the other systems would be possible. The use of RTGS could therefore contribute to linking the settlement process in different funds transfer systems without the risk of payments being revoked.1.7 DIFFERENCES BETWEEN RTGS & NEFT RTGS is based on gross settlement while, NEFT is based on net settlement. Gross settlement is where a transaction is completed on a one-to-one basis without bunching with other transactions. As for a Deferred Net Basis (DNS), or net settlement, this is where transactions are completed in batches at specific times. In NEFT, all transfers will be held up until a specific time whereas RTGS transactions are processed throughout the working hours of the system. RTGS transaction involve large amounts of cash, basically only funds above Rs. 1,00,000 may be transferred using this system. For NEFT, any amount below Rs. 1,00,000 may be transferred, and this system is generally for smaller value transactions involving smaller amounts of money. RTGS processes in real-time (Push Transfer), while NEFT processes in cycles during the given working day. This causes a NEFT transaction that is initiated later than the last cycle to be completed the next day.COMPANY PROFILE

1.8 HISTORYThe Karnataka State Co-operative Apex Bank Limited (hereinafter referred to as the Bank) is a Scheduled Co-operative Bank incorporated under the Karnataka State Co-operative Societies Act 1959. It was established in the year 1915 is entering its Centenary year during next year. During the year in its inception the Bank had deposits of Rs.1.26 lakh, owned funds of Rs. 0.54 lakh and working capital of Rs.1.80 lakh. During the last 99 years the bank has achieved significant development and considered one of the premier State Co-operative Bank in the country. Our Bank is known for its commitment for the development of farmers in the state and also Primary Agricultural Credit Co-operative Societies and District Central Co-operative Banks.

Today it has 42 branches in Bangalore City through which it carries out commercial banking activities. It does not have any branches outside Bangalore.

The Bank was registered on 10th November 1915 under the name and style of The Mysore Provincial Cooperative Bank Limited, under the Mysore Co-operative Societies Act of 1905. Then, the Bank was not an Apex institution, as it was not exclusively meant for financing the co-operatives in the State of Mysore. Another Bank called the Bangalore Central Co-operative Bank Limited, Bangalore (which was later converted into an urban bank), which was registered in 1905, was also financing the co-operatives. The bank owes its origin to Sri. M.A. Narayan Iyengar, B.A., B.L., who was the Registrar of Co-operative Societies at that time.The bank was founded with the objective of financing, inspecting and supervising the Co-operative societies in the Mysore State. Subsequently, several district co-operative central banks with the jurisdiction of a district were registered. Five such district central banks were started. But their working was not satisfactory and they become defunct.

As such the provincial bank started financing the societies directly. Besides granting of loans, the bank served as an outlet for investment of the surplus finds of the co-operative societies in the state. The bank thus acts as the balancing centre of the co-operative movement in the state, safeguarding its interests.

1.9 REORGANIZATION OF PROVISIONAL CO-OPERATIVE INTO AN APEX BANK

At the time of inception of the Mysore Provincial Co-operative Bank, there was also another co-operative organization, the Bangalore Central Co-operative Bank, which was working on similar lines. This was an anomaly, which led to mutual competition unnecessarily in the matter of financing of co-operative societies. In order to remove this anomaly and to have only one institution as an Apex institution exclusively for financing the co-operatives in the state, the government appointed and enquiry committee known as the Mysore Co-operative Enquiry Committee, 1920-22 presided over by Mr. Lallubhai Samaldas and the committee after reviewing the position of these two banks, made the following three alternative recommendations to the government:

To amalgamate the Mysore Provincial Co-operative Bank and the Bangalore Central Co-operative Bank.

To create a new Apex Bank.

To convert the Central Co-operative Bank into an urban bank dealing only with the individuals and to reorganize the Provincial Co-operative Bank into a new Apex Bank.

1.10 PRINCIPAL FUNCTIONS OF THE APEX BANK

Financing of Short Term Loans for Seasonal Agricultural Operations and for marketing of crops. These loans are repayable within one year. During the year 2011-2012, Apex Bank has disbursed total loans of Rs.4423.28 crores of which Rs. 3736.37 crores for Agricultural purposes and Rs. 687.11 crores for Non-Agricultural purpose. Advancing Medium Term Loans for the development of agricultural infrastructure such as Lift Irrigation, Dairy, Poultry, Plantations, Gobar Gas, etc under schematic lending. Providing cash credit loans to processing, marketing and consumer co-operatives as well as sugar factories in Karnataka and also term loans to sugar factories under consortium arrangements. Advancing Working Capital Loans to state levels co-operatives like MARKFED, KCCF and to the national level co-operatives such as IFFCO and KRIBHCO. The bank provides similar facilities to public sector undertakings like Food Corporation of India through consortium arrangements with commercial banks and at times directly. The Bank extends finance to non-farm sector and for the development of cottage industries, small scale industries and rural artisans and weavers. It is a Scheduled Bank in all respects including remittances of funds by Demand draft, Mail transfers, Collection of cheques and Drafts.1.11 REAL TIME GROSS SETTLEMENT (RTGS) AND NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT)

RTGS system is primarily for large value money transaction. The minimum amount to be remitted through RTGS is Rs. 2 lakhs and below Rs. 2 lakhs can be transferred through NEFT.

RTGS is the fastest, cheapest and has left free system of transferring money from one account in difference places. RTGS is now implemented in Apex Bank. Apex Bank is the fourth State Co-operative Bank in India in implementing RTGS.

RTGS or NEFT form

1.12 QUALITY OBJECTIVE

The main aims and objectives of the Bank defined in the Bank Bye Law No. III are given below.

a. To serve as a State Co-operative Bank and as a balancing center in the State of Karnataka for registered co-operative societies;b. To raise funds by way of deposits, loans, grants, donations, subscriptions, subsidies etc. for financing the members by way of loans, cash credits, over-drafts and advances;c. To develop, assist and co-ordinate the member DCCBs and other Co-operative Societies and secure financial assistance for them;d. To participate in financing Co-operative and other institutions who are members of the bank, directly or through consortium of Bankers;e. To participate in the schematic lending and to provide loans for which refinance facility is available with term lending institutions.f. To arrange for the inspection and supervision of the affiliated DCCBs and other Co-operative Societies and guide them in their working;g. To buy and sell securities for the legitimate investment of surplus funds and act as agents for buyers and sellers of securities of Central/State;h. To carry on general business of Banking and other banking activities to the members and customers;i. To purchase, acquire or raise or otherwise obtain moveable or immoveable property for the own use of the Bank and also to dispose them of when not required;j. To take measures to help Co-operative Education;k. To promote and undertake Co-operative Research and Co-operative Development;l. To manage, sell or release any property which may come into the possession of the bank in satisfaction of or part satisfaction of any of its claims;m. To promote economic interest of the members of the Bank in accordance with the principles of Cooperation.n. To do such other things as are incidental or conducive to the promotion and advancement of the business of the Bank1.13 APEX VISION

Equitable and sustainable micro financial inclusion for overall rural prosperity through meaningful utilization of Human Endeavour and Capital.1.14 APEX MISSION

Equitable and sustainable micro financial inclusion for overall rural prosperity through meaningful utilization of Human Endeavour and Capital.1.15 OBJECTIVES OF THE KSC APEX BANK

Helping farmers to get irrigation, dairy, poultry facilities and advancing working capital loans to national level co-operative. Financial to non-for sector for development of cotton industries rural artisans and weavers

Bank carries all the banking transaction like remittances of funds by demand drafts, mail transfer, collection of cheques and drafts, issue of consumer loans, vehicle loans, housing loans, salary earners loans and gold loans etc.

Bank monitors the inland mutual arrangement scheme under which money remittances a cheques are facilities between members banks.

Establishing banks presence in all district of Karnataka.1.16 DOMAIN NETWORK : State Level - Karnataka State Co-operative Apex Bank Ltd. (KSCAB)

District Level - District Central Co-operative Banks (DCCBs)

Block, Taluk & Hobli Level - District Central Co-operative Banks Branches (DCCBBs)

Village Level - Primary Agricultural Credit Co-operative Societies (PACS)1.17 ACTIVITIES OF THE BANK Financing short-term (agriculture) loans for crop production and marketing of crops and advancing Medium Term Loans for development of agricultural infrastructure such as lift irrigation, dairy, poultry, plantation, gobar gas etc. Extending cash credit loans to processing, marketing and consumer co-operatives as well as sugar factories in Karnataka. Advancing term loans to new co-operative/Private sugar factories under consortium arrangement in Karnataka. Advancing working capital loans to sugar factories, state level cooperatives and to national level cooperatives such as IFFCO, KRIBHCO and to state level undertakings through consortium arrangements with commercial banks. Financing to non-farm sector for development of cottage industries, small scale industries and rural artisans and weavers. To carry on general business of Banking like remittances of funds by DD, Mail Transfer, Collection of Cheques and Drafts, issue of consumer loans, vehicle loans, housing loans, salary earners loans and gold loans and other banking activities to the members and customers. To monitor the Inland Mutual Arrangement Scheme under which money remittances and collection of bills and cheques are facilitated between member banks The Bank is a member of All India Mutual Arrangement Scheme, whereby money remittances could be made and DDs issued as well as Bills and Cheques sent for collection throughout India. Similarly, Mail Transfers and Bills Collection are facilitated from any part of the country to Apex Bank.1.18 BOARD OF DIRECTORSAccording to the Karnataka Cooperative Societies Act and Byelaws of the Bank, function of the Bank is regulated by the Board of Directors of the Bank consisting of one elected nominees of each District Central Cooperative Banks and Government Nominees. The Board is headed by the President followed by Vice President, Managing Director. The Chief General Manager, National Bank for Agriculture and Rural Development Bank and Registrar of Cooperative Societies are also among the Board of Directors, and are Government Nominees. The Board Meeting is convened once in a month. The Executive Committee Meeting is convened once a month.

In addition, the bank is also having Sub Committees consisting of Board of Directors in each Committee to monitor the functions of the Bank and District Central Cooperative Banks.1.19 PRODUCTS AVAILABLE BY APEX BANK1.19.1 DEPOSIT SCHEMES AT ATTRACTIVE RATES OF INTEREST

Term Deposit

Savings Bank Account

Current Account

Remittances

1.19.2 LOAN PRODUCTS AT ATTRACTIVE RATES OF INTEREST

1. Site Purchase LoanPurchase of sites at Bangalore.2. Cash Credit FacilityThis loan is for helping traders to carry on business by availing working capital facility from the Bank.3. Commercial VehicleThe Bank provides loans to purchase vehicle for commercial use only.

4. Professional LoanA loan product specially designed to offer security based and hassie free financial assistance to professionals and self-employed persons.

5. Apex ProfessionalPersonal loans to Doctors, Engineers, Architects and also to prompt Income Tax payees.6. Apex PensionLoan for pensioners to meet Medical expenses, other genuine needs and emergent personal expenses.

7. Apex GoldLoans to individuals for purchase of Gold jewellery.

8. Apex Self Employment Terms loans and working capital loan for purchase of Tools.

Loan to Auto-mechanics / Electricians / Plumbers and Carpenters engaged in servicing & repairing, to meet their working capital requirements.

Self-employed persons who are engaged in servicing and repairs.9. Apex WomenLoan sanctioned to women to meet their genuine personal needs like buying household articles, gifts and jewellery.10. Apex RetailThe loan for petty traders.

11. Apex Overdraft Loans to individuals pursuing such activities like Retail trade, Small Business and professionals.

Loan against the security of National Saving Certificate/Life Insurance Corporation policy/Gold Ornaments, etc.12. Apex RentLoan based on the rental income of the property Rented/leased out to Central/State/Semi Government / Banks / Financial Institutions and Multinational Companies.

13. Apex TravelTo meet travel and lodging expenses of individuals for travel in india and abroad either through personally arranged tours or through conducted tours.

14. Apex EducationEducational loan to deserving/meritorious students for pursuing higher education and professional courses in India and abroad in reputed Universities/Institutions.

15. Apex CashLoan against approved Bonds like RBI/NABARD/Other Government Bonds.16. Apex PersonalLoan scheme for employees of Corporates-Professionals can avail this loan.

17. Advance Against NSCsThe Bank provides advances against NSCs to the residents of Bangalore city.

18. Jewel LoanThe Bank provides Jewel Loan against pledge of gold ornaments to the residents of Bangalore city.

19. Vehicle LoanThe Bank provides loans to purchase two wheelers/four wheelers for personal use only.20. Home LoanThe housing finance services offered by the Bank include Construction of House / Mortgage Loan, Site purchase / Mortgage Loan, Purchase of Flats etc., to the public through its network of 42 branches in Bangalore City.

Residents of Bangalore city are eligible for housing under certain rules. Persons applying for loans for construction of house, additional/repairs to the existing House/Flat, purchase of House/Flats, Site Mortgage/purchase Loan etc. within the limits of Bangalore City Corporation, BDA, BMRDA, Revenue Villages, BIAPA & Municipalities coming under the jurisdiction of BMRDA/BIAPA & Bangalore Rural District & Ramanagara District are eligible for loan.

21. Installment LoanThe Bank provides Personal Loans to salaried people living within Bangalore City, to meet expenses such as education of children, medical expenses of self and family, purchase of household articles etc.

1.19.3 VALUE ADDED SERVICES Bank Guarantee Bills Safe Deposit Lockers DDs under IMAS DDs under AIMAS1.19.4 INSURANCE SERVICES

Vehicle Insurance Fire/Earthquake Insurance Apex Gold SB Account1.20 COMPETITORS

1. Shamrao Vital Co-Operative Bank

2. Commercial Banks

3. Corporate Banks1.21 MILESTONES ACHIEVED/AWARDS RECEIVED

Bank is able to lend 75% of the state and it covers all sugar factories in Karnataka.

Apex Bank is habituated to get awards at National levels year after year similarly.

NABARD has been performance award and even PACS have not have logged behind in getting national recognition. All DCC banks and merely 80% of PACS have proved themselves to be financially viable.

Nearly 40% of the loans have been advanced to weaker section/SC/ST and agricultural labourers.

RTGS (Real Time Gross Settlement) system has been implemented in view of speedy transfer of funds.

Bank has entered an agreement with Oriental Insurance Company Ltd., to sell various insurance1.22 AREA OF OPERATION

Apex bank works in the regional level only. It does not work in national level. The area of operation covers the entire Bangalore. It has 42 branches in Bangalore and headquartered in Pampa Mahakavi Road, Chamarajpet. The branches of office bank are adequately delegated with power of sanction of disbursements. If the loans are to be provided up to 10 lakhs it is handled by concerned branch offices but if is more than 10 lakhs then it is handled by main branch.

1.23 OBJECTIVES OF THE STUDY

To understand the NEFT and RTGS facilities provided by the KSC Apex bank.

To identify various customers involved in the transaction using NEFT and RTGS.

To find customer satisfaction towards banking services on NEFT and RTGS.

To provide the findings, suggestions to increase the effectiveness of KSC Apex bank internet banking services to customers.1.24 SCOPE OF THE STUDY

The study is made by considering the entire APEX bank. It investigates about all applications of online banking in APEX. It would help society to understand the usefulness of on- line banking. The study will also help to get the knowledge about process of internet banking and usefulness to banking industry and know about customers satisfaction level or reliability on it. As the study contains the 360 degree information regarding APEX bank and its internet banking.1.25 LIMITATIONS OF THE STUDY

The study has to complete within a short span of time prescribed. Findings are based on the records available at the organizations and the information provided by the company. As the managers were busy in their daily schedules it was not possible for me to spend more time in interaction and discussion with them.

1.26 RESEARCH METHODOLOGYThe study is descriptive in nature. The branch of the bank was selected by convenience and for the sake of access to the qualitative information. All the information collected through the books maintained by bank, through questionnaire, from the employees and also from the website of the bank.

The methodologies follow collecting information by using two sources of data namely:

Primary data

Secondary dataPRIMARY DATAPrimary data are the data collected for the first time and not available in the secondary source. The primary data is obtained through questionnaire with the officers of the KSC Apex Bank Ltd.

SECONDARY DATA

The source of secondary data is published materials such as text book, periodicals, journals, newspaper and annual reports of the KSC Apex Bank Ltd.

The following are the data sources through which the data have been collected.

The training and guidance material supplied to the staff of the branch

Online content of the banks website.

Brochures issued by the bank.

Prospectus issued by the bank.

Several websites on RTGS & NEFT.

1.26.1 SAMPLING TECHNIQUES

The significant component of a research study is the samling plan. Sample is the fraction of production. Sampling is a techniques or method or selection of samples. The researcher has adopted the appropriate technique in a domestic research that is simple random sampling.

Simple Random sampling is a good technique when there are comprehensive lists of the target population. Random sampling should be used when generalization is the objective of the study and a greater degree of accuracy of estimation of population parameters is required.

Sampling size: The sample size adopted for the study is 40 respondents.

Sample procedure: Sample procedures through structured questionnaire.1.26.2 PLAN OF ANALYSISThe primary data collected from the respondents were evaluated manually. Firstly, data was analyzed from each area and finally a consolidated analysis was made, percentage was calculated and used to estimate the proportion of the response for different aspect under consideration.LITERATURE REVIEW

1.27 REVIEW OF LITERATURE: INTRODUCTION

Generally, a researcher conducts and surveys the related literature in order to review the present status of a particular research topic. From the survey of literature, a researcher is able to know the quantum of work already done on his research topic so far not touched, or yet to be undertaken. The overview of literature at the national or an international level is to be researched with the help of research reports, articles, books and other materials. The major benefits of literature reviews are: firstly, helps the researcher in avoiding duplication of efforts on the same research topic. Secondly, helps the researcher in adopting methodologies used successfully by other researchers, writers and policy makers. Thirdly, suggests new approaches in planning, organizing the investigation of research topic. Fourthly, helps to narrow down the research problem more clearly and sixthly, assists investigators to develop firm understandings of theoretical implications of proposed inquiries.

This study contributes to literature by focusing Customer Satisfaction towards RTGS & NEFT. The aim of literature reviews is to justify, rationale of an ensuring research study, provides an overview of historical perspectives and to bring to the light the research trends and problems.

The present study identifies an ample number of research works at global level in general but at domestic level very few studies have been reviewed and found most appropriate on customer satisfaction towards RTGS & NEFT. The contribution of various researchers, policy-makers and writers to this area has focused on explaining the process of the RTGS & NEFT and satisfaction of the customer with the service, their challenges, advantages, disadvantages, herewith, the study, in brief summary and present some of them in a descending order as year of publication.

Raopun (2005), evaluated the level of internet banking services in Thailand and compared the overall satisfaction of banking facilities like NEFT, RTGS. The author used eight dimensional quality model given by David A. Garvin, namely, performance, features, reliability, conformance, durability, serviceability, aesthetics and perceived quality. The results of the study indicated that reliability, security system and information accuracy were the most important perspectives and least important was the perceived quality of commercial bank. The results of the study could be used as a guideline to set up a form of service in order to satisfy the needs of target group accurately and appropriately.Erickson et al. (2005), studied the technology acceptance of banking facilities in Estonia. The objective of the study was to see that to what extent customers accept RTGS and NEFT as a tool for the satisfaction. The findings of the study suggested that RTGS and NEFT proved to be beneficial for the customers to some extent. However, banks need to put much efforts not only into making a user friendly banking facilities, but also to explain their customers how the bank facilities was useful to them.Balwinder Singh and Malhotra .P (2004), examined the impact of online banking. The objective of the study was to find who uses internet, why and where. It also examined the respondents reasons for not using banking online. The data was collected from two universities of Kwazunatal. The researcher analyzed that males use more online banking than females. Main services used through websites were inter-account transfer, paying accounts, checking balance/ statement, communication with the banks, etc. Security was the main issue for not using banking online. The author suggested that to make online banking more adaptive, websites should be more attractive, more informative and colourful. Training should be given to customers. Charges of online facilities should also be less. Banks should advertise and publicize their new products and services offered on the websites so as to make online banking more popular among customers.Milind Sathye (1999), in his research paper, explored the factors affecting the adoption of online banking by Australian customers. The author stated that online and other virtual banking had significantly lower the cost structure than traditional delivery channels. So, the banks should encourage customers to use internet for banking transactions. The author also emphasized that for adoption of online banking, it was necessary that the banks offering this service made the consumers aware about the availability of such a product and explain how it adds value to the other products. However, internet should be considered as a part of overall customers service and distribution strategy. These measures could help in rapid migration of customers to online banking resulting in considerable saving of operating costs of banks.Marius Dannenberg, Dorothee Kellner (1998), overviewed the opportunities for effective utilization of the Internet with regard to the banking industry. The authors evaluated that appropriate application of todays cutting edge technology could ensure the success of banks in the competitive market. They evaluated the services of banks via internet as websites provide sophisticated line of products and services at low price. The authors analyzed that transactions via internet reduce the risk of data loss to customers, chance to cut down expenses, higher flexibility for bank employees, re-shaping the banks image into an innovative and technologically leading institutes, etc.1.28 NEED FOR THE STUDY

New era treats customers as a God. This study helps KSC Apex bank to identify the needs of customers in the usage of RTGS & NEFT facilities and so to improve on the flexibility of RTGS & NEFT facilities to all the customers. Therefore, this is an attempt to enhance customer point-of-view to help successfully handling RTGS & NEFT facilities and make use at the core.DATA ANALYSIS AND INTERPRETATION

1.29 AGE OF THE RESPONDENT

Table 4.1: Showing the age of the respondents

AGE (in years)

RESPONDENTS

PERCENTAGE (%)

Below 30

20

50

31-45

16

40

46-60

3

7

Above 61

1

3

Total

40

100

Source: From Survey

ANALYSIS: The respondents are mainly classified as less than 30, 31-45, 46-60 and above 61 years. This type of classification is done only in order to know which age group are more into the usage of NEFT and RTGS system.

Graph 4.1: Showing the age of the respondents

INTERPRETATION: In the considered respondents, 50% of the respondents belong to the age group of less than 30 years, 40% of them are between 31 to 45 years, 7% of them are between 46 to 60 years and 3% of them are above 61 years.

1.30 QUALIFICATION OF THE RESPONDENT

Table 4.2: Showing the qualification of the respondents

QUALIFICATION

RESPONDENTS

PERCENTAGE (%)Up to Higher Secondary

2

5

Graduate

19

47

Post Graduate

18

45

Professional

1

3

Total

40

100

Source: From SurveyANALYSIS: The respondents are mainly classified as Upto Higher Secondary, Graduate, Post Graduate and Professional. This type of classification is done only to know the education qualification of NEFT and RTGS users.Graph 4.2: Showing the qualification of the respondents

INTERPRETATION: The findings reveal that 3% of the respondent is professional; 45% are post graduate; 47% are graduate and 5% have secondary education. The findings therefore imply that most of the respondents of Apex Bank are Graduate and Post Graduates.1.31 PROFESSION OF THE RESPONDENT

Table 4.3: Showing the profession of the respondents

PROFESSION

RESPONDENTS

PERCENTAGE (%)Unemployed

0

0

Job in Public Sector

16

40

Job in Private Sector

20

50

Business Entrepreneur

4

10

Total

40

100

Source: From SurveyANALYSIS: The respondents are mainly classified as Unemployed, Job in Public Sector, Job in Private Sector and Business Entrepreneur. This type of classification is done to know the profession of the respondents accessing NEFT and RTGS payment systems.Graph 4.3: Showing the profession of the respondents

INTERPRETATION: The findings reveal that 10% of the respondents are business entrepreneur; 50% works in Private Sector: 40% in Public Sector and none of them are unemployed. The findings therefore imply that all of the respondents of Apex Bank are working.1.32 GROSS MONTHLY INCOME OF THE RESPONDENT

Table 4.4: Showing the monthly income of the respondents

INCOME

RESPONDENTS

PERCENTAGE (%)Below 20,000

20

50

20,001-40,000

16

40

40,001-60,000

2

5

Above 60,001

2

5

Total

40

100

Source: From SurveyANALYSIS: The respondents are mainly classified as less than 20,000; between 20,001 to 40,000; 40,001 to 60,000 and more than 60,001. This type of classification is done to know which income level of the respondents accessing NEFT and RTGS payment systems.Graph 4.4: Showing the monthly income of the respondents

INTERPRETATION: The findings reveal that 50% of the respondents have below 20,000 income; 40% have 20,001 to 40,000, 5% of the respondents have 40,001 to 60,000 and 5% of the respondents are getting more than 60,001 incomes. The finding therefore implies that income less than 20,000 are more users of RTGS and NEFT.1.33 USAGE OF INTERNET BANKING SERVICESTable 4.5: Showing the usage of internet banking servicesNO. OF YEARS AS CUSTOMER OF THE BANKRESPONDENTS

PERCENTAGE (%)< 5 years

21

52

5 years - 10 years

12

30

11 years - 15 years

3

8> 15 years

4

10

Total

40

100

Source: From SurveyANALYSIS: The respondents are mainly the customers of bank for a period less than 5 years, 5 to 10 years, 11 to 15 years and more than 15 years. This type of classification is done to know the awareness of internet banking facilities.Graph 4.5: Showing the usage of internet banking services

INTERPRETATION: The findings reveal that 52% of the respondents are using internet banking services less than 5 years, 30% of them from 5 to 10 years, 8% of 11 to 15 years and 10% from more than 15 years. The findings are therefore implying that internet banking services are need to be make much aware to use.1.34 NUMBER OF NEFT USERS

Table 4.6: Showing the number of NEFT usersPARTICULARS

RESPONDENTS

PERCENTAGE (%)Yes

32

80

No

8

20

Total

40

100

Source: From SurveyANALYSIS: The above table shows the number of NEFT users among the selected respondents. Out of that 80% of the sample is currently using the NEFT facility and remaining 20% are not using or not aware of using this mode of payment system.Graph 4.6: Showing the number of NEFT users

INTERPRETATION: From the above graph, we can come to know that there are users of NEFT system i.e., 80% of the population are using this system but 20% are not using or not aware of using this mode of payment system. So it can be interpreted that only 20% of the sample are not using NEFT as a mode of transferring the money.1.35 FREQUENCY OF THE USAGE OF NEFT SYSTEM

Table 4.7: Showing the frequency of the usage of NEFT systemFREQUENCY

RESPONDENTS

PERCENTAGE (%)Once in a week

4

12

Once in a month

6

19

Very often

10

31

Once in quarter

12

38

Total

32

100

Source: From SurveyANALYSIS: The above table shows the frequency of the usage of transferring of their funds through NEFT. It can be considered as Once in a week, Once in a month, Very often or Once in quarter. Based on their requirement the respondents use this NEFT system as a mode of the payment system. Graph 4.7: Showing the frequency of the usage of NEFT system

INTERPRETATION: It is observed that 12% of the respondents frequently uses NEFT system ie., once in a week, 19% of the respondents use once in a month, 31% use very often, 38% of the respondents use once in quarter. By this we can interpret that though the users of NEFT are more among the selected population, but the frequency of users are very less i.e., once in quarter.1.36 THE EXPERIENCES OF THE RESPONDENT WHEN USING NEFT FACILITIES & HOW SOON THEY RECEIVE CREDIT/DEBIT IN THEIR ACCOUNT

Table 4.8: Showing the credit/debit receive in their account through NEFT

PARTICULARS

RESPONDENTS

PERCENTAGE (%)> 2 hours

18

56

< 2 hours

12

38

Others

2

6

Total

32

100

Source: From SurveyANALYSIS: The above table we can analyze that the respondents who are using NEFT system, their experiences while using the system and also in how many hours or time span the amount will be credited or debited in their account and it is broadly classified as more than 2 hours, less than 2 hours or any other.Graph 4.8: Showing the credit/debit receive in their account through NEFT

INTERPRETATION: From the above graph, we can interpret the 56% of the respondents using NEFT facilities for the purpose of transferring money receive a credit/debit in their account in more than 2 hours, 38% receive less than 2 hours and 6% of them receive in more than 4 hours due to some technical issues.1.37 RESPONDENTS OPINION OR DIFFICULTY WHILE FILLING THE NEFT FORM

Table 4.9: Showing the opinion or difficulty while filling the NEFT form

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Yes

14

44

No

18

56

Total

32

100

Source: From SurveyANALYSIS: The above table we can come to know the opinion of the respondents while filling the NEFT form. The difficulty in filling the form can be classified as Yes or No which states that whether the respondents are facing difficulty while filling the form or they does not have any difficulty while filling it.Graph 4.9: Showing the opinion or difficulty while filling the NEFT form

INTERPRETATION: From the above graph we can come to know that 56% of the selected respondents dont have any difficulty while filling the NEFT form and 44% of them found the difficulty in filling it. By this we can interpret that majority of the respondents dont have any difficulty filling the NEFT form.

1.38 TYPE OF CUSTOMERS USING NEFT TRANSACTIONS IN THE BANK

Table 4.10: Showing the type of customer who uses NEFT on a large basis

TYPE

RESPONDENTS

PERCENTAGE (%)Business

8

25

Government Employees

2

6

Retired Persons

2

6

Others

20

63

Total

32

100

Source: From SurveyANALYSIS: The above table we can analyze that type of customer a banker may have who use NEFT transactions on a larger basis. The type of customer may be divided as businessmen, government employees, retired persons and others. Graph 4.10: Showing the type of customer who uses NEFT on a large basis

INTERPRETATION: For the above graph we can interpret that 25% of the businessmen and 63% others are using this facility on a larger basis. Only 6% of government employees and 6% of retired persons are negligible in number as they may not be having any such large transactions to happen. So to conclude we can say that businessmen and others are the people who use NEFT on a larger basis.1.39 DEFICIENCIES IN THE USAGE OF NEFT FACILITIES

Table 4.11: Showing the deficiencies in the usage of NEFT facilities

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Lack of secure

12

38

No confidence

10

31

Others

10

31

Total

32

100

Source: From SurveyANALYSIS: The deficiencies in the usage of NEFT facility can be distinguished as lack of secure, no confidence and others. These are the main types of deficiencies which a customer may have in his mind regarding NEFT. Graph 4.11: Showing the deficiencies in the usage of NEFT facilities

INTERPRETATION: From the above graph we can interpret that 38% of the respondents have is no proper security while transferring of funds through NEFT system. 31% have no confidence and 31% have some other reasons like cost. Problem may be due to thinking the problem of hacking and no proper knowledge and so may be the reason most of the customer hesitate to use NEFT system1.40 DUE TO LACK OF SECURITY NEFT SYSTEM IS NOT ACCEPTED BY CUSTOMERS

Table 4.12: Showing due to lack of security NEFT system is not accepted by customers

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Yes

16

50

No

16

50

Total

32

100

Source: From SurveyANALYSIS: Above table shows that how many customers think that security issues act as a lack to the NEFT system of payment. It can be classified as Yes or No.Graph 4.12: Showing due to lack of security NEFT system is not accepted by customer

INTERPRETATION: From the above graph we come to know that 50% of respondents think that lack of security and 50% dont think that there is a lack of security in NEFT system.

1.41 RISK OF MISAPPROPRIATIONS WHILE

TRANSFERRING OF FUNDS IN CASE OF NEFT

Table 4.13: Showing risk of misappropriations while transferring funds in NEFT

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Yes

12

37

No

20

63

Total

32

100

Source: From SurveyANALYSIS: From the above table, we can come to know that among the selected respondents the percentage of people who think that misappropriations are more while transferring of funds through NEFT and vice versa. The above table can be analyzed that in the sample size selected the respondents have a belief that due to misappropriations NEFT facility is not popular and not being adopted by the account holders for larger volume of transactions.

Graph 4.13: Showing risk of misappropriations while transferring funds in NEFT

INTERPRETATION: The above graph represents 37% think that misappropriations are more in case of transferring of funds while 63% think that due to improve technology misappropriations can be reduced.1.42 UP GRADATION IN TECHNOLOGY HAS AN EFFECT ON LACK OF SECURITY WHILE TRANSFERRING OF FUNDS THROUGH NEFT

Table 4.14: Showing up gradation in technology effects on lack of security in NEFT

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Agree

16

50

Disagree

16

50

Total

32

100

Source: From SurveyANALYSIS: From the above table we can come to know whether an up gradation in technology has an effect on the lack of security while transferring of funds through NEFT. The respondents have given their answers like whether they agree to this point or not.Graph 4.14: Showing up gradation in technology effects on lack of security in NEFT

INTERPRETATION: From the above graph we can interpret that 50% of the respondents agree and 50% does not agree for the upgradation in technology effects lack of security. So some customers think that due to technology up gradation security is not there but in reverse case some people think that due to up gradation in technology even security has been improved.1.43 NUMBER OF RTGS USERS

Table 4.15: Showing the number of RTGS usersPARTICULARS

RESPONDENTS

PERCENTAGE (%)Yes

32

80

No

8

20

Total

40

100

Source: From SurveyANALYSIS: The above table shows the number of RTGS users among the selected respondents. Out of that 80% of the sample is currently using the RTGS facility and remaining 20% are not using or not aware of using this mode of payment system.Graph 4.15: Showing the number of RTGS users

INTERPRETATION: From the above graph, we can come to know that there are users of RTGS system ie., 80% of the population are using this system but 20% are not using or not aware of using this mode of payment system. So it can be interpreted that only 20% of the sample are not using RTGS as a mode of transferring the money.1.44 FREQUENCY OF THE USAGE OF RTGS SYSTEM

Table 4.16: Showing the frequency of the usage of RTGS systemFREQUENCY

RESPONDENTS

PERCENTAGE (%)Once in a week

825Once in a month

1031Very often

619Once in quarter

825Total

32

100

Source: From SurveyANALYSIS: The above table shows the frequency of the usage of transferring of their funds through RTGS. It can be considered as Once in a week, Once in a month, Very often or Once in quarter. Graph 4.16: Showing the frequency of the usage of RTGS system

INTERPRETATION: It is observed that 25% of the respondents frequently uses NEFT system ie., once in a week, 31% of the respondents use once in a month, 19% use very often and 25% of the respondents use once in quarter. By this we can interpret that though the users of RTGS are more among the selected population, but the frequency of users are very less ie., Very often.1.45 THE EXPERIENCES OF THE RESPONDENT WHEN USING RTGS FACILITIES & HOW SOON THEY RECEIVE CREDIT/DEBIT IN THEIR ACCOUNT

Table 4.17: Showing the credit/debit receive in their account through RTGS

PARTICULARS

RESPONDENTS

PERCENTAGE (%)> 2 hours

619< 2 hours

2269Others

412Total

32

100

Source: From SurveyANALYSIS: The above table we can analyze that the respondents who are using RTGS system, their experiences while using the system and also in how many hours or time span the amount will be credited or debited in their account and it is broadly classified as more than 2 hours, less than 2 hours or any other.Graph 4.17: Showing the credit/debit receive in their account through RTGS

INTERPRETATION: From the above graph, we can interpret the 19% of the respondents using RTGS facilities for the purpose of transferring money receive a credit/debit in their account in more than 2 hours, 69% receive less than 2 hours and 12% of them receive in more than 4 hours due to some technical issues.1.46 RESPONDENTS OPINION OR DIFFICULTY WHILE FILLING THE RTGS FORM

Table 4.18: Showing the opinion or difficulty while filling the RTGS form

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Yes

2269No

1031Total

32

100

Source: From SurveyANALYSIS: The above table we can come to know the opinion of the respondents while filling the RTGS form. The difficulty in filling the form can be classified as Yes or No which states that whether the respondents are facing difficulty while filling the form or they do not have any difficulty while filling it.Graph 4.18: Showing the opinion or difficulty while filling the RTGS form

INTERPRETATION: From the above graph we can come to know that 31% of the selected respondents dont have any difficulty while filling the RTGS form and 69% of them found the difficulty in filling it. By this we can interpret that majority of the respondents face difficulty filling the RTGS form.1.47 TYPE OF CUSTOMERS THE BANK MAY HAVE LARGE NUMBER OF RTGS TRANSACTIONS

Table 4.19: Showing the type of customer who uses RTGS on a large basis

TYPE

RESPONDENTS

PERCENTAGE (%)Business

1238Government Employees

2

6

Retired Persons

13Others

1753Total

32

100

Source: From SurveyANALYSIS: The above table we can analyze that type of customer a banker may have who use RTGS transactions on a larger basis. The type of customer may be divided as businessmen, government employees, retired persons and others. Graph 4.19: Showing the type of customer who uses RTGS on a large basis

INTERPRETATION: For the above graph we can interpret that 38% of the businessmen and 53% others are using this facility on a larger basis. Only 6% of government employees and 3% of retired persons are negligible in number as they may not be having any such large transactions to happen. So to conclude we can say that businessmen and others are the people who use RTGS on a larger basis.1.48 DEFICIENCIES IN THE USAGE OF RTGS FACILITIES

Table 4.20: Showing the deficiencies in the usage of RTGS facilities

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Lack of secure

1444No confidence

515Others

1341Total

32

100

Source: From SurveyANALYSIS: The deficiencies in the usage of RTGS facility can be distinguished as lack of secure, no confidence and others. These are the main types of deficiencies which a customer may have in his mind regarding RTGS. Graph 4.20: Showing the deficiencies in the usage of RTGS facilities

INTERPRETATION: From the above graph we can interpret that 44% of the respondents have is no proper security while transferring of funds through RTGS system. 15% have no confidence and 41% have some other reasons like cost. Problem may be due to thinking the problem of hacking and no proper knowledge and so may be the reason most of the customer hesitate to use RTGS system1.49 DUE TO LACK OF SECURITY RTGS SYSTEM IS NOT ACCEPTED BY CUSTOMERS

Table 4.21: Showing due to lack of security RTGS system is not accepted by customers

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Yes

1341No

1959Total

32

100

Source: From SurveyANALYSIS: Above table shows that how many customers think that security issues act as a lack to the RTGS system of payment. It can be classified as Yes or No.Graph 4.21: Showing due to lack of security RTGS system is not accepted by customers

INTERPRETATION: From the above graph we come to know that 41% of respondents think that lack of security and 59% dont think that there is a lack of security in RTGS system.

1.50 RISK OF MISAPPROPRIATIONS WHILE TRANSFERRING OF FUNDS IN CASE OF RTGS

Table 4.22: Showing risk of misappropriations while transferring funds in RTGS

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Yes

1553No

1747Total

32

100

Source: From SurveyANALYSIS: From the above table, we can come to know that among the selected respondents the percentage of people who think that misappropriations are more while transferring of funds through RTGS and vice versa. The above table can be analyzed that in the sample size selected the respondents have a belief that due to misappropriations RTGS facility is not popular and not being adopted by the account holders for larger volume of transactions.

Graph 4.22: Showing risk of misappropriations while transferring funds in RTGS

INTERPRETATION: The above graph represents 53% think that misappropriations are more in case of transferring of funds while 47% think that due to improve technology misappropriations can be reduced.1.51 UP GRADATION IN TECHNOLOGY HAS AN EFFECT ON LACK OF SECURITY WHILE TRANSFERRING OF FUNDS THROUGH RTGS

Table 4.23: Showing up gradation in technology effects on lack of security in RTGS

PARTICULARS

RESPONDENTS

PERCENTAGE (%)Agree

1959Disagree

1341Total

32

100

Source: From SurveyANALYSIS: From the above table we can come to know whether an up gradation in technology has an effect on the lack of security while transferring of funds through RTGS. The respondents have given their answers like whether they agree to this point or not.Graph 4.23: Showing up gradation in technology effects on lack of security in RTGS

INTERPRETATION: From the above graph we can interpret that 59% of the respondents agree and 41% does not agree for the upgradation in technology effects lack of security. So some customers think that due to technology up gradation security is not there but in reverse case some people think that due to up gradation in technology even security has been improved.1.52 COMPARISON ON NUMBER OF NEFT AND RTGS USERS

Table 4.24: Showing comparison on the number of NEFT & RTGS users

USERS

RESPONDENTS

PERCENTAGE (%)Only NEFT

8

20

Only RTGS

8

20

Both RTGS & NEFT

24

60

Total

40

100

Source: From SurveyANALYSIS: From the above table we conclude that if we take only the users of NEFT or RTGS payment system then the number of users for only NEFT or only RTGS is very low.Graph 4.24: Showing comparison on the number of NEFT & RTGS users

INTERPRETATION: From the above graph we can interpret that 20% of the respondents use NEFT only and 20% of RTGS only. But if we take both NEFT & RTGS users the numbers of respondents are less because it is due to awareness of the payment system.CHAPTER - 5

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSIONS

1.53 FINDINGS During the survey of research study it is found that most of the customers are not aware of the payment systems like RTGS & NEFT.

The bank is using the technology and has adopted the recent payment systems like NEFT and RTGS which is useful for faster clearing of the transaction and also in quick transfer of money.

It is found that customers feel there is more service charges included in case of RTGS system of transactions. Because one of this reason many of them hesitate to adopt this type of payment system.

It is found that RTGS is meant for only larger transactions so there is a minimum limit is case of transferring of funds through RTGS system so this mode of payment system is not meant for those transactions which constitutes for smaller transactions within the minimum limit.

During the transfer of funds it is found that two factors are involved. In the first factor it is found that information will be transferred from the payer bank to the payee bank and the second factor includes that settlement of funds takes place between the banks.

It is observed that some of the customer who are willing to use this type of transactions may hesitate to use this due to lack of security. As in the survey conducted we can know majority of them have think that there is a lack of security in RTGS and NEFT payment system.

As stated earlier there are woe factor involved in transfer of banks. The first factor is the transfer of the information from one bank branch to another. So it is found that sometimes while transferring of funds from one bank branch to another, the information can be misappropriated and the whole transactions may be lost.

1.54 SUGGESTIONSWith reference to analysis and findings of the study and my personal experience the following suggestion are made:

It is suggested that before doing any transactions which is related to the payment system especially the NEFT and RTGS system, they have to ensure that there is proper security measures taken while the transfer of money from one branch account to another is taking place.

It is suggested from the bank that the participants while transferring should appoint one of its staff to safeguard communication in NEFT and RTGS system.

As per the survey conducted, most of the customers are not willing to accept this type of payment system as they have the fear of security issues and most of them think that these security issues are happening only because of up gradation in technology so it is very much necessary for the bankers to take care of the security issues.

It is suggested that RTGS and NEFT should be given importance and the information about it should be conveyed, as many of the customers would not be having any idea about what actually it is.1.55 CONCLUSIONS

Based on data analysis and discussion that mentioned, it can be concluded that the responses of respondents partially agree up gradation of technology effects security in RTGS and NEFT system. Findings reveal that Banking facilities like RTGS and NEFT have satisfied most of people banking needs. Most bank clients enjoy using e-Banking, this results into a high level of satisfaction. It is very necessary to pay attention to the risk related issues and a service charge of the payment systems RTGS and NEFT as it lowers the level of satisfaction. Findings revealed that there is a weak positive relationship between Electronic banking and customer satisfaction. It is therefore true to say that Electronic banking has a significant effect on customer satisfaction. Awareness it to be created among the usage of RTGS and NEFT payment systems as many of them are not aware of the system itself.

Thus, I feel proud in doing my project in a well established bank which is doing a great job as it is practicing both NEFT and RTGS system of payment. I wish to conclude by saying that Apex Bank should increase the number of branches in other cities for further growth and to extend its customer loyalty.1.56

ACHARYA BANGALORE B-SCHOOL Page 10