PROJECT REPORT

“MODERNISATION OF SERVICES IN BANKING SECTOR”

Project report submitted to JAGAN INSTITUTE OF MANAGEMENT STUDIES

in fulfillment of award of Post Graduate Diploma in Management (PGDM) under
the guidance of:

Dr. Deepika Saxena

Submitted by:

Bhavya Kirti Gupta

Roll No: FA16014
PGDM – General
(2016-18)

Jagan Institute of Management Studies (JIMS)

3, Industrial Area, Sector – 5, Rohini,
New Delhi – 110085
 CERTIFICATE

This is to certify that the project work done on “Modernisation of services in banking
sector” is an original work carried out by Bhavya Kirti Gupta under my supervision and
guidance. The project report is submitted towards the partial fulfilment of Two year, Full time
Post Graduate Diploma in Management. This work has not been submitted anywhere else for any
other degree/diploma. The work was carried out from 1st January, 2018 to 25th February, 2018.

Sign of Faculty mentor

Assistant Professor
 DECLARATION

I hereby declare that this project titled “Modernisation of services in banking

sector” submitted to JIMS (Jagan Institute of Management Studies) has been carried by
Mr. Bhavya Kirti Gupta. Further, I declare that this is my original work carried out under
the guidance of Dr. Deepika Saxena in partial fulfillment of award of Post Graduate
Diploma in Management (PGDM).
All the contents of this project report are true to the best of my knowledge and has not
been submitted earlier to any other university or institution for award of
degree/diploma/certificate or published any time earlier.

Signature
Bhavya Kirti Gupta
FA16014
 ACKNOWLEDGEMENT

I convey my sincere gratitude to my faculty mentor Dr. Deepika Saxena for her guidance,
encouragement and support throughout the project and making it successful.

I have given my all dedication to this project and have been able to manage the things as
professionals. However, it would not have been possible without the kind support and
help of many individuals from industry as well as the college. I wish to extend my
heartiest gratitude to all of them.

Regards,
Bhavya Kirti Gupta
FA16014
ABSTRACT

Banks have control over a large part of the supply of money in circulation. Therefore, they are the main
stimulus for the economic progress of a country. The Financial sector, of which Banking sector is the
monumental player, plays a supreme role in building the economy of an individual as well as a nation. A
substantial banking and finance sector is, therefore, imperative for a country to emerge as a developed
nation. Today banking is known as innovative banking. It is vital for growth, generation of wealth,
creation of jobs, encouraging entrepreneurial activity, eradication of poverty, and increasing the gross
domestic product. 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. The focus is shifting from mass banking to class banking with the introduction of value
added and customized products. Technology allows banks to create what looks like a branch in a
business building‘s lobby without having to hire manpower for manual operations One of the most
significant areas where IT has had a positive impact is 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 ago has made it
reality. With networking and internet 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 and services.

The Digital India drive is a dream project of the Indian Government to remodel India into a
knowledgeable economy and digitally empowered society, with good governance for citizens by bringing
synchronization and co-ordination in public accountability, digitally connecting and delivering the
government programs and services to mobilize the capability of information technology across
government departments. It is a well-known fact that digital India is the outcome of many innovations
and technological advancements. These transform the lives of people in many ways and will empower
the society in a better manner. The 'Digital India' programme, an initiative of honourable Prime Minister
Mr. Narendra Modi, will emerge new progressions in every sector and generates innovative endeavours
for geNext. The motive behind the concept is to build participative, transparent and responsive system.
Today, every nation wants to be fully digitalized and this campaign strives to provide equal benefit to
the user and service provider. Hence, an attempt has been made in this paper to understand Digital
India – as a campaign where technologies and connectivity will come together to make an impact on all
aspects of governance and improve the quality of life of citizens.
 TABLE OF CONTENTS

 Certificate
 Declaration
 Acknowledgement
 Abstract

S. No. Particulars Page Number

1. Introduction, Objectives, Methodology and
Limitations of the study
2. Modernisation of banking sector
3. Digital India
4. Analysis
5. Findings, Suggestions and Conclusion

 References
 Appendix
I. INTRODUCTION
Digitization in banking industry essentially means making banking seamless and smooth for the
consumers. There is a notable drop in the usage of branches in the recent years and tremendous rise in
digital banking consumption. Most of the public sector banks and private banks are focused on offering
latest technology-based services to its customers like mobile banking, online payment apps and e-
wallets. The greatest advantage of digital channeling in banking is its ability to provide numerous new
customer specific business models and propositions by analyzing this banking pattern which explores
the customer value to the maximum possible.

Information Technology today has become an important tool for an effective and efficient banking
system, and banks of India have put in place a fairly strong infrastructure to leverage its benefits.
Digitization is not an option for banking industry rather it is inevitable as every industry is being digitized
in order to accelerate growth and banking sector is no exception for that. Now India as well as Indians
are ready to become cashless in this era of Digitization. Banks are the backbone of the economy, it is no
brainer that they sink and sail with it. Though riddled with lot of risk, banking services are steadily
moving forward with digitization to offer customers banking services at their fingertips and laptop
screens. The 'Digital India' campaign Started by Mr. Narendra Modi has the potential to transform the
Indian banking industry and lead it towards progress. While highlighting the ever increasing growth of
'Digital India', more than 12,000 rural post office branches have been linked into payment banking.
Many other policies and regulations are expected to be in place in the upcoming years, apart from giving
licenses to new payment banks, which can bring a paradigm shift in the Indian banking sector. The vision
of making India Digital aims to transform our country into a digitally advanced economy with
participation from citizens and business houses. Over 190 million accounts have been opened under the
financial inclusion scheme, with around 38 per cent of these being zero-balance accounts. It prospers to
achieve the maximum value, maximum technological penetration among the masses, and maximum
empowerment to people. India is a nation which is continuously being driven by cash, therefore, it is
essential to move forwards towards a cashless economy with financial inclusion policy and ‘Digital India’
campaign by the government, with the aim of controlling the flow of black money.

OMNI CHANNEL APPROACH The most effective way to understand and bring the organization from
traditional banking to digital banking is Omni-Channel approach. Omni-channel is a multichannel
approach to customer service where all the channels are tightly integrated, keeping customer in the
center of the integration. As customers continue to change their channel usage patterns, banks and
credit firms need to focus on delivering a seamless customer experience across various touch points.
More than just an axiom, Omni-channel banking is a prospect to take bottom-line on higher note by
gaining insights from customers’ channels, behavior and preferences. Today’s customers are more
sophisticated and tech savvy, and to cater to their specific needs, each customer needs a unique
experience from banking. They want the companies to understand their unstated needs as well as their
likes. So, it should come as no surprise that these customers are expecting similar kind of response and
service from banking institutions too. From researching new services, opening an account, checking
balance, conducting transactions, loans, credits, wealth management, customer support, delivering an
Omni-channel experience has become a key to success in this competitive market place.

Espousal of Omni-channel is indispensable to ensure that customer experience is unified, incorporated

and supports customer at the right time, in the right place as the right way. It must be as per their
mobile and digital life style. Staying germane in current banking revolution entails deep acquaintance of
customers’ needs, wants and demands. It also requires the precise mixture of IT infrastructure and
innovative new technologies to certify that one remains ahead in current market space to drive top, as
well as bottom lines upwards. PwC India’s leader banking and capital markets, Shinjini Kumar said,
“Many Indian banks, like their Asian counterparts, are geared to use the advantage of local talent and
leapfrogging technology to create forward looking digital strategies.

The digital world that we live in today is that where every civilian has a bright prospect to transform the
lives in many ways that were hard to envision just a couple of years ago. It is the outcome of several
innovations and technology advances. Today, every nation wants to be fully digitalized that will
empower society in a better manner. The 'Digital India' programme, an initiative of honourable Prime
Minister Mr. Narendra Modi, will emerge new progressions in every sector and generates innovative
endeavours for geNext. The motive behind the concept is to build participative, transparent and
responsive system. All educational institutions and government services will soon be able to provide I-
ways round the clock. Digital India will provide all services electronically and promote digital literacy.
Digital Technologies which includes the concept of cloud computing and mobile applications have
emerged as the catalysts for express economic growth and citizen empowerment. Companies all over
the world desire to invest in Digital India- the 21st century India, as a growth opportunity. Hence, an
attempt has been made in this paper to understand Digital India – as a campaign where technologies
and connectivity will come together to make an impact on all aspects of governance and improve the
quality of life of citizens. Global investors like Sundar Pichai, Satya Nadella, Elon Musk have supported
Modi's Digital India initiative.

NEED FOR MODERNISATION / HISTORY

The need for computerization was felt in the Indian banking sector in late
1980s, in order to improve the book-keeping, MIS reporting and customer
service. In 1988, Reserve Bank of India set up a Committee, headed by Dr. C.
Rangarajan, on computerization in banks.

Initially, banks began using Information Technology with the introduction of

standalone PCs and shifted to Local Area Network (LAN) connectivity. With
further advancement, banks migrated to the Core Banking platform. Thus,
branch banking modified to bank banking. Core Banking Solution (CBS)
enabled banks to increase the comfort features for the customers as a
promising step towards enhancing customer convenience and satisfaction
through “Anywhere and Anytime Banking”. Different Core Banking platforms
such as ‘Finacle’ designed by Infosys, ‘BaNCS’ by TCS, and ‘FLEXCUBE’ by i-
flex, gained popularity.

The process of Computerization gained pace with the opening of the economy
in 1991-92. A major driver for this change was propelled by rising competition
from private and foreign banks. Several commercial banks started moving
towards digital customer services to remain competitive and relevant in the
race.

Banks have benefitted in several ways by adopting newer technologies. E-

banking has resulted in reducing costs drastically and has helped generate
revenue through various channels. As per last available information, the cost
of a bank transaction on Branch Banking is estimated to be in a range of Rs.70
to Rs.75 while it is around Rs.15 to Rs.16 on ATM, Rs.2 or less on Online
Banking and Rs.1 or less on Mobile Banking. The number of customer base
has also increased because of the convenience in 'Anywhere Banking'.
Digitization has reduced human error. It is possible to access and analyze the
data anytime enabling a strong reporting system.

RBI has been a guiding force for the banks in forming regulations and giving
recommendations to achieve various objectives. Commercial Banks in India
have moved towards technology by way of Bank Mechanization and
Automation with the introduction to MICR based cheque processing,
Electronic Funds transfer, Inter-connectivity among bank Branches and
implementation of ATM (Automated Teller Machine) Channel have resulted in
the convenience of Anytime banking. Strong initiatives have been taken by the
Reserve Bank of India in strengthening the Payment and Settlement systems
in banks.

II. LITERATURE REVIEW

Garg (1994) studied that Indian scheduled commercial banks have achieved remarkable progress in last
two decades under study, particularly in branch expansion in rural areas, deposits mobilization and
credit deployment to priority sector and small borrowers. Banking sector reforms is an integral part of
the economic reform package. The reform involved the liberalization of interest rates, promotion of
market-based system of credit allocation, enhancing competition, and efficiency of the regulatory and
supervisory framework (Jegede et al. 2004). Financial reforms were designed to enable the banking
industry develop the required resilience to support the economic development of a nation by
proficiently performing its function of financial intermediation (Lemo, 2005). Biresh et al. (2011)
examined the performance of banks in India in post transition period and concluded that the positive
trend of the reform process is visible through the increase in technical efficiency over the years of the
post transition period.

III. OBJECTIVES OF THE STUDY

The purpose of the study is to observe and understand the usefulness of modernisation in banking sector
and to understand how customers in banking industry can be facilitated by digitalised services.

Specific objectives are:

I. To understand the contribution of banking sector towards the campaign launched

by the government of India, which is, “Digital India”.
II. To know about the new facilities provided by the bank to retain, attract, and
increase the customers.

V. RESEARCH METHODOLOGY

 DATA COLLECTION

The present paper is based on both, primary and secondary, data.

The primary data has been collected through survey of consumers and bank employees using a
well framed questionnaire.

The secondary data has been gathered through information collected by government departments,
organizational records and data that was originally collected for other research purposes. Further,
the data which is mainly published in annual reports of various banks and survey reports of
leading business magazines and various National and International Research Journals which are
related to Commerce, Management, Marketing and Finance is used. The secondary data was
also collected from various reference books related to E-Banking, Banking Service Quality, E-
Commerce, M-Commerce, Information Technology, Marketing, Banking, Finance, Commerce,
Management etc. The Secondary data is also collected from various websites.
  STUDY PERIOD
The study has been done for 2 months, that is, January 2018 and February 2018.

 SAMPLE SIZE
For the purpose of this study, responses of 50 individual consumers have been collected through
a well framed questionnaire. Further, 20 responses have been collected from employees of four
banks, selected randomly. Out of these four, 2 are public and 2 are private, to help draw a
comparison between public and private banks.

VI. DIGITAL INDIA

Digital Technologies, which include Cloud Computing and Mobile Applications, have emerged as
catalysts for quick economic growth and citizen empowerment across the globe. Digital technologies are
being increasingly used by us in everyday lives, from retail stores to government offices. They help us
connect with each other and also share information on issues and concerns faced by us. Honorable
Prime Minister envisions transforming our nation and creating opportunities for all citizens by
harnessing digital technologies. His vision is to empower every citizen with access to digital services,
knowledge and information. Digital India is the next big thing that India is witnessing. It aims at
profoundly touching the lives of everyone with the transformation travelling the paths of both rural and
urban India. Today, the world has transformed from a knowledge savvy to techno knowledge savvy.
Think of something and it is available in one click. So, Digital India is a step by the government to inspire
and connect Indian Economy to such a knowledge savvy world. The program targets to make
Government services available to people digitally and enjoy the benefit of the newest information and
technological innovations. It brings out various schemes like E-Health, Digital Locker, E-Sign, E-Education
etc. and nationwide scholarship portal. The program strives to provide equal benefit to the user and
service provider. The consumers will be benefited by way of saving time, money, physical & cognitive
energy spent in lengthy government processes. The Digital India Programme has been launched with an
aim of transforming the country into a digitally empowered society and knowledge economy. The Digital
India would ensure that Government services are available to citizens electronically. It would also bring
in public accountability through mandated delivery of government’s services electronically; a Unique ID
and ePramaan based on authentic and standard based interoperable and integrated government
applications and data basis. Digital India is a dream project of the government for the citizens and
Industries of India which could help in connecting the various past and present projects to bring India to
a global platform. Through this project government services are available for urban and rural citizens
digitally or electronically. It will help to achieve digital innovation and create positive impact in the
people living in rural and urban areas. It will attract investment in all product manufacturing industries.
Andhra Pradesh is the first State to have opted this implementation. The Digital India project aims to
transform our country into a digital economy with participation from rural or urban citizens and
businesses. This will ensure that all government services and information are available anywhere,
anytime, on any device that is easy-to-use, highly available and secured. Digital India Project removes
digital gap between the rural and urban India.

Vision of Digital India initiative

The three visions are shown in the diagram given below:

 Digital infrastructure as a core utility to every citizen

 Governance and services on demand
 Digital empowerment of citizens

Here is what the government of India aims to achieve through Digital India initiative.

 Infrastructure: The Digital India initiative has a vision to provide high speed internet services to its
citizens in all Gram Panchayats. Bank accounts will be given priority at individual level. People will be
provided with safe and secure cyber space in the country.

 Governance and services: Government services will be available online where citizens will be ensured
easy access to it. Transactions will be made easy through electronic medium.

 Digital empowerment of citizens: This is one of the most important factors of the Digital India initiative
to provide universal digital literacy and make digital sources easily accessible. The services are also
provided in Indian languages for active participation. Section

Scope of Digital India

The overall scope of this programme is:

 To develop India for a knowledgeable future by developing central technology for allowing revolution
this covers many departments under one Umbrella Programme.

 On being transformative, that is to realize IT (Indian Talent) + IT (Information Technology) = IT (India

Tomorrow). The programme weaves together a large number of thoughts and ideas into a single,
extensive vision, and making the mission transformative in totality.

 The Digital India Programme will pull together many existing schemes which would be refocused,
restructured and implemented in a synchronized manner for their transformative impact.

 Digital India targets to provide the much needed sense to the following nine pillars of growth areas.
Section

VII. Nine Pillars of Digital India

The idea of Digital India is to bring abroad commitments to invest towards this initiative so that the
investments would be utilized towards making internet devices and smart phones at an affordable price
in India which would help in generating jobs, reduction in the time and cost of importing them from
abroad. Digital India comprises of various initiatives under the single programme each targeted to
prepare India as a knowledge economy and for bringing good governance to citizens through
synchronized and coordinated engagement of the entire Government. Nine projects have been
undertaken which are shown in the diagram given below:

 Highways to have broadband services: The first step is to provide high speed broadband highways
through fiber optics that connect all the remote areas, government departments, universities, research
and development etc. Web based portals and Mobile apps will be developed to access online
information while on the move.

 Easy access to mobile connectivity: The government is taking steps to ensure that by 2018 all villages
are covered through mobile connectivity. The aim is to increase network penetration and cover gaps in
all 44,000 villages. General public will access the online government services with the help of handheld
devices. Nation is ready to be well-connected, efficient, and more productive in every aspect.

 IT Training for Jobs: The government is preparing to provide training and teaching skills to the youth
for employment opportunities in the IT sector. BPO industries will be established for the fastest growing
segment of the Information Technology Enabled Services industry. It offers eservices 24/7 in every field
and gives more jobs potentials. This initiative seeks to train 10 million people in towns and villages for IT
sector jobs in five years. It also aims to train 0.3 million agents to run viable businesses delivering IT
services.

 Manufacturing of electronics: This milestone will create a huge base for electronics manufacturing in
India with the aid of digital technologies and skills. Target NET ZERO Imports is a striking demonstration
of intent. This ambitious goal requires coordinated action on many fronts.

 Provide public access to internet: Virtuous technologies that support cost containment, collaboration,
security, services-on-the-go, social-connect, and in-built intelligence that deliver remote access to any
information or service available across the domain. This change will open new doors of e-services to
every citizen. The government aims to provide internet services to 2.5 lakh villages which comprises of
one in every Panchayat by March 2017 and 1.5 lakh post offices in the next two years. These post offices
will become Multi Service centres for the people.

 E-Governance: This governance will transform every manual work into fully automation system. It will
revolutionize the system in the following ways:

 Online access to applications i.e. availability of all databases and information in

electronic format.
 Effortlessly tracking of assignments.
 Interface between departments for superior production of work.
 Quickly respond, analyze and resolve persistent problems and many more.
  E-Kranti: This Kranti will fully focus on digital knowledge program where education, health, farming,
rights, financial and many more services will be delivered on a very high bandwidth. Physical boundaries
no longer are a limitation when almost everyone and everything is a digital handshake away.

 Global Information: Hosting data online and engaging social media platforms for governance is the aim
of the government. Information is also easily available for the citizens.

 MyGov.in is a website launched by the government for a 2-way communication between citizens and
the government. People can send in their suggestions and comment on various issues raised by the
government, like net neutrality.

 Early harvest programs: This programme will generate short timeline projects where every manual
service is altered by e-service. E-services like:

 Implementation of Wi-Fi in all the universities.

 Public Wi-Fi Sports to access online information.
 Educational books to e-books.
 People will use the e-services for entertainment, weather information, latest updates
etc.
 Replacement of manual attendance to Biometric procedure

Initiatives under Digital India

Some of the facilities provided under the initiative of Digital India are as follows:

 Digi Locker Digital Locker facility helps citizens to digitally store their significant documents like PAN
card, passport, mark sheets and degree certificates. Digital Locker offers secured access to Government
issued documents. It uses authenticity services provided by Aadhaar. It is targeted at eliminating the use
of physical documents and enables sharing of verified electronic documents across government
agencies. Three key stakeholders of DigiLocker are Citizen, Issuer and requester.

 Attendance.gov.in Attendance.gov.in is a website, launched by PM Narendra Modi to keep a record of

the attendance of Government employees on a real-time basis. This initiative started with
implementation of a common Biometric Attendance System (BAS) in the central government offices
located in Delhi.

 MyGov.in MyGov.in is a platform to share inputs and ideas on matters of policy and governance. It is a
platform for citizen engagement in governance, through a "Discuss", "Do" and "Disseminate" approach.

 SBM Mobile app Swachh Bharat Mission (SBM) Mobile app is being used by people and Government
organisations for achieving the goals of Swachh Bharat Mission.

 e-Hospital The e-Hospital application provides important services such as online registration, payment
of fees and appointment, online diagnostic reports, enquiring availability of blood online etc.
 National Scholarship Portal National Scholarship Portal is a one step solution for end to end
scholarship process right from submission of student application, verification, sanction and disbursal to
end beneficiary for all the scholarships provided by the Government of India

 E-Sign framework e-Sign framework allows citizens to digitally sign a document online using Aadhaar
authentication.

Proposed Impact of Digital India

 Economic impact
According to analysts, the Digital India plan could boost GDP up to $1 trillion by 2025. It can play
a key role in macro-economic factors such as GDP growth, employment generation, labour
productivity, growth in number of businesses and revenue leakages for the Government. As per
the World Bank report, a 10% increase in mobile and broadband penetration increases the per
capita GDP by 0.81% and 1.38% respectively in the developing countries. India is the 2nd largest
telecom market in the world with 915 million wireless subscribers and world’s 3rd largest
Internet market with almost 259 million broadband users. There is still a huge economic
opportunity in India as the tele-density in rural India is only 45% where more than 65% of the
population lives. Future growth of telecommunication industry in terms of number of
subscribers is expected to come from rural areas as urban areas are saturated with a tele-
density of more than 160%.
 Social impact
Social sectors such as education, healthcare, and banking are unable to reach out to the citizens
due to obstructions and limitations such as middleman, illiteracy, ignorance, poverty, lack of
funds, information and investments. These challenges have led to an imbalanced growth in the
rural and urban areas with marked differences in the economic and social status of the people in
these areas.
Modern Information and Communications Technology (ICT) makes it easier for people to obtain
access to services and resources. The penetration of mobile devices may be highly useful as a
complementary channel to public service delivery apart from creation of entirely new services
which may have an enormous impact on the quality of life of the users and lead to social
modernization.
The poor literacy rate in India is due to unavailability of physical infrastructure in rural and
remote areas. This is where m-Education services can play an important role by reaching remote
masses. According to estimates, the digital literacy in India is just 6.5% and the internet
penetration is 20.83 out of 100 populations. The digital India project will be helpful in providing
real-time education and partly address the challenge of lack of teachers in education system
through smart and virtual classrooms. Education to farmers, fisher men can be provided through
mobile devices. The high speed network can provide the adequate infrastructure for online
education platforms like Massive Open Online Courses (MOOCs).
Mobile and internet banking can improve the financial inclusion in the country and can create
win-win situation for all parties in the value-chain by creating an interoperable ecosystem and
 revenue sharing business models. Telecom operators get additional revenue streams while the
banks can reach new customer groups incurring lowest possible costs.
Factors such as a burgeoning population, poor doctor patient ratio (1:870), high infant mortality
rate, increasing life expectancy, fewer quality physicians and a majority of the population living
in remote villages, support and justify the need for tele medicine in the country. M-health can
promote innovation and enhance the reach of healthcare services. Digital platforms can help
farmers in know-how (crop choice, seed variety), context (weather, plant protection, cultivation
best practices) and market information (market prices, market demand, logistics).
 Environmental impact
The major changes in the technology space will not only brought changes to the economic
system but will also contribute to the environmental changes. The next generation technologies
will help in lowering the carbon footprint by reducing fuel consumption, waste management,
greener workplaces and thus leading to a greener ecosystem. The ICT (Information and
Communications Technology) sector helps in efficient management and usage of scarce and
non-renewable resources. Cloud computing technology minimizes carbon emissions by
improving mobility and flexibility. The energy consumption can be decreased from 201.8
terawatt hour (TWH) in 2010 to 139.8 TWH in 2020 by higher adoption of cloud data centers
causing a 28% reduction in carbon footprint from 2010 levels.

XIII. ADVANTAGES AND CHALLENGES FOR DIGITAL

INDIA

XI. ROLE OF BANKING SECTOR IN DIGITAL INDIA

Contribution of Indian banks towards Digital India.

1. Indian’s first digital village is Akodara in Sabarkantha district of Gujarat. The village with a total
population of 1191 people and 250 household used a cashless system for payment of goods and
services. All transaction in the village are carried out through digital modes like SMS, net banking or
debit cards. The village was adopted by ICICI bank under its digital village project in 2015 and made
cashless by adopting digital technology. The villager’s most important transactions selling agriproduce at
the local market or selling milk at the cooperative society have been made cashless. This village is
practically example of how e-banking is practically implemented in Indian villages without much
difficulty to make India cashless economy.

2. SBI bank has adopted Shirki village in Maharashtra to make the entire village will turn cashless within
30days.

3. First and second cashless village in Maharashtra are Dhasai (Thane district) and Pimpri Budruk.
4. Other state whose 1st village are cashless are : Telangana-Ibrahimpur, Jharkhand- Nuagram
(Singhbhum), Uttarakhand- Lachampur (Pauri Garhwal), Chhattisgarh- Palnar ( Dantewada),Jammu and
KashmirLanura (Shrinagar).

5. Karnataka Vikas Grameen bank launched a scheme named ‘Bank Sakhi’ for empowering women who
will be employed to promote cashless transaction.

6. To promote cashless transaction, Haryana government has issued Petro cards to drivers working with
the state government for cashless payments of fuel in association with Indian Oil Corporation and
Bharat Petroleum.

7. IDFC bank has launched the aadhaar-linked cashless merchant solution “Aadhaar Pay” in association
with Unique Identification Authority of India (UIDAI) and the National Payments Corporation of India.

Facilities provided by Indian banks to make India cashless :

1. Indian Banks offer Mobile banking app for Android, iPhone and blackberry helps customer to check
account balance, transfer funds, pay bills and much more. Eg. iMobile by ICICI Bank, State bank
anywhere and State bank freedom from SBI, Axis mobile from Axis bank ltd, U-Mobile from Union bank,
HDFC Bank mobile banking, BOI Mobile banking, PNB mBanking, CANMOBILE from Canara bank, IDBI
Bank Go Mobile, Bank of Baroda M-Connect etc.

2. Almost all Indian bank provide internet banking services to their customer.

3. Indian bank providing Debit and Credit cards to their customers. Also known as plastic card, bank card
and more, customer can enjoy electronic access from saving/current account in any bank via ATMs.
From e gallery deposit and withdrawn of money without hassle of standing in long queues. Same can be
utilized for mobile banking and internet banking.

4. Types of cards:- Visa debit card, Visa electronic Debit card, Master card Debit cards, Contactless Debit
cards, RuPay Debit cards, Maestro Debit cards.

5. Mobile banking Will Be Possible Over Basic Handsets Without Internet-USSD (Unstructured
Supplementary Service Data) technology is the solution for you if find difficulty to pay digitally due to
poor or no internet connectivity.

6. The USSD refers to a simple interactive text messaging system using which a mobile phone user can
reach out to his/ her bank for simple banking services. Though USSD is a pretty old technology, it holds
great significance for a country like ours where internet penetration is low and a greater percentage of
people use basic handsets over which they cannot connect to the internet.

7. Bharat Interface for Money or BHIM app has been launched by the Govt. which simplifies the process
of cashless transactions. The Aadhaar card based app, which combines the power of UPI (United
Payment Interface) and USSD (Unstructured Supplementary Service Data) into one, was launched by PM
Modi during Digi Dhan Mela event in Talkatora stadium in New Delhi. Named after Dr BR Ambedkar,
BHIM app has been described as a ‘wonder app’- One app for all bank accounts, Internet Is Not
Required, Finger-print based cashless transactions. As we used the app, we found the interface super
clean, and the usability flawless. Within 10 seconds after downloading the app, the user can transfer
money, receive money as well as check his linked bank account’s balance. Currently, the Indian banks
are being supported by BHIM app, because they have started UPI based transactions:

Allahabad Bank, Andhra Bank, Axis Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara
Bank, Catholic Syrian Bank, Central Bank of India, DCB Bank, Dena Bank, Federal Bank, HDFC Bank, ICICI
Bank, IDBI Bank, IDFC Bank and Indian Bank etc.

Key barriers of Digital payment

 Habit to use cash

 Complexity of using Internet

 Fraud and hidden charges

 Absence of human interaction

 Less Smartphone penetration in rural area.

 Poor or low internet speed

 Afraid of privacy and security.

Threat for Indian bank

Major Threat for Indian Bank are:

1. Non-Banking entities: non-bank entities such as Paytm, PayPal, Amazon, WalMart and Google. These
entities are offering new, advanced ways to handle finances, such as payments.

2. Payment Bank: The Reserve Bank expects payment banks to target India’s migrant labourers, low-
income households and small businesses, offering savings accounts and remittance services with a low
transaction cost. Reach customers mainly through their mobile phones rather than traditional bank
branches. They can’t offer loans but can raise deposits of up to Rs. 1 lakh, and pay interest on these
balances just like a savings bank account does, enable transfers and remittances through a mobile
phone, offer services such as automatic payments of bills, and purchases in cashless, chequeless
transactions through a phone, issue debit cards and ATM cards usable on ATM networks of all banks,
transfer money directly to bank accounts at nearly no cost being a part of the gateway that connects
banks, provide forex cards to travellers, usable again as a debit or ATM card all over India, offer forex
services at charges lower than banks, also offer card acceptance mechanisms to third parties such as the
‘Apple Pay.’
These companies are: Aditya Birla Nuvo Ltd, Airtel M Commerce Services Ltd, Cholamandalam
Distribution Services Ltd, Department of Posts, Fino PayTech Ltd, National Securities Depository Ltd,
Reliance Industries Ltd, Sun Pharmaceuticals, Paytm, Tech Mahindra Ltd, Vodafone mpesa Ltd.

XV. CONCLUSION
A digitally connected India can help in improving social and economic condition of people through
development of non-agricultural economic activities apart from providing access to education, health
and financial services. However, it is important to note that ICT (Information and Communications
Technology) alone cannot directly lead to overall development of the nation. The overall growth and
development can be realized through supporting and enhancing elements such as literacy, basic
infrastructure, overall business environment, regulatory environment, etc. The Digital India program is
just the beginning of a digital revolution, once implemented properly it will open various new
opportunities for the citizens.

Conclusion: The rapid advancement in information and communication technology has significantly
influenced our banking industry. Banks and financial organizations have improved their services as a
financial intermediary through adopting various IT solutions. Technology now has become a tool that
facilitates banks’ organizational structures, business strategies, customer services and related functions.
Digitalization changes face of branch banking. Today mobile is being increasingly used as a primary
channel of banking and, the potency of providing relevant contextual information on mobile phones.
Banking is being taken to places where Generation Y and Millennials spend most of their time – on social
networks. Increasingly banks are integrating social media components into their online channels and we
are beginning to see use-cases like transferring money to one’s Facebook friends or login to the bank
using Facebook ID. Video banking offers banks the ability to expand the reach and convenience of
customer engagement in a comparatively low-cost fashion. The most common uses of video in recent
times are interactive teller, ATM with teller assists or in-branch video conferencing.