...A Case of Banking Industry in India Kiran Kumar Kakarlapudi Background and Motivation India has entered high growth trajectory with the initiation of economic reforms in the early 1990s with a policy shift towards free market economy.1 While on the growth front, the economy has performed considerably well, on the other hand the issue of distributional effects of growth has gained momentum in the academic and policy environment. Thus, in the eleventh and twelfth five year plans, emphasis has been laid to achieve sustainable economic growth with inclusive development (Singh, 2011). The empirical evidences on India’s growth pattern show that, the fantabulous growth performance, to a large extent, is driven by high growth in the service sector which has grown at 8.1 percent per annum during 1990-91 to 2007-08. Similarly, the share of service sector Gross Domestic Product (GDP) has increased from less than half to 68 percent in 2007-08 (Acharya, 2008). 2 The insights from the studies on service sector growth in India reveal that the spurt in the service growth is driven by the rapid growth of business services (which include Information Technology), communication services, financial services, hotels and restaurants, and trade (distribution) services, which is facilitated by the advent and rapid diffusion of information technology (Gordon and Gupta, 2004; Banga, 2005; Verma, 2006; Eichengreen and Gupta, 2010).3 Further, it has been argued that, rapid technological change is one of the...
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...Problem Productivity growth and efficiency change in Indian banking: Technology effect vs catch-up effect Name: Gajanan S Ghadlinge Roll No. 18, MMS-I Document Information: | Title: | Productivity growth and efficiency change in Indian banking:Technology effect vs catch-up effect | Author(s): | Lakshmi Kumar, Institute for Financial Management and Research (IFMR), ChennaiD. Malathy, Department of Humanities and Social Sciences, IIT Madras, Chennai, andL.S. Ganesh, Department of Management Studies, IIT Madras, Chennai, India | Citation: | Surender Kumar, (2006) "A decomposition of total productivity growth: A regional analysis of Indian industrial manufacturing growth", International Journal of Productivity and Performance Management, Vol. 55 Iss: 3/4, pp.311 - 331 | Publisher: | Journal of Advances in ManagementResearch Vol. 7 No. 2, 2010pp. 194-218#Emerald Group Publishing Limited0972-7981DOI 10.1108/09727981011084995 | Abstract: | Purpose– The purpose of this paper is to understand the influence of technology change in the banking sector by employing data envelopment analysis (DEA) and also to determine the change in total factor productivity (TFP) and its components, namely technical change and technical efficiency change.Design/methodology/approach– The DEA method has been used to assess the efficiency of the entire banking sector and the bank groups. The purpose has been to investigate TFP change and its components’ (obtained using Malmquist index)...
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...Impact of Information Technology on Service Competence In Indian Banking Industry Mrs. Punitha Sahaya Mary Francis Assistant Professor, MBA Dept., St. Xavier’s Catholic College of Engineering, Chunkaankadai, Nagercoil. punithaf2007@rediffmail.com, Mobile: 9942432809 INTRODUCTION The 21st century will bring about an all-embracing convergence of computing, communications, information and knowledge. This will radically change the way we live, work, and think. The growth of high speed networks, coupled with the falling cost of computing power, is making possible applications undreamed of in the past. Voice, data, images, and video may now be transferred around the world in micro-seconds. This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers. All over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidly-changing environment. It is clear that this new technology is changing the banking industry forever. Banks with the ability to invest and integrate information technology will become dominate in the highly competitive global market. Bankers are convinced that investing in IT is critical. Its potential and consequences on the banking industry future is enormous...
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...countries, the banking sector has been the dominant element in the country’s financial system. The sector has performed the key functions of providing liquidity and payment services to the real sector and has accounted for the bulk of the financial intermediation process. Besides institutionalizing savings, the banking sector has contributed to the process of economic development by serving as a major source of credit to households, Government, business and weaker sectors of the economy like village and small scale industries and agriculture. In recent times, Indian banking industry has swiftly introduced innovative banking technologies in banking services. The current study attempts to measure and compare the effect of the introduction of new technologies through electronic-banking on the service quality, and profitability of banks, and to assess the impact of changing from the traditional means to the electronic banking on the customers and on the banks as well. The study is qualitative and quantitative in nature investigating different objectives which determine the performance of banks mainly in terms of profitability and convenience. PURPOSE OF RESEARCH The purpose of this research is to find the changes that took place in banking sector after information technology was introduced in it. The paper shows the role played by banking sector in the economy and the affect after IT took over it. It further explains the benefits and challenges of newly emerged e-banking services....
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...Article :Emerging Trends in Banking – Challenges and Opportunities Abstract Today banking is known as innovative banking. Information technology has given rise to new innovations in the product designing and their delivery in the banking and finance industries, customer services and customer satisfaction are their prime work. One of the most significant areas where IT has had a positive impact so on substitutes for traditional funds movement services. With the advent of electronic banking electronic funds transfer and other Similar products funds transfer within time frames which would have appeared impossible a few years age. With networking and inter connection new challenges are arising related to security privacy and confidentiality to transactions. Finally the banking sector will need to master a new business model by building management and customer services with a variety of products and controlled cost to stay in the long run. Key words: E-Banking, ATM ,Internet Security, NPA, CRR, Introduction:- The traditional functions of banking are limited to accept deposits and to give loans and advances. Today banking is known as innovative banking. Information technology has given rise to new innovations in the product designing and their delivery in the banking and finance industries, customer services and customer satisfaction are their prime work. Current banking sector has come up with a lot of initiatives that oriented to providing a better customer services...
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...CHAPTER-1 INTRODUCTION TO INDIAN BANKING SYSTEM: OBJECTIVE- Here our main objective is to analyse the impact of mergers and acquisition in banking sector in India. We will try to find out from the experience of US and EU how Indian banking sector will respond if some major players merge together. In this report we will create a situation in which five big players in banking sector merge together and we will analyse the effect of merger on Indian Banking sector. In the past three decades, India's banking system has earned several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to metropolises or cities in India. In fact, Indian banking system has reached even to the remote corners of the country.1 This is one of the main aspects of India's banking growth story. The first banks were Bank of Hindustan (1770- 1829) and The General Bank of India, established 1786 and since defunct. The largest bank, and the oldest still in existence, is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. The Government...
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...banks from all verticals, and subtle and not – so – subtle makeovers in banking products are dynamically altering the face of banking. The research paper focuses on the way transformation is affecting the banking sector and the way use of IT products have changed the face of banking in India. It reveals current environment of the banking industry; the factors that have brought changes in the industry; and the way these changes have contributed to the development of banking. This paper concludes that financial market has turned into a buyer’s market. Banks are have now bloomed into one-stop Supermarkets. Their focus is shifting from mass Banking to Class banking with introduction of value added and customized products. Technology now allows banks to create what looks like a branch in a business building’s lobby without having to hire manpower for manual operations. These branches are working on the concept of 24 X 7 working made possible due to Tele banking, ATMs, Internet Banking, Mobile Banking and E - banking. This technology driven delivery channels are used to reach maximum customers at lower cost and in most efficient manner. The beauty of these banking innovations is that it puts both banker and customer in a win-win situation. The need of an hour is to design a system to promote marginal efficiency of investment in technology and widen the gap between marginal benefits and marginal cost involved in Banking transformation with special reference to technological up gradation...
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...Analytical Study of Information Technology in Banking Sector: Opportunities, Challenges and Strategies Case study of selected banks operating in Kathmandu Valley Research Proposal Arika Kayastha Kathmandu College of Management BBIS 4th year, 1st Semester (2011 – 2015) A013408-11 To: Erika Gajurel Research Supervisor Kathmandu College of Management Gwarko, Lalitpur Contents Chapter I: Introduction 1 1.1 Background 1 1.2 Problem statement 3 1.3 Research Question 4 1.4 Research Objective 4 Chapter II: Literature review 6 Chapter III: Conceptual Framework: 8 Chapter IV: Methodology 10 4.1 Research overview 10 4.2 Data Source 10 4.3 Collection Tools 10 4.4 Data Analysis 11 References 12 Work plan 13 Chapter I: Introduction 1.1 Background The 21st century will bring about an all-embracing convergence of computing, communications, information and knowledge. The advent of high speed networks, along with the falling cost of computing power, is making applications possible that were undreamed of in the past. Voice, data, images, and video can now be transferred around the world in micro-seconds (Hassan Ghaziri, 1998). The world, today, has been characterized by technological advancements and digitization like never before. This trend has not only influenced the world of computers but also pervaded all possible facets of human life. This has radically changed the way we live, work, and think. The advances in information and communication technologies and the emergence of the internet...
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...AS A MANAGER JUSTIFY THE USE OF ICT IN YOUR ORGANIZATION MY ORGANIZATION IS A COMMERCIAL BANK The Concept of ICT and a Perspective of Nigerian Banks Technology can be referred to as the application of knowledge for the execution of a given task. It entails skills and processes necessary for carrying out activities (works) in a given context. While ICT encompasses computer systems, telecommunication, networks, and multimedia applications (Frenzel, 1996). It came into use in the late 1980’s replacing earlier terms like Electronic Data Processing (EDP), Management Information System (MIS), although the latter terms are still in use (Frenzel, 1996). ICT has transcended the role of support services or only electronic data processing; its fields of applications are somewhat global and unlimited. Its devices especially the Internet through the World Wide Web (www) and modern computer email facilities have further strengthened early innovations like the telephone and fax. Other ICT devices include data recognition equipment, factory automation hardware and services, tele-computing and teleconferences using real time and online system (Adeoti, 2005). It is a concept that is having a remarkable effect on almost entire aspects of the human endavours. This connotes that it involves the application of principles to engage physical component in achieving an intended goal. The convergence of computer and telecommunication after about four decades of applying computers to routine...
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...Problems facing the U.S. Banking sectors There are still a number of problems that face the U.S banking sector. The banking industry is slowly emerging from the financial crises of 2008 that left its reputation battered and tarnished. This has created a much tougher and a more competitive market. There are around 7,200 commercial banks in the United States. I will identify some of the problems as well as suggest some policy recommendations to resolve these issues in order to overcome and help strengthen and growth this sector. Regulatory issues, emerging technology demands and customer service focus are three main areas I have identified as well as will provide suggestions and recommendations for in the paper. The U.S. banking sector continues to face a great deal of uncertainty in regards to regulations. Bank regulations in the United States are highly fragmented when compared to other countries. Most countries only have one bank regulator as opposed to the United States that is regulated at both the federal and state level. Within those federal and state levels there are a number of regulations that were delayed and or are still being defined. This causes a great deal of uncertainty in regards to the costs associated with complying with these new proposed standards and regulations. In addition, it makes in tough for these institutions to predict or implement a long term strategic plan when there is so much uncertainty with policy in the upcoming years. ...
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...Introduction Indian banking system has emerged as a vibrant sector in the Indian economy. Strong regulatory mechanism, inherent strength in the economy, and progressive policy framework which supports, nurtures, and helps in growing the financial institutions. Indian financial services industry is dominated by the banking sector that contributes significantly to the level of economic activity. The banking structure in India is broadly classified into public sector banks, private sector banks and foreign banks. The public sector banks continue to dominate the banking industry, in terms of lending and borrowing, and it has widely spread out branches which help greatly in pooling up of resources as well as in revenue generation for credit creation. The role of banks in accelerating economic development of the country has been increasingly recognized since the nationalization This facilitated the rapid expansion of banking in terms of its geographical reach covering rural India, in turn leading to significant growth in deposits and advances. Eventually, however, the government used banking sector to finance its own deficit by frequently increasing cash reserve ratios (CRR) and statutory liquidity ratio (SLR). Deregulation of the Indian financial system in 1991 followed by various financial sector reforms during the period 1990 through 1998 led to a major restructuring of the Indian banking industry. India has entered high growth trajectory with the initiation of economic reforms...
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...Organization The banking sector remains always the most dominant sector of the financial sector. Hatton National Bank PLC (HNB) is Sri Lanka’s second largest private sector bank in terms of assets (behind Commercial Bank of Ceylon) and is the fourth largest amongst all banks (after accounting for the two state banks, Bank of Ceylon and Peoples’ Bank). HNB accounts for 10% of banking system assets. HNB provides a broad range of banking products and services in the areas of; Corporate Banking, Small and Medium Size Enterprise Banking, Trade Finance, Retail and Consumer Banking, Asset Leasing, Loan Syndication and Project Finance. HNB has an AA- credit rating from Fitch Ratings Lanka Limited, Sri Lanka’s main rating agency. HNB has been acknowledged globally by The Asian Banker as the Best Retail Bank in Sri Lanka for Six consecutive years for its performance from the year 2007 to 2012. The HNB umbrella of today has two local subsidiaries - HNB Assurance and Acuity Partners. HNB have been established for more than 120 years. Their ethos are so simple for its survival even in turbulent times. HNB remain firm in their belief that they must continue to be banking partner in the lives of the Sri Lankan people. HNB has put in place an effective Risk Management System with clearly stated procedures, utilizing various committees that constitutes senior management personnel with requisite expertise/experience. 1. Identifying Retail Banking Sector of HNB as a SBU ...
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...April - June 2014, Available at: www.paperpublications.org An Analysis of Indian Banking Industry with Special Reference to ICICI Bank Sana Samreen Abstract: The last decade has seen many positive developments in the Indian banking sector. The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related government and financial sector regulatory entities, have made several notable efforts to improve regulation in the sector. The sector now compares favorably with banking sectors in the region on metrics like growth, profitability and non-performing assets (NPAs). However, improved regulations, innovation, growth and value creation in the sector remains limited to a small part of it. The cost of banking intermediation in India is higher and bank penetration is far lower than in other markets. India’s banking industry needs to strengthen itself significantly In this paper, I have mainly focused on the overall analysis of the banking industry through framework like Porter’s five forces model. I have also concentrated upon the various developments being done in the industry along with recognizing the upcoming challenges as well as the opportunities to reap the profits even in troubled waters. Keywords: Indian banking industry, Porters five force model, market regulation. I. Introduction The Indian banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories...
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...Technology and Banking Services The introduction of Information Technology services by the banks has positively impacted on the customers and has brought revolution in the operation of the banks. Technological facilities like ATMs, Mobile Money, Branch Network, Telephone Banking, Internet Banking etc have introduced by banks for the customers. The explosion of technology is changing the banking industry from paper to Internet and branch banks to digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers. All over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidly-changing environment. It is clear that this new technology is changing the banking industry forever. Banks with the ability to invest and integrate information technology will become dominate in the highly competitive global market. Bankers are convinced that investing in IT is critical. Its potential and consequences on the banking industry future is enormous. Computers are getting more sophisticated. So Computers have given banks a potential they could only dream about and have given bank customers high expectations. The changes that new...
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...Introduction: This essay mainly focuses on the relationship between the change of customers’ attitudes towards and expectations and financial services sector’s respond. A review of the theoretical background of business external environment and contextual environment is represented as well to give a theoretical framework. This essay consists of three major parts. The first part refers to the competitiveness of the financial services sector and the importance of organisations recognizing the influences of the external environment and how the developments in these influences can have a substantial impact on organisational success. The second part gives the theoretical framework of business external environment and contextual environment, and especially concentrates on the influence of the social environment on customer attitudes and expectations. In addition, it reveals customers and financial services sector are not isolate parts to each other, whereas they are in a two-way interaction process. The third part provides an example in particular to illustrate the ways in which organisations have recognised changes and how to respond in terms of products and services in order to achieve customer satisfaction and maintain their competitive position. With the development of economic globalization, the number and cooperation of countries’ financial organizations are getting larger and closer, so the competition is increasingly fierce. Competition here includes not only the firms...
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