Structural changes and performance of banking sector with special reference to information technology in India

Since the inception of information technology, the structure of banking sector in India has been changed drastically from traditional banking system to e-banking system. The extent and the usages of e-banking services in Indian banking markets gaining popularity in the recent years due to the entrance of private and foreign banks in this industry. The present scenario of banking structure in terms of information technology observed to be varied considerably across the different banks in the country. The present study is an attempt to find out the structural changes in the banking sector on account of information technology on one hand and to assess the performance of different banks with respect to e-banking services on another hand, respectively. The results revealed that the penetration of ATMs across the country increased from 290 to 182480 depicting 49.60 per cent annual growth rate during the period 1998–99 to 2014–15. Annual compound growth rate of credit and debit cards estimated to the tune of 17.25 and 35.68 per cent, respectively. There has been sustained growth in all type of electronic mode of transactions. The findings of the study brought out that information technology index was the highest in state bank of India (0.616) and stood first rank in terms of the performance of information technology delivery system in India. Private and foreign sector banks following the State Bank of India and therefore HDFC (0.337) and Citi banks (0.074) occupied second and third rank, respectively in this regard. Despite ATMs, intensity of using other ebanking services was very limited among sampled customers. Among all the banks, state bank of India was obtained the highest IT score (26.50), and Bank of Baroda was assigned least score (18.10). However, the IT score of all other banks was more or less same and ranged from 20.40 to 20.85, respectively. It is observed that expansion of banks in terms of accessibility of e-services is as necessary as, the expansion of features therein. Thus, policy interventions is needed for the expansion of banking network in terms of information technology on one hand and to make provision of all new features on another hand. Factor analysis revealed that security concern and privacy matter of banking transactions were emerged as the most important factors which could affect the adoption and extent of using of e-banking services. Therefore, banking sector is recommended to ensure safe and secure e-banking services for users. Need based essential measures must be taken for efficient and confidential banking transaction make through e-services for taking care of privacy matter of the users customers. The development of information technology may be proved as one of important tool for making all payments in digital and electronic manner. Our Hon'ble Prime Minister Mr. Narendra Modi has recently announced demonetization for checking black money in the country. The compulsion imposition of all bills and payments through digitalization could not only an important measure to check the flow of black money in the country, but also enhance the usage of information technology in banking sector.