Comparative Analysis of Public Sector and Private Sectors Banks

8/13/2019 Comparative Analysis of Public Sector and Private Sectors Banks

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ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr.GauravSharma,Relationship Manager Business Banking, HDFC Bank for hisable guidance, continuous support and cooperation throughout my project,without which the present work would not have been possible.

Also, I am thankful to my guide Mr. Sachin Sabharwal of my institute,for his continued guidance and invaluable encouragement.

(MOHIT SINGH NEGI)


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TABLE OF CONTENTS

CHAPTER

NO.

PARTICULARS PAGE NO.

1 INTRODUCTION OF THESTUDY

1-23

2 OBJECTIVES OF THESTUDY

24-25

3 3.1 RESEARCHMETHODOLOGY

3.2 LIMITATIONS OFTHE STUDY

26-36

37

4 DATA ANALYSIS ANDITS INTERPRETATION

38-46

5 FINDING OF THE STUDY 47-50

6 SUGGESTIONS 51-54

7 CONCLUSION 55-56

8 BIBLIOGRAPHY 57-58

9 ANNEXURE 59-62


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INTRODUCTION


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time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters

at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda,

Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in

1935. On July, 1969, 14 major banks of India were nationalized and on 15 th April, 1980 six

more commercial private banks were also taken over by the government.

Reserve Bank of India

The Banking system is an integral sub-system of the financial system. It represents an

important channel of collecting small savings from the households and lending it to the

corporate sector. The Indian banking system has The Reserve Bank of India (RBI) as the apex

body from all matters relating to the banking system. It is the Central Bank of India and act

as the banker to all other banks.

Functions of RBI:

Currency issuing authority

Banker to the government.

Banker to other Bank.

Framing of monetary policy.

Exchange control.

Custodian to foreign exchange and gold reserves.

Development activities.

Research and development in the banking sector.


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CLASSIFICATION OF BANKS

On th e basis of Own ershi p

PUBLIC SECTOR BANKS

Public sector banks are those banks that are owned by the government. The government owns

these banks. In India 20 banks were nationalized in 1969 and 1980 respectively. Social

welfare is there main objective.

PRIVATE SECTOR BANKS

These banks are those banks that are owned and run by private sector. An individual hascontrol over these banks in proportion to the shares of the banks held by him.

CO-OPERATIVE BANKS

These are those banks that are jointly run by a group of individuals. Each individual has an

equal share in these banks. Its shareholders manage the affairs of the bank.

Accordin g to the Law

SCHEDULED BANK

Schedule banks are the banks, which are included in the second schedule of the banking

regulation act 1965. According to this schedule bank:

1. Must have paid-up capital and reserve of not less than Rs500, 000.

2. Must also satisfy the RBI that its affairs are not conducted in a manner

Determinate to the interest of its depositors.

Schedule banks are sub-divided as:-

a) State co-operative banks

b) Commercial banks


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NON-SCHEDULED BANKS

Non -schedule banks are the banks, which are not included in the second schedule of the

banking regulation act 1965. It means they do not satisfy the conditions lay down by that

schedule. These are the banks having paid up capital, less than Rs.5Lakhs. They are further

classified as follows:-

A. Central Co-operative banks and Primary Credit Societies.

B. Commercial banks

Accordin g to F unction

COMMERCIAL BANKS

These are the banks that do banking business to earn profit. These banks make loans for shortto business and in the process create money. Credit creation is the main function of these

banks.

FOREIGN BANKS

These are those banks that are incorporated by foreign company. They have set up their

branches in India. These banks have their head offices in foreign countries. Their principle

function is to make credit arrangement or the export and the import of the country and these

banks deals in foreign exchange.

INDUSTRIAL BANKS

Industrial banks are those banks that offer long term and medium term loan to the industries

and also work for their development. These banks help industries in sale of their shares,

debentures and bonds. They give loan to the industries for the purchase of land and

machinery.

AGRICULTURAL BANKS

Agricultural banks are those banks that give credit to agricultural sector of the economy.


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SAVING BANKS

The principle function of these banks is to collect small savings across the country and put

them to the productive use. In India department of post office functions a savings banks.

CENTRAL BANK

Central Bank is the apex bank of the banking system of the country. It issues currency notes

and acts a banker's bank. Economic stability is the principle function of this bank. In short, it

regulates and controls the banking system of the country. RBI is the Central Bank of India.

STRUCTURE OF BANKING SYSTEMDifferent countries of the world have different types of banking systems. However,

commercial banking had grown under all these banking systems. To understand the structure

of banking system, let us take up various types of banking systems one by one. These types

are:

(1) UNIT BANKING

Unit Banking originated in the United State of America. It grew in the United States of

America. As a counter part of independent or industrial units.

An independent unit bank is a corporation that operates one office and that is not related to

other banks through either ownership or control.

Shaper, Solomon and White.

Thus under unit banking, a single bank is a complete organization in itself having its own

management. The scale of operation is small and the area is restricted to a locality only. Unit

banking is localized banking and is much more responsive to the needs of the locality. It has

better understanding of the local problems and conditions, which helps it to cater to the needs

of the area in a better way. The staff of the unit bank is generally local and is in a better

position to determine the standing or desirability of the customers. The failure of the unit bank

will not endanger the banking system and economy. It is free from the difficulties and


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diseconomies of large scale operations. It will not drain out the financial resources of villages

and small towns to big industrial centers and will ensure a balanced growth.

(2) BRANCH BANKING:

Economic and Managerial problems faced by the unit banks let to the emergence of banking

system. Now, This the most popular and important banking system. In branch banking, a bank

has a large network of branches scattered all over the country. Branch banking developed in

England. Subsequently most of the countries of the world adopted the system. In terms of

branches, the State Bank of India has emerged as one of the largest banks in the world.

As under the system the resources of a number of branches get pooled under the same

management, any individual branch is in a better position to face excessive withdrawals by the

customers. It facilitates diversification of activities because the area covered by the branchesis generally widespread. Under the system branches can operate without keeping large idle

cash reserves. It becomes possible for the bank to hire the services of competent and

professionally qualified managers, capable of understanding the handling technical problems

and complex situations. The cost of remitting or transferring funds from one place to another

works out to be less. The staff stays at a branch only for a limited period, so the chances of

objective decision making in the branch banking are high.

Branch Banking tends to bring homogeneity in the prevailing Interest Rates as it increases the

mobility of resources from one place to another. It is easier for the Central Bank to exercise

Control. It will communicate only with a few Registered /Head Offices of the Banks and not

with each individual branch. In this system there more safety and liquidity of funds. The

choice of securities and investments is larger. Branch banking makes complete banking

services available to the smallest communities. The branches in small localities can be

initially operated at loss in expectation of future gains.

The comparative study of unit banking and branch banking is a case of small scale banking

versus large scale banking. It is evident that the scale is clearly titled towards branch banking.

With the growth of large scale business it is no wonder that the trend is almost every country

towards the branch banking i.e. big banks with a network of branches all over the country.

Even in the U.S.A. The birthplace of unit banking. The Bank of America has now more than

500 branches in the state of California itself.


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(3) CHAIN BANKING :

Shaper, Solomon and White have defined Chain Banking as

An arrangements by which two or more banks each of which retains its identity, capital and

personnel are brought under common control by any device other than a Holding

Company.

Under the system there is pooling of resources. Chain banking overcomes certain limitations

of unit banking. But the system suffers from certain limitations of its own. There may be a

lack of co-ordination, proper control etc. The system is inflexible.

(4) GROUP BANKING :

It is similar to Chain Banking, the difference being that under Group Banking two or more banks are brought under the control of the same management through a Holding Company.

Both the systems aim at gaining the advantages of large scale operations. The banks are able

to pool their resources in case of emergency or when large amount of cash is required to meet

the loan requirements of the customer. The advantages and disadvantages of both the systems

are similar. Both the systems developed in the United State of America as a result of attempts

to overcome the difficulties or limitations of unit banking.

(5) CORRESPONDENT BANKING:

Under Correspondent banking, small banks serving local communities hold deposits with joint

banks serving in big cities. This kind of banking is prevalent in U.S.A. The correspondent

banks perform two important services of outstation cheque clearing and loan participation for

the respondent banks while they benefit for the deposit funds of respondent banks.


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PRIMARY FUNCTIONS :

1) Accepting of Deposits : A bank accepts deposits from the public. People can deposit

their cash balances in either of the following accounts to their convenience:-

a. Fixed or Time Deposit Account : Cash is deposited in this account for a fixed

period. The depositor gets receipts for the amount deposited. It is called Fixed

Deposit Receipt. The receipt indicates the name of the depositor, amount of

deposit, rate of interest and the period of deposit. This receipt is not

transferable. If the depositor stands in need of the amount before the expiry of

fixed period, he can withdraw the same after paying the discount to the bank.

b. Savings Account : This type of deposit suits to those who just want to keep their

small savings in a bank and might need to withdraw them occasionally. Banks provide a certain rate of interest on the minimum balance kept by the depositor

during the month.

c. Current Account : This type of account is kept by the businessman who are

required to withdraw money every new and then. Banks do not pay any interest

on this account. Any sum or any number of withdrawals can be presented by

such an account holder.

2) Advancing of Loans : The bank advances money in any one of the following ways.

a. Overdraft Facilities : Customers of good trading are allowed to overdraw from

their current account. But they have to pay interest on extra amount they have

withdrawn. Overdrafts are allowed to provide temporary accommodation since the

extra amount withdrawn is payable within a short period.

b. Money at Call : It is the money lent for a very short period varying from 1 to 14

days. Such advances are usually made to other banks and financial institutions

only. Money at call ensures liquidity. In the Interbank market it enables bank to

make adjustment according to their liquidity requirements.


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c. Loans : Loans are granted by the banks on securities which can be easily disposed

off in the market. When the bank has satisfied itself regarding the soundness of the

party, a loan is advanced.

d. Cash Credit : The Debtor is allowed to withdraw a certain amount on a given

security. The debtor withdraws the amount within this limit, interest is charged by

the bank on the amount actually withdrawn.

e. Discounting Bill of Exchange : It is another method of making advances by the

banks. Under this method, bank give advance to their clients on the basis of their

bills of exchange before the maturity of such bills.

f. Investment in Government Securities : Purchasing of government securities by the

banks tantamount to advancing loans by them to the Government. Banks prefer to

buy government securities as these are considered to be the safest investment. Forexample : Indira Vikas Patra : It enables the banks to meet requirement of statutory

liquidity ratio (SLR)

3) Credit Creation :One of the main functions of banks these days is to create credit.

Banks create credit by giving more loans than their cash reserves. Banks are able to

create credit because the demand deposits i.e. a claim against the bank is accepted by

the public in settlement of their debts. In this process the bank creates money. For this

reason Prof. Sayers has called bank the manufactures of money.

4) Cheque system of Payment of Funds

A cheque, a negotiable instrument, which in fact is a bill of exchange, drawn upon a banker, is

the most popular credit instrument used by the client to make payments. Cheque system is the

main credit instrument in the banking world.

Although a cheque is not a legal tender money, the serves as a medium of exchange in a

limited way as it is a negotiable instrument.

Because of clearing houses and clearing operations of the banks, cheques can be and are

used for transferring funds from one centre to another. In the modern days they can also be

used for transferring funds from one country to another.


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SECONDARY FUNCTIONS

Besides the above primary functions, banks also perform may secondary functions such as

agency functions, general utility and social functions.

A) Agency Functions

Banks act as agents to their customers in different ways :-

i) Collection and Payment of Credit and Other Instruments: The Commercial banks collect and

pay cheques, bills of exchange, promissory notes, hundies, rent, interest etc. On behalf of their

customers and also make payments of income tax, fees, insurance premium etc. on behalf of

the customers. Customers can leave standing instructions with the banker for various periodic

payments ensuring the regular payments and avoiding the trouble of performing it themselves.

ii) Purchase and Sale of Securities : The modern commercial banks also undertake the purchase and sale of various securities like shares, stocks, bonds units and debentures etc. On

behalf of the customers, banks do not give any advice regarding the suitability or otherwise of

a security but simply perform the functions of a broker.

iii) Trustee and Executor : Banks also acts as trustees and executors of the property of their

customers on their advice. Sometimes banks also undertake income tax services on behalf of

the customers.

iv) Remittance of Funds : The Commercial banks remit funds on behalf of clients from one

place to another through cheques, drafts, mail transfers etc.

v) Representation and Correspondence : Sometimes commercial banks acts as representatives

or correspondents of the clients especially in handling various applications. For instance,

passports and travel tickets, booking of vehicles, plots etc.

vi) Billion Trading : In many countries, the commercial banks trade is billions like gold and

silver. In Oct 1997, 8 banks including SBI, IOB, Canara Bank and Allahabad Bank have been

allowed import of gold which has been put under open general licensed category.

vii) Purchase and Sale of Foreign Exchange : Banks buy and sell foreign exchange, promoting

international trade. This function is mainly discharged by foreign Exchange Banks.

viii) Letter of References : Banks also give information about economic position of their

customers to domestic and foreign traders and vice versa.


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viii) Dealing in Foreign Exchange: Major branches of commercial banks also transact

business of foreign exchange. Commercial banks are the main authorized dealers of

foreign exchange in India.

ix) Merchant banking Services: Commercial banks also render merchant banking

services to the customers. They help in availing loans from non-banking financial

institutions.

x) Help in Transportation of Goods: Big businessmen or industrialists after consigning

goods to their retailers send the Railway Receipt (Consignment Note) to the bank.


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OBJECTIVES OFTHE STUDY


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Objectives of the StudyThis study has been conducted with a variety of important objectives in mind. The following

provides us with the chief objectives that have tried to achieve through the study. The extentto which these objectives have been met could judged from the conclusions and suggestions,which appear in the later of this study.

The Objectives of this study are:1.To find the bank sector that is largely availed by the customer.

2.To study the factors the influencing the choice of a bank for.availing services.

4.To find and compare the satisfaction level of customers in public sector as well as in

private sectors bank.

6.To study the problem faced by customer.

7.To get suggestions for improvement or change in the services of public and private

sector banks.8.To study what do people expect in the new era of banking.


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RESEARCH

METHODOLOGY


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RESEARCH METHODOLOGY

Research is an art of scientific investigation. In other word research is a scientific and

systematic search for pertinent information on a specific topic. The logic behind taking

research methodology into consideration is that one can have knowledge about the method

and procedure adopted for achievement of objectives of the project. With the adoption of this

others can evaluate the results also. Its main aim is to keep the researchers on the right track.

The methodology adopted for studying the objectives was surveying the saving account

holders of District Jalandhar. So keeping in view the nature of requirements of the study to

collect all the relevant information regarding the comparison of saving account of Centurion

Bank of Punjab with other banks, direct personal interview method with structuredquestionnaire was adopted for the collection of primary data.

Secondary data has been collected through the various magazines and newspapers and by

surfing on Internet. And the guide in the organization was consulted at many times.

SAMPLE DESIGN:- A sample design is a definite plan for obtaining a sample from a given

population. It refers to the techniques or the procedure the researcher would adopt in selecting

items for the sample. Sample design may as well lay down the number of items to be included

in the sample i.e.,

the size of the sample. Sample design is determined before data are collected. Here we select

the population as sample in our sample design. The selected respondents should be as

representatives of the total population.

DATA COLLECTION

Data was collected by using main two methods i.e primary data and secondary data.


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PRIMARY DATA

Primary data is the data which is used or collected for first time and it is not used by anyone in

the past. There are number of sources of primary data from which the information can be

collected. We choose the following resources for our research.

QUESTIONNAIRE:- This method of data collection is quite popular, particular in case of big

enquiries. Here in our research we set 15 simple questions and request the respondents to

answer these questions with correct information.

RESPONDENTS:- Respondents helps in creation of more accurate idea about our research.

We personally meet the respondents inside and outside the banks.

SECONDARY DATA

Secondary data is the data which is available in readymade form and which is already used by

people for some purposes. There may be various sources of secondary data such as-

newspapers, magazines, journals, books, reports, documents and other published information.

BANKS ANNUAL REPORTS :-Banks issues there annual reports to get the people informed

with the profitability and growth of the bank. These annual reports helps us a lot to get the

latest data and other related information for our research. It tells us about the increase or

decrease in profits and other facilities.

INTERNET:- We also take into consideration the internet facility with which we collect lot of

latest information.

SAMPLE PLAN :

SAMPLE SIZE: Keeping in mind all the constraints the size of the sample of the

study was selected as 200.


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SAMPLING UNIT:-

HDFC BankLajpat nagar new Delhi . Due to nature of study, we also visited various

different banks ICICI, HDFC, SBI, PUNJAB NATIONAL BANK etc.

SAMPLING TECHNIQUE:- Stratified convenient sampling.

All the saving account holders were taken into consideration. Research was conducted

on clear assumptions that the respondents would give frank and fair answers in a

pragmatic way and without any bias.

SAMPLING DESCRIPTION:- In order to understand the nature and characteristicsof various respondents in this study, the information was collected and analyzed

according to their socio economic background which included the characteristic of

their respondents like education, age marital status and monthly income. This

description shows that respondents included in this survey belong to different

backgrounds and this turn increase the scope of the study.


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PERSONAL DETAILAGEParticulars %age of Respondent

20-30 years 20%

30-40 years 50%40-50 years 20%

50-60 years 10%

Analysis & Interpretation: From the above study we find that nobody is below 20 age and

20% respondents are between 20-30 age group, 50% respondents are between 30-40 age

group, 20% respondents is between 40-50 age group and 10% respondents are between 50-60

age group.


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SEX

Particulars No of Respondent %age

Male 140 70%

Female 60 30%

Total 200 100%

Analysis:From the above result we come to know that out of 100, 62 respondents are male and 38 arefemale which is 62% and 38% are respectively.Interpretation: From the above data we conclude that most of our respondents are male.


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Q4: HIGHEST EDUCATIONAL QUALIFICATION:-

Particulars No of Respondent % age

Matric 8 4%

Senior Secondary 28 14%Graduate &professional 92 46%

Post graduate 72 36%

Total 200 100%

Analysis: This analysis shows that out of 200 respondent, 46% respondents are graduate &

professional, 36% respondents are post graduate, 14% respondents are senior secondary and

2% respondents are of Matric category. All the respondents of our survey are qualified.

Interpretation: From the above data we conclude that most of our respondents are Graduates

& professional degree holders.

Matric4%

Senior secondary

14%

Graduate &professional degree

holders46%

Post graduate36%

Qualification


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OCCUPATION

Particulars No of Respondent %age of respondents

Businessman 64 32%

Government Employee 56 28%

Student 48 24%

Others 32 16%

Analysis: From the above analysis it is clear that 32% respondents are doing their own business, 28% are employees and 16% respondents belong to other category And 24% of ourrespondents are students. Most of the respondents of our survey are Businessmen.Interpretation: From the Above data we conclude that most of our survey respondents are

businessmen.

32%

28%

24%

16%

OccupationBusinessmen Government Employee Students Others


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COMPANY PROFILE


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HDFC Bank

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The

bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its

registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled

Commercial Bank in January 1995.

The Bank is engaged in providing a range of banking and financial services, includingcommercial banking and treasury operations. The Bank has three primary business segments:Retail banking, wholesale banking and treasury. The retail banking segment serves retailcustomers through a branch network and other delivery channels. This segment raises depositsfrom customers and makes loans and provides other services with the help of specialist

product groups to such customers. The wholesale banking segment provides loans, non-fundfacilities and transaction services to corporate, public sector units, government bodies,financial institutions and medium-scale enterprises. The treasury segment includes net interestearnings on investments portfolio of the Bank. As of March 31, 2010, the Bank operated1,725 branches in 779 cities and 4,232 automated teller machines (ATMs). HDFC Bank isheadquartered in Mumbai, India and employs about 52,687 people. The company recordedrevenues of INR107, 117.6 million (approximately $2,069.5 million) in the financial year(FY) ended March 2009, an increase of 42.6% over FY2008. The operating profit of thecompany was INR51, 789.5 million (approximately $1,000.6 million) in FY2009, an increaseof 37.5% over FY2008. The net profit was INR22, 449.3 million (approximately $433.7million) in FY2009, an increase of 41.1% over FY2008.HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound

customer franchises across distinct businesses so as to be the preferred provider of banking

services for target retail and wholesale customer segments, and to achieve healthy growth in

profitability, consistent with the bank's risk appetite. The bank is committed to maintain the

highest level of ethical standards, professional integrity, corporate governance and regulatory

compliance. HDFC Bank's business philosophy is based on four core values - Operational

Excellence, Customer Focus, Product Leadership and People.


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Retail Banking At HDFC Bank

The Bank caters to various customer segments with a wide range of products and

services. The Bank is a one stop shop financial services provider of various deposit products, of retail loans (auto loans, personal loans, commercial vehicle loans,

mortgages, business banking etc.), credit cards, debit cards, depository (custody

services), investment advisory, bill payments and several transactional services. Apart

from its own products, the Bank sells third party financial products like mutual funds

and insurance.

The growth in your Banks retail banking business was robust during the financial year

ended March 31, 2010. The Banks total retail deposits grew by over 14% to Rs.113,527crores in the financial year ended March 31, 2010, driven by retail savings

balance s which grew much faster at 44% during the same period. The Banks retail

assets grew by 18% to Rs. 72,271 crores during the financial year ended March 31,

2010 driven primarily by a growth in auto loans, mortgages, business banking and

commercial vehicle loans.

Services Offered:

1. Accounts & Deposits

2. Loans

3. Cards

4. Investments & Insurance

5. Forex & Trade Services

6. Payment Services

7. HDFC Bank Imperia / Preferred / Classic Banking

8. Private Banking
http://www.hdfcbank.com/personal/preferred/default.htmhttp://www.hdfcbank.com/personal/preferred/default.htmhttp://www.hdfcbank.com/personal/preferred/default.htm


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Strengths:

1. Right strategy for the right products.

2. Superior customer service vs. competitors.

3. Great Brand Image.4. Products have required accreditation.

5. High degree of customer satisfaction.

6. Good place to work

7. Lower response time with efficient and effective service.

8. Dedicated workforce aiming at making a long-term career in the field.

Weakness:

1. Some gaps in range for certain sectors.

2. Customer service staff needs training.

3. Processes and systems, etc

4. Management cover insufficient.

5. Sectoral growth is constrained by low unemployment levels and competition for staff

Opportunities:

1. Profit margins will be good.

2. Could extend to overseas broadly.

3. New specialist applications.

4. Could seek better customer deals.

5. Fast-track career development opportunities on an industry-wide basis.

6. An applied research center to create opportunities for developing techniques to provide

added-value services.

Threats:

1. Legislation could impact.

2. Great risk involved
http://managementfunda.com/customer-service/http://managementfunda.com/customer-service/


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3. Very high competition prevailing in the industry.

4. Vulnerable to reactive attack by major competitors.

5. Lack of infrastructure in rural areas could constrain investment.

6. High volume/low cost market is intensely competitive.

HDFC Bank Implemented Strategies In The Following Way:

Bank expanded its distribution network from 1,412 branches in 528 cities as on

March 31, 2009 to 1,725 branches in 779 cities on March 31, 2010.

The Banks ATMs increased from 3,295 to 4,232 during the same period. The Banks focus on semi-urban and under banked markets continued, with 68% of

the Banks branches now outside the top nine Indian cities. The Banks customer base

grew in line with the growth in its network and increased product penetration

initiatives; this currently stands at over 19 million customers.

In order to provide its customers increased choices, flexibility and convenience the

Bank continued to make significant headway in its multi channel servicing strategy.

Bank offered its customers the use of ATMs, internet, phone and mobile banking in

addition to its expanded branch network to serve their banking needs.

The increase in the Banks debit card base this year coupled with a growth in its ATM

network translated to an increase in ATM transactions by 26%.

The Bank also made strong inroads in its internet banking channel with around 21% of

its registered customers now using net banking facilities for their banking

requirements.

Bank now offers phone banking in 778 locations in addition to giving its customers the

convenience of accessing their bank accounts over their mobile phones. The Bank continued its focus on internal customers for its credit cards portfolio.

Overall credit cards remained a profitable business for your Bank with over 4 million

cards in force as at March 2010.


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As part of its strategy to drive usage of its credit cards the Bank also has a significant

presence in the merchant acquiring business with the total number of point -of-sale

(POS) terminals installed at over 90,000.

The Banks data wareho use, Customer Relationship Management (CRM) and

analytics solutions have helped it target existing and potential customers more

effectively and cost effectively and offer them products appropriate to their profile and

needs.

Bank has made substantial investments in its technology platform and systems, built

multiple distribution channels, including an electronically linked branch network,

automated telephone banking, internet banking and banking through mobile phones, to

offer its customers convenient access to various products.

Bank continued to improve customer service in various spheres of its business through

service quality initiatives and quality projects using lean Sigma Tool-kit, 5S and other

business excellence initiatives. Over 2,000 projects were executed during the year that

resulted in demonstrable process efficiency improvements, enhanced productivity,

improved turn around times, cost reduction all of which ultimately led to an

improvement in customer service.


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Scope of the study

The scope of the study includes the following.

1.To find the bank sector that is largely availed by the customer.2. Studying the factors influencing the choice of a bank for .availing services.

4.To find and compare the satisfaction level of customers in public sector .as well as in

private sectors bank.

6.To study the problem faced by customer.

7.To get suggestions for improvement or change in the services of public and private

sector banks.

8.To study what do people expect in the new era of banking.

9.To find out the pe oples expectation towards their banks.

10.to compare the service quality of public and private sector banks and to know that

whether the customers are happy with that kind of service or they want to shift to another

bank.


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LIMITATIONS OF THE STUDY

Due to constraints of time and resources, the study is likely to suffer from certain limitations.

Some of these are mentioned here under so that the findings of the study may be understood in

a proper perspective.

The limitations of the study are: Some of the respondents of the survey were unwilling to share information. The research was carried out in a short period of 6 weeks . Therefore the sample

size and other parameters were selected accordingly so as to finish the work within

the given time frame. The information given by the respondents might be biased because some of them

might not be interested to give correct information. The officials of the bank supported me a lot, but did not have sufficient time to make

the points more clear.


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DATA ANALYSIS


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2. The respondents were Asked about the bank in which they have their account

Name of bank SBI PNB SyndicateBank

ICICI bank HDFCBank

AxisBank

Total no ofrespondents

55 35 20 30 32 28

Interpretation: It was found that most of the respondents have their account in State bank of

India. SBI have the major chunk of the customers in public sector. Apart from SBI all other

banks have more or less same number of customer ( except for syndicate bank).

0

10

20

30

40

50

60

SBI PNB Syndicate HDFC ICICI Axis


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3. The basic purpose of this question was to know thetype of account therespondent have in their bank

Type of Account Number of respondentsSavings 160Current 35Demat 14FD 45Salary 40RD 10

Analysis: From above graph, it is seen that 160 respondents have their savings accounts. A

very few people are using demat accounts with banks.

Interpretation : From the above graph, it is seen that almost 80% of the respondents avail the

services of savings accounts. This is the most common account among the respondents. Many people have more than one type of accounts.

020

40

60

80

100

120

140

160

180

Savings Current Demat FD Salary RD

Series1


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4. The aim to ask this question was to know the various services thecustomers are availing.

Services No of respondentsATM/ Debit card 200Credit card 105Insurence 36Mobile banking 64Internet banking 75Locker Facility 15Loan 95

Inpretation : By analyzing this graph, we can conclude that all of the people have ATM/Debitcards. LIC is still the most preferred for insurance thats why there are very few people who

have their insurance done through banks

0

50

100

150

200

250

Atm/Debit Credit Card Insurance Mobilebanking

Internetbanking

Locker facility Loan


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5.The respondents were asked about their most preferred bank in case theyhave more than one accounts.

Name of the bank No of respondentsSBI 45PNB 27Syndicate 15HDFC 34ICICI 38Axis 28Other 13

Interpretation: From the above graph, it was found that was availed by most of the people at

public sector banks was that of ATM/Debit cards which hold 90% of respondents. It is clearlyobserved by the graph that Insurance are neck to neck holding 20% of respondent each.

0

5

10

1520

25

30

35

40

45

50

SBI PNB Syndicate HDFC ICICI Axis Other


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6. The purpose of this question is to know the reasons why a customer opensan account or avail any service of a bank.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

image services location charges AQB/AMB network

unimp

not so imp

nuetral

imp

most imp


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7. The respondents were asked about the particular reason for opening anaccount in their bank.

Interpretation:

From this above Graph, we can conclude that location of branches and trust is an important

factor in deciding a bank. SBI scores well on both factors. Advertising do not play an important

role in this regard. There are some other reasons for choosing a bank eg. Relations with

employee, to get a particular service, low monthly/quarterly balance etc.

0102030405060708090

100

Reasons No. of respondentsQuick and fast service 40Location 95Behaviour of the staff 31Trust 85Suggested by friend/family 40Impressed by advertisement 15Product range 66Product pricing 60

Network 25Other 9


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8. The aim to ask this question was to know the satisfaction level of thecustomers in terms of various factors.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Staff Behaviour

Ease of operation

Customereducation

againstsecurity

concerns

Queuemanagement

Queryhandling

Complaintregistration

andresolution

highly dissatisfied

dissatisfied

nuetral

imp

most imp


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Q11. In case a customer wants to shift from his present bank then it wasnecessary to know the next bank he/she is opting for.

Name of the bank No of respondent

SBI 10ICICI 15PNB 6Axis 9HDFC 19Syndicate 1Other 6

Interpretation: the study shows that just one respondent was ready to shift tosyndicate bank. Majority people opted for HDFC and SBI because of their largeand vast network. The other banks where people wanted to move were , Bank of

baroda, yes bank, HSBC etc.

0

2

4

6

8

10

12

14

16

18

20

SBI ICICI PNB Axis HDFC Syndicate Other


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FINDINGS


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FINDINGS OF THE STUDY

More number of people has account with private banks. Majority of the respondents whether in public sectors or in private sector banks have

savings account with banks.

Number of problem faced by the people is more in public sector banks. People want a change in the behavior of the staff of the public sector banks. People are more satisfied form the services of private sector banks due to their better

services provided by them in terms of speedy transactions, fully computerizedfacilities, more working hours (in case of ICICI bank, the number of working hour are

12), good investment Advisory services, efficient and co-operative staff, better

approach to Customer Relationship Management.

In private sector banks proper promotional activities should be taken up so as to makethe population aware of the services provided by the banks even in rural areas.

The facility that was availed by most of the people at public sector banks was that of

ATM/Debit cards. The least availed facility was that of Demat account and foreigntransfer of funds.

The facility that was availed by most of the people at private sector banks was that ofInternet/Phone banking by ATM/Debit card. Besides that these services are also

provided by public sector banks.

Majority of respondents do not want to shift from their present bank.

From the above study it is clear that private banks are providing better services thannationalized banks. 95% respondents favored that private banks are providing better

services than nationalized banks while 5% respondents are not agree with it.


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From the above study it is clear that majority of the respondents said that the average balance requirement for operating their saving account is between 5000-10000. 20%

said it is between 10000-20000 and remaining 5% said it is between 20000-50000 in

private sector banks which as compared to Public sector bank is very high.

40% respondents said that the bank employees never pay any attention to them and10% respondents said that their problems are not solved by bank executives. The

remaining 50% respondents give a positive reaction in the favour of bank. 30%

respondents favoured that their problems are solved by bank executives and 20%

respondents said they are received with smile by bank executives. So there is a mix

response.

Majority of the respondents said that the average time taken for transactions is between 25 to 50 minutes in their bank. 30% respondents said the average time taken

for transaction is between 20-25 minutes, 20% said it is between 10 to 25 min. and

remaining 10% said that the average time taken for transaction by their bank is 5 to 10

minutes.

From the above study is clear that the banks do not organize any customer meets. Allthe 100% respondents said that their bank does not organize any customer's meets to

resolve their problems. Customer satisfaction is the demand of time, so the banks

should organize customer meets to resolve the problems of their customers.

From the above study it is clear that majority of the respondents are ready to paynominal charges for better services provided by private banks while 40% respondents

are not ready to pay any nominal charges.

The above study depicts that 60% respondent said that their bank updates them time totime about the latest facilities and remaining 40% said that their bank doesn't update

them.


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SUGGESTIONS


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SUGGESTIONS

Based on the study conducted, There are some of the suggestions given by the customers of

how the modern banking should be. These are the comment given by them about the

improvement of the banking sector in India.

Banks should obey the RBI norms and provide facilitiesas per the norms, which are

not being followed by the banks. While the customer must be given prompt services

and the bank officer should not have any fear on mind to provide the facilities as per

RBI norms to the units going sick. Banks should increase the rate of saving account Banks should provide loan at the lower interest rate and education loans should be

given with ease without much documentation. All the banks must provide loans

against shares. Fair dealing with the customers. More contribution from the employee of the bank.

The staff Should be co-operative, friendly and must be capable of understanding the

problems of customers Internet banking facility must be made available in all the banks. Prompt dealing with permanent customers and speedy transaction without harassing

the customers Each section of every bank should be computerized even in rural areas also. Real time gross settlement can play a very important role. More ATM coverage should be provided for the convenience of the customers. No limit on cash withdrawls on ATM cards.


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The bank should bring out new schemes at time-to-time so that more people can be

attracted. Even some gifts and prizes may be offered to the customers for their

retention. 24 hours banking should be induced so as to facilitate the customers who may not have

a free time in the daytime. It will help in facing the competition more effectively. The charges for saving account opening are high, so they should also be reduced. Customers generally complain that full knowledge is not granted to them. Thus the

bank should properly disclose the features of the product and services to the

customers. Moreover door to door services can also be introduced by bank. The need of the customer should properly be understood so that customer feels

satisfied. The relationship value should be maintained.

The branch should promote cooperation and coordination among employees whichhelp them in efficient working.

Maintenance of proper hierarchy should be done. A good hierarchy set up can ensure

better results with in the bank.

Banking sector is improving by leaps but still it needs to be improved. Proper and efficient

relationship staffs having knowledge for one stop banking, customer friendly atmosphere,

and better rate of interest are need of the hour.the concept of privatization has overall

improved the services in all the banks. Home banking will be order of the day.

Recommendations

For Public Sector Banks:

Bank staff should be customer friendly and highly motivated to serve the

normal customer. As far as possible, banks should reduce its documentation process while

providing loans.

Computerization should be done in banks at all level and the operators

should de properly trained.


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CONCLUSION


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CONCLUSION

The customers now days are not only exposed of what type of service is being provided by

banks in India but in the world as a whole. They expect much more than what is actually

being provided. So the new coming banking sector has to provide and cater to all the needs ofthe customers otherwise it is difficult to survive in the competition coming up.

They not only expect the safety of money but also best ways to invest that money which need

needs to be fulfilled. Banks need to have a better outlook towards to actually what customers

are requiring. Entries of the private sector banks have made the competition tougher. If a bank

is not functioning properly it is being closed. So it is difficult to face these types of conditions.

Here a simple philosophy can work that customers are God and we need to follow this tosurvive and serve better.

The banking sector is poised for explosive growth. In this, scenario, it is imperative that banks

adopt technology at an aggressive Pace, if they wish to remain competitive. Mani Mamallan

makes a case for banks to outsource their technology infrastructure requirement, thus enabling

early adoption and increased efficiencies.

In the prevailing scenario, a number of banks have adopt a new deployment strategy ofinfrastructure outsourcing, to lower the cost of service channels. As a result, other banks too

will need to align their reinvented business models. The required changes at both the business

and technology levels are enormous. In a highly competitive banking markets, early adopters

are profiting from increased efficiencies.


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BIBLIOGRAPHY


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BIBLIOGRAPHY

BOOKS:

Kothari C.R. (1990 ) Research Methodology: Method and Techniques ;

Wishva Prakashan, New Delhi. Bodie.Z, Kane.A & Mracus.J : Essentials of Investments . Prof. E Gordon & Dr. K. Natrajan Banking Theory Law and Practice . Indian financial System & Commercial Banking by Khan Masood

Ahmed

Banking in India by P.N.Varshney

WEBSITES:

www.iba.org.in www.knowledgestom.com

BROACHERS & PAMPHLETS

Broachers and pamphlets of Saving A/c


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QUESTIONNAIRE


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QUESTIONNAIRE

A comparative study between of service quality of public sectorbanks and private sector banks .

As a part of our Project at Tecnia Institute of Advanced Studies, Delhi, we areconducting a research on service quality of public and private sector bank. This surveyis part of the project. We would appreciate if you devote your 5 minutes and answer thequestions given below. We ensure your anonymity and confirm that your responses willbe used only for academic purposes.

Q1. Which Sector bank do you have your account?

PublicPrivateBoth

Q2. In which bank do you have your Account?1. SBI2.PNB3.Bank of Baroda4.ICICI 5.HDFC 6. Axis Bank

Q3. Which type of account do you have in the bank?

SavingCurrentDematF.DSalaryRD

Q4. Which of the following services you are currently using.Atm/Debit card

Credit card

Insurance

Mobile Banking


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Internet banking

Locker facilityLoanQ5. In Case you have yours Account in more than one a Bank which one is your most

preferred bank (Give only one bank).

Q6. Rank the selection criteria for opening account with bank?

Mostimportant Important Nuetral Not so imp. Unimportant

Image

ServicesLocation

Charges

AQB/AMB

Network

Q7. Kindly choose the reasons for yours preference in this particular bank?

Quickand fast services

Location

Behavior

Trust

Suggestion of some friend/family member

Product Range

Project pricing


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Q13. Are you availing any other service from your/other bank? Name the service andthe bank.

Q14 . Kinly mention the reason for not availing the same service in your own bank.

Q15are you willing to pay extra charges for any added services.

Yes

No

Personal details of the respondent

Name:Age:

Gender:

Occupation:

Income(annual):

Documents

Comparative Analysis of Public Sector and Private Sectors Banks