New ERA in Banking

8/9/2019 New ERA in Banking

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Submitted ToPunjab Technical University, Jalandhar

In partial fulfillment of the requirements for thedegree of

Masters of Business Administration (M.B.A.)

Submitted By : Submitted to :Sahil kukkar Prof.- HardeepSingh

M.B.A.-IVth Sem.Roll No. :7043221461

SESSION 2008-09CT INSTITUTE OF MANAGEMENT & I.T.

JALANDHAR


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PREFACE

Someone has rightly said that practical experience is far better and closer to

the real world than mere theoretical exposure. The practical experience helpsthe students to view the real business world closely, which in turn widely

influences their perceptions and arguments their understanding of the real

situation.

The phenomenon of creation is a long process requiring time, energy and

dedications well as skill and experience of those people engaged in the task,

ultimately in the outcome as the final form of embodiment of the creators

vision.

Research work constitutes the backbone of any management education

programme. A management student has to do research work quiet frequently

during his entire span.

The research work entitled New Era in Indian Banking Sector aims to

know the customer awareness regarding services & services provided by

public and private sector banks. For this purpose the respondents from

fazilka city have been chosen.

MBA is the stepping-stone to management care in order to reach practical

and concrete results. Our contemporary lives have been influenced by the

advancement and growth in banking sector. Wherein the banking sector of

21st century are unthinkable. This study aims to explore all such phases.

The course deals with matters, which are basic and should be known inrelation to banking sector. The topics are dealt with in a general manner.

There would be details about the profile of some banks, services availed by

customers in public as well as private sector banks, satisfaction level of

customers regarding the services they are availing etc.


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ACNOWELDGEMENT

A person always requires guidance and help of other to achieve success in

his mission, similarly it was not possible for me to complete my assignment.

I am indeed very much thankful to all the people who have helped me to

complete the project.

I am gratefully indebted to Prof. Hardeep Singh, my project guide for

providing me all the necessary help and required guidelines for the

completion of my project and also for the valuable time that she gave me

from her schedule.

Last but not least I am thankful to all my friends, who have been a constant

source of inspiration and information for me. I thanks to almighty for

showering his blessing.

____________


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TABLE OF CONTENTS

Sr.No. Particulars Page No.

1. CHAPTER-I: INTRODUCTION TO STUDY

Introduction

Definition of bank

Classification of banks

Era of new banking system in India

Deposits

Easy banking

Plastic money

credit card market Loans

Money transfer

2. CHAPTER-II: MAJOR PLAYERS

ICICI Bank

HDFC Bank

State Bank of India (SBI)

Punjab National Bank

Canara bank

3. CHAPTER-III: REVIEW OF LITERATURE

4. CHAPTER-IV: RESEARCH METHODOLOGY

Sources of Data Collection

Objectives of the Study

Limitations of the Study

5. CHAPTER-V: DATA ANALYSIS AND ITSINTERPRETATION

6. CHAPTER-VI : FINDINGS AND SUGGESTIONS

7. CHAPTER-VII: CONCLUSIONBIBLIOGRAPHY

ANNEXURE

Questionnaire


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INTRODUCTION

The world of banking has assumed a new dimension at dawn of the 21 st

century with the advent of tech banking, thereby lending the industry a

stamp of universality. In general, banking may be classified as retail and

corporate banking. Retail banking, which is designed to meet the

requirements of individual customers and encourage their saving, includes

payment of utility bills, consumer loans, credit cards, checking account and

the like. Corporate banking, on the other hand, caters to the needs of

corporate customers like bills discounting, opening letters of credit,

managing cash, etc.

Metamorphic changes took place in the Indian financial system during the

eighties and nineties consequent upon deregulation and liberalization of

economic policies of the government. India began shaping up its economy

and earmarked ambitious plan for economic growth. Consequently, a seachange in money and capital markets took place. Applications of marketing

concept in the banking sector was introduced to enhance the customer

satisfaction. The policy of privatization of banking services aims at

encouraging the competition in banking sector and introduction of financial

services. Consequently, services such as Demat, Internet Banking, Portfolio

Management, Venture Capital, etc., came into existence to cater to the needs

of public. An important agenda for every banker today is greater operational

efficiency and customer satisfaction. The new watchword for the bank is

pretty ambitious : customer delight.


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The introduction to the marketing concept to banking sector can be traced

back to American Banking Association Conference of 1958. Bank marketing

can be defined as the part of management activity, which seems to direct the

flow of banking services profitability to the customers. The marketing

concept basically requires that there should be thorough understanding of

customers need and to learn about market it operates in. Further the market

is segmented so as to understand the requirements of the customer at a profit

to the bank.

.INDIAN BANKING SYSTEM

Banking in India has its origin as early as the Vedic period. It was believed

that transition from money lending to banking must have occurred even

before Manu, the great Hindu Jurist, who has devoted a section of his work

to deposit advance and laid down rules relating to rates of interest. During

the Mogul period, the indigenous bankers played a very important role in

lending money financing foreign trade and commerce. During the days of

East India Company, it was the turn over of the agency houses to carry on

the banking business. The General Bank of India was the first joint sector

bank to be established in the Year 1786. The others that followed were the

Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported

to have continued till 1906 while the other two failed in the meantime.

In the first half of the 19 th century the East India Company established three

banks:

1. The Bank of Bengal in 1809.


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2. The Bank of Bombay in 1840.

3. The Bank of Madras in 1843.

These three banks also known as Presidency Banks were independent units

and functioned well. These three banks were amalgamated in 1920 and a

new bank, the Imperial Bank of India was established on 27th January 1921.

with the passing of State Bank of India Act in 1955, the undertaking of

Imperial Bank of India was taken over by the newly constituted State Bank

of India. The Reserve Bank which is the Central Bank of India was created

in 1935 by passing Reserve Bank of India Act 1934. In the wale of Swadeshi

Movement, a number of banks with Indian management were established in

the country namely,

Punjab National Bank Ltd.

Bank of India Ltd.

Canara Bank of India Ltd.

Indian Bank Ltd.

The Bank of Baroda Ltd.

The Central Bank of India Ltd.

On July 19, 1969, 14 major banks of India were nationalized and on 15th

April, 1980 six more commercial private banks were also taken over by the

government.


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DEFINITION OF BANK

The Oxford dictionary defines the Bank as,

An establishment for the custody of money, which it pays out, on a

customers order.

A Banking Company in India has been defined in the Banking Companies

act 1949,

One which transacts the business of banking which means the

accepting, for the purpose of lending or investment of the deposits of money

from the public, repayable on demand, or otherwise and withdraw able be

cheque, draft, order or otherwise.

The banking system is an integral subsystem of the financial system. It

represents an important channel of collecting small savings form the

households and lending it to the corporate sector.

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

body for all matters relating to the banking system. It is the central Bank of

India. It is also known as the Banker To All Other Banks.


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CLASSIFICATION OF BANKS

On the basis of Ownership

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.

PIVATE SECTOR BANKS

These banks are those banks that are owned and run by private sector. An

individual has control 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.

According 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:


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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

NON-SCHEDULED BANKS

Non -schedule banks are the banks, which are not included in the secondschedule 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

According to Function

COMMERCIAL BANKS

These are the banks that do banking business to earn profit. These banks

make loans for short to 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


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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 an machinery.

AGRICULTURAL BANKSAgricultural banks are those banks that give credit to agricultural sector of

the economy.

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.


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With years, banks are also adding services to their customers. The Indian

banking industry is passing through a phase of customers market. The

customers have more choices in choosing their banks. A competition has

been established within the banks operating in India.

With stiff competition and advancement of technology, the services

provided by banks has become more easy and convenient. The past days are

witness to an hour wait before withdrawing cash from accounts or a cheque

from north of the country being cleared in one month in the south.

This section of banking deals with the latest discovery in the banking

instruments along with the polished version of their old systems.


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ERA OF NEW BANKING SYSTEM IN INDIA

The Indian banking has finally worked up to the competitive

dynamics of the new Indian market and is addressing the

relevant issues to take on the multifarious challenges of

globalization. Banks that employ IT solutions are perceived

to be futuristic and proactive players capable of meeting

the multifarious requirements of the large customers base.

Private banks have been fast on the uptake and are

reorienting their strategies using the internet as a medium

The Internet has emerged as the new and challenging

frontier of marketing with the conventional physical world

tenets being just as applicable like in any other marketing

medium.

DEPOSITS

The main basic working of the bank is to operate and open maximum

accounts, provide loans to the general public and earn interest. There are

mainly four types of accounts which provides various loan facilities.

Types of Accounts

Saving

AccountCurrent

Account

Recurring

Deposit Account

Fixed

Deposit Account


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SAVINGS ACCOUNT

To open the saving account in the bank firstly you should be have

introducers account number which already have the account in that

bank.

To open the a/c the opening amount should be according to the terms

and conditions of the bank and the same balance should be maintained

by the accountee.

If your balance decreases from the minimum amount than you should

to pay 2% on the balance.

If you want cheque facility then you should have minimum 500/- inyour account and Rs. 2.50 charge as per cheque.

Interest paid by the bank is @ 4% per annum on the total balance with

half yearly interest.

Interest is paid on the minimum amount from the months 10 th day to

last working day but if we deposit money after 10th than we doesnt

get any interest on it or we withdraw money before last day then we

got the interest on remain amount.

There are some restrictions on withdraw. You can withdraw 50 times

in total 6 months.

CURRENT ACCOUNT:

To open the current account in the bank firstly you should be have

introducers account number which already have the account in that

bank.

There are some conditions for the minimum balance and your balance

can go to that level of the amount.


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EASY BANKING

This section is fully dedicated to the Tech Banking. A decade before, it was

tough to belief that banking sector will be at a finger tip. Now its possible. A

mobile hand set with a connection is the only instrument needed to make a

gateway to your banking transaction, the latest innovation of technology.

Apart from the Mobile Banking, including of SMS Banking, Net Banking

and ATMs are the major steps taken by the banks in India towards

modernisation. With all these devises and systems, there is a complete

freedom to experience.

Check your account, transfer your fund, make payments and what more, do

anything of everything what has been followed in physical banking since

ages. But this time no standing for hours in front of cash counter and no time

boundation in withdrawing your own money.

Automated Teller Machine (ATM)

The first bank to introduce the ATM

concept in India was the Hongkong

and Shanghai Banking Corporation

(HSBC). It was in the year 1987.

Now, almost every commercial banks

gives ATM facilities to its customers.

The first bank to cross 1,000 marks in installing ATMs in India is ICICI.

SBI is following the concept of 'ATMs in Quantity'. But Private Sector

Banks have taken the lead. ICICI, AXIS, HDFC and IDBI counts more than

50% of the total ATMs in India.


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Public Sector Banks are also taking the installation of ATMs seriously for

Indian market. They are either setting up their own ATM centres or entering

into tie-ups with other banks. The Corporation Bank has the second largest

network of ATMs amongst the Public Sector Banks in India.

The Indian banks have also come up with a 'Swadhan' scheme. Under this

scheme, the banks can use each other's ATM at a cost, usually Rs. 35 extra

from their customers. The main feature of 'Swadhan Card' are as follows:

No exchange fee charged to change an old ATM card for a Swadhan

card.

Rs. 3,000 fixed as the ceiling on withdrawal.

Exception made for select customers who can withdraw up to

Rs10,000. Still, this is lower than the average withdrawal of Rs15,000

by regular ATMs.

IBA gives banks the discretion to decide a higher maximum amount

for withdrawal.

Transactions conducted through any of the member banks appear on a

bank statement, which is given only by your own bank.

All transactions conducted in any of the member banks appear on the

bank statement, but only your own bank will provide this.

Cost of setting ATM center

Approximately Rs.1mn it takes for the setting of an ATM center. Rs.1.2-

1.4mn per annum is needed for its maintenance. To keep the cost in


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equilibrium position, there should be around 250-300 transactions per day

per ATM.

To overcome or to reach the break-even point, the banks are always

encouraging its customers to use the ATMs. Banks like HDFC and Citibank

even charge penalty if a customer visits the branch.

NCR India and HMA Die bold are the main two players in this market to set

up ATMs in India. The market, according to them is whopping 100% and

they are very optimistic to see 30,000 ATMs in India very soon

Mobile Banking In India

"The account that travels with you". This is needed

in t oday's fast business environment with unending

deadlines for fulfillment and loads of appointments

to meed and meetings to attend. With mobile

banking facilities, one can bank from anywhere, at

anytime and in any condition or anyhow. The

system is either through SMS or through WAP.

(Check out for SMS Banking under different head)

Mobile Banking is the hottest area of development in the banking sector and

is expected to replace the credit/debit card system in future. In past two

years, mobile banking users has increased three times if we compare the use

of either debit card or credit card. Moveover 85-90% mobile users do not

own credit cards.

Mobile banking uses the same infrastructure like the ATM solution. But it is

extremely easy and inexpensive to implement. It reduces the cost of

operation for bankers in comparison to the use of ATMs.


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Using compact HTML and WAP technologies, the following operations can

be conducted through advanced mobile phones which can is further viewed

on channels such as the Internet via the Channel Manager.

Bill payments

Fund transfers

Check balances

Any many more which is also available in SMS Banking

In countries like Korea, two SIM Card is used in mobile phones. One for the

telephonic purpose and the other for banking. Bank account data is

encrypted on a smart-card chip. About 3.3 million transactions were reported

by Bank of Korea in 2004.


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SMS Banking

Businesses are in move. So is to be your money. You may have to thank the

banks which are providing banking at the send-of-your-sms. The technology

is at its highest level to move your money while you are on the move. If you

are having non-WAP enabled mobile handset, you can use the facility of

SMS services. The following operations can be easily used by the service

provider:

Balance enquiry

Last three transactions

Cheque payment status

Cheque book request

Statement request

Demat - Free Balance Holding

Demat - Last two Transactions

Bill Payment

The SMS facility brings peace of mind to customers and opens doors to

many more technological possibilities and innovative services. It is very

similar to how an ATM works.

To use ATM, a card is necessary and to use SMS service, a mobile phone is

needed. In both the cases, secret number is necessary to access.

SMS banking is also very much safe. First, one authenticates the mobile

number with the authentications key. Second, the customer uses secret

Mobile Personal Iddentification Number (MPIN).

A new concept has been developed by Bank of Punjab Ltd. They call it

"Mobile Wallet". With the support of this technology, a customer can make

payment and receive payment of account of buy/sell (merchants) through

SMS.


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In this system, a buyer sends a message for buying and the bank in return

sends a message confirming the purchase both to the merchant as well as to

the buyer. Debit card number is the key field which is used for the

authenticity of the customer.

The processes of the service are simplified as under:

Customer has to send "REG(one space)(Account Number)(one space)

(Debit Card Number)" as an SMS to bank's mobile number

9810999992 for registration. For e.g. "REG 06SB11052122

5047531105000109109" Bank will confirm the registration with the

return message.

After that customer will visit nearest branch to collect the service

brochure and get it filled.

Registration will be a one time process.Once registered, customer

would be able to buy things from any of the registered merchant of the

bank.

Customer need to send "PAY(one space)(merchant code)(one space)

(amount)(one space)(Debit card number)" as an SMS on bank's

mobile number 9810999992. For e.g for making a payment of Rs.

56.16 to merchant BOPSTC from card no. 5047531105000109109,

Send the following message "PAY BOPSTC 56.16

5047531105000109109"

The transaction will be validated online and immediately funds will be

transferred from customer account to merchant account.

Bank would send transaction confirmation as an message to both

merchant and customer(buyer).


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An SMS report will be sent to both merchant & buyer everyday

stating the total number of transaction & total amount of transaction

made during previous one day.

Some Useful Tips

Generally with 3 invalid login attempts, SMS Banking services are locked.

Immediately contact the branch for unlocking the services. In case one

forgets the password, obtain a new password from the branch. To log out,

choose the "Log out" option in the handset and SMS Banking session ends.


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Net Banking

Net Banking is conducting ones banking or

bank account online through a computer and a

net connection. The system is updated

immediately after every transaction

automatically. In other words it is said that it

is updated 'on-line, real time'. Through netbanking one can check the status

of his/her account, place queries and also can be facilitated with a wide

range of transactions simultaneously.

In India, the regulatory body has not yet sanctioned virtual bank, in abroad

there are banks like EGG Bank or NET Bank, which only have a virtual

presence without any physical branches.

Net Banking has three basic features. They are as follows:

The banks offer only relevant informations about their products and

services to the mass.

Few banks provide interaction facility between the banks and its

customers.

Banks are coming up with arrangements of utility payments, like

telephone bills, electricity bills, etc.

The current statistics show that hardly 10 per cent of Indian customers uses

the internet for banking. Among all the facilities provided, the maximum of

them uses only for checking balance or requesting for a cheque book. Very

few customers uses the advance interactive services provided by the banks.

According to HDFC and ICICI Bank, 17 per cent of ICICI customers use the

Internet for banking and 10 per cent of HDFC customers prefer it.

Cost of installation of services


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For basic features, the cost for providing such services to the banks come

around Rs 40 lakh to Rs 50 lakh. For the third level service or sophisticated

services, the investments mount to the tune of Rs 4 crore to Rs 5 crore.

These investments is just a fraction if compared to the operations of the bank

using physical infrastructure.

Services provided by Net Banking

Queries

Check Balance

See Statement

Inquire about cheque status

Ask for a Statement

Ask for a Cheque Book

Inquire about Fixed Deposit

Inquire about TDS details

See Demat Account

Update profile

Transactions

Stop a Cheque

Pay Bills

Ask for a Demand Draft Transfer funds between your accounts

Transfer funds to a third party

Request for a new Fixed Deposit

Shop Online


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Pay Bank Credit Card Dues

Advantages of Net Banking

It removes the traditional geographical barriers as it could reach out to

customers of different countries/legal jurisdiction. This has raised the

question of jurisdiction of law/supervisory system to which such

transactions should be subjected.

It has added a new dimension to different kinds of risks traditionally

associated with banking, heightening some of them and throwing new

risk control challenges.

Security of banking transactions, validity of electronic contract,

customers' privacy, etc., which have all along been concerns of both

bankers and supervisors have assumed different dimensions given that

Internet is a public domain, not subject to control by any single

authority or group of users.

It poses a strategic risk of loss of business to those banks who do not

respond in time to this new technology, being the efficient and cost

effective delivery.


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PLASTIC MONEY

Credit Card

Credit cards in India is gaining ground. A

number of banks in India are encouraging people

to use credit card. The concept of credit card was

used in 1950 with the launch of charge cards in

USA by Diners Club and American Express. Credit card however became

more popular with use of magnetic strip in 1970.

Credit card in India became popular with the introduction of foreign banks

in the country. Credit cards are financial instruments, which can be used

more than once to borrow money or buy products and services on credit.

Basically banks, retail stores and other businesses issue these.

Major Banks issuing Credit Card in India

State Bank of India credit card (SBI credit card)

Bank of Baroda credit card or BoB credit card

ICICI credit card

HDFC credit card

IDBI credit card

HSBC credit card Citibank Credit Card


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Precautions taken after receiving credit card

To Avoid:

Bending the Card.

Exposure to electronic devices and gadgets.

Direct exposure to sunlight.

Be cautious about disclosing your account number over the phone

unless you know you're dealing with a reputable company.

Never put your account number on the outside of an envelope or on a

postcard.

Draw a line through blank spaces on charge or debit slips above the

total so the amount cannot be changed.

Don't sign a blank charge or debit slip.

Tear up carbons and save your receipts to check against your monthly

statements.

Cut up old cards - cutting through the account number - before

disposing of them.

Open monthly statements promptly and compare them with your

receipts. Report mistakes or discrepancies as soon as possible to the

special address listed on your statement for inquiries. Under the

FCBA (credit cards) and the EFTA (ATM or debit cards), the card

issuer must investigate errors reported to them within 60 days of the

date your statement was mailed to you.

Keep a record - in a safe place separate from your cards - of your

account numbers, expiration dates, and the telephone numbers of each

card issuer so you can report a loss quickly.

Carry only those cards that you anticipate you'll need.


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To Do:

Please sign on the signature panel on the reverse of the Card

immediately with a non-erasable ball-point pen (preferably in black

ink). This will ensure that the benefits of membership are yours and

yours alone.

Keep the Card in a prominent place in your wallet. You will notice if

it is missing.

Resons credit card being rejected at retail outlet:

One may have exceeded the borrowing limit or defaulted (constantly)

on minimum payment due.

The Card is hotlisted.

The card has crossed its expiration date.

Non-receipt of dues of one-card blocks future transactions on any

other card(s) held of the same card-issuing bank.

The magnetic stripe on the reverse of the card is damaged i.e. has

been scratched or exposed to continuous heat/direct sunlight or

magnetic field-like card kept near a TV set / other electronic

appliances.

Systems or technology failures have in rare instances also led to non

acceptance of cards when swiped through an Electronic Terminal.

CREDIT CARD MARKET


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MasterCard

MasterCard is a product of MasterCard International and along with VISA

are distributed by financial institutions around the world. Cardholdersborrow money against a line of credit and pay it back with interest if the

balance is carried over from month to month. Its products are issued by

23,000 financial institutions in 220 countries and territories. In 1998, it had

almost 700 million cards in circulation, whose users spent $650 billion in

more than 16.2 million locations.

VISA Card

VISA cards is a product of VISA USA and along with MasterCard is

distributed by financial institutions around the world. A VISA cardholder

borrows money against a credit line and repays the money with interest if the

balance is carried over from month to month in a revolving line of credit.

Nearly 600 million cards carry one of the VISA brands and more than 14

million locations accept VISA cards.

The following are some of the varieties of credit cards in India

ANZ - Gold

ANZ - Silver

Bank Of India - Indiacard

BoB - Exclusive BoB - Premium

Canara Bank - Cancard

ICICI Sterling Silver Credit Card

ICICI Solid Gold Credit Card


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Some facts of credit cards

The first card was issued in India by Visa in 1981.

The country's first Gold Card was also issued from Visa in 1986. The first international credit card was issued to a restricted number of

customers by Andhra Bank in 1987 through the Visa program, after

getting special permission from the Reserve Bank of India.

The credit cards are shape and size, as specified by the ISO 7810

standard. It is generally of plastic quality. It is also sometimes known

as Plastic Money.


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LOANS

Banks in India with the way of development have become easy to apply in

loan market. The following loans are given by almost all the banks in the

country:

Personal Loan

Car Loan or Auto Loan

Loan against Shares

Home Loan

Education Loan or Student LoanIn Personal Loan, one can get a sanctioned loan amount between Rs 25,000

to 10,00,000 depending upon the profile of person applying for the loan.

SBI, ICICI, HDFC, HSBC are some of the leading banks which deals in

Personal Loan.

Almost all the banks have jumped into the market of car loan which is also

sometimes termed as auto loan. It is one of the fast moving financial product

of banks. Car loan / auto loan are sanctioned to the extent of 85% upon the

ex-showroom price of the car with some simple paper works and a small

amount of processing fee.

Loan against shares is very easy to get because liquid guarantee is involved

in it.

Home loan is the latest craze in the banking sector with the development of

the infrastructure. Now people are moving to township outside the city.

More number of townships are coming up to meet the demand of 'house for

all'. The RBI has also liberalised the interest rates of home loan inorder to

match the repayment capability of even middle class people. Almost all

banks are dealing in home loan. Again SBI, ICICI, HDFC, HSBC are


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leading.

The educational loan, rather to be termed as student loan, is a good banking

product for the mass. Students with certain academic brilliance, studying at

recognised colleges/universities in India and abroad are generally given

education loan / student loan so as to meet the expenses on tuition fee/

maintenance cost/books and other equipment.


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MONEY TRANSFER

Beside lending and depositing money, banks

also carry money from one corner of the

globe to another. This act of banks is known

as transfer of money. This activity is termed

as remittance business. Banks generally

issue Demand Drafts, Banker's Cheques,

Money Orders or other such instruments for

transferring the money. This is a type of

Telegraphic Transfer or Tele Cash Orders.

It has been only a couple of years that banks have jumped into the money

transfer businessess in India. The international money transfer market grew

9.3% from 2003 to 2004 i.e. from US$213 bn. to US$233 bn. in 2004.

Economists say that the market of money transfer will further grow at a

cumulative 10.1% average growth rate through 2008.

With the use of high technology and varieties of product it seems that "Free"

money transfers will become commonplace. We will see more bundling of

tailored money services by banks and non-traditional entrants that will

include "free" money transfers. Many banks will even use money transfer

services as loss-leaders inorder to generate account openings and cross-sell

opportunities. The price evolution of money transfer products for banks will

be similar to that of consumer bill pay-the product is worth giving away as

an account acquisition tool to win overall market share and establish

banking relationships.

ATM money transfer card products have had terrible bank adoption rates

since being introduced in the last three to four years. Remittees who are


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highly educated and have been already been exposed to ATM technology in

receiving countries tend to have an interest in this product. Money transfer to

India is one of the most important part played by the banks. This service

provide peace of mind to either the NRIs or to the visitors to India. Many

Indian banks have ATM'S (automatic teller machine), enable to draw foreign

currency in India.

By 2007, we will see a good percent of all foreign-born households doing

some level of online banking. First-mover banks will start having a window

of opportunity to include online transfer functionality within the next couple

of years, which currently frequents traditional money transmitters such as

Western Union. There is a terrific opportunity for banks and non-banks to

offer more robust global inter-institutional funds transfer services online.

More than half of Western Union's customers today are already banked, and

most do not have an alternative product marketed by their bank that is

painless, quick, and cost-effective. That will change as banks offer transfer

services through their online channel.

The following are the details of few banks to check for transferring money to

India

Money Transfer to India

Apart from banks few financial institutions and online portals gives services

of money transfer to India. Some of them are as under:

Western Union Money Transfer

Union Money Transfer

IKobo Money Transfer


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Cash2india.com

Remit2india

Samachar Money Transfer

Timesofmoney.com

Wells Fergo International Money Transfer

Travellers Express

Money Gram International

Visa Money Transfer

Visa has recently introduced the 'Visa Money Transfer' option for its savings

and current account holder of any bank with a visa debit card. This facility

helps its customer to transfer funds from his bank account to any visa card,

either debit or credit within India.

A Visa Money Transfer is of similar kind, in many respects, to the third-

party fund transfer option given by some banks to its account holders

through e-cheque, but this is restricted to only visa cardholders.

How to transfer money?

Log on to your bank account through your respective bank websites.

Fill the beneficiary details like visa card numbers, name, address and

then specify the amount that needs to be transferred. For bank account

specify the visa card number and credit card number for paying credit

card bill. Click on to VISA Transfer Payments button.

Transfer immediately or on schedule date. Your account will be

debited according to the date mentioned.


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Notable points of Visa Money Transfer

The time taken for money transfers could be the same or even more

than that of a demand draft i.e. two or three days or even more.

Currently there are no charges but limits has been set by certain banks

on the current transfers.

It is available in 150 cities across the country now.


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ICICI BANK

ICICI Bank is India's second-largest bank with total assets of about Rs.2,513.89 bn (US$ 56.3 bn) at March 31, 2006 and profit after tax of Rs.

25.40 bn (US$ 569 mn) for the year ended March 31, 2006 (Rs. 20.05 bn

(US$ 449 mn) for the year ended March 31, 2005). ICICI Bank has a

network of about 614 branches and extension counters and over 2,200

ATMs. ICICI Bank offers a wide range of banking products and financial

services to corporate and retail customers through a variety of delivery

channels and through its specialised subsidiaries and affiliates in the areas of

investment banking, life and non-life insurance, venture capital and asset

management. ICICI Bank set up its international banking group in fiscal

2002 to cater to the cross border needs of clients and leverage on its

domestic banking strengths to offer products internationally. ICICI Bank

currently has subsidiaries in the United Kingdom, Russia and Canada,

branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai

International Finance Centre and representative offices in the United States,

United Arab Emirates, China, South Africa and Bangladesh. Our UK

subsidiary has established a branch in Belgium. ICICI Bank is the most

valuable bank in India in terms of market capitalisation.

ICICI Bank's equity shares are listed in India on the Bombay Stock

Exchange and the National Stock Exchange of India Limited and its

American Depositary Receipts (ADRs) are listed on the New York Stock

Exchange (NYSE).


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ICICI Bank has formulated a Code of Business Conduct and Ethics for its

directors and employees.

At June 5, 2006, ICICI Bank, with free float market capitalization* of

about Rs. 480.00 billion (US$ 10.8 billion) ranked third amongst all the

companies listed on the Indian stock exchanges.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian

financial institution, and was its wholly-owned subsidiary. ICICI's

shareholding in ICICI Bank was reduced to 46% through a public offering of

shares in India in fiscal 1998, an equity offering in the form of ADRs listedon the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura

Limited in an all-stock amalgamation in fiscal 2001, and secondary market

sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI

was formed in 1955 at the initiative of the World Bank, the Government of

India and representatives of Indian industry. The principal objective was to

create a development financial institution for providing medium-term and

long-term project financing to Indian businesses. In the 1990s, ICICI

transformed its business from a development financial institution offering

only project finance to a diversified financial services group offering a wide

variety of products and services, both directly and through a number of

subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first

Indian company and the first bank or financial institution from non-Japan

Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the

context of the emerging competitive scenario in the Indian banking industry,

and the move towards universal banking, the managements of ICICI and


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ICICI Bank formed the view that the merger of ICICI with ICICI Bank

would be the optimal strategic alternative for both entities, and would create

the optimal legal structure for the ICICI group's universal banking strategy.

The merger would enhance value for ICICI shareholders through the merged

entity's access to low-cost deposits, greater opportunities for earning fee-

based income and the ability to participate in the payments system and

provide transaction-banking services. The merger would enhance value for

ICICI Bank shareholders through a large capital base and scale of

operations, seamless access to ICICI's strong corporate relationships built up

over five decades, entry into new business segments, higher market share in

various business segments, particularly fee-based services, and access to the

vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of

Directors of ICICI and ICICI Bank approved the merger of ICICI and two of

its wholly-owned retail finance subsidiaries, ICICI Personal Financial

Services Limited and ICICI Capital Services Limited, with ICICI Bank. The

merger was approved by shareholders of ICICI and ICICI Bank in January

2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by

the High Court of Judicature at Mumbai and the Reserve Bank of India in

April 2002. Consequent to the merger, the ICICI group's financing and

banking operations, both wholesale and retail, have been integrated in a

single entity.


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HDFC BANK

The Housing Development Finance Co-Operation Limited (HDFC) was

amongst the first to achieve an in princple approval from the Reserve Bank

of India (RBI) to set up a bank in the private sector as part of the RBIs

liberalization of the Indian Banking Industry. It was incorporated in August

1994 in the name of HDFC Bank Limited with its registered office in

Mumbai. It began its operations as a scheduled commercial Bank in January

1995.

LINEAGE :

HDFC and NAT WEST Group, UK-both are promoters of HDFC Bank. In

1994 HDFC Bank, into a strategic alliance with the Natwest group in UK,

which acquired 20% of its equity. The promoter of the Bank, HDFC is

Indias premier housing finance company. It enjoys an inacceptable track

record in India as well as in International Market.

Since its inception in 1997, HDFC has maintained a consistent growth

in its operations and profitability and over the past 5 years it has achieved

annual growth rate of 25-30%. Its outstanding loan portfolio covers over a

million dwelling units.

HDFC Bank :

The banking industry was thrown open to private sector by Government of

India in 1992 in the constitution of its policy of economic liberalization and

privatization. HDFC Bank is a scheduled commercial bank, promoted by the

largest bank of USA and Housing Development Finance Co-Operation

(which was promoted by GIC, LIC, World Bank & UTI).

Mission Statement


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To build a sound customer franchise across distinct businesses so as to

be the preferred provider of banking services in the niche segments

that the bank operates in and to achieve healthy growth in

profitability, consistent with the banks risk appetite.

To ensure the highest level of ethical standards, professional integrity

and regulatory compliance.

Organization Structure :

HDFC Bank is a two tier organization, head office and Branch Office. It has

been done so as to make decision making more responsive to the needs of

the customers. The branches are directly linked to the head office at

Mumbai. The bank presently has 131 branches.

Business Focus:

Commercial Sector

Forex Business

Personal Banking Segment

Distribution Network :

HDFC Banks head-quarter is in Mumbai. It presently has a network of

around 131 branches and ATMs spread across the country. The branch

network will be extended to cover major cities in India, as well as some

semi-urban locations in line with RBI guidelines.

Mumbai, Calcutta, Chennai and Delhi are supported by phone Banking

Centres.


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STATE BANK OF INDIA

The origins of the State Bank of India date back to 1806 when the Bank of

Calcutta (later called the Bank of Bengal) was established. In 1921, the Bank

of Bengal and two other banks (Bank of Madras and Bank of Bombay) were

amalgamated to form the Imperial Bank of India. In 1955, the Reserve Bank

of India acquired the controlling interests of the Imperial Bank of India and

State Bank of India was created by an act of Parliament to succeed the

Imperial Bank of India. The state Bank of India is the largest commercial

bank in India. The State Bank of India is the largest commercial banks in

India in terms of profits, assets, deposits, branches and employees as on 31st

March 2005, the Bank possessed total assets worth Rs. 26,15,049 million

(US $ 59951 Million) and the total deposits worth Rs. 1968211 million (US

$ 45122 million).

Subsidiary of State Bank of India

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Saurastra

State Bank of Travancore

Worldwide network of SBI Bank

SBI Bank India has 52 Foreign Offices in 34 countries. SBI India serves the

international needs of its foreign customers, in addition to conducting retail

operations. The focus of the offices of SBI is India-related business.
http://finance.indiamart.com/investment_in_india/state_bank_bikaner_and_jaipur.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_hyderabad.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_indore.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_mysore.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_saurastra.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_travancore.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_bikaner_and_jaipur.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_hyderabad.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_indore.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_mysore.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_saurastra.htmlhttp://finance.indiamart.com/investment_in_india/state_bank_of_travancore.html


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PROFIILE OF PUNJAB NATIONAL BANK

Punjab National Bankwas established in 1895 at Lahore, undivided India,

Punjab National Bank has the distinction of being the first bank to have been

started solely with Indian Capital. From its modest beginning, the bank has

grown in size and stature to become a first line banking institution in India at

present. The bank was nationalized in July 1969 along with 13 other banks.

The Punjab National Bank is now a corporation established by an act of

parliament with a common seal and is wholly owned by Government of

India. It has build strong links with trade and industry.

GROWTH OF PNB:-

Punjab National Bank with 4497 offices and the largest nationalised bank is

serving its 3.5 crore customers with the following wide variety of banking

services:

Corporate banking

Personal banking

Industrial finance

Agricultural finance

Financing of trade

International banking

Punjab National Bank has been ranked 38th amongst top 500 companies by

The Economic Times. PNB has earned 9th position among top 50 trusted

brands in India.

Punjab National Bank India maintains relationship with more than 200

leading international banks world wide. PNB India has Rupee Drawing

Arrangements with 15 exchange companies in UAE and 1 in Singapore.


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REVIEW OF LITERATURE

Modern banking system is totally different from past banking system. The

Indian banking industry juxtaposed with other countries, recognizing the

differences between the developed and the emerging economies at present .

I. Status of Indian banking industry :

First, The structure of the industry : In the worlds top 1000 banks,

there are many more large and medium-sized domestic banks from the

developed countries than from the emerging economies. Illustratively,

according to The Banker 2004, out of the top 1000 banks globally, over 200

are located in USA, just above 100 in Japan, over 80 in Germany, over 40 in

Spain and around 40 in the UK. Even China has as many as 16 banks within

the top 1000, out of which, as many as 14 are in the top 500. India, on the

other hand, had 20 banks within the top 1000 out of which only 6 were

within the top 500 banks. This is perhaps reflective of differences in size of

economies and of the financial sectors.

Second, the Share of bank assets in the aggregate financial sector

assets : In most emerging markets, banking sector assets comprise well over

80 per cent of total financial sector assets, whereas these figures are much

lower in the developed economies. Furthermore, deposits as a share of total

bank liabilities have declined since 1990 in many developed countries, while

in developing countries public deposits continue to be dominant in banks. In

India, the share of banking assets in total financial sector assets is around 75

per cent, as of end-March 2004. There is, no doubt, merit in recognizing the


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importance of diversification in the institutional and instrument-specific

aspects of financial intermediation in the interests of wider choice,

competition and stability. However, the dominant role of banks in financial

intermediation in emerging economies and particularly in India, will

continue in the medium-term; and the banks will continue to be special for

a long time. In this regard, it is useful to emphasize the dominance of banks

in the developing countries in promoting non-bank financial intermediaries

and services including in development of debt-markets. Even where role of

banks is apparently diminishing in emerging markets, substantively, they

continue to play a leading role in non-banking financing activities, including

the development of financial markets.

Third, Internationalisation of banking operations : The foreign

controlled banking assets, as a proportion of total domestic banking assets,

increased significantly in several European countries (Austria, Ireland,

Spain, Germany and Nordic countries), but increases have been fairly small

in some others (UK and Switzerland). Amongst the emerging economies,

while there was marked increase of foreign-controlled ownership in several

Latin American economies, the increase has, at best, been modest in the

Asian economies. Available evidence seems to indicate some correlation

between the extent of liberalisation of capital account in the emerging

markets and the share of assets controlled by foreign banks. As per the

evidence available, the foreign banks in India, which are present in the formof branches, seem to enjoy greater freedom in their operations, including

retail banking, in the country on par with domestic banks, as compared with

most of the other developing countries. Furthermore, the profitability of their

operations in India is considerably higher than that of the domestically-


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owned banks and, in fact, is higher than the foreign banks operations in

most other developing countries. India continues to grant branch licences

more liberally than the commitments made to the WTO.

Fourth, Share of state-owned banks in total banking sector assets

Emerging economies, with predominantly Government-owned banks, tend

to have much higher state-ownership of banks compared to their developed

counterparts. While many emerging countries chose to privatise their public

sector banking industry after a process of absorption of the overhang

problems by the Government, we have encouraged state-run banks to

diversify ownership by inducting private share capital through public

offerings rather than by strategic sales and still absorb the overhang

problems. The process has helped reduce the burden on the Government,

enhance transparency, encourage market discipline and improve efficiency

as reflected in stock market valuation, promote efficient new private sector

banks, while drastically reducing the share of the wholly government owned

public sector banks in a rapidly growing industry. Our successful reform of

public sector banks is a good example of a dynamic mix of public and

private ownership in banks.

A noteworthy feature of banking reforms in India is the growth of

newly licensed private sector banks, some of which have attained globally

best standards in terms of technology, services and sophistication. In many

respects related to performance, these domestically promoted banks have

surpassed branches of foreign banks in India, and could be a role model for

other banks.


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II. Challenges Ahead

There are also some challenges which can have a key bearing on the ability

of Indian banks to remain competitive and enhance soundness. Needless to

state, these are more in the nature of random thoughts, rather than any

structured thinking, and are meant to invite discussion.

First, Cost Management. Cost containment is a key to sustainability

of bank profits as well as their long-term viability. To highlight this point,

let me, take recourse to some figures. In 2003, operating costs of banks as a

proportion of total average assets1[1] in the UK were 2.12 per cent, for those

in Switzerland they were 2.03 per cent, and less than 2 per cent in major

European economies like Sweden, Austria, Germany and France. In India,

however, in 2003, operating costs as proportion of total assets of scheduled

commercial banks stood at 2.24 per cent. The tasks ahead are thus clear and

within reach.

Second, Recovery Management. This is a key to the stability of thebanking sector. There should be no hesitation in stating that Indian banks

have done a remarkable job in containment of non-performing loans (NPL)

considering the overhang issues and overall difficult environment. Let me

add that for 2004, the net NPL ratio for the Indian scheduled commercial

banks at 2.9 per cent is ample testimony to the impressive efforts being

made by our banking system. In fact, recovery management is also linked to

the banks interest margins. We must recognise that cost and recovery

management supported by enabling legal framework hold the key to future

health and competitiveness of the Indian banks. No doubt, improving

1


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recovery-management in India is an area requiring expeditious and effective

actions in legal, institutional and judicial processes.

Third, Technological Intensity of Banking: This is one area where

perhaps India needs to do significant catching up, notwithstanding the

rapid strides made over the last few years, though data on this score are

difficult to come by. Some available figures indicate that in late 1999, the

percentage of customers using online banking was less than 1 per cent in

India, compared with anywhere between 6-30 per cent in developed

economies like US, UK, Germany, Finland and Sweden. Even in Latin

America, these figures are much higher than for India. While admittedly the

numbers for India are likely to be much higher at present than these figures

suggest, so would be the case for these other economies as well. The issue,

therefore, remains what has been the extent of catching up by India on this

score? In fact, this seems somewhat intriguing: India happens to be a world

leader in information technology, but its usage by our banking system is

somewhat muted. It is wise for Indian banks to exploit this globally state-of-

art expertise, domestically available, to their fullest advantage.

Fourth, Risk Management. Banking in modern economies is all

about risk management. The successful negotiation and implementation of

Basel II Accord is likely to lead to an even sharper focus on the risk

measurement and risk management at the institutional level. Thankfully, the

Basel Committee has, through its various publications, provided useful

guidelines on managing the various facets of risk. The institution of sound

risk management practices would be an important pillar for staying ahead of

the competition. Banks can, on their part, formulate early warning


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indicators suited to their own requirements, business profile and risk

appetite in order to better monitor and manage risks.

Fifth, Governance. The recent irregularities involving accounting

firms in the US have amply demonstrated the importance of good corporate

governance practices. The quality of corporate governance in the banks

becomes critical as competition intensifies, banks strive to retain their client

base, and regulators move out of controls and micro-regulation. As already

mentioned, banks are special in emerging markets since they take a leading

role in development of other financial intermediaries and of financial

markets, apart from having a large recourse to public deposits. No doubt,

there is nothing like an optimal level of governance for one to be satisfied

with. The objective should be to continuously strive for excellence. The

RBI has, on its part, made significant efforts to improve governance

practices in banks, drawing upon international best practices. It is heartening

to note that corporate governance presently finds explicit mention in the

annual reports of several banks. The improved corporate governance

practice would also provide an opportunity to accord greater freedom to the

banks boards and move away from micro regulation to macro management.

Banks in India are custodians of depositors monies, monies of the millions

of depositors who are seeking safe avenues for their hard earned savings,

and hence, banks must accept and perform an effective fiduciary role. In this

light, improvement in policy-framework, regulatory regime, market-perceptions, and indeed, popular sentiments relating to governance in banks

need to be on the top of the agenda to serve our societys needs and

realities while being in harmony with the global perspective.


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Strategies to meet out the challenges

A bank can follow the following strategies to compete in the modern

banking systemi ) Customer is the king:

To meet these customer concerns, banks must elevate messages of security

and reorganize their fraud-fighting efforts to involve not only bank security,

education and product design but also, perhaps for the first time in history,

the customer. Organizations need to be realigned around fraud prevention

and detection.

Security specialists can no longer be kept behind closed doors,

charged with detecting fraud on the customers' behalf. Rather, these

knowledgeable specialists must be organized in triad teams, integrating

security knowledge with individuals who determine the communications that

have the potential to change consumer behavior, and the customer interface

specialists who design products and even training programs used in online

banking, ATMs, and even branch systems and employee training programs

Security, education and product design specialists each play a

valuable role in deputizing the customer. And as they increasingly work

together in this role, customers can be invited to prevent and detect fraud on

their own behalf.

This customer role is critical because customers have unsurpassed

motivation and knowledge of their personal transaction patterns. And neverbefore have banks been in a position to deputize customers to protect their

own accounts. This can be done by providing customers with more current

information on account activity through a variety of channels and

notification methods and profiling systems.


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ii) Leveraging New Channels :

In order to increase customer security, banks must also fully embrace (ratherthan blame) new channels such as the Internet. It is nave and wholly

ineffective to respond to the inherent risks of electronic banking and

payments while not also taking advantage of the exclusive new strengths

that these new channels bring. Banks that operate or communicate as if new

channels represent only heightened risk are most likely to suffer the greatest

loss, not only in malicious activity but also in reduced growth and

profitability.

Customers must be educated about the risks of the Internet and any

other new channel in the same way as new automobile drivers are expected

to be thoroughly prepared for their added responsibility.

In addition to detection, banks must also harness the inherent potential of new

channels for their use in fraud prevention. For example, online banking excels in the

ability to prevent many cases of identity theft while deputizing customers to detect fraudwith greater efficacy. Identity fraud begins with identity theft, which is the illicit access

to personal information for the express purposes of committing a crime in another's

name. With electronic channels, paper delivery of statements and other private

documents can be eliminated, moving many potential victims out of harm's way.

iii) Educational Messages :

A balanced approach begins with education, yet today's educational

messages often scare customers away from the remedy or simply leave them

in the dark. Such imbalance and omission in the critical area of education

not only deprives customers of essential information, but it also gives the

impression that new channels are for those who are willing to endure


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significant risk. Certainly, "Web-phobic" messages will also result in

customers who will remain ignorant of how to use new channels to more

effectively prevent and detect fraud.

And yet, if new channels bring both risk and safety (primarily

dependent on the degree to which customers have been properly educated),

one-sided educational approaches will serve to scare away some customers

from the very protection offered by new electronic channels. As an example

of balanced education and cautionary messages, banks should educate their

customers on the protection of passwords, PINs and paper statements. They

should also show customers how to avoid criminals who might pose as bank

agents through Internet, phone or even in-person channels; eliminate access

to their private data by turning off paper statements; understand the virtues

of frequent account-monitoring; learn how to reject bogus requests for

personal data and install firewalls and anti-virus software.

Thus account security is a heightened customer requirement, and banks must

elevate and reorganize their security efforts to meet the new threats and

concerns. The concept of self-service made possible by electronic channels

must now be extended to a new realm, that of self-security. Multi-channel

relationships, sophisticated customers and even more sophisticated criminals

are now an essential part of modern banking relationships. To preserve their

customers' trust, banks must engage their security, product and

communications teams around the customer, and communicate to account-

holders with balanced messages.


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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 in-house customers of different banks in the city of Fazilka. So keeping in view

the nature of requirements of the study to collect all the relevant information

regarding the extent of awareness of the in-house customers of the products

and services offered by different banks, direct personal interview method

with structured questionnaire 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.

POPULATION:- The persons belonging to various classes (service,

businessmen, professional, student etc.) were taken into consideration.


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SAMPLE PLAN:-

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

of the study was selected as 100.

SAMPLING UNIT:-

Customers of different private /public sector banks in Fazilka city.

SAMPLING TECHNIQUE:- Stratified convenient sampling.

All the classes of the customers 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.


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DATA COLLECTION: Data was collected using two main methods:

COLLECTION OF DATA

PRIMARY DATA COLLECTION: Primary data do not exist already in

records and publications. The researcher has to gather primary data a fresh

for the specific study undertaken by him. The primary data are explicitly

gathered for a specific research project at hand.

SECONDARY DATA COLLECTION: The Secondary data refer to those

data which are gathered for some other purpose and are already available in

the internal records and commercial, trade, or government publications. In

Secondary Data Primary Data

Banks Annual Reports

Journals and Publications of DifferentPublic/Private Sector Banks

Manuals/Brouchers ofDifferent Public/PrivateSector Banks

Magazines, Newspapers &

Websites of DifferentPublic/Private Sector Banks

Questionnaire

Respondents


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my project, the Secondary data was collected by going through various

newspapers, magazines, journals and web sites (refer Bibliography for

details).


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OBJECTIVES OF THE STUDY

This study has been conducted with a variety of important objectives in

mind. The following provides us with the chief objectives that have tried toachieve through the study. The extent to which these objectives have been

met could be judged from the conclusions and suggestions, which appear in

the later of this study.

THE CHIEF OBJECTIVES OF THIS STUDY ARE:

1. To study the factors influencing the choice of a Bank for availing

services.

2. To get suggestions for improvement or change in the services of

public and private sector banks.

3. To study what do people expect in the new Era of Banking.

4. To know the satisfaction level regarding products and services offered

by public and private sector 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 small city Fazilka so the response may

vary by including the respondents from other citys in other areas as

well.

The research was carried out in a short period. 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 becausesome of them might not be interested to give correct information.


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Q1 WHICH TYPE OF ACCOUNT DO YOU HAVE IN THE BANK?

0

5

10

15

20

25

30

35

Saving

Current

Dem

at

Fixe

dde

posits

Sala

ry

ICICI BANK

HDFC BANK

CANARA BANK

STATE BANK OF INDIA

PUNJAB NATIONAL

BANK

Interpretation

The survey result shows that maximum persons are aware about Saving A/C because this

is one of the common service availed to most of the bank customers which include

maximum number of services class persons those mostly prefer this account.


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Q 2 DO YOU OPERATE ATM?

YES 81%

NO 19%

CUSTOMERS AWARENESS ABOUT ATM FACILITY

81%

19%

YES

NO

Interpretation

The survey shows that maximum no. of customers know about the benefits of using

ATM Facility. The figure shows that 81% respondents are aware about the benefits of

using ATM and only 19% respondents are not aware about ATM-cum-Debit Card.

The reason may be that they might be having account other than saving account or

they may be using some other product like FD, RD etc.


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Q 3 DO YOU KNOW ABOUT ATM CHARGES?

YES 64%

NO 36%

CUSTOMERS AWARENESS ABOUT ATM CHARGES

64%

36%

YES

NO

Interpretation

The survey shows that average customers know about the ATM charges. The figure

shows that 64% persons are aware about ATM charges & 36% persons are not aware

about ATM charges.


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Q 5 DO YOU KNOW ABOUT AUTO FD (FIXED DEPOSITES) FACILITY

OFFERED BY DIFFERENT BANKS ?

YES 33%

NO 67%

CUSTOMERS AWARENESS ABOUT F.D. FACILITY

33%

67%

YES

NO

Interpretation

The survey shows that most of the customers dont know about this facility provided by

the bank as the knowledge about this is provided to the customers at the time of account

opening. The figure shows that 33% persons are aware about the facility and 67%

persons are not aware about this, Because they may have some other account with the

bank like Current account, RD etc.


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Q 6 DO YOU KNOW ABOUT R.D. FACILITY OFFERED BY DIFFERENT

BANKS ?

YES 39%

NO 61%

CUSTOMERS AWARENESS ABOUT R.D. FACILITY

39%

61%

YES

NO

Interpretation

The above figure shows that out of 100 respondents, 39% persons are aware about RD

Facility and 61% persons are not aware about this. Therefore it shows that still there is

need to make the customer aware about the benefit of this Product.


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Q7 ARE YOU SATISFIED WITH THE INFRASTRUCTURE OF YOUR

EXISTING BANK ?

Table no.7:-

YES 90%

NO 10%

Graph no.7:-

INFRASTRUCTURE OF YOUR EXISTING BANK

90%

10%

YES

NO

Interpretation

The survey shows that the majority of the respondents are satisfied with the Infrastructure

of their existing Bank.


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Q 8 DO YOU KNOW ABOUT THE PHONE BANKING FACILITY ?

YES 55%

NO 45%

CUSTOMER AWARENESS REGARDING PHONE

BANKING FACILITY

55%

45%

YES

NO

Interpretation

The survey shows that out of 100 persons, 55% persons are aware about Phone Banking

Facility and 45% persons are not aware about this.


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Q 9 DO YOU KNOW ABOUT THE INTERNET BANKING FACILITY

PROVIDED BY THE EXISTING BANK ?

YES 36%

NO 64%

CUSTOMER AWARENESS REGARDING INTERNET

BANKING

36%

64%

YES

NO

Interpretation

The survey shows that most of the persons dont know about this facility as shown in the

above figure only 36% persons out of 100 are aware about Internet Banking Facility.

Because the majority of the respondents are do not know that how to operate Internet. So

the majority of the respondents are not aware of Internet Facility provided by their

existing bank.


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Q 10 DO YOU KNOW AWARE OF SALARY A/C WITH ZERO BALANCE?

YES 79%

NO 21%

CUSTOMER AWARENESS REGARDING SALARY A/C

79%

21%

YES

NO

Interpretation

The survey shows that most of the persons know about this facility as shown in the above

figure 79% persons are aware about facility of Salary Account with Zero Balance.


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Q 11 DO YOU KNOW ABOUT INSURANCE FACILITY PROVIDED BY YOUR

EXISTING BANK ?

YES 44%

NO 56%

CUSTOMER AWARENESS REGARDING

INSURANCE FACILITY

44%

56%

YES

NO

Interpretation

The survey shows that most of the persons dont know about this facility. Out of the 100

persons only 44% person know about the insurance facility and 56% persons dont know

about this.


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Q 12 WHICH BANK WILL BE PREFFERD BY YOU?

NATIONALISED BANKS 27

NEW GENRATION BANKS 73

PREFERENCE REGARDING BANK

27%

73%

NATIONALISED BANKS

NEW GENRATION BANKS

Interpretation

The survey shows that most of the persons prefer new generation banks due to their

Facilities, Infrastructure and Services.


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Q 13 ARE YOU SATISFIED WITH THE CUSTOMER CARE SERVIVES

PROVIDED BY YOUR BANK?

YES 87%

NO 13%

CUSTOMER SATISFACTION REGARDING CUSTOMER

CARE SERVICES

87%

13%

YES

NO

Interpretation

The survey shows that the majority of respondents are satisfied with the Customer

Care Services


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FINDINGS OF THE STUDY

The attitude of public bank staffs regarding the customers is very rude so

the employees should be very polite while handling them.

Number of problems faced by people is more in public sector banks

The banks are having state of infrastructure as most of the Respondents

comes in satisfied but Bank could lay more emphasis on improving the

Infrastructure.

The most of the respondents were happy with the ATM service provided

by bank but however it could me more improvised.

Majority of the respondent whether in public sector banks or in private

sector banks have savings account with banks. .

People are more satisfied from the private banks due to the better services

provided by them in terms of speedy transactions, fully computerized

facilities, more working hours (in case of ICICI Bank, the number of

working hours are 12), good Investment Advisory services, efficient and

co-operative staff, better approach to Customer Relationship

Management.

In private banks proper promotional activities should be taken up so as to

make the population aware of the services provided by the banks even in

rural areas.


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RECOMMENDATIONS

Banks should obey the RBI norms and provide facilities as per the

norms, which are not being followed by the banks. While the

customer must be given the 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 interest rate of savings account.

Banks should provide loans at the lower interest rates 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 contributions from the

employees of the bank. The staff should be co-operative, friendly andmust be capable of understanding the problems of the customers.

Internet Banking facility must be made available in all the banks.

Prompt dealing with permanent customers and speedy transactions

without harassing the customers.

Each section of every bank should be computerized even in rural areas

also.

Door to door service especially for the senior citizens of the country.


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Personalized banking should be given a thrust as more and more

banks are achieving in usual services.

Covering up the towns in rural areas with ATMs so that the people in

those areas can also avail better services.

No limit on cash withdrawal on ATM cards.

Indian Banks should compete with international banks regarding

Interest rates and services.

Banking sector is improving by big 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.


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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 of the 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. Entry of the private sector

banks have made the competition more tough. If a bank is not functioning

properly it is being merged into some other bank or 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 to survive and serve

better.

The banking sector is poised for explosive growth. In this, scenario, it isimperative 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 requirements, thus enabling early adoption

and increased efficiencies.

In this prevailing scenario, a number of banks have adopted a new

deployment strategy of infrastructure outsourcing, to lower the cost of

service channels. As a result, other banks too will need to align their

technologies with their reinvented business models. The required changes at

both the business and technology levels are enormous. In a highly


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competitive banking market, early adopters are profiting from increased

efficiencies.

To actually face the growing competition, following are some of the ways

which can be adopted:

1. More touch points and more consumers.

2. Share the existing networks and services.

3. Move the existing paper customers to plastic customers.

4. Innovate consumer-specific banking products as against banking-

specific consumer services.

5. Shift the focus from Customer Relationship Management (CRM) to

Customer Managed Relationship (CMR).

6. Outsourcing.


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BIBLIOGRAPHY

I. AUTHORS

R.L. GUPTA

DR. R.R. PAUL

KHAN MASOOD AHMED

P.N. VARSHNEY

II. BOOKS

MONEY BANKING & INTERNATIONAL TRADE

INDIAN FINANCIAL SYSTEM & COMMERCIAL BANKING

BANKING IN INDIA

III. WEBSITES

www.hdfcbank.com

www.google.com

www.icicibank.com
http://www.google.com/http://www.google.com/


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QUESTIONNAIRE

1. WHICH TYPE OF ACCOUNT DO YOU HAVE IN THE BANK?

Saving Current Demat Fixed Deposit Salary

ICICI Bank HDFC Bank Canara bank State Bank of India Punjab National Bank

2. DO YOU OPERATE ATM?

YES NO

3. DO YOU KNOW ABOUT ATM CHARGES?YES NO

4. DO YOU KNOW IN ATM MACHINE YOU CAN?

CHECK BALANCE + WITHDRAW CASH

WITHDRAW CASH

CHECK BALANCE

NEVER USE

5. DO YOU KNOW ABOUT AUTO FD (FIXED DEPOSITS) FACILITY


YES NO

6. DO YOU KNOW ABOUT R.D.(RECURRING DEPOSITS) FACILITY


YES NO

7 ARE YOU SATISFIED WITH THE INFRASTRUCTURE OF YOUR

EXISTING BANK ?

YES NO

8. DO YOU KNOW ABOUT THE PHONE BANKING FACILITY ?


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YES NO

9. DO YOU KNOW ABOUT THE INTERNET BANKING FACILITY

PROVIDED BY THE

Documents

New ERA in Banking