MARKET SURVEY AND CUSTOMER ATTITUDE TOWARDS CANCARDS

With special reference to Canara Bank, Shivamogga CONTENTS

CHAPTER 1: INTRODUCTION Introduction Statement of the problem Purpose of the study Objectives of the Study Scope of the Study Limitations CHAPTER 2: INTRODUCTION TO BANKING Introduction Banking system in India Origin of banking Function of bank Classification of banks CHAPTER 3: CANARA BANK PROFILE CHAPTER 4: THEORETICAL PERSPECTIVE CHAPTER 5: METHODOLOGY Research design Data collection method/ sources Research Instrument/ Tools Sampling plan Field work Analysis CHAPTER 6: DATA ANALYSIS AND INTERPRETATION CHAPTER 7: FINDINGS, SUGGESTIONS AND CONCLUSION Annexure Questionnaire Bibliography

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CHAPTER 1 INTRODUCTION

Introduction Statement of the problem Purpose of the study Objectives of the Study Scope of the Study Limitations

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Introduction The term Bank originally referred to an individual or organization, which acted as a moneychanger and exchanged our currency for another. But now a day a bank is an institution in which people keep their cash balance in the form of deposits. The Indian banking system, which also constitutes the Indias money market. Bank in modern days act as the chief agent in mobilizing the dormant funds of the community and distribute them into production channels. Banks today are the backbone of modern industry. They are an essential part of the community. A banking company deals with the money belonging to others. It deals with the money, which is deposited by the general public. Bank borrows money from the public to be able to lend again. Their own funds are limited. Most o f their business is done with funds collected from the public by way of deposits. This project deport entitled the customer services in CANARA BANK, Shimoga. A special reference of Regional Bank of Shimoga , Savalanga Road branch has been brought out to know the customer opinion about the services provided by this branch. This project also prepared known performance of the branch.

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Statement of the problem: Consumers face difficulty while satisfying some of their needs which cannot be postponed needs are different. It is very difficult to satisfy the

consumers. Credit need is one of them. Credit in the business is one of the important thing. Which is wanted by a modern consumers the institution which are ready to offer these services have not host much progress. Credit cord satisfies one such credit needs of the consumers. Totally almost all the banks issuing credit cords. The cord base is gradually increasing. The credit cord system is becoming most popular in now a days. The cord industry is moving towards the growth stage.

Purpose of the study To study the service provided by the bank. To study the facility of can card. To study the impact of Canara bank can card on customers. To know the opinion of the public about the customers. Services offered by Canara bank through can cards. To know what factor influence in taking can card. To know the awareness of can card facility in Shimogga.

Objectives of the Study The present study aims to the need satisfying aspect of the major credit cord. Can cords is analysis in the terms of market service and customer attitude.

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Thus the objectives of the study as regard to the market and customers attitude towards can cards are: To know the present market scenario of can card To identify the strength and weakness, opportunities and threads of can card. To know the efforts those are taken to overcome these threats and weakness To know the benefits through the card to the can card holders. To study the satisfaction level of credit card holders

Scope of the Study The scope of the project report is confined to Shimogga city only. As per 2001 census the district population 16.42,545. Shimogga is located in Malnad region. The Shimogga city area covers 1108 sq. kms and the total area of Shimogga district in 8465sq kms. The Canara Bank is one of the leading bank in the Shimogga city. They have more than Rs. 240887 crores turnover. And they have more than 3.49 lack card holders during the year 2007. These credit card holders are transaction with Canara bank credit carde, they rises the turnover about 20.48 lacks of rupees through the credit cards and it is easy to transactions other than Canara bank by sweeping the credit card by the holder ( i.e credit card holder) so it is helpful to economical activities and social activities concerned with the citizen of Shimogga city.

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They satisfy their demands through the purchase and Repayment of credit card transaction through the ATMs or identified or authorized sweeping machines used by traders or any other. Its suitable to modern economy to easy achieve. The objective of Canara bank and satisfaction of consumer Demands. Limitations: There are some limitations in doing projects report. They are as follows The study is limited to a few no of customers. Some customers will not give correct opinion about the survey. Acceralecy of this project report in limited because of factors like limitations of times. Banks does not reveals some secrets.

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CHAPTER - 2 INTRODUCTION TO BANKING

INTRODUCTION BANKING SYSTEM IN INDIA ORIGIN OF BANKING FUNCTION OF BANK CLASSIFICATION OF BANKS

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INTRODUCTION TO BANKING Introduction In the past, the use of money for buying and selling was very much restricted, with the development of commerce and the advancement in science and technology and growth of Economic and Political institution, the use of money also expanded. Along with the use of money, the use of credit instruments also developed. The origin of modern financial institution can be traced to antiquity, where the individuals used to accept money in the form of deposits and lend it to the people who needed the same for meeting. Old order of borrowing and lending underwent to a lot of changes. Finance becomes a powerful instrument for any change. The innovation in the field of transport and communication, development of energy and manufacturing have resulted in the innovation of Banking.

Banking system in India The Indian banking holds the traditional method like lending and accepting money deposits, where as bank in developed countries have worked off to cover various aspects of human life and comforts. Banking regulation act 1949 defines banking under section 5(1) (b) as Accepting for the purpose of lending or investment of deposits of money from public, repayable on demand or otherwise and with drawl by check, draft order or otherwise. Under section 5(1) (c) defines the banking as Any company which transacts the business of banking in India. a.1 Current Indian Banking System Scenario It is true that banks in India are facing difficulty in getting deposits. There are many reasons behind this problem.

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Two points for what was happening in banking and investment sector in the last 5 years 1. Increased consumerism: If we look at the consumption pattern in last 5 years, people were moving from being savers to consumers, i.e., more emphasis on benefits gained today rather than gains received through savings in future, this changing attitude is one of the reasons for higher growth in lending compared to deposits. 2. Alternatives and risks: People were looking for more alternatives like mutual funds, different insurance schemes, stock market, etc. People were moving to these products with higher return expectations. These instruments also have higher risk and increased income level people who deposit high amounts of money into banks were ready to take these high-risk alternatives. But now the situation will be slightly better for banking system in India because investors are losing a lot of wealth in stock markets and mutual funds. People will realize the importance of safer investment vehicle and will start diversifying their portfolio with increased exposure to safer instruments like bank deposits. The banks in India generate their funds from two types of sources: Long-Term Sources: 1. Tier one and Tier two Capital in the form of equity/subordinate debts/debentures/preference shares. 2. Internal accrual generated out of profits. 3. Long-term fixed deposits generated from public and corporate clients, financial institutions, and mutual funds, etc.

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4. Long-term borrowings from financial institutions like NABARD/SIDBI. Short-Term Sources: 1. Call money market, i.e., funds generated among interbanking transactions where there is online trading of money between bankers. 2. Fixed deposits generated from public and corporate clients, FIs, and MFs, etc. 3. Market-linked borrowings from RBI. 4. Sale of liquid certificate deposits in the open market. 5. Borrowing from RBI under Repo (Repurchase option). 6. Short and medium-term fixed deposits generated from public and corporate clients, mutual funds, and financial institutions, etc. 7. Floating in current and saving accounts. 8. Short-term borrowings from FIs by way of rated papers placed, etc.

Origin of Banking The Babylonians were the earliest people to develop a systematized banking system. The temples of Babylonians were told as banks and temples of Ephesus and Delphi were famous as great banking Institution. In 12th century some bank were established in Venice and Geneva these banks were simply receiving deposits and lending money to the people. The goldsmith of England prepared the ground for modern banking in England during the period of Queen Elizabeth. The goldsmith used to receive the valuable and funds of their customers and issue receipt acknowledgement. These receipts in course time become promising notes.

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In America during 18th century most of the state owned banks were established. Pennsylvania was the oldest state Bank established in 1780.

Function of banking: Functions of Banks The functions of a commercial banks are divided into two categories: i) Primary functions, and ii) Secondary functions including agency functions. i) Primary functions: The primary functions of a commercial bank include: a) accepting deposits; and b) granting loans and advances; a) Accepting deposits The most important activity of a commercial bank is to mobilize deposits from the public. People who have surplus income and savings find it convenient to deposit the amounts with banks. Depending upon the nature of deposits, funds deposited with bank also earn interest. Thus, deposits with the bank grow along with the interest earned. If the rate of interest is higher, public are motivated to deposit more funds with the bank. There is also safety of funds deposited with the bank. b) Grant of loans and advances

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The second important function of a commercial bank is to grant loans and advances. Such loans and advances are given to members of the public and to the business community at a higher rate of interest than allowed by banks on various deposit accounts. The rate of interest charged on loans and advances varies depending upon the purpose, period and the mode of repayment. The difference between the rate of interest allowed on deposits and the rate charged on the Loans is the main source of a banks income. i) Loans A loan is granted for a specific time period. Generally, commercial banks grant short-term loans. But term loans, that is, loan for more than a year, may also be granted. The borrower may withdraw the entire amount in lumpsum or in instalments. However, interest is charged on the full amount of loan. Loans are generally granted against the security of certain assets. A loan may be repaid either in lumpsum or in instalments. ii) Advances An advance is a credit facility provided by the bank to its customers. It differs from loan in the sense that loans may be granted for longer period, but advances are normally granted for a short period of time. Further the purpose of granting advances is to meet the day to day requirements of business. The rate of interest charged on advances varies from bank to bank. Interest is charged only on the amount withdrawn and not on the sanctioned amount. Modes of short-term financial assistance

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Banks grant short-term financial assistance by way of cash credit, overdraft and bill discounting. a) Cash Credit Cash credit is an arrangement whereby the bank allows the borrower to draw amounts upto a specified limit. The amount is credited to the account of the customer. The customer can withdraw this amount as and when he requires. Interest is charged on the amount actually withdrawn. Cash Credit is granted as per agreed terms and conditions with the customers. b) Overdraft Overdraft is also a credit facility granted by bank. A customer who has a current account with the bank is allowed to withdraw more than the amount of credit balance in his account. It is a temporary arrangement. Overdraft facility with a specified limit is allowed either on the security of assets, or on personal security, or both. c) Discounting of Bills Banks provide short-term finance by discounting bills, that is, making payment of the amount before the due date of the bills after deducting a certain rate of discount. The party gets the funds without waiting for the date of maturity of the bills. In case any bill is dishonoured on the due date, the bank can recover the amount from the customer. ii) Secondary functions Besides the primary functions of accepting deposits and lending money, banks perform a number of other functions which are called secondary functions. These are as follows -

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a) Issuing letters of credit, travellers cheques, circular notes etc. b) Undertaking safe custody of valuables, important documents, and securities by providing safe deposit vaults or lockers; c) Providing customers with facilities of foreign exchange. d) Transferring money from one place to another; and from one branch to another branch of the bank. e) Standing guarantee on behalf of its customers, for making payments for purchase of goods, machinery, vehicles etc. f) Collecting and supplying business information; g) Issuing demand drafts and pay orders; and, h) Providing reports on the credit worthiness of customers.

History of bank in India: The development of modern bank in India begin with banking activities undertaking by English agency house at Calcutta and Bombay which combined banking with trading. It appears that earliest bank on west on western line was established at madras as early as 1683. The first joint stock bank was the bank of Hindustan established at Calcutta in 1770. at that time another banks were established. Bank of Bombay in 1840 bank of madras in 1843 and bank of Bengal. All these three banks were amalgamated in 1921 and was named as The imperial bank of India and again in 1955 this bank was taken over by government and was renamed as state bank of India

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In 1889 other commercial banks were established. It was the first pure India joint stock bank. It was followed by Punjab national bank in 1894 and so on. Growth of banks was very slow in the beginning. In 1913 and in 1922 108 banks were failed. And in 1922 and in 1936, 373 banks failed. Only after independence banking system made a rapid progress, now Indian banking system is one of the developed banking systems of the world.

CLASSIFICATION OF BANK On the basis of function banks can be classified into 6 types. 1. COMMERCIAL BANK: Commercial bank usually requires deposits for a short period and supplies short term credit facilities to trade and commerce. commercial banks are oldest institutional having wide network of branches. One of the commercial bank in our country SBI having a lot of branches from any other bank all over India. 2. INDUSTRIAL BANK: Industrial banks are to meet long term credit facilities to needs of industries which provide credit to industrial undertakings. 3. AGRICULTURAL BANKS: Credit need for agriculture are of 3 types. They are short, medium and long term. Short term credit is required for the purchase of manure, seeds etc, medium term is provided for purchase of agriculture implements and cattle. Long term for making permanent improvement of land.

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4. CENTRAL BANK: It is the top of banking institution operation in the country. It does not compete with other banks for profit but acts as the bankers bank and lender of last resort. 5. SAVING BANK: It encourages the habit of saving among the people of community under such type of banking deposits received are not withdrawal on demand beyond a certain limit. Any withdrawal beyond a certain limit requires a prior notice. 6. EXCHENGE BANK: These banks finance mainly the foreign exchange business that is the export and import trade of the country. As they mainly finance foreign exchange business, they are called exchange banks.

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BANKER A banker is one who does the business of banking. He is dealer in money, credit, and credit instruments. Since how accepts deposits of money form surplus spending units spending units. The bankers acts as an

intermediary or an agent b/w borrows of debts and a survey of credit. There has been much controversy regarding the definition of the term Banker. According to the G. CROWTHER Defines a Banker as A Dealer in Debt his won and other peoples. Dr. H.L. HART defines a banker as one who in The ordinary course of his business honors cheque drown upon him by persons from and for whom he received money on current accounts. Sir JOHN PAGENT SAYS one claiming to be banker must profess himself to be one. The public must accept him as such and finally banking should be his main business. The significance of the banker is in acceptance of deposits from the public. This clearly indicates to a banker is a person who lends money belonging to others. But all the money lender cont be regarded as banker.

The Characteristics of a Banker are follows:1. Acceptance of deposits from the public 2. Obligation to repay deposit on demand. 3. Lending of money or investment of money. 4. Profitable employment of tends so collected. 5. Banking should be his main business.

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FUNCTIONS OF A BANKER: A modern banker perform three primary functions they are. a. Accepting of deposits. b. Advancing of Loans. c. Discounting the bills of exchange. d. Investing the funds on security. Accepting of Deposits: Deposits constitute the main source of funds for commercial banks. Commercial banks receive deposits from the public on various accounts. The main types of account are: 1. Current Account. 2. Savings Account. 3. Fixed deposit Account. 4. Receiving deposits accounts.

1. CURRENT ACCOUNTS Generally current account and opened by trading and industrial concern. Public authorities etc. a customers can deposit money in a current account of the banks with no restrictions on with draw. He can deposit and withdrawn as many times hours of the during business banks. The only condition is that a certain minimum balance should be maintained in the accounts. No amounts of interest is paid by the bank to the depositors. A customers can open current account the depositors. A customers can open current account with a bank by making initial deposit of Rs. 500/-

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2. SAVING BANK ACCOUNT This type of accounts and generally opened by salary. Earners and middle low income groups people, money. Money can be deposited in this account any number of times the depositor wants. By 7 he cannot withdraw money as and when he likes. There are certain restrictions. Placed on withdrawal of money from this A/C. A person can open this account with a initial deposits of Rs. 50. The main objectives of this A/C is to encourage the habit of that among the people. Banks pays a certain percentage of interest on these deposits. 3. FIXED DEPOSIT ACCOUNTS: This income is convenient for those who are interested in earning a study and safe income. Fixed deposit

account refer to an account where in money is deposited for a fixed period of time. The rate of interest paid on this account and higher. Fixed deposits are accepted for a minimum period of one month and a maximum period of 7 years. Modern bankers. However permits the customer to withdraw the amount deposited in this account even before the expiry of the period. A person can open a fixed deposits account with a minimum sun of the 1000. deposits are accepted by periods from 46 days to 10 years. The interest rate from 10% to 13% p.a. depending upon the period of deposits made.

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4. RECURRING DEPOSIT ACCOUNTS: Recurring Deposits account are meant for people who have regular monthly incomes in recurring deposit account the depositor deposits a fixed sum of money every month for an agreed period and @ the end of the specific period. He get back the amount deposited together with the interest accrued them. The minimum amount deposited in their accounts is Rs. 5/-. The period for which a recurring deposits accounts is opened various from one year to 10 years. The rate of interest in almost high it varies from 10% to 13% p.a. Banks there by depositing deposits in different ways as the reserve of public savings. LENDING OF FUNDS Lending of funds constitutes the main business of commercial banks. The major portion of the tends of commercial banks is employed by way of advances as advances from the chief source of profits too banks. Bank lends funds to the public by way of 1. Loan 2. Over Draft 3. Cash credits. 4. Discounting of Bills. 1. LOAN: A loan is financial arrangement under which an advance is granted by the bank to a borrower on a separate accounts called Loan account when a
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loan is granted or sanctioned to a borrower. The entire amount of loan is debited to the loan account of the borrower and is paid to the borrower at once in a lump sum either in cash or the by transfer to the credit of his current account. The repayment of the loan is generally made in one lump sum. Loans are granted for different periods and for different purposes. a. Short-term loan-up to one year. b. Medium term loan: more than one year but not exceeding 5to7 year. c. Long-term loan exceeds one to year.

2. OVER DRAFT: An overdraft is a financial arrangement under which a current account holder 2 permitted by the bank to overdraw more than the amount standing to his credit up to an agreed limit. The customer Enjoys the unique

advantages in that he is required to pay interest on the amount of overdraw contracted for. An O.D. is granted either against collateral securities or against the personal security of the borrower. 3. CASH CREDIT A cash credit is also a financial arrangements under which a borrower is allowed an advance under a separate account called cash credit account up to a specified limit called the cash credit limit. It is given in the strength of either bond of credit by some guarantees on securities. This is used by customers for long term interest is changed only on the amount withdrawn by the borrower about 10% of the total advances of commercial banks in India is by way of cash credit. The customer can withdraw the amount not in lump sum. But he can withdraw the entire amount by installments.

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4. DISCOUNTING BILL OF EXCHANGE Bills of exchange are presented to the bank for discounting the customers who present such bills get the advantage of getting ready cash for carrying on their business and the banker earn his income by way of Discount. The banker as per rule and for safety accepts such bills where in the parties to the bill are known and ratability. This is one of the methods where by the bankers are in a position to attract additional customers. INVESTMENT OF FUNDS ON SECURITIES Investment of funds on securities in one of the important factors of commercial banks. They invest a considerable amount of their funds in government and industrial securities. In India commercial banks are

required by state rate to invest a good portion of their funds in government and other approved securities. CREATION OF FUND [MONEY] Commercial banks not only receive deposit from the public and lend them to the need. But who create money but in the purpose of lending finds they tend received from the public the excess money lend by them over the cash deposits money them from the depositors in the money created by them. Thus commercial banks. Functions are not merely surveyors of

money but also manufacturers of money. Various ways of creating money Bankers can create money in several ways they are: 1. By advancing loan. 2. By allowing overdraft.

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3. By providing cash credits. 4. By discounting bill of exchange. 5. By purchasing securities. 6. By purchasing fixed assets.

2. SUBSIDIARY SECONDARY FUNCTIONS:Apart from performing the main functions of accepting deposits and granting advances. Banker performs a number of subsidies or secondary services. By performing the subsidiary services banker will be able to earn the goodwill of the customers and attract fresh customers. The following are the services or functions rendered. A. AGENCY SERVICES: These services render by a banker as an agent of his customer i.e. for and a behalf of his customer are called agency services. As an agent he has to be sin core in his dealing maintain true accounts. This is the main principle of the agency business. THE IMPORTANT AGENCY SERVICES RENDERED BY THE BANKER ARE AS FOLLOWS: a. Collection of income on behalf of his customers. b. Making payment on behalf of his customers. c. Purchasing and selling of securities on behalf of his customers. d. Acting as a trustee, executor. B. GENERAL UTILITY SERVICES:Services rendered by a banker not only to his customers but also to the general public are called general utility services. They are more useful and
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passes utility to the general public. The general utility services may be of following kinds; a. Safe custody of valuables. b. Dealing in foreign exchange business. c. Dealing in foreign letters of credit and circular notes and Travelers cheque. d. Acting as referee. e. Collecting information about other businessmen as customer. f. Under writing of shares. Debentures and governments securities. g. Remittance of finds. h. Collection of statistics of data.

CUSTOMER The term customer of a bank has been defined by law. Again the ordinary or general definition of the customer. a customer is person who has the habit of restoring to the same place customer refers to a person who has on operative account with a bank. It means the account holder in a bank can be regarded as a customer. DEFINITIONS 1. Sir John pagets view: To constitute a customer there must be some recognizable course or habit of dealing in the nature of regular banking business. 2. Prof M.L. Hart: A customer is a person who has an account with a banker or for whom a banker habitually under takes to act as such.

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To become a customer a person not only an account with the bank but who used it a regular basis. There must be some recognizable course on habit dealing in the nature of regular business. Broadly speaking a customer is a person who has the habit of resorting to the same place or person to do business. So for same banking transactions are concerned he is a persons whose has money has been accepted on the footing that the banker will honor up to the amount of sort or long standing. There are certain types of customers in whose case a bank has to take special care. These customers are known as special types of customers. In other words special types of customers are those customers who suffer from certain legal restriction on account of which a bankers is required to take certain special precautions at the time of the opening and the operation of their customer account. They are as follows: 1. Minors of infants. 2. lunatics 3. Drunkards 4. Married women 5. Purdah women 6. Illiterate persons 7. Insolvent 8. Trustees 9. Executors and administrations. 10. Joint Hindu family etc.

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A customer of a bank may be an individual a firm a joint stock company. A society or any other legal person even one may be customer of another bank. BANKER- CUSTOMER RELATIONSHIP There exists a definite relationship between the banker and the customer is like two sides of a coin. If in of vital importance in the entire business of banking. It starts the movements of accounts in opened and ends immediately on the closure of the accounts. The relationship depends on the nature of the customer's accounts with the bank. The relationship between a banker and customers may be divided into two types. They are. 1. General relationship. 2. Subsidiary general relationship. a. Primary relationship between a banker and customer The primary G.R. commences from the time of the customers open a bank account by depositing money the relationship from control between the two it is a contractual relationship. NATURE OF PRIMARY G.R Soon after receiving the deposit from customer banker are neither a baille nor a trustee nor an agent but only a debtor. Sir Jhon paget says the relation of banker and customer is primary that of debtor and creditor. The respective positions being determined by the state of the account. H.L. Harts says a Banker in normally the debtor his customer and bound to discharge his indebt ness by honoring his customer cheque.

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Justice Atkins observed. The banker undertakes to receive money and collect bills for his customers account and that money so received is not held in trust for the customer but borrowed from him with a promise to repay it or any past of it. a. Banker is not a bailer of a customer's money: In the contract of bailment bailee receives the things and subsequent to the accomplishment of the purpose returns the same identical things to the bailer. In this case banker will receive money and he will not return the same identical currency notes subsequently. So banker is not a baillee. b. Banker is not a trustee of customer's money: A trustee is a person who keeps the assets of others in his up today and he is directed to use or appropriate in his custody and he is directed to use or appropriate the assets according to the term of the trustee. As for as the trustee. Banker will not employee money as per the instruction of the customer. Further he wills not handover the proceeds to the customer. There for a banker is not a depository on a trustee. c. Banker is not an agent in respect of customer's money: In the contract of agency. Agent will be a per the instruction of the principle. Here soon after receiving the money he will not utilize the money as per the instructions of the customer. Therefore he is not an agent of the customer. d. Banker is only a debtor in respect of customer money: John paget says The relationship pf banker and customers in primary that of a debtor creditor. Instead of money being set apart in the safe room.

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It in replaced by a debt due from the bankers. The money deposited with him becomes his property and is absolutely at his disposal. As long as the customers account slow a credit balance. The customer world be a debtor and incase the customers account show debit balance. The banker would be the creditor the state of account would determine the position of the banker of and customer. Features of debtor and creditor relationship of Banker and customer The banker in ready to and willing to return the deposits through a legal tender. When demand in the proper form. 1. Banker is a dignified debtor Banker will not receives debts in the name of debts but it receives in the form of deposits. Therefore it is called as signified debtor 2. Customer in a un-secured creditor of the Bank Usually creditor insets for security while lending the loan. Where as here banker will not be view any of security as debtor. Therefore customer is a general creditor of a Banker. 3. Demand for re-payment of loan Although the banker in a debtor and the customer creditor. It is not at all necessary for the debtors to go to the credit to pay the amount, which is normally expected in ordinary debtor, creditor relationship. But here in the case of a debtor. He is not expected to approach the creditor for settlement of dues here the relationship is different and has a special feature. Namely demand is necessary from the customer.

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4. To be presented at the where the account of Held It only means that the customer should present the cheque for payment at the place of the bank where the customers account and maintained. Because records pertaining to the customers accounts are not available in other place. 5. To be presented on a working day and teat too business hours: Demand must be made during banking hours only not be presented either before or after the business hours. The customer should demand payment on a working day. Not on a holiday on a day which is closed for the public.

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BANKING REGULATION ACT, 1949 1. Short title, extent and commencement (1) This Act may be called the Banking 2[Regulation] Act, 1949. (2) It shall come into force on such date5 as the Central Government may, by notification in the Official Gazette, appoint in this behalf. 2. Application of other laws not barred The provisions of this Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of the 6[Companies Act, 1956 (1 of 1956)], and any other law for the time being in force. (a) a primary agricultural credit society; (b) a co-operative land mortgage bank; and (c) any other co-operative society, except in the manner and to the extent specified in Part V.]

3. Power to suspend operation of Act (1) The Central Government, if on a representation made by the Reserve Bank in this behalf it is satisfied that it is expedient so to do, may by notification in the Official Gazette, suspend for such period, not exceeding sixty days, as may be specified in the notification, the operation of all or any of the provisions of this Act, either generally or in relation to any specified banking company.

(2) In a case of special emergency, the Governor of the Reserve Bank, or in his absence a Deputy Governor of the Reserve Bank nominated by him in this behalf may, by order in writing, exercise the powers of the Central Government under sub-section (1) so however that the period of

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suspension shall not exceed thirty days, and where the Governor or the Deputy Governor, as the case may be, does so, he shall report the matter to the Central Government forthwith, and the order shall, as soon as may be, be published in the Gazette of India.

(3) The Central Government may, by notification in the Official Gazette, extend from time to time the period of any suspension ordered under subsection (1) or sub-section (2) for such period, not exceeding sixty days at any one time, as it thinks fit so however that the total period does not exceed one year.

(4). A copy of any notification issued under sub-section (3) shall be laid on the table of 8[Parliament] as soon as may be after it is issued.

4. Form and business in which banking companies may engage (1) In addition to the business of banking, a banking company may engage in any one or more of the following forms of business, namely,-

(a) the borrowing, raising, or taking up of money; the lending or advancing of money either upon or without security; and drawing, making, accepting, discounting, buying, selling, collecting and dealing in bills of exchange, hundies, promissory notes, coupons, drafts, bill of lading, railway receipts, warrants, debentures, certificates, scrips and other instruments, and securities whether transferable or negotiable or not; the granting and issuing of letters of credit, travellers' cheques and circular notes; the buying, selling and dealing in bullion and specie; the buying and selling of foreign exchange including foreign bank notes; the
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acquiring, holding, issuing on commission, underwriting and dealing in stock, funds, shares, debentures, debenture stock, bonds, obligations, securities and investments of all kinds; the purchasing and selling of bonds, scrips or other forms of securities on behalf of constituents or others; the negotiating of loan and advances; the receiving of all kinds of bonds, scrips or valuables on deposit or for safe custody or otherwise; the providing of safe deposit vaults; the collecting and transmitting of money and securities;

(b) acting as agents for any government or local authority or any other person or persons; the carrying on of agency business of any description including the clearing and forwarding of goods, giving of receipts and discharges and otherwise acting as an attorney on behalf of customers, but excluding the business of a 30[Managing Agent or Secretary and Treasurer] of a company;

(c) contracting for public and private loans and negotiating and issuing the same;

(d) the effecting, insuring, guaranteeing, underwriting, participating in managing and carrying out of any issue, public or private, of State, municipal or other loans or of shares, stock, debentures or debenture stock of any company, corporation or association and the lending of money for the purpose of any such issue;

(e) carrying on and transacting every kind of guarantee and indemnity business;
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(f) managing, selling and realising any property which may come into the possession of the company in satisfaction or part satisfaction of any of its claims;

(g) acquiring and holding and generally dealing with any property or any right, title or interest in any such property which may form the security or part of the security for any loans or advances or which may be connected with any such security;

THE HISTORY OF CREDIT CARDS Credit cards have become an established and inescapable part of our society. They are one of the primary forms of completing a purchase transaction in most retail businesses. Even tradesmen such as appliance repairmen or plumbers accept them. How did this all come about? Let's examine the history of the ubiquitous credit card. The Encyclopedia Britannica tells us that, "the use of credit cards originated in the United States during the 1920s, when individual firms, such as oil companies and hotel chains, began issuing them to customers." But let's see if we can pin it down a little closer. It is widely believed that the creator of the original credit card issued by a bank was John Biggins in 1946. Biggins worked in Brooklyn, New York at the Flatbush National Bank. He called his creation the "Charge-It" program.

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Here's how it worked: Transactions were made between Flatbush National's bank customers and merchants that conducted business locally. These business owners would deposit the sales slips at Flatbush National and in turn the bank would proceed to bill the customer. A brilliant move, the Charge-It program was a convenience for the bank customers and a boon for the local merchants, who reeled in the extra business. Another theory credits Diner's Club as being the first credit card back in 1950. The credit card issued by Diners Club was conceived by Frank McNamara, Diners' Club creator. It was only used to pay restaurant bills. The intent was to give the dining member a feeling of security because he or she did not have to carry a great deal of cash when going out to eat in the evening.

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CHAPTER - 3 CANARA BANK PROFILE

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CANARA BANK PROFILE

HISTORY OF THE BANK Canara bank started functioning on 1st July 1906 from a tiled building rented by SRI RAMA RAO, treasurer uncle of the founder of canara bank. SRI AMMEMBAL SUBBARAP PAI at 75 A, dongerkery street, Mangalore. In the year 1916, the canara bank ltd purchases this premises for a sum of Rs.4500. although the bank spread all over the country and abroad, the first branch of canara bank continued to function up to 1964 in the same premises. It is only in that year the branch was shifted to a more spacious building, and named as the city Mangalore branch. The founder of this bank was late SRI AMMEMBAL SUBBA RAO PAI a philanthropist stated the process of the branch. This small seed blossomed into a limited company as canara bank ltd in 1910 and become a canara bank in 1969 after nationalization. It is one among the 14 nationalized banks on 19th July 1969. Number of small banks have merged with this bank during the last 100 years. The bank has a network of 2600 branches spread over 26 state and union territories of the country which are administered through 13 circle offices and 44 regional offices.

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INITIAL INVESTMENT OF THE BANK: According to the first balance sheet which was drawn on 31 st march 1907, the paid up capital stood at Rs.54, 045, and the fixed deposits at Rs.23260 and advances at Rs.83716 and profits were a princely sum of Rs.2, 421.

DEVELOPMENT It established its first branch in the year 1976, to supervise the functioning of its various foreign departments to give required trust to foreign exchange business, particularly exports. The Bank has its presence abroad as under; 1. Canara Bank, London, U.K (branch) 2. Indo Hong Kong international financial Co.ltd,. Hong Kong 3. Canara Bank, MOSCOW(Representative office) 4. Al Rozouki international Exchange co. Dubai, UAE Eastern Exchange Established, Doha, Qatar (D.D drawing facilities on Canara Bank) Branches and offices: The administration of this Bank is of three tier system. The head office is situated at 112, J.C.Road, Bangalore under which there are 33 circles. Beside this, Bank has international division under which there are foreign Exchange business of the Bank. Among 2560 Branches almost all Branches are computerized. This bank has a work for of around 47000

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Employees on 31st march 2006 in all over the country. The Bank has a Capital of Rs.24,777 Crores at March 2005, rewarding growth of 26.54% and accounting for 43.11% of Net Credit. Significant Milestones Year 1st July 1906 1910 1969 1976 1983 1984 1985 1987 1989 1989-90 1992-93 1995-96 Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000 shares of Rs.50/- each, with 4 employees. Canara Hindu Permanent Fund renamed as Canara Bank Limited 14 major banks in the country, including Canara Bank, nationalized on July 19 1000th branch inaugurated Overseas branch at London inaugurated Cancard (the Banks credit card) launched Merger with the Laksmi Commercial Bank Limited Commissioning of Indo Hong Kong International Finance Limited Canbank Mutual Fund & Canfin Homes launched Canbank Venture Capital Fund started Canbank Factors Limited, the factoring subsidiary launched Became the first Bank to articulate and adopt the directive principles of Good Banking. Became the first Bank to be conferred with ISO 9002 certification for one of its branches in Bangalore Opened a 'Mahila Banking Branch', first of its kind at Bangalore, for catering exclusively to the financial requirements of women clientele. Maiden IPO of the Bank
38

2001-02 2002-03
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2003-04 2004-05

Launched Internet & Mobile Banking Services 100% Branch computerization Entered 100th Year in Banking Service Launched Core Banking Solution in select branches Number One Position in Aggregate Business among Nationalized Banks Retained Number One Position in Aggregate Business among Nationalized Banks. Signed MoUs for Commissioning Two JVs in Insurance and Asset Management with international majors viz., HSBC (Asia Pacific) Holding and Robeco Groep N.V respectively Launching of New Brand Identity Incorporation of Insurance and Asset Management JVs Launching of 'Online Trading' portal Launching of a Call Centre Switchover to Basel II New Capital Adequacy Framework The Bank crossed the coveted Rs. 3 lakh crore in aggregate business The Banks 3rd foreign branch at Shanghai commissioned

2005-06

2006-07

2008-10

2010-11

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Organization of the Bank regional office

Regional Manager

Divisional Manger

Manager

Officer

11

Special Assistant

1 15

Clerks

Peons

6 38

Total

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This branch was started on 7th Aug 1995. Capital of this Branch is 560lakhs. The turnover of the branch is 18crores. Employee of the Bank was one manager; one clerk and one Sub Staff total three staff. A present there are manager, two officer and two clerks and one sub staff, total six staff. Organization chart of SSI-Branch

Manager

Officer

2
Clerks

Peon

Total

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Performance of Canara Bank from last 4 yr. (In lakhs)

Particulars

Position as on 31-03-2008

Position on 31-03-2009

Position as on 31-03-2010

Position as on 31-03-2011

Staff loan Deposits Deposit A/c Total loan No of Loan A/c Gross Income Gross Expense

6 213.58 1126 436.32 170 56.46 16.93

6 366.21 1389 496.43 206 64.67 18.26

6 412.56 1554 56272 238 68.00 20.27

6 560.00 1705 617.98 254 72.17 22.98

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Punchlines of Some Banks CANARA BANK Service to grow, grow to service INDIAN BANK Poised for higher growth SBI BANK With you- all the way HDFC BANK We understand your world HSBC BANK The worlds local bank INDIAN OVERSEAS BANK Good people to grow with DENA BANK The trusted family bank CANARABANK May I help you VIJAYA BANK A friend you can bank with FEDERAL BANK Your perfect banking partner IDBI Plan ahead. Get ahead ORIENTAL BANK OF COMMERCE Where every individual is committed DHFL The friendly housing loan people

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Fact Files of Banks in India The first, the oldest, the largest, the biggest, get all such types of informations about Banking in India in this section. The first bank in India to be given an ISO Certification. The first bank in Northern India to get ISO 9002 certification for their selected branches. The first Indian bank to have been started solely with Indian Capital. The first among the private sector banks in Kerala to become a scheduled bank in 1946 under the RBI Act. India's oldest, largest and most successful commercial bank, offering the widest possible range of domestic, international and NRI products and services, through its vast network in India and overseas. India's second largest private sector bank and is now the largest. Scheduled commercial The Federal Bank Limited State Bank of India South Indian Bank Punjab National Bank Punjab and Sind Bank Canara Bank

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bank in India. Bank which started as private shareholders banks, mostly Europeans shareholders. The first Indian bank to open a branch outside Bank of India, founded in 1906 in India in London in 1946 and the first to open a branch in continental Europe at Paris in 1974. The oldest Public Sector Bank in India having Allahabad Bank branches all over India and serving the customers for the last 132 years. The first Indian commercial bank which was wholly owned and managed by Indians. Central Bank of India Mumbai Imperial Bank of India

Bank of India was founded in 1906 in Mumbai. It became the first Indian bank to open a branch outside India in London in 1946 and the first to open a branch in continental Europe at Paris in 1974.

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CHAPTER 4 THEORETICAL PERSPECTIVE

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THEORETICAL PERSPECTIVE
The satisfaction of the instant need of the consumer with the help of modern financial service undoubtedly started their endeavor with the inception of the monetization. This service can be appreciated in modern markets when compared to traditional markets. Under the erstwhile trade activity a consumer had to convey a large amount of ready cash to meet instant set of needs. Alternatively the consumer had to reply on the in formal financial service such as issuing cheques or promissory note etc. Which may or may not be accepted. But modern markets in the total package cater to a formal financial service to the customers identifying his seeds and the time within which the needs have to be satisfied. This eliminates the waiting theory to a great extent. Some of the financial institutions have introduced a new novel instrument in their major services for this purpose, this is known as credit card system. Many Indian and Foreign banks have issued credit cards to its customers, the issuing bank will have a tie up with a number of establishments ranging from 5000 to 18,000 inclusive of horels, hospitals, shops and departmental stores, which will honor the credit cards. This issuing bank will provides this facility of credit cards to those having a regular monthly income beyond a limit, credit worthiness, judged by their wealth and holder and business executive and their top brass. The bank takes a risk in that card holders is given a credit facility to repay within 30 to 40 days and there is a possibility of default risk.

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Progress of credit card Business: The number of members using it and the number of establishment honoring this credit card often joining the scheme has increased mostly over the past few years. Some Indian banks have joined with international banks to provide this credit card facility on a world wide basis or at selected international centers. As per the latest date available for 2006 the number of banks having launched the credit card rose to 20. Sixteen banks are issuing credit cards as parts of their tie up arrangements with the existing banks in business the details of the terms of issue and the participating members and establishment honoring the credit cards changed from bank to bank.

A brief study on can cards: Canara Bank: Canara Bank founded on July 1906 with the noble objectives of helping the normal man today makes among the top banks of India in term of several performance parameters. Canara Bank extraordinary banking has received recognition at all levels. At macro level it was rate a few years back no 1 among the public sector banks by CRISU India leading credit rating agency. It has featured time and again in The Banker London in its list of top 500 banks. Constantly re engineering itself canara bank is all set to be Indias premier financial instruction, with sharp fundamentals, a proactive works culture and

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technology advanced systems and producers. As it looks beyond into future the bank is all set to conquer new challenges like introduction of credit cards etc and take on newer worlds. Can Card: Canara Bank card is CAN Card. It was launched in a August 1987 can card is being increasingly used for mail order purchases whether it is jewellery subscription to popular journals readers digest Business today etc. Canara Bank efforts in enrolling more merchant outlets continue and it will not be long before we find that way worth while the business establishment will be within establishment. A can card holder need necessarily maintain an account with Canara Bank. However in exceptional cases the bank may at its desertion issue card to non customer on their fulfilling certain eligibility criteria. One who doesnt maintain an a/c with canara bank can settle the card dues as ans when notified by sending cash or local cheque ( drawn by the bank) to any of the canara bank collection centers nearest to the card holders, or he can obtain a demand draft and send it directly by post. It is basically a charge card with no facility for the payment of bills in installments. Can card is issued at nominal enrollment fee of Rs200/-- and Rs 400/depends upon the category of the card provided the eligibility conditions are satisfied. A similar annual fee is also charged. Right from the date of the issue of the card the cardholder is covered by insurance of Rs 1 lakh against the risk of death due to accident, the cost of this insurance is fully borne by canara bank. the chain of can card members

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 A card holder if he desire can opt for additional insurance coverage under their unique CAMCOMFORT scheme, against the risk of death or

injury to accident for amounts ranging from 2 lakhs to Rs 10lakhs. The cost of this insurance ranges from Rs. 30 to Rs 575 annum which means that one can have as much as 71% in terms of insurance coils. Can comport also offers a variety of mediclaim plans to cover hospitalization expenses at rate for cheaper than what is normally payable under similar plans. A cardholder can cover not only himself but also his/ her family under comfort scheme. Depending on the date on which cardholder makes a purchase using can card the gets time up to 45 days. (or some even more) to pay the dues. Can card bills are sent to the cardholder once in month and the gets time up to 15 days from the table of the bill for payment. No extra changes is normally payable by him for the intervening period. Can card also allows the card holder to draw cash up to specified limits from any of their branches the card holder also has the option to go to Canara banks 3 affiliated banks who have a combined net work of over 8000. The entire member affiliate bank viz corporation bank syndicate bank Union bank of India, Karur Vaiasya bank ltd. Lakhmivilas bank, Nedungadi bank, are also issuing can cards to their customers. It is the growing popularity of can card that has attracted a memeber of prominent banks to tie up with canara bank for the issue of cancards. A can card holder need not worry of his/ her card is lost or stolen. If due intimation is given to Canara bank the maximum liability of a card holder in case of nominee picking up the lost stolen card and mis using it would be restricted to Rs. 1000 only.

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Using a can card at member establishment. a. The card holder should first inform the member establishment his intent in to settle the bill through can card. b. He hold present the card to the member establishment to take the imprint of the card in the charge slip in his presence. c. After the transaction is over, the cardholder should collect the card with charges slip copy of the card holder from the member establishment. General privileges on can card Visa/ Aster card. a. It is easy procedure to get a can card. b. It has a wide acceptability more than 60,000 members establishment accept the cards. c. Payment in easy installments is available under can card visa card. d. 15-45 days free credit is available under can card visa card e. More than 10,000 cash withdrawal outlets for can card visa card. Additional privileges of can card, visa / master card. a. Free insurance: Free personal accident coverage for self Rs. 2 lakhs for spouse Rs. 1 lakh. It is due to air crash for self Rs 4 lakh for spouse Rs 2 lakhs Baggage insurance Rs. 25,000. b. Purchase protect in cover Rs 25000 c. Personal accident insurance a mediclaim insurance at consessional rate under unique group insurance called can comfort. Can holders liability is restricted only Rs. 1000 in case of lost cards.

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Unique features of can cards: a. Personal accident cover for the card holder. The primary card holder is issued against death by accident. The insured depends on the type of the card that was issued to him i.e. for, can card propriety 1 lakh can card visa/ master; for self Rs. 2 lakh for spouse Rs. 1 lakh.s. b. Limited liabilities on lost cards:This insurance cover is against misue of lost or stolen goods. Through this cover the maximum liability of the cardholder is restricted to a maximum of Rs. 1000. c. Purchase protection:A purchase protection insurance cover is offered to our visa cardholders for full 12 months period from the day of purchase the lost / theft of the article purchased through can card No other card issuing bank is extending this facility. d. Cash withdraw:This facility is provided on showing the card during banking hours. e. Credit facilities at petrol pump HPCL to IOC Pumps f. Combined statements:Single statements will be sent to the chard holder for all cards i.e. main card/ add on card. g. 24 hour help line:

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Round the clock facility is provided to the card holder if he faces any kind of problem in regard with this can card. h. Easy Mail back facility: Placement of the check deposit boxes in some important places of the cities. i. Special privileges: At star hotels and special discount schemes for 6the can cardholders are available at some selected members establishments mail order business is also gaining momentum. j. The most attractive future of the can card is its fee structure. It is the lowest fees bases product in the industry. k. Canara bank continues to be No1 amongst the domestic banks in card circulation and ranks number 3 in the credit card industry in the country. l. Cancard division has achieved the much converted ISO 9002 certification, a symbol of quality services. a recognition first ever for an Indian credit card. the card division is well set on its quality towards excellence. can card has won the award of visa bank of the year 1997. Advantages to the cancard holders:a. It is convenient carry. b. It minimizes the risk of carrying money. c. The card holder can draw from any of the 10000 bank branches of the Canara Bank. d. It is a free source to the consumption of credit. e. The cardholder may utilize the card for purchase. f. It is easy to operate. g. The used holder can draw up to 50% of the card limit.
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h. 24 hours ATM cash point in all big cities. i. Cancard visa and master card all widely accepted at 70000 outlets in India and Nepal. j. Can card International Visa (Gold) is accepted world wide. Advantages of cardholders: 1) Convenience: A card is the convenient method than cash or cheque for the payment of goods and services. The holders have the option to purchase goods and services and pay conveniently at a later date in manageable installments compatible with their hold budgets. 2) Security:Credit cards are simple to operate and easy to carry. It is much safer than carrying cash. A credit card carries several security features which ensures that only its owner uses the card. Moreover the loosing liability in cash of a lost have stolen, card is limited. So, should when a card holder is wallet, all the needs to do is ensure minimum risk of loss to inform his banker in writing about the loss of his card. On the other hand if he were carrying cash there is little be can do about limiting his losses. 3) Credit without security:A credit works as personal financial management tool and enhances the card holders purchasing power. He can use it to purchasing power. He can use it to purchase goods and services and not have to carry having enough cash on him. Besides he can pay for anything with his credit card. Credit card are accepted at shops hotels travel agencies and even hospitals.
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4) Special Facilities:Card issuing banks provide a wide range of privileges to their members. They include ATMS access at emergency cash, flexible payment plans, special offer at member establishments, accident insurance coverage, airport lounges and access promotiaonal and sports events. The credit card protects the card holder against unforeseen and unexpected expenses and of course, provides a nice blanket of protection and confidence like in the case of Mr. Frank L. Maramala. Credit card provide a certain degree of prestige to the holders. The Status which one gets is not only because of his membership in a credit card organization but because the card at once makes him great in a part of wider phenomenon. The purchasing power of the cardholder increases to the extent of credit limit given in the card. If wisely used by the consumers credit cards can provide then extra money interest free At the one to do is settle the bills in time. Advantages to member establishment:From merchants points of views the advantages of accepting credit cards is extra business, convenience and security. Extra business since the consumers have the power to make purchase, which is not limited by the amount of cash being carried. The fact that the volume of the business increases has been borne out by reported researches in India and abroad. Convenient since handling accounting and tracking is easy.

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 Safe since it reduces the account of non promise cash. The merchant has the guarantee of payment and his account is credited immediately on submitting the charge slip into his bank. No bad debts arise in credit card transactions. A good cash flow is established because of their speedy settlement of the bills by banks. Usually people belonging to the upper class of society possess credit cards. Hence the merchant establishment can enjoy the benefits of getting reputed customers. Disadvantages of Credit Card:The credit is not risk and all players associated with it have to face an element of risk associated with it. Disadvantages of Card Holders:The major disadvantages to the cardholders are The cardholders are burdened with service charges, annual fees,

membership fees, renewal fees, etc. A high rate of interest is charged for deloyed payment. Credit card tempts the cardholders for more purchases beyond their income and repaying capacity. Minimum transaction size has to be approximately Rs 300/ Chances of misuse and hacking of the card. Low margin merchants pass on the service charges to the card user eg. Petrol, Railway etc.

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Disadvantages to the member establishment:1) The commission to be paid to the issuing banks/ credit card organizations is heavy. 2) Some banks make delay in payment due to lack of adequate system and trained personnel, which affects the cash flow of the member establishments. 3) High incidence of paper work processing a transaction i.e. browsing through hot list, preparing the charge slip etc. Which increases leadtime and affect customer service. Disadvantages to the Bankers: The cost involved in the credit business is high. Which includes, cost of plastic card to be imported, cost of information, cost of placing in marketing cards, cost on staff to monitor processing of appliances and to carry out credit check on applicants, etc., unless the number of card holders and the volume of business is high, the credit card business will not be a profitable one. The menace of frauds perpetuated by the holders of bogus cards and some times collision with the number establishments is the major problem for the issues. The average utilization of credit cards is 20% to 30% in India. The under utilization of this facility erodes the profitability of the banks. The credit card system: The credit card system has three components The card issuing agency i.e, the bank

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 The card holder (members) The member establishment i.e merchants or the establishment which honors the credit card. The credit card is issued to the individuals who present them at merchant outlets i.e, shops or establishments, which have agreed to honor the credit and while purchasing any item from the establishment. At a member establishment, the cashier seeks authourization for the cardholders purchase from his bank. This could be done through two methods depending on the equipment available at the merchant establishment. 1) Electric data capture (EDC) terminal: Compulsory authorization for all transactions is required when the merchant has an EDC. In this case, the card is passed through the magnet slot of the terminal. The terminal reads all the way about the card holders card and dials into the banks authorization sanction received, the terminal prints out a charge slip and the cashier completes the transaction by asking the cardholder to sign on it. All this usually happens in less than 30 secounds. 2) Imprinter:When no EDC is provided the bank specifies a floor limits to the merchant. If the value of the purchase is below the floor the cashier need get any authorization from the bank. He only needs to check the following. Card is valid and genuine. Card is not listed in the latest printed warning bulletin.

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 Cardholders seem genuine. Signature of the cardholders matches. The floor limits balances the risk of the low transaction with the effort of seeking voice authorization. The cardholder has to sign is ultimately sent to the holder as a bill statement and thus, the holder makes the payments. Presentation of the credit and issued by the issuing banks and fulfillment of the elementary requirement are enough for the cardholder to make the necessary purchases and walk away from the member establishment outlet.

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CHAPTER 5 METHODOLOGY
Research design Data collection method/ sources Research Instrument/ Tools Sampling plan Field work Analysis

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Research Design: Research design is a frame work or plan for a study that studies the collection and analysis of the data. There are 3 basic type of Research Design. 1) Exploratory Research Design 2) Descriptive research Design 3) Cascial or Experimental Research Design.

1. Exploratory Research Design:- Its major passion is the discovery of data and insight. 2. Descriptive Research Design:- The Descriptive Research Design study is typically concerned with determining with which something occur or how the two variables very tougher this study is typically guided by an initial hypothesis. Importance of Descriptive Research design To make specific predictions. To determine whether certain variable are associated. Survey is best method for descriptive research It seeks response from It is always conducted in natural settings. A descriptive study is considered usually rigid and formed. A descriptive study requires a clear specification of who, how, what, where, aspects of the research. It requires permutation of move specific hypothesis and testing through in frence technique.

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3. Casual or Experimental research design:Experimental is defined as a process where events occur in a settings of the description of the experimenter and contract are used to identify the variation in subject responses. To plan a project it is necessary to anticipate all the steps which must be under taken to the project is to be completed successfully Step involved are: Statement of hypothesis Defining the research problem Execute the project Analysis the data Generation of interpretation Preparation of the report:A research is a logical and systematic plan prepared for directing a research study. The methodology and techniques to adopted for achieving the activities. A Research Design is the program that guides the investigator the observation. Different types of research Design are possible on the nature of the research subject, availability of time money, and trained man power the over an research design is generally considered Under the following subheads. Simple design Observation design Statistical design

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Data collection methods/ sources.

For this study the instrument used for data collection is a questionnaire which containing both open ended and closed ended and multiple choice question. Source of data:- The study is conducted with the help of both . Primary data as well as secondary data. Primary data:- The primary data is collected by the personal interview with the Can card holders Bankers Member Establishment. Questionnaire is used to collect primary data from can card holders. Questionnaire includes open ended question, closed ended question personal interview and multiple choice question. Secondary data:- it is collected through various book, banks journals annual reports Internet etc. Methodology may be understood as Science if studying how the Report/ Research is done. Secondary are the data which invests go for barrows from others who have collected the data for some others purpose since data collected for some other purpose it may not contain all the required information they are nor as primary data. Techniques of collecting primary data: Direct personal interview
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Indirect personal Interview Information through correspondence Method of questionnaire Research instrument / tools For this project report questionnaire method was adopted to analyze the customers behavior and personal interview were conducted together information from the employs of canara bank. The secondary data were collected from the book, magazine internet and from the canara bank, Gopi circle, Shimogga Survey is he most commonly used method of primary data collection in Marketing Research this is widely used because of its extreme flexibility. Sampling plan:- A integral part of the research design. Is the sampling plan. Specifically it includes 3 question Where to survey ( the sample size) How many to survey ( the sample size and select them And the sample procedure Study requires collection of first hand information or data pertaining to the units of study from the field. The unit of study may includes geographical area like district, taluk, cities, village, which are covered by the study, institution is about information is required or person from whom information is available. A part of population is known as a sample the process of drawing a sample from a larger population is called sampling.
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Field work:

Field work means investigation

to secure minimum

information to feed the problem. In this investigation the researcher may meat customers for information by asking the important questions it light on most critical issues for study. When the researcher interacts directly with the can card holders for information. It may determine the need and solution to the problem. For collecting the primary data researcher contacts the managers staffs and credit card holders of the banl.

Sample Size: The number of Respondents were 15 bankers and 20 card holders. Analysis: Analysis is the basis of responses given by the can card holders and bankers of Canara bank. In the questionnaire the responses were first classified on the basis of similarity of views & then tabulated into different groups. Further analysis was done on the basic of tabulated into different groups. Further analysis was done on the basic of tabulated data sutable pie charts & bar charts were shown to represent the data graphically percentage were used in comparing two or more series of data & also to describe the relationship.

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CHAPTER 6
DATA ANALYSIS AND INTERPRETATION

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Table 1 showing the total number of banks issuing credit card in Shivamogga

Description Banks issuing the credit cards Banks not issuing the credit cards Total

Frequency 11 04 15

Percentage 73 27 100%

The above table reveals that about 73% of the banks are issuing credit cards. Where as round 27 % of them are not issuing tee credit cards in the city. Fig 1 shows total number of bank issuing credit cards in Shivamogga

80% 70% 60% 50% 40% 30% 20% 10% 0%

73%

27%

Banks issuing the credit cards

Banks not issuing the credit cards

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Table 2 showing the total No. of banks issuing cancard Description Banks issuing the credit cards Banks not issuing the credit cards Total Frequency 11 04 15 Percentage 73 27 100%

The above table reveals that out of the total respondents who issue credit cards 73% of them issuing can cards where as round 27 % of them are not issuing tee can cards. This shows that the majority of banks in Shimogga issue can cards & the banks that do not issue can cards have their own credit cards.

Fig 2 Shows total number of banks issuing can cards

80% 70% 60% 50% 40% 30% 20% 10% 0%

73%

27%

Banks issuing the credit cards

Banks not issuing the credit cards

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Table 3 Showing the number of holder defaulting

Description Less than 5% 5% to 10% 10% to 15% 15% above Total

Frequency 4 2 1 0 7

Percentage 57 29 14 0 100

The above table reveals that out of the total respondent 57% of them agree that is less than 5% of the card holders default monthly 29% of the respondent save that 5% to 10% of the card holders default whereas only 14% of the respondents agree that 10% to 15% of the card holders default in the city. Fig 3 shows the card holders defaulting

0% 14% Less than 5% 29% 57% 5% to 10% 10% to 15% 15% above

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Table 4 showing the reasons or the non purchase of credit card

Items 1 2 3

A 4 4 3

% 35 36 28

B 4 3 4

% 36 28 36

C 6 4 4

% 36 36 36

The above table reveals that major reasons for the non purchasing of credit card by the people are Income tax liability etc and that the credit card tempt the customer to purchase more that their paying capacity both of which are ranked equally at no1.

Fig 4 Showing reasons for the non purchasing of credit card

6 6 5 4 4 3 3 2 2 1 1 0 Items A B C 3 3 Series1 Series2 Series3 4 4 4 4 4

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Table 5 Showing the classification of respondent by gender. Description Male Female Total Frequency 17 3 20 Percentage 85% 15% 100%

The above table reveals that in respondent survey 85are male respondent where as the female respondent are just 15%. This shows that the majority of the can card holders are men. Where as it has not reached the women in the city. The main reason behind this would be that the men are more drone to come out of the house, travel from the place to another to satisfy the need of their jobs where as the women might be limited to the city only. Fig 5 Shows classification of respondent by gender

15%

Male Female 85%

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Table 6 showing classification of the respondent by age Age group Below 25 years 25-30 30-35 35-40 Above 40 years Total Frequency 1 7 3 3 6 20 Percentage 5 35 15 15 30 100%

The above table has revealed that only 5% of the respondent are below 25 years age 35% are in the age of group to 30 years 15% are in the age of group of 35 years to 40 years and 30% of the respondent are above the 40 years of the age who are the can cards. This shows that the respondents in all the age groups use the can cards from the younger gender on to the people above 40 years of the age. Fig 6 shows the classification of respondent age
7 7 6 5 4 3 2 1 0 Below 25 years 25-30 30-35 35-40 Above 40 years 1 3 3 6

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Table 7 showing classification of the respondent by their educational qualifications

Description Under graduate Graduates female Post graduates Total

Frequency 2 10 8 20

Percentage 10 50 40 100%

The above table reveals that out of 20% . 105 of the respondent were under graduates 50% are graduates and 40% are the post graduates. This shows the highly educated people use the credit card facility at most of main reason behind this would be awareness the exposure among the people in general compared to the people having education. Fig 7 shows that classification of the their educational qualifications
50% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Under graduate Graduates female Post graduates 10% 40%

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Table 8 Showing classification of the respondent by their occupations Items Business Profession Employed Students Total Frequency 6 6 8 0 20 Percentage 30 30 40 0 100%

The above table reveals that out of 20 respondents 40% are employed are in some service 30% of them had business and 30% of the respondent were professional and there were no students among the respondent surveyed. It shows that the people who are employed use the can card services almost compared to the people in business and profession. Fig. 8 shows classifications of respondent by their occupation
40% 40% 35% 30% 25% 20% 15% 10% 5% 0% Business Profession Employed Students 0% 30% 30%

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Table 9 showing classification of the respondent by their monthly income Income per month Below 10,000 Rs 10,000-20,000 Rs. 20,000-30,000 Rs. 30,000 and above Total Frequency 2 7 4 5 20 Percentage 10 45 20 25 100%

The above table reveals that 10% of the respondent has an income below Rs 10,000 and 45% has an income of Rs 10,000 to 20,000 and 20% has on income between 20 to 30 thousands and the last 25% of the respondent have an income more than Rs 30,000 per month. Fig 9 shows classification of respondent by their monthly income

28%

11% Below 10,000 39% Rs 10,000-20,000 Rs. 20,000-30,000 Rs. 30,000 and above

22%

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Table 10 showing No. of persons processing other credit cards with can cards. Description Possessing only can cards Possessing any other card with can cards Total 20 100% Frequency 13 7 Percentage 65 35

The above table reveals that 65% of the respondent have only can cards and 35% of the respondent have other cards along can cards. Here we can say that the people stay in the city more have only the can cards and people who travel much also have other cards along with the can cards. Fig 10 shows that numbers of persons possessing their credit cards with can cards.
14 12 10 8 6 4 2 0 Possessing only can cards Possessing any other card with can cards 7 13

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Table 11 showing the usage of credit cards by the card holders Description From 2 years 2-4 years More than 4 years Total Frequency 8 7 5 20 Percentage 40 35 25 100%

The above table reveals that 40% of the respondent are using the cards from the past two years 35% of the respondent are using the cards to 2-4 years and 25% of the respondent are using the cards from more than 4 years. Fig 11 shows the usage of credit card by the card holders
8 8 7 6 5 4 3 2 1 0 From 2 years 2-4 years More than 4 years 5 7

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Table 12 showing the card holders first introduction personal.

Description Banks Friends/ Relatives Advertisement Self Total

Frequency 6 7 20 5 20

Percentage 30 35 10 25 100%

The above table reveals that their own bankers motivated 30% of the respondent 35% by their friends as relatives and 10% by their advertisements and 25% respondent were self motivation. Fig 12 showing the cardholders first introduction to the can card holders

13%

16% 18% Banks Friends/ Relatives Advertisement Self

53%

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CHAPTER 7

Findings, Suggestions and Conclusion

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FINDINGS
The study reveals that 73% of the banks are issuing credit cards, where as around 27% of them are not issuing the credit cards in the city. Out of the respondents who issue credit card, 73% of them issue the can cards, where as 27% of them do not issue the cancards. The major benefits a bank gets by issuing credit cards is that the image of the bank in the public is improved which s followed by the increase in he profit and grow the new customers and brings survey into the account of the customers and controls the bank cost by reducing the no of Cheques. Out of the total respondents, 57% of them agree that Less than 3% of the card holders default monthly, 29% of the respondents say that 5% to 10% of the card holders default, where as only 14% in the city. The major reasons for the non purchasing of the credit cards by the people are burden of the service charge, annual fees, etc and that credit card tempt the customers to purchase more then their paying capacity. The respondent says that 46% of them have ranked cost involved in the card business as a major problem in managing the credit and card finance which is followed by the under utilization of the credit cards by 36% of the respondents agreeing to it. Where as there were no major problems regarding the default of the card holder which is lost by the majority of the respondents. Out of total respondents survey 85% are male respondents. Where as the female respondents are just 15%. This say that the majority of the

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cancard holders are men where as it has not reached the women in the city. The main reason behind this could be that the men are prone to come out of the house travel from one place to another to satisfy the needs of their jobs, where as the women might be the limited to the city only. As per the classification of the respondents by age 5% of the

respondents are bellow 25% years, 35% are in the age group of 25 to 30 years. 15% are in the age of 35 to 40 years and 30% of the respondents are above 40 years of age who use the can cards. And as per the classification of respondents were under graduates. 50% are graduates and 40% of them are post graduates and as per occupation, out of 20 respondents 40% are employed in some service. 30% of them had business and 30% of them were professionals and there were no students among the respondents surveyed. The study reveals that 19% of the respondents as an income below Rs 10,000 45% has an income of Rs 10,000 to Rs. 20,000, 20% has an income between Rs 20,000 to Rs30,000 and the last 25% of the respondents have an income more than Rs. 30,000 per month. As per the classification of respondents number of persons possessing other credit cards with can cards out of 20, 65% of them have only can cards 35% of them have other cards along can cards. The usage of credit cards by the card holder 40% of the respondents is using the cards from the post few years, 35% of the respondents are using the card from 2-4 years and 25% of the respondents are using the card from more than 4 years. The card holders first introduction to the can cards was by banks, Friends/ relatives, advertisements and self. 30% of the respondents were

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motivated by their own bankers, 35% by their friends/ relatives and 10% advertisements and 25% per self motivated. The study reveals that the average amount monthly used through the credit cards that 50% of the respondents use below limit of Rs 5000 per month, 20% use Rs 5000 to Rs. 10,000, 10% use of Rs 10,000 to 15,000, 10% use of 15,000 to Rs 20,000,5% use Rs 20,000 to 25,000 and 5% of the respondents use above 25000 through the can cards. As per the comparison of can cards with other cards 15% of the respondents rated can cards as excellent when compare to other cards as 25% rated it as they good 30% as just good, 25% of satisfactory and 5% of the respondents have rated it as bad. As per the place where the credit card if often used total of 20 respondents 14% of them use the cards at petrol banks 26% use at shopping centers, 22% use it for travel reservations 35% use at the hotels and 3% of the respondents use the can cards in the hospitals. According to acceptance of credit cards by the business

establishments out of 25, 40% accept credit cards and 60% or them do not accept the credit cards. It is because of high commit ion rates and low profit margin, most of the people are not accepting the credit cards and also due to the long producers involved in it. The purpose behind accepting the credit cards is to attract the new customers. The advantages by accepting the credit cards is that, in increases the volume of reputed customers, customers tend to buy more than their capacity of buying and it improves the image of the business.

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Suggestion to the bankers: 1. Increase in the number of the number establishments There should be considerable increase in the number of the member establishment in the city. The banker should take a step towards it and encourage the business, the professionals and the common to use the plastic money. For the increase in the number of member establishment, The establishment, the banker should try to satisfy the needs, demands of these establishment, the banker should try to satisfy there demand like 1. Increase the rate of commission 2. Providing the necessary equipments. 3. Providing them the required stationary at time the banker would also join the hands with the few recognized member establishment of the city and offer special benefits to the card holder who users the card at these establishment. 2. Awareness program for the common man The bank should arrange an awareness program for the public in general. In this awareness program the banker should give a clear picture about the services provided by the can card, the advantages a person get by using the card a profit earning establishment can get by accepting the can cards. The bank should encourage all classes of the people, may they be rich class or the middle class to have the credit card. They should also make the features of the cards convenient to the middle class people.

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Suggestion to the card holders Maximum utilization of the card A card holder must try to utilize to the maximum extant. It should just be kept in the pockets or in t he treasures and waste its value all together only the people who had capable of using the credit card gets the one possessing through the strict examination and along procedure by the banker and the credit card decision. This process bears a lot of energy, time and money. All this would utterly be wastic if the card holder treasures the card by not using it. The card holders while trying to make the maximum utilization of the credit card facility should take care of the credit limit given to him and the relevant factors. He should manage to pay the bills on time without defaulting . If it is not taken enough care and the card holder defaults he would face technical problem, which would hurt his image. Suggestion to the member establishment (ME) The ME tries to attract more card holders by using marketing and the advertising techniques.

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CONCLUSION In the Shimogga city, a majority of the banks are issuing the credit cards, this not only shows the positive sign but the growing card base show a bright feature of the card market in the city. Comparing to other cards, the can cards has covered a wide credit card market.. The reason behind would be that there are large number of banks who issue can cards and thus it becomes easy for the wide spread o the card among the public. The other reason behind is the services provided by the can cards and the can card visa cards. Also the services provided by home banks i.e the Canara banks, were the card holders deal within regard to their credit cards. Their friends and relatives for the purchase of that card suggested the majority of the people who hold can cards. This proves that the card holders are really impressed by the utility of can cards and thus initiate their friends and relatives to get a can cards and enjoy the benefits. The major draw back in the city with regard to the credit card is that the majority of the card holders do not much purchase through their cards. When asked about it the common reason was that, they tend to purchase more than their capacity when they use a credit card apart from that few card holders like to make purchase through the card fee the problem acceptability of cards, as there is a very low percentage of the number establishment in the city. In the merchants who do not accept the cards were asked the reason for not accepting said that there were not many card holders in the city. If
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this atmosphere of not using the credit cards by the card holders and not accepting the credit cards by the merchants when the card holders want them to accept, would in reality can create a deep illusion about the acceptability and the usage of the can cards in the city.

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Annexure QUESTIONNAIRE Dear Sir/Madam, I am a student of Acharya Thulasi National College of Commerce, Shimoga, studying in Final Year B.B.M. for the Academic Year 201112 for the fulfillment of my course. I am conducting the survey on the Market survey and customer attitude towards Cancards, with special reference to Canara Bank, Shivamogga to prepare a project report. Therefore, I request you to spend for me a few minutes to answer the questions in the questionnaire. Yours Shruthi S.D

1. Name 2. Address

: :

-----------------------------------------------------------------------------3. Telephone --------------

4. Sex

Male Female

[ ] [ ]

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5. Do you have a bank a/c in Canara? Yes No [ ] [ ]

6. Account No. _________________

7. If yes Nature of Bank Account? SB CA FD [ ] [ ] [ ]

8. Do you know about credit card Yes No [ ] [ ]

9. How do you know about credit cards Credit cards Friends/ Relatives Advertisement Self [ ] [ ] [ ] [ ]

10.In credit card which is the most preferred one? International credit card [ ] Indian credit card [ ]

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11.If Indian which of these do you prefer most SBI card Can card SBM card ICICI card [ ] [ ] [ ] [ ]

12.Which of these education qualification you belong to ? Under graduate Graduate Post graduate [ ] [ ] [ ]

13.Which category do you belong to Business Professional [ ] Salaried Student [ ] [ ] [ ]

14.If salaried you work in Government Public private Ltd co. Firm If other specify 15.Your income per month Below Rs. 10,000 Rs. 10,000 to 20,000 Rs 20,000 to 30,000 Above 30,000 [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]

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16.Where do you use your cards? Petrol Banks Shopping center [ ] [ ]

Travel reservation [ ] Hospital [ ]

17.Since how many years you have been using credit cards? Since 1 year Since 2 years Since 3 years Above 3 years [ ] [ ] [ ] [ ]

18.According to you which of these credit cards are beneficial? Cancard ICICI card Master card CITI bank card [ ] [ ] [ ] [ ]

19.Do you think can card is necessary for you? Yes No [ ] [ ]

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20.Is any service charges for the service provided by the bank? Yes No [ ] [ ]

21. If yes will you continue to use can card in future if service charges are applied for using it? Yes No [ ] [ ]

22.If there any interest is charged for the service provided by the bank? Yes No [ ] [ ]

23.If yes what rate of Interest is charged. 24.Will you continue to use can card in future if interest charged for using it? Yes No [ ] [ ]

25.Do you think still more technology to be introduced through can card ? Yes No [ ] [ ]

26.Are you satisfied with the service provided by the bank? Yes No [ ] [ ]

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27.If no specify the reasons---------------28.By using Canara bank can card what are the following benefits availed by you Easy access to hard cash Easy accountability Easy financial transaction Saves time [ ] [ ] [ ] [ ]

29.How do you rate the services of can cards? Excellent Very good Good Satisfactory [ ] Bad 30.Your suggestion about can cards in some words------------[ ] [ ] [ ]

Signature Date: Place:

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BIBILOGRAPHY Theory of Banking Banks Annual report Web sites: www.cancard.com www.canarabank.com cancard.ho@canarabank.co.in www.canarabankinidia.com - B.S. Raman

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