Research methodology
[1]
1.1 Scope of the study:
The study would try to throw some insights into the existing services provided by the banks and
the gap between the customer expectations, perceptions and the actual state of performance. The
results of the study would be able to recognize the lacunae in the system and thus provide key
areas where improvement is required for better performance and success ratio.
(1) To find out the level of expectation and the level of perception of the customers from the
services offered by the banks.
(2) To compare the level of perception and expectation of the services offered by the banks.
(3) To know which service quality dimension the bank is performing well and in which
dimension it needs improvement.
(4) To know the preference towards the public sector and private sector banks.
1.3Sampling Design:
[2]
Sample Size: 200 Respondents
Bank Respondents
ICICI 50
HDFC 50
SBI 50
BOB 50
Primary Data:
Secondary Data:
[3]
• SERVQUAL Analysis.
SERVQUAL is an instrument for measuring how customers perceive the quality of a service. In
the mid-1980s Berry and his colleagues Parasuraman and Zeithaml began to investigate what
determines service quality and how it is evaluated by customers. As a result of their study they
developed the SERVQUAL instrument for measuring service quality, which initially included 10
service quality dimensions, which were later reduced to the following five: tangibles, reliability,
responsiveness, assurance and empathy.
The instrument is based on the idea of the disconfirmation model, in other words on the
comparison of customers’ expectations with their experiences from the service. Usually, the five
dimensions of the instrument are described through the use of 22 attributes an “respondents are
asked to state (on a seven-point scale from “Strongly disagree” to “Strongly agree”) what they
expected from the service and how they perceived the service.”
This instrument has been widely used by researchers, but still, there are some controversies in its
applicability across different service industries. In some studies the five dimensions of the
instrument (determinants) have been found to be unstable across different types of services.
Therefore, the SERVQUAL tool should be applied very carefully and the set of determinants and
attributes used should be adapted to the specific situation.
The test is applied when there are two categorical variables from a single population. It is used to
determine whether there is a significant association between the two variables. For example, in
an election survey, voters might be classified by gender (male or female) and voting preference
(Democrat, Republican, or Independent). We could use a chi-square test for independence to
determine whether gender is related to voting preference. This approach consists of four steps:
(1) state the hypotheses, (2) formulate an analysis plan, (3) analyze sample data, and (4) interpret
results.
[4]
1.7 Hypothesis:
A chi- square test for independence has been conducted for knowing the relation between the age
group and the preference towards the two types of banks.
Ho: Preference towards public/private sector banks and age group are independent
of each other.
H1: Preference towards public/private sector banks and age group are dependent of
each other.
Respondents may give biased answers for the required data. Some of the
respondents did not like to respond.
In our study we have included 50 customers of each bank because of time limit.
[5]
CHAPTER 2
[6]
The world of commercial banking is undergoing a deep transformation as a result of marketable
instruments competing with loans and demand deposits. Because of this strong competition,
commercial banks are struggling to make acceptable margins from their traditional business
entering into investment banking.
Increasing competition has forced banks to search for more income at the expense of more risk.
Banks that lent heavily to Asia in search of better returns than those available in Western markets
are now being blamed for bad credit decisions. The Asian crisis has renewed interest on credit
risk management casting doubts on the effectiveness of current credit regulations. Technological
changes have also heightened competition by making it easier to imitate bank services. The
traditional advantage of physical proximity to clients given by extended networks of branches
has vanished. Banks have to compete with money market mutual funds for deposit business,
commercial papers, and medium-term notes for bank loans.
As margins are squeezed, commercial banks in the United States and Europe have been forced to
cut costs and branches while diversifying into pensions, insurance, asset management, and
investment banking. In the United States, many banks call themselves financial service
companies even in their reported financial statements. Diversification, however, has not always
proved to be an effective strategy, and many banks have had to revert to a concentrated business.
[7]
These examples illustrate how commercial banks are reinventing themselves, not just once but
many times. All these changes are creating an identity crisis for old-fashioned bankers, leading to
the key question, “What is a bank today?” The question is difficult, but evidence suggests that
the concept of banking is being modified and the traditional barriers among financial service Sub
industries (retail banking, private banking, investment banking, asset management, insurance,
etc.) are vanishing. Illustrating what an entity does or serves for often is a useful way to define it.
The identity crisis of banks—especially commercial banks—stems from the deep and rapid
changes in their traditional body of activities (particularly retail and corporate banking). On the
other hand, investment banking, private banking, and banc assurance are the most profitable and
fastest growing segments of the financial service industry. As banks undertake new activities,
they also incur new risks. Since boundaries among sub industries are weakening, if not
vanishing, banks—like all other financial service companies—must redefine themselves in terms
of the products they offer and the customers they serve. The way banks pursue this redefinition is
through a strategic repositioning in the financial service industry. All these factors represent a
new challenge for commercial banks, provided this definition still has a unique meaning.
Increased competition, diversification, new products, and new geographic markets mean that
both the spectrum of risks and the risk profile for banks are dramatically changing.
The scenario commercial banks face today differs greatly from that of the past. Diversification
among sub industries is defining an environment where banks compete with other financial-
service companies to provide mutually exclusive products and services to the same customers.
Traditional branch banking is under the threat of new competitors and technological innovation,
leading some analysts to wonder whether banks are dying. Most likely what is dying is the old-
fashioned concept of the bank and a new scenario is emerging. Banks are changing as economic
markets integrate, providing opportunities for diversification. Only 15 to 20 years ago, most
Western banks generated 90% of revenue from interest income. Now this percentage has fallen
to 60%, sometimes as low as 40%. New sources of income, such as fee-based income from
[8]
investment services and derivatives, are becoming increasingly relevant for the income
statements of commercial banks.
During the same period, the pattern of banking activities has changed through interactions with
the developing security markets. The well-known phenomenon of disintermediation that has
taken place in all Western countries since the 1970s has progressively reduced the monopoly of
banks over the collection of savings from customers. This has created much tougher competition
among financial service companies and has forced banks to find new and diversified sources of
income. The traditional core business of commercial banks has been retail and corporate
banking. As retail and corporate banking become less and less profitable, banks are diversifying
into new businesses to stop the decline of profits. Investment banking, for example, is estimated
to be worth US$14 million, with an annual growth rate of about 14% up to 2010. Derivative
based earnings for larger commercial banks now account for about 15 to 20% of the total
earnings. The drawback is that volatility of earnings has dramatically increased. The
management of these new types of risk—typically, market risk and credit risk on traded assets—
requires competence and expertise. Hence, the risk profile of commercial banks is changing as a
consequence of diversification. Capital markets are playing a key role in defining the bank of the
twenty-first century, but they are also making banks riskier. In fact, with a few exceptions, AAA
ratings for banks have disappeared and consequently the importance of market risk management
is being emphasized. Future competition will not be played in the classic retail banking industry
that, at least in continental Europe (but not in the United Kingdom), is only slightly profitable.
Global competition will take place in asset management and investment banking. Not casually,
huge U.S. investment banks are merging among themselves and with asset management firms.
Alliances and takeovers are occurring also on a transatlantic basis, confirming the global
characters of these two sub industries (the most related to global capital markets).
The following trends are affecting the banking industry and most likely will shape the
competition in the next several years:
• The market share for financial services that banks hold is declining, while securities firms,
mutual funds, and finance companies are getting a growing share of available customers. In the
[9]
United States, the share of total assets held by banks and other depository institutions relative to
all financial intermediaries fell from 56% in 1982 to 42% in 1991, and this downward tendency
is likely to continue. Banks will face growing competition from financial service companies and
nonbank firms.
• To remain competitive, commercial banks will have to exploit new sources of income: Offering
new services (selling mutual funds or insurance policies).Charging customers with noninterest
fees. Offering new services through the phone and the web, Entering into joint ventures with
independent companies, Entering new geographic markets yielding higher returns.
• Banks will need more expertise to manage new sources of risk. Market risk management
models must become an integral part of a bank’s risk management culture.
[10]
RETAIL BANKING
The two main forces changing the competitive environment in retail banking are technological
change and aggressive new competitors:
1. Technological change is creating huge problems for traditional banks with extended and costly
branch networks. The major technological issues affecting the retail banking business are the rise
of telephone banking and the impressive diffusion of the Web-based banking. These innovations
make branch networks less important and national boundaries irrelevant. Computer banking,
either through the Internet or proprietary networks, is gaining a growing and growing
importance.
2. New unrelated competitors are entering the retail banking market. In the United Kingdom, the
country’s two biggest retailers, Sainsbury’s and Tesco, have gone into partnership with the Bank
of Scotland and the Royal Bank of Scotland, respectively. Sainsbury’s Bank offers a savings
account, two credit cards, and personal loans and mortgages, with more services to follow. Tesco
Personal Finance offers only a savings account and a credit card, but aims to expand its range.
These trends do not indicate that traditional branch banking is going to die, but that the
competitive scenario is changing. High-street banks have expensive branch networks and
relatively outdated procedures, with far greater operating costs than their new, more flexible
rivals.
[11]
PRIVATE BANKING
One of the most interesting trends affecting the banking industry is the development of domestic
private banking services. These services, once provided only to aristocrats, are gaining
popularity and seem to be an attractive, fast-growing market. Retail banks are no longer targeting
only the super rich, who hold a small proportion of the total wealth, but also people with,
relatively speaking, high income. Private banking is basically an asset management service and
represents a natural area for banks in time of margin squeezing and increased competition. Risks
of adverse market movements are transferred, at least partially, to customers, while banks
increase their fee-based income. Nevertheless, commercial banks must be aware of actual and
potential competitors including traditional private banks, investment banks, converted building
societies, and insurers. Private banking creates opportunities for commercial banks, but also adds
new problems in the following areas:
• Bank organization.
• Risk management
[12]
GLOBAL INVESTMENT BANKING
Investment banking is by far the most globalized segment of the financial service industries.
Commercial banks today are starting to offer investment-banking and merchant banking services
to larger corporations, thus entering in direct competition with prestigious investment houses.
• A slowing population growth and increasing average life expectancy and per capita income.
Since Western governments need to cut expenditures for old-age benefits to keep deficits under
control, there will be an increase in the importance of private pensions, mutual funds, and private
banking operations.
• The growing importance of a clear strategic intent in the banking industry. Banks, especially
commercial banks, will be obliged to rethink their strategic positioning. While some banks are
opting to offer a vast variety of products/services on a global scale, others are focusing on some
specific market segment (retail banking, private banking, corporate banking) or specific
geographic area.
• New competitors are entering the financial service business. In the retail banking industry,
large department stores in the United Kingdom have entered the market for personal and
mortgage loans, primarily to retain their customers.
[14]
These trends are having and will have a major impact on banks’ and financial institutions’ risk
management process. Contamination also means that firms in the different sub industries will
face risks that were once specific to another sub industry. The relaxation of the Glass-Steagall
Act in the United States, and similar processes of deregulation in many other leading countries, is
forcing even commercial banks to dedicate growing attention to market risk management and
liquidity risk management, in addition to the more traditional credit risk and interest rate risk.
Investment banks). There can be cost-saving potential, particularly in computer systems. But
complexity explodes. Top managers have to handle a far more complicated business; front-line
service staff has to sell a richer mix of products.
2. High degree of contamination. It must cover the full spectrum of financial products and
services.
3. High degree of geographic diversification. A significant portion of its assets must be outside
its original domestic market.
[15]
CHAPTER 3
[16]
Banks are the most significant players in the Indian financial market. They are the biggest
purveyors of credit, and they also attract most of the savings from the population. Dominated by
public sector, the banking industry has so far acted as an efficient partner in the growth and the
development of the country. Driven by the socialist ideologies and the welfare state concept,
public sector banks have long been the supporters of agriculture and other priority sectors. They
act as crucial channels of the government in its efforts to ensure equitable economic
development.
The Indian banking can be broadly categorized into nationalized (government owned), private
banks and specialized banking institutions. The Reserve Bank of India acts a centralized body
monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks
in 1969, the public sector banks or the nationalized banks have acquired a place of prominence
and has since then seen tremendous progress. The need to become highly customer focused has
forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of
products and services through the net has galvanized players at all levels of the banking and
financial institutions market grid to look anew at their existing portfolio offering. Conservative
banking practices allowed Indian banks to be insulated partially from the Asian currency crisis.
Indian banks are now quoting al higher valuation when compared to banks in other Asian
countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge
Non Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in
approach and armed with efficient branch networks focus primarily on the ‘high revenue’ niche
retail segments.
The Indian banking has finally worked up to the competitive dynamics of the ‘new’ Indian
market and is addressing the relevant issues to take on the multifarious challenges of
globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive
players capable of meeting the multifarious requirements of the large customer’s base. Private
Banks have been fast on the uptake and are reorienting their strategies using the internet as a
medium The Internet has emerged as the new and challenging frontier of marketing with the
conventional physical world tenets being just as applicable like in any other marketing medium.
[17]
The Indian banking has come from a long way from being a sleepy business institution to a
highly proactive and dynamic entity. This transformation has been largely brought about by the
large dose of liberalization and economic reforms that allowed banks to explore new business
opportunities rather than generating revenues from conventional streams (i.e. borrowing and
lending). The banking in India is highly fragmented with 30 banking units contributing to
almost 50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the
government) continue to be the major lenders in the economy due to their sheer size and
penetrative networks which assures them high deposit mobilization. The Indian banking can be
broadly categorized into nationalized, private banks and specialized banking institutions.
The Reserve Bank of India acts as a centralized body monitoring any discrepancies and
shortcoming in the system. It is the foremost monitoring body in the Indian financial sector.
The nationalized banks (i.e. government-owned banks) continue to dominate the Indian banking
arena. Industry estimates indicate that out of 274 commercial banks operating in India, 223
banks are in the public sector and 51 are in the private sector. The private sector bank grid also
includes 24 foreign banks that have started their operations here.
The liberalize policy of Government of India permitted entry to private sector in the banking,
the industry has witnessed the entry of nine new generation private banks. The major
differentiating parameter that distinguishes these banks from all the other banks in the
Indian banking is the level of service that is offered to the customer. Their focus has always
centered around the customer – understanding his needs, preempting him and consequently
delighting him with various configurations of benefits and a wide portfolio of products and
services. These banks have generally been established by promoters of repute or by ‘high
value’ domestic financial institutions.
The popularity of these banks can be gauged by the fact that in a short span of time, these banks
have gained considerable customer confidence and consequently have shown impressive growth
rates. Today, the private banks corner almost four per cent share of the total share of deposits.
Most of the banks in this category are concentrated in the high-growth urban areas in metros
[18]
(that account for approximately 70% of the total banking business). With efficiency being the
major focus, these banks have leveraged on their strengths and competencies viz. Management,
operational efficiency and flexibility, superior product positioning and higher employee
productivity skills.
The private banks with their focused business and service portfolio have a reputation of being
niche players in the industry. A strategy that has allowed these banks to concentrate on few
reliable high net worth companies and individuals rather than cater to the mass market. These
well-chalked out integrates strategy plans have allowed most of these banks to deliver
superlative levels of personalized services. With the Reserve Bank of India allowing these
banks to operate 70% of their businesses in urban areas, this statutory requirement has translated
into lower deposit mobilization costs and higher margins relative to public sector banks.
[19]
PEST ANALYSIS
Government and RBI policies affect the banking sector. Sometimes looking into the political
advantage of a particular party, the Government declares some measures to their benefits like
waiver of short-term agricultural loans, to attract the farmer’s votes. By doing so the profits of
the bank get affected. Various banks in the cooperative sector are open and run by the politicians.
They exploit these banks for their benefits. Sometimes the government appoints various
chairmen of the banks. Various policies are framed by the RBI looking at the present situation of
the country for better control over the banks.
ECONOMICAL ENVIROMENT
Banking is as old as authentic history and the modern commercial banking are traceable to
ancient times. In India, banking has existed in one form or the other from time to time. The
present era in banking may be taken to have commenced with establishment of bank of Bengal in
1809 under the government charter and with government participation in share capital.
Allahabad bank was started in the year 1865 and Punjab national bank in 1895, and thus, others
followed.
Every year RBI declares its 6 monthly policy and accordingly the various measures and rates are
implemented which has an impact on the banking sector. Also the Union budget affects the
banking sector to boost the economy by giving certain concessions or facilities. If in the Budget
savings are encouraged, then more deposits will be attracted towards the banks and in turn they
can lend more money to the agricultural sector and industrial sector, therefore, booming the
economy. If the FDI limits are relaxed, then more FDI are brought in India through banking
channels.
[20]
SOCIAL ENVIROMENT
Before nationalization of the banks, their control was in the hands of the private parties and only
big business houses and the effluent sections of the society were getting benefits of banking in
India. In 1969 government nationalized 14 banks. To adopt the social development in the
banking sector it was necessary for speedy economic progress, consistent with social justice, in
democratic political system, which is free from domination of law, and in which opportunities
are open to all. Accordingly, keeping in mind both the national and social objectives, bankers
were given direction to help economically weaker section of the society and also provide need-
based finance to all the sectors of the economy with flexible and liberal attitude. Now the banks
provide various types of loans to farmers, working women, professionals, and traders. They also
provide education loan to the students and housing loans, consumer loans, etc.
Banks having big clients or big companies have to provide services like personalized banking to
their clients because these customers do not believe in running about and waiting in queues for
getting their work done. The bankers also have to provide these customers with special
provisions and at times with benefits like food and parties. But the banks do not mind incurring
these costs because of the kind of business these clients bring for the bank.
Banks have changed the culture of human life in India and have made life much easier for the
people.
TECHNOLOGICAL ENVIROMENT
Technology plays a very important role in bank’s internal control mechanisms as well as services
offered by them. It has in fact given new dimensions to the banks as well as services that they
cater to and the banks are enthusiastically adopting new technological innovations for devising
new products and service.
[21]
The latest developments in terms of technology in computer and telecommunication have
encouraged the bankers to change the concept of branch banking to anywhere banking. The use
of ATM and Internet banking has allowed ‘anytime, anywhere banking’ facilities. Automatic
voice recorders now answer simple queries, currency accounting machines makes the job easier
and self-service counters are now encouraged. Credit card facility has encouraged an era of
cashless society. Today MasterCard and Visa card are the two most popular cards used world
over. The banks have now started issuing smartcards or debit cards to be used for making
payments. These are also called as electronic purse. Some of the banks have also started home
banking through telecommunication facilities and computer technology by using terminals
installed at customers home and they can make the balance inquiry, get the statement of
accounts, give instructions for fund transfers, etc. Through ECS we can receive the dividends
and interest directly to our account avoiding the delay or chance of loosing the post.
Today banks are also using SMS and Internet as major tool of promotions and giving great utility
to its customers. For example SMS functions through simple text messages sent from your
mobile. The messages are then recognized by the bank to provide you with the required
information. All these technological changes have forced the bankers to adopt customer-based
approach instead of product-based approach.
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of
the country. This is one of the main reasons of India’s growth process.
[22]
The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalization of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or
for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient
bank transferred money from one branch to other in two days. Now it is simple as instant
messaging or dials a pizza. Money has become the order of the day.
From 1786 till today, the journey of Indian Banking System can be segregated into three distinct
phases. They are as mentioned below:
To make this write-up more explanatory, we prefix the scenario as Phase I, Phase II and Phase
III.
PhaseI
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These
three banks were amalgamated in 1920 and Imperial Bank of India was established which started
as private shareholders banks, mostly European shareholders.
Exclusively by Indians Punjab National Bank Ltd. was set up in 1894 with headquarters at
Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara
Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.
[23]
During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the
functioning and activities of commercial banks, the Government of India came up with The
Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive
powers for the supervision of banking in India as the Central Banking Authority.
During those day’s public has lesser confidence in the banks. As an aftermath deposit
mobilisation was slow. Abreast of it the savings bank facility provided by the Postal department
was comparatively safer. Moreover, funds were largely given to traders.
PhaseII
Government took major steps in this Indian Banking Sector Reform after independence. In 1955,
it nationalised Imperial Bank of India with extensive banking facilities on a large scale especially
in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI
and to handle banking transactions of the Union and State Governments all over the country.
Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July,
1969, major process of nationalisation was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were
nationalised.
Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.
The following are the steps taken by the Government of India to Regulate Banking Institutions in
the Country:
[24]
• 1949: Enactment of Banking Regulation Act.
• 1955: Nationalisation of State Bank of India.
• 1959: Nationalisation of SBI subsidiaries.
• 1961: Insurance cover extended to deposits.
• 1969: Nationalisation of 14 major banks.
• 1971: Creation of credit guarantee corporation.
• 1975: Creation of regional rural banks.
• 1980: Nationalisation of seven banks with deposits over 200 crore.
After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of institutions.
PhaseIII
This phase has introduced many more products and facilities in the banking sector in its reforms
measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his
name which worked for the liberisation of banking practices.
Efforts are being put to give a satisfactory service to customers. Phone banking and net banking
is introduced. The entire system became more convenient and swift. Time is given more
importance than money.
The financial system of India has shown a great deal of resilience. It is sheltered from any crisis
triggered by any external macroeconomics shock as other East Asian Countries suffered. This is
all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not
yet fully convertible, and banks and their customers have limited foreign exchange exposure.
[25]
NATIONALIZATION OF BANKS IN INDIA
The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime
minister. It nationalized 14 banks then. These banks were mostly owned by businessmen and
even managed by them.
Before the steps of nationalization of Indian banks, only State Bank of India
(SBI) was nationalized. It took place in July 1955 under the SBI Act of
1955. Nationalization of Seven State Banks of India (formed subsidiary)
took place on 19th July, 1960.
The State Bank of India is India's largest commercial bank and is ranked one
of the top five banks worldwide. It serves 90 million customers through a
network of 9,000 branches and it offers -- either directly or through
subsidiaries -- a wide range of banking services.
The second phase of nationalisation of Indian banks took place in the year
1980. Seven more banks were nationalised with deposits over 200 crores.
Till this year, approximately 80% of the banking segments in India were
under government ownership.
After the nationalisation of banks in India, the branches of the public sector
banks rose to approximately 800% in deposits and advances took a huge
jump by 11,000%.
[26]
BANKING STRUCTURE
The Indian banking industry, which has Reserve Bank of India as its
regulatory authority, is a mix of the public sector, private sector, and foreign
banks. The private sector banks are again split into old banks and new banks.
SCHEDULED BANKS
Scheduled commercial banks are those that come under the purview of the
Second Schedule of Reserve Bank of India (RBI) Act, 1934. The banks that
are included under this schedule are those that satisfy the criteria laid down
vide section 42 (60 of the Act). Some co-operative banks come under the
category of scheduled commercial banks though not all co-operative banks.
[27]
Public sector banks are those in which the Government of India or the RBI is
a majority shareholder. These banks include the State Bank of India (SBI)
and its subsidiaries, other nationalized banks, and Regional Rural Banks
(RRBs). Over 70% of the aggregate branches in India are those of the public
sector banks. Some of the leading banks in this segment include Allahabad
Bank, Canara Bank, Bank of Maharashtra, Central Bank of India, Indian
Overseas Bank, State Bank of India, State Bank of Patiala, State Bank of
Bikaner and Jaipur, State Bank of Travancore, Bank of Baroda, Bank of
India, Oriental Bank of Commerce, UCO Bank, Union Bank of India, Dena
Bank and Corporation Bank.
Private Banks are essentially comprised of two types: the old and the new.
The old private sector banks comprise those, which were operating before
Banking Nationalization Act was passed in 1969. On account of their small
size, and regional operations, these banks were not nationalized. These banks
face intense rivalry from the new private banks and the foreign banks. The
banks that are included in this segment include: Bank of Madura Ltd. (now a
part of ICICI Bank), Bharat Overseas Bank Ltd., Bank of Rajasthan,
Karnataka Bank Ltd., Lord Krishna Bank Ltd., The Catholic Syrian Bank
Ltd., The Dhanalakshmi Bank Ltd., The Federal Bank Ltd., The Jammu &
Kashmir Bank Ltd., The Karur Vysya Bank Ltd., The Lakshmi Vilas Bank
Ltd., The Nedungadi Bank Ltd. and Vysya Bank. The new private sector
banks were established when the Banking Regulation Act was amended in
1993. Financial institutions promoted several of these banks. After the initial
licenses, the RBI has granted no more licenses. These banks are gearing up
[28]
to face the foreign banks by focusing on service and technology. Currently,
these banks are on an expansion spree, spreading into semi-urban areas and
satellite towns. The leading banks that are included in this segment include
Bank of Punjab Ltd., Centurion Bank Ltd., Global Trust Bank Ltd., HDFC
Bank Ltd., ICICI Banking Corporation Ltd., IDBI Bank Ltd., IndusInd Bank
Ltd. and UTI Bank Ltd.
FOREIGN BANKS
[29]
INDIAN BANKS AND THE GLOBAL CHALLENGES
The enhanced role of the banking sector in the Indian economy, the
increasing levels of deregulation along with the increasing levels of
competition have facilitated globalisation of the India banking system and
placed numerous demands on banks. Operating in this demanding
environment has exposed banks to various challenges. The last decade has
witnessed major changes in the financial sector - new banks, new financial
institutions, new instruments, new windows, and new opportunities - and,
along with all this, new challenges. While deregulation has opened up new
vistas for banks to augment revenues, it has entailed greater competition and
consequently greater risks. Demand for new products, particularly
derivatives, has required banks to diversify their product mix and also effect
rapid changes in their processes and operations in order to remain
competitive in the globalised environment.
The benefits of globalisation have been well documented and are being
increasingly recognised. Globalisation of domestic banks has also been
facilitated by tremendous advancement in information and communications
technology. Globalisation has thrown up lot of opportunities but
accompanied by concomitant risks. There is a growing realisation that the
ability of countries to conduct business across national borders and the
ability to cope with the possible downside risks would depend, inter-alia, on
the soundness of the financial system and the strength of the individual
participants. Adoption of appropriate prudential, regulatory, supervisory, and
technological framework on par with international best practices enables
strengthening of the domestic banking system, which would help in
fortifying it against the risks that might arise out of globalisation. In India,
[30]
strengthening of the banking sector for facing the pressures that may arise
out of globalisation by adopting the banking sector reforms in a calibrated
manner, which followed the twin governing principles of non-disruptive
progress and consultative process.
Few broad challenges faced by the Indian banks in the following areas, viz.,
enhancement of customer service; application of technology; implementation
of Basel II; improvement of risk management systems; implementation of
new accounting standards; enhancement of transparency & disclosures; and
compliance with KYC aspects. If we were to identify a few global
challenges which banks face today, I am sure we would cover some common
ground. An overview of the global challenges would include the following:
Basel II implementation; enhancing corporate governance; alignment of
regulatory and accounting requirements; outsourcing risks; and application
of advanced technology. I propose to cover these aspects now.
BASE II IMPLEMENTATION
[31]
Comprehensive risk management: Under Basel I banks were focused on
credit and market risks. Basel II has brought into focus a larger number of
risks requiring banks to focus on a larger canvas. Besides the increase in the
number of risks, banks are now beginning to focus on their inter-linkages
with a view to achieve a more comprehensive risk management framework.
Basel II implementation, therefore, is being increasingly seen as a medium
through which banks constantly endeavour to upgrade the risk management
systems to address the changing environment. Further, in the initial stages,
banks were managing each risk in isolation. It is no longer adequate to
manage each risk independently. Enterprises worldwide are, therefore, now
putting in place an integrated framework for risk management which is
proactive, systematic and spans across the entire organisation. Banks in
India are also moving from the individual silo system to an enterprise wide
risk management system. While the first milestone would be risk integration
across the entity, banks are also aware of the desirability of risk aggregation
across the group both in the specific risk areas as also across the risks. Banks
would, therefore, be required to allocate significant resources towards this
endeavour.
[32]
would need to shore up the capital levels not only for complying with these
requirements but also for supporting the balance sheet growth. With a view
to enhancing the options available to banks for augmenting their capital
levels, the Reserve Bank has recently permitted banks to issue new capital
instruments, including perpetual instruments. A notable feature of these
instruments is that these are designed to help banks in not only managing
their capital effectively but also efficiently.
In view of the importance of the banking system for financial stability, sound
corporate governance is not only relevant at the level of the individual bank,
but is also a critical ingredient at the system level. Effective risk
management systems determine the health of the financial system and its
ability to survive economic shocks. To a large extent, many risk
management failures reflect a breakdown in corporate governance which
arise due to poor management of conflicts of interest, inadequate
understanding of key banking risks, and poor Board oversight of the
[33]
mechanisms for risk management and internal audit. Corporate governance
is, therefore, the foundation for effective risk managements in banks and
thus the foundation for a sound financial system2. Therefore, the choices
which banks make when they establish their risk management and corporate
governance systems have important ramifications for financial stability.
These systems can affect how the institution functions and how others
perceive it in the marketplace.
[34]
One of the prime international standards considered relevant for ensuring a
safe and sound banking system is the ‘Core Principles for Effective Banking
Supervision’ issued by the Basel Committee on Banking Supervision
(BCBS). Accounting standards are now a part of the set of twelve standards
that have been identified by the Financial Stability Forum as conducive to a
robust financial infrastructure. Financial reporting and prudential supervision
have slightly different perspectives. While the former is oriented towards
capturing the historical position, the latter has a forward looking element
particularly with reference to measurement of impairment and capital. An
important challenge, therefore, is to ensure that accounting standards and
prudential frameworks are mutually consistent. While working towards
achieving this consistency between the two sets of standards, it is essential
for the regulators to be in a position to address any implications that the
changes in accounting standards may have for the safety and soundness of
banks.
[35]
Financial Reporting Standard 7, International Accounting Standards 32 and
39. The proposed Accounting Standards will be of considerable significance
for financial entities and could therefore have implications for the financial
sector. The formal introduction of these Accounting Standards by the ICAI
is likely to take some time in view of the processes involved. In the
meanwhile, the Reserve Bank is considering the need for banks and financial
entities adopting the broad underlying principles of IAS 39. Since this is
likely to give rise to some regulatory / prudential issues all relevant aspects
are being comprehensively examined. The proposals in this regard would, as
is normal, be discussed with the market participants before introduction.
Adoption and implementation of these principles are likely to pose a great
challenge to both the banks and the Reserve Bank.
OUTSOURCING RISKS
[36]
security/ confidentiality, and comply with legal and regulatory requirements
can lead to financial losses/ reputational risk for the bank and could also lead
to systemic risks for the entire banking system in a country. It would
therefore be imperative for the bank outsourcing its activities to ensure
effective management of these risks.
CAPACITY BUILDING
A relevant point in this regard is that capacity building should be across the
institution and not confined to any particular level or any particular area. The
demand for better skills can be met either from within or from outside. It
would perhaps be worthwhile to first glean through the existing resources to
[38]
identify misplaced or hidden or forgotten resources and re-position them to
boost the bank’s efforts to capitalise on available skills. This does not
undermine the benefits that a bank may derive by meeting their requirements
from the market, but is only intended to prioritise the process.
CONCLUSION
The global challenges which banks face are not confined only to the global
banks. These aspects are also highly relevant for banks which are part of a
globalised banking system. Further, overcoming these challenges by the
other banks is expected to not only stand them in good stead during difficult
times but also augurs well for the banking system to which they belong and
will also equip them to launch themselves as a global bank.
[39]
[40]
TRANSFORMATION INITIATIVES NEEDED FOR BANKS
Strategy
Sales & Marketing strategy for both retail & wholesale banking
Expanding geographies
Brand
[41]
Organization restructuring
Cost efficiency
[42]
Assessing competencies of people across levels and match the
position with the skill-set
Designing and implementing a new PMS for restructured
organization
With years, banks are also adding services to their customers. The Indian
banking industry is passing through a phase of customers market. The
customers have more choices in choosing their banks. A competition has
been established within the banks operating in India.
BANK ACCOUNT
[43]
• Bank Savings Account - Bank Savings Account can be opened for
eligible person / persons and certain organisations / agencies (as
advised by Reserve Bank of India (RBI) from time to time)
• Bank Current Account - Bank Current Account can be opened by
individuals / partnership firms / Private and Public Limited
Companies / HUFs / Specified Associates / Societies / Trusts, etc.
• Bank Term Deposits Account - Bank Term Deposits Account can be
opened by individuals / partnership firms / Private and Public
Limited Companies / HUFs/ Specified Associates / Societies / Trusts,
etc.
• Bank Account Online - With the advancement of technology, the
major banks in the public and private sector has facilitated their
customer to open bank account online. Bank account online is
registered through a PC with an internet connection. The advent in
opening an account.
PLASTIC MONEY
Credit card
Credit cards in India are gaining ground. A number of banks in India are
encouraging people to use credit card. The concept of credit card was used in
1950 with the launch of charge cards in USA by Diners Club and American
Express. Credit card however became more popular with use of magnetic
strip in 1970.
Credit card in India became popular with the introduction of foreign banks in
the country.
Credit cards are financial instruments, which can be used more than once to
borrow money or buy products and services on credit. Basically banks, retail
stores and other businesses issue these.
[44]
Major Banks issuing Credit Card in India
MasterCard
VISA Card
AmericanExpress
[45]
The world's favorite card is American Express Credit Card. More than 57
million cards are in circulation and growing and it is still growing further.
Around US $ 123 billion was spent last year through American Express
Cards and it is poised to be the world's No. 1 card in the near future. In a
regressive US economy last year, the total amount spent on American
Express cards rose by 4 percent. American Express cards are very popular in
the U.S., Canada, Europe and Asia and are used widely in the retail and
everyday expenses segment.
DinersClubInternational
Diners Club is the world's No. 1 Charge Card. Diners Club cardholders
reside all over the world and the Diners Card is a all-time favourite for
corporates. There are more than 8 million Diners Club cardholders. They are
affluent and are frequent travelers in premier businesses and institutions,
including Fortune 500 companies and leading global corporations.
JCBCards
Debit Card
Debit cards, also known as check cards look like credit cards or ATM cards
(automated teller machine card). It operate like cash or a personal check.
Debit cards are different from credit cards. Credit card is a way to "pay
later," whereas debit card is a way to "pay now." When we use a debit card,
our money is quickly deducted from the bank account.
Debit cards are accepted at many locations, including grocery stores, retail
stores, gasoline stations, and restaurants. Its an alternative to carrying a
checkbook or cash.
With debit card, we use our own money and not the issuer's money.
In India almost all the banks issue debit card to its account holders.
[47]
Features of Debit Card
LOANS
Banks in India with the way of development have become easy to apply in
loan market. The following loans are given by almost all the banks in the
country:
• Personal Loan
• Car Loan or Auto Loan
[48]
• Loan against Shares
• Home Loan
• Education Loan or Student Loan
In Personal Loan, one can get a sanctioned loan amount between Rs 25,000
to 10,00,000 depending upon the profile of person applying for the loan.
SBI, ICICI, HDFC, HSBC are some of the leading banks which deals in in
personal loan.
Almost all the banks have jumped into the market of car loan which is also
sometimes termed as auto loan. It is one of the fast moving financial
products of banks. Car loan / auto loan are sanctioned to the extent of 85%
upon the ex-showroom price of the car with some simple paper works and a
small amount of processing fee.
Loan against shares is very easy to get because liquid guarantee is involved
in it.
Home loan is the latest craze in the banking sector with the development of
the infrastructure. Now people are moving to township outside the city.
More number of townships are coming up to meet the demand of 'house for
all'. The RBI has also liberalised the interest rates of home loan in order to
match the repayment capability of even middle class people. Almost all
banks are dealing in home loan. Again SBI , ICICI , HDFC , HSBC are
leading.
[49]
MONEY TRANSFER
Beside lending and depositing money, banks also carry money from one
corner of the globe to another. This act of banks is known as transfer of
money. This activity is termed as remittance business. Banks generally issue
Demand Drafts, Banker's Cheques, Money Orders or other such instruments
for transferring the money. This is a type of Telegraphic Transfer or Tele
Cash Orders.
It has been only a couple of years that banks have jumped into the money
transfer businessess in India. The international money transfer market grew
9.3% from 2003 to 2004 i.e. from US$213 bn. to US$233 bn. in 2004.
Economists say that the market of money transfer will further grow at
cumulative 10.1% average growth rate through 2008.
With the use of high technology and varieties of product it seems that "Free"
money transfers will become commonplace. We will see more bundling of
tailored money services by banks and non-traditional entrants that will
include "free" money transfers. Many banks will even use money transfer
services as loss-leaders inorder to generate account openings and cross-sell
opportunities. The price evolution of money transfer products for banks will
be similar to that of consumer bill pay-the product is worth giving away as
an account acquisition tool to win overall market share and establish banking
relationships.
ATM money transfer card products have had terrible bank adoption rates
since being introduced in the last three to four years. Remittees who are
highly educated and have been already been exposed to ATM technology in
receiving countries tend to have an interest in this product. Money transfer to
India is one of the most important part played by the banks. This service
provide peace of mind to either the NRIs or to the visitors to India. Many
[50]
Indian banks have ATM'S (automatic teller machine), enable to draw
foreign currency in India.
Visa has recently introduced the 'Visa Money Transfer' option for its savings
and current account holder of any bank with a visa debit card. This facility
helps its customer to transfer funds from his bank account to any visa card,
either debit or credit within India.
[51]
• Transfer immediately or on schedule date. Your account will be
debited according to the date mentioned.
MOBILE BANKING
Mobile Banking works on the 'Text Messaging Facility' also called the SMS
that is available on mobile phones. This facility allows sending a short text
message from mobile phone instead of making a phone call.
All that is need to do is, to type out a short text message on mobile phone
and send it out to a specific mobile banking number given by the bank .The
response is sent as an SMS message, all in the matter of a few seconds.
[52]
• IPIN Re-generation request
Mobile banking is popular among the Rs.1 to 5 lakhs per year income group
with almost 60% of mobile banking users falling in the income bracket, an
indicator of adoption of this service by younger generation.
PHONE BANKING
When one dials in to Phone Banking, a voice prompt will guide him through
the various transactions. He may also talk to a Phone Banker, who will
provide him with the required assistance.
INTERNET BANKING
With cybercafes and kiosks springing up in different cities access to the Net
is going to be easy. Internet banking (also referred as e banking) is the latest
in this series of technological wonders in the recent past involving use of
Internet for delivery of banking products & services. Even the Morgan
Stanley Dean Witter Internet research emphasised that Web is more
important for retail financial services than for many other industries.
Internet banking is changing the banking industry and is having the major
effects on banking relationships. Banking is now no longer confined to the
[54]
branches were one has to approach the branch in person, to withdraw cash or
deposit a cheque or request a statement of accounts. In true Internet banking,
any inquiry or transaction is processed online without any reference to the
branch (anywhere banking) at any time. Providing Internet banking is
increasingly becoming a "need to have" than a "nice to have" service. The
net banking, thus, now is more of a norm rather than an exception in many
developed countries due to the fact that it is the cheapest way of providing
banking services.
Indian banks are going for the retail banking in a big way. However, much is
still to be achieved. This study which was conducted by students of IIML
shows some interesting facts:
Foreign & Private banks are much advanced in terms of the number of
sites & their level of development.
[55]
• Special Promotions &
Offers
• Ticket Booking
• Online loans and
credit cards
• Online Shopping
• Online Tax payment
• Prepaid mobile
recharge
[56]
Chapter 4
Bank Profile
ICICI BANK
ICICI Bank is India's second-largest bank with total assets of Rs. 3,562.28 billion (US$ 77
billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$ 648.8 million) for the
nine months ended December 31, 2009. The Bank has a network of 1,654 branches and about
4,883 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking
products and financial services to corporate and retail customers through a variety of delivery
channels and through its specialised subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management. The Bank currently
has subsidiaries in the United Kingdom, Russia and Canada, branches in United States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and
representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.
Corporate Profile
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock
Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE).
ICICI Bank is India's second-largest bank with total assets of Rs. 3,562.28 billion (US$ 77
billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$ 648.8 million) for the
nine months ended December 31, 2009. The Bank has a network of 1,645 branches and about
4,883 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking
products and financial services to corporate and retail customers through a variety of delivery
channels and through its specialised subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management. The Bank currently
has subsidiaries in the United Kingdom, Russia and Canada, branches in United States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and
representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia. UK subsidiary has established branches in Belgium and Germany.
Personal banking Services
Mobile Banking Services offered by ICICI Bank
IMOBILE
You can get details and information regarding all our services – everything
from loans, accounts and deposits to additional services like financial
counselling, interactive features like calculators for loans and premiums, and
lots more.If your TV service is coming to you through Satellite DTH or
Digital Cable, you can avail of our TV Banking from anywhere in India
Benefits
It doesn’t require an Internet connection
It's available 24x7
Zero charges
You can obtain all the information you need about the available banking products
and services on the TV screen itself
HDFC BANK
The Housing
Development
Finance Corporation Limited (HDFC) was amongst the first to receive an 'in
principle' approval from the Reserve Bank of India (RBI) to set up a bank in
the private sector, as part of the RBI's liberalisation of the Indian Banking
Industry in 1994. The bank was incorporated in August 1994 in the name of
'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC
Bank commenced operations as a Scheduled Commercial Bank in January
1995.
Promoter
Business focus
Capital Structure
As on 31st December, 2009 the authorized share capital of the Bank is Rs.
550 crore. The paid-up capital as on said date is Rs. 455,23,65,640/-
(45,52,36,564 equity shares of Rs. 10/- each). The HDFC Group holds 23.87
% of the Bank's equity and about 16.94 % of the equity is held by the ADS
Depository (in respect of the bank's American Depository Shares (ADS)
Issue). 27.46 % of the equity is held by Foreign Institutional Investors (FIIs)
and the Bank has about 4,58,683 shareholders.
The shares are listed on the Bombay Stock Exchange Limited and The
National Stock Exchange of India Limited. The Bank's American Depository
Shares (ADS) are listed on the New York Stock Exchange (NYSE) under the
symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed
on Luxembourg Stock Exchange under ISIN No US40415F2002.
On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was
formally approved by Reserve Bank of India to complete the statutory and regulatory approval
process. As per the scheme of amalgamation, shareholders of CBoP received 1 share of HDFC
Bank for every 29 shares of CBoP. The merged entity will have a strong deposit base of around
Rs. 1,22,000 crore and net advances of around Rs. 89,000 crore. The balance sheet size of the
combined entity would be over Rs. 1,63,000 crore. The amalgamation added significant value to
HDFC Bank in terms of increased branch network, geographic reach, and customer base, and a
bigger pool of skilled manpower.
In a milestone transaction in the Indian banking industry, Times Bank Limited (another new
private sector bank promoted by Bennett, Coleman & Co. / Times Group) was merged with
HDFC Bank Ltd., effective February 26, 2000. This was the first merger of two private banks in
the New Generation Private Sector Banks. As per the scheme of amalgamation approved by the
shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received
1 share of HDFC Bank for every 5.75 shares of Times Bank.
HDFC TECHNOLOGY
The Bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world
class bank. The Bank's business is supported by scalable and robust systems
which ensure that our clients always get the finest services we offer.
The Bank has prioritised its engagement in technology and the internet as
one of its key goals and has already made significant progress in web-
enabling its core businesses. In each of its businesses, the Bank has
succeeded in leveraging its market position, expertise and technology to
create a competitive advantage and build market share.
Management
Mr. Jagdish Capoor took over as the bank's Chairman in July 2001. Prior to
this, Mr. Capoor was a deputy governor of the reserve bank of india.
The Managing Director, Mr. Aditya Puri, has been a professional banker for
over 25 years, and before joining HDFC Bank in 1994 was heading
Citibank's operations in Malaysia.
Personal Loans
Home Loans
Two Wheeler Loans
New Car Loans
Used Car Loans
Overdraft against Car
Express Loans
Loan against Securities
Loan against Property
Commercial Vehicle Finance
Working Capital Finance
Construction Equipment Finance
Offers & Deals
CustomerCenter
Mutual Funds
Insurance
Bonds
Financial Planning
Knowledge Centre
Equities & Derivatives
Mudra gold bar
E. Payment Services
Net Safe
F. Access Your Bank
One View
Insta Alerts
Mobile Banking
ATM
Phone Banking
Branch Network
G. Cards
The bank is entering into many new businesses with strategic tie ups
– Pension Funds, General Insurance, Custodial Services, Private
Equity, Mobile Banking, Point of Sale Merchant Acquisition,
Advisory Services, structured products etc – each one of these
initiatives having a huge potential for growth.
eZ-trade@sbi FOREIGN
SBI VISHWA INWARD
YATRA REMITTANCE
FOREIGN LOCKER
TRAVEL CARD
PAY ROLL
CARDS
ATM SERVICES
GIFT CARDS
GIFT CHEQUES
INTERNET
BANKING
Online Trading
SBI’s value proposition is based on Unmatched Expertise, State-Of-Art Technology And
Operational Ease that will redefine the way india trades.
State Bank of India in alliance with SBICap Securities Limitedand Motilal Oswal Securities
Limited offers an online trading account which will let you trade from the comfort of your home
or office either through the internet. This service provides you with a 3-in1 account which is an
integrated platform of savings bank a/c, demat a/c and an online trading a/c to give you a
convenient and paper free trading experience under one roof.
eZ -Pay Card
Payment of salaries to employees who will be required to work at different locations is generally
a difficult proposition for Employers as a single Banking arrangement can not be made for all
employees. The SBI eZ-Pay card , a prepaid plastic card issued in Indian Rupees in association
with VISA international, is the right solution in such cases. Periodical payments like salary,
payment of TA/ Medical/ incentives etc. can be loaded on to the card from a single point and the
funds are available to the employees immediately.
The SBI eZ-Pay card is a Pre-paid ATM-cum-Debit card usable at all VISA-enabled ATMs
through PIN and at Merchant establishments/ Point of Sale through PIN/ Signature,
in India, Nepal & Bhutan. The cardholder need not visit any Branch to withdraw his money.
Balance enquiry can be made either through ATM or through Internet free of charge.
Away from home, bills can be paid or money sent to the loved ones or balance enquiries done
anytime 24x7!!! That is what SBI FreedoM offers -convenience, simple, secure, anytime and
anywhere banking.
The service is presently available on java enabled mobile phones over SMS/ GPRS/ WAP as also
non java phones with GPRS connection. The service can be availed over the free GPRS facilities
offered by various mobile service providers. The services for other non-Java mobile phonesunder
development and will be offered using Unstructured Supplementary Services Data (USSD).
ATM Services
State Bank offers convenience of over 8000 ATMs in India, the largest network in the country
and continuing to expand fast! This means that you can transact free of cost at the ATMs of State
Bank Group (This includes the ATMs of State Bank of India as well as the Associate Banks –
namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State
Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, and State Bank of Travancore)
and wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State
Bank ATM-cum-Debit (Cash Plus) card.
Gift Cards
Presenting Gifts to Employees is an integral and unique culture in India. Traditionally, gifts have
been given to employees in the form of cash or kind. With the advancement of Banking, Gift
Cheques were introduced, allowing the employees to use the money according to their wishes.
These cheques, however, are accepted at the issuing bank branches only. The SBI Gift Card,
issued in association with VISA International, is one such product which gives the comfort of
convenience and wide acceptability.
Gift Card is a Pre-paid Plastic Card supported by Magnetic-strip based technology. It is usable at
all VISA enabled Merchant Establishments and POS by signature/ PIN. It is a perfect substitute
for Gift Vouchers sold by many retail houses as its use is not restricted to any particular
Merchant Establishment/ Point of Sale.
Internet banking
Simple, fast and convenient - anytime -anywhere - always open. You can now check your
account balances, view your account, request for cheque book, drafts, Bankers cheques, stop
cheque payment and issue standing instructions. You can also transfer funds to your other
accounts at the Branch, request for third party transfers, invest and renew Term Deposits.
RBIEFT
Inter-bank Electronic Funds Transfer facility of the Reserve Bank of India (RBI - EFT) is
available with our branches in the clearing zone of Service Branches at Kolkata, Mumbai ,New
delhi and Chennai.
Bank of Baroda
Bank of Baroda India
The Bank of Baroda was established in the year 1908 in Baroda. Ever since its inception, the
bank has been growing and expanding its branches successfully. At the turn of a century, the
bank has its presence in 25 countries across the world. Bank of Baroda has progressively taken a
step towards commitment and values by providing uncompromising standards of service to its
customers, stakeholders, employees and the like.
The Bank of Baroda was started on 20th July 1908 under the Companies Act of 1887. The initial
capital invested was Rs. 10 Lakhs. The Maharaja was none other than Sayajirao Gaekwad who,
with his visionary insight, planned the beginning of a reputed journey which over the years,
came to be known as the Bank of Baroda.
It is interesting to note that during the period of 1913 to 1917; almost 87 banks in India
succumbed to a financial crisis. However, the Bank of Baroda survived the economic depression
by dint of its financial integrity, business prudence and concern uncompromising concern about
its customers and clients. This has transcended down to the present ages and has become the
motto of the bank.
INITIATIVES
Marketing-Initiatives
The mid-eighties marked the beginning of the shift to a buyers` market. The Bank orchestrated
its business strategies around the centrality of the customer. It diversified into areas of merchant
banking, housing finance, credit cards and mutual funds. A string of segment specific branches
entrenched operations in the profitable markets. Overseas operations were revamped and
structural changes intensified in the territories to cater to second generation NRIs. Slowly but
surely, the move to become a one stop financial supermarket had been set in motion. Service
delivery standards were stipulated.
Technology was adopted to add punch. Employees across the board were inculcated with the
marketing concept. Aggressive marketing became the new business philosophy.
People-Initiatives
Bank of Baroda has always had an immense faith in the infinite potential of its people. This has
been historically demonstrated in its recruitment practices, developmental initiatives, placement
processes and promotion policies. Strategic HR interventions like, according cross border and
cross cultural work exposure to its managers, hiring diverse functional specialists to support line
functionaries and complementing the technical competencies of its people by imparting
conceptual, managerial and leadership skills, gave the Bank competitive advantage. The
elaborate man management policies also made the Bank a breeding ground for business leaders.
The Bank provided around a dozen CEOs to the industry- men who went on to build other great
institutions. People initiatives were blended with IR initiatives to create an effectively
harmonious workplace, where everyone prospered.
Financial-Initiatives
New norms for capital adequacy required new capital management strategies. In 1995 the Bank
raised Rs 300 crores through a Bond issue. In 1996 the Bank tapped the capital market with an
IPO of Rs 850 crores, Despite adverse market conditions prevailing then, the issue was over
subscribed, reflecting the positive public perception of the Bank's fundamental financial strength.
Digital-Initiatives
Bank of Baroda pioneered the shift from manual operating systems to a computerized work
environment. Starting with ledgers, to ledger posting machines, through ALPMs, the Bank
graduated to the use of Unix based systems to Mainframes, to client server based Total Branch
Mechanization Systems. Today, the Bank has 1918 computerized branches, covering 70% of its
network and 91.64% of its business. Alive to the growing complexities of an intensely
competitive marketplace and the mounting expectations of customers fuelled by this competition,
the Bank reworked its distribution strategy. It ventured beyond the brick and mortar delivery
channel into ATMs and the OmniBOB range of anytime, anywhere electronic channels of PC
banking, telephone banking. The e-banking products used state of the art technologies like digital
certificates, smart card authentication and secure networking.
The new IT strategy, in the process of implementation will see the deployment of Core Banking
Systems, Multi Service Transaction Switch, Payment Gateways - all geared to deliver
convenience banking.
Quality-Initiatives
In its relentless striving for quality perfection, the Bank secured the ISO 9001:2000
certification for 15 branches. By end of the current financial, the Bank is targeting 54 more
branches for this quality certification.
The-Future
Revolutionary and discontinuous changes in the operating environment are a stark reminder that
business success is 'impermanent'. The emergence of IT as a major driver for change, has
accentuated the need to initiate a major transformation program. The conversion to an IT savvy,
market driven bank will be a prerequisite to survival and growth. A major and strategic step in
hi-tech, was the establishment of the Integrated Treasury branch, as a forerunner to full-fledged
global treasury operations. Towards creating a future Bank of Baroda, the Bank has adopted a
revolutionary new business strategy that will be enabled by a revolutionary new IT strategy.
Actioning this strategy will position Bank of Baroda as India's uncontested premier bank.
At Bank of Baroda, change is a journey. It has a beginning. There will be no end. It will be a
long and difficult march. And the Bank will emerge stronger, more resilient and positioned to
become India's first bank of truly global standards. The relocation to the imposing Baroda
Corporate Centre, is a true reflection of the Bank's resolve to move ahead of the times. It will not
be out of place now, as it stands on the threshold of a digital era, to echo the same sentiments that
guided the Bank in its platinum jubilee year - 'a promising future is the sequel to a glorious past'.
This is a unique system under which Bank of Baroda helps companies and institutions making
heavy payments disburse these amounts directly into the bank accounts of the beneficiaries such
as account holders, shareholders, investors etc.
Key Benefits
Convenient receipt of money reduces trips made to the bank for depositing
dividend/interest warrants.
BOBCashReach:
A tailor made product for customers, that enables faster remittance of funds. A more economic,
convenient, smoother mode of operation which can be availed of by a well supported network of
centres.
Collection Services
OutwardBillsforCollection:
All branches of Bank of Baroda have the facility of collecting Cheques, Demand Drafts, Interest
Warrants, Dividend Warrants, Refund Orders, Clean Bills and Documentary Bills from
customers and various centres.. All Cheques and other instruments are collected into properly
introduced accounts and sent for collection on the day of receipt from the customers or the next
working day.
TimeBoundCollection:
All branches of Bank of Baroda are prompt in terms of the collections and forwarding of
cheques and other instruments. For metro cities, when financial instruments are presented in a
branch, the proceeds are credited to the customer's account on the same day in the following
week. For state capitals, (and centres with more than 100 branches), amount is credited only after
10 days. If these instruments are not collected within 14 days of lodgement, interest @ 2% per
annum over savings bank rate is paid and is credited to the customer's account, without the
customer having to claim it.
Branches also accept requests for collection of Loan Certificates / FDRs issued by Joint Stock
Cos.; prize money of Lottery Tickets, Foreign Currency Notes etc. The bank levies service
charges as stipulated from time to time.
InwardBillsforCollection:
Bills of Exchange, Promissory Notes, Hundi's etc. (Clean / Documentary), payable locally but
received from outstation branches / banks / parties are treated as "Inward Bills for Collection".
Also, Bills received from Bank of Baroda branches and from other banks, directly from drawers
or outstation parties are treated as Usance (??) Bills.
BOBQuick:
The Funds collected in this offering are credited to the customer's account within a guaranteed
period of 7 days. Bank of Baroda's BOB Quick ensures a better collection service, which
creates new avenues of income and ensures better investment of funds. All cheques amounting to
Rs. 25000/- and above are drawn on select banks and are eligible for "Quick inter station
clearing". Rs. 50/- per packet is charged for courier charges with an additional but nominal
collection charge.
NationalClearingSpecialFacilities:
This product is an undertaking by the Reserve Bank of India, for inter city clearing of cheques
between the four metropolitan centres of Delhi, Mumbai, Chennai and Calcutta.
Key Benefits
All financial instruments are cleared promptly with the introduction of mechanised cheque
processing, achieved through MICR technology. The concept of clearing has been extended
to clearance of outstation cheques also.
In addition to the four metropolitan centres, certain other centres have also been identified
for "One Way National Clearing". These centres are Nagpur, Ahmedabad, Hyderabad,
Bangalore, Pondicherry, Trichy, Trivandrum, Vellore, Baroda, Erode, Madurai, and more.
Baroda Internet Banking
"Baroda Connect" is an internet banking facility introduced as an alternative delivery channel for
rendering effective customer service on 24 X 7 basis. It offers unique customized services to
both Retail & Corporate customers.
Transfer funds immediately or schedule for a future date to self linked and third party
Pay through Online Tax - Direct and Indirect taxes online such as Excise Duty, Service
Tax, Customs Duty, Income Tax etc.
Pay through Baroda Easy Pay - utility bills like electricity, mobile etc , Donations,
Subscription, Travel plan booking online
Book Rail Ticket – IRCTC
Additionally a Corporate user can
o Set up multiple workflow of initiators and approvers for transactions and requests
o View all trade finance related facilities availed eg. Export / Import LC, Inland/
Export Bills, Forward Contracts Bank Guarantees, Packing Credit account etc
o Use upload facility for single debit-multiple credit, multiple debit-multiple credit
and single credit-multiple debit.
CHAPTER 5
M o s t P re fe rre d Ba n kin g Se rv ic e
7%
14%
11%
68%
18%
2%
4%
76%
3) Which factors do you consider before opening account or in purchasing new plan in a
particular bank?
A Financial position
B Current Market Position
C Goodwill
D Future prospects
E Services provided
Factors cons idered before opening an Account
12%
28% 8%
Financial position
Current M arket Pos ition
Goodwill
Future prospects
22%
Services provided
30%
20%
25%
22%
33%
Hypothesis:
H0: Preference towards public/private sector banks and age group are independent of
each other.
H1: Preference towards public/private sector banks and age group are dependent of each
other.
where
Calculation
observed frequency
Age group
Preference 55 and Total of
towards banks 18-25 26-35 36-45 46-55 above raw
Public sector
banks 13 21 31 36 16 117
Private sector
banks 22 16 23 19 3 83
Total of
column 35 37 54 55 19 200
Degree of freedom=(R-1)*(C-1)
= (2-1)*(5-1)
=4
Confidence level = 95 %
Therefore χ2tab = 9.49
Now in this case χ2cal > χ2tab hence null hypothesis is rejected and alternative hypothesis is
accepted.
Conclusion: Preference towards public/private sector banks and age group are dependent
on each other.
Now
Φ = [χ2 / n ]½
= 0.25
Hence
Cramour’s value = [Φ/Min (r-1) or (c-1)] ^½
= 0.5
Now
Reliability 1.35
Tangibility 0.46
Responsiveness 1.45
Assurance 1.74
Empathy 0.68
ICICI bank
1.8 1.74
1.6
1.45
1.35
Average gap score
1.4
1.2
1 Series1
0.8 0.68
0.6
0.46
0.4
0.2
0
Reliability Tangibility Responsiveness Assurance Empathy
Dimension
3. The banks willingness to help customers and provide prompt service. 11.2
4. The knowledge and courtesy of the bank's employees and their ability to 17.9
convey trust and confidence.
5. The caring individual attention the bank provides its customers. 21.7
Total: 100
SERVQUAL Weighted
Dimension Score
Reliability 1.11
Tangibility 1.93
Responsiveness 0.62
Assurance 0.94
Empathy 1.37
ICICI
2.50
1.93
2.00
weighted score
1.50 1.37
1.11 Series1
0.94
1.00
0.62
0.50
0.00
s
y
y
y
e
es
ilit
l it
th
nc
bi
ib
en
pa
ra
ia
ng
Em
siv
su
l
Re
Ta
As
on
sp
Re
Dimension
Reliability 0.28
Tangibility 0.4
Responsiveness 1.03
Assurance 0.9
Empathy 0.78
HDFC bank
1.2
1.03
Average gap score
1 0.9
0.78
0.8
0.6 Series1
0.4
0.4 0.28
0.2
s
y
hy
e
y
es
lit
lit
nc
t
bi
bi
en
pa
ra
i
ia
ng
Em
iv
su
l
Re
ns
Ta
As
o
sp
Re
Dimension
.
Gap score Dimension
Minimum Reliability
Maximum Responsiveness
Reliability 1.50
Tangibility 1.98
Responsiveness 0.93
Assurance 0.88
Empathy 1.11
HDFC
2.50
1.98
2.00
Weighted score
1.50
1.50
1.11 Series1
0.93 0.88
1.00
0.50
0.00
s
y
y
ce
y
es
ilit
th
lit
an
bi
en
ib
pa
ia
ur
ng
iv
Em
l
Re
ss
ns
Ta
A
o
sp
Re
Dimension
Tangibility 0.85
Responsiveness 1.2
Assurance 0.52
Empathy 1.32
SBI bank
1.4 1.32
1.2
1.2 1.13
Average gap score
1
0.85
0.8
Series1
0.6 0.52
0.4
0.2
0
s
y
y
y
e
es
ilit
lit
th
nc
bi
ib
en
pa
ra
ia
ng
Em
iv
su
l
Re
ns
Ta
As
o
sp
Re
Dimension
3. The banks willingness to help customers and provide prompt service. 6.8
5. The caring individual attention the bank provides its customers. 12.3
Total: 100
Reliability 1.23
Tangibility 0.92
Responsiveness 0.39
Assurance 2.92
Empathy 0.70
SBI
3.50
2.92
3.00
Weighted score
2.50
2.00
Series1
1.50 1.23
0.92
1.00 0.70
0.39
0.50
0.00
s
y
y
y
e
es
ilit
l it
th
nc
bi
ib
en
pa
ra
ia
ng
Em
siv
su
l
Re
Ta
As
on
sp
Re
Dimension
Weighted score Dimension
Maximum Assurance
Minimum Responsiveness
Reliability 0.64
Tangibility 0.42
Responsiveness 1.01
Assurance 0.61
Empathy 0.67
BOB
1.2
1.01
Average gap score
0.8 0.67
0.64 0.61
0.6 Series1
0.42
0.4
0.2
0
s
y
y
e
y
es
lit
th
lit
nc
bi
bi
en
pa
ra
i
ia
ng
Em
iv
su
l
Re
ns
Ta
As
o
sp
Re
Dimension
.
Gap score Dimension
Minimum Tangibility
Maximum Responsiveness
Reliability 1.27
Tangibility 1.65
Responsiveness 1.01
Assurance 1.92
Empathy 0.52
BOB
2.50
1.92
2.00
Weighted score
1.65
1.50 1.27
Series1
1.01
1.00
0.52
0.50
0.00
s
y
y
y
e
es
ilit
l it
th
nc
bi
ib
en
pa
ra
ia
ng
Em
siv
su
l
Re
Ta
As
on
sp
Re
Dimension
Reliability
1.6
1.4 1.35
1.2 1.13
Avg gap score
0.8 Series1
0.64
0.6
0.4 0.28
0.2
0
ICICI HDFC SBI BOB
Banks
Reliability
Gap score Bank
Minimum HDFC
Maximum ICICI
Tangibility
BANK GAP SCORE
ICICI 0.46
HDFC 0.4
SBI 0.85
BOB 0.42
Tangibility
0.9 0.85
0.8
0.7
Avg gap score
0.6
0.5 0.46
0.4 0.42 Series1
0.4
0.3
0.2
0.1
0
ICICI HDFC SBI BOB
Bank
Tangibility
Gap score Bank
Minimum HDFC
Maximum SBI
Responsiveness
BANK GAP SCORE
ICICI 1.4
HDFC 1.03
SBI 1.2
BOB 1.01
Responsiveness
1.6
1.4
1.4
1.2
1.2
1.03 1.01
Avg gap score
0.8 Series1
0.6
0.4
0.2
0
ICICI HDFC SBI BOB
Bank
Responsiveness
Gap score Bank
Minimum BOB
Maximum ICICI
Assurance
BANK GAP SCORE
ICICI 1.74
HDFC 0.9
SBI 0.52
BOB 0.61
Assurance
1.8 1.74
1.6
1.4
Avg gap score
1.2
1 0.9 Series1
0.8
0.61
0.6 0.52
0.4
0.2
0
ICICI HDFC SBI BOB
Bank
Reliability
Gap score Bank
Minimum SBI
Maximum ICICI
Empathy
BANK GAP SCORE
ICICI 0.68
HDFC 0.78
SBI 1.32
BOB 0.67
Empathy
1.4 1.32
1.2
1
Avg gap score
0.78
0.8
0.68 0.67
Series1
0.6
0.4
0.2
0
ICICI HDFC SBI BOB
Bank
Reliability
Gap score Bank
Minimum BOB
Maximum SBI
Comparision of gap score
Bank
Dimension ICICI HDFC SBI BOB
Reliability 1.35 0.28 1.13 0.64
Tangibility 0.46 0.4 0.85 0.42
Responsiveness 1.45 1.03 1.2 1.01
Assurance 1.74 0.9 0.52 0.61
Empathy 0.68 0.78 1.32 0.67
1.8
1.6
1.4
1.2 ICICI
Avg gap score
HDFC
1
SBI
0.8 BOB
0.6
0.4
0.2
0
Reliability Tangibility Responsiveness Assurance Empathy
Dim ension
Unweighted average Gap
Bank
score
ICICI 1.14
HDFC 0.68
SBI 1
BOB 0.67
1.2 1.14
1
1
unweighted avg servqual score
0.8
0.68 0.67
0.6 Series 1
0.4
0.2
0
ICICI HDFC SB I BOB
Ba nk
BOB is having minimum unweighted average servqual score amongst all the four banks.
Reliability
Reliability
1.6 1.5
1.4
1.23 1.27
1.2 1.11
Weighted score
0.8 Serie s 1
0.6
0.4
0.2
0
ICICI HDFC SB I B OB
Bank
Reliability
Weighted score Bank
Maximum HDFC
Minimum ICICI
Tangibility
Bank weighted score
ICICI 1.93
HDFC 1.98
SBI 0.92
BOB 1.65
Tangibility
2.5
1.93 1.98
2
1.65
Weighted score
1.5
Series1
1 0.92
0.5
0
ICICI HDFC SBI BOB
Bank
Tangibility
Weighted score Bank
Maximum HDFC
Minimum SBI
Responsiveness
Bank weighted score
ICICI 0.62
HDFC 0.93
SBI 0.39
BOB 1.01
Responsiveness
1.2
1.01
1 0.93
Weighted score
0.8
0.62
0.6 Series1
0.39
0.4
0.2
0
ICICI HDFC SBI BOB
Bank
Responsiveness
Weighted score Bank
Maximum BOB
Minimum SBI
Assurance
Bank weighted score
ICICI 0.94
HDFC 0.88
SBI 2.92
BOB 1.92
Assurance
3.5
2.92
3
2.5
weighted score
1.92
2
Series1
1.5
0.94 0.88
1
0.5
0
ICICI HDFC SBI BOB
Bank
Assurance
Weighted score Bank
Maximum SBI
Minimum HDFC
Empathy
Bank weighted score
ICICI 1.37
HDFC 1.11
SBI 0.7
BOB 0.52
Empathy
1.6
1.37
1.4
1.2 1.11
Weighted score
0.6 0.52
0.4
0.2
0
ICICI HDFC SBI BOB
Bank
Empathy
Weighted score Bank
Maximum ICICI
Minimum BOB
Comparision of weighted score
Bank
Dimension ICICI HDFC SBI BOB
Reliability 1.11 1.50 1.23 1.27
Tangibility 1.93 1.98 0.92 1.65
Responsiveness 0.62 0.93 0.39 1.01
Assurance 0.94 0.88 2.92 1.92
Empathy 1.37 1.11 0.70 0.52
3.50
3.00
2.50
Bank ICICI
weighted score
1.00
0.50
0.00
Reliability Tangibility Responsiveness Assurance Empathy
Dimension
Bank Avg weighted score
ICICI 1.19
HDFC 1.28
SBI 1.23
BOB 1.27
1.3
1.28
1.28 1.27
1.26
Avg weighted score
1.24 1.23
1.22 Series
1
1.2 1.19
1.18
1.16
1.14
ICICI HDFC SBI BOB
Bank
HDFC is having highest average weighted score amongst all the four banks.
CHAPTER-6
KEY FINDINGS
According to respondents the most preferred banking service is ATM service followed by
mobile banking, internet banking and Retail banking.
Most of the respondent’s account decisions are influenced by themselves.
Most important factor which respondent consider before opening an account is Future
prospects followed by services provided, goodwill, financial position and current market
position.
According to respondents most secure bank is SBI followed by BOB, HDFC and ICICI.
From the Chi square test of independence, it has been found that Preference towards
public/private sector banks and age group are dependent on each other and the strength of
the same is 71.42%.
Gap Score
For ICICI bank, the gap score for tangibility is minimum followed by empathy
,reliability, responsiveness and assurance.
For HDFC bank ,the gap score for reliability is minimum followed by tangibility,
empathy, assurance and responsiveness.
For SBI bank, the gap score for assurance is minimum followed by tangibility, reliability,
responsiveness and empathy.
For BOB bank, the gap score for tangibility is minimum followed by reliability
,assurance ,empathy and responsiveness.
For HDFC bank, the highest weight is given to tangibility followed by reliability,
empathy, responsiveness and assurance.
For SBI bank, the highest weight is given to assurance followed by reliability, tangibility,
empathy and responsiveness.
For BOB bank, the highest weight is given to assurance followed by tangibility,
reliability, responsiveness and empathy.
Weighted score
For ICICI bank, the highest weighted score is of dimension tangibility followed by
empathy, reliability, assurance and responsiveness.
For HDFC bank, the highest weighted score is of dimension tangibility followed by
reliability, empathy, responsiveness and assurance.
For SBI bank, the highest weighted score is of dimension assurance followed by
reliability, tangibility, empathy and responsiveness.
For BOB bank, the highest weighted score is of dimension assurance followed by
tangibility, reliability, responsiveness and empathy.
Gap Score
Dimensions
Reliability tangibility Responsiveness assurance Empathy
ICICI 1.35 0.46 1.4 1.74 0.68
HDFC 0.28 0.4 1.03 0.9 0.78
SBI 1.13 0.85 1.2 0.52 1.32
BOB 0.64 0.42 1.01 0.61 0.67
For reliability the minimum gap score is for HDFC bank followed by BOB, SBI and
ICICI.
For tangibility the minimum gap score is for HDFC bank followed by BOB, ICICI and
SBI.
For responsiveness the minimum gap score is for BOB bank followed by HDFC, SBI and
ICICI.
For assurance the minimum gap score is for SBI bank followed by BOB, HDFC and
ICICI.
For empathy the minimum gap score is for BOB bank followed by ICICI, HDFC, and
SBI.
Unweighted
Bank average Gap
score
ICICI 1.14
HDFC 0.68
SBI 1
BOB 0.67
BOB is having minimum unweighted average gap score amongst all the banks
followed by HDFC ,SBI and ICICI.
Weighted score
Dimensions
Reliability tangibility Responsiveness assurance Empathy
ICICI 1.11 1.93 0.62 0.94 1.37
HDFC 1.5 1.98 0.93 0.88 1.11
SBI 1.23 0.92 0.39 2.92 0.7
BOB 1.27 1.65 1.01 1.92 0.52
For reliability the highest weighted score is of HDFC bank followed by BOB, SBI and
ICICI.
For tangibility the highest weighted score is of HDFC bank followed by ICICI, BOB and
SBI.
For responsiveness the highest weighted score is of BOB bank followed by HDFC, ICICI
and SBI.
For assurance the highest weighted score is of SBI followed by BOB, ICICI and HDFC.
For empathy the highest weighted score is of ICICI followed by HDFC, SBI and BOB.
Avg
weighted
Bank score
ICICI 1.19
HDFC 1.28 HDFC is having highest
SBI 1.23 weighted score amongst all
BOB 1.27
the banks followed by
BOB,SBI and ICICI.
CHAPTER-7
CONCLUSION
For ICICI bank tangibility is best amongst all other dimensions, which shows that
customers are satisfied with visually appealing facilities, online banking facilities, time
saving technology facilities and facilities for senior citizens of the bank.
For HDFC bank Reliability is best amongst all other dimensions, which shows that
customers are satisfied with timely services, error free records and sincerity of solving
customers problems of the bank.
For SBI and BOB bank assurance is best amongst all other dimensions, which shows that
customers are satisfied about the safety of their tranctions with the bank.
BOB and HDFC have comparative lower unweighted average gap score.
SBI and ICICI have comparative higher unweighted average gap score.
HDFC bank has the highest weighted score amongst all the banks, which shows that
customers are more satisfied with HDFC bank for the services provided by them.
CHAPTER-8
RECOMMENDATIONS
ICICI and HDFC bank should emphasize on improving their services on responsiveness
and Assurance.
SBI and BOB should emphasize on improving their services on responsiveness and
empathy.
In general responsiveness is the dimension for which the weighted score of all the four
banks is less comparative to other dimension so every bank whether public sector or
private sector should consider their responsibility towards their customers and should
provide proper training to their employees so that they can satisfy their customer.
If we look at both the public sector banks, empathy is common dimension for which
both the banks have got less weighted score which shows that customers are not getting
individual attention so SBI and BOB should improve their services on empathy
dimension.
In private sector banks, assurance is common dimension which have got less weighted
score . ICICI and HDFC should build confidence and trust in their customers regarding
the safety of their transactions and other services provided by the banks.
Though internet banking is convenient and user friendly, respondents don t prefer it more
because of safety issues so all the banks should make their customers aware about the
benefits of internet banking and should provide accurate services .
CHAPTER-9
BIBLIOGRAPHY
List of web-sites.
1. www.statebankofindia.com
2. www.onlinesbi.com
3. www.icicibank.com
4. www.hdfcbank.com
5. www.hdfcindia.com
6. www.bankofbaroda.com
7. www.bobibanking.com
8. www.business.mapsofindia.com
9. www.rbi.org.in
10. www.indiamart.com
11. www.outsource2india.com
12. www.indbankonline.com
13. www.iibf.org.in
14. www.banknetindia.com
15. www.wisegeek.com
16. www.about.com
17. www.americanexpress.com
18. www.efta.org
19. www.12manage.com
20. www.istheory.com
21. www.emeraldinsight.com
22.www.wikipedia.org
23.www.marketresearch.com
List of books
Annexure (Questionnaire)
Questionnaire
Dear sir/madam
We request you to kindly fill the questionnaire below. We assure you that data provided by you
shall be kept confidential.
1) Which type of service do you prefer the most from the banks?
c Broker d friends/relatives
3) Which factors do you consider before opening account or in purchasing new plan in a
particular bank?
A Financial position
C Goodwill
D Future prospects
E Services provided
SERVQUAL QUESTIONS
The following statements relate to your feelings about the particular bank you have chosen.
Please show the extent to which you believe this bank has the feature described in the statement.
Here, we are interested in a number from 1 to 7 that shows your Expectations and perceptions
about the bank.
Reliability
Tangibility
10. The Bank maintains sufficient and easy to use Online Banking
facility
11. The Bank is well equipped with the time saving technology facility
like phone banking and mobile banking.
12. The Bank has enough provision for facilities for senior citizens in
terms of management of queue, solving queries, etc.
Responsiveness
13. Employees are good in explaining the various services the Bank
provides.
16. Employees in the bank are never too busy to respond to your
request.
Assurance
Total: 100
Personal details:
Name:
Address:
Contact no:
Age:
1) 18 – 25
2) 26 -35
3) 36-45
4) 46-55
5) 55 and above
Occupation:
1) Student
2) Government employee
3) Private employee
5) Housewife
Income:
2) 10,001 to 20,000
3) 20,001 to 30,000
4) 30,001 to 40,000