PREFACE

Preparing a project of this nature is an arduous task and I was fortunate enough to get support from a large number o persons. I wish to express my deep sense of gratitude to all those who generously helped in successful completion of this report by sharing their invaluable time and knowledge. It is my proud and previledge to express my deep regards to Respected HOD Dr.Pramesh Gautam, Head of Department of Business Management , SWNIT SAGAR for allowing me to undertake this project. I feel extremely exhilarated to have completed this project under the able and inspiring guidance of Miss Amrita Rawat she rendered me all possible help me guidance while reviewing the manuscript in finalising the report. I also extend my deep regards to my teachers , family members , friends and all those whose encouragement has infused courage in me to complete to work successfully.
HANAMAT SINGH LODHI MBA IST SEM.

ACKNOWLEDGEMENT
Preparing a project of this nature is an arduous task and I was fortunate enough to get support from a large number o persons. I wish to express my deep sense of gratitude to all those who generously helped in successful completion of this report by sharing their invaluable time and knowledge. It is my proud and previledge to express my deep regards to Respected , Head of Department Dr.Pramesh Gautam, Department of Business Management , SWNIT SAGAR for allowing me to undertake this project. I feel extremely exhilarated to have completed this project under the able and inspiring guidance of He rendered me all possible help me guidance while reviewing the manuscript in finalising the report. I also extend my deep regards to my teachers , family members , friends and all those whose encouragement has infused courage in me to complete to work successfully.

HANAMAT SINGH LODHI MBA IST SEM.

DELCLARATION BY THE CANDIDATE

2

Date : I declare that the project report titled " MARKETING STRATEGIES OF TOP FIVE BANKING SECTOR" on Market Segmentation is nay own work conducted under the supervision of MISS AMRITA RAWAT Department of Business Management ,

SWNIT SAGAR

To the best of my knowledge the report does not contain any

work , which has been submitted for the award of any degree , anywhere.

HANAMAT SINGH LODHI MBA IST SEM.

CERTIFICATE
3

The project report titled " MARKETING STRATEGIES OF TOP

FIVE BANKING SECTOR " been prepared by HANAMAT SINGH LODHI

MBA IST Semester , under the guidance and supervision of AMRITA RAWAT for the partial fulfillment of the Degree of B.B.A.

MISS

Signature of the Supervisor

Signature of the Head of the Department

Signature of the Examiner

INTRODUCTION
The Purpose of this study to investigates relationship dimensions and studies the differences in perception of customers with respect to services provided by five Indian 4

banks. The relationship dimensions which lead to customer satisfaction have been identified. This study reports on the different satisfaction levels of customers of private and public sector banks with respect to the services provided by their banks

HISTORY OF THE BANKING SECTOR

Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India. It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondichery, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center. The Bank of Bengal, which later became the State Bank of India. The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India.

The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. The favour of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalized banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking". The State Bank of India (SBI) is the oldest and largest bank in the country. Its origins go back to the first decade of the 19th century, when the Bank of Calcutta was established on 2 June 1806. The bank got its present name after an Act of Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. Today, SBI has a phenomenal 9,559 branches and its ATM network is spread across 6,473 of its own locations& total 8,000ATMs including of those of its associate banks. State Bank of India is a successor to Imperial Bank of India, which was established in 1921.The bank, came into being on 1.7.1955 through the State Bank of India Act, 1955. States of India joined the State Bank Group, as subsidiaries under the State Bank of India (Subsidiaries Banks) Act, 1959.

EMERGING TRENDS IN BANKING SECTOR

The liberalization process initiated by the government about a decade ago has changed the landscape of several sectors of the Indian economy. The financial sector like other sectors is also going through major changes as a consequence of economic reforms. The consumption-led boom in India has fuelled robust demand for financial products especially in the banking domain. Emerging competition has generated new expectations from existing and new customers. There is an urgent need to introduce new and more attractive customer-friendly products and services. The banking sector presently is at an inflexion point. Existing products need to be delivered in an innovative and cost-effective manner by taking full advantage of emerging technologies. Technology has swiftly become a business driver rather than a business enabler. This sector has seen phenomenal 6

growth in terms of technology infusion and adoption in the recent past such as: Internet and Mobile Banking, CRM, etc. With increasing competition and tightening of prudential norms by the Reserve Bank, the players in the banking industry, both Indian and global are taking turns towards mergers and acquisitions. Only banks having adequate infrastructure, technology, economies of scale and well connected network of branches will be able to survive and meet the challenges of ever increasing competition and customer expectations. The book is divided into two sections. Section-I extensively covers the trends, issues and challenges related to the technology i.e. ATMs, e-banking, data warehousing and data mining, CRM solutions, etc. Section-II covers other contemporary issues in the banking sector such as Basel II, financial inclusion, service quality, risk management, banc assurance, retail banking, universal banking etc. The book shall serve as a rich reference resource for decision makers in the banking industry, researchers, academicians and students. The traditional distinctions between banking and other financial services like insurance on one side; and between commercial banking, developmental banking and investment banking are getting blurred. The emergence of universal banking and banc assurance are clearly pointers. This global convergence of financial services may gather further momentum in the years to come. The banking and insurance sector reforms have encouraged private sector players to make forays into the business in collaboration with major international companies. This new scenario will witness financially sound and experienced players transforming the industry with best practices in product development, operational efficiency, marketing capability, service focus, and tech savy orientation. Thus there is a need for intensive, futuristic and career oriented programs in these two areas: Banking and Insurance. These developments in Banking and Insurance industry call for competent and professionally trained managers", Increasing competition, thinner spreads and introduction of new technology driven products are some of the trends that the Indian banking system is experiencing. "Recent trends in Indian banking have reflected the efforts of the major players to adapt to a rapidly liberalizing and globalizing environment.

While the impact of these changes is possibly a subject of debate, there is one group which is not complaining the customers, the beneficiaries of the process of liberalization," observed Amitabh Guha, State Bank of Travancore. Further, the technology oriented banking has become one of the latest mantras of success in the market, especially to win over the customers. To this, says SBI Chairman AK Purwar, "Indian banks need to fuel the market by bringing new products at par with the international standards, extending ATM facility to rural areas and vibrant networking countrywide to compete with the new generation and the MNC banks in India" As T.S. Anantharaman, Financial Analyst, mentioned, "The savings and investments scenario in our country has undergone total change in the past decade, since the country embarked on a course of liberalization and globalization of its economy

With the increasing sophistication of our economy, the variety and type of investments options available to us today have multiplied. Also, with the economy getting more and more integrated with the world economy, rapid changes in the options, instruments, rate of return etc. have become the order of the day." Such a change is visible in respect of shares, mutual funds, fixed income, bank deposits, life insurance, pension plans etc. since change and innovation is involved in this process, and one can legitimately expect an exciting and lucrative career scenario in the banking, finance and insurance sector.

OBJECTIVE OF THE RESEARCH

8

The main objective of this study are To identify customer satisfaction variables which lead to building relationship with customers in the Indian banking sector To study the difference in perception of the customers of the bank towards various services provided by bank. To analyze the satisfaction level of customers with respect to the various service provided by the banks To identify the strategies of banks to satisfy their customers.

RESEARCH METHODOLOGY
9

According to Green and Tall A research design is the specification of the methods and procedures for acquiring the information needed. It is the overall operational pattern or framework of the project that stipulates which information is to be collected, from where it is to be collected and by what procedures This research process based on primary data analysis and secondary data analysis will be clearly defined to meet the objectives of the study.

I chose the primary sources to get the data. A questionnaire was designed in accordance with our mentor in Ketchup. I chose a sample of about 30 corporate customers

I collected some data from the secondary sources like published Company documents, internet etc. Research Design A research design is the arrangement of conditions for collections and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedures. It is a descriptive cross sectional design .It is the conceptual structure with in which research is conducted; it constitutes the blueprint for the collection, measurement and analysis of data. It is needed because it facilitates the smooth sailing of the various research operations, thereby making research as efficient as possible yielding maximal information with minimal expenditure of effort, time and money. In the preliminary stage, my research stage constituted of exploratory study by which it is clear that the existence of the problem is obvious .So, I can directly head for the conclusive research. Sampling Plan Sampling plan is a distinct phase of research process. In this stage I have to determine who is to be sampled, how large should be the needed sample and how sampling unit is to be selected.
10

Population In my research, I have defined my population as a complete set of customers of Sagar City. Sample Survey As compared to census study, a sample study has been conducted by us because of: Wide range of population, it was impossible to cover the whole population Time and money constraints. Sample Unit In this survey I took the list of customers from the dealers of Ketchup Sampling Technique Sampling technique implies the method of choosing the sample items, the two methods of selecting sample are: Probability method. Non-probability method. Probability method is those in which every item of the universe has an equal chance of the inclusion in the sample. Non-probability methods are those that do not provide every item in the universe with known cause of being included in the sample. The selection process is partially subjective. For my study, I employed the Non-probability sampling technique, in which I got the data of the customers from the dealer of Ketchup. Instrument of collection of data I have used one set of questionnaire to collect data from the customers. This questionnaire is structured and highly ordered. This includes both close ended and open ended questions. The close ended questions included both dichotomous and multiple choice questions.

MARKET ANALYSIS
11

FACTORS AFFECTING BANKING SECTOR Starting off with the project, in the initial phase of SIP, I learnt the basics of thestock market. As I had to work here in this market for 3.5 months this was thebasic necessity. In that phase I had a nice exposure of how to deal with clients,how to handle the queries of the investors, it was a practical exposure to learn theworking of the market, how the market moves and all about the corporate culture.Also I had learnt what factors basically affect the equity market. Then I decided tolimit my project to just Banking Sector, because it is one of the most dynamicsector and also availability of time was not permitting me to go beyond this.There are N number of factors which affect the share prices. They can be broadlyclassified into two:
INTERNAL FACTORSEXTERNAL FACTORSINTERNAL FACTORS:

As the name suggests, Internal Factors are thosewhich affect the share prices internally, i.e. they are internal to the company ormore specifically bank. Some of the major internal factors that affect the shareprices of a bank are as follows: EARNINGS OF THE COMPANY: How much Profit a company earns acts as a significant factor in price movements.If the quarterly results are good for a bank, then the price goes up, and if the results are not good, the investors show no interest in such banks share and thus price falls. Investors invest money in the companies who earn well and in turn give goodreturn on investment. Thus, a wealthy and a profitable company have good

investors and thus have positive price movements. Price/Earnings Ratio also givesus idea about the same. MARKET CAPITALIZATION:

12

Generally we commit one mistake that we guess the companys worth from the price of its stock. It is the market capitalization of the company, rather than thestock price, that is more important when it comes to determining the worth of thecompany. We need to multiply the stock price with the total number of outstanding stocks in the market to get the market capitalization of a company andthat is the worth of the company. Thus, a company or bank with high MarketCapitalization turns out to be more popular among investors. For example, HDFCBANK, ICICI BANK and SBI are more popular among investors than other banksbecause they have huge market share and market capitalization. As marketcapitalization increases, the share price tends to increase and as marketcapitalization decreases, the share price tends to decrease. PRICE/EARNINGS RATIO: Price/Earnings ratio or the P/E ratio gives us a fair idea of how a company's shareprice compares to its earnings. If the price of the share is too much lower than theearning of the company, the stock is undervalued and it has the potential to rise inthe near future. On the other hand, if the price is way too much higher than theactual earning of the company and then the stock is said to overvalued and theprice can fall at any point. The earnings also have a direct relation with price whichis already explained above. INTERNAL AFFAIRS OF THE COMPANY: Any happening inside the company or any internal news does affect its share price.For example any key person moving out of the company, acquisition or takeover ormerger news, share split, employee strike and any other thing internal to the affairs of the bank affects the share price. A positive note from the internal affairs takesthe price to new highs and a negative does vice versa. INTERST RATES: Interest rates play a major role in determining stock market trends. Bull markets(those in an upward market) are usually associated with low interest
13

rates and highCapital Gains, and bear markets (those in a downward trend) with high interestrates and low Capital gains. Interest rates are determined by the demand for capital pushes them up and normally indicates that the economy is thriving and thatshares probably expensive. Low interest indicate low demand for capital, thusliquidity builds up on the economy, driving share price down. Other interest rateslike that of on Deposits and Borrowings also have impact on share prices. OTHER FACTORS: Other factors like Growth of the company, figures of deposits, advances, balancesheet, Profit and Loss Account, etc.. also affect the share prices drastically. Adiscussion for the same is done in later part of the report

CONSUMER BEHAVIOUR
Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.

14

Organizations need to retain existing customers while targeting non-customers; Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. Customer satisfaction is an abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other factors the customer, such as other products against which the customer can compare the organization's products. Satisfaction with banking services is an area of growing interest to researchers and managers. The commercial banking industry like many other financial service industries is facing rapidly changing market. New technologies, economic uncertainties, fierce competition and more demanding customers and the changing climate have presented an unprecedented set of challenges. Intangible assets, particularly brands and customers, are critical to any organization and in todays competitive environment relationship marketing is critical to banking corporate success. Banking is a customer oriented services industry. As we know that customer is the king therefore customer is the main focus and customer service is the differentiating factor. Banks have also started realizing that business depends on client service and the satisfaction of the customer and this is compelling them to improve customer service and build relationship with customers. With the current change in the functional orientation of banks, the purpose of banking being redefined. The main driver of this change is changing customer needs and expectations. Customers look for a relationship with bank when they receive benefits from its services. The banking industry like many other financial service industries is facing a rapidly changing market, new technologies, economic uncertainties, fierce competition and more demanding customers and the changing climate has presented an unprecedented set of challenges . The banking industry in India has undergone dramatic change post independence. Banks have also starts realizing that business depends on client service and the satisfaction of the

15

customer and this is compelling them to improve customer service and build relationship with customers. With the current changes in the functional orientation of banks, the purpose of banking is being redefined. The main driver of this change is changing customer needs and expectations. Customers In urban India no longer want to wait in long queues and spend hours in banking transactions. This change in customer attitude has gone hand in hand with the developments of ATMs, phone and net banking along with availability of service right at the customer doorstep. Further the world class banking experience provided by private and multinational banks with their ever evolving products and services has raised the bar of customer expectations. With the emergence of universal banking, banks aim to provide all banking products and service offering under one roof and their Endeavour is to be customer centric. The Indian banking industry is also embracing technology rapidly. Big players among the private and public sector banks are reengineering and automating their core banking processes.

RURAL BANKING
Rural banking in India started since the establishment of banking sector in India. Rural Banks in those days mainly focused upon the agro sector. The Haryana State Cooperative Apex Bank Ltd. commonly called as HARCOBANK plays a vital role in rural banking in the economy of Haryana State and has been providing aids and financing farmers, rural artisans, agricultural laborers, entrepreneurs, etc. in the state and giving service to its depositors. National Bank for Agriculture and Rural Development (NABARD) is a development bank in the sector of Regional Rural Banks in India. It provides and regulates credit and gives service for the promotion and development of rural sectors mainly agriculture, small scale industries, cottage and village industries, handicrafts.

OREIGN BANKS IN INDIA

Foreign Banks in India always brought an explanation about the prompt services to customers. After the set up foreign banks in India, the banking sector in India also become competitive and accusative. New policies are introduced by RBI for themThe policy conveys that foreign banks in India may not acquire Indian ones (except for weak banks identified by the RBI, on its terms) and their Indian subsidiaries will not be able to 16

open branches freely, Main competitors for banking sector. Post offices, Mutual fund, Share market, Insurance, Money lenders, Family and friends, Present scenario banking industry has been undergoing a rapid transformation, Banks today are market driven and market responsive. With the entry of new players and multiple channels, customers (both corporate and retail) have become more discerning and less "loyal" to banks. This makes it imperative that banks provide best possible products and services to ensure customer satisfaction. They have been managing a world of information about customers - their profiles, location, needs, requirements, cash positions, etc. Furthermore, banks have very strong in-house research and market intelligence units in order to face the future challenges of competition, especially customer retention. They are focusing on region-specific campaigns rather than national media campaigns as effective strategy for a diverse country like India. Customer-centricity also implies increasing investment in technology. Apart from the Mobile Banking, including of SMS Banking, Net Banking and ATMs are the major steps taken by the banks in India towards modernization. Services given by banks D-mat account, Lockers, Cash management Insurance product, Mutual fund product, Loans, ECS (Electronic clearance system) Taxes.

NATIONALIZATION OF BANKING SECTORThe 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. Central Bank of India, Bank of Maharashtra, Dena Bank Punjab National Bank Syndicate Bank, Canara Bank Indian Bank Indian Overseas Bank, bank of Baroda, Union Bank, Allahabad Bank United Bank of India UCO Bank. After that Banks have 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 liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. 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.

17

UPCOMING FOREIGN BANKS IN INDIA

By 2009 few more names is going to be added in the list of foreign banks in India. This is as an aftermath of the sudden interest shown by Reserve Bank of India paving roadmap for foreign banks in India greater freedom in India. Among them is the world's best private bank by Euro Money magazine, Switzerland's UBS. The following are the list of foreign banks going to set up business in India:Royal Bank of Scotland Switzerland's UBS US-based GE Capital Credit Suisse Group Industrial and Commercial Bank of China

COMPANY PROFILE
State Bank of India

State

Bank

of

India (SBI)

is

a banking and financial services company based in

18

India. It is a state-owned corporation with its headquarters in Mumbai, Maharashtra. As of March 2012, it had assets of US$360 billion and 14,119 branches, including 173 foreign offices in 37 countries across the globe making it the largest banking and financial services company in India. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in theIndian Subcontinent. Bank of Madras merged into the other two presidency banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank of India. The Government of India nationalised the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI has been ranked 285th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012.[1] SBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout the country. SBI is a regional banking behemoth and has 20% market share in deposits and loans among Indian commercial banks.[2] The State Bank of India was named the 29th most reputed company in the world according to Forbes 2009 rankings[3] and was the only bank featured in the "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010.[4]

19

History

Seal of Imperial Bank of India. The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay(incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock companies and were the result of the royal charters. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they retained until the formation of the Reserve Bank of India. The Presidency banks amalgamated on 27 January 1921, and the re-organized banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company. Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955, the Imperial Bank of India became the State Bank of India. The government of India recently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority.
20

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which made eight state banks associates of SBI. A process of consolidation began on 13 September 2008, when the State Bank of Saurashtra merged with SBI. SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911), which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior State, under the patronage of Maharaja Madho Rao Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja. The new banks first manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, theState Bank of Travancore, already had an extensive network in Kerala.

HDFC Bank
HDFC Bank Limited (BSE: 500180, NSE: HDFCBANK, NYSE: HDB) is an Indianfinancial services company based in Mumbai, Maharashtra that was incorporated in August 1994. HDFC Bank is the fifth or sixth largest bank in
21

India by assets and the first largest bank by market capitalization as of November 1, 2012. The bank was promoted by theHousing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. As on October 2012, HDFC Bank has 2,544 branches and over 10,000 ATMs, in 1,399 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion.[3] For the fiscal year 2010-11, the bank has reported net profit of 3,926.30 crore (US$714.59 million), up 33.1% from the previous fiscal. Total annual earnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$4.42 billion) in 2010-11.[4] History HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation Limited (HDFC), India's largest housing finance company. It was among the first companies to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. The Bank started operations as a scheduled commercial bank in January 1995 under the RBI's liberalisation policies. Times Bank Limited (owned by Bennett, Coleman & Co./The Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,000 crore and net advances of about Rs.89,000 crore. The balance sheet size of the combined entity is more than Rs. 1,63,000 crore Business focus HDFC Bank deals with three key business segments. - Wholesale Banking Services, Retail Banking Services, Treasury. It has entered the banking consortia of over 50 corporates for providing working capital finance, trade services, corporate finance, and merchant banking. It is also providing sophisticated product structures in areas of foreign exchange and derivatives, money markets and debt trading And Equity research. Wholesale banking services For customers from ongoleBlue-chip manufacturing companies in the Indian corp to small & mid-sized corporates and agri-based businesses the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash
22

management, etc. The bank is also a leading provider of the above services to its corporate customers, mutual funds, stock exchange members and banks. Retail banking services HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (Visa Electron) and issues the MasterCard Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2009, the bank had a total card base (debit and credit cards) of over 13 million. The Bank is also one of the leading players in the merchant acquiring business with over 70,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is positioned in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc.With Finest of Technology and Best of Man power in Banking Industry HDFC BANK's retail services have become by and large the best in India and since the contribution to CASAi,e total number of current and savings account of more than 50%, HDFC BANK has full potential to become Indias No.1 Private Sector Bank.it cover also rural area Treasury Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. These services are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio. Distribution network

An HDFC Bank Branch HDFC Bank is headquartered in Mumbai and as of March 31, 2012, the Banks distribution network was at 2,544 branches and 8,913 ATMs in 1,399
23

cities as against 1,986 branches and 10000 ATMs in 996 cities as of october,2012.
State Bank of India (SBI) is the largest bank in India. It is measured by the number of branch offices and employees as the largest bank in the world. Established in 1806 as Bank of Bengal, it remains the oldest commercial bank in the Indian Subcontinent and also the most successful one providing various domestic, international and NRI products and services, through its network of 13,908 branches, including 4,731 associate banks' branches in India and overseas. It also provides financial services, such as life insurance, merchant banking, mutual funds, credit card, factoring, security trading and primary dealership in the money market. With an asset base of $126 billion and its reach, it is a regional banking behemoth. The bank was nationalized in 1955 with the Reserve Bank of India having a 60 percent stake. It has laid emphasis on reducing the huge manpower through Golden handshake schemes and computerizing its operations. It also has non-banking subsidiaries and joint ventures, such as SBI Capital Markets Ltd., SBI DFHI Ltd., SBI Funds Management Pvt Ltd., SBI Factors & Commercial Services Pvt Ltd. and SBI Life Insurance Company Ltd. Effective from April 20, 2005; it acquired a 51 percent stake in Indian Ocean International Bank Ltd. This study examines whether there are economic benefits to be gained from improving service quality in the Taiwanese banking industry. Service quality is perceived quality; and different from objective or actual quality; being a judgment usually made within a customer evoked set. Service quality resembles an attitude in many ways, and service quality is distinct from customer satisfaction. Traditional financial ratios are not appropriate for measuring the economic benefits of service quality improvement. The main single factor influence on business unit performance is goods and service quality. The author develops a framework for this paper based on service quality and profitability theoretical background. Relationships are also established among service quality, customer satisfaction, and profitability. The main conclusion of this study is that the performance scale developed in the SERVPERF model and customer satisfaction in the profitability model are confirmed in the Taiwanese banking industry. The author finds that perception quality is an antecedent of attitude, service quality is an antecedent of customer satisfaction, customer satisfaction directly affects purchase intention, and customer satisfaction is an antecedent of profitability. Finally, the author finds gap

24

between customers and service providers and thus demonstrates that Profitability is positively affected by service quality improvement. Previously, service quality was not been explicitly linked to profit. Zeithaml (2000) has found evidence about the influences of service quality on profits. Rust, Zahorik, and Keiningham (1995) provided a model of service quality improvement and profitability and the submodels, which together constitute the ROQ approach. The service profit chain of Heskett et al. (1997) stipulates that "direct and strong" relationships exist among service quality, customer satisfaction and profitability. As documented above, this study will develop a framework that combines service quality, customer satisfaction, and profitability into a chain of effects

ICICI Bank
ICICI Bank Limited (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) is an Indian diversified financial services company headquartered in Mumbai, Maharashtra. It is the second largest bank in India by assets and third largest by market capitalization. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a network of 2,883 branches and 10021 ATM's in India, and has a presence in 19 countries, including India.[2] The bank 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. The company's UK subsidiary has established branches in Belgium and Germany.[3] ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab National Bank and Canara Bank.[4]

25

[edit]Corporate history

ICICI Bank - Leeds Branch ICICI Bank was established in 1994 by the Industrial Credit and Investment Corporation of India, an Indian financial institution, as a wholly owned subsidiary. The parent company was formed in 1955 as a joint-venture of theWorld Bank, India's public-sector banks and publicsector insurance companies to provide project financing to Indian industry. The bank was initially known as the Industrial Credit and Investment Corporation of India Bank, before it changed its name to the abbreviated ICICI Bank. The parent company was later merged into ICICI Bank. ICICI Bank launched internet banking operations in 1998.[7] ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering of shares in India in 1998, followed by an equity offering in the form ofAmerican Depositary Receipts on the NYSE in 2000. ICICI Bank acquired theBank of Madura Limited in an all-stock deal in 2001, and sold additional stakes to institutional investors during 2001-02. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group, offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE.[8] In 2000, ICICI Bank became the first Indian bank to list on the New York Stock Exchange with its five million American depository shares issue generating a demand book 13 times the offer size.

26

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.[9] In 2008, following the 2008 financial crisis, customers rushed to ATM's and branches in some locations due to rumors of adverse financial position of ICICI Bank. The Reserve Bank of India issued a clarification on the financial strength of ICICI Bank to dispel the rumors.[10] Corporate governance ]Group Anti Money Laundering Policy The ICICI Group AML Policy establishes the standards of AML compliance and is applicable to all activities.[11] Code of Conduct ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees.[12] ICICI merge the bank of rajasthan(BOR) in 2010. RBI was critical of BOR's promoters not reducing their holdings in the company. BOR has been merged with ICICI Bank. ICICI paid Rs.3000 Crores for it. Each 118 shares of BOR will be converted into 25 shares of ICICI Bank. Creation of market infrastructure in India ICICI Bank has contributed to set up different institutions which include the following: National Stock Exchange The National Stock Exchange was promoted by Indias leading financial institutions (including ICICI Ltd.) in 1992 on behalf of the Government of India with the objective of establishing a nationwide trading facility for equities, debt instruments and hybrids, by ensuring equal access to investors all over the country through an appropriate communication network.[13] Credit Rating Information Services of India Limited In 1987, ICICI Ltd. along with UTI set up CRISIL as India's first professional credit rating agency. CRISIL offers a comprehensive range of integrated products and service offerings which include credit ratings, capital market information, industry analysis and detailed reports.[14]
27

National Commodities and Derivatives Exchange Limited NCDEX is a professionally managed online multi-commodity exchange, set up in 2003, by ICICI Bank Ltd, LIC, NABARD, NSE, Canara Bank, CRISIL, Goldman Sachs, Indian Farmers Fertiliser Cooperative Limited (IFFCO) and Punjab National Bank.[15] Financial Innovation Network and Operations Pvt Ltd. ICICI Bank has facilitated setting up of "FINO Cross Link to Case Link Study" in 2006, as a company that would provide technology solutions and services to reach the underserved and underbanked population of the country. Using cutting edge technologies like smart cards, biometrics and a basket of support services, FINO enables financial institutions to conceptualise, develop and operationalise projects to support sector initiatives in microfinance and livelihoods.[16] Entrepreneurship Development Institute of India Entrepreneurship Development Institute of India (EDII), an autonomous body and not-for-profit society, was set up in 1983, by the erstwhile apex financial institutions like IDBI, ICICI, IFCI and SBI with the support of the Govt. of Gujarat as a national resource organisation committed to entrepreneurship development, education, training and research.[17] North Eastern Development Finance Corporation North Eastern Development Finance Corporation (NEDFI) was promoted by national level financial institutions like ICICI Ltd in 1995 at Guwahati, Assam for the development of industries, infrastructure, animal husbandry, agree-horticulture plantation, medicinal plants, sericulture, aquaculture, poultry and dairy in the North Eastern states of India. NEDFI is the premier financial and development institution for the North East region.[18] Asset Reconstruction Company India Limited Following the enactment of the Securitisation Act in 2002, ICICI Bank together with other institutions, set up Asset Reconstruction Company India Limited (ARCIL) in 2003, to create a facilitative environment for the resolution of distressed debt in India. ARCIL was established to acquire non performing assets (NPAs) from financial institutions and banks with a view to enhance the management of these assets and help in the maximisation of recovery. This would relieve institutions and banks from the burden of pursuing NPAs, and allow them to focus on core banking activities.[19][20] Credit Information Bureau of India Limited
28

ICICI Bank has also helped in setting up Credit Information Bureau of India Limited (CIBIL), Indias first national credit bureau in 2000. CIBIL provides a repository of information (which contains the credit history of commercial and consumer borrowers) to its members in the form of credit information reports. The members of CIBIL include banks, financial institutions, state financial corporations, non-banking financial companies, housing finance companies and credit card companies.

Axis Bank

Axis Bank Limited (BSE: 532215, LSE: AXBC) is an Indian financial services firm headquartered in Mumbai, Maharashtra. It had begun operations in 1994, after theGovernment of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I),Life Insurance Corporation of India (LIC), General Insurance Corporation Ltd., National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation and United India Insurance Company UTI-I holds a special position in the Indian capital markets and has promoted many leading financial institutions in the country. As on the year ended 31 March, 2012, Axis Bank had an operating revenue of 134.37 billion and a net profit of 42.42 billion. [1] Axis Bank (erstwhile UTI Bank) opened its registered office in Ahmedabad and corporate office in Mumbai in December 1993. The first branch was inaugurated in April 1994 in Ahmedabad by Dr. Manmohan Singh, then the Honorable Finance Minister. The Bank, as on 31st March, 2012, is capitalized to the extent of Rest. 4.132 billion with the public holding (other than promoters and GDRs) at 54.08%. [2]

29

Network The Bank's Registered Office is situated in Ahmedabad and its Central Office is located at Mumbai. The Bank has an extensive network of more than 1600 branches (including 169 Service Branches/CPCs as on 31st March, 2012). The Bank has a network of over 10000 ATMs (as on 31st March, 2012)[3] Axis Bank operates one of the worlds highest ATM sites at Thegu, Sikkim (at a height of 13,200 feet above sea level) and has the largest ATM network among private banks in India. [4] Business Focus Axis Bank operates in four segments: treasury operation, retail banking, corporate/wholesale banking, and other banking business. [5] Treasury Operations The Banks treasury operation services include investments in sovereign and corporate debt, equity and mutual funds, trading operations, derivative trading and foreign exchange operations on the account, and for customers and central funding. [6] Retail Banking In the retail banking category, the bank offers services such as lending to individuals/small businesses subject to the orientation, product and granularity criterion, along with liability products, card services, Internet banking, automated teller machines (ATM ) services, depository, financial advisory services, and nonresident Indian (NRI) services. [7] Corporate/Wholesale Banking The Bank offers to corporate and other organizations services including corporate relationship not included under retail banking, corporate advisory services, placements and syndication, management of public issues, project appraisals, capital market related services and cash management services. [8]

Punjab National Bank

30

Punjab National Bank (PNB) is an Indian financial services company based in New Delhi, India. PNB is the third largest bank in India by assets. It was founded in 1894 byLala Lajpat Rai and is currently the second largest state-owned commercial bank in India ahead of Bank of Baroda with about 5000 branches across 764 cities. It serves over 37 million customers. The bank has been ranked 248th biggest bank in the world by the Bankers' Almanac. The bank's total assets for financial year 2007 was about US$60 billion. PNB has a banking subsidiary in the UK, as well as branches in Hong Kong, Dubai and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai. History Punjab National Bank was registered on 19 May 1894 under the Indian Companies Act with its office in Anarkali Bazaar Lahore. The founding board was drawn from different parts of India professing different faiths and a varied back-ground with, however, the common objective of providing country with a truly national bank which would further the economic interest of the country. PNB's founders included several leaders of the Swadeshimovement such as Dyal Singh Majithia and Lala Harkishan Lal, Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C. Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass.[2] [3] Lala Lajpat Rai was actively associated with the management of the Bank in its early years. The board first met on 23 May 1894. Ironically, the PNB Website now claims Lala Lajpat Rai to be the founding father, surpassing Rai Mul Raj and Dyal Singh Majithia.[4] The bank opened for business on 12 April 1895 in Lahore. PNB has the distinction of being the first Indian bank to have been started solely with Indian capital that has survived to the present. (The first entirely Indian bank, Commercial Bank, was established in 1881 in Faizabad, but failed in 1958.) PNB has had the privilege of maintaining accounts of national leaders such as Mahatma Gandhi, Shri Jawahar Lal Nehru, Shri Lal Bahadur Shastri, Shrimati Indira Gandhi, as well as the account of the famous Jalianwala Bagh Committee. Timeline In 1900, PNB established its first branch outside Lahore in Rawalpindi. Branches in Karachi and Peshawar followed. The next year, PNB absorbed Bhagwan Dass Bank, a scheduled bank located in Delhi Circle.
31

In 1947, at the Partition of India and the commencement of Pakistani independence, PNB lost its premises in Lahore, but continued to operate in Pakistan. Partition forced PNB to close 92 offices in West Pakistan, 33% of the total number, and which held 40% of the total deposits. PNB still maintained a few caretaker branches. On 31 March 1947, even before Partition, PNB had decided to leave Lahore and transfer its registered office to India; it received permission from the Lahore High Court on 20 June 1947, at which time it established a new head office in Calcutta. 1951: PNB acquired the 39 branches of Bharat Bank (est. 1942); Bharat Bank became Bharat Nidhi Ltd. 1960: PNB again shifted its head office, this time from Calcutta to Delhi. 1961: PNB acquired Universal Bank of India. 1963: The Government of Burma nationalized PNB's branch in Rangoon (Yangon). September 1965: After the Indo-Pak war the government of Pakistan seized all the offices in Pakistan of Indian banks. PNB also had one or more branches in East Pakistan (Bangladesh). 1960s: PNB amalgamated Indo Commercial Bank (est. 1933) in a rescue. 1969: The Government of India (GOI) nationalized PNB and 13 other major commercial banks, on 19 July 1969. 1976 or 1978: PNB opened a branch in London. 1986 The Reserve Bank of India required PNB to transfer its London branch to State Bank of India after the branch was involved in a fraud scandal. 1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a rescue. The acquisition added Hindustan's 142 branches to PNB's network. 1993: PNB acquired New Bank of India, which the GOI had nationalized in 1980. 1998: PNB set up a representative office in Almaty, Kazakhstan.

In 2003, PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. At the time of the merger with PNB, Nedungadi Bank's shares had zero value, with the result that its shareholders received no payment for their shares. PNB also opened a representative office in London.

32

The next year, PNB established a branch in Kabul, Afghanistan and a representative office in Shanghai. PNB also established an alliance with Everest Bank in Nepal that permits migrants to transfer funds easily between India and Everest Bank's 12 branches in Nepal. Currently, PNB owns 20% of Everest Bank. In 2005 PNB opened a representative office in Dubai. Two years later, PNB established PNBIL Punjab National Bank (International) in the UK, with two offices, one in London, and one in South Hall. Since then it has opened more branches, this time in Leicester, Birmingham, Ilford, Wembly, and Wolverhampton. PNB also opened a branch in Hong Kong. In January 2009, PNB established a representative office in Oslo, Norway. PNB hopes to upgrade this to a branch in due course. In 2010, PNB purchased a small minority stake in Kazakhstan-based JSC Dana Bank. Within the year PNB increased its ownership and now PNB owns 84% of what has become JSC (SB) PNB. The subsidiary has branches in Almaty, Astana, Kangandu, andPavlodar. Danabank was established on 20 October 1992 in Pavlodar. Also, in January 2010, PNB established a subsidiary in Bhutan. PNB owns 51% of Druk PNB Bank, which has branches in Thimpu,Phuentsholing, and Wangdue. Local investors own the remaining shares. Then on 1 May, PNB opened its branch in Dubai's financial center. In September 2011, PNB opened a representative office in Sydney, Australia. In December 2012 it signed an agreement with US based life Insurance company Metlife to acquire a 30% stake in MetLife's Indian affiliate MetLife India Limited. The company would be renamed PNB MetLife India Limited and PNB would sell MetLife's products in its branches.[5]

33

CONSUMER BEHAVIOUR
Published standards exist to help organizations develop their current levels of customer satisfaction. The International Customer Service Institute (TICSI) has released The International Customer Service Standard (TICSS). TICSS enables organizations to focus their attention on delivering excellence in the management of customer service, whilst at the same time providing recognition of success through a 3rd Party registration scheme. TICSS focuses an organizations attention on delivering increased customer satisfaction by helping the organization through a Service Quality Model. TICSS Service Quality Model uses the 5 P's - Policy, Processes, People, Premises, Product/Services, as well as performance measurement. The implementation of a customer service standard should lead to higher levels of customer satisfaction, which in turn influences customer retention and customer loyalty.

THE DIMENSIONS OF SERVICE QUALITY: A STUDY OF THE INDIAN RETAIL BANKING ENVIRONMENTRegulatory, structural and technological factors are significantly changing the banking environment throughout the world. One factor that is spurring the growth of the service economy in India is the liberalization that has been ushered in by the government in the banking sector. The financial sector reform in India was designed to infuse greater competitive vitality in the system. To achieve this objective, the Narasimhan Committee was formed. The Narasimhan Committee report suggested wide ranging reforms for the Indian banking sector in 1992 to introduce internationally accepted banking practices and enable Indian banks (which were hitherto resisting liberalization and opening of their markets) to achieve service excellence. The Narasimhan Committee, recommended the liberalization of entry norms and suggested that new banks be permitted in the private sector provided they conformed to the minimum start up capital and other requirements. The committee recommended too, a liberal policy towards allowing foreign banks to open offices in India. Since the reforms started, the interest rate structure has been deregulated to a great extent and banks have been given a great degree of freedom in determining their rate structure for deposits and advances, as well as their product range.

34

Banking has also become more competitive in respect of the location of points of sale, that is, the branch network. The end result is that market power is getting shifted from banks to their customers. With the lowering of entry barriers and blurring product lines of banks and non-banks, the oligopolistic nature of Indian banking is fast changing and giving way to a relatively freer market place. The freedom of choice which bank customers did not have earlier because of standardized products and regimented interest rates has been given to the customers as a result of the changes taking place (Subramanian &Velayudham, 1997). In other words, financial liberalization has led to intense competitive pressures and retail banks are consequently directing their strategies towards increasing customer satisfaction and loyalty through improved service quality. Retail banks are pursuing this strategy, in part, because of the difficulty in differentiating based on the service offering. Typically, customers perceive very little difference in the banking products offered by retail banks as any new offering is quickly matched by competitors. However, much of the research on service quality has been in the developed countries (Herbig & Genestre, 1996), even though services are among the fastest growing sectors in emerging countries (Malhotra et al., 1993). In fact, the bulk of the research on service quality in banks has been in the context of US and European banking institutions. At this juncture, it is important to also study banking institutions based in developing economies like India, which has recently liberalized its banking sector. As banks in such countries as India mature, lessons may be learned from their experiences by banks in developed economies as well as in other developing countries, as banking becomes more and more globally integrated. In fact, there exists a significant gap in the service marketing literature on how consumers evaluate service quality in contexts and cultures very different from the developed countries, even though research has begun to explore this area (Bolton and Myers, 2003). In light of this paucity of research on service quality issues in developing countries like India, it has become very important that banks in India determine the service quality factors, which are pertinent to the customers selection process, as with increased competition, with the advent of international banking, the trend towards larger bank holding companies, and innovations in the marketplace, customers are now having greater difficulty in selecting one institution from another. In order to provide excellent service quality, identifying the underlying dimensions of the service quality construct is the first step in the definition and hence provision of quality service and hence should be a central

35

concern for retail bank managers as well as service management academics and practitioners. This paper endeavors to fill the gap in the service quality literature by exploring the dimensions of customer perceived service quality in the context of the Indian retail banking industry. A set of service quality parameters, drawn from customers perceptions about service quality as well as the bank marketing and service quality literature have been drawn up. These parameters have been used in the context of four of the largest banks in India to identify the underlying dimensions of service quality. Finally, the paper has drawn upon the findings of the service quality dimensions to contend the initiatives that banks managers can take to enhance employees skills and attitudes and instill a customer-service culture. The Dimensions of Service Quality Underpinning our understanding of service quality is an array of factors or determinants. A number of researchers have provided lists of quality determinants, but the best known determinants emanate from Parasuraman and colleagues from the USA, who found five dimensions of service quality, namely, tangibles, reliability, responsiveness, assurance and empathy and used these as the basis for their service quality measurement instrument, SERVQUAL (Parasuraman et al., 1988; Zeithaml et al., 1990). The result was the development of the SERVQUAL instrument, based on the gap model. The central idea in this model is that service quality is a function of the difference scores or gaps between expectations and perceptions. An important advantage of the SERVQUAL instrument is that it has been proven valid and reliable across a large range of service contexts. However, while the SERVQUAL instrument has been widely used, it has been subjected to certain criticisms as well. The contention that service quality consists of five basic dimensions (Parasuraman et al., 1988) is according to some researchers questionable and they have suggested that SERVQUALs dimensions are contextual and not universally applicable (Ekinci & Riley, 1999; Brown et al., 1993; Cronin & Taylor, 1992; Teas, 1993; Bouman & Vander Wiele, 1992; Gagliano & Hathcote, 1994, Kang and James, 2004; Lee, 2005; Fowdar, 2007). Instead, the number and composition of the service quality dimensions are probably dependant on the service setting (Brown et al., 1993; Carman, 1990). It has been suggested that for some services the SERVQUAL instrument needs considerable adaptation (Dabholkar et al., 1996) and that items used to measure service quality should reflect the specific service setting under investigation, and that it is necessary in this regard to modify some of the items and add or delete items as required (Carman, 1990). Moreover, research suggests that culture may 36

play a fundamental role in determining how consumers perceive what constitutes service quality. In a nutshell, there are still issues and varying opinions about the dimensionality of service quality and the universality of the five dimensions, (Rust and Oliver, 1994). These are of interest to and significant for users of SERVQUAL and for all those who wish to understand better the concept of service quality. Hence there is still a need for fundamental research into the dimensionality of service quality bearing in mind the contextual circumstances, the specific industry and the specific service setting.

37

MARKETING STRATEGIES
Financing rapid industrial growthWith the Indian economy growing at a blistering pace on the back of strong industrial and services growth, the Indian companies are looking to build up capacity to meet future demand.Banks play a pivotal role in financing this industrial growth. Technological innovations & challengesBanks are aggressively adopting the latest technology in order to improve product offerings, customer service, and operational efficiency and risk management systems. Financial inclusion & Rural MicrofinanceIn the quest for new markets and customer segments, as well as with the RBI directives in this area, banks are looking at the rural and unbanked segments in a new light as a huge business opportunity. Convergence to a single solution providerWith pressures on the spreads and the competition in the urban markets increasing rapidly, banks need to develop new ways to sustain profitability.Banks led to a plethora of new products, hence becoming a one stop shop for all financial solutions. Roadmap by RBI for foreign banksThe RBI has laid out a two phased roadmap for giving greater freedom to the foreign banks in India.This has spurred the entry of several other foreign banks in India, along with acting as a signal to the domestic players to pull up their socks to face the new competitors. Growth in retail lendingThe under banked Indian population as well as the high margin on retail products makes this a very attractive market for the banks.The all-inclusive nature of this growth in terms of sectors covers all consumer segments as well as product segments. Demand for derivatives & other risk management productsThe increasingly dynamic business scenario and financial sophistication also increase the need for customized exotic financial products.The complex and peculiar nature of risks faced by the companies are passed onto the banks.Innovative financial tools and advanced risk management methods are required by the banks to capitalize on this business opportunity.

MEASURING CUSTOMER SATISFACTION IN THE INDIAN BANKING SECTOR 38

Banking operations are becoming increasingly customer dictated. The demand for banking super malls' offering one-stop integrated financial services is well on the rise. The ability of banks to offer clients access to several markets for different classes of financial instruments has become a valuable competitive edge. Convergence in the industry to cater to the changing demographic expectations is now more than evident. Banc assurance and other forms of cross selling and strategic alliances will soon alter the business dynamics of banks and fuel the process of consolidation for increased scope of business and revenue. The thrust on farm sector, health sector and services offers several investment linkages. In short, the domestic economy is an increasing pie which offers extensive economies of scale that only large banks will be in a position to tap. With the phenomenal increase in the country's population and the increased demand for key differentiators for each bank's future success. Thus it is imperative for banks to get useful feedback on their actual response time and customer service quality aspects of retail banking, which in turn will help them take positive steps to maintain a competitive edge. The working of the customer's mind is a mystery which is difficult to solve and understanding the nuances of what customer satisfaction is, a challenging task. This exercise in the context of the banking industry will give us an insight into the parameters of customer satisfaction and their measurement. This vital information will help us to build satisfaction amongst the customers and customer loyalty in the long run which is an integral part of any business. The customer's requirements must be translated and quantified into measurable targets. This provides an easy way to monitor improvements, and deciding upon the attributes that need to be concentrated on in order to improve customer satisfaction. We can recognize where we need to make changes to create improvements and determine if these changes, after implemented, have led to increased customer satisfaction. "If you cannot measure it, you cannot improve it." - Lord William Thomson Kelvin (1824-1907).

IMPACT OF ATM ON CUSTOMER SATISFACTION This presents the impact of ATM on customer satisfaction. This is a comparative study of three major banks i.e. State Bank of India, ICICI bank and HDFC bank. This paper has been divided into two sections. First section presents the introduction of ATM, brief history of three Banks compiled through the literature available in the field. It also includes the review of the various services provided by the three banks under study. 39

Second section presents the result obtained on the basis of the data collected for the three banks. A sample of 360 respondents equally representing each bank has been taken through questionnaire. Data has also been collected through interview also. Then various statistical tools have been used accordingly to compile the result. KEY WORDS: ATM, Customer satisfaction, Fees, Problems, ATM services, Banks. ATM means neither avoids traveling with money nor any time money, but certainly implies both. Slim ATM cards are fast replacing confounding withdrawal forms as a convenient way of getting your money from banks. In a way, they are rewriting the rules of financial transaction. A smart person no longer needs to carry a wallet-full of paper money on his person. All he needs to do is fish out an ATM (automated teller machine) card, insert it in the slot, punch in a few details and go home with hard cash. Automated teller machines (ATMs) were the first well-known machines to provide electronic access to customers. With advent of Automatic Teller Machines (ATM), banks are able to serve customers outside the banking hall. ATM is designed to perform the most important function of bank. It is operated by plastic card with its special features. The plastic card is replacing cheque, personal attendance of the customer, banking hours restrictions and paper based verification. ATMs have made hard cash just seconds away all throughout the day at every corner of the globe. ATMs allow you to do a number of banking functions such as withdrawing cash from ones account, making balance inquiries and transferring money from one account to another using a plastic, magneticstrip card and personal identification number issued by the financial institution. The Indian ATM industry has seen explosive growth in recent times. ATMs represent the single largest investment in the electronic channel services for the Banks. In India, HSBC set the trend and set up the first ATM machine here in 1987. Since then, they have become a common sight in many of our metros. Automated Teller Machines (ATMs) have gained prominence as a delivery channel for banking transactions in India. Banks have been deploying ATMs to increase their reach. While ATMs facilitate a variety of banking transactions for customers, their main utility has been for cash withdrawal and balance enquiry. As at the end of October 2007, the number of ATMs deployed in India was 31,078. According to some estimates the total cash movement through ATMs across India was around Rs. 70,000 crore in FY 06. Clearly, industry watchers forecast a bright future for ATMs in India. While the ATM is a great service for customers, for the banks it means immense savings on the cost of operations. While a typical cash transaction carried

40

out in a banks branch premise would cost Rs 40 that in an ATM will only cost Rs18translating into a cost saving of Rs 22 per transaction. ATM Networks The ATMs of a bank are connected to the accounting platform of the bank through ATM switches. Inter-bank ATM networks are created by setting up apex level switches to communicate between the ATM switches of different banks. The inter-bank ATM networks facilitate the use of ATM cards of one bank at the ATM(s) of other banks for basic services like cash withdrawal and balance enquiry. Banks owning the ATMs charge a fee for providing the ATM facility to the customers of other banks. The ATM deploying bank from the card issuing banks recovers this fee referred to as interchange fee. However the interchange fee is not fixed across banks and depends on the terms of bilateral / multilateral arrangements. Banks with larger ATM network treat interchange fee as an important stream of revenue. (Sultan Singh, Ms. Komal, (Ph.D.)

41

ABOUT COMPETITORS
PUBLIC SECTOR AND PRIVATE SECTOR BANKS PUBLIC SECTOR BANKS
Among the Public Sector Banks in India, United Bank of India is one of the 14 major banks which were nationalized on July 19, 1969. Its predecessor, in the Public Sector Banks, the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz. Comilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla Union Bank Ltd. (1922) and Hooghly Bank Ltd. (1932).This Public Sector Bank India has implemented 14 point action plan for strengthening of credit delivery to women and has designated 5 branches as specialized branches for women entrepreneurs.

PRIVATE SECTOR BANKSThe first Private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It is one of the fastest growing Banks in India. IDBI ranks the tenth largest development bank in the world as Private Banks in India and has promoted world class institutions in India. The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited, to set up a bank in the private sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995.Co operative banks in India.

Difference between private sector and public sector banks

A private sector is an economy is made up of all businesses and firms owned by ordinary members of the general public. It also consist of all the private households in which people live..,whereas, public sector is an economy is owned and controlled by a government . It consist of government businesses and firms ,and goods and services provided by the government, such as the national health service, state education,jobs,roads,public parks and law and order. 42

Comparison of private sector banks with public sector banks in of customer satisfaction-

terms

The objective of this study is to compare the public sector banks and private sector banks in terms of customer satisfaction and to find out the various reasons of customer dissatisfaction in these banks. The scope of the study is confined in comparing the Public sector and private sector banks in terms of customer satisfaction. The study will be undertaken on the basis of sample survey.

REASONS OF DISSATISFACTION IN PUBLIC SECTOR BANKS

Behavior and attitude of the staff in public sector banks is the first reason of Customer dissatisfaction. Time taken to process the transaction is the second reason of customer dissatisfaction. Many of the services are not provided by the Public sector banks when compared with the Private sector banks e.g. ATM Banking is not provided by Union Bank of India. Internet Banking and Mobile banking is also not provided by many of the Public sector banks.

43

DATA ANALYSIS AND INTERPRETATION

Total No. of Respondents & Among Them Who are Using Standard Chartered Bank

Chart 6:-No. of respondent who are using standard chartered bank

Out of the 16 respondent of income 10 lacs & above,1 respondent uses Standard Chartered. Out of the 21 respondent of income 5-10lakhs,2 respondents use Standard Chartered. Out of the 25 respondent of income 3-5lakhs & above,3 respondents use Standard Chartered. Out of the 1 respondent of income 1-3 lakhs,0 respondents use Standard Chartered.

44

Chart7:- Various banks with which people have accounts

ANALYSIS- The percentage respondents with reference to bank they use. According to this graph the maximum number of users of bank they prefer is other like government or public bank because of high charges of private bank. And in private bank the most preferred bank is ICICI and HDFC and rest share is very low.

45

Type of Account

Chart8:- Different types of account which different respondents have.

Out of the total respondent,6% uses current account. Out of the total respondent,37% uses Salary account. Out of the total respondent,52% uses Saving account. Out of the total respondent,5% uses other accounts.

46

Investment Preferred by People

Chart9,10:- User preference investment options ANALYSIS- This analysis shows that maximum people goes for bank deposit. Real estate and share and debentures have equal percentage 16%, followed by ULIP and then rest of the investment afterwards.

47

Reason Why the Respondent Go for a Particular Bank

Chart11:- Investment reason for number of respondents

Out of total respondent 19 choose there bank because of brand name. 48 went on the basis of expected returns. 1 was keen because of reviews in the magazine. 14 out of total because of risk profile.

48

Consideration of People for Having an Account (Saving, Salary, Current, Others) In Any of the Bank.

Chart12:- Consideration for number of respondents

Out of the total respondent,8% had consideration for building home. Out of the total respondent,13% had consideration for child education. Out of the total respondent,15% had consideration for future contingencies. Out of the total respondent,9% had consideration for pension. Out of the total respondent,32% had consideration for tax saving. Out of the total respondent,23% had consideration for wealth creation.

49

Type of Risk Takers on Basis of There Age

Chart13,14:- Type of risk taker on the basis of age ANALYSISModerate risk takers are max. of age 20-30, from age of 31-50 the no. of moderate risk takers are constant and the no. decline at the age of 51-60 and is least for people who are above 60 years. Low risk takers are also highest at age of 20-30 and are almost constant from age 31-50, the graph shows a little decline from age 51-60 and it again rises for people who are above 60 years. High takers are less at the age segment of 20-30 years they rise and is max. at the age b/w 31-40 then becomes zero from 41-60 and again rise for respondents who are above 60 years.

50

Type of Investors On the Basis of There Age

Chart15:- Type of investors on the basis of their age

In every segment of age group short term investor are less than long term investors. Long term investors are max. at age group of 20-30 followed by age group of 31-40. Whereas short term investors are max. for investors who have age greater than 60 years.

51

Chart16:- Investment option on the basis of age group ANALYSISFor LIC highest no. of investors are of age group from 20-30 and very less from age group 31-40, zero of rest of the age groups. For Shares & Debentures max. are of 31-40 years followed by people from 41-50 years. For Real Estate 20-30 years group max. & 31-60 constant. For ULIPS max are from age of 20-30 years. For Bullions very less respondents are there and they also of age group of youngest and oldest. Mutual funds is used by people from 20-50 years of age group for investment. Among them 31-40 years group has max. respondents. Bank Deposit is used by 20-30 years followed by above 60 years respondents. Post Office is used as investment option max. by older people followed by people of age group from 41-50 years.

52

Chart17:- Bank preference on the basis of age

Max. people of all age group goes towards other banks, mainly government banks. Among that highest is of 20-30 years. HDFC bank & ICICI bank is preferred more than STANDARD CHARTED & KOTAK MAHINDRA banks. 20-30 years of age group people show more interest for SC bank than other age groups

53

LIMITATIONS There are certain limitations of this study. Sample size is small so there may be possible that the desired level of accuracy not exist. This study is conducted only in small area so there may be chance of Inaccuracy of the result. In selecting the Sample, there are chances of sampling errors. Sometimes some respondent do not give right answers, thats why variations may be possible. This study is applicable in Delhi only not in whole India.

54

CONCLUSION The Banking sector in India is undergoing major changes due to competition and the advent of technology. The customer is looking for better quality and services which can provide him/her with satisfaction. This study reveals the different levels of satisfaction that customer had with their banks and helps identify the factors (or relationship dimensions) responsible for satisfying the customer. This would help in enhancing the relationship between the two, and thus aid decision makers in banks to identify the major factors that determine satisfaction. Many service firms, including retail banks have been measuring customer satisfaction and quality to determine how well they are meeting customer needs. This study derives its basic findings and is also in line with empirical findings with respect to customer satisfaction by other researchers. Looking at the demographics of the customer and satisfaction with the services,64 percent customers of IDBI ,ICICI and HDFC are in age group of 25-35 years ,are post graduates and their satisfaction is highest with multi channel banking.71 percent of the customers of SBI are above 35 years, are graduates and their satisfaction is highest with traditional facilities. These findings propose that the private banks namely ICICI, IDBI, and HDFC have been able to attract the younger customers, with higher educational levels, who are comfortable with the usage of multi channel banking. On the other hand the customer of national bank, SBI are older in age and are satisfied with the traditional facilities.SBI with the largest network of branches in India, has given competition to the private banks and has retained its older customers by satisfying them with the traditional facilities. Perceptual mapping has been extensively used in marketing for various applications where a manager wants to know the cognitive dimensions that consumers use to evaluate products and services. Perceptual mapping can also assess the relative positions of various products and services. This study has created a perceptual map using factors scores of each of five banks under study. These maps will help identify how each bank is positioned in the customers mind. We can see from exhibit 6 that customers find most satisfaction with the traditional facilities of state bank of India and least satisfaction with HDFC bank. Customers have maximum satisfaction with multi channel banking facilities of ICICI bank and least satisfaction with Punjab national bank. Internal marketing provides maximum satisfaction to customers of ICICI bank and least to those of state bank of India. Though SBI has a largest network of branches its focus on customer satisfaction with respect to any time anywhere could do with improvement. 55

Perceptual mapping is an important marketing research tool used in many areas of marketing. Strategies based on perceptual maps have led to increased profits, better market control and more stable growth. a ranking score sheet of the customer perception based on perceptual mapping .the result from this study could provide managerial lessons on assessment of strengths, improvement of services and in evolving a research strategy that will benefit the management of banks. Another finding from this study emerges with regard to information seeking. While most of the customers of the other banks in the study acquired information about the banks through the radio or hoardings. The customers of ICICI Bank got information from their friends and relatives. This implies that the bank is able to satisfy its customer who acts as a referral market for the bank. This helps the bank to acquire new customers at low cost. Thus banks must be actively involved in acquiring, satisfying and retaining customers. Also the results suggest that satisfaction of the customer is different across the five banks under the study. Traditional facilitiesDebit card Credit card Demand draft facility Fixed deposits Money transfer Locker facility ATM Networking Multi channel Banking Tele banking Net banking D-mat Internal Marketing Service scale Parking space Attitude of bank staff Dissemination of information Query Handling

56

SUGGESTION
The staff should be adequately trained to deal with the customer on one to one basis. Many public sector banks need to revive their infrastructure to have pace with the competing environment. Many of the services needs improvement in public sector banks e.g. ATM facilities. Staff should be adequately trained to encourage face to face dealing. Staff should be friendly and approachable. Clearly defined customer policy should be adopted by the banks. Customers needs should be anticipated in advance so that they can be helped out in a better way. Honor your promises. To conclude, it can be said that the research findings clearly reveal the goodwill and reputation of the bank among the customer. But there is a need to strengthen the bank by spreading awareness about the services offered by Standard Chartered bank through advertisement and by expanding the branches of the bank all over the country and also by tapping the potential customers through innovative means.

57

BIBLIOGRAPHY
Websites: 1. www.standardchartered.com 2. www.icici.com 3. www.abnamro.com 4. www.kotak.com 5. www.hdfcbank.com

Personnel: 1. Mr. Nitish Dipankar

58

QUESTIONNAIRE
Name:-________________________________ _________ Gender: - Male / Female Occupation:- Service__/ Own Business__/ Retired__ Income:____________________ Age:Annual

Q1): Which type of investment do you prefer ? a): Short term (1year or less than a year) ___ b): Long term (more than 1 year) ____ Q2): How much risk are you willing to take? a): High (Risk taker) b): Moderate (Risk taker) c): Low (Risk averse) Q3): Which among the following investments options you like the most (Rank them from 1-8, 1 for first choice) ___ Bank Deposit Schemes ___Post Office Schemes ___Real Estate ___Bullions (Gold/silver) ___ Shares & Debentures ___ ULIP ___ LIC Policies ____ Mutual Fund Q4): In which of the following banks do you presently have an account? ( NOTE:- Can tick more than one if applicable) a): Standard Chartered b): Kotak Mahindra C): ABN AMRO d): HDFC e): ICICI f): Others Q5): Which type of accounts do you have ? ( NOTE:- Can tick more than one if applicable) a): Current account b): Saving account c): Salary account d): Other Q6): Which factor influences you the most while investing in a company or bank? a): Brand Name b): Expected Returns c): Reviews in financial magazines d): Risk Profile Q7): What would be your major consideration for investment ? a): Children education / marriage b): Building dream home c): Tax saving d): Future contingencies e): Pension plan f): Wealth creation g): Others (Please mention) Q8): Have you ever used any service of Standard Chartered before ? Yes____ No____ Q9): Rank the following attributes of Standard Chartered. ATTRIBUTES Excellent Satisfactory Unsatisfactory Loan facility Interest rate Security of money Customer Care Good network Personalize services Q10): Your recommendations for Standard Chartered Bank regarding product / services._______________________ ______________________________________________________________________ _____________________ 59