Banking in Retail

GENERAL INTRODUCTION
BANKING IN RETAIL
With a jump in the Indian economy from a manufacturing sector, that never really took off, to a nascent
service sector, Banking as a whole is undergoing a change. A larger option for the consumer is getting
translated into a larger demand for financial products and customization of services is fast becoming the
norm than a competitive advantage. With the Retail banking sector expected to grow at a rate of 30%
[Chandra Kocher, ED, ICICI Bank] players are focusing more and more on the Retail and are waking up
to the potential of this sector of banking. At the same time, the banking sector as a whole is seeing
structural changes in regulatory frameworks and securitization and stringent NPA norms expected to be
in place by 2004 means the faster one adapts to these changing dynamics, the faster is one expected to
gain the advantage. In this article, Richer try to study the reasons behind the euphemism regarding the
Retail-focus of the Indian banks and try to assess how much of it is worth the attention that it is
attracting. Retail banking means banking in which banking institutions undertake transactions directly
with consumers, rather than corporations or other banks. Services offered include: savings and
transactional accounts, mortgages, personal loans, debit cards, credit cards, and so forth. Retail lending
is a part of retail banking which is conceptually similar in characteristics.
POTENTIAL FOR RETAIL IN INDIA: IS SKY THE LIMIT

The Indian players are bullish on the Retail business and this is not totally unfounded. There are two
main reasons behind this. Firstly, it is now undeniable that the face of the Indian consumer is changing.
This is reflected in a change in the urban household income pattern. The direct fallout of such a change
will be the consumption patterns and hence the banking habits of Indians, which will now be skewed
towards Retail products. At the same time, India compares pretty poorly with the other economies of the
world that are now becoming comparable in terms of spending patterns with the opening up of our
economy. For instance, while the total outstanding Retail loans in Taiwan is around 41% of GDP, the
figure in India stands at less than 5%.
The comparison with the West is even more staggering. Another comparison that is natural when
comparing Retail sectors is the use of credit cards. Here also, the potential lies in the fact that of all the
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consumer expenditure in India in 2001, less than 1% was through plastic, the corresponding US figure
standing at 18%. Going by international standards, a large portion of the Indian population is simply not
bankable taking profitability into consideration. On the other hand, the financial services market is
highly over-leveraged in India. Competition is fierce, particularly from local private banks such as
HDFC and ICICI, in the business of home, car and consumer loans. There, precisely lie the pitfalls of
such explosive growth.
Competitive Analysis:
The fact that the statistics reveal a huge potential also brings with it a threat that is true for any sector of
a country that is opening up. Just how competitive are our banks? Is the threat of getting drubbed by
foreign competition real? To analyze this, one needs to get into the shoes of the foreign banks. In other
words, how do they see us? Are we good takeover targets?
Going by international standards, a large portion of the Indian population is simply not bankable
taking profitability into consideration. On the other hand, the financial services market is highly overleveraged in India. Competition is fierce, particularly from local private banks such as HDFC and ICICI,
in the business of home, car and consumer loans. There, precisely lie the pitfalls of such explosive
growth. All banks are targeting the fluffiest segment i.e. the upwardly mobile urban salaried class.
Although the players are spreading their operations into segments like selfemployed and the semiurban rich, it is an open secret that the big city Indian yuppies form the most profitable segment. Overdependence on this segment is bound to bring in inflexibility in the business. There are few documents
that get the attention of product planners and marketers the way that a competitive analysis does. A good
competitive analysis is a scouting report of the actual market terrain that your company must navigate in
order to be successful. The analysis begins with a list of your company's competitors. Most of the time,
such a list is comprised of what your company considers to be its chief competitors. However, there may
be other companies that indirectly compete with yours, ones that offer products or services that are
aiming for the same customer capital.
What according to you would be the next big thing to happen in the Indian retail
banking sector
Outsourcing! If you are a keen observer of the market, you would notice that every sector, including big
industrial sectors like car manufacturers, have gone for outsourcing their requirements. Over a period,
those players who have gone aggressive on outsourcing have found that it saves them not only cost and
time but helps them concentrate on their core business area, a key survival necessity in these times of
economic downturns.
Industry profile The Economic Survey of India is a document presented to Parliament by the
government a few days before the Union Budget. It is an analysis of the state of the economy and its
prospects. Economists and analysts scan it closely because it very often reflects policy changes that will
be announced in the Budget.
Economic Survey 2010-11, tabled in Parliament on February 25, had this to say about the retail sector:
Permitting FDI (foreign direct investment) in retail in a phased manner beginning with metros and
incentivizing the existing retail shops to modernize could help address the concerns of farmers and
consumers. FDI in retail may also help bring in technical know-how to set up efficient supply chains
which could act as models of development in India retail banking sector
BANKING IN INDIA
Retail credit outstanding as on March 22, 2003, amounted to Rs 1,60,000 crore. According to one
estimate, the retail segment is expected to grow at 30-40% in the coming years.
Major Players: HDFC Bank, AXIS Bank, IDBI Bank and ICICI Bank. Banking in India in the modern
sense originated in the last decades of the 18th century. The first banks were Bank of Hindustan (17701829) and The General Bank of India, established 1786 and since defunct. The largest bank, and the
oldest still in existence, 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. They are
generally subject to minimum capital requirements based on an international set of capital standards,
known as the Basel Accords. Banking in its modern sense evolved in the 14th century in the rich cities
of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and
lending that had its roots in the ancient world. In the history of banking, a number of banking
dynasties have played a central role over many centuries.
What about the foreign giants

The foreign banks have identified this problem but there are certain systematic risks involved in operating in the
Retail market for them. These include regulatory restrictions that prevent them from expanding their branch
network.
So these banks often take the Direct Selling Agent (DSA) route whereby low-end jobs like sourcing or
transaction processing are outsourced to small regional layers. So now on, when you see a loan mela or a
road show showcasing the retail bouquet of an elite MNC giant, you know that a significant commission
earned out of any such booking gets ploughed back to our own economy. Perhaps, one of the biggest
impediments in foreign players leveraging the Indian markets is the absence of positive credit bureaus.
In the west the risk profile can be easily mapped to things like SSNs and this information can be
publicly traded. PAN is a step in this direction but lot more work need to be done. What has been a
positive step towards this is a negative file sharing started by a consortium of 11 banks. However, as a
McKinsey study points out actual write-offs on NPAs show a strong negative correlation with sharing of
positive information. On top of this, the spend-now-pay-later credit culture in India is just not picking
up.
So all for the keeping then
This will perhaps be the most wrongful inference that can be drawn from the above. We just cannot
afford to look inwards and repeat the mistakes that were the side effects of the Nationalization of the
Banking System. A growing market can never be an alibi for lack of innovation.
Indian banks have shown little or no interest in innovative tailor-made products. A case in point is the
successful implementation of micro-credit networks in Bangladesh. Positioning a bank as a tech-savvy
financial vendor in a country where Internet penetration is an abysmal 1.65% can only add to the overleveraging as pointed out earlier. The focus of the sector should remain in macroeconomic wealth
creation and not increasing the per capita indebtedness that will do little but add to the NPA burden.
Retail Banking in India has to be developed in the Indian way, notwithstanding the long queues in front
of the teller counters in the Public sector banks.
PRODUCT RANGE
PRODUCT/SERVICES PROFILE OF S.B.I
1. Current account
-CA30000
-CA70000
-CA200000
-CA500000
2. Savings account
-Silver savings account
-Gold savings account
3. FIXED DEPOSIT
4. Smart Saver
5. Smart Access
6. Nonresident account (different variant)
CURRENT ACCOUNTS
.Current Account is primarily meant for the purpose of facilitating business transactions. current
account is one of the two primary components of the balance of payments, the other being capital
account. It is the sum of the balance of trade. The difference between a nations savings and its
investment. The current account is an important indicator about an economy's health. It is defined as the
sum of the balance of trade (goods and services exports less imports), net income from abroad and net
current transfers. A positive current account balance indicates that the nation is a net lender to the rest of
the world, while a negative current account balance indicates that it is a net borrower from the rest of the
world. A current account surplus increases a nations net foreign assets by the amount of the surplus,
and a current account deficit decreases it by that amount. The current account and the capital account are
the two main components of a nations balance of payments. A nations current account balance is
influenced by numerous factors its trade policies, exchange rate, competitiveness, forex reserves,
inflation rate and others.
Current Accounts Benefits

The main benefit of Current Account is its high liquidity and also provides safety of funds to the
customer. Current account serves as a low cost of funds for the Bank, provides an opportunity for cross
sell and creates stickiness / engagement of the customer because of their transactional nature. One of the
compulsory requirements when starting a business is that of opening a Current Bank account. It is ideal
for carrying out day-to-day business transactions. And with more and more banks dishing out attractive
features to add customers, businesses are spoilt for choice. Facilities like 24-hour Phone-Banking, NetBanking, Doorstep-Banking, Instant Alert services, free Demand-Drafts/Pay-Orders are commonplace
and almost by default these days.
A current account is generally best suited for managing day to day transactions, while a savings account
provides a safe and potentially profitable home for your extra cash.
Most current accounts allow you to set up automatic payments - including direct debits and standing
orders - issue cheques and provide a debit card that you can use to withdraw cash and pay for goods and
services.
CA 30
Features
1. Swift & Convenient Cheque Collections at SBI Bank Locations as well as 2500 Correspondent
Bank Locations
2. AQT/AQB Criterion for evaluating Non-Maintenance Charges
3. Doorstep Banking allowing pickup and delivery of cash and instruments
4. CMS Services
5. Corporate Net Banking with bulk upload facility
6. Flat and aggressive transaction charges for Pay Orders, Demand Drafts, RTGS, Online RTGS,
Foreign Outward Remittances (non-trade)
CA 70
Features
7. Swift & Convenient Cheque Collections at S.B.I Bank Locations as well as 2500 Correspondent
Bank Locations
10. CMS Services

12. Mobile banking availability.
Flat and aggressive transaction charges for Pay Orders, Demand Drafts, RTGS, Online RTGS, Foreign
Outward Remittances (non-trade)
CA 200
Features
Bank Locations
16. CMS Services
19. S.B.I Business Gold Card providing a cash withdrawal limit of Rs 1 lacs
CA 500
Features
Bank Locations
22. Free Personalized PAP Cheque Books (limits as per account variant)
24. CMS Services
27. S.B.I Business Gold Card allowing a cash withdrawal limit of Rs 1 lacs.
SAVINGS ACCOUNTS
Savings Bank Accounts are meant to promote the habit of saving among the citizens while allowing
them to use their funds when required. Savings accounts are opened for purpose of personal banking
transactions. Saving accounts are accounts maintained by retail financial institutions that pay interest but
cannot be used directly as money in the narrow sense of a medium of exchange. These accounts let
customers set aside a portion of their liquid assets while earning a monetary return.
Savings Accounts Benefits

The main advantage of Savings Bank Account is its high liquidity and safety. Savings account serves as
a low cost of funds for the Bank, provides a platform for cross sell and creates stickiness / engagement
of the customer because of its transactional nature. While savings accounts aren't typically known for
their high interest rates, they do offer numerous advantages over other savings options. Consider these
savings account advantages before putting your money in a CD or other investments.
Savings accounts and money market accounts allow you to withdraw your money at any time, which is
rarely an option with CDs or long-term investment options. Savings accounts allow for unlimited
withdrawals by teller, mail or ATM, but federal regulations limit you to six telephone, electronic or
preauthorized transfers per month. Keep in mind, only three of these withdraw.
SILVER SAVINGS ACCOUNT

Features:
1. Personalized Payable At Par Cheque book
2. More than 2500 locations for collection and more than 640 locations for payment services
3. Free Instant Money transfer (RTGS/NEFT)to over 54,000 Bank branches in India
4. International Silver Debit Card with access to over 1.25 million ATMs worldwide & 35,000
ATMs of Cash tree/Maestro/NFS in India
5. Bill Pay facility with access to over 114 Billers in India
6. Money Multiplier Facility
GOLD SAVINGS ACCOUNT
Features
1. Free Instant Money transfer (RTGS/NEFT)to over 54,000 Bank branches in India
2. Personalized Payable At Par Cheque book
3. More than 2500 locations for collection and more than 640 locations for payment services
4. International Gold Debit Card providing Free Access to over 1.25 million ATMs worldwide &
35,000 ATMs of Cash tree/Maestro/NFS in India
5. Free Bill Pay with access to over 114 Billers in India
6. Waiver of DD/PO charges for up to Rs.1,50,000 per day.
7. Preferential rates for Gold Coins and Foreign Exchange Service.
8. Special asset deals from time to time.
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FIXED DEPOSITS
In a Fixed Deposit Account, a certain sum of money is deposited in the bank for a specified time period
with a fixed rate of interest. The rate of interest for Bank Fixed Deposits depends on the maturity period.
Bank deposits are fairly safe because banks are subject to control of the Reserve Bank of India (RBI)
with regard to several policy and operational parameters. The banks are free to offer varying interests in
fixed deposits of different maturities. Interest is compounded once a quarter, leading to a higher
effective rate. The minimum deposit amount varies with each bank. The minimum amount of Fixed
deposit that can be placed with SBI Bank can range from as low as Rs. 10,000 to an unlimited amount.
Table no.1
Interest Rates for Fixed Deposits
7 to14 Days
15 to 30 Days
31 to 45 Days
46 to 60 Days
61 to 90 Days
91 to 120 Days
121 Days to 180 Days
181 Days to 270 Days
271 Days to less than 1 Year
1 Year to 13 Months
13 Months 1 Day
13 Months 2 Days to 15 Months
15 Months 1 Day to 18 Months
18 Months 1 Day to 2 Years
2 Years 1 Day to 25 Months
25 Months 1 Day
25 Months 2 Days to 3 Years
3 Years 1 Day to 5 Years
Greater than 5 Years
Less than INR

15 lacs
Annualized Yield
2.25%
2.50%
3.00%
3.50%
4.00%
4.50%
4.75%
6.00%
6.00%
6.60%
6.75%
6.60%
6.60%
7.10%
7.10%
7.25%
7.10%
7.50%
7.50%
2.25%
2.50%
3.00%
3.50%
4.00%
4.50%
4.75%
6.14%
6.14%
6.77%
6.92%
6.77%
6.77%
7.29%
7.29%
7.45%
7.29%
7.71%
7.71%
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Returns
The rate of interest for Bank Fixed Deposits depends on the maturity period (duration) of the FD and the
amount invested. Interest rate also varies between each bank. Some banks have facility to pay interest
every quarter or every month, but the interest paid may be at a discounted rate in case of monthly
interest. The Interest payable on Fixed Deposit can also be transferred to Savings Bank or Current
Account of the customer or could be paid back by a PO. Australia and Canada the investment product is
known as a Term Deposit.
Table no.2
Rate of return of fixed deposit account
FD
Value(Rs.)
Minimum Tenure
Account
Type
Rs.200,000
6 Months 1 Day
Gold
Account
Rs.25,000
6 Months 1 Day
Silver
Account
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Table no-3
Target Segment: Resident Individual Customer
TAX SAVER DEPOSIT
1.
2.
Product Name
TAX SAVER DEPOSIT
Product codes
(Normal Citizens )
3.
4.
5.
6.
7.
8.
Product codes
Citizens )
(Senior
Product codes
Residents )
(Non
Tax benefit
Tenure
Eligible for Benefit
Joint Holders
439 - FD-5 Yrs Tax Efficient Payout Resident

440 - FD-5 Yrs Tax Efficient Reinvestment Resident
441 - FD 5 Yrs Tax Efficient Payout Senior Citizen

442 - FD-5 Yrs Tax Efficient Reinvestment Senior
Citizen
443 - FD-5 Yrs Tax Efficient Payout Non Resident

444 - FD-5 Yrs Tax Efficient Reinvestment Non
Resident
Tax benefit up to max. Rs.1,00,000/- under Section 80 C of IT
Act
5 Years
Individuals (Both Residents & Non-Residents) & HUF
Could be Single or Joint holders In case of joint accounts, only
first holder would be eligible for tax deduction
9. Pan Card
10.
Min Amount
Mandatory for Primary holder
11. Max Amount

12.
Deposit denomination
Rs.1,00,000/- in a Financial Year with all Banks
13.
Interest option
Quarterly Payout
or
Reinvestment only.
Monthly payout option NOT available
Premature withdrawal
Pre-closure is permissible only in the event of death of the

primary account holder. Pre-mat will happen at card rate for the
tenure FD is kept with the Bank.
14.
15. Nomination
Rs 10,000/- (Deposit can be in multiple of Rs 1,000 thereafter).
Multiples of Rs 1,000
Only one nomination allowed
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RECURRING DEPOSIT
Given the volatility and risk of capital and return across various investment options, customers look for
avenues to park funds with assured returns and safety of principal. Recurring Deposit scheme enables
the depositor to make a financial provision by paying equated monthly installments for a pre-agreed
period. At the end of pre-determined period you are paid back the lump sum including the principal and
interest.
Features and benefits of Recurring Deposit

1.
Open a Recurring Deposit with a minimum monthly installment of Rs 1,000
2.
Choose the convenience of duration between minimum 6 months to maximum 2 years.
3.
Lock your interest rate now for future bookings (identical to the Term Deposit interest rates).
4.
Senior citizens get an extra benefit in the interest rates (extra 50 basis points).
5.
Non-applicability of Tax Deduction at Source (TDS).
6.
Encourages savings without stress on customers finances.
7.
Easy way of paying monthly installment by providing a onetime standing instruction from customers
S.B.I Bank Savings Account.
SMART ACCESS
Money kept in the Savings Account earns a lower rate of interest vis a vis the same if placed as a Term
Deposit. Money in the Savings account provides liquidity and cover for day to day or immediately
foreseeable expenses. SMART ACCESS account gives you the flexibility by linking your term
deposit(s) to your savings or current account. Whenever there is a need of funds, the same is swept in
from the linked term deposit to meet the requirements.
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Features & Benefits

1. Earn high Term Deposit interest rates on your savings
2. Enjoy the flexibility of a S.B.I Bank Savings Account or a Current Account.
3. Get easy access to you money whenever you need it through a ATM or any S.B.I Bank branch
4. Your Deposit is broken in multiples of Re 1
5. Link multiple Term Deposits to your account.
6. Get a personalized cheque book in the Savings Account
7. Your complete access to your account related information on your fingertips with our phone
banking services.
8. No extra fee or cost will be charged to the customer for this facility. The Savings/Current
Account AQB requirements as well as associated service charges will be as per applicable
Schedule of Charges.
9. All unassisted transactions through telephone banking
10. Internet transactions not from an overseas merchant.
DEBIT/ATM CARDS
1. FREE Unlimited Access to over 19000 ATMs across India
2. Free Unlimited Access to over 1.25 million MasterCard ATMs worldwide and over 19,000
ATMs in India
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3. 1st Indian debit card to offer 0% surcharge on fuel purchases at any petrol pump in India- instant
2.5% saving
4. Daily cash withdrawal limit of Rs. 75,000 & purchase limit of Rs.75,000
5. International transactions are always reflected in Indian Rupees
6. Free access to clipper lounges at Airports in major metros
7. State Bank of India offers unparalleled convenience through State Bank ATM-cum-Debit card.
With this card, there is no need to carry cash in your wallet.
MasterCard
1. FREE Unlimited Access to over 19000 ATMs

2. Daily cash withdrawal limit of Rs. 40,000 & purchase limit of Rs. 40,000
3. Instant updating of account to reflect your debit card transactions. Keeping you in the know, so
you can manage your money better
4. International transactions are always reflected in Indian Rupees
5. Annual fee of only Rs149
6. Zero interest or service charge will be charged.
7. Mostly known its service in India.
8. Easy to use by any customer.
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1. Indias most economical US$ Travel Card: Low fees and cross-currency exchange mark-up not
applicable in U.S.
2. FREE Access to over 9000 Chase ATMs in the U.S.
MOBILE BANKING
1. S.B.I Bank is going to provide its customer a service where they can transfer money, send money
and pay utility bills through their mobile phone. This will be an addition to the existing Mobile
banking facility.
2. The S.B.I BANK OBOPAY Mobile Payment Solution is a mobile payment service by S.B.I
BANK that lets you Send, Spend and Get Money to/from any of the 240+ million mobile phones
in India (provided they are registered users of this service and have a bank account with S.B.I
BANK or any of the partner banks).
Process at the branch

1. For getting registered on the Obopay network customer needs to fill up the application form and
submit the same at the nearest S.B.I Bank branch.(Application form attached)
2. Branch will verify the signature of the customer against the signature present in the FCR
3. Post signature verification branch official will affix a date and time of receipt of application
along with his signatures.
4. Verified forms will be sent to the NOC Mumbai attention to DB Ops team under a covering
schedule.
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NET BANKING
NET BANKING SETUP FOR RETAIL AND CORPORATE
Retail Net Banking Setup
Retail net banking setup is done for those customers who have not opted for a Debit Card but wish to
avail a Net Banking facility.
Receipt of Data
1. Account opening team receives the forms from the various branches for opening the customer
accounts.
2. Data for customers who have not opted for Debit Card but wish to avail a Net Banking facility is
collated by the account opening team on excel.
3. Data collated at Day 0 till EOD is forward to DB Ops team via mail
4. DB Ops on Day 1 utilizes this data for setting up of Retail Net Banking facility for the customer
through FLEX@ Retail admin module
5. Customer can also submit a letter at the branch for availing net banking facility
6. Branch needs to verify the signature and affix the branch stamp on the letter which is then send
across to DB Ops.
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Processing of request
1. Retail Net Banking Set up for the mentioned customers is done by in putter in the retail admin
2. After the setup is complete details of the customers are forwarded to the authorizer
3. Authorizer cross checks data provided by the account opening team with the data input done in
the retail admin module
4. On proper verification of the details the data input done is authorized
Corporate Net Banking Setup
Documents required
View Only facility

1.
Duly Completed Channel Registration form.
2.
Form should be signed as per the mode of operation in the account
Transaction Access
1. Duly Completed Channel Registration form

2. Form Duly Completed Channel Registration form
3. Form should be signed as per the mode of operation in the account
4. Board Resolution for net banking in Desired Format
5. Duly filled bulk upload forms mentioning the payment type & debit account number
signed as per the mode of operation
6. should be signed as per the mode of operation in the account
7. Board Resolution for net banking in Desired Format
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Factor Authentication
1. Duly Completed Channel Registration form
2. Form should be signed as per the mode of operation in the account
3. 2 Factor authentication should be ticked on the user profile form
4. Email Id of the customer is required to be mentioned on setup form
5. Setup will be done in Port wise for sending the SEED and PIN at the email id provided by the
customer
Note:
All the channel registration forms should have the company stamp
Branch to affix date and time stamp on the channel registration form
Receipt of documents
1. Branch to send the complete set of form along with the checklist under a covering schedule
to DB Ops
2. A soft copy of the covering schedule is also sent over email to DB Ops.
3. DB Ops sends acknowledgement over e mail to the branch and updates the record on the ftp
site.
PROCESS FOR BILL PAYMENT
1. S.B.I Bank is providing its customer a service to pay their bills and make charity/subscription
payments through the Internet.
2. This is an extension to the existing Internet Banking facility.
3. All individual customers who have the right to conduct financial transactions in their account
are eligible for this facility.
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Customer Payment Process
Customer Registration
1. The customer needs to register for each Biller separately before paying the bills through Net
Banking
2. For registration customer needs to submit unique identifiers as per the specifications given by
individual Biller.
3. If the Biller is a Payment type biller, customer can immediately start paying bills after successful
registration
4. If the Biller is a presentment type biller, then the customer will be able to view all the bills
pertaining to the said Biller from the next billing cycle, after successful registration.
5. Customer will able to view and pay presentment type bills under View & Pay option
Payment Process
1. Customer can pay the bill through PAY option in the Bill Pay page
2. Once the customer provides a confirmation for payment of the bill following entry is passed by
the system
A. Customer account Dr --------- Biller account Cr
3. Transactions done by Customers till 11:59:59 pm Day 0 are processed on working Day 1.
4. Transactions done after 12 pm are processed on the next working day.
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Research design
TITLE OF PROJECT
A Study on Effectiveness of Retail banking with special reference to

STATE BANK OF INDIA
STATEMENT OF THE PROBLEM
As there is an immense opportunity of the retail banking in India. This Dissertation is on the issues and
challenges in the retail banking because of the competition of the various banks and the customer
satisfaction of the services which the banks are providing and at the same time to solve the complaints of
the customer and maintaining the sound relationship for the future and by this way to estimate the future
growth of the retail banking. As service quality reflects the way the banks are performing, this study
attempts to explore the perception of customers in respect to the services provided by the
Banks. The entry of private and foreign banks, the nature of functioning of these banks and the
promotional attempts of these banks has changed the landscape of the Banking sector in India. In
respect to customer services there are notable perceived differences. Hence this study on customer
service quality of Indian banks looks for bringing out the differences between perceptions of
customers of these banks. This study is descriptive and analytical in nature.
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OBJECTIVES OF STUDY
1. To study the issues and challenges in retail banking

2. To study the recent trends in retail banking
3. To ensure high satisfaction level and reduce percentage of complaints of customers in retail
banking.
4. To estimate the future growth of Indian retail banking.
5. To understand Optimization of retail banking channels.
6. To suggest strategies for improvement in Customer Service.
7. To make suggestions for improvement of quality of services in public, private and foreign
Banks.
8. To find the gap between customers expectations and perceptions of quality of services for
Public private and foreign banks.
DATA COLLECTION
The study relies on both primary as well as secondary data. The source of the secondary data is
Drawn from State Bank of India publications and the sites of the banks to which respondents
are customers. Various journal articles have been referenced for understanding the background
of the study. For obtaining primary data, a structured questionnaire is designed to collect data
from customers of Banks. The questionnaire consisted of four parts. Part A had 26 statements
on 6 dimensions to measure the expectations of the customers. Part B consisted of the profile of
the customers; Part C had 26 statements on 6 dimensions to measure the perception of the
Customers of the banks. Part D had open ended questions to avail insights into the
perceptions of the customers. The responses for the statements in Part A and C were
Measured on a likert scale of servqual tool. An interview schedule is prepared to collect data
from Bankers. In depth interviews are conducted with the help of the interview schedule
.
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Data was collected from two sources-primary and secondary sources.
1. Primary data collection- The primary data was collected by means of survey. It was collected
from different customers through questionnaire.
2. Secondary data collection-This data was collected from Internet, Companys websites &
Magazines etc.
SAMPLE SIZE
Sample size was restricted to 100 respondents, since it was not possible to cover the whole universe in
the available reference period.
SAMPLING METHOD
Convenience Sampling has been used to collect the data because time limit for the completion of the
work is limited and also managers and employees were not available all the time.
Area of Study-
MYSORE
Duration-
2 months
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LIMITATIONS OF THE STUDY
1. The limitation of the study is lack of information being provided by the staff of the bank because
of the privacy policy of the bank.
2. In my two month project work, I have learnt how the S.B.I Bank runs its huge organization with
the support from various departmental wings.
3. One of the factors of the study was lack of time if it will be more than four months.
25
BANKING IN INDIA
Retail credit outstanding as on March 22, 2003, amounted to Rs 1,60,000 crore. According to one
estimate, the retail segment is expected to grow at 30-40% in the coming years.
Major Players: State Bank of India, HDFC Bank, UTI Bank, IDBI Bank and ICICI Bank.
What about the foreign giants

The foreign banks have identified this problem but there are certain systematic risks involved in operating
in the Retail market for them. These include regulatory restrictions that prevent them from expanding their
Branch network.
So these banks often take the Direct Selling Agent (DSA) route whereby low-end jobs like sourcing or
transaction processing are outsourced to small regional layers. So now on, when you see a loan mela or a
road show showcasing the retail bouquet of an elite MNC giant, you know that a significant commission
earned out of any such booking gets ploughed back to our own economy. Perhaps, one of the biggest
impediments in foreign players leveraging the Indian markets is the absence of positive credit bureaus.
In the west the risk profile can be easily mapped to things like SSNs and this information can be
publicly traded. PAN is a step in this direction but lot more work need to be done. What has been a
positive step towards this is a negative file sharing started by a consortium of 11 banks. However, as a
McKinsey study points out actual write-offs on NPAs show a strong negative correlation with sharing of
positive information. On top of this, the spend-now-pay-later credit culture in India is just not picking
up. A swift legal procedure against consumers creating bad debt is virtually non-existent. Finally, the
vast geographical and cultural diversity of the country makes credit policy formulation a tough job and it
simply cannot be dictated from a Wall Street or a Singapore boardroom! All these add up to the
unattractiveness of the Indian retail market to the foreign players. So over the past few years, in spite of
the entry of MNCs in many industries, Retail Banking has seen a flurry of panicky exits. Fewer than 40
remain in India and their share of total bank assets currently 7.2% is falling.
26
Those that remain might be thought to be likely buyers of Indian banks. Yet Citibank, HSBC and
Standard Charteredall in India for more than a century, and with relatively large retail networks
seem to have no pressing need to acquire a local bank. Established foreign banks have preferred to take
over customers or businesses from other foreign banks that want to leave. Thus HSBC, in recent years,
has o-Mitsubishi. ABN Amor took over Bank of America's retail business.
So all for the keeping then

This will perhaps be the most wrongful inference that can be drawn from the above. We just cannot
afford to look inwards and repeat the mistakes that were the side effects of the Nationalization of the
Banking System. A growing market can never be an alibi for lack of innovation. Indian banks have
shown little or no interest in innovative tailor-made products. A case in point is the successful
implementation of micro-credit networks in Bangladesh. Positioning a bank as a tech-savvy financial
vendor in a country where Internet penetration is an abysmal 1.65% can only add to the over-leveraging
as pointed out earlier.
The focus of the sector should remain in macroeconomic wealth creation and not increasing the per
capita indebtedness that will do little but add to the NPA burden. Retail Banking in India has to be
developed in the Indian way, notwithstanding the long queues in front of the teller counters in the Public
sector banks!
27
STATE BANK OF INDIA PROFILE
State Bank of India (SBI) is a multinational banking and financial services company
Based in India. It is a government-owned corporation with its headquarters
in Mumbai, Maharashtra. As of December 2013, it had assets of US$388 billion and
17,000 branches, including 190 foreign offices, making it the largest banking and
Financial Services Company in India by assets.
State Bank of India is one of the Big Four banks of India, along with ICICI Bank, Punjab National
Bank and Bank of Baroda.
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 the Indian
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. Government nationalized the Imperial Bank of India in 1955,
with 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 is a regional banking behemoth and has 20% market share in deposits and loans among Indian
commercial banks
History:
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 company/joint stock companies and were the result of the royal charters.
28
These three banks received the exclusive right to issue paper currency till 1861 when with the Paper
Currency Act, the right was taken over by the Government of India.
The Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity took as its
name Imperial Bank of India. The Imperial Bank of India remained a joint stock company but without
Government participation
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is
Central Bank Indias central bank, acquired a controlling interest in the Imperial Bank of India. On 1
July 1955, the Imperial Bank of India became the State Bank of India. In 2008 the government of India
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.
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, the State Bank of Travancore,
already had an extensive network in Kerala.
The State Bank of India and all its associate banks are identified by the same blue ''keyhole'' logo. The
State Bank of India wordmark usually has one standard typeface, but also utilises other typefaces.
29
OPERATION:
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 India.
Summary of Seal:
30
Domestic presence
SBI had 14,816 branches in India, as on 31 March 2013, of which 9,851 (66%) were in Rural and Semiurban areas. In the financial year 2012-13, its revenue was INR 200,560 Crores (US$ 36.9 billion), out
of which domestic operations contributed to 95.35% of revenue. Similarly, domestic operations
contributed to 88.37% of total profits for the same financial year.
International presence
As of 28 June 2013, the bank had 180 overseas offices spread over 34 countries. It has branches of the
parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los
Angeles, Male in the Maldives, Muscat, Oman|Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It
has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan
and Cape Town. It also has an ADB in Boston, USA.
The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in
the Toronto area and three in the Vancouver area.
SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State
Bank of India (Mauritius). SBI (Mauritius) has 15 branches in major cities/towns of the country
including Rodrigues.
In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten branches
nine branches in the state of California and one in Washington, D.C. The 10th branch was opened in
Fremont, California on 28 March 2011. The other eight branches in California are located in Los
Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield.
In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant Bank
and received permission in 2002 to commence retail banking. It now has five branches in Nigeria.
31
In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the country. In Moscow,
SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns
76% of PT Bank Indo Monex.
The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.
In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for USD 8
million in October 2005.
Associate banks
SBI has five associate banks; all use the State Bank of India logo, which is a blue circle, and all use the
"State Bank of" name, followed by the regional headquarters' name:
1. State Bank of Bikaner & Jaipur
2. State Bank of Hyderabad
3. State Bank of Mysore
4. State Bank of Patiala
5. State Bank of Travancore
Earlier SBI had seven associate banks, all of which had belonged to Indian Princely States|princely
states until the government nationalised them between October 1959 and May 1960. In tune with the
first Five Year Plan, which prioritised the development of rural India, the government integrated these
banks into State Bank of India system to expand its rural outreach. There has been a proposal to merge
all the associate banks into SBI to create a "mega bank" and streamline the group's operations.The first
step towards unification occurred on 13 August 2008 when State Bank of Saurashtra merged with SBI,
reducing the number of associate state banks from seven to six.
32
Then on 19 June 2009 the SBI board approved the absorption of State Bank of Indore. SBI holds 98.3%
in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold
the balance of 1.77 %.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing network of branches. Also,
following the acquisition, SBI's total assets will inch very close to the (INR)10 trillion mark (10 billion
long scale). The total assets of SBI and the State Bank of Indore stood at INR 9,981,190 million as of
March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the SBI
Indore branches started functioning as SBI branches on 26 August 2010.
Non-banking subsidiaries
Apart from its five associate banks, SBI also has the following non-banking subsidiaries:
1. SBI Capital Markets Ltd

SBI Capital Markets''' SBICAPS is an investment bank founded in August 1986. It is a wholly owned
subsidiary of State Bank of India (SBI).
Following the crash in MS Shoes share prices in March 1995, the Central Bureau of Investigation (CBI)
started an investigation.
In June 1997 the CBI sought permission from the government to lay charges against senior officials of
the Securities and Exchange Board of India and SBI Capital Markets.
The CBI alleged that senior officials had violated many guidelines and in the process had cheated
investors.
In January 1997 the Asian Development Bank acquired a 13.84% equity stake in SBICAPS.
This share was repurchased by State Bank of India in March 2010.
In January 2006 SBICAP and the international investment banking group CLSA announced a two-year
partnership to work on large joint deals in equity capital and mergers & acquisitions.
33
In September 2006 SBI Caps announced that it had set up a $100 million venture fund in partnership
with the venture capital division of SBI Holdings of Japan.
Air India ran into serious financial difficulties, and in July 2009 SBICAPS was asked by civil aviation
minister Praful Patel to prepare a road map to bring the carrier back into profitability. SBI Capital was
appointed the mandated firm to restructure Kingfisher Airlines loans during the Kingfisher Airlines
financial crisis, starting in 2010.
In February 2012 SBSCAP and other bank lenders were insisting that commissions paid to promoters be
reversed before they would consider providing further funding to the still-troubled airline.
In October 2006 R Sridhar and was appointed managing director and CEO of SBI Capital.
In July 2009 SBICAPS announced that S. Vishvanathan had replaced A.P. Verma as MD & CEO.
Vishvanathan had joined SBI in 1976, had helped set up SBI's New York branch, and had been chief
general manager of SBIs North Eastern operations.
2. SBI Funds Management Pvt Ltd

3. SBI Factors & Commercial Services Pvt Ltd
4. SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
34
SBI Cards & Payments Services Pvt. Ltd. or ''SBICPSL'', is a payment solutions provider in India. It is
incorporated as a joint venture between the State Bank of India,
India's largest bank, and GE Capital. They are headquartered in Gurgaon, Haryana/ Delhi NCR and have
branches in over 50 cities across India. As of January 2012, SBI Card had 2.171 million credit cards.
Parent corporations:
State Bank of India (SBI) is the country's largest bank. GE Capital has been operating in India since
1993.
SBI Credit Cards :SBI Card caters to both the individual and corporate segments. SBI Card offers a
number of cards under each of the following categories:
1. Premium Cards
2. Classic Cards
3. Travel & Shopping Cards
35
4. Exclusive Cards
5. Corporate Cards
Logo
The SBI Card logo has the symbol of State Bank of India, which is a circle and not key hole and a small
man at the center of the circle.
5. SBI DFHI Ltd

6. SBI Life Insurance Company Limited
SBI Life Insurance''' is a joint venture life insurance company between State Bank of India (SBI), the
largest Government-owned corporation state-owned banking and financial services company in India,
and BNP Paribas Assurance. SBI owns 74% of the total capital and BNP Paribas Assurance the
remaining 26% of the capital. SBI Life Insurance has an authorized capital of INRConvert|20|band a
paid up capital of INRConvert|10|b.
36
History
When the government of India opened the life insurance sector to private companies, State Bank of
India |SBI started SBI Life as a joint venture with BNP Paribas in 2001. While in its initial stage its
business was mainly from bank assurance channel, now it is developing its own agency team for selling
its life insurance products.
7. SBI General Insurance
In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26% of the remaining
capital), to form a joint venture life insurance company named SBI Life Insurance company Ltd.
In 2004, SBI DFHI (Discount and Finance House of India) was founded with its headquarters in
Mumbai.
Other SBI service points
SBI has 27,000+ Automated teller machine ATMs and SBI group (including associate banks) has
32,752 ATMs. SBI has become the first bank to install an ATM at Drass in the Jammu & Kashmir
Kargil region. This was the Bank's 27,032nd ATM on 27 July 2012.
Logo and slogan

* The logo of the State Bank of India is a blue circle with a small cut in the bottom that depicts
perfection and the small man the common man - being the center of the bank's business.
* Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE WAY", "A BANK OF
THE COMMON MAN", "THE BANKER TO EVERY INDIAN", "THE NATION BANKS ON US"
37
Listings and shareholding

As on 30 June 2013, Government of India held around 62% equity shares in SBI. Over 800,000
individual shareholders hold approx. 5.7% of its shares. Life Insurance Corporation of India is the
largest non-promoter shareholder in the company with 10.9% shareholding.
Table no: 4
The equity shares of SBI are listed on the Bombay Stock Exchange, where it is a constituent of the BSE
SENSEX index, and the National Stock Exchange of India, where it is a constituent of the S&P CNX
Nifty.
Its Global Depository Receipts (GDRs) are listed on the London Stock Exchange.
38
Employees:
SBI is one of the largest employers in the country having 228,296 employees as on 31st March 2013, out
of which there were 46,833 female employees (21%) and 2,402 disabled employees (1%). On the same
date, SBI had 43,550 Schedule Caste (19%) and 16,764 Schedule Tribe employees (7%).
Hiring drive
The bank hired 20,682 Assistants in FY 2012-13, from over 30 lakh applicants, for expansion of the
branch network and to mitigate staff shortage, particularly at rural and semi-urban branches. In the same
year, it recruited 847 probationary officers from around 17 lakh candidates which applied for officers
position.
Staff productivity
As per its Annual Report for FY 2012-13, each employee contributed to revenues of INR 944 Lacs and
net profit of INR 6.45 Lacs.
Recent awards and recognitions
1. SBI was ranked 298th in the Fortune Global 500 rankings of the world's biggest corporations for
the year 2012.
2. SBI won "Best Public Sector Bank" award in the Dun & Bradstreet| D&B India's study on
'India's Top Banks 2013
3. State Bank of India won three IDRBT Banking Technology Excellence Awards 2013 for
Electronic Payment Systems, Best use of technology for Financial Inclusion, and Customer
Management & Business Intelligence in the large bank category.
4. SBI won National Award for its performance in the implementation of Prime Ministers
Employment Generation Programme (PMEGP) scheme for the year 2012.
39
5. Best Online Banking Award, Best Customer Initiative Award & Best Risk Management Award
(Runner Up) by IBA Banking Technology Awards 2010
6. SKOCH Award 2010 for Virtual corporation Category for its e-payment solution.
7. SBI 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.
8. The Bank of the year 2009, India (won the second year in a row) by The Banker Magazine.
9. Best Bank Large and Most Socially Responsible Bank by the Business Bank Awards 2009.
10. Best Bank 2009 by Business India
11. The Most Trusted Brand 2009 by The Economic Times.
12. SBI was named the 29th most reputed company in the world according to ''Forbes'' 2009
rankings.
13. Most Preferred Bank & Most preferred Home loan provider by CNBC.
14. Visionaries of Financial Inclusion By FINO.
15. Technology Bank of the Year by IBA Banking Technology Awards.
16. SBI was 11th most trusted brand in India as per the The Brand Trust Report|Brand Trust Report
2010.
40
Major competitors
Some of the major competitors for SBI in the banking sector are Axis Bank, ICICI Bank, HDFC Bank,
Punjab National Bank, Bank of Baroda, Canara Bank and Bank of India. However in terms of average
market share, SBI is by far the largest player in the market.
External links:
1. Official website, VIEWED ON 2ND JAN 2014
2. State Bank Of India on face book VIEWED ON 12 th JAN 2014
3. News about State Bank of India at -The Times of India. VIEWED ON 17 th JAN 2014
4. State Bank of India IFSC Codes & Branch Details Verified Manually. VIEWED ON 22ND JAN
2014
5. State Bank of India IFSC Codes, MICR Codes, Branch Codes and Branch Complete Details.
VIEWED ON 2 ND FEB 2014
Business data :( finance links)
1. State Bank of India at Google finance.

2. State Bank of India at Reuters.
3. State Bank of India at Bombay Stock Exchange.
4. State Bank of India at National Stock Exchange of India.
41
State Bank of India is the largest state-owned banking and financial services company in India. The
Bank provides banking services to the customer. In addition to the banking services, the Bank through
their subsidiaries, provides a range of financial services, which include life insurance, merchant banking,
mutual funds, credit card, factoring, security trading, pension fund management and primary dealership
in the money market. The Bank operates in four business segments, namely Treasury, Corporate/
Wholesale Banking, Retail Banking and Other Banking Business. The Treasury segment includes the
investment portfolio and trading in foreign exchange contracts and derivative contracts. The Corporate/
Wholesale Banking segment comprises the lending activities of Corporate Accounts Group, Mid
Corporate Accounts Group and Stressed Assets Management Group. The Retail Banking segment
consists of branches in National Banking Group, which primarily includes personal banking activities,
including lending activities to corporate customers having banking relations with branches in the
National Banking Group. SBI provides a range of banking products through their vast network of
branches in India and overseas, including products aimed at NRIs. The State Bank Group, with over
16,000 branches, has the largest banking branch network in India. The State bank of India is the 10th
most reputed company in the world according to Forbes. The bank has 156 overseas offices spread over
32 countries. They have branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong,
Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka,
Sydney, and Tokyo. They have offshore banking units in the Bahamas, Bahrain, and Singapore, and
representative offices in Bhutan and Cape Town. State Bank of India was incorporated in the year 1955.
The Bank traces their ancestry to British India, through the Imperial Bank of India, to the founding in
1806 of the Bank of Calcutta, making them the oldest commercial bank in the Indian Sub-continent.
The Government of India nationalized the Imperial Bank of India in the year 1955, with the Reserve
Bank of India taking a 60% stake, and name was changed to State Bank of India. In the year 2001, the
SBI Life Insurance Company was started by the Bank.
They are the only Bank that have been permitted 74% stake in the insurance business.
The Bank's insurance subsidiary 'SBI Life Insurance Company' is a joint venture with Cardiff S.A in
which Cardiff holds 26% of the stake. During the year 2005-06, the bank introduced 'SBI e-tax' an
online tax payments facility for direct and indirect tax payment.
42
They also launched the centralized pension processing. The Bank made a partnership with Tata
Consultancy Services for setup C-Edge Technologies and consulting services to the banking, financial
services and insurance industry. The bank was noted as 'The most preferred bank' in a survey by TV 18
in association with AC Nielsen-ORG Marg. Also, the Bank was voted as 'The most preferred housing
loan provider' in AWAAZ consumer awards for the year 2006. In the customer loyalty survey 2006-07
conducted by 'Business World', the Bank was ranked number one in all parameters of customer
satisfaction, service orientation, customer care/ call center, customer loyalty and home loans. SBI Funds
was judged 'Mutual fund of the year' by CNBC/TV-18/CRISL. The Bank introduced new products and
services such as web-based remittance, instant fund transfer, online-trading and comprehensive cash
management. During the year 2007-08, the Bank launched 965 branches all over the country. They
inaugurated a new state-of-the art Dealing Room with online connectivity to all active forex intensive
Branches at Corporate Centre in Mumbai. They launched a new product, Construction Equipment Loan
to cater to construction Companies. Also, they introduced new products such as SBI Reverse Mortgage
Loan and SBI Home Plus in the areas of Home Loans. During the year, the RBI transferred their entire
shareholding in the Bank representing 59.73% of the issued capital of the Bank to the Government of
India.
The Bank acquired 92.03% of equity of Global Trade Finance Ltd. Consequently, GTFL became a
subsidiary of the Bank. They signed a MoU with the Indian railways for installing ATMs at 682 railway
stations. In March 2008, the Bank opened their 10,000th branch and became only the second bank in the
world to have more than 10,000 branches after China's ICBC. During the year 2008-09, the company
launched Import factoring, a new product in association with SBI Factors & Commercial Services Ltd.
They increased the number of branches for retail sale of gold coins from 250 to 518. Also, they relaunched Gold Deposit Scheme at 50 branches to mobilize gold from domestic market for deployment
as metal loans to jewelers. During the year, the Bank opened their 11,111th Branch at Sonapur (Kamrup
District) in Assam.
They introduced three new products viz., SBI Special Home Loan, SBI Happy Home Loan and SBI
Lifestyle in response to the stimulus package announced by the Government of India.
43
They entered into an exclusive arrangement with TATA Motors for handling the booking process of
TATA 'Nano' cars. During the year, the Bank launched on their web-site an on-line application form for
registering Auto Loan enquiries and expeditiously monitoring and converting these leads into Auto
Loans. Also, they launched 'e-invest' for the ASBA (applications supported by blocked accounts) to aid
investors for their equity subscriptions, IPO and Rights applications. During the year, the Bank set up a
custodial services company namely SBI Custodial Services Pvt. Ltd., in joint venture with Society
Generale, France. They signed letter of intent for setting up of joint venture Company for undertaking
General Insurance Business. Also, they divested 10% equity stake in its wholly owned subsidiary SBI
Pension Fund Pvt. Ltd at cost in favor of its subsidiaries. In October 2008, the Bank signed an MoU with
State General Reserve Fund (SGRF) of Oman, for a general purpose private equity fund. During the
year, State Bank of Saurashtra (SBS), a wholly owned subsidiary of the Bank, amalgamated with the
Bank with effect from August 13, 2008.
They signed a joint venture agreement with Insurance Australia Group for undertaking General
Insurance business. Also, they signed a joint venture agreement with Macquarie Capital Group,
Australia and IFC, Washington for setting up an Infrastructure fund of USD 3 billion for investing in
various infrastructure projects in India. During the year 2009-10, the Bank opened 1,049 branches, out
of which branches were opened in metro and urban areas with a view to increase the Bank's reach and be
more accessible to customers. In July 2009, SBI introduced 'SBI Loan to Affluent Pensioners' enabling
the government pensioners to avail personal loans up to Rs 3 lakh. During the year, the Bank designed a
special package, the Defenses Salary Package, for personnel of the three Armed Forces i.e. the Army,
Navy and Air Force who maintain their Salary accounts with them. As of March 2010, the Bank had
12,496 branches and 21,485 Group ATMs. In June 2009, the company increased their shareholding in
Nepal SBI Bank Ltd to 55.02% and thus Nepal SBI Bank Ltd became a subsidiary of the Bank with
effect from June 14, 2009. In May 2010, the Bank selected consortium of Elavon Incorporation, USA
and Visa International, USA as their joint venture (JV) partner for Merchant Acquiring Business.
They set up a wholly owned subsidiary, namely SBI Payment Services Pvt Ltd for conducting Merchant
Acquiring Business. In August 2010, State Bank of Indore was amalgamated with the Bank as per the
scheme of amalgamation approved by the Central Board. During the year 2010-11.
44
The Bank introduced 2 new products, namely 'Pushpa Ullas' and 'Arthias Plus' on pilot basis. They made
substantial progress in establishing itself as a leading PE fund player of the country. Also, they also
signed a Joint Venture agreement with State General Reserve Fund (SGRF) of Sultanate of Oman, a
sovereign entity, to set up a general purpose private equity fund with an initial corpus of USD 100 mn,
expandable further to USD 1.5 bn. During the year, the Bank opened 576 new branches besides merger
of 470 branches of erstwhile State Bank of Indore. Also, they opened 14 foreign offices during the year,
taking the total to 156.
In July 1, 2010, the Bank launched their 'Green Channel Counter' at select branches across the country.
In General Insurance business, the Bank launched limited operations in April 2010 for the Corporate and
Mid Corporate customers based at Mumbai, and it was expanded to six other major locations in July
2010. In the Retail segment, the Bank launched their Long Term Home Insurance business at Mumbai in
October 2010, which was gradually extended to cover 56 RACPCs and RASMECCs. General Insurance
SME business was launched on a pilot basis in Mumbai and Chennai in February 2011. During the first
quarter of the financial year 2011-12, the Government of India issued the 'Acquisition of State Bank of
India Commercial & International Bank Ltd. vide notification dated July 29, 2011. Consequent to the
said notification, the undertaking of State Bank of India Commercial & International stands transferred
to and vest in State Bank of India with effect from July 29, 2011.
45
Analysis and Interpretation:

Respondents were the customers of SBI of MYSORE city of age group 25-40 years
A. Opinion on Branch experience.

The Branch timings (9:30 am to 6:30 pm from Monday to Saturday) are convenient.
Table: 5
Parameter
In numbers
In percentage
Very Good
Good
Satisfactory
45
5
0
90
10
0
Could be better
Branch Timings
100%
80%
90%
60%
40%
20%
10%
Good
Satisfactory
Could be better
0%
Very Good
Interpretation
The purpose of this question is to know the whether the bank timings are convenient for the customer,
90% of respondents opinioned that bank timings are very good and 10% of respondent opinioned that
timings are good. None of the customers have any problem with respect to timings. As 90% responded
very good, it seems high number are happy with bank timings.
46
The Branch ambience & layout is very friendly

Table: 6
Parameter
In numbers
In percentage
Very Good
40
80
Good
14
Satisfactory
Could be better
Branch Ambience
80%
80%
70%
60%
50%
40%
30%
20%
10%
0%
14%
4%
Very Good
Good
Satisfactory
2%
Could be
better
Interpretation
80% were of the respondent opinioned that Branch ambience is very good, 14% were of the opinioned
that branch ambience is good while 4% Opinioned that it is satisfactory & just 1% opinioned that it
could be better.
As 80% of respondents say branch ambience is very good, so not too many respondents like the branch
ambience.
47
The Branch was clean and well maintained

Table: 7
Parameter
Very Good
Good
In numbers
40
7
In percentage
80
14
Satisfactory
Could be better
Branch Maintenance
Could be better
2%
Satisfactory
4%
Good
14%
80%
Very Good
0%
20%
40%
60%
80%
100%
Interpretation
80% were of the respondent opinioned that Branch cleanness is very good14% were of the opinioned
that branch cleanness is good while 4% opinioned that it is satisfactory & just 1% opinioned that it could
be better.
As 80% of respondents say branch cleanness is very good, so not too many respondents like the branch
cleanness.
48
B. Opinion of the customer regarding Branch personnel?

The Branch personnel have listened to me patiently and have been able to respond
to my queries and clarifications
Table: 8
Parameter
In numbers
In percentage
Very Good
Good
38
7
76
14
Satisfactory
Could be better
3
2
6
4
Branch Personnel
Could be
better
4%
Satisfactory
6%
Good
14%
Very Good
76%
Interpretation
76% of respondents opinioned that branch personnel listened patiently& have been able to respond to
their queries, 14% of respondents opinioned it is good. While only 6% of respondent opinioned that it is
satisfactory and 4% said it could be better.
As only 76% of respondents say branch personnel listens patiently and have been able to respond to
queries and clarifications, so not too many respondents are satisfied.
49
The Branch personnel have been very helpful and courteous

Table: 9
Parameter
In numbers
In percentage
Very Good
37
74
Good
16
Satisfactory
Could be better
Branch Personnel
74%
80%
60%
40%
20%
0%
16%
6%
Very Good
Good
Satisfactory
4%
Could be
better
Interpretation
74% of respondents opinioned that branch personnel have been very helpful and courteous, 16% of
respondents opinioned it is good. While only 6% of respondent opinioned that it is satisfactory and 4%
said it could be better.
As only 74% of respondents say branch personnel have been very helpful and courteous, so not too
many respondents are satisfied.
50
The branch personnel have done a Need Analyses & Risk Assessment before
recommending any investment option.
Table: 10
Parameter
Very Good
Good
Satisfactory
Could be better
In numbers
In percentage
36
10
3
1
72
20
6
2
Branch Personnel
80%
72%
60%
40%
20%
6%
20%
2%
0%
Very Good
Good
Satisfactory
Could be
better
Interpretation
72% of the respondents opinioned that risk assessment before recommending any investment is very
good, 20% of respondents opinioned that it is good, 6% of respondents opinioned that it satisfactory and
only 2% said it could be better.
As only 72% of respondents say branch personnel does a Need Analyses & Risk Assessment before
recommending any investment option, so not too many respondents have positive response.
51
The branch personnel were aware of Product and Services and responded to your
queries
Table: 11
Parameter
In numbers
In percentage
Very Good
Good
Satisfactory
43
3
3
86
6
6
Could be better
Product & Services

Could be better
2%
Satisfactory
6%
Good 6%
86%
Very Good
0%
20%
40%
60%
80%
100%
Interpretation
86% respondents opinioned that branch personnel responded to their queries and is very good, 6% says
to be good & 6% satisfactory. Only 2% said it could be better.
As 86% of respondents say branch personnel were aware of Product and Services and responded to
customer queries, so not too many respondents are satisfied.
52
C. Customers opinion of transacting in Branches?
The waiting time at the Teller Counter was minimal

Table: 12
Parameter
In numbers
In percentage
Very Good
40
80
Good
10
Satisfactory
Could be better
Could be better
8%
Satisfactory
2%
Teller Counter
Good
10%
Very Good
80%
Interpretation
80% of respondent opinioned that waiting time is minimum at teller counter and it is very good, 10% of
respondent opinioned that it is good, 8% its satisfactory and 2% said it could be better.
As 80% of respondents say waiting time at teller counter was minimal , not too many were satisfied with
transaction.
53
The transactions done by us have been smooth & error free

Table: 13
Parameter
In numbers
In percentage
Very Good
45
90
Good
10
Satisfactory
Could be better
Smooth &Error free

100%
90%
80%
60%
40%
10%
20%
0%
Very Good
Good
Satisfactory
Could be
better
Interpretation
90% of respective opinioned that transactions are smooth and error free, 10% of respondent opinioned
that transactions are good. None of the customers have any problem with respect to timings. As 90%
responded very well, it seems high number are happy with transactions.
54
SBI looks into the feedback provided by you and takes necessary action if required.
Table: 14
Parameter
In numbers
In percentage
Very Good
41
82
Good
10
Satisfactory
Could be better
Action on feedback
Satisfactory,4% Could be better,
4%
Good,
10%
Very Good,
82%
Interpretation
82% of respondent responded that SBI looks into the feedback & is very good, 10% said its good, 4%
said its satisfactory and 4% said it could be better.
As 82% of respondents say SBI looks into the feedback provided by customer and takes necessary
action if required, not too many were satisfied with transaction.
55
D. Customers opinion for Bank services?

Are you happy with the TAT (Turn around time) post request?
Table: 15
Parameter
In numbers
In percentage
Very Good
40
80
Good
14
Satisfactory
Could be better
TAT Post request

2%
Could be better
Satisfactory
4%
Good
14%
80%
Very Good
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Interpretation
80% of respondent opinioned that TAT post request is very good, 14% said its good 4% said its
satisfactory 2% said it could be better. As 80% of respondents say the TAT (Turn around time) post
request is very good, not too many were satisfied with TAT post request.
56
E. Products and Services

Which feature of the SBI Savings account you like most
Table: 16
Parameter
In numbers
In percentage
OBOPAY
Money Monitor
Instant FD OD facility
30
35
10
38
45
13
E-Cheques
Saving Account
Could be better
4%
Satisfactory
13%
Very Good
38%
Good
45%
Interpretation
38% of the respondents opinioned for OBOPAY, 45% of respondent are in favor of Money Monitor,
13% are in favor of Instant FD OD while only 4% like E-cheques.
Maximum number of people like Money Monitor feature of YBL Savings account.
57
How do you rate the SBI COMMUNITY EVENTS held at SBI
Table: 17
Parameter
In numbers
In percentage
Very Good
37
74
Good
16
Satisfactory
Could be better
SBI BANK COMMUNITY EVENTS

80%
74%
60%
40%
16%
20%
6%
0%
Very Good
Good
Satisfactory
4%
Could be
better
Interpretation
74% of the respondent opinioned that SBICOMMUNITY EVENTS are very good, 16% of respondents
opinioned that events are good, 6% said it is satisfactory and 4% said it could be better.
As 74% of respondents says SBI COMMUNITY EVENTS is very good, not too many opinioned for
community events.
58
Is the information in the Bank Statement clear, easy to understand and adequate
Table: 18
Parameter
In numbers
In percentage
Very Good
39
78
Good
12
Satisfactory
10
Could be better
Information in Bank Statement

100%
80%
60%
40%
78%
20%
12%
0%
Very Good
Good
10%
Satisfactory
0%
Could be better
Interpretation
78% of the respondent opinioned that information in bank statement is clear, easy & adequate and is
very good, 12% of respondent opinioned that it is good, 10% said it is satisfactory.
As 78% of respondents says information in the Bank Statement is clear, easy to understand and adequate
or not, not too many were satisfied with the bank statement.
59
Will you recommend SBI to your friends and relatives?

Table: 19
Parameter
In numbers
In percentage
Most Definitely
45
90
Yes
May Be
No
SBI BANK
Could be better
0%
2%
Satisfactory
Good
8%
90%
Very Good
0%
20%
40%
60%
80%
100%
Interpretation
90% of respondent opinioned that they will most definitely recommend SBI to their friends & relatives,
8% of respondent opinioned yes. Only 2% said may be.
As 90% of respondent opinioned that they will definitely recommend SBI to their families & friends,
maximum number of respondent opinioned positive.
60
FINANCIAL STATEMENTS
Table no: 20
BALANCE SHEET
Mar ' 13
Sources of funds
Owner's fund
Equity share capital
Share application money
Preference share capital
Reserves & surplus
Loan funds
Secured loans
Unsecured loans
Total
Uses of funds
Fixed assets
Gross block
Less : revaluation reserve
Less : accumulated depreciation
Net block
Capital work-in-progress
Investments
Net current assets
Current assets, loans & advances
Less : current liabilities & provisions
Total net current assets
Miscellaneous expenses not written
Total
Notes:
Book value of unquoted investments
Market value of quoted investments
Contingent liabilities
Number of equity shares outstanding
(Lace)
Mar ' 12
296.98
-
295.79
-
1,327.24
Mar ' 11
280
-
1,023.13
Mar ' 10
270
-
507.06
Mar ' 09
200
-
302.69
17
16,169.42
17,793.64
13,273.16
14,592.08
8,220.39
9,007.45
2,910.38
3,483.07
663.03
880.03
194.88
133.01
86.66
36.24
17.59
64.15
130.73
0.39
7,117.02
35.73
97.28
3.89
5,093.71
17.38
69.28
1.59
3,073.12
6.81
29.43
5.29
1,350.14
1.25
16.34
3.3
394.86
1,326.86
2,918.10
-1,591.24
729.7
1,404.13
-674.42
376.88
1,228.68
-851.8
155.01
214.72
-59.71
49.66
28.4
21.26
5,656.90
4,520.45
2,292.20
1,325.16
435.77
-
43,481.94
68,874.54
52,061.58
17,524.20
6,522.22
2969.79
2957.9
2800
2700
2000
61
Table no: 21
RATIO ANALYSIS
Calculation of the ratios
Particulars
Calculation of Owners Fund (
Equity Base)
Calculation of Net Profit for the
Year
Mar ' 13
Mar ' 12
Mar ' 11
Mar ' 10
Mar ' 09
1,624.22
1,318.92
787.06
572.69
217
304.11
516.07
204.37
285.69
17
Operating Balance of Net Profit
1023.13
507.06
302.69
17
Return on Net Worth
0.19
0.39
0.26
0.50
0.07834
Total Fixed Assets
130.73
97.28
69.28
29.43
16.34
Earning Per Share (Rs.)
0.45
0.35
0.18
0.112107
0.0085
Current Assets
1,326.86
729.7
376.88
155.01
49.66
Current Liabilities
2918.1
1404.13
1228.68
214.72
28.4
Current Ratio
0.45
0.52
0.31
0.72
1.74859
Loan
16169.42
13273.16
8220.39
2910.38
663.03
Capital +Net Profit
1,624.22
1,318.92
787.06
572.69
217
Debt Equity Ratio
9.96
10.063658
10.44443
5.081947
3.05544
Working Capital
-1,591.24
-674.42
-851.8
-59.71
21.26
Net Profit for the Year
304.11
516.07
204.37
285.69
17
Return on Working Capital
-0.19
-0.77
-0.24
-4.78
0.79962
Debt Equity Ratio

(Loan/ capital + Net Profit)
62
Chart 1
Return on Net Worth
Return on Net Worth
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Mar ' 09
Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Year
Chart 2
Earning Per Share
Earning Per Share(Rs.)
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
Mar ' 09
Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Year
63
Chart 3
Calculation of Current Ratio
0.6
Current Ratio
0.5
0.4
0.3
0.2
0.1
0
Mar ' 09
Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Year
Chart 4
Debt Equity Ratio
Debt Equity Ratio
12.00
10.00
8.00
6.00
4.00
2.00
Mar ' 09
Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Year
64
Chart 5
200.00%
100.00%
0.00%
-100.00%
Mar ' 09
Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Mar ' 06
Mar ' 05
-200.00%
-300.00%
-400.00%
-500.00%
-600.00%
Year
Chart 6
Working Capital Ratio
200.00
0.00
Working Capital
-200.00
Mar ' 09
Mar ' 08
Mar ' 07
-400.00
-600.00
-800.00
-1,000.00
-1,200.00
-1,400.00
-1,600.00
-1,800.00
Year
65
RATIOS
1. Return on Net Worth = Net Profit / Owners Fund
2. Earnings Per Share = (Net Profit + Operating Balance of Net Profit) / Net Worth
3. Current Ratio = Current Asset / Current Labilits
4. Debt Equity Ratio = Total Debt / Equity.
5. Return on Working Capital = Net Profit for the year / Working Capital
6. Working Capital = Current Asset Current Liablities.
INTERPRETATIONS
1. Return on Net Worth is low its shows that bank is getting less rate of return on the invested
funds, with the reference to chart no. 1
2. Earnings per share is continuously increasing which could be helpful to attract more number of
customers, with reference to chart no. 2
3. The Current Ratio is adverse because it is lower than 1. Its means the bank has more current
liabilities than current asset, with reference to chart no. 3
4. The Debt Equity Ratio is adverse because it is more than Net Worth, more Debt is not good for
bank, with reference to chart no. 4
5. Return on working capital is slightly increasing as compare to previous years but it is still need
to be more, with reference to chart no. 5
6. Company has current liabilities more than current asset which is not good foe the viability of the
bank it is not beneficial for short and long term and it is showing is negative sign, with reference
to table no. 6
66
OPPORTUNITIES AND CHALLENGES

Retail banking has immense opportunities in a growing economy like India. As the growth story gets
unfolded in India, retail banking is going to emerge a major driver. How does the world view us? The
BRIC report is viewing India as an economic superpower. A.T. Kearney, a global managementconsulting firm, recently identified India as the second most attractive retail destination of 30
emergent markets.
The rise of Indian middle class is an important contributory factor in this regard. The percentage of
middle to high-income Indian households is expected to continue rising. The younger population not
only wields increasing purchasing power, but as far as acquiring personal debt is concerned, they are
perhaps more comfortable than previous generations. Improving consumer purchasing power, coupled
with more liberal attitudes towards personal debt, is contributing to Indias retail banking segment.
The combination of above factors promises substantial growth in retail sector, which at present is in the
nascent stage. Due to bundling of services and delivery channels, the areas of potential conflicts of
interest tend to increase in universal banks and financial conglomerates. Some of the key policy issues
relevant to the retail-banking sector are: Financial inclusion, responsible lending, and access to finance,
long-term savings, financial capability, consumer protection, regulation and financial crime prevention.
What are the challenges for the industry and its stakeholders
First, retention of consumers is going to be a major challenge. According to a research by Riechheld and
Sasser in the Harvard business review, 5percent increase in customer retention can increase profitability
by 35 percent in banking business, 50 percent in insurance and brokerage, and 125 percent in the
consumer credit card market. Thus, banks need to emphasis on retaining consumer and increasing the
market share.
Second, rising indebtedness could turn out to be a cause for concern in the future. Indias position, of
course, is not comparable to that of developed world where household debt as a proportion of disposable
income is much higher. Such a scenario creates high uncertainty. Expressing concerns about the high
67
growth witnessed in consumer credit segments the reserve bank has, as a temporary measure, put in
place risk containment measures and increased the weight from 100 percent to 125 percent in the case of
consumer credit including personal loans and credit cards.
Third, information technology poses both opportunities and challenges. Even with ATM machines and
Internet Banking, many of the customers still prefer the personal touch of their neighborhood branch
bank. Technology has made it possible to deliver services throughout branch network, providing instant
updates to checking accounts and rapid movement of money for stock transfers. However, this
dependency on the network has bought IT departments additional responsibilities and challenges in
managing, maintaining and optimizing the performance of retail banking networks. Illustratively,
ensuring that all bank products and services are
Available, at all times, and across the entire organization is essential for todays retail banks to generate
revenue and remain competitive. Besides, there are network management challenges, whereby keeping
this complex, distributed networks and applications operating properly in support of business objectives
becomes essential. Specific challenges include ensuring that account transaction applications run
efficiently between the branch offices and data centers.
Fourth, KYC Issues and money laundering risks in retail banking is yet another important issue. Retail
lending is regarded as a low risk area for money laundering because of the perception of the sums
involved. However, competition for clients may also lead to KYC procedures being waived in the bid
for new business.
Banks must also consider seriously the type of identification documents the will accept and other
processes to be completed. The Reserve Bank has issued details guidelines on application of KYC
norms in November 2011.
Trends in Retail Banking

Growing a retail banking business is becoming increasingly challenging. The yield curve is flattening,
reducing banks net interest margin. Competition is intensifying, as new, non-traditional players enter
the retail banking space. And consumer preferences for financial products, payment methods and
68
distribution channels continue to evolve, providing revenue opportunities, but also introducing new
operational challenges.
The changing dynamics of the retail banking business have significant implications for financial
institutions. In order to successfully compete in this environment, banks must provide a distinctive
customer experience and offer innovative product solutions in order to differentiate their value
proposition in the marketplace.
Key trends in retail Banking are:

1. Bifurcation of the retail banking business
National- Consolidate- Credit Cards, Home Equity Loans Mortgages
Local- Fragmented- Deposits, Installment Loans, Small Business Loans
2. Lack of differentiation in retail financial services:

Many financial institutions are struggling to differentiate their value propositions
In the retail banking market.
Free checking is now offered by all or most financial institutions.
Most institutions no longer charge for online banking or online bill payment.
Extended branch hours are increasingly common in many markets, as banks
Seek to increase customer convenience.
3. Proliferation and growth of electronic payments: In the last 25 years, the range of payment methods
available in the market has exploded. In addition to cash, checks, and credit cards, consumers can now
use one of an expanding array of electronic payment options that includes debit cards, prepaid cards,
online bill payment, automatic bill payment, and P2P services.
4. Increasing demand for ATM access

Strategies for Ensuring high Customer Satisfaction
69
Set service expectations and standards of behavior- this means that managers must set clear
service expectations and standards of behavior, beginning with defining "excellent service."
Identify and eliminate barriers and obstacles. Policies that do not make sense; procedures that get
in the way; and rules, norms that make satisfying customers difficult all need to be eliminated to
successfully improve service
Learn and develop skills. Clearly, personnel at all levels should learn new skills related to service
excellence and serve the customer.
Listen to your customers. Measurement of customer satisfaction can be a powerful way to

improve service if the feedback is not focused on punishment. Managers need to help staff hear,
first hand, how they are doing. For this feedback to be effective, however, it must be tied to
specific targets and goals and needs to be frontline driven
Reinforce and support continuous improvement. The real challenge is keeping the energy,
learning, and improving alive and going
70
FUTURE OF RETAIL BANKING

How do we see the future of retail banking? What are the major attributes of the shape of things to come
in this sector?
First, customer service should be the be-all and end-all of retail banking. The other day a document
released by the British Bankers Association, entitled UK Retail Banking Manifesto: addressing the
challenges that lie ahead for the industry and its stakeholders on September 29, 2004 came to my notice.
This document analysed the key policy issues relevant to the retail banking sector and highlighted the
role of financial inclusion, responsible lending, access to finance, and consumer protection. It is in this
context that that one is reminded of the needs to develop the standards and codes for banking.
The contribution of the Committee on Procedure & Performance Audit on Public Services (CPPAPS)
(Chairman: Shri S.S. Tarapore) has been invaluable and has provided great insight. Based on the
recommendation of the CPPAPS, the Annual Policy Statement for 2005-06 announced the decision to
set up an independent Banking Codes & Standards Board of India on the model of the mechanism in the
UK in order to ensure that comprehensive code of conduct for fair treatment of customers is evolved and
adhered to. The codes and standards, together with the institutional mechanism to monitor them, are
expected to enhance the quality of customer service, to the individual customer in particular. The codes
will bring about greater transparency in the system and also tackle the issue of information asymmetry.
The Board would function as an industry-wide watchdog of the banking code and ensure that the banks
comply with the banking codes. The codes would establish the banking industrys key commitments and
obligations to customers on standards of practice, disclosure and principles of conduct for their banking
services. The Board will monitor compliance with the Codes by the affiliated banks..
Second, sharing of information about the credit history of households is extremely important as far retail
banking is concerned. Perhaps due the confidential nature of banker-customer, banks have a traditional
resistance to share credit information on the client, not only with one another, but also across sectors.
Globally, Credit Information Bureaus have, therefore, been set up to function as a repository of credit
information - both current and historical data on existing and potential borrowers.The database
maintained by these institutions can be accessed by the lending institutions. Credit Bureaus have been
established not only in countries with developed financial systems but also in countries with relatively
71
less developed financial markets, such as, Sri Lanka, Mexico, Bangladesh and the Philippines. In Indian
case, the Credit Information Bureau (India)
Limited (CIBIL), incorporated in 2000, aims at fulfilling the need of credit granting institutions for
comprehensive credit information by collecting, collating and disseminating credit information
pertaining to both commercial and consumer borrowers. At the same time banks must exercise due
diligence before declaring a borrower as defaulter.
Third, outsourcing has become an important issue in the recent past. With the increasing market
orientation of the financial system and to cope with the competition as also to benefit from the
technological innovations such as, e-banking, the banks are making increasing use of "outsourcing" as a
means of both reducing costs and achieving better efficiency. While outsourcing does have various cost
advantages, it has the potential to transfer risk, management and compliance to third parties who may
not be regulated. A recent BIS Report on Outsourcing in Financial Services developed some highlevel principles. A basic requirement in this context is that a regulated entity seeking to outsource
activities should have in place a comprehensive policy on outsourcing including a comprehensive
outsourcing risk management programmer to address the outsourced activities and the relationship with
the service provider. Application of these principles in the Indian context is under consideration.
Finally, retail banking does not refer to lending only. In the whole story of retailing one should not
forget the role played by retail depositors. The homemaker, the retail shop keeper, the pensioners, selfemployed and those employed in unorganized sector - all need to get a place in the banks. It is in this
backdrop that the Annual Policy for 2005-06 pointed out issues relating to financial exclusion and had
announced that the RBI would implement policies to encourage banks which provide extensive services
while disincentivising those which are not responsive to the banking needs of the community, including
the underprivileged
Furthermore, the nature, scope and cost of services need to be monitored to assess whether there is any
denial, implicit or explicit, of basic banking services to the common person and banks have been urged
to review their existing practices to align them with the objective of financial inclusion.
72
FINDINGS
1. With reference to table no.5, 90% of customers are happy with the bank timings & they
opinioned that it is very good.
2. With reference to table no. 6, 80% of respondents like the branch ambience & layout & find it
friendly with reference to table no.3, 80% of respondents said branch was clean and well
maintained.
3. With reference to table no.8, 76% respondents view that Branch personnel had listened to them
patiently and have been able to respond to their queries and clarifications.
4. 74% of respondent responded that Branch personnel had been very helpful and courteous with
reference to table no.9.
5. With reference to table no.10,72% of respondents opinioned that branch personnel does Need
Analyses & Risk Assessment of customer savings before recommending any investment
option to them.
6. With reference to table no.11,86% of respondent that branch personnel are aware of Product and
Services and responded to your queries.
7. With reference to table no 12, 80% of respondents opinioned that waiting time at the Teller
Counter is very good.
8. With reference to table no.13, 90% of respondent opinioned that transactions are smooth and
error free & is very good.
9. With reference to table no. 14, 82% of respondent responded that SBI looks into the feedback &
is very good.
10. With reference to table no.15, 80% of respondent opinioned that they are happy with the TAT
post request is very good.
11. With reference to table no.16, 45% of respondent are in favour of Money Monitor feature of the
SBI Savings account.
12. With reference to table no.17, 74% of the respondent opinioned that SBI COMMUNITY
EVENTS are very good.
73
13. With reference to table no. 18, 78% of the respondent opinioned that information in bank
statement is clear, easy & adequate and is very good.
14. With reference to table no 19, 90% of respondent opinioned that they will most definitely
recommend SBI to their friends & relatives. Overall the response of the bank customer is good
74
SUGGESTIONS
Suggestions are always considered to be the most important part of any project
report because for every pros there is cons associated with and to reduce the
effect of latter; following suggestions must be taken into consideration in
regard to retail banking.
1. The Branch personnel should listen to customer patiently and should be able to
respond to their queries and clarifications because some customer are new to some
of the bank services and until and unless they will come to know about those
services they will be not be satisfied.
2. With reference to table no.8 as not many respondent opinioned that Branch
Personnel are helpful and courteous, so I will suggest that Bank personnel should
be helpful & courteous towards maximum number of customers.
3. With reference to table no.10, larger number of branch personnel should do Need
Analyses & Risk Assessment before recommending any investment option to
customer.
4. With reference to table no.11, more branch personnel should be aware of Product
and Services and responded to customers queries.
5. With reference to table. 14, SBI should look into the feedback provided by
customer and takes necessary action wherever required.
6. With reference to table no. 18, bank should focus on Instant FD facility &Echeques as small 10% of customer likes this.
7. Some time the customer has to wait at the Teller Counter, the service should
be improve by appointing more staff.
8. Information in the Bank Statement should be more clear, easy to understand and
adequate.
75
9. Along with customer satisfaction employees participation must be kept active by

appraising their salary as theyll as their work.
10. Frequently customers must be kept delighted by providing them regards and by
maintaining customer relationship so that their interest can be kept maintained.
11. The SBI should focus on business and service portfolio for a reputation of being
niche players in the industry.
12. The bank should concentrate on few reliable high net worth companies and
individuals rather than cater to the mass market.
13. As 10% customer response is not good for the clarification of the queries response
towards them so bank personnel should improve this issue because customer is a
source through which business can be increase and satisfy customers is a source to
create more customers, with reference to table no.12
14. As it is only 10% respondent said that sometime there was a error in the transaction
happened so to avoid these kinds of errors should be avoided because it is
unnecessarily results in wastage of time for both staff members and service
rendered, reference to table no. 13
15. There should increase in the number of events organize by bank because it is a
opportunity for the bank to introduce new products and services and at the same
time it is a open opportunity for the customer to come forward and suggest its views
which might prove to add the values for the bank because 10% customer still not
have a good response, with reference to table no.8
16. Communication with the customer should improve and increase so bank can easily
response towards them and in result the customer would be satisfy and no
questiothat they will recommend the SBI to their friends and relatives because 2%
customer are no responding it in a positive manner.
76
CONCLUSIONS
The project aims to study the retail banking operations of SBI. The study was very fruitful, it yielded the
desired results, helped me understand the retail banking. The study also helps in what are the customer
opinions towards operations of bank & its various product and services.
Any serious discussion of the future of the retail banking industry eventually raises a basic question: will
future customers still need retail banks? The answer, it turns out, depends on banks themselves. With
technology and nonblank businesses providing new options for safeguarding and managing their
finances, customers will continue to depend on banks only as long as banks can provide service and
value that cannot be found anywhere else.
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 a new 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 at
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 customers base.
SBI has a great opportunity to increase their market potential in the present market situation.
77
LEARNING EXPERIENCE
The Dissertation is to define the retail banking and regarding the general services of bank.
The study was very fruitful, it yield the desire result, helped me to understand the banking services
better. The study also yields what are the factors that banking is looking forward for the customer.
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.
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. Under the ambit of the nationalized banks come the
specialized banking institutions.
The bank gives great importance towards customer satisfaction .The senior staff with their busy
schedule try to advice the customer how to invest in better way.\
The employees in the bank are well behaved and give a great deal of satisfaction to see them how they
approach their customers. The bank plays an important role not only to fulfill their duties towards
customer but also to understand them better regarding what they want and how to maximize the return
on the investment.
The bank has set up separate department for the impart training program for the employees. The
biggest achievement is the implementation of core banking solution.
78
BIBLIOGRAPHY
1. http://economics.about.com/cs/finance/a/india_banking_2.htm
2. http://www.expresscomputeronline.com/20020610/opinion2.shtml
3. http://www.SBIbank.com/citizen_charter.htm
4. http://www.vyapaarasia.com/india/banks.asp
5. http://www.indianexpress.com/ie/daily/20001222/focus10.htm
6. http://www.peoplesmarch.com/archives/2001/feb2k1/banking.htm
7. http://www.onlinebangalore.com/fina/pro_yes.html
8. http://www.SBIbank.com/loan.htm#yesSHELTER
9. www.moneycontrol.com
10. http://www.yesbank.com/international_banking.htm#PRODUCTS
11. http://www.moneycontrol.com/news/hotstocks/newsdetail_new.php?filename=news19062004112840.h
tm
79
QUESTIONNAIRE
YES for YOU Help us to serve you even better
Dear Valued Customer,
Your candid feedback on our service standards is very important for us to help you serve
even better.
We would like to know a little more about you:
Your Name:
Your Cust Id/A/c No.(optional):
Your Branch:
Your E-mail id:
Your Contact details:
How frequently do you visit the Branch (in a month):
We would be extremely grateful if you would let us know how we are doing. We would
like to know about your experience of Banking with us. Please tick as appropriate.
A. How was the Branch experience?
1) The Branch timings (9:30 am to 6:30 pm from Monday to Saturday) are convenient?
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
2) The Branch ambience & layout is very friendly?

a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
3) The Branch was clean and well maintained?

a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
80
B. How did you find our Branch personnel?

4) The Branch personnel have listened to me patiently and have been able to respond to
my queries and clarifications?
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
5) The Branch personnel have been very helpful and courteous?

a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
6 The branch personnel have done a Need Analyses & Risk Assessment before
recommending any investment option?
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
7) The branch personnel were aware of Product and Services and responded to your
queries?
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
C. How was your experience of transacting in our Branches?
8) The waiting time at the Teller Counter was minimal?
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
9) The transactions done by us have been smooth & error free?
a) Very Good
b) Good
c) Satisfactory
d) Could be better
81
10) SBI looks into the feedback provided by you and takes necessary action if required.
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
11) Are you Happy with the TAT (Turn around time) post request?
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
12) Which feature of the YBL Savings account you like most?
a) OBOPAY
b) Money Monitor
c) Instant FD
OD facility
d) E-Cheques
D. How do you like what we send to you?
13) How do you rate the SBICOMMUNITY EVENTS held at SBI?
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
14) Is the information in the Bank Statement clear, easy to understand and adequate?
a) Very Good
b) Good
c) Satisfactory
d) Could be
Better
15) Will you recommend SBI to your friends and relatives?

a) Most Definitely
b) Yes
c) May be
d) No
82
83

Banking in Retail

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Banking in Retail

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GENERAL INTRODUCTION

POTENTIAL FOR RETAIL IN INDIA: IS SKY THE LIMIT

What about the foreign giants

PRODUCT/SERVICES PROFILE OF S.B.I

6. Nonresident account (different variant)

Current Accounts Benefits

10. CMS Services

Savings Accounts Benefits

SILVER SAVINGS ACCOUNT

GOLD SAVINGS ACCOUNT

Less than INR

Rate of return of fixed deposit account

TAX SAVER DEPOSIT

439 - FD-5 Yrs Tax Efficient Payout Resident

441 - FD 5 Yrs Tax Efficient Payout Senior Citizen

443 - FD-5 Yrs Tax Efficient Payout Non Resident

Mandatory for Primary holder

11. Max Amount

Rs.1,00,000/- in a Financial Year with all Banks

Pre-closure is permissible only in the event of death of the

Rs 10,000/- (Deposit can be in multiple of Rs 1,000 thereafter).

Only one nomination allowed

Features and benefits of Recurring Deposit

Open a Recurring Deposit with a minimum monthly installment of Rs 1,000

Choose the convenience of duration between minimum 6 months to maximum 2 years.

Non-applicability of Tax Deduction at Source (TDS).

Encourages savings without stress on customers finances.

Features & Benefits

1. FREE Unlimited Access to over 19000 ATMs across India

1. FREE Unlimited Access to over 19000 ATMs

Process at the branch

Retail Net Banking Setup

Corporate Net Banking Setup

View Only facility

Duly Completed Channel Registration form.

Form should be signed as per the mode of operation in the account

1. Duly Completed Channel Registration form

7. Board Resolution for net banking in Desired Format

PROCESS FOR BILL PAYMENT

Customer Payment Process

A Study on Effectiveness of Retail banking with special reference to

STATEMENT OF THE PROBLEM

1. To study the issues and challenges in retail banking

Data was collected from two sources-primary and secondary sources.

LIMITATIONS OF THE STUDY

What about the foreign giants

So all for the keeping then

STATE BANK OF INDIA PROFILE

1. SBI Capital Markets Ltd

2. SBI Funds Management Pvt Ltd

5. SBI DFHI Ltd

Logo and slogan

Listings and shareholding

10. Best Bank 2009 by Business India

11. The Most Trusted Brand 2009 by The Economic Times.

14. Visionaries of Financial Inclusion By FINO.

15. Technology Bank of the Year by IBA Banking Technology Awards.

Business data :( finance links)

1. State Bank of India at Google finance.

Analysis and Interpretation:

A. Opinion on Branch experience.

The Branch ambience & layout is very friendly

The Branch was clean and well maintained