PREFACE

The first real insight of an organization for management student comes only during his
preparation of project work because student first interacts with real practical work. This is first
introduction to industry and its working. This project work synthesize the theoretical concept
learn in the class room and its practical orientation in organization.
In my project I have studied the A comparative study of customer satisfaction with services
provided by private and public sector bank.
The First chapter introductory stage of this research report is based on introduction of Public
sector and private sector bank, its objective, importance, scope & limitation.
The Second chapter deals with research methodology. The process of carrying out the whole
research problem is defined in it. It contains information about the objectives of the research,
methods of data collection, sampling and sample design.
The Third chapter is data analysis and interpretation. This is the most important section of the
project work. This section contains the analysis of all the data collected so far and they are
interpreted to produce the final conclusion. It contains all the tables and charts which depicts the
result.
The four chapter contains the finding and recommendation of the research. This is based on the
data analyzed and interpreted in the previous chapter. This is the most important section of the
research report for a report is evaluated on the validity ad correctness of findings.
The fifth chapter depicted conclusion which concludes the whole report, that is, gives a brief
description of the process employed so far. And later chapters contain bibliography. Which

describes the list of sources from where the matter and information is collected? It contains the
list of books, authors, web sites use etc.
Krishna Murari Yadav

ACKNOWLEDGEMENT
Many thanks to the God, who has sent me on this earth and by mercy of him, I would be
able to accomplish this research.
A person who has always encouraged me towards positive and used to say Nothing can be
impossible if you are working hard with heart and soul. The Word regard is very small for
him and I dont know what word will be appropriate for him, that person is my elder Brother
Md. Moaz Ansari.
I express my deep sense of gratitude and regards to Mr. Vijay Kumar Pandey
(Lecturer, Dept. of management studies, T.E.R.I., P.G. College affiliated to Veer Bahadur
Singh Purvanchal University) under whose guidance I completed this project, I am thankful to
her valuable guidance, gentle encouragement and pains she took in guiding me throughout the
study.
Some of my Friend, Dipika, Priti, and anshu. Whose suggestion for what is Right or
Wrong has shown my aim and objectives of life.
Again, I heartily express my regard to all the above person mentioned and pray to the
God May live them long.

Krishna Murari Yadav

BBA 6th Sem.

INTRODUCTION
The world of banking has assumed a new dimension at dawn of the 21 st century with the advent
of tech banking, thereby lending the industry a stamp of universality. In general, banking may be
classified as retail and corporate banking. Retail banking, which is designed to meet the
requirement of individual customers and encourage their savings, includes payment of utility
bills, consumer loans, credit cards, checking account and the like. Corporate banking, on the
other hand, caters to the need of corporate customers like bills discounting, opening letters of
credit, managing cash, etc.
Metamorphic changes took place in the Indian financial system during the eighties and nineties
consequent upon deregulation and liberalization of economic policies of the government. India
began shaping up its economy and earmarked ambitious plan for economic growth.
Consequently, a sea change in money and capital markets took place. Application of marketing
concept in the banking sector was introduced to enhance the customer satisfaction the policy of
privatization of banking services aims at encouraging the competition in banking sector and
introduction of financial services. Consequently, services such as Demat, Internet banking,
Portfolio Management, Venture capital, etc, came into existence to cater to the needs of public.
The introduction to the marketing concept to banking sectors can be traced back to American
Banking Association Conference of 1958. Banks marketing can be defined as the part of
management activity, which seems to direct the flow of banking services profitability to the
customers. The marketing concept basically requires that there should be thorough understanding
of customer need and to learn about market it operates in. Further the market is segmented so as
to understand the requirement of the customer at a profit to the banks.

What is Bank?
According to the Oxford dictionary Bank can be defined as,
An establishment for the custody of money, which it pays out, on a customers order.
Banking Company in India has been defined in the Banking Companies Act 1949 as,
One which transacts the business of banking which means the accepting, for the purpose
of lending or investment of the deposits of money from the public, repayable on demand, or
otherwise and withdraw able be cheque, draft, order or otherwise.
The banking system is an integral subsystem of the financial system. It represents an important
channel of collecting small savings form the households and lending it to the corporate sector.
The Indian banking system has Reserve Bank of India (RBI) as the apex body for all matters
relating to the banking system. It is the Central Bank of India. It is also known as the Banker To
All Other Banks.

1.1

Indian Banking System

Banking in India has its origin as early as the Vedic period. During the Mughal period,
indigenous Bankers played a very important role in lending money financing foreign trade and
commerce. During the days of East India Company, it was turn of the agency houses to carry on
the business. The General Bank of India was the first to join sector in the year 1786.The others
that followed were the Bank of Hindustan and the Bengal bank. The bank of Hindustan is
reported to have continued till 1906 while the other two failed in the meantime.

In the first half of the 19th century the East India Company established three banks:
Bank of Bengal (1809).
Bank of Bombay (1840).
Bank of Madras (1843).

These three banks are also known as Presidency Banks were independent units and functioned
well. These three banks were amalgamated in 1920 and Imperial Bank of India was established
on 27th january1921, which started as private shareholders banks, mostly Europeans
shareholders, with the passing of time Imperial bank was taken over by the newly constituted
State bank of India act in1955.In 1865 Allahabad Bank was established and first time exclusively
by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between
1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian
Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. On July, 1969, 14
major banks of India were nationalized and on 15 th April, 1980 six more commercial private
banks were also taken over by the government.

Reserve Bank of India

The Indian banking system has The Reserve Bank of India (RBI) as the apex body from all
matters relating to the banking system. It is the Central Bank of India and act as the banker to
all other banks.

Functions of RBI:
Currency issuing authority.

Banker to the government.

Banker to other Bank.

Framing of monetary policy.

Exchange control.

Custodian to foreign exchange and gold reserves.

Development activities.

Research and development in the banking sector.

1.2
1.2.1

Classification of Banks
On the basis of ownership

Public Sector Banks

Public sector banks are those banks that are owned by the government. The government owns
these banks. In India 20 banks were nationalized in 1969 and 1980 respectively. Social welfare is
there main objective.
Private Sector Banks
These banks are those banks that are owned and run by private sector. An individual has control
over these banks in proportion to the shares of the banks held by him.

Co-Operative Banks
These are those banks that are jointly run by a group of individuals. Each individual has an equal
share in these banks. Its shareholders manage the affairs of the bank.

According to the Law

Scheduled Bank
Schedule banks are the banks, which are included in the second schedule of the banking
regulation act 1965. According to this schedule bank:
1. Must have paid-up capital and reserve of not less than Rs500, 000.
2. Must also satisfy the RBI that its affairs are not conducted in a manner
determinate to the interest of its depositors.
Schedule banks are sub-divided as:a) State co-operative banks
b) Commercial banks
Non-Scheduled Banks
Non -schedule banks are the banks, which are not included in the second schedule of the banking
regulation act 1965. It means they do not satisfy the conditions lay down by that schedule. These
are the banks having paid up capital, less than Rs.5Lakhs. They are further classified as follows:A. Central Co-operative banks and Primary Credit Societies.
B. Commercial banks

On the basis of function

Commercial Banks
These are the banks that do banking business to earn profit. These banks make loans for short to
business and in the process create money. Credit creation is the main function of these banks.
Foreign Banks
These are those banks that are incorporated by foreign company. They have set up their branches
in India. These banks have their head offices in foreign countries. Their principle function is to
make credit arrangement or the export and the import of the country and these banks deals in
foreign exchange.
Industrial Banks
Industrial banks are those banks that offer long term and medium term loan to the industries and
also work for their development. These banks help industries in sale of their shares, debentures
and bonds. They give loan to the industries for the purchase of land and machinery.

Agricultural Banks
Agricultural banks are those banks that give credit to agricultural sector of the economy.
Saving Banks

The principle function of these banks is to collect small savings across the country and put them
to the productive use. In India department of post office functions a savings banks.
Central Bank
Central Bank is the apex bank of the banking system of the country. It issues currency notes and
acts a banker's bank. Economic stability is the principle function of this bank. In short, it
regulates and controls the banking system of the country. RBI is the Central Bank of India.

1.3

Privatization of Indian Banking

There are two areas of competitions which banking industry is facing internationally and
nationally. In the pre-liberalization era, Indian banks could grow in a closed economy but the
banking sector opened up for private competition. It is possible that private banks could become
dominant players even within India. It has been recorded a rapid rise of the new private sector
banks and it has tracked the transformation of the public sector banks as they grapple with the
changes of financial deregulation.

Use of ATM cards, Internet Banking, Phone Banking, Mobile Banking are the new innovative
channels of banking which are being widely used as they result in saving both time and money
which are two essential things that every one is short of and is running to catch hold of them.
Moreover private sector banks are aligning its infrastructures, marketing quality and technology

to build deep commitment in building consumer and retail banking. The main focus of these
banks is on innovative range of services or products.

1.4

Structure of Banking System

Different countries of the world have different types of banking systems. However, commercial
banking had grown under all these banking systems. To understand the structure of banking
system, let us take up various types of banking systems one by one. These types are:

1. Unit Banking
Unit Banking originated in the United State of America. It grew in the United States of America.
As a counter part of independent or industrial units.
An independent unit bank is a corporation that operates one office and that is not related to
other banks through either ownership or control. (Shaper, Solomon and White).
Thus under unit banking, a single bank is a complete organization in itself having its own
management. The scale of operation is small and the area is restricted to a locality only. Unit
banking is localized banking and is much more responsive to the needs of the locality. It has
better understanding of the local problems and conditions, which helps it to cater to the needs of
the area in a better way. The failure of the unit bank will not endanger the banking system and
economy. It is free from the difficulties and diseconomies of large scale operations.

2. Branch Banking
Economic and Managerial problems faced by the unit banks let to the emergence of banking
system. Now, This the most popular and important banking system. In branch banking, a bank
has a large network of branches scattered all over the country. Branch banking developed in
England. Subsequently most of the countries of the world adopted the system. In terms of
branches, the State Bank of India has emerged as one of the largest banks in the world.

Branch Banking tends to bring homogeneity in the prevailing Interest Rates as it increases the
mobility of resources from one place to another. It is easier for the Central Bank to exercise
Control. In this system there more safety and liquidity of funds.
3. Chain Banking
Shaper, Solomon and White have defined Chain Banking as
An arrangement by which two or more banks each of which retains its identity, capital and
personnel are brought under common control by any device other than a Holding Company.
Chain banking overcomes certain limitations of unit banking. But the system suffers from
certain limitations of its own. There may be a lack of co-ordination, proper control etc. The
system is inflexible.

4. Group Banking :
It is similar to Chain Banking, the difference being that under Group Banking two or more banks
are brought under the control of the same management through a Holding Company. Both the
systems aim at gaining the advantages of large scale operations. Both the systems developed in
the United State of America as a result of attempts to overcome the difficulties or limitations of
unit banking.
5. Correspondent Banking
Under Correspondent banking, small banks serving local communities hold deposits with joint
banks serving in big cities. This kind of banking is prevalent in U.S.A. The correspondent banks
perform two important services of outstation cheque clearing and loan participation for the
respondent banks while they benefit for the deposit funds of respondent banks.

1.5

Functions of Banks

1.5.1

Primary Functions :

1) Accepting of Deposits : A bank accepts deposits from the public. People can deposit their
cash balances in either of the following accounts to their convenience:a. Fixed or Time Deposit Account : Cash is deposited in this account for a fixed
period. The depositor gets receipts for the amount deposited. It is called Fixed
Deposit Receipt. The receipt indicates the name of the depositor, amount of
deposit, rate of interest and the period of deposit. If the depositor stands in need of
the amount before the expiry of fixed period, he can withdraw the same after
paying the discount to the bank.
b. Savings Account : This type of deposit suits to those who just want to keep their
small savings in a bank and might need to withdraw them occasionally. Banks
provide a certain rate of interest on the minimum balance kept by the depositor
during the month.

c. Current Account : This type of account is kept by the businessman who are
required to withdraw money every new and then. Banks do not pay any interest on
this account.
2) Advancing of Loans : The bank advances money in any one of the following ways.
a. Overdraft Facilities : Customers of good trading are allowed to overdraw from their
current account. But they have to pay interest on extra amount they have withdrawn.
Overdrafts are allowed to provide temporary accommodation since the extra amount
withdrawn is payable within a short period.

b. Money at Call : It is the money lent for a very short period varying from 1 to 14 days.
Such advances are usually made to other banks and financial institutions only.
c. Loans : Loans are granted by the banks on securities which can be easily disposed off
in the market. When the bank has satisfied itself regarding the soundness of the party,
a loan is advanced.
d. Cash Credit : The Debtor is allowed to withdraw a certain amount on a given security.
The debtor withdraws the amount within this limit, interest is charged by the bank on
the amount actually withdrawn.
3) Discounting Bill of Exchange : It is another method of making advances by the banks.
Under this method, bank give advance to their clients on the basis of their bills of
exchange before the maturity of such bills.
4) Investment in Government Securities : Purchasing of government securities by the banks
tantamount to advancing loans by them to the Government. Banks prefer to buy
government securities as these are considered to be the safest investment. For example :
Indira Vikas Patra

5) Credit Creation : One of the main functions of banks these days is to create credit. Banks
create credit by giving more loans than their cash reserves. Banks are able to create credit
because the demand deposits i.e. a claim against the bank is accepted by the public in
settlement of their debts. In this process the bank creates money.

4) Cheque system of Payment of Funds :A cheque, a negotiable instrument, which in fact is a

bill of exchange, drawn upon a banker, is the most popular credit instrument used by the client
to make payments. Cheque system is the main credit instrument in the banking world.

Because of clearing houses and clearing operations of the banks, cheques can be and are used
for transferring funds from one centre to another. In the modern days they can also be used for
transferring funds from one country to another.

1.5.2

Secondary Functions

Besides the above primary functions, banks also perform may secondary functions such as agency
functions, general utility and social functions.
A) Agency Functions
Banks act as agents to their customers in different ways :i) Collection and Payment of Credit and Other Instruments: The Commercial banks collect and
pay cheques, bills of exchange, promissory notes, hundies, rent, interest etc. On behalf of their
customers and also make payments of income tax, fees, insurance premium etc. on behalf of the
customers.
ii) Purchase and Sale of Securities : The modern commercial banks also undertake the purchase
and sale of various securities like shares, stocks, bonds units and debentures etc. On behalf of the

customers, banks do not give any advice regarding the suitability or otherwise of a security but
simply perform the functions of a broker.
iii) Trustee and Executor : Banks also acts as trustees and executors of the property of their
customers on their advice. Sometimes banks also undertake income tax services on behalf of the
customers.
iv) Remittance of Funds : The Commercial banks remit funds on behalf of clients from one place
to another through cheques, drafts, mail transfers etc.
v) Representation and Correspondence : Sometimes commercial banks acts as representatives or
correspondents of the clients especially in handling various applications. For instance, passports
and travel tickets, etc.
vi) Billion Trading : In many countries, the commercial banks trade is billions like gold and silver.
In Oct 1997, 8 banks including SBI, IOB, Canara Bank and Allahabad Bank have been allowed
import of gold which has been put under open general licensed category.
vii) Purchase and Sale of Foreign Exchange : Banks buy and sell foreign exchange, promoting
international trade. This function is mainly discharged by foreign Exchange Banks.
viii) Letter of References : Banks also give information about economic position of their
customers to domestic and foreign traders and vice versa.

B) General Utility Services

In addition to agency services, banks render many more utility services to the public. These
services are :i)

Locker Facilities : Banks provide locker facilities to their customers. People can keep
their valuables or important documents in these lockers. Their annual rent is very
nominal.

ii)

Acting as a referee : It desired by the customers, the bank can be a referee i.e. who
could be referred by the third parties for seeking information regarding the financial
position of the customers.

iii)

Issuing letters of credit : Bankers in a way by issuing letters of credit certify the credit
worthiness of the customers. Letters of credit are very popular in foreign trade.

iv)

Acting as Underwriters : Banks also underwrite the securities issued by the

Government and Corporate bodies for a commission. The name of

bank as an

underwriter encouraged investors to have faith in the security.

v)

Acting as information banks : Commercial banks also acts as information bureau as

they collect the financial, economic and statistical data relating to industry, trade and
commerce. HDFC Bank is providing information relating to NRI Schemes and
commentaries of experts on development in the areas of finance through Internet.

vi)

Issuing Travelers cheques and credit cards : Banks have been rendering great service
by issuing travelers cheques, which enable a person to travel without fear of theft or
loss of money. Now, some banks have started credit card system under which a credit

card holder is allowed to avail credit from the listed outlets without any additional cost
or effort. Thus, credit card holder need not carry or handle cash all the time.
vii)

Issuing of gift cheques: Certain banks issue gift cheques of various denominations, e.g.
Some Indian banks issue gift cheques of the denominations of Rs. 21, 31, 51 and 101
etc. They are generally issued free of charge.

viii)

Dealing in Foreign Exchange: Major branches of commercial banks also transact

business of foreign exchange. Commercial banks are the main authorized dealers of
foreign exchange in India.

ix)

Merchant banking Services: Commercial banks also render merchant banking services
to the customers. They help in availing loans from non-banking financial institutions.

x)

Help in Transportation of Goods: Big businessmen or industrialists after consigning

goods to their retailers send the Railway Receipt (Consignment Note) to the bank.

List of Public Sector Banks

o

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Saurastra

State Bank of Travancore

Other Nationalised banks are:

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Bank of Maharastra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

Indian Bank

Indian Overseas Bank

Oriental Bank of Commerce

Punjab & Sind Bank

Punjab National Bank

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

Vijaya Bank

List of Private Sector Bank

Bank of Punjab

Bank of Rajasthan

Catholic Syrian Bank

Centurion Bank

City Union Bank

Dhanalakshmi Bank

Development Credit Bank

Federal Bank

HDFC Bank

ICICI Bank

IDBI Bank

IndusInd Bank

ING Vysya Bank

Jammu & Kashmir Bank

Karnataka Bank

Karur Vysya Bank

Laxmi Vilas Bank

South Indian Bank

United Western Bank

UTI Bank

List of Foreign Banks in India

ABN-AMRO Bank
Abu Dhabi Commercial Bank
Bank of Ceylon
BNP Paribas Bank
Citi Bank
China Trust Commercial Bank

Deutsche Bank
HSBC
JPMorgan Chase Bank
Standard Chartered Bank
Scotia Bank
Taib Bank

Upcoming Foreign Banks In India

By 2009 few more names is going to be added in the list of foreign banks in India. This is as an
aftermath of the sudden interest shown by Reserve Bank of India paving roadmap for foreign
banks in India greater freedom in India. Among them is the world's best private bank by Euro
Money magazine, Switzerland's UBS.

The following are the list of foreign banks going to set up business in India

Royal Bank of Scotland

Switzerland's UBS

US-based GE Capital

Credit Suisse Group

Industrial and Commercial Bank of China

Merrill Lynch is having a joint venture in Indian investment banking space -- DSP Merrill Lynch.
Goldman Sachs holds stakes in Kotak Mahindra arms.
India's GDP is seen growing at a robust pace of around 9-10% over the next few years, throwing
up opportunities for the banking sector to profit from.

HDFC BANK

Housing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd,
was established in the year 1994, as a part of the liberalization
of the Indian Banking Industry by Reserve Bank of India
(RBI).
It was one of the first banks to receive an 'in principle
approval from RBI, for setting up a bank in the private sector.
The bank was incorporated with the name 'HDFC Bank
Limited', with its registered office in Mumbai.
The following year, it started its operations as a Scheduled
Commercial Bank. Today, the bank boasts of as many as 1412
branches and over 3275 ATMs across India.
At present, HDFC Bank boasts of an authorized capital of Rs 550 crore (Rs5.5 billion), of this
the paid-up amount is Rs 424.6 crore (Rs.4.2 billion).
Capital Structure
At present, HDFC Bank boasts of an authorized capital of Rs 550 crore(Rs5.5 billion), of this the
paid-up amount is Rs 424.6 crore (Rs.4.2 billion). In terms of equity share, the HDFC Group
holds 19.4%.
PRDUCT &SERVICES

PERSONAL BANKIG
NRI BANKING

ICICI BANK

ICICI Bank started as a wholly owned subsidiary of ICICI

Limited, an Indian financial institution, in 1994.
ICICI Bank is India's second-largest bank with total assets of Rs.
3,562.28 billion (US$ 77 billion) at December 31, 2009 and
profit after tax Rs. 30.19 billion (US$ 648.8 million) for the nine
months ended December 31, 2009.
The Bank has a network of 1,675 branches and about 4,883
ATMs in India and presence in 18 countries.
ICICI Bank offers a wide range of banking products and financial services to corporate and
retail customers through a variety of delivery channels and through its specialized subsidiaries
and affiliates in the areas of investment banking, life and non-life insurance, venture capital and
asset

management.

The

Bank

currently

has

subsidiaries

in

the

Uni

ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank has 1,420
branches and about 4,644 ATMs. Talking about foreign countries, ICICI Bank has made its
presence felt in 18 countries

PRODUCT&SERVICES

Personal Banking

Nri Banking

Business Banking

AXIS BANK

Axis Bank was the first of the new private

banks to have begun operations in 1994, after
the Government of India allowed new private
banks to be established.
The Bank was promoted jointly by the
Administrator of the specified undertaking of
the Unit Trust of India (UTI - I), Life
Insurance Corporation of India (LIC) and
General Insurance Corporation of India (GIC)
and other four PSU insurance companies, i.e.
National Insurance Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance Company Ltd.
The Bank today is capitalized to the extent of Rs. 403.63 crores with the public
holding (other than promoters and GDRs) at 53.72%.
The Bank's Registered Office is at Ahmadabad and its Central Office is located at
Mumbai. The Bank has a very wide network of more than 896 branches and
Extension Counters (as on 31st December 2009).
The Bank has a network of over 4055 ATMs (as on 31st December 2009)
providing 24 hrs a day banking convenience to its customers. This is one of the

largest ATM networks in the country. The Bank has strengths in both retail and
corporate banking and is committed to adopting the best industry practices
internationally in order to achieve excellence.

BANK OF BARODA

Bank of Baroda is one of the most prominent banks

in India, having its total assets as Rs. 1, 43,146
Crores as on 31st of March 2007.
The bank was founded by Maharaja Sayajirao
Gaekwad III (also known as Shrimant Gopalrao
Gaekwad), the then Maharaja of Baroda on 20th of
July 1908 with a paid capital of Rs. 10 Lacs. From its
introduction in a small building of Baroda,
The bank has come a long way to achieve its current
position as one of the most important banks in India.
On 19th of July 1969, Bank of Baroda was nationalized by the Government of India along with
13 other commercial banks.
Financial Details
As of March 2007, the bank had total deposits worth Rs. 1,24,915 Crores while it had a total
number of 2956 branches located worldwide as on April 2009, out of which 626 were located in
Metro cities, 524 in Urban areas, 642 in Semi-Urban locations, 1092 in Rural areas and 72 were
located outside India. The bank has 10 Zonal Offices and 43 Regional Offices which help it
control its operations nationally.

STATE BANK OF INDIA

The evolution of State Bank of India can be traced back to
the first decade of the 19th century.
It began with the establishment of the Bank of Calcutta in
Calcutta, on 2 June 1806. The bank was redesigned as the
Bank of Bengal, three years later, on 2 January 1809.
It was the first ever joint-stock bank of the British India,
established under the sponsorship of the Government of
Bengal. Subsequently, the Bank of Bombay (established on
15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of
Bengal.
These three banks dominated the modern banking scenario in India, until when they were
amalgamated to form the Imperial Bank of The corporate center of SBI is located in Mumbai. In
order to cater to different functions, there are several other establishments in and outside
Mumbai, apart from the corporate center.
The bank boasts of having as many as 14 local head offices and 57 Zonal Offices, located at
major cities throughout India. It is recorded that SBI has about 10000 branches, well networked
to cater to its customers throughout India.
The eight banking subsidiaries are:

State Bank of Bikaner and Jaipur (SBBJ)

State Bank of Hyderabad (SBH)

State Bank of India (SBI)

State Bank of Indore (SBIR)

State Bank of Mysore (SBM)

State Bank of Patiala (SBP)

State Bank of Saurashtra (SBS)

State Bank of Travancore (SBT)

Punjab National Bank

Punjab National Bank (PNB) is the second
largest government-owned commercial bank in
India. Having more than 3.5 crore customer,
Punjab National Bank has one of the largest
branch networks in India.
The bank's assets for financial year 2007 were
about US$60 billion.

Products

and

Services

Savings Fund Account - Total Freedom Salary

Account, PNB Prudent Sweep,
PNB

Vidyarthi

SF

Account,

PNB

Mitra

SF

Account Current Account - PNB Vaibhav, PNB Gaurav, PNB Smart Roamer.
Fixed Deposit Schemes - Spectrum Fixed Deposit Scheme, Anupam Account, Mahabachat
Schemes, Multi Benefit Deposit
Scheme Credit Schemes - Flexible Housing Loan, Car Finance, Personal Loan, Credit Cards

Social Banking - Mahila Udyam Nidhi Scheme, Krishi Card, PNB Farmers Welfare Trust
Corporate Banking - Gold Card scheme for exporters, EXIM finance.

Objective
1. To assess the various aspects of services provided by the public sector, private sector and
foreign banks.
2. To assess the extent of use of services especially the IT enabled services in these bank.
3. To determine and compare the extent of customers satisfaction with quality of banking
services on the basis of different constituent factors.
4. To find out the parameters on which a customer decides with which bank he wants to be
associated with.
5. To compare the public sector banks and private sector banks in terms of customer
satisfaction.

Scope
Ancient banking system of India constituted of indigenous bankers. They have been carrying
on their age-old banking operations in different parts of the country under different names. The
modern age of banking constitutes the fundamental basis of economic growth. The term Bank is

being used since long time but there is no clear conception regarding its beginning. According to
the viewpoint, in good old days. Italian money leaders were known asB anchi because they
kept a special type of table to transact their business.
Today banks have become a part and parcel of Kotak Bank's life. There was a time when
dwellers of the city alone could enjoy their services. Now banks offer access to even a common
man and their activities extend to areas hitherto untouched. Banks cater to the needs of
agriculturalists, industrialists, traders and to all the other sections of the society. In modern age,
the banking constitutes the fundamental basis of economic growth. Thus, they accelerate the
economic growth of a country and steer the wheels of the economy towards its goals of self
reliance in all fields. It naturally arouses Kotak Bank's interest in knowing more about the
Bank and the various men and the activities connected with it.

RESEARCH METHODOLOGY
RESEARCH:
A systematic search for an answer to a question or solution to problem known as
RESEARCH According to KERLINGER defines RESEARCH, A systematic, Controlled,

Empirical and Critical Investigation of Hypothetical Preposition about Presumes relation among
Natural Phenomena, EMORY Defines RESEARCH as Organized inquiry design and
carried out to provide information for solving a problem
METHODOLOGY:
Research is a common language refers to a search of knowledge. Research is scientific &
systematic search for pertinent information on a specific topic, infact research is an art of
scientific investigation. Research Methodology is a scientific way to solve research problem. It
may be understood as a science of studying how research is doing scientifically. In it we study
various steps that are generally adopted by researchers in studying their research problem. It is
necessary for researchers to know not only know research method techniques but also
technology.
The scope of Research Methodology is wider than that of research methods. The research
problem consists of series of closely related activities. At times, the first step determines the
native of the last step to be undertaken. Why a research has been defined, what data has been
collected and what a particular methods have been adopted and a host of similar other questions
are usually answered when we talk of research methodology concerning a research problem or
study. The project is a study where focus is on the following points:
CHARACTERSTICS OF RESEARCH:

Research is more systematic activity directed towards discovery and the development
and organized body of knowledge

Research is based upon observable experience and empirical evidences.

Research demand accurate observation and description.

Research requires expertise

Research involves gathering new data from primary sources, Existing data for a new
purpose.

.SAMPLE DESIGN:
Sample design is conducted framework and plan for a study that is used as guide in
collecting and analysis of data.
NEED FOR DESIGNING:

Research design makes possible as maximum information with minimum expenditure

of effort, time and money.

We need research design in advance collecting and analysis of data for research
project.

RESEARCH DESIGN:
DESCRIPTIVE RESEARCH:
Descriptive research in contrast to exploratory research is marked by the prior
formulation of specific research Questions. The investigator already knows a substantial

amount about the research problem, perhaps as a Result of an exploratory study, before
the project is initiated; Descriptive research is also characterized by a preplanned and
structured design.
Methods of the data Collection

Secondary Data

Secondary Sources:
Various books on the subject written by eminent authors were studied. Special write ups
and journals and manuals dealing with the topic were referred to. This was done with a
view to gain thorough know ledge about the topic and to analyze training process
objectively.
The facts and information were backed up by the written data and records to safe
guard against ambiguous and vague information.

Data analysis and Interpretation

1. Capital adequacy ratio

ANALYSIS
The above data the researcher found that capital adequacy signifies the banks ability to maintain
capital with the nature and extent of all types of risk and the ability of management to identify,
measure, monitor and control these risks. it also tells about the ability of bank to absorb a
reasonable amount of loss and comply with statutory capital requirements. currently reserve bank
of india (rbi) prescribes banks to maintain capital adequacy ratio (car) of 9% with regard to credit
risk, market risk and operational risk on an ongoing basis, as against 8% prescribed in Basel
framework
The capital adequacy ratio (basel-ii) of new private sector banks is way above rbis minimum
requirement of 9%. This shows that private banks are in comfortable position to absorb losses
since they have more capital to cover for their risk weighted assets and they have less risky
assets in their portfolio for a fixed capital base.

2. Network of banks

ANANLYSIS
The above data the researcher found that Today banks follow a strategy of building a network of
branches and ATMs with effective penetration so that they can continue to enlarge their
geographical coverage with a greater potential for growth. The banks try to deeply entrench
across the country with significant density in areas conducive to the growth of their businesses
The private sector banks have expanded themselves at a much faster rate than public sector
banks. The customer base of these banks has grown manifold since they are able to provide
innovative services to the customers at a much faster pace. This is helping them to capture a
higher market share and depleting some of the share of the public sector counterparts.

3. Productivity

ANANLYSIS
The above data the researcher found that Productivity is the ratio of what is produced to what is
required to produce. In the banking scenario productivity can be measured by profit per
employee, business per employee. Productivity is a very important measure of efficiency of
banks because it means that the firm can meet its obligations to employees, shareholders, and
governments (taxes and regulation), and still remain competitive in the market place.
These ratios can be misleading as banks can improve these ratios by reducing their number of
their employees during the time of recession. This is evident since asset base and profit levels
declined during 2009-10 for new private sector banks but still the above ratios is showing a
continuous increasing trend.

4.Growth of bank

% Growth in Balance Sheet Size

2010
2011
New Private
10.86%
23.51%
Sector Banks
Public Sector

17.93%

19.21%

% Growth in Total Income

2010
2011
-2.19%
14.63%
12.46%

16.71%

Banks
ANANLYSIS
The above data the researcher found that Percentage growth in banks Balance Sheet & Income
(Source: RBI) The public sector banks asset base and income grew at an increasing rate in the
last 2 years whereas new private sector banks faced many fluctuations mainly due to recession.
But the growth of these banks was phenomenal during 2010-11 that shows their ability to recover
faster after such a phase.
Every bank aspires to grow and its growth can be judged by various parameters like growth in
balance sheet size i.e. asset base, total income and many others.

5.Asset Quality

ANANLYSIS

The above data the researcher found that Every bank aspires to grow and its growth can
be judged by various parameters like growth in balance sheet size i.e. asset base, total
income and many others.
Asset Quality reflects the amount of existing credit risk associated with the loan and
investment portfolio as well as off-balance sheet activities. The asset quality of banks can
be judged by the non-performing assets (NPA) ratio.

6. Private sector banks have better ratios since:

ANANLYSIS

The above data the researcher found that The above two graphs signifying the new
private sector banks have better ratios since: a) The interest expense is less as compared
to interest income due to better asset liability management. b) The share of fee income is
more in total income which reflects that banks have other options to earn money like in
exchanges, commissions, brokerages etc.
The Off-Balance Sheet (BS) activities under the purview of New Private Sector banks are
astoundingly large as compared to public sector banks, being the liability of these banks
on outstanding derivative contracts like Interest rate swaps, currency options and interest
rate futures. This makes their business highly susceptible to market risk.
However there is huge difference in asset qualities of public & new private sector banks
because the public sector banks have higher NPAs in services sector. The NPAs in other
sectors like Agriculture, Industry and Personal Loans are almost similar for these banks.
The asset quality of a bank directly affects its credit rating

6.Efficiency of management

ANANLYSIS
The above data the researcher found that Several indicators are used to measure the efficiency
of the management for example ratio of non-interest exp to total assets which explains the
management controls on operating expenses. Similarly efficiency ratios like Asset Turnover ratio
can be used to assess how efficiently company is using its assets to earn the revenue

8. better performance

Bank
Yes Bank
Punjab National Bank
HDFC Bank
Kotak Mahindra Bank
State Bank of India
Axis Bank
Bank of Baroda
ICICI Bank
Indian Bank
Canara Bank
Allahabad Bank
Bank of India

Rank
1
2
3
4
5
6
7
8
9
10
11
12

ANALYSIS
It can be concluded that during the year 2009-11, most of the new private sector banks have
shown better performance than their public sector counterparts. Based on the comparison of
banks of both the sectors, the following ranks have been designated.

9. Branches and ATMs of Scheduled Commercial Banks as on end March 2009

Branches and ATMs of Scheduled Commercial Banks as on end March 2009

Number

of

On-site

Off-site

Total

branches

ATMs

ATMs

ATMs

33,627

3,205

1,567

4,772

Bank type
Nationalised banks

Branches and ATMs of Scheduled Commercial Banks as on end March 2009

Number

of

On-site

Off-site

Total

branches

ATMs

ATMs

ATMs

13,661

1,548

3,672

5,220

4,511

800

441

1,241

1,685

1,883

3,729

5,612

Foreign banks

242

218

582

800

TOTAL

53,726

7,654

9,409

17,645

Bank type

State Bank of India

Old

private

sector

banks
New

private

sector

banks

ANALYSIS
As per Census 2011, 58.7% households are availing banking services in the country. There are
102,343 branches of Scheduled Commercial Banks (SCBs) in the country, out of which 37,953
(37%) bank branches are in the rural areas and 27,219 (26%) in semi-urban areas, constituting
63% of the total numbers of branches in semi-urban and rural areas of the country. However, a
significant proportion of the households, especially in rural areas, are still outside the formal fold

of the banking system. To extend the reach of banking to those outside the formal banking
system, Government and Reserve Bank of India (RBI) are taking various initiatives from time to
time some of which are enumerated below:
Opening of Bank Branches: Government had issued detailed strategy and guidelines on Financial
Inclusion in October 2011, advising banks to open branches in all habitations of 5,000 or more
population in under-banked districts and 10,000 or more population in other districts. Out of
3,925

such

identified

villages/habitations,

branches

have

been

opened

in

3,402

villages/habitations (including 2,121 Ultra Small Branches) by end of April, 2013.

Each household to have at least one bank account: Banks have been advised to ensure service
area bank in rural areas and banks assigned the responsibility in specific wards in urban area to
ensure that every household has at least one bank account.
economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the
following table:

Number

of

banks

Authorised

Capital

Paid-up

Years
that failed

( Lakhs)

( Lakhs)

1913

12

274

35

1914

42

710

109

1915

11

56

1916

13

231

Capital

Number

of

banks

Authorised

Capital

Paid-up

Capital

Years

1917

that failed

( Lakhs)

( Lakhs)

76

25
1

1918

209

FINDING

The above data the researcher found that capital adequacy signifies the banks ability to
maintain capital with the nature and extent of all types of risk and the ability of
management to identify, measure, monitor and control these risks. it also tells about the
ability of bank to absorb a reasonable amount of loss and comply with statutory capital
requirements. currently reserve bank of india (rbi) prescribes banks to maintain capital

adequacy ratio (car) of 9% with regard to credit risk, market risk and operational risk on

an ongoing basis, as against 8% prescribed in Basel framework

The above data the researcher found that Today banks follow a strategy of building a
network of branches and ATMs with effective penetration so that they can continue to
enlarge their geographical coverage with a greater potential for growth. The banks try to
deeply entrench across the country with significant density in areas conducive to the
growth of their businesses

The above data the researcher found that Productivity is the ratio of what is produced to
what is required to produce. In the banking scenario productivity can be measured by
profit per employee, business per employee. Productivity is a very important measure of
efficiency of banks because it means that the firm can meet its obligations to employees,
shareholders, and governments (taxes and regulation), and still remain competitive in the
market place.

The above data the researcher found that Percentage growth in banks Balance Sheet &
Income (Source: RBI) The public sector banks asset base and income grew at an
increasing rate in the last 2 years whereas new private sector banks faced many
fluctuations mainly due to recession. But the growth of these banks was phenomenal
during 2010-11 that shows their ability to recover faster after such a phase.

The above data the researcher found that Every bank aspires to grow and its growth can
be judged by various parameters like growth in balance sheet size i.e. asset base, total
income and many others.

The above data the researcher found that The above two graphs signifying the new
private sector banks have better ratios since: a) The interest expense is less as compared

to interest income due to better asset liability management. b) The share of fee income is
more in total income which reflects that banks have other options to earn money like in
exchanges, commissions, brokerages etc.

The above data the researcher found that The above two graphs signifying the new
private sector banks have better ratios since: a) The interest expense is less as compared
to interest income due to better asset liability management. b) The share of fee income is
more in total income which reflects that banks have other options to earn money like in
exchanges, commissions, brokerages etc.

The above data the researcher found that

Several indicators are used to measure the

efficiency of the management for example ratio of non-interest exp to total assets which
explains the management controls on operating expenses. Similarly efficiency ratios like
Asset Turnover ratio can be used to assess how efficiently company is using its assets to
earn the revenue

It can be concluded that during the year 2009-11, most of the new private sector banks
have shown better performance than their public sector counterparts. Based on the
comparison of banks of both the sectors, the following ranks have been designated.

RECOMDATATION

it has been witnessed that the major area of concern for any bank is the customer service and
customer satisfaction, thus just like the private sector banks, it is high time that the public sector
banks also start concentrating more on the customers and the services provided to them.
Top most rank held by a private bank is a clear indicator of the better performance of the private
banks due to their higher concern towards customer feedback, their efficient management and
thus yielding to higher productivity and networks throughout India.

To strive the cut throat competition given to the public sector banks by the private sector banks,
the public sector will have to pull up their shoes to be at the better half part of the race else the
time is very near which can make these public sector banks just a memory or a history for
everyone.

For Public Sector Banks

Bank staff should be customer friendly and highly motivated to serve the normal customer.

As far as possible, banks should reduce its documentation process while providing loans.

Computerization should be done in banks at all level and the operators should de properly
trained.

Token system should be induced so as to minimize the waiting lines in the banks.

Proper ambience in the banks can develop a healthy working culture.

Quick services should be provided.

For Private Sector Banks

24 hours banking should be induced so as to facilitate the customers who may not have
free time in the day time. It will help in facing the competition more effectively.

More ATM coverage should be provided for the convenience of the customers.

Customer care services should be provided by banks.

CONCLUSION
The capital adequacy ratio (basel-ii) of new private sector banks is way above rbi s
minimum requirement of 9%. This shows that private banks are in comfortable position
to absorb losses since they have more capital to cover for their risk weighted assets and
they have less risky assets in their portfolio for a fixed capital base.
The private sector banks have expanded themselves at a much faster rate than public
sector banks. The customer base of these banks has grown manifold since they are able to
provide innovative services to the customers at a much faster pace. This is helping them

to capture a higher market share and depleting some of the share of the public sector
counterparts.
These ratios can be misleading as banks can improve these ratios by reducing their
number of their employees during the time of recession. This is evident since asset base
and profit levels declined during 2009-10 for new private sector banks but still the above
ratios is showing a continuous increasing trend.
Every bank aspires to grow and its growth can be judged by various parameters like
growth in balance sheet size i.e. asset base, total income and many others.
Asset Quality reflects the amount of existing credit risk associated with the loan and
investment portfolio as well as off-balance sheet activities. The asset quality of banks can
be judged by the non-performing assets (NPA) ratio.
The Off-Balance Sheet (BS) activities under the purview of New Private Sector banks are
astoundingly large as compared to public sector banks, being the liability of these banks
on outstanding derivative contracts like Interest rate swaps, currency options and interest
rate futures. This makes their business highly susceptible to market risk.
However there is huge difference in asset qualities of public & new private sector banks
because the public sector banks have higher NPAs in services sector. The NPAs in other
sectors like Agriculture, Industry and Personal Loans are almost similar for these banks.
The asset quality of a bank directly affects its credit rating
It can be concluded that during the year 2009-11, most of the new private sector banks
have shown better performance than their public sector counterparts. Based on the
comparison of banks of both the sectors, the following ranks have been designated.

Opening of Bank Branches: Government had issued detailed strategy and guidelines on
Financial Inclusion in October 2011, advising banks to open branches in all habitations of
5,000 or more population in under-banked districts and 10,000 or more population in
other districts. Out of 3,925 such identified villages/habitations, branches have been
opened in 3,402 villages/habitations (including 2,121 Ultra Small Branches) by end of
April, 2013.
Each household to have at least one bank account: Banks have been advised to ensure
service area bank in rural areas and banks assigned the responsibility in specific wards in
urban area to ensure that every household has at least one bank account.

Limitation

The study is based on secondary data.

The study is confined only to specific sectors and few examples are given only due to
data and time constraints.

Researcher cannot get wide information during Research.

Researcher is only on indicator and cannot solve the problem.

This research report is part of my course-curriculum and I have analyzed the problem
with the limited time and knowledge which was at my disposal.

Bibliography

Books:

Kothari C.R. (1990) Research Methodology: Method and Techniques; Wishva

Prakashan, New Delhi.

Bodie.Z, Kane.A & Mracus.J : Essentials of Investments.