You are on page 1of 64

A

Project report

On

A COMPARATIVE STUDY OF NATIONALIZED BANK PRODUCTS AND


PRIVATE BANK PRODUCTS

In partial fulfillment of the requirements of

Master of Management Studies

Conducted by

University of Mumbai

Through

Rizvi Institute of Management Studies & Research

Under the guidance of

Mr. Shubash Raje

Submitted by

Nabeel Shaikh

MMS

Batch: 2015 2017.


CERTIFICATE

This is to certify that Mr. Nabeel Shaikh, a student of Rizvi Institute of Management
Studies and Research, of MMS IV bearing Roll No.73 and specializing in Finance has
successfully completed the project titled

A COMPARATIVE STUDY OF NATIONALIZED BANK PRODUCTS AND


PRIVATE BANK PRODUCTS

Under the guidance of Prof. Shubash Raje in partial fulfillment of the requirement of
Masters of Management Studies by University of Mumbai for the academic year 2015
2017.

________________
Prof. Shubash Raje
Project Guide

________________ _______________
Prof. Umar Farooq Dr. Kalim Khan
Academic Coordinator Director
ACKNOWLEDGEMENT

I take this opportunity to thank the University of Mumbai for giving me a chance to do
this project. Firstly, I owe my deepest gratitude to my project guide Prof. Shubash Raje
for his guidance, care and moral support without which this project would have really
been a distant dream.

I thank the teaching and non-teaching staff of Rizvi Institute of Management Studies and
Research for providing encouragement and valuable inputs required for completion and
enrichment of this project.

I would like to thank each and every person who directly or indirectly helped me in the
completion of the project. This acknowledgement would surely be incomplete without
thanking my parents, who raised me, taught me and supported me throughout the years. A
special thanks to my mother who was instrumental in instilling the love of food &
cooking in me, which resulted in the topic of this project

To my parents, I dedicate this dissertation project. Lastly, and most importantly, I thank
God for making all this possible.
EXECUTIVE SUMMARY

This study has been conducted with a variety of important product objectives of bank in
mind. The following provides us with the chief objectives that have tried to achieve
through the study. The extent to which these objectives have been met could judge from
the conclusions and suggestions, which appear in the later of this study.

The Chief Objectives of this study are:


To find the bank sector that is largely availed by the customer.
To study the factors the factors influencing the choice of a bank for availing services.
To find and compare the satisfaction level of customers in public sector as well as in
private sectors bank.
To study the problem faced by customer.
To get suggestions for improvement or change in the services of public
and private sector banks.
To study what do people expect in the new era of banking
To study whether the customers are satisfied with their service
To know about the Customer preferences
To give Suggestions to improve the services
Table of Contents
Chapter I: Introduction to the Topic 01

Chapter II: HISTORY OF BANKING IN INDIA ......02

Chapter III: EVOLUTION OF INDIAN BANKING .05

Chapter IV: Organizational Structure of Banks in India..................07

Chapter V: STRUCTURE OF BANKING SYSTEM......10

Chapter VI: Function of a bank....12

Chapter VII: Reason for Nationalization..........................................................................17

Chapter VIII: PRODUCTS AND SERVICES OFFERED BY BANKS.........................22

Chapter IX: Basel III: ROLE OF IT THE BANKING SECTOR ...................................29

Chapter X: INTEREST RATES ON RUPEE DEPOSIT ................................................32

Chapter XI: FINANCIAL PRODUCTS AND SERVICES.............................................33

Chapter XII: STRUCTURE OF ICICI AND HDFC BANK...........................................48

Chapter XIII: Current Market Condition..........................................................................49

Chapter XIV: RECENT AND CURRENT TRENDS IN BANKING.............................53

Chapter XV: CONCLUSION ..........................................................................................55

Chapter XVI: Bibliography..............................................................................................56


TABLE FOR CHARTS, GRAPHS AND IMAGES

Sr No Particulars Page no
1 Organizational Structure of Banks in India 07

2 CLASSIFICATION OF BANKS 07

3 STRUCTURE OF BANKING SYSTEM 10

4 Function of a bank 12

5 Commercial bank 12

6 Bank of Bengal 17
7 Branches of Nationalizes Bank 18
8 Sector of Nationalizes Bank 19

9 Deposit of Nationalizes Bank 19

10 Credit of Nationalizes Bank 20

11 INTEREST RATES ON RUPEE DEPOSIT 32

12 STRUCTURE OF ICICI AND HDFC BANK 48

13 Market Share of Nationalized Banks and Private Banks 49

14 Market Cap of Nationalized Banks and Private Banks 50

15 Major Players of Nationalized Banks and Private Banks 51


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter I: Introduction to the Topic

About the Banking Sector:

Banking in India in the modern sense originated in the last decades of the 18th
century. The first banks were Bank of Hindustan (1770-1829) 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. The three banks merged in 1921
to form the Imperial Bank of India, which, upon India's independence, became the
State Bank of India in 1955. For many years, the presidency banks acted as quasi-
central banks, as did their successors, until the Reserve Bank of India was established
in 1935.

In 1969 the Indian government nationalised all the major banks that it did not already
own and these have remained under government ownership. They are run under a
structure known as 'profit-making public sector undertaking' (PSU) and are allowed to
compete and operate as commercial banks. The Indian banking sector is made up of
four types of banks, as well as the PSUs and the state banks; they have been joined
since the 1990s by new private commercial banks and a number of foreign 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.

Rizvi Institute of Management Studies and Research 1


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter II: HISTORY OF BANKING IN INDIA


There are three different phases in the history of banking in India.
1) Pre-Nationalization Era.
2) Nationalization Stage.
3) Post Liberalization Era.

1) Pre-Nationalization Era:
In India, the business of banking and credit was practices even in very early
times. The remittance of money through Hundies, an indigenous credit instrument,
was very popular. The hundies were issued by bankers known as Shroffs, Sahukars,
Shahus or Mahajans in different parts of the country. The modern type of
banking, however, was developed by the Agency Houses of Calcutta. During the
early part of the 19th Century, volume of foreign trade was relatively small. Later on,
as the trade expanded, the need for banks of the European type was felt and the
government of the East India Company took interest in having its own bank. The
government of Bengal took the initiative and the first presidency bank, the Bank of
Calcutta (Bank of Bengal) was established in 1840. In 1840, the Bank of Bombay
and IN 1843, the Bank of Madras was also set up.
These three banks also known as Presidency Bank. The Presidency Banks had their
branches in important trading centers but mostly lacked in uniformity in their
operational policies. In 1899, the Government proposed to amalgamate these three
banks in to one so that it could also function as a Central Bank. However, the
conditions obtaining during world war period (1914-1918) emphasized the need for a
unified banking institution, as a result of which the Imperial Bank was set up in1921.
The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of the
Country. In 1949, the Banking Regulation act was passed and the RBI was
nationalized and acquired extensive regulatory powers over the commercial banks. In
1950, the Indian Banking system comprised of the RBI, the Imperial Bank of India,
Cooperative banks, Exchange banks and Indian Joint Stock banks.

2) Nationalization Stages:
Nationalization of banks paved way for retail banking and as a result there has
been an alt round growth in the branch network, the deposit mobilization After
Independence, in 1951, the All India Rural Credit survey, committee of Direction with
Shri. A. D. Gorwala as Chairman recommended amalgamation of the Imperial Bank
of India and ten others banks into a newly established bank called the State Bank of
India (SBI). The Government of India accepted the recommendations of the
committee and introduced the State Bank of India bill in the Lok Sabha on 16th April
1955 and it was passed by Parliament and got the presidents assent on 8th May 1955.

Rizvi Institute of Management Studies and Research 2


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

In 1959, the SBI (Subsidiary Bank) act was proposed and the following eight state-
associated banks were taken over by the SBI as its subsidiaries.

Name of the Bank Subsidiary with effect from


1. State Bank of Hyderabad 1st October 1959
2. State Bank of Bikaner 1st January 1960
3. State Bank of Jaipur 1st January 1960
4. State Bank of Saurashtra 1st May 1960
5. State Bank of Patiala 1st April 1960
6. State Bank of Mysore 1st March 1960
7. State Bank of Indore 1st January 1968
8. State Bank of Travancore 1st January 1960

With effect from 1st January 1963, the State Bank of Bikaner and State Bank of
Jaipur with head office located at Jaipur. Thus, seven subsidiary banks State Bank of
India formed the SBI Group.
On 19th July 1969, then the Prime Minister, Mrs. Indira Gandhi announced the
nationalization of 14 major scheduled Commercial Banks each having deposits worth
Rs. 50 crore and above.
Later the Government Nationalized six more commercial private
sector banks with deposit liability of not less than Rs. 200 crores on 15th April 1980,
viz.
Andhra Bank.
Corporation Bank.
New Bank of India.
Oriental Bank of Commerce.
Punjab and Sind Bank.
Vijaya Bank.

In 1969, the Lead Bank Scheme was introduced to extend banking facilities to every
corner of the country. Later in 1975, Regional Rural Banks were set up to supplement
the activities of the commercial banks and to especially meet the credit needs and of
course employment.
The first year after nationalization witnessed the total growth in the agricultural loans
and the loans made to SSI by 87% and 48% respectively. The overall growth in the
deposits and the advances indicates the improvement that has taken place in the
banking habits of the people in the rural and semi-urban areas where the branch
network has spread.
Consequences of Nationalization:
The quality of credit assets fell because of liberal credit extension policy.
Political interference has been as additional malady.
Poor appraisal involved during the loan meals conducted for credit disbursals.
The credit facilities extended to the priority sector at concessional rates.

Rizvi Institute of Management Studies and Research 3


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

3) Post-Liberalization Era---Thrust on Quality and Profitability:


By the beginning of 1990, the social banking goals set for the banking
industry made most of the public sector resulted in the presumption that there was no
need to look at the fundamental financial strength of this bank. Revamping this
structure of the banking industry was of extreme importance, as the health of the
financial sector in particular and the economy was a whole would be reflected by its
performance.
The need for restructuring the banking industry was felt greater with
the initiation of the real sector reform process in 1992. the reforms have enhanced the
opportunities and challenges for the real sector making them operate in a borderless
global market place. The route causes for the lackluster performance of banks,
formed the elements of the banking sector reforms. Some of the factors that led to the
dismal performance of banks were.
Regulated interest rate structure.
Lack of focus on profitability.
Lack of transparency in the banks balance sheet.
Lack of competition.
Excessive regulation on organization structure and managerial resource.
Excessive support from government.

Against this background, the financial sector reforms were initiated to bring
about a paradigm shift in the banking industry, by addressing the factors for its dismal
performance.
In this context, the recommendations made by a high level committee
on financial sector, chaired by M. Narasimham, laid the foundation for the banking
sector reforms. The Narasimham Committee suggested that there should be functional
autonomy, flexibility in operations, dilution of banking strangulations, reduction in
reserve requirements and adequate financial infrastructure in terms of supervision,
audit and technology.

Rizvi Institute of Management Studies and Research 4


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter III: EVOLUTION OF INDIAN BANKING


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 asBanchi because they kept a special type of
table to transact their business.

3.1: IMPORTANCE OF BANKS


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.

3.2: INDIAN BANKING SYSTEM


"The success of the economic reforms is therefore all to see and the driving force of
these reforms is the banking sector".

Union Finance Minister P. Chidambaram strongly believes that the country's banking
sector has been one of the driving forces in the process of economic reforms.
Banking system occupies an important place a nation's economy. A banking
institution is indispensable in a modern society. In plays a pivotal role in the
economic development of a country.
Thus, economic development of a country depends upon success of banking industry
and success of banking Industry is determined to a large extent by now well then
needs of its customers have been understood and satisfied.
.

Rizvi Institute of Management Studies and Research 5


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

3.3: Reserve Bank of India


The Banking system is an integral sub-system of the financial system. It represents an
important channel of collecting small savings from the households and lending it to
the corporate sector.
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.

3.4: 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.

Rizvi Institute of Management Studies and Research 6


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter IV: Organizational Structure of Banks in India


In India banks are classified in various categories according to differ rent criteria. The
following charts indicate the banking structure:

Reserve Bank of

Commercial Banks Co-operative Banks Development Banks

Nationalized Private Short-term creditLong-term credit

Agricultural Credit Urban Credit EXIM Industrial Agricultural

4.1: CLASSIFICATION OF BANKS

PRIVATE
BANKS

COMMERC
SCHEDUL IAL
E BANKS
BANKS

BAN
KS CO-
OPERATIV
FOREIGN E
BANKS BANKS

INDUSTRI
AL
BANKS

Rizvi Institute of Management Studies and Research 7


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

PUBLIC SECTOR BANKS:

Nationalised banks or public banks dominate banking System in India. The


nationalisation of banks in India took place in 1969 by Mrs. Indira Gandhi the then
prime minister. The major objective behind nationalisation was to spread banking
infrastructure in rural areas and make available cheap finance to Indian farmers.
Before 1969, State Bank of India (SBI) was the only public sector bank in India.
Despite the entry of many new domestic and foreign private banks since
liberalization, public sector banks continue to dominate the commercial banking
industry.

PRIVATE SECTOR BANKS:

Private sector banking in India received a flip in 1994 when Reserve Bank of India
encouraged setting up of private banks as part of its policy of liberalisation of the
Indian Banking Industry. Housing Development Finance Corporation Limited
(HDFC) was amongst the first to receive an 'in principle' approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector. Private Banks have played
a major role in the development of Indian banking industry. They have made banking
more efficient and customer friendly. In the process they have jolted public sector
banks out of complacency and forced them to become more competitive. India has a
better banking system in place of other developing countries.

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 Function:

o 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.

o 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

Rizvi Institute of Management Studies and Research 8


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

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.

Rizvi Institute of Management Studies and Research 9


A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter V: 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:

Rizvi Institute of Management Studies and Research


10
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

(1) UNIT BANKING:


Unit Banking originated in the United State of America. It grew in the United States
of America.

An independent unit bank is a corporation that operates one office and that is not
related to other banks through either ownership or control.

(2) BRANCH BANKING:

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. Under the system branches can operate without keeping large idle cash
reserves. Branch Banking tends to bring
homogeneity in the prevailing Interest Rates. The choice of securities and investments
is larger.
With the growth of large scale business it is no wonder that the trend is almost every
country towards the branch banking i.e. big banks with a network of branches all over
the country. The Bank of America has now more than 500 branches in the state of
California itself.

(3) CHAIN BANKING:

Under the system there is pooling of resources. 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.
The banks are able to pool their resources in case of emergency or when large amount
of cash is required to meet the loan requirements of the customer.

(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.

Rizvi Institute of Management Studies and Research


11
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter VI: Function of a bank

Rizvi Institute of Management Studies and Research


12
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

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:-

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. This receipt is not transferable. 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.

i) 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.

ii) 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. Any sum or any number of withdrawals can be presented by such an
account holder.

2) Advancing of Loans: The bank advances money in any one of the following
ways.

i) 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.

ii) 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.
Money at call ensures liquidity. In the Interbank market it enables bank to make
adjustment according to their liquidity requirements.

iii) Loans: Loans are granted by the banks on securities which can be easily
disposed of in the market. When the bank has satisfied itself regarding the soundness
of the party, a loan is advanced.

iv) 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
Rizvi Institute of Management Studies and Research
13
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

bank on the amount actually withdrawn.

v) 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.

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 : It enables the banks to meet requirement of statutory
liquidity ratio (SLR)

3) 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. For this reason Prof. Sayers has called bank the manufactures of 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. Although a cheque is not a legal tender money, they
serves as a medium of exchange in a limited way as it is a negotiable instrument.

SECONDARY FUNCTIONS:

Besides the above primary functions, banks also perform many secondary functions
such as agency functions, general utility and social functions.

A) Agency Function:
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.

Rizvi Institute of Management Studies and Research


14
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

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, booking of vehicles, plots 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) 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.

iii) 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.

iv) Help in Transportation of Goods: Big businessmen or industrialists after


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

Rizvi Institute of Management Studies and Research


15
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

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

vi) 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.

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

List of Public Sector Banks:


Reserve Bank of India - Central Bank
Bank of India
Dena Bank
IDBI Bank
Indian Bank
Oriental Bank of Commerce
Punjab National Bank
United Bank of India
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Indian Overseas Bank
Syndicate Bank
Union Bank of India
Vijaya Bank
Punjab & Sind Bank

List of Private Banks:


Axis Bank
Bank of Rajasthan
Catholic Syrian Bank
Dhanalakshmi Bank
Federal Bank
Jammu & Kashmir Bank
Yes Bank
ICICI Bank
HDFC Bank
Rizvi Institute of Management Studies and Research
16
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

PB BANK
HSBC BANK
ABN AMRO
DEUTSCHE BANK

Chapter VII: Reason for Nationalization

Commercial banks created monopoly in the country.


The priority sector was neglected. Banks did not pay attention to credit needs
to farmers, small scale industries
Management lacked professional expertise.
Resources of banks were misused for benefit of directors.
Bank credit was not made according to five year developmental plans.

This was observed by the then prime minister Indira Gandhi in 1969. She thought that
these banks were not working for development of nation. So she thought of taking
over banks into government undertaking.

1955: Nationalization of State Bank of India.


1959: Nationalization of 7 SBI subsidiaries.
February 1st1969: Nationalization of 14 major banks with deposit of over 50cr.
1980: Nationalization of seven banks with deposits over 200cr.

Rizvi Institute of Management Studies and Research


17
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Major Point on Which Nationalized Bank Work:

Equally distribution of bank credit.


To strengthen banking system by preventing bank failure.
To make bank finance available for productive purposes in the priority sectors
of the economy.
To extend banking services in rural areas.
To foster new class of entrepreneurs.

Progress of Nationalizes Bank:

Branches
64980

8262

Branches

Source: RBI

Rizvi Institute of Management Studies and Research


18
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Sector

Rural Semi-Urban Urban

Source: RBI

Deposit

988099

4665

amount in crores

Source: RBI
Rizvi Institute of Management Studies and Research
19
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Credit

342012

3399

amount in crores
Source: RBI

Problems faced after Nationalization:


Political interference
Overstaffing
Inadequate supervision and regulation
Lack of Competition

Major Frauds:
Hindustan Photo Films Rs. 395 crore
Mangalore Chemicals and Fertilizers - Rs. 165 crore
JK Synthetics Rs. 87 crore
Harshad Mehta Rs.812 crore
Hyderabad Allwyn Rs. 85 crore
Rizvi Institute of Management Studies and Research
20
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

HMT Rs. 77 crore


Total Fraud was 1621 Crore.

What's the Needs of Privatization???

In early 80s, the Banking Sector in India was dominated by the public sector banks
which were characterized by
High Intermediation Costs.
Over-staffing and Over-branching.
Huge portfolio of Non-Performing Loans
Poor Customer Services
Undercapitalized
Poorly Managed / Narrow Product Range
Undue Interference in Lending, Loan Recovery & Personnel

Objective of Privatization:

Foster competition,
Ensuring greater capital investment,
Competitiveness and Modernisation,
Increases in Employment
Improved quality of products and services to the consumers
Reduction in the fiscal burden.
Increase in the efficiency levels

Privatization Benefits:

There was a great increase in the no. of bank branches after privatization from 8262
to 45,898.
Branches in rural/semi-urban sectors increases from 2% to 40% after privatization.
Credit to agriculture increases from Rs.162 crore to Rs.4,46,496 crore.
More job opportunities raise after privatization which leads to increase in staff from
2,20,000 to 9,65,720.
Private sector bank loans growth is faster as compared to public sector banks.
There was a great increase in the efficiency of the private banks as the control over
bank employees increases.
Private sector banks provide many additional services to its customers.

Adverse Impacts of Privatization:

Interest rate is more as compare to the public sector banks.


Private banks are responsible for this recession in the world & also in India.

Rizvi Institute of Management Studies and Research


21
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Less job security.


Private recovering agencies to recover bad loans.

Chapter VIII: PRODUCTS AND SERVICES OFFERED


BY BANKS

Broad Classification of Products in a bank:


The different products in a bank can be broadly classified into:
1. Retail Banking.
2. Trade Finance.
3. Treasury Operations.

Retail Banking and Trade finance operations are conducted at the branch level while
the wholesale banking operations, which cover treasury operations, are at the hand
office or a designated branch.

1. Retail Banking include:


Deposits
Loans, Cash Credit and Overdraft
Negotiating for Loans and advances
Remittances
Book-Keeping (maintaining all accounting records)
Receiving all kinds of bonds valuable for safe keeping

2. Trade Finance include:


Issuing and confirming of letter of credit.
Drawing, accepting, discounting, buying, selling, collecting of bills of exchange,
promissory notes, drafts, bill of lading and other securities.

3. Treasury Operations:
Buying and selling of bullion. Foreign exchange
Acquiring, holding, underwriting and dealing in shares, debentures, etc.
Purchasing and selling of bonds and securities on behalf of constituents.
The banks can also act as an agent of the Government or local authority. They insure,
guarantee, underwrite, participate in managing and carrying out issue of shares,
debentures, etc.

4. Common Banking Products Available:


Some of common available banking products are explained below:

1) Credit Card: Credit Card is postpaid or pay later card that draws from a
Rizvi Institute of Management Studies and Research
22
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

credit line-money made available by the card issuer (bank) and gives one a
grace period to pay. If the amount is not paid full by the end of the period, one
is charged interest.
A credit card is nothing but a very small card containing a means of identification,
such as a signature and a small photo. It authorizes the holder to change goods or
services to his account, on which he is billed. The bank receives the bills from the
merchants and pays on behalf of the card holder. Credit cards have found wide spread
acceptance in the metros and big cities. Credit cards are joining popularity for online
payments. The major players in the Credit Card market are the foreign banks and
some big public sector banks like SBI and Bank of Baroda. India at present has about
3 million credit cards in circulation.

2) Debit Cards: Debit Card is a prepaid or pay now card with some stored
value. Debit Cards quickly debit or subtract money from ones savings account, or if
one were taking out cash. Every time a person uses the card, the merchant who in turn
can get the money transferred to his account from the bank of the buyers, by debiting
an exact amount of purchase from the card. To get a debit card along with a Personal
Identification Number (PIN). When A CUSTOMER makes a purchase, he enters this
number on the shops PIN pad. When the card is swiped through the electronic
terminal, it dials the acquiring bank system either Master Card or Visa that validates
the PIN and finds out from the issuing bank whether to accept or decline the
transaction. The customer never overspread because the amount spent is debited
immediately from the customers account. So, for the debit card to work, one must
already have the money in the account to cover the transaction. There is no grace
period for a debit card purchase.
The major limitation of Debit Card is that currently only some 3000-4000 shops
country wide accepts it.

3) Automatic Teller Machine: The introduction of ATMs has given the


customers the facility of round the clock banking. The ATMs are used by banks for
making the customers dealing easier. ATM card is a device that allows customer who
has an ATM card to perform routine banking transaction at any time without
interacting with human teller. ATMs are currently becoming popular in India that
enables the customer to withdraw their money 24 hours a day and 365 days. The
advantages of ATMs are many. It increases existing business and generates new
business. It allows the customers.
To transfer money to and from accounts.
To view account information.
To order cash.
To receive cash.
Advantages of ATMs:
To the Customers
ATMs provide 24 hrs. 7 days and 365 days a year service.
Service is quick and efficient
Privacy in transaction

Rizvi Institute of Management Studies and Research


23
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Wider flexibility in place and time of withdrawals.

4) E-Cheaques: The e-cheaques consists five primary facts. They are the
consumers, the merchant, consumers bank the merchants bank and the e-mint and
the clearing process. Electronic version of cheaques are issued, received and
processed. A typical electronic cheque transaction takes place in the following
manner:
The customer accesses the merchant server and the merchant server presents its goods
to the customer.
The consumer selects the goods and purchases them by sending an e-cheque to the
merchant. The merchant validates the e-cheque with its bank for payment
authorisation.
The consumers bank updates the consumers account with the withdrawal
information.
The e-chequing is a great boon to big corporate as well as small retailers. Most major
banks accept e-cheques. Thus this system offers secure means of collecting payments,
transferring value and managing cash flows.

5) Electronic Funds Transfer (EFT): Many modern banks have computerised


their cheque handling process with computer networks and other electronic
equipments. These banks are dispensing with the use of paper cheques.
The system called electronic fund transfer (EFT) automatically transfers money from
one account to another. In big companies pay is not disbursed by issued cheques or
issuing cash. The payment office directs the computer to credit an employees account
with the persons pay.

6) Telebanking: Telebanking refers to banking on phone services.. a customer can


access information about his/her account through a telephone call and by giving the
coded Personal Identification Number (PIN) to the bank. Telebanking is extensively
user friendly and effective in nature.
To get a particular work done through the bank, the users may leave his instructions
in the form of message with bank.
Facility to stop payment on request. One can easily know about the cheque status.
Information on the current interest rates.
Information with regard to foreign exchange rates.
Request for a DD or pay order.
D-Mat Account related services.
And other similar services.

7) Mobile Banking: A new revolution in the realm of e-banking is the emergence


of mobile banking. On-line banking is now moving to the mobile world, giving
everybody with a mobile phone access to real-time banking services, regardless of

Rizvi Institute of Management Studies and Research


24
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

their location. But there is much more to mobile banking from just on-lie banking. It
provides a new way to pick up information and interact with the banks to carry out
the relevant banking business. The potential of mobile banking is limitless and is
expected to be a big success. Booking and paying for travel and even tickets is also
expected to be a growth area.. According to this system, customer can access account
details on mobile using the Short Messaging System (SMS) technology where select
data is pushed to the mobile device. The wireless application protocol (WAP)
technology,
which will allow user to surf the net on their mobiles to access anything and
everything. This is a very flexible way of transacting banking business.

8) Internet Banking: Internet banking involves use of internet for delivery of


banking products and services. With internet banking is now no longer confirmed to
the branches where one has to approach the branch in person, to withdraw cash or
deposits a cheque or request a statement of accounts. In internet banking, any inquiry
or transaction is processed online without any reference to the branch (anywhere
banking) at any time. The Internet Banking now is more of a normal rather than an
exception due to the fact that it is the cheapest way of providing banking services. As
indicated by McKinsey Quarterly research, presently traditional banking costs the
banks, more than a dollar per person, ATM banking costs 27 cents and internet
banking costs below 4 cents approximately. ICICI bank was the first one to offer
Internet Banking in India.

Benefits of Internet Banking:


Reduce the transaction costs of offering several banking services and diminishes
the need for longer numbers of expensive brick and mortar branches and staff.
Increase convenience for customers, since they can conduct many banking
transaction 24 hours a day.
Increase customer loyalty.
Improve customer access.
Attract new customers.
Easy online application for all accounts, including personal loans and mortgages

Financial Transaction on the Internet:


1) Electronic Cash: Companies are developing electronic replicas of all existing
payment system: cash, cheque, credit cards and coins.
Automatic Payments: Utility companies, loans payments, and other businesses use on
automatic payment system with bills paid through direct withdrawal from a bank
account.

2) Direct Deposits: Earnings (or Government payments) automatically deposited


into bank accounts, saving time, effort and money.
Rizvi Institute of Management Studies and Research
25
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

3) Stored Value Cards: Prepaid cards for telephone service, transit fares,
highway tolls, laundry service, library fees and school lunches.

4) Point of Sale transactions: Acceptance of ATM/Cheque at retail stores and


restaurants for payment of goods and services. This system has made functioning of
the stock Market very smooth and efficient.

5) Cyber Banking: It refers to banking through online services. Banks with web
site Cyber branches allowed customers to check balances, pay bills, transfer funds,
and apply for loans on the Internet.

6) Demat: Demat is short for de-materialisation of shares. In short, Demat is a


process where at the customers request the physical stock is converted into electronic
entries in the depository system.
In January 1998 SEBI (Securities and Exchange Board of India) initiated DEMAT
ACCOUNTANCY System to regulate and to improve stock investing. As on date, to
trade on shares it has become compulsory to have a share demat account and all
trades take place through demat.

How to Operate DEMAT ACCOUNT?


One needs to open a Demat Account with any of the branches of the bank.
After opening an account with any bank, by filling the demat request form one can
handover the securities. The rest will be taken care by the bank and the customer will
receive credit of shares as soon as it is confirmed by the Company/Register and
Transfer Agent. There is no physical movement of share certification any more. Any
buying or selling of shares is done via electronic transfers.
If the investor wants to sell his shares, he has to place an order with his broker and
give a Delivery Instruction to his DP (Depository Participant). The DP will debit his
account with the number of shares sold by him.
If one wants to buy shares, he has to inform his broker about his Depository Account
Number so that the shares bought by him are credited in to his account.
Payment for the electronic shares bought or sold is to be made in the same way as in
the case of physical securities.

Banking Services: Banking covers so many services that it is difficult to define it.
However, these basic services have always been recognized as the hallmark of the
genuine banker. These are
The receipt of the customers deposits
The collection of his cheques drawn on other banks
The payment of the customers cheques drawn on himself
There are other various types of banking services like:
Advances Overdraft, Cash Credit, etc.
Rizvi Institute of Management Studies and Research
26
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Deposits Saving Account, Current Account, etc.


Financial Services Bill discounting etc.
Foreign Services Providing foreign currency, travelers cheques, etc.
Money Transmission Funds transfer etc.
Savings Fixed deposits, etc.
Services of place or time ATM Services.
Status Debit Cards, Credit Cards, etc.

Customer Services in Commercial Banks: Customer service is the service


provided in support of a banks core products. Customer service often includes
answering questions; handling complaints. Customer service can occur on site (as
when an onstage employee helps a customer or answers a question) or it can occur
over the phone or the Internet. Quality customer service is essential to building cordial
customer relationship.
Banking being a service industry, a lot depends on efficient and prompt
customer service. Customer service is the most important duty of the banking
operations. Prompt and efficient service with smile will develop good public relations
reduce complaints and increase business.
Why is Customer Service Important?
Changing customer expectations: Today the customer is more demanding and more
sophisticated than he or she was thirty years ago.
The increased importance of customer service: With changing customer expectations,
competitors are seeing customer service as a competitive weapon with which they
differentiate their products and services.
The need for a relationship strategy: To ensure that a customer service strategy that
will create a value preposition for customers should be formulated implemented and
controlled. It is necessary to give it a central role and not one that is subsumed in the
various elements of the marketing mix. The customer is the kingpim in growth
organizations like commercial banks. Only those institutions which work according to
his dictates will flourish. Quality, Consistency and Durability at low price are the final
expectations of a customer. Quality will have to be unambiguous, of world class
quality. Quality cannot be of minimum acceptable standards. Customer
responsiveness must be quick and also competent. Speed, performance and cost will
be the new values mantra for success. The ten key areas of customers services to
be attended timely and regularly are:
i. Submission of statement of A/Cs to customers

ii. Updating of savings pass books.

iii. Teller system efficiency.

iv. Cleanliness and Upkeep of premises.

v. Intermediate Credit for institution cheques/land bills.


Rizvi Institute of Management Studies and Research
27
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

vi. Advance intimation to customers for rewards of Term Deposits Receipts on


maturity.

vii. Advance for Debit/credit to accounts.

viii. Punctuality of staff.

ix. Handling of complaint register.

x. Maintain a complaint register.

Customers dissatisfaction in the banking industry is neither recent nor


unknown. This is mainly due to delays in handling transactions across the counter in
collections, update of passbooks supply of statements of accounts, etc. Failure to
provide prompt and efficient customer service is likely to lead to reduction in the
number of customers and they may have to face closure. To event such situation the
following improvements in the customer services may be carried out:

1) Personal relations of the bank employee with customers will improve


customer satisfaction. 1 service with smile should be the motto of every bank
employee.

2) Rapid customer services should be provided through automation of work and


simplification of procedures.

3) ATMs may be introduced in all the branches of the banks, based upon the
volume of transactions. This shall facilitate non-stop banking.

4) Credit Cards Services, Debit Card Services, which should be provided to the
customers, must a link service with all the banks and branches if possible to
facilitate the customer and the business organizations.

5) E-mail service made freely available at all banking centers.

Rizvi Institute of Management Studies and Research


28
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

6) Foreign Exchange transactions are to be extended to all the branches to


facilitate trade and industries.

7) All the customers are not homogenous in their needs. Hence need based
schemes may be introduced.

8) Totally deregulated interest rate structure should be there.

9) The banking staff must be trained to understand the customers psychology, so


they may provide customer service in a qualified manner.

10) Educating the customers will increases better utilisation of banking services.

Chapter IX: ROLE OF INFORMATION


TECHNOLOGY (IT) IN THE BANKING SECTOR

Banking environment has become highly competitive today. To be able


to survive and grow in the changing market environment banks are going for the latest
technologies, which is being perceived as an enabling resource that can help in
developing learner and more flexible structure that can respond quickly to the
dynamics of a fast changing market scenario. It is also viewed as an instrument of cost
reduction and effective communication people and institutions associated with the
banking business. Information Technology enables sophisticated product
development, better market infrastructure, implementation of reliable techniques for
control of risks and helps the financial intermediaries to reach geographically distant
and diversified markets. Internet has significantly influenced delivery channels of the

Rizvi Institute of Management Studies and Research


29
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

banks. Internet has emerged as an important medium for delivery of banking products
and services.

The customers can view the accounts; get account statements, transfer funds and
purchase drafts by just punching on few keys. The smart cards i.e., cards with
microprocessor chip have added new dimension to the scenario. IT is increasingly
moving from a back office function to a prime assistant in increasing the value of a
bank over time. IT does so by maximizing banks of pro-active measures such as
strengthening and standardizing banks infrastructure in respect of security,
communication and networking, achieving inter branch connectivity, moving towards
Real Time gross settlement (RTGS) environment the forecasting of liquidity by
building real time databases, use of Magnetic Ink Character Recognition and Imaging
technology for cheque clearing to name a few. Indian banks are going for the retail
banking in a big wa E-Banking: E-banking made its debut in UK and USA 1920s. It
becomes prominently popular during 1960, through electronic funds transfer and
credit cards. The concept of web-based baking came into existence in Europe and
USA in the beginning of 1980.

In India e-banking is of recent origin. The traditional model for growth has been
through branch banking. Only in the early 1990s has there been a start in the non-
branch banking services. The new private sector banks and the foreign banks are
handicapped by the lack of a strong branch network in comparison with the public
sector banks.

Credit Cards Debit Cards

ATM

E-Cheques

EFT (Electronic Funds Transfer)

D-MAT Accounts

Mobile Banking

Rizvi Institute of Management Studies and Research


30
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Telephone Banking

Internet Banking

EDI (Electronic Data Interchange)

Benefits of E-banking:

To the Customer:

Anywhere Banking no matter wherever the customer is in the world. Balance enquiry,
request for services, issuing instructions etc., from anywhere in the world is possible.

Anytime Banking Managing funds in real time and most importantly, 24 hours a
day, 7days a week.

Convenience acts as a tremendous psychological benefit all the time.

Brings down Cost of Banking to the customer over a period a period of time.

Cash withdrawal from any branch / ATM

On-line purchase of goods and services including online payment for the same.

To the Bank:

Innovative, scheme, addresses competition and present the bank as technology driven
in the banking sector market

Reduces customer visits to the branch and thereby human intervention

Inter-branch reconciliation is immediate thereby reducing chances of fraud and


misappropriation

Rizvi Institute of Management Studies and Research


31
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

On-line banking is an effective medium of promotion of various schemes of the bank,


a marketing tool indeed.

Integrated customer data paves way for individualised and customised services.

Impact of IT on the Service Quality: The most visible impact of technology


is reflected in the way the banks respond strategically for making its effective use for
efficient service delivery. This impact on service quality can be summed up as below:

With automation, service no longer remains a marketing edge with the large banks
only. Small and relatively new banks with limited network of branches become better
placed to compete with the established banks, by integrating IT in their operations.

The technology on one hand serves as a powerful tool for customer servicing, on the
other hand, it itself results in depersonalizing of the banking services. This has an
adverse effect on relationship banking. A decade of computerization can probably
never substitute a simple or a warm handshake.

Impact of IT on Banking System: The banking system is slowly shifting from


the Traditional Banking towards relationship banking. Traditionally the relationship
between the bank and its customers has been on a one-to-one level via the branch
network. This was put into operation with clearing and decision making
responsibilities concentrated at the individual branch level. The head office had
responsibility for the overall clearing network, the size of the branch network and the
training of staff in the branch network. The bank monitored the organisations
performance and set the decision making parameters, but the information available to
both branch staff and their customers was limited to one geographical location.

Rizvi Institute of Management Studies and Research


32
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter X: INTEREST RATES ON RUPEE DEPOSIT

REVISED RATES
Effective From 04.08.2016

UPTO Rs 15 Above Rs 15 lac


Maturity Above Rs. 1 crore
lac to Rs 1 Crore

7 - 14 Days 2.50 2.50 2.50

15 - 30 Days 2.75 2.75 3.10

31 - 45 Days 3.25 3.25 3.25

46 - 90 Days 4.25 4.25 4.75

91 - 179 Days 5.25 5.25 5.75

180 -269 Days 5.75 5.75 6.10

270 - 364 Days 6.00 6.25 6.50

1 Year-2 Years 7.10/ 7.25* 7.10/ 7.25* 7.10

Above 2 Years - <3


7.25/ 7.50** 7.25/ 7.50** 7.25
Years

3 Years -< 5 Years 7.25 7.00 7.25

5 years - 10 years 7.50 7.00 7.50

Rizvi Institute of Management Studies and Research


33
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter XI: FINANCIAL PRODUCTS AND SERVICES


Following are the various financial product and services:

1. Saving Account
2. Current Account
3. Reccuring Deposit Account
4. Tax Saving Deposit
5. Safe Deposit Lockers

SAVINGS ACCOUNTS:
Ace Saving Account
Edge Savings Account
Pro Savings Account
Classic Savings Account
Nova Savings Account

Ace Saving Account:


Ace Saving Account Is a Power Packed Saving Account That Gives You The
Additional Advantage Pf Banking And Financial Benefits For Free.Let Kotak Ace
Saving Account Take Care Of All Your Savings & Investment Requirement And
Ensure That You Always Get Greater Financial Flexibility. With This Exclusively
Designed Saving Account You Get Access To Many Premium Services. So, Make
Your Money Work Harder By Converting A Part Of Your Savings Into Fixed Deposits
Or Get Add-On Debit Cards For Your Loved Ones At No Extra Cost

Benefits of Ace Saving Account:

Average Monthly Balance (AMB) Of Rs. 50,000/-


Earn Up To 6% Interest On Your Savings Account Balance
Extended Debit Card Withdrawal Limit Of Rs. 2 Lakh Per Day Through ATM
Three NMC Waived Edge Savings Accounts For Family Members

Rizvi Institute of Management Studies and Research


34
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Free Access to All Domestic and International VISA ATM


Free Platinum International Debit Card
Free Add-On Platinum International Debit Card
Free Net Banking, Mobile Banking And Phone Banking
Free Cash Withdrawals At Other Domestic Atms
Free Home Banking

EDGE SAVINGS ACCOUNT:


Edge Savings Is A Straightforward Savings Account That Combines The Best Of
Regular And Privileged Banking To Give You Many Benefits With Limited Premium
Services. Designed To Suit The Requirements Of The New-Age Professional,Kotak
Edge Saving Account Gives You A Little Bit Extra Than A Regular Savings Account.
So,Enjoy Free Access To All Domestic Visa Atms Or Carry-Out Neft Transaction
From Your Phone, All With One Savings Account.

Benefits of Edge Saving Account:

Average Monthly Balance (AMB) Of Rs. 10,000/-


Earn Up To 6% Interest On Your Savings Account Balance
Free Access To All Domestic VISA Atms, Up To Five Transactions Per Month
Classic Debit Card With High Limits.
Free At-Par Cheque (Up To 25 Leaves Per Quarter)
Free Phone Banking, Net Banking And Mobile Banking
Free NEFT (Only Through Net Banking
Free IMPS
Free Cash Withdrawals At Kotak Bank Atms
Kotak Activ money - Converts Savings Account Balance Above A Certain Amount
Into Term Deposits, So You Earn A Higher Rate Of Interest

PRO SAVINGS ACCOUNT:

Multiple Benefits and Free Premium Banking Services Of A High-End Savings


Account Now Come At A Much Lesser AMB. This Account Is Suitable For Those
Who Are Interested In Availing Of Banking Benefits, As Well As Taking Advantage
Of Additional Free Services.

Rizvi Institute of Management Studies and Research


35
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Average Monthly Balance (AMB) Ofrs. 20,000/-


Earn Up To 6% Interest On Your Savings Account Balance

Benefits of pro saving account:

Average Monthly Balance (AMB) Of Rs. 20,000/-


Earn Up To 6% Interest On Your Savings Account Balance
One NMC Waived Edge Savings Account For Your Family Member
Free Access To All Domestic VISA Atms
Free Platinum International Debit Card For The First Year
Free Net Banking, Mobile Banking And Phone Banking
Free Cash Pick-Up / Delivery (5 Calls Per Month)
Free Instrument Pick-Up / Delivery (5 Calls Per Month)
Free NEFT Through Net banking
Free Cash Withdrawals from Any Kotak Branch Across India

CLASSIC SAVINGS ACCOUNT:

An Account Packed With Great Features To Provide You A Superior Banking


Experience At A Very Comfortable Balance Requirement. Experience Priority
Services From Your Relationship Manager And Take Care Of Your Banking And
Investment Needs With The Kotak Classic Saving Account.

Benefits of classic saving account:

Average Monthly Balance (AMB) Of Rs. 10,000/-


Earn Up To 6% Interest On Your Savings Account Balance
One NMC Waived Nova Savings Account For Your Family Member
Free Access To All Domestic VISA Atms
Free Net Banking, Mobile Banking And Phone Banking
Free Cash Pick-Up / Delivery (5 Calls Per Month)
Free Instrument Pick-Up / Delivery (5 Calls Per Month)
Free NEFT Through Net banking
Free Cash Withdrawals From Any Kotak Branch Across India
Free Cash Withdrawals At Other Domestic Atms

Rizvi Institute of Management Studies and Research


36
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

NOVA SAVINGS ACCOUNT:

A Complete Financial Package Customized To Meet Regular Banking Needs, Kotak


NOVA Savings Account Ensures Faster And Secure Access With Convenience
Banking.Let Your Personal Banking Experience Move A Step Closer To You With An
Account That Gives You Exactly What You Want
Invest In Market Instrument, Shop Online, Pay Utility Bills And Do Much Through
Your Phone, On Mobile, Internet, ATM Or Branch.

Benefits of nova saving account:


Average Monthly Balance (AMB) Of Rs. 5,000/-
Earn Up To 6% Interest On Your Savings Account Balance1
Free Access To All Domestic VISA Atms, Up To Five Transactions Per Month2
Classic Debit Card With High Limits.
Free At-Par Cheque (Up To 25 Leaves Per Quarter)
Free Phone Banking, Net Banking And Mobile Banking
Free NEFT (Only Through Net Banking)
Free IMPS
Free Cash Withdrawals At Kotak Bank Atms
KotakActivmoney - Converts Savings Account Balance Above A Certain Amount Into
Term Deposits, So You Earn A Higher Rate Of Interest

Rizvi Institute of Management Studies and Research


37
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

CURRENT ACCOUNT:
ACE CURRENT ACCOUNT
ELITE CURRENT ACCOUNT
PRO CURRENT ACCOUNT
EDGE CURRENT ACCOUNT
NEO CURRENT ACCOUNT
GLOBAL TRADE CURRENT ACCOUNT
TRADER PRO CURRENT ACCOUNT
TRADER CLASSIC CURRENT ACCOUNT
ACE SALARY ACCOUNT
REGULAR TERM DEPOSITS
SENIOR CITIZEN DEPOSITS

ACE CURRENT ACCOUNT:

A Premium Current Account With Maximum Benefits And Features For Large
Business And Enterprises.

Benefits of Ace Current Account:

Average Quarterly Balance (AQB) Of Rs. 2.5 Lac


Free Business Power Platinum Debit Card With Enhanced Daily Purchase Limit
Of Rs. 2.5 Lac And Daily ATM Cash Withdrawal Limit Of Rs. 2 Lakhs
Free Access At All Domestic And International VISA Atms With Kotak Business
Platinum Debit Card
Free Unlimited Demand Drafts Payable At Kotak Bank Branch Locations
Free Demand Drafts Up To Rs. 30 Lac Per Month Payable At Non Kotak Bank
Branch Locations
Free Cheque Payments And Collection Anywhere In India
Free Cheque Collection Through Speed Clearing
Free Home Banking Service - Cash/Cheque Pickup And Delivery, At Your Call
Free Beat Service - Daily Visits To Home Or Office For Cheque Pickup And
Deposit In Your Account
Free Multi-City Cheque Books (At Par Cheque Books)

Rizvi Institute of Management Studies and Research


38
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

ELITE CURRENT ACCOUNT:


Elite Current Account Is Suitable For A Medium To Large
Business/Enterprises.Now Enjoy Several Banking Benefits And Features At A
Comfortable Balance Requirement

Benefits of Elite Current Account:

Average Quarterly Balance (AQB) Of Rs. 1 Lac


Free Demand Drafts Payable At Kotak Bank Branch Locations (Up To 100 Per
Month)
Free Demand Drafts Up To Rs. 10 Lac Per Month Payable At Non Kotak Bank
Branch Locations
Free Cheque Payments And Collection Anywhere In India
Free Cheque Collection Through Speed Clearing
Free Multi-City Cheque Books (At Par Cheque Books)
Free Cash Deposit2 And Withdrawal At Home Branch Location
Free Cash Deposit At Non-Home Branch Locations Up To Rs. 3 Lac Per
Month
Free Cash Withdrawal At Non-Home Branch Locations Up To Rs. 1 Lac Per
Day
Free Home Banking Service - Cash/Cheque Pickup And Delivery, At Your
Call

PRO CURRENT ACCOUNT:

Presenting A Current Account That Offers You Multiple Banking Benefits With
Manageable Balance Requirement. With Pro Account, You Can Access A Range Of
Privileged Banking Services Required For A Growing Business/Enterprise.

Benefits of Pro Current Account:

Average Quarterly Balance (AQB) Of Rs. 50,000/-


Free Demand Drafts Payable At Kotak Bank Branch Locations (Up To 50 Per
Month)
Free Cheque Payments And Collection1 Anywhere In India
Free Cheque Collection Through Speed Clearing
Free Multi-City Cheque Books (At Par Cheque Books)
Rizvi Institute of Management Studies and Research
39
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Free Cash Deposit3 And Withdrawal At Home Branch Location


Free Cash Deposit At Non-Home Branch Locations Up To Rs. 1 Lac Per Month
Free Cash Withdrawal At Non-Home Branch Locations Up To Rs. 50,000/- Per
Day
Free Home Banking Service Cash/ChequePickup And Delivery, At Your Call
Free Beat Service Daily Visits To Home Or Office For Cheque Pickup And
Deposit In Your Account

EDGE CURRENT ACCOUNT:

An Efficient Package Of Banking Services That Delivers That More Than You Expect
Of Current Account. This Account Suits A Small Or Medium Business/Enterprise
Looking To Maintain A Lower Balance Requirement While Enjoying A Well Defined
Set Of Banking Benefits

Benefits of Edge Current Account:

Average Quarterly Balance (AQB) Of Rs. 25,000/-


Free Demand Drafts Payable At Kotak Bank Branch Locations (Up To 25 Per
Month)
Free Cheque Payments And Collection1 Anywhere In India
Free Cheque Collection Through Speed Clearing
Free Multi-City At Par Cheque Book (Up To 1 Per Month)
Free Cash Deposit2 And Withdrawal At Home Branch Location
Free Cash Deposit At Non-Home Branch Locations Up To Rs. 50,000/- Per
Month
Free Cash Withdrawal At Non-Home Branch Locations Up To Rs. 25,000/-
Per Day
Free NEFT And RTGS Through Net Banking
Free Business Power Gold Debit Card With Enhanced Daily
Purchase Rs. 175000/- And ATM Cash Withdrawal Limit Of Rs. 25,000/-

NEO CURRENT ACCOUNT:

Rizvi Institute of Management Studies and Research


40
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Presenting An Account With The Lowest Balance Requirement And Features That
Can Make A Tremendous Difference To Na Newly Set Up Or A Growing Small
Business/Enterprise.

Benefits of Neo Current Account:


Average Quarterly Balance (AQB) Of Rs. 10,000/-
Free Cheque Payments And Collection1 Anywhere In India
Free Cheque Collection Through Speed Clearing
Multi-City At Par Cheque Book (First Cheque Book Is Free)
Free Cash Deposit2 And Withdrawal At Home Branch Location
Free NEFT And RTGS Through Net Banking
Free Business Power Gold Debit Card With Enhanced Daily Purchase Rs. 175000/-
And ATM Cash Withdrawal Limit Of Rs. 25,000/-
Free 24x7 Net Banking, Mobile Banking, Phone Banking And SMS Banking
Balance Alerts / Transaction And Value Added Alerts Through SMS At Nominal
Charge (Alerts Through Email Are Free)
KotakActivmoney Convert Current Account Balance Above Certain Amount
Into Term Deposits So You Earn Attractive Returns On Your Idle Balances

GLOBAL TRADE CURRENT ACCOUNT:


Presenting The Kotak Global Trade Current Account, Power-Packed With Exclusive
Features That Can Make A Tremendous Difference To The Way You Do Business.

Benefits of Global Trade Current Account:


A Dedicated Team Of Well Experienced Officers In Trade And Forex
Wide Network Of Branches Covering All Major Locations/Industrial Clusters
Large Network Of Correspondent Banking Relationship Across The Globe
Online FX Rate Booking System (FX Live) Offers Booking Of FX Rates At Your
Convenience
E-Banking Platform Provides Information On Outstanding Bills/ Credit Limits
Online
Tracking Mechanism Of The Deals Booked (Auto E-Deal Confirmation)
E-Advices Facilitate Timely Accounting And Reconciliation
E-SWIFT To Provides Faster Communication With Your Overseas Business Partner
Rizvi Institute of Management Studies and Research
41
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

TRADER PRO CURRENT ACCOUNT:

A Current Account Designed Specifically For The Retailers / Wholesalers / Textile


Traders By Understanding Your Business Transaction Needs.

Benefits of Trader Pro Current Account:

Average Quarterly Balance (AQB) Of Rs. 50,000.


Fungible Free Cash Deposit Limit To Enable You To Deposit Cash Across Any Of
The Branches Spread Across India.
Free Combined Monthly Cash Deposit Limit At Home And Non Home Location
Of Rs. 10 Lacs Per Month Or 8 Times The Previous Months Average Credit
Balance, Whichever Is Higher.
Free Cash Withdrawal At Home Branch Location.
Free Cash Withdrawal At Non Home Branch Location Of Rs. 50,000 Per Day.
Free Local And Anywhere Cheque Collection Facility.
Free Cheque Collection Through Speed Clearing
Free 10 Outward Cheque Return Charges Per Month
Free 100 Payable At Par Cheque Leaves Per Month
Free RTGS Collections And Payments

TRADER CLASSIC CURRENT ACCOUNT:


A Current Account Designed Specifically For The Retailers / Wholesalers / Textile
Traders By Understanding Your Business Transaction Needs.

Benefits of Trader Classic Current Account:


Average Quarterly Balance (AQB) Of Rs. 10,000.
Fungible Free Cash Deposit Limit To Enable You To Deposit Cash Across Any Of
The Branches Spread Across India.

Rizvi Institute of Management Studies and Research


42
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Free Combined Monthly Cash Deposit Limit At Home And Non Home Location
Of Rs. 10 Lacs Per Month Or 8 Times The Previous Months Average Credit
Balance, Whichever Is Higher.
Free Cash Withdrawal At Home Branch Location.
Free Cash Withdrawal At Non Home Branch Location Of Rs. 10,000 Per Day.
Free Local And Anywhere Cheque Collection Facility.
Free Cheque Collection Through Speed Clearing
Free 10 Outward Cheque Return Charges Per Month
ACE SALARY ACCOUNT:
An Account That Packs A Range Of Premium Solutions Designed To Meet The
Requirements Of Professionals Looking For Wealth Benefits Within Salary Account.

Benefits of Ace Salary Account:


Free Zero Balance Account (Subject To Salary Credits) Earns 6% Interest Per
Annum On Your Savings Balances Over Rs. 1 Lac And 5.5% Interest Per Annum
On Your Balances Up To 1 Lac1
Activmoney: Earn Higher Interest On Funds Lying Idle In Your Savings Account
With Auto Sweep-In / Sweep-Out Facility
Free Electronic Fund Transfer
Unlimited Value Demand Draft At Home Location And Delivered To Registered
Communication Address
Unlimited Visa Atms Transactions At All Atm's In India
Platinum Debit Card With Rs. 2 Lakhs Cash Withdrawal / Shopping Limit Per Day
2.5% Fuel Surcharge Waiver At Any Petrol Pump1
Lost Card Liability Insurance Of Rs. 2 Lakhs
Lost Baggage Insurance Of Rs. 1 Lac
Personal / Home Loans At Preferred Rates With Reduced Processing Fee

REGULAR TERM DEPOSITS:


A Regular Term Deposit Lets You Decide When You Want The Interest On Your
Principle Money
You Can Book A Term Deposit With An Interest Payout Frequency Which Suites Your
Requirement
I.E.Monthly Or Quarterly And You Can Also Keep It Invested Till Maturity.

Rizvi Institute of Management Studies and Research


43
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Feature and Benefits:


Attractive Interest Rates

Make A Deposit Of As Low As Rs. 10,000/- ( Rs. 25,000/- For New Customer)
Booking Period 7 Days To 10 Years1
Choose To Receive Interest Monthly, Quarterly Or Keep It Invested Till Maturity
Kotak Bank Customers Can Book Term Deposits Online Through Net Banking
Partial/Premature Withdrawal Of Term Deposit Is Permitted.
Nomination Facility Is Available
Liquidity Through Sweep-In Facility
Flexibility To Keep Your Financial Portfolio Diversified

SENIOR CITIZEN DEPOSITS:

To Facilitate Senior Citizen With Maximum Returns Over Term Deposits,Kotak


Mahindra Bank Offers Special Rates On These Deposits.All Resident Indians
Individuals,Above 60 Years Of Age Can Avail Benefits Of This Scheme.New
Customers Need To Submit A Valid Age Proof Along With The Application.

Book A Kotak Senior Citizen Deposits For Safe And Steady Return Whenever You
Want i.e. Monthly Or Quarterly.You Can Also Keep It Invested Till Maturity.

Feature And Benefits:


Attractive Interest Rates
Make A Deposit Of As Low As Rs. 10,000/- ( Rs. 25,000/- For New Customer)
Booking Period 7 Days To 10 Years1
Choose To Receive Interest Monthly, Quarterly Or Keep It Invested Till Maturity
Kotak Bank Customers Can Book Term Deposits Online Through Net Banking
Partial/Premature Withdrawal Of Term Deposit Is Permitted.
Nomination Facility Is Available
Liquidity Through Sweep-In Facility
Flexibility To Keep Your Financial Portfolio Diversified
Avail Overdraft Facility Against Term Deposit

Rizvi Institute of Management Studies and Research


44
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

RECURRING DEPOSIT:
A Small Saving Made Every Month Can Bring You One Step Closer To Your
Dreams.Make The Smarter Choice, Save With Kotak Recurring Deposits And
Maximize The Returns From Your Saving.

Benefits of Recurring Deposit:

Make Savings A Habit With Monthly Investment Amounts As Low As Rs. 100/-
Enjoy Easy Payment Options From Your Savings Account
No Tds Applicable On Recurring Deposits
Simple, Safe & Risk Averse Investment Options
A Small Saving Made Every Month Can Bring You One Step Closer To Your
Dreams.Make The Smarter Choice, Save With Kotak Recurring Deposits And
Maximize The Returns From Your Saving.

SWEEP-IN FACILITY:
The Sweep-In Facility Enables You To Link Your Existing Term Deposit To Your
Current Or Saving,Which Can Be Utilized In Case Of An Emergency ,Wherein The
Shortfall In Your Account Is Swept In From Your Linked Term Deposit In The Units
Of Rs.1/- Thereby Giving You The Convenience Of Getting Payments Processed With
Ease Ensuring Complete Peace Of Mind

Benefits of Sweep-in-Facility:
Enjoy Liquidity By Linking Your Term Deposit To Savings Account Or Current
Account
Earn Applicable Interest On The Money Till It Is Swept-In The Account, While The
Remaining Term Deposit Amount Will Fetch You Interest Of Term Deposit At The
Contracted Rate
Only An Exact Amount Required To Make Up For The Deficit In The Account Is
Withdrawn From Your Term Deposit In The Units Of Rs. 1/-, Thereby Giving You
Rizvi Institute of Management Studies and Research
45
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

The Convenience Of Getting Payments Processed With Ease Ensuring Complete


Peace Of Mind
Only The Principal Amount Of The Term Deposit Will Be Considered For The
Sweep-In Facility
Multiple Term Deposits Can Be Linked To Your Savings Account
Avail Overdraft Facility Against Term Deposit

TAX SAVING DEPOSITS:


Save Tax Along With Great Returns Over The Investment InKotak Mahindra Banks
Tax Saving Term Deposits. The Savings Products Are Available To Resident
Individuals Above The Age Of 60 Years

Benefits of Tax Saving Deposits:

Attractive Interest Rates


Choose To Receive Interest Quarterly, Or Keep It Invested Till Maturity
Save Tax On An Amount Between Rs. 100/- To Rs. 1 Lakh In Multiples Of Rs. 100/-
Booking Period Minimum 5 To Maximum 10 Years
Interest Rates For Tax Saving Tds For General Customers As Well As Senior Citizens
Are Applicable As Per Their Normal Schedule
Nomination Facility Is Available
Partial Withdrawal / Premature Withdrawal Is Not Allowed
TDS Will Be Applicable As Per Existing Guidelines

ACE DEPOSITS:
Ace Deposit Is A Composite Product, Where Monthly Interest Earned On Term
Deposit Is Invested I An Equity Mutual Fund, By Way Of Systematic Investment Plan
Through Standing Instructions Placed On The Savings Accounts.

Rizvi Institute of Management Studies and Research


46
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Benefits of Ace Deposit:

Attractive Interest Rates


Protection Of Principal: Ensures Safety Of Principal Amount Of Term Deposit
Potential Of Higher Returns: Interest From Term Deposit Is Invested In Equity
Mutual Fund Thus Having Potential Of Earning Higher Returns
Tax Arbitrage: Earnings From Equity Fund Are Tax Free If Redeemed After 1 Year
From The Date Of Investment
Rupee Cost Averaging: Investment On A Regular Basis Counters Volatility Of
Equity
Automated Sip Funding: Monthly Interest Payout Credited In Casa Is Invested In
Equity Mf Through Si Convenience
Ease And Convenience Of Operation
Nomination Facility Is Available
Choice To Select The Equity Mf Scheme
Available For Resident Individual, Nro And Non-Individual Customers

SAFE DEPOSIT LOCKERS:


Get Peace Of Mind With Kotak Mahindra Banks Safe Deposit Lockers- Our Banking
Service Providing Security To Your Precious Jewellery, Document And Other
Valuables

Benefits of Safe Deposit Lockers:


Payment: You Can Instruct The Branch To Debit The Annual Locker Rent From Your
Savings/Current Account.
Nomination Convenient Locker Sizes: Choose From A Range Of Options - Small,
Medium And Large.
Dual Key Security: Two Keys Required At Once, To Open The Locker. One Stays
With You And The Other With The Bank.
Safety: Branches Are Equipped With Security Features Like, Burglar Alarm, Iron-
Gated Vault & Electronic Surveillance Via Cctv.
Ease Of Location: Locker Facility Is Available In Over 350 Branches Across The
Country.
Multiple Access: You Can Add Or Remove Individuals Who Can Operate The
Locker On Your Behalf.
Ease Of Facility: You Can Nominate Your Close Ones For Safe Deposit Lockers.

Rizvi Institute of Management Studies and Research


47
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

EDUCATION LOAN:
Education Is The Most Important Investment One Makes In Life. Therefore, Kotak
Mahindra Bank Brings To You Educational Loans, Which Aims To Finance
Meritorious Student Who Choose To Pursue A Higher Education (Professional Or
Technical) In India And Abroad

Features and Benefits

You Can Avail A Loan Of Up To Rs. 10 Lacs For Education In India And Rs. 20 Lacs
For Education Abroad, Based On Your Income And Repayment Capacity To Fulfil
All Your Financial Needs
Quick Approval With A Kotak Mahindra Bank Education Loan, You Are Not Far
Away From Making Your Dreams Come True
Our Minimal Documentation Requirements Leave You Relaxed

TRACTOR FINANCE:
We Offer Finance For Purchase Of New And Old Tractors For
Agriculture/Commercial Purpose. We Are The Preferred Financier Of Key
Manufacturers

Features And Benefits

Loans For Purchase Of New Tractor / Old Tractor (Mortgage & Non-Mortgage
Loans)
Balance Transfer
Top-Up Loans
Service At Your Doorstep
Avail Life Insurance Shield Kotak Kisan Suraksha
Quick And Hassle-Free Process
Minimum Documentation
Excellent After Sale Service
Attractive Rates Of Interest

Rizvi Institute of Management Studies and Research


48
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter XII: STRUCTURE OF ICICI AND HDFC BANK:


Attributes ICICI Bank HDFC Bank

Business Loans,Loan Against


Business Loans,Loan Against
Business Deposit,Professional Loan,Project
Deposit,Professional Loan,Project
Loans Finance,Term Finance,Trade
Finance,Term Finance,Trade Finance
Finance
Corporate Credit Card,Credit Card,Debit Corporate Credit Card,Credit
Card,E-Shop Card,Loyalty Card,Debit Card,E-Shop
Cards
Cards,Remittance Card,Travel Currency Card,Loyalty Cards,Meal
Card Card,Travel Currency Card
Current Account,Demat
Current Account,Demat Account,Fixed
Account Account,Fixed Deposit
Deposit Account,Recurring Deposit
Types Account,Recurring Deposit
Account,Saving Account
Account,Saving Account
Bank Type Private Private
Personal Agricultural Loan Schemes,Commercial Commercial Vehicle
Loans Vehicle Loan,Consumer Goods Loan,Consumer Goods
Rizvi Institute of Management Studies and Research
49
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Loan,Educational Loan,Four
Loan,Educational Loan,Four Wheeler Wheeler Loan,Home Improvement
Loan,Home Improvement Loan,Housing Loan,Housing Loan,Loan Against
Loan,Loan Against Deposit,Loan Against Deposit,Loan Against Gold,Loan
Gold,Loan Against Property,Loan Against Against Property,Loan Against
Share,Loan Against Vehicle,Personal Share,Loan Against
Loan,Two Wheeler Loan Vehicle,Personal Loan,Two
Wheeler Loan
Business Monday to Friday-9:00am-4:00pm, Monday to Friday-9:30am-4:00pm,
Hours Saturday-9:00am-1:00pm Saturday-9:30am-12:30pm
Bonds,Equity,Fixed
Bonds,Equity,Fixed Deposit,Flexible
Investment Deposit,Flexible
Deposit,Insurance,Mutual Fund,Stock
Products Deposit,Insurance,Mutual
Invest
Fund,Stock Invest
Card To Card Money
Card To Card Money Transfer,Currency
Transfer,Currency Exchange,Demat
Exchange,Demat Services,Direct Tax
Services,Direct Tax
Payment,Electronic Clearing
Payment,Electronic Clearing
Services Service,Mobile Phone Banking,Multi City
Service,Locker Facility,Mobile
Cheque Facility,Net Banking,Pension
Phone Banking,Multi City Cheque
Disbursement,Personal Tax Assistance &
Facility,Net Banking,Personal Tax
Investment,Portfolio Management,Retail
Assistance & Investment,Portfolio
Chapter XIII: Current Market Condition

Market Share of Nationalized Banks and Private Banks:

Rizvi Institute of Management Studies and Research


50
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Fig 1.1 Market share

State Bank of India has the largest market share with 19.10%
followed by ICICI bank with 10.34% followed by Punjab
National Bank with 5.48% . Next is Bank Of India with 5.20%
followed by HDFC Bank with 2.91% followed by Axis Bank with
2.73%.

Market Cap of Nationalized Banks and Private Banks:

Rizvi Institute of Management Studies and Research


51
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Fig 1.2 Market Cap of Nationalized Banks (in Cr)

Fig 1.3 Market Cap of Private Banks (in Cr)

Major Players of Nationalized Banks and Private Banks:

Rizvi Institute of Management Studies and Research


52
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Fig 1.4 Major Players of Nationalized banks in terms of net profit (Rs. Cr)

Fig 1.5 Major Players of Private Banks in terms of net profit (Rs. Cr)

Growth Rate of Nationalized Banks and Private Banks:

Rizvi Institute of Management Studies and Research


53
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Fig 1.6 Growth Rate of Banks (%)

Fig 1.6 Growth Rate of Banks (%)

Rizvi Institute of Management Studies and Research


54
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter XIV: RECENT AND CURRENT TRENDS IN


BANKING

RECENT TRENDS IN BANKING:


Today, we are having a fairly well developed banking system with different classes of
banks public sector banks, foreign banks, private sector banks both old and new
generation, regional rural banks and co-operative banks with the Reserve Bank of
India as the fountain Head of the system.
During the last 39 years since 1969, tremendous changes have taken place in the
banking industry. The banks have shed their traditional functions and have been
innovating, improving and coming out with new types of the services to cater to the
emerging needs of their customers.
The major challenges faced by banks today are as to how to cope with competitive
forces and strengthen their balance sheet. Today, banks are groaning with burden of
NPAs. It is rightly felt that these contaminated debts, if not recovered, will eat into
the very vitals of the banks. Another major anxiety before the banking industry is
the high transaction cost of carrying Non-Performing Assets in their books. The
resolution of the NPA problem requires greater accountability on the part of the
corporate, greater disclosure in the case of defaults, an efficient credit information
sharing system and an appropriate legal framework pertaining to the banking system
so that court procedures can be streamlined and actual recoveries made within an
acceptable time frame. The banking industry cannot afford to sustain itself with
such high levels of NPAs thus, lend, but lent for a purpose and with a purpose
ought to be the slogan for salvation. homes and operating through internet. This
would be the case of banking reaching the customers.
In the days to come, banks are expected to play a very useful role in the economic
development and the emerging market will provide ample business opportunities to
harness. Human Resources Management is assuming to be of greater importance. As
banking in India will become more and more knowledge supported, human capital
will emerge as the finest assets of the banking system.

Rizvi Institute of Management Studies and Research


55
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Current Trends in the Banking sector:


Telephone banking is a service provided by a bank or other financial institution
that enables customers to perform financial transactions over the telephone,
without the need to visit a bank branch or automated teller machine. Telephone
banking times can be longer than branch opening times, and some financial
institutions offer the service on a 24 hour basis. From the bank's point of view,
telephone banking reduces the cost of handling transactions by reducing the need
for customers to visit a bank branch for non-cash withdrawal and deposit
transactions. Real time gross settlement systems (RTGS) are specialist funds
transfer systems where transfer of money or securities takes place from one bank
to another on a "real time" and on "gross" basis. Settlement in "real time" means
payment transaction is not subjected to any waiting period. The transactions are
settled as soon as they are processed. "Gross settlement" means the transaction is
settled on one to one basis without bundling or netting with any other transaction.
Once processed, payments are final and irrevocable.RTGS systems are typically
used for high-value transactions that require immediate clearing, in some
countries the RTGS systems may be the only way to get same day cleared funds
and so may be used when payments need to be settled urgently such as when
purchasing a house. However most regular payments would not use a RTGS
system, but instead would use a national payment system or network that allows
participants to batch and net payments Electronic funds transfer (EFT) is the
electronic exchange, transfer of money from one account to another, either within
a single financial institution or across multiple institutions, through computer-
based systems. ECS is an electronic mode of payment / receipt for transactions
that are repetitive and periodic in nature. ECS is used by institutions for making
bulk payment of amounts towards distribution of dividend, interest, salary,
pension, etc., or for bulk collection of amounts towards telephone / electricity /
water dues, cess / tax collections, loan installment repayments, periodic
investments in mutual funds, insurance premium etc. Essentially, ECS facilitates
bulk transfer of monies from one bank account too many bank accounts or vice
versa. Primarily, there are two variants of ECS - ECS Credit and ECS Debit

Point of sale terminal (POS terminal) is an electronic device used to process card
payments at retail locations. A POS terminal generally does the following:
Reads the information off a customers credit or debit card
Checks whether the funds in a customers bank account are sufficient
Transfers the funds from the customers account to the sellers account (or at least,
accounts for the transfer with the credit card network)
Records the transaction and prints a receipt

Rizvi Institute of Management Studies and Research


56
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter VX: CONCLUSION

The banking scenario has changed drastically. The changes which have taken
place in the last ten years are more than the changes took place in last fifty years
because of the invention of new and creative products institutionalisation,
liberalisation, globalization, technology and automation in the banking industry.
Indian banking system and products has several outstanding achievements to its
credit, the most striking of which is its reach. Indian banks are now spread out into
the remote corners of our country. In terms of the number of branches, Indias
banking system is one of the largest in the world. According to the Banker 2012,
India has 20 banks within the worlds top 1000 out of which only 6 are within the
top 500 banks.
Today banking sector is marked by high customer expectations and technological
innovations. Technology is playing a crucial role in the day to day functioning of
the banks. These banks that have harnessed and leveraged technology best have a
strategic advantage. To face competition, it is necessary for banks to absorb the
technology and upgrade their services.
In todays context banks products are following the strategy of relationship
banking than mass banking which is need of the hour. The customer services
are playing a very significant role in banking business. In India, major events
leading to deregulation, liberalisation and privatisation have unleashed forces of
competition, making the banks run for their business, not only to create the
customer, but more difficult to run for their business, not only to create the
customer, but more difficult to retain the customer. Prompt and efficient customer
service, thus, has become very significant. Relationship banking is the new
paradigm for survival and success, embracing a share of customer approach to
growth by identifying, protecting and expanding customer relationship.

Rizvi Institute of Management Studies and Research


57
A Comparative Study of Nationalized and Private Bank Product Nabeel Shaikh

Chapter XVI: Bibliography


(2017, 03 16). Retrieved from Ebscohost: www.ebscohostsearch.com

(2017, 03 17). Retrieved from Punjab national bank:


http://business.mapsofindia.com/banks-in-india/punjab-national-bank.html

(2017, 03 15). Retrieved from Google: www.googlesearch.com

(2017, 03 18). Retrieved from Icici bank: http://business.mapsofindia.com/banks-in-


india/icici-bank-ltd.html

(2017, 03 20). Retrieved from Bank of baroda:


http://business.mapsofindia.com/banks-in-india/bank-baroda.html

(2017, 03 21). Retrieved from Rbi : www.rbi.com

(2017, 03 22). Retrieved from Script: https://www.scribd.com/upload-document?


archive_doc=52229450&escape=false&metadata=%7B%22context%22%3A
%22archive%22%2C%22page%22%3A%22read%22%2C%22action
%22%3Afalse%2C%22logged_in%22%3Atrue%2C%22platform%22%3A
%22web%22%7D

(2017, 03 18). Retrieved from Wikipedia: www.wikipedia.com

(2017, 03 15). Retrieved from All banking solution : www.allbankingsolution.com

Rizvi Institute of Management Studies and Research


58