INDUSTRY PROFILE

From times immemorial, the banker has been an indispensible pillar of Indian society. Some
kind of banking business was being carried in India even during Vedic period. Before the
formation of the joint stock indigenous bankers banking services were offered by money
lenders known as shrestis, seths, chetties, Vaishyas, Marvadis, and Malthanis etc. the
manushmurthi and the Buddist litereature also provide ample evidence on the existence of
such a banking system in our country. In the past, economic advancement was unknown.
Consequently, use of money for buying and selling was very much restricted. With the
development of communication and economic process, spread of science and the growth of
economic and political institutions the use of money also expanded.

Banking in India originated in the first decade of 18th century with The General Bank of
India coming into existence in 1786. This was followed by Bank of Hindustan. Both these
banks are now defunct. The oldest bank in existence in India is the State Bank of India being
established as "The Bank of Bengal" in Calcutta in June 1806.

A couple of decades later, foreign banks like Credit Lyonnais started their Calcutta operations
in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to
the trade of the British Empire, and due to which banking activity took roots there and
prospered. The first fully Indian owned bank was the Allahabad Bank, which was established
in 1865.

By the 1900s, the market expanded with the establishment of banks such as Punjab National
Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were
founded under private ownership. The Reserve Bank of India formally took on the
responsibility of regulating the Indian banking sector from 1935. After India's independence
in 1947, the Reserve Bank was nationalized and given broader powers.

Early history

At the end of late-18th century, there were hardly any banks in India in the modern sense of
the term. At the time of the American Civil War, a void was created as the supply of cotton to
Lancashire stopped from the Americas. Some banks were opened at that time which
functioned as entities to finance industry, including speculative trades in cotton. With large
exposure to speculative ventures, most of the banks opened in India during that period could
not survive and failed. The depositors lost money and lost interest in keeping deposits with

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banks. Subsequently, banking in India remained the exclusive domain of Europeans for next
several decades until the beginning of the 20th century.

At the beginning of the 20th century, Indian economy was passing through a relative period
of stability. Around five decades have elapsed since the India's First war of Independence,
and the social, industrial and other infrastructure have developed. At that time there were
very small banks operated by Indians, and most of them were owned and operated by
particular communities.

The banking in India was controlled and dominated by the presidency banks, namely, the
Bank of Bombay, the Bank of Bengal, and the Bank of Madras - which later on merged to
form the Imperial Bank of India, and Imperial Bank of India, upon India's independence, was
renamed the State Bank of India. There were also some exchange banks, as also a number of
Indian joint stock banks. All these banks operated in different segments of the economy.

The presidency banks were like the central banks and discharged most of the functions of
central banks. They were established under charters from the British East India Company.
The exchange banks, mostly owned by the Europeans, concentrated on financing of foreign
trade. Indian joint stock banks were generally undercapitalized and lacked the experience and
maturity to compete with the presidency banks, and the exchange banks. There was potential
for many new banks as the economy was growing. Lord Curzon had observed then in the
context of Indian banking: "In respect of banking it seems we are behind the times. We are
like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and
cumbersome compartments."

Under these circumstances, many Indians came forward to set up banks, and many banks
were set up at that time, a number of which have survived to the present such as Bank of
India and Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank.

During the Wars

The period during the First World War (1914-1918) through the end of the Second World
War (1939-1945), and two years thereafter until the independence of India were challenging
for the Indian banking. The years of the First World War were turbulent, and it took toll of
many banks which simply collapsed despite the Indian economy gaining indirect boost due to
war-related economic activities. At least 94 banks in India failed during the years 1913 to
1918.

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Post-independence

The partition of India in 1947 had adversely impacted the economies of Punjab and West
Bengal, and banking activities had remained paralyzed for months. India's independence
marked the end of a regime of the Laissez-faire for the Indian banking. The Government of
India initiated measures to play an active role in the economic life of the nation, and the
Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy.
This resulted into greater involvement of the state in different segments of the economy
including banking and finance. The major steps to regulate banking included:

In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it
became an institution owned by the Government of India.

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India."

The Banking Regulation Act also provided that no new bank or branch of an existing bank
may be opened without a licence from the RBI, and no two banks could have common
directors. However, despite these provisions, control and regulations, banks in India except
the State Bank of India, continued to be owned and operated by private persons. This
changed with the nationalization of major banks in India on 19th July, 1969.

Nationalization

By the 1960s, the Indian banking industry has become an important tool to facilitate the
development of the Indian economy. At the same time, it has emerged as a large employer,
and a debate has ensued about the possibility to nationalize the banking industry. Indira
Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual
conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank
Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was
swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest
commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a
national leader of India, described the step as a "masterstroke of political sagacity." Within
two weeks of the issue of the ordinance, the Parliament passed the Banking Companies
(Acquit ion and Transfer of Undertaking) Bill, and it received the presidential approval on
9th August, 1969.

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A second dose of nationalization of 6 more commercial banks followed in 1980. The stated
reason for the nationalization was to give the government more control of credit delivery.
With the second dose of nationalization, the GOI controlled around 91% of the banking
business of India.

After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the
average growth rate of the Indian economy.

Liberalization

In the early 1990s the then Narasimha Rao government embarked on a policy of liberalization
and gave licenses to a small number of private banks, which came to be known as New
Generation tech-savvy banks, which included banks such as UTI Bank (now re-named as
Axis Bank) (the first of such new generation banks to be set up), ICICI Bank and HDFC
Bank. This move, along with the rapid growth in the economy of India, kickstarted the
banking sector in India, which has seen rapid growth with strong contribution from all the
three sectors of banks, namely, government banks, private banks and foreign banks.

The next stage for the Indian banking has been setup with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be given
voting rights which could exceed the present cap of 10%, at present it has gone up to 49%
with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time, were
used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4%) of functioning. The
new wave ushered in a modern outlook and tech-savvy methods of working for traditional
banks. All this led to the retail boom in India. People not just demanded more from their
banks but also received more.

Current situation

Currently, banking in India is generally fairly mature in terms of supply, product range and
reach-even though reach in rural India still remains a challenge for the private sector and
foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered
to have clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region. The Reserve Bank of India is an autonomous body, with minimal
pressure from the government. The stated policy of the Bank on the Indian Rupee is to
manage volatility but without any fixed exchange rate-and this has mostly been true.

4
With the growth in the Indian economy expected to be strong for quite some time-especially
in its services sector-the demand for banking services, especially retail banking, mortgages
and investment services are expected to be strong. One may also expect M&As, takeovers,
and asset sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in
Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has
been allowed to hold more than 5% in a private sector bank since the RBI announced norms
in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by
them.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is
with the Government of India holding a stake), 29 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign
banks. They have a combined network of over 53,000 branches and 17,000 ATMs.
According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75
percent of total assets of the banking industry, with the private and foreign banks holding
18.2% and 6.5% respectively.

Development of banking in India:

Banking in India is indeed as old as Himalayas. But the banking functions became an
effective force only after the first decade of twentieth century. To understand the history of
modern banking in India, one has to refer the “English agency houses” established by the east
India Company. These agency houses were basically trading firms and carrying on the
business of banking as part of their main business. Because of dual functions and lack of their
capital (agency houses depend entirely on deposits for their capital requirement) they failed
and vanished from the scene during the decade of eighteenth century.
In the first half of the 19th century the East India Company established three banks, they are:
1. Bank of Bengal, in 1809.
2. Bank of Bombay, in 1840.
3. Bank of madras, in 1843.

These three banks also known as “presidency banks”, they were independent units and
functioned well. These three banks were amalgamated in1920 and a new bank, the imperial

5
bank of India was established on 27th January 1921. It was given power to hold government
funds and manage the public debt.

With the passing of the state bank of India act in1955 the undertaking of the imperial bank of
India was taken over by the newly constituted State Bank of India and “imperial bank” was
nationalized. Even though the need for a central was felt in the 18th century, it could
materialize in the 20th century. On the basis of recommendation the Reserve Bank was
created in 1935 by passing Reserve Bank of India Act 1934, to regulate the issues of banks
noted, securing monitory stability in India and to operate the currency and credit system of
the country to its economic development.

Banking system in India:

Bank plays an important role in the economic development of a country. Banking institutions
form an important part of the money market and is indispensable in a modern developing
society. In India, banking has a wide network reaching every nook and corner of the country.
The government by allowing the setting up of commercial banks, regional banks, rural
development banks, etc., has made accessible to the citizens in general to have easy and quick
transactions with regard to banking institutions. Indian banking system over past few decades
has played a very effective role in mobilization of savings of the economy, spreading in bank
habit to the furthest corner of the country and enlarged entrepreneurial base. It is not denying
of the fact that developmental banks, insurance sectors and mutual funds/ non-banking
financial institutions have helped in enlarging the capital base of the economy also.

Kinds of Banks:

Banks can be classified according to the functions, which they perform. Such a functional
classification is open to difficulties, or some of the functions overlap. For example; Exchange
Banks are interested in undertaking foreign exchange transactions. But such banks are not
prevented from undertaking ordinary banking business. The chartered bank and the
mercantile bank are mainly exchange banks. They cater to the needs of trading classes by
forwarding and collecting bills payable and due. They are also ordinary commercial banks in
the sense that they undertake ordinary commercial banking business. Similarly, the Indian
Overseas Bank also undertakes foreign exchange transactions in addition to being an ordinary
commercial bank. The foreign exchange department of the state bank of India is a standing

6
example of the combination of banking and other activities. However, the Banks are usually
classified into the following groups:

1. Commercial Banks / Investment or Industrial Banks.

2. Co-operative and Land Mortgage Banks.
3. Exchange Banks
4. Savings Banks and
5. Central Bank.
Commercial banks, Investment or Industrial Banks are organized as a joint stock company,
primarily for earning profits. They cater the needs of the short-term, medium-term, and
working capital of the businessmen and industrialists. Long-term capital is provided by the
investment or industrial banks, while commercial banks are focused on meeting the short-
term financial needs of industry, trade and agriculture.

Just as industry needs short-term and long-term loans, so also agriculture and this is done by
the banks in the co-operative sector. Of course, in our country even commercial banks extend
loans to rural sector.

Exchange banks undertake the finance of foreign trade also. Banks in some countries assist
foreign trade transactions by providing such facilities as buying discounting and selling
approved bills of exchange, import and export of bullion and in several other ways,
participate in foreign trade.

Savings banks are institutions interested in the mobilization of savings in the community.
They encourage and at the same time develop the habit of thrift among the people. They
encourage it by offering inducements and develop the same by imposing restrictions on the
withdrawal of funds. In the post-office savings banks, the customers allowed to draw only a
limited portion during a certain specified period of time. Now a day, commercial banks have
Savings bank departments of their own.

Central Banks are institutions, which control the activities of commercial banks with a view
to promote a uniform monetary policy. These banks discharge a number of functions such as
being bankers to the government, banker’s bank and the custodian of nations banking
reserves. They possess the monopoly of note-issue. For this purpose, the central bank is
divided into two departments, viz, the banking department. The note issue function rests with
the issue department.

7
 Structure of Indian Banking System

Reserve Bank of India

Scheduled Commercial Banks Scheduled cooperative Banks

Public sector Private

Banks sector Banks 222inIndia-31 Regional
Foreign Banks in India Rural S.
Banks S. state Coop. Ba
Urban Coop Banks

NationalizedState
Banks Old Private Banks
bank of India and its Subsidiaries New Private Banks

The organized banking system in India can be broadly be divided into three categories, viz.,
the central bank of the country known as the Reserve Bank of India, the commercial banks
and the co-operative banks. The Reserve Bank of India is the supreme monetary and banking

8
authority in the country and has the responsibility to control the banking system in the
country. It keeps reserve of all the commercial banks and hence is known as the “Reserve
Bank”.

Commercial banks have been in existence in India for many decades. Commercial banks
mobilize savings in urban areas and make them available to large and small industrial and
training units mainly for working capital requirements. After 1969commercial banks are
broadly classified into nationalized or public sector banks and private sector banks. The State
Bank of India and its associate banks along with another 20 banks are public sector banks.
The private sector banks include a small number of Indian scheduled banks, which have not
been nationalized.

The regional rural banks came into existence in the middle of 1970s with specific objective of
providing credit and deposit facilities particularly to the small and marginal farmers,
agricultural labourers and artisans and small entrepreneurs.

The banking system is still dominated by the public sector banks, which accounts nearly 90%
of the branches and 73% of the credit in the banking system. Of the public sector banks State
Banks of India and its seven regional subsidiaries are by the far the largest players controlling
nearly 25% of the market. The other public sector represents a diverse group of players.
Canara bank, Punjab national bank, bank of Baroda, and the bank of India are the four largest
players in the area representing collectively around 25% of banking assets.

COMPANY PROFILE

Vijaya Bank, was founded on 23rd October 1931 by late Shri A.B.Shetty and other
enterprising farmers in Mangalore, Karnataka. The objective of the founders was essentially

9
to promote banking habit, thrift and entrepreneurship among the farming community of
Dakshina Kannada district in Karnataka State. The bank became a scheduled bank in 1958.

Vijaya Bank steadily grew into a large All India bank, with nine smaller banks merging with
it during the 1963-68. The credit for this merger as well as growth goes to late Shri M.Sunder
Ram Shetty, who was then the Chief Executive of the bank. The bank was nationalised on
15th April 1980. The bank has built a network of 1065 branches,45 Extention Counters and
352 ATMs as at 03.01.2009, that span all 28 states and 4 union territories in the country.

MISSION STATEMENT:

The mission of Vijaya bank is to emerge as a prime national bank backed by modern
technology, meeting customer’s aspirations with professional banking services and sustained
growth contributing to national development.

Objectives of Vijaya bank:

1. It promotes banking habit among the people.

2. It provides savings scheme with attractive interest and rich safety.

3. It provides safe deposit lockers to the customers.

4. It provides loan schemes to customers.

5. It provides employment to larger section of the society.

6. It provides agency arrangements.

7. Undertakes collection of income taxes payment of pension etc.

OVERVIEW:

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Vijaya Bank has the highest number of branches in its home state Karnataka. During
the Current financial Year up 31st December, 2008 the bank has opened 14 Branches, of
which 2 extension counters was upgraded.

In line with the prevailing trends, the bank has been giving greater thrust towards
technological up gradation of its operations. The bank has network of 1065 branches, 45
Extension Counters and 352 ATMs. [ As at 03.01.2009] 874 branches,38 extension counters,
12 service branches are functioning on CBS platform, and at 490 centers, covering 97.4 % of
Bank's business. Realizing your constantly evolving and diverse needs, the bank has
diversified too. Entering several new areas such as credit card, merchant banking, hire
purchase and leasing, and electronic remittance services.

Vijaya bank is one among the few banks in the country to take up principal membership of
VISA International and Master Card International. The driving force behind Vijaya bank’s
every initiative has been its 12107 strong dedicated workforce.

The Trend Setter:

Vijaya bank has many pioneering achievements. It was the first public sector bank to offer
“ATM cum Credit card”. It was also the first bank to open a fully computerized Capital
Market Services branch. The Vijaya bank is one of the first bank to pioneer the credit cards
business in the country. Towards financial inclusion the Bank has initiated several innovative
measures.

Organization:

The bank has, over the years, refurbished banking operations by putting into practice such
celebrated management concepts as delegation, decentralization etc, in its way of conducting
banking business.

In addition, there are 11 service branches, which handle the work relating to collection of
instruments drawn on branches in these centers and clearing functions. To help the branches
in optimum cash management the bank has set up 24 currency chests. As the extended wings
of inspection department at HO, the bank has set up 9 regional inspectorates.

Capital:

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During 2000-01, the bank entered the capital market with an initial public offer of 10 crore
shares of Rs.10/- each for cash aggregating Rs.100 crores. The issue received good response
and was oversubscribed to the extent of 1.81 crores. In the month of October 2003, the bank
has gone for second public issue of 10 shares of Rs 10/- each for cash at a premium of Rs 14/-
aggregating to Rs 240 crores. With this issue, the government of India shareholding has come
down from 70.02% to 53.87%. The issue was oversubscribed by 17.07 times which is a
record in the banking industry.

Deposits & Advances:

The total deposits of the bank amounted to Rs.37604.50 crores in March 2007. The bank also
has introduced several customer friendly deposit schemes. The gross advances of the bank
amounted to Rs.24643.91 crores in March 2007. Lending to retail segments are given focused
attention. Accordingly, bank has also launched many retail lending schemes.

Social banking activities:

Coming as it does from a bank, which was founded mainly to promote agriculture; it goes
without saying that ‘Agriculture Credit’ is one of the bank’s priority areas of lending. The
outstanding level of agriculture credit stood at Rs. 3212.67 crores in March 2007 forming
13.18%of net credit.

Customer Service:

The bank is committed to providing high quality customer service and has accorded top
priority to customer redressal of customer grievances. In compliance with the directives of
RBI, the bank had constituted a standing committee on customer service.

Credit Expansion:

In the field of credit expansion, as against the sluggish growth that prevailed in the banking
industry, bank could record a larger credit expansion during the current year. The advances to
industries constituted only 15% of advances portfolio as compared to 40% for the banking
system. High yielding advances do not necessarily mean the neglecting of priority sector.

Depending on the geographical location branches should increase their priority sector credit
especially credit to agriculture.

Computerization:

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The Bank had planned to increase the number of fully computerized branches from 60 to 80
and partially computerized branches from 74 to 75 so as to increase the coverage of business
of computerized branches in total business of the bank from 47% in March 1997 to 52% in
March 1998. However the objective of improving the quality of customer service and
improved productivity in these branches are yet to be realized.

Present Status of HRD:

Vijaya bank was established in the year 1931 in Mangalore, Karnataka. But later in the 1970s
bank shifted its headquarters from Mangalore to Bangalore. During the year Head Office has
setup restruring by merging/closing certain departments. Bank has closed the ‘Leasing , Hire
Purchase and Factoring Division’ with the planning Economic Research and Development
department. Bank has also setup a separate Risk Management Department, its head office to
facilitate inter departmental co-ordination and to monitor implementation process. A
customer’s services center is functioning in head office, headed by general manager, to take
care of customer complaints emanating at variuos branches for speedy redressal.

Regional Office was restructured by the process of merging contiguous offices. Thus in the
process, some of the regional offices were merged there by reducing the number of regional
offices to 17. In order to make faster decision making, the level of incumbency was elevated
at several of these offices. Bank has setup IT Training labs at 6 Regional Centers.

Vijaya bank classifies its branches into 5 categories, i.e. Small (JMG), Medium (ScaleII),
Large (ScaleIII), Very large (ScaleIV) and Exceptionally Large (Scale V). Despite of stiff
competition, The bank is known for its excellent services relating to payment of Dividend
Warrant Debenture redemption, Interest Warrants, Refund Orders etc, of a large number of
corporate houses, through the vast network of branches. The branches are spread over in all
the 28 state and 3 union territories of the country. Out of these, 447 (54%) are located in
rural/semi urban centers and 37 are specialized branches.

The bank rationalized its branch network by merging 16 branches with the nearby branches,
upgraded an extension counter into full fledged branch and converted its Regional foreign
exchange cell at Bangalore into specialized overseas branch. With the merger of three funds
transfer service branches, one industrial finance branch and opening of an overseas branch,
the total number of specialized branches stood at 37. The bank has designated 35 branches for
dealing in foreign exchange.

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Organization Chart of the Regional Office (RO)

RM

AGM

Chief Manager

Senior Manager

Manager

Assistant Manager

Clerks

Sub Staff

Financial Inclusion:
Bank actively co-ordinated with all the banks in its lead districts, namely, Mandya, Dharwad
and Haveri in Karnataka and successfully completed the first phase of the financial inclusion
programme. In the first phase, the bank opened 1,69,453 Vijaya Saral Savings Accounts, the
No Frill account scheme, introduced to provide basic banking to those financially excluded.
In the second phase of the programme, the bank has taken forward the initiative by extending
Vijaya General Credit Cards and other need based credit facilities to such families. Initiatives
were also taken to implement, on a pilot basis, IT enabled Financial Inclusion through
Business Correspondent/Smart Cards to provide banking facilities at their door steps.

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Implementation of RTGS & NEFT:
The Bank joined the Real Time Gross Settlement (RTGS) system under the aegis of Reserve
Bank of India on June 14, 2004 and has been undertaking customer transactions with effect
from January 12, 2005. As on March 31, 2008, 747 branches of the bank were RTGS
enabled. Vijaya Bank joined the National Electronic Funds Transfer (NEFT) with effect from
December 7, 2006. While its service branch, Mumbai has been identified as Nodal Office for
the bank, the implementation and monitoring of the system is taken care of by Treasury
Management Department at Head Office. Though initially only 5 branches were NEFT
enabled, the facility has been extended to cover all the RTGS branches with effect from April
3, 2007.

International Banking:
Though the Banks operations are confined to the domestic arena, conscious efforts have been
made to improve forex business through strategic alliances. Foreign exchange turnover
increased from Rs.11043 crore as at March 2007 to Rs.15256 crore as at March 2008.
The Foreign Currency Credit Portfolio of the bank stood at USD 139.64 million as at March
2008, registering a growth of 85.08% over USD 75.45 million in March 2007. The
outstanding Export Credit of the Bank stood at Rs.1429.51 crore as at March 2008 as against
Rs.1384.65 crore as at March 2007.

ATMs:
An additional 101ATMs were installed during the financial year 2007-08 and the total
number of ATMs as on March 31, 2008 was 272. Bank has entered into ATM sharing
arrangements with National Financial Switch consortium of IDRBT with effect from August
2, 2007, which is having 29 member banks with 18695 ATMs as on March 31, 2008.

Business Highlights:-

Bank's business level as at December 2008 was of the order of Rs.89340 crores, implying a
Y-o-Y growth of 24.76%. While deposits moved up by 21.38% to reach Rs. 52837 crores,

15
advances clocked a 30% growth to move up to Rs.36503 crores. Credit Deposit ratio
improved to 69.08% as at December, 2008 from 64.51% a year ago.

Growth in Bank's gross advances during the first nine months was broad based. Priority
sector advances recorded a 25.88% growth (y-o-y) to reach Rs.13458 crores as at December
2008, accounting for 42.03% of Adjusted Net Bank Credit. While agricultural advances
posted 45% growth to reach Rs.4736 crores, MSME advances were of the order of Rs.4427
crores, signifying a y-o-y growth of 40%. Advances to weaker sections clocked growth of
111% while loans to women clientele saw a 21% jump accounting for 5.6% of Adjusted Net
Bank Credit as against the 5% norm. Under education loan, the portfolio of Rs.411 crores
reflected a Y-o-Y growth of 40%.

Retail portfolio across the industry continued to exhibit slackness, including slowdown in
loans to housing, auto and personal segments. For Vijaya Bank, outstanding retail loans
aggregated to Rs.8996 crores with a Y-o-Y growth of 9.18%, while retail disbursals during
the nine months stood at Rs.2511 crores. Outstanding retail loans accounted for 24.64% of
Bank's gross credit.

Comparison of year ended 31.03.2008 with year ended 31.03.2007:-

 Net Profit before incremental provision for MTM diminution in the value of
investments is Rs.477.71 crores recording a growth of 44.18%. Bank suffered marked
to market diminution in the value of investments amounting to Rs.272.12 crores
during the quarter ended 31.03.2008 due to adverse movement in bond yield and
volatility in the equity market during the last fortnight of the quarter.
 Net Profit for the year ended 31.03.2008 is Rs.361.26 crores as againstRs.331.34
crores for the previous year, recording increase of 9.03%.
 Operating Profit for the year ended 31.03.2008 is Rs.660.86 crores.
 Interest Income from advances increased from Rs.1763.71 crores to Rs.2704.40
crores, recording growth of 53.34%.
 Other Income increased from Rs.264.29 crores to Rs.437.15 crores, recording growth
of 65.41%.

Comparison of quarter ended 31.03.2008 with quarter ended 31.03.2007:-

16
  Operating Profit Rs.186.41 crores as against Rs.193.28 crores for the quarter ended
31.03.2007.
 Net Profit stood at Rs.17.78 crores, after providing for incremental MTM
diminution in the value of investments to the tune of Rs.272.12 crores.
 Interest Income from advances increased from Rs.513.37 crores to Rs.742.25
crores, recording growth of 44.58 %.
 Other Income for the quarter ended 31.03.2008 increased from Rs.84.60 crores to
Rs.165.10 crores, recording growth of 95.15%.

Business:-

 Total Business increased by 28.47% from Rs.62248 crores to Rs.79971 crores.

 Total Deposits increased by 27.52% from Rs.37604 crores to Rs.47952 crores.
 Gross Advances increased by 29.93% from Rs.24644 crores to 32019 crores.
 Credit Deposit ratio increased from 65.53% to 66.77%.

Asset Quality:-

 Gross NPA ratio is 1.60% as against 2.29% as on 31.03.2007.

 Net NPA ratio is 0.57% as against 0.59% as on 31.03.2007.

Commitment to Society:-

 Priority Sector Credit is Rs.11536 crores as against Rs.9935 crores as on 31.03.2007,

recording a growth of 16.11%.
 Priority Sector Credit as percentage to Adjusted Net Bank Credit stood at 46.81% as
against 40.86% as on 31.03.2007.
 Agriculture Credit increased fromRs.3212 crores to Rs.3959 crores, recording growth
of 23.25%.
 Advances to Micro, Small & Medium Enterprises (MSME) increased from Rs.1889
crores to Rs.3468 crores, and recording growth of 83.59%. MSME credit constitutes
14.07% of Adjusted Net Bank Credit.
 Education Loan increased from Rs.209.22 crores to Rs.310.75 crores, recording
growth of 48.53 %.
 Advances to Weaker Sections increased from Rs.1351 crores to Rs.1544 crores,
recording growth of 14.28%.
 Bank achieved 100% financial inclusion in all its three lead districts during the year.

17
New business initiatives:-

 Corporate goal for 2008-09 is “Profitability Powered by Cost Efficiency”.

 To reach total business of Rs.1,00,000 crores and achieve a Credit Deposit ratio of
above 70%.
 To reach 1150 branches network by March 2009.
 To increase credit off take to improve under retail lending scheme, priority sector
particularly Agriculture Credit, SME etc.,
 Bank launched the 'Reverse Mortgage Loan Scheme', a hand holding facility for
senior citizens against self-owned, self- occupied residential property in April 2008.
 IT enabled V-Gyan Kendra knowledge portal launched for holistic dissemination of
information across all sections of employees.
 To set up online trading portal to provide stock trading facility to its customers.
 To set up Business Facilitator Units at field levels to maximize the benefits under
Core Banking environment and improve the data quality.
 To move towards second phase of financial inclusion and empower the financially
excluded segments in line with the inclusive growth strategy envisaged by the
government of India.
 Implementation is in advanced stage of progress under HRMS (Human Resources
Management Solution), ITMS (Integrated Treasury Management Solution) and IRMS
(Integrated Risk Management Solution).
 To bring all the branches under CBS by 31.03.2009 and attain business coverage of
100% on CBS platform.
 To increase the number of ATMs from 272 as at March, 2008 to 375 by March, 2009.
 To achieve accelerated performance under recovery of NPAs with specific focus on
AUC accounts through Vijaya Adalats and Settlement Camps with HO participation.
 To focus on improving fee-based income and aggressively promote fee-based non-
fund based business like LCs and Bank Guarantees/ DPGs etc.
 To ensure compliance with BASEL II capital adequacy requirements by September
2008, ahead of the prescribed schedule of March 2009.

Support systems and new business initiatives:-

18
  Total number of branches/offices under Core Banking Platform improved to
912, covering over 97% of total business.
 14 new ATMs operationalized and networked during the quarter, taking the
tally of ATMs to 352.
 As at 3.1.2009, the Bank had 1065 Branches, spread over 28 States and 4 UTs.
 V- Payroll, an SB deposit scheme with attractive features was introduced
targeted at the salaried class.
 Facility of SMS alerts enabled under Internet banking.
 VIJAYA VIKAS Smart Card launched under IT enabled financial inclusion.

PRODUCT PROFILE
Product profile- Services & Deposits

The various services, deposits, loans etc offered by the bank are discussed below:

1. Deposits
• Savings bank: These account are designed to help the individuals (Personal
customers) to inculcate habit of saving money and to meet their future requirement of
money. The amounts can be deposits / withdrawn from these accounts by way of
cheque / withdrawal slips.
• Current account: Current accounts can be opened by individuals, partnership firms,
private and public limited companies, HUF’s/ specified associations, societies, trusts,
etc.
• V star savings scheme: Under this saving scheme, Vijaya bank offers two types of
loans and it is eligible for those depositors who maintain a minimum monthly balance
of Rs. 5000/- during the 6 preceding months.
1. Term deposits:
Term deposit accounts can be opened by individuals, partnership firms, private and public
limited companies, HUF’s / specialized associations, etc.

19
 • Recurring deposits: Customers are free to choose either fixed or variable monthly
installments.
• V cash certificates: It helps customer to build capital benefited with compound
interest.
• V stock invest deposit scheme: Customer investing in stocks and shares gets
handsome returns in investing in this account at Rs 100/- per unit irrespective of
allotment of shares.
• Vijayashree units: These units, issued at Rs 1000/- multiples, give higher interest rates
and facilitate partial withdrawal.
• Fixed deposits: The minimum deposit amount is Rs 50/- and cab be deposited for any
period ranging from 15 days to 10 days.
• Jeevan Nidhi deposits: This money facilitates collection of money from doorstep. The
minimum deposit is Re 1/- and the period of deposit can be 12, 39 or 63 months.
• Capital gains scheme: This Scheme helps an income tax assessee to avail the benefit
of exemption from Capital Gains.
1. Loans and Advances:
• Vijaya home loan: For construction/ acquisition of house/flat for repair/renovation of
existing house/flat.
• Vijaya wheels: For purchase of two/four wheelers.
• V-equip: For equipment and machinery.
• V-rent: For rental purpose.
• V-cash: To meet short term credit needs.
• V-kanyadhan: To meet the marriage expenses.
• Educational loans: For students who have secured admission to professional/technical
course.
• Jewel loans.
• Loans against securities.
• Advance to agriculture, SSI and others: To provide a simple, comprehensive and
flexible credit package to farmers.
• V- Rakshak: To meet the credit needs of the defence personnel, an honour in
recognition and appreciation of the role of Defence Personnel to the nation.
• V-Swashakti: To expand the employment and income- generating program so as to
make women self-reliant and economically independent.

1. NRI services: These are schemes exclusively for NRI,s.

20
 • NRE
• FCNR(B)
• Ordinary non resident A/c
• Resident foreign currency deposit A/c

1. Other services:
i.Credit Cards:
• Vijaya classic Visa/Master card
• Vijaya Gold visa/Master card
• Vijaya corporate card
• Vijaya International card
• Vijaya Global card

ii. Merchant Banking:

• DP services
1. Remittance and collection facilities:
• FOREX remittance
• Inland remittance
• E-remittance services
• Inward/Outward collection instruments.

EDUCATION LOAN OF VIJAYA BANK

Eligibility
Student should be an Indian National and should have secured admission to the relevant
Professional/ Technical courses in India or Abroad through Entrance Test/ Merit Based
Selection process.

Courses Eligible

A) Studies in INDIA (Indicative List)

21
 • Graduation courses: BA, B.Com., B.Sc., etc.

• Post Graduation courses: Masters & Phd.

• Professional Courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental,

Management, Computer etc.

• Computer certificate courses of reputed institutes accredited to Dept., of Electronics

or institutes affiliated to University.

• Courses like ICWA, CA, CFA etc.

• Courses conducted by IIM, IIT, IISc, XLRI.NIFT etc.

• Professional courses with ICFAI National College.

• Coursed offered by M/s. Franklin Institute of Air Hostess.

• Pilot Training Programme. (Government or recognized private institute approved by

Director General of Civil Aviation, Government of India).

• Courses offered in India by reputed foreign universities.

• Evening courses of approved institutes.

• Other courses leading to diploma/ degree etc, conducted by colleges/ universities

approved by UGC/ Govt/ AICTE/ AIBMS/ ICMR etc.

• Courses offered by National Institutes and other reputed private institutions. Banks
may have the system of appraising other institution courses depending on future
prospects/ recognition by user institutions.

B) Studies Abroad

Graduation: For job oriented professional / technical courses offered by the reputed
university.
Post graduation: MCA, MBA, MS, etc.
Courses conducted by CIMA-London, CPA in USA, etc.

Pilot Training Programme offered by recognized institutions abroad approved by competent

authority in that country. Example in USA the Federal Aviation Administration, Government
of USA
The licences issued by such institutions should be convertible into corresponding Indian

22
Licences in case the applicant desires to take up employment in India after completion of
course/ training abroad, as per directives of Director General of Civil Aviation, Government
of India.

Expenses Considered for Loan

• Fee payable to college/ school/ hostel.

• Examination/ Library/ Laboratory fee.

• Purchase of books/ equipments/ instruments/ uniforms.

• Caution deposit/ building fund/ refundable deposit supported by Institution bills/

receipts.

• Travel expenses/ passage money for studies abroad.

• Purchase of computers – essential for completion of the course.

• Any other expense required to complete the course – like study tours, project work,
thesis etc.

• Issuance of DD favouring CET Cell

• Fee payable to the Institution/hostel/examination fee, cost of books, travel expenses

for studies abroad, purchase of computer, etc.

Loan Amount
Studies in India : Maximum Rs.10.00 lakhs
Studies abroad : Maximum Rs.20.00 lakhs

Margin
Upto Rs.4 lakhs : NIL
Above Rs.4 lakhs : Studies in India : 5 % *
Studies Abroad : 15 % *

* Scholarship / Assistantship to be included in the margin. Margin can be brought in as and

when disbursements are made on prorata basis.

Rate of Interest
with effect from 15.02.2008:
[BPLR = 13.00%]
Amount Slab Rate of interest per annum - Floating

23
Upto Rs. 4 lakhs 11.50 % [BPLR - 1.5%]
Above Rs. 4 lakhs 11.50 % + 1 = 12.50%

Repayment
Repayment will commence one year after completion of course or six months after securing a
job, whichever is earlier

Place of Study Loan Amount Repayment Period in Years

Upto Rs. 7.5 lacs 5-7

In India Above Rs. 7.5 lacs 5-10

Upto Rs. 15 lacs 5-7
Amount Studies in India Studies Abroad
Abroad
Upto Rs. 4 lacs No Security Above Rs. 15 lacs No Security
5-10

Above Rs. 4 lacs to Suitable Third Party Suitable Third Party Guarantee
Rs. 7.5 lacs Guarantee
Above Rs. 7.5 lacs to Tangible Collateral Security Tangible Collateral security of
Rs. 10 lacs (India)/ for full value of loan suitable value of loan or third party
Rs.15 lacs (Abroad) guarantee with assignment of future
income of the student for payment of
instalment
Rs. 15 lacs to Rs. 20 NA Tangible Collateral security for full
lacs value of loan and third party
guarantee with assignment of future
income of the student for payment of
instalment

Security

24
 Design of study

Statement of the problem

The research is done to find out how customers are satisfied with the education loan of the
Vijaya bank.

Education loans are meant for people whose income is not high enough, to pursue their
higher education. As higher education in India costs more, the poor students cannot afford to
pay more and get their education done. So, there is a need for these meritorious students to
borrow the education loan from any of the financial institution and pursue their desired
course. With this regard the present study on “Customer satisfaction towards the education
loan of Vijaya bank” has been taken, to know whether the poor meritorious students are
getting sufficient loan to complete their higher education.

Objective of the study

The main objective of this research is to know the customer satisfaction towards the
education loan of Vijaya Bank in Udupi District.

Sub-Objectives

The study has the following sub-objectives:

1) To study the satisfaction level of customer regarding the education loan.

2) To know the relationship between the customer and employees of the bank
3) To know how different is the education loan of the bank as compared to other bank
4) To study customers attitude towards the Vijaya bank in Udupi
5) To know the overall service provided by the bank to the customer
6) To know how quick the loan will be sanctioned to the customer
7) To know how the bank handles the grievance of the customer as compared to other
banks.
8) To bring out the suggestions for the improvement in the procedure of lending the
education loan to the customer.
9) To know whether the bank is lending sufficient loan to various fields like Medical,
Engineering, MCA, MBA etc.

Need for the study

25
India is a developing country and is forging ahead to create a definite niche in the global
economy. Education is an important factor for the development of any country. India is not
far behind in an attempt to provide education to every child by granting education loans to
students. All banks in India provide education loans to students for studies in India, as well
as abroad. Apart from banks, there are a number of charitable institutions and other private
funding associations in India that provide education loans to students.

It should be noted that India’s spend more than $4 billion annually to send their children
abroad for higher studies and technical training while there is no reason for India not
emerging as a global hub for higher education and technical training. The real challenge
therefore, is to expand capacities in higher education to keep ahead of the curve of rising
domestic and global demand.

The study conducted at Vijaya Bank Regional Office (RO), Udupi is to determine the
satisfaction level of the customer towards the education loan. Education loan is provided to
those who are seeking the financial assistance from the bank. Those who want to pursue
their higher education, and seek to borrow the education loan from the bank can apply for the
loan and the bank will sanction the loan based on the certain terms and conditions of the
bank. The main purpose to give the loan is to see that those who are financially unable to
pursue their higher education because of financial constraints, the bank is the only solution.

The topic “Customer Satisfaction towards the Education Loan of Vijaya Bank” is taken
because to know whether the students who are unable to pay their college fee, hostel fee,
tution fee etc are met by means of education loan as provided by the bank and also to know
how satisfied are the customer towards the loan borrowed from the bank. Once the bank
sanctions the education loan to the meritorious students one can pursue his/her education.
Soon after the completion of the education, the student is given a time period of one year or
six months to get an appropriate job in any organization. Once he/she gets the job he needs
to repay the actual amount of the loan along with some interest which the bank normally
charges.

Scope of the study

26
The study titled “Customer satisfaction towards education loan of Vijaya Bank” is based on
the information collected from Vijaya bank customers of Udupi District.

About 100 customers (from various fields like MBA, MCA, Diploma, Medical, Engineering)
of Vijaya Bank of udupi, Regional Office branch were contacted during the month of
December 2008 to January 2009 for the purpose of information. The present study on the
above mentioned topic makes an attempt to understand the satisfaction level of individual
customer towards the retail product of Vijaya bank in particularly the “Education Loan”.

Research Methodology

Research methodology is a systematic way for solving any research problem. It is a science
of analyzing how research is done scientifically. It studies the various steps that are generally
adopted by a researcher in studying the research problem.

Sources of Data

There are two types of data

1. Primary data
2. Secondary data

Primary data

The primary data are those, which are, collected a fresh for the first time and thus happen to
be original in character. The primary data collection involves the collecting of information
for the first time by observation, experimentation and through questionnaire in the original
form by the researching himself or his nominees. Such data are published by authorities who
themselves are responsible for their collection.

The primary data for the present study is collected mainly from the structured questionnaire.
Here an attempt by the researcher is made to get information on the topic “Customer
satisfaction towards the education loan of Vijaya bank” and it was restricted to Udupi district.
The sample doesn’t represent the total population, but however, the response received by the
100 samples is to be believed as 100% true, and moreover the data that was collected is by
means of personnel interview.

Secondary Data

27
The secondary data are those which have been collected by some other and which have been
processed. Generally speaking secondary data are information, which have been previously
collected by some organization to satisfy its own need. But the department under reference
for an entirely different reason is using it.The secondary data that was collected in the present
study was mainly from the magazine of the Vijaya bank

There are two main sources for secondary data

1. Published data
Data that is already available in books, magazines, trade journals, newspapers, reports
prepared by research scholar.
2. Secondary Data
This is not published, it can be found in unpublished biographies, autobiographies,
some governmental aspects, and private individual organizations etc.

Methodology of the study

The methodology adopted to carry out the present project is as follows:
1. Sampling Method: Non—probability sampling and judgment sampling.
2. Sample size: 100 customers
3. Area: Udupi Dist
4. Primary data: Structured Questionnaire and Personal Interview
5. Period: January 2009

Sample Size

All together 100 respondents including MCA – 26 students, MBA – 28, Diploma 12 students,
Engineering – 18 students, and Medical –16 students were personally interviewed. Due to
the time constraint only 100 sample size were collected. The sample size was selected from
various fields like Medical, MCA, MBA, Diploma, Engineering in the Udupi District.

Data Analysis

28
The primary data which was collected from the structured questionnaire by means of personal
interview needs to be analyzed. For this purpose the data was analyzed using appropriate
software like MS-Excel and SPSS where the data are grouped under various heading and then
by analyzing the table, the graphs were drawn and then inferences were drawn from the
graph.

Data will be analyzed based on the following criteria:

1. The data are grouped under various headings.

2. Analyses were drawn from table
3. Graphs were drawn according to data in the table
4. Inferences were drawn from the analysis of these graph and tables
5. This inferences will finally lead to conclusion

Limitations

The study has the following limitations

1. The study was conducted within a short period of 42 days.

2. The survey was limited to area in and around Udupi district only.
3. As the sample size is 100 in number, the finding s may or may not be appropriate as
no sample can represent the total population.
4. Preferences change over a period of time and have to be constantly updated.
5. The information collected from the respondent is believed to be 100% correct. The
study was certainly limited to the information gathered from limited number of
people.
6. By the research conducted we cannot predict the behavior of the future customers. It
is only an effort to understand the present situation level and act as a pilot study.

Apart from these imitations there was an attempt made to take care that the response received
from the respondents were believed to be 100% correct because the survey was conducted by
structured questionnaire and personal interview.

Data Analysis
The total sample size is 100 and was restricted to Udupi District. The total response
received from the 100 respondents was analyzes and interpreted. The following

29
Tables and Graphs represent the data collected through questionnaire. The analysis
and interpretation is as follow:

Respondent Gender Profile:

Table
Gender Frequency Percentage No.1 Shows
Male 68 68 Respondents

Female 32 32 Gender Profile

Total 100 100

Chart No.1 Respondents Gender Profile

Analysis

From the total Response received, it was found that the number of male respondents
constitutes 68% and female respondents constitute 32%.Here majority of the
respondents are male.

Respondents Income Group

Table No.2 Shows Annual Income Group Profile

Income Frequency Percentage

Less than 1 lakh 29 29
1lakh-2.5lakh 39 39
2.5lakh-5lakh 22 22

30
 More than 5 lakh 10 10
Total 100 100

Chart No. 2 Annual Income Group

Analysis:
From the total response received, it was found that 29% of the respondents have their
income less than 1 lakh, 39% of the respondents have their income in the range
between 1lakh-2.5lakh, 22% of the respondents have their income between the range
2.5lakh-5lakh and 10% have their income level more than 5 lakh. Here we can see
that majority of the respondents have income in the range of 1 lakh – 2.5 lakh

Parents Occupation Profile

Table No. 3 Shows Occupation of Parents

Occupation Frequency Percentage

Salaried 30 30
Professional 18 18
Businessman 24 24
Others 28 28
Total 100 100

31
 Chart No. 3 Occupation of parents

Analysis:
From the response received, it was found that 30% of the parents were Salaried, 18%
were Professional, 24% were Businessman and 28% were of different occupation.

Respondents banking with Vijaya Bank

Table No. 4 Shows Respondents Banking with Vijaya Bank

Banking Frequency Percentage

Less than 1 year 14 14
1-2 years 49 49
2-5 years 28 28
More than 5 years 9 9
Total 100 100

32
 Chart No. 4 Number of Years Banking with Vijaya Bank

Analysis:
From the response received, it was found that 14% of the respondents were banking
with Vijaya Bank for less than 1year, 49% were banking for 1-2 years, 28% were
banking between 2-5 years and 9% were banking for more than 5 years.

Respondents Course Profile

Table No.5 Shows Respondents Course Profile

Course Frequency Percentage

MCA 26 26
MBA 28 28
Diploma 12 12
Engineering 18 18
Medical 16 16
Total 100 100

33
 Chart No. 5 Course

Analysis:

Out of the total response received, it was found that 26% of the respondents have
applied their education loan for MCA course, 28% have applied for MBA, 12%
have applied for Diploma, 18% have applied for Engineering and 16% have applied
for Medical

Respondents Reason to Select the Bank

Table No. 6 Shows Reason to Select Bank

Reason Frequency Percentage

Quality of service 22 22
Credibility of Bank 17 17
Convenience 24 24
Advertisement 14 14
Low interest rate 8 8
Others 15 15
Total 100 100

Chart No. 6 Reason to select Bank

Analysis:

34
Out of the total response received, it was found that 22% respondents select the bank
because of Quality of Service, 17% because of Credibility of Bank, 24% because of
Convenience, 14% because of Advertisement, 8% because of Low interest rate and
15% for other reasons.
Respondents heard or viewed the advertisement

Table No. 7 Shows Respondents Heard or Viewed Advertisement

Particulars Frequency Percentage

Yes 73 73
No 27 27
Total 100 100

Chart No. 7 Heard or Viewed Advertisement

Analysis:
From the response received, it was found that 73% of the respondents have heard or
viewed the advertisement and 27% have not heard or viewed the advertisement.

Respondents opinion about advertisements

Table No. 8 Shows Respondents Opinion About Advertisements

Opinion Frequency Percentage

Impressive 28 28
Satisfactory 34 34
Unsatisfactory 17 17
Needs lot of 21 21

35
 improvement
Total 100 100

Chart No. 8 Opinion about advertisement

Analysis:
Out of the total response received, it was observed that 28% of the respondents
suggests that advertisement was impressive, 34% suggests that it was satisfactory,
17% suggests that it was unsatisfactory and 21% suggests that it needs lot of
improvement.

Best suited Media

Table No. 9 Shows Best Suited Media

Suited Media Frequency Percentage

Newspaper 31 31
Magazines 22 22
Telivision 28 28
Internet 19 19
Total 100 100

Chart No. 9 Best Suited Media

Analysis

36
From the response received, 31% of the respondents suggests that Newspaper was the
best suited media for advertisement, 22% suggests Magazines, 28% suggests
Telivision and 19% of respondents suggest internet for the advertisement.

Respondents source of information

Table No. 10 Shows Source of Information

Source Frequency Percentage

Parents 30 30
Friends 11 11
Bank 33 33
Institution 26 26
Total 100 100

Chart No. 10 source of information

Analysis:
Out of the total response received, it was observed that 30% of the respondents got
information to borrow the loan from their parents, 11% got information from friends,
33% from bank and 26% from the institution in which they are pursuing their
education.

Difficulty in applying loan

Table No. 11 Shows Difficulty in Applying Education loan

37
 Difficulty in applying Frequency Percentage
loan
Yes 12 12
No 88 88
Total 100 100

Chart No. 11 Difficulty in Applying Education loan

Analysis:
From the total response received, it was found that 12% found difficulty and 88% of
the respondents did not find any difficulty in applying for education loan.

Time taken to process Education Loan

Table No. 12 Shows Time Taken to Process the Education Loan

Time Taken Frequency Percentage

More time 40 40
Less time 26 26
Reasonable 34 34
Total 100 100

Chart No. 12 Time Taken to Process the Education Loan

38
Analysis:
Out of the total response received, it was found that 40% of the respondents say that
the bank has taken more time to process the education loan, 26% respondents say that
the bank has taken less time and 34% of them say that the time taken was reasonable.

Most attractive feature of loan

Table No. 13 Shows Most Attractive Feature of Loan

Attractive Feature Frequency Percentage

Interest rate 21 21
Repayment holiday 24 24
Low security 32 32
Quick sanctioning 23 23
Total 100 100

Chart No. 13Most Attractive Feature of Loan

39
Analysis:

Out of the total response received, it was observed that 21% of the respondents say
that the interest rate was their main attractive feature, 24% say it was repayment
holiday, 32% say it was the low security for which they have been attracted, 23% say
it was because of quick sanctioning.

Respondents Service Satisfaction

Table No. 14 Shows Respondents Service Satisfaction

Satisfied by Service Frequency Percentage

Highly satisfied 35 35
Satisfied 31 31
Neither satisfied nor 27 27
dissatisfied
Dissatisfied 7 7
Total 100 100

Chart No. 14 Respondents Service Satisfaction

Analysis:
Out of the response received, it was observed that 35% are highly satisfied by the
service provided by the bank, 31% were satisfied, 27% were neither satisfied nor
dissatisfied and only 7% were dissatisfied by the service provided by the bank
towards the education loan.

40
Respondent ranking the Education Loan

Table No. 15 Shows Respondent ranking the Education Loan

Particulars Frequency Percentage

Excellent 31 31
Good 29 29
Fair 27 27
Bad 13 13
Total 100 100

Chart No. 15 Ranking the Education Loan

Analysis:
From the total response received, it was observed that 31% ranked the education loan
as excellent, 29% ranking the education loan as good, 27% ranking loan as fair and
13% rank the education loan as bad.
Customers expectation

Table No. 16 Shows Customers Expectation

Customers expectation Frequency Percentage

Strongly agree 29 29
Agree 39 39
Neither agree nor 21 21
disagree
Disagree 11 11

41
 Total 100 100

Chart No. 16 Customers Expectation

Analysis:
Out of the total response received, it was found that 29% of the respondents strongly
agree that customers expectation are met by education loan scheme, 39% of them are
agreed, 21% of them are neither agree nor disagree and 11% of the respondents are
disagree.

Awareness of Service rate

Table No. 17 Shows Awareness of Service Rate

Service Rate Frequency Percentage

Yes 27 27
No 52 52
Not sure 21 21
Total 100 100

Chart No. 17 Aware of Service Rate

Analysis:

42
Out of the total response received, it was found that 27% of the respondents are aware
of the service rate charged by the bank, 52% were not aware and 21% were not sure
about the service rate charged by the bank.

Satisfied with Repayment Structure

Table No. 18 Shows Satisfied with Repayment Structure

Repayment Structure Frequency Percentage

Yes 71 71
No 29 29
Total 100 100

Chart No. 18 Repayment Structure

Analysis:
Out of the total response received, it was found that 71% of the respondents were
satisfied with the repayment structure and 29% were not satisfied with the repayment
structure of the bank.

Respondents Awareness of Other Services

Table No. 19 Shows Awareness of Other Services

Awareness of Other Services Frequency Percentage

V Rent 12 12

43
 V Equip 4 4
V Swashakthi 7 7
V Shikshak 9 9
V Rakshak 5 5
V Wheels 33 33
V Cash 18 18
V Professional 12 12
Total 100 100

Chart No. 19 Awareness of Other Services

Analysis:

Out of the total response received, it was found that 12% of the respondents are aware
of Rent, 4% are aware of V Equip, 7% are aware of V Swashakthi, 9% are aware of
V Shikshak, 5% are aware of V Rakshak, 33% are aware of V Wheels, 18% are aware
of V Cash, 12% are aware of V Professional.
Collateral Securities

Table No. 20 Shows Collateral Securities

Collateral Securities Frequency Percentage

Yes 78 78
No 22 22
Total 100 100

Chart No. 20 Collateral Securities

44
Analysis:
Out of the total response received, it was found that 78% of the respondents said that
collateral securities are important in granting loan and 22% says it is not important.

Getting Sufficient Loan

Table No. 21 Shows Getting Sufficient Loan

Sufficient Loan Frequency Percentage

Yes 89 89
No 11 11
Total 100 100

Chart No. 21 Sufficient Loan

Analysis:
From the total response received, it was found that 89% of the respondents said that
they are getting sufficient loan and only 11% said they are not getting loan facility.

Concession for Meritorious Students

45
Table No. 22 Shows Concession for Meritorious Students

Concession in loan Frequency Percentage

Yes 71 71
No 29 29
Total 100 100

Chart No. 22 Concession for Meritorious Students

Analysis:

Out of the total response received, it was found that 71% of the respondents agree that
concessions should be given to meritorious students and 29% disagree to give any
concession for meritorious students.

Customer Relations in Bank

Table No. 23 Shows Customer Relations in Bank

46
 Criteria Excellent Good Average Poor Total
Time taken to respond 21 61 12 6 100
your queries
Behavior of the Bank 28 35 32 5 100
employees
Handling of Grievances 10 42 36 12 100
Procedure of bank 19 44 26 11 100
Promt in services 31 41 21 7 100

Chart No. 23 Customer Relations in Bank

Analysis:
Out of the total response received, it was found that 61% of the respondents agree that
the time taken to respond the queries is good, 35% of the respondents agree that
behaviour of the bank employees is good, 42% of the respondents agree that handling
of grievances is good, 44% of the respondents agree regarding the procedure of the
bank, 41% of them agree about the promptness of service provided was good.

ATM Card Facility

Table No. 24 Shows ATM Card Facility

ATM Card Facility Frequency Percentage

Yes 87 87
No 13 13
Total 100 100

Chart No. 24 ATM Card Facility

47
Analysis:
From the total respondents, it was found that 87% of them say that ATM card facility
should be provided and only 13% won’t agree with this.

Loan You Prefer To Borrow From other Bank

Table No. 25 Shows Loan You Prefer To Borrow From other Bank

Other bank Frequency Percentage

Corporation Bank 36 36
Canara Bank 22 22
Syndicate Bank 21 21
SBI 10 10
Others 11 11
Total 100 100

Chart No. 25 Loan You Prefer To Borrow From other Bank

Analysis:
Out of the total response received, it was found that 36% preferred to borrow from
Corporation bank, 22% from Canara bank, 21% from Syndicate bank, 10% from SBI
and 11% from other bank.

Overall service Lend by the Bank

48
 Overall service Frequency Percentage
Excellent 21 21
Good 36 36
Fair 27 27
Bad 16 16
Total 100 100

Table No. 26 Shows Overall service Lend by the Bank

Chart No. 26 Overall service Lend by the Bank

Analysis:
From the response received, it was observed that 21% of the respondents ranked the
overall service of the Vijaya bank as excellent, 36% of them respondent as good, 27%
as fair and 16% as bad.

Suggest Loan to other Friends

Table No. 27 Shows Suggesting Loan to other friends

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 Suggest Loan to other Frequency Percentage
Yes 91 91
No 9 9
Total 100 100

Chart No. 27 Suggest loan to others

Analysis:
From the survey, it was found that 91% of the respondents are interested to suggest
the education loan to other friends and 9% said they are not going to suggest loan to
others.

Interpretations and Findings

From the analysis study of the data collected through survey following were arrived at the
education loan scheme of Vijaya Bank:

• It was found from the survey that most of the respondents are male (68%) as
compared to female (32%). One of the reason that male respondents dominate the
female is because of less sample size. If the study has taken appropriate sample size
than the problem would have been overcome. Another reason is because the study has
concentrated on various fields.
• The bank is lending the education loan facilities to those who have their annual
income level very less (income level ranging from 1 lakh- 2.5 lakh). This shows that
the bank is really concerned for the poor financially needy students.

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• It is clear from the survey that most of the respondents were banking with Vijaya
Bank between the range 1 year to 5 years and they have the good relationship with the
bank and moreover the bank has a good image and reputation.
• From the survey conducted it was found that the bank has lend the education loan not
only to professional course like MBA but also for technical courses like MCA,
Engineering. It was also found that the bank was lending the education loan to other
courses like Diploma, Vocational courses ettc.
• It was found from the survey that most of the respondents have selected the bank
because of quality of service, convenience and credibility. The trustworthy of the
bank made some of the respondents to select this bank. Even some of them select
because of lower interest rate and the ad in newspaper and billboard and other
reasons.
• From the response received, it is clear that bank and parents constitutes the major
source of information provider about the education loan to the students and even to
some extent institution and friends gave information about the education loan.
• It was found that some of the respondents feel difficulty in applying for education
loan that is mainly because of lack of knowledge about the loan, moreover the
procedure in applying the loan may not be known to the students and even it may be
the documents that needs to be enclosed.
• From the survey we come to know that the Vijaya bank plays a very important role in
lending funds to the customer. The customers are getting sufficient loan facility from
the bank.
• From the survey it reveals that the most of the customers are dealing with the Vijaya
bank from many years. From this we can say that the customers are satisfied with the
funds providing by the Vijaya bank.
• The 89% of the respondents are getting sufficient fund from the Vijaya bank. 11% of
the respondents are not getting sufficient funds as per their requirement reason behind
this is that the bank is asking for more collateral securities for granting loans. This
made very difficult for the customers to arrange for the collateral securities.
• Most of the respondents ranked the education loan that has granted by Vijaya bank as
excellent. Because most of the customers are happy with the education loan of Vijaya
bank.
• Majority of the respondents are satisfied with the repayment structure of education
loan of the Vijaya bank because the bank gives sufficient time period of 5-7 years to
repay the loan as compared to other banks.

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• From the survey it was found that brand awareness of the Vijaya bank is very high in
south canara.
• It was found that the bank has good image in the mindset of the customers.
• The customers are dealing with the bank with large number, this shows the bank has
good status in the society.
• Majority of the customers would like to make deposit in the bank, borrow loan from
the Vijaya bank.
• Most of the students mainly meritorious students who are financial backward have
borrowed education loan facility from the bank.
• Most of the students are aware of the other services of the bank, one of their product
V Wheels is highly aware in the students (from the survey it was found about 34%, as
compared to other products).

Recommendations
 Overall the bank performance is rated as good by the respondents. The bank must
perform well in the area of service and hospitality to be the best bank in Udupi.

 From the survey it was found that many of its retail products are not aware by the
customer. The bank must improve the publicity of its retail products by means of
advertising, ads in newspaper, personal selling etc.

 According to the survey majority of the respondents prefer for ATM service than the
manual service. Bank must take necessary step to come out with ATM facility as a
compulsion with the education loan.

 Most of the respondents prefer to borrow the education loan from other bank because
there is a lot of competition from other bank including private and public sector bank.
So, the bank has to come with new products and services and must provide various
additional features to the customer in order to excel and to face competition from
other banks.

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  It is not necessary to have many products but the services provided to each product
and how the grievance is handling should be given more importance rather than going
for too many products.

 From the survey conducted it was found that the processing of education loan was
more time consuming and most of the respondents prefer to sanction the loan as soon
as possible, the bank has to make a serious note of this.

 The education loan should be made flexible in order to reach the needy student who
actually requires the loan for his /her higher education.

 The bank has to make a niche of their retail products so as to distinguish its products
and services from those of the competitors. Due to the intervention of more private
and public player in the retail products the bank needs to stand different from their
competitors.

Conclusion
In today’s global environment, an accessible and high quality higher education system is
imperative for nation’s economic progress. A sound higher education system supports and
enhances the process of economic and social development for a better future. India is one of
the largest higher education systems in the world. However, outside a few islands of
excellence the system is failing to produce wealth creators and creative, intellectual leaders
who are much needed in all sectors of the society.

Everywhere in the world, higher education is the harbinger of the future. Higher education is
integrally linked to the economic, cultural and social health of a nation. In a developing
country like India, reforms in higher education have the potential to achieve sustainable and
far reaching improvement in the lives of millions of Indians. These reforms will lead to
incredible growth in an increasingly knowledge-based economy which requires a sustained
inflow of skilled and talented workers.

The face of banking is changing rapidly. Competition is going to be tough. For a strong and
resilient banking and financial system, therefore, bank need to go beyond peripheral issues

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and tackle significant issues like improvements in profitability, efficiency and technology.
Overall, banking in India is considered as fairly mature in terms of supply, product range and
reach even though reach in rural India still remains a challenge for the private sector and
foreign banks. Indian bank are considered to have clean, strong and transparent balance sheet
as compared to other banks in comparable economies in its region.

All the banks are facing stiff competition between them. Overall the bank performance
depends upon the services and hospitality provided by the bank to its customers. To sustain
higher position in Udupi, Vijaya bank must excel in service to its customers. As the younger
generation are moving towards technology, the Vijaya bank must understand the current
market requirement and go for more ATM’s, Debit card, Credit card system.

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