CHAPTER 1

EXECUTIVE SUMMARY

1.1INTRODUCTION TO BANKING

Bank is defined in many ways by various authors in the book son economics and commerce.

It is very difficult to define a bank; because a bank performs multifarious functions may be

defined in many ways according to their functions. The evolution of different types of banks,

each specializing in a particular field, gives emphasis on each and every kind of bank. A

general and comprehensive definition to cover all types of banking institutions would be

unscientific and probably impossible. Each type of bank should have its own definition,

explaining its specialized functions. Legislators have understood this difficulty and that is

why the bill of exchange Act 1882 (England) defines

“A bank includes a body of persons,

“Bank is an institution, which deals in money and credit”

According to this precise definition a bank accepts deposits from public and makes advances

and loans to them. In practice bank receives deposits of money in savings and current

accounts at lower rate of interest or profit and gives on credit to needy persons and

businessmen at a higher rate of interest or profit. It also transfers money for the clients from

one city or country to another and also performs various other agency services for earnings.

1.2 Banking in India

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 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 nationalized all the major banks that it did not already own

and these have remained under government ownership. They are run under a structure know

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.

Banking in India was generally fairly mature in terms of supply, product range and reacheven

though reach in rural India and to the poor still remains a challenge. The government has

developed initiatives to address this through the State Bank of India expanding its branch

network and through the National Bank for Agriculture and Rural Development with things

like microfinance

Indian Banking Industry currently employees 1,175,149 employees and has a total of 109,811

branches in India and 171 branches abroad and manages an aggregate deposit of 67504.54

billion (US$1.1 trillion or €820 billion) and bank credit of 52604.59 billion (US$880 billion

or €640 billion). The net profit of the banks operating in India was 1027.51 billion (US$17

billion or €12 billion) against a turnover of 9148.59 billion (US$150 billion or €110 billion)

for the fiscal year 2012 13.

1.2 OBJECTIVES OF THE STUDY

This study has been conducted with a variety of important objectives 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 judged from the conclusions and suggestions,

which appear in the later of this study. The Chief Objectives of this study are:-

1. To find the banking sector largely preferred by the customers.

2. To find out the factors which influences the customers to choose a bank.

3. To study the problems faced by the customers in public as well as private sector banks and

also to compare between them.

1.3 STATEMENT OF PROBLEM

The title of the research is A Comparative study of SBI and AXIS banking services .This

indicates that how far the customers of SBI and axis are satisfied with the services provided

by their bank. To analyse this in the research primary data is collected through

questionnaires. The collected data has been analysed to know that which banks’ customers

are more satisfied.

1.4 SIGNIFICANCE OF STUDY

• Getting clear picture about comparative analysis of public and private sector banks services

and commitments.

• Identifying real image of the bank in terms of customers; satisfaction and preferences.

• For knowing customers expectations from the bank.

• For improving services and customer relationship management practises(CRM)

• Useful for the prospects customers who wants to invest in the banks.

• Useful to improve marketing practises of banking services.

1.5 RESEARCH METHODOLOGY

A broad definition of research is given by Martyn Shuttleworth - "In the broadest sense of

the word, the definition of research includes any gathering of data, information and facts for

the advancement of knowledge. Methodology is the systematic, theoretical analysis of the

methods applied to a field of study. It comprises the theoretical analysis of the body of

methods and principles associated with a branch of knowledge. Typically, it encompasses

concepts such as paradigm, theoretical model, phases and quantitative or qualitative

techniques. So it is easy to derive that one of the most significant factor in a research work is

to determine research methodology.

The purpose is to describe the Title, Objectives, Hypothesis, Research Design, Sample

Design, Sources and Data Collection, Sampling Technique, Analysis and Interpretation of

data and also Limitations of the study. The title of the research is A Comparative study of

SBI and AXIS banking services.

Sources of data information and collection

The study is undertaken on the basis of all details about services from SBI and AXIS . It

includes the banks profile, evolution and developmental phases, awards won by both the

banks and other necessary details. The primary data is also plays very vital role in this study

which is collected through questionnaires prepared separately for selective bank branches

customers.

• SBI and AXIS banks’ websites on internet.

• Authenticated websites on internet

• Website of RBI(Reserve bank of India)

• Information collected to know the preferences and opinions would be mainly from primary

sources such as:

1.6 LIMITATIONS OF THE STUDY

As the research is based on questionnaires here are some limitations..

1. Because of time and other constraints in this survey it would not be possible to

contact each and every branch of SBI and AXIS bank whose responses would have

provided a better insight regarding customers’ preferences regarding bank services.

3. Lack of customers’ and employees interest to fill up Questionnaire.

4. Customers past experience may also affect his present preference..

6. Limited sample size

7. Difficulty to get details from some employees of both the banks.

CHAPTER 2 REVIEW OF LITRATURE

1.Dr. M.Kumarswami ,Jayprasad D.(2014),The study was based on Customer Relationship

Management in KaveriGrameena Bank, The respondents have shown unfavourable views

with respect to banking experience, transaction accuracy and promptness. However,

customers share positive views concerning bank trustworthiness and accuracy of banking

solutions. Therefore, it can be argued that customers trust their bank. Indeed, trust is seen as a

critical construct in a range of discipline areas including CRM. Further, within the realm of

relationship marketing, trust has been recognized as an important variable for the success of

relationships in the banking sector.

2. N.Satghiya ,(2013),A study on customer relationship management practises (with reference

to salemdistrict ,In the study The total number of Public Sector Banks, Private Sector Banks,

in the Salem district has been taken into consideration to decide about the number of banks

for the purpose of study in each category. 2. By the above process totally 22 banks were

chosen for the purpose of study. From each of the 22 banks 25 customers were selected as

respondents. 3. The branches situated in the North, South and Central part of the Salem

district were covered for the purpose of study. The findings says that the customers of

banking industries strongly believed that advertisements, reports, communication, guidance,

may I help you counter, information pamphlets and ombudsman committee role to achieve
the customer satisfaction. The customer staff relationships in CRM depend upon employee’s

personal touch with their customers and employee’s performance.

3. Navinkumar Mishra and VijaykumarPandey(may 2013) in their paper “customer

satisfaction –A comparison of public and private sector banks of India in which research is

done to compare public and private sector banks of India by evaluating their customer

satisfaction. This research is mainly based on primary data which has been collected through

a well-structured questionnaire (adapted from three different studies). The questionnaire has

been distributed to 350 different respondents on different chosen locations. This paper makes

a useful contribution as there are very low number of studies has been conducted in India on

such areas like price, technology, reliability, customer service, location and infrastructure.

Their findings says that most of people prefer to deal with public sector banks due to safety

and reliability factors.

4.Uppal R K and Poonam Rani (2012), in their study titled Customer Perception towards

Better Banking Services in India- An Empirical Study, analyzed customer perception about

CRM, reliability, accuracy, security and transparency among the customers of public sector

banks, Indian private sector banks and foreign banks in Amritsar, Punjab. They have found

that most of the customers are satisfied with banking services and that customer satisfaction

can be improved by ensuring more speed in rendering transactions and giving prompt

services.

5.Jaspal Singh and GagandeepKaur(2009) in “Determinants of Customer Satisfaction: An

Empirical Study of Select Indian (Universal) Banks” in which they investigate the

determinants of customer satisfaction of Indian(Universal) banks. Data was collected from a

sample of 180 respondents using convenience sampling technique. Factor analysis results

reveals that responsiveness, tangibles, services innovation, reliability and accessibility,

assurance, pricing and other facilities, problem solving capability and convenient working

hours are the main determinants of customer satisfaction .Their result shows that customer

satisfaction is influenced by nine factors, namely, Responsiveness, tangibles like appearance

of a bank’s physical facilities’ , equipment and employees, Reliability and accessibility,

assurance, pricing and other facilities, problem solving capability and convenient working

hours of bank.

6.Manoj p.k, (2010) in “Determinants of Profitability and Efficiency of Old Private Sector

Banks in India with Focus on Banks in Kerala State:” An Econometric Study paper which

Focuses on the OPBs based at Kerala state (KOPBs) in the Indian union, this paper seeks to

identify the determinants of profitability and operational efficiency of KOPBs, using an

econometric methodology. For the sake of comparison of KOPBs, the general case of OPBs

and New generation Private sector Banks (NPBs) in India have also been analyzed. Their

study results that priority sector advances are do not affect either profitability or risk

management adversely, as against the popular belief in this regard. The strategies as above

have got special significance in respect of OPBs in general and KOPBs in particular in the

ongoing globalized regime of industrial competition; because higher profitability, and strong

risk management capability are vital for these banks for survival and growth.

7.PoojaMengi (2008) in “Customer satisfaction with service quality-An empirical study of

public and private sector banks” The study compares customers’ perceptions of service

quality of public and private banks of Jammu. The service quality of both the banks has been

measured using SERVQUAL (service quality) scale. It was found that customers of public

sector banks are more satisfied with the service quality, than those of private sector banks.

The results of the study indicate that tangibility and reliability provides Maximum

satisfaction to customers of private as well as public sector banks.. Superior SERVQUAL

performance will ensure maximum customer satisfaction and also help in attaining
customer’s loyalty. Improved customer satisfaction through SERVQUAL would result in a

positive word-of-mouth and consequently better customer acquisition and retention.

8. B S Bodla and RichaVerma Bajaj (2006) in “ An analysis of private sector banks India” .In

this paper the research the Production approach of Data Envelopment Analysis (DEA) was

applied to judge the efficiency of private sector banks. In this model, banks are considered as

service providers, and while interest expenses, non- interest expenses and the Non-

Performing Asset (NPA) ratio. The study findings say that the position of private banks is

greatly affected by the output variables; Centurion Bank (64.17%) was the most inefficient

bank among the private sector banks during their study period.

CHAPTER 3

DEFINITION OF BANK

The Oxford dictionary defines the Bank as,

“An establishment for the custody of money, which it pays out, on a customer’s

order.”

According to Whitehead,

“ A Bank is defined as an institution which collects surplus funds from the public,

safeguards them, and makes them available to the true owner when required and also lends

sums be their true owners to those who are in need of funds and can provide security.”
Banking Company in India has been defined in the Banking Companies act 1949,

“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.

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 as

“Banchi” because they kept a special type of table to transact their business.
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.

Indian Banking System

Banking in India has its origin as early as the Vedic period. It was believed that transition

from money lending to banking must have occurred even before Manu, The great Hindu

Jurist, who has devoted a section of his work to deposit advance and laid down rules relating

to rates of interest. During the Mogul period, the indigeneousBankers played a very important

role in lending money financing foreign trade and commerce. During the days of East India

Company, it was turn over the agency houses to carry on the business. “The General Bank of

India” was the first to join sector in the year 1786.The others that followed were the Bank of

Hindustan and the Bengal bank. The bank of Hindustan is reported to have continued till

1906 while the other two failed in the meantime.

In the first half of the 19th century the East India Company established three banks:

1. Bank of Bengal (1809).

2. Bank of Bombay (1840).

3. Bank of Madras (1843.

These three banks are also known as Presidency Banks were independent units and

functioned well. These three banks were amalgamated in 1920 and Imperial Bank of India

was established on 27th january1921, which started as private shareholders banks, mostly

Europeans shareholders, with the passing of time Imperial bank was taken over by the newly

constituted State bank of India act in1955.In 1865 Allahabad Bank was established and first

time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters

at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda,

Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in

1935. On July, 1969, 14 major banks of India were nationalized and on 15th April, 1980 six

more commercial private banks were also taken over by the government.

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.

Types OF BANKS

On the basis of Ownership

PUBLIC SECTOR BANKS

Public sector banks are those banks that are owned by the government. The government owns

these banks. In India 20 banks were nationalized in 1969 and 1980 respectively. Social

welfare is there main objective.

PRIVATE SECTOR BANKS

These banks are those banks that are owned and run by private sector. An individual has

control over these banks in proportion to the shares of the banks held by him.

CO-OPERATIVE BANKS

These are those banks that are jointly run by a group of individuals. Each individual has an

equal share in these banks. Its shareholders manage the affairs of the bank.

According to the Law

SCHEDULED BANK

Schedule banks are the banks, which are included in the second schedule of the banking

regulation act 1965. According to this schedule bank:

1. Must have paid-up capital and reserve of not less than Rs500, 000.

2. Must also satisfy the RBI that its affairs are not conducted in a manner

Determinate to the interest of its depositors.

Schedule banks are sub-divided as:-

a) State co-operative banks

b) Commercial banks

NON-SCHEDULED BANKS

Non -schedule banks are the banks, which are not included in the second schedule of the

banking regulation act 1965. It means they do not satisfy the conditions lay down by that

schedule. These are the banks having paid up capital, less than Rs.5Lakhs. They are further

classified as follows:-

A. Central Co-operative banks and Primary Credit Societies.

B. Commercial banks

According to Function

COMMERCIAL BANKS
These are the banks that do banking business to earn profit. These banks make loans for short

to business and in the process create money. Credit creation is the main function of these

banks.

FOREIGN BANKS

These are those banks that are incorporated by foreign company. They have set up their

branches in India. These banks have their head offices in foreign countries. Their principle

function is to make credit arrangement or the export and the import of the country and these

banks deals in foreign exchange.

INDUSTRIAL BANKS

Industrial banks are those banks that offer long term and medium term loan to the industries

and also work for their development. These banks help industries in sale of their shares,

debentures and bonds. They give loan to the industries for the purchase of land and

machinery.

AGRICULTURAL BANKS

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

SAVING BANKS

The principle function of these banks is to collect small savings across the country and put

them to the productive use. In India department of post office functions a savings banks.

CENTRAL BANK
Central Bank is the apex bank of the banking system of the country. It issues currency notes

and acts a banker's bank. Economic stability is the principle function of this bank. In short, it

regulates and controls the banking system of the country. RBI is the Central Bank of India.

PRIVATIZATION OF INDIAN BANKING

For the public sector banks, the era of bumper profit is over. For much of the last decade the

process of collaborated financial liberalization had cleared up the Bank’s balance sheet

enabling them to with stand increased competition, global financing, turmoil and even

unprotected industrial slow down. But the cycle of liberalization has run its full course. Now

it is the time for the big structural leap, rationalization, mergers, and privatization. Unless the

banks undertake these fundamental changes, their profit will stay under pressure.

There are twp areas of competitions which banking industry is facing internationally and

nationally. In the pre-liberalization era, Indian banks could grow in a closed economy but the

banking sector opened up for private competition. It is possible that private banks could

become dominant players even within India. It has been recorded a rapid rise of the new

private sector banks and it has tracked the transformation of the public sector banks as they

grapple with the changes of financial deregulation.

Use of ATM cards, Internet Banking, Phone Banking, Mobile Banking are the new

innovative channels of banking which are being widely used as they result in saving both
time and money which are two essential things that every one is short of and is running to

catch hold of them. Moreover private sector banks are aligning its infrastructures, marketing

quality and technology to build deep commitment in building consumer and retail banking.

The main focus of these banks is on innovative range of services or products.

STRUCTURE OF BANKING SYSTEM

Different countries of the world have different types of banking systems. However,

commercial banking had grown under all these banking systems. To understand the structure

of banking system, let us take up various types of banking systems one by one. These types

are:

(1) UNIT BANKING

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

America. As a counter part of independent or industrial units.

“An independent unit bank is a corporation that operates one office and that is not related to

other banks through either ownership or control.

Shaper, Solomon and White.

Thus under unit banking, a single bank is a complete organization in itself having its own

management. The scale of operation is small and the area is restricted to a locality only. Unit

banking is localized banking and is much more responsive to the needs of the locality. It has

better understanding of the local problems and conditions, which helps it to cater to the needs

of the area in a better way. The staff of the unit bank is generally local and is in a better

position to determine the standing or desirability of the customers. The failure of the unit

bank will not endanger the banking system and economy. It is free from the difficulties and

diseconomies of large scale operations. It will not drain out the financial resources of villages

and small towns to big industrial centers and will ensure a balanced growth.
(2) BRANCH BANKING:

Economic and Managerial problems faced by the unit banks let to the emergence of banking

system. Now, This the most popular and important banking system. In branch banking, a

bank has a large network of branches scattered all over the country. Branch banking

developed in England. Subsequently most of the countries of the world adopted the system.

In terms of branches, the State Bank of India has emerged as one of the largest banks in the

world.

As under the system the resources of a number of branches get pooled under the same

management, any individual branch is in a better position to face excessive withdrawals by

the customers. It facilitates diversification of activities because the area covered by the

branches is generally widespread. Under the system branches can operate without keeping

large idle cash reserves. It becomes possible for the bank to hire the services of competent

and professionally qualified managers, capable of understanding the handling technical

problems and complex situations. The cost of remitting or transferring funds from one place

to another works out to be less. The staff stays at a branch only for a limited period, so the

chances of objective decision making in the branch banking are high.

Branch Banking tends to bring homogeneity in the prevailing Interest Rates as it increases the

mobility of resources from one place to another. It is easier for the Central Bank to exercise

Control. It will communicate only with a few Registered /Head Offices of the Banks and not

with each individual branch. In this system there more safety and liquidity of funds. The

choice of securities and investments is larger. Branch banking makes complete banking

services available to the smallest communities. The branches in small localities can be

initially operated at loss in expectation of future gains.

The comparative study of unit banking and branch banking is a case of small scale banking

versus large scale banking. It is evident that the scale is clearly titled towards branch banking.

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.

Even in the U.S.A. The birthplace of unit banking. The Bank of America has now more than

500 branches in the state of California itself.

(3) CHAIN BANKING :

Shaper, Solomon and White have defined Chain Banking as

“An arrangements by which two or more banks –each of which retains its identity, capital

and personnel –are brought under common control by any device other than a Holding

Company.”

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. The advantages and disadvantages of both the systems
are similar. Both the systems developed in the United State of America as a result of attempts

to overcome the difficulties or limitations of unit banking.

(5) CORRESPONDENT BANKING:

Under Correspondent banking, small banks serving local communities hold deposits with

joint banks serving in big cities. This kind of banking is prevalent in U.S.A. The

correspondent banks perform two important services of outstation cheque clearing and loan

participation for the respondent banks while they benefit for the deposit funds of respondent

banks.

History of banking in India

In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC). Later

during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in use, which

was an order on a banker desiring him to pay the money of the note to a third person, which

corresponds to the definition of a bill of exchange as we understand it today. During the

Buddhist period, there was considerable use of these instruments. Merchants in large towns

gave letters of credit to one another.

COLONIAL ERA

During the period of British rule merchants established the Union Bank of Calcutta in 1829,

first as a private joint stock association, then partnership. Its proprietors were the owners of

the earlier Commercial Bank and the Calcutta Bank, who by mutual consent created Union

Bank to replace these two banks. In 1840 it established an agency at Singapore, and closed

the one at Mirzapore that it had opened in the previous year. Also in 1840 the Bank revealed

that it had been the subject of a fraud by the bank's accountant. Union Bank was incorporated
in 1845 but failed in 1848, having been insolvent for some time and having used new money

from depositors to pay its dividends.

The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock

bank in India, it was not the first though. That honour belongs to the Bank of Upper India,

which was established in 1863, and which survived until 1913, when it failed, with some of

its assets and liabilities being transferred to the Alliance Bank of Simla. Foreign banks too

started to appear, particularly in Calcutta, in the 1860s. The Comptoird'Escompte de Paris

opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras

and Pondicherry, then a French possession, followed. HSBC established itself in Bengal in

1869. Calcutta was the most active trading port in India, mainly due to the trade of the British

Empire, and so became a banking centre.

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in

1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in

Lahore in 1895, which has survived to the present and is now one of the largest banks in

India. Around the turn of the 20th Century, the Indian economy was passing through a

relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the

social, industrial and other infrastructure had improved. Indians had established small banks,

most of which served particular ethnic and religious communities.

The presidency banks dominated banking in India but there were also some exchange banks

and a number of Indian joint stock banks. All these banks operated in different segments of

the economy. The exchange banks, mostly owned by Europeans, concentrated on financing

foreign trade. Indian joint stock banks were generally under capitalized and lacked the

experience and maturity to compete with the presidency and exchange banks. This

segmentation let Lord Curzon to observe, "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."

The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi

movement. The Swadeshi movement inspired local businessmen and political figures to

found banks of and for the Indian community. A number of banks established then have

survived to the present such as Bank of India, Corporation Bank, Indian Bank,Bank of

Baroda, Canara Bank and Central Bank of India. The fervour of Swadeshi movement lead to

establishing of many private banks in Dakshina Kannada and Udupi district which were

unified earlier and known by the name South Canara ( South Kanara ) district. Four

nationalised banks started in this district and also a leading private sector bank. Hence

undivided Dakshina Kannada district is known as "Cradle of Indian Banking".

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 Indian

banking. The years of the First World War were turbulent, and it took its toll with banks

simply collapsing despite the Indian economy gaining indirect boost due to war-related

economic activities.

POST-INDEPENDENCE

The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,

paralysing banking activities 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:

The Reserve Bank of India, India's central banking authority, was established in April 1935,

but was nationalised on 1 January 1949 under the terms of the Reserve Bank of India

(Transfer to Public Ownership) Act, 1948 (RBI, 2005b).

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 could be opened without a

license from the RBI, and no two banks could have common directors.

NATIONALIZATION IN THE 1960S

Despite the provisions, control and regulations of the Reserve Bank of India, banks in India

except the State Bank of India (SBI), continued to be owned and operated by private persons.

By the 1960s, the Indian banking industry had become an important tool to facilitate the

development of the Indian economy. At the same time, it had emerged as a large employer,

and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, the

then Prime Minister of India, expressed the intention of the Government of India in the

annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on

Bank Nationalization."[7] The meeting received the paper with enthusiasm. Thereafter, her

move was swift and sudden. The Government of India issued an ordinance ('Banking

Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969') and nationalised

the 14 largest commercial banks with effect from the midnight of 19 July 1969. These banks

contained 85 percent of bank deposits in the country.[7] 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 (Acquisition and

Transfer of Undertaking) Bill, and it received the presidential approval on 9mAugust 1969.

A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated

reason for the nationalisation was to give the government more control of credit delivery.

With the second dose of nationalisation, the Government of India controlled around 91% of

the banking business of India. Later on, in the year 1993, the government merged New Bank

of India with Punjab National Bank. It was the only merger between nationalised banks and

resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until

the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth

rate of the Indian economy.

LIBERALIZATION IN THE 1990S

In the early 1990s, the then government embarked on a policy of liberalization, licensing a

small number of private banks. These came to be known as New Generation tech-savvy

banks, and included Global Trust Bank (the first of such new generation banks to be set up),

which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis),

ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of

India, revitalised 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 set up 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 74% 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 demanded more from their banks and received

more.

CURRENT PERIOD

All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934

are Scheduled Banks. These banks comprise Scheduled Commercial Banks and Scheduled

Co-operative Banks. Scheduled Commercial Banks in India are categorised into five different

groups according to their ownership and/or nature of operation. These bank groups are:

State Bank of India and its Associates

Nationalised Banks

Private Sector Banks

Foreign Banks

Regional Rural Banks.

In the bank group-wise classification, IDBI Bank Ltd. is included in Nationalised Banks.

Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled

Urban Cooperative Banks.

By 2010, banking in India was 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. 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.

In recent years critics have charged that the non-government owned banks are too aggressive

in their loan recovery efforts in connexion with housing, vehicle and personal loans. There

are press reports that the banks' loan recovery efforts have driven defaulting borrowers to

suicide.

About sbi bank

state Bank of India (SBI) Group is the biggest financial services conglomerate in India.

Headquartered in Mumbai, SBI provides a wide range of products and services to individuals,

commercial enterprises, large corporates, public bodies and institutional customers through

its various branches and outlets, joint ventures, subsidiaries and associate companies. The
Group comprises of State Bank of India (SBI), its various non-banking subsidiaries/ joint

ventures, and foreign banking subsidiaries/ joint ventures.

SBI, the flagship company of the group, traces its ancestry to Bank of Calcutta founded in

1806. It was the first bank established in India, and over a period of time, evolved into State

Bank of India (SBI). SBI represents a sterling legacy of over 200 years. It is the oldest

commercial bank in the Indian subcontinent, strengthening the nation’s trillion-dollar

economy and serving the aspirations of its vast population. The Bank is India’s largest

commercial Bank in terms of assets, deposits, branches, number of customers and employees,

enjoying the faith of millions of customers across the social spectrum.

A Fortune 500 company, SBI has entered into the league of top 50 global banks with a

balance sheet size of over Rs 30 lakh crore, over 24,000 branches and 59,000+ ATMs serving

over 42 crore customers after the merger of its five Associate Banks and Bharatiya Mahila

Bank on 1st April 2017. SBI has an overseas presence through 195 foreign offices spread

across 36 Countries.

What these impressive figures do not reveal is the tremendous trust Indians repose on the

Bank. SBI has been the most trusted brand on the banking horizon in India. The Bank

believes that it owes a solemn duty to the less fortunate and underprivileged members of the

society to make sustainable social change in their lives.

The Bank has always placed the interest of the common man at its core. SBI has thoughtfully

designed products and services to meet all the needs of the financial life cycle of an average

Indian. Bank’s customised savings products are very good options for young adults to build a

corpus for themselves and their children. The variety of Home Loan products offered at very

affordable prices, personal loans, car loans, debit and credit cards and travel cards cater to

lifestyle improvement needs. While Education Loans ensure smooth completion of technical
or higher education in India and abroad, the range of Health Insurance options provide

reliable protection for aging parents and also the whole family. From vehicle and home

insurance to demat accounts and wealth management, from precious metals to private

banking, SBI is at your beck and call to cater to your needs, on its own and through the group

companies.

On the technology front, SBI has expanded the digital base of the Bank manifold in recent

years. It plays a vital role in making the Government of India’s Digital India initiative a

reality. SBI has always been on the forefront to embrace changes without losing sight of its

credos like transparency, sustainability, social responsibility and customer service.

The roots of the State Bank of India lie in the first decade of the 19th century when the Bank

of Calcutta later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of

Bengal was one of three Presidency banks, the other two being the Bank of

Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July

1843). All three Presidency banks were incorporated as joint stock companies and were the

result of royal charters. These three banks received the exclusive right to issue paper currency

till 1861 when, with the Paper Currency Act, the right was taken over by the Government of

India. The Presidency banks amalgamated on 27 January 1921, and the re-organised banking

entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint

stock company but without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,

which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On

1 July 1955, the Imperial Bank of India became the State Bank of India. In 2008,

the Government of India acquired the Reserve Bank of India's stake in SBI so as to remove

any conflict of interest because the RBI is the country's banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made

eight banks that had belonged to princely states into subsidiaries of SBI. This was at the time

of the first Five Year Plan, which prioritised the development of rural India. The government

integrated these banks into the State Bank of India system to expand its rural outreach. In

1963 SBI merged State Bank of Jaipur (est. 1943) and State Bank of Bikaner (est.1944).

SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911), which

SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National

Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired

Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior State, under the

patronage of Maharaja Madho Rao Scindia. The bank had been the Dukan Pichadi, a small

moneylender, owned by the Maharaja. The new bank's first manager was Jall N. Broacha, a

Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was

the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in

Kerala.

There has been a proposal to merge all the associate banks into SBI to create a single very

large bank and streamline operations.[8]

The first step towards unification occurred on 13 August 2008 when State Bank of

Saurashtra merged with SBI, reducing the number of associate state banks from seven to six.

On 19 June 2009, the SBI board approved the absorption of State Bank of Indore. SBI holds

98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the

government hold the balance of 1.7%.)[9]

The acquisition of State Bank of Indore added 470 branches to SBI's existing network of

branches. Also, following the acquisition, SBI's total assets will approach ₹10 trillion. The

total assets of SBI and the State Bank of Indore were ₹9,981,190 million as of March 2009.
The process of merging of State Bank of Indore was completed by April 2010, and the SBI

Indore branches started functioning as SBI branches on 26 August 2010.[10]

On 7 October 2013, Arundhati Bhattacharya became the first woman to be appointed

Chairperson of the bank.[11] Mrs. Bhattacharya received an extension of two years of service

to merge into SBI the five remaining associated banks.

Operations[edit]

BI provides a range of banking products through its network of branches in India and

overseas, including products aimed at non-resident Indians (NRIs). SBI has 16 regional hubs

and 57 zonal offices that are located at important cities throughout India.

Domestic presence[edit]

SBI has 18,354 branches in India.[12] In the financial year 2012–13, its revenue was ₹2.005

trillion (US$28 billion), out of which domestic operations contributed to 95.35% of revenue.

Similarly, domestic operations contributed to 88.37% of total profits for the same financial

year.[12]

Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by Government

in August 2014, SBI held 11,300 camps and opened over 3 million accounts by September,

which included 2.1 million accounts in rural areas and 1.57 million accounts in urban

areas.[13]

International presence[edit]
As of 2014–15, the bank had 191 overseas offices spread over 36 countries having the largest

presence in foreign markets among Indian banks.[14]

SBI operates several foreign subsidiaries or affiliates.

In 1989, SBI established an offshore bank, State Bank of India International (Mauritius) Ltd.

his then amalgamated with The Indian Ocean International Bank (which had been doing retail

banking in Mauritius since 1979) to form SBI (Mauritius) Ltd. Today, SBI (Mauritius) Ltd

has 14 branches – 13 retail branches and 1 global business branch at Ebene in

Mauritius. [15] SBI Sri Lanka now has three branches located in Colombo, Kandy and Jaffna.

The Jaffna branch was opened on 9 September 2013. SBI Sri Lanka is the oldest bank in Sri

Lanka; it was founded in 1864.

In 1982, the bank established a subsidiary, State Bank of India, which now has ten

branches—nine branches in the state of California and one in Washington, D.C. The 10th

branch was opened in Fremont, California on 28 March 2011. The other eight branches in

California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego,

Tustin and Bakersfield.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo–Nigerian

Merchant Bank and received permission in 2002 to commence retail banking. It now has five

branches in Nigeria.

In Nepal, SBI owns 55% of "SBI Nepal". (The state-owned Employees Provident Fund of

Nepal owns 15% and the general public owns the remaining 30%.) SBI Nepal has branches

throughout the country.

In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest.
In Indonesia, it owns 76% of PT Bank Indo Monex.

The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.[16]

In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired

for US$8 million in October 2005.[17]

In January 2016, SBI opened its first branch in Seoul, South Korea following the continuous

and significant increase in trade due to the Comprehensive Economic Partnership

Agreement signed between New Delhi and Seoul in 2009.

Former Associate Banks[edit]

SBI acquired the control of seven banks in 1960. They were the seven regional banks of

former Indian princely states. They were renamed, prefixing them with 'State Bank of'. These

seven banks were State Bank of Bikaner and Jaipur (SBBJ), State Bank of

Hyderabad (SBH), State Bank of Indore (SBN), State Bank of Mysore (SBM), State Bank of

Patiala (SBP), State Bank of Saurashtra(SBS) and State Bank of Travancore (SBT). All these

banks were given the same logo as the parent bank, SBI.

The plans for making SBI a single very large bank by merging the associate banks started in

2008, and in September the same year, SBS merged with SBI. The very next year, State Bank

of Indore (SBN) also merged. In the same year, a subsidiary named Bharatiya Mahila

Bank was formed. The negotiations for merging of the 6 associate banks (State Bank of

Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of

Patiala, State Bank of Travancore and Bharatiya Mahila Bank) by acquiring their businesses

including assets and liabilities with SBI started in 2016.[18][19] The merger was approved by

the Union Cabinet on 15 June 2016.[20] The State Bank of India and all its associate banks
used the same blue Keyhole logo. The State Bank of India wordmark usually had one

standard typeface, but also utilized other typefaces.

On 15 February 2017, the Union Cabinet approved the merger of five associate banks with

SBI.[21] What was overlooked, however, were different pension liability provisions and

accounting policies for bad loans, based on regional risks.[22]

The State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State

Bank of Patiala and State Bank of Travancore, and Bharatiya Mahila Bank were merged with

State Bank of India with effect from 1 April 2017.

Non-banking subsidiaries[edit]

Apart from five of its associate banks (merged with SBI since 1 April 2017), SBI's non-

banking subsidiaries include:

 SBI Capital Markets Ltd

 SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

 SBI Life Insurance Company Limited

In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26% of

the remaining capital), to form a joint venture life insurance company named SBI Life

Insurance company Ltd.

Other SBI service points[edit]

As of 31 March 2017, SBI group (including associate banks) has 59,291 ATMs.[23]

Since November 2017, SBI also offers an integrated digital banking platform named YONO.
LISTINGS AND SHAREHOLDING

As on 31 March 2017 Government of India held around 61.23% equity shares in SBI.

The Life Insurance Corporation of India, itself state-owned, is the largest non-promoter

shareholder in the company with 8.82% shareholding.

Shareholders Shareholding

Promoters: Government of India 54.23%

FIIs/GDRs/OCBs/NRIs 18.17%

Banks & Insurance Companies 10.00%

Mutual Funds & UTI 8.29%

Others 9.31%

Total 100.0%

The equity shares of SBI are listed on the Bombay Stock Exchange,] where it is a constituent

of the BSE SENSEX index,] and the National Stock Exchange of India, where it is a

constituent of the CNX Nifty. Its Global Depository Receipts (GDRs) are listed on

the London Stock Exchange.

EMPLOYEES

SBI is one of the largest employers in the country with 209,567 employees as on 31 March

2017, out of which there were 23% female employees and 3,179 (1.5%) employees with

disabilities. On the same date, SBI had 37,875 Scheduled Castes (18%), 17,069 Scheduled

Tribes (8.1%) and 39,709 Other Backward Classes (18.9%) employees. The percentage of
Officers, Associates and Sub-staff was 38.6%, 44.3% and 16.9% respectively on the same

date. Around 13,000 employees have joined the Bank in FY 2016–17. Each employee

contributed a net profit of ₹511,000 (US$7,100) during FY 2016–17.

Recent awards and recognition

SBI was ranked 232nd in the Fortune Global 500 rankings of the world's biggest corporations

for the year 2016. SBI was 50th most trusted brand in India as per the Brand Trust

Report 2013, an annual study conducted by Trust Research Advisory, a brand analytics

company and subsequently, in the Brand Trust Report 2014, SBI finished as India's 19th most

trusted brand in India.

ABOUT AXIS BANK

Axis Bank is the third largest private sector bank in India. The Bank offers the entire

spectrum of financial services to customer segments covering Large and Mid-Corporates,

MSME, Agriculture and Retail Businesses.

The Bank has a large footprint of 3,964 domestic branches (including extension counters)

with 12,705 ATMs & 3,548 cash recyclers spread across the country as on 31st December,

2018. The overseas operations of the Bank are spread over ten international offices with

branches at Singapore, Hong Kong, Dubai (at the DIFC), Colombo and Shanghai;

representative offices at Dhaka, Dubai, Abu Dhabi; a step down subsidiary in the US- Axis

Capital USA, LLC and an overseas subsidiary in London, UK. The international offices focus

on corporate lending, trade finance, syndication, investment banking and liability businesses.

Axis Bank is one of the first new generation private sector banks to have begun operations in

1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of
India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India

(LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The

New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India

Insurance Company Ltd. The share holding of Unit Trust of India was subsequently

transferred to SUUTI, an entity established in 2003.

With a balance sheet size of Rs. 6,91,330 crores as on 31st March 2018, Axis Bank has

achieved consistent growth and with a 5 year CAGR (2012-13 to 2017-18) of 15% in Total

Assets, 12% in Total Deposits, 17% in Total Advances.

Promoter

Axis Bank is one of the first new generation private sector banks to have begun operations in

1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of

India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India

(LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The

New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India

Insurance Company Ltd. The share holding of Unit Trust of India was subsequently

transferred to SUUTI, an entity established in 2003.

Capital structure

The Bank has authorized share capital of Rs. 850 crores comprising 4,250,000,000 equity

shares of Rs.2/- each.As on 31st March 2017, the Bank has issued, subscribed and paid-up

equity capital of Rs. 476.67 crores, constituting 2,38,28,31,826 equity shares of Rs.2/- each.

The Bank’s shares are listed on the National Stock Exchange of India Limited and the BSE

Limited. The GDRs issued by the Bank are listed on the London Stock Exchange (LSE). The
Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock

exchange

Distribution network

he Bank has a large footprint of 3,882 domestic branches (including extension counters) and

12,660 ATMs spread across the country as on 30th September 2018. The overseas operations

of the Bank are spread over nine international offices with branches at Singapore, Hong

Kong, Dubai (at the DIFC), Colombo and Shanghai; representative offices at Dhaka, Dubai,

Abu Dhabi and an overseas subsidiary at London, UK. The international offices focus on

corporate lending, trade finance, syndication, investment banking and liability busisiness

subsidiaries

The Bank at present has following 11 subsidiaries namely:

The Bank has 11 subsidiaries; namely, Axis Capital Ltd. (ACL), Axis Securities Ltd. (ASL),

Axis Private Equity Ltd. (APE), Axis Trustee Services Ltd. (ATSL), Axis Asset Management

Company Ltd. (AAMC), Axis Mutual Fund Trustee Ltd. (AMFT), Axis Finance Ltd (AFL),

A.TREDS Ltd.(ATL) Axis Bank UK Ltd. (ABUK), Freecharge Payment Technologies

Private Limited (Freecharge) and Accelyst Solutions Private Limited (Accelyst).

Axis Capital Ltd. (formerly Axis Securities and Sales Ltd.) (ACL)

ACL was incorporated in India as a wholly-owned subsidiary of the Bank on 6th December

2005 and received its certificate of commencement of business on 2nd May 2006. Certain

businesses of M/s. Enam Securities Pvt. Ltd. were merged with Axis Capital Ltd. as part of a

scheme and the following companies became direct subsidiaries of ACL:

 Axis Securities Ltd. (formerly Enam Securities Direct Pvt. Ltd.)

  Axis Finance Ltd. (formerly Enam Finance Pvt. Ltd.)

 Axis Securities Europe Ltd. (formerly Enam Securities Europe Ltd.)

 Enam International Ltd., UAE (voluntarily dissolved with effect from 24th August

2014)

Axis Securities Ltd., Axis Finance Ltd. and Axis Securities Europe Ltd. later became direct

subsidiaries of the Bank in line with the RBI directives. Enam International Ltd., (UAE) was

voluntarily dissolved with effect from 24th August 2014. The paid-up capital of ACL on 31st

March 2017 was Rs.73.50 crore. ACL is in the business of merchant banking, institutional

broking and investment banking. The net profit of ACL for the year ended 31st March 2017

was Rs.113.22 crore.

Axis Securities Ltd. (formerly Enam Securities Direct Pvt. Ltd.) (ASL)

Axis Private Equity Ltd. (APE)

Axis Trustee Services Ltd. (ATSL)

Axis Asset Management Company Ltd. (AAMC)

Axis Mutual Fund Trustee Ltd. (AMFT)

Axis Finance Ltd (AFL)

A.TREDS Ltd. (ATL)

Axis Bank UK Ltd. (ABUK)

Freecharge Payment Technologies Private Limited (Freecharge)

Accelyst Solutions Private Limited (Accelyst)