Chapter 1 Research methodology

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1.1 Scope of the study:
The study would try to throw some insights into the existing services provided by the banks and the gap between the customer expectations, perceptions and the actual state of performance. The results of the study would be able to recognize the lacunae in the system and thus provide key areas where improvement is required for better performance and success ratio.

1.2 Research Objectives:
(1) To find out the level of expectation and the level of perception of the customers from the services offered by the banks. (2) To compare the level of perception and expectation of the services offered by the banks. (3) To know which service quality dimension the bank is performing well and in which dimension it needs improvement. (4) To know the preference towards the public sector and private sector banks.

1.3Sampling Design:
 Targeted banks: ICICI,HDFC,SBI,BOB  Sampling Frame: All the customers of four banks in Noida.  Sampling Unit: Any customer of four banks in Noida.  Sampling Area: Noida.  Sampling Method: Non- Probability Convenience Sampling

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 Sample Size: 100 Respondents Bank ICICI HDFC SBI BOB Respondents 25 25 25 25

1.4 Data Sources:
 Primary Data: It is collected through structured questionnaire by conducting survey.  Secondary Data: Internet, journals, books, magazines, etc.....

1.5 Research Design:
Our research is Descriptive in nature as the banking industry is well-developed in India and lot of research has already been done in this area.

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We could use a chi-square test for independence to determine whether gender is related to voting preference. voters might be classified by gender (male or female) and voting preference (Democrat. the SERVQUAL tool should be applied very carefully and the set of determinants and attributes used should be adapted to the specific situation.6 Research tool: • SERVQUAL Analysis. SERVQUAL is an instrument for measuring how customers perceive the quality of a service. Republican.1. • Chi-Square test of independence The test is applied when there are two categorical variables from a single population. (2) formulate an analysis plan. there are some controversies in its applicability across different service industries. In some studies the five dimensions of the instrument (determinants) have been found to be unstable across different types of services. For example. This approach consists of four steps: (1) state the hypotheses. in other words on the comparison of customers’ expectations with their experiences from the service. As a result of their study they developed the SERVQUAL instrument for measuring service quality. reliability. It is used to determine whether there is a significant association between the two variables.” This instrument has been widely used by researchers. responsiveness. or Independent). (3) analyze sample data. and (4) interpret results. but still. which were later reduced to the following five: tangibles. assurance and empathy. In the mid-1980s Berry and his colleagues Parasuraman and Zeithaml began to investigate what determines service quality and how it is evaluated by customers. in an election survey. The instrument is based on the idea of the disconfirmation model. which initially included 10 service quality dimensions. [4] . Usually. the five dimensions of the instrument are described through the use of 22 attributes an “respondents are asked to state (on a seven-point scale from “Strongly disagree” to “Strongly agree”) what they expected from the service and how they perceived the service. Therefore.

1.  Ho: Preference towards public/private sector banks and age group are independent of each other.square test for independence has been conducted for knowing the relation between the age group and the preference towards the two types of banks. [5] .8 Limitations of the Study:  Respondents may give biased answers for the required data.  In our study we have included 50 customers of each bank because of time limit. Some of the respondents did not like to respond.7 Hypothesis: A chi. 1.  H1: Preference towards public/private sector banks and age group are dependent of each other.

CHAPTER 2 GLOBAL BANKING INDUSTRY [6] .

commercial banks are struggling to make acceptable margins from their traditional business entering into investment banking. As margins are squeezed. and medium-term notes for bank loans. commercial banks in the United States and Europe have been forced to cut costs and branches while diversifying into pensions. and many banks have had to revert to a concentrated business. [7] . Diversification.The world of commercial banking is undergoing a deep transformation as a result of marketable instruments competing with loans and demand deposits. many banks call themselves financial service companies even in their reported financial statements. Increasing competition has forced banks to search for more income at the expense of more risk. The traditional advantage of physical proximity to clients given by extended networks of branches has vanished. however. Because of this strong competition. commercial papers. asset management. Banks have to compete with money market mutual funds for deposit business. insurance. In the United States. Banks that lent heavily to Asia in search of better returns than those available in Western markets are now being blamed for bad credit decisions. The Asian crisis has renewed interest on credit risk management casting doubts on the effectiveness of current credit regulations. Technological changes have also heightened competition by making it easier to imitate bank services. has not always proved to be an effective strategy. and investment banking.

investment banking. Diversification among sub industries is defining an environment where banks compete with other financialservice companies to provide mutually exclusive products and services to the same customers.) are vanishing. On the other hand. leading some analysts to wonder whether banks are dying. All these changes are creating an identity crisis for old-fashioned bankers. such as fee-based income from [8] . private banking. and new geographic markets mean that both the spectrum of risks and the risk profile for banks are dramatically changing. new products. Only 15 to 20 years ago. Increased competition. Since boundaries among sub industries are weakening. asset management. sometimes as low as 40%. banks—like all other financial service companies—must redefine themselves in terms of the products they offer and the customers they serve.These examples illustrate how commercial banks are reinventing themselves. Illustrating what an entity does or serves for often is a useful way to define it. investment banking. not just once but many times. Banks are changing as economic markets integrate. and banc assurance are the most profitable and fastest growing segments of the financial service industry. The identity crisis of banks—especially commercial banks—stems from the deep and rapid changes in their traditional body of activities (particularly retail and corporate banking). Now this percentage has fallen to 60%. As banks undertake new activities. All these factors represent a new challenge for commercial banks. DEFINING A BANK IN 2010 The scenario commercial banks face today differs greatly from that of the past. New sources of income. Traditional branch banking is under the threat of new competitors and technological innovation. The way banks pursue this redefinition is through a strategic repositioning in the financial service industry. etc. “What is a bank today?” The question is difficult. leading to the key question. private banking. they also incur new risks. Most likely what is dying is the oldfashioned concept of the bank and a new scenario is emerging. providing opportunities for diversification. if not vanishing. provided this definition still has a unique meaning. most Western banks generated 90% of revenue from interest income. diversification. insurance. but evidence suggests that the concept of banking is being modified and the traditional barriers among financial service Sub industries (retail banking.

but they are also making banks riskier. is estimated to be worth US$14 million. Derivative based earnings for larger commercial banks now account for about 15 to 20% of the total earnings.investment services and derivatives. the pattern of banking activities has changed through interactions with the developing security markets. The traditional core business of commercial banks has been retail and corporate banking. mutual funds. The management of these new types of risk—typically. with a few exceptions. confirming the global characters of these two sub industries (the most related to global capital markets). This has created much tougher competition among financial service companies and has forced banks to find new and diversified sources of income. Hence. banks are diversifying into new businesses to stop the decline of profits. Not casually.S. The well-known phenomenon of disintermediation that has taken place in all Western countries since the 1970s has progressively reduced the monopoly of banks over the collection of savings from customers. huge U. In fact. are becoming increasingly relevant for the income statements of commercial banks. In the [9] . while securities firms. Alliances and takeovers are occurring also on a transatlantic basis. investment banks are merging among themselves and with asset management firms. market risk and credit risk on traded assets— requires competence and expertise. AAA ratings for banks have disappeared and consequently the importance of market risk management is being emphasized. Capital markets are playing a key role in defining the bank of the twenty-first century. with an annual growth rate of about 14% up to 2010. the risk profile of commercial banks is changing as a consequence of diversification. for example. and finance companies are getting a growing share of available customers. As retail and corporate banking become less and less profitable. is only slightly profitable. Investment banking. The following trends are affecting the banking industry and most likely will shape the competition in the next several years: • The market share for financial services that banks hold is declining. The drawback is that volatility of earnings has dramatically increased. During the same period. Global competition will take place in asset management and investment banking. Future competition will not be played in the classic retail banking industry that. at least in continental Europe (but not in the United Kingdom).

commercial banks will have to exploit new sources of income: Offering new services (selling mutual funds or insurance policies). Market risk management models must become an integral part of a bank’s risk management culture. the share of total assets held by banks and other depository institutions relative to all financial intermediaries fell from 56% in 1982 to 42% in 1991. Entering new geographic markets yielding higher returns. • Banks will need more expertise to manage new sources of risk. [10] . Banks will face growing competition from financial service companies and nonbank firms. Offering new services through the phone and the web. leading to consolidation. The natural shrinkage of the market share held by commercial banks started this process in the past decade. • To remain competitive. • Disintermediation is making traditional banking less and less necessary.Charging customers with noninterest fees. and this downward tendency is likely to continue. but it has dramatically accelerated in the past few years because of global competition.United States. Entering into joint ventures with independent companies.

Sainsbury’s and Tesco. the country’s two biggest retailers.RETAIL BANKING The two main forces changing the competitive environment in retail banking are technological change and aggressive new competitors: 1. and personal loans and mortgages. These trends do not indicate that traditional branch banking is going to die. 2. but aims to expand its range. Sainsbury’s Bank offers a savings account. respectively. with more services to follow. These innovations make branch networks less important and national boundaries irrelevant. is gaining a growing and growing importance. Computer banking. The major technological issues affecting the retail banking business are the rise of telephone banking and the impressive diffusion of the Web-based banking. either through the Internet or proprietary networks. more flexible rivals. [11] . High-street banks have expensive branch networks and relatively outdated procedures. have gone into partnership with the Bank of Scotland and the Royal Bank of Scotland. but that the competitive scenario is changing. New unrelated competitors are entering the retail banking market. two credit cards. with far greater operating costs than their new. Technological change is creating huge problems for traditional banks with extended and costly branch networks. In the United Kingdom. Tesco Personal Finance offers only a savings account and a credit card.

but also people with. These services. once provided only to aristocrats. Risks of adverse market movements are transferred. investment banks. converted building societies.PRIVATE BANKING One of the most interesting trends affecting the banking industry is the development of domestic private banking services. to customers. at least partially. Private banking creates opportunities for commercial banks. Retail banks are no longer targeting only the super rich. Private banking is basically an asset management service and represents a natural area for banks in time of margin squeezing and increased competition. high income. Nevertheless. and insurers. commercial banks must be aware of actual and potential competitors including traditional private banks. are gaining popularity and seem to be an attractive. • Culture needed to manage private banking. but also adds new problems in the following areas: • Bank organization. who hold a small proportion of the total wealth. while banks increase their fee-based income. fast-growing market. relatively speaking. • Risk management [12] .

e. commercial banks in search of globalization are boosting takeovers of investment banks.GLOBAL INVESTMENT BANKING Investment banking is by far the most globalized segment of the financial service industries. market trading. Commercial banks today are starting to offer investment-banking and merchant banking services to larger corporations. • Providing strategic advice. thus entering in direct competition with prestigious investment houses. financial lending and fund management. The aim is to provide multinational corporations with a broad range of financial service products. To provide customers with a broader spectrum of services. These services include: • Identifying possible merger targets. • Financing acquisitions of other companies. Relationship banking is replacing transaction-based banking: What is important is to increase the loyalty of the client to the bank. facilities in the world’s leading markets. including conventional investment banking such as merger and acquisition (M&A) advice. • Offering hedging services against market risk. security underwritings). [13] . almost irrespectively of the service needed or required. at both the institutional and retail levels. All the major competitors have developed.. • Dealing in customers’ securities (i. or are in the process of developing.

RECENT TRENDS IN THE GLOBAL BANKING INDUSTRY The global banking industry has been undergoing deep transformation. primarily to retain their customers. [14] . In the retail banking industry. will be obliged to rethink their strategic positioning. Since Western governments need to cut expenditures for old-age benefits to keep deficits under control. • Increasing competition in terms of both markets (geographic diversification) and products. • New competitors are entering the financial service business. corporate banking) or specific geographic area. there will be an increase in the importance of private pensions. The following trends can be outlined: • The technological breakthrough caused by the eruption of e-banking and e-finance. mutual funds. others are focusing on some specific market segment (retail banking. and private banking operations. • A slowing population growth and increasing average life expectancy and per capita income. To face the rising costs and squeezing margins created by competition. While some banks are opting to offer a vast variety of products/services on a global scale. • Worldwide consolidation and consequent restructuring. investment banks need partners with large amounts of available capital. thanks to a progressive relaxation of regulations and huge inter-industry acquisitions. •“Contamination” among different industries.Diversification is not the whole story. • The growing importance of a clear strategic intent in the banking industry. private banking. large department stores in the United Kingdom have entered the market for personal and mortgage loans. Banks. especially commercial banks.

[15] .. A significant portion of its assets must be outside its original domestic market. CONTAMINATION—THE RISE OF GLOBAL PLAYERS Consolidation is also taking place also on an interindustry basis. a banking conglomerate must satisfy three characteristics: 1. There can be cost-saving potential. particularly in computer systems. High degree of contamination. front-line service staff has to sell a richer mix of products. It must cover the full spectrum of financial products and services. 3. High degree of geographic diversification.These trends are having and will have a major impact on banks’ and financial institutions’ risk management process. Top managers have to handle a far more complicated business. By interindustry consolidation.g. is forcing even commercial banks to dedicate growing attention to market risk management and liquidity risk management. in addition to the more traditional credit risk and interest rate risk. But complexity explodes. and similar processes of deregulation in many other leading countries. 2. Size. we mean M&As taking place between firms of different sub industries in the financial service industry (e. It must be big enough to play on a global basis. Contamination also means that firms in the different sub industries will face risks that were once specific to another sub industry. The relaxation of the Glass-Steagall Act in the United States. insurance companies acquiring commercial banks or commercial banks acquiring Investment banks). To be a global player.

CHAPTER 3 INDIAN BANKING INDUSTRY [16] .

The Indian banking can be broadly categorized into nationalized (government owned).Banks are the most significant players in the Indian financial market. Indian banks are now quoting al higher valuation when compared to banks in other Asian countries (viz. and they also attract most of the savings from the population. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to look anew at their existing portfolio offering. public sector banks have long been the supporters of agriculture and other priority sectors. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. The Indian banking has finally worked up to the competitive dynamics of the ‘new’ Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization. Since the nationalization of banks in 1969. Singapore. the public sector banks or the nationalized banks have acquired a place of prominence and has since then seen tremendous progress. Driven by the socialist ideologies and the welfare state concept. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. [17] . Hong Kong. Private Banks have been fast on the uptake and are reorienting their strategies using the internet as a medium The Internet has emerged as the new and challenging frontier of marketing with the conventional physical world tenets being just as applicable like in any other marketing medium. Co-operative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the ‘high revenue’ niche retail segments. Philippines etc. Dominated by public sector.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. They are the biggest purveyors of credit. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive players capable of meeting the multifarious requirements of the large customer’s base. They act as crucial channels of the government in its efforts to ensure equitable economic development. private banks and specialized banking institutions. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. the banking industry has so far acted as an efficient partner in the growth and the development of the country.

preempting him and consequently delighting him with various configurations of benefits and a wide portfolio of products and services. Most of the banks in this category are concentrated in the high-growth urban areas in metros [18] . These banks have generally been established by promoters of repute or by ‘high value’ domestic financial institutions. government-owned banks) continue to dominate the Indian banking arena.e. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i. Industry estimates indicate that out of 274 commercial banks operating in India. The Reserve Bank of India acts as a centralized body monitoring any discrepancies and shortcoming in the system. The popularity of these banks can be gauged by the fact that in a short span of time. 223 banks are in the public sector and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that have started their operations here. It is the foremost monitoring body in the Indian financial sector.e. The liberalize policy of Government of India permitted entry to private sector in the banking. Their focus has always centered around the customer – understanding his needs. the private banks corner almost four per cent share of the total share of deposits. The Indian banking can be broadly categorized into nationalized.The Indian banking has come from a long way from being a sleepy business institution to a highly proactive and dynamic entity. The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. The major differentiating parameter that distinguishes these banks from all the other banks in the Indian banking is the level of service that is offered to the customer. private banks and specialized banking institutions. the industry has witnessed the entry of nine new generation private banks. borrowing and lending). Today. The nationalized banks (i. Indian nationalized banks (banks owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization. these banks have gained considerable customer confidence and consequently have shown impressive growth rates.

superior product positioning and higher employee productivity skills. operational efficiency and flexibility. The private banks with their focused business and service portfolio have a reputation of being niche players in the industry. With the Reserve Bank of India allowing these banks to operate 70% of their businesses in urban areas. These well-chalked out integrates strategy plans have allowed most of these banks to deliver superlative levels of personalized services. [19] . With efficiency being the major focus.(that account for approximately 70% of the total banking business). Management. these banks have leveraged on their strengths and competencies viz. A strategy that has allowed these banks to concentrate on few reliable high net worth companies and individuals rather than cater to the mass market. this statutory requirement has translated into lower deposit mobilization costs and higher margins relative to public sector banks.

others followed. Sometimes the government appoints various chairmen of the banks. If the FDI limits are relaxed. In India. If in the Budget savings are encouraged. [20] . booming the economy. therefore. ECONOMICAL ENVIROMENT Banking is as old as authentic history and the modern commercial banking are traceable to ancient times. The present era in banking may be taken to have commenced with establishment of bank of Bengal in 1809 under the government charter and with government participation in share capital. Sometimes looking into the political advantage of a particular party. the Government declares some measures to their benefits like waiver of short-term agricultural loans. By doing so the profits of the bank get affected. to attract the farmer’s votes. They exploit these banks for their benefits. Every year RBI declares its 6 monthly policy and accordingly the various measures and rates are implemented which has an impact on the banking sector. Various policies are framed by the RBI looking at the present situation of the country for better control over the banks. Allahabad bank was started in the year 1865 and Punjab national bank in 1895. then more FDI are brought in India through banking channels. then more deposits will be attracted towards the banks and in turn they can lend more money to the agricultural sector and industrial sector. banking has existed in one form or the other from time to time. and thus. Also the Union budget affects the banking sector to boost the economy by giving certain concessions or facilities.PEST ANALYSIS POLITICAL/ LEGAL ENVIROMENT Government and RBI policies affect the banking sector. Various banks in the cooperative sector are open and run by the politicians.

In 1969 government nationalized 14 banks. Banks having big clients or big companies have to provide services like personalized banking to their clients because these customers do not believe in running about and waiting in queues for getting their work done. TECHNOLOGICAL ENVIROMENT Technology plays a very important role in bank’s internal control mechanisms as well as services offered by them. It has in fact given new dimensions to the banks as well as services that they cater to and the banks are enthusiastically adopting new technological innovations for devising new products and service. The bankers also have to provide these customers with special provisions and at times with benefits like food and parties. Accordingly. their control was in the hands of the private parties and only big business houses and the effluent sections of the society were getting benefits of banking in India.SOCIAL ENVIROMENT Before nationalization of the banks. professionals. in democratic political system. keeping in mind both the national and social objectives. etc. Banks have changed the culture of human life in India and have made life much easier for the people. bankers were given direction to help economically weaker section of the society and also provide needbased finance to all the sectors of the economy with flexible and liberal attitude. and in which opportunities are open to all. consumer loans. [21] . working women. Now the banks provide various types of loans to farmers. To adopt the social development in the banking sector it was necessary for speedy economic progress. and traders. They also provide education loan to the students and housing loans. consistent with social justice. which is free from domination of law. But the banks do not mind incurring these costs because of the kind of business these clients bring for the bank.

It is no longer confined to only metropolitans or cosmopolitans in India. Today MasterCard and Visa card are the two most popular cards used world over. Automatic voice recorders now answer simple queries. This is one of the main reasons of India’s growth process. For example SMS functions through simple text messages sent from your mobile. The use of ATM and Internet banking has allowed ‘anytime. anywhere banking’ facilities. etc. give instructions for fund transfers. The most striking is its extensive reach. Through ECS we can receive the dividends and interest directly to our account avoiding the delay or chance of loosing the post.The latest developments in terms of technology in computer and telecommunication have encouraged the bankers to change the concept of branch banking to anywhere banking. These are also called as electronic purse. [22] . In fact. HISTORY OF BANKING IN INDIA Without a sound and effective banking system in India it cannot have a healthy economy. currency accounting machines makes the job easier and self-service counters are now encouraged. get the statement of accounts. Credit card facility has encouraged an era of cashless society. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. All these technological changes have forced the bankers to adopt customer-based approach instead of product-based approach. The banks have now started issuing smartcards or debit cards to be used for making payments. Indian banking system has reached even to the remote corners of the country. Some of the banks have also started home banking through telecommunication facilities and computer technology by using terminals installed at customers home and they can make the balance inquiry. The messages are then recognized by the bank to provide you with the required information. Today banks are also using SMS and Internet as major tool of promotions and giving great utility to its customers. For the past three decades India's banking system has several outstanding achievements to its credit.

To make this write-up more explanatory. an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. and Bank of Mysore were set up. the journey of Indian Banking System can be segregated into three distinct phases. Today. New phase of Indian Banking System with the advent of Indian Financial & Banking sector reforms after 1991. Bank of India. Central Bank of India. he has a choice. Next came Bank of Hindustan and Bengal Bank. Gone are days when the most efficient bank transferred money from one branch to other in two days. They are as mentioned below: • • • Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. mostly European shareholders. Indian Bank. Canara Bank. PhaseI The General Bank of India was set up in the year 1786. Now it is simple as instant messaging or dials a pizza. Exclusively by Indians Punjab National Bank Ltd. Reserve Bank of India came in 1935. was set up in 1894 with headquarters at Lahore. Money has become the order of the day. Bank of Baroda. Between 1906 and 1913. Not long ago. Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. we prefix the scenario as Phase I. From 1786 till today. Phase II and Phase III. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks. The East India Company established Bank of Bengal (1809). [23] .

1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July. Moreover. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. In 1955. During those day’s public has lesser confidence in the banks. PhaseII Government took major steps in this Indian Banking Sector Reform after independence. As an aftermath deposit mobilisation was slow. it nationalised Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership. major process of nationalisation was carried out. 14 major commercial banks in the country were nationalised. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: [24] . funds were largely given to traders.During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. It was the effort of the then Prime Minister of India. mostly small. the Government of India came up with The Banking Companies Act. Mrs. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. 1969. There were approximately 1100 banks. To streamline the functioning and activities of commercial banks. Indira Gandhi. 23 of 1965).

This is all due to a flexible exchange rate regime. the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11.• • • • • • • • 1949: Enactment of Banking Regulation Act. a committee was set up by his name which worked for the liberisation of banking practices. 1975: Creation of regional rural banks. Efforts are being put to give a satisfactory service to customers. The financial system of India has shown a great deal of resilience. under the chairmanship of M Narasimham. PhaseIII This phase has introduced many more products and facilities in the banking sector in its reforms measure. Time is given more importance than money. 1959: Nationalisation of SBI subsidiaries. the capital account is not [25] . Phone banking and net banking is introduced. 1969: Nationalisation of 14 major banks. 1980: Nationalisation of seven banks with deposits over 200 crore. 1961: Insurance cover extended to deposits. 1955: Nationalisation of State Bank of India. In 1991.000%. Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of institutions. 1971: Creation of credit guarantee corporation. The entire system became more convenient and swift. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. the foreign reserves are high. After the nationalization of banks.

The State Bank of India is India's largest commercial bank and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9. Nationalization of Seven State Banks of India (formed subsidiary) took place on 19th July.000 branches and it offers -. only State Bank of India (SBI) was nationalized. It took place in July 1955 under the SBI Act of 1955.a wide range of banking services. Indira Gandhi the then prime minister. 1960.either directly or through subsidiaries -. [26] . and banks and their customers have limited foreign exchange exposure. • • • • • • • Central Bank of India Bank of Maharashtra Dena Bank Punjab National Bank Syndicate Bank Canara Bank Indian Bank • • • • • • • Indian Overseas Bank Bank of Baroda Union Bank Allahabad Bank United Bank of India UCO Bank Bank of India Before the steps of nationalization of Indian banks. NATIONALIZATION OF BANKS IN INDIA The nationalization of banks in India took place in 1969 by Mrs.yet fully convertible. It nationalized 14 banks then. These banks were mostly owned by businessmen and even managed by them.

Seven more banks were nationalised with deposits over 200 crores. approximately 80% of the banking segments in India were under government ownership. is a mix of the public sector.The second phase of nationalisation of Indian banks took place in the year 1980. BANKING STRUCTURE The Indian banking industry. The banks that are included under this schedule are those that satisfy the criteria laid down [27] . the branches of the public sector banks rose to approximately 800% in deposits and advances took a huge jump by 11. Till this year. SCHEDULED BANKS Scheduled commercial banks are those that come under the purview of the Second Schedule of Reserve Bank of India (RBI) Act. private sector. and foreign banks. After the nationalisation of banks in India. 1934.000%. The private sector banks are again split into old banks and new banks. which has Reserve Bank of India as its regulatory authority.

State Bank of Travancore. Some co-operative banks come under the category of scheduled commercial banks though not all co-operative banks. PUBLIC SECTOR BANKS Public sector banks are those in which the Government of India or the RBI is a majority shareholder. State Bank of India. On account of their small size. which were operating before Banking Nationalization Act was passed in 1969. The old private sector banks comprise those. other nationalized banks. Central Bank of India. UCO Bank. Bank of Baroda. and Regional Rural Banks (RRBs). Oriental Bank of Commerce. Over 70% of the aggregate branches in India are those of the public sector banks. Dena Bank and Corporation Bank.vide section 42 (60 of the Act). State Bank of Patiala. Bank of Maharashtra. These banks face intense rivalry from the new private banks and the foreign banks. Canara Bank. and regional operations. The [28] . Bank of India. State Bank of Bikaner and Jaipur. Some of the leading banks in this segment include Allahabad Bank. PRIVATE SECTOR BANKS Private Banks are essentially comprised of two types: the old and the new. These banks include the State Bank of India (SBI) and its subsidiaries. Indian Overseas Bank. these banks were not nationalized. Union Bank of India.

FOREIGN BANKS The operations of foreign banks... [29] .. ICICI Banking Corporation Ltd. IDBI Bank Ltd... The Karur Vysya Bank Ltd. Lord Krishna Bank Ltd. are looking to expand and diversify. though similar to that of other commercial Indian banks.. An inter-departmental committee has been set up to endorse applications for entry and expansion. The new private sector banks were established when the Banking Regulation Act was amended in 1993. are mainly confined to metropolitan areas... After the initial licenses. The Lakshmi Vilas Bank Ltd. Hong Kong Shanghai Banking Corporation. Centurion Bank Ltd. the RBI has granted no more licenses. IndusInd Bank Ltd. economic and political bilateral relations. Global Trust Bank Ltd. The Dhanalakshmi Bank Ltd. Standard Chartered Grindlays Bank. and Vysya Bank.. Bank of America. Currently. The Jammu & Kashmir Bank Ltd.... (now a part of ICICI Bank). Deutsche Bank. Bank of Rajasthan. in the wake of the liberalization era. Financial institutions promoted several of these banks. The leading banks that are included in this segment include Bank of Punjab Ltd.banks that are included in this segment include: Bank of Madura Ltd. Bharat Overseas Bank Ltd. These banks are gearing up to face the foreign banks by focusing on service and technology. HDFC Bank Ltd. Development Bank of Singapore and Banque National De Paris. The Nedungadi Bank Ltd. Some of the leading foreign banks that operate in India are Citibank. these banks are on an expansion spree.. The Catholic Syrian Bank Ltd. Foray of foreign banks depends on reciprocity. The Federal Bank Ltd. spreading into semi-urban areas and satellite towns.. Karnataka Bank Ltd.. and UTI Bank Ltd. Foreign banks.

Operating in this demanding environment has exposed banks to various challenges. GLOBALISATION – A CHALLENGE AS WELL AS AN OPPORTUNITY The benefits of globalisation have been well documented and are being increasingly recognised. new instruments. particularly derivatives. The last decade has witnessed major changes in the financial sector . Globalisation of domestic banks has also been [30] . the increasing levels of deregulation along with the increasing levels of competition have facilitated globalisation of the India banking system and placed numerous demands on banks.new banks. it has entailed greater competition and consequently greater risks. new financial institutions. new windows. While deregulation has opened up new vistas for banks to augment revenues.INDIAN BANKS AND THE GLOBAL CHALLENGES The enhanced role of the banking sector in the Indian economy. new challenges.and. along with all this. and new opportunities . Demand for new products. has required banks to diversify their product mix and also effect rapid changes in their processes and operations in order to remain competitive in the globalised environment.

viz. inter-alia. If we were to identify a few global challenges which banks face today. application of technology. strengthening of the banking sector for facing the pressures that may arise out of globalisation by adopting the banking sector reforms in a calibrated manner. alignment of regulatory and accounting requirements. enhancement of customer service. enhancing corporate governance. outsourcing risks. regulatory. GLOBAL CHALLENGES IN BANKING Few broad challenges faced by the Indian banks in the following areas. Adoption of appropriate prudential. which would help in fortifying it against the risks that might arise out of globalisation. In India. enhancement of transparency & disclosures. I am sure we would cover some common ground. improvement of risk management systems. and compliance with KYC aspects. and technological framework on par with international best practices enables strengthening of the domestic banking system. Globalisation has thrown up lot of opportunities but accompanied by concomitant risks. implementation of new accounting standards. on the soundness of the financial system and the strength of the individual participants. implementation of Basel II.. I propose to cover these aspects now. which followed the twin governing principles of non-disruptive progress and consultative process. and application of advanced technology. An overview of the global challenges would include the following: Basel II implementation. There is a growing realisation that the ability of countries to conduct business across national borders and the ability to cope with the possible downside risks would depend.facilitated by tremendous advancement in information and communications technology. [31] . supervisory.

Highlighting two opportunities that are offered to banks. banks are also aware of the desirability of risk aggregation across the group both in the specific risk areas as also across the risks. is being increasingly seen as a medium through which banks constantly endeavour to upgrade the risk management systems to address the changing environment. be required to allocate significant resources towards this endeavour. refinement of risk management systems. Enterprises worldwide are. While the first milestone would be risk integration across the entity. therefore. Basel II implementation has another dimension which offers considerable opportunities to banks. Basel II has brought into focus a larger number of risks requiring banks to focus on a larger canvas. banks were managing each risk in isolation.. Further. and improvement in capital efficiency. viz. Capital efficiency: Basel II prescriptions have ushered in a transition from the traditional regulatory measure of capital adequacy to an evaluation of [32] .BASE II IMPLEMENTATION Basel II implementation is widely acknowledged as a significant challenge faced by both banks and the regulators internationally. Basel II implementation. therefore. It is true that Basel II implementation may be seen as a compliance challenge. in the initial stages. now putting in place an integrated framework for risk management which is proactive. It is no longer adequate to manage each risk independently. While it may be so for some banks. Banks in India are also moving from the individual silo system to an enterprise wide risk management system. Besides the increase in the number of risks. Comprehensive risk management: Under Basel I banks were focused on credit and market risks. therefore. systematic and spans across the entire organisation. banks are now beginning to focus on their inter-linkages with a view to achieve a more comprehensive risk management framework. Banks would.

banks may adopt a more dynamic approach to use of capital. This revised efficiency approach is expected to guide the return-on-equity strategy and influence banks’ business plans. 1949 have been supplemented by regulatory prescriptions issued by RBI from time to time. [33] .whether a bank has found the most efficient use of its capital to support its business i. With the extension of capital charge for market risks to the AFS portfolio this year and the coming into force of Basel II norms in March 2007. In view of the above. ENHANCING CORPORATE GOVERNANCE The issues related to corporate governance have continued to attract considerable national and international attention in light of a number of highprofile breakdowns in corporate governance. in which capital will flow quickly to its most efficient use..e. Banks are also important participants in the payment and settlement systems. the Reserve Bank has recently permitted banks to issue new capital instruments. a transition from capital adequacy to capital efficiency. how effectively capital is used will determine return on equity and a consequent enhancement of shareholder value. banks would need to shore up the capital levels not only for complying with these requirements but also for supporting the balance sheet growth. but also leverage such funds through credit creation. This becomes all the more relevant for banks since they not only accept and deploy large amount of uncollateralized public funds in fiduciary capacity. legal prescriptions for ownership and governance of banks in Banking Regulation Act. In this transition. A notable feature of these instruments is that these are designed to help banks in not only managing their capital effectively but also efficiently. With a view to enhancing the options available to banks for augmenting their capital levels. including perpetual instruments. In effect.

it is important that key personnel are fit and proper for their jobs. Although some ownership structures might have the potential to alter the strategies and objectives of a bank. Therefore. many risk management failures reflect a breakdown in corporate governance which arise due to poor management of conflicts of interest. Effective risk management systems determine the health of the financial system and its ability to survive economic shocks. the choices which banks make when they establish their risk management and corporate governance systems have important ramifications for financial stability.In view of the importance of the banking system for financial stability. these banks will also face many of the same risks associated with weak corporate governance. compliance and audit functions. To a large extent. (2) oversight by individuals not involved in the day-to-day running of the various business areas. There are four important forms of oversight that should be included in the organisational structure of any bank in order to ensure appropriate checks and balances: (1) oversight by the board of directors or supervisory board. therefore. Therefore. (3) direct line supervision of different business areas. sound corporate governance is not only relevant at the level of the individual bank. banks may have to cultivate a good governance culture building in appropriate checks and balances in their operations. but is also a critical ingredient at the system level. inadequate understanding of key banking risks. and (4) independent risk management. In addition. [34] . rules may not be able to capture its essence effectively. the foundation for effective risk managements in banks and thus the foundation for a sound financial system2. These systems can affect how the institution functions and how others perceive it in the marketplace. A good “governance culture” is crucial for financial stability but since it is an ‘intangible’. Corporate governance is. and poor Board oversight of the mechanisms for risk management and internal audit.

the latter has a forward looking element particularly with reference to measurement of impairment and capital. which is happening in the Indian banking system. While the risk management framework for derivative trading. which is a relatively new area for Indian banks (particularly more in respect of structured products). is to ensure that accounting standards and prudential frameworks are mutually consistent. Accounting standards are now a part of the set of twelve standards that have been identified by the Financial Stability Forum as conducive to a robust financial infrastructure.COMPLIANCE WITH INTERNATIONAL ACCOUNTING STANDARDS One of the prime international standards considered relevant for ensuring a safe and sound banking system is the ‘Core Principles for Effective Banking Supervision’ issued by the Basel Committee on Banking Supervision (BCBS). While the former is oriented towards capturing the historical position. the need to upgrade the accounting [35] . the absence of clear accounting guidelines in this area is matter of significant concern. it is essential for the regulators to be in a position to address any implications that the changes in accounting standards may have for the safety and soundness of banks. It is widely accepted that as the volume of transactions increases. therefore. Financial reporting and prudential supervision have slightly different perspectives. Derivative activity in banks in India has been increasing at a brisk pace. While working towards achieving this consistency between the two sets of standards. is an essential pre-requisite. An important challenge.

be discussed with the market participants before introduction. The proposals in this regard would. including an affiliated entity within a corporate group. measurement. to perform activities on a continuing basis that would normally be undertaken by the bank itself. The Accounting Standards Board of the Institute of Chartered Accountants of India (ICAI) is considering issue of Accounting Standards on the above aspects pertaining to financial Instruments. International Accounting Standards 32 and 39. presentation and disclosures pertaining to financial instruments. the Reserve Bank is considering the need for banks and financial entities adopting the broad underlying principles of IAS 39. Since this is likely to give rise to some regulatory / prudential issues all relevant aspects are being comprehensively examined. These will be the Indian parallel to International Financial Reporting Standard 7. The formal introduction of these Accounting Standards by the ICAI is likely to take some time in view of the processes involved.framework needs no emphasis. The World Bank’s ROSC on Accounting and Auditing in India has commented on the absence of an accounting standard which deals with recognition. In the meanwhile. OUTSOURCING RISKS Banks are increasingly using outsourcing for achieving strategic aims leading to either rationalisation of operational costs or tapping specialist expertise which is not available internally. document [36] . 'Outsourcing' may be defined as a bank's use of a third party. The proposed Accounting Standards will be of considerable significance for financial entities and could therefore have implications for the financial sector. Adoption and implementation of these principles are likely to pose a great challenge to both the banks and the Reserve Bank. as is normal. Typically outsourced financial services include applications processing (loan origination. credit card).

concentration risk and systemic risk. The failure of a service provider to provide a specified service. investment management. Outsourcing might give rise to several risks including. strategic risk. therefore. or reputation being compromised or weakened. Accordingly. counterparty risk. It is in this background that RBI has issued draft guidelines on outsourcing. data processing and back office related activities etc. ensure security/ confidentiality. reputation risk. operational risk. marketing and research. which is intended to provide direction and guidance to banks to effectively manage risks arising from such outsourcing activities. The underlying principles for any outsourcing arrangement by a bank are that such arrangements should neither diminish the bank’s ability to fulfill its obligations to its customers and the RBI nor impede effective supervision by RBI. It would therefore be imperative for the bank outsourcing its activities to ensure effective management of these risks. supervision of loans. Outsourcing banks. country risk. access risk. exit strategy risk. compliance risk. banks are not expected to outsource any activity that would result in their internal control. and comply with legal and regulatory requirements can lead to financial losses/ reputational risk for the bank and could also lead to systemic risks for the entire banking system in a country. APPLICATION OF ADVANCED TECHNOLOGY [37] .processing. business conduct. should take steps to ensure that the service provider employs the same high standard of care in performing the services as would be employed by the banks if the activities were conducted within the banks and not outsourced.

Technology is a key driver in the banking industry, which creates new business models and processes, and also revolutionises distribution channels. Banks which have made inadequate investment in technology have consequently faced an erosion of their market shares. The beneficiaries are those banks which have invested in technology. Adoption of technology also enhances the quality of risk management systems in banks. Recognising the benefits of modernising their technology infrastructure banks are taking the right initiatives. While doing so, banks have four options to choose from: they can build a new system themselves, or buy best of the modules, or buy a comprehensive solution, or outsource. In this context banks need to clearly define their core competencies to be sure that they are investing in areas that will distinguish them from other market players, and give them a competitive advantage6. A further challenge which banks face in this regard is to ensure that they derive maximum advantage from their investments in technology and avoid wasteful expenditure which might arise on account of uncoordinated and piecemeal adoption of technology; adoption of inappropriate/ inconsistent technology and adoption of obsolete technology.

CAPACITY BUILDING As dictated by the changing environment, banks need to focus on appropriate capacity building measures to equip their staff to handle advanced risk management systems and supervisors also need to equally equip themselves with appropriate skills to have effective supervision of banks adopting those systems. In the likelihood of a high level of attrition in the system, banks need to focus on motivating their skilled staff and retaining them7. Skill requirements would be significantly higher for banks
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planning to migrate to the advanced approaches under Basel II. Capacity building gains greater relevance in these banks, so as to equip themselves to take advantage of the incentives offered under the advanced approaches. A relevant point in this regard is that capacity building should be across the institution and not confined to any particular level or any particular area. The demand for better skills can be met either from within or from outside. It would perhaps be worthwhile to first glean through the existing resources to identify misplaced or hidden or forgotten resources and re-position them to boost the bank’s efforts to capitalise on available skills. This does not undermine the benefits that a bank may derive by meeting their requirements from the market, but is only intended to prioritise the process. CONCLUSION The global challenges which banks face are not confined only to the global banks. These aspects are also highly relevant for banks which are part of a globalised banking system. Further, overcoming these challenges by the other banks is expected to not only stand them in good stead during difficult times but also augurs well for the banking system to which they belong and will also equip them to launch themselves as a global bank.

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TRANSFORMATION INITIATIVES NEEDED FOR BANKS Strategy   Brand   Understanding the values of the brand Repositioning the brand to communicate the values [41] Sales & Marketing strategy for both retail & wholesale banking Expanding geographies .

Call Center & back office   processes Centralization of branch operations and deferred processes to free up resources Cost efficiency    Reduction in Total cost of acquisition Reduction in transaction costs Reduction in fixed and overheads cost Right sizing and matching of skills  Manpower modelling for branch & back office at various volume Productivity improvement for sales & service functions Competency Assessments & profiling scenarios   Creating a high performing organization [42] .Organization restructuring  Re organization of the bank in line with the strategic thrust Re engineering of the key business processes   Redesign of Sales processes to increase conversion ratio Six Sigma process improvements for branch channel.

The past days are witness to an hour wait before withdrawing cash from accounts or a cheque from north of the country being cleared in one month in the south. BANKING SERVICES IN INDIA With years. A competition has been established within the banks operating in India. banks are also adding services to their customers. KRA Assessing competencies of people across levels and match the position with the skill-set  Designing and implementing a new PMS for restructured organization Change management & creating a new mind set  Developing critical mass of champions and drive ‘Change’ across the organisation to move from conventional banking to new age banking. The following are the major services provided by the Banks. The bank accounts are as follows: [43] . the services provided by banks have become more easy and convenient. There are different types of bank account in Indian banking sector. BANK ACCOUNT Open bank account the most common and first service of the banking sector. With stiff competition and advancement of technology. The Indian banking industry is passing through a phase of customers market. The customers have more choices in choosing their banks.  Define new roles & responsibilities.

• Bank Account Online . etc.• Bank Savings Account . Bank account online is registered through a PC with an internet connection. the major banks in the public and private sector has facilitated their customer to open bank account online.With the advancement of technology.Bank Term Deposits Account can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs/ Specified Associates / Societies / Trusts. • Bank Term Deposits Account . Credit cards are financial instruments. A number of banks in India are encouraging people to use credit card.Bank Savings Account can be opened for eligible person / persons and certain organisations / agencies (as advised by Reserve Bank of India (RBI) from time to time) • Bank Current Account .Bank Current Account can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs / Specified Associates / Societies / Trusts. Credit card in India became popular with the introduction of foreign banks in the country. which can be used more than once to [44] . The concept of credit card was used in 1950 with the launch of charge cards in USA by Diners Club and American Express. etc. Credit card however became more popular with use of magnetic strip in 1970. PLASTIC MONEY Credit card Credit cards in India are gaining ground. The advent in opening an account.

it had almost 700 million cards in circulation. Cardholders borrow money against a line of credit and pay it back with interest if the balance is carried over from month to month. A VISA cardholder borrows money against a credit line and repays the money with interest if the balance is carried over from month to month in a revolving line of credit. In 1998. Its products are issued by 23. whose users spent $650 billion in more than 16. [45] .2 million locations. retail stores and other businesses issue these. Major Banks issuing Credit Card in India • • State Bank of India credit card (SBI credit card) Bank of Baroda credit card or Bob credit card • • • • • IDBI credit card ABN AMRO credit card Standard Chartered credit card ICICI credit card • HSBC credit card HDFC credit card Global player in credit card market MasterCard MasterCard is a product of MasterCard International and along with VISA are distributed by financial institutions around the world.000 financial institutions in 220 countries and territories. Basically banks. VISA Card VISA cards is a product of VISA USA and along with MasterCard is distributed by financial institutions around the world.borrow money or buy products and services on credit.

Diners Club cardholders reside all over the world and the Diners Card is a all-time favourite for corporates. JCBCards The JCB Card has a merchant network of 10.S. They are affluent and are frequent travelers in premier businesses and institutions. The JCB philosophy of "identify the customer's needs and please the customer with Service from the Heart" is paying rich dividends as their customers spend US$43 billion annually on their JCB cards. The following are some of the varieties of credit cards in India [46] . Around US $ 123 billion was spent last year through American Express Cards and it is poised to be the world's No. It is supported by over 320 financial institutions worldwide and serves more than 48 million cardholders in eighteen countries world wide. AmericanExpress The world's favorite card is American Express Credit Card. DinersClubInternational Diners Club is the world's No. 1 Charge Card. More than 57 million cards are in circulation and growing and it is still growing further. There are more than 8 million Diners Club cardholders.93 million in approximately 189 countries. including Fortune 500 companies and leading global corporations. the total amount spent on American Express cards rose by 4 percent. 1 card in the near future. American Express cards are very popular in the U.Nearly 600 million cards carry one of the VISA brands and more than 14 million locations in the world. Canada.. In a regressive US economy last year. Europe and Asia and are used widely in the retail and everyday expenses segment.

Indiacard Bol .Gold ANZ .Classic Citibank Cry Card Citibank Silver • • International Credit Debit Card Debit cards.• • • • • • • • • • • • ANZ . It operate like cash or a personal check. Credit card is a way to "pay [47] .Executive Stanchart .Silver Citibank WWF Card Citibank Visa Card for • Citibank Electronic Credit Card • • Citibank Times Card Citibank Citi Diners Club Card • • • HSBC .Gold BoB .Gold HSBC .Gold Stanchart .Exclusive BoB .Classic ICICI Sterling Silver Credit Card • ICICI Solid Gold Credit Card • ICICI True Blue Credit Card • • Women • • SBI Card Stanchart .Taj Premium Bol . Debit cards are different from credit cards.Cancard Citibank .Gold Citibank .Silver Bank Of India .Premium Canara Bank . also known as check cards look like credit cards or ATM cards (automated teller machine card).

and restaurants. Debit cards are accepted at many locations. • Debit cards may be more readily accepted by merchants than checks. especially in other states or countries wherever your card brand is accepted." When we use a debit card. gasoline stations. retail stores. giving you no grace period. our money is quickly deducted from the bank account. • The debit card is a quick. are [48] . • • Using a debit card frees you from carrying cash or a checkbook. With debit card. we use our own money and not the issuer's money. Using a debit card means you no longer have to stock up on traveler's checks or cash when you travel.later. "pay now" product. • Using a debit card may mean you have less protection than with a credit card purchase for items which are never delivered. including grocery stores. In India almost all the banks issue debit card to its account holders. Features of Debit Card • • Obtaining a debit card is often easier than obtaining a credit card. Using a debit card instead of writing checks saves you from showing identification or giving out personal information at the time of the transaction. Its an alternative to carrying a checkbook or cash." whereas debit card is a way to "pay now.

one can get a sanctioned loan amount between Rs 25. It is one of the fast moving financial products of banks. Almost all the banks have jumped into the market of car loan which is also sometimes termed as auto loan. or were misrepresented. SBI. you may dispute unauthorized charges or other mistakes within 60 days.00. • Returning goods or canceling services purchased with a debit card is treated as if the purchase were made with cash or a check.defective. [49] . ICICI. But. HDFC. You should contact the card issuer if a problem cannot be resolved with the merchant. The following loans are given by almost all the banks in the country: • • • • • Personal Loan Car Loan or Auto Loan Loan against Shares Home Loan Education Loan or Student Loan In Personal Loan.000 depending upon the profile of person applying for the loan. as with credit cards. LOANS Banks in India with the way of development have become easy to apply in loan market. HSBC are some of the leading banks which deals in in personal loan.000 to 10. Car loan / auto loan are sanctioned to the extent of 85% upon the ex-showroom price of the car with some simple paper works and a small amount of processing fee.

Students with certain academic brilliance. The RBI has also liberalised the interest rates of home loan in order to match the repayment capability of even middle class people. Almost all banks are dealing in home loan. HSBC are leading. The international money transfer market grew 9.e. from US$213 bn. is a good banking product for the mass. ICICI . rather to be termed as student loan. It has been only a couple of years that banks have jumped into the money transfer businessess in India.Loan against shares is very easy to get because liquid guarantee is involved in it. This act of banks is known as transfer of money. to US$233 bn. The educational loan. This activity is termed as remittance business. HDFC . Economists say that the market of money transfer will further grow at cumulative 10. banks also carry money from one corner of the globe to another.3% from 2003 to 2004 i. [50] . Again SBI . Now people are moving to township outside the city. This is a type of Telegraphic Transfer or Tele Cash Orders. Banks generally issue Demand Drafts. MONEY TRANSFER Beside lending and depositing money.1% average growth rate through 2008. studying at recognized colleges/universities in India and abroad are generally given education loan / student loan so as to meet the expenses on tuition fee/ maintenance cost/books and other equipment. More number of townships are coming up to meet the demand of 'house for all'. Home loan is the latest craze in the banking sector with the development of the infrastructure. in 2004. Money Orders or other such instruments for transferring the money. Banker's Cheques.

ATM money transfer card products have had terrible bank adoption rates since being introduced in the last three to four years. The price evolution of money transfer products for banks will be similar to that of consumer bill pay-the product is worth giving away as an account acquisition tool to win overall market share and establish banking relationships. [51] . and cost-effective. Many banks will even use money transfer services as loss-leaders inorder to generate account openings and cross-sell opportunities. enable to draw foreign currency in India. Money transfer to India is one of the most important part played by the banks. Many Indian banks have ATM'S (automatic teller machine). This service provide peace of mind to either the NRIs or to the visitors to India. we will see a good percent of all foreign-born households doing some level of online banking. There is a terrific opportunity for banks and non-banks to offer more robust global inter-institutional funds transfer services online. We will see more bundling of tailored money services by banks and non-traditional entrants that will include "free" money transfers. That will change as banks offer transfer services through their online channel. quick. By 2007. More than half of Western Union's customers today are already banked. Remittees who are highly educated and have been already been exposed to ATM technology in receiving countries tend to have an interest in this product. First-mover banks will start having a window of opportunity to include online transfer functionality within the next couple of years.With the use of high technology and varieties of product it seems that "Free" money transfers will become commonplace. and most do not have an alternative product marketed by their bank that is painless. which currently frequents traditional money transmitters such as Western Union.

using the SMS facility. to the thirdparty fund transfer option given by some banks to its account holders through e-cheque. Fill the beneficiary details like visa card numbers. Your account will be debited according to the date mentioned. [52] . address and then specify the amount that needs to be transferred. name. This facility helps its customer to transfer funds from his bank account to any visa card.Visa has recently introduced the 'Visa Money Transfer' option for its savings and current account holder of any bank with a visa debit card. A Visa Money Transfer is of similar kind. Transfer immediately or on schedule date. Mobile Banking works on the 'Text Messaging Facility' also called the SMS that is available on mobile phones. in many respects. MOBILE BANKING Mobile Banking is a service that allows customers to do banking transactions on their mobile phone without making a call . • • Click on to VISA Transfer Payments button. For bank account specify the visa card number and credit card number for paying credit card bill. either debit or credit within India. but this is restricted to only visa card holders. This facility allows sending a short text message from mobile phone instead of making a phone call. How to transfer money? • • Log on to your bank account through your respective bank websites.

The response is sent as an SMS message. The following transactions are currently available across India • • • Balance Inquiry of all accounts linked to Customer Identification Number (maximun up to five accounts) Following transactions give information on primary account Checking the last 3 transactions in your primary account for MobileBanking • • • • • • • Placing a Stop Payment on a cheque Requesting a cheque book Requesting an Account Statement Cheque Status inquiry Bill Presentment Fixed Deposit Inquiry A Help menu.All that is need to do is. a reach of 15% among urban Indian mobile phone user. [53] . 2009. to type out a short text message on mobile phone and send it out to a specific mobile banking number given by the bank . all in the matter of a few seconds.approximately 43 million urban Indians used their mobile phones to access banking services during quarter ending August. which gives you the transaction codes for the various transactions • IPIN Re-generation request Mobile banking in India is set to explode .

11 Mobile banking is popular among the Rs. Usage Used mobile banking Checking account balance View last three transactions Status of cheques Payment reminders Request a cheque book Unique Users (In millions) 43. a voice prompt will guide him through the various transactions.70 39. who will provide him with the required assistance. 28 million and status of cheques with 21 million users.Most Popular Banking Service on Mobile Checking account balances is the most popular banking service used by urban Indians with almost 40 million users followed by checking last three transactions.92 19.1 to 5 lakhs per year income group with almost 60% of mobile banking users falling in the income bracket. • • • • • Check your account balance Enquire on the cheque status Order a Cheque Book / Account Statement Stop Payment Loan Related queries [54] . He may also talk to a Phone Banker.97 28. an indicator of adoption of this service by younger generation.15 21. PHONE BANKING When one dials in to Phone Banking.06 20.

Internet banking is changing the banking industry and is having the major effects on banking relationships.• • transfer Funds between accounts Open a Fixed deposit or Enquire on your Fixed deposits / TDS • • • • • Pay bills Report loss of ATM / Debit Card / ForexPlus Card Enquire about latest Interest / Exchange rates Request a Demand Draft / Manager's Cheque Demat Related Queries INTERNET BANKING Internet banking is the technology that allows banking customers to do the things they would normally do at their bank from the comfort of home with a connection to the Internet. Banking is now no longer confined to the [55] . which is done on the Internet. is considered Internet banking. With cybercafes and kiosks springing up in different cities access to the Net is going to be easy. Internet banking (also referred as e banking) is the latest in this series of technological wonders in the recent past involving use of Internet for delivery of banking products & services. Even the Morgan Stanley Dean Witter Internet research emphasised that Web is more important for retail financial services than for many other industries. Anything that would normally be done in the offshore bank account.

However. thus. Providing Internet banking is increasingly becoming a "need to have" than a "nice to have" service. 55% are so called 'entry level' sites. these Internet sites offer only the most basic services. Indian banks are going for the retail banking in a big way. In true Internet banking. The net banking. transactions and cash management services. now is more of a norm rather than an exception in many developed countries due to the fact that it is the cheapest way of providing banking services. any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. This study which was conducted by students of IIML shows some interesting facts: • Throughout the country. the Internet Banking is in the nascent stage of development (only 50 banks are offering varied kind of Internet banking services). Only 8% offer 'advanced transactions' such as online funds transfer. Following services can be availed on the internet: [56] . to withdraw cash or deposit a cheque or request a statement of accounts. offering little more than company information and basic marketing materials. much is still to be achieved. Foreign & Private banks are much advanced in terms of the number of sites & their level of development.branches were one has to approach the branch in person. In general.

• • • Bill Payment Funds Transfer Special Promotions & Offers • • Ticket Booking Online loans and credit cards • • • Online Shopping Online Tax payment Prepaid mobile recharge [57] .

Chapter 4 Bank Profile .

venture capital and asset management. China.562. Hong Kong. Bangladesh. branches in United States.8 million) for the nine months ended December 31.ICICI BANK ICICI Bank is India's second-largest bank with total assets of Rs. The Bank currently has subsidiaries in the United Kingdom. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking. 2009 and profit after tax Rs. Sri Lanka.19 billion (US$ 648. Malaysia and Indonesia. Thailand.28 billion (US$ 77 billion) at December 31. Our UK subsidiary has established branches in Belgium and Germany. Bahrain. Russia and Canada.654 branches and about 4. 2009. The Bank has a network of 1. Singapore.883 ATMs in India and presence in 18 countries. . life and non-life insurance. 30. 3. South Africa. Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates.

Thailand. UK subsidiary has established branches in Belgium and Germany. branches in United States. The Bank currently has subsidiaries in the United Kingdom. South Africa. Hong Kong.Corporate Profile ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates.883 ATMs in India and presence in 18 countries.562. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking. . Russia and Canada. 30. ICICI Bank is India's second-largest bank with total assets of Rs. 3. Bangladesh. China. 2009. The Bank has a network of 1.645 branches and about 4.8 million) for the nine months ended December 31. Bahrain.28 billion (US$ 77 billion) at December 31. life and non-life insurance. Malaysia and Indonesia. venture capital and asset management. 2009 and profit after tax Rs. Sri Lanka. Singapore.19 billion (US$ 648.

Personal banking Services .

bill payment and prepaid mobile recharge  Continually updated services .000 per day for funds transfer to any account.Mobile Banking Services offered by ICICI Bank Bank Account Funds Transfer* Bill Payment+ Balance Enquiry Last 5 Transactions Cheque Book Request Stop Cheque Request Cheque Status Enquiry Credit Card Balance Details Last Payment Details Payment Due Date Reward Point Status Demat Holding Enquiry Transaction Status Bill Enquiry ISIN Enquiry Loan Provisional Income Tax Certificate Final Income Tax Certificate Reset Letter Rescheduled Letter Loan Agreement Copy Other Services Locate Branch Locate ATM Phone Banking Number Prepaid Mobile Recharge* Apply for Bank Products Status of Service Request Raised IMOBILE Benefits of using iMobile:    Secure access to your bank accounts anytime. anywhere Convenient menu based features designed for easy access Enjoy financial transactions worth Rs 50.

cheque status and balance enquiry. you can avail of our TV Banking from anywhere in India Benefits  It doesn’t require an Internet connection . Multiple service options with minimal effort Services available with iMobile:  Payment of utility bills and credit card bills  Transfer of funds to any bank account  Payment of insurance premium Placement of service request such us ordering of cheque books. TV Banking. This pioneering initiative now enables you to get information regarding loans. Quite certainly.If your TV service is coming to you through Satellite DTH or Digital Cable. You can get details and information regarding all our services – everything from loans. Tv banking at icici bank At ICICI Bank. and lots more. bank account statements. we've introduced India to an all new way of banking. TV Banking has revolutionized banking by bringing it right into your living room. accounts. accounts and deposits to additional services like financial counselling. deposits and a lot more while you're watching that exciting cricket match or your favorite sitcom. interactive features like calculators for loans and premiums.

the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages.   It's available 24x7 Zero charges You can obtain all the information you need about the available banking products and services on the TV screen itself HDFC BANK The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited'. India. with its registered office in Mumbai. Since its inception in 1977. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. Promoter HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. as part of the RBI's liberalisation of the Indian Banking Industry in 1994. Its outstanding loan .

455. HDFC was ideally positioned to promote a bank in the Indian environment. professional integrity.94 % of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue).640/(45. HDFC Bank's business philosophy is based on four core values .portfolio covers well over a million dwelling units.46 % of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has about 4. Business focus HDFC Bank's mission is to be a World-Class Indian Bank. With its experience in the financial markets.36. 27.65.23. 2009 the authorized share capital of the Bank is Rs. corporate governance and regulatory compliance.87 % of the Bank's equity and about 16. The paid-up capital as on said date is Rs. large shareholder base and unique consumer franchise. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities.564 equity shares of Rs. The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. consistent with the bank's risk appetite. 550 crore. 10/. and to achieve healthy growth in profitability. The HDFC Group holds 23. Capital Structure As on 31st December.each). a strong market reputation.683 shareholders. The Bank's American Depository Shares (ADS) are listed on the New York Stock Exchange (NYSE) under the . Product Leadership and People.58.52. The bank is committed to maintain the highest level of ethical standards. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments. Customer Focus.Operational Excellence.

On May 23. Multi-branch access is also provided to retail customers through the branch network and Automated Teller Machines (ATMs). The merged entity will have a strong deposit base of around Rs. to build the infrastructure for a world class bank. The amalgamation added significant value to HDFC Bank in terms of increased branch network.63.symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002. geographic reach. 89. 1. The balance sheet size of the combined entity would be over Rs.000 crore. The Bank's business is supported by scalable and robust systems which ensure that our clients always get the finest services we offer. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India. Times Bank Limited (another new private sector bank promoted by Bennett.000 crore and net advances of around Rs. the amalgamation of Centurion Bank of Punjab with HDFC Bank was formally approved by Reserve Bank of India to complete the statutory and regulatory approval process. HDFC TECHNOLOGY HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. which enables the bank to offer speedy funds transfer facilities to its customers. and customer base.. In a milestone transaction in the Indian banking industry. In each of its businesses. As per the scheme of amalgamation. All the bank's branches have online connectivity. the Bank has . 2008. shareholders of CBoP received 1 share of HDFC Bank for every 29 shares of CBoP. shareholders of Times Bank received 1 share of HDFC Bank for every 5. The Bank has made substantial efforts and investments in acquiring the best technology available internationally.75 shares of Times Bank. effective February 26. / Times Group) was merged with HDFC Bank Ltd. 1.000 crore. 2000. The Bank has prioritised its engagement in technology and the internet as one of its key goals and has already made significant progress in webenabling its core businesses.22. and a bigger pool of skilled manpower. Coleman & Co. This was the first merger of two private banks in the New Generation Private Sector Banks.

succeeded in leveraging its market position. has been a professional banker for over 25 years. The Managing Director. Prior to this. Management Mr. Mr. expertise and technology to create a competitive advantage and build market share. Accounts & Deposits            Regular Savings Account Savings Plus Account SavingsMax Account Senior Citizens Account No Frills Account InstitutionalSavings Account Payroll Salary Account Classic Salary Account Regular Salary Account Premium Salary Account Many others . Senior banking professionals with substantial experience in India and abroad head various businesses and functions and report to the Managing Director. Aditya Puri. and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia. The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in public policy. Given the professional expertise of the management team and the overall focus on recruiting and retaining the best talent in the industry. Mr. Capoor was a deputy governor of the reserve bank of india. Jagdish Capoor took over as the bank's Chairman in July 2001. Products and Services at glance Personal banking A. the bank believes that its people are a significant competitive strength. administration. industry and commercial banking. Senior executives representing Hdfc are also on the board.

B. Investments & Insurance        Mutual Funds Insurance Bonds Financial Planning Knowledge Centre Equities & Derivatives Mudra gold bar Prepaid Refill Bill Pay Direct Pay Visa Money Transfer E-Monies Electronic Funds Transfer  Excise and Service Tax Payment      D. Payment Services  Net Safe . Forex Services Trade Finance Travelers’ Cheques Foreign Currency Cash Foreign Currency Drafts Foreign Currency Cheque Deposits  Foreign Currency Remittances  Cash To Master  ForexPlus Card      E. Loans               Personal Loans Home Loans Two Wheeler Loans New Car Loans Used Car Loans Overdraft against Car Express Loans Loan against Securities Loan against Property Commercial Vehicle Finance Working Capital Finance Construction Equipment Finance Offers & Deals CustomerCenter C.

Get More from Your Card           Offers & Savings My Rewards Insta Wonderz Add-On Cards Credit Card Usage Guide Easy EMI Net safe Smart Pay Secure Plus My City Benefit Card . Cards             Silver Credit Card Gold Credit Card Woman's Gold Credit Card Platinum plus Credit Card Titanium Credit Card Value plus Credit Card Health plus Credit Card HDFC Bank Idea Silver Card HDFC Bank Idea Gold Card Compare Cards Transfer & Safe TrackyourCreditCard H. Access Your Bank       One View Insta Alerts Mobile Banking ATM Phone Banking Branch Network G.F.

        Debit Cards Easy ShopInternational Debit Card Easy Shop Gold Debit Card Easy ShopInternational Business Debit Card Easy ShopWoman's Advantage Debit Card Prepaid Cards Forex Plus Card Kisan Card State Bank of India .

 The Bank is forging ahead with cutting edge technology and innovative new banking models. Advisory Services. number of branches.000 villages in the next two years. structured products etc – each one of these initiatives having a huge potential for growth. The State Bank of India.  The bank is entering into many new businesses with strategic tie ups – Pension Funds. to expand its Rural Banking base. General Insurance. the country’s oldest Bank and a premier in terms of balance sheet size. Private Equity. market capitalization and profits is today going through a momentous phase of Change and Transformation – the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for their money. . Custodial Services. Mobile Banking. looking at the vast untapped potential in the hinterland and proposes to cover 100. Point of Sale Merchant Acquisition.

debit cards. It is the only Indian bank to feature in the Fortune 500 list. It is consolidating its global treasury operations and entering into structured products and derivative instruments. today it offers the largest banking network to the Indian customer. Today. It has also 7 Subsidiaries in India – SBI Capital Markets. SBI Life and SBI Cards . SBICAP Securities. on whole sale banking capabilities to provide India’s growing mid / large Corporate with a complete array of products and services. It is also focusing at the top end of the market. . the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. SBI DFHI.  The bank is also looking at opportunities to grow in size in India as well as Internationally. It is in the process of raising capital for its growth and also consolidating its various holdings. The Bank is also in the process of providing complete payment solution to its clientele with its over 8500 ATMs.forming a formidable group in the Indian Banking scenario. mobile banking. etc  With four national level Apex Training Colleges and 54 learning Centres spread all over the country the Bank is continuously engaged in skill enhancement of its employees. With about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks already networked. Some of the training programes are attended by bankers from banks in other countries.  The Bank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer experience. It presently has 82 foreign offices in 32 countries across the globe. and other electronic channels such as Internet banking. SBI Factors.

The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the programme.000 employees in a period of 100 days using about 400 Trainers. attitudes and take all employees together on this exciting road to Transformation. the Bank is also attempting to change old mindsets. to drive home the message of Change and inclusiveness. In a recently concluded mass internal communication programme termed ‘Parivartan’ the Bank rolled out over 3300 two day workshops across the country and covered over 130. State Bank of India offers a wide range of services in the Personal Banking Segment which are indexed here  eZ-trade@sbi  SBI  FOREIGN VISHWA INWARD REMITTANCE  LOCKER YATRA FOREIGN TRAVEL CARD  PAY ROLL CARDS  ATM SERVICES  GIFT CARDS  GIFT CHEQUES  INTERNET BANKING . Throughout all this change.

bills can be paid or money sent to the loved ones or balance enquiries done anytime 24x7!!! That is what SBI FreedoM offers -convenience. simple. The SBI eZ-Pay card . anytime and anywhere banking. The service can be availed over the free GPRS facilities offered by various mobile service providers. payment of TA/ Medical/ incentives etc. Balance enquiry can be made either through ATM or through Internet free of charge. State-Of-Art Technology And Operational Ease that will redefine the way india trades. a prepaid plastic card issued in Indian Rupees in association with VISA international. The service is presently available on java enabled mobile phones over SMS/ GPRS/ WAP as also non java phones with GPRS connection. The cardholder need not visit any Branch to withdraw his money. Nepal & Bhutan. is the right solution in such cases. The services for other non-Java mobile phonesunder development and will be offered using Unstructured Supplementary Services Data (USSD). Periodical payments like salary. . This service provides you with a 3-in1 account which is an integrated platform of savings bank a/c. can be loaded on to the card from a single point and the funds are available to the employees immediately. eZ -Pay Card Payment of salaries to employees who will be required to work at different locations is generally a difficult proposition for Employers as a single Banking arrangement can not be made for all employees. The SBI eZ-Pay card is a Pre-paid ATM-cum-Debit card usable at all VISA-enabled ATMs through PIN and at Merchant establishments/ Point of Sale through PIN/ Signature. State Bank of India in alliance with SBICap Securities Limitedand Motilal Oswal Securities Limited offers an online trading account which will let you trade from the comfort of your home or office either through the internet. Mobile banking services Away from home. secure.Online Trading SBI’s value proposition is based on Unmatched Expertise. in India. demat a/c and an online trading a/c to give you a convenient and paper free trading experience under one roof.

issued in association with VISA International. Traditionally. is one such product which gives the comfort of convenience and wide acceptability. for shopping through internet by using VbV (Verified by VISA) certified internet websites. Gift Cards Presenting Gifts to Employees is an integral and unique culture in India.e. It is usable at all VISA enabled Merchant Establishments and POS by signature/ PIN. State Bank of Saurashtra. the largest network in the country and continuing to expand fast! This means that you can transact free of cost at the ATMs of State Bank Group (This includes the ATMs of State Bank of India as well as the Associate Banks – namely. exclusively designed for vibrant youth of Indiabetween 18-30 years of Age. The SBI Gift Card. SBI Commercial and International Bank Ltd. This Card is available in all our branches free of cost. State Bank of Indore. You can not only draw cash at ATM but also swipe it for. This card can ‘be used for e-commerce i. The card can be used at ATMs for cash withdrawal at all ATMs under bilateral arrangement. Gift Card is a Pre-paid Plastic Card supported by Magnetic-strip based technology. Gift Cheques were introduced. using the State Bank ATM-cum-Debit (Cash Plus) card. These cheques. It is a perfect substitute for Gift Vouchers sold by many retail houses as its use is not restricted to any particular Merchant Establishment/ Point of Sale. however. and State Bank of Travancore) and wholly owned subsidiary viz. Funds can also be transferred using VISA . State Bank of Patiala. gifts have been given to employees in the form of cash or kind. Sbi Yuva Card SBI Yuva Card is an International Debit Card on VISA platform.ATM Services State Bank offers convenience of over 8000 ATMs in India.. shopping and traveling at POS/MEs. With the advancement of Banking. It can be used for dining. State Bank of Mysore. This card is PIN based on ATM and signature based at POS/MEs. State Bank of Bikaner & Jaipur. State Bank of Hyderabad. are accepted at the issuing bank branches only. allowing the employees to use the money according to their wishes.

view your account.always open. request for third party transfers. drafts.anytime -anywhere . Bank of Baroda . Using our ATMs. You can also transfer funds to your other accounts at the Branch. fast and convenient .Monet Transfer facility. request for cheque book. RBIEFT Inter-bank Electronic Funds Transfer facility of the Reserve Bank of India (RBI . stop cheque payment and issue standing instructions. Mumbai . You can now check your account balances. Internet banking Simple. card holder can also transfer funds to other VISA Debit/ Credit Cards issued by our Bank or any other Bank. invest and renew Term Deposits.EFT) is available with our branches in the clearing zone of Service Branches at Kolkata.New delhi and Chennai. Bankers cheques.

stakeholders. 10 Lakhs. the bank has its presence in 25 countries across the world. This has transcended down to the present ages and has become the motto of the bank. almost 87 banks in India succumbed to a financial crisis. came to be known as the Bank of Baroda. business prudence and concern uncompromising concern about its customers and clients. Bank of Baroda has progressively taken a step towards commitment and values by providing uncompromising standards of service to its customers. At the turn of a century. However. planned the beginning of a reputed journey which over the years.Bank of Baroda India The Bank of Baroda was established in the year 1908 in Baroda. The initial capital invested was Rs. the Bank of Baroda survived the economic depression by dint of its financial integrity. with his visionary insight. the bank has been growing and expanding its branches successfully. employees and the like. Ever since its inception. Heritage & Ethics of Bank of Baroda: The Bank of Baroda was started on 20th July 1908 under the Companies Act of 1887. It is interesting to note that during the period of 1913 to 1917. The Maharaja was none other than Sayajirao Gaekwad who. .

The elaborate man management policies also made the Bank a breeding ground for business leaders. hiring diverse functional specialists to support line functionaries and complementing the technical competencies of its people by imparting conceptual. A string of segment specific branches entrenched operations in the profitable markets. Aggressive marketing became the new business philosophy. housing finance. according cross border and cross cultural work exposure to its managers. Strategic HR interventions like. credit cards and mutual funds. It diversified into areas of merchant banking. In 1995 the Bank raised Rs 300 crores through a Bond issue. People initiatives were blended with IR initiatives to create an effectively harmonious workplace. . the issue was over subscribed. This has been historically demonstrated in its recruitment practices. Slowly but surely. the move to become a one stop financial supermarket had been set in motion. Overseas operations were revamped and structural changes intensified in the territories to cater to second generation NRIs. Financial-Initiatives New norms for capital adequacy required new capital management strategies. Employees across the board were inculcated with the marketing concept.men who went on to build other great institutions. People-Initiatives Bank of Baroda has always had an immense faith in the infinite potential of its people. managerial and leadership skills. gave the Bank competitive advantage. The Bank orchestrated its business strategies around the centrality of the customer. developmental initiatives. Despite adverse market conditions prevailing then. placement processes and promotion policies. Service delivery standards were stipulated. The Bank provided around a dozen CEOs to the industry. Technology was adopted to add punch. reflecting the positive public perception of the Bank's fundamental financial strength.INITIATIVES Marketing-Initiatives The mid-eighties marked the beginning of the shift to a buyers` market. In 1996 the Bank tapped the capital market with an IPO of Rs 850 crores. where everyone prospered.

The emergence of IT as a major driver for change. the Bank secured the ISO 9001:2000 certification for 15 branches.Digital-Initiatives Bank of Baroda pioneered the shift from manual operating systems to a computerized work environment. has accentuated the need to initiate a major transformation program. The e-banking products used state of the art technologies like digital certificates. the Bank graduated to the use of Unix based systems to Mainframes. was the establishment of the Integrated Treasury branch. Starting with ledgers. The new IT strategy. as a forerunner to full-fledged global treasury operations. Alive to the growing complexities of an intensely competitive marketplace and the mounting expectations of customers fuelled by this competition. to ledger posting machines. the Bank has adopted a revolutionary new business strategy that will be enabled by a revolutionary new IT strategy. the Bank has 1918 computerized branches. Today. By end of the current financial. smart card authentication and secure networking. It ventured beyond the brick and mortar delivery channel into ATMs and the OmniBOB range of anytime. through ALPMs. in the process of implementation will see the deployment of Core Banking Systems. telephone banking. Actioning this strategy will position Bank of Baroda as India's uncontested premier bank. covering 70% of its network and 91. . the Bank reworked its distribution strategy. Towards creating a future Bank of Baroda.all geared to deliver convenience banking. market driven bank will be a prerequisite to survival and growth. Payment Gateways . A major and strategic step in hi-tech. The conversion to an IT savvy. to client server based Total Branch Mechanization Systems. Quality-Initiatives In its relentless striving for quality perfection.64% of its business. The-Future Revolutionary and discontinuous changes in the operating environment are a stark reminder that business success is 'impermanent'. the Bank is targeting 54 more branches for this quality certification. anywhere electronic channels of PC banking. Multi Service Transaction Switch.

The relocation to the imposing Baroda Corporate Centre. more resilient and positioned to become India's first bank of truly global standards. And the Bank will emerge stronger. change is a journey. to echo the same sentiments that guided the Bank in its platinum jubilee year . Products & Services ElectronicClearingServices(ECS) This is a unique system under which Bank of Baroda helps companies and institutions making heavy payments disburse these amounts directly into the bank accounts of the beneficiaries such as account holders. . convenient.'a promising future is the sequel to a glorious past'. A more economic. that enables faster remittance of funds. is a true reflection of the Bank's resolve to move ahead of the times. It will be a long and difficult march. There will be no end. Convenient receipt of money reduces trips made to the bank for depositing dividend/interest warrants. It has a beginning. investors etc. BOBCashReach: A tailor made product for customers.   Smoother: Time and money spent on dispatches are saved More economic: Involves a premium service at nominal cost with a pickup service from the client's office.At Bank of Baroda. as it stands on the threshold of a digital era. Key Benefits   Prompt payment on the due date. shareholders. smoother mode of operation which can be availed of by a well supported network of centres. It will not be out of place now.  Elimination of fraudulent encashment against instruments lost in transit.

Branches also accept requests for collection of Loan Certificates / FDRs issued by Joint Stock Cos. Clean Bills and Documentary Bills from customers and various centres. Foreign Currency Notes etc. when financial instruments are presented in a branch. Refund Orders. the proceeds are credited to the customer's account on the same day in the following week. Collection Services OutwardBillsforCollection: All branches of Bank of Baroda have the facility of collecting Cheques.  Spread over a good network: Initially launched at 5 centres. without the customer having to claim it. For state capitals. prize money of Lottery Tickets. If these instruments are not collected within 14 days of lodgement. Interest Warrants. with the connectivity to be now fanned over to around 200 centres. The bank levies service charges as stipulated from time to time. Dividend Warrants. ease of liquidity and profit maximisation through better resource management. (and centres with more than 100 branches).. More Convenient: The collection and credit are both done on days convenient to the client.  Centred towards client benefits: All the benefits are passed on to the clients. For metro cities. TimeBoundCollection: All branches of Bank of Baroda are prompt in terms of the collections and forwarding of cheques and other instruments. in terms of enhanced quality. Demand Drafts. All Cheques and other instruments are collected into properly introduced accounts and sent for collection on the day of receipt from the customers or the next working day.. amount is credited only after 10 days. . interest @ 2% per annum over savings bank rate is paid and is credited to the customer's account.

BOBQuick: The Funds collected in this offering are credited to the customer's account within a guaranteed period of 7 days. Key Benefits  Settlement of transactions on the basis of net value of instruments.  In addition to the four metropolitan centres. All cheques amounting to Rs. Bank of Baroda's BOB Quick ensures a better collection service. 25000/.and above are drawn on select banks and are eligible for "Quick inter station clearing". Promissory Notes. Trichy. The concept of clearing has been extended to clearance of outstation cheques also. Also. NationalClearingSpecialFacilities: This product is an undertaking by the Reserve Bank of India. which creates new avenues of income and ensures better investment of funds. Bills received from Bank of Baroda branches and from other banks. certain other centres have also been identified for "One Way National Clearing". for inter city clearing of cheques between the four metropolitan centres of Delhi. Madurai. Pondicherry. Baroda. 50/. These centres are Nagpur. Bangalore. Trivandrum. . Hundi's etc. Erode. (Clean / Documentary). Noida. Vellore.InwardBillsforCollection: Bills of Exchange.per packet is charged for courier charges with an additional but nominal collection charge. and more. Mumbai.  All financial instruments are cleared promptly with the introduction of mechanised cheque processing. Rs. Hyderabad. Chennai and Calcutta. payable locally but received from outstation branches / banks / parties are treated as "Inward Bills for Collection". directly from drawers or outstation parties are treated as Usance (??) Bills. achieved through MICR technology.

mobile etc .Baroda Internet Banking "Baroda Connect" is an internet banking facility introduced as an alternative delivery channel for rendering effective customer service on 24 X 7 basis.Direct and Indirect taxes online such as Excise Duty.utility bills like electricity. Donations.  Pay through Baroda Easy Pay . Packing Credit account etc o Use upload facility for single debit-multiple credit. Customs Duty. multiple debit-multiple credit and single credit-multiple debit. Under THIS facility customer can    View Account summary of all operative. Travel plan booking online  Book Rail Ticket – IRCTC  Additionally a Corporate user can o o Set up multiple workflow of initiators and approvers for transactions and requests View all trade finance related facilities availed eg. Forward Contracts Bank Guarantees. deposit and loan accounts View all multiple Account information online with a single user id Get Account statements Under Transaction facility customer can  Transfer funds immediately or schedule for a future date to self linked and third party  Pay through Online Tax . Service Tax. Subscription. Export / Import LC. It offers unique customized services to both Retail & Corporate customers. Income Tax etc. Inland/ Export Bills. .

CHAPTER 5 DATA ANALYSIS AND INTERPRETATION ANALYSIS OF GENERAL QUESTIONS .

1) Which type of service do you prefer the most from the banks? a ATM services b Internet banking c Mobile banking d Retail banking Most Preferred Banking Service ATM Services Internet Banking 7% 14% Mobile Banking Retail Banking 11% 68% 2) Your Account Decisions are influenced by: a Oneself b Market research c broker d friends/relatives .

Influence Of Account Decisions Oneself Market Research 18% 2% 4% Broker Friends/Relatives 76% 3) Which factors do you consider before opening account or in purchasing new plan in a particular bank? .

A B C D E Financial position Current Market Position Goodwill Future prospects Services provided Factors considered before opening an Account 12% 28% 8% Financial position Current Market Position Goodwill 22% Future prospects Services provided 30% .

5) Which bank is more secure according to you? a ICICI b HDFC c SBI d BOB Most Secure Bank ICICI HDFC SBI BOB 20% 25% 22% 33% ANALYSIS OF CHI SQUARE TEST OF INDEPENDENCE .

where Fo= observed frequency Fe= expected frequency for each cell Fe=(frequency for the column)(frequency for the row)/n Calculation observed frequency Age group Preference towards banks Public sector banks Private sector banks Total of column 18-25 13 22 35 26-35 21 16 37 36-45 31 23 54 46-55 36 19 55 55 and above 16 3 19 Total of raw 117 83 200 . H1: Preference towards public/private sector banks and age group are dependent of each other.Chi square test of independence Hypothesis: H0: Preference towards public/private sector banks and age group are independent of each other.

175 22.36 22.81 55.83 -4. .41 22.02 0.03 2 χ Cal = 12.80 0.59 23.64 31.59 22.45 2.41 46-55 32.02 0.885 Fo 13 21 31 36 16 22 16 23 19 3 Fe 20.89 (Fo-Fe)^2 55.49 Now in this case χ2cal > χ2tab hence null hypothesis is rejected and alternative hypothesis is accepted.41 0.59 3.83 7.73 0.01 0. Conclusion: Preference towards public/private sector banks and age group are dependent on each other.82 4.59 -3.825 55 and above 11.53 15.84 0.18 11.475 14.12 14.64 0.59 32.35 14.91 [(Fo-Fe)^2]/Fe 2.35 14.115 7.95 0.03 0.Expected frequency Age group Preference towards banks Public sector banks Private sector banks 18-25 20.64 -0.645 15.88 7.64 3.91 Degree of freedom=(R-1)*(C-1) = (2-1)*(5-1) =4 Confidence level = 95 % Therefore χ2tab = 9.41 0.48 -0.355 36-45 31.89 Fo-Fe -7.525 26-35 21.14 3.48 21.67 23.47 0.

70 = 71.70.5 Upper limit = [(r-1)/r] ^½ = 0.5 Therefore strength = 0.25 Hence Cramour’s value = [Φ/Min (r-1) or (c-1)] ^½ = 0.42 % SERVQUAL ANALYSIS Calculation of servqual scores for ICICI bank .Strenth of contingency co efficient: Cramour’s value =[Φ/Min (r-1) or (c-1)]^½ Now Φ = [χ2 / n ]½ = 0.70 Now Out of 0.5/0. strength = 0.

8 3.1 Gap Score 2.4 1.4 5 5.Dimension Statement Expectation Score 6.2 0.9 3.25 2.1 0.7 2.25 2.6 0.6 1.8 6 5.2 0.35 0.6 5.74 0.68 Unweighted Average SERVQUAL score: 1.3 4.3 0.5 2 0.7 0.6 6.6 0.7 5.35 Reliability Tangibility Responsiveness Assurance Empathy 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0.5 5.8 3.4 5.2 Perception Score 4.2 6.2 2.7 1.2 4 3.9 5.6 1.4 1 0.6 5.6 1.7 5.5 6 5.6 5.9 4.5 4.46 1.6 0.9 5.45 .5 5 3.75 6 6.08 1.3 5.6 6.1 Average for Dimension 1.4 1.2 1.2 4.67 4.46 1.7 5.4 5.8 4.5 5.9 2.7 5.3 3.2 3.8 4.8 5.1 0.4 0.5 6.6 5.4 0.6 4.8 1.9 1.8 5.5 6.6 5.45 1.136 Reliability Tangibility Responsiveness 1.4 5.4 1.8 5.

68 0.2 1 0.45 1.8 0.46 Reliability Tangibility Responsiveness Assurance Empathy Dimension Gap score Minimum Maximum Dimension Tangibility Assurance Weightage given by respondents to different dimension Points .35 1.4 0.6 1.74 0.74 Average gap score 1.68 ICICI bank 2 1.4 1.8 1.6 0.2 0 Series1 0.Assurance Empathy 1.

1.93 .11 1. 3.46 1.7 1.65 6.9 21.7 100 SERVQUAL Dimension Reliability Tangibility Responsiveness Assurance Empathy Score from Table 1 1.9 21.19 Average weighted score SERVQUAL Dimension Weighted Score Reliability Tangibility 1.93 0.74 0.Score from table 1 5.35 0.45 1. personnel and communication materials. 2.68 7. The knowledge and courtesy of the bank's employees and their ability to convey trust and confidence.The bank's ability to perform the promised service dependably and accurately.37 1.26 6.2 17.5 11.54 5. The caring individual attention the bank provides its customers.11 1. equipment.7 29.7 29. The appearance of the banks physical facilities. The banks willingness to help customers and provide prompt service. Total: 19.5 11.94 1.32 Weighting Weighted from Score Table 2 19.62 0.55 5.2 17. 5. 4.

00 0.50 2.94 1.62 0.28 Reliability 1 2 Em 0.6 Perception Score 6.62 0.50 0.50 1.2 0.37 0.Responsiveness Assurance Empathy 0.94 Series1 weighted score Weighted score Maximum Minimum Re sp on siv Dimension Dimension Tangibility Responsiveness Calculation of servqual scores for HDFC bank Dimension Statement Expectation Score 7 6.00 1.4 Gap Score Average for Dimension 0.93 1.11 1.8 6.37 ICICI 2.00 en es s y As su ra nc e Re lia bi lity Ta ng i pa th y bi lit 1.2 .

7 5.28 0.1 6.9 0.5 1.9 0.4 1.78 .2 5.4 6 5.5 6.9 6.65 5.6 4.4 1.4 1.7 6.5 1 0.3 0.8 0.1 3.03 0.7 6.2 5.3 5.78 Unweighted Average SERVQUAL score: 0.3 4.1 5.8 0.6 0.9 0.3 5.7 0.2 0.6 0.3 6.5 4.5 0.5 6.8 5.2 0.8 0.9 4.4 0.9 6 6.03 0.1 5.9 4.5 1.7 5.4 1 0.8 4.2 5.9 5.2 4.6 6.35 5.5 6.3 1.1 0.7 6.3 6 6.45 0.7 0.678 Reliability Tangibility Responsiveness Assurance Empathy 0.5 0.5 5 6.3 3.8 6.Tangibility Responsiveness Assurance Empathy 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5.5 5.7 4.25 5.5 5.7 6.4 5.1 0.7 1.3 5.2 0.6 6.8 5.9 4.

2 0 en es s y 0. The appearance of the banks physical facilities.8 0.5 .4 0.HDFC bank 1. personnel and communication materials.28 As su ra nc e Re lia bi lity Ta ng i Re sp on siv Dimension .2 Average gap score 1.The bank's ability to perform the promised service dependably and accurately.4 0.03 0. 2.6 0.3 30 15. Gap score Minimum Maximum Dimension Reliability Responsiveness Weightage given by respondents to different dimension 1. The banks willingness to help customers and provide prompt service. equipment. Em pa th y bi lit Points 22.9 0.78 Series1 1 0. 3.

28 0. The knowledge and courtesy of the bank's employees and their ability to convey trust and confidence.78 6.98 0.97 6.28 Average weighted score .11 1.4 1.03 0.93 0. 5.Score from table 1 Weighting from Table 2 Weighted Score Reliability Tangibility Responsiveness Assurance Empathy 0.4 17.4 17.9 0.3 30 15.22 22. The caring individual attention the bank provides its customers.72 6.88 1.5 14.8 100 SERVQUAL Dimension Score from Table 1 7.4. Total: 14.50 1.6 5.8 1.1 6.

11 0.50 1.00 en es s y As su ra nc e Re lia bi lity Ta ng i pa th y bi lit 1.11 HDFC 2.00 0.98 0.SERVQUAL Dimension Reliability Tangibility Responsiveness Assurance Empathy Weighted Score 1.88 1.50 1.88 Series1 Weighted score Re sp on siv Dimension Weighted score Maximum Minimum Dimension Tangibility Assurance Em .93 0.93 0.98 1.50 1.00 1.50 0.50 2.

004 Unweighted Average SERVQUAL score: .3 6.2 0.2 0.7 6 5.2 0.5 3.3 6.32 1.4 1.1 0.9 3.3 6 5.8 0.6 Gap Score 0.3 5 5.Calculation of servqual scores for SBI bank Dimension Statement Expectation Score 5.7 3 4.2 0.3 5.2 2.3 6.9 1.7 0.9 6.7 5 5.6 5.6 3.85 1.7 2.8 5.7 0.8 5.2 0.4 3.2 0.3 1 0.3 0.5 6 6.2 0.52 1.9 6 5 5.4 0.9 4.4 3.9 1.9 4.8 3.7 4 6.9 4.5 6.5 1.4 0.3 5.2 5.2 5.4 1.3 0.8 5.6 2 2 1.13 0.3 5.4 3 4.7 5.4 3.3 6 Perception Score 5 5.3 2.8 6.4 Average for Dimension Reliability Tangibility Responsiveness Assurance Empathy 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1.8 1.5 6.2 5.8 5 5 6.7 5.

Reliability Tangibility Responsiveness Assurance Empathy 1.4 0.32 SBI bank 1.13 0.52 Re sp on siv Dimension Gap score Minimum Maximum Dimension Assurance Empathy Weightage given by respondents to different dimension Em Points .2 Average gap score 1 0.2 0 en es s y As su ra nc e Re lia bi lity Ta ng i pa th y bi lit 1.32 1.85 Series1 1.4 1.8 0.6 0.2 0.13 0.2 0.85 1.52 1.

3 1. The appearance of the banks physical facilities. The knowledge and courtesy of the bank's employees and their ability to convey trust and confidence. 3. Total: 20.23 Average weighted score .2 0.92 0.The bank's ability to perform the promised service dependably and accurately.1. 2.3 100 SERVQUAL Dimension Score from Table 1 7-Score from table 1 Weighting from Table 2 Weighted Score Reliability Tangibility Responsiveness Assurance Empathy 1.15 5.9 15 6.92 0.87 6.8 45 12. The caring individual attention the bank provides its customers. 5. The banks willingness to help customers and provide prompt service.48 5.68 20.70 1.8 6.13 0.85 1.39 2.8 45 12. equipment.9 15 6.52 1. personnel and communication materials. 4.23 0.32 5.

23 0.SERVQUAL Dimension Reliability Tangibility Responsiveness Assurance Empathy Weighted Score 1.00 en es s y As su ra nc e Re lia bi lity Ta ng i pa th y bi lit Series1 1.92 Weighted score 2.50 1.39 2.00 1.92 0.50 3.92 0.00 2.92 0.23 0.70 SBI 3.39 0.50 2.70 Re sp on siv Dimension Em .00 0.50 0.

6 6.43 6.2 1 1.2 1.6 5.4 4.72 6.61 Empathy 0.7 5.3 Average for Dimension Reliability 0.42 Responsiveness 1.05 0.9 5.8 4.8 6.5 4.3 0.9 6.42 0.01 4.7 6.25 6.82 4.3 6.7 5 5.53 0.2 6.35 6.15 0.75 4.88 5.38 0.3 1.1 6.6 5.1 0.2 0.Weighted score Maximum Minimum Dimension Assurance Responsiveness Dimension Calculation of servqual scores for BOB bank Statement Expectation Perception Gap Score Score Score 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 6.65 6.8 3.3 5.7 5.64 Tangibility 0.6 1.3 6.67 .1 0.9 0.3 5.29 1.6 6.25 1.7 4.3 0.7 4.6 5.8 3.3 5.9 5.6 7 6.01 Assurance 0.13 3.6 7 4 5.47 2.7 5.8 6.3 5.78 5 6.7 5.9 6.05 0.4 0.3 6.25 0.2 1.2 0.15 1 0.97 5.28 0.75 2.

61 0. Em .8 0.3 6 0.42 0.67 Unweighted Average SERVQUAL score: Reliability Tangibility Responsiveness Assurance Empathy 0.64 0.01 0.2 0 en es s y As su ra nc e Re lia bi lity Ta ng i pa th y bi lit 0.42 1.61 0.6 0.2 Average gap score 1.67 BOB 1.3 0.28 6.01 1 0.67 Series1 Re sp on siv Dimension .64 0.4 0.

58 5.64 0. 4.67 7-Score from table 1 6.39 6. equipment.65 1.42 1.52 1. 3.2 Weighted Score Reliability Tangibility Responsiveness Assurance Empathy 1.36 6.99 6.Gap score Minimum Maximum Dimension Tangibility Responsiveness Weightage given by respondents to different dimension 1. personnel and communication materials. The caring individual attention the bank provides its customers. The appearance of the banks physical facilities.8 30 8.2 100 SERVQUAL Dimension Score from Table 1 0. 2. The knowledge and courtesy of the bank's employees and their ability to convey trust and confidence.27 1.92 0.61 0.01 0.27 Average weighted score . The banks willingness to help customers and provide prompt service.8 30 8. 5.The bank's ability to perform the promised service dependably and accurately.33 Weighting from Table 2 20 25 16.01 1. Total: Points 20 25 16.

65 1.01 1.50 1.50 2.27 1.65 1.SERVQUAL Dimension Reliability Tangibility Responsiveness Assurance Empathy Weighted Score 1.50 0.00 en es s y As su ra nc e Re lia bi lity Ta ng i pa th y bi lit 1.52 BOB 2.92 0.00 1.00 0.92 1.01 Series1 Weighted score Weighted score Maximum Minimum Re sp on siv Dimension Dimension Assurance Empathy Em .27 1.52 0.

Reliability BANK ICICI HDFC SBI BOB GAP SCORE 1.64 Banks Reliability Gap score Minimum Maximum Bank HDFC ICICI .35 0.28 1.2 1.13 Avg gap score 1 0.28 Series1 0.64 Reliability 1.8 0.4 0.6 1.2 0 ICICI HDFC SBI BOB 0.6 0.4 1.35 1.13 0.

85 0.3 0.1 0 ICICI HDFC SBI BOB 0.46 0.9 0.4 0.42 Tangibility 0.7 0.5 0.85 Avg gap score 0.4 0.6 0.8 0.4 0.2 0.42 Series1 Bank Tangibility Gap score Minimum Maximum Bank HDFC SBI .46 0.Tangibility BANK ICICI HDFC SBI BOB GAP SCORE 0.

2 1.01 Avg gap score 1 0.01 Responsiveness 1.03 1.2 1.2 1.03 1.4 1.8 0.6 0.2 0 ICICI HDFC SBI BOB Series1 Bank Responsiveness Gap score Minimum Maximum Bank BOB ICICI .4 1.4 0.Responsiveness BANK ICICI HDFC SBI BOB GAP SCORE 1.6 1.4 1.

52 0.61 Assurance 2 1.6 1.4 1.2 0 ICICI HDFC SBI BOB 0.6 0.74 0.8 0.2 1 0.61 Series1 Bank Reliability Gap score Minimum Maximum Bank SBI ICICI .9 0.4 0.74 Avg gap score 1.Assurance BANK ICICI HDFC SBI BOB GAP SCORE 1.52 0.9 0.8 1.

68 0.8 0.Empathy BANK ICICI HDFC SBI BOB GAP SCORE 0.2 1 Avg gap score 0.78 0.78 1.6 0.67 Series1 1.32 0.2 0 ICICI HDFC Bank SBI BOB 0.4 1.67 Empathy 1.4 0.68 0.32 Reliability Gap score Minimum Maximum Bank BOB SBI .

74 0.4 0.01 0.6 0.Comparision of gap score Bank Dimension Reliability Tangibility Responsiveness Assurance Empathy ICICI 1.67 comparision of gap score 2 1.4 1.52 1.2 0 Reliability Tangibility Responsiveness Dimension Assurance Empathy ICICI HDFC SBI BOB .2 0.64 0.9 0.8 1.8 0.61 0.28 0.32 BOB 0.35 0.85 1.4 Avg gap score 1.42 1.68 HDFC 0.03 0.46 1.78 SBI 1.13 0.6 1.2 1 0.45 1.

6 0.68 1 0.67 1.14 1 1 unweighted avg servqual score 0.Bank ICICI HDFC SBI BOB Unweighted average Gap score 1.68 0. Reliability Bank weighted score .4 0.67 Series1 0.2 0 ICICI HDFC Bank SBI BOB BOB is having minimum unweighted average servqual score amongst all the four banks.8 0.2 1.14 0.

ICICI HDFC SBI BOB 1.6 0.2 1.4 1.5 1.5 1.6 1.2 0 ICICI HDFC SBI BOB Series1 Bank Reliability Weighted score Maximum Minimum Bank HDFC ICICI Tangibility .4 0.8 0.27 Reliability 1.23 1.11 1.11 1.27 Weighted score 1 0.23 1.

5 Series1 2 1.98 1.65 Tangibility 2.98 0.92 1.93 1.93 1 0.92 0.5 0 ICICI HDFC Bank SBI BOB Tangibility Weighted score Maximum Minimum Bank HDFC SBI Responsiveness .5 1.Bank ICICI HDFC SBI BOB weighted score 1.65 Weighted score 1.

01 1 0.62 0.6 0.2 0 ICICI HDFC SBI BOB 0.39 Series1 Bank Responsiveness Weighted score Maximum Minimum Bank BOB SBI Assurance .Bank ICICI HDFC SBI BOB weighted score 0.62 0.93 Weighted score 0.93 0.01 Responsiveness 1.39 1.2 1.4 0.8 0.

88 1.5 0 ICICI HDFC SBI BOB 0.94 0.94 0.88 2.5 3 2.Bank ICICI HDFC SBI BOB weighted score 0.92 Series1 Bank Assurance Weighted score Maximum Minimum Bank SBI HDFC Empathy .5 2 1.92 1.5 1 0.92 Assurance 3.92 weighted score 2.

37 1.Bank ICICI HDFC SBI BOB weighted score 1.11 Weighted score 1 0.6 1.6 0.11 0.2 0 ICICI HDFC SBI BOB 0.8 0.52 Series1 Bank Empathy Weighted score Maximum Minimum Bank ICICI BOB .7 0.2 1.4 1.52 Empathy 1.4 0.37 1.7 0.

Dimension Reliability Tangibility Responsiveness Assurance Empathy

Comparision of weighted score Bank ICICI HDFC 1.11 1.93 0.62 0.94 1.37 1.50 1.98 0.93 0.88 1.11

SBI 1.23 0.92 0.39 2.92 0.70

BOB 1.27 1.65 1.01 1.92 0.52

comparision of weighted score

3.50 3.00 2.50

weighted score

Bank ICICI
2.00 1.50 1.00 0.50 0.00 Reliability Tangibility Responsiveness Assurance Empathy

Bank HDFC Bank SBI Bank BOB

Dimension

Bank ICICI HDFC SBI BOB

Avg weighted score 1.19 1.28 1.23 1.27

1.3 1.28 Avg weighted score 1.26 1.24 1.22 1.2 1.18 1.16 1.14 ICICI 1.19

1.28

1.27

1.23 Series 1

HDFC Bank

SBI

BOB

HDFC is having highest average weighted score amongst all the four banks.

CHAPTER-6 KEY FINDINGS

Key Findings for general questions

 According to respondents the most preferred banking service is ATM service followed by mobile banking, internet banking and Retail banking.

 Most of the respondent’s account decisions are influenced by themselves.  Most important factor which respondent consider before opening an account is Future prospects followed by services provided, goodwill, financial position and current market position.  According to respondents most secure bank is SBI followed by BOB, HDFC and ICICI.  From the Chi square test of independence, it has been found that Preference towards public/private sector banks and age group are dependent on each other and the strength of the same is 71.42%.

Key Findings for servqual questions
Gap Score  For ICICI bank, the gap score for tangibility is minimum followed by empathy ,reliability, responsiveness and assurance.  For HDFC bank ,the gap score for reliability is minimum followed by tangibility, empathy, assurance and responsiveness.  For SBI bank, the gap score for assurance is minimum followed by tangibility, reliability, responsiveness and empathy.  For BOB bank, the gap score for tangibility is minimum followed by reliability ,assurance ,empathy and responsiveness.

Weight for five dimensions

responsiveness and empathy. For ICICI bank. responsiveness and assurance.  For BOB bank.  For HDFC bank. Weighted score  For ICICI bank. the highest weighted score is of dimension assurance followed by reliability. reliability. tangibility. empathy and responsiveness. responsiveness and empathy. tangibility. the highest weighted score is of dimension tangibility followed by empathy.  For SBI bank. reliability. the highest weight is given to tangibility followed by reliability.  For SBI bank. the highest weight is given to tangibility followed by empathy.  For BOB bank. the highest weight is given to assurance followed by tangibility. empathy and responsiveness. assurance and responsiveness. reliability. assurance and responsiveness. the highest weight is given to assurance followed by reliability. reliability. the highest weighted score is of dimension tangibility followed by reliability.  For HDFC bank. Comparison amongst banks on different dimensions Gap Score . responsiveness and assurance. empathy. empathy. the highest weighted score is of dimension assurance followed by tangibility.

7 0. HDFC.5 1.67  For reliability the minimum gap score is for HDFC bank followed by BOB.61 Empathy 0.03 1.85 0. ICICI and SBI.  For tangibility the minimum gap score is for HDFC bank followed by BOB. SBI and ICICI.4 1.Dimensions ICICI HDFC SBI BOB Reliability 1.98 0. SBI and ICICI.  For empathy the minimum gap score is for BOB bank followed by ICICI.35 0.13 0.14 0.01 assurance 1.46 0.68 0.78 1. Weighted score Dimensions Reliability tangibility Responsiveness assurance ICICI 1.42 Responsiveness 1.64 tangibility 0. HDFC and ICICI.01 1.68 1 0.2 1.94 HDFC 1. and SBI.  For responsiveness the minimum gap score is for BOB bank followed by HDFC.SBI and ICICI.37 1.92 0.4 0.88 SBI 1.93 0.92 BOB 1.32 0.28 1.52 .23 0.52 0.92 Empathy 1.74 0.93 0.39 2.65 1.27 1.11 0. Unweighted average Gap score 1.11 1.  For assurance the minimum gap score is for SBI bank followed by BOB.9 0.67 Bank ICICI HDFC SBI BOB BOB is having minimum unweighted average gap score amongst all the banks followed by HDFC .62 0.

SBI and BOB. SBI and ICICI.28 1. ICICI and HDFC. Bank ICICI HDFC SBI BOB Avg weighted score 1. BOB and SBI. For reliability the highest weighted score is of HDFC bank followed by BOB.  For responsiveness the highest weighted score is of BOB bank followed by HDFC.23 1. ICICI and SBI.19 1.  For empathy the highest weighted score is of ICICI followed by HDFC.  For assurance the highest weighted score is of SBI followed by BOB.  For tangibility the highest weighted score is of HDFC bank followed by ICICI.27 .

CHAPTER-7 CONCLUSION .SBI and ICICI.HDFC is having highest weighted score amongst all the banks followed by BOB.

.  BOB and HDFC have comparative lower unweighted average gap score.  For SBI and BOB bank assurance is best amongst all other dimensions. ATM is the preferred service. which shows that customers are satisfied about the safety of their tranctions with the bank. which shows that customers are satisfied with timely services.  SBI and ICICI have comparative higher unweighted average gap score.  There is a dependency relationship between age group and preference towards public/private sector banks. which shows that customers are more satisfied with HDFC bank for the services provided by them. error free records and sincerity of solving customers problems of the bank.  For HDFC bank Reliability is best amongst all other dimensions.  HDFC bank has the highest weighted score amongst all the banks.  For ICICI bank tangibility is best amongst all other dimensions. which shows that customers are satisfied with visually appealing facilities. online banking facilities. time saving technology facilities and facilities for senior citizens of the bank.  SBI is the most secure bank.

CHAPTER-8 RECOMMENDATIONS .

. respondents don t prefer it more because of safety issues so all the banks should make their customers aware about the benefits of internet banking and should provide accurate services .  In general responsiveness is the dimension for which the weighted score of all the four banks is less comparative to other dimension so every bank whether public sector or private sector should consider their responsibility towards their customers and should provide proper training to their employees so that they can satisfy their customer.  Though internet banking is convenient and user friendly. ICICI and HDFC bank should emphasize on improving their services on responsiveness and Assurance.  SBI and BOB should emphasize on improving their services on responsiveness and empathy. empathy is common dimension for which both the banks have got less weighted score which shows that customers are not getting individual attention so SBI and BOB should improve their services on empathy dimension. ICICI and HDFC should build confidence and trust in their customers regarding the safety of their transactions and other services provided by the banks.  In private sector banks. assurance is common dimension which have got less weighted score .  If we look at both the public sector banks.

indiamart.icicibank. www. www.about. www.in 10.bobibanking.statebankofindia.onlinesbi.com 8.com 15.in 14. www. www. www. www.CHAPTER-9 BIBLIOGRAPHY List of web-sites. www.business. www.org.com 9.com 6.com 13. www. www.com 16.rbi.com .mapsofindia. 1.iibf. www.com 4.banknetindia.bankofbaroda. www.hdfcbank.com 5. www. www. www.com 12.indbankonline.com 3.outsource2india.com 11.wisegeek.com 7.hdfcindia.org.com 2.

istheory.com 21.David S.:Service Marketing Integrated customer Focus Across The Firm” . Fourth Edition  Zillur Rahman.americanexpress. www.j. Seventh Edition . A.com List of books  Zeithmal V.com 18.. GremblerD..Levin. “Service Quality: Gap in the Indian Bank Industry” The ICFAI Journal of Marketing Management. www. www.www.wikipedia.Rubin –Statistics For Management.com 20. www..emeraldinsight.com 22.marketresearch. Bitner M. www. and Pandit A.efta.  Naresh K.www.org 19. Fifth Edition  Richard I.17.org 23.12manage.D.Malhotra : Marketing Research – An applied orientation.

.CHAPTER-10 Annexure (Questionnaire) Questionnaire Dear sir/madam We are students of NRIBM Noida. Presently working on a project on SERVQUAL Analysis of Banking services and comparative analysis of customer satisfaction of various banks.

We assure you that data provided by you shall be kept confidential.We request you to kindly fill the questionnaire below. 1) Which type of service do you prefer the most from the banks? a ATM services b Internet banking c Mobile banking d Retail banking 2) Your account decisions are influenced by a Oneself c Broker b Market research d friends/relatives 3) Which factors do you consider before opening account or in purchasing new plan in a particular bank? A Financial position B Current Market Position C Goodwill D Future prospects E Services provided 4) Which bank do you prefer the most from the following? a) Public sector bank b) Private sector bank 5) Which bank is more secure according to you? a ICICI b HDFC c SBI d BOB e others .

Please show the extent to which you believe this bank has the feature described in the statement. Here.SERVQUAL QUESTIONS The following statements relate to your feelings about the particular bank you have chosen. You should rank each statement as follows: Strongly Disagree 1 2 3 4 5 6 Strongly Agree 7 . we are interested in a number from 1 to 7 that shows your Expectations and perceptions about the bank.

The Bank maintains sufficient and easy to use Online Banking facility 11. Tangibility 5. drinking water facility etc. The Bank maintains visually appealing physical facilities like Reception. The employees are decently dressed. Customers feel safe about their transactions E-Score P-score . broachers. solving queries. 6. 2. 16. The Bank has accessible materials like forms. 15. The Bank has enough provision for facilities for senior citizens in terms of management of queue. 9. etc. Employees instill confidence In the customers 19. The Bank provides required and accurate information when needed. Employees in the bank are always willing to help you. Employees give sufficient attention to properly respond to the senior citizens. 3. Employees are good in explaining the various services the Bank provides. The Bank has different properly identified counters. stationary associated with services. The Bank provides timely service.Statement Reliability 1. 12. The Bank shows sincere interest in solving a customer’s problem. 4. 17. Employees in the bank give you prompt service. sufficient seating arrangement. The Bank insists on error free records services. 7. 14. The Bank has good ATM’s services 10. Responsiveness 13. Assurance 18. 8. Employees in the bank are never too busy to respond to your request. The Bank is well equipped with the time saving technology facility like phone banking and mobile banking.

5.Features 1. 2. The knowledge and courtesy of the bank's employees and their ability to convey trust and confidence. The bank's ability to perform the promised service dependably and accurately 3. The banks willingness to help customers and provide prompt service. Total: Points 100 Personal details: Name: Address: Contact no: Age: 1) 18 – 25 . The caring individual attention the bank provides its customers. The appearance of the banks physical facilities. equipment. 4. personnel and communication materials.

2) 26 -35 3) 36-45 4) 46-55 5) 55 and above Occupation: 1) Student 2) Government employee 3) Private employee 4) Professional/ self employed 5) Housewife Income: 1) Less than 10.000 4) 30.001 to 30.001 to 40.000 5) 40.001 and above .000 2) 10.001 to 20.000 3) 20.