Submitted To

Punjab Technical University, Jalandhar

In partial fulfillment of the requirements for the
degree of
Masters of Business Administration (M.B.A.)

Submitted By : Submitted to :
Sahil kukkar Prof.- Hardeep
Singh
M.B.A.-IVth Sem.
Roll No. :7043221461

SESSION – 2008-09
CT INSTITUTE OF MANAGEMENT & I.T.
JALANDHAR
 PREFACE

Someone has rightly said that practical experience is far better and closer to
the real world than mere theoretical exposure. The practical experience helps
the students to view the real business world closely, which in turn widely
influences their perceptions and arguments their understanding of the real
situation.
The phenomenon of creation is a long process requiring time, energy and
dedications well as skill and experience of those people engaged in the task,
ultimately in the outcome as the final form of embodiment of the creator’s
vision.
Research work constitutes the backbone of any management education
programme. A management student has to do research work quiet frequently
during his entire span.
The research work entitled “New Era in Indian Banking Sector” aims to
know the customer awareness regarding services & services provided by
public and private sector banks. For this purpose the respondents from
fazilka city have been chosen.
MBA is the stepping-stone to management care in order to reach practical
and concrete results. Our contemporary lives have been influenced by the
advancement and growth in banking sector. Wherein the banking sector of
21st century are unthinkable. This study aims to explore all such phases.
The course deals with matters, which are basic and should be known in
relation to banking sector. The topics are dealt with in a general manner.
There would be details about the profile of some banks, services availed by
customers in public as well as private sector banks, satisfaction level of
customers regarding the services they are availing etc.
 ACNOWELDGEMENT

A person always requires guidance and help of other to achieve success in

his mission, similarly it was not possible for me to complete my assignment.
I am indeed very much thankful to all the people who have helped me to
complete the project.

I am gratefully indebted to Prof. Hardeep Singh, my project guide for

providing me all the necessary help and required guidelines for the
completion of my project and also for the valuable time that she gave me
from her schedule.

Last but not least I am thankful to all my friends, who have been a constant
source of inspiration and information for me. I thanks to almighty for
showering his blessing.

____________
 TABLE OF CONTENTS

Sr.No. Particulars Page No.

1. CHAPTER-I: INTRODUCTION TO STUDY
• Introduction
• Definition of bank
• Classification of banks
• Era of new banking system in India
• Deposits
• Easy banking
• Plastic money
• credit card market
• Loans
• Money transfer
2. CHAPTER-II: MAJOR PLAYERS
• ICICI Bank
• HDFC Bank
• State Bank of India (SBI)
• Punjab National Bank
• Canara bank
3. CHAPTER-III: REVIEW OF LITERATURE
4. CHAPTER-IV: RESEARCH METHODOLOGY
• Sources of Data Collection
• Objectives of the Study
• Limitations of the Study
5. CHAPTER-V: DATA ANALYSIS AND ITS
INTERPRETATION
6. CHAPTER-VI : FINDINGS AND SUGGESTIONS
7. CHAPTER-VII: CONCLUSION
BIBLIOGRAPHY
ANNEXURE
• Questionnaire
 INTRODUCTION

The world of banking has assumed a new dimension at dawn of the 21st
century with the advent of tech banking, thereby lending the industry a
stamp of universality. In general, banking may be classified as retail and
corporate banking. Retail banking, which is designed to meet the
requirements of individual customers and encourage their saving, includes
payment of utility bills, consumer loans, credit cards, checking account and
the like. Corporate banking, on the other hand, caters to the needs of
corporate customers like bills discounting, opening letters of credit,
managing cash, etc.

Metamorphic changes took place in the Indian financial system during the
eighties and nineties consequent upon deregulation and liberalization of
economic policies of the government. India began shaping up its economy
and earmarked ambitious plan for economic growth. Consequently, a sea
change in money and capital markets took place. Applications of marketing
concept in the banking sector was introduced to enhance the customer
satisfaction. The policy of privatization of banking services aims at
encouraging the competition in banking sector and introduction of financial
services. Consequently, services such as Demat, Internet Banking, Portfolio
Management, Venture Capital, etc., came into existence to cater to the needs
of public. An important agenda for every banker today is greater operational
efficiency and customer satisfaction. The new watchword for the bank is
pretty ambitious : customer delight.
The introduction to the marketing concept to banking sector can be traced
back to American Banking Association Conference of 1958. Bank marketing
can be defined as the part of management activity, which seems to direct the
flow of banking services profitability to the customers. The marketing
concept basically requires that there should be thorough understanding of
customers need and to learn about market it operates in. Further the market
is segmented so as to understand the requirements of the customer at a profit
to the bank.

.INDIAN BANKING SYSTEM

Banking in India has its origin as early as the Vedic period. It was believed
that transition from money lending to banking must have occurred even
before Manu, the great Hindu Jurist, who has devoted a section of his work
to deposit advance and laid down rules relating to rates of interest. During
the Mogul period, the indigenous bankers played a very important role in
lending money financing foreign trade and commerce. During the days of
East India Company, it was the turn over of the agency houses to carry on
the banking business. The General Bank of India was the first joint sector
bank to be established in the Year 1786. The others that followed were the
Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported
to have continued till 1906 while the other two failed in the meantime.

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

1. The Bank of Bengal in 1809.

 2. The Bank of Bombay in 1840.
3. The Bank of Madras in 1843.

These three banks also known as Presidency Banks were independent units
and functioned well. These three banks were amalgamated in 1920 and a
new bank, the Imperial Bank of India was established on 27th January 1921.
with the passing of State Bank of India Act in 1955, the undertaking of
Imperial Bank of India was taken over by the newly constituted State Bank
of India. The Reserve Bank which is the Central Bank of India was created
in 1935 by passing Reserve Bank of India Act 1934. In the wale of Swadeshi
Movement, a number of banks with Indian management were established in
the country namely,

Punjab National Bank Ltd.

Bank of India Ltd.
Canara Bank of India Ltd.
Indian Bank Ltd.
The Bank of Baroda Ltd.
The Central Bank of India Ltd.

On July 19, 1969, 14 major banks of India were nationalized and on 15th
April, 1980 six more commercial private banks were also taken over by the
government.
 DEFINITION OF BANK

The Oxford dictionary defines the Bank as,

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

A Banking Company in India has been defined in the Banking Companies

act 1949,
“One which transacts the business of banking which means the
accepting, for the purpose of lending or investment of the deposits of money
from the public, repayable on demand, or otherwise and withdraw able be
cheque, draft, order or otherwise.”

The banking system is an integral subsystem of the financial system. It

represents an important channel of collecting small savings form the
households and lending it to the corporate sector.

The Indian banking system has Reserve Bank of India (RBI) as the apex
body for all matters relating to the banking system. It is the central Bank of
India. It is also known as the Banker To All Other Banks.
 CLASSIFICATION OF BANKS

On the basis of Ownership

PUBLIC SECTOR BANKS
Public sector banks are those banks that are owned by the government. The
government owns these banks. In India 20 banks were nationalized in 1969
and 1980 respectively. Social welfare is there main objective.

PIVATE SECTOR BANKS

These banks are those banks that are owned and run by private sector. An
individual has control over these banks in proportion to the shares of the
banks held by him.

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

According to the Law

SCHEDULED BANK
Schedule banks are the banks, which are included in the second schedule of
the banking regulation act 1965. According to this schedule bank:
 1. Must have paid-up capital and reserve of not less than Rs500, 000.
2. Must also satisfy the RBI that its affairs are not conducted in a manner
determinate to the interest of its depositors.

Schedule banks are sub-divided as:-

a) State co-operative banks
b) Commercial banks

NON-SCHEDULED BANKS
Non -schedule banks are the banks, which are not included in the second
schedule of the banking regulation act 1965. It means they do not satisfy the
conditions lay down by that schedule. These are the banks having paid up
capital, less than Rs.5Lakhs. They are further classified as follows:-
A. Central Co-operative banks and Primary Credit Societies.
B. Commercial banks

According to Function
COMMERCIAL BANKS
These are the banks that do banking business to earn profit. These banks
make loans for short to business and in the process create money. Credit
creation is the main function of these banks.

FOREIGN BANKS
These are those banks that are incorporated by foreign company. They have
set up their branches in India. These banks have their head offices in foreign
countries. Their principle function is to make credit arrangement or the
export and the import of the country and these banks deals in foreign
exchange.

INDUSTRIAL BANKS
Industrial banks are those banks that offer long term and medium term loan
to the industries and also work for their development. These banks help
industries in sale of their shares, debentures and bonds. They give loan to the
industries for the purchase of land an machinery.

AGRICULTURAL BANKS
Agricultural banks are those banks that give credit to agricultural sector of
the economy.
SAVING BANKS
The principle function of these banks is to collect small savings across the
country and put them to the productive use. In India department of post
office functions a savings banks.

CENTRAL BANK
Central Bank is the apex bank of the banking system of the country. it issues
currency notes and acts a banker's bank. Economic stability is the principle
function of this bank. In short, it regulates and controls the banking system
of the country. RBI is the Central Bank of India.
With years, banks are also adding services to their customers. The Indian
banking industry is passing through a phase of customers market. The
customers have more choices in choosing their banks. A competition has
been established within the banks operating in India.

With stiff competition and advancement of technology, the services

provided by banks has become more easy and convenient. 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.

This section of banking deals with the latest discovery in the banking
instruments along with the polished version of their old systems.
 ERA OF NEW BANKING SYSTEM IN INDIA

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. Banks that employ IT solutions are perceived
to be ‘futuristic’ and proactive players capable of meeting
the multifarious requirements of the large customers base.
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.

DEPOSITS
The main basic working of the bank is to operate and open maximum
accounts, provide loans to the general public and earn interest. There are
mainly four types of accounts which provides various loan facilities.

Types of Accounts

Saving Current Recurring Fixed

Account Account Deposit Account Deposit Account
SAVINGS ACCOUNT
• To open the saving account in the bank firstly you should be have
introducer’s account number which already have the account in that
bank.
• To open the a/c the opening amount should be according to the terms
and conditions of the bank and the same balance should be maintained
by the accountee.
• If your balance decreases from the minimum amount than you should
to pay 2% on the balance.
• If you want cheque facility then you should have minimum 500/- in
your account and Rs. 2.50 charge as per cheque.
• Interest paid by the bank is @ 4% per annum on the total balance with
half yearly interest.
• Interest is paid on the minimum amount from the month’s 10th day to
last working day but if we deposit money after 10th than we doesn’t
get any interest on it or we withdraw money before last day then we
got the interest on remain amount.
• There are some restrictions on withdraw. You can withdraw 50 times
in total 6 months.

CURRENT ACCOUNT:
• To open the current account in the bank firstly you should be have
introducer’s account number which already have the account in that
bank.
• There are some conditions for the minimum balance and your balance
can go to that level of the amount.
 • There is no interest paid by the bank for accountee.
• If you want cheque facility then you should have minimum 500/- in
your account and Rs. 2.50 charge as per cheque.
• Accountee has Cheque collection facility.
• Accountee has overdraft facility
• There is no limit for money transaction
• For cheque and draft there is service charge which does the accountee
pay ?

FIXED DEPOSIT:
• You can deposit the money as a fixed amount for a specific time
period.
• The interest paid by the bank is depending upon the period of the
deposit.
• There is no withdrawing facility.
• Upto 75% amount you can withdraw the money but as a loan (but
with 2% interest depending on the rate of deposit)

RECURRING DEPOSIT :
• You can deposit the fixed money per month or in any time period.
• Same facility as in fixed deposit.
• The interest paid by the bank is depending upon the period of the
deposit.
• There is no withdrawing facility.
 EASY BANKING

This section is fully dedicated to the Tech Banking. A decade before, it was
tough to belief that banking sector will be at a finger tip. Now its possible. A
mobile hand set with a connection is the only instrument needed to make a
gateway to your banking transaction, the latest innovation of technology.
Apart from the Mobile Banking, including of SMS Banking, Net Banking
and ATMs are the major steps taken by the banks in India towards
modernisation. With all these devises and systems, there is a complete
freedom to experience.
Check your account, transfer your fund, make payments and what more, do
anything of everything what has been followed in physical banking since
ages. But this time no standing for hours in front of cash counter and no time
boundation in withdrawing your own money.

Automated Teller Machine (ATM)

The first bank to introduce the ATM
concept in India was the Hongkong
and Shanghai Banking Corporation
(HSBC). It was in the year 1987.
Now, almost every commercial banks
gives ATM facilities to its customers.
The first bank to cross 1,000 marks in installing ATMs in India is ICICI.
SBI is following the concept of 'ATMs in Quantity'. But Private Sector
Banks have taken the lead. ICICI, AXIS, HDFC and IDBI counts more than
50% of the total ATMs in India.
Public Sector Banks are also taking the installation of ATMs seriously for
Indian market. They are either setting up their own ATM centres or entering
into tie-ups with other banks. The Corporation Bank has the second largest
network of ATMs amongst the Public Sector Banks in India.

The Indian banks have also come up with a 'Swadhan' scheme. Under this
scheme, the banks can use each other's ATM at a cost, usually Rs. 35 extra
from their customers. The main feature of 'Swadhan Card' are as follows:
• No exchange fee charged to change an old ATM card for a Swadhan
card.
• Rs. 3,000 fixed as the ceiling on withdrawal.
• Exception made for select customers who can withdraw up to
Rs10,000. Still, this is lower than the average withdrawal of Rs15,000
by regular ATMs.
• IBA gives banks the discretion to decide a higher maximum amount
for withdrawal.
• Transactions conducted through any of the member banks appear on a
bank statement, which is given only by your own bank.
• All transactions conducted in any of the member banks appear on the
bank statement, but only your own bank will provide this.

Cost of setting ATM center

Approximately Rs.1mn it takes for the setting of an ATM center. Rs.1.2-
1.4mn per annum is needed for its maintenance. To keep the cost in
equilibrium position, there should be around 250-300 transactions per day
per ATM.
To overcome or to reach the break-even point, the banks are always
encouraging its customers to use the ATMs. Banks like HDFC and Citibank
even charge penalty if a customer visits the branch.
NCR India and HMA Die bold are the main two players in this market to set
up ATMs in India. The market, according to them is whopping 100% and
they are very optimistic to see 30,000 ATMs in India very soon

Mobile Banking In India

"The account that travels with you". This is needed
in t oday's fast business environment with unending
deadlines for fulfillment and loads of appointments
to meed and meetings to attend. With mobile
banking facilities, one can bank from anywhere, at
anytime and in any condition or anyhow. The
system is either through SMS or through WAP.
(Check out for SMS Banking under different head)
Mobile Banking is the hottest area of development in the banking sector and
is expected to replace the credit/debit card system in future. In past two
years, mobile banking users has increased three times if we compare the use
of either debit card or credit card. Moveover 85-90% mobile users do not
own credit cards.

Mobile banking uses the same infrastructure like the ATM solution. But it is
extremely easy and inexpensive to implement. It reduces the cost of
operation for bankers in comparison to the use of ATMs.
Using compact HTML and WAP technologies, the following operations can
be conducted through advanced mobile phones which can is further viewed
on channels such as the Internet via the Channel Manager.
• Bill payments
• Fund transfers
• Check balances
• Any many more which is also available in SMS Banking
In countries like Korea, two SIM Card is used in mobile phones. One for the
telephonic purpose and the other for banking. Bank account data is
encrypted on a smart-card chip. About 3.3 million transactions were reported
by Bank of Korea in 2004.
SMS Banking
Businesses are in move. So is to be your money. You may have to thank the
banks which are providing banking at the send- of-your-sms. The technology
is at its highest level to move your money while you are on the move. If you
are having non-WAP enabled mobile handset, you can use the facility of
SMS services. The following operations can be easily used by the service
provider:
• Balance enquiry
• Last three transactions
• Cheque payment status
• Cheque book request
• Statement request
• Demat - Free Balance Holding
• Demat - Last two Transactions
• Bill Payment
The SMS facility brings peace of mind to customers and opens doors to
many more technological possibilities and innovative services. It is very
similar to how an ATM works.
To use ATM, a card is necessary and to use SMS service, a mobile phone is
needed. In both the cases, secret number is necessary to access.
SMS banking is also very much safe. First, one authenticates the mobile
number with the authentications key. Second, the customer uses secret
Mobile Personal Iddentification Number (MPIN).
A new concept has been developed by Bank of Punjab Ltd. They call it
"Mobile Wallet". With the support of this technology, a customer can make
payment and receive payment of account of buy/sell (merchants) through
SMS.
In this system, a buyer sends a message for buying and the bank in return
sends a message confirming the purchase both to the merchant as well as to
the buyer. Debit card number is the key field which is used for the
authenticity of the customer.

The processes of the service are simplified as under:

• Customer has to send "REG(one space)(Account Number)(one space)
(Debit Card Number)" as an SMS to bank's mobile number
9810999992 for registration. For e.g. "REG 06SB11052122
5047531105000109109" Bank will confirm the registration with the
return message.
• After that customer will visit nearest branch to collect the service
brochure and get it filled.
• Registration will be a one time process.Once registered, customer
would be able to buy things from any of the registered merchant of the
bank.
• Customer need to send "PAY(one space)(merchant code)(one space)
(amount)(one space)(Debit card number)" as an SMS on bank's
mobile number 9810999992. For e.g for making a payment of Rs.
56.16 to merchant BOPSTC from card no. 5047531105000109109,
Send the following message "PAY BOPSTC 56.16
5047531105000109109"
• The transaction will be validated online and immediately funds will be
transferred from customer account to merchant account.
• Bank would send transaction confirmation as an message to both
merchant and customer(buyer).
 • An SMS report will be sent to both merchant & buyer everyday
stating the total number of transaction & total amount of transaction
made during previous one day.

Some Useful Tips

Generally with 3 invalid login attempts, SMS Banking services are locked.
Immediately contact the branch for unlocking the services. In case one
forgets the password, obtain a new password from the branch. To log out,
choose the "Log out" option in the handset and SMS Banking session ends.
Net Banking
Net Banking is conducting ones banking or
bank account online through a computer and a
net connection. The system is updated
immediately after every transaction
automatically. In other words it is said that it
is updated 'on-line, real time'. Through netbanking one can check the status
of his/her account, place queries and also can be facilitated with a wide
range of transactions simultaneously.
In India, the regulatory body has not yet sanctioned virtual bank, in abroad
there are banks like EGG Bank or NET Bank, which only have a virtual
presence without any physical branches.
Net Banking has three basic features. They are as follows:
• The banks offer only relevant informations about their products and
services to the mass.
• Few banks provide interaction facility between the banks and its
customers.
• Banks are coming up with arrangements of utility payments, like
telephone bills, electricity bills, etc.
The current statistics show that hardly 10 per cent of Indian customers uses
the internet for banking. Among all the facilities provided, the maximum of
them uses only for checking balance or requesting for a cheque book. Very
few customers uses the advance interactive services provided by the banks.
According to HDFC and ICICI Bank, 17 per cent of ICICI customers use the
Internet for banking and 10 per cent of HDFC customers prefer it.

Cost of installation of services

For basic features, the cost for providing such services to the banks come
around Rs 40 lakh to Rs 50 lakh. For the third level service or sophisticated
services, the investments mount to the tune of Rs 4 crore to Rs 5 crore.
These investments is just a fraction if compared to the operations of the bank
using physical infrastructure.

Services provided by Net Banking

Queries
• Check Balance
• See Statement
• Inquire about cheque status
• Ask for a Statement
• Ask for a Cheque Book
• Inquire about Fixed Deposit
• Inquire about TDS details
• See Demat Account
• Update profile

Transactions
• Stop a Cheque
• Pay Bills
• Ask for a Demand Draft
• Transfer funds between your accounts
• Transfer funds to a third party
• Request for a new Fixed Deposit
• Shop Online
 • Pay Bank Credit Card Dues
Advantages of Net Banking
• It removes the traditional geographical barriers as it could reach out to
customers of different countries/legal jurisdiction. This has raised the
question of jurisdiction of law/supervisory system to which such
transactions should be subjected.
• It has added a new dimension to different kinds of risks traditionally
associated with banking, heightening some of them and throwing new
risk control challenges.
• Security of banking transactions, validity of electronic contract,
customers' privacy, etc., which have all along been concerns of both
bankers and supervisors have assumed different dimensions given that
Internet is a public domain, not subject to control by any single
authority or group of users.
• It poses a strategic risk of loss of business to those banks who do not
respond in time to this new technology, being the efficient and cost
effective delivery.
 PLASTIC MONEY

Credit Card
Credit cards in India is gaining ground. A
number of banks in India are encouraging people
to use credit card. The concept of credit card was
used in 1950 with the launch of charge cards in
USA by Diners Club and American Express. Credit card however became
more popular with use of magnetic strip in 1970.
Credit card in India became popular with the introduction of foreign banks
in the country. Credit cards are financial instruments, which can be used
more than once to borrow money or buy products and services on credit.
Basically banks, 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
• ICICI credit card
• HDFC credit card
• IDBI credit card
• HSBC credit card
• Citibank Credit Card
Precautions taken after receiving credit card
To Avoid:
• Bending the Card.
• Exposure to electronic devices and gadgets.
• Direct exposure to sunlight.
• Be cautious about disclosing your account number over the phone
unless you know you're dealing with a reputable company.
• Never put your account number on the outside of an envelope or on a
postcard.
• Draw a line through blank spaces on charge or debit slips above the
total so the amount cannot be changed.
• Don't sign a blank charge or debit slip.
• Tear up carbons and save your receipts to check against your monthly
statements.
• Cut up old cards - cutting through the account number - before
disposing of them.
• Open monthly statements promptly and compare them with your
receipts. Report mistakes or discrepancies as soon as possible to the
special address listed on your statement for inquiries. Under the
FCBA (credit cards) and the EFTA (ATM or debit cards), the card
issuer must investigate errors reported to them within 60 days of the
date your statement was mailed to you.
• Keep a record - in a safe place separate from your cards - of your
account numbers, expiration dates, and the telephone numbers of each
card issuer so you can report a loss quickly.
• Carry only those cards that you anticipate you'll need.
To Do:
• Please sign on the signature panel on the reverse of the Card
immediately with a non-erasable ball-point pen (preferably in black
ink). This will ensure that the benefits of membership are yours and
yours alone.
• Keep the Card in a prominent place in your wallet. You will notice if
it is missing.

Resons credit card being rejected at retail outlet:

• One may have exceeded the borrowing limit or defaulted (constantly)
on minimum payment due.
• The Card is hotlisted.
• The card has crossed its expiration date.
• Non-receipt of dues of one-card blocks future transactions on any
other card(s) held of the same card-issuing bank.
• The magnetic stripe on the reverse of the card is damaged i.e. has
been scratched or exposed to continuous heat/direct sunlight or
magnetic field-like card kept near a TV set / other electronic
appliances.
• Systems or technology failures have in rare instances also led to non
acceptance of cards when swiped through an Electronic Terminal.

CREDIT CARD MARKET

MasterCard
MasterCard is a product of MasterCard International and along with VISA
are distributed by financial institutions around the world. Cardholders
borrow money against a line of credit and pay it back with interest if the
balance is carried over from month to month. Its products are issued by
23,000 financial institutions in 220 countries and territories. In 1998, it had
almost 700 million cards in circulation, whose users spent $650 billion in
more than 16.2 million locations.

VISA Card
VISA cards is a product of VISA USA and along with MasterCard is
distributed by financial institutions around the world. 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.
Nearly 600 million cards carry one of the VISA brands and more than 14
million locations accept VISA cards.

The following are some of the varieties of credit cards in India

• ANZ - Gold
• ANZ - Silver
• Bank Of India - Indiacard
• BoB - Exclusive
• BoB - Premium
• Canara Bank - Cancard
• ICICI Sterling Silver Credit Card
• ICICI Solid Gold Credit Card
 • ICICI True Blue Credit Card
• SBI Card
• Stand.chart - Gold
• Stand.chart - Executive
• Stand.chart - Classic
• Thomas Cook Standard Chartered Global Credit Card

Standard segregation of credit cards

• Standard Card - It is the most basic card (sans all frills) offered by
issuers.
• Classic Card - Brand name for the standard card issued by VISA.
• Gold Card/Executive Card - A credit card that offers a higher line of
credit than a standard card. Income eligibility is also higher. In
addition, issuers provide extra perks or incentives to cardholders.
• Platinum Card - A credit card with a higher limit and additional perks
than a gold card.
• Titanium Card - A card with an even higher limit than a platinum
card.
The following are some of the plus features of credit card in India
• Hotel discounts
• Travel fare discounts
• Free global calling card
• Lost baggage insurance
• Accident insurance
• Insurance on goods purchased
• Waiver of payment in case of accidental death
• Household insurance
Some facts of credit cards
• The first card was issued in India by Visa in 1981.
• The country's first Gold Card was also issued from Visa in 1986.
• The first international credit card was issued to a restricted number of
customers by Andhra Bank in 1987 through the Visa program, after
getting special permission from the Reserve Bank of India.
• The credit cards are shape and size, as specified by the ISO 7810
standard. It is generally of plastic quality. It is also sometimes known
as Plastic Money.
 LOANS

Banks in India with the way of development have become easy to apply in
loan market. 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, one can get a sanctioned loan amount between Rs 25,000
to 10,00,000 depending upon the profile of person applying for the loan.
SBI, ICICI, HDFC, HSBC are some of the leading banks which deals in
Personal Loan.
Almost all the banks have jumped into the market of car loan which is also
sometimes termed as auto loan. It is one of the fast moving financial product
of banks. 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.
Loan against shares is very easy to get because liquid guarantee is involved
in it.
Home loan is the latest craze in the banking sector with the development of
the infrastructure. Now people are moving to township outside the city.
More number of townships are coming up to meet the demand of 'house for
all'. The RBI has also liberalised the interest rates of home loan inorder to
match the repayment capability of even middle class people. Almost all
banks are dealing in home loan. Again SBI, ICICI, HDFC, HSBC are
leading.
The educational loan, rather to be termed as student loan, is a good banking
product for the mass. Students with certain academic brilliance, studying at
recognised 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.
 MONEY TRANSFER

Beside lending and depositing money, banks

also carry money from one corner of the
globe to another. This act of banks is know n
as transfer of money. This activity is termed
as remittance business. Banks generally
issue Demand Drafts, Banker's Cheques,
Money Orders or other such instruments for
transferring the money. This is a type of
Telegraphic Transfer or Tele Cash Orders.
It has been only a couple of years that banks have jumped into the money
transfer businessess in India. The international money transfer market grew
9.3% from 2003 to 2004 i.e. from US$213 bn. to US$233 bn. in 2004.
Economists say that the market of money transfer will further grow at a
cumulative 10.1% average growth rate through 2008.
With the use of high technology and varieties of product it seems that "Free"
money transfers will become commonplace. We will see more bundling of
tailored money services by banks and non-traditional entrants that will
include "free" money transfers. Many banks will even use money transfer
services as loss-leaders inorder to generate account openings and cross-sell
opportunities. 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.
ATM money transfer card products have had terrible bank adoption rates
since being introduced in the last three to four years. 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. Money transfer to
India is one of the most important part played by the banks. This service
provide peace of mind to either the NRIs or to the visitors to India. Many
Indian banks have ATM'S (automatic teller machine), enable to draw foreign
currency in India.
By 2007, we will see a good percent of all foreign-born households doing
some level of online banking. First-mover banks will start having a window
of opportunity to include online transfer functionality within the next couple
of years, which currently frequents traditional money transmitters such as
Western Union. There is a terrific opportunity for banks and non-banks to
offer more robust global inter-institutional funds transfer services online.
More than half of Western Union's customers today are already banked, and
most do not have an alternative product marketed by their bank that is
painless, quick, and cost-effective. That will change as banks offer transfer
services through their online channel.

The following are the details of few banks to check for transferring money to
India

Money Transfer to India

Apart from banks few financial institutions and online portals gives services
of money transfer to India. Some of them are as under:
• Western Union Money Transfer
• Union Money Transfer
• IKobo Money Transfer
 • Cash2india.com
• Remit2india
• Samachar Money Transfer
• Timesofmoney.com
• Wells Fergo International Money Transfer
• Travellers Express
• Money Gram International

Visa Money Transfer

Visa has recently introduced the 'Visa Money Transfer' option for its savings
and current account holder of any bank with a visa debit card. This facility
helps its customer to transfer funds from his bank account to any visa card,
either debit or credit within India.
A Visa Money Transfer is of similar kind, in many respects, to the third-
party fund transfer option given by some banks to its account holders
through e-cheque, but this is restricted to only visa cardholders.

How to transfer money?

• Log on to your bank account through your respective bank websites.
• Fill the beneficiary details like visa card numbers, name, address and
then specify the amount that needs to be transferred. For bank account
specify the visa card number and credit card number for paying credit
card bill.
• Click on to VISA Transfer Payments button.
• Transfer immediately or on schedule date. Your account will be
debited according to the date mentioned.
Notable points of Visa Money Transfer
• The time taken for money transfers could be the same or even more
than that of a demand draft i.e. two or three days or even more.
• Currently there are no charges but limits has been set by certain banks
on the current transfers.
• It is available in 150 cities across the country now.
 ICICI BANK

ICICI Bank is India's second-largest bank with total assets of about Rs.
2,513.89 bn (US$ 56.3 bn) at March 31, 2006 and profit after tax of Rs.
25.40 bn (US$ 569 mn) for the year ended March 31, 2006 (Rs. 20.05 bn
(US$ 449 mn) for the year ended March 31, 2005). ICICI Bank has a
network of about 614 branches and extension counters and over 2,200
ATMs. 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, life and non-life insurance, venture capital and asset
management. ICICI Bank set up its international banking group in fiscal
2002 to cater to the cross border needs of clients and leverage on its
domestic banking strengths to offer products internationally. ICICI Bank
currently has subsidiaries in the United Kingdom, Russia and Canada,
branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai
International Finance Centre and representative offices in the United States,
United Arab Emirates, China, South Africa and Bangladesh. Our UK
subsidiary has established a branch in Belgium. ICICI Bank is the most
valuable bank in India in terms of market capitalisation.

ICICI Bank's equity shares are listed in India on the 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).
ICICI Bank has formulated a Code of Business Conduct and Ethics for its
directors and employees.

At June 5, 2006, ICICI Bank, with free float market capitalization* of

about Rs. 480.00 billion (US$ 10.8 billion) ranked third amongst all the
companies listed on the Indian stock exchanges.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian

financial institution, and was its wholly-owned subsidiary. ICICI's
shareholding in ICICI Bank was reduced to 46% through a public offering of
shares in India in fiscal 1998, an equity offering in the form of ADRs listed
on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura
Limited in an all-stock amalgamation in fiscal 2001, and secondary market
sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI
was formed in 1955 at the initiative of the World Bank, the Government of
India and representatives of Indian industry. The principal objective was to
create a development financial institution for providing medium-term and
long-term project financing to Indian businesses. In the 1990s, ICICI
transformed its business from a development financial institution offering
only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of
subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first
Indian company and the first bank or financial institution from non-Japan
Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the

context of the emerging competitive scenario in the Indian banking industry,
and the move towards universal banking, the managements of ICICI and
ICICI Bank formed the view that the merger of ICICI with ICICI Bank
would be the optimal strategic alternative for both entities, and would create
the optimal legal structure for the ICICI group's universal banking strategy.
The merger would enhance value for ICICI shareholders through the merged
entity's access to low-cost deposits, greater opportunities for earning fee-
based income and the ability to participate in the payments system and
provide transaction-banking services. The merger would enhance value for
ICICI Bank shareholders through a large capital base and scale of
operations, seamless access to ICICI's strong corporate relationships built up
over five decades, entry into new business segments, higher market share in
various business segments, particularly fee-based services, and access to the
vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of
Directors of ICICI and ICICI Bank approved the merger of ICICI and two of
its wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. The
merger was approved by shareholders of ICICI and ICICI Bank in January
2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by
the High Court of Judicature at Mumbai and the Reserve Bank of India in
April 2002. Consequent to the merger, the ICICI group's financing and
banking operations, both wholesale and retail, have been integrated in a
single entity.
 HDFC BANK
The Housing Development Finance Co-Operation Limited (HDFC) was
amongst the first to achieve an ‘in princple’ approval from the Reserve Bank
of India (RBI) to set up a bank in the private sector as part of the RBI’s
liberalization of the Indian Banking Industry. It was incorporated in August
1994 in the name of ‘HDFC Bank Limited’ with its registered office in
Mumbai. It began its operations as a scheduled commercial Bank in January
1995.
LINEAGE :

HDFC and NAT WEST Group, UK-both are promoters of HDFC Bank. In
1994 HDFC Bank, into a strategic alliance with the Natwest group in UK,
which acquired 20% of its equity. The promoter of the Bank, HDFC is
India’s premier housing finance company. It enjoys an inacceptable track
record in India as well as in International Market.
Since its inception in 1997, HDFC has maintained a consistent growth
in its operations and profitability and over the past 5 years it has achieved
annual growth rate of 25-30%. Its outstanding loan portfolio covers over a
million dwelling units.
HDFC Bank :

The banking industry was thrown open to private sector by Government of

India in 1992 in the constitution of its policy of economic liberalization and
privatization. HDFC Bank is a scheduled commercial bank, promoted by the
largest bank of USA and Housing Development Finance Co-Operation
(which was promoted by GIC, LIC, World Bank & UTI).
Mission Statement
 • To build a sound customer franchise across distinct businesses so as to
be the preferred provider of banking services in the niche segments
that the bank operates in and to achieve healthy growth in
profitability, consistent with the bank’s risk appetite.

• To ensure the highest level of ethical standards, professional integrity

and regulatory compliance.
Organization Structure :

HDFC Bank is a two tier organization, head office and Branch Office. It has
been done so as to make decision making more responsive to the needs of
the customers. The branches are directly linked to the head office at
Mumbai. The bank presently has 131 branches.
Business Focus:

 Commercial Sector
 Forex Business
 Personal Banking Segment
Distribution Network :

HDFC Bank’s head-quarter is in Mumbai. It presently has a network of

around 131 branches and ATMs spread across the country. The branch
network will be extended to cover major cities in India, as well as some
semi-urban locations in line with RBI guidelines.
Mumbai, Calcutta, Chennai and Delhi are supported by phone Banking
Centres.
 STATE BANK OF INDIA
The origins of the State Bank of India date back to 1806 when the Bank of
Calcutta (later called the Bank of Bengal) was established. In 1921, the Bank
of Bengal and two other banks (Bank of Madras and Bank of Bombay) were
amalgamated to form the Imperial Bank of India. In 1955, the Reserve Bank
of India acquired the controlling interests of the Imperial Bank of India and
State Bank of India was created by an act of Parliament to succeed the
Imperial Bank of India. The state Bank of India is the largest commercial
bank in India. The State Bank of India is the largest commercial banks in
India in terms of profits, assets, deposits, branches and employees as on 31 st
March 2005, the Bank possessed total assets worth Rs. 26,15,049 million
(US $ 59951 Million) and the total deposits worth Rs. 1968211 million (US
$ 45122 million).

Subsidiary of State Bank of India

• State Bank of Bikaner & Jaipur

• State Bank of Hyderabad
• State Bank of Indore
• State Bank of Mysore
• State Bank of Saurastra
• State Bank of Travancore

Worldwide network of SBI Bank

SBI Bank India has 52 Foreign Offices in 34 countries. SBI India serves the
international needs of its foreign customers, in addition to conducting retail
operations. The focus of the offices of SBI is India-related business.
PROFIILE OF PUNJAB NATIONAL BANK
Punjab National Bank was established in 1895 at Lahore, undivided India,
Punjab National Bank has the distinction of being the first bank to have been
started solely with Indian Capital. From its modest beginning, the bank has
grown in size and stature to become a first line banking institution in India at
present. The bank was nationalized in July 1969 along with 13 other banks.
The Punjab National Bank is now a corporation established by an act of
parliament with a common seal and is wholly owned by Government of
India. It has build strong links with trade and industry.
GROWTH OF PNB:-
Punjab National Bank with 4497 offices and the largest nationalised bank is
serving its 3.5 crore customers with the following wide variety of banking
services:
• Corporate banking
• Personal banking
• Industrial finance
• Agricultural finance
• Financing of trade
• International banking
Punjab National Bank has been ranked 38th amongst top 500 companies by
The Economic Times. PNB has earned 9th position among top 50 trusted
brands in India.

Punjab National Bank India maintains relationship with more than 200
leading international banks world wide. PNB India has Rupee Drawing
Arrangements with 15 exchange companies in UAE and 1 in Singapore.
 REVIEW OF LITERATURE

Modern banking system is totally different from past banking system. The
Indian banking industry juxtaposed with other countries, recognizing the
differences between the developed and the emerging economies at present .

I. Status of Indian banking industry :

First, The structure of the industry : In the world’s top 1000 banks,
there are many more large and medium-sized domestic banks from the
developed countries than from the emerging economies. Illustratively,
according to The Banker 2004, out of the top 1000 banks globally, over 200
are located in USA, just above 100 in Japan, over 80 in Germany, over 40 in
Spain and around 40 in the UK. Even China has as many as 16 banks within
the top 1000, out of which, as many as 14 are in the top 500. India, on the
other hand, had 20 banks within the top 1000 out of which only 6 were
within the top 500 banks. This is perhaps reflective of differences in size of
economies and of the financial sectors.

Second, the Share of bank assets in the aggregate financial sector

assets : In most emerging markets, banking sector assets comprise well over
80 per cent of total financial sector assets, whereas these figures are much
lower in the developed economies. Furthermore, deposits as a share of total
bank liabilities have declined since 1990 in many developed countries, while
in developing countries public deposits continue to be dominant in banks. In
India, the share of banking assets in total financial sector assets is around 75
per cent, as of end-March 2004. There is, no doubt, merit in recognizing the
importance of diversification in the institutional and instrument-specific
aspects of financial intermediation in the interests of wider choice,
competition and stability. However, the dominant role of banks in financial
intermediation in emerging economies and particularly in India, will
continue in the medium-term; and the banks will continue to be “special” for
a long time. In this regard, it is useful to emphasize the dominance of banks
in the developing countries in promoting non-bank financial intermediaries
and services including in development of debt-markets. Even where role of
banks is apparently diminishing in emerging markets, substantively, they
continue to play a leading role in non-banking financing activities, including
the development of financial markets.

Third, Internationalisation of banking operations : The foreign

controlled banking assets, as a proportion of total domestic banking assets,
increased significantly in several European countries (Austria, Ireland,
Spain, Germany and Nordic countries), but increases have been fairly small
in some others (UK and Switzerland). Amongst the emerging economies,
while there was marked increase of foreign-controlled ownership in several
Latin American economies, the increase has, at best, been modest in the
Asian economies. Available evidence seems to indicate some correlation
between the extent of liberalisation of capital account in the emerging
markets and the share of assets controlled by foreign banks. As per the
evidence available, the foreign banks in India, which are present in the form
of branches, seem to enjoy greater freedom in their operations, including
retail banking, in the country on par with domestic banks, as compared with
most of the other developing countries. Furthermore, the profitability of their
operations in India is considerably higher than that of the domestically-
owned banks and, in fact, is higher than the foreign banks’ operations in
most other developing countries. India continues to grant branch licences
more liberally than the commitments made to the WTO.

Fourth, Share of state-owned banks in total banking sector assets

Emerging economies, with predominantly Government-owned banks, tend
to have much higher state-ownership of banks compared to their developed
counterparts. While many emerging countries chose to privatise their public
sector banking industry after a process of absorption of the overhang
problems by the Government, we have encouraged state-run banks to
diversify ownership by inducting private share capital through public
offerings rather than by strategic sales and still absorb the overhang
problems. The process has helped reduce the burden on the Government,
enhance transparency, encourage market discipline and improve efficiency
as reflected in stock market valuation, promote efficient new private sector
banks, while drastically reducing the share of the wholly government owned
public sector banks in a rapidly growing industry. Our successful reform of
public sector banks is a good example of a dynamic mix of public and
private ownership in banks.

A noteworthy feature of banking reforms in India is the growth of

newly licensed private sector banks, some of which have attained globally
best standards in terms of technology, services and sophistication. In many
respects related to performance, these domestically promoted banks have
surpassed branches of foreign banks in India, and could be a role model for
other banks.
II. Challenges Ahead
There are also some challenges which can have a key bearing on the ability
of Indian banks to remain competitive and enhance soundness. Needless to
state, these are more in the nature of random thoughts, rather than any
structured thinking, and are meant to invite discussion.

First, Cost Management. Cost containment is a key to sustainability

of bank profits as well as their long-term viability. To highlight this point,
let me, take recourse to some figures. In 2003, operating costs of banks as a
proportion of total average assets1[1] in the UK were 2.12 per cent, for those
in Switzerland they were 2.03 per cent, and less than 2 per cent in major
European economies like Sweden, Austria, Germany and France. In India,
however, in 2003, operating costs as proportion of total assets of scheduled
commercial banks stood at 2.24 per cent. The tasks ahead are thus clear and
within reach.

Second, Recovery Management. This is a key to the stability of the

banking sector. There should be no hesitation in stating that Indian banks
have done a remarkable job in containment of non-performing loans (NPL)
considering the overhang issues and overall difficult environment. Let me
add that for 2004, the net NPL ratio for the Indian scheduled commercial
banks at 2.9 per cent is ample testimony to the impressive efforts being
made by our banking system. In fact, recovery management is also linked to
the banks’ interest margins. We must recognise that cost and recovery
management supported by enabling legal framework hold the key to future
health and competitiveness of the Indian banks. No doubt, improving

1
recovery-management in India is an area requiring expeditious and effective
actions in legal, institutional and judicial processes.

Third, Technological Intensity of Banking: This is one area where

perhaps India needs to do significant ‘catching up’, notwithstanding the
rapid strides made over the last few years, though data on this score are
difficult to come by. Some available figures indicate that in late 1999, the
percentage of customers using online banking was less than 1 per cent in
India, compared with anywhere between 6-30 per cent in developed
economies like US, UK, Germany, Finland and Sweden. Even in Latin
America, these figures are much higher than for India. While admittedly the
numbers for India are likely to be much higher at present than these figures
suggest, so would be the case for these other economies as well. The issue,
therefore, remains what has been the extent of ‘catching up’ by India on this
score? In fact, this seems somewhat intriguing: India happens to be a world
leader in information technology, but its usage by our banking system is
somewhat muted. It is wise for Indian banks to exploit this globally state-of-
art expertise, domestically available, to their fullest advantage.

Fourth, Risk Management. Banking in modern economies is all

about risk management. The successful negotiation and implementation of
Basel II Accord is likely to lead to an even sharper focus on the risk
measurement and risk management at the institutional level. Thankfully, the
Basel Committee has, through its various publications, provided useful
guidelines on managing the various facets of risk. The institution of sound
risk management practices would be an important pillar for staying ahead of
the competition. Banks can, on their part, formulate ‘early warning
indicators’ suited to their own requirements, business profile and risk
appetite in order to better monitor and manage risks.

Fifth, Governance. The recent irregularities involving accounting

firms in the US have amply demonstrated the importance of good corporate
governance practices. The quality of corporate governance in the banks
becomes critical as competition intensifies, banks strive to retain their client
base, and regulators move out of controls and micro-regulation. As already
mentioned, banks are special in emerging markets since they take a leading
role in development of other financial intermediaries and of financial
markets, apart from having a large recourse to public deposits. No doubt,
there is nothing like an ‘optimal’ level of governance for one to be satisfied
with. The objective should be to continuously strive for excellence. The
RBI has, on its part, made significant efforts to improve governance
practices in banks, drawing upon international best practices. It is heartening
to note that corporate governance presently finds explicit mention in the
annual reports of several banks. The improved corporate governance
practice would also provide an opportunity to accord greater freedom to the
banks’ boards and move away from micro regulation to macro management.
Banks in India are custodians of depositors’ monies, monies of the millions
of depositors who are seeking safe avenues for their hard earned savings,
and hence, banks must accept and perform an effective fiduciary role. In this
light, improvement in policy-framework, regulatory regime, market-
perceptions, and indeed, popular sentiments relating to governance in banks
need to be on the top of the agenda – to serve our society’s needs and
realities while being in harmony with the global perspective.
 Strategies to meet out the challenges

A bank can follow the following strategies to compete in the modern

banking system
i ) Customer is the king:
To meet these customer concerns, banks must elevate messages of security
and reorganize their fraud-fighting efforts to involve not only bank security,
education and product design but also, perhaps for the first time in history,
the customer. Organizations need to be realigned around fraud prevention
and detection.
Security specialists can no longer be kept behind closed doors,
charged with detecting fraud on the customers' behalf. Rather, these
knowledgeable specialists must be organized in triad teams, integrating
security knowledge with individuals who determine the communications that
have the potential to change consumer behavior, and the customer interface
specialists who design products and even training programs used in online
banking, ATMs, and even branch systems and employee training programs
Security, education and product design specialists each play a
valuable role in deputizing the customer. And as they increasingly work
together in this role, customers can be invited to prevent and detect fraud on
their own behalf.
This customer role is critical because customers have unsurpassed
motivation and knowledge of their personal transaction patterns. And never
before have banks been in a position to deputize customers to protect their
own accounts. This can be done by providing customers with more current
information on account activity through a variety of channels and
notification methods and profiling systems.
ii) Leveraging New Channels :

In order to increase customer security, banks must also fully embrace (rather
than blame) new channels such as the Internet. It is na•ve and wholly
ineffective to respond to the inherent risks of electronic banking and
payments while not also taking advantage of the exclusive new strengths
that these new channels bring. Banks that operate or communicate as if new
channels represent only heightened risk are most likely to suffer the greatest
loss, not only in malicious activity but also in reduced growth and
profitability.
Customers must be educated about the risks of the Internet and any
other new channel in the same way as new automobile drivers are expected
to be thoroughly prepared for their added responsibility.
In addition to detection, banks must also harness the inherent potential of new
channels for their use in fraud prevention. For example, online banking excels in the
ability to prevent many cases of identity theft while deputizing customers to detect fraud
with greater efficacy. Identity fraud begins with identity theft, which is the illicit access
to personal information for the express purposes of committing a crime in another's
name. With electronic channels, paper delivery of statements and other private
documents can be eliminated, moving many potential victims out of harm's way.

iii) Educational Messages :

A balanced approach begins with education, yet today's educational

messages often scare customers away from the remedy or simply leave them
in the dark. Such imbalance and omission in the critical area of education
not only deprives customers of essential information, but it also gives the
impression that new channels are for those who are willing to endure
significant risk. Certainly, "Web-phobic" messages will also result in
customers who will remain ignorant of how to use new channels to more
effectively prevent and detect fraud.
And yet, if new channels bring both risk and safety (primarily
dependent on the degree to which customers have been properly educated),
one-sided educational approaches will serve to scare away some customers
from the very protection offered by new electronic channels. As an example
of balanced education and cautionary messages, banks should educate their
customers on the protection of passwords, PINs and paper statements. They
should also show customers how to avoid criminals who might pose as bank
agents through Internet, phone or even in-person channels; eliminate access
to their private data by turning off paper statements; understand the virtues
of frequent account-monitoring; learn how to reject bogus requests for
personal data and install firewalls and anti-virus software.

Thus account security is a heightened customer requirement, and banks must

elevate and reorganize their security efforts to meet the new threats and
concerns. The concept of self-service made possible by electronic channels
must now be extended to a new realm, that of self-security. Multi-channel
relationships, sophisticated customers and even more sophisticated criminals
are now an essential part of modern banking relationships. To preserve their
customers' trust, banks must engage their security, product and
communications teams around the customer, and communicate to account-
holders with balanced messages.
 RESEARCH METHODOLOGY

Research is an art of scientific investigation. In other word research is a

scientific and systematic search for pertinent information on a specific topic.
The logic behind taking research methodology into consideration is that one
can have knowledge about the method and procedure adopted for
achievement of objectives of the project. With the adoption of this others can
evaluate the results also. Its main aim is to keep the researchers on the right
track.
The methodology adopted for studying the objectives was surveying the in-
house customers of different banks in the city of Fazilka. So keeping in view
the nature of requirements of the study to collect all the relevant information
regarding the extent of awareness of the in-house customers of the products
and services offered by different banks, direct personal interview method
with structured questionnaire was adopted for the collection of primary data.
Secondary data has been collected through the various magazines and
newspapers and by surfing on Internet. And the guide in the organization
was consulted at many times.

POPULATION:- The persons belonging to various classes (service,

businessmen, professional, student etc.) were taken into consideration.
SAMPLE PLAN:-

SAMPLE SIZE: Keeping in mind all the constraints the size of the sample
of the study was selected as 100.

SAMPLING UNIT:-
Customers of different private /public sector banks in Fazilka city.

SAMPLING TECHNIQUE:- Stratified convenient sampling.

All the classes of the customers were taken into consideration. Research was
conducted on clear assumptions that the respondents would give frank and
fair answers in a pragmatic way and without any bias.
 DATA COLLECTION: Data was collected using two main methods:

COLLECTION OF DATA

Secondary Data Primary Data

Questionnaire
Bank’s Annual Reports

Journals and Publications of Different Respondents

Public/Private Sector Banks

Manuals/Brouchers of
Different Public/Private
Sector Banks
Magazines, Newspapers &

Websites of Different
Public/Private Sector Banks

PRIMARY DATA COLLECTION: Primary data do not exist already in

records and publications. The researcher has to gather primary data a fresh
for the specific study undertaken by him. The primary data are explicitly
gathered for a specific research project at hand.

SECONDARY DATA COLLECTION: The Secondary data refer to those

data which are gathered for some other purpose and are already available in
the internal records and commercial, trade, or government publications. In
my project, the Secondary data was collected by going through various
newspapers, magazines, journals and web sites (refer Bibliography for
details).
 OBJECTIVES OF THE STUDY

This study has been conducted with a variety of important objectives in

mind. The following provides us with the chief objectives that have tried to
achieve through the study. The extent to which these objectives have been
met could be judged from the conclusions and suggestions, which appear in
the later of this study.

THE CHIEF OBJECTIVES OF THIS STUDY ARE:

1. To study the factors influencing the choice of a Bank for availing

services.
2. To get suggestions for improvement or change in the services of
public and private sector banks.
3. To study what do people expect in the new Era of Banking.
4. To know the satisfaction level regarding products and services offered
by public and private sector bank.
 LIMITATIONS OF THE STUDY

Due to constraints of time and resources, the study is likely to suffer from
certain limitations. Some of these are mentioned here under so that the
findings of the study may be understood in a proper perspective.

The limitations of the study are:

 Some of the respondents of the survey were unwilling to share
information.
 The research was carried out in small city Fazilka so the response may
vary by including the respondents from other city’s in other areas as
well.
 The research was carried out in a short period. Therefore the sample
size and other parameters were selected accordingly so as to finish
the work within the given time frame.
 The information given by the respondents might be biased because
some of them might not be interested to give correct information.
Q1 WHICH TYPE OF ACCOUNT DO YOU HAVE IN THE BANK?

35
30
ICICI BANK
25
20 HDFC BANK
15
CANARA BANK
10
5 STATE BANK OF INDIA
0
PUNJAB NATIONAL
nt

ts
g

at

y
in

r
si

BANK
re

em

la
v

po
ur

Sa
Sa

de
C

d
xe
Fi

Interpretation
The survey result shows that maximum persons are aware about Saving A/C because this
is one of the common service availed to most of the bank customers which include
maximum number of services class persons those mostly prefer this account.
Q 2 DO YOU OPERATE ATM?

YES 81%
NO 19%

CUSTOMERS AWARENESS ABOUT ATM FACILITY

19%

YES
NO

81%

Interpretation
The survey shows that maximum no. of customers know about the benefits of using
ATM Facility. The figure shows that 81% respondents are aware about the benefits of
using ATM and only 19% respondents are not aware about ATM-cum-Debit Card.
The reason may be that they might be having account other than saving account or
they may be using some other product like FD, RD etc.
 Q 3 DO YOU KNOW ABOUT ATM CHARGES?

YES 64%
NO 36%

CUSTOMERS AWARENESS ABOUT ATM CHARGES

36%

YES
NO

64%

Interpretation
The survey shows that average customers know about the ATM charges. The figure
shows that 64% persons are aware about ATM charges & 36% persons are not aware
about ATM charges.
 Q 4 DO YOU KNOW IN ATM MACHINE YOU CAN?

Check balance + withdraw cash 54%

Withdraw cash 28%
Check balance 8%
Never use 10%

CUSTOMERS AWARE ABOUT ATM FACILITIES

Check balance +
withdraw cash
Withdraw cash

Check balance

Never use

Interpretation
The above chart shows that out of 100 respondents, 54% know how to avail the ATM
facilities and only 46% of the customers are such those don’t know the use of ATM
facility and rest have incomplete knowledge of ATM Facility.
Q 5 DO YOU KNOW ABOUT AUTO FD (FIXED DEPOSITES) FACILITY
OFFERED BY DIFFERENT BANKS ?

YES 33%
NO 67%

CUSTOMERS AWARENESS ABOUT F.D. FACILITY

33%

YES
NO

67%

Interpretation
The survey shows that most of the customers don’t know about this facility provided by
the bank as the knowledge about this is provided to the customers at the time of account
opening. The figure shows that 33% persons are aware about the facility and 67%
persons are not aware about this, Because they may have some other account with the
bank like Current account, RD etc.
Q 6 DO YOU KNOW ABOUT R.D. FACILITY OFFERED BY DIFFERENT
BANKS ?

YES 39%
NO 61%

CUSTOMERS AWARENESS ABOUT R.D. FACILITY

39%

YES
NO

61%

Interpretation

The above figure shows that out of 100 respondents, 39% persons are aware about RD
Facility and 61% persons are not aware about this. Therefore it shows that still there is
need to make the customer aware about the benefit of this Product.
Q7 ARE YOU SATISFIED WITH THE INFRASTRUCTURE OF YOUR
EXISTING BANK ?

Table no.7:-

YES 90%
NO 10%

Graph no.7:-

INFRASTRUCTURE OF YOUR EXISTING BANK

10%

YES
NO

90%

Interpretation
The survey shows that the majority of the respondents are satisfied with the Infrastructure
of their existing Bank.
Q 8 DO YOU KNOW ABOUT THE PHONE BANKING FACILITY ?

YES 55%
NO 45%

CUSTOMER AWARENESS REGARDING PHONE

BANKING FACILITY

45%
YES
NO
55%

Interpretation
The survey shows that out of 100 persons, 55% persons are aware about Phone Banking
Facility and 45% persons are not aware about this.
Q 9 DO YOU KNOW ABOUT THE INTERNET BANKING FACILITY
PROVIDED BY THE EXISTING BANK ?

YES 36%
NO 64%

CUSTOMER AWARENESS REGARDING INTERNET

BANKING

36%

YES
NO

64%

Interpretation
The survey shows that most of the persons don’t know about this facility as shown in the
above figure only 36% persons out of 100 are aware about Internet Banking Facility.
Because the majority of the respondents are do not know that how to operate Internet. So
the majority of the respondents are not aware of Internet Facility provided by their
existing bank.
Q 10 DO YOU KNOW AWARE OF SALARY A/C WITH ZERO BALANCE?

YES 79%
NO 21%

CUSTOMER AWARENESS REGARDING SALARY A/C

21%

YES
NO

79%

Interpretation

The survey shows that most of the persons know about this facility as shown in the above
figure 79% persons are aware about facility of Salary Account with Zero Balance.
Q 11 DO YOU KNOW ABOUT INSURANCE FACILITY PROVIDED BY YOUR
EXISTING BANK ?

YES 44%
NO 56%

CUSTOMER AWARENESS REGARDING

INSURANCE FACILITY

44%
YES
NO
56%

Interpretation
The survey shows that most of the persons don’t know about this facility. Out of the 100
persons only 44% person know about the insurance facility and 56% persons don’t know
about this.
Q 12 WHICH BANK WILL BE PREFFERD BY YOU?

NATIONALISED BANKS 27
NEW GENRATION BANKS 73

PREFERENCE REGARDING BANK

27%

NATIONALISED BANKS
NEW GENRATION BANKS

73%

Interpretation
The survey shows that most of the persons prefer new generation banks due to their
Facilities, Infrastructure and Services.
Q 13 ARE YOU SATISFIED WITH THE CUSTOMER CARE SERVIVES
PROVIDED BY YOUR BANK?

YES 87%
NO 13%

CUSTOMER SATISFACTION REGARDING CUSTOMER

CARE SERVICES

13%

YES
NO

87%

Interpretation

The survey shows that the majority of respondents are satisfied with the Customer
Care Services
 FINDINGS OF THE STUDY

• The attitude of public bank staffs regarding the customers is very rude so
the employees should be very polite while handling them.

• Number of problems faced by people is more in public sector banks

• The banks are having state of infrastructure as most of the Respondents

comes in satisfied but Bank could lay more emphasis on improving the
Infrastructure.

• The most of the respondents were happy with the ATM service provided
by bank but however it could me more improvised.

• Majority of the respondent whether in public sector banks or in private

sector banks have savings account with banks. .

• People are more satisfied from the private banks due to the better services
provided by them in terms of speedy transactions, fully computerized
facilities, more working hours (in case of ICICI Bank, the number of
working hours are 12), good Investment Advisory services, efficient and
co-operative staff, better approach to Customer Relationship
Management.

• In private banks proper promotional activities should be taken up so as to

make the population aware of the services provided by the banks even in
rural areas.
 RECOMMENDATIONS

• Banks should obey the RBI norms and provide facilities as per the
norms, which are not being followed by the banks. While the
customer must be given the prompt services and the bank officer
should not have any fear on mind to provide the facilities as per RBI
norms to the units going sick.

• Banks should increase the interest rate of savings account.

• Banks should provide loans at the lower interest rates and education
loans should be given with ease without much documentation. All the
banks must provide loans against shares.

• Fair dealing with the customers. More contributions from the

employees of the bank. The staff should be co-operative, friendly and
must be capable of understanding the problems of the customers.

• Internet Banking facility must be made available in all the banks.

• Prompt dealing with permanent customers and speedy transactions

without harassing the customers.

• Each section of every bank should be computerized even in rural areas

also.

• Door to door service especially for the senior citizens of the country.
 • Personalized banking should be given a thrust as more and more
banks are achieving in usual services.

• Covering up the towns in rural areas with ATMs so that the people in
those areas can also avail better services.

• No limit on cash withdrawal on ATM cards.

• Indian Banks should compete with international banks regarding

Interest rates and services.

Banking sector is improving by big leaps but still it needs to be improved.

Proper and efficient relationship staffs having knowledge for one stop
banking, customer friendly atmosphere, and better rate of interest are need of
the hour. The concept of privatization has overall improved the services in
all the banks. Home banking will be order of the day.
 CONCLUSION

The customers now days are not only exposed of what type of service is
being provided by banks in India but in the world as a whole. They expect
much more than what is actually being provided. So the new coming
banking sector has to provide and cater to all the needs of the customers
otherwise it is difficult to survive in the competition coming up.
They not only expect the safety of money but also best ways to invest that
money which need needs to be fulfilled. Banks need to have a better outlook
towards to actually what customers are requiring. Entry of the private sector
banks have made the competition more tough. If a bank is not functioning
properly it is being merged into some other bank or being closed. So it is
difficult to face these types of conditions. Here a simple philosophy can
work that customers are God and we need to follow this to survive and serve
better.
The banking sector is poised for explosive growth. In this, scenario, it is
imperative that banks adopt technology at an aggressive pace, if they wish to
remain competitive. Mani mamallan makes a case for banks to outsource
their technology infrastructure requirements, thus enabling early adoption
and increased efficiencies.
In this prevailing scenario, a number of banks have adopted a new
deployment strategy of infrastructure outsourcing, to lower the cost of
service channels. As a result, other banks too will need to align their
technologies with their reinvented business models. The required changes at
both the business and technology levels are enormous. In a highly
competitive banking market, early adopters are profiting from increased
efficiencies.

To actually face the growing competition, following are some of the ways
which can be adopted:

1. More touch points and more consumers.

2. Share the existing networks and services.

3. Move the existing “paper” customers to “plastic” customers.

4. Innovate consumer-specific banking products as against banking-

specific consumer services.

5. Shift the focus from Customer Relationship Management (CRM) to

Customer Managed Relationship (CMR).

6. Outsourcing.
 BIBLIOGRAPHY

I. AUTHORS
 R.L. GUPTA
 DR. R.R. PAUL
 KHAN MASOOD AHMED
 P.N. VARSHNEY
II. BOOKS
 MONEY BANKING & INTERNATIONAL TRADE
 INDIAN FINANCIAL SYSTEM & COMMERCIAL BANKING
 BANKING IN INDIA

III. WEBSITES
 www.hdfcbank.com
 www.google.com
 www.icicibank.com
 QUESTIONNAIRE
1. WHICH TYPE OF ACCOUNT DO YOU HAVE IN THE BANK?
Saving Current Demat Fixed Deposit Salary

ICICI Bank     
HDFC Bank     
Canara bank     
State Bank of India     
Punjab National Bank     

2. DO YOU OPERATE ATM?

YES  NO 

3. DO YOU KNOW ABOUT ATM CHARGES?

YES  NO 

4. DO YOU KNOW IN ATM MACHINE YOU CAN?

CHECK BALANCE + WITHDRAW CASH 

WITHDRAW CASH 
CHECK BALANCE 
NEVER USE 

5. DO YOU KNOW ABOUT AUTO FD (FIXED DEPOSITS) FACILITY

OFFERED BY DIFFERENT BANKS ?
YES  NO 

6. DO YOU KNOW ABOUT R.D.(RECURRING DEPOSITS) FACILITY

OFFERED BY DIFFERENT BANKS ?
YES  NO 

7 ARE YOU SATISFIED WITH THE INFRASTRUCTURE OF YOUR

EXISTING BANK ?
YES  NO 

8. DO YOU KNOW ABOUT THE PHONE BANKING FACILITY ?

 YES  NO 

9. DO YOU KNOW ABOUT THE INTERNET BANKING FACILITY

PROVIDED BY THE EXISTING BANK ?
YES  NO 

10. DO YOU KNOW AWARE OF SALARY A/C WITH ZERO BALANCE?

YES  NO 

11. DO YOU KNOW ABOUT INSURANCE FACILITY PROVIDED BY YOUR

EXISTING BANK ?
YES  NO 

12. WHICH BANK WILL BE PREFFERD BY YOU?

NATIONALISED BANKS 
NEW GENRATION BANKS 

13. ARE YOU SATISFIED WITH THE CUSTOMER CARE SERVIVES

PROVIDED BY YOUR BANK?
YES  NO 