A STUDY ON EFFECTIVENESS OF CORE BANKING

Submitted in partial fulfilment of the requirement for the

Award of Degree

BATCHELOR OF COMMERCE

UNIVERSITY OF CALICUT

Submitted by

AMRUTHA .P. R (ELAPBCM038)

2015-2018

Under the guidance of

Ms. Rajitha. A. G [M.Com, MBA]

ASSISTANT PROFESSOR

ST. ALOYSIUS COLLEGE, ELTHURUTH, THRISSUR

POST GRADUATE DEPARTMENT OF COMMERCE

ST.ALOYSIUS COLLEGE

ELTHURUTH, THRISSUR

(Affiliated to Calicut University)

2018
1
 CERTIFICATE

This is to certify that this project report titled “A STUDY ON

EFFECTIVENESS OF CORE BANKING” submitted to the University of
Calicut in partial fulfilment of the requirement for the Degree of Commerce
is a bona fide work done by AMRUTHA. P. R , Sixth Semester B.com
student, Department of Commerce, St. Aloysius College, Elthuruth, Thrissur
under my guidance and supervision.

Elthuruth Ms. RAJITHA. A. G

March 2018 M.Com, MBA

Assistant Professor

Department of Commerce

St. Aloysius College, Elthuruth, Thrissur

2
 CERTIFICATE

This is to certify that this project titled “A STUDY ON EFFECTIVENESS OF CORE

BANKING” submitted to the University of Calicut in partial fulfilment of the requirement
for the degree of commerce is a bona fide work done by AMRUTHA. P. R Sixth
Semester B.Com student, Department of Commerce, St. Aloysius College, Elthuruth,
Thrissur.

The work is supervised by Ms. Rajitha. A. G, Assistant Professor,

Department of Commerce, St. Aloysius College, Elthuruth, Thrissur.

Elthuruth Rev. Fr. Dr. Babu Paul

30 March 2018 Principal
St.Aloysius College, Elthuruth, Thrissur

3
 ST.ALOYSIUS COLLEGE, ELTHURUTH, THRISSUR
(Affiliated to Calicut University)

CERTIFICATE
This is to certify that this project report titled

“A STUDY ON EFFECTIVENESS OF CORE BANKING”

Is a bona fide record of project work done by

Amrutha. P. R
Sixth Semester, B.Com student, in partial fulfilment of the requirement for the
degree of commerce, Calicut University, under the supervision and guidance of
Ms. Rajitha. A. G, M.Com, M.B.A.

Elthuruth Mrs. Rajitha.A.G, M.Com,MBA

March 2018 Head of the Department
Department of Commerce
St. Aloysius College,
Elthuruth, Thrissur

4
 CERTIFICATE

This is to certify that this project report titled “A STUDY ON

EFFECTIVENESS OF CORE BANKING” submitted to the University of
Calicut in partial fulfilment of the requirement for the Degree of Commerce
is a bona fide work done by AMRUTHA. P. R , Sixth Semester B.com
student, Department of Commerce, St. Aloysius College, Elthuruth, Thrissur
under my guidance and supervision.

Elthuruth Ms. RAJITHA. A. G

March 2018 M.Com, MBA

Assistant Professor

Department of Commerce

St. Aloysius College, Elthuruth, Thrissur

5
 DECLARATION

I, AMRUTHA.P.R, do hereby declare that this project report titled “A STUDY ON

EFFECTIVENESS OF CORE BANKING” submitted to the University of Calicut in
partial fulfilment of the requirement for the degree of Commerce is a bona fide work done
by me under the guidance and supervision of Ms. Rajitha.A.G, M.Com, M.B.A., Assistant
Professor, St. Aloysius College, Elthuruth, Thrissur.

Elthuruth AMRUTHA. P .R

30 March 2018

6
 ACKNOWLEDGEMENT

First of all, I reverently thank lord Almighty, for his enlightened grace and
the choicest blessings that he has showered upon us for the successful
fulfilment of his dissertation.

The project has been made possible through direct and indirect co-operation
of various persons to whom I wish to express my appreciation and gratitude. I
extend my sincere thanks and deep gratitude to Rev.Fr.Dr.Babu Paul,
Principal of St.Aloysius College, and Elthuruth. I thank my guide and
Department Head MS. RAJITHA. A .G, who gave me keen interest,
suggestions and constant encouragement to accomplish this work and also
express my sincere thanks.

I would like to thank all my loving friends and especially to my co-

workers for their whole hearted support and assistance which was a source of

encouragement in this Endeavour.

AMRUTHA. P .R

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 TABLE OF CONTENTS
CHAPTER TITLE PAGE
NO NO
INTRODUCTION
1.1 Introduction 11-17
1.2 Statement of the problem
1 1.3 Objectives of the study
1.4 Scope of the study
1.5 Period of the study
1.6 Research methodology
1.7 Limitations of the study
2 REVIEW OF LITERATURE 18-21
3 INDUSTRY PROFILE 22-32

4 COM PANY PROFILE 33-44

5 DATA ANALYSIS AND INTERPRETATION 45-67

6 FINDINGS, SUGGESTIONS AND 68-71

CONCLUSION
7 BIBLIOGRAPHY 72
APPENDIX

8
 LIST OF TABLES

SL.N0 TITLE PAGE.NO

4.1 REDUCTION OF WORKLOAD OF JOB IN BANK 47
4.2 INCREASE IN SERVICE EFFICIENCY 48
4.3 SECURITY MEASURES TO SECURE BANKING 49
ACTIVITIES
4.4 NEED FOR RIGOROUS TRAINING TO HANDLE 50
ALL BANKING ACTIVITIES
4.5 BENEFIT OF TRAINING TO HANDLE ALL 51
BANKING ACTIVITIES
4.6 SIGNIFICANT CHANGE IN BANK WHEN BRICKS 52
& MORTAR SYSTEM CHANGED INTO CLICK &
PORTAL SYSTEM
4.7 PROBLEMS OF CORE BANKING 53
4.8 RATE OF CORE BANKING ON THE BASIS OF 54
DIFFICULTY IN OPERATIONS
4.9 RATE OF CORE BANKING SOLUTIONS 55
PROVIDED BY BANK TO CUSTOMERS
4.10 BENEFIT OF CORE BANKING TO EMPLOYEES 56
4.11 SATISFACTION OF EMPLOYEES TOWARDS 57
CORE BANKING
4.12 NEED FOR IMPROVEMENT IN CORE BANKING 58
4.13 NUMBER OF MEN AND WOMEN HAVE BANK 59
ACCOUNT
4.14 OCCUPATION OF THE USERS 60
4.15 AWARENESS ABOUT CORE BANKING 61
4.16 BANKING TRANSACTIONS ARE SECURED 62
TRANSACTIONS
4.17 CONVINIENT MODE OF BANKING 63
4.18 EMPLOYEE RESPONSE TO SERVICES 64
4.19 PROBLEMS OF CORE BANKING 65
4.20 SATISFACTION LEVEL OF CUSTOMERS IN 66
CORE BANKING SOLUTIONS
4.21 SATISFACTION TOWARDS CORE BANKING 67
SERVICES

9
 LIST OF FIGURES

SL.N0 TITLE PAGE.NO

4.1 REDUCTION OF WORKLOAD OF JOB IN BANK 47
4.2 INCREASE IN SERVICE EFFICIENCY 48
4.3 SECURITY MEASURES TO SECURE BANKING 49
ACTIVITIES
4.4 NEED FOR RIGOROUS TRAINING TO HANDLE 50
ALL BANKING ACTIVITIES
4.5 BENEFIT OF TRAINING TO HANDLE ALL 51
BANKING ACTIVITIES
4.6 SIGNIFICANT CHANGE IN BANK WHEN BRICKS 52
& MORTAR SYSTEM CHANGED INTO CLICK &
PORTAL SYSTEM
4.7 PROBLEMS OF CORE BANKING 53
4.8 RATE OF CORE BANKING ON THE BASIS OF 54
DIFFICULTY IN OPERATIONS
4.9 RATE OF CORE BANKING SOLUTIONS 55
PROVIDED BY BANK TO CUSTOMERS
4.10 BENEFIT OF CORE BANKING TO EMPLOYEES 56
4.11 SATISFACTION OF EMPLOYEES TOWARDS 57
CORE BANKING
4.12 NEED FOR IMPROVEMENT IN CORE BANKING 58
4.13 NUMBER OF MEN AND WOMEN HAVE BANK 59
ACCOUNT
4.14 OCCUPATION OF THE USERS 60
4.15 AWARENESS ABOUT CORE BANKING 61
4.16 BANKING TRANSACTIONS ARE SECURED 62
TRANSACTIONS
4.17 CONVINIENT MODE OF BANKING 63
4.18 EMPLOYEE RESPONSE TO SERVICES 64
4.19 PROBLEMS OF CORE BANKING 65
4.20 SATISFACTION LEVEL OF CUSTOMERS IN 66
CORE BANKING SOLUTIONS
4.21 SATISFACTION TOWARDS CORE BANKING 67
SERVICES

10
 CHAPTER - 1
INTRODUCTION

11
1.1 INTRODUCTION
Banking sector plays a significant role in the development of an economy. The advent of
information technology and its convergence with communication technology have
drastically changed landscape of banking services across the globe. Over the past few
decades, banks all over the world have been investing substantial amounts of money
information technology with the avowed objectives of improving operational efficiency,
competitive position and product innovation. The use of IT in the banking sector has
contributed to the emergence of more flexible and user friendly and self service banking
technologies to address the rapid and changing needs of banking customers. It has changed
the face of global banking sector radically, altering the manner in which customers
conduct their banking transactions. Indian banking sector too has followed the same path
and the gap between Indian banks and their counterparts in the technology advanced
countries is vanishing.
HISTORY

Core banking became possible with the advent of computer and telecommunication
technology that allowed information to be shared between bank branches quickly and
efficiently.

Before the 1970s it used to take at least a day for a transaction to reflect
in the real account because each bank had their local services, and the data from server in
each branch was send in a batch to servers in the data centre only at the end of the day
(EOD). Over the following 30 years most banks moved to core banking applications to
support their operations creating a Centralised Online Real-time Exchange (or
Environment) (CORE).

Core Banking

Core banking refers to a centralised system established by a bank which allows its
customers to conduct their business irrespective of their bank’s branch. This meant that all
the bank’s branches could access applications from centralised data centres. Deposits

12
made were reflected immediately on the bank’s servers, and the customer could withdraw
the deposited money from any of the bank’s branches.

Software
Advancements in internet and information technology reduced manual work in banks
and increasing efficiency. Computer software is developed to perform core operations of
banking like recording of transactions, passbook maintenance, interest calculations on
loans and deposits, customer records, balance of payments and withdrawal. This software
is installed at different branches of bank and then interconnected by means of computer
networks based on telephones, satellite and the Internet etc. It allows the user (customers)
to operate accounts from any branch if it installed core banking solutions. Core banking
software applications are Infosys Finacle, Oracle Financial Services, Fiserv, Canopus,
Fidelity National Information Services (FIS) etc.

Gartner defines a core banking system as a back-end system that processes

daily banking transactions, and posts updates to accounts and other financial records. Core
banking systems typically include deposit, loan and credit-processing capabilities, with
interfaces to general ledger systems and reporting tools. Core banking applications are
often one of the largest single expense for banks and legacy software are a major issue in
terms of allocating resources. Spending on these systems is based on a combination of
service-oriented architecture and supporting technologies that create extensible, agile
architectures.

Many banks implement custom applications for core banking. Others

implement or customize commercial independent software vendor packages. System
integrators like Cognizant, EdgeVerve Systems Limited, Capgemini, Accenture, IBM and
Tata Consultancy Services implement these core banking packages at banks.

Core Banking Solutions

Core banking solutions are banking applications on a platform enabling a phased, strategic
approach that is intended to allow banks to improve operations, reduce costs and be
prepared for growth. Implementing a modular, component-based enterprise solution
facilitates integration with a bank’s existing technologies. An overall service-oriented-

13
architecture (SOA) helps banks reduce the risk that can result from manual data entry and
out-of-date information, increases management information and review, and avoid the
potential disruption to business caused by replacing entire systems.

Core banking solutions are new jargon frequently used in banking circles. The
advancement in technology, especially internet and information technology has led to new
ways of doing business in banking. The technologies have cut down time, working
simultaneously on different issues and increased efficiency. The platform where
communication technology and information technology are merged to suit core need of
banking is known as Core Banking Solutions. Here, computer software is developed to
perform core operations of banking like recording of transactions, passbook maintenance,
interest calculations on loans and deposits, customer records, balance of payments and
withdrawal. This software is installed at different branches of bank and then
interconnected by means of computer networks based on telephones, satellite and the
Internet etc. It allows the user (customers) to operate accounts from any branch if it
installed core banking solutions. This new platform has changed the way banks are
working.

Providers

While larger financial institutions may implement their own custom core, community
banks and credit unions tend to outsource their core systems to system providers. While
there is no consensus or a public register on the actual Core Banking Providers, various
Market Research Companies like Gartner or Forrester Research release annual deal
surveys mentioning platform deals. Fiserv, Jack Henry & Associates inc, Misys, Oracle,
Temenos etc are core banking technology software providers.

Features of Core Banking Solutions

 Customer-On Boarding.
 Managing deposits and withdrawals.
 Transactions management.
 Interest calculation and management.
 Payments processing (cash, cheques, mandates, NEFT, RTGS etc.).

14
  Accounts management.
 Loans disbursal and management.

1.2 STATEMENT OF PROBLEM

The Indian economy is growing .There are various factors contributing for the
development of economy. One of the industries which have revolutionalise the economy is
banking. Change in the IT and faster growth has changed the banking operations to a great
extent. Core banking is one area that changed gradually in meeting dynamic needs of
customers. Core banking solutions has changed the banks are working. In this background
this study is selected to know the impact of core banking on bank employees and
customers.

1.3OBJECTIVESOF STUDY
Primary objectives

 To know the impact of core banking on bank employees and customers.

Secondary Objectives

 To know the satisfaction level of bank employees towards core banking.

 To know the satisfaction level of customers towards core banking.
 To analyse the difficulties of core banking.
1.4 SCOPE OF STUDY
The topic of current research related to the analysis of impact of core banking on bank
employees is to evaluate the level of satisfaction of bank employees towards core banking.
It is helpful know whether core banking is beneficial to bank employees or not. The
geographical scope of study is restricted to the private and public sector banks in Thrissur
district. The topical scope focuses on the identification of bank employees’ problems
regarding core banking and customers’ satisfaction towards core banking.

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1.5 PERIOD OF THE STUDY

Period taken for completing the study is 21 days.

1.6 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Descriptive type of research is used for this particular study. 50 samples were collected. A
questionnaire of 26 questions was prepared and data were collected from the employees of
private and public sector banks and customers.

METHODS OF DATA COLLECTION

The task of data collection begins after a research problem has been defined and research
design foundout. While deciding about the method of data collection to be used for the
study, the researcher should keep two types of data, they are ;

 Primary data
 Secondary data

Primary Data

The primary data are those which are collected raw and for the first time and this happen
to be original in character. The primary data consist of information collects for specific
purpose. The projects relied on the response from staff members including branch
manager and customer of bank as primary data.

Secondary Data

Secondary data means the data that has been already collected by someone and which has
already been passed through the statistical processes. In this study the in secondary data
were obtained from various sources like textbooks, journals, books, websites and the
review of literature etc.

16
 SAMPLE SIZE

Sample refers to the items to be selected from the universe to constitute a sample. The
sample size selected here is 50 bank employees 50 customers.

SAMPLING DESIGN

Sampling may be defined as the selection of some part of an aggregate or

totality on the basis of which a judgement or inference about the totality made .

SAMPLING TECHNIQUE

The sampling tecnique used in the study is convenience sampling. This method includes
purposive and deliberated selection of a particular unit of the universe for consulting a
sample which represents the universe .

TOOLS

The mathematical tool like tables, charts and percentage analysis are used for this
study.

Tables: it means presenting data through tables. Table is made up rows and columns. It is
the systematic presentation of data , it is the process between collection of data and its
analysis.

Diagrams : A Diagram is a symbolic representation of information according to some

visualization technique.

Percentage analysis: Percentage analysis is the method for represent raw streams of data as
a percentage [a part in 100-percent] for better understanding of collected data.

1.7 LIMITATIONS

 A sample of 50 bank employees and 50 customers were chosen for the purpose of
study.
 Time span for the study was limited.
 Some of the respondents were reluctant to contribute their suggestions.

17
 CHAPTER - 2
REVIEW OF LITERATURE

18
 REVIEW OF LITERATURE

A review of literature is a text of scholarly paper, which includes the

current knowledge including substantive findings as well as theoretical and
methodological contribution to a particular topic. Literature review are secondary source,
and do not report new or original experimental work. Most often associated with
academic- oriented literature, such reviews are often found in academic journals and are
not to be confused with book reviews that may also paper in the same publication.
Literature reviews are a basis for research in nearly academic field. A narrow scope
literature review may include as part of peer- reviewed journal article presenting new
research, serving to situate the current study within the body of the relevant literature and
to provide context for the reader . In such case review usually precedes the methodology
and result section of the work.
Kamakodi (2008) discussed in their article about the paradigm shift and implementation
of “Core Banking System in all the banks”.
DR. Anurag. B. Singh; MS. PriyankaTandon (2012) in their Article “A Study on
Financial Performance: A Comparative Analysis of SBI and ICICI Bank” stated about the
efficient banking system. The purpose of study is to examine the financial performance of
the banks after the introduction of the Core Banking Solutions.
DR. Kalagarsamy ; S. Wilson (2013) in their Article “A study on customer behaviour
towards banking services with special reference to public sector banks” stated the
customer satisfaction towards the recent banking technology and services given by banks.
Universal banking procedure can help the customer for the better banking transactions.
GarimaChaudhary (2014) in their Article “Performance comparison of private sector
banks with public sector banks in India” stated about the context of customer satisfaction
and the efficiency of banks after the introduction of Core Banking Solutions.
Mrs.Geetha S ; DR. C S Ramanarayanan (2015) in their Article “The Impact of Core
Banking Services in SBM” stated that majority of the uneducated and computer illiterate
customers don’t envince interest in CBS , because they don’t find a helping hand in the
premises of banks. Even though banks have displayed notices in premises about CBS due

19
to lack of sufficient employees the details regarding CBS don’t reach the uneducated and
computer illiterates. Such customers prefer branch banking with the assistance of counter
clerks. No doubt, CBS has made a significant welcome change in the banking scenario of
the country and certainly improved the efficiency of the banking operations. The CBS has
created awareness about the presence of the banking sector everywhere and the benefits of
banking to common man.

Ms.Shaikh Farha Rasheed (2016) in their Article “Core Banking Solution – Advantages
and Disadvantages” stated that introduction of Core Banking Solution has made a
significant impact on the working of banks. The growth percentage would further be
increased in the bank are given effective services on Core Banking Solution and also
educating and increase awareness level of CBS to the customers as well as to bank.
Everything has been taken into account to judge the effectiveness of CBS. The concept of
Core Banking Solution has made a significant effect on bank and customers.
Malathy. k ; DR.SubhashiniSrivasta (2017) in their article “Customer’s Ecstasy towards
Core Banking Solutions in the context of Globalisation” stated that globalisation has
brought tremendous developments in the economic sector of the economy by facilitating
the free movement of capital, labour, technology and resources across the countries. Entire
banking sector has undergone several revolutionary changes after globalisation and it gave
rise to much technological advancements. Core Banking Solutions which were installed by
the bankers to make banking a friendly exercise gained more popularity after
globalisation. Though there are certain challenges in the adoption and success of Core
Banking technology in the country, if corrective measures are taken at the appropriate time
it can create wonders and definitely win the ecstasy of the customers.
Ravi C.S and KundanBasavaraj (2013) in their article “Customers Preference and
Satisfaction towards banking services with special reference to Shivamogga district in
Karnataka” stated that after the implementation of government policies on globalisation
and liberalisation, the banks provide a variety of products and services to customers. The
various services offered by the banks can be utilised by the customers only when they are
made aware of these services. The banker and customers have to know about one another.
The banker has to understand the customers’ needs and in the same way, the customer has
to know about the various services offered by the banks. Increased level of awareness
20
among the customers lead to increased preferences. The purpose of this study is to
investigate the preference and satisfaction level of customers towards loans, deposit
schemes, insurances and value added services rendered by private and public banks in
Shivamogga district. The present study is to compare and analyse the customer preference
and satisfaction towards banking services both private and public banks in Shivamogga
district.

21
 CHAPTER - 3
INDUSTRY PROFILE

22
Origin and Development of Banking
Banks have influenced economy and politics for centuries. Historically, the
primary purpose of a banks is to provide loans to trading companies. Banks provided
funds to business for purchasing inventory and collected those funds back with interest
when the goods were sold. For centuries, the banking industry only dealt with business,
not consumers. Today commercial lending is a very powerful activity, with banks
carefully analyzing the financial condition of their business clients to determine the level
of risk in each loan transaction. The evolution of banking can be traced back to the era of
early times of human history. It was in existence in one form or other in ancient times. In
olden times, people deposited their money and valuables at temples because these places
of worship were considered as the safest place to keep these valuables. Probably it was
the earliest form of banking. In ancient Greece, the famous temples such as Ephesus,
Delphi, and Olympia were used as the depositories of surplus funds of people in 2000 BC.
Pre-historic Hindu scriptures provide enough evidence of the existence of money lending
business in India. It was in existence in Vedic period. The practice of storing precious
metals and coins at sale places and loaning of money to the people was also prevalent in
ancient Rome.

Evolution of Banking in India

There were sufficient evidence to believe that the money lending business was prevalent in
India. The writings of Manu and Kautila contained the references to banking. Mahajans,
Shroffs, Sahukars etc were engaged in banking business. In the beginning of the
eighteenth century, East India Company launched a few commercial banks on modern
lines. The first Indian Bank named Bank of Hindustan was started in 1770 at Calcutta.
Later on, East India Company started three Presidency Banks with Government
participation. These were the Bank of Calcutta, the Bank of Bombay, and the Bank of
Madras. These banks were given the right of note issue in their respective regions. Later
all these banks were amalgamated and the Imperial Banks was formed. Allahabad bank
came in to existence in 1865 and Alliance bank in 1875. The first purely commercial bank
was formed in 1880. Its name was Oudh Commercial bank. The Pubjab bank was
23
launched in 1894 and the people bank in 1901. The swedeshi movement encouraged the
Indian entrepreneurs to start many new banks. A number of banks failed during the first
half of the twentieth century. It effected the people’s belief and faith in banks. This
insisted the need for an institution to regulate and control the banking industry in the
country. As a result. The Reserve Bank of India was established in 1935.
There were 648 commercial banks in 1947. Frequent failures of the banks insisted
the government to regulate and reforms the banking system of our country. The Reserve
Bank of India was nationalized in 1949 and the Banking Companies Act was passed in the
same year. Later it was changed into Banking Regulation Act. The enactment of Banking
Regulation Act was a bold step in the history of banking of our country. The imperial
Bank was nationalized in 1955 and renamed it as State Bank of India. State bank started a
number of branches in the rural and urban areas. In 1967, the Government introduced the
concept of “social control” in the field of banking industry. It was aimed at bringing some
laudable changes in the management and credit policy of commercial banks.
Fourteen Banks were nationalized in June 1969. It was a revolution in the history
of banking industry of India. Regional Rural bank Schemes were started in 2nd October
1975. Six more commercial banks were nationalized in 1980. National Bank for
Agricultural and Rural Development was set up in July 1982. Exim Bank was launched in
1984 and National Housing Bank was started in 1988. New Bank of India got merged
with Punjab National Bank in 1993. At present, there are 27 Public Sector Banks in India
including SBI (plus its 5 associates) and 19 nationalized banks. Further, there are two
banks which have been categorized by RBI as ‘Other Public Sector Banks”. IDBI and
Bhartiya Mahila Bank come under this category. There are 13 old private sector banks
and seven new private sector banks. As on December 2014, there are 43 foreign banks
from 26 countries operating as branches in India and 46 banks from 22 countries operating
as representative offices in India. Number of RRBs in India as on 31.03.2015 is 56.

On the basis of Reserve Bank of India Act, 1934, banks are two type. They are;
Scheduled Banks
A scheduled bank is a bank which is included in the second schedule of the Reserve Bank
of India Act 1934 and it will fulfil thee conditions.
1. It has a paid up share capital and reserves of at least Rs.5 Lakhs
24
 2. It ensures the Reserve Bank that its operations are not detrimental to the interest of
the depositors.
3. It is a corporation or a co-operative society and not a partnership or a single owner
firm.
At present there are 90 scheduled commercial banks in India. Scheduled Commercial
Banks can be further divided into four groups: Public Sector Banks : (This includes : SBI
& Associates Nationalized Banks), Other Public Banks, Private Banks, Foreign Banks

and Regional Rural Banks. Scheduled cooperative banks consist of 53 scheduled urban
co-operative banks and 31 scheduled state co-operative banks.
Non Scheduled Banks
Commercial banks which have a paid up share capital and reserves of an aggregate value
of less than 5 lakhs is considered as non scheduled banks. Their names do not appear in
the second schedule of the Reserve Bank of India Act. They are under the obligation to
maintain a minimum 5% of their deposits with some scheduled commercial bank. At
present we have 4 non scheduled commercial banks.
Structure of Banking in India
Indian banking system comprises both organized and unorganized banking sector.

Organized Banking Sector

Organized sector comprises,
1. Central Bank and monetary authority-Reserve Bank of India
2. Apex banks
3. Banking institutions-Commercial Banks, Regional Rural Banks, Co-operative
Banks and Local area banks
4. Development Banks-Industrial development Banks and Land Development Banks.
Reserve Bank
Every country has a central bank. It is the leader of the all banking institutions of the
country. It regulates controls and supervises the monetary and credit system of the
country. Reserve Bank of India is our central bank. Its main functions consist of
1. Monopoly of note issue
2. Acts as the banker to the government
3. Acts as the banker’s bank
25
 4. Acts as the controller of credit
5. It is the custodian of the foreign exchange reserves
6. It acts as the lender of last resort
7. It functions as the bank of central clearances, settlement and transfer.
Apex Banks
The banks which stand at the top of Indian Banking structure after Reserve Bank of India
are known as Apex Banks. These institutions assist and support the development of other
financial institutions of the country. It acts on behalf of RBI and perform certain functions
of RBI. It comprises :
i. Industrial Development Bank of India (IDBI)
The Industrial Development Bank of India Limited is one of India’s leading
public sector banks and 4th largest Bank in overall ratings. RBI categorised
IDBI as an “other public sector bank”. It was the apex banking institution in
the field of long term industrial finance. It was set up in July 1964 as a wholly
owned subsidiary of the Reserve Bank. It was formed to catalyze the
development of diversified and efficient industrial structure in the country in
the line with national priorities.

ii. National Bank for Agriculture and Rural Development

(NABARD)
It is an apex development bank for agriculture and rural development. It was set up on
12th July 1982 with a paid up share capital of Rs.100 crore by way of merging the
agricultural Credit Department and Rural Planning and Credit Cell of the Reserve
Bank of India and the entire undertaking of Agricultural Refinance and Development
Corporation (ARDC). NABARD facilities credit flow for promotion and development
of agriculture, small-scale industries, cottage and village industries, handicrafts and
other allied economic activities in rural areas, promote integrated and sustainable rural
development and secure propriety of rural areas.

iii. Export Import bank of India (EXIM BANK)

Exim Bank was set up in January 1982 and commenced its operation from 1st March 1982.
It is a public sector financial institution created by an act of parliament viz., The Export-
Import Bank of India Act, 1981. It works as the apex banking institution for assisting and
26
supporting developmental activities of such financial institutions which are engaged in the
field of foreign trade in India. The entire business of the Industrials Development Bank of
India relating to export financing has been taken over by this bank.
iv. Industrial Reconstruction Bank of India (IRBI Investment
Bank of India (IIBI)
It is the principal credit and reconstruction agency for industrial revival by undertaking
modernization, expansion, re-organisation, diversification or rationalization of industry
and coordinates similar works of other institutions engaged in to assist and rehabilitate
industrial concerns.

v. Small Industries Development Bank of India (SIDBI)

SIDBI is wholly owned subsidiary of IDBI. It was set up under a separate Act of Parliamen on 2 nd
April 1990. It is an apex body for small units giving refinance to State Financial Corporations and
Twin Function Industrial Development Corporations.Scheduled Commercial Banks and State Co-
operative Banks, Scheduled Urban Co-operative Banks and Regional Rural Banks. It has
taken over IDBI’s financing activities relating to small scale sector. Now the Board of
SIDBI and the Ministry of Finance has given as in principle clearance to covert SIDBI into
a bank.
Mission : To empower the Micro, Small and Medium Enterprises (MSME) sector with a
view to contributing to the process of econ9mic growth, employment generation and
balanced regional development.
vi. National Housing Bank (NHB)
It was established under the National Housing Bank Act 1987 as per the recommendations
made by a high level group headed by Dr.Rangarajan. It started its functioning from 9 th
July 1988. It is wholly owned by Reserve Bank of India. It is the apex institution in the
matter of housing finance.

Banking Institutions
i) Commercial Bank
It accepts deposits from the public and lends money generally to trade and commerce.
The commercial bank accepts deposits for a short period. So these banks normally lend
short term loans to businessman and traders and avoid medium-term and long term
27
lending. But recently, the commercial banks extended their area of operation to medium
term and long term finance. They also render a number of services to customers such as
collection of cheques, safe custody of valuables, remittance facilities and payment of
insurance premium, electricity bills etc.
ii) Regional Rural Bank (RRBs)
In the early 1970s, there was a feeling that even after nationalization, there were cultural
issues which made if difficult for commercial banks, even under government ownership,
to lend to farmers.
iii) Co-operative Banks
Co-operative banks are institutions established on the principle of co-operation and it deal
in ordinary banking business. It help to promote the habits of thrift and self help among
the low and middle income groups of the society. It collects funds through shares, accept
deposits, and grant loans. The main feature of the co-operative banks is that it has no
profit motive. Co-operative banks are very helpful to meet the financial requirements of
small farmers, artisans etc. The co-operative banking structure in India comprises two
main components, viz., urban co-operative banks and rural co-operative credit institutions.
iv) Local area banks
Government decided to allow Local Area Banks in 1996m RBI issued
guidelines in this respect. It is allowed to function with a view to provide
institutional mechanism for promoting rural savings as well as for the
provision of credit for viable economic activities in the local areas.
Development Banks
i) Industrial Development Banks
The Industrial Development Bank of India Limited is one of India’s leading public sector
banks and 4th largest Bank in overall ratings. RBI categorised IDBI as an “other public
sector bank”. It was the apex banking institution in the field of long terms industrial
finance. It was set up in July 1964 as a wholly owned subsidiary of the Reserve Bank. It
was formed to catalyze the development of diversified and efficient industrial structure in
the country in the line with national priorities.

28
 ii) Land Development Banks
These banks meet the long term credit requirements of agriculturists against security of
their land for purchasing tools, implements etc, for repaying old debts and for permanent
improvements or land. It is registered as co-operative society with limited liability.
Unorganized Sector
Unorganized sector comprises :
1. Money lenders
2. Indigenous banks

FUNCTIONS OF BANKS
I. Primary functions
It comprises :
1. Receiving deposits from the public
2. Making loans and advances
3. Credit creation
4. Use of cheque system and the plastic card
5. Transfer of funds

1. Receiving deposits from the public

It is one of the important functions of the commercial bank. It accepts deposits from every
class and from every source. To attract savings from all sorts of individuals, the bank
maintains different types of deposit accounts.
 Fixed deposit accounts
It is also known as time deposits. Money is deposited in these accounts for a fixed period
of time. It cannot be withdrawn before the expiry of that period. However it can be
withdrawn before the maturity date by discarding the interest at least partly. The rate of
interest given to fixed deposits is higher than other types of deposits. Rate of interest may
be higher if the period of deposit is long.

29
  Current deposit
This type of deposit is suitable for businessman. Current account holders should keep a
minimum balance of Rs.500 to keep the account running. Ordinarily no interest is allowed
in this type of accounts. The bank may charge a nominal amount is incidental charges
from the depositor.
 Savings deposit account
It can be opened with a minimum amount of Rs.5. There is variations in the minimum
amount to be kept by different banks. Certain restrictions are imposed on number of times
for withdrawal of money from the deposit account and the amount of withdrawal with in a
period. The rate of interest paid is less than the rate of interest paid on fixed deposits.
 Recurring deposits
The purpose of this account is to encourage the public to save regularly a fixed sum.
Theamount is paid in total after the stipulated period with interest. The rate of interest
paid may be nearly the rate of interest on fixed deposit.
2. Making loans and advances
Lending of money is the other major important function of the commercial bank. After
keeping certain percentage of deposits as cash reserve the balance is given as loans and
advances.
 Loans
A loan is granted by the banker in a separate account known as loan account. The amount
sanctioned is either paid or credited in the account of the customer. The interest is
charged on the whole amount of loan. The loan can be repaid in instalments or in
maturity.
 Overdraft
Under this facility the depositors are allowed to withdraw money more than their deposits.
 Cash credit
It is a type of loan granted to the borrower against his current assets, such as shares,
stocks, bonds etc. Under this arrangement, the borrower is allowed a specific amount of
advance under a separate account known as cash credit account.
 Discounting of bills of exchange
 Money at call and short notice

30
  Consumer credit
 Miscellaneous advances
3. Credit creation
It is a unique function of a modern bank. When the bank performs important functions
such as receiving and lending of money. It automatically performs another function
namely creation of credit. So when a loan is given it creates an equivalent deposit. It
results in a net increase in money stock of the economy. Creation of such deposit is called
credit creation.

4. Use of the cheque system and the plastic card

Under the cheque system, the depositors are allowed to withdraw money from their
deposits. Cheque can be used for large transactions instead of money. It is used for the
transaction purpose in the developed countries. But now it is replaced by plastic cards.
For e.g. VISA and MASTER cards. These two international cards are very popular and
are accepted and honoured all over the world.
5. Transfer of funds
Under this function, the commercial bank provides facilities for transferring funds from
one part of the country to another or from one country to another country. Money is
transferred by issuing bank drafts, mail transfers, telegraphic transfers or electronic fund
transfer.
II. SECONDARY FUNCTIONS
Agency services :
i) Collection of credit instruments
ii) Collection of dividends
iii) Acts as a trustee or executer
iv) Execution of standing orders
v) Purchase and sale of securities
vi) Acting as a representative or correspondent
vii) Remittance of funds
viii) Deals foreign exchange
ix) They act as agent
x) Acts as a administrator
31
General utility services :
i) Safe custody of valuables
ii) Locker facility
iii) Letter of credit
iv) Fund transfer
v) Provides information
vi) Act as referees
vii) Underwrites shares
viii) Issue of gift cheques
ix) Foreign exchange
x) Credit cards
xi) Travellers cheques
xii) Collection of statistics

32
 CHAPTER - 4

COMPANY PROFILE

33
 STATE BANK OF INDIA
Type : Public
Traded as : NSE: SBIN
BSE: 500112
LSE: SBID
Industry : Banking, Financial services.
Founded : 2-06-1806
Headquarters : Mumbai, Maharashtra, India
Area served : Worldwide
Key people : Chairperson- Arundhati Bhattacharya
Managing directors- B. Sriram, Dinesh Kumar Khara,
Rajnish Kumar, P. K. Gupta
Directors- Sunil Mehta, M D Mallya, Chandan Sinha,
Sanjiv Malhotra, Girish K. Ahuja, Pushpendra Rai,
Anjuly Chib Duggal, Deepak I. Amin
Products : Consumer banking, corporate banking, finance and
Insurance, investment banking, mortgage loans, savings,
Private banking, private equity, securities, asset
management, wealth management, credit cards.
Revenue : ₹ 298,640.45 Crore
Website : www.sbi.co.in

HISTORY
The evolution of State Bank of India can be traced back to the first decade of the 19th
century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June
1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January
1809. It was the first ever joint-stock bank of the British India, established under the
sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay
(established on 15 April 1840) and the Bank of Madras (established on 1 July 1843)

34
followed the Bank of Bengal. These three banks dominated the modern banking scenario
in India, until when they were amalgamated to form the Imperial Bank of India, on 27
January 1921. An important turning point in the history of State Bank of India is the
launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving
the Indian economy in general and the rural sector of the country, in particular. Until the
Plan, the commercial banks of the country, including the Imperial Bank of India, confined
their services to the urban sector. Moreover, they were not equipped to respond to the
growing needs of the economic revival taking shape in the rural areas of the country.
Therefore, in order to serve the economy as a whole and rural sector in particular, the All
India Rural Credit Survey Committee recommended the formation of a state-partnered and
state-sponsored bank. The All India Rural Credit Survey Committee proposed the takeover
of the Imperial Bank of India, and integrating with it, the former state-owned or state-
associate banks. Subsequently, an Act was passed in the Parliament of India in May 1955.
As a result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in
making the State Bank of India more powerful, because as much as a quarter of the
resources of the Indian banking system were controlled directly by the State. Later on, the
State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State
Bank of India to make the eight former State-associated banks as its subsidiaries.
SUBSIDIARIES
The State Bank Group includes a network of eight banking subsidiaries and several non-
banking subsidiaries. Through the establishments, it offers various services including
merchant banking services, fund management, factoring services, primary dealership in
government securities, credit cards and insurance.
The eight banking subsidiaries are:
• State Bank of Bikaner and Jaipur (SBBJ)
• State Bank of Hyderabad (SBH)
• State Bank of India (SBI)
• State Bank of Indore (SBIR
• State Bank of Mysore (SBM)
• State Bank of Patiala (SBP)
• State Bank of Saurashtra (SBS)
• State Bank of Travancore (SBT)

VISION AND MISSION

VISION
• My SBI.
35
• My Customer first.
• My SBI: First in customer satisfaction

MISSION
• We will be prompt, polite and proactive with our customers.
• We will speak the language of young India.
• We will create products and services that help our customers achieve their goals.
• We will go beyond the call of duty to make our customers feel valued.
• We will be of service even in the remotest part of our country.
• We will offer excellence in services to those abroad as much as we do to those in
India.
• We will imbibe state of the art technology to drive excellence.

36
 CANARA BANK
Type : Public
Traded as : NSE: CANBK
BSE: 532483
Industry : Banking, financial services
Founded : Ammembal Subba Rao Pai
Headquarters : Bangalore, Karnataka, Kerala
Key people : Chairperson- T.N. Manoharan
MD- Rakesh Sharma
Directors- Pradyuman Singh Rawat, Harideesh Kumar,
Dinabandhu Mohapatra, Rajat Bhargava, Pankaj Jain, Uma
Shanker
Products : investment banking, consumer banking, credit cards,
private banking, asset management, pension, mortgages,
commercial banking
Revenue : ₹ 48,942 crore
Websites : www.canarabank.com
HISTORY
Canara Bank is a state-owned commercial bank with headquarter in Bangalore. The Bank
operates in four segments, namely treasury operations, retail banking operations,
wholesale banking operations and other banking operations. The Bank provides a range of
products and services to the customers. The subsidiaries of the Bank include Canbank
Financial Services Ltd, Canbank Venture Capital Fund Ltd, Canbank Factors Ltd, Canara
Robecco Asset Management Company Ltd, Canbank Computer Services Ltd, Canara
Bank Securities Ltd and Canara HSBC Oriental Bank of Commerce Life Insurance
Company Ltd. Canara Bank was incorporated on July 1, 1906 with the name Canara
Hindu Permanent Fund Ltd. In the year 1910, the name of the Bank was changed from
Canara Hindu Permanent Fund Ltd to Canara Bank Ltd. In July 19, 1969, the Bank was
nationalized along with 14 major banks in the country. In the year 1976, they inaugurated
their 1000th branch.
In the year 1983, the Bank inaugurated an overseas branch at London. In the year 1984,
Laksmi Commercial Bank Ltd was amalgamated with the Bank. In the year 1985, the
37
Bank commissioned Indo Hong Kong International Finance Ltd. In the year 1987, they
launched Canbank Mutual Fund & Canfin Homes. In the year 1989, they started Canbank
Venture Capital Fund. During the year 1989-90, the Bank incorporated their factoring
subsidiary, Canbank Factors Ltd. During the year 1992-93, they became the first Bank to
articulate and adopt the directive principles of 'Good Banking'. During the year 1995-96,
they became the first Bank to be conferred with ISO 9002 certification for one of its
branches in Bangalore.

VISION AND MISSION

VISION
• To emerge as a Preferred Bank‘ by pursuing global benchmarks in profitability,
operational efficiency, asset quality, risk management and expanding the global reach.
MISSION
• To provide quality banking services with good customer care, create value for all
stakeholders and continue as a responsive corporate social citizen.

38
 PUNJAB NATIONAL BANK
Type : Public
Traded as : NSE: PNB
BSE: 532461
Industry : Banking, financial services
Founded : 19-05-1894
Headquarters : New Delhi
Key People : MD- Usha Ananthasubramanian
Directors- Brahmji Rao, Ram S.S, Rajesh Aggarwal,
Rabi.N.Mishra, Dilip Kumar, G.P Khadelwal, Sudhir Nayar
Hiroo Mirchandani
Products : Credit cards, consumer banking, corporate banking, finance
and insurance
Revenue : ₹47,424.35 crore
Website : www.pnbindia.in

HISTORY
Established in 1895 in Lahore, Punjab National Bank is one of the oldest banks in India
having a virtual presence in every important center of the country. The Bank has the
distinction of being the first Indian bank to have been started solely with Indian capital. In
the year 1940, the Bank absorbed Bhagwan Dass Bank, a scheduled bank located in Delhi
circle. In the year 1951, they acquired the 39 branches of Bharat Bank and in the year
1961, they acquired Universal Bank of India. Punjab National Bank was nationalized in
July 1969 along with 13 other banks. The banks were expected to reach people in every
nook and corner, meet their needs, and work for their economic upliftment. Removal of
poverty and regional imbalances were accorded a high priority. PNB has always
responded enthusiastically to the nation's needs. It has been earnestly engaged in the task
of national development. In the process, the bank has emerged as a major nationalized
bank.

39
VISION AND MISSION
VISION
• ―To position Punjab National Bank as the Most preferred bank‘ for customers, the Best
Place to Work In‘ for the employees and a Benchmark of Excellence‘ for the industry.

MISSION
Creating value of all its customers, Investors and Employees for being the first choice for
all stakeholders.

40
 SOUTH INDIAN BANK
Type : Private
Traded as : NSE: SOUTHBANK
BSE: 532218
Industry : Banking industry
Founded : 1929
Headquarters : SIB House, Mission Quarters Thrissur city, Kerala, India,
680001
Key people : Chairperson- Amitabha Guha
MD- V.G Mathew
Directors- Salim Gangadharan, Mohan E. Alapatt, K.
Thomas Jacob, Dr.John Joseph, Francis Alapatt, Cheryan
Varkey, Ranjana Salgaocar, Parayil George John Tharakan.
Products : Loans, savings, investment, vehicles, insurance etc.
Revenue : ₹ 26.4270 billion
Net Income : ₹2.3376 billion
Website : www.southindianbank.com

HISTORY
South Indian Bank was registered as a private Limited Company under the companies Act
of 1913 and commenced business on 29-01-1929 at Round South, Thrissur. The South
Indian Bank Ltd., was formed by a group of 44 enterprising men of Thrissur who
contributed Rs.500/ - each to the initial paid up capital of Rs.22000/ -. Their main
objective was to serve the merchant community of Thrissur by freeing them from the
clutches of the money lenders who charged exorbitant rates of interest. The bank received
very good support from the public at large. Initially the growth was slow but steady. The
number of branches opened each year testified its stability and popularity. It was included
in the second schedule of the Reserve Bank of India and became a scheduled Bank on 07-
08-1946. SIB was the first scheduled Bank in the private sector in Kerala to get the license
under section 22 of the Banking Regulation Act 1949 from RBI on 17-06-1957. With
branches all over India and a clientele across the world, the bank is considered one of the
most proactive banks in India with a competent tech savvy team of professional at the core
of services.

41
VISSION AND MISSION
Vision
• To be the most preferred bank in the areas of customer service, stakeholder value and
corporate governance.
Mission
• To provide a secure, agile, dynamic and conducive banking environment to
customers with commitment to values and unshaken confidence, deploying the best
technology, standards, processes and procedures where customer convenience is of
significant importance and to increase the stakeholders‘ value

42
 FEDERAL BANK
Type : Private
Traded as : NSE: FEDERALBNK
BSE: 500469
LSE: FEDS
Industry : Banking and Allied Industries
Predecessor : Travancore Federal Bank
Founded : 23.04.1931
Founder : Travancore federal bank: Oommer Geevarughese
: Federal bank: Kulangara Paulo Hormis
Headquarters : Federal towers, aluva, kochi- 683101, Kerala, India.
Area served : India
Key people : Chairperson - Nilesh Shivji Vikamsey
MD - Shyam Srinivasan
Directors - Ganesh Sankaran, Ashutosh Khajuria,
Balagopal Chandrasekhar, Shubhalakshmi Panse, KM
Chandrasekhar, Grace Elizabeth Koshie, Sudhir Moreshwar
Joshi, Harish H Engineer, Dilip Gena Sadarangani.
Products : Loans, saving accounts, current accounts, Debit cards,
credit cards, payment gateways.
Revenue : ₹77.4 billion
Website : www.federalbank.co.in

HISTORY
Federal bank, earlier known as Travancore Federal bank, was incorporated in 1931.
Though initially it was known as the Travancore Federal Bank, it gradually transformed
into a full-fledged bank under the able leadership of its founder, K.P Hormis. The name
Federal Bank Limited was officially announced in the year 1947 with its headquarters
nestled on the banks on the river periyar. Since then there has been no looking back and
the bank has become one of the strongest and most stable banks in the country. It began
operations with an authorized capital of Rs 5000. In the beginning it was engaged in
auction chitty and other banking transactions related to agriculture and industry. Today it
43
is the largest traditional private sector banks in the country. The bank is the fourth largest
bank in India in terms of capital base and can easily boast of a Capital Adequacy Ratio of
17.23%, one of the highest in the industry. This along
with the existence in a highly regulated environment has helped the bank to tide over the
recession with minimum impact to its financial stability. The bank has been expanding
organically over the past few months. The bank believes in extending their reach to their
customers by making its services available to all, 24x7. The bank has branches and ATMs
across India in addition to the Representative Office a Abu Dhabi that serves as a nerve
center for the NRI customers in UAE.

VISION AND MISSION

Vision
• To be the Most Admired Bank by all stakeholders.
Mission
Devote balanced attention to the interests and expectations of stakeholders, and in
Particular :
• Shareholders: Achieve a consistent annual post-tax return of 18% on net worth.
• Employees: Develop in every employee a high degree of pride and loyalty in serving the
Bank.
• Customers: Meet and even exceed expectations of target customers by delivering
appropriate products and services, employing as far as feasible, single window and 24-
hour-seven-day-week concepts, leveraging a strengthened branch infrastructure, ATMs,
other alternative distribution channels, cross-selling a range of products and services to
meet customer needs varying over time, and ensuring the highest standards of service at all
time.

44
 CHAPTER - 5
DATA ANALYSIS AND
INTERPRETATION

45
 DATA ANALYSIS
The data after collecting has to be processed and analysed in accordance with the outline
laid down for their purpose at the time of developing the research plan. This is essential
for the scientific study and for ensuring that the researcher has all the relevant data for
contemplated comparison analysis.
The term analysis refers to the computation of the certain measures
along with searching patterns of relationship that exists among data groups. Analysis of
data in general way involves a number of closely related operations that are performed
with the purpose of summarizing these in such a manner that they answer the research
questions. In the purpose of analysis, relationship to determine with what validity, data can
be said to indicate any employee.
The study is conducted among the employees of public and
private sector banks and bank customers in Thrissur district. The overall research was
based upon the responses taken from the questionnaire.

46
 (FOR EMPLOYEES)
TABLE SHOWING REDUCTION OF WORK LOAD OF JOB IN
BANK

RESPONSES NO. OF PERCENTAGE

RESPONDENTS
Agree 33 66
Strongly Agree 8 16
Disagree 2 4
Strongly Disagree 0 0
Neutral 7 14
Total 50 100
Table 4.1

CHART SHOWING REDUCTION OF WORKLOAD OF JOB IN

BANK

Agree
Strongly Agree
Disagree
Strongly Disagree
Neutral

Chart 4.1

INTERPRETATION
The objective of this question was to know whether there is reduction of workload of job
in bank. Here 66% of respondents agree that there is reduction of work load of job in bank,
16% of the employees strongly agree, 14% of respondents do not have any opinion and
4% of respondents disagree with this.

47
 TABLE SHOWING INCREASE IN SERVICE EFFICIENCY

RESPONSES NO OF PERCENTAGE
RESPONDENTS
Agree 31 62
Strongly Agree 8 16
Disagree 0 0
Strongly Disagree 0 0
Neutral 11 22
Total 50 100
Table 4.2

CHART SHOWING INCREASE IN SERVICE EFFICIENCY

Agree
Strongly Agree
Disagree
Strongly Disagree
Neutral

Chart 4.2

INTERPRETATION
The objective of this question was to know whether there is increase in service efficiency
due to Core Banking or not. Here 62% of the respondents are agreed with the statement
increase in service efficiency due to core banking, 22% of the respondents stay neutral and
16% of the respondents are highly agree with this.

48
TABLE SHOWING SECURITY MEASURES TO SECURE BANKING
ACTIVITIES

RESPONSES NO.OF RESPONDENTS PERCENTAGE

Yes 50 100
No 0 0
Total 50 100
Table 4.3

CHART SHOWING SECURITY MEASURES TO SECURE BANKING

ACTIVITIES

Yes
No

Chart 4.3

INTERPRETATION
The objective of this question was to know the security measures are in place to secure
banking activities. Here 100% of the respondents are aware of security measures to secure
banking transactions.

49
 TABLE SHOWING NEED FOR RIGOROUS TRAINING TO
HANDLE ALL BANKING ACTIVITIES

RESPONSES NO.OF RESPONDENTS PERCENTAGE

Yes 22 44
No 28 56
Total 50 100
Table 4.4

CHART SHOWING NEED FOR RIGOROUS TRAINING TO

HANDLE ALL BANKING ACTIVITIES

Yes
No

Chart 4.4

INTERPRETATION
The objective of this question was to know rigorous training is required for bank
employees to handle all banking activities. Here the percentage of response is 44% and
56% respectively. This shows that 56% of the respondents don’t need rigorous training for
handling banking activities and 44% of the respondents need rigorous training for
handling banking activities.

50
 TABLE SHOWING BENEFIT OF TRAINING TO HANDLE ALL
BANKING ACTIVITIES

RESPONSES NO.OF RESPONDENTS PERCENTAGE

Yes 42 84
No 8 16
Total 50 100
Table 4.5

CHART SHOWING BENEFIT OF TRAINING TO HANDLE ALL

BANKING ACTIVITIES

Yes
No

Chart 4.5

INTERPRETATION
The objective of this question was to know the training provided is enough to bank
employees handle all banking activities. This shows that 84% of the respondents are
satisfied with the training provided to handle all banking activities and 16% of the
respondents are not satisfied with the training provided to handle all banking activities.

51
 TABLE SHOWING SIGNIFICANT CHANGE IN BANK WHEN
BRICKS & MORTAR SYSTEM CHANGED INTO CLICK &
PORTAL SYSTEM
RESPONSES NO.OF PERCENTAGE
RESPONDENTS
Agree 31 62
Strongly Agree 11 22
Disagree 0 0
Strongly Disagree 0 0
Neutral 8 16
Total 50 100
Table 4.6

CHART SHOWING SIGNIFICANT CHANGE IN BANK WHEN

BRICKS & MORTAR SYSTEM CHANGED INTO CLICK &
PORTAL SYSTEM

Agree
Strongly Agree
Disagree
Strongly Disagree
Neutral

Chart 4.6

INTERPRETATION
The objective of this question was to know whether there is significant change occurred in
bank when Bricks & Mortar System changed into Click & Portal System or not. Here
62% of respondents agreed with significant change occurred in bank when bricks and
mortar system changed into click and portal system, 22% of respondents are highly agreed
and 16% of respondents stay neutral.

52
 TABLE SHOWING PROBLEMS OF CORE BANKING

RESPONSES NO.OF PERCENTAGE

RESPONDENTS
Lack of training 14 28
Lack of knowledge 8 16
about technology
Fear about failure in 10 20
computer systems
Less direct interaction 18 36
with customers
Total 50 100
Table 4.7

CHART SHOWING PROBLEMS OF CORE BANKING

Lack of training

Lack of knowledge about

technology
Fear about failure in
computer systems
Less direct interaction
with customers

Chart 4.7

INTERPRETATION
The objective of this question was to know the problems faced by bank employees. Here
36% of respondents have less direct interaction with customers, 28% of the respondents
have lack of training, 20% of respondents have fear about failure in computer systems and
16% of the respondents have lack of knowledge about technology.

53
 TABLE SHOWING RATE OF CORE BANKING ON THE BASIS OF
DIFFICULTY IN OPERATIONS

RESPONSES NO.OF RESPONDENTS PERCENTAGE

1 20 40
2 15 30
3 10 20
4 5 10
5 0 0
Total 50 100
Table 4.8

CHART SHOWING RATE OF CORE BANKING ON THE BASIS OF

DIFFICULTY IN OPERATIONS

1
2
3
4
5

Chart 4.8

INTERPRETATION
The objective of this question was to know the difficulty in Core Banking operations. Here
40% of the respondents have a like rate of 1, 30% of the respondents have a like rate of 2,
20% of respondents have a like rate of 3 and 10% of respondents have a like rate of 4.

54
 TABLE SHOWING RATE OF CORE BANKING SOLUTIONS
PROVIDED BY BANK TO CUSTOMERS

RESPONSES NO.OF RESPONDENTS PERCENTAGE

1 0 0
2 0 0
3 7 14
4 19 38
5 24 48
Total 50 100
Table 4.9

CHART SHOWING RATE OF CORE BANKING SOLUTIONS

PROVIDED BY BANK TO CUSTOMERS

1
2
3
4
5

Chart 4.9

INTERPRETATION
The objective of this question was to know the rate of Core Banking Solutions provided by
bank to customers. Here 48% of the respondents have a like rate of 5, 38% of the
respondents have a like rate of 4 and 14%of the respondents have a like rate of 3.

55
 TABLE SHOWING BENEFIT OF CORE BANKING TO
EMPLOYEES
RESPONSES NO.OF RESPONDENTS PERCENTAGE

Yes 48 96
No 2 4
Total 50 100
Table 4.10

CHART SHOWING BENEFIT OF CORE BANKING TO

EMPLOYEES

Yes
No

Chart 4.10

INTERPRETATION
The objective of this question was to know whether Core Banking is beneficial to bank
employees or not. Here 96% of the respondents are benefited from Core Banking and 4%
of the respondents are not benefited from Core Banking.

56
 TABLE SHOWING SATISFACTION LEVEL OF EMPLOYEES
TOWARDS CORE BANKING

RESPONSES NO.OF PERCENTAGE

RESPONDENTS
Satisfied 17 34
Highly Satisfied 28 56
Dissatisfied 0 0
Highly Dissatisfied 0 0
No Opinion 5 10
Total 50 100
Table 4.11

CHART SHOWING SATISFACTION LEVEL OF EMPLOYEES

TOWARDS CORE BANKING

Agree
Strongly Agree
Disagree
Strongly Disagree
Neutral

Chart 4.11

INTERPRETATION
The objective of this question was to know the satisfaction level of bank employees
towards core banking. Here 56% of the respondents are highly satisfied and 34% of the
respondents are satisfied, and 10% of the respondents have no opinion.

57
 TABLE SHOWING NEED FOR IMPROVEMENT IN CORE
BANKING

RESPONSES NO.OF RESPONDENTS PERCENTAGE

Yes 50 100
No 0 0
Total 50 100
Table 4.12

CHART SHOWING NEED FOR IMPROVEMENT IN CORE

BANKING

Yes
No

Chart 4.12

INTERPRETATION
The objective of this question was to know the need for improvement in Core Banking.
Here 100% of the respondents need improvement in Core Banking.

58
 (FOR CUSTOMERS)

TABLE SHOWING NUMBER OF MEN AND WOMEN HAVE BANK

ACCOUNT

RESPONSE NO. OF PERCENTAGE

RESPONDENTS

Men 30 60
Women 20 40
TOTAL 50 100
Table 4.13

CHART SHOWING NUMBER OF MEN AND WOMEN HAVE BANK

ACCOUNT

Men
Women

Chart 4.13

INTERPRETATION
The objective of this question was to know the number of men and women have bank
account. Here 60% of men and 40% of women have bank account.

59
 TABLE SHOWING THE OCCUPATION OF THE USERS
RESPONSES NO.OF RESPONDENTS PERCENTAGE

Government job 6 12
Private sector 11 22
Business 13 26
Self employment 8 16
House wife 5 10
Student 5 10
Others 2 4
TOTAL 50 100
Table 4.14

CHART SHOWING THE OCCUPATION OF THE USERS

Government job
Private sector
Business
Self employment
House wife
Student
Others

Chart 4.14

INTERPRETATION
The objective of this question was to know the occupation of users. This shows that 26%
of users are businessman, 22% of the users are private sector employees, 16% of the users
are self employed, 12% of the users are government employees, 10% of the users are
house wives, 10% of the users are students and 4% of users are other sector employees.

60
 TABLE SHOWING AWARENESS ABOUT CORE BANKING

RESPONSES NO.OF RESPONDENTS PERCENTAGE

Yes 40 80
No 10 20
Total 50 100
Table 4.15

CHART SHOWING AWARENESS ABOUT CORE BANKING

Yes
No

Chart 4.15

INTERPRETATION

The objective of this question was to know the awareness about core banking. Here 80%
of the respondents are aware about core banking and 20 % of the respondents are unaware
of it.

61
 TABLE SHOWING BANKING TRANSACTIONS ARE SECURED
TRANSACTIONS

RESPONSES NO.OF PERCENTAGE

RESPONDENTS
Agree 26 52
Strongly Agree 10 20
Disagree 3 6
Strongly Disagree 0 0
Neutral 11 22
Total 50 100
Table 4.16

CHART SHOWING BANKING TRANSACTIONS ARE SECURED

TRANSACTIONS

Agree
Strongly Agree
Disagree
Strongly Disagree
Neutral

Chart 4.16

INTERPRETATION

The objective of this question was to know banking transactions are secured transactions.
Here 52% of the respondents are agreed with banking transactions are secured
transactions, 22 % of the respondents have no opinion, 20% of the respondents are
strongly agreed and 6 % of the respondents disagree with this.
62
 TABLE SHOWING CONVINIENT MODE OF BANKING

RESPONSES NO.OF RESPONDENTS PERCENTAGE

ATM Services 23 46
Mobile Banking 5 10
Internet Banking 12 24
Branch Banking 10 20
Total 50 100
Table 4.17

CHART SHOWING CONVINIENT MODE OF BANKING

ATM Facility
Personal Banking
Mobile Banking
Tele Banking
Internet Banking

Chart 4.17

INTERPRETATION
The objective of this question was to know the convenient mode of banking. Here 46 % of
respondents prefer ATM Services, 24% of the respondents prefer Internet Banking, 20%
of the respondents prefer Branch Banking and 10% of the respondents prefer Mobile
Banking.

63
 TABLE SHOWING EMPLOYEE RESPONSE TO SERVICES

RESPONSES NO.OF PERCENTAGE

RESPONDENTS
Very Good 14 28
Good 28 56
Satisfactorily 8 16
Total 50 100
Table 4.18

CHART SHOWING EMPLOYEE RESPONSE TO SERVICES

Very good
Good
Satisfactorily

Chart 4.18

INTERPRETATION

The objective of this question was to understand the employees’ response towards
customers. Most of the customers are satisfied with employees’ response towards them.
Here 56 % of the employees have good response towards customers, 28 % of the
employees have very good response and 16 % of the employees have satisfactorily
response.

64
 TABLE SHOWING PROBLEMS OF CORE BANKING

RESPONSES NO.OF PERCENTAGE

RESPONDENTS
Lack of awareness 26 52
Security problem 9 18
Network problem 15 30
Total 50 100
Chart 4.19

CHART SHOWING PROBLEMS OF CORE BANKING

Lack of awareness
Security problem
Network problem

Chart 4.19

INTERPRETATION
The objective of this question was to understand the problems of core banking to
customers. Here 52 % of the respondents have the problem of lack of awareness, 30% of
the respondents have network problem and 18% of respondents have security problem.

65
 TABLE SHOWING SATISFACTION LEVEL OF CUSTOMERS IN
CORE BANKING SOLUTIONS

RESPONSES NO.OF RESPONDENTS PERCENTAGE

Satisfied 30 60
Highly Satisfied 15 30
Dissatisfied 0 0
Highly Dissatisfied 0 0
Neutral 5 10
Total 50 100
Table 4.20

CHART SHOWING SATISFACTION LEVEL OF CUSTOMERS IN

CORE BANKING SOLUTIONS

Satisfied
Highly Satisfied
Dissatisfied
Highly Dissatisfied
Neutral

Chart 4.20

INTERPRETATION
The objective of this question was to know the satisfaction level of customers. Here 60%
of the respondents are satisfied with Core Banking, 30% of the respondents are highly
satisfied and 10% of the respondents have no opinion.

66
 TABLE SHOWING SATISFACTION TOWARDS CORE BANKING
SERVICES

RESPONSES NO.OF PERCENTAGE

RESPONDENTS
Cheap and Best 8 16
Save time consumption 12 24
Fast transactions 20 40
No need to visit branch 10 20
Total 50 100
Table 4.21

CHART SHOWING SATISFACTION TOWARDS CORE BANKING

SERVICES

Cheap and Best

Save time consumption
Fast transactions
No need to visit branch

Chart 4.21

INTERPRETATION
The objective of this question was to know the satisfaction of respondents towards Core
Banking services. Here 40% of respondents are satisfied because of fast transactions, 24%
of respondents are satisfied because of saves time consumption, 20% of respondents are
satisfied because of no need to visit branch and 16% of respondents are satisfied because
of cheap and best.

67
 CHAPTER – 6

FINDINGS, SUGGESTIONS AND

CONCLUSION

68
INTRODUCTION

This chapter summarizes the findings emerged from analysis of the results of effectiveness
of core banking on bank employees and customers, few suggestions have been
recommended for the efficient functioning and effective management of Core Banking.

FINDINGS
After making the systematic analysis and interpretation the following findings are invented

 Workload of job in bank has reduced due to Core Banking.

 Service efficiency is increased in bank due to Core Banking.
 Security measures are in place to secure all banking transactions.
 Training is required for bank employees to handle all banking activities.
 Training provided to bank employees is enough to handle all banking activities.
 Significant change occurred in bank when Bricks & Mortar System changed into
Click & Portal System.
 Most of the employees face problems with Core Banking are reduction in direct
interaction with customers, reduction in number of employees and centralised
banking system.
 There is less difficulty in functioning Core Banking.
 Banks could provide better Core Banking services to customers.
 Core Banking is more helpful to bank employees.
 All bank employees are satisfied with the concept Core Banking.
 All employees need improvement in the concept of Core Banking.
 Males are the major users of Core Banking services.
 Business men, private employees and self employed peoples are using core
banking services effectively.
 Most of the customers are aware about core banking.
 Banking transactions are secured transactions.
 Majority of the customers prefer ATM services and Internet Banking as convenient
mode of banking.
 Employees have good response to services offered for customers.
 Customers have a problem of network problem and lack of awareness regarding
Core Banking .
 Most of the customers are satisfied with Core Banking.
 Majority of the customers are satisfied with core banking due to fast transactions
and saves time consumption.
69
 SUGGESTIONS
 The satisfaction level could further be increased if the employees are given proper
training with respect to core banking.
 If any failure in computer system occur, it can cause entire network go down. So
precaution like instant back up apps should be used to avoid this problem.
 Core banking service should be according to the employee satisfaction. The bank
should reframe the demonstration programs for the employees to enjoy the services
properly.
 Core banking has reduced customers’ direct interaction with banks. So there
should be a good relation between employees and customers.
 Customers may less aware of core banking. So bank should conduct some
awareness program with respect to core banking.
 Customers should be educated with respect to all benefits available with Core
Banking.
 The banks should focus at improving security especially to eliminate threats at
Core Banking.

70
 CONCLUSION
The study was conducted to understand the effectiveness of core
banking on bank employees. Execution of Core Banking System across all branches helps
to speed up most of the common transactions of bank and customer. In Core Banking, the
all branches access banking applications from centralised server which is hosted in
secured data centre.

This shows that core banking has made a significant impact

on banking activities. Bank employees are satisfied to core banking. The growth
percentage would further be increased if the employees of the bank are given effective and
complete training on core banking and also by educating and increasing the awareness
level of them. And customers are satisfied with core banking and bank should provide
awareness regarding core banking to customers for increasing its efficiency.

71
 BIBLIOGRAPHY
BOOKS
 M. Revathy Sriram (2013) “CORE BANKING SOLUTION : Evaluation of
Security and Controls”
 Dr. K. Venugopalan and Dr. Abdul Assis Koroth (2015) “Banking and
Insurance”, Calicut University Central Co-operative Stores
Ltd.No.4347.Calicut University

WEBSITES
 www.shodhganga.inflibnet.ac.in
 www.virmati.com/core-banking-system.html
 http://www.esds.co.in/corebanking-hosting.php
 www.scribd.com
 http://corebanking.bankingciooutlook.com

72
APPENDIX

73
Dear Respondent,

As a part of my UG program, under St. Aloysius College,

Elthuruth ( Affiliated to Calicut University ), I, Amrutha. P. R is undergoing
a project work on “ EFFECTIVENESS OF CORE BANKING”.

I would be much obliged for sharing your views and opinions

through this questionnaire. I also assure you that the information provided by
you will be kept as highly confidential.

THANKING YOU,

AMRUTHA. P. R

THE EFFECTIVENESS OF CORE BANKING

(For Employees)
1. Name : ……………………………………………..

2. Gender : Male Female

3. Age :

Below 30 Above 30 and below 45 Above 45

4. Qualification :

Post Graduate Graduate 10th/+2

5. Name of bank where you currently working

…………………………………………....

6. Total years of service in banking organization

…………………………………………..

7. Core Banking has helped to reduce the workload of job in bank.

Strongly Agree Agree Neutral

Strongly Disagree Disagree

74
8. Service efficiency is increased due to Core Banking.

Strongly Agree Agree Neutral

Strongly Disagree Disagree

9. Are security measures are in place to secure banking transactions?

Yes No

10. Rigorous training is required for bank employees to handle banking transactions.

Yes No

11. Was the training provided by bank to you enough to handle all banking

transactions?

Yes No

12 . Significant change occurred in bank, when Bricks & Mortar system changed into

Click & Portal system.

Strongly Agree Agree Neutral

Strongly Disagree Disagree

13. As an employee, what problems do you face with Core Banking?

a) Lack of training
b) Lack of knowledge about technology
c) Fear about failure in computer systems
d) Less direct interaction with customers
Any other (please specify)
……………………………………………………………………

14. Rate Core Banking from 1 to 5 on difficulty in operation [5 to high and 1 to least]
1 4

2 5

75
 15. Rate the Core Banking services provided by bank to customers [5 to best and 1 to
least]
1 4

2 5

16. Does Core Banking seems beneficial for you?

Yes No

17. How much are you satisfied with the concept of core banking ?

Highly Satisfied Satisfied Neutral

Highly Dissatisfied Dissatisfied

18. Do you think there is a need to improve in the concept of core banking ?

Yes No

(For Customers )
1. Name : ……………………………………………..

2. Gender : Male Female

3. Age :

Below 30 Above 30 and below 45 Above 45

4. Occupation :

Government employee Private job Business

Self-employed Student House wife
Others (Please specify) ……………………………………………….

5. Do you have bank Account ?

Yes No
6. Do you know the bank has introduced the concept Core Banking ?
Yes No
76
7. Banking transactions are secured transactions.
Strongly Agree Agree Neutral

Strongly Disagree Disagree

8. According to you which is more convenient way for banking ?

ATM Services Mobile Banking

Internet Banking Branch Banking

Any other (please specify) …………………………………………………….

9. How well does the employees of the bank response to the concept core banking ?

Very Good Good Satisfactorily

10. As a customer, what problems do you face with core banking ?

a) Lack of awareness
b) Security problem
c) Network problem

Any other (Please Specify ) ………………………………………………..

11. How much are you satisfied with Core Banking Solutions ?

Highly Satisfied Satisfied Neutral

Highly Dissatisfied Dissatisfied

12. What are the reasons for satisfaction towards Core Banking services ?

a) Cheap and best

b) Saves time consumption
c) Fast transactions
d) No need to visit bank

Any other (Please Specify ) ………………………………………………..

77