A PROJECT REPORT

ON

“JOB SATISFACTION AMONG BANK EMPLOYEES”

In the fulfilment of requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION

(2018-2020)

Submitted To:- Submitted By:-

Ms. Rakhneet Kaur Khushwant Kaur
UID:-87012
MBA 2th Sem

MALWA COLLEGE, BATHINDA

1
 EXECUTIVE SUMMARY
The Banking Industry was once a simple and reliable business that took deposits from
investors at a lower interest rate and loaned it out to borrowers at a higher rate. The Banking
Industry at its core provides access to credit. In the lenders case, this includes access to their
own savings and investments, and interest payments on those amounts. In the case of
borrowers, it includes access to loans for the creditworthy, at a competitive interest rate.
Banking services include transactional services, such as verification of account details,
account balance details and the transfer of funds, as well as advisory services, that help
individuals and institutions to properly plan and manage their finances. Online banking
channels have become key in the last 10 years.
The topic of my project is JOB SATISFACTION among Bank employees. The
objective of my topic is to determine the level of satisfaction of bank employees, to
know their satisfaction level with compensation package, work timings and facilities
provided to them by the banks. Sample size of this project is 100.Convenient sampling
is used.
Findings of this project is that 48 % of respondents are satisfied with their
compensation package, 65%are satisfied with their work timings, 59 % are satisfied with
their job. Among physical conditions of their workplace lighting and among benefits given to
them salary is the most important for them. Techniques used are pie, bar charts and chi-
square. There is significant relation between age and employees career growth from
their work and qualification and their empowerment to make and implement their own
decisions in their work area.

2
3
 TABLE OF CONTENTS
TOPIC PAGE NO.
1. SUMMARY 2
2 INTRODUCTION 4-5
3. BANKING INDUSTRY 6-41
4. OVERVIEW OF TOPIC 42
5. DATA INTERPRETATION & ANALYSIS 43-60
6. LIMITATIONS 61
7. ANNEXURE 62-64
8. BIBLIOGRAPHY 65

4
 INTRODUCTION
Bank A bank is a financial institution that accepts deposits and channels those deposits into
lending activities. Banks primarily provide financial services to customers while enriching
investors. Government restrictions on financial activities by banks vary over time and
location. Banks are important players in financial markets and offer services such as
investment funds and loans.
Size of global banking industry Assets of the largest 1,000 banks in the world grew by
6.8% in the 2008/2009 financial year to a record $96.4 trillion while profits declined by 85%
to $115bn. Growth in assets in adverse market conditions was largely a result of
recapitalisation. EU banks held the largest share of the total, 56% in 2008/2009, down from
61% in the previous year. Asian banks' share increased from 12% to 14% during the year,
while the share of US banks increased from 11% to 13%. Fee revenue generated by global
investment banking totalled $66.3bn in 2009, up 12% on the previous year.
The United States has the most banks in the world in terms of institutions (7,085 at the end of
2008) and possibly branches (82,000).[citation needed] This is an indicator of the geography
and regulatory structure of the USA, resulting in a large number of small to medium-sized
institutions in its banking system. As of Nov 2009, China's top 4 banks have in excess of
67,000 branches (ICBC:18000+, BOC:12000+,CCB:13000+,ABC:24000+) with an
additional 140 smaller banks with an undetermined number of branches. Japan had 129 banks
and 12,000 branches. In 2004, Germany, France, and Italy each had more than 30,000
branches—more than double the 15,000 branches in the UK.
Bank crisis Banks are susceptible to many forms of risk which have triggered occasional
systemic crises. These include liquidity risk (where many depositors may request withdrawals
beyond available funds), credit risk (the chance that those who owe money to the bank will
not repay it), and interest rate risk (the possibility that the bank will become unprofitable, if
rising interest rates force it to pay relatively more on its deposits than it receives on its
loans).Banking crises have developed many times throughout history, when one or more risks
have materialized for a banking sector as a whole. Prominent examples include the bank run
that occurred during the Great Depression, the U.S. Savings and Loan crisis in the 1980s and
early 1990s, the Japanese banking crisis during the 1990s, and the subprime mortgage crisis
in the 2000s. Usually, the governments bail out the bank through rescue plan or individual
public intervention

5
World Banking Industry - Rise, Fall & Recovery A Bank is a financial institution that
accepts deposits and gives loans. It serves as a custodian to the money of general public. In
the economic system, banks have to play a very important role as they have the power of
creating credit for the businessmen and general public for various purposes. Banking system
has been instrumental in the development of World Economy. When banks offer loans &
related products at a lower interest rate, it enhances the growth prospects of the economy and
vice-versa. But in the process of aiming higher targets and profits, many a times banks end up
giving loans to the defaulters who not only turn bad but also let the bankers huge losses.
During 2005-2007, lendings all over the world grew rapidly mainly on account of hike in real
estate prices. And banks even sanctioned loans to sub-standard borrowers. Interest rates
charged were very high and ultimately the real estate bubble burst out. This created huge
liquidity crunch and steep rise in the default rates. As a result, the world economy shook up.
Banking industry witnessed series of shocks and people's trust on the investment banks was
lost. Mergers and Acquisitions which once became a theory, converted into reality. Now, with
restricted measures and effective control banking sector has emerged on the path of recovery.

6
 BANKING INDUSTRY
Indian Banking India has a large population with almost 65 percent of the population residing in
rural and semi urban areas. It is a land of diverse cultures and unique socio economic and geographic
characteristics. The Indian economy is heavily biased towards the public sector with an economic
policy that combines both socialistic and capitalistic features. All these features determine the size,
structure, diversity and nature of the banking sector in India.
The Indian banking system comprises the following institutions:
Commercial banks
-public sector
-private sector
-foreign banks
-cooperative institutions
a. urban cooperative banks
b. state cooperative banks
c. central cooperative banks
Market Size
_ Total assets of US$ 335 billion
_ Total deposits of US$ 279 billion
_ Over 290 scheduled banks
_ Public sector: 27
_ Private sector: new – 9; old – 24
_ Foreign: 37
_ Over 190 regional rural banks
_ Over 66,000 branches
_ Public sector: 46,000
_ Private sector: 5,500
_ Foreign: 190
_ Regional rural: 14,400

LIST OF BANKS IN INDIA

Public Sector Banks:
1. Allahabad Bank
2. Andhra Bank
3. Bank of Baroda
4. Bank of India
5. Bank of Maharashtra

7
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10. Indian Bank
11. Indian Overseas Bank
12. Oriental Bank of Commerce
13. Punjab and Sind Bank
14. Punjab National Bank
15. Syndicate Bank
16. UCO Bank
17. Union Bank of India
18. United Bank of India
19. Vijaya Bank
Private Sector Banks
1. Bank of Rajasthan Ltd.
2. Catholic Syrian Bank Ltd.
3. City Union Bank Ltd.
4. Dhanalakshmi Bank Ltd.
5 Federal Bank Ltd
6. ING Vysya Bank Ltd.
7. Jammu and Kashmir Bank Ltd.
8 Karnataka Bank Ltd.
9. Karur Vysya Bank Ltd.
10. Lakshmi Vilas Bank Ltd.
11. Bank of Punjab Ltd. (since merged with
Centurion Bank)
12. Centurion Bank of Punjab (since merged
with HDFC Bank)
13. Development Credit Bank Ltd.
14. HDFC Bank Ltd.
15. ICICI Bank Ltd.
16. IndusInd Bank Ltd.
17. Kotak Mahindra Bank Ltd.
18. Axis Bank (earlier UTI Bank)
19. Yes Bank Ltd.
20. IDBI Bank Ltd.

8
Foreign Banks in India
ABN-AMRO Bank N.V.
Abu Dhabi Commercial Bank Ltd.
American Express Bank Ltd.
Barclays Bank PLC
BNP Paribas
Citibank N.A.
DBS Bank Ltd
Deutsche Bank AG
HSBC Ltd.
Standard Chartered Bank
State Bank of Mauritius Ltd.
Main Competitors for Banking
• Post offices.
• Mutual fund
• Share market
• Insurance.
• Money lenders
• Family and friends
SERVICES OFFERINGS Courtesy the advances in technology, the bank customer now has access
to ATMs, mobile banking, any branch banking, Electronic Fund Transfer(EFT), etc; treasury
managers have transparent Negotiated Delivery Systems(NDS); and commercial bankers with the
comfort of Real Time Gross Settlement(RTGS). Thus, transaction processing is done at the back
office and bank now focuses on building relationships and products with each of the distinct customer
categories:
Personal Personal category has been the most focussed and hence with the most diverse offerings.
Conventional services include:
Deposits: Term (Fixed, Savings), Non-term(Current)
Free debit/credit card
Free/nominal premium insurance coverage
Loans: Housing, Education, Vehicle
Lockers and safety vaults
Gift cheques
Corporate and Business (B2B) To cater to the fast growing corporate clientele, specialised service
packages are being offered. Wholesale banking provides facilities of syndication and internalisation of
loans; loans to meet working capital requirements; Line of Credit; Export Finance; MBOR loan; Sub
PLR loan; FCNR loan; Bridge loan; Advance against shares; Project loans; SME loans for the

9
business enterprises; Clear Traders’ loan; Takeover of Accounts are normal services which are
indispensable for the corporate sector.
Merchant banking services provided to corporates during equity issue including underwriting, issue
management, collection and dispensing, letter of guarantee; foreign capital arrangement etc. Are
essential to any corporate.
International (NRIs) For NRIs, remittances from abroad can be channelized through a number of
banks in collaboration with Western Union Money Transfer like SBI and BoB.
Specialised facilities to returning Indians is a focus of BoB wherein it makes arrangements for
transferring savings and investments from abroad to India and advising them on taxes and other
compulsory border charges.
FGN Currency credits are provided; FCNR (B) loans; off shore banking; Correspondent banking;
Exim banking etc. are other services
Other Services This includes services beneficial to all categories like bill payment, internet banking,
money transfer, Demat account etc.
Treasury services are provided by banks both in domestic and foreign currencies for Commercial
Papers (CP), Certificates of Deposits (CDs), Government Securities, Bonds and Certificates,
Debentures, Equities etc. National Securities Depository Limited (NSDL) works in collaboration with
the banks to provide soft depository maintenance of equities and shares, also enabling transferring and
easy sale via the electronic medium.
Wealth management services are provided to help clients maintain the financial portfolios like mutual
funds, gold funds, off shore funds, energy funds, future markets etc. Cash management services are
also provided to help compound present investments.
Letters of credit are provided to help enable foreign trade on credit and letters of credit worthiness
may also be issued. Free tax consultation and tax filing services are also provided to all clients as and
when required. SMS alerts (pull or push) in the OTS format as well as toll free service numbers are
provided to keep the interface active during non-banking hours. Internet banking helps create a 24
hour banking experience for all kinds of customers, thus, making banking truly accessible and
available. 24 hour bank branches also cater to this requirement.
Indian Banking Industry Banking in India originated in the first decade of 18th century with The
General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both
these banks are now defunct. The oldest bank in existence in India is the State Bank of India being
established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign
banks like Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time,
Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to
which banking activity took roots there and prospered. The first fully Indian owned bank was the
Allahabad Bank, which was established in 1865.

10
By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in
1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private
ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian
banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and
given broader powers.
Nationalisation By the 1960s, the Indian banking industry has become an important tool to facilitate
the development of the Indian economy. At the same time, it has emerged as a large employer, and a
debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then
Prime Minister of India expressed the intention of the GOI in the annual conference of the All India
Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation." The paper was
received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an
ordinance and nationalised the 14 largest commercial banks with effect from the midnight of July 19,
1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of
political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking
Companies (Acquition and Transfer of Undertaking) Bill, and it received the presidential approval on
9th August, 1969.A second dose of nationalisation of 6 more commercial banks followed in 1980. The
stated reason for the nationalisation was to give the government more control of credit delivery. With
the second dose of nationalisation, the GOI controlled around 91% of the banking business of India.
After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average
growth rate of the Indian economy.
Liberalisation In the early 1990s the then Narasimha Rao government embarked on a policy of
liberalisation and gave licences to a small number of private banks, which came to be known as New
Generation tech-savvy banks, which included banks such as UTI Bank(now re-named as Axis Bank)
(the first of such new generation banks to be set up), ICICI Bank and HDFC Bank. This move, along
with the rapid growth in the economy of India, kickstarted the banking sector in India, which has seen
rapid growth with strong contribution from all the three sectors of banks, namely, government banks,
private banks and foreign banks. The next stage for the Indian banking has been setup with the
proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks
may be given voting rights which could exceed the present cap of 10%,at present it has gone up to
49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers,
till this time, were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning.
The new wave ushered in a modern outlook and tech-savvy methods of working for traditional
banks.All this led to the retail boom in India. People not just demanded more from their banks but
also received more.
Banking The Indian banking system is financially stable and resilient to the shocks that may arise
due to higher non-performing assets (NPAs) and the global economic crisis, according to a stress test
done by the Reserve Bank of India (RBI). Significantly, the RBI has the tenth largest gold reserves in

11
the world after spending US$ 6.7 billion towards the purchase of 200 metric tonnes of gold from the
International Monetary Fund (IMF) in November 2009. The purchase has increased the country's
share of gold holdings in its foreign exchange reserves from approximately 4 per cent to about 6 per
cent. Following the financial crisis, new deposits have gravitated towards public sector banks.
According to RBI's 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks:
September 2009', nationalised banks, as a group, accounted for 50.5 per cent of the aggregate
deposits, while State Bank of India (SBI) and its associates accounted for 23.8 per cent. The share of
other scheduled commercial banks, foreign banks and regional rural banks in aggregate deposits were
17.8 per cent, 5.6 per cent and 3.0 per cent, respectively. With respect to gross bank credit also,
nationalised banks hold the highest share of 50.5 per cent in the total bank credit, with SBI and its
associates at 23.7 per cent and other scheduled commercial banks at 17.8 per cent. Foreign banks and
regional rural banks had a share of 5.5 per cent and 2.5 per cent respectively in the total bank credit.
The report also found that scheduled commercial banks served 34,709 banked centres. Of these
centres, 28,095 were single office centres and 64 centres had 100 or more bank offices. The
confidence of non-resident Indians (NRIs) in the Indian economy is reviving again. NRI fund inflows
increased since April 2009 and touched US$ 45.5 billion on July 2009, as per the RBI's February
bulletin. Most of this has come through Foreign Currency Non-resident (FCNR) accounts and Non-
resident External Rupee Accounts. India's foreign exchange reserves rose to US$ 284.26 billion as on
January 8, 2010, according to the RBI's February bulletin.
Major Developments The State Bank of India (SBI) has posted a net profit of US$ 1.56 billion for
the nine months ended December 2009, up 14.43 per cent from US$ 175.4 million posted in the nine
months ended December 2008. The SBI is adding 23 new branches abroad bringing its foreign-branch
network number to 160 by March 2010. This will cement its leading position as the bank with the
largest global presence among local peers. Amongst the private banks, Axis Bank's net profit surged
by 32 per cent to US$ 115.4 million on 21.2 per cent rise in total income to US$ 852.16 million in the
second quarter of 2009-10, over the corresponding period last year. HDFC Bank has posted a 32 per
cent rise in its net profit at US$ 175.4 million for the quarter ended December 31, 2009 over the figure
of US$ 128.05 million for the same quarter in the previous year.
Government Initiatives In its platinum jubilee year, the RBI, the central bank of the country, in a
notification issued on June 25, 2009, said that banks should link more branches to the National
Electronic Clearing Service (NECS). Ideally, all core-banking-enabled branches should be part of
NECS. NECS was introduced in September 2008 for centralised processing of repetitive and bulk
payment instructions. Currently, a little over 26,000 branches of 114 banks are enabled to participate
in NECS. In the Third Quarter Review of Monetary Policy for 2009-10, the RBI observed that the
Indian economy showed a degree of resilience as it recorded a better-than-expected growth of 7.9 per
cent during the second quarter of 2009-10. In its Third Quarter Review of Monetary Policy for 2009-

12
10, the RBI hiked the Cash Reserve Ratio (CRR) by 75 basis points (bps) to 5.75 per cent, while
keeping repo and reverse repo rates unchanged.
According to the RBI, the stance of monetary policy for the remaining period of 2009-10 will be to:
•Anchor inflation expectations and keep a vigil on inflation trends and respond swiftly through policy
adjustments,
•Actively manage liquidity to ensure credit demands of productive sectors are met adequately,
•Maintain an interest rate environment consistent with financial stability and price stability.
The money supply (M3) growth on a year-on-year basis at 18.9 per cent as on October 9, 2009,
remained above the indicative projection of 18.0 per cent set out in the First Quarter Review of July
2009. The main source of M3 expansion was bank credit to the government, reflecting large market
borrowings of the Government. Meanwhile, outstanding bank credit in the 15 days up to January 29
2010 rose by US$ 4.32 billion, pointing to a revival in credit growth. This is the highest year-on-year
growth recorded since August 14, 2009.
Snail Paced Indian Banking Industry Running Super Fast The Indian banking industry has
become one of the rapidly growing industries in the country due to increasing use of technology and
better customer service. Today, the banking industry is counted among the rapidly growing industries
in India. It has transformed itself from a sluggish business entity to a dynamic industry. The growth
rate in this sector is remarkable and therefore, it has become the most preferred banking destinations
for international investors. Fast pace growth in the Indian banking sector prompted RNCOS, a leading
market research firm, to do a comprehensive research titled, “Booming Indian Retail Banking Sector”.
The Indian banking sector is growing at an astonishing pace and recorded a CAGR of 21% from
March 2004 to March 2007. The RNCOS study has analyzed the factors that are giving impetus to the
Indian banking industry. In recent years, the Indian banking sector has acquired a new status by
offering new services to people with which they were completely unaware of in past. One such new
service is retail banking and a big proportion of the Indian youth is reaping benefits from it. The
growth in this segment is a combined effort of the banking industry to offer new facilities such as
investment in mutual funds, credit & debt cards, ATMs, etc. Consequently, more and more people are
gaining from these services. The RNCOS report has given a comprehensive study on how these new
services are shaping the future growth of the Indian banking sector. Till few years back, the Indian
banking sector was accused for poor customer service. But now, both public and private banks are
paying adequate attention to improve their customer services and therefore, are increasingly using
technology to make their customer service fast and hi-tech. Mobile and Internet banking are two fields
which reflect use of technology in the banking sector. As per the report, the Indian banking industry is
expected to begin offering mobile banking services, which will give people freedom from standing in
long queues before ATMs.
“Booming Indian Retail Banking Sector” has discussed not only the current status of the Indian
banking sector but also analyzed the future prospects of its various segments, like Internet banking,

13
retail banking, and loan facilities. Based on different parameters, the report has given an overview of
the future of the Indian banking sector.
Current Situation Currently (2007), banking in India is generally fairly mature in terms of supply,
product range and reach-even though reach in rural India still remains a challenge for the private
sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are
considered to have clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure
from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but
without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy
expected to be strong for quite some time-especially in its services sector-the demand for banking
services, especially retail banking, mortgages and investment services are expected to be strong. One
may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed
Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is
the first time an investor has been allowed to hold more than 5% in a private sector bank since the
RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to
be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector
banks (that is with the Government of India holding a stake), 29 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks.
They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by
ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Emerging
Trends in Banking - The traditional distinctions between banking and other financial services like
insurance on one side; and between commercial banking, developmental banking and investment
banking are getting blurred The emergence of universal banking and bancassurance are clearly
pointers. This global convergence of financial services may gather further momentum in the years to
come. The banking and insurance sector reforms have encouraged private sector players to make
forays into the business in collaboration with major international companies. This new scenario will
witness financially sound and experienced players transforming the industry with best practices in
product development, operational efficiency, marketing capability, service focus, and tech savy
orientation. Thus there is a need for intensive, futuristic and career oriented programs in these two
areas: Banking and Insurance. These developments in Banking and Insurance industry call for
competent and professionally trained managers", observed Dr. A.B.C. Raj, Chancellor, the ICFAI
University, in one of his recent messages Increasing competition, thinner spreads and introduction of
new technology driven products are some of the trends that the Indian banking system is
experiencing. "Recent trends in Indian banking have reflected the efforts of the major players to adapt
to a rapidly liberalising and globalising environment. With the increasing sophistication of our
economy, the variety and type of investments options available to us today have multiplied. Also, with

14
the economy getting more and more integrated with the world economy, rapid changes in the options,
instruments, rate of return etc. have become the order of the day." Such a change is visible in respect
of shares, mutual funds, fixed income, bank deposits, life insurance, pension plans etc
Since change and innovation is involved in this process, one can legitimately expect an exciting and
lucrative career scenario in the banking, finance and insurance sector.
The banking system in emerging economies: Banking crises in emerging markets in the 1990s were
associated with major macroeconomic disruptions: sharp increases in interest rates, large currency
depreciations, output collapses and lasting declines in the supply of credit. Bank credit has since
recovered in a number of countries, and there have been significant changes in banking structure,
performance and risk management capacity.
Drawing on contributions by senior central bank officials from emerging market economies and staff
of the Bank for International Settlements, the volume seeks to shed light on recent developments by
addressing five broad topics.
1.Recent trends in bank credit After peaking in the second half of the 1990s, bank credit to the
private sector has recently risen in a number of emerging market economies, partly because of
stronger demand for loans associated with robust growth and low interest rates, and partly because of
greater supply of loans associated with improved bank balance sheets. The share of bank credit to the
business sector has nonetheless declined in part because lagging investment spending has curbed
corporate loan demand, and also because of the availability of financing in bond and equity markets.
In some countries risk averse banks have held government securities rather than lend to the corporate
private sector. Financial institutions have increased lending to households but this exposes them to
new forms of risk, as illustrated by difficulties in the credit sector in Korea earlier in this decade. One
concern is that banks in some countries have transferred a significant amount of interest rate or
exchange rate risk to households through floating rate credit or loans denominated in foreign currency.
2. The pace of structural change Banking systems in emerging economies have been
transformed by privatisation, consolidation and foreign bank entry. Bank efficiency and performance
have improved, apparently in response to a more competitive climate. More recently, reforms appear
to have slowed, in part because the easy work had been done and because of alternative approaches to
reform. For example, rather than engaging in full scale privatisation, countries like China and India
are only gradually transferring ownership of major state-owned banks to the private sector. As for
bank consolidation, it has been market-driven and foreign banks have played an important role in
central and eastern Europe and Mexico, while the state has played a larger role in Asia. Increased
concentration was not seen as a threat to competition and access to bank financing had improved with
the growing presence of foreign banks. However foreign banks raised political concerns because of
perceived high profits and were also difficult to supervise because parent banks' global goals and
information flows did not always coincide with the needs of host country supervisors.

15
3.Evolution in and management of risks facing banks Macroeconomic vulnerabilities (particularly
to external shocks) appear to have declined, reflecting a mix of favourable temporary conditions as
well as improved policies (higher foreign reserves, more flexible exchange rates, domestic debt
market development and improved fiscal policies). However, some central banks were still concerned
about vulnerability to certain shocks (eg to domestic demand, to increases in oil prices or interest rates
or declines in property prices), particularly given the exposure of banks to interest rate or exchange
rate risk and the need in some countries for further fiscal consolidation. Banks increasingly relied on
systematic risk assessment procedures and quantitative risk management techniques, with lending
being influenced less by government direction or special bank relationships with borrowers. However,
challenges still arose from lack of data on loan histories for estimating default probabilities, and risks
related to liquidity and credit risk transfer. Regarding liquidity risk, there is a need to ensure that
banks rely on the interbank markets, rather than the central bank for liquidity. Regarding credit risk
transfer, notwithstanding significant benefits associated with the growing use of credit risk transfer
instruments, their rapid spread might in some cases outpace the capacity of financial institutions to
assess and price risks.
4.Preventing systemic banking crises One indicator of stronger banking systems is that the
volatility of output and inflation has fallen in emerging market economies while their capital ratios
have risen significantly. This reflects (i) policies designed to improve bank governance and
information disclosure that enhances market discipline, (ii) regulatory measures to dilute risk
concentration, limit connected lending, establish realistic provisioning rules and to improve inspection
process; (iii) the evolution in supervisory strategy from "ratio watching" (checking bank positions
against predetermined prudential ratios) to examining the bank's risk management process. The ability
to take early action to deal with incipient problems before a crisis develops has also been enhanced by
increased authority, independence and legal protection for supervisors. At the same time, explicit and
limited deposit insurance has helped make clear that not all bank deposits are guaranteed by the
government. The payment of fixed premia have encouraged banks to monitor the
strictness/effectiveness of supervisory authority and ensured weak banks share the burden of any
payouts. Some of these improvements have been helped by efforts to adopt international standards for
best practice (Basel Core Principles for Effective Banking Supervision, Basel I and Basel II) and
outside assessments of financial stability (ie Financial Sector Assessment Programs, or FSAPs).
Challenges remain, including changing the culture in supervisory agencies as well as audit
departments of banks towards more effective risk management, and the lack of adequately trained
staff.
5.Changing financial intermediation: implications for monetary policy Bank deregulation and
global integration has on the one hand made monetary policy in emerging markets more potent by
allowing a wider range of transmission channels, including asset market and exchange rate channels.
Domestic bank loan rates also appear to be more responsive to changes in money market rates in

16
countries with profit-driven banking systems, perhaps reflecting the recovery in the health in banking
systems (pass through is lower in countries with weak bank systems eg post 1997-1998 crisis). On the
other hand, external factors unrelated to monetary policy have also shaped bank behaviour. For
example, demand for bank deposits has depended on exchange rate expectations. Global integration
had also led to some convergence in long-term interest rates.
India Banking 2010 The last decade has seen many positive developments in the Indian banking
sector. The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and
related government and financial sector regulatory entities, have made several notable efforts to
improve regulation in the sector. The sector now compares favourably with banking sectors in the
region on metrics like growth, profitability and non-performing assets (NPAs). A few banks have
established an outstanding track record of innovation, growth and value creation. This is reflected in
their market valuation. However,improved regulations, innovation, growth and value creation in the
sector remain limited to a small part of it. The cost of banking intermediation in India is higher and
bank penetration is far lower than in other markets. India’s banking industry must strengthen itself
significantly if it has to support the modern and vibrant economy which India aspires to be. While the
onus for this change lies mainly with bank managements, an enabling policy and regulatory
framework will also be critical to their success. The failure to respond to changing market realities has
stunted the development of the financial sector in many developing countries. A weak banking
structure has been unable to fuel continued growth, which has harmed the long-term health of their
economies. In this “white paper”, we emphasise the need to act both decisively and quickly to build
an enabling, rather than a limiting, banking sector in India.
GOOD PERFORMANCE Indian banks have compared favourably on growth, asset quality and
profitability with other regional banks over the last few years. The banking index has grown at a
compounded annual rate of over 51 per cent since April 2001 as compared to a 27 per cent growth in
the market index for the same period. Policy makers have made some notable changes in policy and
regulation to help strengthen the sector. These changes include strengthening prudential norms,
enhancing the payments system and integrating regulations between commercial and co-operative
banks. However, the cost of intermediation remains high and bank penetration is limited to only a few
customer segments and geographies. While bank lending has been a significant driver of GDP growth
and employment, periodic instances of the “failure” of some weak banks have often threatened the
stability of the system. Structural weaknesses such as a fragmented industry structure, restrictions on
capital availability and deployment, lack of institutional support infrastructure, restrictive labour laws,
weak corporate governance and ineffective regulations beyond Scheduled Commercial Banks (SCBs),
unless
OPPORTUNITIES AND CHALLENGES
FOR PLAYERS The bar for what it means to be a successful player in the sector has been raised.
Four challenges must be addressed before success can be achieved. First, the market is seeing

17
discontinuous growth driven by new products and services that include opportunities in credit cards,
consumer finance and wealth management on the retail side, and in fee-based income and investment
banking on the wholesale banking side. These require new skills in sales & marketing, credit and
operations. Second, banks will nolonger enjoy windfall treasury gains that the decade-long secular
decline in interest rates provided. This will expose the weaker banks. Third, with increased interest in
India, competition from foreign banks will only intensify. Fourth, given the demographic shifts
resulting from changes in age profile and household income, consumers will increasingly demand
enhanced institutional capabilities and service levels from banks.
NEED TO CREATE A MARKET-DRIVEN
BANKING SECTOR WITH ADEQUATE
FOCUS ON SOCIAL DEVELOPMENT
The term “policy makers” used in this document, as mentioned earlier, refers to the Ministry of
Finance and the RBI and includes the other relevant government and regulatory entities for the
banking sector. We believe a co-ordinated effort between the various entities is required to enable
positive action. This will spur on the performance of the sector. The policy makers need to make co-
ordinated efforts on six fronts: Help shape a superior industry structure in aphased manner through
“managed consolidation”and by enabling capital availability. This would create 3-4 global sized banks
controlling 35-45 per cent of the market in India; 6-8 national banks controlling 20-25 per cent of the
market; 4-6 foreign banks with 15-20 per cent share in the market, and the rest being specialist players
(geographical or product/ segment focused).Focus strongly on “social development” by moving away
from universal directed norms to an explicit incentive-driven framework by introducing credit
guarantees and market subsidies to encourage leading public sector, private and foreign players to
leverage technology to innovate and profitably provide banking services to lower income and rural
markets. Create a unified regulator, distinct from the central bank of the country, in a phased manner
to overcome supervisory difficulties and reduce compliance costs. Improve corporate governance
primarily by increasing board independence and accountability. Accelerate the creation of world class
supporting infrastructure (e.g., payments, asset reconstruction companies (ARCs), credit bureaus,
back-office utilities) to help the banking sector focus on core activities. Enable labour reforms,
focusing on enriching human capital, to help public sector and old private banks become competitive.
NEED FOR DECISIVE ACTION BY
BANK MANAGEMENTS
Management imperatives will differ by bank. However, there will be common themes across
classes of banks: PSBs need to fundamentally strengthen institutional skill levels especially in sales
and marketing, service operations, risk management and the overall organisational performance ethic.
The last, i.e., strengthening human capital will be the single biggest challenge. Old private sector
banks also have the need to fundamentally strengthen skill levels. However, even more imperative is

18
their need to examine their participation in the Indian banking sector and their ability to remain
independent in the light of the discontinuities in the sector.
New private banks could reach the next level of their growth in the Indian banking sector by
continuing to innovate and develop differentiated business models to profitably serve segments like
the rural/low income and affluent/ HNI segments; actively adopting acquisitions as a means to grow
and reaching the next level of performance in their service platforms.
Attracting, developing and retaining more leadership capacity would be key to achieving this and
would pose the biggest challenge. Foreign banks committed to making a play in India will need to
adopt alternative approaches to win the “race for the customer” and build a value-creating customer
franchise in advance of regulations potentially opening up post 2009. At the same time, they should
stay in the game for potential acquisition opportunities as and when they appear in the near term.
Maintaining a fundamentally long-term value-creation mindset will be their greatest
challenge. The extent to which Indian policy makers and bank managements develop and execute
such a clear and complementary agenda to tackle emerging discontinuities will lay the foundations for
a high-performing sector in 2010.
Process Innovation and Technology In India, outsourcing of processes is largely constrained by the
RBI regulations and resistance from trade unions. According to Arun Jethmalani, CEO, ValueNotes,
"Aggressive adoption of IT and centralization of operations have served as a key enabler to
outsourcing of business processes in the banking industry." Other factors such as growth in the
banking industry, deregulation, increasing competition, consolidation and improving benchmarks in
the industry are driving the outsourcing of business processes. PSBs have been sluggish in adopting
new technology as compared to global banks. Post liberalization, with RBI tightening its regulations,
PSBs have undertaken massive computerization to achieve 'Total Branch Automation'. With
privatization and increasing competition, all the large banks are now aggressively implementing 'Core
Banking Solutions'. There is increasing focus on technology as evidenced by more and more PSU
banks going for aggressive computerization and transferring their processes into some technology
platform or other. While a few large PSBs have been quick to respond to competitive pressures by
introducing new services, investing in technology and acquiring capabilities like marketing and sales,
others lag behind.
Sanjay Sharma, MD & CEO, IDBI Intech Ltd spoke about leveraging technology for process
innovation. He argued that "Banks still need to reach the level where processes are streamlined in a
manner so that there is consistent customer service in every branch on any bank."
P A Kalyanasundar, General Manager, Bank of India said that "Unlike the new generation private and
foreign banks, PSBs come with a legacy. The biggest challenge that PSBs are faced with is
completeness of data. This poses a hurdle when a bank decides to outsource."
On similar lines, R I S Sidhu, Chief General Manager (IT), Punjab National Bank said that

19
"While banks need to invest in technology, it is a challenge for them to implement technology and
train their staff. Explaining the marked difference when talking about technology in a PSB, he said
that until recently there was very little 'technology' for the banker and processes were largely manual
procedures, however today technology implies enterprise wide data warehousing."
Most banks have partially outsourced their IT related requirements and matured in terms of their
understanding of risks and advantages in outsourcing. We believe that with greater success in IT
outsourcing, banks will be more inclined to outsource their business processes and thus leverage on
the benefits and economies gained through investments in IT.
Future
Outlook
•With greater success in IT outsourcing, Public Sector Banks will be more inclined to outsource their
business processes thus leveraging on the benefits gained through investments in IT.
•Foreign banks having captive centers servicing their global and Indian subsidiaries are unlikely to
entirely hive off these centers to third party vendors in the near term.
However, some of the services from the captive centers will gradually see their way to third party
vendors over the next few years.
•The scope for outsourcing will widen in the long term with customers migrating to
new delivery channels (like mobile banking) coupled with implementation of CBS in
finance and HR.
Banking channels
Banks offer many different channels to access their banking and other services:
• A branch, banking centre or financial centre is a retail location where a bank or financial
institution offers a wide array of face-to-face service to its customers.
• ATM is a computerised telecommunications device that provides a financial institution's
customers a method of financial transactions in a public space without the need for a human clerk or
bank teller. Most banks now have more ATMs than branches, and ATMs are providing a wider range
of services to a wider range of users. For example in Hong Kong, most ATMs enable anyone to
deposit cash to any customer of the bank's account by feeding in the notes and entering the account
number to be credited. Also, most ATMs enable card holders from other banks to get their account
balance and withdraw cash, even if the card is issued by a foreign bank.
• Mail is part of the postal system which itself is a system wherein written documents typically
enclosed in envelopes, and also small packages containing other matter, are delivered to destinations
around the world. This can be used to deposit cheques and to send orders to the bank to pay money to
third parties. Banks also normally use mail to deliver periodic account statements to customers.
• Telephone banking is a service provided by a financial institution which allows its customers
to perform transactions over the telephone. This normally includes bill payments for bills from major
billers (e.g. for electricity).

20
• Online banking is a term used for performing transactions, payments etc. over the Internet
through a bank, credit union or building society's secure website.
• Mobile banking is a method of using one's mobile phone to conduct simple banking
transactions by remotely linking into a banking network.
• Video banking is a term used for performing banking transactions or professional banking
consultations via a remote video and audio connection. Video banking can be performed via purpose
built banking transaction machines (similar to an Automated teller machine), or via a videoconference
enabled bank branch.
Types of banks
Banks' activities can be divided into retail banking, dealing directly with individuals and small
businesses; business banking, providing services to mid-market business; corporate banking, directed
at large business entities; private banking, providing wealth management services to high net worth
individuals and families; and investment banking, relating to activities on the financial markets. Most
banks are profit-making, private enterprises. However, some are owned by government, or are non-
profit organizations.
Central banks are normally government-owned and charged with quasi-regulatory responsibilities,
such as supervising commercial banks, or controlling the cash interest rate. They generally provide
liquidity to the banking system and act as the lender of last resort in event of a crisis.
Types of retail banks
• Commercial bank: the term used for a normal bank to distinguish it from an investment bank.
After the Great Depression, the U.S. Congress required that banks only engage in banking activities,
whereas investment banks were limited to capital market activities. Since the two no longer have to be
under separate ownership, some use the term "commercial bank" to refer to a bank or a division of a
bank that mostly deals with deposits and loans from corporations or large businesses.
• Community banks: locally operated financial institutions that empower employees to make
local decisions to serve their customers and the partners.
• Community development banks: regulated banks that provide financial services and credit to
under-served markets or populations.
• Postal savings banks: savings banks associated with national postal systems.
• Private banks: banks that manage the assets of high net worth individuals.
• Offshore banks: banks located in jurisdictions with low taxation and regulation. Many
offshore banks are essentially private banks.
• Savings bank: in Europe, savings banks take their roots in the 19th or sometimes even 18th
century. Their original objective was to provide easily accessible savings products to all strata of the
population. In some countries, savings banks were created on public initiative; in others, socially
committed individuals created foundations to put in place the necessary infrastructure. Nowadays,
European savings banks have kept their focus on retail banking: payments, savings products, credits

21
and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus,
they also differ from commercial banks by their broadly decentralised distribution network, providing
local and regional outreach—and by their socially responsible approach to business and society.
• Building societies and Landesbanks: institutions that conduct retail banking.
• Ethical banks: banks that prioritize the transparency of all operations and make only what
they consider to be socially-responsible investments.
• Islamic banks: Banks that transact according to Islamic principles.
Types of investment banks
• Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for their
own accounts, make markets, and advise corporations on capital market activities such as mergers and
acquisitions.
• Merchant banks were traditionally banks which engaged in trade finance. The modern
definition, however, refers to banks which provide capital to firms in the form of shares rather than
loans. Unlike venture capital firms, they tend not to invest in new companies.

FACTORS AFFECTING BANKING SECTOR Starting off with the project, in the initial phase of
SIP, I learnt the basics of the stock market. As I had to work here in this market for 3.5 months this
was the basic necessity. In that phase I had a nice exposure of how to deal with clients, how to handle
the queries of the investors, it was a practical exposure to learn the working of the market, how the
market moves and all about the corporate culture. Also I had learnt what factors basically affect the
equity market. Then I decided to limit my project to just Banking Sector, because it is one of the most
dynamic sector and also availability of time was not permitting me to go beyond this. There are N
number of factors which affect the share prices. They can be broadly classified into two:
INTERNAL FACTORS
EXTERNAL FACTORS
INTERNAL FACTORS: As the name suggests, Internal Factors are those which affect the share
prices internally, i.e. they are internal to the company or more specifically bank. Some of the major
internal factors that affect the share prices of a bank are as follows:
EARNINGS OF THE COMPANY: How much Profit a company earns acts as a significant factor in
price movements. If the quarterly results are good for a bank, then the price goes up, and if the results
are not good, the investors show no interest in such bank‟s share and thus price falls. Investors invest
money in the companies who earn well and in turn give good return on investment. Thus, a wealthy
and a profitable company have good investors and thus have positive price movements.
Price/Earnings Ratio also gives us idea about the same. MARKET CAPITALIZATION: Generally we
commit one mistake that we guess the company‟s worth from the price of its stock. It is the market
capitalization of the company, rather than the stock price, that is more important when it comes to
determining the worth of the company. We need to multiply the stock price with the total number of

22
outstanding stocks in the market to get the market capitalization of a company and that is the worth of
the company. Thus, a company or bank with high Market Capitalization turns out to be more popular
among investors. For example, HDFC BANK, ICICI BANK and SBI are more popular among
investors than other banks because they have huge market share and market capitalization. As market
capitalization increases, the share price tends to increase and as market capitalization decreases, the
share price tends to decrease. PRICE/EARNINGS RATIO: Price/Earnings ratio or the P/E ratio gives
us a fair idea of how a company's share price compares to its earnings. If the price of the share is too
much lower than the earning of the company, the stock is undervalued and it has the potential to rise
in the near future. On the other hand, if the price is way too much higher than the actual earning of the
company and then the stock is said to overvalued and the price can fall at any point. The earnings also
have a direct relation with price which is already explained above.
INTERNAL AFFAIRS OF THE COMPANY: Any happening inside the company or any internal
news does affect its share price. For example any key person moving out of the company, acquisition
or takeover or merger news, share split, employee strike and any other thing internal to the affairs the
bank affects the share price. A positive note from the internal affairs takes the price to new highs and a
negative does vice versa. INTERST RATES: Interest rates play a major role in determining stock
market trends. Bull markets (those in an upward market) are usually associated with low interest rates
and high Capital Gains, and bear markets (those in a downward trend) with high interest rates and low
Capital gains. Interest rates are determined by the demand for capital – pushes them up and normally
indicates that the economy is thriving and that shares probably expensive. Low interest indicate low
demand for capital, thus liquidity builds up on the economy, driving share price down. Other interest
rates like that of on Deposits and Borrowings also have impact on share prices. OTHER FACTORS:
Other factors like Growth of the company, figures of deposits, advances, balance sheet, Profit and
Loss Account, etc.. also affect the share prices drastically.
EXTERNAL FACTORS: After studying the internal factors, lets take a look at some External
Factors which affect the Share Prices.
SENTIMENTS: Investor sentiment is almost impossible to predict and can be infuriating if, for
example, you have bought shares in a company that you think is a good „buy‟ but the price remains
flat. Investor sentiment is influenced by a wide variety of factors. Share prices can, for example, be
flat during the summer simply because so many major investors are on holiday or attending major
sporting events such as Royal Ascot and Wimbledon, hence the adage „sell in May and go away‟.
Investor sentiment can lead to irrational buying or selling of shares and result in bull and bear
markets. A bull market is when share prices rise while a bear market is when they fall. In the
technology boom of the late 1990s, for example, investors paid extremely high prices for shares and
ignored traditional valuation measures, such as P/E ratios. This carried on until 2000 when investors
belatedly realized these shares has risen too far and resulted in a three year bear market in shares.

23
Thus, Sentiments of investors affect the share prices a lot and this is something unpredictable and
immeasurable factor, but still the most important one.
COMPANY NEWS and OTHER NEWS: The way investors interpret news coming out of
companies is also a major influence on share prices. If, for example, a company puts out a warning
that business conditions are tough, shares will often drop in value. If, however, a director buys shares
in the firm, it may be a signal that the company‟s prospects are improving. Companies put out a great
deal of news and most of the major announcements are covered by the financial press. But some
announcements not regarded as so important and sometimes, particularly among smaller firms that are
monitored less by investors and financial journalists, indicators of the company‟s health can be
missed. Takeovers or even rumors of takeovers also have a big influence on prices. This is because
investors expect the bidder to pay a premium to shareholders. Also any other news or speculation
about factors like change in Repo Rate, Cash Reserve Ratio, Reverse Repo Rate, any change or likely
change in the policies of government or RBI or SEBI, any new guidelines issued by the concerned
authority, etc. affect the price of the share. A positive news in any of these respects leads to a rise in
price and a negative takes it to the other side. Thus, news in any respect is undoubtedly a huge factor
when it comes to stock price. Positive news about a company can increase buying interest in the
market while a negative press release can ruin the prospect of a stock. Having said that, we must
always remember that often times, despite amazingly good news, a stock can show least movement. It
is the overall performance of the company that matters more than news. It is always wise to take a
wait and watch policy in a volatile market or when there is mixed reaction about a particular stock.
DEMAND AND SUPPLY: This fundamental rule of economics holds good for the equity market as
well. The price is directly affected by the trend of stock market trading. When more people are buying
a certain stock, the price of that stock increases and when more people are selling the stock, the price
of that particular stock falls. Now it is difficult to predict the trend. Thus, we should be very careful
while dealing in stocks as buying or selling pressure may lead to steep rise or fall in price of the
shares.
ANALYSTS’ REPORTS: Reports produced by independent analysts also influence share prices. If
an analyst changes their recommendation from „sell‟ to „buy‟, for example, the shares will often rise
in value. Analysts‟ reports are produced primarily by investment banks for professional investors,
although some stockbrokers will make their research available to private investors. We may find
summaries of some reports published on financial news websites or in newspapers and magazines.
Some investment banks also publish their reports on their websites for free. We should remember that
the recommendation an analyst puts on a company will affect its share price very quickly and can
become irrelevant within hours. This is because the analyst will usually say a stock is a „buy‟ within a
particular price range. If the price moves above their targets the improvements the analyst expects
may be „priced in‟ and so the shares are not worth buying. But analysts‟ reports are always worth
reading, even if the recommendation is out of date. The reports usually contain a great deal of useful

24
information on the company and how its business is developing. They also often look at how the
company rates against its competitors.
TECHNICAL INFLUENCES: Share prices can rise and fall for a variety of technical reasons that
may have nothing to do with the actual outlook for an individual company or the outlook for the
market. It is, for example, a common occurrence for share prices to drop back after a strong rally. This
happens because investors take profits on some of the shares that have risen in value, protecting their
gains just in case the shares start to slip back. Investors often refer to this as market consolidation.
Another technical reason for share prices to rise or fall is the quarterly adjustment in the FTSE 100™
index. Shares that are expected to enter the FTSE 100™ may experience a sharper rise than one
would expect in the weeks beforehand while shares that leave the index can fall more sharply. This
happens because funds that simply track the index have to match the composition of the index. Some
professional fund managers who hold the affected stocks also adjust their portfolios as they do not
want their holding to be too far above or below the company‟s weighting in the index. Share prices
can also be affected by investors who use technical analysis to drive their investment techniques.
Technical analysis, also known as Chartism, is simply the study of past share price movements and
stock market index trends, which are then used to forecast how shares and stock markets will behave
in future. Market makers can also influence prices. If they, for example, do not own enough shares to
balance their books they will have to buy more. Market makers also influence prices if the market is
looking flat, reducing prices to attract buyers. Thus, technical reasons can also be a cause for the rise
or fall in the prices of shares.
OTHER FACTORS: Some other factors which influence share prices are as follows: Change in
Rates by RBI: Looking at the changing scenario, RBI keeps on changing rates like Repo Rate,
Reverse Repo Rate and Cash Reserve Ratio. These rates have a direct relation with the Bank‟s
performance and in turn the share prices are linked with Bank‟s Performance. Thus, a change in these
rates or even a speculation of change in these rates affects share prices. Global Changes: Any change
in the global economy or in other words global changes also affects Indian economy. Thus, the
performance of an economy and its banks is affected by these global changes. For example: The
recession was first observed in the USA and later on it caught its lead in other countries too. When it
entered India, the share market crashed literally. So, a careful and logical investor always keeps this in
mind that what global changes affect the market and thus leads to rise or fall in share prices. Change
in Government Policies: Keeping in mind the progress and well wishes about the country, the
government takes desired steps and keeps on reviewing its policies, rules and regulations and
procedures. A change in FDI and FII inflow restrictions, entry exit barriers for foreign banks in India,
EXIM regulations, change in Basel Norms, etc form part of important government policies. Thus, a
change in these policies affects the market scenario. For example: if government allows entry of
foreign Banks in India, then the competition would rise and it might happen that those foreign Banks
may outperform and leave our own banks far behind. Then in this case, the investors would be

25
interested in investing in those foreign Banks and a government would never like that the funds are
invested in some foreign banks rather than our own banks. Thus, some restriction would follow and
this will definitely affect the share prices.
BANKING SECTOR Banks are the most significant players in the Indian financial market. They are
the biggest purveyors of credit, and they also attract most of the savings from the population.
Dominated by public sector, the banking industry has so far acted as an efficient partner in the growth
and the development of the country. Driven by the socialist ideologies and the welfare state concept,
public sector banks have long been the supporters of agriculture and other priority sectors. They act as
crucial channels of the government in its efforts to ensure equitable economic develop PEST
ANALYSIS
TECHNOLOGICAL ENVIROMENT Technology plays a very important role in bank’s internal
control mechanisms as well as services offered by them. It has in fact given new dimensions to the
banks as well as services that they cater to and the banks are enthusiastically adopting new
technological innovations for devising new products and services. The latest developments in terms of
technology in computer and telecommunication have encouraged the bankers to change the concept of
branch banking to anywhere banking. The use of ATM and Internet banking has allowed ‘anytime,
anywhere banking’ facilities. Automatic voice recorders now answer simple queries, currency
accounting machines makes the job easier and self-service counters are now encouraged. Credit card
facility has encouraged an era of cashless society. Today MasterCard and Visa card are the two most
popular cards used world over. The banks have now started issuing smartcards or debit cards to be
used for making payments. These are also called as electronic purse. Some of the banks have also
started home banking through telecommunication facilities and computer technology by using
terminals installed at customers home and they can make the balance inquiry, get the statement of
accounts, give instructions for fund transfers, etc. Through ECS we can receive the dividends and
interest directly to our account avoiding the delay or chance of loosing the post. Today banks are also
using SMS and Internet as major tool of promotions and giving great utility to its customers. For
example SMS functions through simple text messages sent from your mobile. The messages are then
recognized by the bank to provide you with the required information. All these technological changes
have forced the bankers to adopt customer-based approach instead of product-based approach.
ECONOMICAL ENVIROMENT Banking is as old as authentic history and the modern
commercial banking are traceable to ancient times. In India, banking has existed in one form or the
other from time to time. The present era in banking may be taken to have commenced with
establishment of bank of Bengal in 1809 under the government charter and with government
participation in share capital. Allahabad bank was started in the year 1865 and Punjab national bank in
1895, and thus, others followed Every year RBI declares its 6 monthly policy and accordingly the
various measures and rates are implemented which has an impact on the banking sector. Also the
Union budget affects the banking sector to boost the economy by giving certain concessions or

26
facilities. If in the Budget savings are encouraged, then more deposits will be attracted towards the
banks and in turn they can lend more money to the agricultural sector and industrial sector, therefore,
booming the economy. If the FDI limits are relaxed, then more FDI are brought in India through
banking channels.
POLITICAL/ LEGAL ENVIROMENT Government and RBI policies affect the banking sector.
Sometimes looking into the political advantage of a particular party, the Government declares some
measures to their benefits like waiver of short-term agricultural loans, to attract the farmer’s votes. By
doing so the profits of the bank get affected. Various banks in the cooperative sector are open and run
by the politicians. They exploit these banks for their benefits. Sometimes the government appoints
various chairmen of the banks. Various policies are framed by the RBI looking at the present situation
of the country for better control over the banks.
SOCIAL ENVIROMENT Before nationalization of the banks, their control was in the hands of the
private parties and only big business houses and the effluent sections of the society were getting
benefits of banking in India. In 1969 government nationalized 14 banks. To adopt the social
development in the banking sector it was necessary for speedy economic progress, consistent with
social justice, in democratic political system, which is free from domination of law, and in which
opportunities are open to all. Accordingly, keeping in mind both the national and social objectives,
bankers were given direction to help economically weaker section of the society and also provide
need-based finance to all the sectors of the economy with flexible and liberal attitude. Now the banks
provide various types of loans to farmers, working women, professionals, and traders. They also
provide education loan to the students and housing loans, consumer loans, etc. Banks having big
clients or big companies have to provide services like personalized banking to their clients because
these customers do not believe in running about and waiting in queues for getting their work done.
The bankers also have to provide these customers with special provisions and at times with benefits
like food and parties. But the banks do not mind incurring these costs because of the kind of business
these clients bring for the bank. Banks have changed the culture of human life in India and have made
life much easier for the people.
PRODUCT MIX The product mix of a company includes all different product lines a company offers
to its customers. The product line of a bank might easily include more than 100 different services. In
today’s competitive scenario it has become very necessary for a bank to provide it’s customers with a
wide variety of services and the best technology in order to attract them. Here is an example of some
of the products offered by UTI Bank to its customers.
Offering UTI Bank's Savings Account is just the right product for everyone, salaried, employees or
businessmen, high net worth individuals and NRI's. The unmatched package of UTI Bank Savings
Bank account given below brings the benefits of better, efficient and hassle free banking.
•ATM Network

27
A Savings Bank Account with UTI Bank entitles you to a free ATM card, which enables you to access
your account anytime and at any ATM centre across the country. You can withdraw and deposit
money and cheques with your ATM card. Unlike most other ATMs, a UTI Bank ATM allows you to
withdraw up to Rs. 20,000 a day. In addition, cash can be withdrawn from any of the ATMs against
your MasterCard (domestic/international).
•7-Day Banking
At select branches spread over the country, you can bank on all the 7 days of the week (except for
public holidays), over extended working hours.
•Telebanking
Telebanking service provides you instant access to your account. It offers you a wide range of services
over the phone such as account information, Balance Enquiry, Transaction Details, Statement of
Account, Status of your Cheque , etc.
•iConnect-Internet Banking
This is the concept of "the Bank on your desk-top". You can look-up the status of your account, query
and undertake a range of financial transactions, simply by clicking the mouse. Now don't you think
you have a great opportunity to see yourself laughing your way to the bank?
Offering
UTI Bank has joined hands with Citibank, to give rise to a new kind of card power - unique and
unmatched benefits and international utility at the most competitive rates. The UTI Bank Citibank
International Silver Card, the MasterCard and 'Unique' Card offers quite a few benefits.
Rewards
UTI Bank Citibank Card combines dual conveniences of high purchase power and flexible payment
facility. Purchase of high-value items is now convenient and when it comes to payback time, your bill
can be paid in installments, depending on your financial liquidity at a given moment. The Revolving
Credit Facility lets you pay as little as 5% of your total outstanding every month. Giving you the
power to buy now and pay later in parts!
Dial-A-Draft
One can use your UTI Bank Citibank Card to pay for your personal expenses at places where credit
cards are not accepted yet. Like paying for investments, telephone and electricity bills, school fees
and much more. Just call CitiPhone and the draft you need will be delivered to you!
Credit Limit Increase
You can call CitiPhone and ask for a Credit Limit Increase in the event that you have to make a large
purchase on your card urgently. It's especially handy for paying off vehicle repairs, telephone bills and
electricity bills. And for anniversaries, weddings, birthdays, or business trips or when a holiday goes
beyond budget
24-Hour ATMs

28
One can withdraw emergency cash up to 60% of your credit limit from 24- Hour ATMs in
Ahmedabad, Bangalore, Calcutta, Chennai, Delhi, Hyderabad, Mumbai and Pune. While traveling
overseas you can draw cash from MasterCard ATMs spread across the globe. The same is applicable
for any Citibank branch. Also the cash you withdraw is insured against theft for a period of 12 hours
after withdrawal. A never before facility is brought to you with the UTI Bank Citibank Card at a
transaction
fee of 2.5% or Rs.50 whichever is higher. All cash advances also carry a service charge from the date
of the transaction. The cash withdrawal limit for the first year is Rs. 5,000.
Major National Banks :-
Allahabad Bank Allahabad Bank is one of the premier nationalized banks in India. It is also the
oldest joint stock bank of India. It was incorporated by a group of Europeans at Allahabad on April
24, 1865. It was the time Indian economy had started shifting towards organized trade and business
affairs. After some years in 1920, the P&O Bank brought Allahabad Bank and its headquarters at
Kolkata. The Allahabad bank got an entirely new identity when it was nationalized in 1969 along with
13 other banks in India. Since then the Allahabad Bank had a smooth journey towards progress. Today
it is one of the leading banks in India with a whooping business of over Rs.1, 00,000 crores.
Branches and Business
Allahabad has adopted CBS (Core Banking Service) since 2006 and has developed 24 hours
connectivity with its 2165 branches across the length and breath of the country. In 143 years of it
existence the bank has come a long way by developing a wide grip over all the corners of India. At
present the Allahabad Bank has 44 Zonal Offices 6 Staff Training Colleges and 3 Staff Training
centers for imparting training centers in India.

Apart from general branches, the bank has also come up with specialized branches, like Industrial
Finance Branches, International Branches, Finance Branches, Recovery Branches, NRI Branches
Specialized Personal Banking Branches, Specialized Savings Bank Branches, Quick Collection
Service Branches, Trading Finance Branches and Service Branches in many major cities of India. The
businesses of the bank are thriving successfully. In the end of March 2007, the Allahabad Bank
crosses a land mark of Rs.1, 00,000 crores. The bank's business also registered a 6.90% growth during
April-Sept 2007, when its business increased up to Rs.1, 08,458 crores from Rs.1, 01,458 crores in
merely 5 months. On Year-on-Year basis, the business of the bank has grown at a rate of 19.87%. The
bank also registered an immense growth in total deposit record when its business went up to
Rs.65,896 at end of September 2007 crores from Rs.54,006 crore in September 2006.
Bank of India Bank of India was founded on September 7, 1906 by a group of eminent businessmen
from Mumbai. In July 1969 Bank of India was nationalized along with 13 other banks. Beginning
with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has made a rapid growth over the
years. It has evolved into a mighty institution with a strong national presence and sizable international

29
operations. In business volume, Bank of India occupies a premier position among the nationalized
banks. Presently, Bank of India has 2609 branches in India spread over all states/ union territories
including 93 specialized branches. These branches are controlled through 48 Zonal Offices. Bank of
India has several firsts to its credit. The Bank has been the first among the nationalised banks to
establish a fully computerised branch and ATM facility at the Mahalaxmi Branch at Mumbai way
back in 1989. It pioneered the introduction of the Health Code System in 1982, for evaluating/ rating
its credit portfolio. Bank of India was the first Indian Bank to open a branch outside the country, at
London, in 1946, and also the first to open a branch in Europe, Paris in 1974. The Bank has sizable
presence abroad, with a network of 23 branches (including three representative office ) at key banking
and financial centres viz. London, New York, Paris, Tokyo, Hong-Kong, and Singapore.
Canara Bank Canara Bank is one of the most prominent commercial banks of India. The bank was
established in the year 1906 at Mangalore, Karnataka by a well known personality Mr. Ammembal
Subba Rao Pai. Initially, it was founded with the name Canara Bank Hindu Permanent Fund, but later
on the name was changed to Canara Bank Limited. Mr. Ammembal Subba Rao Pai had envisioned the
bank to not only offer financial services but also fulfill social causes such as removal of superstitions
and ignorance, promotion of habit of saving, providing assistance to the people in need and develop a
sense of humanity among the people.
Key Attributes
Apart from setting other benchmarks in the field of providing comprehensive banking services to the
consumers, Canara Bank has a number of achievements to its credit, which include being the first
bank in India to have launched Inter-City ATM network, being the first bank to have been awarded
ISO Certification for one of its branches, providing credit card for farmers for the first time in India
along with offering Agricultural Consultancy Services.
Vital Details
Canara Bank has established a strong presence in the country, with 2710 branches across the nation as
of September 2008. The bank boasts of having the maximum number of ATM installations among all
the nationalized banks summing up to more than 2000 of them at 698 centres. Also, 1351 branches of
the bank provide Internet and Mobile Banking (IMB) services, while ‘Anywhere Banking’ services
are being provided at 2027 of its branches. All the branches of Canara Bank are enabled with Real
Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) transaction facilities,
insuring smooth and swift money transfer from any corner of the nation to another corner.
Central Bank of India Central Bank of India is one of the oldest commercial banks of India, and
reportedly is the first truly Indian bank which was totally owned and established by Indian without
any foreign help. Sir Sorabji Pockhanawala was the founder of the bank, who had always dreamt of
establishing a thoroughly Indian bank, who was so happy and excited about the project that he
reportedly termed the Central Bank of India as “property of the nation and the country’s asset”. The

30
first Chairman of the bank was Sir Pherozesha Mehta, a yet another Indian enthusiast. In the year
1969 the bank was nationalized by the Government of India.
Key Attributes
Central Bank of India claims to be the first bank to be conferred with the National Award for
Excellence in Micro and Small Enterprises (MSE) Lending for the year 2007-08. The bank entered a
partnership with Kotak Mahindra Assets Management Company in December 2008, under which all
the Kotak Mutual Fund products will be made available through Central Bank of India branches.
Presence in India
Central Bank of India has a strong presence in the country with over 3000 branches and more than
250 extension counters nationwide as of April 2009. The headquarters of the bank are located in
Mumbai, the financial capital of India, along with 16 other zonal offices established in different cities
of the nation, including Agra, Ahmedabad, Bhopal, Chandigarh, Chennai, Guwahati, Hyderabad,
Kolkata, Lucknow, Mumbai Metro Zonal Office, Muzaffarpur, Nagpur, New Delhi, Patna, Pune and
Raipur.
Corporation Bank Corporation Bank is an Indian bank based in Mangalore, Karnataka. The bank
was founded in the year 1906 at a town named Udupi in Karnataka with an investment of just Rs.
5000. A group of enthusiasts including Khan Bahadur Haji Abdulla Haji Kasim Saheb Bahadur were
the founders of the bank. Interestingly, Udupi was not much far from Mangalore, and the banking
needs of the people were being solely controlled by some local rich individuals. Hence, to find a way
out of the existing monopoly of the money lenders, Corporation Bank was established with the initial
name ‘The Canara Banking Corporation (Udupi) Ltd’.
Key Attributes
Corporation Bank has an array of awards and recognitions to its credit, including National Award for
Assistance to Exporters from the President of India for the year 1976-77, Shiromani Award for
Banking from Union Minister of Commerce in the year 1992, Best Bank Award for Excellence in
Banking Technology from Institute for Development and Research in Banking Technology (IDRBT)
in the year 2001, and Best Bank Award for Innovative Usage and Application on INFINET (Indian
Financial Network) from the same institution in the year 2002. Apart from it, Corporation Bank has
been the path breaker among the Indian banks in many ways, as it was the first bank in the country to
launch Cash Management Services, Gold Banking, m-Commerce and 100% Core Banking Services
(CBS) compliance.
IDBI Bank The Industrial Development Bank of India Limited, now more popularly known as IDBI
Bank, was established as a wholly-owned subsidiary of Reserve Bank of India. The foundation of the
bank was laid down under an Act of Parliament, in July 1964. The main aim behind the setting up of
IDBI was to provide credit and other facilities for the Indian industry, which was still in the initial
stages of growth and development. In February 1976, the ownership of IDBI was transferred to
Government of India. After the transfer of its ownership, IDBI became the main institution, through

31
which the institutes engaged in financing, promoting and developing industry were to be coordinated.
In January 1992, IDBI accessed domestic retail debt market for the first time, with innovative Deep
Discount Bonds, and registered path-breaking success. The following year, it set up the IDBI Capital
Market Services Ltd., as its wholly-owned subsidiary, to offer a broad range of financial services,
including Bond Trading, Equity Broking, Client Asset Management and Depository Services. In
September 1994, in response to RBI's policy of opening up domestic banking sector to private
participation, IDBI set up IDBI Bank Ltd., in association with SIDBI. In July 1995, public issue of the
bank was taken out, after which the Government's shareholding came down (though it still retains
majority of the shareholding in the bank). In September 2003, IDBI took over Tata Home Finance
Ltd, renamed ‘IDBI Home finance Limited’, thus diversifying its business domain and entering the
arena of retail finance sector. The year 2005 witnessed the merger of IDBI Bank with the Industrial
Development Bank of India Ltd. The new entity continued to its development finance role, while
providing an array of wholesale and retail banking products (and does so till date). The following
year, IDBI Bank acquired United Western Bank (which, at that time, had 230 branches spread over 47
districts, in 9 states). In the financial year of 2008, IDBI Bank had a net income of Rs 9415.9 crores
and total assets of Rs 120,601 crores.
The Present
Today, IDBI Bank is counted amongst the leading public sector banks of India, apart from claiming
the distinction of being the 4th largest bank, in overall ratings. It is presently regarded as the tenth
largest development bank in the world, mainly in terms of reach. This is because of its wide network
of 509 branches, 900 ATMs and 319 centers. Apart from being involved in banking services, IDBI has
set up institutions like The National Stock Exchange of India (NSE), The National Securities
Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL).
United Bank of India Originally established as United Bank of India Ltd., the bank was a result of
merger of four Bengali banks - Comilla Banking Corporation Ltd., Bengal Central Bank Ltd., Comilla
Union Bank Ltd. and Hooghly Bank Ltd. in 1950. Almost two decade later, in 1969, United Bank of
India was one among the major banks that were nationalized. Thereafter, the bank expanded in a
major way, covering all the states of India. It also was an active participant in the growth and
developmental activities, mainly in the rural and semi-urban regions. Acknowledging the efforts made
by United Bank of India, it was honored as a Lead Bank in several districts of India. Presently, it the
Lead Bank in 30 districts in the States of West Bengal, Assam, Manipur and Tripura. The Bank also
holds the position of being the Convener of the State Level Bankers' Committees (SLBC) for the
States of West Bengal and Tripura. The bank is known to spread its banking services especially in the
Eastern and North-Eastern parts of India. United Bank of India supported the 4 Regional Rural Banks
(RRB) at West Bengal, Assam, Manipur and Tripura. Thanks to United Bank of India, even places
with little or no reach such as the Sunderbans in West Bengal, today, have an access to banking
services. UBI had established two floating mobile branches on motor launches. These moved from

32
one island to another on different days of the week, providing people with all the facilities. However,
the floating branches paved way to the full-fledged bank branches at these centers. The largest lender
to the tea industry, UBI is also recognized as the 'Tea Bank', for its longstanding involvement with the
financing of tea gardens.

Branches & ATM Services

Presently the Bank has a three-tier organizational set-up consisting of the Head Office, 28 Regional
Offices. Out of its total 1450 branches, 500 of them have been automated either fully or partially. Its
branches in all the metropolitan cities of India are equipped with Electronic Fund Transfer System.
UBI has ATMs all over the country and having Cash Tree arrangement with 11 other Banks.
Union Bank of India Union Bank of India was inaugurated by the Father of the Nation, Mahatama
Gandhi, on November 11, 1919. Started as a limited company in Mumbai, it was one of the few
Financial Commercial banks in India. Until 1947, UBI had only 4 branches - 3 in Mumbai and 1 in
Saurashtra, all concentrated in key trade centres. Catering to all the sectors of the society, be it
agriculture, industry, trade and commerce, services or infrastructure, the bank has also played a major
role in rendering services to the financial needs of every section. Apart from this, the bank also
extended financial support to educational, housing and trade sector. Union Bank of India undertook
the task of establishment of village knowledge centers and self-employment training centers. It was in
1975, that the Union Bank of India was nationalized. It was, then, that it merged with the Belgaum
Bank, a private sector bank. Another merger was on cards in 1985, this time with the Miraj State
Bank. Union Bank is a Public Sector Unit with 55.43% Share Capital held by the Government of
India. The Bank came out with its Initial Public Offer (IPO) in August 20, 2002 and Follow on Public
Offer in February 2006. Presently 44.57 % of Share Capital is presently held by institutions,
individuals and others.
Tech-Savvy
With the age of global banking, Union Bank of India also changed its style, boasting of urbanized and
computerized core banking systems. A front runner among public sector banks in modern-day
banking, it has all the facilities that a modern bank should have - internet banking and centrally
computerized branches. UBI was one of the pioneer public sector banks, which launched Core
Banking Solution in 2002. As of September 2005, more than 670 branches/extension counters of Bank
are networked under Core Banking Solution. The Bank has launched multiple Electronic Delivery
Channels and has installed nearly 423 networked ATMs.
Syndicate Bank Established in the year 1925, Syndicate Bank had its first office in the coastal region
of Karnataka, Udupi. It was then named as 'Canara Industrial & Banking Syndicate Ltd'. The bank
was initiated by a trio - Sri Upendra Ananth Pai, a businessman, Sri Vaman Kudva, an engineer and
Dr.T M A Pai, a physician, with a capital of Rs. 8000. During that time, the crisis in the handloom

33
industry crippled the local weavers completely. The main aim of Syndicate Bank was to provide
financial assistance to them, by mobilizing small savings from the community.

Three years later, in 1928, the bank came up with Pigmy Deposit Scheme, in which it collected as
little as 2 annas per day, at the doorsteps of the depositors through its agents. The scheme existing till
date, earns the bank a sum of Rs. 2 crore daily. In the same year, Syndicate bank opened its first
branch at Brahmavar in Dakshina Kannada District. It became a member of the Clearing House for
the first time at Bombay, in 1937. Almost a decade later, Syndicate Bank opened 29 branches opened
in a single day in rural areas. Its 100th branch opened at Ilkal in Karnataka in 1957. The bank with its
socio-economic aim was making extensive growth and advancement and entered Foreign Exchange
business by opening Foreign Exchange Department at Bombay. In 1964, the bank changed its name to
'Syndicate Bank Limited' and the head office was also shifted from Udupi to Manipal. The bank had
then set up an Economic Research Department, being one of the first few Banks to emphasize on
research in Banking, even before nationalization. In 1971, it opened the first specialized branch in
Foreign Exchange, in Delhi. Five years later, it opened its first overseas branch opened at London. In
1984, Syndicate Bank opened its 1000th branch in Hauz Khas, Delhi. In the same year, it undertook
the management of Musandam Exchange Co. in Muscat. Five years thence, in 1989, Syndicate Bank
opened its 1500th branch at Kanakumbi. In 1999, it raised a capital of Rs. 125 Crore from its more
than 4 lakh shareholders. Next year, in 2000, the bank established its first specialized Capital Market
Services, at Mumbai. In 2003, Syndicate Bank entered into a MOU with Bajaj Allianz, for distribution
of Life Insurance products. In 2004, Syndicate Bank amalgamated with United India Insurance Co.
Ltd. for distribution of Non-Life Insurance products. With the age of progressive banking, Syndicate
Bank has created a name for itself in the last 80 years. Rooted in rural India, the Bank has a clear
picture of the grass root realities and a vision of future India. Changing with the changing times, the
Bank has well equipped itself with all the facilities of the new age, without, however, altering its
distinctive socio-economic and cultural culture. Syndicate Bank's unique principle of mutual
development, of both the Bank and the people, has won it a long list of clientele, which includes both
the rural and the semi-urban class.
State Bank of India (SBI) 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) 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

34
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 take over 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. The State Bank of India emerged as a pacesetter,
with its operations carried out by the 480 offices comprising branches, sub offices and three Local
Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the
community's savings and lending to creditworthy parties, the State Bank of India catered to the needs
of the customers, by banking purposefully. The bank served the heterogeneous financial needs of the
planned economic development.
Branches
The corporate center of SBI is located in Mumbai. In order to cater to different functions, there are
several other establishments in and outside Mumbai, apart from the corporate center. The bank boasts
of having as many as 14 local head offices and 57 Zonal Offices, located at major cities throughout
India. It is recorded that SBI has about 10000 branches, well networked to cater to its customers
throughout India.

ATM Services
SBI provides easy access to money to its customers through more than 8500 ATMs in India. The Bank
also facilitates the free transaction of money at the ATMs of State Bank Group, which includes the
ATMs of State Bank of India as well as the Associate Banks – State Bank of Bikaner & Jaipur, State
Bank of Hyderabad, State Bank of Indore, etc. You may also transact money through SBI Commercial
and International Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card.

Punjab National Bank Punjab National Bank (PNB) is the second largest government-owned
commercial bank in India. Having more than 3.5 crore customer, Punjab National Bank has one of the
largest branch networks in India. The bank's assets for financial year 2007 were about US$60 billion.
Coming into Being

35
The bank was established in 1895 at Lahore. PNB's founders included several leaders of the Swadeshi
movement like Dyal Singh Majithia, Lala HarKishen Lal, Lala Lalchand, Kali Prosanna Roy, EC
Jessawala, Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively
associated with the banks’s management in its early years. It holds the distinction of being the first
Indian bank to have been started solely with Indian capital. In 1969, it was nationalized by the
Government of India along with 13 other banks.

Private Banks :-Major

Federal Bank Federal Bank Limited was founded as Travancore Federal Bank Limited in the year
1931, with an authorized capital of Rs. 5000. It was established at Nedumpuram, a place near
Tiruvalla, in Central Travancore (a princely state later merged into Kerala), under Travancore
Company's Act. Thirteen years later, in 1944, Shri K P Hormis and his close relatives /friends took
over the controlling interest in the bank. The following year, the paid-up capital of the bank went up
to 71,000 and its registered office shifted to Aluva, in Ernakulam district of Kerala. With the opening
of its first branch at Aluva, Travancore Federal Bank commenced its business. It was in the Board
Meeting of March 1947 that the name of the bank was changed to Federal Bank Limited. After a gap
of 12 years i.e. in 1959, the bank was licensed under Sec. 22 of the Banking Companies Act 1949,
after which it floated several kuries and launched various deposit schemes. In 1964, it took over the
liabilities of Chalakudy Public Bank Ltd. (Chalakudy), Cochin Union Bank Ltd. (Trichur) and
Alleppey Bank Ltd. (Alleppey). In the next five year, Federal Bank took over St.George Union Bank
Ltd. Puthenpally (1965) and Marthandom Commercial Bank Ltd. Trivandrum (1968). In 1970, it
became a Scheduled Bank. Two years later, it became an authorized dealer in Foreign Exchange.
Thereafter, Federal Bank came in an expansion mode and opened 53 branches in 1975 and 42
branches in 1976. In 1984, Federal Bank set up an Agricultural Finance Department in its head office,
improving its performance in the field of agricultural and priority sector lending.

Tech-Savvy Bank
It was in the year 2000 that Federal Bank started the Any Where Banking (ABB) service, in
Bangalore, followed by the Depository Services, in association with NSDL. The same year, Internet
Banking 'FedNet' was launched, with the Federal Millennium CD being just in tow. With the start of
2001, the bank saw the launch of Wide Area Network, connecting Regional Offices at Mumbai,
Bangalore, Chennai, Ernakulam and Chennai F & I with Head Office. The following year, all the
branches of the bank were fully computerized (using FedSoft). In 2002, Federal Bank started the
installation of switch for networking all the ATMs. Soon enough, it introduced FedAlerts and
FedMobile, with real-time transaction alerts and customizable options. Two years later, a call centre
was set up by the bank, attached to the Systems and Technology Department, and co-branded credit
cards were launched, in association with ICICI Bank. Not much time later, Federal Bank claimed the

36
distinction of becoming the first traditional bank with networked branches, having 100 percent
connectivity.

HDFC Bank Housing Development Finance Corporation Limited, more popularly known as HDFC
Bank Ltd, was established in the year 1994, as a part of the liberalization of the Indian Banking
Industry by Reserve Bank of India (RBI). It was one of the first banks to receive an 'in principle'
approval from RBI, for setting up a bank in the private sector. The bank was incorporated with the
name 'HDFC Bank Limited', with its registered office in Mumbai. The following year, it started its
operations as a Scheduled Commercial Bank. Today, the bank boasts of as many as 1412 branches and
over 3275 ATMs across India.
Amalgamations
In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a private sector bank promoted
by Bennett, Coleman & Co. / Times Group). With this, HDFC and Times became the first two private
banks in the New Generation Private Sector Banks to have gone through a merger. In 2008, RBI
approved the amalgamation of Centurion Bank of Punjab with HDFC Bank. With this, the Deposits of
the merged entity became Rs. 1,22,000 crore, while the Advances were Rs. 89,000 crore and Balance
Sheet size was Rs. 1,63,000 crore.
Tech-Savvy
HDFC Bank has always prided itself on a highly automated environment, be it in terms of information
technology or communication systems. All the braches of the bank boast of online connectivity with
the other, ensuring speedy funds transfer for the clients. At the same time, the bank's branch network
and Automated Teller Machines (ATMs) allow multi-branch access to retail clients. The bank makes
use of its up-to-date technology, along with market position and expertise, to create a competitive
advantage and build market share.

Capital Structure
At present, HDFC Bank boasts of an authorized capital of Rs 550 crore (Rs5.5 billion), of this the
paid-up amount is Rs 424.6 crore (Rs.4.2 billion). In terms of equity share, the HDFC Group holds
19.4%. Foreign Institutional Investors (FIIs) have around 28% of the equity and about 17.6% is held
by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). The bank
has about 570,000 shareholders. Its shares find a listing on the Stock Exchange, Mumbai and National
Stock Exchange, while its American Depository Shares are listed on the New York Stock Exchange
(NYSE), under the symbol 'HDB'.

ICICI Bank ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial
institution, in 1994. Four years later, when the company offered ICICI Bank's shares to the public,
ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity

37
offering in the form of ADRs on the New York Stock Exchange (NYSE), thereby becoming the first
Indian company and the first bank or financial institution from non-Japan Asia to be listed on the
NYSE. In the next year, it acquired the Bank of Madura Limited in an all-stock amalgamation. Later
in the year and the next fiscal year, the bank made secondary market sales to institutional investors.
With a change in the corporate structure and the budding competition in the Indian Banking industry,
the management of both ICICI and ICICI Bank were of the opinion that a merger between the two
entities would prove to be an essential step. It was in 2001 that the Boards of Directors of ICICI and
ICICI Bank sanctioned the amalgamation of ICICI and two of its wholly-owned retail finance
subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with
ICICI Bank. In the following year, the merger was approved by its shareholders, the High Court of
Gujarat at Ahmedabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of
India.
Present Scenario
ICICI Bank has its equity shares listed in India on Bombay Stock Exchange and the National Stock
Exchange of India Limited. Overseas, its American Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE). As of December 31, 2008, ICICI is India's second-largest bank,
boasting an asset value of Rs. 3,744.10 billion and profit after tax Rs. 30.14 billion, for the nine
months, that ended on December 31, 2008.

Branches & ATMs

ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank has 1,420
branches and about 4,644 ATMs. Talking about foreign countries, ICICI Bank has made its presence
felt in 18 countries - United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai
International Finance Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. The Bank proudly holds its subsidiaries in the United
Kingdom, Russia and Canada out of which, the UK subsidiary has established branches in Belgium
and Germany.

ING Vysya Bank ING Vysya Bank Ltd came into being in October 2002, when erstwhile Vysya
Bank Ltd was merged with ING, a global financial powerhouse boasting of Dutch origin. Vysya Bank
Ltd, one of initial banks to be set up in the private sector of India, was established in the year 1930,
with the aim of providing a helping hand to all those who couldn't afford the privilege of enjoying the
services of a bank. Eighteen years later, in 1948, the bank was listed as one of the Scheduled Banks of
the country. With the passing time, Vysya Bank aimed at the number one position in all the private
sector banks. It was in 2000 only that ING and Vysya Bank set up ING Vysya Life Insurance
Company, after receiving RBI nod, commencing its business in the following year. Two years later, a
wide range of services were launched, including Vys Vyapar Plus - the range of loan schemes for

38
traders, ATM services, Smartserv - personal assistant service, Save & Secure - an account that
provides accident hospitalization and insurance cover, Sambandh - the International Debit Card and
the mi-b@nk net banking service. In 2002, ING took over the management of Vysya Bank and RBI
gave its permission for the new name of the bank to be 'ING Vysya Bank Ltd'. In the following year,
the bank introduced customer friendly products, mainly Orange Savings, Orange Current and
Protected Home Loans. Its innovative products in the coming years included Solo - My Own Account
for youth and Customer Service Line - Phone Banking Service (2005) and ‘AAA’ transactions -
Anywhere, Anytime & Anyhow Banking - through networking of all its braches (2006).

Branches, ATMs & Financial Highlights

As of March 31st 2008, ING Vysya Bank had a total of 677 branches, of which there were 407
Branches, 39 Extension Counters, 28 Satellite Offices and 203 ATMs. At the same time, its Net Worth
was Rs 14260.00 millions, Deposits worth Rs. 204980.00 millions, Advanced amounting to Rs.
146500.00 millions and Profits were to the tune of Rs. 1569.00 millions. The bank also has Internet
Banking, mi-b@nk and Customer Service Line for Phone Banking Service, within its gamut of
services.

Kotak Mahindra Bank Kotak Mahindra Bank is one of India's leading financial private banking
institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial
services include commercial banking, stock broking, mutual funds, life insurance and investment
banking. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license
to carry on with banking business by the Reserve Bank of India in February 2003. It is the first
company in the Indian banking history to convert to be converted from a private financial institution
to a bank.
Kotak Mahindra Bank : Branches and Business Within a small span of 6 years, the bank has spread it
wings in several sphere of finances. Presently, spread in 82 cities in India, the bank caters to the needs
of its 5.9 million customers spread throughout the length and breadth of country and even abroad. By
the end of FY 2007-2008, the Kotak Mahindra Bank had about 178 branches spread all over the
country and it plans to add some more branches by the end of FY 2010.
The entire Kotak Mahindra group has a net worth of over Rs. 6,327 crore and at the end of FYP 2007-
2008,it was reported that the consolidated profit of Kotak Mahindra Bank individually was Rs 991.2
crore which was 84% higher than the consolidated profit of Rs 538.2 crore in FY07. Kotak Mahindra
Bank has 75 ATMs at 41 locations in the country which are 24x7 accessible. Before the free
transactions facility of RBI was made mandatory to all the ATM operating banks in India from April
1, 2009, Kotak Mahindra Bank had underwent under a treaty with the HDFC Bank to provide free
network free of cost to most of its customers through its 1335 ATMs spread in the country to ensure
comfort to its customers.

39
Kotak Mahindra Bank: Facilities and Customer Care
The facilities of Kotak Mahindra Bank are wide spread. It's banking sector acts as a central platform
for customer relationships across the entire Kotak Mahindra group's various businesses. The bank
marks its presence in the commercial vehicles, retail finance, corporate banking and treasury and
housing finance segments. It offers you several facilities like personal banking, commercial banking,
insurance and investment banking.
Apart from traditional facilities like deposits accounts, savings account, current account, term
deposits, personal loans, home loans the bank has spread its wing in the investment services by
providing its customer facilities like Demat, mutual fund and insurance. The bank has also opted for
net banking, mobile banking and phone banking for convenience of its customers.

UTI Bank Axis Bank was formed as UTI when it was incorporated in 1994 when Government of
India allowed private players in the banking sector. The bank was sponsored together by the
administrator of the specified undertaking of the Unit Trust of India, Life Insurance Corporation of
India (LIC) and General Insurance Corporation ltd. and its subsidiaries namely National insurance
company ltd., the New India Assurance Company, the Oriental Insurance Corporation and United
Insurance Company Ltd. However, the name of UTI was changed because of the disagreement on
terms and conditions of the bank authority over certain stipulations including royalty charged over the
name from UTI AMC. The bank also wanted to have a new name from its pan-Indian as well as
international business perspective. So from July 30, 2007 onwards the UTI bank was named as Axis
Bank.

Axis Bank: Branches and Business

Set up with a capital of Rs. 115 crore- with UTI contributing Rs. 100 crore, LIC contributing Rs. 7.5
crore and GIC and its four subsidiaries contributing Rs. 1.5 crores, the bank came in operation with its
first registered office at Ahmedabad . Today, Axis Bank has more than 726 branch offices and
Extension Counters spread over 341 cities, towns and villages of the country. Presently, the authorized
share capital of Axis Bank is Rs. 300 Crores and the paid up share capital is Rs. 232.86 Crores. The
Axis bank is currently capitalized with Rs. 282.65 Crores with a public holding of 57.05% apart from
the promoters. The FY2009 shows a net profit of Rs. 500.86 crore up by 63.24% yoy over the Net
Profit of Rs. 306.83 crores for the thirdquarter of last year.
Axis Bank: Facilities and Services
Axis Bank its customers with all kinds of facilities that should be provided by a modern Bank. It deals
with personalized as well as commercial banking. It has one of the largest spread ATM network in the
country.

40
YES Bank Yes Bank is one of the top most private Indian banks. Awarded by the only Greenfield
license award by RBI in last 14 years, this bank is established and run by Rana Kapoor and Ashok
Kapur with the financial support of Rabobank Nederland, the world's single AAA rated private Bank.
Three respected global institutional private equity investors, CVC Citigroup, AIF Capital and
ChrysCapital are also associated with this bank. The Yes Bank was established with the motto of
providing Indian customers with a motive to provide Indian customers with a spirit of professional
entrepreneurship blended with a premium quality, technologically savvy banking trends.

YES Bank: Branches and Business

Yes Bank is recently rated to be the second best private banks in India on its overall performance. The
bank is spread in India with a total of 117 branches in India most of which are located in north India.
Yes Bank plans an expansion with 133 more branches in the country by the end of 2010. Yes Bank's
financial details show it in a very strong financial state presently. The net profit of Yes Bank after Tax
for year 2007 is estimated to be Rs.944 millions which is 391 million ahead of FY 2005-2006.

YES Bank: Facilities and Customer Service

Yes Bank provides its customers with world class facilities. The biggest feature that differentiates the
standard of Yes Bank from a mediocre bank is the inclusion of knowledge bankers in its management
team, who have an expertise in the Indian economy. This expertise therefore proves beneficial in
profiting the valued customers of the bank. Apart from this, the philosophy of technological edge,
corporate governance and responsible banking also sets a standard set of working parameters for the
bank.

41
SWOT Analysis.

42
43
 OVERVIEW OF JOB SATISFACTION :-

Job satisfaction and Job satisfaction describes how content an individual is with his or her job. The
happier people are within their job, the more satisfied they are said to be. Job satisfaction is not the
same as motivation, although it is clearly linked. Job design aims to enhance job satisfaction and
performance, methods include job rotation, job enlargement and job enrichment. Other influences on
satisfaction include the management style and culture, employee involvement, empowerment and
autonomous work groups. Job satisfaction is a very important attribute which is frequently measured
by organizations. The most common way of measurement is the use of rating scales where employees
report their reactions to their jobs. Questions relate to rate of pay, work responsibilities, variety of
tasks, promotional opportunities the work itself and co-workers.

OBJECTIVES:
 To determine the satisfaction of employees with their work timings.
 To determine the most preferred physical condition of their work place.
 To determine the most preferred benefit for the employees.
 To determine the satisfaction level of employees with their compensation package.
 To determine the satisfaction level of employees with their job.
 To determine if there is any significant relation between age and their career growth relevant
to their work.

44
 DATA INTERPRETATION & ANALYSIS
DEMOGRAPHICS :-

Interpretation :-
Maximum number of respondents belong to 23 – 27 age group.

Interpretation :-
Mostly respondents are male.

45
Interpretation :-
Mostly respondents are graduate.

Interpretation :-
Maximum number of respondents belong to 2 – 4 Lakh of annual income.

46
Interpretation :-
Maximum number of respondents agree that salary increment is based on performance.

Interpretation :-
Maximum number of respondents agree that they are provided with adequate medical facilities
on time.

47
Interpretation :-
Mostly respondents agree that they receive recognition and appreciation for timely completion
of work.

Interpretation :-
Mostly respondents agree that they get rewards based on merit and performance.

48
Interpretation :-
Mostly respondents agree that they are encouraged to give new ideas and suggrstions.

Interpretation :-
Maximum respondents agree that management has created an open and comfortable work
environment.

49
Interpretation :-
Mostly respondents agree that they are provided adequate paid leave.

Interpretation:-
Maximum number of respondents agree that they get recognition and appreciation for their
abilities and efficiency.

50
Interpretation :-
Mostly respondents agree that management take good care of their problems and tries to
solve them at the earliest.

Interpretation :-
Mostly respondents get a sense of accomplishment from their work.

51
Interpretation :-
Mostly respondents feel that their work will help in their career growth.

Interpretation :-
Mostly respondents agree that they can make and implement their own decisions in their
work area.

52
Interpretation :-
Maximum number of respondents agree that their views and participation are valued.

Interpretation :-
Maximum number of respondents agree that their job is secure.

53
Interpretation :-
Maximum number of respondents agree that their role and responsibilities are clear to them.

Interpretation :-
Maximum number of respondents agree that they are able to meet their work schedule
everyday.

54
Interpretation :-
Maximum number of respondents agree that they are happy with their work timings.

Interpretation :-
Maximum number of respondents agree that they are able to apply their skills, education and
qualification in their job.

55
Interpretation :-
Maximum number of respondents agree that their job is interesting.

Interpretation :-
Maximum number of respondents agree that they are provided with adequate facilities to do
their job.

56
Interpretation :-
Maximum number of respondents agree that they are provided with variety of tasks to do.

Interpretation :-
Mostly respondents are satisfied with the gratuity policy adopted by their organisation.

57
Interpretation :-
Maximum number of respondents are satisfied with their compensation package.

Interpretation :-
Maximum number of respondents agree that job leaves them with sufficient time for their
personal/family and social life.

58
Interpretation :-
Maximum number of respondents are satisfied with their job.

Interpretation :-
Lighting is the most important for employees among physical conditions of their workplace.

59
Interpretation :-
Salary is the most important thing for respondents among various types of benefits provided
to them.

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

a
Pearson Chi-Square 73.776 4 .000
Likelihood Ratio 96.745 4 .000
Linear-by-Linear Association 57.890 1 .000
N of Valid Cases 100

Interpretation :-
As the calculated value 73.776 is more than the table value 9.488 so we reject the null hypothesis and there is
no significant relation between gender and my job leaves me with sufficient time for my personal/family and
social life.

Chi-Square Tests
Asymp. Sig. (2-
Value df sided)
a
Pearson Chi-Square 70.016 8 .000
Likelihood Ratio 90.283 8 .000
Linear-by-Linear Association 49.584 1 .000
N of Valid Cases 100

Interpretation :-
As the calculated value 70.016 is more than the table value 15.507 so we reject the null
hypothesis as there is no significant relation between my job is an application of my skills,
education and qualification and qualification of employees.

60
Chi-Square Tests
Asymp. Sig. (2-
Value df sided)
a
Pearson Chi-Square 55.521 3 .000
Likelihood Ratio 75.207 3 .000
Linear-by-Linear Association 48.872 1 .000
N of Valid Cases 100

Interpretation :-
As the calculated value 55.521 is more than the table value 7.815 so we reject the null
hypothesis as there is no significant relation between gender and i am happy with my work
timings.
Chi-Square Tests
Asymp. Sig. (2-
Value df sided)
Pearson Chi-Square 23.556a 16 .100
Likelihood Ratio 26.964 16 .042
Linear-by-Linear Association 1.531 1 .216
N of Valid Cases 100

Interpretation :-
As the calculated value 23.556 is less than the table value 26.296, so we accept the null
hypothesis as there is significant relation between age and i feel my work will help in my
career growth.
Chi-Square Tests
Asymp. Sig. (2-
Value df sided)
Pearson Chi-Square 9.364a 8 .312
Likelihood Ratio 10.835 8 .211
Linear-by-Linear Association 3.431 1 .064
N of Valid Cases 100

Interpretation :-
As the calculated value 9.364 is less than the calculated value 15.507, so we accept the null
hypothesis as there is significant relation between qualification and i am permitted to make
and implement my own decisions in my work area.

61
 LIMITATIONS
Respondent error – some respondents are not willing in filling up of questionnaire.
Some respondents feel that they will be providing some confidential information so they are
not interested in filling the questionnaire.
Bias opinion – some respondents might have given subjective response instead of
objective.

62
 ANNEXURE

Hi, I am Khushwant Kaur. I am a student of Malwa College, Bathinda . As per the assignment
for the final project, I am conducting a research on Job Satisfaction among Bank Employees.
You are one of the selected respondents to participate in this survey. All the information
given by you will be kept absolutely confidential & will only be used for research purpose.

1. Is the salary increment based on performance ?

Yes No
2. Are the medical facilities adequate and provided on time ?
Yes No
3. Does the timely completion of work get an appreciation ?
Yes No
4. Are rewards given on the basis of merit and performance ?
Yes No
5. Are employees encouraged to give new ideas and suggestions about their work ?
Yes No
6. Has the management created an open and comfortable work environment ?
Yes No
7. Does the organisation give you adequate paid leave ?
Yes No
8. Do employees receive recognition and appreciation for their abilities and efficiency ?
Yes No
9. Does the management takes good care of the problems of employees and try to resolve
them with proper counselling at the earliest ?
Yes No
10. Please read the following statements and indicate your opinion.
Strongly disagree / Disagree / Can’t say/ Agree / Strongly agree

STATEMENTS SD D CS A SA
a) I get a sense of accomplishment from my work.
b) I feel m I feel my work will help in my career growth.
c) I am permitted to make and implement my own decisions in
my work area.
d) My views and participation are valued.
e) I feel secure about my job.
f) My role and responsibilities are very clear to me.
g) I am able to meet my work schedule everyday.
h) I am happy with my work timings.

63
 i) My job is an application of my skills, education and
qualification.
j) My job is interesting and i am motivated to do it well.
k) I am provided adequate facilities to do my job.
l) I am provided with variety of tasks.
m) I am satisfied with the gratuity policy adopted by the
organisation.
n) I am satisfied with my compensation package.
o) My job leaves me with sufficient time for my personal/family and
social life
p) I am satisfied with my job.

11. Rank the following according to your preference about physical conditions of
workplace:-
i. Drinking water facilities ...........
ii. Lighting ........
iii. Work area (space) .........
iv. Maintenance of computers and other equipments .......
v. Cleanliness of workplace ........

12. Rank the following benefits according to your preference:-

i. Salary day (paid on time) .......
ii. Incentive amount (paid on time) ........
iii. Casual leaves ......
iv. Earned leaves ......
v. Increments .......
vi. Promotions ........
vii. Recreation through picnics, parties and get - togethers .......

64
Personal Details : -
Name ..........................................
Age ( years) 18-23 23-27
27-32 32-37 37 & Above
Gender Male Female
Qualification Graduate Post–Graduate Others
Annual Income ( Rs) (Lakh) Less than 2 2-4
4-6 6-8 8 & Above

65
 BIBLOGRAPHY
WEBSITES:-
 http://CiteFin.com
 http://IBEF.com
 http://wickipedia.com
 http://finance.indiamart.com

66