SYNOPSIS FOR RESEARCH STUDY

OF THE THESIS
FOR THE DEGREE OF DOCTOR OF PHILOSOPHY (COMMERCE)
IN THE SUBJECT OF
BUSINESS POLICY AND ADMINISTRATION
OF UNIVERSITY OF MUMBAI

ON

A STUDY ON INNOVATIVE BANKING POLICIES

FOR DEPOSIT MOBILISATION AND ITS IMPACT

BY
FAZLE HUSSAIN WADIWALA

UNDER THE GUIDANCE OF

Dr. MOHD. KHALIL AHMAD

Research Centre

K.P.B. Hinduja College of Commerce and Economics,

Charni Road, Mumbai – 400004

3RD MAY, 2019

FAZLE HUSSAIN WADIWALA Dr. MOHD. KHALIL AHMAD

Research Student Research Guide
 INDEX
No. Title Pg. No.
1. Introduction 5

2. Statement of Problem 6

3. Review of literature 6

4. Profile of Study Area 9

5. Conceptual Framework 10

6. Scope of Study 11

7. Research Objectives 12

8. Research Hypotheses 12

9. Research Methodology 13

9.1 Universe 13

9.2 Sample 13

9.3 Type of Data 14

9.4 Data Presentation 15

9.5 Data Analysis 15

9.6 Research Report 15

10. Data Analysis and Conclusion 15

10.1 Sampled Banks 16

10.2 Deposit Generation Factors (From Customer’ Perspective) 16

10.3 Likert’s Five Point Scale 17

10.4 Ranking of Parameters Affecting Deposit Mobilisation 19

Policies of Banks
10.5 Ranking of Banks on the Basis of Effectiveness of various 20

Factors Affecting their Deposit Mobilisation Policies

10.6 Correlation between Effectiveness of various Factors 20

Affecting Deposit Mobilisation Policies of Banks:

10.7 Impact Assessment of Deposit Mobilisation Policies of 21

Banks and their Deposits

 2
10.8 Correlation between Effectiveness of various Factors 22

Affecting Deposit Mobilisation Policies of Banks and their

Impact on Deposit Mobilisation by Banks
11. Establishment of Hypotheses 23

12. Achievement of Objectives 24

13. Chapterisation 24

14 Significance of the Study 24

15. Scope for Further Research 25

3
 SYNOPSIS OF THE THESIS SUBMITTED TO
UNIVERSITY OF MUMBAI
FOR THE DEGREE OF DOCTOR OF PHILOSOPHY (PH.D.)
IN THE FACULTY OF COMMERCE
(BUSINESS POLICY AND ADMINISTRATION)
1. TITLE OF THE THESIS A STUDY ON INNOVATIVE BANKING
POLICIES FOR DEPOSIT MOBILISATION
AND ITS IMPACT

2. NAME OF THE FAZLE HUSSAIN WADIWALA

CANDIDATE

3. NAME & DESIGNATION OF Dr. MOHD. KHALEEL AHMED

RESEARCH GUIDE
4. PLACE OF RESEARCH
5. NUMBER AND DATE OF
REGISTRATION
6. DATE OF SUBMISSION OF
SYNOPSIS
RESEARCH GUIDE,
KPB HINDUJA COLLEGE OF COMMERCE &
ECONOMICS, CHARNI RAOD, MUMBAI -
400004
PH.D. RESEARCH CENTRE,
KPB HINDUJA COLLEGE OF COMMERCE &
ECONOMICS, CHARNI RAOD, MUMBAI -
400004
REGISTRATION NO. 48
DATED 17 FEB. 2014
3 RD MAY, 2019

7. SIGNATURE OF THE
CANDIDATE

8. SIGNATURE OF THE
RESEARCH GUIDE

4
1. INTRODUCTION:
Money is compressed work, stored energy, which can be exchanged for goods
and services. If exchange is delayed, money can be saved or invested so that it will
create more money in the future, i.e. a penny saved is a penny earned. What
happens
in practice is that entities in need of money (such as individuals, households,
businesses or government) access available savings (from households or other
companies) through financial intermediaries (like banks, money market and
capital market). Banks provide various loans and advances to industries,
corporates and individuals. The interest received on these loans is their
main source of income. Thus, banks thrive on savings and saving comes
from idle cash or from those postpone, sacrifice or forego spending resulting into
future assets or wealth.

The significance of banking has increased all over the world with the rise in
income levels and growth in the volume of financial transactions. There has been
a transition in the outlook of banking from class banking to mass banking. The role
of commercial banks in this sphere is substantial. Currently, this is a zenith stage
for Banking revolution showing economic success for the developing countries like
that
of ours, i.e. India. Indian banks have introduced innovative schemes like
Differential Rate of Interest Scheme (DRI) and have come to finance new
schemes such as Integrated Rural Development Programme (IRDP), Self-
employment to Educated Unemployed Youth (SEEUY) and Prime Ministers
Rozgar Yojana (PMRY). All these schemes need money which can be generated
from mobilisation of savings of individuals and households.

As stated above, bank deposits are the main source of funds for
banking sector. Banks are the intermediaries that direct the excess cash
balances of individuals and households from unproductive to productive
channels. In the post- liberalisation and privatization era, the competition
among banks has intensified with the establishment of number of private sector
banks and foreign banks in India. Also, the Indian households are becoming
more of spending-oriented rather than saving-oriented. The direct effect of
this is increasing competition for meagre savings of households intensifying the
competition among banks to mobilise more
and more savings. In this scenario, the banks are compelled to use innovative

5
practices to mobilise limited household savings with a view to divert it to productive
channels.

2. STATEMENT OF PROBLEM:
As stated above, the main source of finance for banking sector is
deposits received by them through various deposit schemes such as saving
deposits, fixed deposits and recurring deposits. Among various types of
deposits, fixed or time deposits is the main source of finance for banking sector.
Various initiatives on the part of government for financial inclusion, the
prominent among them being Jan Dhan Yojana of Modi Government, are big
leaps in giving boost to deposits mobilisation by banking sector in India.
However, triangular competition among public sector banks, private sector
banks and foreign banks necessitates the deployment of new and innovative
methods of deposit mobilisations by banking sector. Against this background,
the present study aims to study the various factors that affect the choice of banks
by general public for saving their hard-earned money and policies framed by banks
to capitalise on these factors to mobilise deposits from general public under the title:

A STUDY ON INNOVATIVE BANKING POLICIES FOR DEPOSIT

MOBILISATION AND ITS IMPACT

3. REVIEW OF LITERATURE:
The researcher has undertaken extensive survey of literature in order to build a
theoretical foundation for the present research. A snapshot of the same has been
produced here:
Sr. No. Title of the Study and Authors Summary
1. Emmanuel Melvin O. Pesa (2015)  The main objective of the study
Factors Affecting Deposit Mobilisation was to asses’ factors affecting
by Bank Agents in Kenya: A deposit mobilization by bank
Case Study of National Bank of agents in Kenya.
Kenya, Kissi Country  The specific objectives were to
establish the extent to which
fraud at agent level,
customer
6
 satisfaction and branch network
affect deposit mobilisation by
bank agents.
2. Helani Udara Gunasekara1 and  The main objective of the
Prasansha Kumari (2018) study is to investigate the
most effective factors
affecting deposit
mobilization by banks.
 The study reveals that, there
is a significant and positive
relationship between
deposit mobilization and
deposit interest rate, security,
branch expansion,
services, technology and
awareness.
 Moreover, there is
a significant
relationship between living
area and the amount of
deposits and the
demographic variables,
such as, gender,
occupation, education level

3. Thangam Alagarsamy and Dr. S.  and

The income
study significantly
highlights the
Ganapathy (2017) factors affecting deposit
Deposit Mobilisation mobilization in the
of Commercial Banks: A Study Western regions of Goa,
with Special Reference to Western Gujarat, Maharashtra, Dadra
India & Nagar Haveli and Daman
& Diu.
 The study analyses the CAGR
in deposit mobilisation
of scheduled commercial

7
 in the Western Region of
India during the period from
2005-2006 to 2014-2015.
 The study found
that Maharashtra leads in
the deposit mobilization in
the Western parts of India.
4. Seyte Zewde, Kenenisa Lemie and  The main objective of the
Ganfure Tarekegn (2018) study is to identify the
Determinants of Deposit determinants of commercial
Mobilization in Ethiopian banks deposit in Ethiopia.
Commercial Banks  The research s based
on secondary data collected
for a period from 2002-2016
for the sample of seven
commercial banks in Ethiopia.
 Hausman test was employed.
Under this study, both
internal and external factors
affecting deposit
mobilization.
5. Narayana Maharana, Suman  This paper makes an attempt
Kalyan Choudhury and Ashok to evaluate the trend and
Kumar Panigrahi (2015) growth in deposit
Deposit Mobilization mobilization of scheduled
of Commercial Banks: A commercial banks in
Comparative Study of BOB and Bhubaneswar from a period
Axis Bank in Bhubaneswar City from 2008-09 to 2013-14.
 Three different types of
deposits, namely
demand deposit, savings
deposit and term deposit is
considered

8
 for the study taking BOB and
Axis Bank.

It can be seen in the above analysis that most of the above studies
deals
with deposit mobilisation in a number of foreign countries. There are some
local studies which are either region-specific or bank-specific. But there is no
extensive study which mainly focuses on the innovative deposit mobilisation
strategies by Indian banks. Thus, there exists a research gap which the present
study tries to fill
up by undertaking a primary research in the city of Mumbai which is also a
financial capital of India under the title:
A STUDY ON INNOVATIVE BANKING POLICIES FOR DEPOSIT
MOBILISATION AND ITS IMPACT

4. PROFILE OF STUDY AREA:

Profiling the study area and its cannons for the research is an essential element
of the research study. The profile of research area gives a proper idea about
the physical, social, ethnic, political, economical and geographical features of the
region where the study has been undertaken.

The present study is confined to the city of Mumbai. Mumbai is the capital
cit y of the Indian stat e of Maharashtra . It is the most populated city in India and
is the ninth most populated cities in the world. As per the Census 2011, the
total population of the city stood at 18.4 million. Over the years, the city of
Mumbai has expanded to its adjoining regions of Thane district and Raigad
district. All these regions together constitute Mumbai Metropolitan Region
(MMR). The total population of Mumbai city and its surrounding Mumbai
Metropolitan Region (MMR) was 20.7 million in the year 2011. Mumbai
city along with the neighbouring regions of the Mumbai Metropolitan
Region (MMR) is one of the most populated urban regions in the world.
Mumbai lies on the Western coast of India and has a deep natural harbour. It
is also the wealthiest city in India. Mumbai has the highest number of
bill ionaires and millionaires among all cities
in India. The Gross Domestic Product (GDP) of the city is the highest among any
city in South, West or Central Asia .
 9
Mumbai is the financial, commercial and entertainment capital of India. It
is one of the world's top ten centres of trade and commerce in terms of global
financial flow, generating 6.16% of India's GDP and accounting for 25% of
industrial output,
70% of maritime trade in India and 70% of capital transactions to India's economy.
The city houses important financial institutions such as the Reserve Bank of
India (RBI), the Securities Exchange Board of India (SEBI), the Bombay Stock
Exchange (BSE), the National Stock Exchange of India (NSE), Multi-commodity
Exchange of India Ltd. (MCX) and the corporate headquarters of numerous
Indian companies and Multinational Corporations (MNCs). Many premier
scientific and nuclear institutes of India like BARC, NPCL, IR E L ,
TIFR, AERB, AECI and the Department of Atomic Energy are located in
and around the city of Mumbai. India's Hindi (Bollywood) and Marathi film
and television industry are located in Mumbai. Mumbai's business
opportunities, as well as its potential to offer a higher standard of living,
attract migrants from all over India, making the city
a melting pot of many communities and cultures.

Owing to economic, commercial and financial hub, the city of Mumbai

experiences large scale migration from different parts of the country. As a result,
the city has expanded in all directions. During the last three decades, the
population of the city has increased multi-fold, pushing demand for housing sector.
Also changing life style, disintegration of joint family system, favourable
government policy and increasing income have also contributed to the development
of construction industry
in the city. All these factors make Mumbai an ideal place for conducting research on
banking industry.

5. CONCEPTUAL FRAMEWORK:
(1) Bank: The word ‘Bank’ comes from the French word ‘Banque’, meaning, a
bench. The Jews who lived in Italy in the olden days, used to sit on ‘benches’
to transact their businesses in the market places. It is interesting to note that
the word ‘Bank’ also finds its origin in the German language and was known
 as ‘Banck’, meaning, funds that were held in joint custody. The Italians used
the word ‘Banco’ to represent the interpretation of the term ‘piles of money’.
Whatever the origin and connotation of the word, banks today are seen as

10
structures and safe houses, wherein money is stored, deposited, borrowed or
lent.

(2) Deposits: Bank deposits are the main source of finance for any banking
institution. Bank deposits are the surplus money at the disposal of individuals,
households and business organisations which they keep in bank for safety and
to earn returns in the form of interests. There are different types of
banks deposits such as saving deposits, time deposits, term deposits,
etc. The accountholder can withdraw these money from bank at a short
notice as per their requirements. There are certain restrictions on the
withdrawal of certain types of deposits.

(3) Deposit Mobilisation: Deposit mobilisation are the drives undertaken

by banks to encourage people to save their money. As stated above,
there is a triangular competition between public sector banks, private sector
banks and foreign banks in the Indian banking sector. In addition to that
there is a large network of cooperative banks. All these banks compete for the
meagre savings
of the individuals and households. Therefore, banks have started conducting
special drives for deposit mobilisations.

(4) Deposit Policies: Deposit policies of the banks are influenced greatly by the
guidelines issued by the Reserve Bank of India (RBI). The Reserve Bank of
India declares base interest rates which provide guidelines to banks to
decide their interest rates. Some interest rates such as interest rates on senior
citizen bank deposits are regulated by the Reserve Bank of India. However,
each bank
is free to decide its own interest rate over and above base rate declared by
the Reserve Bank of India. Banks are also free to formulate their own
policies regarding mobilisation of deposits under their various schemes.
6. SCOPE OF STUDY:
The present research study is limited to the four types of banks, viz., public
sector banks, private sector banks, foreign banks and co -operative banks.
Geographically, the study is restricted to the city of Mumbai. The dat a for the

11
present study have been collected during a period from 2013 to 2018. The research
study is constrained by the physical and financial limitations of the researcher.

7. RESEARCH OBJECTIVES:
Various research objectives which the present research seeks to achieve are as
under:
(1) To trace the origin, development, growth and role of banks in general and with
respect to India in particular.
(2) To understand the various components of balance sheets of banks with main
focus on deposits and their implications on bank performance.
(3) To analyse the relation between various factors affecting deposit mobilisation
by different categories of banks.
(4) To evaluate the impact of these factors on the deposit mobilisation by different
categories of banks.
(5) To suggest measures and methods to bring about grater alignment between
deposit mobilisation factors and bank policies for deposit mobilisation.

8. RESEARCH HYPOTHESES:
Hypothesis - 1
H0 There is no significant relation between the factors that affect deposit
mobilisation policies of different categories of banks.
H1 There is a significant relation between the factors that affect deposit
mobilisation policies of different categories of banks.

Hypothesis - 2
H0 There is no significant relation between the factors affecting Deposit
Mobilisation Policies of Banks and their Impact on Deposit Mobilisation by
Banks.
H1 There is a significant relation between the factors affecting Deposit
 Mobilisation Policies of Banks and their Impact on Deposit Mobilisation by
Banks.

12
9. RESEARCH METHODOLOGY:
The present research study is exploratory and descriptive in nature. An
exploratory study is a valuable means of finding out ‘what is happening; to
seek new insights; to ask questions and to assess phenomena in a new light’
(Robson
2002:59). The present study is an attempt to explore the factors that affect the
deposit mobilisation capacity of various types of banks with reference to the city
of Mumbai. The object of descriptive research is ‘to portray an accurate profile of
persons, events or situations’ (Robson 2002:59). This may be an extension of, or a
forerunner to, a piece of exploratory research or, more often, a piece
of explanatory research. The present research tries to describe the factors that
directly
or indirectly impact the deposit mobilisation capacity of banks.
9.1 Universe:
The study is confined to the four categories of banks, viz., Public
Sector Banks, Private Sector Banks, Foreign Banks and Co -operative
Banks. Geographically, the study has been undertaken in the city of Mumbai, the
financial and commercial capital of India and state capital of Maharashtra.
Thus, all the branches of Public Sector Banks, Private Sector Banks, Foreign
Banks and Co - operative Bank situated in the city of Mumbai and their
customers and employees constitute the sample for the purpose of the present
study. Thus, the population under consideration is large and heterogeneous and
cannot be defined precisely.

9.2 Sample:
Where the population is unknown, the sample size can be derived by
computing the minimum sample size required for accuracy in estimating
proportions by considering the standard normal deviation set at 95%
confidence level (1.96), percentage picking a choice or response (50% =
0.5) and the
 confidence interval (0.05 = ±5). The formula is:

2
z pq
n  2
e

Where, n is the sample size, z is the selected critical value of desired

confidence level, p is the estimated proportion of an attribute that is present in the
population and q = 1− p and e is the desired level of precision or tolerable error.

13

Assuming the maximum variability, which is equal to 50% ( p = 0.5)

and
taking 95% confidence level with ±5% precision, the calculation for required
sample size will be as follows:

p = 0.5 and hence, q =1 – 0.5 = 0.5; e = 0.05; z =1.96

2
(1.96)  0.5  0.5
2 n 
(0.05)
= 384.16

Accordingly, the ideal sample size has been found to be 384.16. Therefore,
the sample size has been selected as 475 in order to include some more elements
of the population.
Table No. 1.1
Distribution of Sample
Questionnaire
Type of Bank Distributed Received Valid Selected for
Analysis
Public Sector Bank 250 214 207 200
Private Sector Bank 250 226 211 200
Foreign Bank 50 32 26 25
Co-op Bank 100 58 52 50
Total 650 520 496 475

Source: Field Survey

9.3 Type of Data:

 The research study is based on both primary as well as secondary data. The
main source of secondary data has been the reports of Reserve Bank of India (RBI)
and Annual Reports of selected commercial banks. Secondary data has also
been sought from other published sources such as journals, magazines,
newspaper articles, dissertations and theses. Primary data has been collected
directly from bank customers through personal visits to various bank branches
with the help of
closed ended questionnaire.

14
9.4 Data Presentation:
The data so collected has been tabulated with the help of bivariate
and multivariate tables. Simple bar diagrams, pie diagrams and multiple bar
diagrams have been used for data presentation.

9.5 Data Analysis:

The data so tabulated has been analysed using simple statistical tools
like mean and percentage. The researcher has made use of Spearman’s
Rank Correlation for the establishment of various research hypotheses. Rank
Correlation studies the degree of correlation between ranks assigned to the same
v ariables by two different rankers or respondents. It is one of the most frequently
used tool for assessing the nature of relation and its degree between
ranking of various
parameters by two different entities.

Spearman’s Rank Correlation (R) =1–

2
i
6d
2
n(n  1)

Where,
d = different between ranks.
n = number of elements under consideration.

The results of the rank correlation always lie between +1 and –1, which can be
interpreted as under:
9.6 Research Report:
The researcher report has been presented in popular format.

10.DATA ANALYSIS AND CONCLUSION:

The snapshot of data analysis and conclusions derived thereof has been
presented here:

15
10.1 Sampled Banks:
The researcher has considered the following four types of banks which are
mainly situated in the urban areas:
(a) Public Sector Banks.
(b) Private Sector Banks.
(c) Foreign Banks.
(d) Co-operative Banks.

10.2 Deposit Generation Factors (From Customer’ Perspective):

On the basis of available research studies and pilot studies, the researcher
has identified the following factors that have direct or indirect bearing on deposit
mobilisation capacity of banks:
Parameter 1 - Rate of Interest
Parameter 2 - Location of Branch
Parameter 3 - Easy Documentation Facility
Parameter 4 - Online Deposit Services
Parameter 5 - Deposit Mobilisation Drives
Parameter 6 - Target Group Schemes
Parameter 7 - Customer Relationship Management (CRM)
Parameter 8 - Shot Liquidity Option
Parameter 9 - Priority/Preferred Customer Status
Parameter 10 - Varieties of Services Offered
Parameter 11 - Quality of Services Rendered
Parameter 12 - Employees Competence
Parameter 13 - Marketing Strategies of Bank
Parameter 14 - Bank Charges
Parameter 15 - Bank Image

The banks have been found to be using combination of these factors to

devise innovative methods for deposit mobilisation.

16
10.3 Likert’s Five Point Scale:
In Likert-style rating scale respondent is asked how strongly she or he
agrees or disagrees with a statement or series of statements, usually on a
four-, five-, six- or seven-point rating scale (Dillman 2007). This is one of
the best method of converting qualitative data like opinions or views into
quantitative ones. The researcher has made use of the following five point scale
to seek the opinion
of respondents about various factors that influence deposit mobilisation capacity
of commercial banks:
(1) Most Significant (MS)
(2) Significant (S)
(3) Neutral (N)
(4) Insignificant (I)
(5) Most Insignificant (MI)

The responses so obtained have been multiplied with score points as under
to convert qualitative views and opinions into objective scores for ranking – Most
Significant (MS) = 5 points, Significant (S) = 4 points, Neutral (N) = 3
points, Insignificant (I) = 2 points and Most Insignificant (MI) = 1 point. The
following example related to the first parameter, i.e. rate of interest, will make it
clear.
Table No. 1.2
Ranking of Distribution of Sample
Rate of Interest
MS S N I MI Total
Marks 5 4 3 2 1
Public Sector Bank 142 47 7 3 1 200
Private Sector Bank 167 28 1 4 0 200
Foreign Bank 11 13 1 0 0 25
Co-operative Bank 33 16 1 0 0 50
Total 353 104 10 7 1 475

Source: Field Survey.

It can be seen in the above table that from 200 respondents from Public
Sector Banks, 142 have rated Rate of Interest to be the most significant factor
affecting deposit mobilisation by banks, 47 have rated it to be significant, 7 have

17
rated it to be neutral, 3 have rated it to be insignificant and 1 has rated it
to be most insignificant. The respective responses from 200 respondents from
private sector banks is 167, 28, 1, 4 and 0, for foreign banks it is 11,13,1, 0 and 0
from a total of 25 respondents and 33, 16, 1, 0 and 0 from 50
respondents from cooperative banks. These responses have been converted into
percentage so as to bring different sample sizes from different categories of
banks at par in the
following table.

MS S N I MI Total
% % % % %
Public Sector Bank 71.0 23.5 3.5 1.5 0.5 100.0
Private Sector Bank 83.5 14.0 0.5 2.0 0.0 100.0
Foreign Bank 44.0 52.0 4.0 0.0 0.0 100.0
Co-operative Bank 66.0 32.0 2.0 0.0 0.0 100.0
Total 264.5 121.5 10.0 3.5 0.5 400.0

Source: Field Survey.

These responses have been multiplied with the weights of 5, 4, 3, 2 and 1

for MS, S, N, I and MI respectively to get the aggregate score by the respondents
of each banks for rate of interest as a factor affecting deposit mobilisation.
Accordingly, rate of interest is the most important factor for clients of
private sector banks, followed by co-operative banks, public sector banks and
foreign banks respectively. Thus, in all the total score assigned to rate of
interest as a
factor affecting deposit mobilisation is 1846 as indicated in the total column.

MS S N I MI Total
5 4 3 2 1
Public Sector Bank 355.0 94.0 10.5 3.0 0.5 463.0
Private Sector Bank 417.5 56.0 1.5 4.0 0.0 479.0
Foreign Bank 220.0 208.0 12.0 0.0 0.0 440.0
Co-operative Bank 330.0 128.0 6.0 0.0 0.0 464.0
Total 1322.5 486.0 30.0 7.0 0.5 1846.0

Source: Field Survey.

18
10.4 Ranking of Parameters Affecting Deposit Mobilisation Policies of Banks:
Following the similar technique as discussed above, all 15 parameters affecting deposit mobilisation policies of banks have b een
quantified and ranked as indicated in the table below:
Table 1.3
Ranking of Factors Affecting Deposit Mobilisation Policies of Banks

Public Private Co-

Foreign
Parameters Sector Sector operative Total R1 R2 R3 R4 RF
Banks
Banks Banks Banks
1. Rate of Interest 463.0 479.0 440.0 464.0 1846.0 7 5 7.5 3.5 5
2. Location of Branch 478.0 455.0 432.0 434.0 1799.0 3 9 9 7.5 8
3. Documentation Facility 464.5 466.0 440.0 434.0 1804.5 6 6 7.5 7.5 7
4. Online Deposit Services 488.5 494.5 492.0 466.0 1941.0 1 1 2.5 2 1
5. Deposit Mobilisation Drives 267.5 266.0 192.0 350.0 1075.5 14 15 15 13 15
6. Target Group Schemes 461.5 449.0 288.0 432.0 1630.5 9 11 13 9 10
7. CRM 462.5 493.0 464.0 394.0 1813.5 8 3 5 11 6
8. Priority/Preferred Customer Status 341.5 451.0 388.0 376.0 1556.5 12 10 11 12 12
9. Short Liquidity Option 476.0 459.5 264.0 484.0 1683.5 4 7.5 14 1 9
10. Varieties of Services Offered 351.0 398.0 404.0 420.0 1573.0 11 12 10 10 11
11. Quality of Services Rendered 480.5 494.0 492.0 464.0 1930.5 2 2 2.5 3.5 2
12. Employees Competence 460.5 479.5 488.0 450.0 1878.0 10 4 4 6 4
13. Marketing Strategies of Bank 329.0 299.5 324.0 306.0 1258.5 13 14 12 14 14
14. Bank Charges 472.0 459.5 496.0 460.0 1887.5 5 7.5 1 5 3
15. Bank Image 259.5 308.5 452.0 298.0 1318.0 15 13 6 15 13
Source: Field Survey.

19
10.5 Ranking of Banks on the Basis of Effectiveness of various Factors Affecting their Deposit Mobilisation Policies:
Similarly the banks bank categories under consideration have been ranked on the basis of their total score on 15 parameters
suggested above in the following table:
Table 1.4
Ranking of Banks on the Basis of Effectiveness of various Factors Affecting their Deposit Mobilisation Policies
Bank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total Rank
Public Sector Banks 3 1 2 3 2 1 3 4 2 4 3 3 1 2 4 38 2.5
Private Sector Bank 1 2 1 1 3 2 1 1 3 3 1 2 4 4 2 31 1
Foreign Bank 4 4 3 2 4 4 2 2 4 2 2 1 2 1 1 38 2.5
Co-operative Bank 2 3 4 4 1 3 4 3 1 1 4 4 3 3 3 43 4

10.6 Correlation between Effectiveness of various Factors Affecting Deposit Mobilisation Policies of Banks:
Using the Spearman’s Rank Correlation, the correlation between ranking of these 15 parameters was found. The results of the same
are shown in the following table:

Rank Correlation between R1 and R2 0.7589

Rank Correlation between R1 and R3 0.4571

Rank Correlation between R1 and R4 0.8642

Rank Correlation between R2 and R3 0.7089

Rank Correlation between R2 and R4 0.7357

Rank Correlation between R3 and R4 0.3723

20
Conclusions:
(1) There exists a strong positive correlation between the factors that affect deposit mobilisation policies of (1) Pub lic Sector Banks
and Private Sector Banks, (2) Public Sector Banks and Co -operative Banks (3) Private Sector Banks and Foreign Banks (4) Private
Sector Banks and Co-operative Banks.
(2) There exists a weak positive correlation between the factors that affect d eposit mobilisation policies of (1) Public Sector Banks and
Foreign Bank and (2) Foreign Banks and Co-operative Banks.

10.7 Impact Assessment of Deposit Mobilisation Policies of Banks and their Deposits:
It would also be interesting to study if there is a ny correlation between the deposit mobilisation policies of banks and their
deposit mobilisation. For this purpose, there researcher has found out the incremental values of various types of deposits mobilised
by banks during the preceding five years. The following table summarises the growth in deposits of various types of banks under
considerations:
Table 1.4
Incremental Values of Growth in Deposits of Various Types of Banks under Consideration
2013-14 2014-15 2015-16 2016-17 2017-18 Change (%) Rank
Public Sector Banks 100 111.6 120.5 128.1 136.7 36.72 4
Private Sector Bank 100 117.4 140 166.6 193.7 93.65 1
Foreign Bank 100 114.4 136.6 159.2 146.6 46.62 3
Co-operative Bank 100 110.3 122.7 139.9 148.9 48.94 2
Total 100 111.3 123.5 135.9 147.1 47.07 ---

Source: Handbook of RBI Statistics, 2018.

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 It can be seen in the above table that the incremental growth of deposits of private sector banks is the highest during the last five
years, followed by co-operative banks, foreign banks and public sector banks. Thus, these banks have been ranked in the descending order
of their deposit growth as under:
Rank 1: Private Sector Banks (93.65%)
Rank 2: Co-operative Banks (48.94%)
Rank 3: Foreign Banks (46.62%)
Rank 4: Public Sector Banks (36.72%)

10.8 Correlation between Effectiveness of various Factors Affecting Deposit Mobilisation Policies of Banks and their Impact on Deposit
Mobilisation by Banks:
Rank Correlation between the Effectiveness of various Factors Affecting Deposit Mobilisation Policies of Banks and t heir Impact on
Deposit Mobilisation by Banks = 0.35
Conclusions:
There exists a weak positive correlation between the various factors affecting Deposit Mobilisation Policies of Banks and their
Impact on Deposit Mobilisation by Banks

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11.ESTABLISHMENT OF HYPOTHESES:
Hypotheses Outcome
Hypothesis - 1 (1) There exists a strong positive
H0 There is no significant correlation between the factors
relation between the factors that affect deposit mobilisation
that affect deposit mobilisation policies of (1) Public Sector
policies of different categories Banks and Private Sector Banks,
of banks. (2) Public Sector Banks and
Co-operative Banks (3) Private
H1 There is a significant relation Sector Banks and Foreign Banks
between the factors that (4) Private Sector Banks and Co-
affect deposit mobilisation operative Banks.
policies of different categories (2) There exists a weak positive
of banks. correlation between the factors
that affect deposit mobilisation
policies of (1) Public Sector
Banks and Foreign Bank and

Hypothesis - 2 (2) Foreign Banks and Co-

H0 There is no significant There exists a weak positive correlation

relation between the factors between the various factors
affecting Deposit Mobilisation affecting Deposit Mobilisation Policies
Policies of Banks and their of Banks and their Impact on
Impact on Deposit Deposit Mobilisation by Banks
Mobilisation by Banks.

H1 There is a significant relation

between the factors affecting
Deposit Mobilisation Policies
of Banks and their Impact on
Deposit Mobilisation by Banks.

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12.ACHIEVEMENT OF OBJECTIVES:
Objective Remark
(1) To trace the origin, development, growth and role of banks in Achieved
general and with respect to India in particular.
(2) To understand the various components of balance sheets of banks with Achieved
main focus on deposits and their implications on bank performance.
(3) To analyse the relation between various factors affecting deposit Achieved
mobilisation by different categories of banks.
(4) To evaluate the impact of these factors on the deposit mobilisation Achieved
by different categories of banks.
(5) To suggest measures and methods to bring about grater alignment Achieved
between deposit mobilisation factors and bank policies for deposit
mobilisation.

13.CHAPTERISATION:
The study consists of the following chapters:
CHAPTER 1 INTRODUCTION

CHAPTER 2 REVIEW OF LITERATURE

CHAPTER 3 RESEARCH METHODOLOGY

CHAPTER 4 DATA ANALYSIS AND PRESENTATION

CHAPTER 5 CONCLUSIONS AND SUGGESTIONS

14.SIGNIFICANCE OF THE STUDY:

The present study has been undertaken with a view to assess the role
and significance of various factors that affect the deposit mobilization policies
of the commercial banks with reference to the city of Mumbai. There are a
number of factors that have implications on the deposit mobilization by
commercial banks. These factors together constitute deposit mobilization
policies of commercial banks. Different banks have different approach to
these factors which are put
together to form a unique deposit mobilization policy by the bank s. The
present
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study tries to study the relative importance of these factors in the
deposit mobilization policies of commercial banks and if there exists any
similarity or dissimilarity between the inter-bank deposit mobilization policies.
The study also assesses the extent of the impact of these policies on deposit
mobilization by different categories of the banks. The study is of immense
importance for banks to blend various deposit mobilization factors together to
devise a unique deposit mobilization policy.

15.SCOPE FOR FURTHER RESEARCH:

The present research study undertakes comparative evaluation of
deposit mobilization policies of different categories of banks in India, viz.,
public sector banks, private sector banks, foreign banks and co-operative banks.
The study can
be extended to regional rural banks. A research can also be undertaken
to understand the difference in deposit mobilization policies in rural areas and
urban areas. The researcher can also evaluate the relative importance of various
factors that affect deposit mobilization policies of commercial banks. At
international level, the study can be used to compare and contrast the deposit
mobilization strategies of banks in different countries and their impact
on their deposit mobilization capacities.

FAZLE HUSSAIN WADIWALA Dr. MOHD. KHALEEL AHMED

Research Student Research Guide
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