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1 RETAIL BANKING
Service with a smile: Today’s finicky banking customers will settle for nothing less. The customer has come to realize somewhat belatedly that he is the king. The customer’s choice of one entity over another as his principal bank is determined by considerations of service quality rather than any other factor. He wants competitive loan rates but at the same time also wants his loan or credit card application processed in double quick time. He insists that he be promptly informed of changes in deposit rates and service charges and he bristles with ‘customary rage’ if his bank is slow to redress any grievance he may have. He cherishes the convenience of impersonal net banking but during his occasional visits to the branch he also wants the comfort of personalized human interactions and facilities that make his banking experience pleasurable. In short he wants financial house that will more than just clear his cheque and updates his passbook: he wants a bank that cares and provides great services. So, do banks meet these heightened expectations? Is there a gap that exists between the management perception and the customer perception with reference to the services offered in Retail Banking? 1.1.1What is Retail Banking? Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services. Today’s retail banking sector is characterized by three basic characteristics:

• multiple products (deposits, credit cards, insurance, investments and securities); • multiple channels of distribution ( branch, internet); and • multiple customer groups (consumer, small business, and corporate).
1.1.2 Retail Banking in India: Retail banking in India is not a new phenomenon. It has always been prevalent in India in various forms. For the last few years it has become synonymous with mainstream banking for many banks.

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The typical products offered in the Indian retail banking segment are housing loans, consumption loans for purchase of durables, auto loans, credit cards and educational loans. The loans are marketed under attractive brand names to differentiate the products offered by different banks. As the Report on Trend and Progress of India, 2003-04 has shown that the loan values of these retail lending typically range between Rs.20,000 to Rs.100 lakh. The loans are generally for duration of five to seven years with housing loans granted for a longer duration of 15 years. Credit card is another rapidly growing sub-segment of this product group. In recent past retail lending has turned out to be a key profit driver for banks with retail portfolio constituting 21.5 per cent of total outstanding advances as on March 2004. The overall impairment of the retail loan portfolio worked out much less then the Gross NPA ratio for the entire loan portfolio. Within the retail segment, the housing loans had the least gross asset impairment. In fact, retailing make ample business sense in the banking sector. While new generation private sector banks have been able to create a niche in this regard, the public sector banks have not lagged behind. Leveraging their vast branch network and outreach, public sector banks have aggressively forayed to garner a larger slice of the retail pie. By international standards, however, there is still much scope for retail banking in India. After all, retail loans constitute less than seven per cent of GDP in India vis-à-vis about 35 per cent for other Asian economies — South Korea (55 per cent), Taiwan (52 per cent), Malaysia (33 per cent) and Thailand (18 per cent). As retail banking in India is still growing from modest base, there is a likelihood that the growth numbers seem to get somewhat exaggerated. One, thus, has to exercise caution in interpreting the growth of retail banking in India. 1.1.3 Drivers of retail banking business in India Some of the basic reasons which led to the retail banking growth are as follows: First, economic prosperity and the consequent increase in purchasing power has given a fillip to a consumer boom. During the 10 years after 1992, India's economy grew at an average rate of 6.8 percent and continues to grow at almost the same rate – not many countries in the world match this performance. Second, changing consumer demographics indicate vast potential for growth in consumption both qualitatively and quantitatively. India is one of the countries having highest proportion (70%) of the population below 35 years of age (young population). The BRIC report of the Goldman-Sachs, which predicted a bright future for Brazil, Russia, India 2

and China, mentioned Indian demographic advantage as an important positive factor for India. Third, technological factors played a major role. Convenience banking in the form of debit cards, internet and phone-banking, anywhere and anytime banking has attracted many new customers into the banking field. Technological innovations relating to increasing use of credit / debit cards, ATMs, direct debits and phone banking has contributed to the growth of retail banking in India. Fourth, the treasury income of the banks, which had strengthened the bottom lines of banks for the past few years, has been on the decline during the last few years. In such a scenario, retail business provides a good vehicle of profit maximization. Considering the fact that retail’s share in impaired assets is far lower than the overall bank loans and advances, retail loans have put comparatively less provisioning burden on banks apart from diversifying their income streams. Fifth, decline in interest rates have also contributed to the growth of retail credit by generating the demand for such credit. 1.1.4 Opportunities and Challenges of Retail Banking in India Retail banking has immense opportunities in a growing economy like India. As the growth story gets unfolded in India, retail banking is going to emerge a major driver. How does the world view us? As already referred to the BRIC Report, talking India as an economic superpower; A. T. Kearney, a global management consulting firm, recently identified India as the "second most attractive retail destination" of 30 emergent markets. The rise of the Indian middle class is an important contributory factor in this regard. The percentage of middle to high income Indian households is expected to continue rising. The younger population not only wields increasing purchasing power, but as far as acquiring personal debt is concerned, they are perhaps more comfortable than previous generations. Improving consumer purchasing power, coupled with more liberal attitudes toward personal debt, is contributing to India's retail banking segment. Global investors are attracted to India because of the growing number of well-educated, English-speaking workers who are comfortable working in information technology. India's IT work force will be augmented by a booming population of engineering students. Furthermore, India's labor pool also serves as an expanding customer base for retail bank products and services.

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this dependency on the network has brought IT departments additional responsibilities and challenges in managing. maintaining and optimizing the performance of retail banking networks. the Reserve Bank has. responsible lending. and across the entire organization is essential for today’s retails banks to generate revenues and remain competitive. Some of the key policy issues relevant to the retail banking sector are: financial inclusion. retention of customers is going to be a major challenge. Due to bundling of services and delivery channels. put in place risk containment measures and increased the risk weight from 100 per cent to 125 per cent in the case of consumer credit including personal loans and credit cards (Mid-term Review of Annual Policy. Technology has made it possible to deliver services throughout the branch bank network. Besides. at all times. ensuring that all bank products and services are available. rising indebtedness could turn out to be a cause for concern in the future. the areas of potential conflicts of interest tend to increase in universal banks and financial conglomerates. financial capability. 5 per cent increase in customer retention can increase profitability by 35 per cent in banking business. banks need to emphasise on retaining customers and increasing market share. Third. Even with ATM machines and Internet Banking. providing instant updates to checking accounts and rapid movement of money for stock transfers. is not comparable to that of the developed world where household debt as a proportion of disposable income is much higher. The younger. of course. and 125 per cent in the consumer credit card market. which at present is in the nascent stage. consumer protection. 2004-05). Such a scenario creates high uncertainty. The percentage of middle to high income Indian households is expected to continue rising. access to finance. India's position. Second.The development of India's economy is boosting overall consumer purchasing power. long-term savings. However. more educated population not only wields increasing purchasing power. Thus. but it is more comfortable than previous generations with acquiring personal debt The combination of the above factors promises substantial growth in the retail sector. Expressing concerns about the high growth witnessed in the consumer credit segments. information technology poses both opportunities and challenges. regulation and financial crime prevention. The challenges for the industry and its stakeholders are as follows: First. as a temporary measure. Illustratively. many consumers still prefer the personal touch of their neighbourhood branch bank. According to a research by Reichheld and Sasser in the Harvard Business Review. 50 per cent in insurance and brokerage. there 4 .

KYC Issues and money laundering risks in retail banking is yet another important issue. competition for clients may also lead to KYC procedures being waived in the bid for new business. as a McKinsey study points out actual writeoffs on NPAs show a strong negative correlation with sharing of positive information. Specific challenges include ensuring that account transaction applications run efficiently between the branch offices and data centres. PSBs need to figure out the means to generate profitable business from this segment in the days to come. with the banks jumping over one another to give out loans. 1. Banks must also consider seriously the type of identification documents they will accept and other processes to be completed. Now they need to sell banking.6 What about the foreign giants? The foreign banks have identified the wide opportunity but there are certain systematic risks involved in operating in the Retail market for them. is now the most important of the lot. These include regulatory restrictions that prevent them from expanding their branch network. A swift legal procedure against consumers creating bad debt is virtually nonexistent. So these banks often take the Direct Selling Agent (DSA) route whereby low-end jobs like sourcing or transaction processing are outsourced to small regional layers. the spend-now-pay-later “credit culture” in India is just not picking up. On top of this. which was earlier ignored. the vast 5 .are network management challenges. The nimble footed new generation private sector banks have taken a lead on this front and the public sector banks are trying to play catch up. Finally. with the banks undercutting one another. The Reserve Bank has issued detailed guidelines on application of KYC norms in November 2004. The PSBs have been losing business to the private sector banks in this segment. 1.5 But how competitive are the players? The entry of new generation private sector banks has changed the entire scenario. whereby keeping these complex distributed networks and applications operating properly in support of business objectives becomes essential.1. A lot of foreign banks have already burnt their fingers in the retail game and have now decided to get out of a few retail segments completely.1. Fourth. The consumer has never been so lucky with so many banks offering so many products to choose from. Earlier the household savings went into banks and the banks then lent out money to corporates. However. However. With supply far exceeding demand it has been a race to the bottom. Retail lending is often regarded as a low risk area for money laundering because of the perception of the sums involved. The retail segment.

7 Reasons for the change over from Corporate Banking to Retail Banking: • The financial sector reforms undertaken by the Government since the year 1991 have accelerated the process of disintermediation which has encouraged blue chip corporate to access cheaper funds to meet their working capital requirements directly from investors in India and abroad through capital market instruments and external Commercial Borrowings route thus by-passing Banks in the process. the retail advances offer attractive interest spread of 3to 4 percent. most of the banks have experienced substantial reduction in interest spreads and drain on their profitability.5 percent only. profitability and capital adequacy of banks adversely. because retail borrowers are less interest rate sensitive than the Corporates. The deregulation of markets and interest rates has lead to cut throat competition among Banks for corporate loans making them to lend even at PLR or sub PLR and offer other valued services at comparatively cheaper rates to big and high value corporates. 6 . and with relatively large retail networks—seem to have no pressing need to acquire a local bank. Income Recognition and provisioning norms has resulted in growing menace of NPAs in corporate loans which has affected the asset quality. Thus HSBC. 100 lakh and repayable normally in short period of 3.geographical and cultural diversity of the country makes credit policy formulation a tough job All these add up to the unattractiveness too. 1. has acquired customers from France's BNP.1. The risks involved in retail Banking advances are comparatively less and well diversified as loan amounts are relatively small ranging from Rs. • Whereas corporate loans give average return of just 0. in recent years. In the process. HSBC and Standard Chartered—all in India for more than a century. Germany's Deutsche Bank and Japan's Bank of Tokyo-Mitsubishi. ABN Amro took over Bank of America's retail business. Yet Citibank. Established foreign banks have preferred to take over customers or businesses from other foreign banks that want to leave. Another reason for large interest spreads on retail advances is that the retail customers are too fragmented to bargain effectively.5 to 1. The risks involved in corporate loans are very high as corporates have to keep all their eggs in one basket. 5000 to Rs. • The introduction of stringent Asset Classification.years except housing loans (where repayment period is long up to 15 years in some cases) and from fixed source of income like salaries. of the Indian retail market to the foreign players.

consumer products and automobiles. The peer pressure and demonstration effect is further pushing up demand for housing loans. • Retail Banking gives a lot of stability and public image to banks as compared to corporate banking. This offers great potential for banks to enlarge their loan books. • The housing loans.• While corporate loans are subject to ups and downs in trade frequently. retail loans are comparatively independent of recession and continue to deliver even during the sluggish phase of economy. is enlarging the retail markets. carry risk weight of just 50% for capital adequacy purposes. mass selling and ability to categorize/select clients using scoring system and data mining. 7 . which form the major chunk of retail lending and where NPAs are the least. which has propensity to consume to raise their standard of living. The potential is huge as present penetration level is just over 2 percent in the country. • The greater amount of consumerism in the country with upswing in income levels of burgeoning middle class. All these developments give big push to Retail Banking activities. This offers added incentive to banks for lending to this retail segment as against corporate lending where capital consumption is higher. This market is growing 2 50 percent per year and boosting the demand for credit from households. Given the easy liquidity scenario in the country the growth rate in this sector is likely to go up manifold in the years come. This is likely to come down further as new Basel Capital Accord or (Basel II) norms are put in place from the year 2006. consumer goods vehicles and vacationing etc. Banks can cut costs and achieve economies of scale and improve their bottom-line by robust growth in retail business volume. • The Indian mindset is also changing and consumers prefer to improve their quality of life even if it means borrowing for facilities like housing. • Retail Banking clients are generally loyal and tend not to change from one Bank to another very often. • Large numbers of Retail clients facilitate marketing. The profiles of customers are fast changing from conservative dodos to fashionable peacocks. Borrowing and lending is no longer considered a taboo.

mutual fund products and demat facilities etc. • The share of retail loans is fast increasing in the loan books of banks. both on the asset side and the liabilities front. Reduction in costs offers a win win situation both for banks and the customers. • Retail Banking offers opportunities to banks to cross-sell other retail products like credit card. 1. • Banks can foster lasting business relationship with customers and retain the existing customers and attract new ones. Retail banking allows bank to cross sell other products and services as it is far more easier to sell 8 .1.8 Impact of Retail Banking: The major impact of retail Banking is that. • Innovative products like asset securitization can open new vistas in sustaining optimal capital adequacy and asset liability management for banks.• Through product innovations and competitive pricing strategies Banks can foster business relationship with customers to retain the existing clients and attract new ones. to depositors and investors. • Banks can diversify risks in their credit portfolio and contain the menace of NPAs. • Banks can cut costs and achieve economies of scale and improve their revenues and profits by robust growth in retail business. insurance. • Retail Banking is transforming banks into one stop financial super markets. the pie itself is growing exponentially. the customers have become the Emperors – the fulcrum of all Banking activities. The hitherto sellers market has transformed into buyers market the customers have multiple of choices before them now for cherry picking products and services. Retail Banking has fuelled a considerable quantum of purchasing power through a slew of retail products. which suit their lifestyles and tastes and financial requirements as well. There is a rise in their service as well. Banks now go to their customers more often than the customers go to their banks. • It has affected the interface of banking system through different delivery mechanism • It is not that banks are sharing the same pie of retail business.

1. It is easy to enter. • Retail Banking is so wide accepted by the customer as well as very aggressively promoted by the bankers that if the bankers do not take adequate care in distributing and recovering advances. but difficult to get out. 9 . reduction in transaction costs and enhancement in efficiency of operations. distribution channels and new trained staff as well as improvement in back office operations also in very near future. It becomes so popular and widely acceptable that more and more customers had started to use it. So an unsatisfied customer can easily switch over to another competitor’s bank. Customer database have tremendously increased and it becomes difficult to manage them. It is highly sensitive . A systematic and a calculated approach is the pre-requisite for success in the long run. • Re-engineering of business with sophisticated technology based products will lead to business creation. 1. • Retail Banking is being introduced with the concept of serving customer with better and innovative products with the latest technology and easy availability. And that would be an alarming situation. They have to continually improve their service standards. Cross selling is one of the best avenues for relationship • Banking and retention of customers. Banks can thus increase their business volume and improve their bottom-line substantially. there are chances of increasing in NPAs in coming feature. This itself a time bounded problem and banks have to do it as early as possible.9 Problems faced in Retail Banking: • Retail Banking has all it’s attendant risks. Now it becomes a mass product. So banks need to be very careful in handling the customers.Banks got to move cautiously. Every bank is providing more or less similar kind of products.other products to the same customer rather than search for absolutely new ones. banks have to set up more branches. • Today’s competitive market customer has more than one options for his retail banking needs. • To match the customer inflows and current customer requirements as well as service standards.

Current Account: A current account is an active and running account. which may be operated upon any number of times during a working day. Such deposits are also known as FD or term deposit . 3. The rate of interest payable on by the banks on deposits maintained in savings account is prescribed by RBI. which is specified at the time of making the deposit is known as fixed deposit. Savings Account.10 Retail Banking Products Portfolio A.A FD is repayable on the expiry of a specified period.1. Locker Facilities. Corporate Salary Account. etc. Recurring Account. Current Account. They are listed and explained as follows: 1. Savings Account: Saving bank account is meant for the people who wish to save a part of their current income to meet their future needs and they can also earn in interest on their savings. in section 21 and 35A of the Banking Regulation Act 1949. RBI has also permitted the banks to formulate FD schemes specially meant for senior citizen with higher interest than normal.Deposits: There are many products in retail banking like Fixed Deposit. Free Demand Draft Facilities. Different banks give different name to this product. Cash Credit Facilities. There is no restriction on the number and the amount of withdrawals from a current account. Cheque Facilities.1. Fixed Deposit: The deposit with the bank for a period. suit the requirements of a big 10 . Now-a-days the fixed deposit is also linked with saving account. 2. NRI Account.Each bank has prescribed their own rate of interest and has also permitted higher rates on deposits above a specified amount. Senior Citizen Scheme. The rate of interest and other terms and conditions on which the banks accepted FD were regulated by the RBI. Whenever there is excess of balance in saving account it will automatically transfer into Fixed deposit and if there is shortfall of funds in savings account . Free Demat Account. Current account. by issuing cheque the money is transferred from fixed deposit to saving account. Kid’s Account. Overdraft Facilities.

4. foreign currency account is the account in foreign currency. All other facilities available in savings a/c is also available in corporate salary account. Euro. Non Resident ( Non Repatriable Deposit Scheme ) ( NRNR) d. housing finance scheme for NRI investment schemes. more than one person jointly or severally. Non Resident ( special)Rupee Account Scheme ( NRSR) Apart from this.. Pound Sterling. Resident foreign currency. 5. The rate of interest on the recurring deposit account is higher than as compared to the interest on the saving account. The account can be open normally in US Dollar.businessmen. The recurring deposit account can be opened by any number of persons. 11 . NRI Account: NRI accounts are maintained by banks in rupees as well as in foreign currency. Non Resident Rupee Ordinary Account (NRO) b. Four types of Rupee account can be open in the names of NRI: a. Non Resident External Account (NRE) c. Here. The only thing required is the account number of the employees and the amount to be paid them as salary. 6. In certain cases the minimum balance required is zero. Recurring Deposit: A variant of the saving bank a/c is the recurring deposit or cumulative deposit a/c introduced by banks in recent years. foreign banks and recently by some public sector banks also. The accounts of NRIs are Indian millenium deposit. Banks open such accounts for periods ranging from 1 to 10 years. Corporate Salary Account: Corporate Salary account is a new product by certain private sector banks. joint stock companies. public authorities and public corporation etc. by a guardian in the name of a minor and even by a minor. institutions. Under this account salary is deposited in the account of the employees by debiting the account of employer. a depositor is required to deposit an amount chosen by him.

mainly traders. business and industrial enterprises. and profitability. extension. medium term. The amount of loan is depended on the income of the borrower and his/her capacity to repay the loan. long term and also for different purpose. and land development. This is due to some social responsibilities of banks towards aged persons whose earnings are mainly on the interest rate. which is the most profitable employment of its funds. investment services etc. liquidity. 1. renovation. 9. Banks grant loans for different periods like short term. Account is opened in the name of kids by parents or guardians. internet banking . Housing Loans: NHB is the wholly own subsidiary of the RBI which control and regulate whole industry as per the guidance and information. Demat Account: Dematerialization is a process by which physical share certificates / securities are taken back by the company or registrar and destroyed ultimately. This may be related to his/her business purpose. There are three main principles of bank lending that have been followed by the commercial banks and they are safety . There the borrower can use for his/her personal purpose. The purpose of loan is mainly for purchase. Kid’s Account ( Minor Account ) : Children are invited as customer by certain banks. The major portion of a bank’s funds is employed by way of loans and advances. 2. B. Just like saving/current account with a bank one can open a securities account with the depository through a depository participant 8. The features of kid’s account are free personalized cheque book which can be used as a gift cheque . Loans and Advances: The main business of the banking company is lending of funds to the constituents.7. Personal Loans: This is one of the major loans provided by the banks to the individuals. Under this. 12 . Senior Citizenship Scheme: Senior citizens can open an account and on that account they can get interest rate somewhat more than the normal rate of interest. An equivalent number of shares are credited electronically to customers depository account.

Consumer Durable Loans: Under this. A margin of 50% is normally accepted by the bank on market value. A debit card facilitates purchases or payments by the cardholder . letter of continuing security. CREDIT CARDS: A credit card is an instrument. Few banks do not charge any fee for issuing credit cards while others impose an initial enrollment fee and annual fee also. Loans against Shares and Securities: Finance against shares are given by banks for different uses. For these loans the documents required are normally DP notes. power of attorney. Even for second hand car finance is available.It debits 13 . pledge form. 6. 2. BOB.3.C. loans are given for acquisition of T. It is made of plastic and hence popularly called as Plastic Money. DEBIT CARDS: It is a new product introduced in India by Citibank a few years ago in association with MasterCard.11 Retail Banking Services 1. Some banks insist on the cardholder being their customers while others do not.5%. Architect. C. 7. Fridge and other items. If the amount is not paid within the time duration the bank charges a flat interest of 2. bikes etc. which provides immediate credit facilities to its holder to avail a variety of goods and services at the merchant outlets. A. 4. auto-rickshaw. Canara Bank.1. Professional Loans: Loans are given to doctor. Education Loans: Loans are given for education in country as well as abroad. Here the loan repayment is normally done in the form of equated monthly. ICICI. Standard Chartered etc are the important issuers of credit card in India. Washing Machines. car. Vehicle Loans: Loans are given for purchase of scooter. HDFC and a few foreign banks like CITIBANK. Low interest rates. This loan can be used for business or personal purpose. 5. Engineer or Management Consultant. Leading Indian Banks such as : SBI. increasing income levels of people are the factors for growth in this sector.V. 1. Now-a-days finance against shares are given mostly in demat shares. Such cards are issued by bank to persons with minimum income ranging between RS 50000 and RS 100000 per annum and are accepted by a variety of business establishments which are notified by the card issuing bank.A. Cell phones.

Check last three transactions. g. i. 14 . c. MOBILE BANKING: Using mobile banking facility one can – a. View FD details. g. NET BANKING: This facilitates the customers to do all their banking operations from their home by using the internet facility. This implies that the cardholder can spend only if his account permits. h.money from the account of the cardholder during a transaction. e. d. Facilitate bill Payments. Pay Utility Bills. 4. Access demat account f. h. Request for a cheque book. 3. Download Account Statement c. With Net Banking one can carry out all banking and shopping transactions safely and with total confidentiality. f. Instruct stock cheque payment. Request for a new cheque book. Request for a statement d. Check Balance b. e. Request for a stop payment of a cheque. Transfer funds. With Net Banking one can easily perform various functions: a. Transfer funds. Pay Credit Card dues instantly. Check Account Balance b. Enquire on a cheque status.

Cash Deposit c. Using phone banking facility one can: a. ANYWHERE BANKING: One can deposit or withdraw cash from any branch of a particular bank all over the country up to a prescribed limit.5. Enquire on a cheque status. ICICI Bank’s ATM network is one of the largest and most widespread ATM network in India. security and convenience. SMART CARD: The smart card. and much more. Transaction at various merchant establishments. AUTOMATED TELLER MACHINES (ATM): ATMs features user-friendly graphic screens with easy to follow instructions. e. 6. the smart card has the 15 . When coupled with a reader. Cash Withdrawal b. Following are the features available on ATMs which can be accessed from anywhere at anytime: a. The ATMs interact with customers in their local language for increased convenience. d. The chip stores electronic data and programmes that are protected by advanced security features. c. One can also transfer funds. it has a memory chip embedded in it. Cheque Book Request e. Check Balance b. Check last three transactions. Smart Card is similar in size to today’s plastic payment card. 8. Request for a cheque book. Transfer funds. 7. Balance Enquiry d. a latest additional to the world of banking and information technology has emerged as the largest volume driven end-product in the world due to its data portability. PHONE BANKING: It helps to conduct a wide range of banking transactions from the comfort of one’s home or office.

The highest can be termed as desired service: the level of service the customer hopes to receive. or it can occur over the phone or via the internet. handling complaints. The threshold level of acceptable service which the customers will accept is adequate service. As an access-control device. be confused with the services provided for sale by a company. taking orders. To ensure the confidentiality of all banking service. dealing with billing issues. smart cards make personal and business data available only to appropriate users. Customer satisfaction is a mental state which results from the customers comparison of expectations prior to a purchase with performance perception after a purchase. Yet there is hard evidence that consumers perceive lower quality of service overall and are less satisfied. Quality customer service is essential to building customer relationships. one of the most advanced security techniques currently available. 16 . These mechanisms are based on private and public key cryptography combined with a digital certificate. Many companies operate customer service call centers. often staffed around the clock. Customer Service most often includes answering questions.processing power to serve many different applications. Services tend to be more intangible than manufactured products. It should not. There are generally two types of customer expectations. Customer Perception on Service: Customer Service is the service provided in support of a company’s core products. Strong customer service helps an organization to reach upto customers expectations. smart cards have mechanisms offering a high degree of security. There is a growing market for services and increasing dominance of services in economies worldwide. however. Infact. and perhaps scheduling maintenance or repairs.2 WHAT IS CUSTOMER PERCEPTION? Customer Perception is an important component of an organization’s relationship with their customers. Possible reasons may be: • With more companies offering tiered service based on the calculated profitability of different market segments. Customer Service can occur on site. many customers are in fact getting less service than they have in past. it is possible to connect to the web banking service without a smart card. Typically there is no charge for customer service. 1. • Increasing use by companies of self-service and technology-based service is perceived as less service because no human interaction or human personalization is provided.

To close this all important customer gap. and support needed to actually deliver quality service. Gap 4: Not matching performance to promises. The gaps model positions the key concepts. • Organizations have cut costs to the extent that they are too lean and are too understaffed to provide quality service. and there are many failures and poorly designed systems in place. • Customer expectations are higher because of the excellent service they receive from some companies. Firms need to close this gap. • The intensely competitive job market results in less skilled people working in frontline service jobs. high-quality service is not easy.• Technology-based services (Automated Voice Systems. 17 .the provider gaps. strategies. the difference between customer expectations and perceptions. The central focus of the gaps model is the customer gap.need to be closed.between what customers expect and receive – in order to satisfy their customers and build long term relationships with them. Internet-Based Services. compensation. Thus they expect the same from all and are frequently disappointed. yet many companies promise it. Gap 3: Not delivering to service standards. shown below are the underlying causes behind the customer gap: Gap 1: Not knowing what customers expect. and decisions in services marketing in a manner that begins with the customer and builds the organization’s tasks around what is needed to close the gap between customer expectations and perceptions. Gap 2: Not selecting the right service designs and standards. • Delivering consistent. • Many companies give lip service to customer focus and service quality. but they fail to provide the training . The following four provider gaps. the model suggests that four gaps. Technology Kiosks) are hard to implement. talented workers soon get promoted or leave for better opportunities.

The evolution of banking dates back to the earliest writing. The word “Bank” is derived from the Italian word ‘banco’ signifying a bench. order otherwise. and continues in the present where a bank is a financial institution that provides banking and other financial services. 808. which refers to an out of business bank. During the Mogul period.3. 1. a bank generates profits from transaction fees on financial services or the interest spread on resources it holds in trust for clients while paying them interest on the asset. the great Hindu Jurist. it was the turn of the agency houses to carry on the banking business. lend money and act as collecting and paying agents. or big open rooms. Banking licenses are granted by financial supervision authorities and provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. having its bench physically broken. The essential function of a bank is to provide services related to the storing of value and the extending credit. It is believed that the transition from money lending to banking must have occurred even before Manu. There are also financial institutions that provide certain banking services without meeting the legal definition of a bank. Banks are a subset of the financial services industry. where it was customary to exchange money. The Bank of Barcelona in Spain (1401) was perhaps the first institution that could be called a bank in this sense. repayable on demand or otherwise and wthdrawable by cheque. 18 .3 INDUSTRY PROFILE The Banking Regulation Act 1949 defines banking as accepting the purpose of lending or investment. who has devoted a section of his work to deposits and advances and laid down rules relating to rates of interest.1. draft.1 HISTORY OF THE INDIAN BANKING SECTOR Banking in India has its origin as early as the Vedic period. The others which followed were the Bank of Hindustan and the Bengal Bank. The basic functions of banks are to accept deposits. which was erected in the market place. of deposits of money from the public.d. The General Bank of India was the first Joint Stock Bank to be established in the year 1786. Money lenders in Northern Italy originally did business in open areas. The terms bankrupt and "broke" are similarly derived from banca rotta . with each lender working from his own bench or table. the indigenous bankers played a very important role in lending money and financing foreign trade and commerce. Typically. During the days of the East India Company. a so called non-bank. the first bench having been established in Italy a. Currently the term bank is generally understood an institution that holds a banking license.

and another in Bombay in 1862. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking". The Reserve Bank which is the Central Bank was created in 1935 by passing Reserve Bank of India Act 1934. followed. With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial Bank of India was taken over by the newly constituted State Bank of India. Bank of India Ltd. six more commercial private sector banks were also taken over by the government. then a French colony. branches in Madras and Pondicherry. Currently. These three banks also known as Presidency Banks. According to a report by ICRA Limited. the Bank of Baroda Ltd. the Bank of Bengal in 1809.000 branches and 17. and so became a banking center. India has 88 scheduled commercial banks (SCBs) . the Imperial Bank of India was established on 27th January 1921. the public sector banks hold over 75 19 . 14 major banks of the country were nationalized and in 15th April 1980. Indian Bank Ltd. mainly due to the trade of the British Empire. 29 private banks (these do not have government stake. Calcutta was the most active trading port in India. The Comptoire d’Escompte de Paris opened a branch in Calcutta in 1860. they may be publicly listed and traded on stock exchanges) and 31 foreign banks. Punjab National Bank Ltd. The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. These three banks were amalgamated in 1920 and a new bank. a number of banks with Indian management were established in the country namely. They have a combined network of over 53. Foreign banks too started to arrive.000 ATMs. The Central Bank of India Ltd. in the 1860s. were independent units and functioned well. 1969.The Bank of Hindustan is reported to have continued till 1906 while the other two failed in the meantime. Canara Bank Ltd. On July 19. In the first half of the 19th century the East India Company established three banks. the Bank of Bombay in 1840 and the Bank of Madras in 1843. In the wake of the Swadeshi Movement. particularly in Calcutta.27 public sector banks (that is with the Government of India holding a stake). Four nationalised banks started in this district and also a leading private sector bank. a rating agency.

Indira Gandhi. and the GOI issued an ordinance and 20 . The major steps to regulate banking included: • • • In 1948. India's central banking authority. and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. and a debate has ensued about the possibility to nationalize the banking industry. it has emerged as a large employer. At the same time. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. continued to be owned and operated by private persons. control.percent of total assets of the banking industry. From World War I to Independence: The period during the First World War (1914-1918) through the end of the Second World War (1939-1945). At least 94 banks in India failed between 1913 and 1918. and inspect the banks in India. the Indian banking industry has become an important tool to facilitate the development of the Indian economy. Thereafter. Nationalization: By the 1960s. the Reserve Bank of India. 1969. Post-independence: The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal. and no two banks could have common directors. This changed with the nationalization of major banks in India on 19 July. and two years thereafter until the independence of India were challenging for Indian banking. banks in India except the State Bank o India." The paper was received with positive enthusiasm. paralyzing banking activities for months.2% and 6. and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. her move was swift and sudden. control and regulations. The Government of India initiated measures to play an active role in the economic life of the nation.5% respectively. the-then Prime Minister of India expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization. and it became an institution owned by the Government of India. This resulted into greater involvement of the state in different segments of the economy including banking and finance. was nationalized. The years of the First World War were turbulent. with the private and foreign banks holding 18. despite these provisions. However. In 1949." The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI. the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate.

After this. until the 1990s. product range and reach-even though reach in rural India still remains a challenge for the private sector and 21 . were used to the 4-6-4 method (Borrow at 4%. closer to the average growth rate of the Indian economy. Chidambaram. UTI Bank(now re-named as Axis Bank). Bankers. including Home minister P. a national leader of India. 1969. private banks and foreign banks. in the year 1993. With the second dose of nationalization. The nationalized banks were credited by some. The stated reason for the nationalization was to give the government more control of credit delivery. Liberalization: In the early 1990s. the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalized banks from 20 to 19.at present it has gone up to 49% with some restrictions. This move. and it received the presidential approval on 9 August. the GOI controlled around 91% of the banking business of India. A second dose of nationalization of 6 more commercial banks followed in 1980.Go home at 4) of functioning. 1969. banking in India is generally fairly mature in terms of supply. revitalized the banking sector in India. till this time.Lend at 6%. The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment. along with the rapid growth in the economy of India. and included Global Trust Bank (the first of such new generation banks to be set up). These came to be known as New Generation tech-savvy banks. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. the government merged New Bank of India with Punjab National Bank. Jayaprakash Narayan. the then Narsimha Rao government embarked on a policy of liberalization. where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%. which has seen rapid growth with strong contribution from all the three sectors of banks." Within two weeks of the issue of the ordinance. Later on. ICICI Bank and HDFC Bank. licensing a small number of private banks. to have helped the Indian economy withstand the global financial crisis of 2007-2009. The new policy shook the Banking sector in India completely. namely. government banks.nationalized the 14 largest commercial banks with effect from the midnight of July 19. the nationalized banks grew at a pace of around 4%. Currently. which later amalgamated with Oriental Bank of Commerce. All this led to the retail boom in India. described the step as a "masterstroke of political sagacity. People not just demanded more from their banks but also received more.

Indian banks are considered to have clean. One may also expect M&As. mortgages and investment services are expected to be strong. It is the sole authority for issuing bank notes and the supervisory body for banking operations in India. In terms of quality of assets and capital adequacy. 1. and in some the government either already has or will reduce its ownership. Capital adequacy norm Foreign banks were required to achieve an 8 percent capital adequacy norm by March 1993. especially retail banking. of these many commenced banking business. The banking sector is to be used as a model for opening 22 . The entry of foreign banks is based on reciprocity. India's government-owned banks dominate the market.3.foreign banks. Private and foreign banks The RBI has granted operating approval to a few privately owned domestic banks. An inter-departmental committee approves applications for entry and expansion. strong and transparent balance sheets relative to other banks in comparable economies in its region. 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. Though the banking industry is currently dominated by public sector banks. The Reserve Bank of India is an autonomous body. Several public sector banks are being restructured. Foreign banks operate more than 150 branches in India. with a few being consistently profitable. It is also responsible for granting licenses for new bank branches. takeovers. with minimal pressure from the government. All other banks had to do so by March 1996. while Indian banks with overseas branches had until March 1995 to meet that target. Their performance has been mixed. It supervises and administers exchange control and banking regulations.2 INDIAN BANKING SYSTEM Introduction The Reserve Bank of India (RBI) is India's central bank. and administers the government's monetary policy. economic and political bilateral relations. numerous private and foreign banks exist. and asset sales. 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.

up of India's insurance sector to private domestic and foreign participants. Under foreign exchange regulations. because they hinder the availability of credit to the non-food sector and at the same time do not foster competition between banks. popularly known as "consortium guidelines" seem to have outlived their usefulness. Indian and foreign. Scheduled and non scheduled banks There are approximately 80 scheduled commercial banks. including foreign companies. These are the scheduled commercial banks. the public sector banks. Currently about 25 foreign banks are licensed to operate in India. regardless of the extent of foreign participation. and the cooperative and special purpose rural banks. RBI restrictions The Reserve Bank of India lays down restrictions on bank lending and other activities with large companies. and a number of primary agricultural credit societies. 23 . foreigners and non-residents. more than 350 central cooperative banks. namely the State Bank of India and the nationalized banks. In terms of business. the regional rural banks which operate in rural areas not covered by the scheduled banks. Foreign bank branches in India finance trade through their global networks. They are permitted to accept deposits and provide credit in accordance with the banking laws and RBI regulations. These restrictions. almost 200 regional rural banks. Local financing All sources of local financing are available to foreign-participation companies incorporated in India. dominate the banking sector. The banking system has three tiers. while keeping the national insurance companies in operation. 20 land development banks. require the permission of the Reserve Bank of India to borrow from a person or company resident in India Regulations on foreign banks Foreign banks in India are subject to the same regulations as scheduled banks.

two sub. Global evidence seems to suggest that even though there is great enthusiasm when companies merge or get acquired. globally.targets for loans to the small scale sector (minimum of 10 percent) and exports (minimum of 12 percent) have been fixed. foreign banks have been required to make 32 percent of their loans to these priority sector.Indian vs. Government and RBI regulations All commercial banks face stiff restrictions on the use of both their assets and liabilities Forty percent of loans must be directed to "priority sectors" and the high liquidity ratio and cash reserve requirements severely limit the availability of deposits for lending. The urge to merge: In the recent past there has been a lot of talk about Indian Banks lacking in scale and size. 24 . majority of the mergers/acquisitions do not really work. Before a merger is carried out cultural issues should be looked into. Since July 1993. So in the zeal to merge with or acquire another bank the PSBs should not let their common sense take a back seat. The RBI requires that domestic Indian banks make 40 percent of their loans at confessional rates to priority sectors' selected by the government. A bank based primarily out of North India might want to acquire a bank based primarily out of South India to increase its geographical presence but their cultures might be very different. however. or to make loans to the agricultural sector. and small businesses. Within the target of 32 percent. The central government also seems to be game about the issue and is seen to be encouraging PSBs to merge or acquire other banks. use modern equipment and attract high-caliber employees. are not required to open branches in rural areas. Most of the PSBs are either looking to pick up a smaller bank or waiting to be picked up by a larger bank. While these new banks and foreign banks still face restrictions in their activities. Foreign banks. The State Bank of India is the only bank from India to make it to the list of Top 100 banks. they are well-capitalized. exporters. So the integration process might become very difficult. foreign banks Most Indian banks are well behind foreign banks in the areas of customer funds transfer and clearing systems. Technological compatibility is another issue that needs to be looked into in details before any merger or acquisition is carried out. These sectors consist largely of agriculture. They are hugely over-staffed and are unlikely to be able to compete with the new private banks that are now entering the market.

loans and value.1. The establishment of the bank was the fulfillment of the dreams of a group of enterprising men who joined together at Thrissur. 1. the bank has during its long sojourn been able to project itself as a vibrant. (but better than the peer group) business growth. with a strong brand image as customer focused. Translating the vision of the founding fathers as its corporate mission. The objective behind establishment of the Bank was to provide for the people a safe. garnering core deposits with accent on cost. innovation is a tradition. fast growing.4. qualitative and strong asset base and earn commensurate profits 1. service oriented and trend setting financial intermediary. efficient and service oriented repository of savings of the community on one hand and to free the business community from the clutches of greedy moneylenders on the other by providing need based credit at reasonable rates of interest.1 Vision To build a strong brand image to make the South Indian Bank technology driven.4. customer oriented and the most preferred bank. where passion for excellence is a way of life. enabling the Bank to achieve an impressive all round. 25 . “South Indian Bank" came into being since 1929.2 Mission To become the most preferred and fastest growing among the Kerala based banks. technology driven and an innovative bank with core competence in fostering relationship banking.4 COMPANY PROFILE One of the earliest banks in South India. build a healthy. during the Swadeshi movement.added services to its customers. commitment to values is unshaken and customer loyalty is abiding. The major product and services offered by the South Indian Bank are classified into three major heads: • • • Personal banking NRI banking Business banking Under these heads bank provide various schemes for deposits.

26 . qualitative appraisal and effective monitoring. ensuring a high level of internal efficiency through impeccable housekeeping and enhancing shareholder value by achieving the highest net profits amongst the peer group banks of Kerala. 2) Carrying on the business of accepting deposits of money on current account and to carry on the business of banking. South Indian Bank has 545 branches. discounting .creating and maintaining high yielding quality assets through focused marketing. making. collecting and dealing bill of exchange . The Bank’s shares are listed on • • • The Cochin Stock Exchange Ltd (CSE) The Stock Exchange Mumbai (BSE) The National Stock Exchange of India Ltd Mumbai (NSE) 1. dealing in instruments like share . raising or taking up money. accepting . 3) Contracting for public and private loans and negotiating and issuing it. the lending or advancing of money either upon or without security. Carrying on agency business of any discipline other than the business of managing it. Presently.4. selling . 1. promissory notes .4. 9 extension counters and 295 ATM. The FIRST bank in the private sector in India to open a Currency Chest on behalf of the RBI in April 1992.bond etc.3 Objectives of SIB 1) To establish and carry on the business of banking at registered office of the company and at such branches. 6) To undertake and carry on all other forms of business as may be permissible for banking company. coupons and other instruments and securities.4 Milestones • • • The FIRST among the private sector banks in Kerala to become a scheduled bank in 1946 under the RBI Act. 5) The borrowing. 4) Act as an agent of the government or local authorities or any other persons. the drawing. buying . The FIRST private sector bank to open a NRI branch in November 1992.

South Indian Bank has won a special award for excellence in Banking Technology from IDRBT (Institute for Development and Research in Banking Technology) – the technical arm of the Reserve Bank of India. The FIRST bank in Kerala to develop in-house. bankers . • The bank has setup the SIB students economic forum designed to enkindle interest in economic affairs in the minds of our young generation. The FIRST among the private sector banks in Kerala to open an "Overseas Branch" to cater exclusively to the export and import business in June 1993. These theme papers have been receiving by economists. the recognition from IDRBT is really a feather in the cap for SIB. Foreign Banks and Co-operative Banks.With complete anywhere banking facility Group Salary Savings Account. This award was presented to the Bank as a national level recognition to the excellent contribution made in the area of Information Systems Security Policies and Procedures.For the students above age 12 SARAL Savings. in India.for every employee to meet the expectations Junior Savings.4. teachers and students. • • The FIRST Kerala based private scheduled commercial bank to implement Core Banking System. Competing against top level banks in India across all categories such as Public Sector Banks. with all its branches under Core banking System. The THIRD largest branch network among Private Sector banks. The forum highlights one theme every month to be discussed in their monthly meeting.5 Few services offered by the bank Savings Accounts: The different type of Savings Accounts of the South Indian Bank to suit the customers exact need are: Regular Savings.• • • The FIRST bank in the private sector to start an Industrial Finance Branch in March 1993. fully integrated branch automation software in addition to the in-house partial automation solution operational since 1992.No Frills Account – low minimum balance Youth Plus Savings.An exclusive SB Account for Youth 27 . Private Sector Banks.With normal cheque book facility Privilege Savings. 1.

An attractive Savings Bank account exclusively for women NRE Rupee Account.Easy general purpose loans Vehicle Loans.for higher studies Agriculture Loans.for various agricultural needs Flexi Loans.Short term deposits with part closure option Fixed Deposits.for private. NRIs and Senior Citizens Gold Loans.for residents. GBP and Euro.Eligible for tax exemption under Sec 80 C Fast Cash Deposit.Non Resident External Rupee Account (Savings/ Deposits) NRO Rupee Account. 28 .Easy Loans against Gold Educational Loans.(FCNR / RFC ) Term Deposits: Kalpakanidhi.For certain specific purposes Pravasi Swagat.Automatic part closure to cover Savings Account deficit SIB Tax Gain 2006.Loan against property Other Loans.For NRIs returning for ever to India.Fixed Monthly installment deposit scheme Loans: Since loans are an integral part of personal finance SIB provides the following kind of special packages as given: Personal Loan. commercial or agricultural purposes Home Loans.Interest is paid out quarterly/monthly Recurring Deposit.MAHILA Savings.Interest is compounded quarterly SIB Flexi Deposit.In USD.Non Resident Ordinary Rupee Account (Savings/ Deposits) Foreign Currency Deposits.

Value added services: The various value added services provided by SIB is as follows:  Any Branch Banking  Global ATM cum Debit Card  Internet Banking  Mobile Banking  Credit Card  SIB Collect  Demat Services  NRI Branches  NRI Cell  NRI FAQ’s 29 .

To assess the management perception related to customers expectations on the bank’s service. To examine the gaps between customers and bank management’s perceptions and give remedies so as to minimize them and increase the customer base of the bank.5 OBJECTIVE OF THE STUDY • • • To understand the customers perception on the service delivery of the bank.1. 30 .quality specifications and delivery.

Over the years. Twenty-five senior branch bank managers were then asked to rank the same set of issues to ascertain what they felt to be the key influencers to customer registration for internet banking. the pure retail banking is conceived to be the provision of mass banking products and services to private individuals as opposed to wholesale banking which focuses on corporate clients. It is only from past few years that it is being viewed as an attractive market segment. Generally. In the study of Mark Durkin et al. services to high net worth net worth individuals in their retail banking portfolio.e. The study revealed that gap varies across the banking sector with public sector banks showing the widest gap and foreign banks showing a narrow gap. A major influence is from a 31 . the market leaders have drawn a disproportionably higher share of eretail banking customers.1 Concept of Retail Banking The retail banking encompasses deposit and assets linked products as well as other financial services offered to individual for personal consumption. Financial institutions are actively developing new electronic banking products for their retail customers. the concept of retail banking has been expanded to include in many cases the services provided to small and medium sized businesses. The concept of Retail banking is not new to banks. Some banks in Europe even include their private banking business i. customer satisfaction questionnaire was issued to over 2. The three factors that the managers failed to identify.. To date. smaller institutions have become quite active in exploring ways to participate profitably in online banking. It is important for the service providers to know the level of customer expectations so that they can meet and even exceed them to gain maximum customer satisfaction 1.2. In response. Though the term retail banking and retail lending are often used synonymously. all the banking needs of individual customers are taken care of in an integrated manner. The diversified portfolio characteristic of retail banking gives better comfort and spreads the essence of retail banking in individual customers. 2. which offers opportunities for growth with profits.000 retail customers. yet the later is lust one side of retail banking. In retail banking.2 Review of Literature Anil Dutta and Kirti Dutta in their paper reveal the expectations and perceptions of the consumers across the three banking sectors in India. fell into two broad categories: relationship management status and comfort with new technology 2.

The results show that confidence benefits have a direct. and the proposed relationships were tested using structural equations modeling methods. However. A second aim was to examine to what extent information on banking relationships is able to extend CRM analysis beyond that offered by typical demographic and income data. Multi-item indicators from prior studies were employed to measure the constructs of interest. frontline employees should be committed to establishing and maintaining confidence benefits for customers. Based on a theoretical framework regarding the relationship between relational benefits and customer satisfaction. The important change drivers in most European retail banking systems are found to be competition and IT developments. Two broad strategic themes are explored. The first is the evolution of retail banking in a strategic marketing context from a supply focus towards a 32 . Therefore. where institutions try to limit the outflow of current customers and direct high-value customers to potential products from a multi-product service offering array. The first aim of this study was to examine the role that online and electronic banking play in defining the customer's primary financial relationship. And. positive effect on the satisfaction of customers with their bank. Current customer account relationships are found to be highly predictive of use of electronic services use in general. and the theoretical model is tested. an empirical study using a sample of 204 bank customers was conducted. Thus the study provides useful information on the relationship between customer satisfaction and specific relational benefits in retail banking 4. These findings can be useful for retail banking in identifying potential high-value users from a customer relationship management perspective 3. These efforts can succeed only if retail bank marketers focus the promotion of the new products and services that can utilise this channel toward those customers who are most likely to find them attractive (Don Sciglimpagli). interest in the use of specific online services is related to differing customer relationships in addition to ordinary demographic and balance information. This paper presents a causal model that identifies a connection between the relational benefits achieved through a stable and long-term relationship with a given bank and customer satisfaction with retail banking. special treatment benefits and social benefits did not have any significant effects on satisfaction in a retail banking environment.customer relationship management (CRM) perspective. The purpose of the paper by Aurto Molina is to investigate the impact of relational benefits on customer satisfaction in retail banking. The findings suggest that banks can create customer satisfaction through relational strategies that focus on building customer confidence. The analysis of 701 retail customers of a financial institution presented in this study suggests that banks and other institutions are highly vulnerable to loss of customers to rivals with extensive online services.

In the age of consumerism. Banks today do much more than lend and borrow money. This is reflected by the increasing market share and better profitability of private banks in comparison to that of public sector banks. public sector banks have also responded to the challenges posed by the private sector banks through conscious efforts to enhance their service quality. The new-age private sector banks can be said to be the forerunners in offering such customer-oriented service. which allows a customer to fulfill a wide range of banking operation online. anywhere banking.much greater demand orientation. With the growth of the Indian economy over the past few years. This study (R. Although the sector is part of the service industry. ICICI or HDFC over the past few years does show the stability which has been imparted to the overall revenue stream by the retail business 7. etc. Banks are even taking 33 . the customer is king. all indicating that the demand for retail finance will continue to be very strong well into the future. The concept of CBS (Core Banking Solution). The private sector banks are posing a very stiff competition to the public sector banks through their initiatives for meeting customer expectations and gaining a cutting edge. for its customers through ATMs. rising income levels.Ravi) compares public sector banks and private sector banks in terms of user perception of their retail banking services 6. plastic money (credit and debit cards). At the same time. mobile and internet banking. The second theme explored is the intensifying strategic imperative towards a shareholder value culture. only recently have individual banks woken up to the fact that offering products and services tailored to meet the customers' specific needs can actually bring in more business. understanding the customer perception about service quality is becoming indispensable. B. This has not only helped in reducing operational costs but facilitated greater conveniences to its customers and so the customer preferences have to be taken care of constantly in the retail banking business 8. In his article in Business Line T. Cross-country studies clearly point . It has also offered services like D-MAT.increasing urbanisation. The key features and strategic challenges of the `new' retail banking revolution are finally summarized in the study of Gardener Edwar and Howcroft Barry 5.A. Kapali. has come alive during the past few years. It has faced up to the need of the hour and introduced anytime. And the banking sector is latching on to this mantra of sales and marketing. online transfers. explains the perceived stability of the income stream from the retail business is probably the most important driver of the push into retail. Due to increasing competition in retail banking. the retail banking sector in India has also witnessed phenomenal growth.

loans to the customers. banks give loans against insurance. they are trying to determine strategies and tactics needed to secure their franchises and their futures.. The above studies show that retail banking business will continue to be very strong. well into the future. The banks are converting to the age of commoditised business i. The rapid and provocative changes facing the retail sector seems to vary somewhat from country to country. Banks have also become a one-stop shop for selling products such as mutual funds. Give the consumer a product and a reason to use it 9. The studies also suggest that the bank of the future will not win by creating a single strategy but focus on building customer confidence and extensive online services. The increasing competition is compelling the service providers to know the level of customer expectations and meet them. For instance. customer channels. Cross-selling also helps banks personalise products for their customers. each of its activities within products.e. 34 . which will be benchmarked against market-segmented customer demand and profitability. The bank of the future will not win by creating a single strategy. and support services will be the subject of a discreet "business unit" strategy. regulatory and competitive realities. and competitors' businesses in this area 10. Collectively. The present study looks into understanding the customers’ perception towards the retail banking and also their awareness regarding the various retail banking services. or link deposit schemes to insurance. retail banks everywhere are working vigorously to address new technological. depending on customer needs. Rather. insurance and RBI bonds and offer service such as payment of utility bills and equity trading.

They are. journals and articles written on the subject. an in depth study was done from the various books.3 Statistical Tool The study has used various statistical tools for the analysis of data. company. Non. Questionnaire was prepared and customers of the bank were approached to fill up the questionnaire. etc. competitors. Garrett Method and Cross Tabulation. Secondary Data: In order to have a proper understanding of the sector of Retail Banking.1 Sampling Design The study has used Non. Information was also taken from the internet related to industry. The filled up information was later analyzed to obtain the required information. 3.Probability sampling involves deliberate selection of a particular unit of the population for constituting a sample.METHODOLOGY • • • • • • • • • Research Method : Descriptive Research Sampling Tool : Questionnaire Sampling Design : Non – probability sampling. 3. Sampling Method : Convenience Sampling Sample Size : 150 Sampling Universe: Customers of South Indian Bank. percentage analysis. Data Collected : Primary and Secondary Data Statistical Package : SPSS Statistical Tools Used : Percentage Analysis. Garette method and Cross tabulation: 35 .Probability sampling design. magazines. 3.2 Data Collection Method Primary Data: The primary data was collected by means of a survey.

36 . Test Statistics: Percentage = Number of Responses Number of Respondents * 100 Garette Ranking Technique: It is a technique used to find out how various items under considerations are ranked by the respondents.Percentage Analysis: To have a general idea on the opinion given by the respondents a simple percentage analysis was carried out.4 Limitation of the Study The data from the sample may not reflect the universe. 3. As the topic is wide. since it is restricted only to the area Vennikulam. In this technique the rate given by respondents will be converted into percentile position using: P = 100 ( R – 0. Kerala and only 150 customers. There were also time limitations. all matters regarding the study could not be analyzed. This score will be used to evaluate the ranks. N= No: of items R= Rank P= Percentile position From these percentile position scores will be taken from Garatte’s table.5) N Where.

2 : Gender details of the SIB respondents Gender Male Female Total Frequency 108 42 150 Percent 72 28 100 CHART 4.1: Demographic details of the SIB respondent’s Age 25-35 36-45 46-55 Above 55 Total Frequenc y 35 41 39 35 150 Percent 23.2 : 37 . The respondent’s responses for the questions have been interpreted and a finding has been made based on the respondents responses.1: Demographic details of the respondents 28 27 Percentage 26 25 24 23 22 21 25-35 36-45 46-55 Above 55 Age in yrs. TABLE 4.33 100 CHART 4.ANALYSIS AND INTERPRETATION The following information contains the data interpretation of the questionnaire.33 26 23. Percent Interpretation: From the above data. it is observed that 27. So it is concluded that the majority of the respondents fall under this category.33% of the respondents are belonging to the age category of 36-45yrs.33 27. TABLE 4.

the remaining 26% being post graduated. it is concluded that the majority of the respondents are males. 38 . TABLE 4.3 : Education details of the SIB respondent’s.Gender Ratio of the respondents 28% Male Female 72% Interpretation: From the data it is observed that 72% of the respondents are males. it is observed that 40% of the respondents are graduated whereas 34% have school education.3 : Educational details of the respondents 26% 34% 40% School UG Pg Interpretation : From the above data. So. Education School UG PG Total Frequency 51 60 39 150 Percent 34 40 26 100 CHART 4.

67 100 CHART 4.5: Income details of the SIB respondent’s. TABLE 4. it is observed that 61% of the respondents are in service while only 3% are house.5: 39 .4 : Occupation details of the respondents 20% 3% 16% 61% Service Business Pensioner House-wife Interpretation : From the above data. Income Level 5000 -15000 15001-25000 25001-35000 Above 35000 Total Frequency 51 42 26 31 150 Percent 34 28 17.4 : Occupation details of the SIB respondent’s Occupation Service Business Pensioner House-wife Total Frequency 92 24 30 4 150 Percent 61.67 100 CHART 4.wives.TABLE 4.33 20.33 16 20 2. So it is concluded that the majority of the respondents fall under the service category.

67 27.7 CHART 4.33 10 2. of Years Less than 1yr 1-4 yr 4-7 yr 7-10 yr 10-13 yr 13-16 yr 16-19 yr Total Frequency 9 32 30 19 41 15 4 150 Percentage 6 21. it is observed that 34% of the respondents are belonging to the income category of Rs.6: 40 .3 22. TABLE 4.m.33 20 12. TABLE 4.3%) of the respondents are associated with the bank from last 10-13 years.7: Accounts the respondents have with the bank.6 : Number of years the respondent’s have been associated with SIB. A/c type Savings A/c Current A/c Availed Loan 3rd Party Product Percent 100 12.5000. No.67 100 Interpretation: The above data shows that maximum number(27.Income details of the respondents 21% 34% 17% 28% 5000-15000 15001-25000 25001-35000 Above 35000 Interpretation: From the above data.15000p. So it is concluded that the majority of the respondents fall under that income level.7 9.

TABLE 4.Accounts the Respondents have with the bank 100 80 Percentage 60 40 20 0 Percent Accounts Savings A/c Current A/c Availed Loan 3rd Party Pdt Interpretation: The above data makes it very clear that only very few customers have availed loan from the bank and invested in the third party products. Rating Good Very Good Excellent Total Frequency 44 72 34 150 Percent 29.9: Rating the Working Hours of the bank. 41 . TABLE 4.67 100 CHART 4.7 : Rating the Courtesy Level shown by the SIB Staff 60 50 Percentage 40 30 20 10 0 Good Very Good Rating Percent Excellent Interpretation: The above data shows that 77% of the respondents have rated the courtesy level they receive from the bank’s personnel to be good and thus it is interpreted that this service of the bank is satisfactory.33 48 22.8: Rating the courtesy level shown by the SIB staff.

67 30.33 100 Interpretation: From the above data it can be interpreted that half of the population.8 : Rating the Working Hours of the bank 40 35 30 25 Percentage 20 15 10 5 0 Average Good Very Good Excellent Ratings Percent Interpretation: From the above data it can be interpreted that 60% of the respondents are satisfied with the working hours of the bank.67 11.33 50. Ratings Average Good Very Good Excellent Total Frequency 11 76 46 17 150 Percent 7.10: Rating the Knowledge of Bank Staff in answering the queries. TABLE 4. 50. This also coincides with the management perspective which does not create any gap in the analysis.Ratings Average Good Very Good Excellent Total Frequency 17 60 55 18 150 Percent 11. 42 .33 40 36.67 12 100 CHART 4.6% are satisfied with the knowledge level of the bank staff.

So it is concluded that the customers are satisfied with the fastness of this service.33 16. 50 40 Percentage 30 20 10 0 Average Good Very Good Excellent Ratings Percent Interpretation: The above data shows that 50% of the respondents are rating the fastness of the personnel in responding/ attending to them to be good.10: 43 .11 : Rating the fastness of the personnel in responding/ attending to the customers. The pictorial representation is as follows: CHART 4.12 : Rating the “Transaction Time” taken for Cash deposit.TABLE 4.9 : Rating the fastness of the personal in responding/ attending to the customers. Ratings Average Good Very Good Excellent Total Frequency 14 75 36 25 150 Percent 9.67 100 CHART 4. So it can be concluded that the customers are satisfied with this service. Ratings Average Good Very Good Excellent Total Frequency 6 75 44 25 150 Percent 4 50 29.33 50 24 16. TABLE 4.67 100 Interpretation: The above data shows that 50% of the respondents have rated the transaction time for cash deposit to be good.

Ratings Average Good Very Good Excellent Total Frequency 49 57 29 15 150 Percent 32. 32.11: 44 . So it is concluded that the customers are satisfied with this service..33 10 100 Interpretation: The above data shows that.e.67 38 19.67% have rated it to be average. 38% of the respondents have rated the bank to be good for the easeness they find in opening an account with the bank. whereas very near to it i.Rating the Transaction Time taken for Cash deposit 50 40 Percentage 30 20 10 0 Average Good Very Good Excellent Ratings Percent TABLE 4. The pictorial representation of the same is as follows: CHART 4.13: Rating the easiness to open an account with the bank.

45 . TABLE 4. The management has rated this service to be very good.33 63.33 100 Interpretation: The above data shows that more than half the respondents.33 56 24 14.3%. have rated the bank good. 56% of the respondents have rated the bank to be average for the promptness in informing the customers of the deposit rates/ service charges.15: Rating the bank’s promptness in informing the deposit rates/ charges. So it can be interpreted that here a gap exists between the customer’s and the management’s perspective. So it can be interpreted that the customers are satisfied with the product innovations of the bank. 63.67 4 100 Interpretation: The above data shows that the majority.14: Rating the product/ service innovation in the past two years.Rating the Easeness to Open an Account with the bank 40 30 Percentage 20 10 0 Average Good Very Good Excellent Ratings Percent TABLE 4. on the product or service innovation in the past two years. Ratings Poor Average Good Very Good Excellent Total Frequency 2 84 36 22 6 150 Percent 1. Ratings Average Good Very Good Excellent Total Frequency 23 95 24 8 150 Percent 15.33 16 5.

Ratings Poor Average Good Very Good Excellent Total Frequency 1 6 57 77 9 150 Percent 0. So it can be interpreted that the customers are satisfied with this service of the bank.12 : Rating the bank’s Promptness in Informing the deposit rates/ charges 60 50 40 Percentage 30 20 10 0 Poor AverageGood Very Excellent Good Ratings Percent TABLE 4. TABLE 4.16: Rating the bank’s grievance redressal system.18: Rating the location of the bank.33 6 100 Interpretation: The above data show that majority of the respondents.17: Rating the bank’s facility in terms of the comfort facilities it offers.33%. Ratings Average Good Very Good Excellent Total Frequency 5 23 113 9 150 Percent 3.67 4 38 51. 46 . TABLE 4.33 15. 75. So it can be concluded that the customers are very satisfied with this service of the bank.33 75.CHART 4. have rated the bank’s comfort facilities to be very good.3% of the respondents have rated the bank’s grievance redressal system to be very good.33 6 100 Interpretation: The above data shows that 51.

5 42.67 12 4 100 Interpretation: The above data shows that 42% of the respondents have rated the quality of the bank’s ATM service to be average. have rated the bank’s location to be very good. But the management in this case has rated the service to be very good.5 17. 72.5 100 CHART 4. Rating Average Good Very Good Excellent Total Frequency 9 17 7 7 40 Percent 22.67%.33 42 40. Ratings Poor Average Good Very Good Excellent Total Frequency 2 63 61 18 6 150 Percent 1. So it can be concluded that the customers are very satisfied with the location of the bank.20: Rating the bank’s fastness in processing and disbursement of loans.Ratings Average Good Very Good Excellent Total Frequency 4 19 109 18 150 Percent 2.13: 47 . So it is interpreted that the customers are not much satisfied with the quality of the ATM service and also a gap is analysed in between the two perspectives in this case.67 72. TABLE 4.5 17.19: Rating the quality of the bank’s ATM services.67 12. TABLE 4.67 12 100 Interpretation: The above data show that majority of the respondents.

So it can be interpreted that the interest rate offered by the bank is not much satisfactory to the customers and also slight gap analysed. CHART 4. who has availed loan from any banks.Rating the bank's Fastness in Processing and Disbursing Loans 50 40 Percentage 30 20 10 0 Average Good Very Good Excellent Rating Percent Interpretation: The above data shows that the fastness of the bank in processing and disbursement of loans is rated good by 42. The management has rated this as good.33 10.5% of the respondents.14: 48 . TABLE 4. So it is interpreted that the customers are satisfied with this service of the bank. Ratings Average Good Very Good Excellent Total Frequency 69 62 16 3 150 Percent 46 41.21: Rating the interest rates currently being offered by the bank.67 2 100 Interpretation: The above data shows that 46% of the respondents have rated the interest rate currently being offered by the bank to be average which is very near to the 42% who has rated it to be good. out of the 40.

Rating the Interest Rates currently being offered by the bank
50 40 Percentages 30 20 10 0 Average Good Very Good Excellent

Ratings Percent

TABLE 4.22:Rating the internet/ mobile banking facility offered by the bank.
Ratings Average Good Very Good Excellent Total Frequency 24 20 10 9 63 Percent 38.09 31.75 15.87 14.29 100

CHART 4.15:
Rating the Internet/ Mobile Banking Facility offered by the bank
40 30 Percentage 20 10 0 Average Good Very Good Excellent

Ratings Percent

Interpretation: The above data shows that the quality of the internet/ mobile banking facility is rated average by 38.1% of the respondents, out of the 63, who uses this facility of the bank. The management has rated the same as very good. So it is interpreted that the customers are

49

not much satisfied with this service of the bank and also a gap is analyzed between the customer and management perspective. TABLE 4.23: Mean score showing the awareness of the respondents towards few services of the Retail Banking, in general.
Services ATM Services Withdrawing Deposit Cheque Book Enquiry Statement Total Internet Banking Fund transfer Status of Cheque Bill Payment Interest Details Alerts Total Mobile Banking Balance Status of Cheque Locate ATM Alerts Time preference Total Mean Score 4.63 3.47 2.65 2.47 13.22 2.18 2.09 1.97 2.02 2.13 10.39 2.57 2.14 1.96 2.37 2.26 11.3

Interpretation: The data above shows that the respondents are more aware of the ATM services whose mean score is 13.22 than compared to the internet and the mobile banking services. TABLE 4.24:Awareness of the respondents on the ATM services provided by SIB.
Services Withdrawal of Cash Deposit Cash/ Cheques Balance Verification Requirement for Cheque Book Frequency 147 110 147 69 Percentage 98 73.3 98 46

CHART 4.16: 50

Awareness of the respondents on the ATM services provided by SIB
100 80 Percentage 60 40 20 0 Withdrawal of Cash Balance Verification Services

Interpretation: The above data shows that 98% of the respondents are aware of cash withdrawal and balance verification through ATM service of the bank whereas 73% and only 46% are aware about depositing cash/ cheque and requirement for cheque book/ statement respectively. TABLE 4.25:Awareness of the respondents on the internet banking services provided by SIB.
Services Transfer funds Bill/ Loan Payment DD/ Term Deposit Request Getting Reminders None Frequency 50 38 34 44 99 Percentage 33.3 25.3 22.7 29.3 66

Interpretation: The above data shows that 33.3% of the respondents are aware of transferring funds through internet banking services whereas only 29.3% and 25.3% are aware about getting reminders and payment of bill/ loan respectively. It is also shown that 66% of the respondents are not aware of any services provided by the internet banking of SIB. TABLE 4.26:Awareness of the respondents on the mobile banking services provided by SIB.
Services A/c Balance Cheque Details Reminders/ alerts None Frequency 64 35 63 85 Percent 42.7 23.3 42 56.7

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followed by the other attributes as shown in the table above.7% of the respondents are aware of checking account balance through mobile banking services whereas 42% and only 23.24 CHART 4.Interpretation: The above data shows that 42.29 9.28:The various banks preferred for availing the loan. It is also shown that 56.27: Ranking of.3% are aware about receiving reminders and knowing the cheque details respectively through this service.14 4.52 7. using garatte ranking method.17: 52 . the attributes considered. Name of Banks Federal Bank ICICI SBI SBT SIB Tiruvalla East Bank HDFC Total Frequency 6 4 3 5 19 Co-opt 3 2 42 7.14 11. shows that the respondents give their first preference to the interest rate offered by a bank when they go for availing a loan. to choose a bank before going for a bank loan GARATTE METHOD : Formula:: P = 100 (R – 0. TABLE 4. TABLE 4.5) N Total Percent Score (x) Interest Rate (Freq.76 100 Percentage 14.7% of the respondents are not aware of any services provided by the mobile banking of SIB. f) fx Security Demanded (f) fx Efficient Customer Service(f) fx Repayment Period (f) fx Eligibility (f) fx 10 75 98 7350 18 1350 30 2250 0 0 4 300 30 60 42 2520 38 2280 41 2460 22 1320 7 420 50 50 9 450 59 2950 35 1750 39 1950 8 400 70 40 1 40 32 1280 22 880 77 3080 18 720 90 24 0 0 3 72 22 528 12 288 113 2712 10360 7932 7868 6638 4552 Interpretation: The ranks analysed.90 45.

90 14.29: Reasons which influenced the customers choose a bank for the loan.9% from SBT and the rest from other few banks as shown in the bank. followed by 14.3% from Federal Bank. Reasons Good customer service Low interest rate Quick processing Customer Satisfaction Simple Formalities Near to home/business/work place Promptness and knowledge of Staff Total Frequency 9 10 7 2 5 6 3 42 Percent 21. TABLE 4.28 7.2% has availed it from SIB. 11.81 16.14 100 CHART 4.43 23.The various banks preferred for availing the loan HDFC Tiruvalla East Co-opt Bank Percentage SIB SBT SBI ICICI Federal Bank 0 10 20 30 40 50 Banks Percent Interpretation: The above data shows that out of the 42 respondents who has availed loan 45.67 4.18: 53 .76 11.

using garatte ranking method. 54 . shows that the respondents give their first preference to the personal loan offered by the bank. GARETTE RANKING METHOD: Total Percent Score (x) Gold Loan (f) fx Personal Loan (f) fx Vehicle Loan (f) fx Educational Loan (f) fx House Loan (f) fx Agricultural Loan (f) fx 8.02 37 0 0 2 74 5 185 5 185 7 259 11 407 91.01 63 6 378 12 756 6 378 4 252 0 0 2 126 41.68 54 8 432 2 108 11 594 5 270 4 216 0 0 58. quick processing and so on.35 46 2 92 2 92 5 230 12 552 4 184 5 230 75.Reasons which influenced the customers to choose a bank for the Loan 25 20 Percentage 15 10 5 0 Good custom er service Quick processing Sim ple Form alities Prom ptness and know ledge of Staff z Percent Reasons Low interest rate Cus tomer Satisfaction Near to hom e/business/w ork place Interpretation: The above data shows that the attribute which the respondents give the first preference for to choose a bank for availing a loan is lowest interest rate. followed by the gold loan and so on as shown in the table above.69 23 4 92 1 23 1 23 3 69 13 299 8 184 1764 1900 1564 1405 1112 1255 Interpretation: : The ranks analyzed. TABLE 4.34 77 10 770 11 847 2 154 1 77 2 154 4 308 25.30: Preferences of the respondents (ranks provided) towards the various loans from SIB. followed by good customer service.

31: The other banks where the respondents have account with Banks SBT Federal Bank ICICI SBI Axis Bank Others Frequency 91 45 37 31 23 85 Interpretation: The above data shows that the major competitor for the bank is State Bank of Travancore. ICICI and others as shown in the table.TABLE 4. Ratings Average Good Very Good Excellent Percent 15. 55 .28 40.32: Rating given to SIB’s customer service when compared to the other bank’s the respondents have account with.19: Rating given toSIB's Customer Service when compared to the other bank's.28% of the respondents have rated this attribute to be good. the respondents have account with. TABLE 4. TABLE 4.33: Rating given to SIB’s transaction speed when compared to the other banks. 50 40 Percentage 30 20 10 0 Average Good Very Good Excellent Ratings Percent Interpretation: The data above shows that 40. So it is interpreted that the customer service of SIB is in par with other banks. the respondents have account with.44 CHART 4. followed by Federal Bank.28 25 19.

So it is interpreted that the transaction cost of SIB is in par with other banks.35: Rating given to SIB’s technology & innovation when compared to the other banks. So it is interpreted that the transaction time of SIB is in par with other banks. the respondents have account with.56 Interpretation: The data above shows that 57.69 32.78 5.86% of the respondents have rated this attribute to be good.34: Rating given to SIB’s transaction cost when compared to the other banks.Ratings Average Good Very Good Excellent Percentage 9. the respondents have account with. the respondents have account with. TABLE 4.64% of the respondents have rated this attribute to be good. Ratings Poor Average Good Very Good Excellent Percentage 0.64 58.03 57. the respondents have account with.64 27.69 Interpretation: The data above shows that 58.39 54.86 15. CROSS TABULATION 56 .78 Interpretation: The data above shows that 54. Ratings Average Good Very Good Excellent Percentage 26. the respondents have account with. So it is interpreted that the technology & innovation of SIB is in par with other banks. TABLE 4.33 7.97 2.33% of the respondents have rated this attribute to be good.64 0.

38 : Relationship between the no: of year the respondents are associated with the bank and the privilege received.35000 per month. Internet Services Transfer funds Bill/ Loan Payment DD/ Term Depo Request Getting Reminders None Awareness(No: of Respondents) 50 38 34 44 99 NRI's 29 20 21 29 2 Interpretation: The above data reveals that more than half of the respondents. especially NRIs can be attracted more to increase such investments.TABLE 4. So it can be interpreted that high income level customers. are NRIs. TABLE 4. So. TABLE 4.term customers.36: Relationship between awareness of the internet services and the no: of NRI customers . it can be interpreted that NRIs can be attracted more by providing more innovative and technological user.friendly products. aware of the internet banking services. 57 . No: of Years Privilege Yes No 15 years 1 7 13 years 1 4 10 Years 5 16 Others 4 12 3 Total 11 15 0 Total 8 5 21 127 Interpretation: The data above clearly reveals that the bank has not given due care to provide any privilege/ benefit for its regular/ long.37 : Relationship between the income level of the respondents and the no: of third party investors. Income Level 5000-15000 15001-25000 25001-35000 > 35000 Total 3rd Investors 3 9 7 15 34 Party Interpretation: The above data shows that the majority of the customers who have invested in third party products are with income level of more than Rs.

whereas the management rates it to be very good which reveals a gap existing in this service between the two perspectives.  27.  Only 22.  50% of the respondents have rated the bank good with regard to the transaction time taken for cash deposit.33% of the respondents are associated with the bank from the past 10.  72% of the respondents are males.  61% of the respondents are with service as their occupation. average.3% of the respondents have rated the bank very good with regard to the comfort facilities it offers. the personnel show in responding/ attending to the customer.45 years. with regard to the promptness in keeping the customers informed of deposit rates/ service charges .3% of the respondents have rated the bank very good with regard to the grievance redressal system. whereas only 9.  50% of the respondents have rated the bank good with regard to the fastness.  34% of the respondents have Rs.  40% of the respondents are graduates (UG).  51.  38% of the respondents have rated the bank good with regard to the easiness the customers found to open an account with the bank.5. 5000.67% of the respondents have rated the bank good with regard to the bank staff’s knowledge in answering/ solving the customers’ queries.7% of the respondents have invested in third party products.  50.  48% of the respondents have rated the bank good with regard to the courtesy level of the bank’s personnel/ staff.3% of the respondents fall under the age category of 36.  63. followed by 20% of pensioners. 58 .1 FINDINGS  27.  56% of the respondents have rated the bank.13 years.15000 as their income level per month.3% of the respondents have rated the bank good with regard to the product/ service innovation in the past two years.3% have availed loan from the bank.  75.  40% of the respondents have rated the bank good with regard to the working hours of the bank.

 Since 91 respondents out of the 150 has account with SBT.. The management has rated this as very good which shows a slight gap existing and also the dissatisfaction of the customers regarding this service.67% of the respondents have rated the bank very good with regard to the location of the bank. 59 .  42% out of the few who have availed loan from any of the bank have rated the bank’s fastness in processing and disbursing loans to be good.1% out of the 63 respondents who use the internet and mobile facilities have rated bank’s this facility to be average. which shows that SIB is in par with those banks.78% of the respondents rate SIB to be good w. the main reasons being lower interest rate and good customer service. attributes like customer service. The management has rated this as good which shows a slight gap existing and also that the interest rate offered by the bank is not much satisfactory to the customers.  46% of the respondents have rated the bank average with regard to the interest rate currently being offered.  42% of the respondents have rated the bank average with regard to the quality of the ATM services provided by the bank..  38. etc. whereas management rates it to be very good which again reveals a gap existing in between the two perspectives.3% of the respondents use the mobile and internet banking facility of the bank respectively.  Only 46% of the respondents are aware of the facility such as requirement for cheque book/ statement through the ATM. when compared to the other competitor banks they have account with.r. transaction cost. 72.  Majority of the respondents have found to have not received any privileges/ benefits for being a regular/ long term customer of SIB.  52. the main competitor for the bank turn out to be SBT followed by Federal Bank and ICICI.t.  Only 30% and 23.  The next preferred bank for availing loan after SIB is found to be State Bank of Travancore and Federal Bank.  Interest rate offered by a bank is rated as the first attribute which a customer considers to choose a bank before going for a bank loan.

60 .  Since a large number of the respondents are unaware of the services provided through internet(66%)/ mobile(56.5.7% of the respondents having been invested in the third party products the bank can look for promoting the same. internet and mobile banking of the bank.  Only 22. except one out of the few customers who have been associated with the bank for the past 15-13 years have not been receiving any privilege.2 SUGGESTIONS  46% of the respondents felt that the interest rates on loan were high and hence the interest rates may be reduced to attract more customers. in the area. the bank can look forward to design few more schemes to attract the female customers. with high income group NRI customers.  Only 28% of the respondents being female. It is therefore suggested to give privilege to its long term customers so as to retain them. and use the services provided through ATM. initiatives. The bank also has a huge scope for this.7%) banking.  As the cross tabulation reveal. can be done to make the customers aware. demo of the services in the bank website. such as posting a list of services that are rendered to the customers inside the bank premises.

thereby increasing the customer base. The gap analyzed can be minimized by better technology. customer service and also by creating awareness about the various services. so.friendly products and better interest rates when compared to other banks they have account with. So as to retain the existing customers and to build up customer loyalty. through product innovation and competitive pricing strategy the bank can foster business relationship with its customers.5.3 CONCLUSION Customers always look for more user. 61 . Customer Relationship Management should be given more importance.

62 . Future researchers may continue the study by taking number of private or public sector banks.4 SCOPE FOR FURTHER RESEARCH There is a wide scope to extend this study in the future.5. to bring about the potential of retail banking industry.

for the following questions: E = Excellent VG = Very Good G = Good A = Average P = Poor 8. In South Indian Bank. 7.Rs 25000 Above Rs. Please use a tick mark against any one option to give your responses/ ratings. (d) With regard to. (c) With regard to. (e) With regards to the “Transaction time” taken for Cash deposit.15000 Rs. How do you rate the South Indian Bank : E (a) With regard to the courtesy level of the bank’s personnel/ staff. 35000 6. (b) With regard to the working hours of the bank. 35000 Service House-wife Rs. 1. how well informed/ knowledgeable you feel the bank staff is in answering/ solving your questions/ queries. Mutual funds. Age: 25-35 yrs 2. Occupation: Student Pensioner 5. (f)With regards to the “Transaction time” taken for Cash withdrawal. I will be thankful to the respondents. The South Indian Bank to reach upto your expectations in Retail Banking and also finish my project towards the partial fulfillment of MBA Degree. Gender: 36-45 yrs Male 46-55 yrs Female PG Business Above 55yrs 3. you have: Savings A/c Current A/c Has availed any loan Invested in any third party pdt like LIC. QUESTIONNAIRE ( For Customers). how fast the personnel are in responding/ attending to you.1. 25001. which will help. For how long are you associated with the SIB? ( in mth/ yrs) _____________ . 5000 – Rs. if you will spare 4-5 minutes from your valuable time to answer this questionnaire.Rs. Income Level: Rs. etc. 15001. Educational Qualification: School UG 4. 63 VG G A P .

. 2= Disagree. (o)With regard to the debit & credit card services offered by the bank (p) With regard to the fastness you feel it is in processing and disbursing loans. It is useful for to inquire on the Status of a cheque issued by me. k. ATM Service I don’t face any problem in withdrawing cash from ATM. It helps me to locate the nearest SIB ATMs based on PIN Code 64 1 2 3 4 5 . d. Please use a tick mark in the appropriate column to give your responses for the following statements: 1=Strongly Disagree. l. g.No: a. (l) With regard to the bank’s facility in terms of the comfort facilities it offers. (r) With regard to the internet/mobile banking facility offered by the bank 9. j. minimum balance alert. (h) With regard to. (k) With regard to the bank’s grievance redressal system. h. ATM services are useful for me to get the enquiry statement of my account. 5= Strongly Agree S. (q) With regard to the interest rates currently being offered. It helps me know the status of my Cheque. loan repayment alert. It helps me to get the interest details on deposit accounts. (n) With regard to the quality of the ATM services provided by the bank.. It helps me get alerts like Deposit maturing soon. It helps me in bill payment. Internet Banking It helps me to make an instant fund transfer or schedule a transfer for the future date. (m) With regard to the location of the bank. 3= Neutral. f. how hassle free it was for you to open an account with the bank. e. (i) With regard to the product or service innovation in the past two years. ATM services are useful for me to deposit cash & cheques. c. i. b. ATM services are useful for me to require my Cheque book. Mobile Banking It is useful for me to get the balance in any of my accounts instantaneously. 4= Agree. (j) With regard to its promptness in keeping you informed of deposit rates/ service charges.(g) With regards to the “Transaction time” taken to issue DD/Cheque/statements.

most preferred to 6. income. What are all the attributes you consider to choose a bank before going for a bank loan? (Rank them from 1= most preferred to 5= least preferred).. Which loan will you prefer the most to take from SIB?( Pls rank these from 1. n. How many facilities out of the following are you aware of being provided through the internet banking of SIB? To transfer funds from the bank to personalized transaction.) 14.. Which were the all the banks in your consideration set when you planned for availing a loan? ________________________________________________________________ __________________________________________________________________ 15. Interest rates offered Security demanded Efficient Customer Service Repayment Period Eligibility for loan (like your age. None of the above 13. 12. None of the above. It helps me get alerts like Deposit maturing soon. 10. loan repayment alert. How many facilities out of the following are you aware of being provided through the mobile banking of SIB? A/c balance any time To know the cheque details Receiving reminders/ alerts. Which bank did you finally prefer and what influenced you for that? Bank: _______________ Reason: _____________________________________________ 16. minimum balance alert. How many facilities out of the following are you aware of being provided through the ATM services of SIB? Withdrawal of Cash Deposit Cash/ Cheques Balance verification Requirement for Cheque Book/ Statement 11. other than SIB? ___________________________________________________________________ 65 .least preferred) Gold Loan Educational Loan Personal Loan House Loan Vehicle Loan Agricultural Loan 17.m.etc. I will be able to set my own time preferences for receiving messages. Bill/Loan Payment DD/ Term Deposit Request Getting reminders/alerts. Which are all the other banks you have account in.

How do you rate SIB when compared to those banks. please give some suggestions to serve you better. Did you find any drawbacks in the services of SIB? Yes No 21.___________________________________________________________________ 18. Did you receive any privileges/ benefits for being a regular/long-term customer of SIB? If Yes. _________________________________________________ _________________________________________________ _________________________________________________ _________________________________________________ 22. in the following attributes? E = Excellent VG = Very Good G = Good A = Average P = Poor Attributes E VG G A P Efficient Customer Service Time Saving Transaction Cost Technology & Innovation 19. what ___________________________________________________________ 20. If Yes. Are you a Non Residential Indian? Yes No 66 .

Sir/Madam. QUESTIONNAIRE (For Management). how fast the personnel are in responding/ attending to the customers. (h) With regard to. (k) With regard to the bank’s grievance redressal system. (n) With regard to the quality of the ATM services provided by the bank. (m) With regard to the location of the bank. Please use a tick mark against any one option to give your response/ rating. (d) With regard to. (j) With regard to its promptness in keeping the customers informed of deposit rates/ service charges. (b) With regard to the working hours of the bank.2. How do you rate your South Indian Bank : E (a) With regard to the courtesy level of the bank’s personnel/ staff. I will be very much thankful to you if you will spare your 3-4 minutes from your valuable time to answer this questionnaire. (l) With regard to the bank’s facility in terms of the comfort facilities it offers. (i) With regard to the product or service innovation in the past two years. how well informed/ knowledgeable you feel the bank staff is in answering/ solving the customer’s questions/ queries. (e) With regard to the “Transaction time” taken for Cash deposit. which will help me to better perform the comparative study and to analyze the gap between the management and customers. (g) With regard to the “Transaction time” taken to issue DD/Cheque/statements. (f)With regard to the “Transaction time” taken for Cash withdrawal. (c) With regard to. for the following questions: E = Excellent VG = Very Good G = Good A = Average P = Poor 1. (o)With regard to the debit & credit card services offered by the bank (p) With regard to the fastness you feel it is in processing and VG G A P 67 . how hassle free it is for your customers to open an account with the bank.

How many percent of your customers do you feel are aware of all the facilities available through your retail banking services like: ATM Services: _____________ Mobile Services: ____________ Internet Services: ____________ 3.disbursing loans. (r) With regard to the internet/mobile banking facility offered by the bank. 2. (q) With regard to the interest rates currently being offered. What are all the privileges/ benefits you provide for a regular/long-term customer of SIB? __________________________________________________________________ 5. What are all the measures you are taking to be ahead of your competitors? ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ 68 . How many percent do you feel are aware but are not using these facilities? Percent: _____________ Reason: _________________________________________________________ _________________________________________________________ 4. Which are all the banks according to you turning out to be your tough competitors? __________________________________________________________________ ___________________________________________________________________ 6.

Service Industries Journal. Gardener Edwar.BIBLIOGRAPHY 1. HOW RETAIL BANKING HAS GONE INTO OVERDRIVE. Nov. RELATIONAL BENEFITS AND CUSTOMER SATISFACTION IN RETAIL BANKING.southindianbank. 2005. THE FUTURE OF RETAIL BANKING: A GLOBAL PERSPECTIVE. www. May2008. p237.10 Issue 04. T. Durkin Mark. July 18.com 14.ebscohost. 4. 3. Journal of Services Research. 2. www. ICFAI Journal of Bank Management. International Journal of Bank Marketing. USER PERCEPTION OF RETAIL BANKING SERVICES: A COMPARATIVE STUDY OF PUBLIC AND PRIVATE SECTOR BANKS. Business Line. Number 1 (April-September 2009).gov 13. Aurto. Vol. 2008. 2007. B. Journal of Strategic Marketing. 15 Issue 2/3. Howcroft Barry. p109-122. http://search. Financial Express. Vol. Kapali.researchandmarkets. 5. Websites: 11. Vol. CAPTURING THE BOOM IN RETAIL BANKING. Gautam Chakrabarty.A. Crowe Joseph. BANKING ON TECHNOLOGY. 22 Issue 23. 05 18. 6.Ravi. Aug 21. 9. p32-46. Volume 9.com 12. Economic Times. p83-100. CUSTOMER EXPECTATIONS AND PERCEPTIONS ACROSS THE INDIAN BANKING INDUSTRY AND THE RESULTANT FINANCIAL IMPLICATIONS. Vol. Molina. 2007. EBANKING ADOPTION: FROM BANKER PERCEPTION TO CUSTOMER REALITY. June 3. Dutta Anil. Dewan Anwarul Latif. Vol.com 69 . 19 Issue 2. Don. THE NEW RETAIL BANKING REVOLUTION SOURCE. May2007. CUSTOMER ACCOUNT RELATIONSHIPS AND E-RETAIL BANKING USAGE. Priya Nair. p31-49. O'Donnell Aodheen Mullholland Gwyneth. Dutta Kirti. R. Frontline. 7. 10. Journal of Financial Services Marketing.bls. 7 Issue 2. Sciglimpagli. www. Apr99. 8. May 2006.

17. Katuri Nageswara Rao. 70 . IT IN BANKS. Pg No:301311. Pg No: 34-42.STRATEGIC ISSUES.N. Pg No: 56-66.co.in Books : 16. ELEMENTS OF BANKING AND INSURANCE. 53-62.google. A. STRATEGIC BUSINESS MANAGEMENT & BANKING.15. Sarkar. www. Jyotsana Sethi and Nishwan Bhatia. 18.

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