CHAPTER 1

1.1 INTRODUCTION TO BANKING IN INDIA
The banking section will navigate through all the aspects of the Banking System in India. It will discuss upon the matters with the birth of the banking concept in the country to new players adding their names in the industry in coming few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association (IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined under three separate heads with one page dedicated to each bank.

However, in the introduction part of the entire banking cosmos, the past has been well explained under three different heads namely:
• • •

History of Banking in India Nationalization of Banks in India Scheduled Commercial Banks in India

The first deals with the history part since the dawn of banking system in India. Government took major step in the 1969 to put the banking sector into systems and it nationalized 14 private banks in the mentioned year. This has been elaborated in Nationalization Banks in India. The last but not the least explains about the scheduled and unscheduled banks in India. Section 42 (6) (a) of RBI Act 1934 lays down the condition of scheduled commercial banks. The description along with a list of scheduled commercial banks are given on this page.

1.1.1

HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dials a pizza. Money has become the order of the day.

The first bank in India. Punjab National Bank Ltd. Next came Bank of Hindustan and Bengal Bank. They are as mentioned below: • • Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. I prefix the scenario as Phase I. From 1786 till today. was established in 1786. Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. Phase II and Phase III. mostly Europeans shareholders. To make this write-up more explanatory. though conservative. was set up in 1894 with . Phase I The General Bank of India was set up in the year 1786. • New phase of Indian Banking System with the advent of Indian financial & banking sector reforms after 1991. the journey of Indian Banking System can be segregated into three distinct phases. In 1865 Allahabad Bank was established and first time exclusively by Indians. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks. The East India Company established Bank of Bengal (1809).

Indian Bank. During those day’s public has lesser confidence in the banks. mostly small. Phase II Government took major steps in this Indian Banking Sector Reform after independence. Between 1906 and 1913. There were approximately 1100 banks. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. In 1955. Bank of Baroda. Canara Bank. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. the Government of India came up with The Banking Companies Act. 23 of 1965). Reserve Bank of India came in 1935. As an aftermath deposit mobilisation was slow. funds were largely given to traders.headquarters at Lahore. Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. Central Bank of India. and Bank of Mysore were set up. it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. Moreover. Bank of India. To streamline the functioning and activities of commercial banks. It formed State Bank of India to act as the principal .

Mrs. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: • • • • • • • • 1949: Enactment of Banking Regulation Act. 1959: Nationalization of SBI subsidiaries. It was the effort of the then Prime Minister of India. 1961: Insurance cover extended to deposits. Indira Gandhi. 1975: Creation of regional rural banks. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. 1980: Nationalization of seven banks with deposits over 200 crore.agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July. 1969. 1955: Nationalization of State Bank of India. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. . 14 major commercial banks in the country were nationalized. major process of nationalization was carried out. This step brought 80% of the banking segment in India under Government ownership.

Time is given more importance than money. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. the foreign reserves are high. The financial system of India has shown a great deal of resilience.After the nationalization of banks.000%. This is all due to a flexible exchange rate regime. Phase III This phase has introduced many more products and facilities in the banking sector in its reforms measure. Efforts are being put to give a satisfactory service to customers. a committee was set up by his name which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. the capital . Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions. the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11. Phone banking and net banking is introduced. The entire system became more convenient and swift. under the chairmanship of M Narasimham. In 1991.

1934. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. foreign banks (45). and banks and their customers have limited foreign exchange exposure. a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act.1.918 branches. The scheduled commercial banks in India comprise of State bank of India and its associates (8).account is not yet fully convertible. 1955 (23 of 1955). As on 30th June. 1. 1999. private sector banks (32).2 SCHEDULED COMMERCIAL BANKS IN INDIA The commercial banking structure in India consists of: • • Scheduled Commercial Banks in India Unscheduled Banks in India Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act. a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act. "Scheduled banks in India" means the State Bank of India constituted under the State Bank of India Act. or under section 3 of the Banking Companies . there were 300 scheduled banks in India having a total network of 64. 1970 (5 of 1970). nationalized banks (19). 1959 (38 of 1959). co-operative banks and regional rural banks.

1980 (40 of 1980). "Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act.(Acquisition and Transfer of Undertakings) Act. or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act. 1949 (10 of 1949). which is not a scheduled bank". The following are the Scheduled Banks in India (Public Sector): • • • • • • • • • • • • • • State Bank of India State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurashtra State Bank of Travancore Andhra Bank Allahabad Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India . 1934 (2 of 1934). but does not include a cooperative bank".

• • • • • • • • • • • • Corporation Bank Dena Bank Indian Overseas Bank Indian Bank Oriental Bank of Commerce Punjab National Bank Punjab and Sind Bank Syndicate Bank Union Bank of India United Bank of India UCO Bank Vijaya Bank The following are the Scheduled Banks in India (Private Sector): • • • • • • • ING Vysya Bank Ltd Axis Bank Ltd Indusind Bank Ltd ICICI Bank Ltd South Indian Bank HDFC Bank Ltd Centurion Bank Ltd .

3 BANKING SERVICES IN INDIA With years. Hongkong and Shanghai Banking Corporation Standard Chartered Bank.1. Bank of America NT & SA Bank of Tokyo Ltd. Banquc Nationale de Paris Barclays Bank Plc Citi Bank N. ANZ Gridlays Bank Plc. Deutsche Bank A.C.G.• • Bank of Punjab Ltd IDBI Bank Ltd The following are the Scheduled Foreign Banks in India: • • • • • • • • • • • • American Express Bank Ltd. 1. The Chase Manhattan Bank Ltd. banks are also adding services to their customers. Dresdner Bank AG. The Indian banking industry is passing through a phase of customers .

With stiff competition and advancement of technology. the services provided by banks have become more easy and convenient. The past days are witness to an hour wait before withdrawing cash from accounts or a cheque from north of the country being cleared in one month in the south. There are different types of bank account in Indian banking sector. This section of banking deals with the latest discovery in the banking instruments along with the polished version of their old systems. A competition has been established within the banks operating in India. . BANK ACCOUNT The most common and first service of the banking sector. The bank accounts are as follows: • Bank Savings Account .Bank Savings Account can be opened for eligible person / persons and certain organizations / agencies (as advised by Reserve Bank of India (RBI) from time to time) • Bank Current Account . The customers have more choices in choosing their banks.Bank Current Account can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs / Specified Associates / Societies / Trusts.market. etc.

etc.With the advancement of technology. Credit cards are financial instruments. • Bank Account Online . Bank account online is registered through a PC with an internet connection. Credit card in India became popular with the introduction of foreign banks in the country.Bank Term Deposits Account can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs/ Specified Associates / Societies / Trusts. PLASTIC MONEY Credit cards in India are gaining ground. The advent of bank account online has saved both the cost of operation for banks as well as the time taken in opening an account. Credit card however became more popular with use of magnetic strip in 1970. The concept of credit card was used in 1950 with the launch of charge cards in USA by Diners Club and American Express. A number of banks in India are encouraging people to use credit card. the major banks in the public and private sector has faciliated their customer to open bank account online.• Bank Term Deposits Account . which can be used more than .

The following loans are given by almost all the banks in the country: • • • • • Personal Loan Car Loan or Auto Loan Loan against Shares Home Loan Education Loan or Student Loan In Personal Loan. Basically banks. retail stores and other businesses issue these. LOANS Banks in India with the way of development have become easy to apply in loan market.000 to 10. one can get a sanctioned loan amount between Rs 25. It is one of the fast moving financial products of banks. 00.000 depending upon the profile of person applying for the loan. SBI. Car loan / auto loan are sanctioned to the extent of . HDFC. HSBC are some of the leading banks which deals in Personal Loan. Almost all the banks have jumped into the market of car loan which is also sometimes termed as auto loan. ICICI.once to borrow money or buy products and services on credit.

85% upon the ex-showroom price of the car with some simple paper works and a small amount of processing fee. ICICI. Loan against shares is very easy to get because liquid guarantee is involved in it. This act of banks is known as . Now people are moving to township outside the city. More number of townships is coming up to meet the demand of 'house for all'. studying at recognised colleges/universities in India and abroad are generally given education loan / student loan so as to meet the expenses on tuition fee/ maintenance cost/books and other equipment. rather to be termed as student loan. Students with certain academic brilliance. is a good banking product for the mass. MONEY TRANSFER Beside lending and depositing money. The RBI has also liberalised the interest rates of home loan in order to match the repayment capability of even middle class people. Home loan is the latest craze in the banking sector with the development of the infrastructure. HDFC. Again SBI. Almost all banks are dealing in home loan. The educational loan. banks also carry money from one corner of the globe to another. HSBC are leading.

It has been only a couple of years that banks have jumped into the money transfer businesses in India. The international money transfer market grew 9. like deregulation of interest rates. 1. Banker's Cheques. based on these past and current movements in the market. This paper aims to foresee major future banking trends. reflecting a number of underlying developments.2 FUTURE OF BANKING IN INDIA A healthy banking system is essential for any economy striving to achieve good growth and yet remain stable in an increasingly global business environment. This trend has created new competitive threats as well as new opportunities.1% average growth rate through 2009. dilution of government stake in PSBs. . The Indian banking system has witnessed a series of reforms in the past.transfer of money. It has also undergone rapid changes. to US$233 bn. This activity is termed as remittance business. This is a type of Telegraphic Transfer or Tele Cash Orders. from US$213 bn. Economists say that the market of money transfer will further grow at a cumulative 12.e.3% from 2003 to 2004 i. and increased participation of private sector banks. Banks generally issue Demand Drafts. in 2004. Money Orders or other such instruments for transferring the money.

The success (or failure) of any bank would depend not only on tapping the untapped customer base (from other departments of the same bank. customers . Geography will no longer be an inhibitor.2. Technology will prove to be the differentiator in the short-term but the dynamic environment will soon lead to its saturation and what will ultimately be the key to success will be a better relationship management. and others too adopting a single-PIN. The future of banking would be in terms of integration. At the same time. Hence.Given the competitive market. 1.1 OVERVIEW If one were to say that the future of banking in India is bright. the customers (you and I) stand only to benefit more to say the least. banking will (and to a great extent already has) become a process of choice and convenience. it would be a gross understatement. With the growing competition and convergence of services. I see a growing trend towards the importance of relationship managers. emergence of a multitude of complex financial instruments is foreseen in the near future (the trend is visible in the current scenario too) which is bound to confuse the customer more than ever unless she spends hours (maybe days) to understand the same. This is already becoming a reality with new-age banks such as YES Bank.

asset classification. Technology has made tremendous impact in banking. India has witness to a sea change in the way banking is done in the past more than two decades.2 RISK MANAGEMENT The future of banking will undoubtedly rest on risk management dynamics. ‘Anywhere banking’ and ‘Anytime banking’ have become a reality. the Reserve Bank of India (RBI) took steps to reform the Indian banking system at a measured pace so that growth could be achieved without exposure to any macroenvironment and systemic risks. In the wake of greater financial deregulation and global financial integration. Since 1991. Some of these initiatives were deregulation of interest rates. Only those banks that have efficient risk management . 1.of related similar institutions or those of the competitors) but also on the effectiveness in retaining the existing base. and provisioning. dilution of the government stake in public sector banks (PSBs).2. The financial sector now operates in a more competitive environment than before and intermediates relatively large volume of international financial flows. the biggest challenge before the regulators is of avoiding instability in the financial system. guidelines being issued for risk management.

the post-Basel II era will belong to the banks that manage their risks effectively. adequate provisioning and maintaining a robust financial structure.system will survive in the market in the long run.’ . Although capital serves the purpose of meeting unexpected losses. but would also add value to the shareholders and other stakeholders by properly pricing their services. Coming years will witness banks striving to create sound internal control or risk management processes. ‘The future belongs to bigger banks alone. With the focus on regulation and risk management in the Basel II framework gaining prominence. The banks with proper risk management systems would not only gain competitive advantage by way of lower regulatory capital charge. capital is not a substitute for inadequate decontrol or risk management systems. The effective management of credit risk is a critical component of comprehensive risk management essential for long-term success of a banking institution. as well as to those which have minimized their risks considerably.

CHAPTER 2 .

5 crore customers with the following wide variety of banking services: • • • • Corporate banking Personal banking Industrial finance Agricultural finance .2. Shanghai (China) and in London and a full fledged Branch in Kabul (Afghanistan). the first Indian bank started only with Indian capital.1 INTRODUCTION Punjab National Bank of India. Punjab National Bank with 4497 offices and the largest nationalized bank is serving its 3. was nationalized in July 1969 and currently the bank has become a front-line banking institution in India with 4525 Offices including 432 Extension Counters. The corporate office of the bank is at New Delhi. Punjab National Bank of India has set up representative offices at Almaty (Kazakhistan).

The Bank is the second largest government-owned commercial bank in India with about 4.1 HISTORY OF THE BANK Punjab National Bank (PNB) was registered on May 19. 1894 under the Indian Companies Act with its office in Anarkali Bazaar Lahore.500 branches across 764 cities. The bank has been ranked 248th biggest bank in the world by Bankers Almanac. Dubai. Punjab National Bank India maintains relationship with more than 200 leading international banks world wide. PNB has a banking subsidiary in the UK. . and representative offices in Almaty. PNB India has Rupee Drawing Arrangements with 15 exchange companies in UAE and 1 in Singapore. PNB has earned 9th position among top 50 trusted brands in India. It serves over 37 million customers. Oslo. The bank's total assets for financial year 2007 were about US$60 billion.1.• • Financing of trade International banking Punjab National Bank has been ranked 38th amongst top 500 companies by The Economic Times. London. and Shanghai. 2. as well as branches in Hong Kong and Kabul.

Jessawala. • September 1965: After the Indo-Pak war the government of Pakistan seized all the offices in Pakistan of Indian banks. but continued to operate in Pakistan. Shri Kali Prosanna Roy. Shri E. 1963: The Government of Burma nationalized PNB's branch in Rangoon (Yangon). 1942). PNB has the distinction of being the first Indian bank to have been started solely with Indian capital that has survived to the present. Bakshi Jaishi Ram. • • 1961: PNB acquired Universal Bank of India.• 1895: PNB commenced its operations in Lahore. Shri Prabhu Dayal. 1940: PNB absorbed Bhagwan Dass Bank.C. Lala Lajpat Rai was actively associated with the management of the Bank in its early years. Bharat Bank became Bharat Nidhi Ltd. . PNB lost its premises in Lahore. was established in 1881 in Faizabad. the Ouch Commercial Bank. a scheduled bank located in Delhi circle. (The first entirely Indian bank. • 1951: PNB acquired the 39 branches of Bharat Bank (est. and Lala Dholan Dass. • • 1904: PNB established branches in Karachi and Peshawar.) PNB's founders included several leaders of the Swadeshi movement such as Dyal Singh Majithia and Lala HarKishen Lal.[1] Lala Lalchand. • 1947: Partition of India and Pakistan at Independence. but failed in 1958.

author of Kundalatha.M. • 1986: PNB acquired Hindustan Commercial Bank (est. At the time of the merger with PNB. Kazakhstan. • • 1998: PNB set up a representative office in Almaty. 2003: PNB took over Nedungadi Bank. Rao Bahadur T. It was incorporated in 1913. 1986 The Reserve Bank of India required PNB to transfer its London branch to State Bank of India after the branch was involved in a fraud scandal. on July 19.including PNB's head office. and in 1965 had acquired selected assets and deposits of the Coimbatore National Bank. • 1993: PNB acquired New Bank of India. the oldest private sector bank in Kerala. which the GOI had nationalized in 1980. 1943) in a rescue. had established the bank in 1899. one of the earliest novels in Malayalam. • 1960s: PNB amalgamated Indo Commercial Bank (est. The acquisition added Hindustan's 142 branches to PNB's network. 1933) in a rescue. . 1969. • 1969: The Government of India (GOI) nationalized PNB and 13 other major commercial banks. PNB also had one or more branches in East Pakistan (Bangladesh). which may have moved to Karachi. Appu Nedungadi. • • 1976 or 1978: PNB opened a branch in London.

with the result that its shareholders received no payment for their shares. 2. • • 2005: PNB opened a representative office in Dubai. PNB also opened a representative office in Shanghai.1.2 ACHIEVEMENTS . and one in South Hall. 2009: PNB opened a representative office in Oslo. 2007: PNB established PNBIL Punjab National Bank (International) . Gatin Gupta became Chairmen of Punjab National Bank. • 2004: PNB established a branch in Kabul. • • 2008: PNB opened a branch in Hong Kong. PNB also opened a representative office in London. one in London. Norway. Afghanistan.in the UK.Nedungadi Bank's shares had zero value. and is planning a fourth in Birmingham. PNB established an alliance with Everest Bank in Nepal that permits migrants to transfer funds easily between India and Everest Bank's 12 branches in Nepal. with two offices. Since then it has opened a third branch in Leicester.

Punjab National Bank announced its Q1FY2010 results on 29 July 2009, delivering 62% y-o-y growth in net profits to Rs832 crore (Rs512cr), substantially ahead of expectations on account of large treasury gains, apart from healthy operating performance.

While the bank’s deposit growth was reasonably robust at 4.4% sequentially and 26.5% y-o-y, unlike the peers its growth in advances also remained strong at 38% y-o-y.

In spite of being at the forefront of PLR cuts, the bank posted a healthy growth in Net Interest Income (NII) of 29% y-o-y.

Other Income surged 113% y-o-y, driven by strong treasury gains of Rs355 crore during the quarter in line with industry trends, even as Fee income was also robust at 45% y-o-y, on the back of strong balance sheet growth.

Operating expenses were higher than expected on account of Rs150 crore of provisions for imminent wage hikes.

Gross and Net NPA ratios remained stable sequentially at 1.8% and 0.2%, with the bank not adopting the guidelines of treating floating provisions as part of tier 2 capital instead of adjusting against NPAs on express permission from the RBI.

2.2 VISION AND MISSION
Vision • To evolve and position the bank as a world class, progressive, cost effective and customer friendly institution providing comprehensive financial and related services. • Integrating frontiers of technology and serving various

segments of society especially weaker section. • Commited to excellence in serving the public and also excelling in corporate values Mission • To provide excellent professional services and improve its position as a leader in financial and related services. • Build and maintain a team of motivated workforce with high work ethos. • Use latest technology aimed at customer satisfaction and act as an effective catalyst for socio economic development.

2.3 VALUES AND ETHICS
• Bonding and Integrity

• • • •

Ethical conduct Periodic disclosure Confidentiality and fair dealing Compliance with rules and regulations

2.4 PRODUCTS AND SERVICES
Savings Fund Account - Total Freedom Salary Account, PNB Prudent Sweep, PNB Vidyarthi SF Account, PNB Mitra SF Account Current Account - PNB Vaibhav, PNB Gaurav, PNB Smart Roamer Fixed Deposit Schemes - Spectrum Fixed Deposit Scheme, Anupam Account, Mahabachat Schemes, Multi Benefit Deposit Scheme Credit Schemes - Flexible Housing Loan, Car Finance, Personal Loan, Credit Cards Social Banking - Mahila Udyam Nidhi Scheme, Krishi Card, PNB Farmers Welfare Trust Corporate Banking - Gold Card scheme for exporters, EXIM finance Business Sector - PNB Karigar credit card, PNB Kushal Udhami, PNB Pragati Udhami, PNB Vikas Udhami

2. London.5 AWARDS AND DISTINCTIONS • Ranked among top 50 companies by the leading financial daily. and the PNB also offers locker facilities. • Ranked as 323rd biggest bank in the world by Bankers Almanac (January 2006).Apart from these. Economic Times. • Golden Peacock Award for Excellence in Corporate Governance 2005 by Institute of Directors. London. • Included in the top 1000 banks in the world according to The Banker. PPF schemes and various E-services. • FICCI's Rural Development Award for Excellence in Rural Development – 2005 .C Nielson Survey. • Earned 9th place among India's Most Trusted top 50 service brands in Economic Times. senior citizens schemes.A.

2. BHIKAJI CAMA PLACE. NEWDELHI-66 ZONAL OFFICES (25) REGIONAL OFFICES (48) BRANCHS (4525) SWOT ANALYSIS Strength Weakness .6 ORGANIZATIONAL STRUCTURE E HEAD OFFICE 7.

Opportunities Threats Let’s analyze SWOT in order to know as to where the company stands 2.7 SWOT ANALYSIS STRENGTH  Wide network  Large number of customers  Fast adaptability to technology  Brand image WEAKNESS .

 Casual behaviour  Corruption and red tapism  Slow decision making due to large hierarchy  High gross NPA OPPORTUNITIES  Home to home banking services .

 Diversification towards other fields  Globalization THREATS  Stiff competition from SBI and other private players. .

CHAPTER 3 .

Gaining high levels of customer satisfaction is very important to a business because satisfaction customers are most likely to be loyal and to make repeat orders and to use a wide range of services offered by a business .1 CUSTOMER SATISFACTION Customer satisfaction refers to the extent to which customers are happy with the products and services provided by a business. Definition 2: Customer satisfaction is the perception of the customer that the outcome of a business transaction is equal to or greater than his/her expectation. Customer satisfaction levels can be measured using survey techniques and questionnaires DEFINITIONS: Definition 1: Customer satisfaction is equivalent to making sure that product and service performance meets customer expectations. Definition 3: Customer satisfaction occurs when acquisition of products and/or services provides a minimum negative departure from expectations when compared with other acquisitions.3.

2 BENEFITS OF CUSTOMER SATISFACTION The importance of customer satisfaction and support is increasingly becoming a vital business issue as organization realize the benefits of Customer Relationship Management (CRM) for providing effective customer service. What is clear about customer satisfaction is that customers are most likely to appreciate the goods and services that they buy if they are made to feel special. 3.There are many factors which lead in high levels of customer satisfaction including. Products and services which are customer focused and hence provide high levels of value for money. . need to keep informed about the latest customer satisfaction techniques for running a valuable customer service function. Professionals working within customer-focused business or those running call centers or help desks. This occurs when they feel that the products and services that they buy have been specially produced for them or for people like them. the importance of developing a valued relationship with customers using CRM is essential to support customer and long-term business growth. From small customer service departments to large call centers.

We need to know what our customers expect from the products and services we provide. Customer expectations have two types –  Expressed  Implied Expressed Customer Expectations are those requirements that are written down n the contract and agreed upon by both parties for example. For example. Implied Customer Expectations are not written or spoken but are the ones the customer would ‘expect’ the supplier to meet nevertheless. . advent of new technology. it is important to develop a clear understanding of what exactly the customer wants. product specifications and delivery requirements. Process improvements. a customer would expect the service representative who calls on him to be knowledgeable and competent to solve a problem on the spot.What Do Customers Want? Before we begin to create tools to measure the level of satisfaction. There are many reasons why customer expectations are likely to change overtime. Supplier’s performance against these requirements is most of the items directly measurable.

Customer satisfaction is customer’s perception that a supplier has met or exceeded their expectations.3 WHAT CONSTITUTES SATISFACTION? We cannot create customer satisfaction just by meeting customer’s requirements fully because these have to be met in any case. The customer is always right.changes in customer’s priorities. improved quality of service provided by competitors are just a few examples. However failing short is certain to create dissatisfaction Major Attributes of customer satisfaction in banking industry can be summarized as:  Product quality  Premium Outflow  Return on Investment  Services . Supplier’s job is to provide the customer what he/she wants. when he/she wants it. 3.

 Overall communication. The purpose of the exercise is to identify priorities for . accessibility and attitude. WHAT ARE THE TOOLS? Customer expectations can be identified using various methods such as:  Periodic contract reviews  Market research  Telephonic interviews  Personal visits  Warranty records  Informal discussions  Satisfaction surveys Depending upon the customer base and available resources. we can choose a method that is most effective in measuring the customer’s perceptions. Responsiveness and ability to resolve complaints and reject reports.

This includes:  Defining Objectives of the Survey  Design Survey approach  Develop questionnaires and forms  Administer Survey (Email. Telephone or Post)  Method of compiling data and analyzing the findings  Format of the report to present the findings There is no point in asking irrelevant questions on a customer satisfaction questionnaire. We must develop a method or combination of methods that helps to continually improve service.4 CUSTOMER SATISFACTION SURVEYS Formal survey has emerged as by far the best method of periodically the customer satisfaction. The basic purpose is to find out what we are doing right or wrong. where do .improvements. The survey are not marketing tools but an information—gaining tool. 3. Enough homework needs to be before embarking on the actual survey. Where is the scope for improvement.

 Priorities for improvement Survey forms should be easy to fill out with minimum amount of time and efforts on customer’s part. For repeated surveys. you could provide the rating that was previously accorded by the customer. Yet they must provide accurate data should also be sufficiently reliable for management decision making. . This works like a reference point for the customer. Space should always be provided for the customers own opinions this enables them to state any additional requirements or report any shortcomings that are not covered by the objective questions. This can be achieved by incorporating objective type questions where customer has to “rate” on scale of say 1 to 10. They should be designed to actively encourage the customer to complete the questions. How we can serve the customer better? A customer satisfaction measurement survey should at least identify the following objectives:  Importance to customers (Customers priorities)  Customer’s perception of supplier’s performance  Your performance relative to customer’s priorities.we stand vis-à-vis other suppliers.

user. surveying a number of respondents for each customer gives a complete perspective of customer satisfaction. . Respondents should be asked to give a weighting factor. receiving inspector. finance and purchase person etc. It may be necessary to device a different questionnaire for each of them. again on a rating scale of say. 1 to 10.Normally. we deal various personnel at various levels in the customer’s organization—the buyer. This gives a better indication of relative importance of each parameter towards overall customer satisfaction and makes it easier for suppliers to prioritize their action plans by comparing the performance rating (scores) with importance rating (weighing). Respondents must be provided a way to express the importance they attach to various survey parameters. for each requirement.

CHAPTER 4 .

Most of the consumer research focused on adopter categories.4.1.1 CONSUMER RESEARCH IN DIFFERENT DISCIPLINES A considerable body of literature exists on consumption. habits. consumer behaviour and consumer decision making process. 4.1 CONSUMER SATISFACTION PROCESS The paramount goal of marketing is to understand the customer and to influence buying behaviour. attitudes and intentions rather that on actually measuring the satisfaction level with the service. The process can be depicted as follows:- .

 Search for information.  Consumption(utilization of the procured option)  Post purchase alternative re-evaluation.2 WAYS FOR MAINTAINING RELATIONS WITH THE CUTOMERS ADOPTED BY PNB The ability of the banking industry to achieve the socio-economic objectives and in the process bringing more and more customers into its fold will ultimately depend on the satisfaction of the customers.realization of the difference between the desired and the current situation that serves as a trigger for entire process. . We have a strong belief that a satisfied customer is the foremost factor in developing our business.  Pre purchase alternative evaluation.  Divestment(disposal remnants) of the unconsumed product and it’s 4. Need recognition.

This document was made in consultation with the users and highlights our Bank's commitments towards the customer satisfaction. We maintain constant consultations with our clientele through various Seminars. thus ensuring accountability and responsibility amongst its officials and staff. However. Citizens' Charter concept was considered as a base instrument to fill this need and accordingly this document was prepared. This is not a legal document creating rights and obligations. etc. all our customers are requested to keep us informed of their experiences about the various services rendered by the Bank and feel free to comment on this Code. Government of India and Ministry of Administrative Reforms and Public Grievances for encouraging us to bring out this Code. We wish to acknowledge the initiative taken by the Ministry of Finance. The Code has been prepared to promote fair banking practices and to give information in respect of various activities relating to customer service. This Code for customers not only explains our commitment and responsibilities along with the redressed methods but also specifies the obligation on the part of customers for healthy practices in Customer-Banker relationships.A need was felt by us at Punjab National Bank that in order to become more customers friendly the Bank should come out with Charter of its services for the customers. . Customer Meets. to evaluate improve and widen the range of service to customer.

 Render courteous services. account opened in individual capacity) and all safe deposit locker hirers (i.e.  Notify change in interest rates on advances.e. etc. .  Provide separate 'Enquiry' or 'May I help you' counter at large branches. individual hirers).  Provide details of various deposit schemes/services of the Bank.  Attend to all customers present in the banking hall at the close of business hours. Pay Orders.  Offer nomination facility to all deposit accounts (i.  Display Time-Norms for various banking transactions.We intend to bring it out in many Regional Languages in subsequent years.  Display interest rates for various deposit schemes from time to time.  Issue Demand Drafts. COMMON PRACTICES FOLLOWED BY PNB BRANCHES  Display business hours.

 Provide complaint/suggestion box in the branch premises. Pay interest for delayed credit of outstation cheques.  Display address of Regional/Zonal and Central Offices as well as Nodal Officer dealing with customer grievances/complaints. as advised by RBI from time to time.  Accord immediate credit in respect of outstation and local cheques upto a specified limit subject to certain conditions. CHAPTER 5 . as advised by Reserve Bank of India (RBI) from time to time.

5. This study will help banks to .1 STATEMENT OF THE PROBLEM This Study will help us to understand the consumer’s satisfaction about banking services and products.

The study will be able to reveal the preferences. 5.understand.2 NEED FOR THE STUDY  The deeper the company understands of consumer’s needs and satisfaction. how a consumer selects.3 SCOPE OF THE STUDY This study is limited to the consumers with in New Delhi city. needs. Hence the study is very important.  This study will help companies to customize the service and product. The market is more aware and realistic about investment and returns from financial products. satisfaction of the .  This study will also help the companies to understand the experience and expectations of the existing customers. 5. the earlier the product or service is introduced ahead of competition. the greater the expected contribution margin. according to the consumer’s need. In this background this study tries to analyze the customer satisfaction towards banking services in general and PNB in particular. organizes and interprets the Quality of service and product offered by banks.

4 OBJECTIVE OF THE STUDY  To have an insight into the attitudes and behaviors of customers. when.5 REASERCH METHODOLOGY A descriptive study tries to discover answers to the questions who. what.  To access the degree of satisfaction of the consumers 5.  To understand consumer’s preferences. It also help banks to know whether the existing products or services the are offering are really satisfying the customers needs. how.  To find out the differences among perceived service and expected service. where.customers regarding the banking services. The researcher attempts to .  To produce an executive service report to upgrade service characteristics. sometimes. 5. and.

not-for-profit and government organizations.describe or define a subject. people. efficiency. This descriptive study is popular in business research because of its versatility across disciplines. cost. . and evaluating. Such studies may involve the collection of data and the creation of a distribution of the number of times the researcher observes a single event or characteristic (the research variable). and adequacy. monitoring. Yet many firms that have such data files do not mine them regularly for the decision-making insight they might provide. In this context. A descriptive study. often by creating a profile of a group of problems. and suppliers already have significant data to conduct descriptive studies using internal information. effectiveness. does not explain why an event has occurred or why the variables interact the way they do. customers. or they may involve relating the interaction of two or more variables. descriptive investigations have a broad appeal to the administrator and policy analyst for planning. Organizations that maintain databases of their employees. however. In for-profit. or events. Descriptive studies may or may not have the potential for drawing powerful inferences. how questions address issues such as quantity.

In sampling technique.6. All the 100 respondents were the customers of different branches of PNB.1 SAMPLE SIZE Sample size denotes the number of elements selected for the study. thus the name convenience. information is collected only from a representative part of . It is a non-probability sample.7 SAMPLING METHOD A sample is a representative part of the population.6 SAMPLE METHOD Convenience sampling method is used for the survey of this project. Example includes informal pools of friends and neighbours or people responding to a newspaper’s invitation for readers to state their position on some public issue. For the present study. This is the least reliable design but normally the cheapest and easiest to conduct .5. 100 respondents were selected at random. 5. 5.In this method Researcher have the freedom to choose whomever they find.

5. Further. The structured questionnaire will reduce both interviewers and interpreters bias. The questionnaires were used as an instrumentation technique. the researcher used questionnaire method. A convenience sampling technique was used to collect data from the respondents. 5. It has been designed as a primary research instrument.9 TYPES OF DATA . So in the present study questions were arranged and interconnected logically. Questionnaires were distributed to respondents and they were asked to answer the questions given in the questionnaire. suggestions and finally to the conclusion about the topic.8 METHOD OF DATA COLLECTION To know the response. The success of the questionnaire method in collecting the information depends largely on proper drafting.the universe and the conclusions are drawn on that basis for the entire universe. coding and analysis was done for each question’s response to reach into findings. because it is an important method of data collection.

Every decision poses unique needs for information. It is a conceptual structure with in which research is conducted. Research design means the framework of study that leads to the collection and analysis of data. they are collected for a particular purpose. A well-structured questionnaire was personally administrated to the selected sample to collect the primary data. PRIMARY DATA Primary data are those collected by the investigator himself for the first time and thus they are original in character. It facilitates smooth sailing of various research operations to make the research as effective as possible. Research is the systematic objective and exhaustive search for and study of facts relevant to the problem. . and relevant strategies can be developed based on the information gathered through research.

on the other hand. . 1. Time Constraints: The time stipulated for the project to be completed is less and thus there are chances that some information might have been left out. Two types of secondary data were collected for the preparation of the project work: Internal Data was generated from company’s brochures. which handicapped the research viz.SECONDARY DATA Secondary data are those. which have already been collected by some other persons for their purpose and published. Secondary data are usually in the shape of finished products. intranet and internet (websites). was generated from magazines. research books. 5.10 LIMITATIONS OF THE STUDY Although the study was carried out with extreme enthusiasm and careful planning there are several limitations. manuals and annual reports External Data.

It was difficult to find respondents as they were busy in their schedule.however due care is taken to include all the relevant information needed. the study had to be carried out based on the availability of respondents. Therefore. 2. 4. 3. Sample size: Due to time constraints the sample size was relatively small and would definitely have been more representative if I had collected information from more respondents. and collection of data was very difficult. some respondents tend to give misleading information. . Accuracy: It is difficult to know if all the respondents gave accurate information.

CHAPTER 6 .

Saving A/Cs 78 78% . NATURE OF ACCOUNTS NUMBER OF RESPONDENTS PERCENTAGE OF RESPONDENTS 1. No.TABLE 6.1 SHARE OF DIFFERENT TYPES OF ACCOUNTS SL.

4. 3. and 9% have Current A/Cs and rest of the respondents have 13% share of other A/Cs in total (which includes fixed deposits. loans. Total Current A/Cs Fixed Deposits Loans Others 9 4 3 6 100 9% 4% 3% 6% 100% Graph .2.6. 5.1 Classification based on nature of A/Cs Saving A/Cs Current A/Cs Fixed Deposits Loans Others Analysis: Above table shows that 78% respondents have Saving A/Cs. . and other products) Interpretation: This means most of the respondents are having Saving A/Cs which means the bank deposits are enriching as Saving A/Cs share is most.

2 SATISFACTION OF RESPONDENTS WITH SERVICES OFFERED BY PNB BRANCH SL. Only 11% of consumers are not satisfied. No. 2.TABLE 6. TOTAL Satisfied Not satisfied 89 11 100 PERCENTAGE OF RESPONDENTS 89% 11% 100 % Graph . of respondents 50 11 0 Satisfied Not satisfied Analysis: From the above table it could be inferred that 89% of the consumers are satisfied with the service and quality of products of their bank.2 Classification based on satisfaction level of respondents 89 100 No. RESPONSE NUMBER OF RESPONDENTS 1. .6.

1.3 RATINGS OF THE SERVICES OFFERED BY THE RESPONDENT’S LIFE INSURANCE COMPANY SL.Interpretation: Most of the respondents are satisfied with the service offered by PNB. 3. RATINGS No. TABLE 6. 2. Customers are getting good service from the bank. 5. Presently the bank offers varieties of services and the customers are getting a good rate of return from their deposits. TOTAL EXCELLENT VERY GOOD GOOD AVERAGE POOR RESPONDENTS 05 09 76 06 04 100 RESPONDENTS 5% 9% 76% 6% 4% 100 % NUMBER OF PERCENTAGE OF . 4.

and 05% of them have rated as excellent and average’ while only 4% have rated as ‘poor’ Interpretation: Service offered by the bank is improving day by day. Banks are providing a good service to the customers due to increased competition in the market.Graph . This may be the reason for more satisfaction TABLE 6. very good and excellent because of the customer service offered by the bank. Majority of the customers rates good.6. 9% of them have rated them as ‘very good’. Returns consumers are getting are also attractive.3 Classification based on Rating of the service offered by PNB branches 645 9 76 EXCELLENT VERY GOOD GOOD AVERAGE POOR Analysis: From this table it could be inferred that 76% of the consumers have rated service offered as ‘good’.4 TABLE SHOWING MOTIVE BEHIND THE SELECTING PNB .

secondly they prefer ‘satisfaction’. and what are the important criteria or factors on which decisionmaking is done. From this table we can infer that consumers give more importance for ‘Brand name’. 2. ATTRIBUTE Brand name Customer service Interest Others Graph .4 M otive behind the Selecting of PNB 60 50 SCORE 56 30 12 2 RANK 1 2 3 4 56 30 12 2 Motives 40 No.6. of 30 respondents 20 10 0 Brand name Customer service Interest Others Analysis: This table show the strengths and weaknesses of the brand. 3. Interpretation: This purely shows that people are now looking forward for better customer service in addition to the brand name in which they are investing and the returns they are getting. and then ‘returns on investment’.NO 1.SL. . 4.

No. 2.TABLE 6. RESPONSES NUMBER OF RESPONDENTS PERCENTAGE OF RESPONDENTS 1.5 CONSUMERS WILLINGNESS TO RECOMMEND THEIR LIFE INSURANCE COMPANY TO OTHERS SL. Recommended Not recommended TOTAL 100 100 % 92 08 92% 8% .

6. So customers are getting good service.5 Classification based on the willingness to recommend PNB branch services to other banks recommended Not recommended Analysis: From this table it can be noted that the majority of consumers (92%) would like to recommend their bank services to others and only 8% of consumers would not like to recommend it to others.Graph .6 . TABLE 6. Interpretation: Since the competition has increased in the field of benefits and service of banking. so that they are willing to recommend their bank services to others.

Interpretation: The reason can be increasing customer satisfaction and quality services offered by the bank. RESPONSES NUMBER OF RESPONDENTS PERCENTAGE OF RESPONDENTS 1. TOTAL Shift Doesn’t shift 8 92 100 8% 92% 100 % Graph . . 2.6. No.CONSUMERS WILLINGNESS TO SHIFT THEIR A/Cs TO OTHER BANKS SL.6 Classification based on the willingness of respondents to shift their A/Cs to other banks Shift Doesn't shift Analysis: From this table it can be noted that the majority of consumers (92%) doesn’t like to shift their A/Cs to other banks.

CHAPTER 7 .

consumers respond at different rates. . Hence I PNB should try to bring their new product and services to the attention of potential early adopters. depending on the consumer’s characteristics.SUGGESTIONS & RECOMMENDATIONS With regard to banking products and services.

 Return on investment company reputation and premium outflow are most preferred attributes that are expected by the respondents.  PNB should ask for their consumer feedback to know whether the consumers are really satisfied or dissatisfied with the service and product of the bank. Hence greater focus should be given to these attributes. PNB should adopt better strategies to attract more customers. . then the reasons for dissatisfaction should be found out and should be corrected in future. If they are dissatisfied.  The PNB brand name has earned a lot of goodwill and enjoys high brand equity. Due to the intense competition in the financial market.  PNB should adopt effective promotional strategies to increase the awareness level among the consumers. PNB should work hard to maintain its position and offer better service and products to consumers. only the customers will be satisfied. As there is intense competition.  The bank should try to increase the Brand image through performance and service then.

 Majority of the people find banking important in their life. so PNB should employ the strategies to convert the want in to need which will enrich their business. .

CHAPTER 8 CONCLUSION: .

The project entitled “A STUDY TO UNDERSTAND THE CUSTOMER SATISFACTION AT PNB” has helped me in studying satisfaction about services and products offered to consumers. I am sure the bank has a very bright future to look forward to and will be a trailblazer in its own right. In short. I would like to say that the very act of the concerned management at PNB in giving me the job of critically examining consumer satisfaction towards financial products and services of the company is a step in their continual mission of making all round improvements as a means of progress. . Yet. PNB is far behind SBI. private banks are in the fray each one trying to cover more market share than the other. PNB must also be alert what with Private Banks (ICICI. Since the opening up of the banking sector. which I hope will take them miles ahead of competition. I am sure the bank will find my findings relevant and I sincerely hope it uses my suggestions enlisted. HDFC) breathing down its neck.

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