Osmania Degree College for (W),Knl ANDHRA BANK

INTRODUCTION

Commercial Banks play an important role in the economy by financing the

requirements of trade, industry and agriculture in the country. They draw the community

savings into the organized sector which are then allocated among the different

economic activities according to the priorities laid down by the authorities i.e. RBI and

Government of lndia.

The recognition of the potential of the banking system to promote larger

economic objectives such as growth and distributive jusiici: led LO the nationalization of

banks. The emergence of public hector in the Indian Banking Scene began with the

nationalization of the Imperial bank of India and it was renamed as State Bank of lndia

in 1955. July 19. 1969, marks an important milestone in the history of the Indian

banking as on that day, 14 major Indian Commercial Banks, each having total deposits

of not less than Rs.50 crores at the end of June 1969 were nationalized. Another major

development in the sphere of commercial banking was the nationali~ation on April IS,

1980 of six more banks in the private sector having total deposits of not less than Rs.

200 crores in India on March 14, 1980. Among public sector banks, the evolution of

Andhra Bank, its achievement, operations, functioning and progress are discussed in

this chapter.

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Osmania Degree College for (W),Knl ANDHRA BANK

PROFILE :

The Profile of Andhra Bank

“Andhra Bank" was founded by the eminent freedom fighter and a

multifaceted genius, Dr.Bhogaraju Pattabhi Sitaramayya. The Bank was
registered on 20th November 1923 and commenced business on 28th November
1923 with a paid up capital of Rs 1.00 lakh and an authorised capital of Rs 10.00
lakhs.
The bank introduced many innovative schemes for the development of
banking and to provide customer services at the doorstep. Though, the bank has
established its staff college in 1973, the banking function was given emphasis
only after the nationalization.
The major Developments in the History of Andhra
Bank 1980
 The Bank has been nationalized on 15th April. Consequent to the taking
over of the undertaking of Andhra Bank, Ltd. It is a Government of India
undertaking. The Bank transacts general banking business of all kinds
including foreign exchange.
1981
 Andhra Bank is a pioneer in introducing Credit cards in the country.

1983
 In March the Bank sponsored its second RRB Chaitanya Grameena Bank in
Guntur district.

2001
 Andhra Bank has tied up with a real estate portal - indiaproperties.com, to
provide housing loans through the Internet.
 Andhra Bank has announced that it has entered into a rupee drawing
arrangement with the National Exchange Company, WLL, Doha, Qatar, for
facilitating private remittances to India, mainly on behalf of non resident
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Osmania Degree College for (W),Knl ANDHRA BANK
Indians (NRIs).
 The credit card division of Andhra Bank will market cards with additional
features -- such as the rollover facility -- to its account-holders, though it will
not fight shy of issuing cards to non-account holders too
2002
 Andhra Bank mainly focused on Retail lending and personal banking.
 Andhra Bank signed Memorandum of Understanding with United India
Insurance Co. Ltd., and it would provide its products through various
branches.
 Andhra Bank has started its online ATM service
 Bank has entered into an alliance with Western Union Financial Services
International, so as to make available inbound money transfer services at
all its locations in India.
2003
 Andhra Bank takes position in Top 1000 banks of the world, as its
Operating profit zoomed 77%.
 Andhra Bank, venturing on its major IT initiative plans has sanctioned
Rs.69cr
 Bank has appointed 71 agriculture graduates from different universities as Rural
Development Officers (RDO), to soar its rural credit.

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Osmania Degree College for (W),Knl ANDHRA BANK

EVOLUTION OF ANDHHA BANK

Andhra Bank has a historical and patriotic background. It was an offshoot of

National Movement and was founded by Dr. Bhogaraju Pattabhi Sitaramaiah, an ardent

freedom fighter of the country. It was registered on 20" November, 1923 at

Machilipatnam, a port town in coastal Andhra Pradesh, with a paid up capital of Rs. I

lakh and authorized capital of Rs. 10 lakh, which were raised to Rs. 25 lakh and Rs. I

crore respectively by 1946. It was the first commercial bank established in Andhra

Pradesh. Dr. Pattabi was the Managing Director of the Bank since its inception in 1923

to 193 1 and continued to be a director till 1941. He also started Bharata Lakshmi Bank,

a second one in Andhra Pradesh, which was merged with the Andhra Bank in 1964.

In spite of some difficulties faced during the Second World War, the bank moved

forward and steadily sailed towards progress and stabilization. The Bank attained the

status of scheduled bank in 1943. The Bank stepped out of Andhra Pradesh for the first

time in February 1945 by opening a branch at Madras. The central ofice was shifted

from Machilipatnam to Hyderabad in 1963.

With the nationalization of 14 major banks in July 1969, Andhra Bank remained

as the largest hank among the non-nationalised banks. It maintained this position of No.

1 in the Private Sector Banks throughout till it was nationalized on 1 51h April 1980

along with five more banks'. The Bank was assigned the Lead role in five districts,

namely, Srikakulam, East and West Godavari. Guntur in Andhra Pradesh and Gunjam

in Orissa even before its nationalization. The Bank took up the financing of Small Scale

Industries, agriculture, foreign trade, and weaker sections on a massive scale. For the
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Osmania Degree College for (W),Knl ANDHRA BANK

benefit of farmers, the bank introduced Kisan Card. To render more help to the people

in rural areas, a number of Rural Credit Branches were opened besides sponsoring a

number of Farmers' Service Co-operative Societies.

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Osmania Degree College for (W),Knl ANDHRA BANK

LIMITATION

AB INFI-net INTERNET BANKING '

TERMS AND CONDITIONS

The words I/We, Me/Us, My/Our. Customer refers to the person(s) who open the
account(s) and shall mean and include both singular and plural.

I agree to abide by the Bank's Terms and Conditions and rules in force and the
changes in Terms and Conditions from time to time relating to my account.

I agree that the opening and maintenance of the account is subject to rules and
regulations introduced or amended from time to time by Reserve Bank of India.

I agree that the Bank can, at its sole discretion, withdraw any of the services/facilities
given in my account either wholly or partially at any time without giving me any notice.

I agree that any change in my account status or change of address will be immediately
informed to the Bank.

I agree to preserve my cheque book / ATM/Debit card/related PINs/Login user-

ids/passwords etc. carefully. In case of loss/theft of the same I shall immediately inform
the Bank in writing

I agree that I shall be liable to pay all charges, fees, interest, costs wherever applicable,
which the Bank in its absolute discretion may levy with respect to my account or any
transaction and the same may be recovered by the Bank by a debit to my account.

I agree that the Bank will send me communications/letters/cheque books/etc. through

courier / messenger/mail or through any other mode at its discretion and the Bank shall
not be liable for any loss or delay arising there from.

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Osmania Degree College for (W),Knl ANDHRA BANK

I agree that the Cheque Books, AB INFI-net Internet Banking PINs, Debit / ATM Cards
& Pins will be dispatched by courier (or any other mode at the Bank's discretion) at my
risk and consequence. I shall not hold the Bank liable in any manner what so ever in
respect of such dispatch of these items.

I agree and undertake to ensure that there would be sufficient funds/cleared

balance/pre-arranged credit facilities in my account for effecting transactions. I agree
that the Bank shall not be liable for any consequences arising out of noncompliance by
the Bank of my instructions due to inadequacy of funds and the Bank can at its sole
discretion decide to carry out the instructions notwithstanding the inadequacy of funds.
The Bank may do the aforesaid without prior approval from or notice to me and I shall
be liable to repay the resulting advance, overdraft or credit thereby created with interest
at monthly rests.

I agree that the Bank shall not be liable for any damages, losses (direct or indirect)
whatsoever, due to disruption or non availability of any of services/facility/s due to
technical fault/error or any failure in communication network /other networks.
I agree that the Bank may disclose customer information, in strict confidence, to any of
its agent/s and/or contractors with whom the Bank enters or has entered into any
arrangement in connection with providing of services.

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Osmania Degree College for (W),Knl ANDHRA BANK

OBJECTIVES OF ANDHRA BANK

The main aim of the bank is to become a trustworthy, efficient and strong bank.

Andhra Bank is increasing its share of the market by introducing best services that are

customer-focused. It also takes every step to improve the creative talents of its staff

members in using leveraging technology in such a way that clientele is expanded

thereby offering value-added and quality service to customers. The main objective of

Andhra Bank includes positioning itself in the financial horizon as a rising star, to create

all types of possibilities to achieve its objectives, to empower and to dynamically locate

people, fast-cycle knowledge into innovative products and to improve the capabilities of

its staff members in such a way that customers are served properly.'

1923 - Establishment of the Bank

1943 - Bank attained the status of a Scheduled Bank

1945 - Opened first branch outside Andhra Pradesh in Chennai, Tamil Nadu

1964 - Amalgamation of Bharat Lakshmi Bank with the Bank

1969 - Lead Bank role in 4 districts of Andhra Pradesh and 1 district in Orissa State

1980 - Nationalisation of the Bank

198 1 - Introduction of Credit Cards by the Bank

1993 - First totally computerised branch opened at RP Road branch, Secunderabad

1998 - Bank was granted functional autonomy by the GO1

1999 - Deposits oi'thc Bank surpassed Rs.1000.00 million 2001 - Initial Public Offering

of the Bank

2002 - Launching of network ATMs

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Osmania Degree College for (W),Knl ANDHRA BANK

2003 - Achieved 100% branch computerization and ABHFL merged with the Bank

2006 - Bank for the first time, organized Bancon - Annual Bankers' conference at

Hyderabad in association with IBA

2008 - Andhra Bank along w~th Bank of Baroda and Legal and General Group PLC of

U.K., have floated a Joint Venture Life Insurance Co.

2009 - Total business of the Bank rcachcd to Us

2010 - Andhra Bank has emerged as BhST BANK MID-SIZE , with Rank 1

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Osmania Degree College for (W),Knl ANDHRA BANK

Summary of Findings, Conclusion and

Suggestions

All organizations learn, whether they consciously choose to or not - it is a

fundamental requirement for their sustained existence. Some firms deliberately advance

organizational learning, development capabilities that are consistent with their objectives:

others make no focused effort and, therefore, acquire habits that are counterproductive.

Nonetheless, all organizations learn.

But what does it mean that an organization learns? We can think of organizational

learning as a metaphor derived from our understanding of individual learning. In fact,

organizations ultimately learn via their individual members. Hence, theories of individual

learning are crucial for understanding organizational learning. Psychologists have studied

individual learning for decades, but they are still far from fully understanding the

workings of the human mind. Likewise, the theory of organizational learning is still in its

embryonic stage.

Although interest in organizational learning has grown dramatically in recent

years, a general theory of organizational learning has remained elusive. The study tries

to identify the renewal of the overall enterprise as the underlying phenomenon of

interest and organizational learning as a principal means to this end. With this

perspective it is tried to develop a framework for the process of organizational learning,

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Osmania Degree College for (W),Knl ANDHRA BANK
presenting organizational learning as four processes—intuiting, interpreting, integrating,

and institutionalizing—linking the individual, group, and organizational levels.

Occupation, Monthly Income, Name of the bank and Type of Account, Five variables

viz.. Gender, Education, Occupation, Income and Name of the bank out of seven

contributed significantly to the equation at 5% level.

Summary of Findings and Suggestions Findings

The Information Technology practices are divided into four categories in the

public sector banks viz, ATM Services, Phone banking (inclusive of Mobile Banking),

Internet banking and branch banking.

1. Security: With regard to security dimension, Canara bank respondents and IDBI bank

respondents, who are having the bank account in these two banks felt more secure than

the remaining banks followed by State bank of India, which reveals that their opinion on

security aspect is above average level. With the security concern these two categories

respondents are happy with their bank provisions.

Usability: The average opinion score of State bank of India and Corporation Bank on

usability dimension is more or less unanimous, followed by Andhra Bank but the

difference in the opinion scores of all the banks are statistically significant and differ at

five percent level.

3. Data Manipulation: The Average opinion score of self employee respondents is

significantly higher than the remaining categories of the occupation on data

manipulation dimension and the opinion score on this data manipulation is greater

than average level i.e., self employees have much knowledge in Data Manipulation
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Osmania Degree College for (W),Knl ANDHRA BANK
when compare to the remaining categories of the customers. The students and

private employees average score is equal with zero standard deviation.

4. User interface: The education of the customer plays a vital role in the dimension of

user Interface, as the opinion of the customer varied with their education as per the

AN OVA test results at five percent level.

5. Services flexibility: The student category customers and private

employees are more optimistic in the aspect of service flexibility

followed by government employees and self employees and the

difference in these scores are statistically significant.

Suggestions :

• Andhra Bank, SBI, Coiporation Bank and Syndicate Banks have to address their

security' issue and improve it to the satisfaction of customers. Syndicate Bank,

Canara Bank and IDBI Banks are suggested to make better the usability of their

IT services.

• Speed and accuracy of data manipulation should be picked up to facilitate all types

of customers satisfaction in public sector banks and expedite the process of data

entry, retrieval etc. User interface must be simplified to an extent where in all

categories of customers can easily operate.

• Services support should be extended to all categories of employees especially private

and self employees and service flexibility must be made flexible to reach out the

students and of all age group categories.

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Osmania Degree College for (W),Knl ANDHRA BANK
• Corporation bank and IDBI banks have to expedite their process of automated

clearances sans any server slowdowns and breakdowns. Syndicate bank and

Canara banks have to develop their automated teller machine services.

• IDBI bank, Andhra bank and Syndicate banks have to streamline their Internet

Banking activities to reach out for internet using customers. All banks except

Andhra bank and SBI have to enhance their mobile banking services.

• Except Canara bank all banks IT banking services have to expand and increase

the operating efficiency and usability. There is significantly low usage of prepaid

instruments of all banks except Andhra bank and SBI, hence these public sector

banks should encourage and advance the usage of prepaid instruments.

Conclusions :

The research made a fundamental contribution in three areas: (1) Identifying the

customers predilection towards IT services of Indian public sector banks (2)

Understanding the IT individual learning of the employees of public sector banks (3) IT

organizational learning of public sector banks.

Public sector banks are maintaining necessary security to maintain

confidentiality, reliability, accuracy etc. to the satisfaction of customers.

Respective P-values reveal that there is a significant difference in the opinion of

the respondents on services support among the mentioned categories.

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Osmania Degree College for (W),Knl ANDHRA BANK

DATA ANALYSIS :

They respondents were asked regarding the Bank that they prefer the most

BANK PREFERRED NO. OF RESPONDENTS

Good 30
Excellent 50
Average 15
Poor 10

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Osmania Degree College for (W),Knl ANDHRA BANK
QUESTIONNAIRE :

1. Which category of the banks do you consider as most technologically advanced?

A. Public sector bank B. Private sector bank

2. Which attribute of the bank do you value the most?

A. Quality of Service B. Technology used C. Trust D. Location E.

Type of the bank

3. Which factor promotes you to use the new techniques in banking? ( Tick all that are

applicable )

A. Reduced time of transactions B. Cost effectiveness

C. Ease of use D. Technology savvy

4. How familiar are you with computer usage level of your bank?

A. No knowledge of computer B. Beginner

C. Average knowledge D.Advanced computer knowledge E.

Expert

5. Customer level of usage of technology ( Tick all that are applicable to you )

A. Connected to the Internet at home or work to do their financial transactions

B. Uses E – mail C. ATM / Debit card service

D. Credit card service E. Online banking services F. E – payments

G. Electronic Fund Transfer (EFTs)/NEFT/RTGS

6. How frequently do you use the following banking services per month? Nil 1to3 3to 8

8to 12 over 12 times times times times

A. Branch Banking B. ATM

C. Internet Banking D. Tele Phone banking E. Mobile banking

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Osmania Degree College for (W),Knl ANDHRA BANK

1. Approximately how many people visit your bank web site per day?

A. Less than 1000 B. 1000 to 5000

C. Above 5000 D. Others (Please specify)____________

2. How long has your bank been providing Internet Banking?

A. Less than a year B. 1 to 5 years

C. More than 5 years D. ________________

3. How frequently do you update your website?

A. Daily B. Weekly

C. Monthly D. More than once in a month for every update

4. What was the reason behind introduction of internet banking?

A. Because of competition from foreign banks

B. Man power shortage C. Qualitative customer service

D. Faster transactions & Time saving E. Any other (Please specify)

_____________________

5. How do you make your potential customer aware of your location on the Net?

A. Advertising on the Net B. News media

C. Banks publications D. Any other (Please

specify)_____________________

6. Relative importance of factors determining provision of electronic banking

A. Vision of the future B. Prediction of customer acceptance

C. Organisational culture of innovation

D. Market share or strength of organization

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