SYNOPSIS OF THE FINAL RESEARCH PROJECT ON THE TOPIC

COMPARATIVE ANALYSIS
OF
PUBLIC SECTOR BANKS
&
PRIVATE SECTOR BANKS
IN
DEHRADUN

SUBMITTED BY:
UPASANA JAIN
BBA-6TH (FINANCE)
INTRODUCTION:
The economic reforms in India started in early 90’s but their outcome is
remarkably new. Major changes took place in the functioning of Banks in India
only after liberalisation. Due to reform in 90’s the depth and width of financial
system in India has improved.

Though the role of banks as financial intermediaries has reduced gradually,

market share of banks continues to remain the largest in the financial market.
Increased competition, new information technologies and there by declining
processing costs, the erosion of product and graphic boundaries and less
restrictive governmental regulations have all played a major role for public
sector banks in India to forcefully compete with private sector banks.

For last 5 years, several agencies in India started comparing the working of
industries, B-schools, banks, etc on their performance over the past, through
surveys. This sometimes gives a feel that pushing a person into waves who have
not learnt about swimming and asking him to compete with the other
professional swimmers, keeping this point in mind, the authors have taken the
survey result on banks over a period of time and compared Indian public sector
bank among themselves as a closed model and later with other banks as open
market using various statistical techniques like cluster analysis.

This article deals with clustering the banks during the period of study and then
finding out the common feature of these clusters. The research also focuses on
the factors that made the banks moving from one cluster to another.
REVIEW OF LITERATURE:
The main sources of literature for this study are the questionnaires being
prepared and the analysis done previously by different financial analysts. These
analyses were done on a large scale but they gave fair idea regarding the
situation which prevailed in a small city like Dehradun. Few of the excerpts of
these previous analyses are as follows:

Das (1999) compares performance among public sector banks for

three years in the post reform period: 1992,1995 and 1998. He finds a certain
convergence in performance. He also noted that while there is a welcome
increase in the non-interest income, banks have tended to show risk-averse
behaviour by opting for risk-free investments over risky loans.

Das (1997) analyses overall efficiency-technical, allocative and

scale- at PSB’s. During 1990-96, the study found a decline in overall efficiency.
This occurred because there was a decline in technical efficiency, both pure and
scale which was not offset by an improvement in the allocative efficiency. The
study, however, points out that the deterioration in technical efficiency was
mainly on account of four nationalised banks.

They found that, in the comparison between private banks and PSB’s, there was
only a weak ownership effect. Traded private banks were superior to PSBs with
respect to profitability measures. Non-traded private banks did not significantly
differ from PSBs in respect of either profitability or efficiency.
RESEARCH METHODOLOGY:
 OBJECTIVE OF THE STUDY:

The project is to develop an insight into the challenges and new trends
faced by the banking industry.

1. To understand the challenges experienced in the banking sector.

2. To identify new trends in banking industry.
3. To compare the performance of public and private sector banks.
4. To suggest measure to enhance comparative competitive
efficiency in banks.

 SOURCES OF DATA:
1. Primary Sources: Interview of employees working in State Bank of
India with the help questionnaire.
2. Secondary Sources: Books on managing change, journals,
magazines, case studies, internet.

 SAMPLE SIZE:
The sample is of about 50 employees and customers who are benefitted
by the schemes and services provided by the bank.