Publicprvtbanks 25 M 22

See discussions, stats, and author profiles for this publication at: https://www.researchgate.
net/publication/333995126
A Comparative Study on Nationalized and Private Sector Banks in Kanchipuram,

in the Context of Economic Meltdown
Conference Paper · January 2010
CITATION READS
1 5,825
3 authors, including:
Sankararaman Ganapathyraman
REC
28 PUBLICATIONS 18 CITATIONS
SEE PROFILE
Some of the authors of this publication are also working on these related projects:
Stock Market Analysis View project
Civid 19 View project
All content following this page was uploaded by Sankararaman Ganapathyraman on 25 June 2019.
The user has requested enhancement of the downloaded file.

1446 ATHENAEUM–2010
A Comparative Study on Nationalized and

Private Sector Banks in Kanchipuram, in
the Context of Economic Meltdown
G. Sankararaman, R. Panneer1 and T.S. Vembu2
Department of Management Studies, Rajalakshmi Engineering College,
Chennai
1
Department of Business Administration, Sri Sankara Arts & Science College,
Kanchipuram
2
Department of Commerce, DG Vaishnav College, Chennai
ABSTRACT
The economic prosperity of a country is greatly influenced by various
factors like the operational efficiency, productivity and financial performance
of industrial sector, efficiency and varieties of services in service sector. The
real strength of economy lies on service sector and banking sector in
particular. The banking and finance sector has witnessed a major setback
across the globe in recent days in terms of their financial performance.
India, a fast growing economy is not an exception to the agony of recession.

However, the effective and timely prescriptions like Financial Stimulus
Packages taken by Reserve Bank of India and Ministry of Finance saved
the Indian Economy and Banking sector from the meltdown shock and
repercussion. Due to these measures taken by RBI the Indian Banking
Companies have considerably performed well in the present meltdown
scenario. It is also evidenced that almost all the banking companies in India
have positive figures in the fourth quarter of financial year 2008-09.
In this context an attempt was made to study the performance of

nationalized and private sector banks through the opinion survey of
customers of various banks to measure the impact and valence of
economic meltdown in Kanchipuram Town. A structured Interview Schedule
was administered among Account holders of the various banks during
January to July 2009. Since the population size is large, convenience
sampling was adopted.
A Comparative Study on Nationalized and Private Sector Banks in Kanchipuram… 1447
Expected research deliverable in the study is, Government Initiative as a

panacea to tackle the meltdown through banks really worked out or not.
Keywords: RBI Initiative, Financial Stimulus Packages, Nationalized Bank

and Private Sector Banks
INTRODUCTION
Indian banking system, over the years has gone through various phases after
establishment of Reserve Bank of India in 1935 during the British rule, to
function as Central Bank of the country. Earlier to creation of RBI, the central
bank functions were being looked after by the Imperial Bank of India. With
the 5-year plan having acquired an important place after the independence, the
Govt. felt that the private banks may not extend the kind of cooperation in
providing credit support, the economy may need. In 1954 the All India Rural
Credit Survey Committee submitted its report recommending creation of a
strong, integrated, State-sponsored, State-partnered commercial banking
institution with an effective machinery of branches spread all over the
country. The recommendations of this committee led to establishment of first
Public Sector Bank in the name of State Bank of India on July 01, 1955 by
acquiring the substantial part of share capital by RBI, of the then Imperial
Bank of India. Similarly during 1956-59, as a result of re-organisation of
princely States, the associate banks came into fold of public sector banking.
Banking and financial services, construction, health and air transport services
are sectors where the policy regime is moderately liberal. In the Banking and
other financial services (except insurance) FDI is permitted up to 49%.
However foreign branches can operate only as licensed branches or
subsidiaries. Limitations are there with respect to number of annual branch
licenses (12 per year). Moreover voting rights of the foreign shareholders are
restricted to 10%. At present there are 18 branches operating in India. Now
FDI has reached $1.25 billion in the year 2002. The Indian Banking market
has been opened fully in the year 2009. The foreign banks can hold 74% of
equity in their banks in India from 2009. Remaining 26% has to be offered to
the Indian General Public. The foreign banks can acquire the Indian private
banks, which are identified by the RBI from time to time as per the GATS
guidelines. The present foreign stack is 7% in total banking assets in India.
NEED FOR THE STUDY

The entire world has seen the dramatic effects of meltdown of economy. For
the meltdown India is also not an exemption. In this context the expects say
that the only sector which is not affected by melt down is Banking sector
The Expects further feel that the nationalized banks are the organizations
which are less affected compared to other sectors of the economy .In fact
almost all the nationalized banks have shown good performance in the 4th
quarter in this financial year (2008-2009).Therefore to study and explore this
comment, the study is under taken and the performance of nationalized banks
are compared with private sector banks based on customer opinion in
Kanchipuram town.
Customer satisfaction represents a modern approach for quality in enterprises

and organisations and serves the development of a truly customer-focused
management and culture. Measuring customer satisfaction offers an
immediate, meaningful and objective feedback about clients’ preferences and
expectations.
In this way, bank’s performance may be evaluated in relation to a set of

satisfaction dimensions that indicate the strong and the weak points of a
business organisation. This paper presents an original customer satisfaction
survey in the private bank sector.
BANK NATIONALISATION AND PUBLIC SECTOR BANKING

Organised banking in India is more than two centuries old. Till 1935 all the
banks were in private sector and were set up by individuals and/or industrial
houses which collected deposits from individuals and used them for their own
purposes. In the absence of any regulatory framework, these private owners of
banks were at liberty to use the funds in any manner, they deemed appropriate
and resultantly, the bank failures were frequent.
Move towards State ownership of banks started with the nationalisation of

RBI and passing of Banking Companies Act 1949. On the recommendations
of All India Rural Credit Survey Committee, SBI Act was enacted in 1955
and Imperial Bank of India was transferred to SBI. Similarly, the conversion
of 8 State-owned banks (State Bank of Bikaner and State Bank of Jaipur were
two separate banks earlier and merged) into subsidiaries (now associates) of
SBI during 1959 took place. During 1968 the scheme of ‘social control’ was
introduced, which was closely followed by nationalisation of 14 major banks
in 1969 and another six in 1980.
Keeping in view the objectives of nationalisation, PSBs undertook expansion

of reach and services. Resultantly the number of branches increased 7 fold
(from 8321 to more than 60000 out of which 58% in rural areas) and no. of
people served per branch office came down from 65000 in 1969 to 10000.
Much of this expansion has taken place in rural and semi-urban areas. The
expansion is significant in terms of geographical distribution. States neglected
by private banks before 1969 have a vast network of public sector banks. The
PSBs including RRBs, account for 93% of bank offices and 87% of banking
system deposits.
In the early 1990s, the then Narsimha Rao government embarked on a policy
of liberalization, licensing a small number of private banks. These came to be
known as New Generation tech-savvy banks, and included Global Trust Bank
(the first of such new generation banks to be set up), which later amalgamated
with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI
Bank and HDFC Bank. This move, along with the rapid growth in the
economy of India, revitalized the banking sector in India, which has seen
rapid growth with strong contribution from all the three sectors of banks,
namely, government banks, private banks and foreign banks.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to

increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%.
This is the first time an investor has been allowed to hold more than 5% in a
private sector bank since the RBI announced norms in 2005 that any stake
exceeding 5% in the private sector banks would need to be vetted by them.
Currently (2007), banking in India is generally fairly mature in terms of

supply, product range and reach-even though reach in rural India still remains
a challenge for the private sector and foreign banks. In terms of quality of
assets and capital adequacy, Indian banks are considered to have clean, strong
and transparent balance sheets relative to other banks in comparable
economies in its region. The Reserve Bank of India is an autonomous body,
with minimal pressure from the government. 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.
OBJECTIVES OF THE STUDY

The study has the following objectives
1. To conduct a detailed comparative study on customer satisfaction with
respect to public and private sector banks in Kanchipuram town.
2. To identify the opinion of the respondents on the features of the bank and
to rate the banks by their services to customers.
3. To know the opinion of respondents on how they get the information
from the bank and its correctness.
4. To assess the feeling of the feeling of the respondents about the treatment
and care been given by the bank.
5. To understand the respondents’ viewpoint about ATM, Internet services
and the charges levied by the bank for various reasons.
6. To identify the opinion and confidence level of the respondents’ on the
performance of the bank.
7. To rank the various banks based on the opinions of the customers
REVIEW OF LITERATURE
Evangelia Blery and Michalis Michalakopoulos 1 in their article titled
“Customer relationship management: A case study of a Greek bank” discuss
that Today, banks are facing an aggressive competition and they have to make
efforts to survive in a competitive and uncertain market place. Banks have
realised that managing customer relationships is a very important factor for
their success.Customer relationship management (CRM) is a strategy that can
help them to build long-lasting relationshipswith their customers and increase

their profi ts through the right management system and the application of
customer-focused strategies. CRM in the banking sector is of strategic
importance. In this study, a single descriptive case study of one major Greek
bank that has implemented CRM is presented. The aim of this study is to
analyse the design and implementation of CRM in the bank, identify the
benefi ts, the problems, as well as the success and failure factors of the
implementation and develop a better understanding of CRM impact on
banking competitiveness as well as provide a greater understanding of what
constitutes good CRM practices.
K.S. Srinivasa Rao and Chowdari Prasad 2, in their paper “Can Public Sector
Banks Compete with Foreign / Private Banks? A Statistical Analysis”, say
that the economic reforms in India started in early nineties, but their outcome
is visible now. Major changes took place in the functioning of Banks in India
only after liberalization. Due to reforms in the 1990s, the depth and width of
financial system in India has improved. Though role of banks as financial
intermediaries has reduced gradually, market share of banks continues to
remain the largest in the financial market (CRIS INFAC Banking Annual
Review: August, 2002). Increased competition, new information technologies
and thereby declining processing costs, the erosion of product and geographic
boundaries, and less restrictive governmental regulations have all played a
major role for Public Sector Banks in India to forcefully compete with Private
and Foreign Banks.
Richa Sharma Vyas and Nijaguna Rudrayya Bhusnur Math 3, in their paper
“A comparative study of cross-selling practices in public and private sector
banks in India”, trace that the differences emerge mainly from their different
philosophy, background and distinct target customer segments. However, both
sectors can learn from each other; public sector banks can introduce
specialised training and incentives, whereas private sector banks need to
introduce appropriate control mechanisms and avoid indiscriminate cross-
selling. The paper also brings out the elements of successful cross-selling in
India.
Rengasamy Elango and Vijaya Kumar Gudep 4, in their paper “A

Comparative Study on the Service Quality and Customer Satisfaction Among
Private, Public and Foreign Banks” focused on the service quality and
customer satisfaction among the private, public and foreign banks in India. An
analysis is carried out to examine the level of awareness among customers and
to identify the best sector which provides qualitative customer service. This
becomes relevant in the context of recommendations of various committees
constituted by the Government of India and the RBI, from time to time, to
suggest measures to improve customer service systems of the public sector
commercial banks of India. The results indicate that the level of awareness
among the customers improved significantly during the study period. This has
larger implications on the public sector commercial banks in India with
respect to customer service delivery aspects. It is high time the public sector
commercial banks made efforts to revamp their approach towards customers,
so as to perform better and derive competitive advantage in the long run.
R.A. Ravi 5 in his article “User Perception of Retail Banking Services: A

Comparative Study of Public and Private Sector Banks” describes that due to
increasing competition in retail banking, understanding the customer
perception about service quality is becoming indispensable. 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.
This is reflected by the increasing market share and better profitability of
private banks in comparison to that of public sector banks. At the same time,
public sector banks have also responded to the challenges posed by the private
sector banks through conscious efforts to enhance their service quality. This
study compares public sector banks and private sector banks in terms of user
perception of their retail banking services
RESEARCH METHODOLOGY
In this study the researchers have adopted descriptive research design. The
sampling method adopted was non probabilistic convenience sampling. The
researchers have collected 165 samples in the Chennai city, but found that 15
questionnaires were incomplete in certain questions so finally 150 samples
were taken for analysis. A self administered questionnaire was used to collect
data from the customers who have account in Banks. Percentile analysis,
Rank Correlation, Chi – Square tests and ANOVA were carried out in the
research to analyse the collected data.
Period of Study
The study was conducted in the year 2009 for a period of four months from
January to April.
Analysis and Interpretation
Table 1: Opinion on the special Features of the Bank

Features of the Bank
Name of Unlimited No. Auto
the Bank Zero Interest Reduction
of Sweep Total
Balance Rates Bank Rates
Withdrawals Facility
SBI 5 4 4 2 0 15
Indian
5 4 5 0 1 15
Bank
IOB 3 5 5 2 0 15
Canara
4 7 1 2 1 15
Bank
PNB 6 5 2 1 1 15
ICICI
2 8 3 1 1 15
Bank
HDFC
5 5 2 2 1 15
Bank
AXIS
2 9 2 1 1 15
Bank
TMB 1 2 11 1 0 15
KVB 3 6 1 0 5 15
Total 36 55 37 12 10 150
Inference
The opinion about the banks may vary when the customers are enjoying
different services. The expectations of the rural and second line city customers
may not be as the urban customers. Based on the facilities enjoyed most of the
customers are comfortable with the nationalized banks by considering
facilities like unlimited number of withdrawals, interest rates etc among the
Nationalized banks PNB is gets the first position followed by SBI ., while
they are happy with the private banks in availing the modern facilities like
zero balance, auto sweep facility etc. Amongst the private sector banks ICICI
bank is placed in first position followed by Axis bank.
Table 2: Opinion on Sources of Information about the Bank

Opinion on Sources of Information about the Bank
Name By
of the Visiting SMS/ Postal Through
Bank Internet Total
the Phone Communication Representatives
Branch
SBI 9 2 3 0 1 15
Indian 7 1 2 2 3
15
Bank
IOB 10 1 1 3 0 15
Canara 10 2 2 1 0
15
Bank
PNB 10 1 1 1 2 15
ICICI 2 2 5 3 3
15
Bank
HDFC 6 2 3 2 2
15
Bank
AXIS 5 3 2 1 4
15
Bank
TMB 7 5 0 2 1 15
KVB 9 1 1 2 2 15
Total 75 20 20 17 18 150
Opinion on Sources of Information
12
No. of Respondents
10 By Visiting the Branch

8 SMS/ Phone
6 Internet
4 Postal Communication
2 Through Representatives
0
B
na OB
B
I
B
SB
nk
FC k
nk
nk
AX nk
TM
PN
KV
a n
Ba
I
Ba
Ba
Ba
IB
IS
ra
ian
IC
IC
Ind
HD
Ca
Name of the Bank
Inference
Most of the nationalized banks provide information only when the customers
contact the branch personally, while most of the private banks use modern
methods like sms, internet and representatives to pass the information to their
customers.
Table 3: Opinion on the prompt and correctness of information

Prompt and Correct Information
Name of the
Timely and Not Irrelevant Total
Bank Periodically
Reliable Regular sometimes
SBI 2 4 6 3 15
Indian Bank 7 2 4 2 15
IOB 7 3 4 1 15
Canara Bank 2 7 4 2 15
PNB 3 5 4 3 15
ICICI Bank 6 5 3 1 15
HDFC Bank 4 4 5 2 15
AXIS Bank 2 6 4 3 15
TMB 6 5 3 1 15
KVB 3 2 5 5 15
Total 42 43 42 23 150
Prompt and correctness of Information
10
No. of Respondents
8 Timely and Reliable

6 Periodically
4 Not Regular
2 Irrelavant sometimes
0
B
ra B
IC B
ian SBI
B
nk
FC nk
nk
nk
IS k
TM
na IO
IC PN
KV
AX an
HD I Ba
Ba
Ba
Ba
B
Ind
Ca
Bank
Inference
Excepting one or two banks almost all banks are providing the reliable and
correct information to their customers. Indian bank and IOB are sharing the
first place based on reliability while Axis bank is ranked first based on
periodical information.
Table 4: Opinion on the bank’s treatment of the Customer

Care by the bank
Name of the
Treated Like Fair and Equal No Importance Total
Bank
VIP Treatment Given
SBI 2 10 3 15
Indian Bank 1 13 1 15
IOB 2 5 8 15
Canara Bank 1 12 2 15
PNB 2 11 2 15
ICICI Bank 6 9 0 15
HDFC Bank 7 7 1 15
AXIS Bank 6 8 1 15
TMB 8 5 2 15
KVB 6 7 2 15
Total 41 87 22 150
Care by the Bank
14
No. of Respondents
12 Treated Like VIP

10
8 Fair and Equal
6 Treatment
4 No Importance Given
2
0
B
ra B
IC B
ian SBI
B
nk
FC nk
nk
nk
AX ank
TM
na IO
IC PN
KV
HD I Ba
Ba
Ba
Ba
B
IS
Ind
Ca
Name of the Bank
Inference
From the study it is found that all the private banks are exciting their
customers by treating them like VIPs. Tamil Nadu Mercantile Bank is
occupying the first position in that aspect. While except a few most of the
nationalized banks are giving fair treatment to their customers, Indian Bank is
ranked first based on fair treatment of customers.
Outstanding Services of the Bank
12
No. of Respondents
Less Processing Time

10
8 Upto date Information
6
4 Appearance and Interior
2
0 Accesibility and Approach of
Manager
B
na IOB
IC PNB
ian BI
B
nk
FC k
nk
nk
AX ank
TM
KV
HD Ban
S
Support and Assistance from

Ba
Ba
Ba
B
I
IS
other Staff
ra
IC
Ind
Ca
Comfort (Seating, A/c)

Name of the Bank
Table 5 : Opinion on Bank’s outstanding facilities

Bank Outstanding In
Name Support
Accessibility
of the Less and Comfort Total
Up to date Appearance and
Bank Processing Assistance (Seating,
Information and Interior Approach of
Time from other A/c)
Manager
Staff
SBI 2 6 3 2 1 1 15
Indian
Bank 3 9 1 1 1 0 15
IOB 5 6 1 2 1 0 15
Canara
Bank 6 2 3 1 1 2 15
PNB 4 5 2 3 1 0 15
ICICI
Bank 4 9 0 1 0 1 15
HDFC
Bank 3 3 3 0 5 1 15
AXIS
Bank 2 10 0 2 1 0 15
TMB 5 5 1 1 1 2 15
KVB 5 3 1 1 3 2 15
Total 39 58 15 14 15 9 150
Inference
Though the banks are regulated by the governing body Reserve Bank of India,
they still try to attract the customers by making some difference in extending
the services and facilities within the purview of the RBI. From the study it is
found that Axis bank is rated as first based on the upto date information while
Canara bank is considered to be first in quick processing transactions.
Table 6: Opinion on ATM Services of the Bank

Opinion on ATM of Services of the Bank
Name Working Non-
of the with Out of Operation Not Total
Bank Functioning Adequate Service Shortage of Printing
Properly Funds Often of Funds Repairs Accounts Statements
SBI 5 5 4 0 1 0 0 15
Indian
Bank 5 2 4 1 2 1 0 15
IOB 5 2 2 2 3 1 0 15
Canara
Bank 9 3 0 1 1 1 0 15
PNB 6 2 2 1 1 2 1 15
ICICI
Bank 9 5 1 0 0 0 0 15
HDFC
Bank 7 3 2 2 1 0 0 15
AXIS
Bank 9 1 2 0 1 0 2 15
TMB 10 3 1 0 0 0 1 15
KVB 4 4 4 2 1 0 0 15
Total 69 30 22 9 11 5 4 150
Opinion about ATM Services of the Bank
12
No. of Respondents
10
8 Funcitoning Properly
6 Working with Adequate Funds
4 Out of Service Often
2
Shortage of Funds
0
Repairs
B
na IOB
IC PNB
ian BI
B
FC k
Non- Opeeration of Accounts

nk
nk
AX nk
TM
nk
KV
HD Ban
S
Ba
Ba
Ba
Ba
IS
Not Printing Statements

ra
IC
Ind
Ca
Name of the Bank

Inference
The development of modern banking is greatly viewed in terms of modern
facilities like ATM, Debit card facilities etc. From the study it is identified
that Canara Bank and Axis bank share the first rank based on the proper
functioning of ATM counters.
Table 7: Opinion on the working of online Banking

Provided by the bank
Comment on Net banking Facility
Name
No Clarity
Proper
Total
of the Clarity Not
Response Easy to Poor Error Not
Bank and Secure Easy to
from Operate Response Message Secured
Genuine Operate
Server
SBI 5 4 1 3 1 0 0 0 1 15
Indian
Bank 1 3 2 6 2 0 0 1 0 15
IOB 1 0 5 5 0 0 2 1 1 15
Canara
Bank 2 1 1 8 0 0 2 0 1 15
PNB 5 2 2 3 2 1 0 0 0 15
ICICI
Bank 1 4 1 6 2 0 0 0 1 15
HDFC
Bank 3 4 1 4 0 1 0 0 2 15
AXIS
Bank 2 1 4 6 2 0 0 0 0 15
TMB 2 4 5 3 1 0 0 0 0 15
KVB 0 3 3 5 0 0 0 1 3 15
Total 22 26 25 49 10 2 4 3 9 150
8 Comment on Netbanking Facility

7 Proper Response from
No. of Respondents
6 Server
Clarity and Genuine
5
Secure
4
Easy to Operate
3
2 Poor Response
1 Error Message
0 Not Secured
SBI Indian IOB Canara PNB ICICI HDFC AXIS TMB KVB
Bank Bank Bank Bank Bank Not Easy to Operate
Bank Name
Inference
Today’s world is dominated by computers and internet. People are highly
interested in doing their transactions and retrieving of information through
internet. From the study it is examined that Canara has convinced its
customers by providing easy way of operation in net banking while Axis and
Indian Banks are trying to fulfill the expectations of the customers in this
regard.
Opinion on Penalty for non maintenance of

minimum balance
No. of Respondents
14
12
10 Fair and Reasonable
8
6 Comparatively High
4 Comparatively Low
2
0
B
ra B
ian SBI
IC B
B
FC nk
nk
nk
nk
IS k
TM
na IO
IC PN
KV
AX an
HD I Ba
Ba
Ba
Ba
B
Ind
Ca
Name of the Bank

Table 8: Opinion on the charges and fees for Non-maintenance of minimum

balance by the Bank
Opinion on Penalty Levied for Non Maintenance of Minimum
Balance
Name of the
Total
Bank Fair and Comparatively Comparatively
Reasonable High Low
SBI 8 2 5 15
IOB 10 1 4 15
Canara Bank 12 1 2 15
PNB 7 1 7 15
ICICI Bank 4 10 1 15
HDFC Bank 9 4 2 15
AXIS Bank 6 11 1 18
TMB 3 8 1 12
KVB 3 9 3 15
Total 72 49 29 150
Inference
Whatever may be the advancement achieved by the banking industry, it will
be a failure to the industry if it is not taking into consideration the rates,
charges levied by it on the customers for any reason. On this ground as per the
study majority of the respondents opined that Canara Bank is charging the
reasonable rates followed by Indian Bank and IOB. It has to be noted that the
respondents have a strong feeling that the private banks are charging heavily
for non maintenance of minimum balance.
Table 9: Opinion on ATM & DEBIT Charges levied by the Bank

Opinion on ATM/ Debit Card Charges
Name of the
Fair and Comparatively Comparatively Total
Bank
Reasonable High Low
SBI 8 2 5 15
IOB 8 1 6 15
Canara
Bank 10 2 3 15
PNB 9 2 4 15
ICICI Bank 4 8 3 15
HDFC Bank 6 7 2 15
AXIS Bank 6 8 1 15
TMB 7 4 4 15
KVB 8 4 3 15
Total 72 41 37 150
ATM/ Debit Card Charges
12
No. of Respondents
10
8 Fair and Reasonable
6 Comparatively High
4 Comparatively Low
2
0
B
ra B
IC B
ian SBI
B
FC nk
nk
nk
nk
IS k
TM
na IO
IC PN
KV
AX an
HD I Ba
Ba
Ba
Ba
B
Ind
Ca
Name of the Bank

Inference
As per the study majority of the respondents opined that Canara Bank is rated
first followed by, PNB regarding the ATM/DEBIT card charges.
Table 10: Opinion on the financial performance of the Bank

Financial Performance of the Bank
Name of the Bank Total
Excellent Good Average Poor Very Poor
SBI 2 8 5 0 0 15
Indian Bank 4 9 2 0 0 15
IOB 3 8 4 0 0 15
Canara Bank 3 8 4 0 0 15
PNB 3 8 3 1 0 15
ICICI Bank 4 11 0 0 0 15
HDFC Bank 3 10 2 0 0 15
AXIS Bank 1 9 5 0 0 15
TMB 4 8 3 0 0 15
KVB 1 7 6 1 0 15
Total 28 86 34 2 0 150
Financial Performance of the Bank
12
No. of Respondents
10 Excellent
8 Good
6 Average
4 Poor
2 Very Poor
0
B
na IOB
IC B
ian BI
B
FC k
nk
nk
nk
AX nk
TM
PN
KV
HD an
S
Ba
Ba
Ba
Ba
IB
IS
ra
IC
Ind
Ca
Name of the Bank

Inference
It is necessary to know the confidence level of the customers to introduce the
new products and to venture into new areas. In order to check the confidence
level of the customers it is tested with collecting the opinion of the customers
on the financial performance of the bank. In this aspect ICICI bank has been
rated no. 1 in financial performance followed by HDFC bank. The
nationalized banks are also relatively gaining the confidence of the people on
this ground.
Table 10: Rank of Banks

Name of the Bank Rank No. of Respondents Percentage
SBI Rank1 31 21
ICICI Bank Rank1 31 21
Axis Bank Rank3 24 16
HDFC Bank Rank4 24 16
Canara Bank Rank5 28 19
Indian Bank Rank6 23 16
IOB Rank7 26 18
PNB Rank8 29 20
KVB Rank9 28 19
TMB Rank10 33 22
Inference
From the overall study it is found that SBI and ICICI bank are sharing the first
rank followed by Axis bank.
Statistical Analysis
1. Chi-Square Test on Income of Respondents & Charges on overdue/non-
maintenance of
Minimum balance.
HYPOTHESIS
H0: The Income of the respondents and opinion charges on maintenance of
minimum balance are independent.
H1: The Income of the respondents and opinion charges on maintenance of

minimum balance are Dependent
Table 11a: Cross Tabulation for Income of Respondents & Charges

INCOME OBSERVED
OPINION Below Rs10001- 25001- Above VALUE
10000 25000 50000 50,000 (TOTAL)
Fair and
reasonable 32 52 7 4 95
charges
Comparatively
16 9 10 6 41
high
Comparatively
low 4 5 3 2 14
TOTAL 52 66 20 12 150
Table 11b: Chi– Square Table

OBSERVED `EXPECTED EXPECTED FREQUENCY(CALC.
FREQUENCY FREQUENCY VALUE)
32 32.93 0.02
16 14.21 0.22
4 4.85 0.14
52 41.8 2.48
9 18.04 4.53
5 6.16 0.21
7 12.66 2.53
10 5.46 3.77
3 1.86 0.69
4 7.6 1.70
6 3.28 2.25
2 1.12 0.69
Degrees of freedom 6
Level of significance 5%
Chi square Table value 12.59
Chi-Square Calculated Value 19.23
Calculated value > Table value
Hence Ho is rejected. H1 is accepted.

CONCLUSION
Hence, The Income of the respondents and opinion on charges on
maintenance of minimum balance are Dependent. Hence when the income
level decreases, people feel that the charges are high and vice versa.
ANOVA Test on Kinds of Services & Account holder

H0: All the banks does not provide all kinds of banking services
H1: All the banks does provide all kinds of banking services
Table 12a: Cross Tabulation for account holder kinds of services

Kinds of Services
Name of Payment of
ATM and Internet At Par Total
the Bank Insurance Safety Locker
Debit Cards Banking Cheques
Premiums
SBI 7 2 3 2 1 15
Indian
Bank 10 1 1 2 1 15
IOB 6 2 4 1 2 15
Canara
Bank 6 2 3 1 3 15
PNB 10 1 1 1 2 15
ICICI Bank 5 3 2 2 3 15
HDFC
Bank 6 1 4 1 3 15
AXIS Bank 9 1 1 3 1 15
TMB 9 2 2 1 1 15
KVB 7 3 1 2 2 15
Total 75 18 22 16 19 150
Correction Factor CF = T²/N

= 150²/50 = 450
Total sum of squares SST =593+33+62+30+43 – 450
= 311
Sum of squares between = 562.5+32.4+48.4+25.6+36.1-450
columns SSC = 255
Sum of squares between =15²/5 + 15²/5+ 15²/5 + 15²/5 + 15²/5+15²/5 +
Rows SSR 15²/5+ 15²/5
+ 15²/5 +15²/5 -450=0
Residual SSE =SST - (SSC + SSR)
=311-(255+0)=56
Table 12b: ANOVA Table

Source of Sum of Degrees of Mean sum of F
Variation squares freedom squares value
Between SSC = 255 (c-1) = 5 -1 = 4
columns 63.75 41.12
Between rows SSR = 0 (r-1) = 10 -1 = 9
0 0
Residual SSE = 56 (c-1)(r-1) = 36
1.55
Inference
For Degrees of freedom (4, 36) the table of F = 2.69
The calculated F value >Table value. Hence the null hypothesis is rejected.
Conclusion: All the banks does not provide all kinds of banking services
ANOVA Test on Occupation & ATM/Debit card charges

H0: There is no significant relation between Occupation and ATM/Debit card
charges
H1: There is significant relation between Occupation and ATM/Debit card

charges
Table 13a: Tabulation for Occupation & ATM/DEBIT card charges

Opinion on ATM/DEBIT card charges
Occupation Fair and Comparatively Comparatively Total
Reasonable High Low
Self Employed 9 10 2 21
Professional 15 15 0 30
Home Maker 6 3 5 14
Government
15 4 3 22
Employee
Retired 5 0 1 6
Business 11 7 5 23
Others 18 7 9 34
Total 79 46 25 150
Correction Factor CF = T²/N

= 150²/21 = 1071.42
Total sum of squares SST = 1021+327+170-1071.42= 446.6
Sum of squares between Rows = (21)^2/3+ (30)^2/3+(14)^2/3 +

SSR (22)^2/3+(34)^2/3+(6)^2/3 + (34)^2/3-
1071.14
= 176.18
Sum of squares between = 847+264.14+128.57 – CF
columns SSC = 1239.71-1071.42
= 168.29
Residual SSE = SST - (SSC + SSR)
= 446.6 - (168.29+176.18) = 102.13
Table 13 B: ANOVA table

Source of Sum of Degrees of Mean sum of F
Variation squares freedom squares value
Between SSC = 168.29 (c-1) = 3 -1 = 2
columns 84.145 11.54
Between rows SSR = 176.18 (r-1) = 7 -1 = 6
29.363 4.02
Residual SSE = 102.13 (c-1)(r-1) = 14
7.29
Inference
The calculated F value >Table value. Hence the null hypothesis is rejected.
Conclusion: There is no significant relation between Occupation and

ATM/Debit card charges
RESULTS
1. Punjab National Bank tops among nationalized banks by providing the
feature unlimited number of withdrawals and ICICI bank occupies the
first position among private banks by providing zero balance facility.
2. Customers are visiting the nationalized banks personally to get
information while the private banks are providing information through
sms and internet.
3. Indian bank and IOB are rated best for providing reliable information
and Axis bank is rated for providing periodical information.
4. Almost all private banks are treating their customers like VIPs, in
specific Tamil Nadu Mercantile Bank occupies the first place and the
customers feel that Indian Bank is treating the customers in a fair
manner.
5. Axis Bank shows the difference from other banks by providing upto date
information and Canara is unique in quick processing of transactions.
6. Canara Bank and Axis Bank are rated best for providing good ATM
services
7. Canara Bank and Axis Bank are rated best for providing good Internet
services
8. Customers have a feel that Canara Bank is charging relatively less for
non maintenance of minimum balance.
9. Customers have a feel that Canara Bank is charging relatively less for
ATM / Debit cards
10. Customers have a feel that ICICI bank is financially outstanding
compared to other banks.
11. In the over all ranking by the customers SBI and ICICI share the first
rank.
12. There is a significance between income and charges levied by the banks
13. All banks are not providing all facilities
14. There is no significant relationship between occupation and ATM / Debit
card charges
DISCUSSIONS
1. Each bank has got its own uniqueness. It has been understood that
nationalized banks are not inferior in providing the facilities to their
customers. It is only the attitude which makes the difference. If it is
understood by the managers and staff, there will not be any difference
like nationalized or private banks.
2. The nationalized banks have to improve the areas of modern facilities of
banking like sms, internet etc
3. It is once again proved that nationalized banks are not second to private
banks but only thing amongst them is they have to provide periodical
information.
4. Though the customers are not treated like VIPs by the nationalized banks
it is really a notable thing that they treat their customers in a fair manner.
This can be adjusted by providing loans like agriculture and agricultural
jewel loans.
5. The area of concentration is taking less processing time and providing

periodical information.
6. Certain nationalized banks are able to provide better services in ATM
and Internet; it has to be followed by all the banks.
7. The people from low income and lower middle income group still afraid
of going to private banks because of the charges levied by them for
various reasons. It has to be decreased in order to attract the customers
from all levels and to satisfy the norms of RBI.
8. The nationalized banks have to improve in the area of financial
performance in order to build the confidence among the customers.
9. All banks are expected to provide all kinds of facilities.
CONCLUSION
Understanding the customers is the key for success of any business, which is
applicable also for banking industry. Whether it is a nationalized bank or a
private sector bank there is no doubt that they have to understand the
expectations and aspirations of the customer. Even the size of the customer is
immaterial in this aspect i.e., whether he is retail customer or a corporate
customer, treating the customer as a customer is very important particularly
and it is inevitable in the situation like meltdown.
It is a challenge for any industry to face the global meltdown. One notable
point is when the other avenues are not promising then obviously the investors
will be looking for risk free area of investment. In this regard banking is one
of the most comfortable risk free zone for the investors. This opportunity has
to be capitalized by the banking industry. There is no doubt that it is well
received by the banking industry and that is the reason why all the banks in
India have shown good performance in the fourth quarter of the financial year
2009.
In order to asses the attitude of the banking industry in the meltdown

scenario, the study was conducted in the second line city Kanchipuram and
from the study it is concluded that both the private and nationalized banks are
having their own uniqueness in retaining their customers and taking steps in
attracting the new customers. There is no doubt that if both the nationalized
and private sector banks eliminate certain unwanted limitations, the industry
will grow rapidly irrespective of the growth of other industries.
Once again through the study it is reiterated that the mantra of ‘Customer are
Kings’ has to be kept in mind of the all the people concerned right from the
junior most staff member to that of the Chairman and Managing Director of
the Bank.
Axis should come up with objectives and goals to meet the demands and
expectations of the public as the entrance of the other private banks has
increased the competition and it would be a tough task to secure good position
in the market. To attract the large section of the public, the bank should
expand its sales force, So that success can be achieved in large
REFERENCES
[1] Evangelia Blery and Michalis Michalakopoulos, “Customer relationship
management: A case study of a Greek bank” Journal of Financial Services
Marketing (2006) 11, 116 – 124. doi: 10.1057/palgrave.fsm. 4760014.
[2] K.S.Srinivasa Rao and Chowdari Prasad, “Can Public Sector Banks Compete
with Foreign / Private Banks? A Statistical Analysis”, Paper submitted to the
International Conference on "Business & Finance” held during 15-16,
December 2003 at ICF AI Business School, Hyderabad.
[3] Richa Sharma Vyas and Nijaguna Rudrayya Bhusnur Math, “A comparative
study of cross-selling practices in public and private sector banks in India”,
Journal of Financial Services Marketing (2006) 10, 123–134.
doi:10.1057/palgrave.fsm.4760027
[4] Rengasamy Elango and Vijaya Kumar Gudep, “A Comparative Study on the
Service Quality and Customer Satisfaction Among Private, Public and Foreign
Banks”, The ICFAI Journal of Marketing Management, Vol. 5, No. 3, pp. 6-17,
August 2006
[5] R. A. Ravi, “User Perception of Retail Banking Services: A Comparative Study
of Public and Private Sector Banks”, The Icfai Journal of Bank Management,
Vol. 12, No. 2, pp. 32-46, May 2008.
View publication stats

Publicprvtbanks 25 M 22

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Publicprvtbanks 25 M 22

Uploaded by

Copyright:

Available Formats

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

A Comparative Study on Nationalized and Private Sector Banks in Kanchipuram,

Conference Paper · January 2010

Stock Market Analysis View project

Civid 19 View project

The user has requested enhancement of the downloaded file.

A Comparative Study on Nationalized and

India, a fast growing economy is not an exception to the agony of recession.

In this context an attempt was made to study the performance of

Expected research deliverable in the study is, Government Initiative as a

Keywords: RBI Initiative, Financial Stimulus Packages, Nationalized Bank

NEED FOR THE STUDY

Customer satisfaction represents a modern approach for quality in enterprises

In this way, bank’s performance may be evaluated in relation to a set of

BANK NATIONALISATION AND PUBLIC SECTOR BANKING

Move towards State ownership of banks started with the nationalisation of

Keeping in view the objectives of nationalisation, PSBs undertook expansion

In March 2006, the Reserve Bank of India allowed Warburg Pincus to

Currently (2007), banking in India is generally fairly mature in terms of

OBJECTIVES OF THE STUDY

help them to build long-lasting relationshipswith their customers and increase

Rengasamy Elango and Vijaya Kumar Gudep 4, in their paper “A

R.A. Ravi 5 in his article “User Perception of Retail Banking Services: A

Analysis and Interpretation

Table 1: Opinion on the special Features of the Bank

Table 2: Opinion on Sources of Information about the Bank

Opinion on Sources of Information

10 By Visiting the Branch

Name of the Bank

Table 3: Opinion on the prompt and correctness of information

Prompt and correctness of Information

8 Timely and Reliable

Table 4: Opinion on the bank’s treatment of the Customer

Care by the Bank

12 Treated Like VIP

Name of the Bank

Outstanding Services of the Bank

Less Processing Time

Support and Assistance from

Comfort (Seating, A/c)

Table 5 : Opinion on Bank’s outstanding facilities

Table 6: Opinion on ATM Services of the Bank

Opinion about ATM Services of the Bank

Non- Opeeration of Accounts

Not Printing Statements

Name of the Bank

Table 7: Opinion on the working of online Banking

8 Comment on Netbanking Facility

Opinion on Penalty for non maintenance of

Name of the Bank

Table 8: Opinion on the charges and fees for Non-maintenance of minimum

Table 9: Opinion on ATM & DEBIT Charges levied by the Bank

ATM/ Debit Card Charges

Name of the Bank

Table 10: Opinion on the financial performance of the Bank

Financial Performance of the Bank

Name of the Bank

Table 10: Rank of Banks

H1: The Income of the respondents and opinion charges on maintenance of

Table 11a: Cross Tabulation for Income of Respondents & Charges

Table 11b: Chi– Square Table

Hence Ho is rejected. H1 is accepted.

ANOVA Test on Kinds of Services & Account holder