UNIVERSITY OF MUMBAI

PROJECT ON
INNOVATIVE PRODUCTS OFFERED BY PUBLIC SECTOR BANKS

BACHELOR OF COMMERCE

BANKING & INSURANCE

SEMESTER VI

(2023-2024)

SUBMITTED
In partial Fulfilment of the requirement for the Award of Degree of
Bachelor of Commerce- Banking & Insurance

SUBMITTED BY,
ADITYA PRAKASH PARAB

ROLL NO – 231030

UNDER GUIDANCE,
ASST. PROF. PRIYANKA BHATKAR

MAHARSHI DAYANAND COLLEGE OF ARTS, SCIENCE &

COMMERCE PAREL, MUMBAI- 400 012.

 MAHARSHI DAYANAND COLLEGE
OF ARTS, SCIENCE & COMMERCE
PAREL, MUMBAI- 400 012.

CERTIFICATE

This is to certify that ADITYA PRAKASH PARAB.

, of B. Com (BANKING & INSURANCE) Semester VI (2022-

2023) has successfully completed the project on “INNOVATIVE
PRODUCTS OFFERED BY PUBLIC SECTOR BANKS”

under the guidance of ASST. PROF. PRIYANKA BHATKAR

Course Coordinator Principal

Project Guide/ Internal Examiner External Examiner

 DECLARATION

I ADITYA PRAKASH PARAB, the student of B. Com (BANKING

& INSURANCE) Semester VI (2022-2023) has declare that I have
completed the Project on INNOVATIVE PRODUCTS OFFERED BY
PUBLIC SECTOR BANKS.
The information submitted is true and original to the best of my
knowledge.

Signature of student
Name of Student
ADITYA PRAKASH PARAB

Roll No. 231030

 ACKNOWLEDGEMENT

The college, the faculty, classmates & the atmosphere, in the college
were all the favorable contributory factors right from the point when
the topic was to be selected till the final copy was prepared. It was a
very enriching experience throughout the contribution from the
following individuals in the form in which it appears today. We feel
privileged to take this opportunity to put on record my gratitude
towards them.
Course Coordinator Dr. KUNAL SONI made sure that the resource
was made available in time & also for immediate advice & guidance
throughout making the project. The principal of our college Dr. C.S
PANSE has always been inspiring and driving force.

4
 INDEX

SR PG
NO. PARTICULARS NO.
1 Ch.1 Introduction 07
2 1.1 History of public sector banks. 07
3 1.2 Major problems faced by Indian public sector banks. 12
4 1.3 Development of public sector for bank 14
5 1.4 Role of public sector bank 17
6 1.5 Advantages & Disadvantages of public sector banks. 20
7 1.6 Innovative products offered by public sector banks. 23

8 Ch.2 Research Methodology 25

9 2.1 Objectives 25
10 2.2 Scope 25
11 2.3 Limitations 27
12 2.4 Sample Size 28
13 2.5 Data collection sources 28

14 Ch.3 Review of Literature 29

15 Ch.4 Data Analysis 31

16 Ch.5 Conclusion 48

17 Ch.6 Bibliography 49

18 Ch.7 Appendix 50

5
 Abstract:
The idea of innovation means to do something new. Innovation is the introduction of a new
product or a new way of production or the opening of a new market or the defeat of a new supply
chain or the launch of a new organization of any industry.
India is an economy with a population of 1200 million and these 500 million trades with banks
every day. In such a country, there was an urgent need to ensure investment and greater openness
in the banking sector. This requires the adoption of new technologies and innovations in banking
systems and better customer support.
India's banking system affects the lives of millions and should be driven by social media and
national priorities. Indian banks also introduce practices such as e-banking, application-focused
payment services, e-pass documents, and the like.
This paper discusses the history of Indian banking and additionally depicts new banking products
used by Indian banks in the current dynamic business environment to strengthen the banking
portfolio and growth of financial inclusion.

6
 INTRODUCTION
Public sector banks are those in which the government holds more than 50% of the total stock.
The government formulates all the financial guidelines for public sector banks. The public sector
banks operate under the government to inspire trust in the depositors that their money is safe.
After independence, the government of India started the nationalization of the Imperial Bank of
India in 1955 to enter the banking business. The Reserve Bank of India took 60% of the share
and renamed it the State Bank of India.

1.1 HISTORY OF PUBLIC SECTOR BANKS

The story of public sector banks in India is intertwined with the nation's journey towards
economic independence and development. It's a tale of transformation, from colonial legacies to
ambitious nationalization efforts, and finally, navigating the challenges of a modern, globalized
economy.

 Early Beginnings and Colonial Shadows (18th - 19th Century):

The seeds of modern banking in India were sown in the mid-18th century with the establishment
of the Bank of Hindustan (1770) and the General Bank of India (1786). However, these ventures
were short-lived. The more significant players came in the form of the three presidency banks:
Bank of Bengal (1806), Bank of Bombay (1840), and Bank of Madras (1843), established by the
British East India Company. These banks primarily catered to the needs of the colonial
government and foreign trade, neglecting the needs of the wider Indian population.

7
  Nationalization: A New Dawn (1947 - 1980):

Following India's independence in 1947, the government recognized the crucial role of banking
in achieving economic growth and social development. In 1955, the Imperial Bank of India
(descendant of the presidency banks) was nationalized and renamed the State Bank of India
(SBI), marking the birth of the first public sector bank in the country.

The government embarked on a series of nationalization waves:

 1969: Fourteen major private banks were nationalized, including Bank of India, Punjab National
Bank, and United Bank of India. This significantly expanded the reach and influence of public
sector banks.
 1980: Six more private banks were nationalized, further consolidating the public sector's
dominance in the banking landscape.

 Growth and Challenges (1980 - 2000):

The nationalized banks played a pivotal role in fostering financial inclusion, providing credit to
rural areas, and supporting agricultural and industrial development. They witnessed significant
growth in deposits and branch networks, reaching every corner of the country. However,
challenges emerged:

 Bureaucracy and Inefficiency: Public sector banks often faced criticism for slow decision-
making, lack of innovation, and susceptibility to political interference.
 Non-Performing Assets (NPAs): Rising NPAs due to various factors, including loan defaults in
specific sectors, became a significant concern impacting their financial health.

 Navigating the 21st Century:

The turn of the millennium ushered in a new era of reforms and competition. The government
began opening up the banking sector to private players, fostering a more diversified and dynamic
financial landscape. Public sector banks faced the challenge of adapting to this competitive
environment:

 Modernization and Technological Integration: Public sector banks embarked on a digital

transformation journey, adopting new technologies to improve efficiency and customer
experience.
 Mergers and Consolidation: Recognizing the need for greater scale and efficiency, several
mergers were undertaken among public sector banks, resulting in the creation of larger and
stronger entities.

8
  The Present and the Future:

Today, public sector banks still hold a significant share (around 60%) of India's banking sector
assets. They continue to play a vital role in promoting financial inclusion, especially in rural and
underserved areas. However, they face ongoing challenges:

 Competition: Private banks and new-age fintech companies are constantly innovating and
challenging the traditional banking model.
 Governance and Regulatory Reforms: Ensuring good corporate governance and implementing
efficient regulatory frameworks is crucial for public sector banks to remain competitive and
contribute to the nation's economic growth.

The future of public sector banks in India lies in their ability to adapt to the changing landscape.
By embracing innovation, improving efficiency, and upholding strong governance practices, they
can continue to play a vital role in India's economic and social development journey.

 Mergers
The consolidation of SBI-associated banks started first by State Bank of India merging its
subsidiary State Bank of Saurashtra with itself on 13 August 2008. Thereafter it merged State
Bank of Indore with itself on August 27, 2010. The remaining subsidiaries, namely the State
Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of
Patiala and State Bank of Travancore, and Bhartiya Mahaila Bank were merged with State Bank
of India with effect from 1 April 2017.

Andhra Bank and Corporation Bank were merged into Union Bank of India.

Syndicate Bank was merged into Canara Bank.

9
Here are the public sector banks in India, with market cap data.

 State Bank of India

 CEO: Dinesh Kumar Khara

 Market Cap (Rs Crore): 5,00,179.88

SBI, established in 1955, is the largest public sector banks in India. It is a prominent figure in
the nation's financial sector. With an extensive array of banking and financial services, it
caters to millions of domestic and international clients. In the first quarter of the 2023-24
fiscal year, SBI surpassed Reliance Industries to become India's most profitable corporation.

 Union Bank of India

 CEO: A. Manimekhalai
 Market Cap (Rs Crore): 79,239.07

Union Bank of India, the fourth largest public sector bank in India, was established in 1919, and
boasts a substantial nationwide presence. Mahatma Gandhi inaugurated the Union Bank of
India's office upon its establishment. Subsequently, in 1969, the bank underwent nationalization,
joining forces with 14 other banks to pool their resources and funds for the country's progress.
The Union Bank has recently introduced two new debit card variants on the Rupay network—a
metal card for the ultra HNI and one specifically for women. Both bring unique benefits to the
respective user groups.

 Bank of India
 CEO: Rajneesh Karnatak
 Market Cap (Rs Crore): 42,533.46

Established in 1906, the Bank of India (BOI) is among India's oldest public sector banks. BOI,
headquartered in Mumbai, Maharashtra, boasts a storied history and an extensive branch network
nationwide. The bank aims to stimulate economic development through various financial
offerings and services.
Bank of India has reported a significant increase in net profit to Rs1,551 crore for the June 2023
quarter. This surge is attributed to reduced bad loans and higher margins resulting from the
repricing of existing assets.

10
  Canara Bank
 CEO: K. Satyanarayana Raju
 Market Cap (Rs Crore): 71,005.06

Canara Bank was founded in 1906. With its headquarters in Bengaluru, Karnataka, the bank
boasts a rich and illustrious legacy of catering to the financial requirements of numerous patrons.
Canara Bank has raised Rs5,000 crore by issuing Long Term Infrastructure Bond, Series I Bonds
in the fiscal year 2022-23. These bonds carry a coupon rate of 7.54 percent per annum. The
issuance received strong investor interest, with bids totaling over Rs14,180 crores, surpassing the
base issue size of Rs1,000 crores, and including a green shoe option of Rs4,000 crores.

 Bank of Maharashtra
 CEO: A S Rajeev
 Market Cap (Rs Crore): 30,697.75

The Bank of Maharashtra is a public sector bank in India, established in 1937. It is headquartered
in Pune, Maharashtra. The bank offers a wide range of banking products and services to its
customers, including deposits, loans, and investment products.
The Bank of Maharashtra is one of the leading public sector banks in India. It has a network of
over 2,000 branches and ATMs across the country. The bank offers a variety of deposit schemes,
loan schemes, and investment products to its customers.

11
12
 1.2 MAJOR PROBLEMS FACED BY INDIAN PUBLIC SECTOR BANKS
1. Losses in Rural Branches:

Most of the rural branches are running at a loss because of high overheads and prevalence of the
barter system in most parts of rural India.

2. Large Over-Dues:

The small branches of commercial banks are now faced with a new problem—a large number of
overdue advances to farmers. The decision of the former National Front Government to waive all
loans to farmers up to the value of Rs. 10,000 crores have added to the plight of such banks.

3. Non-Performing Assets:

The commercial banks at present do not have any machinery to ensure that their loans and
advances are, in fact, going into productive use in the larger public interest. Due to a high
proportion of non-performing assets or outstanding due to banks from borrowers they are
incurring huge losses. Most of them are also unable to maintain a capital adequacy ratio.

4. Advance to Priority Sector:

As far as advances to the priority sectors are concerned, the progress has been slow. This is
partly attributable to the fact that the bank officials from top to bottom could not accept
nationalization gracefully, viz., diversion of a certain portion of resources to the top priority and
hitherto neglected sectors. This is also attributable to the poor and unsatisfactory loan recovery
rates from the agricultural and small sectors.

5. Competition from Non-Banking Financial Institution:

As far as deposit mobilization is concerned, commercial banks have been facing stiff challenges
from non-banking financial intermediaries such as mutual funds, housing finance corporations,
leasing, and investment companies. All these institutions compete closely with commercial
banks in attracting public deposits and offer higher rates of interest than are paid by commercial
banks.

6. Competition with Foreign Banks:

Foreign banks and the smaller private sector banks have registered higher increases in deposits.
One reason seems to be that non-nationalized banks offer betters customer service. This creates
the impression that a diversion of deposits from the nationalized banks to other banks has
probably taken place.

13
7. Gap between Promise and Performance:

One major weakness of the nationalized banking system in India is its failure to sustain the
desired credit pattern and fill in credit gaps in different sectors. Even though there has been a
reorientation of bank objectives, the bank staff has remained virtually static and the bank
procedures and practices have continued to remain old and outmoded.

The post-nationalization period has seen a widening gap between promise and performance. The
main reason seems to be the failure of the bank staff to appreciate the new work philosophy and
new social objectives.

8. Bureaucratization:

Another problem faced by commercial banks is the bureaucratization of the banking system. This
is indeed the result of nationalization. The smooth functioning of banks has been hampered by
red-tapism, long delays, lack of initiative, and failure to take quick decisions.

9. Political Pressures:

The smooth working of nationalized banks has also been hampered by growing political
pressures from the Centre and the States. Nationalized banks often face lots of difficulties due to
various political pressures. Such pressures are created in the selection of personnel and grant of
loans to particular parties without considering their creditworthiness.

14
15
 1.3 DEVELOPMENT OF PUBLIC SECTOR BANKS

The development of public sector banks (PSBs) in India is a story of national ambition, evolving
needs, and continuous adaptation. From their humble beginnings to their current position as the
backbone of the nation's financial system, PSBs have played a pivotal role in shaping the
economic landscape of India.

 The Seeds of Modern Banking (18th - 19th Century):

The seeds of modern banking in India were sown in the 18th century with the establishment of
the Bank of Hindustan (1770) and the General Bank of India (1786). However, these ventures
were short-lived and failed to make a lasting impact. The most significant impact came from the
three presidency banks: Bank of Bengal (1806), Bank of Bombay (1840), and Bank of Madras
(1843). These British East India Company creations primarily served the colonial government
and foreign trade, neglecting the financial needs of a vast majority of Indians.

 Nationalization: A New Paradigm (1947 - 1980):

Following independence in 1947, the newly formed Indian government recognized the vital role
of banking in achieving economic independence and promoting social development. This vision
led to the nationalization of the Imperial Bank of India (descendant of the presidency banks) in
1955, marking the birth of the first public sector bank, the State Bank of India (SBI).

Nationalization wasn't a one-time event. The government undertook subsequent waves to bring
more banks under public control:

 1969: Fourteen major private banks, including Bank of India, Punjab National Bank, and United
Bank of India, were nationalized, significantly expanding the reach and influence of PSBs.
 1980: Six more private banks were nationalized, further consolidating the public sector's
dominance in the banking landscape.

The development of PSBs in India is a testament to their crucial role in the nation's journey
towards economic and social development. As they navigate the complexities of the 21st
century, their ability to adapt, innovate, and maintain strong governance practices will be key to
securing their place as the cornerstone of India's financial future.

16
 1. Development of SBI

The State Bank of India (SBI) has a rich history, tracing its roots back to the Bank of Calcutta
established in 1806. Here's a brief overview of its development:

 1806: Bank of Calcutta founded, later becoming the Bank of Bengal in 1809.
 1921: The Bank of Bengal, Bank of Bombay, and Bank of Madras merged to form the Imperial
Bank of India.
 1955: The Imperial Bank of India was nationalized and renamed the State Bank of India (SBI),
marking the birth of the first public sector bank in India.
 1959: Eight state-owned banks were merged as subsidiaries of SBI.
 2008: The government of India acquired the RBI's stake in SBI to remove any conflict of
interest.

SBI has grown significantly, becoming India's largest bank and a global financial services firm.
It played a vital role in promoting financial inclusion and supporting economic development
throughout its history.

2. Development of UNION BANK OF INDIA

Union Bank of India's development can be summarized in these key points:

 Founded in 1919 by Seth Sitaram Poddar.

 Inaugurated by Mahatma Gandhi in 1921.
 Initially focused on trade centers in Mumbai and Saurashtra.
 Nationalized by the Indian government in 1969.
 Grew organically and through acquisitions (Belgaum Bank, Miraj State Bank, Sikkim Bank).
 Expanded internationally with offices in Abu Dhabi and Shanghai (2007).
 Merged with Andhra Bank and Corporation Bank in 2020, becoming a major public sector bank.
 Today, it boasts a vast network of branches, ATMs, and digital services.

3. Development of BANK OF MAHARASHTRA

The Bank of Maharashtra's development can be summarized in these key points:

 Founded: 1935 in Pune, India.

 Initial Focus: Serving the needs of the Maharashtra region.
 Nationalization: 1969, becoming a public sector bank.
 Growth: Rapid expansion of branches, reaching all corners of Maharashtra.
 Milestones:
o 1998: Achieved autonomous status, allowing for greater operational flexibility.
o 2004: Crossed the ₹1 lakh crore business mark.

17
o 2022: Received the National MSME Award.
 Present:
o 2,263 branches across India (as of June 2023).
o Leading public sector bank in Maharashtra in terms of branch network.
o Focus on financial inclusion, digitalization, and supporting micro, small, and medium enterprises
(MSMEs).

4. Development of BANK OF INDIA

The Bank of India (BOI) story starts in 1906 with its founding by businessmen in Mumbai.
Initially private, it became a public sector bank in 1969 during a nationalization wave.

BOI began with one office and has grown into a major national player with a strong international
presence. While adhering to traditional values, they've also been at the forefront of innovation,
being the first among nationalized banks to offer computerized branches and ATMs.

5. Development of CANARA BANK

Canara Bank, established in 1906 by philanthropist Ammembal Subba Rao Pai, has evolved
through various phases:

Initial Years (1906 - 1960s):

 Founded in Mangalore, initially serving the local community.

Growth and Nationalization (1960s - 1980s):

 Undertook its first acquisition in 1961 and continued expanding its branch network.
 Nationalized in 1969, becoming a major player in the Indian banking landscape.

Modernization and Expansion (1980s - Present):

 Focused on business diversification during the 1980s.

 Established an international presence with overseas branches and offices since 1983.
 Embarked on digital transformation in recent years, offering mobile and online banking services.
 Became the third largest nationalized bank in India, known for its customer-centric approach

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 1.4 ROLE OF PUBLIC SECTOR BANKS IN INCOME GROWTH

Public sector banks (PSBs) in India have played a multifaceted and crucial role in the country's
economic growth. Here's an overview of their key contributions:

1. Financial Inclusion: PSBs have been instrumental in broadening access to financial services,
particularly in rural and underserved areas. This has been achieved through:

 Extensive branch network: PSBs have the widest branch network compared to private banks,
reaching remote areas and providing access to banking facilities for a larger population.
 Financial products tailored to specific needs: PSBs offer a variety of financial products, such
as microloans, small and medium-sized enterprise (SME) loans, and agricultural credit, catering
to various sectors and income groups.
 Government schemes: PSBs play a crucial role in implementing government-sponsored
financial inclusion schemes, making credit and financial services more accessible to previously
excluded populations.

2. Mobilization of Savings: PSBs have played a significant role in mobilizing savings from the
public, which is essential for funding investments and economic growth. This is achieved by:

 Large deposit base: PSBs enjoy the largest deposit base in the country, attracting savings from a
diverse range of individuals and institutions.
 Wide range of deposit products: PSBs offer various deposit products catering to different risk
appetites and income levels, encouraging diverse sections of society to save.

19
 3. Supporting Priority Sectors: PSBs have played a vital role in channeling credit to priority
sectors like:

 Agriculture: PSBs provide essential agricultural loans to farmers, supporting agricultural

development and ensuring food security.
 Small and Medium Enterprises (SMEs): PSBs offer loans and other financial services to
SMEs, crucial for their growth and job creation.
 Infrastructure development: PSBs participate in funding infrastructure projects, essential for
economic development and connectivity.

4. Stimulating Economic Activity: PSBs contribute to economic activity through:

 Credit creation: By providing loans to businesses and individuals, PSBs help create credit in
the economy, which fuels investment and consumption, leading to economic growth.
 Financial stability: PSBs play a crucial role in maintaining financial stability by acting
as custodians of public funds and ensuring smooth financial operations in the economy.

However, PSBs also face challenges impacting their role in economic growth, such as:

 Bureaucracy and inefficiency: Concerns regarding slow decision-making and operational

inefficiencies can hinder their responsiveness to market needs and limit their competitiveness.
 Non-performing assets (NPAs): High levels of NPAs can impact their financial health and
ability to provide credit, potentially slowing down economic growth.

Despite these challenges, PSBs continue to be essential players in India's economic landscape.
By addressing their limitations and embracing reforms, they can further contribute to the nation's
continued growth and development.

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21
 1.5 ADVATAGES OF PUBLIC SECTOR BANK:

 Financial inclusion: PSBs have extensive branch networks, reaching remote areas and providing
access to banking facilities for a broader population, especially in underserved and rural areas.
 Mobilization of savings: PSBs have a large deposit base, attracting savings from diverse
individuals and institutions, which contributes to funding investments and economic growth.
 Supporting priority sectors: PSBs play a crucial role in channeling credit to priority sectors
like agriculture, small and medium enterprises (SMEs), and infrastructure development, which
are crucial for sustainable economic growth.
 Financial stability: PSBs act as custodians of public funds and play a role in maintaining
financial stability by ensuring smooth financial operations in the economy.
 Social responsibility: PSBs often participate in government-sponsored financial inclusion
schemes and social welfare programs, contributing to social development.

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 DISADVATAGES OF PUBLIC SECTOR BANK:

 Bureaucracy and inefficiency: PSBs can be criticized for slow decision-making and operational
inefficiencies due to hierarchical structures and government regulations, potentially hindering
their competitiveness.
 Non-performing assets (NPAs): High levels of NPAs due to various factors can impact
financial health, restrict credit availability, and potentially slow down economic growth.
 Limited innovation: Compared to private banks, PSBs may face challenges in adapting to new
technologies and innovating products and services, hindering their ability to meet evolving
customer needs.
 Profitability: PSBs may prioritize social objectives over strict profit maximization, impacting
their financial performance and ability to attract investments.
 Susceptibility to political interference: PSBs being government-owned can be susceptible to
political interference in decision-making, potentially impacting their operational efficiency and
allocation of resources.

It's important to note that these are general advantages and disadvantages, and the specific
strengths and weaknesses of a PSB can vary depending on various factors. Additionally, reforms
and modernization efforts are underway to address some of the challenges faced by PSBs,
aiming to improve their efficiency and competitiveness in the evolving financial landscape.

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24
 1.6 INNOVATIVE PRODUCTS OF PUBLIC SECTOR BANKS

Public sector banks (PSBs) in India, while facing challenges, have been increasingly pushing
towards innovation to stay competitive and cater to evolving customer needs. Here are some
examples of innovative products offered by PSBs:

1. Digital-first initiatives:

 Mobile wallets and payment platforms: Many PSBs have launched their own mobile wallets
and digital payment platforms, offering users convenient and secure cashless transactions.
 Instant account opening and loan approvals: Some PSBs have introduced online platforms for
instant account opening and loan approvals, reducing processing time and improving customer
experience.
 AI-powered chatbots and virtual assistants: PSBs are utilizing AI-powered chatbots and
virtual assistants to provide 24/7 customer support and answer queries efficiently.

2. Tailored financial solutions:

 Themed accounts: PSBs have introduced themed accounts, such as student accounts, senior
citizen accounts, and women's savings accounts, offering customized features and benefits for
specific customer segments.
 Micro savings and loan products: PSBs cater to the unbanked and underbanked population
with micro savings and loan products like Jan Dhan accounts and MUDRA loans, promoting
financial inclusion.
 Agri-focused products: PSBs offer specialized products like Kisan Credit Cards and Kisan
RuPay Cards, catering to the specific needs of farmers.

3. Collaboration and partnerships:

 Co-branded cards and products: PSBs have partnered with various companies to offer co-
branded cards and products, like credit cards with airline loyalty programs or insurance products
with e-commerce platforms.
 Fintech partnerships: PSBs are collaborating with fintech companies to leverage their
technological expertise and offer innovative financial solutions.

4. Focus on sustainability:

 Green loans and deposits: Some PSBs offer green loans and deposits, encouraging sustainable
practices and attracting environmentally conscious customers.
 Investment products in renewable energy: PSBs are launching investment products linked to
renewable energy projects, promoting clean energy initiatives.

It's important to note that this list is not exhaustive, and the specific innovative products offered
by PSBs can vary depending on the bank and its strategic initiatives. However, these examples
showcase the growing focus on innovation and customer-centricity among public sector banks in
India

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26
 CHP 2 RESEARCH METHODOLOGY
2.1 OBJECTIVES

1. To find out the innovative products offered by public sector banks.

2. To find awareness about innovative products offered by public sector banks.
3. To find out impact on customers about innovative products offered by public sector
banks.

2.2 SCOPE OF THE STUDY

A study on innovative products offered by PSBs can encompass various aspects, providing
valuable insights into their strategies and impact on the financial landscape. Here are some
potential areas of focus:

The study could define and categorize "innovative" products. It could delve into specific
examples of innovative products offered by public sector banks. This could explore mobile
banking platforms, digital loan applications, micro-investment schemes, or social security-linked
products. This could highlight areas where public sector banks excel (e.g., financial inclusion
initiatives) or identify areas for improvement (e.g., faster product development cycles). The
study could explore the challenges faced by public sector banks in fostering innovation. Finally,
the study could provide recommendations for public sector banks to further enhance their
innovative product offerings. Additionally, it could explore future trends in the banking sector
and how public sector banks can adapt to remain competitive through innovation.

The study may also consider the effectiveness of these innovative products in achieving their
intended goals and their impact on the overall competitiveness of public sector banks.

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28
2.3 LIMITATION OF INNOVATIVE PRODUCTS OFFERED PUBLIC
SECTOR BANK

Public sector banks (PSBs) in India, while making strides towards offering innovative products,
still face limitations in this area. Here are some key reasons:

PSBs often have outdated infrastructure and technology systems, making it challenging to
develop and implement new technology-driven products efficiently. Integrating new
technologies with existing systems can be complex and costly. PSBs can be characterized by
hierarchical structures and complex approval processes, potentially hindering their agility and
responsiveness to market trends and customer needs. This can delay the development and launch
of innovative products. PSBs might face challenges in attracting and retaining skilled
professionals with expertise in developing and managing innovative financial products. PSBs
often prioritize social objectives and financial inclusion over strict profit maximization.
Complying with various regulations can increase the time and cost associated with developing
and launching innovative products. PSBs may face challenges in fostering a culture of innovation
and risk-taking within their organizations. Changing traditional mindsets and encouraging an
innovative approach can be a slow and ongoing process.

29
These limitations can hinder the ability of PSBs to fully compete with private sector banks and
fintech companies in offering innovative and customer-centric products. However, it's important
to acknowledge the ongoing efforts of PSBs to address these challenges. They are increasingly
investing in technological upgrades, talent acquisition, and innovation initiatives to bridge the
gap and enhance their product offering

2.4 SAMPLE SIZE

The sample size of the study is 5 banks.

State Bank of India.
Bank of India.
Union Bank of India.
Bank of Maharashtra.
Canara Bank.

2.5 Data Collection Sources

There are two types of data

1) Primary Data
For the purpose of the study, primary data is collected by questionnaire.

2) Secondary Data
There are some secondary data collected from internet and websites to collect the proper
information and the industry details about public sector banks.

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 CHP 3. REVIEW OF LITERATURE
1. Khatri (2012) had empirically done comparative financial analysis of three banks of
India. The objectives of the paper were to compare the financial position with the help of
balance sheet and to compare the financial performance through ratio analysis. The study
covers a period from 2008-2012 and three banks i.e. SBI, ICICI and PNB have been
selected. To meet the objectives, data were employed purely from secondary data
published by respective banks. The study found that operating efficiency of SBI is higher
or better than PNB and ICICI banks. The study also found that profitability of PNB Bank
is more than SBI and ICICI Bank.

2. Binija George (2014) has discussed the various challenges and opportunities like
transparency, growth in banking sector, global banking, managing technology etc. Banks
are striving to combat the competition. The competition from global banks and
technological innovation has compelled the banks to rethink their policies and strategies.
Finally, the banking sector will need to master a new business model by building
management and customer services. Banks should contribute intensive efforts to render
better services to their customer. Nationalized and commercial banks should overcome
the challenges and to get advantage of opportunities in changing banking scenario.

3. Paramjit Kaur (2013) has found that in the past few years, the Indian banking sector
has completely transformed. The banks are facing many challenges and many
opportunities are available with the banks. Many financial innovations like ATMs, credit
cards, RTGS, debit cards, mobile banking etc. have completely changed the face of
Indian banking. But still there is a need to have more innovative solutions so that the
challenges can be solved and opportunities can be availed efficiently by the banks.

4. Ajay Thackeray (2010) has expressed that India is one of the top 10 economies in the
world, where the banking sector has tremendous potential to grow. Indian banking
industry has been witnessing a tremendous growth over last decades. A lot of innovations
are taking place in the banking sector in India. However, Indian banking industry faced
the numerous challenges such as increasing competition, pressure on spreads, and
systemic changes to align with international standards have necessitated a re-evaluation
of strategies and processes in order to remain competitive in this dynamic environment.

31
5. Arora (2003) has in its research focused on the effect of banking transformation. The
innovation of technology has a direct role in helping transactions in the banking sector,
and the impact of this innovation in the banking sector has come with new products and
services.

6. Ali Naghi Mansour Beigi et al (2016) the research aimed to study the effects of e-
banking services quality on customers’ satisfaction and loyalty the results show that e-
banking services quality has positive and significant effects on custom.

7. A. Kavitha and M. Muthumeenaksh (2016) the study indicates positive opinion toward
the service of bank and the behavior of employees for rendering services. However,
compared to other private and public banks, co-operative banks are lagging in adoption of
technology and modern equipment. The co-operative banks will adopt more and modern
technologies for facing competition and make their services more qualitative one.

8. Meenu Kumar (2015) The study focuses on understanding customer’s satisfaction from
the services provided by public sector banks using SERVQUAL model. The study
suggests that perception of customers on Tangibility, Assurance, Empathy and
Responsiveness of SERVQUAL model are less than expectation while it is more in case
of Assurance.

9. Jothi Selvamuthukumar.A & Arul.M (2015) study concludes that banks need to focus
on product innovation and look for activities to increase their bottom line revenue with
non-core activity, efficient service delivery process, effective risk management and
special attention to customer satisfaction.

10. Adisak Suvittawat (2015) The study reveals that the variables that showed the highest
service quality results were: Customers perceive high safety and security, Bank has a
secure customer information protection system, Bank employees are courteous, Bank
employees are knowledgeable and skilled, and Bank shows an interest in customer
problem-solving. The variables that showed the lowest service quality results were: Bank
employees provide quick service, Bank has a good layout for customer service, Bank has
modern equipment such as bank book updates, Bank offers customers drinking water or
coffee, and the Bank has enough parking. This means the bank needs to make
improvements in these areas to improve its competitiveness advantage.

32
BANKS AND THEIR INNOVATIVE PRODUCTS

33
1.STATE BANK OF INDIA

The bank offers a totally technology-driven cash management product, based on the satellite-
linked SBI FAST (for Funds Available in the Shortest Time) platform that connects 722 centers
spread across the country. Your cash collections can be pooled at these centers at competitive
rates.

Further, your cost centers at various locations can have a daily limit with the SBI's local branch
which can be swept automatically into your main account located at your corporate center and
reverse sweep shall take place next day morning. Thus, Corporates can save on interest cost.

 e-VFS and e-DFS are fully automated and secured products, designed to ensure efficient
management of working capital cycle of the corporate and sustained growth and
profitability of business partners and the entire Supply Chain is taken care under the
scheme. Under Supply Chain Finance bas has tied up with 65 Industry Majors with
across all Industry verticals like Auto, Oil, Steel, Power, Fertilizer, FMCG and Textiles.

34
  Channel Financing

Channel financing is an innovative finance mechanism by which the bank meets the various fund
necessities along your supply chain at the supplier's end itself, thus helping you sustain a
seamless business flow along the arteries of the enterprise.

Channel finance ensures the immediate realization of sales proceeds for the SBI client's supplier,
making it practically a cash sale. On the other hand, the corporate gets credit for a duration
equaling the tenor of the loan, enabling smoother liquidity management.

SBI has the world's largest banking network of over 22000 branches and this enables it to deliver
the financial solution at your supplier’s doorsteps, across the span of the country

 Construction Equipment Loan (CEL):

Line of credit for financing the requirement of existing construction companies, having credit
rating of SB-1 to SB-8 (new model), to purchase new machines / equipment’s / vehicles for
execution of construction projects / standard construction equipment’s.

Quantum: Rs 3.00 crores to Rs 100.00 crores.

Pricing: Linked to the Base Rate of the Bank as per credit rating of the company.

Tenure: up to 4 years

Repayment: In monthly instalments. However, variable repayment programmed can also be

considered based on the cash flow of the company.

Others: The loan may be disbursed in several tranches, subject to minimum 10% of the
sanctioned amount for any tranche, within a period of maximum one year from the date of
sanction depending on requirement of equipment’s / machinery / vehicles within the specified
time frame

 Corporate Loan:

Corporate Loan, an innovative product which is in existence, has been revamped/modified. Now,
the Corporates with Borrower Rating of SB 10 and above, can avail finance without any CAP for
the following purposes under " Corporate Loan Scheme" by way of Term Loan/WCTL with
Repayment period not to exceed 10 years or the useful life of the fixed assets under cover,
whichever is earlier.

35
 Shoring up the net working capital (NWC)

 Long term working capital requirements

 Ongoing capital expenditure such as replacement of parts of machineries,

upgradation, renovation etc.

 Repayment of high cost debts

 Research and Development expenditure

 Implementing Voluntary Retirement Scheme in the company

36
2.UNION BANK OF INDIA

 Union MSME Gold Loan Plus

 Eligibility
Any individual MSME including Proprietorship firm, Business owners, Women Entrepreneurs,
Self- employed professionals, Individuals doing Retail/Wholesale trade business owning gold
ornaments/Jewelry/ Coins, either singly or jointly

 Purpose
Finance to MSME units engaged in the trading, services and manufacturing sectors for their
business requirements like day to day working capital requirements, petty trade, for expansion of
business units etc. The loan amount will be sanctioned based on a declaration by the borrower.

 Interest
Finance to MSME units engaged in the trading, services and manufacturing sectors for their
business requirements like day to day working capital requirements, petty trade, for expansion of
business units etc. The loan amount will be sanctioned based on a declaration by the borrower.

37
  Union Nari Shakti

 Eligibility: All Women owned and managed MSMEs (i.e., share capital of min 51% with
Women)

 Term loan for purchase/construction/ renovation of business premises/ purchase of plant

& machinery
 CC for Working Capital requirement

 Quantum
Minimum – Rs 2.00 lakh
Maximum – Rs 10.00 Crs (Rs 20 lakh for SHGs)

 Margin
 5% for limits up to Rs 1.00 Cr
 15% for limits above Rs 1.00 Cr

 Union Ayushman Plus

 Eligibility:
Hospitals/Clinics/Nursing
Homes/Diagnostic
Centre’s, Pathology labs
etc.
 Qualified Medical practitioners
in the age group of 25 to 65
years.

 Purpose/Facility:
Term loan for purchase/construction/renovation/expansion/modernization of premises,
purchase of new Equipment’s/Ambulances/Solar power etc.
Working capital for business requirements.
Financing of refundable deposits (Lower of ‘6 months’ rent’ or Rs.30.00 Lacs) in case the
hospital premises is taken on lease subject to conforming the terms and conditions of the
Scheme.

38
  Quantum: Maximum:
Rs.100.00Crore (TL+WC)
 Margin: Equipment – 15%
 Land/Construction/Building/Renovation: 35%

 Union Aarogyam Loan Scheme for Healthcare Sector

 Eligibility
a. Entities eligible for fresh lending support are:
Vaccine manufacturers
Importers/ Suppliers of vaccine & priority medical devices
Hospitals/ Dispensaries
Pathology Labs
Manufacturers and suppliers of ventilators
Importers of Vaccines & COVID related drugs
COVID related Logistics firms etc.

b. All other units other than hospitals engaged in the manufacture and supply of Healthcare Services.
c. Ecosystem engaged in building / servicing Health care Infrastructure.

 Purpose: Financing under the scheme is for ramping up of COVID related healthcare
infrastructure and services in the country.
 Quantum of Finance: Minimum: Above Rs 10.00 lakh Maximum: Rs 100.00 Crore.
 Interest Rate: As per IC no.2621-2021 dt.24.05.2021
– MSME - Minimum EBLR + 2.00% to 2.50%
Others - Minimum MCLR + 2.00% to 2.50%

3. BANK OF MAHARASHTRA

39
In order to increase customer convenience, the Bank has launched a virtual debit card, opening
of e-FD (e-Fixed Deposits) and e-RD (e-Recurring Deposits) and Positive Pay System (PPS) on
its mobile banking platform. It also implemented an Online Dispute Resolution (ODR) platform
via Mobile and Internet Banking for swift dispute resolution of digital transactions, self-
enrolment options for internet banking customers, online PPF account opening, Updating of
KYC, application for insurance policies among many other schemes were added to its Internet
Banking platform for greater convenience to its customers.
 Virtual card: A “virtual card” is stored on your phone and can be used to pay contactless
in stores or online, but has its own unique card number, expiry date, and CVC.

 opening of e-FD (e-Fixed Deposits): A fixed deposit or an FD is an investment

instrument that banks and non-banking financial companies (NBFC) offer their
customers. Through an FD, people invest a certain sum of money for a fixed period at a
predetermined rate of interest in an FD. The rate of interest varies from one financial
institution to another, although it is usually higher than the interest offered on savings
accounts.

 e-RD (e-Recurring Deposits): With recurring deposits, the customers have the
flexibility to invest a sum of their choice every month and save as per their convenience.
This is the primary difference between FD and RD.
Many banks offer recurring deposits with a tenure that ranges from 6 months to 10 years.
The interest rates remain fixed over the tenure. And just like Fixed Deposit, the principal
is received on maturity, and you can choose to receive the interest at regular intervals or
at the time of maturity

 Positive Pay System (PPS): the issuer of the cheque submits certain minimum details of
that cheque like Cheque Number, Cheque Amount, Cheque Date, Payee/Beneficiary
Name to the drawee bank. Positive Pay System will be available for all account holders
issuing cheques for amount of Rs. 50000 and above

40
 4.Bank of India

Bank of India: A Look at Innovative Products

While Bank of India offers a wide range of traditional banking products, it also strives to
implement innovative solutions for its customers. Here's a glimpse into some of their noteworthy
offerings:

1. Digital Focus:
 BOI Star: This mobile banking app allows users to perform various transactions, check account
balances, and access investment options. It also offers features like bill payments, recharges, and
instant money transfers.
 BOI Digi Locker: This service enables secure storage of essential documents like PAN cards,
passports, and driving licenses. Users can easily access and share these documents electronically.
 Internet Banking: Bank of India's internet banking platform provides a convenient way to
manage finances remotely. Customers can transfer funds, pay bills, and invest in mutual funds
directly through the website.
2. Agri-Tech Solutions:
 Kizan Ratna Savings Account: This account caters specifically to farmers' needs, offering
higher interest rates and accidental death insurance cover.
41
 PCCCS Loan Scheme: This scheme provides loans to farmers' societies at concessional rates to
support agricultural activities and infrastructure development.
 PSB Loans in Agriculture (PSBA): This government-backed initiative facilitates easy access to
credit for farmers, with relaxed eligibility criteria and attractive interest rates.
3. Social Impact Initiatives:
 ** Pradhan Mantri Jan Dhan Yojana (PMJDY): ** This government scheme aims at financial
inclusion, and Bank of India actively promotes it. PMJDY provides basic savings bank accounts
with RuPay debit cards and overdraft facilities, particularly for the unbanked population in rural
areas.
 Stand Up India Loan Scheme: This scheme encourages entrepreneurs from underprivileged
communities by offering them loans for setting up greenfield ventures.
4. Tailored Products:
 Star Home Loan: This loan scheme offers competitive interest rates and flexible repayment
options for individuals seeking to purchase a new home.
 Star Women Savings Account: This account caters to women, providing them with special
benefits like higher interest rates and free ATM withdrawals.
 Star Student Loan Scheme: This scheme offers education loans at affordable interest rates to
help students pursue higher education.
5. Investment Products (through BOI Mutual Fund):
 BOI Flexi Cap Fund: This fund invests across market capitalizations, offering the potential for
growth across different market phases.
 BOI Ultra Short Duration Fund: This fund invests in debt instruments with maturities of less
than six months, providing a relatively low-risk option for investors seeking short-term returns.
 BOI ELSS Tax Saver: This scheme allows tax deductions under Section 80C of the Income Tax
Act, making it an attractive option for tax-conscious invest

42
 5.CANARA BANK

Canara Bank: Fostering Innovation in Financial Solutions (approx. 1000 words)

Canara Bank, a leading public sector bank in India, recognizes the importance of staying ahead
of the curve in a dynamic financial landscape. Here's a detailed look at some of Canara Bank's
innovative products that cater to diverse customer segments:

1. Digital Transformation:
 Canara mobile app: This user-friendly app facilitates a wide range of transactions, including
account balance checks, fund transfers, bill payments, recharges, and investment options. It also
offers features like mobile wallets, QR code payments, and instant money transfers through
BHIM UPI.
 Canara Online: The bank's internet banking platform provides a secure and convenient way to
manage finances remotely. Customers can access account statements, transfer funds, pay bills,
invest in mutual funds, and even apply for loans online.
 Canara AI Assistant (Mitra): This AI-powered virtual assistant helps customers navigate the
Canara mobile app and website. Mitra can answer questions, provide account information, and
even complete simple transactions like bill payments.

43
 2. MSME (Micro, Small and Medium Enterprises) Focused Solutions:
 Canara MSM Advantage: This comprehensive package caters to the specific needs of MSMEs.
It offers customized loan products with competitive interest rates, flexible repayment options,
and working capital solutions. Additionally, it provides value-added services like online trade
finance, cash management services, and business advisory services.
 TREAD (Trade Receivables Electronic Discounting System): This platform facilitates online
discounting of trade bills for MSMEs. It streamlines the process, reduces transaction costs, and
allows MSMEs to access quicker working capital.
 Supply Chain Finance: Canara Bank offers supply chain finance solutions that improve
liquidity for both MSMEs and their larger corporate partners. This ensures timely payments to
suppliers and streamlines cash flow management.

3. Rural and Agricultural Banking:

 Gram Seva: This initiative focuses on financial inclusion in rural areas. Canara Bank offers
basic savings bank accounts with RuPay debit cards and overdraft facilities through Gram Seva.
It also promotes micro-loans for income generation activities and crop insurance schemes for
farmers.
 Kisan Credit Card Scheme: This scheme provides credit facilities to farmers at concessional
interest rates for agricultural activities like purchasing seeds, fertilizers, and equipment.
 Krishak Suraksha (Farmer's Protection): This insurance scheme offers financial protection to
farmers in case of crop failures, natural disasters, or accidental death.

4. Sustainable Finance Solutions:

 Green Finance: Canara Bank recognizes the importance of sustainability and offers loans for
projects that promote renewable energy, energy efficiency, and environmental conservation.
 Sustainable Agri Business Loan Scheme: This scheme provides financial support to farmers
for adopting sustainable agricultural practices like organic farming and water conservation
techniques.

44
 5. Investment and Wealth Management:
 Canara Wealth Management: This service caters to high net worth individuals (HNIs) by
providing personalized investment advice, portfolio management services, and access to
exclusive investment products.
 Canara Tax Savings Scheme (Canara Tax Relief Scheme): This scheme allows tax
deductions under Section 80C of the Income Tax Act, making it an attractive option for tax-
conscious investors.
 Canara Mutual Fund: Canara Bank offers a variety of mutual fund schemes catering to
different risk appetites and investment goals. These include equity funds, debt funds, hybrid
funds, and gold funds.

Looking Ahead: The Future of Innovation at Canara Bank

Canara Bank continues to explore new avenues to enhance customer experience and cater to
evolving needs. Here are some potential areas for future innovation:

 Open Banking: By adopting open banking practices, Canara Bank could allow customers to
share their financial data securely with third-party applications. This could lead to the
development of more personalized financial products and services.
 Big Data Analytics: Utilizing big data analytics can offer deeper insights into customer behavior
and preferences. This can be used to develop targeted products and personalized financial advice.
 Cybersecurity Measures: As digital adoption increases, so does the need for robust
cybersecurity solutions. Canara Bank is likely to invest in advanced security measures to protect
customer data and transactions.
 Focus on Financial Inclusion: Canara Bank is expected to continue its efforts to promote
financial inclusion, particularly in rural and unbanked areas. This could involve further
development of digital banking solutions and partnerships with local communities.

45
 IMPACT ON CUSTOMER OF INNOVATIVE PRODCUTS OFFERED BY
PUBLIC SECTOR BANKS

Innovative products from public sector banks can have a significant positive impact on
customers in several ways:

 Increased Convenience:
 Anytime, Anywhere Banking: Mobile banking apps and internet banking allow customers to
access accounts, transfer funds, and pay bills 24/7, eliminating the need to visit physical
branches during banking hours.
 Faster Transactions: Features like instant money transfers and online bill payments streamline
financial activities, saving customers time and effort.
Improved Financial Management:
 Budgeting and Tracking Tools: Mobile apps can categorize spending, set budgets, and provide
financial insights, helping customers make informed financial decisions.
 Automated Savings: Features like auto-transfers allow for automatic savings towards goals,
fostering a culture of saving.

46
  Enhanced Security:
 Biometric Authentication: Fingerprint and facial recognition logins provide a more secure way
to access accounts compared to traditional passwords.
 Real-time Fraud Alerts: Banks can offer instant notifications of suspicious activity, allowing
customers to take immediate action.

 Financial Inclusion:
 Digital Onboarding: Online account opening processes can make banking services accessible to
those in remote locations or with limited mobility.
 Simplified Products: Public sector banks may offer basic accounts with lower fees, catering to
the unbanked population.

However, there are also some challenges to consider:

 Digital Divide: Not everyone has access to smartphones or reliable internet connections,
potentially limiting the reach of these innovations.
 Security Concerns: Some customers may be hesitant to use digital banking due to worries about
fraud or data breaches.
 Financial Literacy: Understanding how to use these new features effectively requires a certain
level of financial literacy, which may not be present in all customer segments.

Overall, innovative products from public sector banks can empower customers with greater
control over their finances, improve convenience, and promote financial inclusion. By addressing
the challenges and ensuring customer education, public sector banks can maximize the positive
impact of these innovations.

47
 AWARENESS OF INNOVATIVE PRODUCTS OFFERED BY PUBLIC
BANK

 Bridging the Gap: Public Banks and Customer Awareness of Innovative Products

Public sector banks play a crucial role in promoting financial stability and inclusion. However, in
a rapidly evolving financial landscape, keeping pace with innovative products can be a
challenge. This creates a vital gap – public banks may offer cutting-edge solutions, but how
aware are their customers of these offerings?

 Limited Awareness: A Multifaceted Issue

Several factors contribute to limited customer awareness of innovative products in public banks:

 Traditional Image: Public banks often struggle to shed their image of being slow and
bureaucratic. This perception can deter customers from exploring the new and improved services
available.
 Marketing and Communication Strategies: Public banks may not have the same marketing
budgets as private banks, leading to limited outreach about their innovative products.
Communication might be focused on traditional channels like branch notices, which may not
reach tech-savvy users.
 Digital Divide: While public banks are making strides in digitalization, not everyone has access
to smartphones or reliable internet connections. This digital divide limits awareness and access
for a significant portion of the population.
 Financial Literacy: Understanding the benefits and functionalities of new financial products
requires a certain level of financial literacy. Public banks may need to invest in educational
initiatives to bridge this gap.

 Innovative Products, Empowered Customers

Despite the challenges, public banks are actively developing exciting new products that can
significantly impact their customers' lives. Here are some examples:

 Mobile Banking Apps: These user-friendly apps allow customers to manage their finances on
the go, offering features like account balance checks, money transfers, bill payments, and mobile
wallets.
 Micro-ATMs: These compact ATMs can be deployed in rural and underbanked areas, extending
banking services to those who may not have access to traditional branches.
 Instant Account Opening: Public banks are utilizing digital onboarding processes to streamline
account opening, making banking accessible to more people.
48
 Micro Loans: These small loans cater to entrepreneurs and small businesses, promoting
financial inclusion and economic development.
 Financial Literacy Programs: Public banks are developing educational initiatives to inform
customers about responsible financial management, product benefits, and safe online banking
practices.
 Biometric Authentication: Fingerprint or facial recognition logins provide a safer and more
convenient way to access accounts compared to traditional passwords.
 Cashless Transactions: Public banks actively promote debit cards and digital wallets,
encouraging a shift towards cashless transactions for greater security and convenience.

 Strategies for Enhancing Customer Awareness

Public banks can implement several strategies to raise awareness of their innovative products:

 Leverage Digital Channels: Utilize social media platforms, targeted online advertisements, and
informative website sections to reach a wider audience.
 Partner with NGOs and Community Organizations: Collaborate with organizations that focus
on financial inclusion to reach unbanked and underbanked populations.
 Targeted Communication: Develop campaigns tailored to specific customer segments,
highlighting features relevant to their needs.
 Simplify Messaging: Use clear and concise language that explains the benefits of new products
in an easy-to-understand manner.
 Invest in Employee Training: Train branch staff to inform customers about innovative products
and answer their questions effectively.
 Leverage Existing Channels: Utilize branch displays, brochures, and customer statements to
promote new and exciting services.
 Public Awareness Campaigns: Partner with government agencies to launch nationwide
campaigns that emphasize the importance of financial inclusion and the role of public sector
banks.

 Building Trust and Embracing Innovation

By fostering customer awareness and trust in their innovative offerings, public banks can achieve
several goals:

 Financial Inclusion: Reach underserved populations and provide them with access to essential
financial services.
 Enhanced Customer Experience: Offer greater convenience, security, and control over
finances.
 Increased Revenue & Market Share: Attract new customers and compete effectively in the
financial services sector.
 Financial Literacy Improvement: Educational initiatives can empower customers to make
informed financial decisions.

49
  The Road Ahead

Public banks stand on the threshold of a transformative era. By bridging the awareness gap and
embracing innovation, they can empower their customers, promote financial inclusion, and
solidify their position as vital pillars of a healthy financial ecosystem. The key lies in a multi-
pronged approach: strategically leveraging technology, investing in customer education, and
fostering trust through clear communication. Only then can public banks truly harness the
potential of their innovative products to improve the lives of their customers

50
 Appendix

1. Are you aware of any innovative products offered by public sector banks?

96.3% people are aware of innovative products offered by public sector banks and 3.7% people
are not aware.

2. Which of the following innovative products have you used from public sector banks?

After mobile banking apps digital banking services are well known and online loan applications
are least used offered by innovative products by public sector bank.

51
 3. How satisfied are you with the innovative products offered by public sector banks?

29.6% people’s people are very satisfied by the innovative products offered by public sector
banks and 29 and 37% people are satisfied and 33.3% are neutral

4. What improvements would you like to see in the innovative products offered by
public sector banks?

Enhance security measure are most wanted improvement to see in the informative products
offered by public sector banks

52
 5. Do you think public sector banks are keeping up with private banks in terms of
offering innovative products?

Master 59.3 percent people think public sector banks are keeping up with private sector
banks in terms of offering innovative

6. Which public sector bank do you think offers the most innovative products?

State Bank of India offers the most innovative products.

7. What factors influence your decision to use innovative products from public sector
banks?
53
Trust in the bank factor influenced most people in decision to use innovative products from
public sector banks

8. Have you faced any challenges while using the innovative products offered by public
sector banks? If yes, please specify.
 No
 Risky transactions
 Networking issue during online payments
 Nope
 One of the biggest challenges facing the banking industry is regulatory changes. Banks
must comply with various regulations,
 One of the biggest challenges facing the banking industry is regulatory changes. Banks
must comply with various regulations, from anti-money laundering (AML) to data
protection laws
 Too buffering
 Yes
 Too buffering
 Yes, many time users face service/network down problem while doing payments to others
and sometimes it happens on crucial moments. So, this problem has to be solved.
 Honestly, I haven't personally faced any challenges while using the innovative products
offered by public sector banks since I don't have access to those services. However, I've
heard from some people that occasional technical glitches or slow response times can be
a minor inconvenience. But overall, the convenience and accessibility of these digital
banking features outweigh any small hiccups. Have you encountered any challenges
while using them?

9. How often do you use the innovative products offered by public sector banks?

54
Most of the people use innovative products weekly offered by public sector banks

10. Which channels do you prefer for accessing innovative products from public sector
banks?

Mobile app channel is most preferred for assessing innovative products from public sector banks.

CONCLUSION
55
The Indian banking sector is growing very well its customer base also increased dramatically.
The growth of the Indian banking sector become possible due to various reasons like political
support for the banking sector development, new innovations, new value-added services offer
by the banks. Nowadays, the new technology is sure that the future of banking will introduce
more offers and services to the customers with the bust banking product and innovations.
Banking sector has also increased the accessibility of a common person to bank for their
productivity and requirements. The Indian banking sector has improved the new Technology.
The banking system has improved the manifolds in terms of product and services, banking
system, technology, trading facility etc. it is the evident that the banking system has grown in
India to compare with other country. Further, the bank comprehends their customer and bank
will be meeting their requirements.

BIBLIOGRAPHY

56
 Branch visit of SBI bank
 Referred their project work
a) Binija George
b) Chavda Viral (Oct 2017), A STUDY ON INNOVATION IN BANKING SECTOR
IN INDIA.
c) Innovation in Indian Banking Sector – A Study on face of transformation and challenges
Pooja Nagpal.
d) Oshi, M. K. (2020). FINANCIAL PERFORMANCE ANALYSIS OF SELECT INDIAN
PUBLIC SECTOR BANKS USING ALTMAN’S Z-SCORE MODEL. JOURNAL OF
BUSINESS MANAGEMENT STUDIES.

 https://www.livemint.com/market/stock-market-news/profit-of-indian-public-sector-
banks-surged-by-40-in-first-nine-months-of-fy24-pnb-sbi-union-bank-bank-of-india-
11707811891616.html

 https://bank.sbi/documents/17826/35696/Annual_Report_2023.pdf

 https://www.paisabazaar.com/bank-of-india/


 https://bankingblog.accenture.com/ultimate-guide-product-innovation-banking

 https://www.quora.com/What-are-the-most-innovative-products-in-the-banking-sector

57