PROJECT REPORT

ON
CONSUMER PERCEPTION REGARDING DIFFERENT SERVICES
PROVIDED BY PUBLIC AND PRIVATE SECTOR
BANKS

SUBMITTED TO
PUNJAB TECHNICAL UNIVERSITY
JALANDHAR

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE

AWARD OF THE DEGREE OF
BACHELORS IN BUSINESS ADMINISTRATION

SUBMITTED BY:
Kanwalpreet Kaur
Roll No. 508240067

LOVELY INSTITUTE OF MANAGEMENT

PHAGWARA
SESSION (2005-08)
1

PREFACE
Someone has rightly said that practical experience is far better and closer to the
real world than mere theoretical exposure. The practical experience helps the
students to view the real business world closely, which in turn widely influences
their perceptions and arguments their understanding of the real situation.
The phenomenon of creation is a long process requiring time, energy and
dedications well as skill and experience of those people engaged in the task,
ultimately in the outcome as the final form of embodiment of the creator's vision.
Research work constitutes the backbone of any management education programme.
A management student has to do research work quiet frequently during his entire
span. The research work entitled "Consumer perception regarding different
services provided by public and private sector banks" aims to compare the various
services provided by public and private sector banks. For this purpose thee
respondents from different cities have been chosen.
BBA is the stepping-stone to management care in order to reach practical and
concrete results.

Our contemporary lives have been

influenced

by the

advancement and growth in banking sector. Wherein the banking sector of 21 st

century are unthinkable. This study aims to explore all such phases.
The course deals with matters, which are basic and should be known in relation to
banking sector. The topics are dealt with in a general manner. There would be
details about the profile of some banks, services availed by customers in public as
well as private sector banks, satisfaction level of customers regarding the services
they are availing etc.

ACKNOWELDGEMENT
A person always requires guidance and help of other to achieve success in his in
his mission; similarly it was not possible for me to complete my assignment. I am
indeed very much thankful to all the people who have helped me to complete the
project.
I am gratefully indebted to Ms.Impreet Kaur, my project guide for providing me all
the necessary help and required guidelines for the completion of my project and
also for the valuable time that she gave me from her schedule.
Last but not least I am thankful to all my friends, who have been a constant source
of inspiration and information for me. I thanks to almighty for showering his
blessing.

Kanwalpreet Kaur

CERTIFICATE
This is to certify that the project report entitled "Consumer perception regarding
different services provided by public and private sector banks" submitted by
Kanwalpreet Kaur is a bonafide piece of work conducted under my direct supervision
and guidance. No part of this work has been submitted for any other degree of any
other university. It may be considered for evaluation in partial fulfillment of the
degree of Bachelors in Business Administration.
Project Guide:
Ms. Impreet Kaur
Lecturer
Lovely Institute of Management, Phagwara

Dated: 28 April, 2008

TABLE OF CONTENTS

CHAPTER NO.
NO.

PARTICULARS

PAGE

1.

INTRODUCTION

8-22

Definition of bank
Indian Banking System
Classification of Banks
2.

PROFILE OF BANKS

23-40

State Bank of India

24-26

Punjab National Bank

27-29

Bank of Punjab

30-31

Lord Krishna Bank

32-34

HDFC Bank

35-38

IDBI Bank

39-40

3.

REVIEW OF LITERATURE

41-44

4.

OBJECTIVES

45-46

5.

RESEARCH METHODOLOGY

47-49

6.

LIMITATIONS

50-51

7.

DATA ANALYSIS

52-67

8.

FINDINGS

68-70

9.

SUGGESTIONS &

10.

RECOMMENDATIONS

71-74

CONCLUSION

75-77

QUESTIONNAIRE

BIBLIOGRAPHY

LIST OF TABLES
TABLE NO.

PARTICULARS

1.

Banking sectors services

PAGE NO.

respondents avail
2.1

No. of type of accounts held

in public sector banks

2.2

54

No. of type of accounts held

in private sector banks

3.

53

56

No. of Respondents preferring

different banks

58

4.

Reasons for accounts in different banks

60

5.

No. of people availing different

facilities at public & private sector banks

6.1

62

Satisfaction level of customers regarding

the facilities availed from the public
sector banks

6.2

64

Satisfaction level of customers regarding

the facilities availed from the
public sector banks

7.
8.

65

No. of customers ready to shift from

their present bank

66

Problems faced by customers

67

CHAPTER -1
INTRODUCTION

INTRODUCTION
The world of banking has assumed a new dimension at dawn of the 21 st
century with the advent of tech banking, thereby lending the industry a
stamp of universality. In general, banking may be classified as retail and
corporate banking. Retail banking, which is designed to meet the
requirements of individual customers and encourage their saving, includes
payment of utility bills, consumer loans, credit cards, checking account and
the like. Corporate banking, on the other hand, caters to the needs of
corporate customers like bills discounting, opening letters of credit,
managing cash, etc.
Metamorphic changes took place in the Indian financial system during the
eighties and nineties consequent upon deregulation and liberalization of
economic policies of the government. India began shaping up its economy
and earmarked ambitious plan for economic growth. Consequently, a sea
change in money and capital markets took place. Applications of marketing
concept in the banking sector were introduced to enhance the customer
satisfaction. The policy of privatization of banking services aims at
encouraging the competition in banking sector and introduction of financial
services. Consequently, services such as Demat, Internet Banking, Portfolio
Management, Venture Capital, etc., came into existence to cater to the needs
of public. An important agenda for every banker today is greater operational
efficiency and customer satisfaction. The new watchword for the bank is
pretty ambitious: customer delight.
The introduction to the marketing concept to banking sector can be traced
back to American Banking Association Conference of 1958. Bank
marketing can be defined as the part of management activity, which seems
9

to direct the flow of banking services profitability to the customers. The

marketing concept basically requires that there should be thorough
understanding of customers need and to learn about market it operates in.
Further the market is segmented so as to understand the requirements of the
customer at a profit to the bank.

EVOLUTION OF INDIAN BANKING

Ancient banking system of India constituted of indigenous bankers. They
have been carrying on their age-old banking operations in different parts of
the country under different names. The modern age of banking constitutes
the fundamental basis of economic growth. The term Bank is being used
since long time but there is no clear conception regarding its beginning.
According to the viewpoint, in good old days. Italian money leaders were
known as Banchi because they kept a special type of table to transact
their business.

IMPORTANCE OF BANKS
Today banks have become a part and parcel of our life. There was a time
when dwellers of the city alone could enjoy their services. Now banks offer
access to even a common man and their activities extend to areas hitherto
untouched. Banks cater to the needs of agriculturalists, industrialists, traders
and to all the other sections of the society. In modern age, the banking
constitutes the fundamental basis of economic growth.

10

DEFINITION OF BANK
The Oxford dictionary defines the Bank as,
An establishment for the custody of money, which it pays out, on a
customers order.
According to Whitehead,
A Bank is defined as an institution which collects surplus funds
from the public, safeguards them, and makes them available to the true
owner when required and also lends sums be their true owners to those who
are in need of funds and can provide security.
A Banking Company in India has been defined in the Banking
Companies act 1949,
One which transacts the business of banking which means the
accepting, for the purpose of lending or investment of the deposits of money
from the public, repayable on demand, or otherwise and withdraw able be
cheque, draft, order or otherwise.

The banking system is an integral subsystem of the financial system. It

represents an important channel of collecting small savings form the
households and lending it to the corporate sector.
The Indian banking system has Reserve Bank of India (RBI) as the apex
body for all matters relating to the banking system. It is the central Bank of
India. It is also known as the Banker To All Other Banks.

11

INDIAN BANKING SYSTEM

Banking in India has its origin as early as the Vedic period. It was believed
that transition from money lending to banking must have occurred even
before Manu, the great Hindu Jurist, who has devoted a section of his work
to deposit advance and laid down rules relating to rates of interest. During
the Mogul period, the indigenous bankers played a very important role in
lending money financing foreign trade and commerce. During the days of
East India Company, it was the turn over of the agency houses to carry on
the banking business. The General Bank of India was the first joint sector
bank to be established in the Year 1786. The others that followed were the
Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported
to have continued till 1906 while the other two failed in the meantime.
In the first half of the 19 th century the East India Company established three
banks:
1. The Bank of Bengal in 1809.
2. The Bank of Bombay in 1840.
3. The Bank of Madras in 1843.
These three banks also known as Presidency Banks were independent units
and functioned well. These three banks were amalgamated in 1920 and a
new bank, the Imperial Bank of India was established on 27 th January 1921.
with the passing of State Bank of India Act in 1955, the undertaking of
Imperial Bank of India was taken over by the newly constituted State Bank
of India. The Reserve Bank which is the Central Bank of India was created
in 1935 by passing Reserve Bank of India Act 1934. In the wale of
Swadeshi Movement, a number of banks with Indian management were
established in the country namely,
12

 Punjab National Bank Ltd.

Bank of India Ltd.
Canara Bank of India Ltd.
Indian Bank Ltd.
The Bank of Baroda Ltd.
The Central Bank of India Ltd.
On July 19, 1969, 14 major banks of India were nationalized and on 15 th
April, 1980 six more commercial private banks were also taken over by the
government.

RESERVE BANK OF INDIA

The banking system is an integral sub-system of the financial system. It
represents an important channel of collecting small savings from the
households and lending it to the corporate sector. The Indian banking
system has The Reserve Bank of India (RBI) as the apex body from all
matters relating to the banking system. It is the Central Bank of India and
acts as the banker to all other banks.
Functions of RBI:
Currency issuing authority.
Banker to the government.
Banker to other banks.
Framing of monetary policy.
Exchange control.
Custodian to foreign exchange and gold reserves.
Development activities.

Research and development in the banking sector .

13

CLASSIFICATION OF BANKS:
Banks under Reserve Bank of India has been classified as follows:
1. Non Scheduled Banks: These are banks, which are not included in
the second schedule of the Banking Regulation Act, 1965. It means
they do not satisfy the conditions laid down by that schedule.
2. Scheduled Banks: These are banks, which are included in the second
schedule of the Banking Regulation Act, 1965. According to this
schedule a scheduled Bank :
# Must have paid-up capital and reserve of not less than Rs. 5, 00,000
# Must also satisfy the RBI that its affairs are not conducted in a
manner
detrimental to the interests of its depositors.
Scheduled banks are sub-divided as:
1. State Co-operative Banks: These are Co-operatives owned and
managed by the state.
2. Commercial Banks: These are business entities whose main
business is accepting deposits and extending loans.

Their main

objective is profit maximization and adding shareholder value.

These are further sub-divided as:
1. Indian Banks: These banks are companies registered in India under
the Companies Act. Their place of origin is in India. Indian banks
can be further classified into Public sector and Private sector banks.

14

2. Foreign Banks: These are banks that were registered outside India
and had originated in a foreign country. As a result of liberalization,
a number of foreign banks were allowed to set their branches in India.

Classification of Banks

Reserve Bank of India

Schedule Banks

State Co-operative Banks

Non Scheduled Banks

Commercial Banks

Indian Banks

Public Sector Banks

Foreign Banks

Private Sector Banks

PUBLIC SETOR BANKS:

The public sector banks in India is formally owned and managed by the
Government of India. The government owns these banks. In India 20 banks
were nationalized in 1969 and 1980 respectively. Social welfare is there
main objective. It basically constitutes of the following:

15

a) State Bank of India and its subsidiaries: State Bank of India and
its associates are called State bank group. This group comprises of
the State Bank of India (SBI) and its seven subsidiaries viz. State
Bank of Patiala, State Bank of Hyderabad, State Bank of Travancore,
State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank
of Saurashtra and State Bank of Indore.
b) 20 Nationalized Banks: This group consists of private sector banks
that were nationalized by the Government of India. On the 19 th July
1969, fourteen major Indian bans having deposits of more than Rs. 50
crores were nationalized. The undertakings of these fourteen banks
were taken over by and have vested in 14 new corporate bodies
established under the baking companies (acquisition and transfer of
undertaking) act, 1970. It has been amended by banking companies
act 1994, according to which the share capital up to 49% of the
nationalized banks can be held by the public and the cost of the share
capital will be owned by the Government of India. These 14 banks
are now manages by the Govt. of India through the board of directors
appointed by it. On 15th April 1980, six more banks having deposits
not less than Rs. 200 crores were also nationalized. The undertakings
of these banks were taken over and vested in six corresponding new
banks under the banking companies (acquisition and transfer of
undertakings) act, 1980.
c) Regional Rural Banks: These were established by the RBI in the
year 1975 of Banking Commission. It was established to operate in
rural areas to provide credit and other facilities to small and marginal
farmers, agricultural laborers, artisans and small entrepreneurs.

16

LIST OF PUBLIC SECTOR BANKS

State Bank of India
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of Indore
State Bank of Mysore
State Bank of Patiala
State Bank of Saurashtra
State Bank of Travancore
Other nationalized banks are:
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab and Sindh Bank
Punjab National Bank
Syndicate Bank
17

 UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank

PRIVATE SECTOR BANKS:

These banks are those banks that are owned and run by private sector. An
individual has control over these banks in proportion to the shares of the
banks held by him. The Private Banks in India basically constitutes of the
following:
a) Old Private Sector Banks: This group consists of banks that were
established by the privy states, community organizations or by a
group of professionals for the cause of economic betterment in their
area of operations. Initially their operations were concentrated in a
few regional areas.

However, their branches slowly spread

throughout the nation as they grew.

b) New Private Sector Banks: After the nationalization of 14
commercial banks in 1969, RBI in the country licensed no new
private banks though there was no legal ban on the entry of private
sector banks.

The Narasimha Committee report of 1991, has

envisaged a larger role for private sector banks. In recognition of the

need to introduce greater competition with a view to achieving higher
productivity and efficiency of the banking system, RBI issued few
guidelines in January 1993 for the entry of private sector banks. It
prescribed a minimum paid up capital of Rs. 100 crores for the new
bank and the shares are to be listed at stock exchanges. Also the new
bank being granted license under the Banking Regulation Act shall be

18

registered as a Public Limited Company under the Companies Act,

1956. Subsequently 9 new commercial banks have been granted
license to start banking operations. The new private sector banks
have been very aggressive in business expansion and is also reporting
higher profit levels taking the advantage of technology and skilled
manpower. In certain areas these banks have even out crossed the
other groups of banks including foreign banks.
The RBI issued guidelines regarding the formation and functioning of
private sector banks in January 1993. These guidelines are as follows:
1. The banks shall be governed by the provisions of the Reserve Bank of
India Act, 1934, The Banking Regulations Act, 1949, and other
relevant statuaries.
2. Private sector banks are required to be registered as public limited
companies in India.
3. The shares of banks are required to be listed on stock exchanges.
4. Preference will be given to those banks whose headquarters are
proposed to be located in center, which does not have headquarters of
any other Bank.
5. Maximum voting rights of an individual shareholder would be limited
to 1% of total voting rights.
6. The new Bank would not be allowed to have as its director any
person who is already director in a banking system.
7. The Bank will be subject to prudential norms in respect of banking
operations, accounting policies and other policies, as laid down by
RBI. The Bank will be required to adhere the following :
Minimum paid up share capital of Rs. 1 bln.
Promoters contribution as determined by the RBI Capital
adequacy of 8% of the risk weighted assets.
19

 Single borrower and group borrower exposure limits in force.

Priority sector lending Export credit loan policy within overall
policy guidelines laid down by the RBI.
8.

The banks will be free to open branches anywhere

once they satisfy the capital adequacy and prudential accounting
norms.

9.

The banks would not be allowed to have investments

in subsidiaries, mutual funds and portfolio investments in other
companies in excess of 20% of the banks own paid up capital and
reserves.

LIST OF PRIVATE SECTOR BANKS

**Bank of Madura Ltd.
Bank of Rajasthan Ltd.
Bareilly Corporation Bank Ltd.
Bharat Overseas Bank Ltd.
City Union Bank Ltd.
Development Credit Bank Ltd.
Ganesh Bank of Kurundwad Ltd.
Karnataka Bank Ltd.
Lord Krishna Bank Ltd.
Nainital Bank Ltd.
SBI Comm. and Int Bank Ltd.
Tamilnadu Mercantile Bank Ltd.
The Benares State Bank Ltd.
The Catholic Syrian Bank Ltd.
The Dhanalakshmi Bank Ltd.
20

 The Federal Bank Ltd.

The Jammu And Kashmir Bank Ltd.
The Karur Vysya Bank Ltd.
The Lakshmi Vilas Bank Ltd.
The Nedungadi Bank Ltd.
The Ratnakar Bank Ltd.
The Sangli Bank Ltd.
The South Indian Bank Ltd.
The United Western Bank Ltd.
The Vysya Bank Ltd.
New Private Sector Banks

Bank of Punjab Ltd.

Centurian Bank Ltd.
Global Trust Bank Ltd.
HDFC Bank Ltd.
ICICI Banking Corporation Ltd.
IDBI Bank Ltd.
Indusland Bank Ltd.
*Times Bank Ltd.
UTI Bank Ltd.
*since merged with HDFC Bank
**since merged with ICICI Bank

21

PRIVATIZATION OF INDIAN BANKING

For the public sector banks, the era of bumper profit is over. For much of the
last decade the process of collaborated financial liberalization had cleared up
the Banks balance sheet enabling them to with stand increased competition,
global financing, turmoil and even unprotected industrial slow down. But
the cycle of liberalization has run its full course. Now it is the time for the
big structural leap, rationalization, mergers, and privatization. Unless the
banks undertake these fundamental changes, their profit will stay under
pressure.
There are twp areas of competitions which banking industry is facing
internationally and nationally. In the pre-liberalization era, Indian banks
could grow in a closed economy but the banking sector opened up for
private competition. It is possible that private banks could become dominant
players even within India. It has been recorded a rapid rise of the new
private sector banks and it has tracked the transformation of the public
sector banks as they grapple with the changes of financial deregulation.
Use of ATM cards, Internet Banking, Phone Banking, Mobile Banking are
the new innovative channels of banking which are being widely used as they
result in saving both time and money which are two essential things that

22

every one is short of and is running to catch hold of them. Moreover private
sector banks are aligning its infrastructures, marketing quality and
technology to build deep commitment in building consumer and retail
banking. The main focus of these banks is on innovative range of services or
products. For example, HDFC, ICICI, etc.

CHAPTER -2
PROFILE OF BANKS
23

EVOLUTION OF SBI
The origin of the State Bank of India goes back to the first decade of the
nineteenth century with the establishment of the Bank of Calcutta in
Calcutta on 2 June 1806. Three years later the bank received its charter and
was re-designed as the Bank of Bengal (2 January 1809). A unique
institution, it was the first joint-stock bank of British India sponsored by the
Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank
of Madras (1 July 1843) followed the Bank of Bengal. These three banks
remained at the apex of modern banking in India till their amalgamation as
the Imperial Bank of India on 27 January 1921.
The three banks were governed by royal charters, which were revised from
time to time. Each charter provided for a share capital, four-fifth of which
were privately subscribed and the rest owned by the provincial government.
The members of the board of directors, which managed the affairs of each
bank, were mostly proprietary directors representing the large European
managing agency houses in India. The rest were government nominees,
invariably civil servants, one of whom was elected as the president of the
board.

24

Group Photograph of Central Board (1921)

A major change in the conditions of operation of the Banks of Bengal,
Bombay and Madras occurred after 1860. With the passing of the Paper
Currency Act of 1861, the right of note issue of the presidency banks was
abolished and the Government of India assumed from 1 March 1862 the sole
power of issuing paper currency within British India. The task of
management and circulation of the new currency notes was conferred on the
presidency banks and the Government undertook to transfer the Treasury
balances to the banks at places where the banks would open branches. None
of the three banks had till then any branches (except the sole attempt and
that too a short-lived one by the Bank of Bengal at Mirzapore in 1839)
although the charters had given them such authority. But as soon as the three
presidency bands were assured of the free use of government Treasury
balances at places where they would open branches, they embarked on
branch expansion at a rapid pace. By 1876, the branches, agencies and sub
agencies of the three presidency banks covered most of the major parts and
many of the inland trade centers in India. While the Bank of Bengal had
eighteen branches including its head office, seasonal branches and sub
agencies, the Banks of Bombay and Madras had fifteen each.
In 1951, when the First Five Year Plan was launched, the development of
rural India was given the highest priority. The commercial banks of the
country including the Imperial Bank of India had till then confined their
operations to the urban sector and were not equipped to respond to the
emergent needs of economic regeneration of the rural areas. In order,
25

therefore, to serve the economy in general and the rural sector in particular,
the All India Rural Credit Survey Committee recommended the creation of a
state-partnered and state-sponsored bank by taking over the Imperial Bank
of India, and integrating with it, the former state-owned or state-associate
banks. An act was accordingly passed in Parliament in May 1955 and the
State Bank of India was constituted on 1 July 1955. More than a quarter of
the resources of the Indian banking system thus passed under the direct
control of the State. Later, the State Bank of India (Subsidiary Banks) Act
was passed in 1959, enabling the State Bank of India to take over eight
former State-associated banks as its subsidiaries (later named Associates).
The State Bank of India was thus born with a new sense of social purpose
aided by the 480 offices comprising branches, sub offices and three Local
Head Offices inherited from the Imperial Bank. The concept of banking as
mere repositories of the community's savings and lenders to creditworthy
parties was soon to give way to the concept of purposeful banking sub
serving the growing and diversified financial needs of planned economic
development. The State Bank of India was destined to act as the pacesetter
in this respect and lead the Indian banking system into the exciting field of
national development.

26

PUNJAB NATIONAL BANK

HERITAGE
Punjab National Bank has faced many a trials of strength including the
trauma of partition of India in 1947 at the time of independence. However,
due to its inherent strengths and resilience, the bank not only withstood such
adversities but established itself still firmly on the Indian subcontinent. The
bank was nationalized in July 1969 Established in 1895 at Lahore,
undivided India, Punjab National Bank (PNB) has the distinction of being
the first bank to have been started solely with Indian capital. From its
modest beginning, the bank has grown in size and stature to become a frontline banking institution in India at present. During its existence of over one
hundred and eight years, along with 13 other banks. The bank's strength lies
in its corporate belief of growth with stability.
PROFILE
With its presence virtually in all the important centers of the country, Punjab
National Bank offers a wide variety of banking services which include
corporate and personal banking, industrial finance, agricultural finance,
financing of trade and international banking. Among the clients of the Bank
are Indian conglomerates, medium and small industrial units, exporters,
non-resident Indians and multinational companies. The large presence and
27

vast resource base have helped the Bank to build strong links with trade and
industry.
Punjab National Bank is serving over 3.5 crore customers through 4497
offices, largest amongst Nationalized Banks. The Bank was recently ranked
38th amongst top 500 companies by the leading financial daily, Economic
Times. PNB's attempts at providing best customer service has earned it 9th
place among Indias Most Trusted top 50 service brands in Economic
Times- A.C Nielson Survey. PNB is also ranked 313 amongst the top 1000
banks in the world according to "The Banker" London.
At the same time, the bank has been conscious of its social responsibilities
by financing agriculture and allied activities and small scale industries (SSI).
Considering the importance of small scale industries bank has established 31
specialized branches to finance exclusively such industries.
Strong correspondent banking relationship which Punjab National Bank
maintains with over 200 leading international banks all over the world
enhances its capabilities to handle transactions world-wide. Besides, bank
has Rupee Drawing Arrangements with 15 exchange companies in the Gulf
and one in Singapore. Bank is a member of the SWIFT and over 150
branches of the bank are connected through its computer-based terminal at
Mumbai. With its state-of-art dealing rooms and well-trained dealers, the
bank offers efficient forex dealing operations in India.
The bank has been focusing on expanding its operations outside India and
has identified some of the emerging economies which offer large business
potential. Bank has set up representative offices at Almaty, Kazakhktan,
Shanghai, China and in London. Besides, Bank has opened a full fledged
Branch in Kabul, Afghanistan.
Keeping in tune with changing times and to provide its customers more
efficient and speedy service, the Bank has taken major initiative in the field
of computerization. All the Branches of the Bank have been computerized.
The Bank has also launched aggressively the concept of "Any Time, Any
28

Where Banking" through the introduction of Centralized Banking Solution

(CBS) and over 1066 offices have already been brought under its ambit.
PNB also offers Internet Banking services in the country for Corporate as
well as individuals. Internet Banking services are available through all
Branches of the Bank networked under CBS. Providing 24 hours, 365 days
banking right from the PC of the user, Internet Banking offers world class
banking facilities like anytime, anywhere access to account, complete details
of transactions, and statement of account, online information of deposits,
loans overdraft account etc. PNB has recently introduced Online Payment
Facility for railway reservation through IRCTC Payment Gateway Project
and Online Utility Bill Payment Services which allows Internet Banking
account holders to pay their telephone, mobile, electricity, insurance and
other bills anytime from anywhere from their desktop.
Another step taken by PNB in meeting the changing aspirations of its
clientele is the launch of its debit card, which is also an ATM card. It
enables the card holder to buy goods and services at 45,000 merchant
establishments across the country. Besides, the card can be used to withdraw
cash at more than 4500 ATMs, where the 'Maestro' logo is displayed, apart
from the PNB's over 450 ATMs and tie up arrangements with other Banks.

29

BANK OF PUNJAB
Bank of Punjab opened its first branch at Chandigarh, in April 1995. In a
short span of 8 years, the Bank added many firsts to its credit:
The first bank to focus on retail banking.
The first bank in north India to install a state-of-the Art ATM payment
gateway allowing on line transactions. Till today, the only such gateway in
North India.
The first bank to have introduced fax banking and telebanking for its
customers.
Leveraging the strength of technology, the First bank to offer extended
banking hours to its customers.
Realizing the importance of Human Resources, the First amongst peer banks
to set up a residential fully equipped training Institute.
The first bank to have transferred technology to the masses.
Bank of Punjab has a wide area network of branches across the country.
Customers in excess of 55, 63, 07 serviced by a team of 961 dedicated
professionals. The bank has established correspondent banking relationships
across 60 countries.
At its very inception, the bank's public issue in March 1995 of Rs. 29.52
million was over subscribed 20 times.

30

From a deposit base of Rs. 2342.17 Crores in the first year ended March
1996, deposits of the bank have grown to Rs. 3244.76 Crores, in the year
ended December, 2001, an annualized growth of 200% over the last 4 years.
The Bank is positioning itself at the leading edge of technology and is
coming out with various technology driven products and services for its
customers. On the anvil are Debit and Credit cards, Smart Cards and Online
e-commerce.
The Bank has already launched its E-Banking services and mobile phone
banking for its customers as value added services.
The Bank has put in place a 24 hour customer care center enabling secure
Online Banking and information services.
Bank of Punjab has made a strategic tie up with Master Card International
for its MASTERO, SWADHAN and CIRRUS International Card Network.
Bank's own ATM Network at On-Site Branches and Offsite locations will
swell from existing 125 to over 200 in the next one year.
Over and above its own ATM Network the customer of Bank of Punjab
would also be able to access hundreds of ATMs of other Master Card
member banks in India and over 5,40,000 worldwide displaying CIRRUS
logo.
The Bank's reach is further being extended through over 5000 merchant
establishments which would be accepting the Bank's "E-bank" card and the
Maestro Debit Card from Master card.
As a tribute to the memory of its founder late Dr. Inderjit Singh and his
commitment of giving the very best to customers, employees and the world
of Banking , Bank of Punjab has set up a state-of-the-art, Dr. Inderjit Singh
Institute of Banking and Insurance Management at Gurgaon, near Delhi.
The first among peer banks, the residential institute, of truly international
standards, is equipped with comprehensive training aids, an extensive

31

library and the latest IT tools. The institute provides an ideal learning
environment for professionals from banking, insurance and financial sectors.

LORD KRISHNA BANK

Lord Krishna Bank striding ahead in the business of banking. Weve
spread our wings. Broadened our horizons. And scaled new heights in
consumer services and reaching out to more and more customers. Today our
wide range of products and services help people across the country, live
their dreams.
Backed by state-of-the-art technology and experienced professionals adept
in financial management, we strive to make banking, simple, fast and
customer friendly. Just the way you like it.
Take a few moments to go through our website. Were sure youll see a
whole new side to banking. The year was 1940. In a quaint little hamlet
called Kodungallur in Trichur district of Kerala, a humble initiative was
taken, to serve the people of the region with honesty, commitment and
dynamism. And thus was born Lord Krishna Bank. While the seeds of
expansion were sown in the 60s when 3 commercial banks merged with
LKB, the turning point came in 1992 when the reputed Puri group took
substantial stake in the equity of the bank.
Today, while the bank continues to retain its trademark values of
personalized customer care, it has grown rapidly in size and scope, from a
local to a national player. From a traditional bank to an ultra-modern,

32

technology driven entity that is redefining relationship banking with an ideal

partnership of man and machine.
Net worth of the bank, which was Rs. 106.12 crores as of 31.03.2005 has
gone up to Rs. 163.81 crores as of 31.03.2006

2.1.2 Mission & Vision

Keeping the customer as the central focus, Lord Krishna Bank is committed
to provide excellence in banking services through a well-matched mix of
trained professionals and state-of-the-art technology.
To follow the strategy of speedy and aggressive branch network expansion
throughout India, to be a truly National Bank.
To offer a technology driven, well diversified range of services to cater to
both the retail segment as well as large and medium sized corporate.

2.2 DISTRIBUTION NETWORK

LKB is a pan-Indian Bank with network of 112 branches spread

across 11 States. LKB is poised to have 114 branches across 13 States
/ Union Territories at the earliest.

LKB has reached out at the doorsteps of Schools, Colleges etc.

through its 11 Extension Counters in major cities. This network is
planned to be increased to about four times shortly.

LKBs 100% business is computerized.

LKB believes in offering the latest in banking technology to its

clients. As a part of this strategy, the present thrust is on providing
"ANYTIME, ANYWHERE BANKING" with 44 ATM. In this

33

direction, interconnectivity of branches and ATMs is already

established successfully.

LKB has, as a part of an on-going process, re-structured its various

products to cater to the retail segment. The newly structured products
cover: Personal Loan, Consumer Loan, Education Loan, Loan against
Rent, Home Loan, Car Loan and Trade Loan.

LKB apart from banking services, offers popular financial products

like:

Life and non-life insurance,

Mutual Funds,

Infrastructure /Tax saving/Relief Bonds.

LKB has established its International Banking Division (IBD) fully

capable to handle varied forex transactions with centralized, fullfledged dealing room driven by state of the art technology.

LKB has 21 full-fledged authorized branches offering forex business

services.

Bank has expanded correspondent relationships across the globe with

230 banks in 95 countries and are fully capable to handle bilateral
transactions like advising letters of credit, negotiating/discounting
LCs, remittances etc. with various overseas banks.

LKB has, in order to ensure seamless services to NRI customers, tied

up with Western Union for quick money transfer of NRIs. The Bank
has entered into Rupee drawing arrangement with well-known
exchange houses in UAE viz Al Razouki International Exchange Co.,
Dubai, Al- Ansari Exchange Est, Abudhabi, UAE Exchange Centre
LLC, Abudhabi Federal Exchange and Arabian Exchange. Recently
LKB has signed another Rupee Drawing arrangement with Wall
Street Exchange Centre LLC, Dubai. Similar arrangements are also in
the offing with more Exchange Houses in Saudi Arabia, Qatar,
Bahrain, Oman, Kuwait and London.
34

LKB has undertaken a restructuring and re-engineering exercise to

emerge as a modern, market driven and high-tech bank.

About - HDFC Bank Limited, India

The Housing Development Finance Corporation Limited (HDFC) was
amongst the first to receive an 'in-principle' approval from the Reserve Bank
of India (RBI) to set up a bank in the private sector, as part of the RBI's
liberalization of the Indian Banking Industry in 1994. The bank was
incorporated in August 1994 in the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995.
Promoter
HDFC is India's premier housing finance company and enjoys an
impeccable track record in India as well as in international markets. Since its
inception in 1977, the Corporation has maintained a consistent and healthy
growth in its operations to remain a market leader in mortgages. Its
outstanding loan portfolio covers well over a million dwelling units. HDFC
has developed significant expertise in retail mortgage loans to different
market segments and also has a large corporate client base for its housing
related credit facilities. With its experience in the financial markets, a strong
market reputation, large shareholder base and unique consumer franchise,
HDFC was ideally positioned to promote a bank in the Indian environment.
Capital Structure

35

The authorized capital of HDFC Bank is Rs.450 crore (Rs.45 billion). The
paid-up capital is Rs.282 crore (Rs.28.2 billion). The HDFC Group holds
24.2% of the bank's equity while about 13.1% of the equity is held by the
depository in respect of the bank's issue of American Depository Shares
(ADS/ADR Issue). The Indian Private Equity Fund, Mauritius (IPEF) and
Indocean Financial Holdings Ltd., Mauritius (IFHL) (both funds advised by
J P Morgan Partners, formerly Chase Capital Partners) together hold about
5.5% of the bank's equity. Roughly 27.5% of the equity is held by FIIs,
NRIs/OCBs while the balance is widely held by about 214,000 shareholders.
The shares are listed on The Stock Exchange, Mumbai and the National
Stock Exchange. The bank's American Depository Shares are listed on the
New York Stock Exchange (NYSE) under the symbol "HDB".
Times Bank Amalgamation
In a milestone transaction in the Indian banking industry, TimesBank
Limited (another new private sector bank promoted by Bennett, Coleman &
Co. /Times Group) was merged with HDFC Bank Ltd., effective February
26, 2000. As per the scheme of amalgamation approved by the shareholders
of both banks and the Reserve Bank of India, shareholders of TimesBank
received 1 share of HDFC Bank for every 5.75 shares of TimesBank. The
amalgamation added significant value to HDFC Bank in terms of increased
branch network, expanded geographic reach, enhanced customer base,
skilled manpower and the opportunity to cross-sell and leverage alternative
delivery channels.
Distribution Network
HDFC Bank is headquartered in Mumbai. The Bank at present has an
enviable network of over 468 branches spread over 212 cities across the
country. All branches are linked on an online real-time basis. Customers in
90 locations are also serviced through Phone Banking. The Bank's
expansion plans take into account the need to have a presence in all major
industrial and commercial centres where its corporate customers are located
36

as well as the need to build a strong retail customer base for both deposits
and loan products. Being a clearing/settlement bank to various leading stock
exchanges, the Bank has branches in the centres where the NSE/BSE has a
strong and active member base. The Bank also has a network of over 1054
networked ATMs across these cities. Moreover, HDFC Bank's ATM
network can be accessed by all domestic and international Visa/MasterCard,
Visa Electron/Maestro, Plus/Cirrus and American Express Credit/Charge
cardholders.
Management
Mr. Jagdish Capoor took over as the bank's Chairman in July 2001. Prior to
this, Mr. Capoor was a Deputy Governor of the Reserve Bank of India.
The Managing Director, Mr. Aditya Puri, has been a professional banker for
over 25 years and before joining HDFC Bank in 1994 was heading
Citibank's operations in Malaysia.
The Bank's Board of Directors is composed of eminent individuals with a
wealth of experience in public policy, administration, industry and
commercial banking. Senior executives representing HDFC are also on the
Board.
Senior banking professionals with substantial experience in India and abroad
head various businesses and functions and report to the Managing Director.
Given the professional expertise of the management team and the overall
focus on recruiting and retaining the best talent in the industry, the bank
believes that its people are a significant competitive strength.
Technology
HDFC Bank operates in a highly automated environment in terms of
information technology and communication systems. The entire bank's
branches have connectivity which enables the bank to offer speedy funds
transfer facilities to its customers. Multi-branch access is also provided to
retail customers through the branch network and Automated Teller
Machines (ATMs).
37

The Bank has made substantial efforts and investments in acquiring the best
technology available internationally to build the infrastructure for a worldclass bank. In terms of software, the Corporate Banking business is
supported by Flex cube, while the Retail Banking business by Fin ware,
both from i-flex Solutions Ltd. The systems are open, scaleable and webenabled.
The Bank has prioritized its engagement in technology and the internet as
one of its key goals and has already made significant progress in webenabling its core businesses. In each of its businesses, the Bank has
succeeded in leveraging its market position, expertise and technology to
create a competitive advantage and build market share.
Rating
HDFC Bank has its deposit programmes rated by two rating agencies Credit Analysis & Research Limited (CARE) and Fitch Ratings India Pvt.
Ltd. The Bank's Fixed Deposit programme has been rated 'CARE AAA
(FD)' [Triple A] by CARE, which represents instruments considered to be
"of the best quality, carrying negligible investment risk". CARE has also
rated the Bank's Certificate of Deposit (CD) programme "PR 1+" which
represents "superior capacity for repayment of short term promissory
obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.)
has assigned the "tAAA (ind)" rating to the Bank's deposit programme, with
the outlook on the rating as "stable". This rating indicates "highest credit
quality" where "protection factors are very high". HDFC Bank also has its
long-term unsecured, subordinated (Tier-II) Bonds rated by CARE and Fitch
Ratings India Pvt. Ltd. CARE has assigned the rating of "CARE AAA" for
the Tier-II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating
"AAA (ind)" with the outlook on the rating as "stable". In each case referred
to above, the ratings awarded were the highest assigned by the rating agency
for those instruments?

38

IDBI BANK
The birth of IDBI Bank took place after RBI issued guidelines for entry of
new private sector banks in January 93. Subsequently, IDBI as promoters
sought permission to establish a commercial bank and retained KPMG a
management consultant of international repute to prepare the groundwork
for establishing a commercial Bank. The Reserve Bank of India conveyed
it's in principle approval to establish IDBI Bank on February 11th, 1994.
Thereafter the Bank was incorporated at Gwalior under Companies Act on
15th of September 1994 (Registration No. 10-08624 of 1994) with its
Registered Office at Indore. The Certificate for Commencement of Business
was received on 2nd of December 1994.

World class Management for World class Service

The Top Management Team, led by Managing Director and CEO, Mr. G.V.
Nageswara Rao, is always alive to the changing needs of the clientele of
IDBI Bank. In fact, constant evolution has been the key to the success of the
Bank. Having strengthened its base over the years, IDBI Bank now looks
forward to brace the future with extra vigour and energy with a host of new
products, rapid expansion and above all quality service that differentiates
IDBI Bank above all else.

Management Team - The Core Strength of the Bank

39

Mr. Nageswara Rao was appointed MD & CEO of IDBI Bank in December
2003. Prior to his appointment he was the MD of IDBI Capital Market
Services Ltd. During his tenure, IDBI Capital established itself as a leading
intermediary in the capital markets with dominant market positions in most
businesses. In IDBI Bank his aim will be to pursue a path of aggressive
growth to build upon the robust platform that the company has already
established.

Top management team:

Pradeep Patil heads Retail Banking. Pradeep was earlier the Head-Audit at
IDBI Bank for the last seven years and comes with a varied experience of 18
years from Union Bank of India.
Janak Desai joined in as Country Treasurer after an outstanding innings at
Standard Chartered Bank and ABN Amro.
Susheel Kak joined as Head - Corporate Banking after 25 years of varied
banking experience in SBI and Deutsche Bank in Singapore and India.
Jayant Mehrotra joined as Chief Financial Officer. He carries a varied
experience from Industrial Bank of Oman (SAOG), Peregrine India, ESSAR
World Trade Ltd, Tata Tea Ltd, Shalimar Paints Ltd, Lovelock and Lewes.
Pramod Vaidya took over as Head - Risk Management & HR, earlier he was
heading Ahmedabad branch since September 1996. He comes with a 22
years experience from Indian Bank.
Sanjay Sharma took over as the Chief Technology Officer; prior to this he
was heading the Product Development Group. He joined IDBI Bank in
August 1995. He carries a varied experience from State Bank of India.

40

Iswar Agasti took over as Head Centralized Operations. He joined IDBI

Bank in October 1997 as Vice President Operations. He carries a varied
experience from Times Bank Ltd & The Vysya Bank Ltd.

CHAPTER -3
REVIEW OF
LITERATURE
41

REVIEW OF LITERATURE
Most of us like to save something for our difficult times. On the other hand
there are some people who need finance to start or expand their business.
Here the banking services step in. A bank mobilizes people surplus money
to meet the objective of national economic growth. Today banks not only
serve as savings bank but render many more services such as to provide safe
custody for our valuables, to lend money against property, to accept
deposits, to issue traveler cheques etc.
As on March 31, 2000, there were 33 private banks and 43 foreign banks
operating in the country. The 27 public sector banks still hold the biggest
share of the banking business, accounting for about 83 per cent of the total
deposits and 80.50 percent of the total advances.
While nationalized banks struggle with their baggage from our socialist past,
winds of change are sweeping other segments. Modern day banks are not
mere suppliers of money. They have become providers of a wide range of
services. Provided the government rectifies its policies, banks can provide a
host of services such as selling insurance, mutual funds and investment
opportunities, as in other countries. More dramatic are the developments in
technology. Today, traditional business models are being challenged.
Customers can do all their banking transactions while sitting at home. Banks
are introducing Automatic Teller Machine (ATM) cards and, lately, debit
cards as well. This promises to change the face of banking forever.

42

During the year 2003-04, the banking sector witnessed strong growth in
deposits and advances. The aggregate deposits of scheduled commercial
banks (SCBs) grew by 17.5 per cent compared to 13.4 per cent in 2002-03.
Credit and investments by SCBs increased by 15.3 per cent and 25.1 per
cent, respectively in 2003-04 compared to 16.1 per cent and 23.3 per cent
respectively in 2002-03. These developments coupled with a decline in
gross NPAs enabled SCBs to improve their financial performance, despite a
lower income growth consequent upon low interest rates. Ratio of net profits
to total assets of SCBs improved marginally from 1.0 per cent to 1.1 per
cent. Ratio of operating profits to total assets improved from 2.4 per cent in
2002-03 to 2.7 per cent in 2003-04. The total income of SCBs increased by
6.6 per cent to Rs. 1,83,767 crore in 2003-04 as compared to an increase of
14.0 per cent in 2002-03.
Private Banks are on an ascending trend. In 2003-04, they made huge
inroads into the over Rs 1, 00,000 crore ($21.5 billion) retail business
market that has so far been dominated by PSU banks.
Banks such as ICICI Bank, HDFC Bank, UTI Bank and IDBI Bank
registered a 62 per cent growth and offered retail loans worth over Rs
11,743 crore ($2.5 billion) in FY04. On the other hand, PSU banks such as
SBI, PNB, Canara Bank, Bank of Baroda and Bank of India together posted
36 per cent growth in personal loans at over Rs 80,813 crore ($17.4 billion).
PSU banks showed a growth figure of 50.44 per cent in the home loans
category at over Rs 40,000 crore ($8.6 billion), but private banks surged
ahead of them with 58 per cent growth at Rs 3,437 crore ($742 million).
In consumer durable loans, private banks listed a marginal growth of 7.72
per cent at Rs 291 crore ($62.8 million) during the year, while PSU banks
recorded nearly a 15 per cent drop in credit at Rs 1,838 crore ($396.8
million).

43

Private Banks grew significantly in the rest of the personal loan category at
67 per cent (Rs 8,015 crore or $1.7 billion), while PSU banks witnessed
26.84 per cent (Rs 4,801.55 crore or $1 billion) in 2003.
The present study focuses on the banking industry and reveals several
factors that influence customer perceptions of service quality. It examines
the differences between private and public banks in terms of their customers'
perceived service quality and their effect on loyalty. It studies the types of
accounts held by customers in different banks.

It further studies the

elements of switching behavior. It provides managers with appropriate tools

to measure the service quality and loyalty level of their customer base, in an
effort to build a sustainable competitive advantage. Limitations of the study
are also reported.

44

CHAPTER -4
OBJECTIVES

45

OBJECTIVES OF THE RESEARCH:

This study has been conducted with a variety of important objectives in
mind. The following provides us with the chief objectives that have tried to
achieve through the study. The extent to which these objectives have been
met could be judged from the conclusions and suggestions, which appear in
the later of this study.

THE CHIEF OBJECTIVES OF THIS STUDY ARE:

1. To find the banking sector that is largely availed by the customers.
2. To study the factors influencing the choice of a Bank for availing
services.
3. To find and compare the satisfaction level of customers in public
sector as well as in private sector banks.
4. To study the problems faced by customers.
5. To get suggestions for improvement or change in the services of
public and private sector banks.
6. To study what do people expect in the new Era of Banking.

46

CHAPTER -5
RESEARCH
METHODOLOGY
47

RESEARCH METHODOLOGY
Research methodology is one of the important aspects of any project. This
gives us a clear-cut view of the method so used while gathering the
information so needed for competition of the report. Research design is an
arrangement of conditions for collection of and analysis of data in a manner
that aims to combine relevance to research purpose with economy of
procedure.

1. Type of research: - Exploratory research has been conducted for this

study.
2. Sampling design:
a) Universe: - The basic thing to be decided is a universe (what is to be
surveyed?).

For example, in a survey on Consumer Perception about

services provided by Public and Private Sector Banks whether which class
of customers to be surveyed? In this study the universe or population
includes all the respondents or customers, which have account in one or
more banks
b) Sample size: - The next issue to be decided is the sample size (how many
units to be surveyed?). Of course, the whole of the universe cannot be
studied in a single search project. The researcher has to select a relevant
48

fraction of the population, which is a representative of the entire population

or the universe. Generally, in exploratory study a sample less than 1% is
sufficient to provide reliable results. In my study, the size of sample was 100
customers of different cities who have account in one or more banks
c) Sampling Technique: - The technique used to select the sample has been
convenience sampling. In this method, the sample units are chosen primarily
on the basis of the convenience to the investigator.
3. Data Collection: - Data will be collected using two main methods:
a) Primary data collection: - Primary data do not exist already in records
and publications. The researcher has to gather primary data a fresh for the
specific study undertaken by him. The primary data are explicitly gathered
for a specific research project at hand. In my project, the Primary data has
been collected through questionnaire from the relevant respondents.
b) Secondary data collection: - The Secondary data refer to those data
which are gathered for some other purpose and are already available in the
internal records and commercial, trade, or government publications. In my
project, the Secondary data has been collected by going through various
newspapers, magazines, journals and web sites (refer Bibliography for
details).

49

CHAPTER -6
LIMITATIONS

50

LIMITATIONS OF THE STUDY

Like all other studies, this study too had its limitations. Although all
possible steps were taken to overcome most of limitations, but the following
were beyond and hence played their part in their conduct of the study.
Study is carried out on the customers belonging to carious part of
society who are human beings. Human beings have a tendency to
behave artificially when they know that they are being observed. So
the customers and respondents start behaving artificially when they
know that their attitudes, opinions, beliefs, etc. are being studied. This
aspect of human behavior distorts the project research result.
The questionnaire might also be having certain undetectable errors
and limitations that also affect the study, since no pre-test was done
before the circulation of the questionnaire.
The sample size taken is small and may not be sufficient to predict
the results with 100% accuracy. For a study like this one a still bigger
sample size would have been appropriate.
The scope of the study is limited to some part of the Jalandhar only
because of limited time and financial resources. So the result of the
study may not be generalized for India as a whole.

51

CHAPTER -7
DATA ANALYSIS

52

DATA ANALYSIS AND INTERPRETATION

1. The respondents were asked about which banking sectors
services they avail.
Table 1: Banking sectors services which the respondents avail

Banking Sector
Public

Number of
Respondents
20

Private
Both

55
25

60

55

50
40
Public
30
20

25
20

Private
Both

10
0
Number of Respondents

Graph 1: Banking sectors services which the respondents avail

INFERENCE:
53

It was found that 55% of the respondents were availing services of

private sector banks while those of the public sector banks were only
20%. The remaining 25% were availing the services of both these
sectors. So, at the present, the private sector is dominating the banking
sector in this context.

2. The respondents were asked about the type of account they have
in the Public Sector as well as in Private Sector banks :Table2.1 Number of type of accounts held in Public sector banks
Type of Accounts

Name of the

Savin Curre

Dema Fixed

Salary

Bank

nt

Deposit

State Bank

16

Group
Punjab

18

national Bank
Allahabad

Bank
Punjab & Sind 9

Bank

54

State Bank
Group
Punjab National
Bank
Allhabad Bank
Punjab & Sind
Bank

Sa
la
ry

FD

D
em
at

nt

C
ur
re

Sa
vi
n

20 18
18 16
16
14
12
9
10
8
5
6
33
3
4
2
2
22
1
1
1
2
0 0 00
00
0

Graph 2.1 Number of type of accounts held in Public sector banks

INFERENCE:
It was found that in case of public sector banks, maximum number of
account holders that is 18%, own Savings account with Punjab National
Bank.

Followed by State Bank Group which hold 16% in Saving

account. In some banks, like Allahabad Bank the number of account

holders for Current, Demat and Salary accounts is zero. It was found
that most of the respondents have Saving Account in banks.

55

Table 2.2 Number of types of accounts held in Private sector banks

Type of Accounts

Name of the Savi

Curr

Dem

Fixed

Salar

Bank
HDFC Bank
ICICI Bank
LKB Bank
Bank
of

ng

ent

at

Deposit

15
36
9
3

0
3
3
3

5
6
5
1

2
3
1
1

3
4
12
1

Punjab

56

36
HDFC Bank
ICICI Bank

15 15
9

12
2 31 1

LKB BanK
Bank of Punjab

34 1

Sa
la
ry

565

Fi
xe
dDe
po
si

nt
Cu
rre

Sa
vi
n

33 3

De
m
at

0
g

40
35
30
25
20
15
10
5
0

Graph 2.2 Number of types of accounts held in Private sector banks

INFERENCE:
It was found that in case of private sector banks, maximum number of
account holders that is 36% own Savings account with ICICI Bank.
Followed by HDFC and Bank of Punjab which hold 15% each. In IDBI
Bank, the number of account holders for Current account is zero. It
was found that most of the respondents have Saving Account in banks.

57

3. The basic purpose of this question was to know the most preferred
bank:Table 3: Number of respondents preferring different banks

58

Names of Banks
LKB Bank
ICICI Bank
HDFC Bank
Bank of Punjab
State Bank Group
Punjab National
Bank
Punjab & Sind
Bank
Allahabad Bank

Number of
Respondents
10
25
23
8
20
10
3
1

IDBI Bank
ICICI Bank
10%

3%1%

HDFC Bank

10%
25%

20%
8%

23%

Bank Of Punjab
State Bank Group
Punab National
Bank
Punjab & Sind Bank
Allahabad Bank

Graph 3: Number of respondents preferring different banks

INFERENCE:
From this graph, it is seen that ICICI Bank is the most preferred Bank
as compared to other Public and Private Sector Banks. It holds 25%
stake of the respondent followed by HDFC which hold 23% respondent.
59

ICICI Bank has the advantage of more working hours. It is the first
Bank in India to provide 12-Hour banking. Also the number of ATM
machines is more as compared to the other private sector banks. In vase
of public sector banks, State Bank Group is the most preferred which
have 20% respondent. The reason for preference of public sector banks
is the minimum amount of deposit for savings account is Rs.500
whereas in private sector banks, it is Rs.5000. Punjab National Bank
and LKB Bank are neck to neck holding 10% respondent each.

4. The aim to ask this question was to know about the reasons for
their preference in different banks:Table 4: Reasons for accounts in different banks

Reasons

No. of
60

Friendly behavior of

respondent
20

the staff
Promotional activities
Reliability/Trust
Quick and fast services
Location

2
30
25
23

Friendly
behaviour of
the staff

30
25

Promotional
activities

20
15

Reliability/Trust

10
5

Quick and fast

services

0
No. of respondent

Location

Graph 4: Reasons for accounts in different banks

INFERENCE:
By analyzing this Graph, we can conclude that 30% of the people
open accounts in different Banks due to the Goodwill of the Bank
followed by the people preferring fast and speedy services that is
25%. Only 2% respondents believe on promotional activities.
Therefore promotional activities should be taken up by banks so as

61

to make the population aware of the services provided by banks even

in rural areas.

5. The respondents were asked about the facilities they were

availing in public as well as private sector banks:Table 5: Number of people availing different facilities at Public
& Private Sector Banks:

Facilities
availed

No. of
Respondents

No. of
Respondents

No. of
Respondents

Total

62

in Public
Bank
ATM/Debit
card
Demat
Internet/Mobile
/Phone Banking
Insurance
Electronic
Funds Transfer
Foreign
Transfer of
Funds
Housing Loan
Investment
Advisory
Total

5
0
5
3

in Private
Bank

in Both Cases

10

17

1
5

0
6

1
16

10
8

5
4

18
14

15

8
4

2
1

12
7

55

25

100

2
1
2
2
20

63

Series 1
Series 2
Series 3
Series 4

oa
vt
ns
.A
dv
is
or
y

In

H
.L

FT

EF
T

B
an
ki
ng
In
su
ra
nc
e

at

N
et

De
m

A
TM

20
18
16
14
12
10
8
6
4
2
0

Graph 5.1: Number of people availing different facilities at public

sector banks
INFERENCE:
It was found that the facility that was availed by most of the people at
public & private sector banks was that of Insurance which hold 18% of
respondent. It can be clearly observed by the graph that ATM and
Debit Card are neck to neck holding 17% of respondent each. The least
availed facility was that of demat account and foreign transfer of funds
which have only 2% population.

6.

The purpose of this question is to know the satisfaction level they

were having with their banks overall performance:64

Public Sector Banks

Table 6.1: Satisfaction levels of customers regarding the facilities
availed from the public sector banks

Level of satisfaction
Highly Satisfied
Satisfied
Dissatisfied

No. of
Respondents
23
12
10

24%

50%
26.47%
23.52%

Highly Satisfied
50%

26%

%age

Satisfied
Dissatisfied

Graph 6.1: Satisfaction levels of customers regarding the facilities

availed from the public sector banks
INFERENCE:
It was found that in case of public sector banks, 50% of the respondents
were highly satisfied from the products and services availed by them
such as ATM/Debit cards, loans, clearing of cheques, lockers,
investment advisory, etc. 26% were just satisfied while 24% of the
people remained unsatisfied from the facilities availed at their preferred
public sector Bank.

PRIVATE SECTOR BANKS

Table 6.2: Satisfaction levels of customers regarding the facilities
availed from the private sector banks
65

Level of satisfaction
Highly Satisfied
Satisfied
Dissatisfied

No. of
Respondents
43
25
7

%age
57.57%
33.33%
9.09%

9%
Highly Satisfied
33%

58%

Satisfied
Dissatisfied

Graph 6.2: Satisfaction level of customers regarding the facilities

availed from the private sector banks
INFERENCE:
It was found that in case of private sector banks, 58% of the
respondents were highly satisfied from the products and services
availed by them such as ATM/Debit cards, loans, clearing of cheques,
lockers, investment advisory, etc. 33% were just satisfied while 9% of
the people remained unsatisfied from the facilities availed at their
preferred public sector Bank.

7. the respondents were asked that if they have given option, would
they like to shift from the present bank:Table 7: Number of customers ready to shift from their present Bank

66

80

72

70
60
50
40
30

28

20
10
0
Yes

No

Graph 7: Number of customers ready to shift from their present Bank

or not.

INFERENCE:
From this graph, we can conclude that the number of respondents
ready to shift from their present Bank is 28 while 72 customers seem to
be satisfied from their Bank and hence are not willing to shift from
their present preferred bank to other.

8. The aim to ask this question was to know whether the respondent
faces any problem regarding the services provided them by their
preferred bank:Table 8: Problems faced by customers

67

Types of Problems
Time Consuming
Introduction
Reference
Too many formalities
No facility of photograph
instantly
No problem

No. of Respondents
20
17
30
13
8
12

Time Consuming
Introduction

8%

12%

Reference

20%

13%

17%
30%

Too many
formalities
No facility of
photograph instantly
No problem

Graph 8: Problems faced by customers

INFERENCE:

It was found that only 30% of the respondents faced the problems of
reference. 20% of respondents find the processes in banks are time
consuming. Only 12% of the respondents surveyed had not problem at
all.

68

CHAPTER -8
FINDINGS

FINDINGS

More number of people has account with private banks.

69

 Majority of the respondent whether in public sector banks or in

private sector banks have savings account with banks.
Number of problems faced by people is more in public sector
banks.
People want a change in the behavior of the staff of the public
sector banks.
People are more satisfied from the private banks due to the better
services provided by them in terms of speedy transactions, fully
computerized facilities, more working hours (in case of ICICI
Bank, the number of working hours are 12), good Investment
Advisory services, efficient and co-operative staff, better approach
to Customer Relationship Management.
In private banks proper promotional activities should be taken up
so as to make the population aware of the services provided by the
banks even in rural areas.
The facility that was availed by most of the people at public sector
banks was that of ATM/Debit Cards. The least availed facility
was that of demat account and foreign transfer of funds.
The facility that was availed by most of the people at private
sector banks was that of Internet/Phone Baking followed by
ATM/Debit Card. The least availed facility was that of foreign
transfer of funds.

70

71

CHAPTER -9
SUGGESTIONS
&
RECOMMENDATIONS

SUGGESTIONS

72

These are some of the suggestions given by the customers of how the
modern banking should be. These are the comments given by them about the
improvement of the banking sector in India.
Banks should obey the RBI norms and provide facilities as per the
norms, which are not being followed by the banks. While the
customer must be given the prompt services and the bank officer
should not have any fear on mind to provide the facilities as per RBI
norms to the units going sick.
Banks should increase the interest rate of savings account.
Banks should provide loans at the lower interest rates and education
loans should be given with ease without much documentation. All the
banks must provide loans against shares.
Fair dealing with the customers. More contributions from the
employees of the bank. The staff should be co-operative, friendly and
must be capable of understanding the problems of the customers.
Internet banking facility must be made available in all the banks.
Prompt dealing with permanent customers and speedy transactions
without harassing the customers.
Each section of every bank should be computerized even in rural
areas also.
Door to door service especially for the senior citizens of the country.

73

 New account opening can be clubbed to the insurance policies either

life or general.
Personalized banking should be given a thrust as more and more
banks are achieving in usual services.
Real Time Gross Settlement can play a very important role.
Covering up the towns in rural areas with ATMs so that the people in
those areas can also avail better services.
No limit on cash withdrawal on ATM cards.
Indian Banks should compete with international banks regarding
Interest rates and services.
One counter service and 24-Hour banking.
Banking sector is improving by big leaps but still it needs to be improved.
Proper and efficient relationship staffs having knowledge for one stop
banking, customer friendly atmosphere, and better rate of interest are need
of the hour. The concept of privatization has overall improved the services
in all the banks. Home banking will be order of the day.

74

RECOMMENDATIONS
FOR PUBLIC SECTOR BANKS
Bank staff should be customer friendly and highly motivated to
serve the normal customer.
As far as possible, banks should reduce its documentation process
while providing loans.
Computerization should be done in banks at all levels and the
operators should be properly trained.
Token system should be induced so as to minimize the waiting
lines in the banks.
Proper ambience in the banks can develop a healthy working
culture.

FOR PRIVATE SECTOR BANKS

24 hours banking should be induced so as to facilitate the
customers who may not have a free time in the daytime. It will
help in facing the competition more effectively.
More ATM coverage should be provided for the convenience of
the customers.

75

CHAPTER -10
CONCLUSION

76

CONCLUSION
The customers now days are not only exposed of what type of service is
being provided by banks in India but in the world as a whole. They expect
much more than what is actually being provided. So the new coming
banking sector has to provide and cater to all the needs of the customers
otherwise it is difficult to survive in the competition coming up.
They not only expect the safety of money but also best ways to invest that
money which need needs to be fulfilled. Banks need to have a better outlook
towards to actually what customers are requiring. Entry of the private sector
banks has made the competition tougher. If a bank is not functioning
properly it is being merged into some other bank or being closed. So it is
difficult to face these types of conditions. Here a simple philosophy can
work that customers are God and we need to follow this to survive and serve
better.
The banking sector is poised for explosive growth. In this, scenario, it is
imperative that banks adopt technology at an aggressive pace, if they wish to
remain competitive. Mani mamallan makes a case for banks to outsource
their technology infrastructure requirements, thus enabling early adoption
and increased efficiencies.
In this prevailing scenario, a number of banks have adopted a new
deployment strategy of infrastructure outsourcing, to lower the cost of
service channels. As a result, other banks too will need to align their
technologies with their reinvented business models. The required changes at
both the business and technology levels are enormous. In a highly

77

competitive banking market, early adopters are profiting from increased

efficiencies.
To actually face the growing competition, following are some of the ways
which can be adopted:
1. More touch points and more consumers.
2. Share the existing networks and services.
3. Move the existing paper customers to plastic customers.
4. Innovate consumer-specific banking products as against bankingspecific consumer services.
5. Shift the focus from Customer Relationship Management (CRM) to
Customer Managed Relationship (CMR).
6. Outsourcing.

78

CHAPTER -11
APPENDICES

79

QUESTIONNAIRE
Dear Customer,
I am a student of Lovely Institute of Management, Jalandhar. I am undergoing a
project named, "Consumer perception regarding different services
provided by public and private sector banks". So by filling this
questionnaire, please help me in completing my project.

1. Which sector bank's services do you avail?

a) Public

[ ]

b) Private

[ ]

c) Both

[ ]

2. In which bank do you have your account?

1.
2.
3.
4.
3. Which type of account do you have in the bank?
Name
the Bank

of Saving

Current

Demat

Fixed

Salary

Deposit

4. In case you have your account in more than one bank than which is your
most preferred bank? (Please mention only one bank)

5. Kindly rank the reasons for your preference towards this particular bank?

80

Quick & Fast Service

Location

Friendly Behavior of the Staff

Reliability

Promotional Activities

Any Other

6. What facilities are you availing at your bank?

ATM/Debit Card

Electronic Funds Transfer

Demat

Insurance

Internet/Phone/Mobile Banking

Any Other

7. How much satisfied are you with your banks overall performance?
Excellent [

Good

Poor

8. Any specific services you expect from your bank?

____________________________________________________________
9. If an option is given to you, would you like to shift from the present
bank?
Yes

No

10.Do you face any problem regarding the services provided by your
preferred bank?
If yes___________________________________________________
11.Would you like to give any suggestions for the betterment of the banks in
these sectors:
81

Public Sector______________________________________
Private Sector_____________________________________
Personal Details: Name

_____________________________

Age

_____________________________

Gender

_____________________________

Occupation _____________________________
Address

_____________________________

Thanks for your valuable time given to us.

BIBLIOGRAPHY

82

 BOOKS
Kothari C.R. (1990) Research Methodology: Methods
and Techniques; Wishva Prakashan New Delhi.
Bodie.Z, Kane.A & Mracus.J:

Essentials

of

Investment.
Prof. E Gordon & Dr. K. Natrajan Banking Theory
Law and Practice.
Dutt, Rudar and Sundra, K.P.M., Indian Economy
(New Delhi: S. Chand & Co.)
Luck, David J. & Rubin, Ronald S., Marketing
Research, (New Delhi: Prentice Hall of India )
E. Gordan, K. Nattrajan, Banking (Theory, Law and
Practice), (Himalaya Publishing House)
TR Jain, C L Singla, Banking and Foreign Trade
Management, (V K Publications)
S C Gupta, Statistics

WEBSITES
http://www.punjabnationalbank.com
http://www.statebankofindia.com
http://www.bankofpunjab.com
http://www.hdfc.com
http://www.idbibank.com
http://www.google.com

83