Deposit:The Growth propeller

A comparative analysis selected private and public bank

Submitted By

SUCHISMITA DAS
University Roll No:13000919021

Submitted for the partial fulfillment of the degree of

Master of Business Administration
Under
Maulana Abul Kalam Azad University of Technology, West Bengal
(formerly known as West Bengal University of Technology)

Techno Main Salt Lake

EM 4/1, Salt Lake, Sector – V, Kolkata – 700091.
 ACKNOWLEDGEMENT

I am extremely indebted to the management of Punjab National Bank, for providing me the
opportunity to undertake the project work in their esteemed organization. I am extremely grateful
for all the guidance provided by Bhaskar Prasad(Assistant Manager), without whose help this
project would not have been possible.

I would like to express my sincere gratitude to Prof. Arnob Sen, of the School of Management
Studies, Techno Main Salt Lake, whose role as project guide was invaluable for the project.

Thanks, are also due to the Training and Placement Cell of School of Management Studies,
Techno Main Salt Lake, for all the assistance provided throughout the Summer Internship
Programme.

I would also like to convey my gratitude to all the teachers for providing us the technical skills
that will always remain as our asset and to all non-teaching staff for their cordial support. I am
extremely thankful for the keen interest Techno Main Salt Lake College took in advising us, for
the books and reference materials provided, and for the moral support extended to us.

-------------------------------------------------
Name: Suchismita Das

University Roll No:13000919021

University Regn. No & Year: 027604 OF 2019-20

Place: Techno Main Salt Lake

Date: 27/11/2020

Techno India School of Management Studies

Techno Main Salt Lake, Sector-V, Salt Lake, Kolkata --- 700091,West Bengal, India.

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 DECLARATION BY THE INTERN

I, the under-mentioned, solemnly declare that this internship report on “Deposit:The growth
propellar”:A comparative analysis of selected private and public banks.
is my original work. I further declare that I have strictly observed reporting ethics and duly
discharged copy-right obligation and properly referred all outsourcing of materials used in this
report and nothing is confidential in this report in respect of the company of my internship.

Signature: __________________

Name: Suchismita Das

Registration No: 027604 OF 2019-20

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 TABLE OF CONTENT

Sl. No. TOPIC Page No.

[1] Executive Summary 4

[2] Introduction to the topic / Theoretical Background 5

Banking system 6-10

[3] Objectives of the study 11-12

[4] Company profile 13-19

[5] Research Methodology 20-21

[6] Public vs private bank 22-23

[7] Deposit 24-27

[8] Data Analysis & Interpretation 28-37

[9] Conclusion 38

[10] Suggestion 39

[11] Limitations of the Project 40

[12] References 41

[13] Webliography 42

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 Executive Summary

Borrowing and lending are the key function of Indian banking sector. Deposits are the life
blood of the banking institution as they constitute the major source of funds to lending
activities. To increase their deposits the bank competes themselves. Here in the research an
attempt has been made to see the deposits pattern of selected public and private sector banks
for the period of 2015-16 to 2019-20. The objective of the research paper is to do the
comparative trend analysis of public and private sector banks. The second objective of the
research is to predict the trends of deposits on the basis of historical data over the period of
time. Here the hypothesis for the research is that there is significant difference in deposit
pattern of public and private sector bank over the period of time. For the research the
research used mean and standard deviation as a tool of analysis. It is concluded from the
research that the deposits of public and private sector banks showing a rising trends.
Keywords: Public sector banks, private sector banks, deposits and trend.

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 Introduction

Banks and financial sector is the life blood of industry, commerce and trade. Banks are the
backbone of the modern business and its contributes major part in the development of the
economy. Banks are the financial institutions which are in depositsand advances and other
related services. Its role is to receive money from those who wish to save money and lend to
those who need money. It’s an essential element to function the financial activities smoothly. In
the current scenario people not able to do the proper transitions without deploying the proper
bank network. So the competent banking system has significant constructive externalities, which
increase the efficiency of the economy transaction in general.
Banks in India are making an effort to attract more deposits by coming up with new schemes
of saving. The government had made every possible efforts to increase their new deposits with
new schemes and reaching to the rural areas because as the deposits can provide them
sufficient funds for lending its and to earn profit out of that. To increase their shares in overall
rural development, the bank has to mobilize the deposits on large scale. As the funds opted by
bank through deposits and borrowing it has to deploy in the right way to get maximum return
out of that in terms of serving to society and also to generate revenues. A significant amount
of deposits is however, prompted by cash reserve ratio and statutory liquidity ratio
requirements. In any bank the credit policy of the government and the way it is implemented
determines the amount of deployable resources accessible to a bank and also the areas where
in profitable opportunities it can be deployed.

The Indian banking sector has emerged as one of the strongest drivers of India’s economic
growth. The Indian banking industry has made outstanding advancement in last few years, even
during the times when the rest of the world was struggling with financial meltdown. India's
economic development and financial sector liberalization have led to a transformation of the
Indian banking sector over the past two decades. Today Indian Banking is at the crossroads of an
invisible revolution. The sector has undergone significant developments and investments in the
recent past. Most of banks provide various services such as Mobile banking, SMS Banking, Net
banking and ATMs to their clients. Indian banks, the dominant financial intermediaries in India,
have made high-quality progress over the last five years, as is evident from several factors,
including annual credit growth, profitability, and trend in gross non-performing assets (NPAs).

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 Banking System

Banks and financial sector is the life blood of industry, commerce and trade. Banks are the
backbone of the modern business and its contributes major part in the development of the
economy. Banks are the financial institutions which are in depositsand advances and other
related services. Its role is to receive money from those who wish to save money and lend to
those who need money. It’s an essential element to function the financial activities smoothly. In
the current scenario people not able to do the proper transitions without deploying the proper
bank network. So the competent banking system has significant constructive externalities, which
increase the efficiency of the economy transaction in general. Indian government took the major
step in 1969 by putting the banking sector into the systematic system by nationalized 14 private
banks. This has been elaborate in nationalization banks in India. It was consider that private
ownership of the bank helps to improve the efficiency and performance of bank and as a result
the Indian government started diluting its equity in PSBs from the start of 1990 in a phased
manner. Later on liberalization and globalization phase have opened up many challenges to the
Indian financial sector. Even banks are on path to align their accounting standards n operating
norms with the internationalstandards and global players. During this phase the banks has to go
through many challenges like privatization, technology reforms, infrastructure development etc.
The focus of public sectors banks was on serving to the society where as the private sectors was
more towards generating revenues and because of this the banking system has to go through the
issues of NPA. Later on in the recent years the major challenge the banks gone through is
demonetization and now finally the recapitalization of the banks. (Khare, 2018)Although some
form of banking, mainly of the money-lending type, has been in existence in India since ancient
times, it was only over a century ago that proper banking began. The first bank in India, though
conservative, was established in 1786. From 1786 till today, the journey of Indian Banking
System can be segregated into three distinct phases. • Early phase from 1786 to 1969 of Indian
Banks • Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms •
New phase of Indian Banking System with the advent of Indian Financial & Banking Sector
Reforms after 1991 The banking industry has moved gradually from a regulated environment to
a deregulated market economy. The pace of transformation has been more significant in recent
times with technology acting as a catalyst. While the banking system has done fairly well in
adjusting to the new market dynamics, greater challenges lie ahead.

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 STRUCTURE

The Reserve Bank of India, the nation’s central bank, began operations on April 01, 1935. It was
established with the objective of ensuring monetary stability and operating the currency and
credit system of the country to its advantage.

In India, the banks are being segregated in different groups. Each group has their own benefits,
own dedicated target markets, limitations in operating in India. The commercial banking
structure in India consists of Scheduled Commercial Banks and Unscheduled Banks. Scheduled
commercial Banks constitute those banks which have been included in the Second Schedule of
Reserve Bank of India (RBI) Act, 1934. For the purpose of assessment of performance of banks,
the Reserve Bank of India categorise commercial banks as public sector banks, private sector
banks,Regional Rural Banks and foreign banks.

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BUSINESS DIVISION

Retail banking - Loans to Individuals (Auto loan, Housing Loan, Education Loan and other
personal loan) or small businesses.

Wholesale banking – Loans to Mid and Large corporate (Working Capital loans, Project finance,
Term loans, Lease Finance)

Treasury Operations – Investment in Equity, Derivates, Commodities, Mutual Funds, Bonds,

Trading and Forex operations

Other Banking Businesses – Merchant Banking, Leasing business, Hire purchase, Syndication
services etc

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 SWOT ANALYSIS

STRENGTHS WEAKNESSES

 High Standard Regulatory  Lower Operational Size

Environment  High level of NPAs
 Bank lending contribution in GDP  Financial inclusion
and economy  Inadequate mobilization of deposits
 New Bank Presence in rural areas  Underutilized capacity in rural areas
 Deposits increase  Inadequate risk management skills
 Maximization of Profit  Inability in managing banks
 Use of Plastic money
 Digital banking

OPPORTUNITIES THREATS

 Increase in Profit  High Probability of decreasing trend

 Emerging Economy in non-interest income
 Long term growth potential  Rising in corporate debts market
 Holding of large chunk of money in
CSR & SLR
 Alternative avenues in lending
 Rising cost of fund
 Underutilized capacity particularly in
rural areas
Structural weakness like lack of
institutional support, weak corporate
governance , inefficient regulation etc.

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 PORTER’S FIVE FORCES MODEL

Banking is mainly a client oriented business. A high-quality of services to the client is crucial for
the growth and stability of any bank. A wider distribution and access of financial services helps
both consumers and producers to raise their welfare and productivity. Such access is especially
powerful for the poor as it provides them opportunities to build savings, make investments, avail
credit, and more important, insure themselves against income shocks and emergencies. To
survive in an increasingly competitive environment, bank need to come up with various facilities
like Internet banking, mobile banking etc. With the onset of mobile banking, the industry finds
itself at the threshold of the next major technological leap.

Buyer Power - High bargaining power of customer’s

on account of banks renders uniform services to the
clients. Now a day’s almost all banks would like to
provide requisite information very easily by way to
Internet, Mobile banking to the clients .
Supplier Power- Low bargaining power of supplier’s
on account of RBI regulatory benchmarks. Banks have
to meet numerous regulatory standards created by RBI.
Competitive Rivalry- High competition of account of
number of prominent public, private, foreign along with
cooperative banks .
Availability of Substitutes - High menace from
substitutes like NBFC’s, Mutual funds, Government
securities and T-bills .
Threat of new entrants - Low threat of new entrants
on account of banking regulations. Before setting up of
a new bank, it is essential to take the consent of RBI.

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 Project Scope

Title of study
“Deposit:The growth propellar”:A comparative analysis of selected private and public
banks.

Statement of Problem

Bank Deposit are the important and core products of banking institutions.Since deposit plays
pivot role in banking field,so entire study revolves in understanding the concepts of various kind
of bank deposits and also the features,performance with respect to PNB.

Objective of study

The objective of the project work is to analyze various kind of deposits collected in PNB.The
study intends to present a brief and clear picture of deposit and its utilization.
 To analyze various kind of deposits of the bank.
 To study the trends of deposits of private sector banks
 To evaluate the variations arises in deposits with public sector banks to that of private
sector banks.
 To study any similarity in the pattern of deposits between public sector and private
sector banks
 To identify the future potential for public and private sector banks in India.
Scope of study
In general scope of study refers to the area of study.In this study we have taken data of each bank
for whole India and it is limited to only 5 years(2015-2016 to 2019-20).
Research Methodology
The focus of current study is to find out the pattern of deposits with the public sector banks
and private sector banks. Further study has expanded to check whether there is any similarity
exist between the deposits with public sector and private sector banks

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Primary data
 The data consisted of information collected with the help of bank personnel.
 Observation method was used for understanding various kind of deposit products nad
their features.

Secondary data
 This study is based on the basis of secondary data. Data and information collected from
annual report of selected banks
Secondary data is very useful for research with its significant advantages: time saving and
rapid accessibility

Research Hypothesis
The following hypothesis has been framed for existing study
H01: average deposits generated by public sector banks and private sector banks are having no
significant difference.
H02: correlation coefficient between average deposits of public sector banks and private sector
banks is not significant.

Plan of analysis
The information obtained from the sources were processed, tabulated, interpretation and
analyzed in the form of Tables and charts.It is likely analysis of the data will be more analytical
and descriptive in nature of the study.

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 PROFILE OF THE COMPANY

Punjab National Bank, abbreviated as PNB, is a Banking and Financial service bank owned by
the Government of India with its headquarters is in New Delhi, India. The bank was founded in
1894 and is the second largest public sector bank (PSB) in India, both in terms of business and
its network. The bank has over 180 million customers, 10,910 branches and 13,000+ ATMs post
merger with United Bank of India and Oriental Bank of Commerce, effective from 1 April 2020.

PNB has a banking subsidiary in the UK (PNB International Bank, with seven branches in the
UK), as well as branches in Hong Kong, Kowloon, Dubai, and Kabul. It has representative
offices in Almaty (Kazakhstan), Dubai (United Arab
Emirates), Shanghai (China), Oslo (Norway), and Sydney (Australia). In Bhutan it owns 51% of
Druk PNB Bank, which has five branches. In Nepal PNB owns 20% of Everest Bank Limited,
which has 50 branches. Lastly, PNB owns 41.64 % of JSC (SB) PNB Bank in Kazakhstan, which
has four branches.

HISTORY

Punjab National Bank is a PSU working under Central Government of India regulated
by Reserve Bank of India Act, 1934 and Banking Regulation Act, 1949. Punjab National Bank
was registered on 19 May 1894 under the Indian Companies Act, with its office in Anarkali
Bazaar, Lahore, in present-day Pakistan. The founding board was drawn from different parts of
India professing different faiths and of varying back-ground with, the common objective of
creating a truly national bank that would further the economic interest of the country.[1] PNB's
founders included several leaders of the Swadeshi movement such as Dyal Singh
Majithia and Lala Harkishen Lal, Lala Lalchand, Kali Prosanna Roy, E. C. Jessawala, Prabhu
Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively associated with
the management of the Bank in its early years. The board first met on 23 May 1894.[1] The bank
opened for business on 12 April 1895 in Lahore.

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PNB is the first Indian bank to have been started solely with Indian capital that survives to the
present – the earlierOudh Commercial Bank was established in 1881, but failed in 1958.

Mahatma Gandhi, Jawahar Lal Nehru, Lal Bahadur Shastri, Indira Gandhi and the Jalianwala
Bagh Committee have held PNB accounts.

Mission
"Creating Value for all its customers, Investors and Employees for being the first choice for all
stakeholders"
Vision
"To position PNB as the `Most Preferred Bank` for customers, the `Best Place to Work In` for
employees and a `Benchmark of Excellence` for the industry"

Awards and recognitions

 In the area of technology, the Bank was declared winner of IBA Banking Technology
Awards 2020 in the categories of most Innovate Project using Technology for PNB One.
 Bank was also recognized as Runners Up in Best Use of Data and Analytics for Business
Outcome in the Large Bank Category.
 Bank has won BFSI Digital Innovation Awards in the category of Robotic Process
Automation. Besides, Bank has received award of Governance Now BFSI Awards 2019
in Mobile App and SME Connect.
 PNB was adjudged ‘Bank of the year’ by Indo-American Chamber of Commerce
(IACC). Bank has also been recognized as the Best State Nodal Bank Award 2018-19 by
Ministry of Rural Development, Government of India.
 Bank was also recognized as “Best Bank for Corporate Social Responsibility” by the
Asiamoney Banking Awards 2020, second year in row.
 Bank has received 1st Prize in Rajbhasha Kirti Award by Govt. of India (Home
Ministry). The Bank has also been bestowed with third prize in the SCOPE Excellence
Award 2019 in the category of ‘Crisis Handling’
 Bank has been ranked 3rd among all Public Sector Banks in India in the recent Forbes
magazine’s annual ranking of the world’s 2000 largest public companies

Page | 14
Mergers and acquisitions

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Amalgamation

On 30 August 2019, Finance Minister Nirmala Sitharaman announced that the Oriental Bank of
Commerce and United Bank of India would be merged with Punjab National Bank. The
proposed merger would make Punjab National Bank the second largest public sector bank in the
country with assets of ₹17.95 lakh crore (US$250 billion) and 11,437 branches. The Union
Cabinet approved the merger on 4 March 2020. PNB announced that its board had approved the
merger ratios the next day. Shareholders of Oriental Bank of Commerce and United Bank will
receive 1,150 shares and 121 shares of PNB, respectively, for every 1,000 shares of they hold.On
1 April 2020, the merger came into effect. Post merging, all customers of other two merging
banks are now be treated as the customers of PNB

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Listings and shareholdings

PNB's equity shares are listed on Bombay Stock Exchange and the National Stock Exchange of
India.It is a constituent of the CNX Nifty at the NSE.

Subsidiaries

 PNB Housing Finance Ltd.

 PNB Metlife India Insurance Company Co. Ltd.
 PNB Investments Services Ltd.
 PNB (International) Ltd.
 PNB Gilts Limited

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Products & Services Provided

The bank provides a wide range of financial and banking services including Credit/ Debit Cards,
Savings/Current Account, Loans, Investments, Insurance and Finance corporate banking, mortgage
loans Private banking Private equity wealth management.

Punjab National Bank provides various banking products and services in India and
internationally. The company offers personal banking products and services comprising savings
accounts, current accounts, fixed deposits, nomination facilities, and debit cards, as well as
various credit schemes, such as housing loans, car finance, personal loans, professional loans,
educational loans, reverse mortgage loans, and various other credit schemes. The company also
provides corporate banking products and services, such as loans against future lease rentals,
EXIM finance products, cash management services, and gold card schemes for exporters. The
company has its registered office located in Delhi.

Social media presence

Bank believes in a thriving communication with its customers and in this context understands
the importance of Social media as an effective tool. Punjab National Bank is having a Facebook
following of 9,22,112, Twitter following of 1,54,225, LinkedIn of 57,624, Instagram of 35,049
and YouTube following of 24,725.

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BOARD OF DIRECTORS
As on 31st March 2020, the Bank’s Board comprised of 7 Directors including 3 whole time
Directors i.e. One Managing Director & CEO and two Executive Directors as on 31.03.2020.
During FY’20, the following changes took place in the composition of Board of Directors:

● Dr. R. K. Yaduvanshi has been appointed Executive Director on the Board of Bank w.e.f.
15.04.2019.

● Dr Rabi N. Mishra, Director under RBI Nominee Director category ceased to be a Director
on Bank’s Board w.e.f. 24.07.2019.

● Shri Vivek Aggarwal has been appointed as RBI Nominee Director on the Board of Bank
w.e.f. 24.07.2019 as per DFS notification.

● Shri Mahesh Baboo Gupta, Director under CA Category Director completed his tenure on
25.07.2019.

● Shri Ravi Mittal, Director under Govt. Nominee Director category ceased to be a Director on
Bank’s Board w.e.f. 08.08.2019.

● Shri Pankaj Jain has been appointed as Govt. Nominee Director on the Board of Bank w.e.f.
08.08.2019 as per DFS notification.

● Shri Sunil Mehta, Managing Director & CEO completed his tenure on 30.09.2019.

● Shri CH. S. S. Mallikarjuna Rao has been appointed as Managing Director & CEO of the
Bank w.e.f. 01.10.2019 as per DFS notification.

● Shri L. V. Prabhakar, Executive Director has been elevated as Managing Director and CEO
of the Canara Bank w.e.f. 01.02.2020 as per DFS notification.

● Shri Sunil Mehta, Non-Executive Chairman of the Bank completed his tenure on 15.02.2020.

● The Board wishes to place on record its appreciation for the valuable contribution made by
Shri Rabi N. Mishra, Shri Mahesh Baboo Gupta, Shri Ravi Mittal, Shri Sunil Mehta (MD
& CEO), Shri L. V. Prabhakar and Shri Sunil Mehta (Non Executive Chairman).

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DATA ANALYSIS, INTERPRETATION AND PRESENTATION

RESEARCH METHODOLOGY

Sample Description

The study is an exploratory and analytical in nature with a bid to analyse the deposit trend of
public sector SBI PNB and BOI are the private sector banks with reference to HDFC, ICICI and
Axis banks. In this study, we primarily study the comparative analysis of the Deposit trend of
selected private and public sector banks for the last 5 years

Sample Design

The deliberate sampling technique used for the present research study. The sampling method
involves the purpose or deliberate selection of particular unit for deliberate selection of particular
unit for a sample that represent the population.

Selection of sampling Unit

The banking sector in India is considered as the one of the fastest growing financial institutions
in the world. By using a sample study, top three Public Sector Banks such as State Bank of India,
Punjab National Bank, and Bank of India were selected for the PSU banks and Private sector
Banks such as HDFC, ICICI and Axis Bank are the top three PSB which constitute the sample
unit for the study of deposit trend analysis.

Data Collection

The data which is required for the present research study would be collected by using secondary
method.The secondary data collected from the following sources
• Annual reports of respective banks

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• Journals and reports on trends
• Newspapers, magazines
• Progress of Banking of India
• Government publications
• Financial Statement,Website

Tools for Data Analysis

For the analysis of collected secondary data following tools were used to know financial
performance and business model of SBI, PNB, HBFC and Axis banks.

• Graphs (like bar charts and trend line diagrams)

• Different comparative tables
A bar chart or bar graph is a chart or graph that presents categorical data with rectangular bars
with heights or lengths proportional to the values that they represent
Line chart or line plot or line graph or curve chart is a type of chart which displays information
as a series of data points called 'markers' connected by straight line segments.

Period of Study

The study covers the period of last five years i.e. 2015-16-2019-20.

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Analysis of deposit offered by Public and private Banks
PUBLIC BANK:

Public Sector Banks (PSBs) are a major type of bank in India, where a majority stake (i.e. more
than 50%) is held by the government. The shares of these banks are listed on stock exchanges.
There are a total of 12 Public Sector Banks alongside 1 state-owned Payments Bank in India.

The Central Government entered the banking business with the nationalization of the Imperial
Bank of India in 1955. A 60% stake was taken by the Reserve Bank of India and the new bank
was named State Bank of India. The seven other state banks became subsidiaries of the new bank
in 1959 when the State Bank of India (Subsidiary Banks) Act, 1959 was passed by the Union
government.

The next major government intervention in banking took place on 19 July 1969 when the Indira
Gandi government nationalised an additional 14 major banks. The total deposits in the banks
nationalised in 1969 amounted to 50 crores. This move increased the presence of nationalised
banks in India, with 84% of the total branches coming under government control.

he share of the banking sector held by the public banks continued to grow through the 1980s, and
by 1991 public sector banks accounted for 90% of the banking sector. A year later, in March,
1992, the combined total of branches held by public sector banks was 60,646 across India, and
deposits accounted for ₹1,10,000 crore. The majority of these banks was profitable, with only
one out of the 21 public sector banks reporting a loss.

he nationalised banks reported a combined loss of ₹1160 crores. However, the early 2000s saw a
reversal of this trend, such that in 2002-03 a profit of ₹7780 crores by the public sector banks: a
trend that continued throughout the decade, with a ₹16856 crore profit in 2008–2009.

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 Bharatiya Mahila Bank were merged with State Bank
of India with effect from 1 April 2017.

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Vijaya Bank and Dena Bank were merged into Bank of Baroda in 2018. IDBI Bank was
categorised as a private bank with effect from January 2019.[7]

On 30 August 2019, Finance Minister Nirmala Sitharaman announced the government's plan for
further consolidation of public sector banks: Indian Bank's merger with Allahabad Bank (anchor
bank - Indian Bank); Punjab National Bank's merger with Oriental Bank of
Commerce and United Bank (anchor bank - Punjab National Bank); Union Bank of India's
merger with Andhra Bank and Corporation Bank (anchor bank - Union Bank of India);
and Canara Bank's merger with Syndicate Bank (anchor bank - Canara Bank).[8] The mergers
took effect from 1 April, 2020.

PRIVATE BANK

Private sector banks are banking companies with majority stakes or equity being held by private
shareholders and not the Government of India. With all the major banks being nationalised in
1969, the private banking sector had been diminished significantly. In 1991, the Narasimhan
Committee laid emphasis on the importance of healthy competition in the banking sector, which
had been absent in the post nationalisation era and hence, unequivocally advocated for the entry
of private and foreign banking companies in the Indian market. Accordingly, guidelines were
lied down by the RBI for the establishment of public sector banks which were as follows:

 the private banks were to be established as public limited companies under the Indian
Companies Act,1956;
 The paid-up capital was not to be less than Rs. 100 Crore, which was later raised to Rs.
200 Crore by the 2001 guidelines. This capital is required to mandatorily be enhanced
to Rs. 300 Crore within three years of the commencement of business, among other
stipulations.

With RBI’s liberalisation policy in 1990s, the private sector banks boomed again. In India, they
have been categorised into two types by the financial regulators; Old Private Sector Banks
(emerged prior to 1968) and New Private Sector Banks (emerged after 1968). The Old private
sector banks had been too small in 1969 to be included in the nationalisation and hence preserved
their independence whereas the new private sector banks emerged after the policy change by
RBI. At present, there are 22 private sector banks in India. The old private banks are smaller in

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size and more regional in nature compared to the new ones. Having witnessed the ill-effects of
unregulated expansion of the public banks after nationalisation, private banks are much more
cautious about opening new branches.

Private sector banks mainly target corporate salaried individuals as their consumer base for their
salary accounts and credit cards. In terms of loans and deposits, Private banks appeal to the
younger generation and foreign nationals because of their online application processes, ease of
approval, better management, faster processing, doorstep delivery and quality customer service.
Owing to the monthly targets and sales goals, their performance as a business is much more
reliable as compared to public sector banks. However, higher processing fees, elevated interest
levels on loans and pre-payment clauses with lock-in periods and penalties make them an
unapproachable option for consumers on a budget. However, with respect to financial
performance in terms of most parameters like net interest margins and non-performing assets
(NPA), in spite of occupying a much smaller portion of the industry as compared to Public
Sector Banks (PSBs), private sector banks are much better placed.

DEPOSITS:
Bank deposits consist of money placed into banking institutions for safekeeping. These deposits
are made to deposit accounts such as savings accounts, checking accounts and money market
accounts. The account holder has the right to withdraw deposited funds, as set forth in the terms
and conditions governing the account agreement. The deposit itself is a liability owed by the
bank to the depositor. Bank deposits refer to this liability rather than to the actual funds that have
been deposited. When someone opens a bank account and makes a cash deposit, he surrenders
the legal title to the cash, and it becomes an asset of the bank. In turn, the account is a liability to
the bank.

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Types of Bank Deposits

Savings Account
A savings account can be opened with a bank or financial institution, to earn interest on the
balance maintained.This account should be opened with the objective of storing money in
electronic form. These days, most savings accounts can be used for multiple purposes like paying
bills, quick transactions, easy credit, etc.It offers high liquidity and is very popular among the
masses. It does, however, have cash withdrawal and transaction limits to promote digital
payments.Banks provide an interest rate which is only slightly higher than inflation, so it is not
very optimal for investment. The interest provided by Public sector bank is only 4%, however,
some of the private banks like Yes Bank and Kotak Bank offers interest between 6-7%.

Current Account
A current account is a special type of account that has lower restrictions than a savings account
when it comes to withdrawals and transactions.It is also known as a demand deposit account and
it is meant for businessmen to conduct their business transactions smoothly.These accounts
should only be opened by you if you are a small businessperson who has multiple monetary
transactions on a daily basis.These are the most liquid deposits and there are no restrictions on
the number and the number of transactions in a day.Banks also offer overdraft facilities on these,
i.e., they let account-holders withdraw more money than there is in the account.
Moreover, there is no minimum balance required to be maintained here, unlike other bank
accounts.With the advancement of digital payments, banks also offer the best online banking
facilities to these accounts, which has helped them contribute more to develop businesses in the
economy.A disadvantage of these accounts is that banks do not pay any interest on these
accounts. Also, these accounts also charge hefty fees for their services and maintenance.

Term Deposits

Term Deposits, popularly known as Fixed Deposit, is an investment instrument in which a lump-
sum sum amount is deposited at an agreed rate of interest for a fixed period of time, ranging

Page | 25
from 1 month to 5 years. Term Deposits can be availed at financial institutions like Banks, Non-
Banking Financial Companies (NBFC), credit unions, post offices and building societies.

Term Deposits have unique monetary features that have made them popular among the
investment circles. The essential characteristics of term deposits are:

 Fixed rate of interest: The rate of interest for term deposits are fixed and are not subject
to fluctuations in the market.
 Safety of investment: Since interest rates of the term deposit are not affected by the
changes in the economy, it is one of the safest investment options available.
 Preset investment period: The investor has the freedom to choose the tenor of the
investment based on the plans offered by the financial institution. Normally the interest
rate offered by the institution will be higher for a longer tenor. But it is advisable to
compare the interest to tenor ratios before making the investment.
 Interest Payment: The investor has the option to choose to receive the interest income
either on maturity or periodically – monthly, quarterly or yearly.
 Wealth Generation: The stable interest received on the investment ensures that the
investors’ wealth grows even during difficult times in the market.
 Rollover: An investor who does not require their money on the maturity of the term
deposit has an option to roll over the deposit for a fresh term. ‘Rollover’ refers to the
reinvesting of maturity proceeds in a new term deposit and adding on to the interest. So,
an investor doesn’t have to utilize their money as soon as the term deposit matures.
 Penalty on premature withdrawal: Since term deposits come with a fixed tenor, it is
considered ‘locked-in’. If the investor opts to withdraw from the deposit before the lock-
in period ends they are liable to pay a penalty to the financial institution along with
lowered interest income.
 Loan against deposit: If in a contingent situation the investor needs financial liquidity,
they can avail a loan of up to 60-75% of the deposit amount.
 Taxation on interest: Under the Income Tax Act, the interest earned on the deposit is
taxable income and can be subject to a Tax Deducted at the Source (TDS).

Page | 26
  Low investment limit: The lower limit of investment varies as per the financial
institution, but the lower limit is generally Rs 1000. Although, there is no upper limit on
how much can be invested in term deposits.
 Insurance on deposit: Under the RBI regulations, any deposit in a certified bank is
eligible for an insurance cover of up to Rs 1 lakh under the Deposit Insurance and Credit
Guarantee Corporation

CASA

CASA stands for Current Account and Savings Account which is mostly used in West Asia and
South-east Asia. CASA deposit is the amount of money that gets deposited in the current and
savings accounts of bank customers. It is the cheapest and major source of funds for banks. The
savings accounts portion pays more interest compared to current accounts.

Description: Banks offer mainly two types of accounts. These could be term deposits- like fixed
or recurring deposits or non-term deposits - like current or savings accounts.

A term deposit is valid for a fixed period of time and in return the bank pays interest at a fixed
rate with the condition that you do not touch the money in the interim. For example, you put in
Rs 10,000 in a fixed deposit for a period of seven years and the bank pays you an interest at the
rate of 12 per cent per annum.

On the other hand, current and savings accounts are used for daily operations and are valid as
long as the customer wants them to be. They have lower interest rates than term deposits
depending on the bank’s terms and conditions. For example, in an urban area ICICI Bank pays
4.0 per cent interest on a savings account with cheque book on a minimum balance of Rs 10,000.

Since interest rates are lower than term deposits, CASA is a cheaper source of funds for banks.
For this reason, financial experts also look at CASA ratio to understand a bank’s financial health,
as the same reflects the bank’s capacity to raise money with lower borrowing costs.

Page | 27
Data Analysis and interpretation
PUBLIC BANK

Punjab National Bank

Table 1:Table of analysis of different types of deposit of PNB

CASA INCREASE TERM INCREASE
SR NO YEAR TOTAL INCREASE OR OR
DEPOSIT(IN OR DECREASE DECREASE
IN CASA IN TERM
CRORES) DECREASE DEPOSIT IN DEPOSIT IN
OF TOTAL %(2016 as %(2016 as
base year) base year)
DEPOSIT IN
%(2016 as
base year)

205,582 NIL 347,467 NIL

1 2016 570,382 NIL

260,015 26 361,688 4
2 2017 629,650 10

263,247 28 378,978 9
3 2018 648,439 14

267,248 29 390,989 13
4 2019 681,874 20

302,474 47 401,371 16
5 2020 710,254 25

CHART NO:1

800,000

700,000 TOTAL DEPOSIT(IN CRORES)

600,000
CASA
500,000
Amount

400,000 TERM

300,000
Linear (TOTAL DEPOSIT(IN
200,000 CRORES))
Linear (CASA)
100,000

0 Linear (TERM)
2015 2016 2017 2018 2019 2020 2021
Years

Page | 28
INTERPRETATION:-
From the above table and chart it can be seen that total deposit and increasing/decreasing trend
based on the base year considered as 2016 to 2020.Here we see that there is a continuous
increasing trend in total deposit of PNB from the year 2016 to 2020.PNB was
In the year 2017 we can see that deposit have increased from 570,382 to 629,650,which is a
increase of 10% and the percentage has increased moderately in the next 5 years.So, we can say
that PNB has performed moderately among the selected public sector bank. The increment in
CASA deposit and Term deposit has still a lot more space to grow. Term deposits
should be given more attention such that the bank can have long term funds with it,
which ultimately will create the base for further advances.

State Bank Of India

TABLE 2:Table of analysis of Total deposit of SBI

CASA INCREASE TERM INCREASE
SR NO. YEAR TOTAL INCREASE OR OR
DEPOSIT(IN OR DECREASE DECREASE
IN CASA IN TERM
CRORES) DECREASE DEPOSIT IN DEPOSIT IN
OF TOTAL %(2016 as %(2016 as
base year) base year)
DEPOSIT IN
%(2016 as
base year)

2016 1,730,722 NIL

1 750,167 NIL 993,169 NIL
2017 2,044,751 18
2 911,382 21 1,133,368 14
2018 2,706,343 56
3 1,203,947 60 1,502,391 51
2019 2,911,386 68
4 1,297,626 73 1,737,557 75
2020 3,241,620 87
5 1,433,706 91 1,807,913 82

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 CHART NO: 2

3,500,000 TOTAL DEPOSIT(IN CRORES)

3,000,000
2,500,000 CASA
AMOUNT

2,000,000
TERM
1,500,000
1,000,000 Linear (TOTAL DEPOSIT(IN
CRORES))
500,000
Linear (CASA)
0
2015 2016 2017 2018 2019 2020 2021
Linear (TERM)
YEARS

Interpretation:-
From the above table and charts it is vividly evident that among that the public sector banks
SBI’s performance in respect to deposit is remarkable.In the year 2018 we see there is a huge
jump from 18% to 56%.The increasing trends is visible in the last 5years which is growing at a
constant rate.In the year 2019-20 we see the percentage of increase is 87% and it is one of the
vital reason that SBI is ranked one public sector bank in India.CASA deposit of SBI is
remarkable it had an increment of 91% in the 2020.In term deposit we see that from the 2016 to
2017 the percentage had increased from 14% to 51% which was a huge increment.

Page | 30
 Bank Of India
Table no.3:Table of analysis of Total deposit of BOI
CASA INCREASE TERM INCREASE
SR NO YEAR TOTAL INCREASE OR OR
DEPOSIT(IN OR DECREASE DECREASE
IN CASA IN TERM
CRORES) DECREASE DEPOSIT IN DEPOSIT IN
OF TOTAL %(2016 as base %(2016 as base
year) year)
DEPOSIT IN
%(2016 as base
year)

2016 513,004 NIL

1
132,724 NIL 380,280 NIL
2017 540,032 5
2
172,218 30 367,812 -5
2018 520,854 2
3
177,661 34 295,422 -17
2019 520,862 2
4
186,999 41 335,250 4
2020 555,504 8
5
201,832 52 354,209 7

CHART NO: 3
600000 TOTAL DEPOSIT(IN CRORES)

500000
CASA
400000
Amount

300000 TERM

200000 Linear (TOTAL DEPOSIT(IN

100000 CRORES))
Linear (CASA)
0
2015 2016 2017 2018 2019 2020 2021
Linear (TERM)
YEARS

Interpretation:
From the above figures and charts it can be seen BOI is not performing well in compare to SBI
and PNB.In 2017 we see there is a small increase in total deposit amount from 513004 to 540032
which has amounted to 5% growth.In 2018 there is a decreased in the total deposit amount
resulting in decrease of 2% and same scenario is seen in 2019.In 2020 again there is a increase in
the total deposit and an increase in 8% which is a good sign,as BOI was able to recover.In CASA

Page | 31
deposit we have seen a constant growth though the growth is much less as compare to PNB and
SBI.In Term deposit in 2017 and 2018 there is a negative growth which means BOI was
struggling in long term funds,in 2017 it has hit a low of -17% but in the year 2019 BOI was able
to recover and had a growth of 4% and 7% in the year 2020.

PRIVATE BANK

AXIS BANK

TABLE no:4: Table of analysis of deposit of AXIS bank

CASA INCREASE TERM INCREASE
SR NO YEAR TOTAL INCREASE OR OR
DEPOSIT(IN OR DECREASE DECREASE
IN CASA IN TERM
CRORES) DECREASE DEPOSIT IN DEPOSIT IN
OF TOTAL %(2016 as %(2016 as
base year) base year)
DEPOSIT IN
%(2016 as
base year)

2016 357,967 NIL

1 169445 NIL 188523 NIL
2017 414,378 16 213050 201329
2 26 7
2018 453,622 27 243852 239771
3 44 27
2019 548,471 53 243394 305077
4 44 62
2020 640,104 79 263706 376399
5 56 100

Page | 32
 CHART 4

AXIS
700,000

600,000

500,000
TOTAL DEPOSIT(IN
Amount

400,000 CRORES)
300,000 CASA
200,000
TERM
100,000

0
2015 2016 2017 2018 2019 2020 2021
YEARS

Interpretation:
From the table and charts it is evident that AXIS bank is performing satisfactorily.There is a
positive growth since 2016 and it is also seen in the year 2019 there is a huge growth from 27%
to 53% and it has also maintained the growth consecutively in the next year as well.The CASA
growth rate fpr axis bank for the last 5 years in some what constant but one thing that stands out
in the figures is the term deposit growth ,Axis bank has the 2nd best term deposit growth among
the selected banks .It had a 100% growth in 2020 with base year 2016.

Page | 33
 HDFC

Table No:5: Table of analysis of deposit of HDFC bank

CASA INCREASE TERM INCREASE
SR NO YEAR TOTAL INCREASE OR OR
DEPOSIT(IN OR DECREASE DECREASE
IN CASA IN TERM
CRORES) DECREASE DEPOSIT IN DEPOSIT IN
OF TOTAL %(2016 as %(2016 as
base year) base year)
DEPOSIT IN
%(2016 as
base year)

5,46,424 NIL
1 2016
236310 NIL 310113 NIL
6,43,639 18 309151
2 2017
31 334487 8
7,88,770 44 343092
3 2018
45 445677 44
9,23,140 69 391197
4 2019
66 531942 72
11,47,502 110 484624
5 2020
105 662877 114

CHART 5
1400000

1200000

1000000
Total deposit
amount

800000 CASA

600000 TERM
Linear (Total deposit)
400000
Linear (CASA)
200000
Linear (TERM)
0
2015 2016 2017 2018 2019 2020 2021
years

INTERPRETATION:
It is very much evident from the above table and charts that HDFC is the bank which has
performed the best among the selected private banks.As seen from the charts there is a steep
slope in diagram which indicates the growth is happening in huge leap.In the year 2017 we see

Page | 34
that percentage increase is 18% with respect to the base year.In the 2018 it has increased to
44%.In 2019 it has increased to 69% and from there in 2020 it had total deposit of
11,47,502,with percentage increase of 110% which is the highest among all selected
banks.HDFC has performed the best among the selected banks.Both the deposits,CASA as well
as term deposit has increased by leaps and bounds in the last 5years.

ICICI

Table NO:6: Table of analysis of deposit of ICICI bank

CASA INCREASE TERM INCREASE
SR NO YEAR TOTAL INCREASE OR OR
DEPOSIT(IN OR DECREASE DECREASE
IN CASA IN TERM
CRORES) DECREASE DEPOSIT IN DEPOSIT IN
OF TOTAL %(2016 as %(2016 as
base year) base year)
DEPOSIT IN
%(2016 as
base year)

421,425 NIL
1 2016 193100 NIL 228326 NIL
490,039 16 246821
2 2017 22 243217 7
560,975 33 289925
3 2018 39 271050 19
652,919 54 323939
4 2019 53 328979 44
770,968 83 347817
5 2020 63 423150 85

Page | 35
 Chart 6
900,000
800,000 TOTAL DEPOSIT(IN CRORES)
700,000
CASA
600,000
amount

500,000
TERM
400,000
300,000 Linear (TOTAL DEPOSIT(IN
CRORES))
200,000
Linear (CASA)
100,000
0 Linear (TERM)
2015 2016 2017 2018 2019 2020 2021
years

INTERPRETATION
From the above table and chart it can be seen that total deposit and increasing/decreasing trend
based on the base year considered as 2016 to 2020.Here we see that there is a continuous
increasing trend in total deposit of ICICI from the year 2016 to 2020.In the year 2017 we can see
that deposit have increased from 421,425 TO 490,039,which is a increase of 16% and the
percentage has increased moderately in the next 5 years.In 2020 there is a increase of 83%.So,
we can say that ICICI has performed moderately among the selected private sector bank.CASA
deposit has a constant growth.In Term deposit we see that there was a huge increment in the
year 2020.

Page | 36
PRIVATE VS PUBLIC BANK
Here total of three selected private and public bank deposit are taken into account for each year
to analyse the overall deposit trend of public and private bank.

TABLE NO:7:Total deposit of each year of the selected banks

YEAR PUBLIC BANK PRIVATE BANK

2020 4,539,919 2,558,575

2019
4,143,277 2,124,530
2018 3,891,471 1,803,368
2017
3,214,433 1,548,057
2016
3,337,243 1,325,818

CHART NO:7
5000000

4500000

4000000

3500000

3000000
amount

PUBLIC BANK
2500000
PRIVATE BANK
2000000
Linear (PUBLIC BANK)
1500000 Linear (PRIVATE BANK)
1000000

500000

0
2015 2016 2017 2018 2019 2020 2021
years

Page | 37
Conclusion
 For the selected public banks SBI has performed the best in respect to the annual deposit
mix for last 5 years.PNB is in 2nd position,this maybe because SBI has more number of
branches(24,000) as compared to PNB even SBI has came into existence before PNB.
 For the selected private bank HDFC has performed the best as it has huge CASA. HDFC
bank partners with corporates to have salary account of their employees in their bank.
Unlike other banks, they provide lucrative offers for salary account like salary account
benefits to family, platinum cards, no withdrawal limit from ATM, Cashbacks, free
insurance. CASA enable banks to take deposit at very low interest, unlike time deposits
or other borrowings. They offer personal loans, vehicle loans etc to corporates(Retail
customers) and account holders. They are fast, pre approved loans, exclusive for
corporates having salary accounts with them. Chances of default is very very low. And
interest earning is large. They have invested a lot on the technology. They have superior
net banking, phone banking services. They offer monthly biller facilities like automatic
debit for SIPs, bill payment, insurance premium etc. And many other facilities. This
technology segment is often overlooked by other banks. It has always attracted
customers.
 Public banks has performed better than private banks as Private banks arrived relatively
late in the Indian banking sector thanks to the reforms introduced in 1991. This is one of
the reasons why people find public banks secure as they already have been around longer
enabling them the gain their trust. Also, the confidence that the government will not let a
public bank fail adds to this security. Private banks make up for these security concerns
through their technological advancements and superior customer service. Longer periods
of existence in the Indian markets have allowed public banks to develop a larger
customer base in comparison to the private banks.Public banks function with the aims of
ensuring banking accessibility throughout the country.This has motivated the public
banks to penetrate deeper into rural areas gaining a greater customer base. Private banks,
on the other hand, enter only areas where they see a potential to earn a profit. This is the
reason private banks mainly function in urban areas and not rural.

Page | 38
 SUGGESTION

1. To make people aware of the benefits of becoming PNB bank’s various deposit,following
activities of advertisements should be done through

 Hoardings & Banners

 Stalls in trade Fares
 Distribution of leaflets containing details information

2.PNB should provide user friendly services to all its customers.

3.Make people aware about the various benefits of its product.

4.PNB should organize program so that people will be aware about the Bank and different kinds
of deposits provide by them.

Page | 39
 LIMITATIONS OF THE STUDY

Every study has certain limitations. This study is not an exception. Limitations are as follows:

 The study is limited to the selected three private sector banks and three Public sector
Banks.

 The study covers a period of 5 years only from 2015-16 to 2019-20.

 The study is based on secondary data and so its inherent limitations. The source of
finding deposit is taken from annual report and website of money control.

 Deposit pattern are changing with the time. The study is done in the present environment
without foreseeing future developments.

 The study was done taking into consideration data of pre-amalgamation.

Researcher should discover how the PNB works after amalgamation. Future research may focus
on risk and benefits of PNB after amalgamation.

Page | 40
 REFERENCES

1.Venkatesan, S. (2012, sep). An Empirical Approach to Deposit Mobilization of

Commercial Banks in Tamilnadu. IOSR Journal of Business and Management (IOSR-JBM),
4(2), 41-45.
2.Kothari, D. S. (2013, December). Impact of Banking Sector Reforms on
Profitability of Banking Industry in India. Pacific Business Review International, 6(6),
60-65.
3.S, M. P. (2015). An Analytical Study on Trends and Progress of Indian banking
Industry. Journal of Business and financial affairs , 1-7.

4.P, S. N. (2014, December 10). A Study on the Deposit Mobilization Pattern of the
Dindigul District Central Co-operative Bank Limited. Retrieved May 19, 2018, from
omnicsonline.org: https://www.omicsonline.org
Khare, A. (2018, January 27). Budget 2018: An Opportunity to Reform the Banking
Sector. Retrieved May 19, 2018, from business-standard.com: http://www.business-
standard.com/article/budget2018/budget-2018-an-opportunity-to-reform-the-banking-
sector- 118012700171_1.html

Page | 41
 WEBLIOGRAPHY

 www.icicibank.com
 www.hdfcbank.com
 www.axisbank.com
 https://www.moneycontrol.com/
 www.rbi.org.in
 www.sbi.co.in
 https://www.pnbindia.in/
 https://www.pnbindia.in/annual-reports.html
 www.sbi.co.in/web/corporate-governance/annual-report
 https://www.bankofbaroda.in/annual-report.htm
 https://www.axisbank.com/shareholders-corner/shareholders-information/annual-reports
 https://www.icicibank.com/aboutus/annual.page
 https://www.hdfcbank.com/personal/about-us/investor-relations/annual-reports

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