A PROJECT REPORT

ON

COMPARATIVE STUDY BETWEEN PRIVATE AND

PUBLIC SECTOR BANKS
SUBMITTED BY
MAHESHWARAM SANDHYA RAVI
T.Y.B.B.I. [Semester V]

PADMASHREE ANNASAHEB JADHAV BHARTIYA SAMAJ UNNATI MANDALS

B.N.N. COLLEGE
DHAMANKAR NAKA, BHIWANDI, 421302
SUBMITTED TO

UNIVERSITY OF MUMBAI
ACADEMIC YEAR
2016-2017

UNDER THE GUIDANCE OF

PROF. CHARMI GONDALIYA

136

Est. June 1966

Padmashree Annasaheb Jadhav Bhartiya Samaj

Unnati Mandals
B.N.N.College, Bhiwandi.
(Arts, Science & Commerce) Dist.Thane 421 305
SELF FUNDED COURSES
Bachelor of Banking and Insurance (BBI)

CERTIFICATE
This is to certify that, MISS. MAHESHWARAM SANDHYA RAVI. (Roll No.87)
of TYBBI, B.N.N College, Semester V (Academic Year 2016 - 2017) has successfully
completed the project entitled COMPARATIVE STUDY BETWEEN PRIVATE AND
PUBLIC SECTOR BANKS and submitted the Project Report in partial fulfillment of
the requirement for the award of the Degree of B.Com (Banking & Insurance sem-V)
of University of Mumbai.

Prof. Charmi Gondaliya

Dr.Ashok.D.Wagh
(Project Guide)

Dr. Suvarna T. Rawal

(Co-ordinator)

(Principal)

Examiner: - 1._______________________
2._______________________

DECLARATION
137

I, Miss MAHESHWARAM SANDHYA RAVI (Roll No.87) of

TY.B.COM.(Banking and Insurance) Semester V, studying in
B.N.N. College, Bhiwandi, hereby declare that the information
contained

in

the

project

titled

COMPARATIVE

STUDY

BETWEEN PRIVATE AND PUBLIC SECTOR BANKS is true

and correct to the best of my knowledge and belief.

____
____________________
MAHESHWARAM SANDHYA

RAVI

T.Y.B Com (B&I)

PLACE: BHIWANDI
DATE:
ACKNOWLEDGMENTS
I am deeply indebted to my project guide, my family and friends who have supported me all through
my project by encouraging and inspiring me. They have also contributed to the quality of the material
presented in the project. I would like to acknowledge all those whom I owe a debt of gratitude. It is my
foremost duty to express my sincere gratitude towards my mentor, guru and guide, Miss Charmi
Gondaliya ,Assistant Professor, B.N.N. College, Bhiwandi, Dist.Thane, Maharashtra for her constant
138

encouragement, support and generous attitude which helped me with new insights not only in understanding
different aspects of my project but also the intricacies of life. It was truly an enriching experience working
under her guidance.
I must thank the Management of B.N.N. College, Dist.Thane, Maharashtra and
Dr. Ashok D. Wagh, Principal, B. N. N. College for constantly encouraging me for my project.I also thank
to Dr. S.T. Rawal, Head Department of Banking and Insurance and all Vice-Principal of B.N.N. College for
their support and cooperation from time to time and also to my other friends in the T.Y.B.B.I. for their
support as and when I required.
I must specially thank my mother.. for instilling confidence in me to pursue my project work.
Discussions with them have helped me develop great clarity of thought and understanding in my project.I am
also thankful to the staff of library of B.N.N. College. I express my deep sense of gratitude to all my
teachers, friends and all well wishers who were always concerned about my project and contributed directly
or indirectly for the successful completion of my project work.

MAHESHWARAM SANDHYA RAVI

Executive Summary

The objective of the study is to have a comparative study of the PSU Banks and Private Sector Banks in Cachar District and also
to find out the most preferred Banking Sector among them.

For the above study a questionnaire was designed and the same was provided to the respondents for their valuable inputs. Some of
the inputs were taken from Qualtrics Survey Software and others were provided in the form of hard copies.

All the aspects of the study included introduction of the study, objective of the study, research methodology, literature review, data
interpretation and analysis, findings, suggestions and recommendations.

The study suggests that in this part of the country the Public Sector Banks are ahead of the Private Sector Banks. The main reasons
according to our study are the trust and reliability factor (DICGC assurance on deposits) and the location of the branch (Financial
Inclusion policy of Reserve Bank of India)
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The data collection of the study was mainly taken from primary source i.e. Questionnaire. And secondary sources of the data i.e.
internet and KiranPrakashan Books and Arihant Books.

INDEX
CHAPTER

CONTENTS

PAGE NO.

S
1

Introduction

Profile

Review of literature

Data Analysis and interpretation

Observations and Conclusions

Suggestions

Bibliography

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Objectives of the Study

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
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 bank sector that is largely availed by the customer.
2.To study the factors the factors influencing the choice of a bank for 3.availing services.
4.To find and compare the satisfaction level of customers in public sector 5.as well as in
private sectors bank.
6.To study the problem faced by customer.
7.To get suggestions for improvement or change in the services of public and private
sector banks.
8.To study what do people expect in the new era of banking.
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CHAPTER - 1
INTRODUCTION

The world of banking has assumed a new dimension at dawn of the21 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 requirement of individual customers
and encourage their savings, includes payment of utility bills, consumer loans, credit cards, checking
account and the like. Corporate banking, on the other hand, caters to the need 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. Application of marketing concept in the banking sector was 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 mew watchword for the bank is pretty ambitious: customer delight.

The introduction to the marketing concept to banking sectors can be traced back to American Banking
Association Conference of 1958. Banks marketing can be defined as the part of management activity, which
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seems to direct the flow of banking services profitability to the customers. The marketing concept basically
requires that there should be thorough understanding of customer need and to learn about market it operates
in. Further the market is segmented so as to understand the requirement of the customer at a profit to the
banks.

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.
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.

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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.

EVOLUTION OF INDIAN BANKING

Ancient banking system of India constituted of indigenous bankers. They have been carrying on their ageold 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 Kotak Bank's 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. Thus, they accelerate the economic growth of a country and steer the wheels of the economy
towards its goals of self reliance in all fields. It naturally arouses Kotak Bank's interest in knowing more
about the Bank and the various men and the activities connected with it.

Indian Banking System

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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 indigeneousBankers played a very important role in lending money financing foreign trade and
commerce. During the days of East India Company, it was turn over the agency houses to carry on the
business. The General Bank of India was the first to join sector 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 19th century the East India Company established three banks:
1. Bank of Bengal (1809)
2. 2. Bank of Bombay (1840)
3. Bank of Madras (1843)

These three banks are also known as Presidency Banks were independent units and functioned well. These
three banks were amalgamated in 1920 and Imperial Bank of India was established on 27 th january1921,
which started as private shareholders banks, mostly Europeans shareholders, with the passing of time
Imperial bank was taken over by the newly constituted State bank of India act in1955.In 1865 Allahabad
Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894
with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda,
Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. On July,
1969, 14 major Research and development in the banking sector. Banks of India were nationalized and on
15th April, 1980 six more commercial private banks were also taken over by the government.

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CLASSIFICATION OF BANKS

On the basis of Ownership

PUBLIC SECTOR BANKS

Public sector banks are those banks that are owned by the government. The government owns these banks.
In India 20 banks were nationalized in 1969 and 1980 respectively. Social welfare is there main objective.

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.

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CO-OPERATIVE BANKS
These are those banks that are jointly run by a group of individuals. Each individual has an equal share in
these banks. Its shareholders manage the affairs of the bank.

CO-OPERATIVE BANKS
These are those banks that are jointly run by a group of individuals. Each individual has an equal share in
these banks. Its shareholders manage the affairs of the bank.

According to the Law

SCHEDULED BANK
Schedule banks are the banks, which are included in the second schedule of the banking regulation act 1965.
According to this schedule bank:
1. Must have paid-up capital and reserve of not less than Rs500, 000.
2. Must also satisfy the RBI that its affairs are not conducted in a manner
Determinate to the interest of its depositors.

Schedule banks are sub-divided as:a) State co-operative banks

b) Commercial banks

NON-SCHEDULED BANKS
Non -schedule banks are the banks, which are not included in the second schedule of the banking regulation
act 1965. It means they do not satisfy the conditions lay down by that schedule. These are the banks having
paid up capital, less than Rs.5Lakhs. They are further classified as follows:A. Central Co-operative banks and Primary Credit Societies.
B. Commercial banks
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According to Function
COMMERCIAL BANKS
These are the banks that do banking business to earn profit. These banks make loans for short to business
and in the process create money. Credit creation is the main function of these banks.

FOREIGN BANKS
These are those banks that are incorporated by foreign company. They have set up their branches in India.
These banks have their head offices in foreign countries. Their principle function is to make credit
arrangement or the export and the import of the country and these banks deals in foreign exchange.

INDUSTRIAL BANKS
Industrial banks are those banks that offer long term and medium term loan to the industries and also work
for their development. These banks help industries in sale of their shares, debentures and bonds. They give
loan to the industries for the purchase of land and machinery.

AGRICULTURAL BANKS
Agricultural banks are those banks that give credit to agricultural sector of the economy.
SAVING BANKS
The principle function of these banks is to collect small savings across the country and put them to the
productive use. In India department of post office functions a savings banks.
CENTRAL BANK
Central Bank is the apex bank of the banking system of the country. It issues currency notes and acts a
banker's bank. Economic stability is the principle function of this bank. In short, it regulates and controls the
banking system of the country. RBI is the Central Bank of India.

PRIVATIZATION OF INDIAN BANKING

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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 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.

1.10 Business of Banking

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Money
Money Surplus Units Money deficit Units
Intermediary
( SAVERS)

(Invest

( Banks)
(INVESTOR

INTERMEDIA
RY

S)

COMMERCIAL BANKS

A)

PRIMARY
FUNCTIONS :

1) Accepting of Deposits : A bank accepts deposits from the public. People can deposit their cash
balances in either of the following accounts to their convenience:a. Fixed or Time Deposit Account : Cash is deposited in this account for a fixed period. The
depositor gets receipts for the amount deposited. It is called Fixed Deposit Receipt. The receipt
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indicates the name of the depositor, amount of deposit, rate of interest and the period of deposit.
This receipt is not transferable. If the depositor stands in need of the amount before the expiry of
fixed period, he can withdraw the same after paying the discount to the bank.
b. Savings Account : This type of deposit suits to those who just want to keep their small savings in
a bank and might need to withdraw them occasionally. Banks provide a certain rate of interest on
the minimum balance kept by the depositor during the month.
c. Current Account : This type of account is kept by the businessman who are required to withdraw
money every new and then. Banks do not pay any interest on this account. Any sum or any
number of withdrawals can be presented by such an account holder.

2) Advancing of Loans : The bank advances money in any one of the following ways.
i. Overdraft Facilities : Customers of good trading are allowed to overdraw from their
current account. But they have to pay interest on extra amount they have withdrawn.
Overdrafts are allowed to provide temporary accommodation since the extra amount
withdrawn is payable within a short period.
ii. Money at Call : It is the money lent for a very short period varying from 1 to 14 days.
Such advances are usually made to other banks and financial institutions only. Money
at call ensures liquidity. In the Interbank market it enables bank to make adjustment
according to their liquidity requirements.
iii. Loans : Loans are granted by the banks on securities which can be easily disposed off
in the market. When the bank has satisfied itself regarding the soundness of the party, a
loan is advanced.
iv. Cash Credit : The Debtor is allowed to withdraw a certain amount on a given security.
The debtor withdraws the amount within this limit, interest is charged by the bank on
the amount actually withdrawn.
v. Discounting Bill of Exchange : It is another method of making advances by the banks.
Under this method, bank give advance to their clients on the basis of their bills of
exchange before the maturity of such bills.
vi. Investment in Government Securities : Purchasing of government securities by the
banks tantamount to advancing loans by them to the Government. Banks prefer to buy
government securities as these are considered to be the safest investment. For
example : Indira Vikas Patra : It enables the banks to meet requirement of statutory
liquidity ratio (SLR)
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3) Credit Creation :One of the main functions of banks these days is to create credit. Banks create credit
by giving more loans than their cash reserves. Banks are able to create credit because the demand
deposits i.e. a claim against the bank is accepted by the public in settlement of their debts. In this process
the bank creates money. For this reason Prof. Sayers has called bank the manufactures of money.

4) Cheque system of Payment of Funds

A cheque, a negotiable instrument, which in fact is a bill of exchange, drawn upon a banker, is the most
popular credit instrument used by the client to make payments. Cheque system is the main credit instrument
in the banking world.
Although a cheque is not a legal tender money, the serves as a medium of exchange in a limited way as it is a
negotiable instrument.
Because of clearing houses and clearing operations of the banks, cheques can be and are used for
transferring funds from one centre to another. In the modern days they can also be used for transferring funds
from one country to another.

SECONDARY FUNCTIONS
Besides the above primary functions, banks also perform may secondary functions such as agency functions,
general utility and social functions.
1) Agency Functions
Banks act as agents to their customers in different ways :

I.

Collection and Payment of Credit and Other Instruments: The Commercial banks

collect

and pay cheques, bills of exchange, promissory notes, hundies, rent, interest etc. On behalf of their
customers and also make payments of income tax, fees, insurance

premium etc. on behalf of the

customers. Customers can leave standing instructions with the banker for various periodic payments
ensuring the regular payments and avoiding the trouble of performing it themselves
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II.

. Purchase and Sale of Securities : The modern commercial banks also undertake the purchase and
sale of various securities like shares, stocks, bonds units and debentures etc. On behalf of the
customers, banks do not give any advice regarding the suitability or otherwise of a security but simply

III.

perform the functions of a broker.

Trustee and Executor : Banks also acts as trustees and executors of the property of their customers on

IV.

their advice. Sometimes banks also undertake income tax services on behalf of the customers.
Remittance of Funds : The Commercial banks remit funds on behalf of clients from one place to
another through cheques, drafts, mail transfers etc.

Representation and Correspondence :

Sometimes commercial banks acts as representatives or correspondents of the clients especially in

V.

handling various applications. For instance, passports and travel tickets, booking of vehicles, plots etc.
Billion Trading : In many countries, the commercial banks trade is billions like gold and silver. In Oct
1997, 8 banks including SBI, IOB, Canara Bank and Allahabad Bank have been allowed import of

VI.

gold which has been put under open general licensed category.
Purchase and Sale of Foreign Exchange : Banks buy and sell foreign exchange, promoting

VII.

international trade. This function is mainly discharged by foreign Exchange Banks.

Letter of References : Banks also give information about economic position of their customers to
domestic and foreign traders and vice versa.

2) GENERAL UTILITY SERVICES

In addition to agency services, banks render many more utility services to the public. These services are :-

i. Locker Facilities : Banks provide locker facilities to their customers. People can keep
their valuables or important documents in these lockers. Their annual rent is very
nominal.
ii. Acting as a referee : It desired by the customers, the bank can be a referee i.e. who
could be referred by the third parties for seeking information regarding the financial
position of the customers. The bank will acts as referee only and only if it is desired by
the customer, otherwise the secrecy of a customers is account is maintained very
carefully.
iii. Issuing letters of credit : Bankers in a way by issuing letters of credit certify the credit
worthiness of the customers. Letters of credit are very popular in foreign trade.

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iv. Acting as Underwriters : Banks also underwrite the securities issued by the
Government and Corporate bodies for a commission. The name of

bank as an

underwriter encouraged investors to have faith in the security.

v. Acting as information banks : Commercial banks also acts as information bureau

as they collect the financial, economic and statistical data relating to industry, trade and
commerce. HDFC Bank is providing information relating to NRI Schemes and
commentaries of experts on development in the areas of finance through Internet.

vi. Issuing Travelers cheques and credit cards : Banks have been rendering great
service by issuing travelers cheques, which enable a person to travel without fear of
theft or loss of money. Now, some banks have started credit card system under which a
credit card holder is allowed to avail credit from the listed outlets without any
additional cost or effort. Thus, credit card holder need not carry or handle cash all the
time. Now, international credit cards are joining hands with Indian Banks.
vii. Issuing of gift cheques: Certain banks issue gift cheques of various denominations,
e.g. Some Indian banks issue gift cheques f the denominations of Rs. 21, 31, 51 and
101 etc. They are generally issued free of charge.
viii. Dealing in Foreign Exchange: Major branches of commercial banks also transact
business of foreign exchange. Commercial banks are the main authorized dealers of
foreign exchange in India.
ix. Merchant banking Services: Commercial banks also render merchant banking
services to the customers. They help in availing loans from non-banking financial
institutions.
x. Help in Transportation of Goods: Big businessmen or industrialists after consigning
goods to their retailers send the Railway Receipt (Consignment Note) to the bank.

PUBLIC SECTOR BANKS

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Definition of Public Sector Bank

Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by a
government. The shares of these banks are listed on stock exchanges. There are a total of 21 PSBs
in India..
Emergence of Public Sector Banks
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 as the State Bank of India. The seven other state banks became the subsidiaries of the
new bank when nationalised on 19 July 1960.[2] The next major nationalisation of banks took
place in 1969 when the government of India, under prime minister Indira Gandhi, 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.[3]
The next round of nationalisation took place in April 1980. The government nationalised six
banks. The total deposits of these banks amounted to around 200 crores. This move led to a
further increase in the number of branches in the market, increasing to 91% of the total branch
network of the country. The objectives behind nationalisation where:
To break the ownership and control of banks by a few business families,
To prevent the concentration of wealth and economic power,
To mobilize savings from masses from all parts of the country,
To cater to the needs of the priority sectors.....

List of Public Sector Banks

State Bank of Bikaner & Jaipur

155

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Saurastra

State Bank of Travancore

Other Nationalised banks are:

Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharastra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
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 Indian Overseas Bank

Oriental Bank of Commerce
Punjab & Sind Bank
Punjab National Bank
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank

PRIVATE SECTOR BANKS

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The private-sector banks in India represent part of the Indian banking sector that is made up of both
private and public sector banks. The "private-sector banks" are banks where greater parts of stake
or equity are held by the private shareholders and not by government.
Banking in India has been dominated by public sector banks since the 1969 when all major banks were
nationalised by the Indian government. However since liberalisation in government banking policy in
1990s, old and new private sector banks have re-emerged. They have grown faster and bigger over
the two decades since liberalisation using the latest technology, providing contemporary innovations
and monetary tools and techniques
The private sector banks are split into two groups by financial regulators in India, old and new. The
old private sector banks existed prior to the nationalization in 1969 and kept their independence
because they were either too small or specialist to be included in nationalization. The new private
sector banks are those that have gained their banking license since the liberalization in the 1990s.

List of Private Sector Bank

Bank of Punjab
Bank of Rajasthan
Catholic Syrian Bank
Centurion Bank
City Union Bank
Dhanalakshmi Bank
Development Credit Bank
Federal Bank
HDFC Bank
ICICI Bank
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 IDBI Bank
IndusInd Bank
ING Vysya Bank
Jammu & Kashmir Bank
Karnataka Bank
Karur Vysya Bank
Laxmi Vilas Bank
South Indian Bank
United Western Bank
UTI Bank

159

CHAPTER - 2

LITERATURE REVIEW

A study on public and private sector banks and their study shows that quality gap between expectations of
consumers and perceptions of service delivered is highest in public sector banks and lowest in private sector
banks(using gap 5). Another study found out that public sector banks are better than private sector banks.
Other studies and their findings are given below

Sharma and Sharma( 2006)-The study analysed customer delight in urban consumer banking. The study
found out that customers were satisfied with loan facilities, bank environment, routine work procedures,
location ,interest rates etc and were dissatisfied with loan formalities and promotion through media.

Dash et al(2007)- The study measured customer satisfaction through 5 service quality dimensions in Noida
and Ghaziabad and findings revealed that assurance was the most important dimension of service quality
followed by reliability and responsiveness. Tangibles was found to be least important
Sharma S, et al (2007)-The study did a comparison of public and private banks with respect to perceptions
of customers regarding service quality. It was found out that service quality is associated with satisfaction
and there was significant difference between quality of services provided by banks. Banks in smaller cities
are far behind big cities in this regard
Tracey Dagger ,Jillian Sweeney (2007)- The study consists of qualitative research to investigate the effect
of consumption stage on service quality perceptions and then development of hypothesis. The findings
indicate the evidence that customers rely more heavily on attributes that are search based in the initial stages
of service experience and in later stages consumption becomes important
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Dr.Vannirajan&B.Anbazagan(2007)- The study tries to make an assessment of SERVPERF scale in the

Indian Retail banking sector by doing a survey in banks at Madhurai. The study found that in public sector
banks tangibles and assurance are most important and in private sector banks reliability ,,responsiveness and
tangibles are most important.
P K Gupta(2008)-Objective of this study was to find out the behavior of customers with respect to internet
banking vis--vis conventional banking. The study found out that internet banking was found to be easier
and speedier than conventional banking and trust, accuracy and confidentiality were the most important
factors here.

Ellaine Wallce&Leslie De Cheratatony(2009)-Study finds out the importance of ,assurance and reliability,
customer orientation teamwork etc in performance of . Also the study highlights criticality of branch&
employee teamwork for performance. Continuous commitment and service recovery were also found
important
Mohammed Siddique Khan,Siba Sankar Mahapatra(2009)-The study was to identify important
parameters affecting service quality in internet banking. Factor analysis of the data collected finds 7 factors
which included factors like reliability, access, user friendliness privacy etc. Correlation analysis shows that a
significant positive correlation exists between factors..Also it was found out that business class differs from
other classes in perception
Padhy P K and B N Swar(2009)- the paper investigated role of technology in banking and its impact on
perceived service quality in public, private and foreign banks in Orissa using a s ample size of 300
customers. Foreign bank was found to be very close to expectations of customers followed by ICICI and
AXIS. Service quality in public sector banks was found to be very low
Rod et al(2009)-The study focused on relationship between service quality, overall internet banking service
quality and customer satisfaction in New Zealand. The study found out that online customer service quality
and online information systems were significantly and positively related to overall customer internet banking
service quality. Overall internet banking service quality and customer satisfaction were positively correlated
Sandip Khosh Hazra, Dr.Kailash Srivatava (2010)-The study was done to find out the association
between service quality, customer satisfaction ,loyalty and commitment. SERVQUAL is used and the study
finds out that in private banks dimensions of service quality, assurance and reliability are significant for
satisfaction of customers, loyalty and commitment. The banks taken differed in these parameters.
161

Akiko Ueno(2010)- The paper talks about the importance of quality. The study finds out the features that are
fundamental in supporting service quality. The secondary research finds out the human resource functions
like recruitment, teamwork etc in maintain service quality

Monica Bedi(2010)-The study investigates relationship between service quality, customer satisfaction and
behavioral intentions. The findings also indicated the importance of service quality. The study also found out
that banks differed in the service quality parameters.
Fulbag Singh, Davinder Kaur(2010-11)- The study combines all literature review done in service quality
And related areas in banking till 2010. It contains the works of Cronin& Taylor, Bahia and Nantel and others
on this area
Dr Ravichandran et al(2010)- The paper analyses existing study and tries to understand socio demographic
and rational profile of public retail banking consumers. It also finds out the importance of service quality
dimensions to predict the multidimensional model of behavioral intentions among public sector consumers
in India. Loyalty was found to be influenced by operating hours, modern equipments, error free records etc.
Service quality parameters like tangibility, responsiveness and empathy dimensions were also found to be
very important.
Davood Feiz et al(2010)-The study uses hypothesis to find out service quality in Iran railways. It was found
out that perceived service was found to be within zone of tolerance and service was satisfactory. The
difference between ideal level and current level was significant. There was significant relationship between
service adequacy variables and perceived value. The study in nutshell gives an image of service quality
Sachin Mittal&Rajnish Jain(2010)-This paper is basically a literature review of banking industry and
effect of IT based services on customer satisfaction. The study highlights customer satisfaction levels among
young customers in banking industry. A survey indicates the gaps between customers expectations and
perception with respect to IT based banking services. Findings indicated need to improve the IT based
services for enhancing customer satisfaction
H.Emari et al(2011)- The main objective of this research was to determine the dimensions of service quality
in the banking industry of Iran. For this the study empirically examined the European perspective (i.e.,
Gronrooss model) suggesting that service quality consists of three dimensions, technical, functional and
image. The results from a banking service sample revealed that the overall service quality is identified more
by a consumers perception of technical quality than functional quality
162

Kumbhar, Vijay (2011)- It examined the relationship between the demographics and customers satisfaction
in internet banking,. It also found out relationship between service quality and customers satisfaction as well
as satisfaction in internet banking service provided by the public sector bank and private sector banks. The
study found out that overall satisfaction of employees, businessmen and professionals are higher in internet
banking service. Also it was found that there is significant difference in the customers perception in internet
banking services provided by the public and privates sector banks.
Kailash M (2012)- The paper compares public and private sector banks in Vijayawada city using
SERVQUAL model. The findings revealed that private sector banks have good services to customers and
they retained customers by providing better facilities. The study finds out importance of new products and
services for banks for retaining customers.

The studies mentioned above clearly points out to the importance of having a structured study on this where
banks in different categories are compared with respect to the service quality aspect which will help them to
find out their core competencies and to capitalize on them and at the same time find out the areas where they
can improve. This is the major aim of my thesis

CHAPTER - 3
LIMITATIONS OF THE

STUDY

Due to constraints of time and resources, the study is likely to suffer from certain limitations. Some of these
are mentioned here under so that the findings of the study may be understood in a proper perspective.

The limitations of the study are:

163

 Some of the respondents of the survey were unwilling to share information.

The research was carried out in a short period of 6 weeks. Therefore the sample size and other
parameters were selected accordingly so as to finish the work within the given time frame.
The information given by the respondents might be biased because some of them might not be
interested to give correct information.
The officials of the bank supported me a lot, but did not have sufficient time to make the points more
clear.

CHAPTER

DATA

ANALYSIS

AND

INTERPRETATION
Analysis of Data collected

1.The respondents were asked about which banking sectors services do their avail.
Table1: banking sectors services which the respondents avail.
Banking sector

Number of respondents

Public

32

Private

38

Both

30
164

40
35
30
25
Public

20

Private
Both

15
10
5
0
No of respondents

Graph 1: Banking Sectors services which the respondents availsI

Interpretation:-It was found that most of the respondents were availing services of private sectors banks
while those of the public sector banks were less as compare to public sector

2. The respondents were Asked about the type of account they have in the public sector as well as
Private sector banks

Table 2.1 Number of type of account held in Public sectors banks

Type of Accounts
Name

of Savings

Current

Demat

Account
Total no of 50

Fixed

Salary

deposits
15

respondents

15

14

Graph
2.1 :-Number
of

type

of

accounts held in Public sector banks

Analysis: 50% people own Saving Account, 15% own Current account, 6% demat,15% fixed deposits
account and 14% salary Account

165

Interpretation: It was found that in case of public sector banks, maximum number of account holders owns
Saving Account. After Saving account most prefer account is salary account prefer by people and the next
priority goes to fixed deposits Accounts.

3. The basic purpose of this question was to know the most preferred bank.

Table 3. Number of respondents preferring different banks

Names of Banks

Number of respondents

ICICI Bank

24

HDFC Bank

22

State Bank Group

20

Punjab National Bank

28

Punjab And Sind Bank

Analysis: From above graph, it is seen that 28% stake of the respondents follows to Punjab National bank
followed byICICI bank. It is the bank which provide 12-hour banking.also the ATM machine is more as
compared to the other private sector banks.
Interpretation : From the above graph, it is seen that Punjab national is the most preferred bank as
compared to other Public and Private sector Banks. The reason for preference of public sector bank is the
minimum amount of deposit for saving account.
4. The aim to ask this question was to know he reasons for their preference in different banks :Table 4:- Reason for account in different banks

166

Reasons

No of respondents

Friendly Behaviour of the Staff

16

Reliability/trust

14

Quick and fast services

55

Location

15

Graph 4:-Reasons for account in different banks

Inpretation: By analyzing this graph, we can conclude that most of the people is influenced by the quick
and speedy services provided by the bank and location is given less preference than others

5.The respondents were asked about the facilities they were availing in public as well as private sector
banks :-

167

Table 5.1 Number of people availing different facilities at public sector banks:

Facilities Availed

No of respondents

ATM/Debit card

60

Demat

Internet/Mobile/Phone Banking

15

Insurance

20

60
50
ATM/Debit card

40

Demat
Internet/Mobile/Phone
banking

30

Insurance

20
10
0
No of Respondents

Graph 5.1: Number of people availing different facilities at public sector banks
Interpretation:From the above graph, it was found that was availed by most of the people at public sector
banks was that of ATM/Debit cards which hold 90% of respondents. It is clearly observed by the graph that
Insurance are neck to neck holding 20% of respondent each

6. The purpose of this question is to know the satisfaction level they were having with their banks
overall performance:Public sector banks
Table 6.1 Satisfaction level of the customers regarding the facilities availed from the public sector banks
168

Level of Satisfaction

No.of respondents

%age

Excellent

12

24%

Good

21

42%

Very Good

27

54%

60%

54%

50%
42%
40%
30%

24%

20%
10%
0%

Excellent

Good

Very Good

Series 1

Graph 6.1 Satisfaction level of Customers regarding the facilities availed from the public sector banks.
Analysis:
It was found that in case of public sectors banks, 18% of the respondents were highly satisfied ranked
excellent from the products and services availed by them. 44% were just satisfied given very good and 38%
have moderate view.
Interpretation: People have mixed type of view regarding public sector banks.
8. The aim to ask this question was to know whether the respondents faces any problem regarding the
services provided them by their preferred bank :169

Table 8 Problem faced by customers.

Types of problem

No of respondents

Time consuming

10

Introduction

Reference

15

Too many formalities

No facility of photograph instantly

No problem

8%

12%

12%

22%
16%

30%

Time Consuming
Introduction
Reference
Too many Formalities
No facilities of photograph
instantly
No problem

Interpretation:
It was found that most of the respondents are facing problem of reference. Respondents also find that the
time and too much formalities also cause problem in banks

COMPARISON BETWEEN SBI BANK AND ICICI BANK

170

SBI PROFILE

COMPANY OVERVIEW:State Bank of India (SBI) is a multinational banking and financial services company based in India. It is
a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2013, it
had assets of US$388 billion and 17,000 branches, including 190 foreign offices, making it the largest
banking and financial services company in India by assets.
State Bank of India is one of the Big Four banks of India, along with ICICI Bank, Punjab National
Bank and Bank of Baroda.
The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of
the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras
merged into the other two presidencies banksBank of Calcutta and Bank of Bombayto form the
Imperial Bank of India, which in turn became the State Bank of India. Government of India owned the
Imperial Bank of India in 1955, with Reserve Bank of India taking a 60% stake, and renamed it the State
Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India.

ICICI BANK PROFILE

171

ICICI Bank is Indias second-largest bank with total assets of 3,997.95 billion (US$ 100 billion) at March
31, 2008and profit after tax of Rs. 41.58 billion for the year ended March 31, 2008. ICICI Bank is the most
valuable bank in India in terms of market capitalization and is ranked second amongst all the companies listed on
the Indian stock exchanges .In terms of free float market capitalization*.The Bank has a network of
about 130 branchesand3,950 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of
banking products and financial services to corporate and retail customer through a variety
of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management. The Bank currently has
subsidiaries in the United Kingdom, Russia and Canada , branches in Singapore, Bahrain, Hong Kong, Sri Lanka and
Dubai International Finance Center and representative offices in the United Stat es, United
Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. UK subsidiary has
established a branch in Belgium. ICICI Bank's equity shares are listed in India on Bombay Stock
Exchange( B S E ) a n d t h e N a t i o n a l S t o c k E x c h a n g e ( N S E ) o f I n d i a L i m i t e d a n d i t s
American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

172

SBI v/s ICICI

SBI stands for State Bank of India. It is a public sector institution (government owned), with a huge
customer base all over India. It has seven associate banks operating under its SBI name. It has over thirteen
thousand branches across India and in some selected international countries and a 56,000 ATM network
across India. The
Standard Bank of India inherited the Bank of Calcutta, which was founded in 1806, and has been in
existence for over two hundred years.

On the other hand, the ICICI is a private sector bank (privately owned), with a relatively smaller
clientele base. It is one of the major banks in India (precisely the second largest), but much smaller than the
SBI. It has 950 branches, with 3,500 branches across India. The bank has deposits of Rs 1.65 lakh crore
compared to SBIs Rs 3.8 lakh crore (accumulated in a period of twelve years), racking up a net worth of
Rs 22,000 against Rs 27,000 for the State Bank of India. This represents Rs 9 crore business generated by
each ICICI employee per year, compared to Rs 3 crore worth of business per employee of the ICICI.

While the State Bank pays 4.7 percent on deposits, and earns less on advances, the ICICI pays 0.7
less (4 percent), while earning more on advances, and thus earns
0.4 percent more on assets than the SBI. This is no surprise, as theres seemingly limitless access to funds
from the government for the state owned SBI.
On money transfers from overseas accounts, with the SBI, once a transfer transaction is completed,
you will be able to know the exchange rate used, and there are no restrictions on the amounts you can
transfer a day. However, the ICICI transfer is somewhat different. After completion of a money transfer
173

transaction, the exchange rate can only be known after five days, and there is a daily limit of $5000 that can
be transferred a day.
Although the SBI has generally performed well in the past, in recent years, the ICICI has seen very
good performance, almost edging out the SBI in every aspect, especially financially. The financial years
between 2001-2002 and 2005, and 2006, saw very strong gains for the ICICI bank. Its deposits grew by
200 percent, five times more than the SBIs, and while SBIs revenue grew by 30 percent and the ICICI
banks revenue grew by seven times that percentage. This trend means that ICICIs growth will eventually
overtake SBIs in the future, in terms of deposits.

The SBI is a government owned bank (public sector), while ICICI is a privately owned bank
(private sector).

The SBI is much older (more than 200 years old) and more established than the ICICI, which is less
than 25 years old.

The SBI does not limit daily international transfer amounts, while the ICICI limits daily transfers to
$5000 a day.

The SBI bank pays a higher percentage on deposits than the ICICI bank.

6.2ANALYSIS AND INTERPRETATION OF SERVICES

Case 1 Sale of Gold during Akshya Tritiya (2012) SBI

ICICI

174

We can see here that SBI advertises sale of mutual fund units in their Gold Fund scheme during the
festival of Akshaya Tritiya. Investors who have knowledge about the market will know very well that gold
as a commodity yields an average 20% YoY and has since never saw a negative rate of return. SBI also had
a scheme that offered 1% discount on all denominations of Gold coins except those above 100gms during
their campaign. The drawback of advertising like this is, many do not know the benefits of investing in
paper gold. Which means, gold mutual funds or gold exchange traded funds; this form of investment has
superior advantages than

investing in gold as a physical commodity. ICICI however had

decorated all its branches during the festival and even offered a larger discount, 8% on gold coins being
purchased online. Many Indians today still choose gold as a physical commodity and it is possible that
ICICI had better sales than SBI in comparison to gold coins.

SBI could simply mention the rate of return on its gold mutual funds or offer the advantages of
paper gold over

physical gold in its advertisements during Akshaya Tritiya. The advantages of

investing in paper gold are not even mentioned on their mutual funds website by means of a flash
advertisement.

Case 3-ATM Services

SBI

ICICI

Cash Withdrawal

Cash Withdrawal

Mobile Recharge

Mobile Recharge

Fund Transfers

Pay Utility Bills (All)

Mini Statement

Pay ICICI credit card bills

Balance Enquiry

Pay ICICI Prudential Insurance premium Donate to temple trusts

Request cheque book

Donate to relief funds

Pay Utility Bills (MTNL and Bescom only)
Pay SBI Credit Card Bills

Fund Transfers
Mini Statement
Balance Enquiry
175

Pay SBI Life Insurance premium

Pay fees of certain colleges

SBI ATMs do have more services than what ICICI ATMs offer. But there is a small glitch in their
service delivery and marketing. SBI offers the basic services (highlighted purple) in all the ATMs.
However, the rest are available only in a select few. The data for which is unavailable.

Only on their website in a link that shows up when you type ATM in the search bar. Poor advertising of
its ATM functionality has resulted in lack of awareness among consumers regarding the services available.
In fact, the SBI website also does not advise any details on what services their ATMs offer.
The irony is, SBI keeps advertising on the number of ATMs and cash withdrawals made by
consumers over the years in these ATMs. This advertising is irrelevant. As a customer of SBI, it makes no
difference on the number of ATMs added over the years since the data is irrelevant. ICICI however offers
all the services in all of its ATMs. And the advertising of its services has been clearly seen on all its
branches. There is even a flash demo on the banks website that provides details on the services available at
its ATMs. Their current marketing campaign,

suggests Our

ATM is almost a bank branch indicating customers the improvised convenience offered to them.

176

Figure 6.1. Innovative Banking Services

Banks

17

ICICI
SBI

83

1. On being asked about the innovative nature of banking services, 83.2 % of the customers of ICICI
bank said that the banking schemes offered by ICICI bank are very much innovative.
2. The SBI customer were asked about the innovative nature of SBI services, around 77.5 %
customers out of 100 said that the schemes are very much innovative.
Figure 6.2.

Innovative Banking Services

177

Banks

48.5

ICICI
51.5

SBI

3. As far as the comparisons of innovative scheme of both the banks are concerned; it is found that
ICICI bank offers more innovative schemes than SBI.
4. About the dynamic nature of banking services offered by ICICI bank only 51.5% of the customers
out of 100 said that the services are very much dynamic in nature whereas 33.3% SBI customers
fell that the services provided by SBI are dynamic. In comparison with SBI about dynamic services,
ICICI bank stands first.

178

Figure 6.3

Dynamic Services

Banks

43.6

ICICI
56.4

SBI

5. In terms of competitiveness of banking schemes ICICI bank has only 56.4% customer saying its
services are very much competitive.
6. SBI customers are negative about the competitiveness of banking schemes of SBI. Around 37.3%
customers feel that the services are very much competitive whereas majority of customers i.e. 50%
have the opinion that the schemes offered by SBI are very less competitive.
Figure 6.4.

Competitive Schemes

Banks

43.6

ICICI
56.4

SBI

179

7. The customers of ICICI bank are satisfied with the services offered by ICICI bank. Since 83.2 % of
the, customers responded yes to the question whether they are satisfied with the services of ICICI
bank.
Figure 6.5.

Service Satisfaction

Banks
17

ICICI
SBI

83

8.SBI customers are also satisfied with the banking services offered by SBI. The customers who are
satisfied with ICICI bank services stand at 76.5%.
Figure 6.6.

Banking Services

Banks

23.5
SBI
ICICI
76.5

9.It was obvious that ICICI bank customers are more satisfied with 83.2% out of total 100 respondents
when compared with SBI bank in terms of satisfaction.
180

Figure 6.7

Customer Satisfaction

Banks
17

ICICI
SBI

83

10.Private sector banks give more importance to customer satisfaction. For private sector banks, not only
the product and services are important, but also the way they communicate about their new services,
opening of new branches, changes in interest rates etc. to their customers. It shows that 80.2 % out
of total respondents are satisfied with the communication from ICICI bank.
Figure 6.8

Product Satisfaction

Banks
20
ICICI
SBI
80

11.SBI customers are more satisfied at 85.3 % about communication from SBI about new services, changes
in interest rates opening of new branches, etc.

181

Figure 6.9

Communication Satisfaction

Banks
14.7

SBI
ICICI

85.3

12. When ICICI bank and SBI are compared on satisfaction with the communication from banks it is
found that SBI is more prompt and efficient in communication with the customers.
13. It is found that 34.6 % customers of ICICI bank are always satisfied with the way ICICI bank
markets it banking services. And 61.4% of the ICICI bank customers are sometimes satisfied with
marketing of ICICI bank services.
14. it is found that 50% customers of SBI are sometimes satisfied with the SBI markets its products,
47.1% customers of SBI are always satisfied with the way bank markets its services.
15. ICICI bank has 11.9% customers who are not satisfied with the service of ICICI bank. The study
also attempts to find out the reasons for dissatisfaction of services of ICICI bank, it is found that;

182

8.9% customers are not satisfied because of services.

1.0% customers are not satisfied because of schemes offered by ICICI bank.

7.9% customers are not satisfied with the staff of ICICI bank.

7.0% customers of ICICI bank are not satisfied because of banking charges.

4.0% percent customers of ICICI bank are not satisfied because of the time taken for transaction.

Figure 6.10

Staff and Scheme Satisfaction of ICICI Bank

Banks
19.8

14.8

166
13.2
12
7

ICICI
ICICI
ICICI
ICICI
ICICI
ICICI

767.2

SBI

16. SBI has 7.9% out of the total respondents who are not satisfied with the services of SBI. The Study also
attempts to find out the reasons for dissatisfaction of services of SBI It is found that:

6.9% of the customers of SBI are not satisfied because of services.

3.9% customers of SBI are not satisfied with the schemes offered by SBI

13.7% of the customers are not satisfied with the staff SBI
10.8% Customers of SBI are not satisfied with service charges charged by SBI
183

3.9% of the customers of SBI are not satisfied because of the time taken for transaction.

Figure 6.11

Staff and Scheme satisfaction of SBI

Banks
11.5 6.5
13.2

22.8
18
6.5

SBI
SBI
SBI
SBI
SBI
SBI
ICICI
922.5

17.

It is found out from the above study that the major reason for dissatisfaction of ICICI bank customers is
banking staff and charges by ICICI bank.

18.

It is found out from the above study that the major reason for dissatisfaction of SBI customers is banking
staff with 13.7% and service charges with 10.8%.

19.

When Customers of ICICI bank asked to rate ICICI bank on the basis of customer services the customer of
ICICI bank have rated ICICI bank as follows:
32.7% of the total respondents said ICICI bank is excellent in terms of customer services.
28.7% of the total respondents said ICICI bank is very good in terms of customer service.
30.7% of the total respondents said ICICI bank is good in terms of customer service.
7.9% of the total respondents said ICICI bank is poor in terms of customer service.

184

Figure 6.12

ICICI Customer Service

Banks
7.9

32.7

ICICI
ICICI

30.7

ICICI
ICICI
SBI

28.7

20.

When customers of SBI asked to rate SBI on the basis of customer services the customers of SBI have rated
SBI as follows:
25.5% of the total respondents said SBI is excellent in terms of customer services.
34.4% of the total respondents said SBI is very good in terms of customer services.
37.3% of the total respondents said SBI is good in terms of customer services.
4.9% of the total respondents said SBI is poor in terms of customer services.

185

Figure 6.13

SBI Customer Service

Banks
31.9
43
SBI
46.6

SBI

6.1

SBI
SBI
ICICI

37.4

21.

When asked about the Redressal of complaints most of the marketing staff of ICICI bank replied in negative
terms. Around 32% said it is satisfactory, 26% said it is poor. And 6% said the Redressal of complaints at ICICI
bank is excellent, 10% said it is very good and 26% said it is good.
Figure 6.14

Complaint Redressal

Banks
4
32

26

ICICI
ICICI
ICICI
ICICI
ICICI

10

SBI
6

26

186

22.

The question regarding customer complaints when asked to marketing staff of SBI they
replied in following way: reply to customer complaints at SBI is excellent 12%, very good
6%, good 45% and 16% satisfactory around 21% said it is poor.

Figure 6.15

custommm
Mer Complaint

Banks
4

12
6

21

SBI
SBI
SBI
SBI

16

SBI
45

ICICI

23. IT is found that the marketing problems faced by marketing staff of SBI is related to banking
products 8%, marketing strategies 12%, service charges 55% banking staff 20% and other 5%.
Figure 6.16

Marketing Staff

Banks
5 4

8
12

SBI
SBI

20

SBI
SBI
SBI
55

ICICI

187

24.

In case of ICICI bank it is found that the marketing problems faced by marketing staff is
related to banking products 9% marketing strategies 10% service charges 63% banking staff
10 and other 8%.

25. It is found that most of the time ICICI bank marketing staff faces problems in convincing the
customers because of reasons such as service charges, banking staff, etc. at 79% where SBI staff
faces problems at 51%.
26. The major question remains whether all these problems affect the marketing staff in convincing the
customer about other products. Only 2% of ICICI bank marketing staff feels that they have
problem in convincing the customers all the times because of all these problems stated above, 9%
have problems most of the time. 79% have problems some times, and 10% never have problems
because of all these reason to convince the customers.

ICICI BANK

Chapter - 5
FINDINGS

More number of people have account with private banks.

Majority of the respondents whether in public sectors or in private sector banks have savings account
with banks.

Number of problem faced by the people is more in public sector banks.

People want a change in the behavior of the staff of the public sector banks.

188

People are more satisfied form the private sector banks due to their 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 hour are 12), good investment Advisory services, efficient
and co-operative staff, better approach to Customer Relationship Management.

In private sector 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
banking by ATM/Debit card.

Majority of respondents do not want to shift from their present bank.

From the above study it is clear that private banks are providing better services than nationalized banks.
95% respondents favored that private banks are providing better services than nationalized banks while
5% respondents are not agree with it.

From the above study it is clear that majority of the respondents said that the average balance
requirement for operating their saving account is between 5000-10000. 20% said it is between 1000020000 and remaining 5% said it is between 20000-50000 in private sector banks which as compared to
Public sector bank is very high.

40% respondents said that the bank employees never pay any attention to them and 10% respondents
said that their problems are not solved by bank executives. The remaining 50% respondents give a
positive reaction in the favour of bank. 30% respondents favoured that their problems are solved by bank
executives and 20% respondents said they are received with smile by bank executives. So there is a mix
response.

Majority of the respondents said that the average time taken for transactions is between 25 to 50 minutes
in their bank. 30% respondents said the average time taken for transaction is between 20-25 minutes,
20% said it is between 10 to 25 min. and remaining 10% said that the average time taken for transaction
by their bank is 5 to 10 minutes.
189

CHAPTER 6
SUGGESTIONS

Based on the study conducted, There are some of the suggestions given by the customers of how the modern
banking should be. These are the comment given by them about the improvement of the banking sector in India.

Banks should obey the RBI norms and provide facilitiesas per the norms, which are not being followed
by the banks. While the customer must be given 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 rate of saving account
Banks should provide loan at the lower interest rate 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 contribution from the employee of the bank. The staff Should be
co-operative, friendly and must be capable of understanding the problems of customers
Internet banking facility must be made available in all the banks.
Prompt dealing with permanent customers and speedy transaction without harassing the customers
Each section of every bank should be computerized even in rural areas also.
Real time gross settlement can play a very important role.
More ATM coverage should be provided for the convenience of the customers.
No limit on cash withdrawls on ATM cards.
The bank should bring out new schemes at time-to-time so that more people can be attracted. Even some
gifts and prizes may be offered to the customers for their retention.
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.
190

 The

charges for saving account opening are high, so they should also be reduced.

Customers generally complain that full knowledge is not granted to them. Thus the bank
should properly disclose the features of the product and services to the customers. Moreover door to
door services can also be introduced by bank.

The need of the customer should properly be understood so that customer feels satisfied. The
relationship value should be maintained.
The branch should promote cooperation and coordination among employees which help them in efficient
working.
Maintenance of proper hierarchy should be done. A good hierarchy set up can ensure better results with
in the bank.

Banking sector is improving by 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.

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 level and the operators should de 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.

Quick services should be provided.

For Private sector Banks

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24 hours banking should be induced so as to facilitate the customers who

may not have free time in the day time. It will help in facing the competition

more effectively.

More ATM coverage should be provided for the convenience of the customers.

Customer care services should be provided by banks.

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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. Entries of the
private sector banks have made the competition tougher. If a bank is not functioning properly it is 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 requirement, thus enabling early adoption and increased efficiencies.

In the prevailing scenario, a number of banks have adopt 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 reinvented
business models. The required changes at both the business and technology levels are enormous. In a highly
competitive banking markets, early adopters are profiting from increased efficiencies.

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BIBLIOGRAPHY
BOOKS:

Kothari C.R. (1990) Research Methodology: Method and Techniques; Wishva Prakashan, New Delhi.

Bodie.Z, Kane.A & Mracus.J : Essentials of Investments.

Prof. E Gordon & Dr. K. Natrajan Banking Theory Law and Practice.

Indian financial System & Commercial Banking by Khan Masood Ahmed

Banking in India by P.N.Varshney

WEBSITES:

www.centurionbop.co.in

www.pnbindia.com

www.statebankofindia.com

www.icicibank.com

www.rbi.org.in

www.iba.org.in

www.knowledgestom.com

www.igniter.com

BROACHERS & PAMPHLETS

Broachers and pamphlets of Saving A/c

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