Jaipuria Institue of Management

Operation Management

Impact of location on banking industry

Submitted By

Priyank Bhargva Fs 39
Amit kumar Fs 04

Vikas jaiswal Fs 058

Shagufta Arif Fs 061

Akriti Mehrotra Fs002

Tarun Agarwal Fs052

 Acknowledgement:

We express our sincere gratitude to our respected

“Prof. Ashish Trivedi”, faculty of Jaipuria Institute of
Management who has helped us to clarify our concepts
by sharing his valued experiences in his teaching,
research and training, which have thereby become an
unconscious part of our ideas and thoughts while
analyzing the impact of location on bank for this report,
without his sincere help and guidance, the project report
would have not been a grand success.

Thank you everyone.

 Working of a bank and the services provided by them depends upon its
location. A bank situated in a commercial area will have customers who would visit
the bank’s branch for availing different services than the customers of a residential
area. On the other hand banks would also face different problems in providing
services to customers of different areas. To find out the different services availed by
customers of different areas and problems face by the banks we visited the Gomti
Nagar Branch of Punjab National Bank.

After visiting the above mentioned branch of PNB we found that being
situated in Gomti Nagar area, the bank has both the type of customers. One who
are salaried class and they visit bank for their personal purpose and another who
are businessmen, they visit bank for their day to day transactions.

Services availed by both the classes of customers are very different. The salaried
class customers generally visit bank to avail following services:

1) Withdrawal of salary from their salary account,

2) Transactions like deposit to and withdrawal from their saving accounts,

3) Making Fixed Deposits,

4) Availing Home loans, Education loans, Personal loans, Automobile loans, etc.

5) Inquiring for different Financial Products.

While a business class customers visits bank to avail following services:

1) Operating a current account with credit limit or without credit limit,

2) Taking Over Draft facility,

3) Making RTGS, Demand Drafts

4) Commercial loans
 We talked to the employees and tried of find out that during which time of
the month or week more customers visited the bank and what are the problems
faced by them in giving service to the customers and what all problems do they
think the customers would be facing while visiting the bank. After talking to them
we found that most of the business class customers daily visit the bank. They
mostly bring a huge amount of cash with them to be deposited in their account. The
employees there told that it takes a lot of time in counting the cash and if more
then one customer with large amount of cash comes at one time then a long queue
gets gathered because of the time taken in counting the large amount of cash. They
also told that the numbers of customers visiting bank increases during 1 st to 10th of
every month, as the salaried class customers visit the bank to withdraw salaries
from their salary account, retired persons visit to withdraw their monthly pension,
students visit to deposit fees of the schools or withdraw fees from scholarship
account and also business class customers visit for their day to day transactions.
This create problem for the bank to provide service to more number of customers
than the number of customers visiting bank in regular days.

Since the bank provides core banking facility i.e. all the data is centralized,
therefore customers having account in PNB all over India can access their account
any where in India. The customers those who have account in other cities and living
in also visit this branch for availing the banking facility because of the easy
accessibility to the branch. Thus number of customers visiting the branch increases.

As the banks working is fully dependent on internet due to core banking

system therefore when the internet service providing lines gets busy and network
congestion gets generated and the working gets affected due to it. By the time the
lines get free and connectivity is regained, lots of work gets piled up and customers
have to wait for their work to get done until the connectivity is regained.

Some of the problems that we observed by visiting the bank are as under.

We saw that some of the customers who visited the bank were illiterate, thus
they were not able to fill up the withdrawal or deposit forms and asked other
customers in the bank to help them by filling up the form for them. Among those
people some of them got help but some of them didn’t got help, so they disturbed
the employees for asking for help because of which the employees loses their
concentration in their work and affecting the work quality and efficiency.

Other problem which we saw was that the customers who visited the bank
for first time for opening a new account get confused when they didn’t found any
PRO table so they disturb other employees enquiring about details regarding
opening a new account. Many customers who are educated didn’t knew how to fill
up the withdrawal or deposit forms because of not having any experiences of
availing any banking service.

Another problem which we observed was when peoples visited the bank for
availing loan, due to lack of knowledge most of the people came with incomplete
documents as a result processing of request form for loan took more time and in
some cases peoples have to visit the bank many times for completion of documents
required for approval of loan. Processing of request form for loan also took time due
to some of the internal factors such as the higher authority peoples are on leave, or
it takes time in transferring the request form from one department to other for
processing, from get transferred to wrong department, and due to many other
human errors.

Customer also face problem in getting certificates of their deposits, no dues

certificates on completion of installments of the loan availed.

To resolve the above stated problems we would like to suggest some

solutions which are as under.

As stated above that many business class customers most of the time daily
visit the bank to make deposits to their account and they bring large cash with
them, so bank can make a separate counter where cash above Rs. 25000 would be
deposited. By this way bank can separate counters for deposit of large amount and
small amount, hence customers who want to deposit small amount of money have
not to wait longer for deposit of cash and long queues would not gathered because
of customers with large cash. And on the counter where large amount will be
deposited there two persons should be appointed, one who would count cash
through counting machine and another who would process the deposit slip. One of
the individual can be place at some other job on the days when there is less
number of customers visiting the bank.

The bank working is based on core banking; it is beneficial for both the
customers as well as the bank. The customers can easily access their accounts from
any of the branch of bank all over India. It creates problem when the connectivity
to the central server is weak. In order to resolve the connectivity problem the bank
can also maintain data at local or branch level on computers and can update the
central server when ever the connectivity gets regained. In this manner banks can
cope up with the connectivity problem up to some extent and make its customers
more satisfied.

Another problem was that the bank does not have any PRO counter due to
which customers disturb the working as well as gets panic. Bank should arrange for
a PRO counter from where people visiting the bank can easily gather information
and can be directly send to the concerned persons who is responsible for providing
a certain service. People first time visiting the bank can contact PRO and can easily
avail the required service without any problem. PRO can also be help full to the
customers who are illiterate or who have no experience of visiting a bank by
helping them in filling up the withdrawal or deposit forms or any other type of form
required for any of the banking service.

The processing time of loan request application forms of customers can be

reduced by making the application online. By this the chance of delay due to
transfer of application form to wrong department can be reduced as in online
system the application form would move through a proper channel for processing.
PRO can help customers by informing them about all the formalities that are
required for availing loan from bank, thus a customer can easily and in less time
get its loan approved and sanctioned.

Huff Retail Location Model

 First, a gravity analogy is used to estimate attractiveness of store j for
customers in area i.

Aij= Attraction to store j for customers in area i

Sj = Size of the store (e.g. square feet)

Tij= Travel time from area i to store j

lambda = Parameter reflecting propensity to travel

Sj
Aij =
Tijλ

Second, to account for competitors we calculate the probability that

customers from area i will visit a particular store j.

Aij
Pij = n

∑A
j =1
ij

Third, annual customer expenditures for item k at store j can now be

calculated.

Pij = Probability customers from area i travel to store j

Ci = Number of customers in area i (e.g. census track)

Bik = Annual budget for product k for customers in area i

 m = Number of customer areas in the market region

E jk = ∑( Pij Ci Bik )
m

j =1
Fourth, market share of product k purchased at store j can now be
calculated.

E jk
M jk = m

∑(C B
i =1
i ik )