COMPARISON BETWEEN PUBLIC SECTOR BANK AND PRIVATE SECTOR BANK

OF KOTTAYAM MUNICIPALITY

Sherin Anna Abraham

B.Ed. Student (social science)
Mount Carmel college of teacher education for women Kottayam

ABTRACT
The present article “comparison between public sector bank and private sector
bank” is survey carried out with the objective to study the comparison between public and
private sector bank to determine whether there is any significant difference of public and
private sector bank.
A sample of 30 customers of Kottayam municipality was selected both from private and
public sector bank using random sampling technique.

The study shows 60% the customers depend on private bank for their needs and other 40%
only depend on public bank for their facilities.

The customers received the services with limited from private bank. Thus it can conclude
that private bank is efficient in providing the services.

By the introduction of IT Based services, banking transactions become speedy and there is
less chance for the mistakes.
Private and public bank also provides the services like online banking, internet banking.
ATM, telephone banking etc. and have made banking transactions easy and convenient. Thus
the application of information technology in banking services to the customers.

The study reveals that 40% of customers are using ATM once in a while and 60% of
customers are using ATM once in a while.
Of the 30 customers 22 customers are Private bank ATM holder and they are regular users or
using ATM once or twice in a week.
Using ATM, customers can withdraw and deposit cash besides availing a variety of facilities.
It improves customer service and reduce transaction cost.

INDROUCTION

Banks play a very important role in the economic development of every modern state. Banks
operate at the heart of modern economy. Traditionally, banking had been restricted from
private participation I India and public sector banks had been enjoying complete protection.
This scenario has changed since 1990. The decade of 90s witnessed a sea change in the
working of banking in India. Technology made tremendous impact by introducing “anywhere
banking”. The financial sector now operates in a more competitive environment than before
and involves relatively large volume of international financial flows. In the wake of greater
financial deregulation and global financial integration, the biggest challenge before the public
sector banks is to match the market requirement rather than being promoted by government
or regulator. Foreign banks and the new private banks have embraced technology right from
the inception of their operations and therefore, they have adapted themselves to the changes
in the technology easily. Deregulation, liberalization and globalization have produced intense
competition in banking industry resulting into declining margins in traditional businesses,
increased cost pressures and greater risks. Market positioning, cost of intermediation and
service delivery are likely to be determinants of the efficiency of banks with the respect to
their competitiveness. In the changed environment creating new customers and retaining the
existing ones have become difficult tasks for banks.

Objectives of the Study

1. To analyse the performance of both private and public sector bank
2. To compare the performance between private and public with special focus on customer
satisfaction

Research Methodology
The present study is secondary data based collected from various journals, reports of RBI and
annual reports of banks, money control. . The study period is limited, from 2004-05 to 2013-
14.
Growth is the concept for banking sector to grow in a profitable manner, in assets, in number
of branches and networks in number of ATMs, in capital adequacy ratio, but less in
percentage of NPA.
Every year targets are fixed by the banks to achieve it, various types of scheme are launched,
and interest on deposits and loans are adjusted. The increase in business per employee of the
bank in comparison to the previous year is evaluated. Operating profits, net profits, earning
per share, dividend per share, return on capital employed, return on equity, interest coverage
ratios are the other yardsticks to measure the growth of a business entity over a period of
time. Growth also means to compare the net profit of current year to the previous year’s
profit.
Definition of Public Sector Bank
Public Sector Banks are the banks whose more than 50% shareholding lies with the central or
state government. These banks are listed on stock exchange. In the Indian Banking System,
PSB’s are the largest category of banks and emanated before independence.

Definition of Private Sector Bank

Banks whose greater part of the equity is held by private shareholders and entities rather than
government is known as private sector banks. After most of the banks had got nationalised in
the two tranches, but those non-nationalised banks carried on their operations, known as Old
Generation Private Sector Banks. Further, when the liberalisation policy was coined in India,
the banks which got a license like HDFC bank, ICICI bank, Axis bank, etc. are considered as
New Generation Private Sector Banks.
Table 4.1: gender wise classification
Category Number Percentage

Male 19 63
Female 11 37
Total 30 100
Diagram
 63

female

Table 4.2: Occupation wise classification of respondents

Respondents may be classified on the basis of occupation. There are business persons,
employees, agriculturists, and other like housewife’s etc. the following table depicts the
classification in numbers.

Educational status number %

Business people 10 33
Employees 9 30
Agriculturists 8 26
Others 3 11
total 30 100
Source: primary data
The above table shows the occupation wise classification of respondents. Of the total
respondents 33% are business people, 30% are employed persons, 26% are agriculturists and
remaining 11% are others. From this we can see that most of the customers constitute the
business people and employees.

Column1

business employees
agriculturist others

Table 4.3: Education wise classification

Total customer respondents the occupation wise classification of respondents. Of the total
respondents 33% are business people, 30% are employed person26% are agriculturists and
remaining 11% are others. From this we can see that most of the customers constitute the
business people and employees.

Educational status number %

Primary education 1 3
SSLC 3 10
Higher secondary 7 23
Degree 9 30
Post graduate 6 20
Technical 4 14
qualification
Total 30 100
Table4.4
Income wise classification
On thebasis of annual income there are six categories of persons below 25000 of annual
income, 24% are in between 25000-50000, 20% are in between 50000-750000, 13% are in
between 75000-100000, 7% re in between 100000-125000 and 3% are in the level of above
RS 125000/
income business employmen agriculturi others total %
t st
Below 25000 1 1 6 2 10 33

25000-50000 2 2 2 1 7 24
50000-750000 3 3 0 0 5 20
750000-100000 2 2 0 0 4 13
100000-125000 1 1 0 0 1 3
Above 1250000 1 0 0 0 1 3

Source primary: primary data

 Column1

public private both

Findings of the study

Following are the important findings of the study.

The study shows 60% the customers depend on private bank for their needs and other 40%
only depend on public bank for their facilities.

The customers received the services with limited from private bank. Thus it can conclude
that private bank is efficient in providing the services.

By the introduction of IT Based services, banking transactions become speedy and there is
less chance for the mistakes.
Private and public bank also provides the services like online banking, internet banking.
ATM, telephone banking etc. and have made banking transactions easy and convenient. Thus
the application of information technology in banking services to the customers.

The study reveals that 40% of customers are using ATM once in a while and 60% of
customers are using ATM once in a while.
Of the 30 customers 22 customers are Private bank ATM holder and they are regular users or
using ATM once or twice in a week.
Using ATM, customers can withdraw and deposit cash besides availing a variety of
facilities. It improves customer service and reduce transaction cost.
On account of ATM customer are benefited from fast transaction, convenience, 24 hrs.
Service etc. it is more useful the business and employed people.

Suggestions
The customer service has a greater importance today. The private bank and public bank are
now vigilant to ensure better services in banks. The government provides various guidelines
to banks for better customer services. The management of banks has implemented these
guidelines and other measures to improve the customer in banks. However, is it true that the
customers are not cent percent satisfied with services provided by the bank.
There are some reasons for it, one area of compliant is the fact that banks charge for the
mistakes made on account. The employees and customers of banking organisation are not
well aware of new technology on account of techno-phobia. They are if fear of fraud with
increased use of telephones or computers. Customers are greatly confused with new concept
of banking transaction with electronic devices. The success of IT lead banking depends upon
customer awareness.
Conclusion

Information technology has a lot of influence on banking transactions. It is ensuring quick

service with low transaction cost to the customers. There can be no end to the variety
through the electronic channel by banks and financial institutions. Every institution is trying
constantly to innovate and offer new products to woo the customer. The benefit to
customer on account of the internet is that he is able to know at a time the type of facilities
being provided by different institutions an he is able to make the best choice suited for his
needs. Private Sector Banks performance is much better than that of Public
Sector Banks. Customers especially the higher income groups are more satisfied with the
private sector banks due to their good quality customer service.