Comparative Study on Services of Public Sector and Private Sector Banks

COMPARATIVE STUDY ON SERVICES OF PUBLIC AND PRIVATE BANKS

We like to humbly acknowledge the contributions made by several persons without whose valuable support, this Project could not have taken the present shape.

We should first of all like to thank our patron, Dr. RATNESH SINHA Director, MBA. Now we would also like to thank our teacher and guide Mr. NIRMAL SIR, Mr. AMIT SIR, Mr. BRAJESH SIR, Mr. SUMAN SIR and Mrs. SWETA MAM and all our faculty members without whose timely

support and guidance this project on the subject of “Comparative Study on Services of Public Sector and Private Sector Banks” would not have been a successful venture.

In this moment of deep thought and reflection, We pay humble salute to our parents who have taken pains unknown and unperceivable – day and night – to bring us up and polish our future to attain the desired goal.

How can our librarian be forgotten, who has helped us by providing books on subject. Our department’s fourth grade employee Mr. JHAJI is also deserving candidate of our gratitude that they have extended from time to time in the department.

PREFACE

Someone has rightly said that practical experience is for better and closer to the real world then mere theoretical exposure. The practical experience


helps the students view the real world closely, which in turn widely influences their perceptions and argument their understanding of the real situation.

Research work constitutes the backbone of anymanagement education program. A management student has to do research work quite frequently during his entire span.

The research work entitle “COMPARATIVE STUDY ON SERVICES OF PUBLIC SECTOR AND PRIVATE SECTOR BANKS” aims to analyze various services provided by private sector banks and public sector banks. For this purpose Bhagalpur city have been chosen.


(1) INTRODUCTION OF THE STUDY

(2) INDIAN BANKING SYSTEM

2.1 FUNCTIONS OF BANK

2.2 PRODUCTS/SERVICES OFFERED BY BANK

(3) OBJECTIVES OF THE STUDY

(4) REVIEW OF LITERATURE

(5) RESEARCH METHODOLOGY

5.1 SAMPLE PLAN

5.2 LIMITATIONS OF STUDY

(6) DATA ANALYSIS AND ITS INTERPRETATION

(7) FINDINGS

(8) SUGGESTIONS AND RECOMMEDATIONS

(9) CONCLUSION

(10) APPENDICES

1. INTRODUCTION OF THE STUDY

The world of banking has assumed a new dimension at dawn of the 21st 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 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 customer’s 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. 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 age-old banking operations in different parts of the country under different names. The modern age of banking constitutes the fundamental basis of economic growth. The term Bank is being used since long time but there is no clear conception regarding its beginning. According to the viewpoint, in good old days. Italian money leaders were known as“B anchi” 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.

2. INDIAN BANKING SYSTEM "The success of the economic reforms is therefore all to see and the driving force of these reforms is the banking sector".

P. Chidam Baram


Reserve Bank of India

Commercial Banks Co-operative Banks Development Banks

Nationalized Private Short-term credit

Long-term credit

Union Finance Minister P. Chidambaram strongly believes that the country's banking sector has been one of the driving forces in the process of economic reforms.

Banking system occupies an important place a nation's economy. A banking institution is indispensable in a modern society. In plays a pivotal role in the economic development of a country.

Thus, economic development of a country depends upon success of banking industry and success of banking Industry is determined to a large extent by now well then needs of its customers have been understood and satisfied.

.

Reserve Bank of India

The Banking system is an integral sub-system of the financial system. It represents an important channel of collecting small savings from the households and lending it to the corporate sector.The Indian banking system has The Reserve Bank of India (RBI) as the apex body from all matters relating to the banking system. It is the “Central Bank” of India and act as the banker to all other banks.

Functions of RBI: • Currency issuing authority• Banker to the government.• Banker to other Bank.• Framing of monetary policy.• Exchange control.• Custodian to foreign exchange and gold reserves.• Development activities.• Research and development in the banking sector.

Organizational Structure of Banks in India:

In India banks are classified in various categories according to differ rent

criteria. The following charts indicate the banking structure:


CLASSIFICATION OF BANKS On the basis of Ownership

PUBLIC SECTOR BANKS

Nationalised banks or public banks dominate banking System in India. The nationalisation of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective behind nationalisation was to spread banking infrastructure in rural areas and make available cheap finance to Indian farmers. Before 1969, State Bank of India (SBI) was the only public sector bank in India. Despite the entry of many new domestic and foreign private banks since liberalization, public sector banks continue to dominate the commercial banking industry.

PRIVATE SECTOR BANKS

Private sector banking in India received a flip in 1994 when Reserve Bank of India encouraged setting up of private banks as part of its policy of liberalisation of the Indian Banking Industry. Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. Private Banks have played a major role in the development of Indian banking industry. They have made banking more efficient and customer friendly. In the process they have jolted public sector banks out of complacency and forced them to become more competitive. India has a better banking system in place of other developing countries.

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.

2.1) 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.

STRUCTURE OF BANKING SYSTEM

Different countries of the world have different types of banking systems. However, commercial banking had grown under all these banking systems. To understand the structure of banking system, let us take up various types of banking systems one by one. These types are:

(1) UNIT BANKING Unit Banking originated in the United State of America. It grew in the United States of America.


“An independent unit bank is a corporation that operates one office and that is not related to other banks through either ownership or control.

(2) BRANCH BANKING:

This the most popular and important banking system. In branch banking, a bank has a large network of branches scattered all over the country. Branch banking developed in England. Subsequently most of the countries of the world adopted the system. In terms of branches, the State Bank of India has emerged as one of the largest banks in the world. Under the system branches can operate without keeping large idle cash reserves. Branch Banking tends to bringhomogeneity in the prevailing Interest Rates. The choice of securities and investments is larger.With the growth of large scale business it is no wonder that the trend is almost every country towards the branch banking i.e. big banks with a network of branches all over the country. The Bank of America has now more than 500 branches in the state of California itself.

(3) CHAIN BANKING:

Under the system there is pooling of resources. Chain banking overcomes certain limitations of unit banking. But the system suffers from certain limitations of its own. There may be a lack of co-ordination, proper control etc. The system is inflexible.(4) GROUP BANKING:

It is similar to Chain Banking, the difference being that under Group Banking two or more banks are brought under the control of the same management through a Holding Company. Both the systems aim at gaining the advantages of large scale operations. The banks are able to pool their resources in case of emergency or when large amount of cash is required to meet the loan requirements of the customer.

(5) CORRESPONDENT BANKING:

Under Correspondent banking, small banks serving local communities hold deposits with joint banks serving in big cities. This kind of banking is prevalent in U.S.A. The correspondent banks perform two important services of outstation cheque clearing and loan participation for the respondent banks while they benefit for the deposit funds of respondent banks.


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 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.

a. 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.

b.c. 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.

d. 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.

e. 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.


f. 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.

g. 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)

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, they serves as a medium of exchange in a limited way as it is a negotiable instrument.

SECONDARY FUNCTIONS:

Besides the above primary functions, banks also perform many secondary functions such as agency functions, general utility and social functions.

A) Agency FunctionsBanks 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

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 perform the functions of a broker.

iii) Trustee and Executor : Banks also acts as trustees and executors of the property of their customers on their advice. Sometimes banks also undertake income tax services on behalf of the customers.


iv) Remittance of Funds : The Commercial banks remit funds on behalf of clients from one place to another through cheques, drafts, mail transfers etc.

v) Representation and Correspondence : Sometimes commercial banks acts as representatives or correspondents of the clients especially in handling various applications. For instance, passports and travel tickets, booking of vehicles, plots etc.

vi) 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 gold which has been put under open general licensed category.

vii) Purchase and Sale of Foreign Exchange : Banks buy and sell foreign exchange, promoting international trade. This function is mainly discharged by foreign Exchange Banks.

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

B) GENERAL UTILITY SERVICES

In addition to agency services, banks render many more utility services to thepublic. 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) 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.

iii) 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.

iv) Help in Transportation of Goods: Big businessmen or industrialists after consigning goods to their retailers send the Railway Receipt (Consignment Note) to the bank.

v) 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.


vi) 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.

vii) Merchant banking Services: Commercial banks also render merchant banking services to the customers. They help in availing loans from non-banking financial institutions.

Public Sector Banks

Reserve Bank of India - Central Bank Bank of India Dena Bank IDBI Bank Indian Bank Oriental Bank of Commerce Punjab National Bank United Bank of India Allahabad Bank Andhra Bank Bank of Baroda Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Indian Overseas Bank Syndicate Bank Union Bank of India Vijaya Bank Punjab & Sind Bank

Private Banks

Axis Bank Bank of Rajasthan Catholic Syrian Bank City Union Bank Dhanalakshmi Bank Federal Bank Jammu & Kashmir Bank Tamil Nadu Mercantile Bank Yes Bank ICICI Bank


HDFC Bank PB BANK HSBC BANK ABN AMRO DEUTSCHE BANK

2.2) PRODUCTS/SERVICES OFFERED BY BANK

Some of common available banking products are explained below:

1) Credit Card: Credit Card is “post paid” or “pay later” card that draws from a credit

line-money made available by the card issuer (bank) and gives one a grace period to pay. If

the amount is not paid full by the end of the period, one is charged interest. These bills are

assembled in the bank and the amount is paid to the bank by the card holder totally or by

installments. The card holder need not have to carry money/cash with him when he travels or

goes for purchasing.

Credit cards have found wide spread acceptance in the ‘metros’ and big cities.

Credit cards are joining popularity for online payments. The major players in the Credit Card

market are the foreign banks and some big public sector banks like SBI and Bank of Baroda.

India at present has about 3 million credit cards in circulation.

2) Debit Cards: Debit Card is a “prepaid” or “pay now” card with some storedvalue. Debit

Cards quickly debit or subtract money from one’s savings account, or if one were taking out

cash.

When A CUSTOMER makes a purchase, he enters this number on the shop’s

PIN pad. When the card is swiped through the electronic terminal, it dials the acquiring bank

system – either Master Card or Visa that validates the PIN and finds out from the issuing

bank whether to accept or decline the transaction. The customer never overspread because the

amount spent is debited immediately from the customers account. So, for the debit card to

work, one must already have the money in the account to cover the transaction. There is no

grace period for a debit card purchase.

The major limitation of Debit Card is that currently only some 3000-

4000 shops country wide accepts it.


3) Automatic Teller Machine: The introduction of ATM’s has given the customers the

facility of round the clock banking. ATM card is a device that allows customer who has an

ATM card to perform routine banking transaction at any time without interacting with human

teller. This can be done by inserting the card in the ATM and entering the Personal

Identification Number and secret Password.

ATM’s are currently becoming popular in India that enables the customer to

withdraw their money 24 hours a day and 365 days. It provides the customers with the ability

to withdraw or deposit funds, check account balances, transfer funds and check statement

information.

4) E-Cheques: The e-cheques consists five primary facts. They are the consumers, the

merchant, consumer’s bank the merchant’s bank and the e-mint and the clearing process. This

chequring system uses the network services to issue and process payment that emulates real

world chequing. The payer issue a digital cheques to the payee ant the entire transactions are

done through internet. Electronic version of cheques are issued, received and processed

The e-chequing is a great boon to big corporate as well as small retailers. Most

major banks accept e-cheques. Thus this system offers secure means of collecting payments,

transferring value and managing cash flows.

Electronic Funds Transfer (EFT): Many modern banks have computerised their cheque

handling process with computer networks and other electronic equipments. These banks are

dispensing with the use of paper cheques. The system called electronic fund transfer (EFT)

automatically transfers money from one account to another. This system facilitates speedier

transfer of funds electronically from any branch to any other branch. In this system the sender

and the receiver of funds may be located in different cities and may even bank with different

banks. Funds transfer within the same city is also permitted. The scheme has been in

operation since February 7, 1996, in India.

6) Telebanking: Telebanking refers to banking on phone services.. a customer can

access information about his/her account through a telephone call and by giving the

coded Personal Identification Number (PIN) to the bank. Telebanking is extensively

user friendly and effective in nature.


5) Mobile Banking: A new revolution in the realm of e-banking is the emergence of

mobile banking. On-line banking is now moving to the mobile world, giving everybody with

a mobile phone access to real-time banking services, regardless of their location. The

potential of mobile banking is limitless and is expected to be a big success.

According to this system, customer can access account details on mobile using

the Short Messaging System (SMS) technology where select data is pushed to the mobile

device. The wireless application protocol (WAP) technology, which will allow user to surf

the net on their mobiles to access anything and everything. This is a very flexible way of

transacting banking business.

Already ICICI and HDFC banks have tied up cellular service provides such as

Airtel, Orange, Sky Cell, etc. in Delhi and Mumbai to offer these mobile banking services to

their customers.

6) Internet Banking: Internet banking involves use of internet for delivery of

banking products and services. With internet banking is now no longer confirmed

to the branches where one has to approach the branch in person, to withdraw cash

or deposits a cheque or request a statement of accounts. In internet banking, any

inquiry or transaction is processed online without any reference to the branch

(anywhere banking) at any time.

ICICI bank was the first one to offer Internet Banking in India.

Financial Transaction on the Internet:

Electronic Cash: Companies are developing electronic replicas of all existing payment

system: cash, cheque, credit cards and coins.

Automatic Payments: Utility companies, loans payments, and other businesses use on

automatic payment system with bills paid through direct withdrawal from a bank account.

Direct Deposits: Earnings (or Government payments) automatically deposited into bank

accounts, saving time, effort and money.


Stored Value Cards: Prepaid cards for telephone service, transit fares, highway tolls,

laundry service, library fees and school lunches.

Point of Sale transactions: Acceptance of ATM/Cheque at retail stores and restaurants for

payment of goods and services. This system has made functioning of the stock Market very

smooth and efficient.

7) Cyber Banking: It refers to banking through online services. Banks with web site “Cyber”

branches allowed customers to check balances, pay bills, transfer funds, and apply for loans

on the Internet.

8) Demat: Demat is short for de-materialisation of shares. In short, Demat is a process where

at the customer’s request the physical stock is converted into electronic entries in the

depository system.

3. 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 extentto 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 availing

services.

3. To find and compare the satisfaction level of customers in public sector as well as in

private sectors bank.

4. To study the problem faced by customer.

5. To get suggestions for improvement or change in the services of public

and private sector banks.


6. To study what do people expect in the new era of banking

7. To study whether the customers are satisfied with their service

8. To know about the Customer preferences

9. To give Suggestions to improve the services

4. REVIEW OF LITERATURE

The banking sector in India has made remarkable progress since the economic reforms in 1991. New private sector banks have brought the necessary competition into the industry and spearheaded the changes towards higher utilization of technology, improved customer service and innovative products. Customers are now becoming increasingly conscious of their rights and are demanding more than ever before.

The recent trends show that most banks are shifting from a “product-centric model” to a “customer-centric model” as customer satisfaction has become one of the major determinants of business growth. In this context, prioritization of preferences and close monitoring of customer satisfaction have become essential for banks. Keeping these in mind, an attempt has been made in this study to analyze the factors that are essential in influencing the investment decision of the customers of the public sector banks.

Secondly, this study also suggests some measures to formulate marketing strategies to lure customers towards banks


5. RESEARCH METHODOLOGY

Research is an art of scientific investigation. In other word research is a scientific and systematic search for pertinent information on a specific topic. The logic behind taking research methodology into consideration is that one can have knowledge about the method and procedure adopted for achievement of objectives of the project. With the adoption of this others can evaluate the results also. Its main aim is to keep the researchers on the right track.

The methodology adopted for studying the objectives was surveying the saving account holders of Bhagalpur District. So keeping in view the nature of requirements of the study to collect all the relevant information regarding the comparison of saving account of state bank of India with other banks, direct personal interview method with structured questionnaire was adopted for the collection of primary data.

Secondary data has been collected through the various magazines and newspapers and by surfing on Internet. And the guide in the organization was consulted at many times.

SAMPLE DESIGN:-A sample design is a definite plan for obtaining a sample from a given population. It refers to the techniques or the procedure the researcher would adopt in selecting items for the sample. Sample design may as well lay down the number of items to be included in the sample i.e. the size of the sample. Sample design is determined before data are collected. Here we select the population as sample in our sample design. The selected respondents should be as representatives of the total population.


POPULATION:- The persons holding saving account related to business class of Bhagalpur District were taken into consideration.

DATA COLLECTION

Data was collected by using main two methods i.e primary data and secondary data

PRIMARY DATA

Primary data is the data which is used or collected for first time and it is notused by anyone in the past. There are number of sources of primary datafrom which the information can be collected.

QUESTIONNAIRE:-This method of data collection is quite popular. Here in our research we set 27 simple questions and request the respondents to answer these questions with correct information.

RESPONDENTS:-Respondents helps in creation of more accurate idea about our research. We personally meet the respondents inside and outside the banks.

SECONDARY DATA

Secondary data is the data which is available in readymade form and which is already used by people for some purposes. There may be various sources of secondary data such as-newspapers, magazines, journals, books, reports, documents and other published information.

BANKS ANNUAL REPORTS:-Banks issues there annual reports to get the people informed with the profitability and growth of the bank. These annual reports helps us a lot to


get the latest data and other related information for our research. It tells us about the increase or decrease in profits and other facilities.

JOURNALS AND PUBLICATIONS OF DIFFERENT BANKS :-We also take into consideration the journals and publications issued by the bank at different times. we come to know about the Branches, ATM, locations and other useful information.

MANUALS AND BROACHERS OF DIFFERENT BANKS:-We take the help of bank staff and other people who gives us deep information and data which may not be available at anywhere. They gives us there full cooperation.

INTERNET:-We also take into consideration the internet facility with which we collect lot of latest information.

5.1) SAMPLE PLAN:

SAMPLING UNIT:- STATE Bank of INDIA, Branch in BHAGALPUR city. Due to nature of study, we also visited various different banks ICICI, HDFC, PUNJAB NATIONAL BANK etc. of Bhagalpur District.

SAMPLING TECHNIQUE:- Stratified convenient sampling.

All the saving account holders were taken into consideration. Research was conducted on clear assumptions that the respondents would give frank and fair answers in a pragmatic way and without any bias.

SAMPLING DESCRIPTION:- In order to understand the nature and characteristics of various respondents in this study, the information was collected and analyzed according to their socio economic background which included the characteristic of their respondents like education, age marital status and monthly income. This description shows that respondents included in this survey belong to different backgrounds and this inturn increase the scope of the study.


Analysis & Interpretation: From the above study we find that nobody is below

20 age and 20% respondents are between 20-30 age group, 50% respondents are between 30-40 age group, 20% respondents is between 40-50 age group and 10% respondents are between 50-60 age group.


Analysis: From the above result we come to know that out of 100, 70 respondents are

male and 30 are female which is 70% and 30% respectively.

Interpretation: From the above data we conclude that most of our

respondents are male.


MARITAL STATUS

Analysis: From the above study we find that out of 100%, 33% respondents are

married and 67% respondents are unmarried.

Interpretation: Most of the respondents of our survey are Unmarried.


HIGHEST EDUCATIONAL QUALIFICATION:-

Analysis: This analysis shows that out of 100 respondent, 46% respondents are graduate & professional, 36% respondents are post graduate, 14% respondents are senior secondary and 4% respondents are of Matric category. All the respondents of our survey are qualified.

Interpretation:From the above data we conclude that most of our respondents are Graduates & professional degree holders.


OCCUPATION

Particulars No of Particulars %age of respondentsBusinessman 32 32%Government Employee 28 28%

Student 24 24%Others 16 16%

Analysis: From the above analysis it is clear that 32% respondents are doing their own business, 28% are employees and 16% respondents belong to other category And 24% of our respondents are students. Most of the respondents of our survey are Businessmen.

Interpretation: From the Above data we conclude that most of our survey respondents are businessmen.



5.2) 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:

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

The research was carried out in a short period of 1 week . 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.


6. DATA ANALYSIS AND ITS INTERPRETATION

1. The respondents were asked about which banking sector’s services do they avail.

Table1: Banking sector’s services which the respondents avail.

Public32%

Private38%

Both30%

Number of respondents

Graph 1: Banking Sector’s services which the respondents avails


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.

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

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

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.


Interpretation: It was found that in case of public sector banks, maximum number of account holders owns Savings Account. After Savings Account most preferred account is salary account preferred 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 RespondentsICICI Bank 24HDFC Bank 22State Bank Group 28Punjab National Bank 20Punjab And Sind Bank 6

ICICI Ban

k

HDFC Ban

k

State

Bank G

roup

Punjab Nati

onal Ban

k

Punjab And Si

nd Bank

0

5

10

15

20

25

30



Analysis: From above graph, it is seen that 28% stake of the respondents follows to State Bank Of India bank followed by ICICI bank. It is the bank which provides 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 State Bank Of India 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 the reasons for their preference in different banks:-

Table 4:- Reason for account in different banks

Friendly Behaviour of the Staff16%

Reliability/trust14%

Quick and fast services

55%

Location15%

No. of respondents

Graph 4:- Reasons for account in different bank

Analysis: From the above graph, it is seen that 55% of the respondents need quick and fast services. And the next reason is friendly behavior of the staff which is 16%.

Interpretation: 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:-


Table 5.1 Number of people availing different facilities at public sectorbanks:

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 60% 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

Excellent Good Very Good

12

2127

24

42

54

Chart TitleNo. of respondents age

Graph 6.1 Satisfaction level of customer regarding the facilities availed from the public sector bank.

Analysis

It was found that in case of public sectors banks, 18% of the respondents werehighly satisfied ranked excellent from the products and services availed bythem. 44% were just satisfied given very good and 38% have moderate view.

Interpretation: People have mixed type of view regarding public sector

Banks

7. The respondents were asked that if they have given option, would they like to shift from the present banks:-


Table 7. Number of customers ready to shift from present bank.

Interpretation: From this above Graph, we can conclude that the number of respondents ready to shift from their present bank is 28% while 70% customers seems to be satisfied from their bank and hence willing to shift from their present bank to other.


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 :-

.

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


7. FINDINGS

More number of people have account with Public 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.

People are more satisfied from 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 10000-20000 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.

From the above study is clear that the banks do not organize any customer meets. All the 100% respondents said that their bank doesn’t organize any customer's meets to resolve their problems. Customer satisfaction is the demand of time, so the banks should organize customer meets to resolve the problems of their customers.

From the above study it is clear that majority of the respondents are ready to pay nominal charges for better services provided by private banks while 40% respondents are not ready to pay any nominal charges.

The above study depicts that 60% respondent said that their bank updates them time to time about the latest facilities and remaining 40% said that their bank doesn't update them.

8. 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 facilities as 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 withdrawals 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.

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. Hence, some banks have

even started like ICICI Banks

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 be properly trained.

Token system should be induced

Proper ambience in the banks can develop a healthy working culture.

Quick services should be provided.

For Private sector Banks

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.


9. CONCLUSION

The customers now days are not only exposed of what type of service is being

provided by bank 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 Private 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 highly competitive banking markets, early adopters are profiting from increased efficiencies


10. APPENDICES

BIBLIOGRAPHY

Research Methodology

- ICFAI Publication

S.P.Gupta Statistics Book.

Websites:

[email protected]

www.googlesearch.com

www.iupindia.org

www.ebscohostsearch.com

www.emeraldinsight.com


http://[email protected]

http://www.emeraldinsight.com/

http://www.ebscohostsearch.com/

http://www.iupindia.org/

http://www.googlesearch.com/

QUSETIONAIRE ON COMPARATIVE STUDY ON SERVICES OF PUBLIC AND PRIVATE BANKs

Name of the Bank (Branch):-__________________________

Name of the Customer:-_____________________________

Address:-_____________________________

______________________________

______________________________

A/C No: - _______________________________

Part – A – Questionnaire

Primary Aspects

Sl. No.

Question AnswerYes No

1. Do you have an A/C-------------------------------------------------(a)if yes------------------------------------------------(b)if No(i)why not

-----------------------------

-----------------------------

-----------------------------

-----------------------------

2. What is your A/C no? If Interested

A/C-

3. In which bank you have you’re A/C

Name of Bank ->

Public Bank Private Bank

4. Why did you select regarding its(a) Goodwill/ faith(b) Security reason(c) Location

√ or ×


Part- B – Questionnaire

Qualitative Aspects

Sl. No. Services Rating1. Cleanliness, Layout, Access to the entrance,

Visibility of SignboardsV. Good Good Average Poor

2. Space available for sitting / waiting / writing V. Good Good Average Poor3. Easy availability of loose pay-in-slips, withdrawal

slips, DDs / TTs forms & challans etc.V. Good Good Average Poor

4. Availability of services of staff members :a) For any enquiry

V. Good Good Average Poor

b) Listening to your problems V. Good Good Average Poorc) Guidelines for various deposit schemes, their advantages


d) For procuring publicity related materials V. Good Good Average Poor5. General behaviour of the members of staff V. Good Good Average Poor6. Availability of services at Computerised

Counters eg. Knowing the balance, Debit /Credit of instruments etc., and delivery of printed Pass Books / Statements


7. Expert services available in handling of import / export business


8. Compliance of standing instructions V. Good Good Average Poor9. Your experience about Locker Service rendered

by the branchV. Good Good Average Poor

10. Availability of Complaint Register on demand Easily availableon Demand

Not available

11. Any complaint lodged by you is still to beredressed. If so please put the date of complaintlodged with the branch

None Not attended (putdate of lodgement

of complaint)


PART - C – Questionnaire

QUANTITATIVE ASPECTS

Sl. No. Staff initiative to minimise waiting hours of the customers at the Counter

1. Payment of Cash, Cheques, Demand Drafts within 15min.

15-30min.

More than30 min.

2. Receipt of Cash in the accounts / purchase ofDDs and in other accounts

within 15min.

15-30min.

More than30 min.

3. Delivery of Demand Drafts / Pay Orders / BankOrders

within 20min.

20-30min.

More than30 min.

4. Delivery of Fixed Deposit Receipts within 20min.

20-30min.

More than30 min.

5. Updating of Savings / RD Pass Books (Whereentries are not more)

within 15min.

15-30

min.

More than30 min.

Morethan 1

day6. Issue of Cheque Books in Current / SB a/cs within 15

min.15-30min.

More than30 min.

Morethan 1

day7. Issue of Statement of Accounts (Manual) Within 7

days7-15 days More than

15 days

8. Issue of Statements of Accounts / Pass Books (on Computers)

Instantly More than30 min.

More than1 hour

9. Credit of proceeds of domestic transfers Within 20min.

20-30 min. More than30 min.

10. Affording credit upto Rs. 15,000/- in respect ofoutstation cheques

Immediate OnRequest

Not Done

11. Time taken in realisation of proceeds ofoutstation cheques / bills

Within 14days

15-21days

More than21 days

12. Time taken in sanctioning of loans againstBank's deposits

Within 30min.

30-60 min. More than60 min.

Your suggestions, if any, for improving Customer Service at the Branch:

NAME:

SIGNATURE:

Account Number:

Branch :

Surveyor :

Date :


Comparative Study on Services of Public Sector and Private Sector Banks

Documents