Comparative+Study+of+Customer+Perception+Cooperative+Bank+&+SBOP

COMPARATIVE STUDY OF THE CUSTOMER PERCEPTION

COOPERATIVE BANK & SBOP

A training report submitted in partial fulfillment of the requirement for the degree of

MASTERS OF BUSINESS ADMINISTRATION

(2009-2011)

Submitted by:

Name of Student: BUTTA SINGH

MBA – II SEC CRoll No.: 5871

SCHOOL OF MANAGEMENT STUDIES

P U N J A B I U N I V E R S I T Y P A T I A L A

2

PREFACE

The Six Week Vocational Training Programme has been introduced by the Punjabi University

for an elaborate and practical study on selected topics related to Management from the company.

An employee when joins the organization is just a raw individual, who does not posses the

desired level of skill and knowledge to produce the standard output. Also, the employees are required to

be up to date according to the technological changes. To achieve these objectives some kind of training

is required. In other words the organization need to maintain a viable and knowledgeable work force to

meet the current and future challenges. For this training is the only medium/method/weapon by which

organization can achieve the objectives. So training is a continuous process, which exist till the

organization sustains.

The project work about the survey is a small piece of research work in various aspects of the

training. While carrying out I got opportunities to interact with employees at various levels and the

people which enhanced my practical knowledge and experience in regard to the topic.

3

ACKNOWLEDGEMENT

Before we get into the thick of thing, I would like to say that it was a great pleasure & privilege

for me to have the opportunity of undertaking the training at Pta. Central Cooperative Bank, Daun

Kalan, Patiala for a period of 6 weeks as my MBA marketing training. I would like to thank the Bank

for providing me such an opportunity.

To test the student’s academic knowledge in practical conditions of life, eight weeks summer

training has been included in the Masters of Business Administration (Marketing) course. I express my

gratitude to Summer Internship Coordinator Mr. Sandeep Virdi for allowing me to undergo summer

training in The Punjab State Cooperative Bank Ltd.

I have the honor to express my sincere thanks to the management of the bank for providing me the

opportunity to pursue my training in their organization. I place on record my thanks to Mr. N. K.

Mahindru for giving me every sort of help and guidance.

My summer training has added to my practical knowledge and build up my confidence. I thank once

again all the staff members of the bank with the active support of whom I was able to complete my

project report successfully. I am sure that the knowledge & information that I have gained during this

period would be of immense value for my growth in business world.

Butta Singh

MBA-II, Sem. III

Roll No. 5871

4

TABLE OF CONTENTS

Page No.

LIST OF ABBREVIATIONS USED 6

LIST OF FIGURES, TABLES, GRAPHS 7

EXECUTIVE SUMMARY 8

CHAPTER NAME

I INTRODUCTION TO BANKING SECTOR 9-12

II COOPERATIVE BANKING 13-40

111 STATE BANK OF PATIALA 41-46

1V PROJECT OVERVIEW, RATIONALE,

OBJECTIVES

47-48

V RESEARCH METHODOLOGY 49-50

V1 DATA ANALYSIS AND INTERPRETATION 51-64

V11 FINDINGS, RECOMMENDATIONS,

LIMITATIONS AND CONCLUSION

65-69

BIBLIOGRAPHY 70

ANNEXURE 71-73

5

LIST OF ABBREVATION USED

SCB: State Cooperative Banks

SLDB: State Land Development Banks

UCB: Urban Cooperative Banks

CCB: Central Cooperative Banks

CLDB: Central Land Development Banks

PACS: Primary Agricultural Credit Societies

PLDB: Primary Land Development Banks

RRB: Regional Rural Banks

Cop: Cooperative

PSADB: Punjab State Agricultural Development Bank

PSCB: Punjab State Cooperative Bank

PADB: Primary Cooperative Agricultural Development Bank

A/c: Account

PAN: Permanent Account Number

HUF: Joint Hindu Family

FDR: Fixed Deposit Receipt

SB: Savings

RCC: Revolving Cash Credit

NFS: Non Farming Sector

CASS: Cooperative Agricultural Savings Societies

SBOP: State Bank of Patiala

6

A. LIST OF FIGURES

Page No.

STRUCTURE OF INDIAN BANKING 13

STRUCTURE OF COOPERATIVE BANKING 17

B. LIST OF TABLES

Page No.

DISTRICT CENTRAL COOPERATIVE BANKS 22

BRANCHES OF PATIALA CENTRAL COOPERATIVE BANK 25

DEPOSIT AND INTEREST SCHEMES INTEREST RATES 26-27

DIFFERENT LOAN SCHEMES OF COOPERATIVE BANKS 33-39

TYPES OF LOANS BY SBOP 44

DEPOSIT AND LOAN RATE OF INTEREST SBOP 45-46

LEVEL OF PREFERENCE

C. LIST OF GRAPHS

Page No.

6.1 DEMOGRAPHIC ANALYSIS BASED ON OCCUPATION 55

6.2 TYPE OF ACCOUNT 56

6.3 CUSTOMERS WHO HAVE TAKEN LOAN FROM THE BANK 57

6.4 INFORMATION SOURCE OF SCHEMES AND SERVICES OF BANK 58

6.5 RATE OF INTEREST PREFERRED 58

6.6 APPRECIATION FOR BEING A GOOD CUSTOMER 59

6.7 FUTURE PREFERABLE BANK (A) (B) 60

6.8 MOTIVATIONAL FACTORS 61

6.9 INFLUENCE OF IMAGE OR BRAND OF THE BANK 62

6.10 ESSENTIALITY OF COMPUTERIZED BANKING 63

6.11 CUSTOMER DIFFER IN PERCEPTION FOR A GOVT. & PRIVATE BANK 64

7

EXECUTIVE SUMMARY

The report contains introduction to Banks, which includes past, present and future of banks and

challenges for banking industry in future. Banks plays the most important role in providing various

banking services. Earlier the banks were engaged in accepting and lending money. But in the recent

past the scope of services provided by the banks has increased. The growing competition requires

prompt and efficient services to the customers at reasonable cost. These days bank aim to provide

maximum satisfaction to their customers. Next Part contains bank profile, Bank profile shows the Bank

status, Mission and Vision of PUNJAB STATE CO-OPERATIVE BANK AND THE PATIALA

CENTRAL CO-OPERATIVE BANK LTD. The main purpose of this Bank was to cater the rapidly

developing financial services sector. The Bank mainly deals in Deposits and Loans. This part also

contains the Bank profile of STATE BANK OF PATIALA, because the project is about the

comparison of the customer perception of the Cooperative Bank and State Bank of Patiala. Next Chapter

is about the Research Methodology, which includes justification about the topic selected, the objective

of the study, Scope of the study and sources of information (primary as well as secondary). It also

includes various limitations during the course of the project. Next part of this report is about the data

interpretations and its findings. Next are the Recommendations, the various proposals that the

Cooperative bank could apply for maintaining its position in the region and to face future challenges and

the suggestions for the improvement. Then there are the limitations and the conclusion of the study.

8

CHAPTER I

INTRODUCTION TO BANKING SECTOR

A Bank is a financial institution licensed by a government. Its primary activities include

borrowing and lending money. Many other financial activities were allowed over time. For example

banks are important players in financial markets and offer financial services such as investment funds.

The level of government regulation of the banking industry varies widely, with countries

TYPES OF BANKS

Banks' activities can be divided into:-

Retail banking, dealing directly with individuals and small businesses;

Business banking, providing services to mid-market business; corporate banking, directed at large

business entities;

Private banking, providing wealth management services to high net worth individuals and families;

Investment banking, is relating to activities on the financial markets. Most banks are profit-making,

private enterprises. However, some are owned by government, or are non-profit organizations.

Central banks are normally government-owned and charged with quasi-regulatory responsibilities,

such as supervising commercial banks, or controlling the cash interest rate. They generally provide

liquidity to the banking system and act as the lender of last resort in event of a crisis.

9

http://en.wikipedia.org/wiki/Lender_of_last_resort

http://en.wikipedia.org/wiki/Interest_rate

http://en.wikipedia.org/wiki/Central_bank

http://en.wikipedia.org/wiki/Non-profit_organization

http://en.wikipedia.org/wiki/Financial_markets

http://en.wikipedia.org/wiki/Investment_banking

http://en.wikipedia.org/wiki/High_net_worth_individual

http://en.wikipedia.org/wiki/Private_banking

http://en.wikipedia.org/wiki/Business_banking

http://en.wikipedia.org/wiki/Retail_banking

http://en.wikipedia.org/wiki/Regulation

http://en.wikipedia.org/wiki/Government

http://en.wikipedia.org/wiki/Government

IMPORTANCE OF A BANK

SAFETY OF MONEY:

The money with the bank remains in safe custody there is always risk in keeping cash with one’s

own self. It may be lost or stolen. Businessman likes to keep money with a bank to avoid risks of

money the customer need not keep large some of money.

IT CULTIVATES HABIT OF SAVING:

Banks cultivates the habit of saving in the Bank on the one hand are safe and on the other earned

interest for the depositor who prompted to safe and deposit money in their banks accounts.

FINANCIAL HELP TO CUSTOMER:

Banks allows overdraft facilities to their customer so whenever a customer needs money he can even

withdraw more money then the balance in his account. Bank also grants loans and credit facilities to

their customers.

SAFE CUSTODY OF VALUABLE ARTICLES :

Valuable articles deals security etc. can also be deposited in the bank for safe custody. Safe deposit

vaults are provided by bank storing for these valuables.

OTHER INFORMATION:

By opening an account with a bank, the customers may also take advantages of various other

services providing by the banks, such a purchase and sale of securities, travelers cheque etc.

10

BANKING IN INDIA

Without having sound and effective banking system India cannot have healthy economy. The

banking system of India should not only be hassle free but it should be able to meet new challenges

posed by the technology and any other external and internal factors. Banking in India originated in the

last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a

government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank

in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935

formally took over these responsibilities from the then Imperial Bank of India, relegating it to

commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized

and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the

government nationalized the six next largest in 1980.

Currently, India has 293 scheduled commercial banks (SCBs) - 27 public sector banks (that is

with the Government of India holding a stake), 30 private banks (these do not have government stake;

they may be publicly listed and traded on stock exchanges) and 40 foreign banks.

The oldest bank in existence in India is the State Bank of India, which originated in the Bank of

Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three

presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which

were established under charters from the British East India Company. For many years the Presidency

banks acted as quasi-central banks, as did their successors. The three banks merged in 1925 to form the

Imperial Bank of India, which, upon India's independence, became the State Bank of India

11

http://en.wikipedia.org/wiki/Imperial_Bank_of_India

http://en.wikipedia.org/wiki/Bank_of_Madras

http://en.wikipedia.org/wiki/Bank_of_Bombay

http://en.wikipedia.org/wiki/Bank_of_Bengal

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Reserve_Bank_of_India

http://en.wikipedia.org/wiki/State_Bank_of_India

RESERVE BANK OF INDIA (RBI)

SCHEDULED BANKS IN INDIA

COMMERCIAL BANKS COOPERATIVE BANKS

REGIONAL RURAL BANKS (196)

PRIVATE SECTOR BANKS (30)

PUBLIC SECTOR BANKS (27)

FOREIGN BANKS (40)

NEW (8)

OLD (22)

NATONALIZED BANKS (19)

SBI AND ASSOCIATE BANKS (8)

URBAN COOPERATIVES (52)

STATE COOPERATIVES (16)

STRUCTURE OF INDIAN BANKING

12

CHAPTER II

COOPERATIVE BANKING INTRODUCTION

Cooperative banking is retail and commercial banking organized on a cooperative basis.

Cooperative banking institutions take deposits and lend money in most parts of the world. The

Cooperative banks have a history of almost 100 years. The Cooperative banks are an important

constituent of the Indian Financial System, judged by the role assigned to them, the expectations they

are supposed to fulfill, their number, and the number of offices they operate. The cooperative movement

originated in the West, but the importance that such banks have assumed in India is rarely paralleled

anywhere else in the world. Their role in rural financing continues to be important even today, and their

business in the urban areas also has increased phenomenally in recent years mainly due to the sharp

increase in the number of primary cooperative banks. While the cooperative banks in rural areas mainly

finance agricultural based activities including farming, cattle, milk, hatchery, personal finance etc. along

with some small scale industries and self-employment driven activities, the co-operative banks in urban

areas mainly finance various categories of people for self-employment, industries, small scale units,

home finance, consumer finance, personal finance, etc.

DEFINITION

A cooperative bank is a financial entity which belongs to its members, who are at the same time the

owners and the customers of their bank.

13

http://en.wikipedia.org/wiki/Banking_institution

http://en.wikipedia.org/wiki/Cooperative

ORIGIN OF COOPERATIVE BANKS IN INDIA

The origins of the cooperative banking movement in India can be traced to the close of

nineteenth century when, inspired by the success of the experiments related to the cooperative

movement in Britain and the cooperative credit movement in Germany, such societies were set up in

India. They are the primary financiers of agricultural activities, some small-scale industries and self-

employed workers. The Anyonya Cooperative Bank in India is considered to have been the first

cooperative bank in Asia.

Cooperative movement is quite well established in India. The first legislation on cooperation was

passed in 1904. In 1914 the Maclagen committee envisaged a three tier structure for cooperative banking

viz. Primary Agricultural Credit Societies (PACs) at the grass root level, Central Cooperative Banks

(CCBs) at the district level and State Cooperative Banks (SCBs) at state level or Apex Level. The first

urban cooperative bank in India was formed nearly 100 years back in Baroda.

In the beginning of 20th century, availability of credit in India, more particularly in rural areas,

was almost absent. Agricultural and related activities were starved of organized, institutional credit. The

rural folk had to depend entirely on the money lenders, who lent often at usurious rates of interest.

The cooperative banks arrived in India in the beginning of 20th Century as an official effort to

create a new type of institution based on the principles of cooperative organization and management,

suitable for problems peculiar to Indian conditions. These banks were conceived as substitutes for

money lenders, to provide timely and adequate short-term and long-term institutional credit at

reasonable rates of interest. In the formative stage Cooperative Banks were Urban Cooperative Societies

run on community basis and their lending activities were restricted to meeting the credit requirements of

their members. The concept of Urban Co-operative Bank was first spelt out by Mehta Bhansali

Committee in 1939 which defined on Urban Cooperative Bank. Provisions of Section 5 (CCV) of

14

http://en.wikipedia.org/wiki/Anyonya_Co-operative_Bank_Limited

http://en.wikipedia.org/wiki/List_of_co-operative_banks_in_India

Banking Regulation Act, 1949 (as applicable to Co-operative Societies) defined an Urban Cooperative

Bank as a Primary Co-operative Bank other than a Primary Cooperative Society was made applicable in

1966.

FEATURES OF COOPERATIVE BANKS

Cooperative Banks are organised and managed on the principal of co-operation, self-help, and

mutual help. They function with the rule of "one member, one vote". Function on "no profit, no

loss" basis.

Cooperative banks, as a principle, do not pursue the goal of profit maximization.

Cooperative bank performs all the main banking functions of deposit mobilization, supply of

credit and provision of remittance facilities. Cooperative Banks provide limited banking products

and are functionally specialists in agriculture related products. However, cooperative banks now

provide housing loans also.

Cooperative bank do banking business mainly in the agriculture and rural sector.

Cooperative banks are perhaps the first government sponsored, government-supported, and

government-subsidized financial agency in India. They get financial and other help from the

Reserve Bank of India NABARD, central government and state governments.

Cooperative Banks belong to the money market as well as to the capital market.

Primary agricultural credit societies provide short term and medium term loans.

Cooperative banks are financial intermediaries only partially. The sources of their funds

(resources) are:

(a) Central and state government,

(b) The Reserve Bank of India and NABARD,

(c) Other co-operative institutions,

15

RBI

NABARD

SCBs SLDBs UCBs

CCBs CLDBs

PLDBs BRANCHES OF SLDBs

PACS

(d) Ownership funds and,

(e) Deposits or debenture issues.

It is interesting to note that intra-sectoral flows of funds are much greater in cooperative banking

than in commercial banking. Inter-bank deposits, borrowings, and credit from a significant part

of assets and liabilities of cooperative banks. This means that intra-sectoral competition is absent

and intra-sectoral integration is high for cooperative bank.

Cooperative Banks are subject to CRR and liquidity requirements as other scheduled and non-

scheduled banks are. However, their requirements are less than commercial banks.

Since 1966 the lending and deposit rate of commercial banks have been directly regulated by the

Reserve Bank of India.

STRUCTURE OF COOPERATIVE BANKING

16

SCBs: State Cooperative Banks

SLDBs: State Land Development Banks

UCBs: Urban Cooperative Banks

CCBs: Central Cooperative Banks

CLDBs: Central Land Development Banks

PACS: Primary Agricultural Credit Societies

PLDBs: Primary Land Development Banks

TYPES OF COOPERATIVE BANKS

1) STATE COOPERATIVE BANKS (SCBs)

State cooperative banks are a federation of central cooperative banks and act as a watchdog of

the cooperative banking structure in the state. Its funds are obtained from share capital, deposits, loans

and overdrafts from the Reserve Bank of India. State cooperative banks lend money to central

cooperative banks and primary societies and not directly to farmers.

2) CENTRAL COOPERATIVE BANKS (CCBs)

Central cooperative banks are the federations of primary credit societies in a district and are of

two types – those having a membership of primary societies only and those having a membership of

societies as well as individuals. The funds of the bank consist of share capital, deposits, loans and

overdrafts from state cooperative banks and joint stocks. These banks finance member societies within

the limits of the borrowing capacity of societies.

3) PRIMARY AGRICULTURAL CREDIT SOCIETIES (PACS)

Cooperatives have played a major role in the supply of finance to agricultural sector for the

development of land, irrigation system and for its mechanization. The agricultural cooperative credit in

Punjab is divided into two sectors mainly, one dealing with short and medium-term credit and the other

17

with the long-term credit. The long term credit is awarded from the Punjab State Cooperative Land

Mortgage Banks at the apex and the Primary Cooperative Land Mortgage Banks at district/tehsil level.

4) PRIMARY COOPERATIVE BANKS (PCBs)

They are non-agricultural societies. These are of two types: Urban cooperative banks and Salary

earners’ societies. Development of PCBs is looked after by the RBI. The RBI and IDBI offer them

concessional refinance facility on a selected basis. They operate in urban and semi-urban areas. They

provide housing finance and loans and advances for various purposes such as petty trade and industry.

DIFFICULTIES FACED BY COOPERATIVE

BANKS IN RURAL AREAS

1) Slow progress: The progress of co-operative banks is not up to the expectation and is slow when

comparing other type of banks because of many restrictions on their operations.

2) Limited scope of investment: The main objective of co-operative banks is to provide credit facilities

to the poor people i.e., to small and marginal farmers and other weaker sections. They were originally

having limited scope to invest their surplus funds freely.

3) Delay in decision making: The co-operative banks directly or indirectly by various agencies i.e.,

NABARD, RBI. Thus it takes long time to take decision on some important issues. This, in turn affects

the progress of co-operative banks.

4) Lack of training facilities: Generally the staff of co-operative banks is urban oriented and they may

not know the problems and conditions of rural areas. Lack of training facility concerning these areas

also affects the growth of co-operative banks.

5) Poor recovery rate: The recovery performance of the co-operative banks is not up to the mark. the

reason for poor recovery of loans and mounting overdue are; inadequate supervision and follow up

action to assess the end use of credit by co-operative banks due to inadequate staff in banks, poor

18

Identification of beneficiaries, inadequate generation of output and income by the beneficiaries, poor

marketing facilities.

6) Lack of local participation: Rural co-operative banks have not received sufficient local

participation. The cooperative banks have been thrust upon the rural people from above without

involving local people in its operation and management. In this connection, it is suggested that

knowledgeable persons in the rural areas need be associated with the management of co-operative

banks.

7) Lack of co-ordination: There is lack of proper co-ordination between co-operative banks and other

institutional financing agencies like commercial banks and RRBs. Also, there is inadequate co-

ordination between co-operative banks and other developmental agencies operating in rural areas. This

has hampered the progress of co-operative banks.

8) Poor development of rural areas: In spite of several efforts made during the course o development

plans to promote the development of rural areas, it has not taken place in a significant way. The areas, at

present lack economic infra- structures like; facilities of marketing storage and distribution of inputs.

Besides, social infrastructure like; schools, medical facilities. As a result, co-operative banks find it

extremely difficult to operate in such areas.

19

THE PUNJAB STATE COOPERATIVE BANK LTD., Chandigarh

The Punjab State Cooperative Bank was established at Shimla in the year 1949 at Apex of three

tier short term Cooperative Credit structure as a principle financing institution of the cooperative

movement in Punjab. In 1951 its Head Office was shifted to Jalandhar from where it moved in 1963 to

its present building at Chandigarh. In the cooperative Banking structure, the position of the Punjab State

Cooperative Bank is extremely important as the whole credit system revolves around it. It has 3

Divisional Offices at Amritsar, Bhatinda and Jalandhar. It has 19 branches and 3 extensions counters

operating in the city of Chandigarh. Besides this, there are 20 District Central Cooperative Banks having

805 branches and 23 extension counters in the State of Punjab affiliated with it. The bank was

established to help to provide timely and adequate flow of credit to the farmers for agriculture and allied

activities through PACS.

OBJECTS :

The objects for which the Bank is established are as under :-

1. To serve as a balancing center for cooperative societies (herein called the society/societies) in the

State of Punjab registered under the Act for the time being in force.

2. To promote the economic interest of the members of the Bank and Cooperative Societies in the State

in accordance with cooperative principles and to facilitate the development and funding of any

Cooperative Society registered under the said Act.

3. To establish and support or aid in the establishment of and support to association, institutions, funds,

trusts and convenience designed to benefit the employees or ex-employees of the Bank or the

20

dependents or connections of such persons to grant pensions and allowances and make payment

toward insurance.

4. To provide long term loan for the maximum period of 15 years to the individuals, Coop. House

Building Societies and members of Group Housing Societies for purchase of house or construction

thereof by enrolling members/nominal members.

5. To adopt such measures as are conducive to the spread of cooperative education and training.

6. To promote and develop Cooperative Societies in the State.

ORGANISATIONAL STRUCTURE

The bank operates in the city of Chandigarh having 19 branches and 3 extension counters. It has 3

Divisional Offices in Punjab at Amritsar, Jalandhar & Bathinda. The organizational structure is as

under:-

Divisional Offices: 1. Amritsar 2. Jalandhar 3. Bathinda

1. District Central Cooperative Banks

1. Amritsar 1. Jalhadhar 1. Bathinda

2. Tarntarn 2. Hoshiarpur 2. Fazilka

3. Gurdaspur 3. Kapurthala 3. Faridkot

4. Ferozpur 4. Ludhiana 4. Mansa

5. Moga 5. Nawan Shahar 5. Muktsar

6. Patiala 6. Sangrur

7. Ropar

8. Fathegrah Sahib

21

COOPERATIVE CREDIT POLICY 2001-2006

The Cooperative Credit Institutions are distinctively structured to provide for short-term and long-term

credit needs of the farmers in the State. The Punjab State Cooperative Bank (PSCB) and its constituent

20 Central Cooperative Banks (CCBs) and 4000 Primary Agricultural Cooperative Service Societies

(PACS) direct and deliver short-term production credit to the farmers. The Punjab State Cooperative

Agricultural Development Bank (PSADB) and its constituent 84 Primary Cooperative Agricultural

Development Banks (PADBs) cater to long term credit needs of the farmer. These institutions are

committed to promote and sustain economic interests of their members and customers in keeping with

the principals of self-help, self-responsibility and self-administration. They facilitate development of

their members by providing easy, timely, cost-effective and quality services.

THE PATIALA CENTRAL CO-OPERATIVE BANK LTD., PATIALA

BRIEF HISTORY: -

The Patiala Central Cop. Bank ltd., Patiala was registered on 29-09-1949 under the Cooperative

Societies Act, 1912. The Bank is presently working in 59 year.

Name of the Society: - The Patiala Central Cooperative Bank Ltd. Registration No & Date: -

No.772, 28th Sept. 1949.

Area of Operation: - As per bye-law no. 3, the Area of operation of the Bank shall extend over

Patiala District.

22

Object of the Bank: - As per bye-law no. 4, the object of the Bank is supposed to facilitate the

operation of the affiliated Cooperative Societies by:-

Providing banking & credit facilities to its members, as convenient & easy terms are possible.

Encouraging thrift & saving amongst its members by offering suitable facilities.

Making arrangements for supervision and inspection of its affiliated cooperative Societies.

Undertaking such measures as are conductive to the spread of cooperative education and

training.

RESOURCES

The bank resources is collection of share capital, strengthening of its owned funds, by

topping deposits from the public and borrowings from NABARD, Punjab State Cooperative Bank

Ltd., Chandigarh.

The Patiala Central Cooperative Bank is having 43 branches under it at different places related

with it. The whole process of the branches is under the control of it.

The names of the branches and year of their establishment are given in the following table.

23

BRANCHES OF PATIALA CENTRAL

COOPERATIVE BANK

24

1. Pta Main Branch 01-08-1977

2. Babarpur 22-09-1972

3. Bhadson 06-02-1968

4. Banur 01-04-1968

5. Dakala 27-10-1970

6. Dandrala Dhindsa 09-03-1978

7. Devigarh 01-10-1970

8. Gajju Majra 19-10-1978

9. Galwatti 19-09-1972

10

.

Gajewas 13-10-1977

11

.

Ghanaur 07-12-1970

12

.

Galzarpura 17-10-1978

13

.

Jand Mangouli 07-10-1977

14

.

Kamalpur 13-10-1978

15

.

Khera Gajju 20-03-1979

16

.

Lang 20-10-1977

17

.

Massingan 21-10-1978

18

.

Nabha 01-06-1957

19

.

Nabha(E) 05-02-1986

DEPOSIT SCHEMES INTEREST RATES

Interest Rates on Deposits with effect from 16th

25

23

.

Agoul 12-10-1978

24

.

New Anaj Mandi 01-05-1970

25

.

Top Khanna Mor 15-03-1976

26

.

Patran 18-08-1968

27

.

Rakhra 04-01-1986

28

.

Rajpura 04-05-1956

29

.

Samana 08-06-1960

30

.

Sanaur 01-07-1973

31

.

Shambhu Kalan 12-10-1978

32

.

Shatrana 12-10-1978

33

.

Tohra 18-02-1980

34

.

Mandouli 08-11-1990

35

.

Ghagga 29-10-1987

36

.

Basantpura 14-11-1987

37 Balbehra 01-05-1989

Nov, 2009

Interest Rates on Deposits with effect from 6%

Period Below Rs.1.00 Cr. Rs.1.00 Cr. & above

7 Days to 14 Days 2.50% 2.50%

15 days to 45 days 3.00% 2.75%

46 Days to 90 Days 4.00% 3.00%

91 Days to 179 Days 5.00% 3.75%

180 to <1 year 5.50% 5.00%

1 year to < 2 years 6.5% 6%

2 year to < 5 years 7% 6%

5 years and above 7.25% 6%

*Interest Rate @ 0.50% over and above these rates to the Senior Citizens will be admissible on single Fixed Deposit Receipt of Rs.5000/- and above for one year and above.

LOAN SCHEMES INTEREST RATES

Interest Rates on Loans with effect from 16th Nov, 2009

Interest Rates on Loans with effect from 6%

Loan Scheme Rate of interest

Personal Loan Scheme 13%

Non Farm Sector Loan Scheme (NFS) Up to Rs.0.50 Lac 11.50% Above Rs.0.50 Lac 12%

Consumer Durable Loan 13%

Vehicle Loan Scheme 11%

Second hand Vehicle Loan Scheme 12%

Urban Housing Scheme 10%

Cash Credit Facility to Traders 13%

Revolving Cash Credit to Farmers (RCC) 11%

Two Wheeler Loan to Farmers 11%

26

Rural Housing Scheme 10%

Mini Dairy Scheme 10.50%

Commercial Dairy Development Scheme 10%

Cooperative Education Loan Scheme

children of poor farmers, Dalits, BC, etc.

7.25%

Loan against Rental Income Scheme 13%

Dairy Loan Scheme to purchase a Cow 10%

Loan against Property 14%

Loan scheme for Earnest Money As fixed by the bank.

Mai Bhago Istri Shakti Scheme PACS to members 10.75% CCB to PACS 9.25%

Bhai Lalo Sehkari Kirt Shakti Scheme PACS to members 11.50% CCB to PACS 9.50%

Different Deposit and Loan Schemes Offered by the bank

The Bank is offering various schemes of deposit and loans .These can be studied under the two different

headings separately as following.

I. Different types of Deposit Accounts

1. Saving Bank A/c

A Saving Bank A/c can be opened with an initial deposit of Rs.500/- without Cheque Book facility and

Rs.1000/-with Cheque Book facility.

Eligible categories to open SB A/c:

1. Any individuals

2. Joint A/c with others in the form of 'either or Survivor', 'Former or Survivor', and 'joint' etc.

3. Joint Hindu family (HUF)

4. Coop Societies, Clubs, Societies, Associations etc.

27

The intending customer should visit the bank to fill in A/c opening forms with complete particulars

such as parentage, occupation, address, latest two passport size photographs, residence such as copies of

Voter card, Passport, Telephone/Electricity bill etc. and PAN or form No.60. The accounts are required

to be introduced properly by the existing account holder of the bank or any person known to the bank.

Only 30 withdrawals are allowed per half year for a saving Bank A/c exceeding which service charges

are levied by the bank.

A minimum balance of Rs.500/- (without Cheque Book) and Rs.1000/- (with Cheque Book) has to

be maintained in the account, otherwise services charges are levied on monthly Basis.

At the time of opening the account, pass book is issued to the customer, which needs to be

accompanied every time when payment is drawn through a withdrawals form. Maximum limit of

withdrawal form is Rs.2000/- with passbook. Nomination facility is also in these accounts. A depositor

or depositors can nominate one Person only.

2. Current A/c

A Current A/c can be opened with the initial deposit of Rs.5000/-. It can be opened in the name of

individual, a Sole Proprietary Concern partnership firm, club, Religious Institution, Association Govt. /

Semi Govt. Dept., Local Bodies. As usual, all prospective applicants need to fill in the Account opening

forms wherein following documents are required to be attached:

1. Sole Proprietary Concern - Declaration of Sole Proprietorship

2. Partnership firm - Partnership Deed duly attested

3. Clubs, Schools, Societies, Association.

4. 1. Certificate of Registration

2. Copy of Bye Laws.

3. Memorandum of Association, if any.

28

4. Resolution of Board of Directors.

5. Limited Companies, Pvt. Ltd. Companies

6. Trusts

1. Instrument or Document of Trust

2. Resolution

3. Certification of registration.

All Current A/c need to be introduced properly from another current account A/c holder only.

Staff members are not allowed to introduce a Current A/c.

A minimum balance of Rs.5000/- has to be maintained.

Recent Passport size photographs of the operator/s need to be affixed on the AOF. All payment is

made by Cheques only. There is no restriction on the number of withdrawals unlike that in SB A/c Pass

Book is issued at the time of opening of account. Statement of account can also be got issued.

3. Recurring Deposit A/c

A Recurring Deposit A/c can be opened with a certain initial deposit wherein a Depositor needs to

deposit money by way of monthly installments over stipulated period. The period may be 2, 24, 36, 48,

60 month etc. On the expiry of the period, the accumulated amount along with interest is paid in lump

sum. All individuals, jointly with others minors, blind/illiterate person etc. can open the A/c. Rate of

interest on Recurring Deposits for various periods will be the rate applicable on term deposit for that

period.

Minimum monthly installment of the A/c is Rs.100/-

Maximum period is 10 years.

The intending customer should fill in A/c opening form with complete particulars such as parentage,

occupation, address etc. Two passport size photographs are required to be affixed along with furnishing

29

of residence proof such as copies of ration card, Voter card, Passport, Telephone/Electricity bill etc. and

PAN or Form No.60. The account is required to be introduce properly by the existing A/c holder of the

bank of any person know to the bank. On the expiry of the stipulated period, accumulated amount is paid

to the customer.

4. Term Deposit A/c

Term Deposit is a deposit received by the bank for a specific fixed period which is withdraw able after

expiry of said period.

Eligible categories to open Term Deposit A/c

Individual

Joint A/c with other in the form of Either or Survivor , Former or Survivor, any one or survivor

jointly etc.

Minors

Illiterate persons

Blind person

Joint Hindu Family (HUF)

Coop. Dept, Clubs, Societies, Associations etc.

The intending customer should fill A/c opening form with complete particulars such as parentage,

occupation, address etc. Two passport size photographs are required to be affixed along with furnishing

of residence proof such as copies of Voter Card, Passport, Telephone/ Electricity bill etc and PAN or

Form No.60. The account is required to be introduced properly by the existing A/c holder of the bank or

any person known to the bank. A minimum of Rs.1000/- can be placed in a term deposit. Minimum &

30

maximum period for which the amount is place in a term deposit are fixed by the bank from time to

time.

In a fixed deposit A/c, it usually ranges from 7 days to 120 months whereas in Long Term Deposit,

The minimum period is 12 months. Rate of interest is fixed by the bank from time to time, keeping in

view the market trends. Interest on Fixed Deposit can be fixed quarterly, half yearly or yearly etc. But in

Long term deposit it is cumulative with quarterly rests with the result that is paid only on maturity.

After opening the account in Computer, FDR is issued to the customer.

A TDS is to be deducted at source as per Income Tax Act. The mode of operation should be clearly

mentioned while opening the A/c. Term deposit A/c can also be opened with Cheques drawn on the

same branch or other banks. After getting proper discharge on the back side of the FDR from the

depositor payment can be made on due date. For payment before due date, The FDR has to be

discharged on the back side by all the operators. FDRs can be renewed on due date by mentioning the

period for which they are to be renewed on the back side. TDS is deducted if interest is Rs.10000/- and

more in a financial year prohibition for payment in cash – The payment of FDR is prohibited to be made

in each if the amount of the FDR along with interest exceeds Rs.20,000/- . So usually the payment of

FDR should be made either by way of Bank Draft/ Pay order or through an a/c.

5. Saving Bank-No frill A/c

The No Frill A/c can be opened by any person without furnishing any resident proof or any proper

introduction. The A/c Can be opened with a minimum amount of Rs.10 /- only. In such accounts, the

Balance should not exceed Rs.50000/- otherwise, it will become an ordinary SB A/c. No cheque book is

allowed to be issued to the customer. The condition of maintaining any minimum balance in this A/c is

waived off.

31

6. Lockers A/c

Lockers of four different sizes viz. small, medium, large and extra large are available in the bank

which can be hired by any prospective customer for safe custody of their articles. A prospective

customers who wants to hire a locker, has to fill in embossing form and specimen signature card. For

getting a locker, the locker hire must open a SB A/c with the bank so that annual lock rent can be

charged by debiting that A/c. He has to keep a lien or minimum balance in that account depending upon

the size of the locker hired. The annual rates of Locker rent and the lien are as follows.

Term Deposit for Locker

A minimum of Rs.10000/- has to be placed in Term Deposit by a locker hirer as per RBI guidelines.

Nomination must for Individual Locker Holders

A Single locker holder must nominate someone in his locker A/c to receive the articles lying in his

locker after his death.

Loans Schemes of Cooperative Bank for Punjab

32

1. Revolving Cash Credit to Farmers (RCC)

Beneficiary Any individual farmer holding the agricultural land.

Purpose Credit facility for meeting out socio-economic needs.

Loan Limit Maximum amount Rs.6.00 Lac. Subject to Rs.1.00 Lac / acre

Margin No margin money required

Rate of Int. 11%

Repayment Period Renewable on annual basis

Collateral Security Agriculture Land valuing at 150% of the loan amount.

2. Non Farm Sector Loan Scheme (NFS)

Beneficiary Individual, Sole Prop., Firm, Coop. Societies or a Company.

Purpose For the establishment of cottage, tiny and SSI unit.

Loan Limit Maximum amount up-to Rs.25.00 Lac at CCB Level.

Rate of Int. Up to Rs.0.50 Lac 11.50% Above Rs.0.50 Lac 12.00%

Margin Minimum 10%

Repayment Period Maximum 5 to 7 Years.

Collateral Security Immovable Properties for the value of 150% of the amount.

Installment Rs.2225.00 for 5 years.

3. Personal Loan Scheme

Beneficiary Employees of Punjab Govt., PSU, Boards, Corporations etc.

Purpose Credit Facility for meeting out socio-economic needs.

Loan Limit 12 times of gross monthly salary or Rs.2.00, whichever is less.

Rate of Int. 13%

Margin No Margin required.

Repayment Period Maximum 5 years.

Collateral Security Two Good Sureties as per satisfaction of the bank.


4. Consumer Durable Loan

33

Beneficiary Individual salary earners and non salary earners.

Purpose For the purchase of consumer durables.

Loan Limit Maximum amount up-to Rs.1.00 Lac.

Rate of Int. 13%

Margin 25%




5. Two Wheeler Loan to Farmers

Beneficiary An agriculturist having land in his own name/family member.

Purpose For the purchase of new two wheelers.


Rate of Int. 11.00%

Margin 15%




6. Cash Credit Facility to Traders

Beneficiary Individual, Sole Prop., Firm, Coop. Societies or a Company.

Purpose For meeting working capital requirement of business.


Rate of Int. 13%

Margin 25%

Repayment Period Renewable on annual basis.

Collateral Security Immovable Properties for the value of 150% of the amount.

7. Vehicle Loan Scheme

34

Beneficiary Individual, Firm, HUF, Trust, Coop. Societies or a Company.

Purpose For the purchase of new vehicle for business and personal use.

Loan Limit Maximum amount up-to Rs.10.00 Lac or 80% of cost of

vehicle.

Rate of Int. 11%

Margin 20%


Collateral Security Two Good Sureties as per satisfaction of the bank besides the

hypothecation of the vehicle.

Installment Rs.2174.00 for 5 years

8. Second hand Vehicle Loan Scheme

Beneficiary Individual, Sole Prop., Professionals and Partnership Firm.

Purpose For the purchase of second hand vehicle should be not more

than 3 years.

Loan Limit Maximum amount up-to Rs.5 Lac or 75% of cost of Vehicle.

Rate of Int. 12%

Margin 25%


Collateral Security Two Good Sureties as per satisfaction of the bank besides the

Hypothecation of the vehicle.


9. Rural Housing Scheme

Beneficiary Individual and Members of Coop. Housing Societies.

Purpose Purchase of built up house, construction of new house,

repairs / Renovation and addition of existing house in rural

areas.


Rate of Int. 10%

35

Margin 15%


Collateral Security Agricultural land for the value of 100% of the loan amount

besides the Mort - gage of house to be financed by the bank.


10. Urban Housing Scheme

Beneficiary Individual and Members of Coop. Housing Societies.

Purpose Purchase of built up house or flat, construction of new house,

repairs/Renovation and addition of existing house in urban

areas.


Rate of Int. 10%

Margin 25%


Collateral Security First mortgage of House Property to be financed by the bank.


11. Mini Dairy Scheme

Beneficiary Members of Coop. Milk Producers Society/ PACS.

Purpose Purchase of up to 25 milk cattle.


Rate of Int. 10.50%

Margin 15%


Collateral Security Mortgage of landed property value of 150% of the loan

amount.


36

12. Commercial Dairy Development Scheme

Beneficiary Any Individual, Partnership Firm, corporate body and any

other Co - operative organization.

Purpose To increase the income of milk producers by helping them to

purchase High yielding milk cattle equipments.


Rate of Int. 10%

Margin 15%



amount.

Installment Rs.2125 for 5 years.

13. Education Loan Scheme

Beneficiary Salaried employees of Coop. banks, Punjab Govt. /

Chandigarh Administration and its boards & Corporation

Purpose To provide financial assistance to deserving and meritorious

student for Pursuing higher studies in India or abroad.


Rate of Int. 9%


Repayment Period The installment will start after completion of course.

Maximum 5 years.


amount. For the loan up to Rs.5.00 Lac, no Immovable

security is required. If the loaner is the employee of Punjab

Govt. or Coop. Dept.


37

14. Cooperative Education Loan Scheme Children of Poor farmers, Dalits, BC, etc.

Beneficiary Children of poor farmers, Dalits, BC, and other poor sections.

Purpose To provide financial assistance to deserving and meritorious students

for Pursuing higher studies in India or abroad.


Rate of Int. 7.25%


Repayment

Period

The installment will start after completion of course. Maximum 5

years.

Collateral

Security

Mortgage of landed property value of 100% of the loan amount.


16. Dairy Loan Scheme to purchase a Cow

Beneficiary Members of Coop. Milk Producers Society.

Purpose Purchase of a cow.


Rate of Int. 10.5%

Margin 10%




17. Loan against Property

Beneficiary Any Individual.

Purpose To offer instant solutions relating to socio-economic needs

and business needs such as children’s higher education,

Travel, daughter’s marriage Medical emergencies etc.


38

Rate of Int. 14%



Collateral Security Mortgage landed property value of 200% of the loan mount.


19. Mai Bhago Istri Shakti Scheme

Beneficiary Any women beneficiaries’ member of the PACS.

Purpose To establish the micro or small business in rural areas.

Loan Limit Rs.25000 through PACS.

Rate of Int. PACS to members 10.75%

CCB to PACS 9.25%


Collateral Security One good Surety having landed property.


20. Bhai Lalo Sehkari Kirt Shakti Scheme

Beneficiary Any men/women beneficiaries’ member of the PACS.

Purpose To establish the micro or small business in rural areas.

Loan Limit Rs.25000 through PACS.

Rate of Int. PACS to members 11.50%

CCB to PACS 9.50%


Collateral Security One good Surety having landed property.


39

BRANCH: DAUN KALAN PTA. CCB

The branch was established in June 1996 for serving the people living in the village and the

nearby villages. It is situated by the side of Shri Guru Teg Bahadur Public School and in front of the

Village Gurudwara Sahib. There are only two banks serving in the village and the near by villages. The

other one is State Bank of Patiala.

The Organization Structure of the bank includes the staff of 5 members. Details of them are given

below.

Branch Manager: Mr. N.K. Mahindru

Cashier: Mrs. Mamta Sharma

Clerk: Mr. Naveen Kumar

Peon: Mrs. Surjeet Kaur

Security Guard: Mr. Bhag Singh

Contact Number: 0175-2660236

Cooperative Societies

There are five cooperative societies which are linked with the bank:

1. Daun Kalan CASS Ltd.

2. Daun Khurd CASS Ltd.

3. Janherian CASS Ltd.

4. Dhreri Jattan CASS Ltd.

5. Kauli CASS Ltd.

40

The Bank is, currently, having the following number of Loans Account and the Deposit Account in the

branch. The name and number of respective account number is given below:

Name & Number of

Loans Deposit Accounts

Vehicle loan – 29 Current Account - 2

Two wheeler loan – 140 Savings Account - 2728

Mini-dairy loan - 26 Fixed Deposit - 64

Personal loan – 40 Long Term Deposit – 503

Self help group – 20 Recurring Deposit - 11

Non Salary Earners– 76

C.C Fertilizer – 5

C.C. Goods - 4

SRY - 39

Mai Bhago Loan - 25

House Building Loan – 43

Loan to Individual -14

NFA - 48

Sb. Socities – 9

41

CHAPTER III

INTRODUCTION TO STATE BANK OF PATIALA

An Associate Bank of the State Bank of India, State Bank of Patiala (SBP) was established in 1917 by

Late His Highness Bhupinder Singh, the Maharaja of erstwhile Patiala state. SBP started its operations

from one branch called 'Chowk Fort', in Patiala. During the time of the establishment, the state owned

Bank was known as Patiala State Bank. It was set up for the purpose of promoting the growth of

agriculture, trade and industry.

Patiala State Bank was renamed State Bank of Patiala on 1 April 1960, when it became a wholly

owned undertaking of the Government of Punjab. On that day, SBP became a subsidiary of the State

Bank of India (SBI). Since it was renamed, SBP has grown significantly in terms of its size and the

volume of business. It is now one of the prominent Banks of India. Another milestone in the history of

SBP was the computerization of all its branches on 24 January 2003. With this development, the Bank

became India's first fully computerized Public Sector Bank. The bank is principally engaged in the

provision of commercial and retail banking services to the individuals and business customers. The bank

offers a range of services to the including personal banking, agriculture and rural banking.

Branches and ATM Services

The business of State Bank of Patiala has grown manifold since its establishment. Recent records

say that State Bank of Patiala is networked by its 830 service outlets. There are as many as 750 branches

of SBP, spread across the major cities of India, out of which, the majority of branches are located in its

home State, Haryana, Himachal Pradesh, Rajasthan, Jammu & Kashmir, Delhi and Chandigarh. The

Bank provides easy access to money to its customers through its ATMs spread over 16 states of India.

42

STATE BANK SERVICES:

State Bank of Patiala offers various types of services to its clients. SBP shares its ATM network with

other State Bank group members, so this means that the bank's customers have access to the more than

7000 State Bank Group ATMs across the country. Some of the services offered by the bank consist of:

NRI Services

Govt. Business

Personal Banking

Internet Banking

SME & Corporate Banking

Agriculture & Rural Banking

State bank Patiala loans

State Bank of Patiala is a prominent subsidiary of State Bank of India. Headquartered in Patiala, Punjab,

SBP offers a range of innovative products and services for the individual clients, agricultural businesses,

non resident Indians, corporate clients and small and medium enterprises. State Bank of Patiala loans are

obviously one of the best credit products that are available in Indian market.

State Bank of Patiala loans are recognized for attractive interest rates and flexible repayment terms. The

convenient terms and conditions associated with these loans truly make them admired credit options

among borrowers. State Bank of Patiala loans can be categorized into the following:

1) State Bank of Patiala loans – Personal Banking

2) State Bank of Patiala Loans – Agricultural and Rural Banking

3) State Bank of Patiala loans – SME and Corporate Banking

4) State Bank of Patiala loans – NRI Banking

43

PERSONAL BANKING:

Under the Personal Banking services offered by State Bank of Punjab, various types of loans are given

to customers, so that they can take care of all their monetary needs without any hassles.

TYPES OF LOANS

44

1. Personal Loan 8. Loan Against LIC/ SBI-Life Products

2. Rent 9. Loan For Rural Housings

3. Loan to Pensioners 10 Loan Against Term Deposits

4. Realty 11. Home Loan Scheme

5. Loan Against RBI Relief Bonds 12. Car Loan

6. Two Wheeler Loan 13. Loan For Earnest Money

7. Loan Against Gold Ornaments 14. Career Loan

DEPOSIT ACCOUNTS RATE OF INTEREST

NATURE RATE OF INTEREST MINIMUM BALANCE

NORMAL SENIOR CITIZEN Rural Semi Urban

Urban

ACCOUNT

1. Savings Bank A/c A. Domestic

a. with cheque book facility

3.50 3.50 500 1000 1000

b. without cheque book facility

3.50 3.50 250 500 500

c. No Frills Account 3.50 3.50 0 0 0

B. Non-Resident

a. NRO 3.50 3.50 Same as domestic deposits

b. NRE 3.50 3.50

2. Term Deposit

A. Domestic Rate of Interest (w.e.f. 01.01.2010)

Term Deposits (All maturities) Below Rs.1 Corer

7 to 14 days 2.50#

15 to 45 days 2.75

46 to 90 days 4.00

91 days to 180 days 5.00

181 days to < 1 year 5.75

1 year to 2 years 6.75

> 2 years to < 3 years 6.75

3 years to < 5 years 7.00

5 years to < 8 years 7.25

8 years to 10 years 7.50

45

RATES OF INTEREST OF LOANS

RATE OF INTEREST (w.e.f. 06.07.2009) PROCESSING CHARGES

LOANS 1. Housing Loan Upto Rs

30 LacMore than Rs.30 Lac

Above Rs. Lakhs Upto Rs. Lac

Above Rs. Lac

Floating

Category

Upto 5 years 8.75% 9.75% - -

0.50% Max. 10,000/-

More than 5 yrs. & upto 15 years

9.00% 10.00% - -

More than 15-25 yrs

9.25% 10.25% - -

Fixed Category

Upto 5 years 12.75% 12.75% -

0.50% Max. 10,000/-

More than 5 yrs. & upto 10 years

12.75% 12.75% -

More than 10yrs N.A. N.A. N.A

2. Personal Loan scheme

14.50% - - - 1.10%

3. Vehicle Loan

a) Two Wheeler Loans

14.00% - - - 1.10%

b) Three Wheel Loans

N.A.

c) Car Loan Upto 3

yrs

>3 to 5 yrs. > 5 to 7 yrs

For New Cars 11.00% 11.25 11.50% - 0.50%

For Old Cars 14.25% 14.50% 14.50% - 0.50%

4. Educational Loans

Upto Rs. 4.00 lakhs Rs.4.00 lakhs upto 20 lakhs

11.25% 13.00%

46

Agriculture and Rural Banking

1. Finance against warehouse receipt issued by National Bulk Handling Corporation Ltd. (NBHC)

2. Loans granted under tie-up arrangement with Milkfed Punjab & Haryana Dairy Development

Corporation Ltd., Haryana.

3. Establishment of dairy unit of 02 milch animals under schedule caste sub plan in the state of Punjab.

4. Finance to Farmers under KIisan Card and Golden Card Schemes.

5. Financing Commercial Dairy units

6. Indirect loans given through Primary Agricultural Cooperative Society (PACS)/ Farmer Service

Society (FSS)/ Large sized Adivasi/Agricultural Multipurpose Society (LAMPS)

7. Loans to self help Groups

8. Tractor Loans

Introduction to State Bank of Patiala, Branch – Daun Kalan

It was established in 1992 and situated in the village Daun Kalan, Patiala by the side of village

Gurudwara Sahib and in front of the Cooperative Bank.

Organizational Structure of the Branch includes:

Branch Manager: Mr. Rajesh Kant

Head Cashier: 1

Cashier cum Clerk: 3

Subordinate Staff: 3

47

CHAPTER IV

Project

Comparative Study of the Customer Perception of the Cooperative Bank and SBOP

Project Overview

In today competitive environment where corporate are constantly searching for ways to keep a

float and sustain the market share, they have to find newer and better ways to satisfy the customer needs.

To run any organization successfully the management needs to think always for the betterment of their

service and product, every time there is a chance of improvement in the functioning of every

organization specially when we talk about the banking sector in past there is very less or no competition

in the market and the banks has no pressure to provide better facilities to the peoples but in recent years

the competition is increased due to the entry of the private banks and other money lending units.

Considering this the state cooperative banks need to be more careful and needs to take such steps which

favors hem to stay ahead in the market. This has always been the motto of Cooperative Banks and in

order to achieve this, I was entrusted in the dual task of doing a comparison of customer perception

analysis of the Cooperative bank branch and the SBOP branch in the village Daun Kalan, Patiala.

48

RATIONALE OF THE STUDY

Banking operations are becoming increasingly customer dictated. The ability of banks to offer

clients access to several markets for different classes of financial instruments has become a valuable

competitive edge. By going with the topic they can identify their own strengths and weaknesses, where

they stand in comparison to their competitors, chart out path future progress and improvement. This

comparison helps to promote an increased focus on customer outcomes and stimulate improvements in

the work practices and processes used within the bank and outside. With better understanding of

customers' perceptions, banks can determine the actions required to meet the customers' needs.

OBJECTIVES OF THE STUDY

1 To have a comparison between the Customer Perception of the Village Daun Kalan Branches of

Patiala Central Cooperative Bank and State Bank of Patiala.

2 To compare the different factors of the banks which influence the customer perception.

3 To study and understand the factors which motivate the customers while going for Banking Services

4 To understand and compare the level of Advertisement impact on customers followed by the both

banks

5 To study that if customer prefers the computerized banking or not.

6 To compare that if there is influence of image or brand of the bank on the customer

49

7 To have a comparison that if the customer is differing in his perception for a Government oriented

bank and private Bank.

CHAPTER V

RESEARCH METHODOLOGY

Research Problem

Comparison of the customer perception of the Cooperative Bank and State Bank of Patiala.

Research Design

Research Design is exploratory and descriptive which helps me to explore the factors influencing

the perception of the customers and to describe the gap between the banks at various levels.

Sampling Design

The study aimed to survey 100 samples from the village Daun Kalan and near by villages, who

are the customers, visiting in the banks. 50 respondents are of the customers of the Cooperative Bank

and the other 50 are the customers of the SBOP. Sampling Design was such to have a comparison of the

Customer Perception of the both banks. The respondents were selected on the basis of convenience

sampling.

Data Collection:

Both primary and secondary data have been collected for meeting the objectives of the current

study.

50

For the purpose of the collection of the primary data, personal interview of the respondents

was conducted. An unbiased, undisguised structured questionnaire was prepared which was

administered to the respondent for the purpose of getting the information. With the reference of certain

previously carried studies, certain statements for getting out the customer perception were formulated

and these were clubbed together to formulate the questionnaire having two parts: First part was having

10 general questions in addition to the demographic details and the second part dealt with the 10

elements of the bank showing the customer level of preference.

For the purpose of secondary data, secondary sources of information like magazines, newspapers,

journals; studies conducted in past etc. have been referred. The main sources of secondary data in the

study

1. Banks’ Detail Books

2. Websites

3. Books

Analysis Techniques

The questionnaire is having the alternative choices. Questions having alternative choices have

been analyzed by taking percentages and by the use of Likert scaling.

Scope of the study

The scope of the study is limited to the customers visiting to the Daun Kalan branch of the

Patiala Central Cooperative bank and the customer visiting to the village branch of State Bank of

Patiala. Present study has been restricted to time period from June 2010 to July 2010.

51

CHAPTER IX

DATA ANALYSIS AND INTERPRETATION

6.1 Demographic Analysis of the Customers based on occupation

Farmer Businessman Salaried Employee Other0%

10%

20%

30%

40%

50%

60%

CooperativeSBOP

Analysis and Interpretation - Out of the respondent customers of Cooperative Bank and SBOP

Majority is of farmers. Cooperative bank has more farmer customers in comparison with SBOP because

it is mainly a rural bank. It doesn’t mean that it has less percentage of customers of the businessman and

salaried employees. Businessman and the salaried employees are more among the respondents of the

SBOP. Other customers are students or housewives.

52

Questions:

6.2 Type of account

Savings FD Both Other0%

10%

20%

30%

40%

50%

60%

70%

CooperativeSBOP

Analysis and Interpretation – The comparison of the type of accounts which the respondents are

having in their respective banks, have little difference. The respondent customers of Cooperative Bank

are having Savings, Fixed Deposit Accounts. Comparatively Savings percentage is more and FD

percentage is less in SBO. Perhaps the rate of interest offered can be the reason of this minor difference.

53

6.3 No of Respondents who have ever taken any loan from the bank

Yes No0%

10%

20%

30%

40%

50%

60%

70%

CooperativeSBOP

Analysis and Interpretation – Majority of the respondents of the Cooperative Bank have taken loan

from the bank. On the other side of there is approx equal number of customers of the SBOP have taken

loan and who have not. They only are having deposit account in the bank. The reason may be the

Cooperative Bank as a main rural lending bank.

54

6.4 Information source of the schemes and services of the bank

Personal Visit Advertisement Word of Mouth Other0%

10%

20%

30%

40%

50%

60%

Cooperative SBOPAnalysis and Interpretation - Data shows that Majority of the respondents from the Cooperative Bank

and SBOP respectively, come to know about the schemes and services of the bank by visiting

personally. Cooperative Bank is lacking in its advertisement in comparison to SBOP. Word of Mouth is

also an information source. Reason may be interpreted that branches of the bank do not pay much heed

to advertisement and also the customers prefer to visit the bank personally for the detail of banking

services offered.

55

6.5 Type of rate of interest preferred

Yearly Half Yearly Monthly0%

10%

20%

30%

40%

50%

60%

70%

CooperativeSBOP

Analysis and Interpretation – Most of the customers of Cooperative Bank are from agricultural

background so that half yearly rate of interest is preferred, because of their crop cycle. Salaried

employee and businessmen prefer to pay monthly Rate of interest. Yearly rate of interest is not

offered by SBOP.

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6.6 Appreciation for being a good Customer

Yes No0%

10%

20%

30%

40%

50%

60%

70%

80%

CooperativeSBOP

Analysis and Interpretation – Less number of the respondents from the Cooperative Bank says that

they have a received positive appreciation from the bank for being a good customer, while the majority

denies it. Looking at the data of SBOP respondents the percentage is however opposite, Majority is

favoring. There is set procedure in the bank that if you are a good customer as you timely pay your

installments and interest, you will get some rebate in the percentage of the interest but there is no such

procedure in Cooperative Bank.

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6.7 (A) Future Preferable bank

SBOP Stick to Same Some other0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Cooperative

6.7 (B) Future Preferable bank

Cooperative Stick to Same Some Other0%

10%

20%

30%

40%

50%

60%

SBOP

Analysis and Interpretation - By the experience near about half of the respondents of the Cooperative

bank say that they will also stick to the same bank for same requirement in future, while other majority

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wants to shift to SBOP and some other bank. The data analysis of SBOP shows that most of respondents

want to remain with SBOP. While other want to go for Cooperative Bank and to shift for some other

bank. The reason may be the requirement of the customer, schemes offered, rate of interest offered and

also the personal attachment.

6.8 Motivational Factors

Interest Schemes Popularity All Other0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

CooperativeSBOP

Analysis and Interpretation - From the survey it was found that motivational factor, for opting for the

banking service, of the most of the respondents of Cooperative bank is Schemes offered by the bank

while other factors are like rate of interest, popularity etc. Data interpretation of the SBOP shows that

maximum percentage is with rate of interest, while other factors are schemes and popularity. Almost

equal number considers these all factors in both of the banks.

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6.9 Influence of image or brand of the bank on the customers

Agree Disagree0%

10%

20%

30%

40%

50%

60%

70%

80%

CooperativeSBOP

Analysis and Interpretation – Majority of the respondents from SBOP and Cooperative bank agree

that image or name of the bank has its influence on customers. Customers consider the brand of the bank

while going for the banking. It can be interpreted that it might influence the decision of the customers

and prospects.

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6.10 Essentiality of computerized Banking

Strongly Disagree Somewhat Disagree Neutral Somewhat Agree Strongly Agree0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Cooperative SBOP

Analysis and Interpretation – Major part of the respondents from the cooperative bank agree and

strongly agree to the need of computerized system in the bank. By the response of SBOP customers,

majority of response agree and strongly agree to that computerized system is essential for modern

banking. Cooperative Bank is still using the manual books for accounts instead of computerized banking

as it is in SBOP.

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6.11 Customer differs in his perception for a Government Bank & private bank

Strongly Disagree Somewhat Disagree Neutral Somewhat Agree Strongly Agree0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

CooperativeSBOP

Analysis and Interpretation – More than half of the respondents from the cooperative bank agree that

customer differ in his perception for a govt. bank and private bank. From the response of SBOP

customers, it may be interpreted majority also agree to it. The reason may be interpreted as the customer

feel that there is a genuine difference between a Govt. oriented bank and a private bank regarding the

services, rate of interest, infrastructure and other factors.

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Level of Preference

Range

10 Statements and 50 respondents of each bank

Score

Max. Score = 5*50 = 250 (strongly agree)

Avg. Score = 3*50 = 150 (neutral)

Min. Score = 1*50 = 50 (strongly disagree)

Sr. No Basis of Comparison Scores

Cooperative SBOP

1 Schemes Offered 193 186

2 Rate of Interest 177 186

3 Loan Passing & Repayment 182 179

4 Flexibility of Schemes 158 170

5 Transparency 154 170

6 Number of Staff 118 194

7 Customer Dealing 149 179

8 Bank Environment 123 202

9 Advertisement 119 194

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10 Bank Image 153 182

Analysis and Interpretation

1. Schemes Offered: There is favorable response for the schemes offered by both of the banks.

However it is more in case of Cooperative Bank because it is established for mainly the rural and

agriculture services. So the village customer is more satisfied with the schemes offered by this

bank.

2. Rate of Interest: Rate of Interest is also generating favorable response in both of the banks.

However it is less favorable in case of Cooperative Bank. May be the customer feels that the rate

of interest is less charged or the structure of rate of interest is more convenient in the SBOP.

3. Loan Passing and repayment: Survey shows that the loan passing and the repayment process is

generating almost equal response in both of the banks. This process is favorable in both of the

banks. May be the banks are adopting such a procedure where customer feels minimum

harassment.

4. Flexibility of Schemes: Data analysis shows that SBOP customers are more favorable to the

flexibility of schemes which they avail than in case of Cooperative bank.

5. Transparency: Research shows that both banks are having more than average response

regarding the statement. But there is gap in the customer preference in both of the banks. SBOP

is having more favorable response than Cooperative bank.

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6. Number of Staff: Data analysis shows that the scoring of the Cooperative Bank respondents is

much low than the average response but it is much higher in SBOP. Reason is that the

Cooperative Bank is only having 3 staff members including branch manager for the service of

customers. On the other side the number is seven in case of SBOP.

7. Customer Dealing: Cooperative Bank is also lacking in the customer dealing in comparison to

SBOP, as scored by the respondents. The reason may be interpreted as the staff of the

cooperative bank is less trained in comparison with the SBOP. Moreover the manual working,

due to lack of computerized system, also affects the customer dealing.

8. Bank Environment: Survey analysis shows Customer is negatively scoring the banking

environment in the cooperative bank because of less infrastructure facilities, the shortage of staff,

the non-availability of computerized system, the staff behavior. SBOP is having positive score in

this respect because of all the above stated factors and a fully air conditioned branch.

9. Advertisement: Survey analysis shows that majority of the respondents from the cooperative

bank disagree with the advertisement campaign of the bank because most of the customers come

to know about the schemes by the bank through their personal visit. The score given is the clear

evidence of it. The respondents of the SBOP are favorable to the advertisement by the bank.

10. Bank Image: Cooperative has been given average score regarding its bank image while it is

favorable in case of SBOP. The reason may be concluded the scam did by the previous branch

manager of Cooperative Bank. The last branch manager has been accused of manipulating

certain amount of loan. This had its influence on the bank image.

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CHAPTER VII

FINDINGS OF THE STUDY

1. Majority of the customers of the cooperative bank and SBOP belong to agricultural background.

2. The percentage of different accounts having the customers of the two banks is relatively same.

3. The percentage of respondents who have taken loan from Cooperative is more in comparison

with SBOP.

4. This is shown by the research that personal visit of customers is the main source of information

for knowing the bank schemes.

5. Most of the customers of the Cooperative Bank prefer to pay half yearly interest rate, while the

salaried employees prefer to pay the interest monthly, this is also same in the case of SBOP.

6. Majority of the respondents do not respondents in Cooperative Bank do not receive any

appreciation for being a good customer. But things are opposite in case of SBOP.

7. About the Future Bank Service, Majority of the respondents of the customers of SBOP want to

stick with SBOP as in comparison with the Cooperative Bank.

8. Analysis shows that Schemes offered by the banks is the main motivational factor for the

respondents of Cooperative Bank and the interest rate is the main motivational factor in case of

SBOP.

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9. Majority of the both respondents from the both admits that image or name or brand of the bank

do influence the customer.

10. Essentiality of computerized banking is agreed by the respondents of the both banks.

11. Majority of respondents from both the banks agree that whether it is a Government Bank or

Private Bank, customer perception is differing about the both type of banks.

12. The comparison between the schemes offered by the both banks reveals that Schemes offered by

Cooperative Bank, being a rural lending bank, are little bit more preferred than SBOP.

13. The comparison between the interest rate offered by the both banks shows that interest rates of

SBOP are little bit more attractive than the Cooperative Bank.

14. The customers’ perception about the loan passing and its repayment process is almost same in

the both of the banks.

15. Flexibility of schemes offered and transparency of the customer related processes is more

satisfactory in the SBOP in comparison with Cooperative Bank.

16. The branch of the Cooperative Bank is lacking in its staff number. While the branch of SBOP is

having sufficient number of staff members according to perception of its customers.

17. Customer service and dealing is also far behind the point in the Cooperative bank as it is

satisfactory in SBOP.

18. Customers do not agree with the Cooperative bank environment. Comparatively, SBOP branch

has a fully satisfied environment according to the perception of the customer.

19. Mainly Cooperative Bank is lacking in advertisement at local level. On the other side SBOP

advertisement campaign makes agree its customers.

20. The bank image of Cooperative Bank is little bit lacking in comparison with SBOP, as going

with the response of the customers.

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RECOMMENDATION AND SUGGESTIONS

1. More mass awareness campaigns should be organized in order to enhance market share of bank.

So Bank should concentrate on its advertisement itself.

2. Bank should refocus on its interest rate as responded by people. Periodic review of the interest

rate should be done.

3. There should be computerized system in the bank as it will reduce the time wastage of manual

work and will lead to the better performance of the bank.

4. Training of the employees should be there to meet the needs of the time.

5. Proper posting of the staff should be done.

6. Customer’s satisfaction must be the top priority of the bank.

7. Maximum practical exposure should be provided to the job trainees so that they may handle the

various enquiries of customer effectively.

8. Communication gap within the bank and with the head-office should be reduced.

9. Infrastructure facilities should be provided to the branch of Cooperative Bank, as it is catering to

the 5-6 near by villages.

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10. Banks is also advised to have proper internal control measures for monitoring its functions and

transactions.

LIMITATIONS OF THE STUDY

1 Some respondents were hesitant in providing complete information.

2 The findings of this study are based on the expressed opinion of the respondents.

3 Difficulty was faced in getting the responses to various questions because the customers could

not devote enough time to us and the communication problem was there.

4 This study only relates to one organization, so conclusions drawn may not be finding its utility in

all the other banks.

5 Even the employees of the bank hesitated to give the complete & accurate data.

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CONCLUSION

The project was undertaken to analyze and compare the customer perception of the two banks

one is Cooperative Bank and other is State Bank of Patiala. The study concludes that Cooperative Bank,

which was established for mainly for the service of rural sector, still is not on the line to its goal. It is

lacking at various elements, particularly at the branch levels, which reveals the edge of other public and

private sector banks over the Cooperative bank, the lines at which the bank is lacking behind.

Indiscipline and lack of commitment in these banks make people’s trust in the cooperative sector a

casualty.

Some of the co-operative banks are quite forward looking and have developed sufficient core

competencies to challenge state and private sector banks. But there is shortage of staff in some of the

cooperative banks and the traditional manual banking which is affecting the business and customer

services. People are still unaware of the services provided by the Cooperative Banks due to lack of

advertisement.

There is a need to analyze and pick up early warning signals. A change is needed today in the

cooperative banks which is built on confidence in human capital - the most important of all resources -

in commitment, creativity and innovation brought about by proactive management, membership and

employees. The ability to capture knowledge and wisdom gives cooperative banks their competitive

70

advantage. A prerequisite is that participants from all parts of a cooperative organization know and

understand its purpose, core values and visions.

In this way, by keeping in mind the certain shortcomings, appropriate measures to overcome

them should be adopted. So that the real purpose of the Cooperative bank must be realized with a

competitive advantage and the gap between the customer perception of the Cooperative Bank and the

other private and public sector bank, i.e. SBOP can be reduced.

BIBLIOGRAPHY

a. Books:

i. Kainth Gursharan Singh(1996),” Dynamics of Cooperatives in Punjab”; Indian Cooperative

Review, Vol. XXXVII, No.1,pp. 38-52

ii. Kothari C.R.(2007), “Research Methodology”; revised second edition; pages 71-76, 84-85,

100-102

b. Web Pages:

i. http://pbcooperatives.gov.in/PSCB.htm

ii. http://www.pscb.in/index.php?mod=interest_rate&opt=Deposit

iii. http://www.pscb.in/index.php?mod=interest_rate&opt=Loans

iv. http://pbcooperatives.gov.in/pscb_achievements.htm

v. http://www.pscb.in/index.php

vi. http://www.nabard.org/citizen.asp

71

ANNEXURE

72

Questionnaire

Dear respondent,

I would be extremely thankful if you spare some time to answer the following questions. All the

facts disclosed by you will be used for academic purpose only.

Personal details:

a. Name: ______________________________

b. Age: _____

c. Gender: Male Female

d. Occupation: Farmer Businessman Salaried Employee Other

____________________________________________________________________________________

1. Which type of account do you have? Please tick. SB FD Both Other

2. Have you taken ever any loan from this bank? Yes No

3. How do you come to know about the schemes and services of the bank?

Personal Visit Advertisement Word of Mouth Other

4. Which type of rate of interest do you prefer, offered? Yearly Half yearly Monthly

5. Do you avail any appreciation from bank for being a good customer? Yes No

6. In future service of which bank will you prefer?

73

SBOP Cooperative Stick to same some other

7. What factors motivate you while going for a particular banking service?

Interest rate Schemes & terms Popularity of bank All Other

8. Do you agree that image or brand of the bank has its influence on the customers?

Agree Disagree

9. Do you think that computerized Banking is the essential of modern banks?

Strongly Disagree Somewhat Disagree Neutral

Somewhat Agree Strongly Agree

10. Do you think that customer differ in his perception for a Government Bank & private bank?

Strongly Disagree Somewhat Disagree Neutral

Somewhat Agree Strongly Agree

11. Indicate your level of preference for the following statements regarding the bank.

Schemes Offered

Strongly Disagree

Somewhat Disagree Neutral Somewhat Agree Strongly Agree

Interest Rate Offered

Strongly Disagree


Loan Passing & Repayment Process

Strongly Disagree


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Flexibility of Schemes

Strongly Disagree


Transparency of the process

Strongly Disagree


Number of Staff Members

Strongly Disagree


Customer Dealing

Strongly Disagree


Bank environment

Strongly Disagree


Advertisement

Strongly Disagree


Bank Image

Strongly Disagree


Thanks for Your Cooperation

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Comparative+Study+of+Customer+Perception+Cooperative+Bank+&+SBOP

Documents

private bank

future of banks

training report

services of bank rate

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