j&k Customer Satisfaction- Shabeer

REPORT

ON

“ANALYSIS OF CUSTOMER SATISFACTION IN BANKING SECTOR OF JAMMU & KASHMIR BANK”

THE JAMMU & KASHMIR BANK LTD.

Submitted in partial fulfillment of the requirementsfor the award of the degree of

Master of Business Administration (MBA)

Affiliated To

_______________________________

Guide: Submitted by:Guide Name Student Name

Roll No.:

RIMT group of institutes Mandi Gobindgarh

Batch (20.. to 20…..)

1

CERTIFICATE

I, Mr./Ms._______________________________, Roll No. ________________

certify that the Summer Training Report (Paper Code-------) entitled “Analysis of

Customer Satisfaction in Banking Sector of Jammu & Kashmir Bank” is done by me

and it is an authentic work carried out by me at ___________________________

(Name of the firm or company). The matter embodied in this has not been submitted

earlier for the award of any degree or diploma to the best of my knowledge and belief.

Signature of the Student

Date:

Certified that the Summer Training Report (Paper Code-------) entitled

“____________” done by Mr./Ms._______________________________, Roll

No. ___________, is completed under my guidance.

Signature of the Guide

Date:

Name of the Guide:

Designation:

Countersigned

Prof. …..

Director

2

ACKNOWLEDGEMENT

The present work is an effort to throw some light on “Analysis of Customer

Satisfaction in Banking Sector of Jammu & Kashmir Bank”. The work would not

have been possible to come to the present shape without the able guidance,

supervision and help to me by number of people, ……………………...

With an overwhelming sense of gratitude, I acknowledge the valuable guidance and

consistent encouragement extended to me by our knowledgeable faculty members like

…………………… with whose guidance, I am able to accomplish this endeavor.

Their technical acumen and years of experience have provided me with crucial inputs

at a critical stage.

I also extend my heartfelt thanks to my family and friends for their support directly or

indirectly provided to me.

…………………

enrollment no._________________

3

EXECUTIVE SUMMARY

In the present age, the corporate world has become highly competitive. Hence, only

that service company can sustain which enjoys a competitive edge over the others.

This requires the formulation of policies and strategies keeping in view the existing

financial position, but formulation of these strategies is only possible when the

company enjoy a strong knowledge base of the environment prevailing. Assessments

of environmental position/condition of an industry/a company on the part of

management trainee/management require coupling his/her theoretical knowledge with

some practical exposure and experience.

The project is an attempt to find out the ways of customer satisfaction adopted by the

banks in the real world. So that it would be useful for a manager and staff in the real

business when he will have the responsibility to do the same.

The research methodology in this project is of descriptive nature. A comprehensive

study was done to gather the primary data by conducting personal interview.

For any bank, which exists, the prime motive is that it should be concerned with the

customer satisfaction. In today’s competitive scenario where there is a lot of

competition, the emphasis was to study the usefulness of the current schemes and

services of the J&K Bank Ltd. and also to study the working result so as to find out

what is still required in the banking industry to face competition at all levels.

The project was a great source of learning and a good experience as it made us aware

of professional culture and conduct that exist in the organization.

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CONTENTS

S.No. Topic Page No.

1 Certificate (s) -

2 Acknowledgements -

3 List of Tables -

4 List of Figures -

5 List of Symbols -

6 List of Abbreviations -

7 Chapter-1: Profile of the Firm/Company

8 Chapter-2: SWOT Analysis of the Company

9 Chapter-3: Analysis of Financial Reports of the Company

10 Chapter-4: Lessons Learnt

11 References/Bibliography

12 Appendices

LIST OF TABLES

Table No. Title Page No.

1

2

3

4

LIST OF FIGURES

Figure No. Title Page No.1.2.3.4.5.6.7.8.9.10.

5

LIST OF ABBREVIATIONS

S.No. Abbreviated Name Full Name1 CRM Customer Relationship Management

2 EPS Earning Per Share

3 CS Customer Satisfaction

4 Int Introduction

5 DA Data Analysis

6 R/B Reference & Bibliography

7 MRK Marketing

8 TC Table of Content

9 J&K B Jammu & Kashmir Bank

6

CHAPTER -1

PROFILE OF THE COMPANY

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PROFILE OF THE COMPANY

INTRODUCTION

What is a bank?

Bank is defined as an institution for the keeping, landing and exchanging etc. of

money. Economists have also defined a bank highlighting its various functions.

According to Crowther, the banker business is to take the debt of other people to offer

his own in exchange and thereby create money.” Thus a bank is an institution that

accepts deposits from the public in turn advances loans by creating credit.

It is different from other financial institutions in that they cannot create credit though

they may be accepting deposits and making advances.

Types of banks:

Commercial banks: are those banks which perform all kinds of banking functional

such as accepting deposits, advancing loan, cr.creation and agency functions. They

are also called joint stock banks as they are organized in the same manner as joint

stock companies. They usually advance short term loans to customers some of

commercial banks in India are Andhra Bank, Canara Bank, Indian Bank, PNB etc.

Exchange banks: are those banks, which deal in foreign exchange and specialize in

financing trade. They are called foreign exchange banks. In India these exchange

banks have their head offices located outside India. These banks also render other

services such as collecting and supplying information about the foreign customers

providing remittance facilities etc. such as chartered bank, Gridlays bank.

Industrial banks: are those banks, which provide medium term and long-term

finance for industries for the purchase of land, machinery, etc. They underwrite the

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debenture and shares of industries and also subscribe to them such as industrial

development bank of India, industrial finance corporation of India etc.

Agricultural banks: are those banks, which provide cr. To farmers for short term,

medium term and long term needs. In India, commercial banks, regional rural banks

and agricultural co-operative banks provide short-term loans to farmers. Such as

national bank for agriculture and rural development, NABARD.

Cooperative banks: are those financial institutions, which are organized on the

principle of cooperation. They provide short term, medium term loans to their

members. In rural area there are agriculture cooperative banks, which are also

cooperative banks, which perform the function of ordinary commercial banks but give

loan to their members only. They also get funds from the RBI. There is a state

cooperative bank in every state of India with its branches at the district level known as

the central cooperative banks.

Saving banks: help promote small saving and mobilize them. They have been very

successful in Japan and Germany. In India post office act as saving bank.

Central banks: is the apex bank, in a country, which controls its monetary, and

banking structure. It is owned by the govt. of the country and operates in national

interest. It regulates and issues currency, performs banking and a agency services for

the state, keeps cash reserves of commercial banks, keeps and manages international

currency, act as the lender of the last resort, acts as the clearing house and controls of

credit. The RBI is the central bank in India.

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Banking system

The banking system is an integral sub-system of the financial system. It represents an

important channel of collecting small saving from the households and lending it to the

corporate sector.

The Indian banking system has the RBI as the apex body for all matters relating to the

banking system. It is the ‘central bank’ of India. It is the bankers to all other banks.

Functions of RBI:

1. Currency issuing authority.

2. Banker to the government.

3. Banker to other banks.

4. Framing of monetary policy.

5. Exchange control.

6. Custodian to foreign exchange and gold reserves.

7. Development activities.

8. Research and development in the banking sector.

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1. 1. Company profile of the organization

The Jammu & Kashmir Bank is today one of the fastest growing banks in India with a

network of more than 500 branches/offices spread across the country offering world

class banking products/services to its customers. Today, the Bank has a status of value

driven organization and is always working towards building trust with Shareholders,

Employees, Customers, Borrowers, Regulators and other diverse Stakeholders, for

which it has adopted a strategy directed to developing a sound foundation of

relationship and trust aimed at achieving excellence, which of course, comes from the

womb of good Corporate Governance. Good Governance is a source of competitive

advantage and a critical input for achieving excellence in all pursuits. J&K Bank

considers good Corporate Governance as the sine qua non of a good banking system

and has adopted a policy based on all the four pillars of good governance –

transparency, disclosures, accountability and value, enabling it to practice trusteeship,

transparency, fairness and control, leading to stakeholders delight, enhanced

shareholder value and ethical corporate citizenship. It also ensures that bank is

managed by an independent and highly qualified Board following best globally

accepted practices, transparent disclosures and empowerment of shareholders, besides

ensuring to meet shareholders aspirations and societal expectations following the

principles of management's executive freedom to drive the bank forward without

undue restraints but within the framework of effective accountability. The excellence

achieved by the bank in its operations stemming from the roots of voluntary good

Governance has not gone unrecognized and Bank has recently bagged three very

prestigious awards for following fair business practices and commitment to social

obligations.

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Only on domestic front but also for the foreign exchange earnings .The bank

disbursed advances to the tune of Rs.5.76Lakh in first year Entire banking in the state

of Jammu and Kashmir was performed by traditional lenders till 1920 -30 and that too

at exorbitant interest rates .At the same time some banks functioned at a very limited

scale, such as Punjab National Bank Limited, Grindlay's Bank and Imperial Bank of

India.

The role of these banks was reduced to the acceptance of deposits, as they could not

grant loans and advances to the people of the state owing to the statutory limitations.

Under this scenario banks could not ameliorate the financial and social position of the

people of the state. To over come this critical situation then Maharaja of the state

conceived an idea of setting up of a state bank in the state. After a prolonged exercise

and deliberations the assignment for establishment of " The Jammu and Kashmir

Bank Limited " was given to the late Sir Sorabji N Pochkhanwala, the

Managing Director of the Central Bank of India.

Mr.Pochkhawala formulated a scheme on 24-09-1930, suggesting establishment of a

semi state Bank with participation in capital by state and the public under the control

of state Government. Thus the bank was formally incorporated on the Ist of October

1938 and commenced business from 4th of July 1939 at its Registered Office

Residency Road Srinagar, Kashmir.

The Jammu & Kashmir Bank Limited has been the first of its nature and composition

as a State owned bank in the country .The state Govt. besides contributing half of the

issued capital also appointed it as its bankers for general banking and treasury

business .In its formative years, the bank had to encounter several serious problems,

particularly around the time of independence, when out of its total of ten branches two

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branches of Muzaffarabad and Mirpur fell to the other side of the line of control(now

Pak Administered Kashmir) along with cash and other assets in 1947. However the

State Govt. came to its rescue with the assistance of Rs.6.00 Lacs to meet the claims

however the bank stead fastily over came its difficulties and kept growing.

Following the extension of Central laws to the state of Jammu & Kashmir, the bank

was defined as a govt. company as per the provisions of Indian companies act 1956.

The bank had its first full time chairman in 1971, following social Central measures in

banks. The year 1971 was a turning point for the bank on conferment of

scheduled bank status and witnessed remarkable progress in all the vital fields of

operations .The bank was declared as "A" Class Bank by Reserve Bank of India in

1976. In recognition of dominant role and exalted performance, Reserve bank of India

appointed the bank as its agent for performing the general banking business of the

Central Govt. especially in maintaining currency chests and collection of taxes. The

landmark achievements of the bank in some important fields of operation since its

inception to March 2011 are detailed below:

Brief Profile: Jammu & Kashmir Bank is the only Bank in the country with majority

ownership vested with a state government – the Government of Jammu & Kashmir.

J&K Bank functions as a universal bank in Jammu & Kashmir and as a specialized

bank in the rest of the country. It is also the only private sector bank designated as

RBI’s agent for banking business, and carries out the banking business of the Central

Government, besides collecting central taxes for CBDT.

J&K Bank follows a two-legged business model whereby it seeks to increase lending

in its home state which results in higher margins despite modest volumes, and at the

13

same time, seeks to capture niche lending opportunities on a pan-India basis to build

volumes and improve margins.

J&K Bank operates on the principle of ‘socially empowering banking’ and seeks to

deliver innovative financial solutions for household, small and medium enterprises.

The Bank, incorporated in 1938, and is listed on the NSE and the BSE. It has a track

record of uninterrupted profits and dividends for four decades. The J&K Bank is rated

P1+, indicating the highest degree of safety by Standard & Poor and CRISIL.

Registered Office

M A Road

Srinagar 190 001

Jammu & Kashmir

Corporate Headquarters

M A Road

Srinagar 190 001

Jammu & Kashmir

www.jkbank.net

1.2. Explain the nature of the organization and its business

Support Services

Technology application has remained the thrust area of the Bank for last many years

with an objective to offer state of the art world class Banking facilities to its

customers. The Bank continued to leverage information technology as a strategic tool

for its business operations, to gain competitive edge in customer service as well as

improving productivity and efficiency. The Bank’s IT strategy emphasizes enhanced

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level of customer services through 24x7 availability, multi-channel Banking and cost

efficiency through optimal use of electronic channels, wider market reach and

opportunities for cross-selling. The Bank’s focus is on harnessing technology for

integrating diverse products and services. Keeping this in view, the Bank continued to

widen the scope of multiple delivery channels such as ATM installations, Anywhere

Banking, Internet Banking and SMS Banking at more & more centres.

Anywhere Banking Features

Power to Access to your accounts across our branch network.

The facilities include Cash Deposit/Withdrawal and transfer.

Outstation Cheque collection.

Internet Banking/Features

Available for both Retail and Corporate users.

SMS Banking

Statement of Accounts.

Funds Transfer.

Submit the filled form at your branch for creation of your Internet banking user

Corporate/Retail Internet Banking

Both corporate and retail clients can access their accounts anytime and from any

location via the World Wide Web. Presently following services are available to the

corporate clients:

Access/view of accounts

Transfer of Funds between self linked accounts maintained with our bank.

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Transfer of Funds from their own accounts to external accounts (e.g. Vendor

payment)

Transfer of Funds from external to own accounts (e.g. dealer collection).

Transfers of Bulk upload.

Transfer to non J & K Bank account holders through RBI NEFT/RTGS.

Transfer of non-standard bills.

Utility bill payments.

Ecommerce facility for JK Bank Ebanking customers

J & K Bank Secure Payment Gateway, to provide ecommerce facility to the

ebanking customers.

Tie up with M/S Avenues India Pvt. Ltd. (Ccavenue) and M/S BillDesk, for

extending ecommerce facility to the ebanking customers.

The facility shall be available to only such ebanking users, which have been

enabled by the Bank for Bill Payment facility.

ebanking users intending to purchase goods online through the Ccavenue

shopping site shall be required to:

Logon to the Master Merchant’s (M/S Avenues India Pvt. Ltd.) website

http://world.ccavenue.com/content/clients.jsp.,

Select the item to be purchased

Select ebanking as the mode of payment.

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Select the J & K Bank and the system will take the user to the J & K Bank’s

ebanking site prompting him to enter his ebanking user-id and password.

After entering the Bank’s ebanking site the customer will be able to pay the

amount of bill by debit to its own account.

M/S BillDesk - is a useful service that provides customers a single point of contact

for all your payment needs. Our customer can pay bills and make other payments

online. Instead of writing a cheque each time, now our customers can use any

device connected to the Internet (computer, kiosk, etc) and make payments with

the click of a mouse. In effect, through BillDesk customers can now make All

Payments at a Single Location.

e-Payment of Tax for

JK Bank Ebanking customers

NSDL (National Securities Depository Ltd.), the first and largest depository in

India, established in August 1996 and promoted by institutions of national stature

responsible for economic development of the country has since established a

national infrastructure of international standards that handles most of the securities

held and settled in dematerialised form in the Indian capital market.

Tax Information Network (TIN), a repository of nationwide tax related

information, has been established by National Securities Depository Limited on

behalf of Income Tax Department of India (ITD).

Although India had a vibrant capital market which is more than a century old, the

paper-based settlement of trades caused substantial problems like bad delivery and

delayed transfer of title till recently.

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e-Payment facilitates payment of direct taxes online by taxpayers. To avail of this

facility the taxpayer is required to have a net-banking account with any of the

banks certified by NSDL,CBDT and RBI for collection of Direct TAX. J&K Bank

has been added to the list.Also, e-payment of Indirect Tax for J&K State Govt.

has been added to our services.

SMS Banking

Be in touch with your account on the move Features

Balance Enquiry

Transaction enquiry

Cheque Status Enquiry

ATM Services Features

A network of more than 325 ATMs deployed across the country.

Accepting Maestro / Cirrus / Mastercard / VISA / NFS atm / debit / credit cards.

Debit Cards Features

Pin Based -Maestro / Cirrus Debit Card

Provides online access to savings or current account.

Accepted at all Domestic as Well as International MasterCard™, Maestro™,

Cirrus™ Enabled ATM's and Point Of Sale locations.

Accepted at National Financial Switch (NFS) ATM's.

No Transaction Fee at JK Bank ATM's

No Transaction Fee on purchases

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Credit Cards Features

20-50 day Credit Free Period

Revolving Credit Facility on paying of minimum payment due in the same billing

period.

Hassle free credit facility at competitive rate of interest.

Cash Withdrawal Facility upto 20% of total credit limit.

Loyalty programme

MasterCard® SecureCode™ enbaled Credit Cards.J&K Bank lets you shop

securely online with your J&K Bank MasterCard Credit Card. This service

through a simple checkout process, confirms your identity when you make

purchases on the Internet

To use the facility, you would:

Connect to the Internet and shop online using your J&K Bank Credit Card.

You don't need any special software to use MasterCard SecureCode.

Using this facility is as easy as using a PIN for ATM transactions.

Grievance Nodal Officer for Credit Cards

Mr. Parvez Ahmad

0194-2486427

[email protected]

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Card Issuing and Acquiring Department; Corporate Headquarters J&K Bank

Most Important Terms and Conditions (JK Bank Credit Card)

One Time Password(OTP) for IVR transactions: Effective January 1, 2011, as

mandated by Reserve Bank of India (RBI), Credit-Card-issuing Banks in India have

introduced an additional measure of security for IVR transactions (Interactive Voice

Response transactions are those transactions which are made over the phone where

certain Credit-Card details are to be entered into an automated system in order to

make payment to a merchant for the purchase of goods/services) through their Credit

Cards – the OTP (One Time Password) generation.

What is an OTP?

An OTP is a six-digit code, valid for a limited period from the time of placing a

request for it. You will need to obtain an OTP before every IVR payment transaction.

How to obtain an OTP?

You can obtain the OTP by visiting http://www.jkbank.net/jksip.php and logging in to

J&K Bank Secure Internet Payment. A link Pre OTP is available for generating the

OTP which would be emailed to your registered email. Alternatively, the OTP can be

displayed on the screen by clicking on the small check box provided for the purpose.

How to use the OTP?

The OTP is required at the time of making payment on the IVR, where you will be

prompted to enter it along with the other details like your credit-card number, card

expiry date and CVV number.

Merchant Acquiring/ Features

All types of Visa & MasterCard based cards Accepted

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Quick Merchant Payment

Merchant Helpdesk and Onsite Support.

Competitive Commission Rates

No hidden Charges

Basic Information

Depository: A depository is like a bank where securities are held in electronic

(dematerialized) form.

Dematerialization: It is the process of converting the securities held in physical form

(certificates) to an equivalent number of securities in electronic form and crediting the

same to the investor's demat account. Dematted securities do not have any certificate

numbers or distinctive numbers and are dealt only in quantity i.e. the securities are

replaceable

Stock Broking through INVESTMART an initiative of ILFS: You can avail the

facility of buying and selling of shares under single roof. It integrates your Broker, DP

and Bank on a single platform.You may open a trading account by opening a Demat

account with J&K BANK, SAVING ACCOUNT with J&K BANK and Stock

Broking Account by filling Investor Registration form of INVESTMART an initiative

of ILFS and our business patner for providing broking services.For further queries

you may contact the DP branches of J&K Bank

Depository Participant of NSDL and CDSL: In our country there are two central

depositories - National Securities Depositories Limited (NSDL) and Central

Depository Services Limited (CDSL).J&K BANK is Depository Participant of both

NSDL and CDSL.

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Under the Depositories Act, investors can avail of the services of the depositories

through Depository Participants (DPs) such as J&K BANK. DPs are like bank

branches wherein shares in physical forms need to be deposited for converting the

same to electronic (demat) form.

Market transaction: When securities are transferred from a beneficiary account of

an investor to a clearing member account of a broker for ensuring delivery of

securities on a stock exchange, then it is a market transaction.

Off-market transactions: When securities are transferred from the beneficiary

account of one investor to that of another, and the transaction does not get routed to

the stock exchange, it is an off-market transaction.

Rematerialisation (Remat)

It is the process of conversion of securities from electronic to physical form

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Third party service of Mutual Funds

J&K Bank has entered into tie-ups with reputed Asset Management Companies for

distribution of Mutual Fund products.

Mutual Fund industry is one of the fastest growing segments in financial services in

India. Over the years, banks in India have emerged as the biggest distributors of

financial products. This has helped the banks to capture and retain their huge client

base and simultaneously adding a steady stream of fee based income.

Mutual Funds have become an attractive proposition for investors in the current

context and for J&K Bank it will be a good investment option to have in our product

portfolio. This shall be an important step towards converting the bank branch into a

financial supermarket addressing all the financial needs of the customers thus helping

the bank retain the customers within its fold.

Moreover the branch can augment its fee based income the Bank aims to match to

industry standards.

The AMCs with which the Bank has entered into an arrangement are: UTI, Kotak and

Reliance Mutual Fund. The Bank shall undertake distribution of their current schemes

as well as NFO (New Fund Offer) as and when the AMC comes up with the same.

Insurance Services -Life Insurance

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc.

and was incorporated as a joint venture between MetLife International Holdings, Inc.,

The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private

investors.

MetLife is one of the fastest growing life insurance companies in the country. It

serves its customers by offering a range of innovative products to individuals and

23

group customers at more than 600 locations through its bank partners and company-

owned offices. MetLife has more than 32,000 Financial Advisors, who help customers

achieve peace of mind across the length and breadth of the country.

MetLife, Inc., through its affiliates, reaches more than 70 million customers in the

Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include

the number one life insurer in the United States (based on life insurance in force),

with over 140 years of experience and relationships with more than 90 of the top one

hundred FORTUNE 500® companies. The MetLife companies offer life insurance,

annuities, automobile and home insurance, retail banking and other financial services

to individuals, as well as group insurance, reinsurance and retirement and savings

products and services to corporations and other institutions.

The bank is also Corporate Agent of MetLife and is marketing its products through its

strong branch network. Visit the Metlife Website for the details on products

1.3. Mission & vision

VISION

“To catalyse economic transformation and capitalise on growth.”

Our vision is to engender and catalyse economic transformation of Jammu and

Kashmir and capitalise from the growth induced financial prosperity thus

engineered.The Bank aspires to make Jammu and Kashmir the most prosperous state

in the country, by helping create a new financial architecture for the J&K economy, at

the center of which will be the J&K Bank.

MISSION

Our mission is two-fold: To provide the people of J&K international quality financial

service and solutions and to be a super-specialist bank in the rest of the country. The

two together will make us the most profitable Bank in the country.

24

VALUES: Customer Sovereignty, Passion for Excellence, Continuous Innovation,

Transparency & Integrity, People Orientation and Social Responsibilities are the core

values at the J&K Bank.

PHILOSOPHY: The Bank’s Corporate Governance philosophy is woven around its

total commitment to the ethical practices in the conduct of its business, while striving

in the constant quest to grow with profits and enhance shareholders value and align

the interests of the Stakeholders and Society through adoption of best international

practices and standards. The Corporate Governance policies of your Bank recognize

the accountability of the Board vis-à-vis its various constituents including customers,

shareholders, investors, employees, Government and regulatory authorities and

societal responsibilities as a corporate citizen.

J&K Bank is committed to the best and transparent corporate governance practices. It

believes that proper corporate governance practices leads to effective management

and control of business, which in turn provides best value to all its stakeholders

through highly motivated personnel, visionary leadership, respect for people and

society, innovation and sound fiscal discipline.

Your Directors have immense pleasure in presenting the 67th Annual Report on the

business and operations of your Bank together with the audited accounts for the year

ended March 31.2011,

1.4. Product range of the company

Loans

Housing Loan Scheme: Quantum of loan

For Construction /Purchase 60 months net salary or 75.00 Lacs whichever is lower.

For repairs/renovation 20 months net salary, subject to a maximum of 10.00 Lacs.

25

For purchase of land: 20 months net salary/income subject to maximum of 5 Lacs

within J&K and 10.00 Lacs outside J&K.

Also as an incentive for small borrowers, the loans upto 1.5 Lacs granted for

repairs/renovations of existing houses would now be secured by third party guarantee

of two persons or such other security as is deemed appropriate by the Bank.

Insurance

Life Insurance Segment/ Metlife India Insurance

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc.

and was incorporated as a joint venture between MetLife International Holdings, Inc.,

The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private

investors.

MetLife is one of the fastest growing life insurance companies in the country. It

serves its customers by offering a range of innovative products to individuals and

group customers at more than 600 locations through its bank partners and company-

owned offices. MetLife has more than 32,000 Financial Advisors, who help customers

achieve peace of mind across the length and breadth of the country.

MetLife, Inc., through its affiliates, reaches more than 70 million customers in the

Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include

the number one life insurer in the United States (based on life insurance in force),

with over 140 years of experience and relationships with more than 90 of the top one

hundred FORTUNE 500® companies. The MetLife companies offer life insurance,

annuities, automobile and home insurance, retail banking and other financial services

to individuals, as well as group insurance, reinsurance and retirement and savings

products and services to corporations and other institutions.

26

The bank is also Corporate Agent of MetLife and is marketing its products through its

strong branch network.

Tax Products/Planning

Tax Products & Planning (Tax Saver Term Deposit Scheme)

Purpose: To enable our customers to place long term deposits to earn higher rate of

interest and also to avail the tax benefits under section 80C of Income Tax Act, 1961.

Savings & Deposits

Savings Bank Deposit Scheme

Salient Features

Account can be opened with a minimum initial deposit of 100/- to 500/-

Convenient and easy to operate account to save time and money.

Suitable for irregular income group No time bar on depositing or withdrawing

money.

Who can open this Account?

A person in his/her name.

More than one person in their joint names.

Minor through guardian or himself if above 10 years of age.

Illiterate persons.

Blind persons. - Associations, clubs, Societies, Trusts, etc.

Facilities

Anywhere banking facility.

ATM/Debit card.

Telebanking facility.

Cheque book facility

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Cards

Global Access Card

Salient Features

Pin Based -Maestro / Cirrus Debit Card

Provides online access to savings or current account.

Accepted at all Domestic as Well as International MasterCard™, Maestro™,

Cirrus™ Enabled ATM's and Point Of Sale locations.

Accepted at National Financial Switch (NFS) ATM's.

No Transaction Fee at JK Bank ATM's

No Transaction Fee on purchases

Mutual Funds

J&K Bank has entered into tie-ups with reputed Asset Management Companies for

distribution of Mutual Fund products.

Mutual Fund industry is one of the fastest growing segments in financial services in

India. Over the years, banks in India have emerged as the biggest distributors of

financial products. This has helped the banks to capture and retain their huge client

base and simultaneously adding a steady stream of fee based income.

Mutual Funds have become an attractive proposition for investors in the current

context and for J&K Bank it will be a good investment option to have in our product

portfolio. This shall be an important step towards converting the bank branch into a

financial supermarket addressing all the financial needs of the customers thus helping

the bank retain the customers within its fold.

Moreover the branch can augment its fee based income the Bank aims to match to

industry standards.

28

The AMCs with which the Bank has entered into an arrangement

are: UTI, Kotak and Reliance Mutual Fund. The Bank shall undertake distribution of

their current schemes as well as NFO (New Fund Offer) as and when the AMC comes

up with the same.

Non Resident Banking

A deposit plan that provides standard banking facilities such as Cheque book,

provision for nomination and other remittance facilities and also allows repatriation of

entire funds.

1.5. SIZE OF ORGANIZATION.

3200 employees across India in J&K Bank

1.6. Organization Structure of the Company

29

Fig. 1.6.1 Organization Chart

30

1.7. Market Share & Position of the Company in the Industry

Fig. 1.7.1

Fig. 1.7.2

31

1.8. Present Leadership

J&K Bank’s diverse and rich culture is abundantly evident in its Board Members, who

provide direction to the Bank in order to achieve its vision. A brief profile of our

eminent Board Members is as under:

Brief Profile of Directors

MUSHTAQ AHMAD: Having joined the Bank in

1972 as Probationary Officer (PO), Mr. Mushtaq

Ahmad has a distinguishing career of 36 years as a

prudent banker. His personal progression has been a

vital and contributing element of the unfolding

success story of J&K Bank since more than three

decades.

Before his retirement as Executive Director of the Bank in February 2008, he held

some of the most significant positions in the bank and discharged all his duties with

honesty and distinctive vision.

His person makes an ideal blend of specialized knowledge and practical experience in

almost all the critical fields of contemporary banking, which include Credit/Risk

Management, Strategy and Business Development, Assets & Liability Management,

Human Resource Development, Investments, Treasury, Forex operations,

International Banking, Insurance etc.

As a leading banker, he commands huge respect for his prudence, esteem for his

discipline and affection for his leadership skills in the Bank as well as the industry.

32

As a top executive, Mushtaq Ahmad lays great emphasis on talent search, human

resources development, skill enhancement, besides team building.

SUDHANSHU PANDEY, IAS: Mr. Sudhanshu

Pandey, IAS, is Commissioner Secretary to

Government, Finance Department, J&K, Govt. A

post graduate in Life Science (Botany) with

specialization in Environmental Management and

Ecology (Gold Medal), University of Allahabad,

MBA in Financial Management; Business

Management and Financial Management, Institute of

Management, Ahmadabad, Reforms in Government, Indian Institute of Management,

Bangalore and Decentralized Industrial Development, Japan.

Mr. Sudhansh Pandey began his career with Indian Forest Services in 1985 and

thereafter, joined the Indian Administrative Services in 1987. Mr. Sudhanshu Pandey

has served the IAS in various distinguished capacities, which include Sub-Divisional

Magistrate, Bhaderwah (J&K), Additional Secretary Education(GOJK), Addl. Chief

Executive, Shri Mata Vaishno Devi Shrine Board, Katra (Udhampur), District

Development Commissioner and District Magistrate, Doda, J&K, Special Secretary to

Governor, J&K, Managing Director, SIDCO, Director Information, Director

Employment and Special Secretary, Labor and Employment, J&K, Director & PS to

MoS , Ministry of Commerce and Industry, GOI, Director & PS to Mos , Ministry of

External Affairs, GoI, Counselor and Director, Tagore Centre for Information,

33

ARNAB ROY: Mr. Arnab Roy, the Regional Director, Reserve

Bank of India is a holder of Masters Degrees in Arts and also

Business Administration (MBA).

He has more than 27 years of valuable experience serving the

Reserve Bank in various capacities, prominent being General Manager, Issue

Department and DBS. He has also been associated for a short while with Banking

Ombudsman and is presently the Regional Director, of J&K State.

VIKRANT KUTHIALA: Mr. Vikrant Kuthiala is B.com

(Hons) from Hindu College, Delhi University. He is a prominent

Businessman from Jammu with interests in steel manufacturing

and hydel projects.

He is also representing on the committees of various academic and professional

organizations, prominent being the Regional Advisory Committee of Central Excise

& Customs, J&K, Chamber of Commerce & Industry, Jammu and J&K State

Committee of Federation of Industries of India, New Delhi. He is also a Member of

India Islamic Cultural Centre, New Delhi and INTACH, J&K Chapter, Jammu.

PROF. NISAR ALI: Prof. Nisar Ali is a Ph.D in Economics

from Osmania University, Hyderabad. He is a Professor from

Post-Graduate Department of Economics, University of

Kashmir.

Prof. Nisar Ali is also Dean, Faculty of Social Sciences

University of Kashmir and Member, J&K State Finance Commission. He has served

34

in various prominent positions with the University and has many research papers and

publications to his credit.

A. M. MATTO: Mr. A. M. Matto is a Graduate in

Commerce and World Explorer. He is a high silhouette

Businessman having his interests in the manufacture and

export of Kashmir Handicrafts.

He has made significant contribution to commerce industry

by being associated with it in the capacity of President and other prominent positions.

Mr. A. M. Matto has had a long association with the Bank as Director, during which

he has made valuable contribution to the Institution with his rich and varied

experiences.

RAKESH KUMAR GUPTA: Mr. R.K. Gupta, aged 47

years, is a professional Chartered Accountant with 25 years

standing possessing skill in Finance, Taxation, Auditing and

Corporate Legal Affairs. He started his professional career

with M/s Gupta & Associates in January 1986 and heads this

renowned firm of Chartered Accountants since then.

Mr. Gupta remained in Executive Committee of the Jammu & Kashmir Branch of the

Institute of Chartered Accountants of India for three terms from 1991-1994; 1994-

1998 and 2006-2009. During these three terms he represented the Branch as its

Treasurer, Secretary, Vice-Chairman and Chairman. Mr. Gupta has been member of

Tax Payers Committee of this Region. He has also been member of Research

35

Committee & Direct Tax Committee of The Institute of Chartered Accountants of

India. He is also empanelled as Peer Reviewer with Peer Review Board of the ICAI.

Having authored various articles, Mr. Gupta has to his credit published Articles in

The Chartered Accountant Journal and also in Current Tax.com on the issues of

Taxation and Accounting Standards. Mr. Gupta has been Guest Speaker on many

occasions for various Seminars and Study Circle meets of Chartered Accountants &

others.

Mr. Gupta is Member of Taxation Advisory Committee and other Committees of

Chamber of Commerce & Industry, Jammu. He is also a Trustee in Charitable

Institutions providing education to the under privileged children and relief to the

needy. In view of his interest in social activities and sports, Mr. Gupta is also a

member of Sports and Health Committee of Prestigious Social Club.

NIHAL GARWARE: Mr. Nihal Chandrakant Garware is a

holder of Bachelor of Arts Degree (U.S.A.) and the scion of

well known Industrialist family of India – the Garwares.

Mr. Nihal Chandrakant Garware, is at present Head of the

Legal Department and Liaison Department in some of the

Garware Companies. He has been a Director in various

companies in the Garware Group, where his responsibilities have ranged from

Production, Sales, Legal, Liaison to Finance. He is Advisor to outside Companies like

Ama Pvt. Ltd., D. Y. Patil Group and Sharad Pawar International School.

He is also the founder member of The Youth Wing of Indian Merchants Chamber Of

Commerce.

36

1.9. Source of data collection

OBJECTIVES

To find out parameters of customer satisfaction.

Help the bank to know customer needs from the bank, so that accordingly

they can equip themselves accordingly to the market.

To do the performance evaluation of the organization with respect to

growth, productivity and profitability.

Research Design:

There are 3 types of researches:

- Exploratory research

- Descriptive research

- Casual research

From the above researches, I decided to employ blend of exploratory research and

descriptive research, as it is concerned with discovering the general nature of the

problem and the variables that relate to it.

Data Collection Method:

Data collection is done mainly through two sources namely primary and secondary.

Secondary source is nothing but utilizing somebody else’s earlier effort and work.

Primary source is when the data collection is done for the first time. I had taken up

both secondary database and to have greater accuracy I decided to go in for collection

of primary database.

37

To tap secondary database I went through the brochures of the companies and even

through the web sites of all the companies.

To tap the primary database I decided to go in for Survey Method. Various tools can

be used to conduct a survey. These tools are very important to trigger a stimulus,

which would bring out their attitude and ideas. I have used Questionnaire as a tool

for the above-mentioned purpose.

QUESTIONNAIRE DESIGN

A close-ended Questionnaire has been used in this Project to know the satisfaction

level of the customers of the Bank in order to improve the services in the near future.

SAMPLE DESIGN

SAMPLE SIZE: 100

60 Males and 40 Females

SURVEY AREA: The survey was carried out in North Delhi.

SAMPLING TECHNIQUE: Stratified sampling technique has been used.

TIME FRAME: The time frame has been six to Seven weeks.

38

LIMITATIONS OF THE STUDY

The main source of data is primary data, though secondary data has not been

ignored.

100 samples do not reflect the opinion of customers as whole.

Time limit was another limitation and there may be possibility of committing a

general error.

Due to change in time, policies may change.

39

CHAPTER – 2

SWOT ANALYSIS OF THE COMPANY

40

S.W.O.T ANALYSIS OF J&K BANK STREANGTH

The main strength of the bank is that it is located in the residential as well as

commercial areas due to which the bank is able to cover both residential and

market share.

The bank has six days/week working schedule due to which it provide extra

working hours to its customers.

Bank has authority to deal in foreign exchange

A wide range of scheme and services to meet diverse customer needs.

Net profit of the year 115 crore.

Total assets for the year ending 2010 RS.244, 801,607

80% dividend to its shareholder.

Deposits increase by 16%.

WEAKNESS

No branch in foreign country.

Unable to provide value added services to the customer.

The look of the bank is not very attractive for the customer.

The bank lacks in sales promotion and advertisement its products and services.

Number of ATM services is very less.

41

OPPORTUNITY

Identifying the potential customer and creating market by proper channel

advertising.

Bonding the customers by paying immediate attention towards their

grievances thus enhancing customer satisfaction.

They can move easily towards universal bank.

THREATS

Existing competitors.

Attitude of concerned body towards Pvt. Bank.

Foreign players.

42

CHAPTER – 3

ANALYSIS OF FINANCIAL REPORTS OF THE

COMPANY

43

ANALYSIS OF FINANCIAL REPORTS OF THE COMPANY

Table 3.1: Balance sheet

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Sources of funds

Owner's fund

Equity share capital 48.49 48.49 48.49 48.49 48.49

Share application money - - - 28.10 -

Preference share capital - - - - -

Reserves & surplus 3,430.19 2,961.97 2,574.37 2,232.34 1,960.24

Loan funds

Secured loans - - - - -

Unsecured loans 44,675.94 37,237.16 33,004.10 28,593.26 25,194.29

Total 48,154.62 40,247.62 35,626.96 30,902.19 27,203.03

Uses of funds

Fixed assets

Gross block 788.10 561.35 517.90 471.32 433.63

Less : revaluation reserve - - - - -

Less : accumulated depreciation 396.47 358.54 321.61 289.10 256.94

Net block 391.64 202.81 196.29 182.22 176.69

Capital work-in-progress 2.13 1.32 3.13 9.79 6.76

Investments 19,695.77 13,956.25 10,736.33 8,757.66 7,392.19

Net current assets

Current assets, loans & advances 676.17 714.95 552.34 486.47 377.19

Less : current liabilities & provisions 1,248.88 1,198.97 1,069.67 1,102.02 823.31

Total net current assets -572.71 -484.01 -517.33 -615.55 -446.12

Miscellaneous expenses not written - - - - -

44


Total 19,516.83 13,676.37 10,418.42 8,334.12 7,129.52

Notes:

Book value of unquoted investments - - - - -

Market value of quoted investments - - - - -

Contingent liabilities 26,979.34 12,091.51 10,080.96 11,892.97 3,840.87

Number of equity sharesoutstanding (Lacs) 484.78 484.78 484.78 484.78 484.78

45

Table 3.2: Profit loss account


Income

Operating income 3,936.63 3,418.03 3,133.64 2,603.50 2,002.79

Expenses

Material consumed - - - - -

Manufacturing expenses - - - - -

Personnel expenses 523.61 366.36 278.77 225.77 220.07

Selling expenses 5.99 6.23 7.36 7.72 4.94

Administrative expenses 321.40 317.84 208.01 167.96 185.86

Expenses capitalized - - - - -

Cost of sales 851.01 690.43 494.15 401.45 410.87

Operating profit 916.15 790.05 651.63 578.25 460.44

Other recurring income 100.23 93.90 57.45 56.51 38.62

Adjusted PBDIT 1,016.38 883.95 709.08 634.76 499.06

Financial expenses 2,169.47 1,937.54 1,987.86 1,623.79 1,131.48

Depreciation 37.93 36.93 32.51 32.16 33.14

Other write offs - - - - -

46


Adjusted PBT -1,191.01 847.01 676.57 602.60 465.92

Tax charges 329.54 280.45 222.26 218.16 140.71

Adjusted PAT 615.20 512.38 409.84 360.00 274.49

Non recurring items - - - - -

Other non cash adjustments - - - - -

Reported net profit 615.20 512.38 409.84 360.00 274.49

Earnigs before appropriation 615.20 512.38 409.84 360.00 274.49

Equity dividend 126.04 106.65 81.97 75.14 55.75

Preference dividend - - - - -

Dividend tax 20.94 18.13 13.93 12.77 9.47

Retained earnings 468.22 387.60 313.94 272.09 209.26

Table 3.3: Cash flow


Profit before tax 934.39 - - - -

Net cashflow-operating activity -659.09 -1,109.18 965.35 901.33 1,480.11

Net cash used in investing activity -227.56 -41.65 -39.92 -40.72 -21.86

Netcash used in fin. activity -178.78 490.31 -87.91 -37.13 -131.89

Net inc/dec in cash and equivlnt -1,065.43 -660.52 837.52 823.48 1,326.35

Cash and equivalnt begin of year 4,614.24 5,274.76 4,437.24 3,613.76 2,287.41

Cash and equivalnt end of year 3,548.81 4,614.24 5,274.76 4,437.24 3,613.76

47

DATA ANALYSIS

CUSTOMERS RESPONCE

1. Are you aware that the J&K Bank is having ATM Centers?

Yes-----------------------------------------------75%

No-------------------------------------------------25%

yes, 75%

no, 25%

yes no

Fig.3.1

INTERPRETATION

1. 75% of the Customers are aware of the J&K Bank’s ATM centers.

2. 25% of the Customers are not aware of the J&K Bank’s ATM centers.

48

2. Credit Card owned

Yes-----------------------------------------------40%

No-------------------------------------------------60%

Fig.3.2

INTERPRETATION

1. 40% of the Customers are having J&K Bank’s Credit Cards.

2. 60% of the Customers are not having J&K Bank’s Credit Cards.

49

3. Are you intending to take loans for financing your Assets?

Yes-----------------------------------------------67%

No-------------------------------------------------33%

yes, 67%

no, 33%

yes no

Fig.3.3

INTERPRETATION

1. 67% of the Customers are intending to take loans for financing their Assets.

2. 33% of the Customers are not intending to take loans.

50

4. Do you have a Demat account?

Yes-----------------------------------------------46%

No-------------------------------------------------54%

yes, 46%no, 54%

yes no

Fig. 3.4:

INTERPRETATION

1. 46% of the Customers have Demat account.

2. 54% of the Customers don’t have Demat account.

51

5. A Convenient Branch to get to

Yes-----------------------------------------------75%

No-------------------------------------------------25%

yes, 75%

no, 25%

yes no

Fig. 3.5:

INTERPRETATION

1. 75% of the Customers said that the Branch is Convenient to get to.

2. 25% of the Customers said that the Branch is not convenient to get to.

52

6. Branch Hours are convenient

Excellent-----------------------------------------------25%

Good----------------------------------------------------47%

Satisfactory---------------------------------------------20%

Poor------------------------------------------------------8%

Excellent, 25%

Good, 47%

Satisfactory, 20%

Poor, 8%

Excellent Good Satisfactory Poor

Fig 3.6:

INTERPRETATION

1. 25% of the Customers said that the Branch Hours are Excellent.

2. 47% of the Customers said that the Branch Hours are Good.

3. 20% of the customers said that the Branch Hours are Satisfactory.

4. 8% of the customers said that the Branch Hours are Poor.

53

7. The Branch layout is spacious and uncluttered

Excellent-----------------------------------------------21%

Good----------------------------------------------------73%

Satisfactory---------------------------------------------13%

Poor------------------------------------------------------3%

Excellent, 21%

Good, 73%

Satisfactory, 4%

Poor, 3%


Fig. 3.7

INTERPRETATION

1. 21% of the Customers said that the Branch Layout is Excellent.

2. 73% of the Customers said that the Branch Layout is Good.

3. 4% of the Customers said that the Branch Layout is Satisfactory.

4. 3% of the Customers said that the Branch Layout is Poor.

54

8. I spend very little time waiting in line to get service from the tellers.

Excellent-----------------------------------------------9%

Good----------------------------------------------------81%

Satisfactory---------------------------------------------6%

Poor------------------------------------------------------4%

Excellent, 9%

Good, 81%

Satisfactory, 6%

Poor, 4%


Fig. 3.8

INTERPRETATION

1. 9% of the Customers said that the service is Excellent.

2. 81% of the Customers said that the service is Good.

3. 6% of the Customers said that the service is Satisfactory.

4. 4% of the Customers said that he service is Poor.

55

9. Counter staff is immediately available to provide counter service.

Yes-----------------------------------------------67%

No------------------------------------------------13%

yes, 67%

no, 33%

yes no

Fig. 3.9

INTERPRETATION

1. 67% of the Customers said that the Counter staff is immediately available to

provide counter service.

2. 33% of the Customers said that the Counter staff is not immediately available to

provide counter service.

56

10. Phone calls to the Branch are handled quickly and efficiently

Excellent-----------------------------------------------31%

Good----------------------------------------------------50%

Satisfactory---------------------------------------------10%

Poor------------------------------------------------------9%

Excellent, 31%

Good, 50%

Satisfactory, 10%

Poor, 9%


Fig. 3.10

INTERPRETATION

1. 31% of the Customers said that the phone calls attending service is Excellent.

2. 50% of the Customers said that the phone calls attending service is Good.

3. 10% of the Customers said that this service is Satisfactory.

4. 9% of the Customers said that the phone calls are not attended properly.

57

11. The staff is very courtous and helpful

Excellent-----------------------------------------------80%

Good----------------------------------------------------10%

Satisfactory--------------------------------------------02%

Poor-----------------------------------------------------08%

Excellent, 80%

Good, 10%

Satisfactory, 2%

Poor, 8%


Fig. 3.11:

INTERPRETATION

1. 80% of the Customers said that the Staff is Excellent.

2. 10% of the Customers said that the Staff is Good.

3. 2% of the Customers said that the Staff is Satisfactory.

4. 8% of the Customers said that the staff is not helpful at all.

58

12. The staff is well informed about the banks product and services

Excellent-----------------------------------------------25%

Good----------------------------------------------------47%

Satisfactory---------------------------------------------20%

Poor------------------------------------------------------8%

yes, 75%

no, 25%

yes no

Fig 3.12:

INTERPRETATION

1. 75% of the Customers said that the Staff well informed.

2. 25% of the Customers said that the staff is not well informed about the Products

& Services.

59

13. The Branch has a pleasant and friendly atmosphere

Excellent-----------------------------------------------80%

Good----------------------------------------------------15%

Satisfactory---------------------------------------------03%

Poor------------------------------------------------------02%

Fig 3.13

INTERPRETATION

1. 80% of the Customers said that Branch atmosphere is Excellent

2. 15% of the Customers said that the Branch atmosphere is Good.

3. 3% of the Customers said that the Branch atmosphere is Satisfactory.

4. 2% of the Customers said that the Branch atmosphere is Poor.

60

Excellent, 80%

Good, 15%

Satisfactory, 3%

Poor, 2%


14. My accounts are handled accurately

Excellent-----------------------------------------------64%

Good----------------------------------------------------27%

Satisfactory---------------------------------------------06%

Poor------------------------------------------------------03%

Excellent, 64%

Good, 27%

Satisfactory, 6%

Poor, 3%


Fig 3.14:

INTERPRETATION

1. 64% of the Customers said that Account handling is Excellent

2. 27% of the Customers said that the Account handling is Good.

3. 6% of the Customers said that the Account handling is Satisfactory.

4. 3% of the Customers said that the Account handling is Poor.

61

15. I am well informed concerning any changes in services.

Excellent-----------------------------------------------46%

Good----------------------------------------------------34%

Satisfactory---------------------------------------------19%

Poor------------------------------------------------------01%

Excellent, 46%

Good, 34%

Satisfactory, 19%

Poor, 1%


Fig. 3.15

INTERPRETATION

1. 46% of the Customers said that they are well informed about any changes in

services.

2. 34% of the Customers said that they almost get informed about any changes in

Services.

3. 19% of the Customers said that they sometimes get informed about the

changes.

62

4. 1% of the Customers said that they are not at all get informed about any

changes in services.

CHAPTER-4

LESSONS LEARNT

63

LESSONS LEARNT

The bank was incorporated with the authorized capital of Rs.2.00 Lakh shares of

Rs.25/- each amounting to Rs.50.00 Lakh. The first issue comprised 80,000 shares

amounting to Rs.20.00 Lakh .A total number of 62716 shares of the value of Rs.15,

67,900/ were authorized and Rs.7.66 Lakh paid up as on 30.06.1940 .The authorized

capital was subsequently reduced to 1.20 lakh shares amounting to Rs.30.00 Lacs in

1958 and latter enhanced to 40.00 Lacs in 1992 and 80.00 Lacs in 1993 amounting to

Rs.10.00 Corers and Rs.20.00 Corers respectively. The issue capital of 28.00 lakh

shares amounting to 7.00 Corers stands subscribed and paid up as on March

31,1997 Rs.28/- per share. Thus where as the paid up capital would be increased to

Rs. 48.50 Crores, simultaneously the bank be able to earn the share premium of

Rs.86.80 Corers.

The bank has paid special attention to the vital aspect since its inception .The first

Reserves were created by the bank when amount of Rs.10, 000 / were transferred to

the account as on 30.06.1941.The reserves were created not only to meet the statutory

requirements but also for bad and doubtful debts and for meeting other contingencies.

The free reserves which were of the order of less than one lakh in 1944 and Rs.7.00

lakh in 1966 stood at Rs.42.50 Lacs in 1975 and less than one Crore in 1979. In a

span of just over 16 years the reserves have grown ten thousand times and crossed

Rs.100 Crores mark in 1995, excluding those held for the risk weighted assets.

The Bank came out with unsecured non-convertible redeemable, subordinated tier-II

Bond issue of Rs.75 corers in December 2000. The issue received an overwhelming

response and the Bank mobilized Rs.87 crores against the size of Rs.75 crores at

11.75% p.a. with a tenure of 63 months.

64

The Capital & Reserves of the Bank continued to witness a remarkable growth during

the year 2004-05. It increased to Rs.1665.40 crore during the year from Rs.1593.74

crore of the previous year.

DEPOSITS

The public has reposed its confidence in the standing of the bank from its very

inception and the same has been growing ever since that date; despite the shocks it

received as a consequence of partition because of loss of two branches within eight

years. In the first year of its operation the bank succeeded mobilizing deposits to the

tune of Rs.14 Lacs after which there was no looking back .The deposits which stood

at just over one Crores in 1949 and less than 100 Crores in 1978, grew with amazing

pace within a span of 16 years .The growth of the deposits accelerated at an amazing

pace for the decade 1980-1990, from Rs.191.67 Crores to Rs.1046.35 Crores. Barring

few occasions, the growth rate has been more than the national average, doubling in

1991-1994 (in just four years) despite the slag economic trends in the state due to

turmoil and difficult working conditions .It will be in order to reveal that when all

nationalized banks closed down their offices in valley in 1990, the J & K bank alone

braved against all odds and discharged its banking services to the public at great risks.

Not only in deposits, the bank discharged its duties under those difficult situations in

all spheres and made inroads in multifarious levels in pattern of client base. The bank

performed commendably during the year by registering the growth rate of 26.40%

against the national average of 16.1%. The deposits of the bank stood at

Rs.3658.14 Crores as on March 31st, 1997 against the Rs.2895.18 Crores as on

31.03.1996. The deposit base of the Bank touched new high at 11,168 crores at the

end of financial year 2008-09. The average deposits per branch work out to Rs.30.15

65

crore against the previous year figure of Rs.26.17 crore. The average deposit per

employee stood at Rs. 172 lakh against Rs.150 lakh of the previous year.

During the financial year 2009-10, the rate of growth in deposits was commendable

when compared to 14.1% at national level. The aggregate Deposits of the Bank

recorded an appreciable accretion of 16% to Rs.21644.97 crore during the year from

the previous year figure of Rs.18661.38 crore.

CREDIT DISPENSATION

The J&K Bank Ltd. was established with a sole aim of improving the economic

conditions of the people of the state as then existing banks could not fulfill such needs

because of various limitations as stated earlier. On the very next day of opening a loan

on Rs.1.20 Lacs was granted to the borrower. This may bee a laughable amount today,

but it carried a slogan that time .The people of the state regard J & K bank as their

own bank owing to its local orientation and characteristics and bank in turn has been

fulfilling there aspirations by spear heading the credit dispensation not only under the

normal lending schemes but also through the central and state Govt. sponsored

schemes .The bank has been instrumental in the economic upliftment of the people of

the state which other wise would have been difficult in view of its

backwardness ,topographical conditions and above all conservative attitude of other

banks.

Bank has been playing its role devotedly towards the economic development not,

while as the one Crores mark was achieved after 25 years only. There after the credit

disbursals gained momentum .The amount of advances stood at 131 Crores in 1980

recorded 10 fold increase and stood at Rs.1208 Crores at 31.03.1995. During the last

two years the advances registered an emphatic growth and were recorded at Rs.4763

66

Crores as on 31.03.2011. J K bank is one of the few banks, which has been able to

show exemplary performance in adjusting to the rigorous prudential norms that came

into force during 1992-93.

The bank has not only enhanced the quantitative but also qualitative approval of the

credit portfolio. On some occasions the bank's credit deposit ratio and priority sector

lending has exceeded the desired or prescribed limits. Bank has not only fulfilled its

commitments towards the Govt. of J & K but also has come to its rescue in the hours

of financial crises.

The lending to the state Govt. has been a constant phenomenon for the decades now

and in fact upsets various ratios related to credit on some occasions. The bank has

witnessed a steady growth in the borrower client base, which is spread to more than

one Lacs accounts presently. The credit portfolio of the Bank recorded a healthy

growth of 24% during the financial year 2009-10. The total advances of the Bank

stood at Rs.11517.14 crore as at the end of March 2011 as against Rs.8010.95 crores

of the previous year. The outstanding to priority sector lending increased by Rs.544

crore to Rs.2510 crore at the end of March 2011 from Rs.1966 crore of the previous

year.

INVESTMENTS

Right from the beginning, the liquidity, safety and profitability of the funds has

remained and continues to be the focus of bank's policies. During the first few years,

the surplus funds were kept either in current or fixed deposit accounts with other

banks. It was in the year 1944 when an amount of ten Lacs was invested in Govt.

securities. There after the growth of investment portfolio has been phenomenal

one .The investment holdings of the bank have been far beyond the statutory

67

requirements .The total investments in Govt. and other approved securities, bonds

debentures was to the tune of Rs.792 Crores as on 31.03.1995. During the last few

years bank's investments portfolio grew at amazing pace as the Bank's investment

policy continued to focus on increasing returns through investments in safe and liquid

securities. During the year 2009-10, the investment portfolio has recorded a growth of

7.55% to Rs.9089.23 crore from Rs.8451.10 crore of the previous years.

PROFITABILITY

Except for the first year of business, when bank suffered a loss of Rs.0.07 Lacs as on

30.06.1941, the bank has a consistent track record of growth and profitability .In just

the second year of commencement of business, it recorded an impressive profit of

Rs.0.48 Lacs and wiped out the losses of previous year. With excellent fund

management, the profits of the bank jumped from 177 Lacs in 1990 to 1251 Lacs in

March in 1994 after providing for all the statutory and mandatory provisions.

The Bank posted a net profit of Rs.115.07 crore for the financial year 2009-10 as

against the previous year figure of Rs.406.33 crore.

Financials

The Bank recorded an outstanding achievement in the last fiscal (2009-10) in key

areas of its operations. During the year 2009-10, the Bank achieved an all time high

business turnover of Rs.33162.11 crore from Rs.27946.32 crore of the previous years

registering an increase of 18.66%. The Capital & Reserves of the Bank increased by

Rs.71.66 crore to Rs.1665.40 crore during the year from Rs.1593.74 crore of the

previous year. The Capital Adequacy Ratio stood at 15.15%, which is comfortably

much above the minimum stipulated by Reserve Bank of India. The Bank posted a net

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profit of Rs.115.07 crore in the last fiscal as against the previous year figure of

Rs.406.33 crore .The dip in the profits is in line with overall industry trend which

witnessed diminishing yields in the securities portfolio held by banks and

consequential booking of losses. The Bank could not remain insulated to the said

affects of inflation and hardening of interest rates, which besides impacting the yields

also, depreciated the investment portfolio. In order to insulate the securities portfolio

from future market risk and to reduce the duration of its investments, Bank transferred

securities of Rs.2602.03 crore from AFS to HTM category and also disposed off long

duration securities, thereby booking depreciation /loss on investment portfolio

aggregating Rs.222.47 crore.

Bank's aggregate deposits recorded an appreciable accretion of 16% to Rs.21644.97

crore at the end of financial year 2009-10 from the previous year figure of

Rs.18661.38 crore. The rate of growth is commendable when compared to 14.1% at

national level.

The credit portfolio of the Bank also recorded an appreciable growth during the year.

The total advances of the Bank increased to Rs.11517.14 crore against Rs.9284.94

crore of the corresponding periods of the previous year registering a growth of 24%.

The outstanding to priority sector increased by Rs.544 crore to Rs.2510 crore at the

end of March 2011 from Rs.1966 crore of the previous years. The investment

portfolio recorded a growth of 8% to Rs.9089.23 crore from Rs.8451.10 crore of the

previous years. The net NPAs stood at 1.41%, against 1.48% of the previous year,

which is one of the lowest in the industry.

During the year, the Foreign Exchange business recorded an impressive growth of

29%, moving to Rs.5964.67 crore against Rs.4637 crore of the previous years. The

69

contribution of this segment to the Bank's gross income has been to the tune of

Rs.38.22 crore against Rs.34.80 crore of the previous years. The export turnover of

the Bank increased from Rs.1928.86 crore to Rs.2211.51 crore registering an increase

of 15%.

Keeping in view overall performance of the Bank, the Bank, after the approval of

shareholders, paid 80% dividend (free of tax) for the year ended 31 st March 2011.

The productivity levels continued to show sustained growth with per branch and per

employee business increasing to Rs.6632.4 lakhs and Rs.482.50 lakhs respectively.

Technology Driven Operations:

Maintaining a progressive outlook, the J&K Bank is keeping pace with the changing

technology. The Bank continues to leverage information technology as a strategic tool

for its business operations. The IT strategy emphasizes enhanced level of customer

services through 24x7 availability, multi-channel banking, and cost efficiency through

optimal use of electronic channels, wider market reach and opportunities for cross-

selling.

The initiatives already under way have been given a further push to accelerate growth

with tech commitment. The Bank had issued over 1.25 lakh ‘JK Bank Global Access

Debit Cards' until March end 2011. Besides, the bank also launched its Credit Card,

which is available at all, branches of the bank across the country. Tele Banking

Facility is now available at 32 business locations of Jammu and Kashmir Zones.

Currently 97.4 % business of the Bank is computerized. The number of branches

/offices brought under computerization programme has increased to 423 at the end of

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March 2011 against 360 branches of the previous year. The Bank has an ambitious

plan of achieving total automation of operations by the year 2011.

Anywhere banking facility was extended to many new locations/branches, thereby

giving the customers the advantage of Anywhere Banking at 200 branches at the end

of 31 st March 2011. The number of ATMs of the Bank (both off-site and on-site)

already installed or under process of installation has increased to 170 during the year

under report. Moreover to further improve the customer service and have total

connectivity, the Bank has set-up a Central DATA Center and 78 branches/offices of

Delhi and Mumbai Zones have already been migrated to (Core Banking Solution)

CBS and roll over of rest of the branches of these Zones is in progress. The migration

of branches in Jammu Zone from Bancs 2000 to Finacle has also been taken up. The

Bank launched Internet Banking and SMS banking services, available at our CBS

branches. These delivery channels shall give easy access to our customers on viewing

their accounts and performing other non-financial transactions. The Financial

transactions would be available after, a nod from RBI. For convenience of our ATM

card holders and all sections of cardholders, multilingual (Hindi, Urdu & English)

screens shall be available soon on all ATMs of your Bank. Besides Fund Transfer

Facility from one account to another account shall also be available soon on Bank's

ATMs. The Bank launched its Credit Card in association with MasterCard, with three

variants Gold, Silver and Blue .The cardholders can use these cards at any ATM

carrying the Master card logo for withdrawing cash or POS terminal at merchant

establishments for shopping. The Bank has also enrolled as member of NFS (National

Financial Services) set by IDRBT by virtue of which our ATM switch has been

connected with NFS switch. The connectivity will offer facility to our debit

cardholders to access other Bank's ATMs, which are members of NFS in India at

71

lower transaction costs. During the year under report, you will be glad to know that

the Bank introduced Mobile ATM Service that is unique of its kind in northern part of

the country. The Mobile ATM offers service at the footsteps of the customer. The

Bank has customized software solution in place to handle Asset Liability

Management (ALM) system of the Bank. At present almost all the ALM sensitive

data is captured in automated form ensuring the compilation of ALM picture at short

notice. Besides CIBIL reporting system and MIS architecture has been improved to

match set standards. The Bank has launched its INTRANET SITE for surfing by the

staff .The site shall keep them updated about policies and directions of the

organization at their workplace besides helping them in resolving their customer

grievances /complaints instantly.

Innovative Products:

To maximize value to its customers, the innovation in products and improving the

quality and speed of services is the hallmark of Bank's business strategy. In keeping

with this objective, the bank has launched several unique and innovative deposit

products, which include “Mehendi Deposit Scheme”, “Recurring Plus Deposit

Account”, “Flexi Deposit Scheme" etc. The scheme has flexibility of depositing

variable monthly installments as per the convenience of the depositor. As a measure

to enhance speed and efficiency of service “Single Point Commit system” was

introduced at its select branches, with both front and back offices manned by officers

providing end-to-end service to the customer at the same counter. At 126 branches the

said system has been extended and are in the process to extend it to equal number of

more branches.

72

The Bank is fast emerging as the most preferred DP in the chosen market providing

quality Depository Services of National Securities Depository Services Limited

(NSDL) and Central Depository Services Limited (CDSL) to more than 20000

customers with custody of securities worth Rs5450 crores.

Bank is extending broking services at its DP centers in association with M/S IL&FS

Investsmart Limited. The Bank is having a vision to transform its DP centers into

Capital Market Bank and share trading services, which will provide wide range of

financial products to its existing and prospective customers.

Diversification of Business

The Bank diversified its business activities into insurance, both life and non-life. The

Bank not only became the strategic partner of MetLife Insurance India (P) Limited,

but also has been acting as corporate agent of the said company for distribution of

their life insurance products through network of its branches. The Bank also entered

into a tie-up with Baja Allianz General Insurance Company for distribution of their

non-life insurance products. In view of Bank's deep branch network and loyal

customer base particularly in Jammu and Kashmir, the Bank has been able to

distribute insurance products in deep rural and far flung areas and has made

penetration in the new areas thereby adding to its non interest and fee based income.

Recognition and Awards

The Bank recently won the prestigious Asian Banking Award – 2005 for its

‘Development Project Financing Programme', contributing significantly to the

development of tourism industry of the J&K State. The award was presented by the

73

Under Secretary Finance, Philippines, at a glittering Gala Dinner award function held

at Manila, Philippines on June 17, 2011.

The annual Asian banking awards recognize and honor Asian banks for outstanding,

innovative and world-class products and programmes implemented during the

previous year. It is the most respected and premier banking awards programme in

Asia Pacific region. It is worth mentioning that the Bank has won the Asian Banking

Award consecutively for the second year. Last year, the Bank won the award for

Customer Convenience Programmes and was also given runners up certificate for its

project ‘Motivating Employees for Better Performance' under ‘operational efficiency

programme' category.

The Bank was ranked fifth among the top ten Asian banks and 762 nd among top

1000 World banks. A renowned business journal "Business Today" ranked JK Bank

among 25 top investor friendly companies in India, the only bank in the whole Indian

Banking industry, which has been ranked in the magazine among first 10 Investor

Friendly Companies. The Bank for the second consecutive year was ranked Best

Private Sector Bank in Financial Express/ Ernest and Young combined Survey for the

year 2002-03 released recently. Bank was awarded ‘Shiromani Award' for outstanding

achievements in the field of banking and commitment to national progress and human

welfare during the year under report.

The Bank has figured among 24 Indian companies in Forbes Global - 100 best ‘under

a billion Asia's Rising Companies', listed by Forbes magazine in its latest issue dated

November 1. The publication has commended J&K Bank for representing ‘economic

dynamism' in the region, sustained growth in all spheres and an excellent track record

of rewarding its shareholders.

74

Corporate Social Responsibility:

The Bank has also achieved the distinction of winning the Runner up trophy at

prestigious Asian Corporate Social Responsibility Forum recently. Corporate Social

Responsibility (CSR) is truly embedded in the Bank's day-to-day business, policy and

strategy and addresses all stakeholders. CSR is not just an ‘add-on' or a one time only

subject, but is integrated into the organization's management practices. The Board of

Directors and Management of the Bank are fully aware of Bank's Corporate

Responsibility as a corporate citizen and are actively involved and committed towards

their corporate obligations towards all the stakeholders. The Bank follows the concept

that excellence in CSR is exceeding the minimum regulatory framework in which the

organization operates and to strive to understand and respond to the expectations of

their stakeholders in society. The CSR policy of our Bank involves meeting the needs

of all stakeholders and not just shareholders against some form of ethical basis. The

Bank is committed to the best and transparent corporate governance practices. It

believes that proper corporate governance practices lead to effective management and

control of business, which in turn provides best value to all its stakeholders.

The Bank's CSR is rooted in its Corporate Governance philosophy, which in turn is

woven around Bank's commitment to ethical practices in the conduct of its business,

while striving in the constant quest to grow with profits and enhance shareholders

value and align interests of the shareholders, stakeholders and society through

adoption of best international practices and standards. Managing CSR is not viewed

as an extra cost or burden but is viewed not only as making good business sense but

also contributing to the long-term prosperity of our Bank and ultimately its survival.

Being a good neighbour and showing that you care on the one hand and being a

successful business on the other, are flip sides of the same coin.

75

In early 1990's when most of the banks closed their business in J&K State particularly

in Kashmir valley owing to onset of militancy, it was only J&K Bank that sustained

its operations with perceptible growth in its business besides expanding its network of

branches even into the remotest areas of the State. The Bank has a heritage of braving

all odds and despite hostile operating environments; the Bank has been on a growth

path and has achieved impressive business results during last few years. Bank

manages social issues in the same manner as it manages any other strategic business

issue. CSR is not just recognized as promulgating the Bank's own values and

principles but also the values and principles of all those who have a stake in, or are

affected by, its operation. The Bank, in addition to playing its role in economic

development of the state and country, also contributes significantly towards social

cause. The bank has carved a niche for itself among the poor and the needy by

donating generously for various philanthropic activities aimed at ameliorating their

sufferings. Be it fire victims, disabled or patients with serious ailments who lack

reliable means of survival, the bank continued its support and help to them. The bank

adopts orphans by providing financial support to orphanage homes and donating

computer systems to enable the socially/economically deprived children to acquire IT

knowledge. The bank as a responsible corporate citizen provides donations to patients

for the treatment of dreaded diseases needing Heart Surgery, Kidney Transplantation,

etc and helps the needy & poor in acquiring hearing aids, artificial limbs, pace makers

etc. The Bank has made donation to the tune of Rs.60 lakhs in the recent past. A three

days rehabilitation camp for physically disabled persons was organized by the Bank in

association with Bhagwan Mahaveer Viklang Sahayata Samiti, Jaipur (India) where

210 persons were provided with artificial limbs and appropriate treatment to many

more.

76

The Bank donated a van to Society for Rural and Urban Development (SRUD),

Srinagar, for the use of physically and mentally challenged children. An Ultrasound

machine was donated by the Bank to the Cancer Society of Kashmir, Srinagar for the

treatment of economically deprived patients. The Bank donated Gastro Fibrescope

Endoscopic Machine, costing about Rs.5.67 lakhs to the Cancer Society of Kashmir

for the benefit of poor patients who suffer from serious digestive ailments.

To provide timely relief to the victims of the devastating earthquake in Gujarat, the

Bank donated a sum of Rs.10.00 lakhs to the Jammu & Kashmir Chief Minister's

Relief Fund. The officers of the Bank also donated their one-day's salary amounting

to Rs.11 lakhs to the Relief Fund. Recently the Bank donated Rs.one lakh to Maharaja

Ranjit Singh Trust, New Delhi, for the upliftment of downtrodden sections of the

society. The Bank gave donation to the Foundation for inter-community Relations

Delhi for upliftment of society. A financial assistance to the tune of Rs.1.00 lakh for

the welfare of Gujjars was given to Gurjar Desh Charitable Trust, Jammu. The Bank

donated sewing machines to destitute widows through Barites Dalit Sahitya Academy,

Jammu. Showing its eagerness for the upliftment of women, the Bank donated

embroidary machines to Women's Welfare Society, Kachhama, and Kupwara. The

Bank also gave donation to NGO Friends Association for Ladies and Orphans

Welfare (FALOW), Srinagar.

Devastating fire in village Batpora (Wathora), Kashmir rendered hundreds of people

homeless and two persons lost their lives. The Bank organized a relief camp and

distributed 50 kgs of rice and Rs.5, 000 to each of the affected family. Similarly,

another relief camp was organized for the fire victims at Seer, Anantnag (South

Kashmir), where blankets, eatables and domestic utensils were distributed among the

77

sufferers. A camp was also organised by the Bank at Lasipora, Pahalgam, where cash

was distributed among the fire victims.

With a view to help Kargil war sufferers of Drass area in Ladakh region in their

rehabilitation, the Bank organized a relief camp. Blankets and eatables were

distributed among the people covering about 1500 families settled in 17 villages in

and around Drass, who had migrated to Sankoo, Saliskote and other far flung areas of

Kargil. Stationery items were distributed among the school children.

CONCLUSION

1. J & K bank being the largest bank in the private sector has pioneered the concept

of modern banking as opposed to the traditional and conventional approach to

banking of the nationalized banks.

2. The product and the services of the bank have captured the customer interest and

the bank has grown

Phenomenally within a short period of time.

3. The study helps in providing useful information to the J&K Bank about the

services, product features and the satisfaction level of the customers.

4. The study helps in understanding the competitive environment in which the new

operation private Bank are operating today design to meet Banking needs and

customer satisfaction.

78

RECOMMENDATIONS

The bank should open its branches in rural areas to trap more customers for the

bank.

Brochure if the forthcoming schemes should send to the customers along with

there monthly and quarterly statements.

Banks should try to find out a way to provide door services to its customers, as

this is very convenient for the businessman and shopkeepers of the area.

Competitive strategy should be adopted to capture the market.

Customers usually prefer loan, therefore loan provisions should be given more

emphasis.

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Body of the report (As per Appendix A)

CHAPTER -1: PROFILE OF THE COMPANY

CHAPTER – 2: SWOT ANALYSIS OF THE COMPANY

CHAPTER – 3: ANALYSIS OF FINANCIAL REPORTS OF THE

COMPANY

CHAPTER-4: LESSONS LEARNT

References & Bibliography

Appendices

80

REFERENCES/BIBLIOGRAPHY

BOOKS

The History of Banks- by Richard Hildreath

The Multilateral Development Banks - by Diana Tussie

WWW.JKBANK.NET

WWW.NSEINDIA.COM

PNBINDIA.COM

WWW.BANKSPOWER.COM

81

http://WWW.BANKSPOWER.COM/

http://WWW.JKBANK.NET/

http://books.google.com/books?id=pa8Z8ss60KEC&dq=BOOKS+ON+BANKS&ots=hdUR5PWZXf&sig=j03FK4Ud5BGRaqUYxXx-IpwDg78&prev=http://www.google.com/search%3Fsourceid%3Dnavclient%26ie%3DUTF-8%26rlz%3D1T4ADBF_enIN236IN240%26q%3DBOOKS%2BON%2BBANKS&sa=X&oi=p%20

APPENDICES

QUESTIONNAIRE

Please help us to please you, but first …thank you for being our customer.

We are extremely anxious to make our operation the finest possible, but we need your

help, principally because you see us objectively. Will you be kind enough to check off

some answers on the “self-improvement” questionnaire?

NAME: _______________________________

1. How would you rate the overall Quality of service you receive from THE J&K

Bank?

EXCELLENT

GOOD

SATISFACTORY

POOR

2. A Convenient Branch to get to

EXCELLENT

GOOD

SATISFACTORY

POOR

3. Branch Hours are convenient

EXCELLENT

GOOD

SATISFACTORY

POOR

82

4. The Branch layout is spacious and uncluttered.

EXCELLENT

GOOD

SATISFACTORY

POOR

5. I spend very little time waiting in line to get service from the tellers.

EXCELLENT

GOOD

SATISFACTORY

POOR

6. Counter staff is immediately available to provide counter service.

EXCELLENT

GOOD

SATISFACTORY

POOR

7. Phone calls to the Branch are handled quickly and efficiently.

EXCELLENT

GOOD

SATISFACTORY

POOR

8. The staff is very courteous and helpful.

EXCELLENT

GOOD

SATISFACTORY

POOR

83

9. The staff is well informed about the Bank’s products and services.

EXCELLENT

GOOD

SATISFACTORY

POOR

10. The Branch has a pleasant and friendly atmosphere.

EXCELLENT

GOOD

SATISFACTORY

POOR

11. My accounts are handled

EXCELLENT

GOOD

SATISFACTORY

POOR

12. I am well informed concerning any changes in services

EXCELLENT

GOOD

SATISFACTORY

POOR

Signature: _________________

Name: _________________

84

j&k Customer Satisfaction- Shabeer

Documents

ways of customer satisfaction

guide date

industrya company

valuable guidance

service company

present age

present shape

student date