INTRODUCTION Bank An organization, usually a corporation, chartered by a state or federal government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor's checks; and issues drafts and cashier's checks Banking services in India Banking dates back to 1786, the first bank established in India, then the nationalization of banks in 1969 and recently the liberalization of the same since 1991. Different types of accounts and loans, facilitating with plastic money and money transfer across the globe. 1
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INTRODUCTION
Bank
An organization, usually a corporation, chartered by a state or federal
government, which does most or all of the following: receives demand
deposits and time deposits, honors instruments drawn on them, and pays
interest on them; discounts notes, makes loans, and invests in securities;
collects checks, drafts, and notes; certifies depositor's checks; and issues
drafts and cashier's checks
Banking services in India
Banking dates back to 1786, the first bank established in India, then the nationalization of banks in 1969 and recently the liberalization of the same since 1991.
Different types of accounts and loans, facilitating with plastic money and
money transfer across the globe.
Some co-operative banks are scheduled banks, while others are non-
scheduled banks. For instance, SCBs and some UCBs are scheduled banks
but other co-operative bank are non-scheduled banks. At present, 28 SCBs
and 11 UCBs with Demand and Time Liabilities over Rs 50 crore each
included in the Second Schedule of the Reserve Bank of India Act.
Reviewing of literature is the obvious method for obtaining a basic
understanding of a particular subject, but may also contribute in solving
more specific problems. There are various areas where this method could
be applicable, ranging from general theory to case study, empirical research
and statistics. During this project several dimensions of literature study
have been applied. The literature study is presented in a separate section,
which also contains reflections of the applicability and relevance of the
specific literature.
NIRMALA D. AND K.V.RAO (October-December2006), Performance
evaluation of urban co-operative banks. The Indian journal of commerce
vol.59, no. 4
This paper examined the prudential measures aimed at better risk
management and avoidance of concentration of credit risk in urban co-
operative banks (UCBs). Based on the data of RBI, an attempt has been
made to examine the operational performance of UCBs for the period,
1999-00 to 2003-04. As per RBI guidelines the credit exposure norms
include fixed limit to different kinds of borrowers an sectors as well as
funded credit limits. The non-application of capital adequacy norms
undermines the stability of the whole banking system, as operational risk of
UCBs was similar to those commercial banks. Capital funds were segregated
into two broad groups, viz., Tier-1 and T ier-2. The result obtained showed
that the significance of UCBs was in the realm of the person has turned out
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to be a common knowledge after many banks started. Though RBI has been
initiating action to set the things right, taking into account the
recommendations of several committees. Finally, there was a situation for
strengthening the supervisory mechanism of RBI.
RAJU M. APPPALA ( October- December 2006), Competitive analysis of
public sector bank vs. private and foreign banks. The Indian journal of
commerce vo.59.no. 4.
This paper analyzed the competitive analysis of public, private and foreign
banks. The time period covered for analysis performance of banks from
1990-91 to 2001-02.te financial sector played a major role in the
mobilization and allocation of financial saving from the net saver to net
borrowers. The effective role of intermediation by banks in the banking
system was strong players in the role of intermediation. With the opening
of economy, strong competitive environment has emerged in the market by
the entry of private and foreign banks. The numbers of players in market
increased with easing entry barriers. In the competitive set up, margins on
traditional banking business of public sectors banks declined. Increased
competitiveness leads to inevitable changes in the market. The public
sectors banks need to be market oriented by devising new strategies to be
competitive in the market. In Result the public sectors banks have to give
much emphasis on efficiency factor both operating efficiency and financial
efficiency by introducing technology to promote sophisticated services to
consumers on par with private and foreign banks and by becoming more
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customers centric. This would keep the public sector banks more
competitive
GOYAL PUJA AND KARAM PAL (July-Sept.2008), productivity- based
comparative analysis of public private and foreign banks. The Indian
journal of commerce vol.61, No.3
This paper analyzed the cross relationship among various components of
productivity like earning per employee, business per employee and profit
per employee for public , private and foreign sector banks within India
Banking Industry has used data for five years i.e. the period started from
2001-02 to 2005-06. Various statistical tools like averages, ACGR, regression
and parametric tests have been used to establish evaluate and quantify the
cross-sectional relationship among the variables. Ownership characteristics
of banks were also incorporated into the analyzed to examine productivity
across ownership groups. Result showed that foreign sector banks were
outshining with their performance in all the selected parameters during the
period of study. In terms of ACGR the absolute number too, these banks
have been in top in all the categories. But average ACGR, taking all the
banks of one sector together, is highest for public sector banks in case of
business per employee. It showed that the public sector banks were
growing with consistent pace and intra group variations were also less than
other sectors. Result also showed that private and foreign sector banks
showed significant relation between parameters.
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KAUR RAJINDER AND RITU GOYAL (july-september2008), Performance of
new private sector banks in India. The Indian journal of commerce vol. 61,
No.3
A decade and half has elapsed since the establishment of new private
sector banks in India. With the concept of retail banking and universal
banking gaining ground, most of the Indian banks especially the new
private sectors banks followed aggressive marketing practices to garner a
bigger share of the market. The competition amongst the banks was getting
tough. These banks were listed on the stock exchanges and some of them
have become almost a household name.
The study covered seven new private sector banks operating in India. The
time period covered from 2001-07 for evaluating the performance ranges.
The study analyzed the performances of the banks by using various
Balances sheet and Profit and Loss ratios. In Result there was significant
difference amongst the mean ratios of the banks in out of 16 selected
parameters.
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PAL VED AND PARVEEN CHAUHAN (October-December 2009). Relative
Efficiency of Indian commercial banks. The Indian journal of commerce
vol.62 No. 4
This paper investigated the nature and extent of relative technical
efficiency in Indian banks for the period from 1990 to 2008. Technical
efficiency measures are computed by using the data envelopment analysis.
To measure the efficiency used the data from the input and outputs of
commercial banks were specified in light of intermediation approach, value
addition approach and income approach. The result indicated that majority
of Indian commercial banks were good performer in terms of income
approach. New private banks were observed for their leading position in
the Indian banking system. In post financial liberalization period (1999-08)
the efficiency of banks, based on their intermediation role, has reduced
relative to the previous period.
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RESEARCH METHODOLOGY
Marketing Research is the systematic design, collection, and analysis of
data and reporting of information and findings relevant to a specific
marketing situation facing the company. Every project requires the genuine
research.
Success of any project and getting genuine results from that depends upon
the research methods used by the researcher. Research in common
parlance refers to a search for knowledge. Research is a systematized effort
to gain knowledge and the methods adopted in order to conduct the study
so that we can have proper findings and analysis, which may assist in the
accomplishment of goals, and objectives of the project, are known as
Methodology. Methodology that was felt best for this project about
“Performance Evaluation of PNB and HDFC Bank”: A Comparative is as
follows:
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Objective of the study
1.) To study the services of HDFC and PNB Banks.
2.) To analysis the customers perception towards the services of HDFC and
PNB Banks.
3.) To evaluate the performance of the HDFC and PNB Banks from last three
years.
4.) To give suggestion for improvements of the services
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Research Methodology is a systematic way to solve the research problem. It may be understood as a science of studying how research is done scientifically.
RESEARCH DESIGN: Our Research is a fact-finding research. So for the fact-finding we use Descriptive Research.
Descriptive research includes survey and fact-finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs, as it exists at present
SOURCES OF DATA COLLECTION
The core finding of the study is based on the information collected through both primary data & secondary data.
Method of data collection
The primary information was collected from the customers with the help of a structured questionnaire and journals were used as a secondary source of information.
SAMPLING DESIGN
Sampling Technique: The selection of the respondents is done on the basis of convenience sampling as the universe under the coverage area of the study is large.
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Sample size: The sample size for the research is 100
Sample Area:
BATHINDA
DATA ANALYSIS & INTERPRETATION:
For the purpose of analyzing, raw data is summarized into charts and the results have been carried out. The questions, which have alternative choices, were analyzed by taking percentages. Proper analysis of the data has been made to get proper results
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Financial Performance Evaluation
1. Fixed Deposits
Interpretation:
According to PNB has more fixed deposits in comparison to HDFC bank from 2009,2010 and 2011 respectively 60.18 ,61.08 & 66.14 and HDFC bank has 39.81% in 2009, 38.91% in 2010 and 33.85% fixed deposits in 2011.
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2. Saving Bank Deposits
Interpretation:
As regards the saving deposits, the PNB hold 64.27 percent in the 2009 which is just 35.78 percent by HDFC bank and in 2010 PNB hold 61.03 % & HDFC hold 38.96% there has been reduction in saving deposits base due to customers shift towards other banks. Saving deposits in 2011 by PNB is 59.57 percent and 40.42 percent by HDFC bank.
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3. Current Deposits
Interpretation:
With respect to current deposits the share of PNB account to near about 65 percent as against 35 percent by HDFC bank. 61.78%,64.75% & 62.51% current deposits hold by PNB in respectively years 2009, 2010 and 2011. But the HDFC bank hold 38.21% in 2009, 64.75% in 2010 and 37.49% in 2011.
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4. Bill Purchased and Discounted
Interpretation:
The PNB hold a share of 47.45% in bills purchased and discounted and HDFC bank hold the 52.46% in the year of 2009. In year of 2010 and 2011 which showed the decline the percentage of PNB that is 41.20 and 41.67 but on the other hand side HDFC bank increase the share of bill purchased and discounted that is 58.79% and 58.32% in the year of 2010 and 2011.
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5. Term Loans
Interpretation:
In the loan portfolio, the PNB has more share of term loan but at decreasing rate. In the 2009 term loan of PNB is 52.86% and HDFC bank has 47.13% of term loan & in 2010 PNB hold 51.38 % and HDFC hold 48.86 But in the 2011 PNB has 50.57% of term loan and HDFC bank increasing the percentage at 49.42 of term loan.
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6. Cash Credits and Over Drafts
Interpretation:
With respect the cash credit and over draft the PNB still command more than 75% market share from 2009 to 2011 and HDFC bank has near about 25% of cash credit and over drafts from 2009 to 2011.PND hold 76.39 , 77.41 & 77.53 respectively in 2009,2010 &2011 and HDFC hold 23.86 , 22.58 and 22.46 in respectively 2009,2010 and 2011.
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7. Deposits Per Employee
Interpretation:
With regards to deposits per employee, in 2009 deposits per employee of PNB is 57.1% and in HDFC bank 42.89%, the deposits per employee increase in the both banks that is 57.55% in PNB and 42.44% in HDFC bank in year of 2010. In 2011 PNB has still higher percentage in comparison to HDFC bank that is 59.25% and 40.75% respectively.
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8. Advances Per Employee
Interpretation:
With respect to advances per employee, the HDFC bank has more percentage of HDFC bank in comparison to PNB. PNB hold the near about 43% share of advances per employee from 2009 to 2011. HDFC bank hold the advances per employee in 2009 is 58.57% in 2010 is 57.44% and in the year of 2011it is 56.10%. and PNB hold 41.42, 42.55 and 43.9% in respectively 2009 , 2010 and 2011
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9. Net Profit
Interpretation:
With regards to net profits of banks in 2009 PNB earned the 57.92% net profit and HDFC bank earned the 42.07% net profit. There is gradual increase in net profits of the both banks in 2010 that is 56.98% net profit earned by PNB and HDFC bank earned 43.01%. In the 2011 PNB earned the 53.48% and HDFC bank earned 46.51%.
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ON THE BASIS OF CUSTOMER SATISFCATION
1. In which Bank do you have account?
INTERPRETATION:
Out of 100 respondents , 41% respondents have account in Punjab National Bank, 30% respondents have account in HDFC Bank and the remaining 29% respondents have account in others banks.
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2. Why have you opened account with this bank?
INTERPRETATION:
This is found that 45% respondents have opened account due to the better services of the bank, 23% respondent have opened the account because of the popularity of the bank,13% respondents are influenced by advertisement and 19% respondents have opened the account on the advice of friends.
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3. Which type of account do you have in this bank?
INTERPRETATION:
Out of 100 respondents, 30% respondents having saving account, 32% respondents having current account, 20% respondents having fixed deposits account, only 2% respondents having NRI account and 7% respondents having any other account. Majority of respondents having the both saving and current account.
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4. From how many years you are using the services of this bank?
INTERPRETATION:
Majority of respondents using banking services from more than 5 years that is 56%, 26% respondents using banking services from 3-4 years and 20% respondent are the new customers of the bank who are using banking services from 1-2 years.
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5. Are you satisfied with the time taken by the banks?
INTERPRETATION:
63% respondents are satisfied with the time taken by the banks but the 37% respondents are not satisfied with the time taken by the banks.
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6. Have you ever availed the services of the bank?
INTERPRETATION:
Majority of respondents have availed the services of banks that is 97% but 3% respondents have not availed the services of banks.
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If yes, then specify………………
INTERPRETATION:
Most of respondents used the ATM service that is 63%, net banking service is used by 12% respondents, 9% respondents used the debit and credit services of the bank,7% respondents used mobile banking services , 5% respondent used the locker services of the bank and remaining 4% respondents used the other services of the bank.
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7. Does your bank have any customer complaint redresser mechanism?
INTERPRETATION:
Out of 100 respondents, 74% respondents said yes in his bank have customer complaint redresser mechanism but the 26% respondents said no in his bank have no customer complaint redresser mechanism.
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8. In your opinion what are the main benefits of direct banking services?
INTERPRETATION:
Out of 100 respondents, 31% respondents said that direct banking provide the quick services to customers, 25% respondents said that no need to carry cash, 24% respondents said that direct banking is less risky and 20% respondents said that direct banking is easy to operate.
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9. Are you satisfied with the performance of bank with regards to:
INTERPRETATION:
35% respondents said that bank provide the average services to the customers, 30% respondents said that bank provide the good services to customers, 20% respondents said that bank provide the very good services ,10% respondents said that bank not provide the appropriate services and 5% respondents are not satisfied with the services of the bank.
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Are you satisfied with the performance of bank with regards to:
INTERPRETATION:
30% respondents are satisfied with the performance of bank with regards to good quality of product,23% respondents said that bank provide the moderate quality product,20% respondents said that bank provide the poor quality, 19% respondents are satisfied bank provide the very good product quality but the 8% respondents are not satisfied with the performance of bank with regards to quality.
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Are you satisfied with the performance of bank with regards to;
INTERPRETATION:
Out of 100 respondents, 34% respondents said that bank solve the customers complaint service is average,25% respondents said that problem solving service of bank is good, 21% respondents said that customer complaint service of the bank is poor, 11% respondents are satisfied with
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the customer complaint service but the 9% respondent said that bank not properly handle the customers complaints.
Are you satisfied with the performance of bank with regards to:
INTERPRETATION:
The behavior of staff towards customers is average said by 36% respondents,31% respondents said that the behavior of staff is good, 15% respondents are not satisfied with the behavior of staff, but 13 % respondents said that behavior of staff is very good , 5% respondents are strongly unsatisfied with staff they said that the behavior of staff is very poor.
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FINIDINGS
Financial performance evaluation
1. PNB has more number of saving and current deposits than HDFC bank on the other hand HDFC has more number of fixed deposits.
2. In term loan and cash credits and over drafts PNB hold the higher share in comparison to HDFC Bank. HDFC bank increase the percentage in bill discounted and purchased.
3. The percentage of Deposits of per employee in PNB is higher than HDFC Bank. On the other side HDFC bank hold the higher percentage in Advances per employee.
4. The net profits of PNB is more than HDFC bank.
On the basis of customer satisfaction
1. Most of the people have account in PNB.2. Due to the better service of bank customer have opened the
account in bank.
3. Majority of the respondents are using banking service more than 5 years.
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4. The greater number of respondents using the ATM service of the bank.
5. Most of respondents said that direct banking is beneficial because of quick service.
6. The higher number of respondents said that bank’s performance with regards to services, quality, customer complaint and staff is average satisfied to custom
Conclusion
In nut shell we can say that banking services play the vital role in the
economy. In Indian banking services Punjab national bank and HDFC banks
are leading and growing banks. Punjab National Bank earned the more
profits and HDFC bank has the no. of fixed deposits. Public bank mostly
prefer by the people due to security of their saving and people prefer HDFC
bank because of service quality of the bank. While the entry of private
sectors banks in Indian economy public sector banks provide the better
services to customers but there is need to Proper Corporation of the staff
members of public bank towards customers. Private sector should create
loyalty of customer towards their saving.
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Suggestions
1.Bank staff should be customer friendly and highly motivated to serve the normal customer.
2. As far as possible, banks should reduce its documentation process while providing loans.
3. Computerization should be done in banks at all levels and the operators should be properly trained.
4. Token system should be induced so as to minimize the waiting lines in the banks.
5. Proper ambience in the banks can develop a healthy working culture.
6. 24 hours banking should be induced so as to facilitate the customers who
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may not have a free time in the daytime. It will help in facing the competition more effectively.
7. More ATM coverage should be provided for the convenience of the customers
BIBLIOGRAPHY
JOURNALS AND PROJECT REPORTS:-
RAJU M. APPPALA ( October- December 2006), Competitive analysis of
public sector bank vs. private and foreign banks. The Indian journal of
commerce vo.59.no. 4.
GOYAL PUJA AND KARAM PAL (July-Sept.2008), productivity- based
comparative analysis of public private and foreign banks. The Indian
journal of commerce vol.61, No.3
PAL VED AND PARVEEN CHAUHAN (October-December 2009). Relative
Efficiency of Indian commercial banks. The Indian journal of commerce
vol.62 No. 4
KAUR RAJINDER AND RITU GOYAL (july-september2008), Performance of
new private sector banks in India. The Indian journal of commerce vol. 61,