Summer Project Report on “Customer Satisfaction and performance of J&K Bank Ltd. In Uri (Baramulla).” Project submitted to Lloyd Institute of Management and Technology Greater Noida, in partial fulfillment for the award of Masters of Business Administration of Uttar Pradesh Technical University Lucknow Uttar Pradesh Project Guide Submitted by Mr.Rajul Gupta Amir Bashir Qureshi Professor (LIMT) 1317270008 LLOYD INSTITUTE OF MANAGEMENT AND TECHNOLOGY Knowledge Park II, Plot no - 11, Greater Noida-U.P
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SUMMER PROJECT ON CUSTOMER SATISFACTION AND PERFORMANCE OF JAMMU AND KASHMIR BANK LTD IN URI SECTOR
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Summer Project Report on
“Customer Satisfaction and performance of J&K Bank Ltd. In
Uri (Baramulla).”
Project submitted to Lloyd Institute of Management and Technology Greater Noida, in
partial fulfillment for the award of Masters of Business Administration of Uttar
Pradesh Technical University Lucknow Uttar Pradesh
Project Guide Submitted by
Mr.Rajul Gupta Amir Bashir Qureshi
Professor (LIMT) 1317270008
LLOYD INSTITUTE OF MANAGEMENT AND TECHNOLOGY
Knowledge Park II, Plot no - 11, Greater Noida-U.P
ACKNOWLEDGEMENT
First of all I would like to express our gratitude to Almighty Allah who bestowed his blessings on
me and gave me the courage and right type of environment for completion of my project. I owe a deep
a deep sense of indebtedness to my Parents who had always been a perennial source of inspiration for
me.
I am very thankful to my corporate project guide Mr. Manzoor Ahmad (Branch Head), for
providing proper direction in completing my project for sparing their valuable time and rendering all
possible guidance whenever approached.
I express my gratitude to my Director Dr.Kanak Lata Mam and other Faculty members at Lloyd
Institute of Management and Technology, Greater Noida who provided me with this opportunity
to have my project work with J&K Bank Ltd.
Amir Bashir Qureshi
Place : Srinagar Lloyd Institute of Management and Technology
Greater Noida
DECLARATION BY THE STUDENT
I Hereby declare the project Titled “Customer Satisfaction and performance of J&K
Bank Ltd. In Uri (Baramulla)” b ased on the o r igina l work ca rr ied out
by me under the supervision of Project Guide Mr. Manzoor
Ahmad(Branch Head) &Co-Guide Mr.Rajul Gupta Prof.(LIMT) is an
original and bonafide work carried out in partial fulfillment of the requirement of the
award of the degree of Master of Business Administration from Uttar Pradesh
Technical University. This is my original work and not submitted for any other
diploma, fellowship, award or prizes. This is my sole effort.
Amir Bashir Qureshi
Place: Srinagar Lloyd Institute of Management and Technology
Greater Noida
CONTENTS OF THE PROJECT
Topic Page No.
Objectives of study
Executive Summary
Introduction
Indian Banking System
Industry Profile
History of Indian Banking
Company Profile
Awards
Chairman’s Statement
Customer Satisfaction and its different Scenarios Preface
Financial Inclusion in J&K Bank
Literature Review
Research Methodology
Data Analysis
Findings of Research
Suggestions & Recommendations
Questionnaire
Bibliography
OBJECTIVESS OF STUDY
To collect and evaluate ideas/views and expectations of the internal customers for the
improvement in performance.
To find out the most prominent area of dissatisfaction.
To measure the overall levels of satisfaction of banking customers.
EXECUTIVE SUMMARY
This project report is based on the survey conducted, for the completion of internship
program in Jammu & Kashmir Bank Ltd. The project is titled as:
“Customer Satisfaction and performance of J&K Bank Ltd. In Uri (Baramulla).”
The survey was completed over a period of two months. A questionnaire was prepared,
and door to door survey was conducted especially in the areas like Sultandaki, Gharkot,
Nambla, Dwaran, Salamabad (Dachina), Bijhama, Bagna Noorkhah, Gingal, Nowshera and
other areas Encompassed by the Bank which subsequently, was used as an effective tool for
getting information from the respondents.
Customer satisfaction and service quality are often treated together as functions of
customer’s perceptions and expectations and research has shown that high service quality
contribute significantly to profitability.
The main jest of the Study was concentrated on the Customer Satisfaction and how much a
customer prefers J&K Bank over other Banks.The data obtained during this survey was
tabulated and thoroughly analyzed.
INTRODUCTION
According to Oxford English Dictionary, Bank is, “An establishment for custody of money
received from or on behalf of, its customers. Its essential duty is the payment of the orders
given on it by the customers, its profit mainly from the investment of money left unused by
them”. Banking Regulation Act, 1949 (Sec. 5(c)), has defined the banking company as,
“Banking Company means any company which transacts business of banking in India”.
According to Section 5B, “banking means the accepting of deposit of money from the public
for the purpose of leading or investment, which are repayable on demand or otherwise and
are withdraw able by cheque, draft, and order or otherwise.”
Banking in India has its origin as carry as the Vedic period. It is believed that the transition
from money lending to banking must have occurred even before Manu, the great Hindu jurist,
who has devoted a section of his work to deposits and advances and laid down rules relating
to the interest. During the Mughal period, the indigenous bankers played a very important
role in lending money and financing foreign trade and commerce. During the days of East
India Company, it was to turn of the agency houses top carry on the banking business. The
general bank of India was the first joint stock bank to be established in the year 1786.The
others which followed were the Bank of Hindustan and the Bengal Bank. The Bank of
Hindustan is reported to have continued till 1906, while the other two failed in the meantime.
In the first half of the 19th Century the East India Company established three banks; The
Bank of Bengal in 1809, The Bank of Bombay in 1840 and The Bank of Madras in
1843.These three banks also known as presidency banks and were independent units and
functioned well. These three banks were amalgamated in 1920 and The Imperial Bank of
India was established on the 27th Jan 1921, with the passing of the SBI Act in 1955, the
undertaking of The Imperial Bank of India was taken over by the newly constituted SBI. The
Reserve Bank which is the Central Bank was created in 1935 by passing of RBI Act 1934, in
the wake of Swadeshi movement, a number of banks with Indian Management were
established in the country namely Punjab National Bank Ltd, Bank of India Ltd, Canara Bank
Ltd, Indian Bank Ltd, The Bank of Baroda Ltd, The Central Bank of India Ltd .On July 19th
1969, 14 Major Banks of the country were nationalized and in 15th April 1980 six more
commercial private sector banks were also taken over by the government. The Indian
Banking industry, which is governed by the Banking Regulation Act of India 1949, can be
broadly classified into two major categories, non-scheduled banks and scheduled banks.
Scheduled Banks comprise commercial banks and the co-operative banks. The first phase of
financial reforms resulted in the nationalization of 14 major banks in 1969 and resulted in a
shift from class banking to mass banking. This in turn resulted in the significant growth in the
geographical coverage of banks. Every bank had to earmark a min percentage of their loan
portfolio to sectors identified as “priority sectors” the manufacturing sector also grew during
the 1970’s in protected environments and the banking sector was a critical source. The next
wave of reforms saw the nationalization of 6 more commercial banks in 1980 since then the
number of scheduled commercial banks increased four- fold and the number of bank
branches increased to eight fold. After the second phase of financial sector reforms and
liberalization of the sector in the early nineties. The PSB’s found it extremely difficult to
complete with the new private sector banks and the foreign banks. The new private sector
first made their appearance after the guidelines permitting them were issued in January 1993.
THE INDIAN BANKING SYSTEM
Banking in our country is already witnessing the sea changes as the banking sector seeks
new technology and its applications. The best port is that the benefits are beginning to reach
the masses. Earlier this domain was the preserve of very few organizations. Foreign banks
with heavy investments in technology started giving some “Out of the world” customer
services. But, such services were available only to selected few- the very large account
holders. Then came the liberalization and with it a multitude of private banks, a large
segment of the urban population now requires minimal time and space for its banking needs.
Automated teller machines or popularly known as ATM are the three alphabets that have
changed the concept of banking like nothing before. Instead of tellers handling your own
cash, today there are efficient machines that don’t talk but just dispense cash. Under the
Reserve Bank of India Act 1934, banks are classified as scheduled banks and nonscheduled
banks. The scheduled banks are those, which are entered in the Second Schedule of RBI Act,
1934. Such banks are those, which have paid- up capital and reserves of an aggregate value of
not less then Rs.5 lacs and which satisfy RBI that their affairs are carried out in the interest of
their depositors. All commercial banks Indian and Foreign, regional rural banks and state co-
operative banks are Scheduled banks. Non Scheduled banks are those, which have not been
included in the Second Schedule of the RBI Act, 1934. The organized banking system in
India can be broadly classified into three categories: (i) Commercial Banks (ii) Regional
Rural Banks and (iii) Co-operative banks. The Reserve Bank of India is the supreme
monetary and banking authority in the country and has the responsibility to control the
banking system in the country. It keeps the reserves of all commercial banks and hence is
known as the “Reserve Bank”. Current scenario:- Currently (2007), the overall banking in
India is considered as fairly mature in terms of supply, product range and reach - even though
reach in rural India still remains a challenge for the private sector and foreign banks. Even in
terms of quality of assets and Capital adequacy, Indian banks are considered to have clean,
strong and transparent balance sheets - as compared to other banks in comparable economies
in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from
the government with the growth in the Indian economy expected to be strong for quite some
time especially in its services sector, the demand for banking services especially retail
banking, mortgages and investment services are expected to be strong. Mergers &
Acquisitions., takeovers, are much more in action in India. One of the classical economic
functions of the banking industry that has remained virtually unchanged over the centuries is
lending. On the one hand, competition has had considerable adverse impact on the margins,
which lenders have enjoyed, but on the other hand technology has to some extent reduced the
cost of delivery of various products and services. Bank is a financial institution that borrows
money from the public and lends money to the public for productive purposes. The Indian
Banking Regulation Act of 1949 defines the term Banking Company as "Any company which
transacts banking business in India" and the term banking as "Accepting for the purpose of
lending all investment of deposits, of money from the public, repayable on demand or
otherwise and withdrawal by cheque, draft or otherwise".
Banks play important role in economic development of a country, like:
Banks mobilize the small savings of the people and make them available for productive
purposes.
Promotes the habit of savings among the people thereby offering attractive rates of
interests on their deposits.
Provides safety and security to the surplus money of the depositors and as well provides a
convenient and economical method of payment.
Banks provide convenient means of transfer of fund from one place to another.
Helps the movement of capital from regions where it is not very useful to regions where it
can be more useful. Banks advances exposure in trade and commerce, industry and
agriculture by knowing their financial requirements and prospects.
Bank acts as an intermediary between the depositors and the investors.
Bank also acts as mediator between exporter and importer who does foreign trades. Thus
Indian banking has come from a long way from being a sleepy business institution to a highly
pro-active and dynamic entity. This transformation has been largely brought about by the
large dose of liberalization and economic reforms that allowed banks to explore new business
opportunities rather than generating revenues from conventional streams (i.e. borrowing and
lending). The banking in India is highly fragmented with 30 banking units contributing to
almost 50% of deposits and 60% of advances.
Banking is nothing but a service. The development of banking sector has been closely
associated with money changing in ancient days. The earliest banks of Italy where the name
began were private companies that made & floated loans for the government. Banking made
its first starting point in the middle of 12th century in Italy as public sectors. The Bank of
Venice was the first known public banking institution founded in 1157, and then the Bank of
Barcelona and bank of Geneva were established in 1401 & 1447 respectively. Therefore,
Bank of Amsterdam was established in 17th century where Adam smith elaborately described
the functions of the bank. It received both foreign coins & Domestic coins of the country at
intrinsic value of the gold standard money of the country. The gold smiths assumed
prominence around the middle of the 17th century after the service of King Charles gold
hold’s that were kept under the famous tower of London. The gold smith business however
suffered a great set back due to ill treatment by King Charles – II. The banker ancestors are
the money lenders and gold smith’s lending and borrowing are almost as old as money itself.
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors. For the past
three decades India's banking system has several outstanding achievements to its credit. The
most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners
of the country. This is one of the main reasons of India's growth process. The government's
regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of
14 major private banks of India. Not long ago, an account holder had to wait for hours at the
bank counters for getting a draft or for withdrawing his own money. Today, he has a choice.
Gone are days when the most efficient bank transferred money from one branch to other in
two days. Now it is simple as instant messaging or dials a pizza. Money has become the order
of the day. The first bank in India, though conservative, was established in 1786. From 1786
till today, the journey of Indian Banking System can be segregated into three distinct phases
Early phase from 1786 to 1969 of Indian Banks
Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
INDUSTRY PROFILE
The banking section will navigate through all the aspects of the Banking System in India. It
will discuss upon the matters with the birth of the banking concept in the country to new
players adding their names in the industry in coming few years. The banker of all banks,
Reserve Bank of India (RBI), the Indian Banks Association (IBA) and top 20 banks like
IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined under three separate heads with
one page dedicated to each bank. However, in the introduction part of the entire banking
cosmos, the past has been well explained under three different heads namely:
· History of Banking in India
· Nationalization of Banks in India
· Scheduled Commercial Banks in India
The first deals with the history part since the dawn of banking system in India.
Government took major step in the 1969 to put the banking sector into systems and it
nationalized 14 private banks in the mentioned year. This has been elaborated in
Nationalization Banks in India. The last but not the least explains about the scheduled and
unscheduled banks in India. Section 42 (6) (a) of RBI Act 1934 lays down the condition of
scheduled commercial banks. The description along with a list of scheduled commercial
banks is given on this page.
HISTORY OF BANKING IN INDIA
Without a sound and effective banking system in India it cannot have a healthy economy.
The banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors. For the past
three decades India's banking system has several outstanding achievements to its credit. The
most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners
of the country. This is one of the main reasons of India's growth process. The government's
regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of
14 major private banks of India. Not long ago, an account holder had to wait for hours at the
bank counters for getting a draft or for withdrawing his own money. Today, he has a choice.
Gone are days when the most efficient bank transferred money from one branch to other in
two days. Now it is simple as instant messaging or dials a pizza. Money has become the order
of the day. The first bank in India, though conservative, was established in 1786. From 1786
till today, the journey of Indian Banking System can be segregated into three distinct phases.
They are as mentioned below:
· Early phase from 1786 to 1969 of Indian Banks
· Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
· New phase of Indian Banking System with the advent of Indian Financial & Banking Sector
Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and
Phase III.
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders. In 1865
Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank
Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India,
Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were
set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow
and banks also experienced periodic failures between 1913 and 1948. There were
approximately 1100 banks, mostly small. To streamline the functioning and activities of
commercial banks, the Government of India came up with The Banking Companies Act,
1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965
(Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the
supervision of banking in India as the Central Banking Authority. During those day’s public
has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of
it the savings bank facility provided by the Postal department was comparatively safer.
Moreover, funds were largely given to traders.
Phase II
Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas. It formed State Bank of India to act as the principal
agent of RBI and to handle banking transactions of the Union and State Governments all over
the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960
on 19th July, 1969, major process of nationalization was carried out. It was the effort of the
then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country
were nationalized. Second phase of nationalization Indian Banking Sector Reform was
carried out in 1980 with seven more banks. This step brought 80% of the banking segment in
India under Government ownership.
The following are the steps taken by the Government of India to
Regulate Banking Institutions in the Country:
· 1949: Enactment of Banking Regulation Act.
· 1955: Nationalization of State Bank of India.
· 1959: Nationalization of SBI subsidiaries.
· 1961: Insurance cover extended to deposits.
· 1969: Nationalization of 14 major banks.
· 1971: Creation of credit guarantee corporation.
· 1975: Creation of regional rural banks.
· 1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%. Banking in the
sunshine of Government ownership gave the public implicit faith and immense confidence
about the sustainability of these institutions.
Phase III
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up
by his name which worked for the liberalisation of banking practices. The country is flooded
with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service
to customers. Phone banking and net banking is introduced. The entire system became more
convenient and swift. Time is given more importance than money. The financial system of
India has shown a great deal of resilience. It is sheltered from any crisis triggered by any
external macroeconomics shock as other East Asian Countries suffered. This is all due to a
flexible exchange rate regime, the foreign reserves are high, the capital account is not yet
fully convertible, and banks and their customers
have limited foreign exchange exposure.
SCHEDULED COMMERCIAL BANKS IN INDIA
The commercial banking structure in India consists of:
· Scheduled Commercial Banks in India
· Unscheduled Banks in India
Scheduled Banks in India constitute those banks which have been included in the Second
Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in
this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. As on
30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918
branches. The scheduled commercial banks in India comprise of State bank of India and