CHAPTER 1 INDUSTRY PROFILE

1.1INTRODUCTION TO INDIAN BANKING SYSTEM 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. Long time 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.

PHASE I
The General Bank of India was set up in the year 1786. Next come 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, Canera Bank, Indian. Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935During 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 .During those days 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. India Gandhi 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:

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 cores.

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 liberalizations 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

1.2 Banking system in India

The Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks in 1969, the public sector banks or the nationalized banks have acquired a place of prominence and has since then seen tremendous progress. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to look anew at their existing portfolio offering. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting al higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the high revenue niche retail segments. The Indian banking has finally worked up to the competitive dynamics of the new Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization. Banks that employ IT solutions are perceived to be futuristic and proactive players capable of meeting the multifarious requirements of the large customers base. Private Banks have been fast on the uptake and are reorienting their strategies using the internet as a medium The Internet has emerged as the new and challenging frontier of marketing with the conventional physical world tenets being just as applicable like in any other marketing medium. The Indian banking has come from a long way from being a sleepy business institution to a highly proactive 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. Indian nationalized banks (banks owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit 5

mobilization. The Indian banking can be broadly categorized into nationalized, private specialized banking institutions The Reserve Bank of India act as a centralized body monitoring any discrepancies and shortcoming in the system. It is the foremost monitoring body in the Indian financial sector. The nationalized banks (i.e. governmentowned banks) continue to dominate the Indian banking arena. Industry estimates indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that have started their operations here. Under the ambit of the nationalized banks come the specialized banking institutions. These co-operatives, rural banks focus on areas of agriculture, rural development etc., unlike commercial banks these co-operative banks do not lend on the basis of a prime lending rate. They also have various tax sops because of their holding pattern and lending structure and hence have lower overheads. This enables them to give a marginally higher percentage on savings deposits. Many of these cooperative banks diversified into specialized areas (catering to the vast retail audience) like car finance, housing loans, truck finance etc. in order to keep pace with their public sector and private counterparts, the co-operative banks too have invested heavily in information technology to offer high-end computerized banking services

TYPES OF BANKS CentralBank

The Reserve Bank of India is the central Bank that is fully owned by the Government. It is governed by a central board (headed by a Governor) appointed by the Central Government. It issues guidelines for the functioning of all banks operating within the country. CO-OPERATIVESECTOR::--The co-operative sector is very much useful for rural people. The co-operative banking sector is divided into the following categories. a. State co-operative Banks b. Central co-operative banks c. Primary Agriculture Credit Societies 6

Development Banks/Financial Institutions

IFCI IDBI ICICI IIBI SCICI Ltd. NABARD Export-Import Bank of India National Housing Bank Small Industries Development Bank of India North Eastern Development Finance Corporation

1.3PRIVATE SECTOR BANKS Private Sector Banks

1. HDFC Bank 2. ICICI Bank 3. 4. 5. 6. 7. Federal Bank ING Visas Bank Axis Bank (formerly UTI Bank) Yes Bank Bank of Rajasthan

8. Bharat Overseas Bank 9. Catholic Syrian Bank

10. Centurion Bank of Punjab 7

11. City Union Bank 12. Development Credit Bank 13. Dhanalakshmi Bank 14. Ganesh Bank of Kurundwad 15. IndusInd Bank 16. Jammu & Kashmir Bank 17. Karnataka Bank Limited 18. Karur Vysya Bank 19. Kotak Mahindra Bank 20. Lakshmi Vilas Bank 21. Nainital Bank 22. Ratnakar Bank 23. SBI Commercial and International Bank 24. South Indian Bank 25. Amazing Mercantile Bank 26. Punjab National Bank 27. Rupee Bank 28. Saraswat Bank 29. Tamilnad Mercantile Bank 30. Thane Janata Sahakari Bank 31. Bassein Catholic Bank

MAJOR PLAYERS IN PRIVATE SECTOR BANKS ICICI Bank: ----ICICI Banking is commercial Banking arm of ICICI group. It received its banking license from RBI on May 17 may 1994 and its branch was started in Madras in June 1994. ICICI Bank has a network of about 560 branches and extension counters and over 1,900 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through wide variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to cross border needs of clients and leverage on its domestic banking strengths to offer product internationally. ICICI Banks equity shares are listed in India on the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts are listed on New York Stock Exchange. It is the first bank to start Internet banking service in India. In 1999, ICICI become the first Indian Company and the first bank or financial institution from non-Japan Asia to be listed on NYSE UTI Bank: - UTI Bank was the first of the new private banks to have begun operations in 1994, after the government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the United Trust of India(UTI-I), Life Insurance Corporation of India(LIC) and General Insurance Corporation Ltd. and its associates viz. National Insurance Company Ltd., The New India Assurance Corporation, The Oriental Insurance Corporation and United Insurance Company Ltd. The bank today is capitalized to the extent of Rs.278.12 cores with public holding at 56.18 %. The banks registered office is at Ahmadabad and its central office is at Mumbai. The bank has wide network of more than 350 branch offices and Extension Counters. The Bank has network of over 1657 ATMs providing 24hrs a day banking convenience to its customers. The bank was setup with capital of Rs.115 core, with UTI contributing Rs.100 core, LIC-Rs.7.5 core and its four subsidiaries contributing Rs. 1.5 core each.

HDFC Bank :---- HDFC Bank is headquartered in Mumbai Bank at present has an
enviable network of over 495 branches spread over 218 cities across India. All branches are linked on an online real-time basis. Customers in over 120 locations are also serviced through Telephone Banking. The Banks expansion plans take into account the need to have a presence in all major industrial and commercial centers where its corporate customers are located as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing/settlement bank to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and active member base. The authorized capital of HDFC Bank is Rs.450 core (Rs.4.5 billion). The paid-up capital is Rs.309.9 core (Rs.3.09 billion). The HDFC Group holds 22.2% of the banks equity and about 19.5% of the equity is held by the ADS Depository. The Bank has made substantial efforts and investments in acquiring the best technology available internationally, to build the infrastructure for a world class bank.

1.4 PUBLIC SECTOR BANKS

a. State Bank of India and its associate banks called the State Bank Group b. 20 nationalized banks c. Regional rural banks mainly sponsored by public sector banks

PUBLIC SECTOR BANKS (NATIONALIZED BANKS):

1. State Bank of India (SBI) 2.State Bank of Bikaner & Jaipur 3.State Bank of Hyderabad 4.State Bank of Indore 5.State Bank of Mysore 6.State Bank of Patiala 7.State Bank of Saurashtra 8. State Bank of Travancore 9. Bank of India 10. Canara Bank 11. Central Bank of India 10

12. Corporation bank 13. Indian Bank 14. Indian overseas bank 15.Syndicate Bank 16.UCO Bank 17. Allahabad Bank 18.Andhra Bank 19.Bank of Baroda 20. Bank of Maharashtra 21. Dena Bank 22.Oriental Bank of Commerce 23. Punjab & Sind Bank 24. Union Bank of India

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CHAPTER 2 COMPANY PROFILE

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2.1EVOLUTION OF SBI
The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921. Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernize India's economy. Their evolution was, however, shaped by ideas culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework.

The eight banking subsidiaries are:

1-State Bank of Bikaner and Jaipur (SBBJ) 2-State Bank of Hyderabad (SBH) 3-State Bank of India (SBI) 4-State Bank of Indore (SBIR) 5-State Bank of Mysore (SBM) 6-State Bank of Patiala (SBP) 7-State Bank of Saurashtra (SBS) 8-State Bank of Travancore (SBT)

2.2 PRODUCTS AND SERVICES PROVIDED BY SBI

Savings Accounts Current Accounts Fixed Deposit 13

LOANS
Personal Loans Home Loans Two Wheeler Loans New Car Loans Used Car Loans Overdraft against Car Express Loans Gold Loan Educational Loan Loan against Securities Loan against Property Loans against Rental Receivables

CARDS
Credit Cards Debit Cards

ACCESS YOUR BANK

Net Banking ATM

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2.3 SWOT ANALYSIS: STRENGTHS:

1. Brand Name: SBI Bank has earned a reputation in the market over the period of time (Being the oldest bank in India tracing history back to 1806) 2. Market Leader: SBI is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in 2008 Forbes Global 2000. With an asset base of $126 billion and its reach, it is a regional banking behemoth. 3. Wide Distribution Network: Excellent penetration in the country with more than 10000 core branches and more than 5100 branches of associate banks (subsidiaries). 4. Diversified Portfolio: SBI Bank has all the products under its belt, which help it to extend the relationship with existing customer. SBI Bank has umbrella of products to offer their customers, if once customer has relationship with the bank. Some Products, which SBI Bank is offering are: Retail Banking Business Banking Merchant Establishment Services (EDC Machine) Personal loans & Car loans Insurance Housing Loans Government Owned: Government owns 60% stake in SBI. This gives SBI an edge over private banks in terms of customer security. 5. Low Transition Costs-SBI offers very low transition costs which attracts small customers.

WEAKNESSES:
1. The existing hierarchical management structure of the bank, although strength in some respects, is a barrier to change. 2.Though SBI cards are the 2nd largest player in the credit card industry, it has the highest no performing assets (NPAs) in the industry, which stand out to be at 16.28 % (Dec 2007). 3. Modernisation: SBI lags with respect to private players in terms of modernisation of its processes, infrastructure, centralisation, etc.

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OPPORTUNITIES:
1. Merger of associate banks with SBI: Merger of all the associate banks (like SBH, SBM, etc) into SBI will create a mega bank which streamlines operations and unlocks value. 2. Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will further increase its reach. 3. Increasing trade and business relations and a large number of expatriate populations offers a great opportunity to expand on foreign soil.

THREATS:
1. Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market share of SBI bank. 2. Consumer expectations have increased many folds in last few years and the bank has not been responsive enough to meet them on time. 3. Private Banks have started venturing into the rural and semi-urban sector, which used to be the bastion of the State Bank and other PSU banks 4. Employee Strike: There was an employee strike in the year 2006 which disrupted SBIs activities. This can be repeated in the future.

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2.4 OVERVIEW OF HDFC BANK

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian Bank". They realized that only a single-minded focus on product quality and service excellence would help them to get there. HDFC Bank, one amongst the firsts of the new generation, tech-savvy commercial banks of India, was set up in august 1995 after the Reserve Bank of India allowed setting up of Banks in the private sector. The Bank was promoted by the Housing Development Finance Corporation Limited, a premier housing finance company (set up in 1977) of India. Net Profit for the year ended March 31, 2006 was up 30.8% to Rs 870.8 cores. Currently (2007), HDFC Bank has 583 branches located in 263 cities of India, and all branches of the bank are linked on an online real-time basis. The bank offers many innovative products & services to individuals, corporate, trusts, governments, partnerships, financial institutions, mutual funds, insurance companies. Bank also has over 1471 ATMs. In the next few months the number of branches and ATMs should go up substantially. The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values Operational Excellence, Customer Focus, Product Leadership and People. The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. Incorporated in August 1994 as HDFC Bank Limited, as of December 31, 2006.

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ACTIVITIES
HDFC Bank mainly provides three kinds of banking services: a. Personal Banking b. NRI Banking c. Wholesale Banking The following are the products and services provided by the HDFC bank

HDFC Bank provides loans like Personal Loans , Home Loans , Educational Loans , Two Wheeler Loans , New car Loans, Used Car Loans, Overdraft Against Car, Express Loans, etc.

HDFC Bank provides Credit, Debit and Prepaid Cards to help you meet your financial objectives. HDFC Bank provides facilities like Mutual Funds, Insurance , General & Health Insurance, Bonds , Financial Planning, Knowledge Center, Equities & Derivatives, Mudra Gold bar.

If you need to deal in foreign currency and keep tabs on exchange rates every now and then, transfer funds to India, make payments etc., HDFC Bank has a range of products and services that you can choose from to transact smoothly, efficiently and in a timely manner. HDFC Bank has designed two programs to make banking easier for the customers and they are HDFC Bank Preferred Programme HDFC Bank Classic Programme. HDFC Bank offers Private Banking services to high net worth individuals and institutions. HDFC Bank offers you quick, economical and convenient options to remit and transfer funds to India. Corporate Banking reflects HDFC Banks strengths in providing our corporate clients in India, a wide array of commercial, transactional and electronic banking products.

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HDFC Bank acts as an active medium between the government and the customers by means of various services.

Distribution network
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 684 branches spread over 316 cities across India. All branches are linked on an online real-time basis. Customers in over 120 locations are also serviced through Telephone Banking. The Bank's expansion plans take into account the need to have a presence in all major industrial and commercial centers where its corporate customers are located as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing/settlement bank to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE have a strong and active member base. The Bank also has a network of about over 1,740 networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank's branches have online connectivity, which enables the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also provided to retail customers through the branch network and Automated Teller Machines. The Bank has made substantial efforts and investments in acquiring the best technology available internationally, to build the infrastructure for a world class bank. In terms of software, the Corporate Banking business is supported by Flex cube, while the Retail Banking business by Fin ware, both from I-flex Solutions Ltd. The systems are open, scalable and web-enabled. The Bank has prioritized its engagement in technology and the internet as one of its key goals and has already made significant progress in web-enabling its core businesses. In each of its businesses, the Bank has succeeded in leveraging its market position, expertise and technology to create a competitive advantage and build market share.

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2.5PRODUCTS AND SERVICES PROVIDED BY HDFC BANK SAVINGS ACCOUNTS

Regular Savings Account Savings Plus Account Savings Max Account No Frills Account Retail Trust Account Salary Accounts Payroll Classic Regular Premium Defense Salary Account Kid's Advantage Account Pension Saving Bank Account Family Savings Group

CURRENT ACCOUNTS
Plus Current Account Trade Current Account Premium Current Account Regular Current Account Reimbursement Current Account RFC - Domestic Account

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FIXED DEPOSITS
Regular Fixed Deposit Super Saver Account Sweep-in Account

LOANS
Personal Loans Home Loans Two Wheeler Loans New Car Loans Used Car Loans Overdraft Against Car Express Loans Gold Loan Educational Loan Loan Against Securities

CARDS
Credit Cards Silver Credit Card Gold Credit Card Platinum Plus Credit Card Debit Cards Easy Shop International Debit Card Easy Shop Gold Debit Card Easy Shop International Business Debit Card

ACCESS YOUR BANK

Net Banking Mobile Banking ATM

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Phone Banking

2.6 SWOT ANALYSIS STRENGTHS: Right strategy for the right products. Superior customer service vs. competitors. Great Brand Image. Products have required accreditation. High degree of customer satisfaction. Good place to work Lower response time with efficient and effective service. Dedicated workforce aiming at making a long-term career in the field. WEAKNESS: 1. Some gaps in range for certain sectors. 2. Customer service staff needs training. 3. Processes and systems, etc 4. Management cover insufficient. 5. Sector growth is constrained by low unemployment levels and competition for staff OPPORTUNITIES: 1. Profit margins will be good. 2. Could extend to overseas broadly. 3. New specialist applications. 4. Could seek better customer deals. 5. Fast-track career development opportunities on an industry-wide basis. 6. An applied research center to create opportunities for developing techniques to provide added-value services. 1. 2. 3. 4. 5. 6. 7. 8.

THREATS: 1. 2. Legislation could impact. Great risk involved 22

3. 4. 5. 6.

Very high competition prevailing in the industry. Vulnerable to reactive attack by major competitors. Lack of infrastructure in rural areas could constrain investment. High volume/low cost market is intensely competitive.

2.7 LITERATURE REVIEW

1. Denise K. Conroy :- In his study titled (Customer satisfaction measures in the public sector: what do they tell us?) attempts to devise customer satisfaction measures, according to him there are a number of factors which can affect the interpretation of results - the nature of the customer, service provision, service quality and, for the public sector, the extent to which consumer sovereignty exists. Resources may be better directed towards setting and maintaining high levels of standard of service. This study addresses the difficulties and highlights the complex nature of a customer or service beneficiary who can be, at the same time, a taxpayer, voter, recipient of financial benefits, with expectations of the public sector and its delivery agent, yet cannot choose another provider. 2. Harry Nowka, Southwestern Oklahoma State University, Nancy Buddy, Southwestern Oklahoma State University Robert Reeder, Southwestern Oklahoma State University and Daniel Hart, Southwestern Oklahoma State University in their study titled (Customer Responses: A Comparative Study) wants to determine various variables which influence customers of a bar and grill. This comparative analysis includes customer responses with comparisons made to the major competitor's customer responses, student customer responses, and responses of a panel of non customers assembled to assess potential customer responses. This study indicates that location can be a significant deterrent to expansion of the customer base. The personality of the owner can have a positive impact on customer flow. Analysis of spending patterns indicates that food and pool were underutilized. The male/female ratio was a determinate of customer flow. 3. Dawn Iacobucci, Amy Ostrom, Kent Grayson:- In their study titled (Distinguishing Service Quality and Customer Satisfaction: The Voice of the Consumer ) presents 23

two studies that rely on divergent methodologies to examine whether or not quality and satisfaction have distinct antecedent causes, consequential effects, or both (i.e., whether or not they should be considered a single construct, or distinct, separable constructs). They focus on consumers understanding and use of the words quality and satisfaction; in both studies, respondents report whether or not they think quality and satisfaction differ, and if so, on what dimensions or under what circumstances. In the first study, they use the qualitative critical incident technique to elicit service attributes that are salient to respondents when prompted to consider quality and satisfaction as distinct. The code the responses to these open-ended survey questions to examine whether quality can be teased apart from satisfaction, from the respondents (consumers) perspective. In the second study, to triangulate on the qualitative data, they experimentally manipulated a number of service attributes drawn from both the first study and from the literature to see whether or not they have differential impacts on judgments of quality and satisfaction. They did not presuppose that quality and satisfaction differrather, they asked respondents to make a judgment either of quality or of satisfaction, defining the term as they saw fit. 4. Entrees D. Athanassopoulos:-In this study titled (Customer Satisfaction Cues To Support Market Segmentation and Explain Switching Behavior) examined the customer satisfaction cues in retail banking services in Greece. The study proposes an instrument of customer satisfaction that contains service quality and such other attributes as price, convenience, and innovation. The proposed framework of customer satisfaction was verified empirically yielding four distinct facets for business customers and five for individual customers. The performance implications of the customer satisfaction instrument are also explored. What is shown is that customer segments, in fact, yield statistically different satisfaction scores, which verifies the managerial value of customer segmentation practices. Finally, the facets of customer satisfaction as explanatory cues for the switching behavior of individual and business customers were tested successfully. 5. Rengasamy Elango and Vijaya Kumar Guide:- In their study titled(A Comparative Study on the Service Quality and Customer Satisfaction among Private, Public and Foreign Banks) focuses on the service quality and customer satisfaction among the private, public and foreign banks in India. An analysis is carried 24

out to examine the level of awareness among customers and to identify the best sector which provides qualitative customer service. This becomes relevant in the context of recommendations of various committees constituted by the Government of India and the RBI, from time to time, to suggest measures to improve customer service systems of the public sector commercial banks of India. A well-structured questionnaire is used to collect the views of respondents across the three banking sectors. The survey instrument includes various dimensions, pertaining to the quality of customer services in terms of banking personnel, convenient working hours, Web-based services, error free valueadded services and efficient grievance redressed mechanism etc. Apart from the basic statistical tools such as measures of central tendency, authors also use `factor analysis' and the `One-way ANOVAs' classification. The idea behind this is to extract the relevant factors and analyze whether there is any significant difference with respect to service quality within the three banking sectors. The results indicate that the level of awareness among the customers improved significantly during the study period. It is interesting to note that the results are consistent with the previous studies conducted on customer service aspects, and it has been observed that the foreign and the new generation private sector banks are serving the customers better. This has larger implications on the public sector commercial banks in India with respect to customer service delivery aspects. It is high time the public sector commercial banks made efforts to revamp their approach towards customers, so as to perform better and derive competitive advantage in the long run.

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CHAPTER3 RESEARCH METHODOLOGY

26

3.1 RESEARCH METHODOLOGY

It describes the data collection method, the sampling plan, the tools of investigation, planning and testing of questionnaire and the limitations of the study. The study requires the data to be collected from two different sources i.e. the primary source and the secondary source. The primary data is collected with the help of structured questioners which is being modified & reliable and the secondary data through the various journals, newspapers and websites

3.2OBJECTIVES OF THE STUDY

1. To study the preference of customers regarding SBI bank and HDFC bank. 2. To analyze which facility influences the customer most while selecting a Bank. 3. To compare the various services provided by these banks. 4. To make aware about the various services provided by the banks. 5. To know the which type of facilities preferred by customers

DATA SOURCE:
(a) Primary Data:- Primary data was collected by means of questionnaires (b) Secondary data: - Secondary data collected by referring to various books, newspapers, magazines, journals and internet (details in bibliography)

RESEARCH DESIGN:-27

Present study enquired and brought forward the results concerning the set objectives specified before which relates to description of the state of affairs as a result it clearly states that it was a DESCRIPTIVE STUDY, which included fact finding enquiries of different kinds.

SAMPLING DESIGN Universe: - The universe was infinite in this study, since the population of Chandigarh
City is uncertain.

Sampling Unit: - The sampling unit is an individual (non-staff member) who is

having account in SBI and HDFC Banks.

Sample Size: - The sample size for the study was 70 individuals, non-staff members of
SBI and HDFC Banks, Chandigarh Out of which 35 belongs to SBI and 35 belongs to HDFC bank.

Sampling Procedure: - Due to the time and resource constraints the convenience
sampling technique was used. The individuals were selected according to convenience to fill the questionnaires.

Research Instrument used::--- Questionnaires.

3.3 LIMITATIONS

1. Sometimes respondents did not respond well to all the questions in the questionnaire. 2. Low cooperation from the bank executives make to struggle more, due to which we were forced to restrict our sample size to 70. 3. Some biasness might have occurred in analysis. Because of lack of expert knowledge.

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4. Best efforts were made to incorporate all-important variables in study, yet chances of some of variables not appearing in study are not ruled out. 5. Frequent developments in this sector can be a major reason of limitation in the study 6. Biasness in views of respondents cant be ruled out 7. Resistance to change sometimes affects view of respondents.

CHAPTER 4 DATA ANALYSIS & INTERPRETATION

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4.1 DATA ANALYSIS OF SBI

Sample Size 35 WITH SBI1. AGE GROUP AND DISTRIBUTION OF MALE AND FEMALE CUSTOMERSDEALING (a) AGE GROUP AGE LESS THAN 25 25-35 35-45 45-55 55 & ABOVE NO. OF PERSONS 5 8 6 12 4

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NO. OFPERSONS

INTERPRETATION:According to survey, 5 persons is less than 25 years,8 persons is 25-35 years, 6 persons 35-45,12 persons 45-55 and the only 4 person 55 & above dealing with SBI bank. In a 45-55 age group more persons dealing with SBI bank.

(b)

GENDER
NO. OF

GENDER MALE FEMALE

PERSONS 28 7

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INTERPRETATION:According to survey, 28 male and only 7 female customers dealing with SBI bank. Female customer very less compare to male customers.

2. OCCUPATION OF THE CUSTOMERS OF SBI

OCCUPATION SERVICEMEN BUSINESMEN PROFESSIONALS STUDENTS HOUSEWIIVES NO. OF PERSONS 15 6 3 8 3

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INTERPRETATION:According this to survey the occupation of SBI customer in out of 35, 15 customer in serviceman, 6 customers are businessmen,3 customers are professional,8 customers are student and only 3 customers are housewives.

3. DISTRIBUTION OF THE INCOME OF CUSTOMERS OF SBI PER YEAR

INCOME NIL LESS THAN 50000 50000-150000 150000-300000 300000-500000 500000-ABOVE 33 NO. OF PERSONS 8 5 7 5 6 4

INTERPRETATION:According this survey, the income of SBI customers are 8 customers income less than 50000,7 customers income are 50000-150000,10 customers income are 150000-300000,6 customers income are 300000-500000 and only 4 persons income are above 500000 and above.

4. MOST IMPORTANT REASON FOR CHOOSING SBI

NO. OF FACTORS I have a traditional bank account with the same bank The brand name of the bank The excellent service offered by this bank ATM service Net banking facility Location advantage PERSONS 12 4 5 7 3 4

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INTERPRETATION:According this to survey when asked the respondent most important reason for choosing SBI bank they said 12 persons said traditional bank account with same bank, 4 persons said brand name.5 excellent service offered by bank,7 persons said ATM location, 3 persons said net banking facilities and 4 persons location advantage.

5. ACCOUNT FACILITY AVAILING IN THE SBI

FACILITY Savings account Current account Fixed deposit NRI account NO. OF PERSONS 18 5 12 0

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INTERPRETATION:According to survey, when I asked the respondent which facility availing in the bank they said 18 persons said saving account,5 persons said current account,12 persons said fixed account.

6.NO. OF YEARS, CUSTOMERS DEALING SBI

NO. OF YEARS Less than 1 year 1 to 2 years 3 to 5 years More than 5 years PERSONS 7 12 7 9

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INTERPRETATION:According the survey, when asked the respondent, how many years dealing with SBI bank 7 persons said less than 1 year,12 person said 1to 2 years, 7 persons said 3 to 5 years and 9 person said more than 5 years.

7. REASON FOR TYPICALLY VISITING THE BANK BRANCH

NO. OF REASONS To make a deposit To get advice for investment options To inquire about a balance To withdraw cash PERSONS 14 2 7 12 37

INTERPRETATION:According to survey, when asked the respondent, reason for visiting the branch, they said persons 14 persons said to make a deposit, 2 persons said to get advice for investment, 7 persons said to inquire about a balance and 12 persons said to withdraw cash.

8.WHICH FACILITY SATISFIES YOU MOST

FACILITY ATM Loan Early cheque clearance Preparation of drafts Interest package Net banking Phone banking NO. OF PERSONS 13 7 2 3 3 3 4

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INTERPRETATION:According the survey, when I asked the customer which facilities satisfied you , 13 persons said ATM,7 person said loan,3 persons said early cheque clearance ,3 persons said preparation of drafts, 3 person said interest package, 3 person said net banking and 4 persons said phone banking.

9.IF YOU ARE PROVIDED WITH BETTER SERVICES BY OPTIONAL BANK. WOULD YOU LIKE TO MOVE TO OTHER BANK

YES NO

6 29

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INTERPRETATION:According to survey when I asked the SBI bank customer, if you are provided with better services by optional bank. Would you like to move to other bank in out of 35 , 6 said yes and 29 said no.

10.OVERALL SATISFACTION OF THE CUSTOMERS WITH THE PERFORMANCE OF SBI

NO. OF SATISFCTION EXCELLENT GOOD SATISFACTORY AVERAGE BELOW AVERAGE PERSONS 8 6 18 3 0

40

SATISFACTION LEVEL INTERPRETATION:According to survey, when I asked Of Overall Satisfaction Of The Customers With The Performance SBI 8 persons said excellent, 6 persons said good, 18 person said satisfactory 3 persons said average and no one said below average.

4.2DATA ANALYSIS HDFC BANK

SAMPLE SIZE 35 1. AGE GROUP AND DISTRIBUTION OF MALE AND FEMALE CUSTOMERS DEALING WITH HDFC a) Age Group
NO. OF AGE LESS THAN 25 25-35 35-45 45-55 55 & ABOVE PERSONS 4 12 7 9 3

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INTERPRETATION:According to survey, 4 persons is less than 25 years,12 persons is 25-35 years, 7 persons 35-45,19 persons 45-55 and the only 3 person 55 & above dealing with HDFC bank. In a 45-55 age group more persons dealing with SBI.

B) GENDER
NO. OF GENDER MALE FEMALE PERSONS 27 8

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INTERPRETATION:According to survey, 8 male and only 27 female customers dealing with SBI bank. Female customer very less compare to male customers.

2. OCCUPATION OF THE CUSTOMERS OF HDFC

NO. OF OCCUPATION SERVICE BUSINESMAN PROFESSIONAL STUDENT PERSONS 12 13 5 3 43

HOUSEWIFE

INTERPRETATION:According this to survey the occupation of HDFC customer in out of 35, 12 customers in service, 13 customers are businessman,5 customers are professional,3 customers are student and only 2 customers are housewife.

3. DISTRIBUTION OF THE INCOME OF THE CUSTOMERS OF HDFC PER YEAR

INCOME NIL LESS THAN 50000 50000-150000 150000-300000 300000-500000 500000-ABOVE NO. OF PERSONS 0 4 9 8 9 5

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INTERPRETATION:According this survey, the income of HDFC customers are 4 customers income less than 50000,9 customers income are 50000-150000,8 customers income are 150000-300000,9 customers income are 300000-500000 and only 5 persons income are above 500000 and above.

4. MOST IMPORTANT REASON FOR CHOOSING HDFC

FACTORS I have a traditional bank account with the same bank The brand name of the bank The excellent service offered by this bank ATM service Net banking facility Location advantage NO. OF PERSONS 3 6 12 5 2 7

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INTERPRETATION:According this to survey when asked the respondent most important reason for choosing HDFC bank they said 3 persons said traditional bank account with same bank, 6 persons said brand name.12 persons excellent service offered by bank , 5 persons said ATM service, 2 persons said net banking facilities and 7 persons location advantage.

5. ACCOUNT FACILITY AVAILING IN THE HDFC

FACILITY Savings account Current account Fixed deposit NRI account

NO. OF PERSONS 21 7 6 1

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INTERPRETATION:According to survey, when I asked the respondent which facility availing in the bank they said 21 persons said saving account,7 persons said current account,6 person said fixed account, only 1 person have NRI account.

6. NO. OF YEARS, CUSTOMERS DEALING WITH HDFC

NO. OF YEARS Less than 1 year 1 to 2 years 3 to 5 years More than 5 years PERSONS 7 9 13 6

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INTERPRETATION:According the survey, when asked the respondent, how many years dealing with HDFC bank 7 persons said less than 1 year,9 person said 1to 2 years, 13 persons said 3 to 5 years and 6 persons said more than 5 years.

7. REASON FOR TYPICALLY VISITING THE BANK BRANCH

NO. OF REASONS To make a deposit To get advice for investment options To inquire about a balance To withdraw cash PERSONS 17 3 5 10

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INTERPRETATION:According to survey, when asked the respondent, reason for visiting the branch, they said persons 17 persons said to make a deposit, 3 persons said to get advice for investment, 5 persons said to inquire about a balance and 10 persons said to withdraw cash.

8.WHICH FACILITY SATISFIES YOU MOST

NO. OF FACILITY ATM Loan Early cheque clearance Preparation of drafts Interest package Net banking Phone banking PERSONS 10 4 8 2 3 5 3

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INTERPRETATION:According the survey, when I asked the customer which facilities satisfied you , 10 persons said ATM,4 person said loan,8persons said early cheque clearance ,2persons said preparation of drafts, 3 person said interest package, 5 person said net banking and 3 persons said phone banking

9.IF YOU ARE PROVIDED WITH BETTER SERVICES BY OPTIONAL BANK. WOULD YOU LIKE TO MOVE TO OTHER BANK
YES NO 9 26

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INTERPRETATION:According to survey when I asked the HDFC bank customer, if you are provided with better services by optional bank. Would you like to move to other bank in out of 35 , 9 said yes and 26 said no.

10.OVERALL SATISFACTION OF THE CUSTOMERS WITH THE PERFORMANCE OF HDFC BANK

SATISFCTION EXCELLENT GOOD SATISFACTORY AVERAGE BELOW AVERAGE NO. OF PERSONS 7 12 8 5 3

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SATISFACTION LEVEL INTERPRETATION:According to survey, when I asked Of Overall Satisfaction Of The Customers With The Performance HDFC 7 persons said excellent, 12 persons said good, 8person said satisfactory 5 persons said average and 3 persons said below av

4.3DATA ANALYSIS COMPARATIVE STUDY OF SBI AND HDFC BANKS Sample Size 70 1. COMPARATIVE STUDY OF AGE GROUP WITH GENDER OF CUSTOMERS LINKING WITH SBI AND HDFC BANK a) AGE GROUP
AGE LESS THAN SBI 5 HDFC 4 52

25 25-35 35-45 45-55 55 & ABOVE

8 6 12 4

12 7 9 3

INTERPRETATION:According to survey, when compare to age group of SBI and HDFC bank. In SBI bank the more persons 12 belong to 45-55 and in HDFC bank more 12 person belong to 25-35 years

b) GENDER
GENDER MALE FEMALE SBI 28 7 HDFC 27 8

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INTERPRETATION:According to survey, when we compare to gender of SBI and HDFC bank, in SBI bank more 28 customers belong to male and 7 female customers but in HDFC 27 customers belong to male and 8 customer belong to female.

2. COMPARATIVE STUDY OF THE CUSTOMERS OF SBI AND HDFC BANK REGARDING THEIR OCCUPATION

OCCUPATION SERVICE

SBI 15 54

HDFC 12

BUSINESMAN PROFESSIONAL STUDENT HOUSEWIFE

6 3 8 3

13 5 3 2

INTERPRETATION:According to survey when compare to occupation of SBI and HDFC banks. In SBI Bank most of customer occupation is service but in HDFC bank most of customers occupation is businessman.

3. COMPARATIVE STUDY OF THE CUSTOMERS OF SBI AND HDFC BANK REGARDING THEIR INCOME PER YEAR
INCOME NIL LESS THAN 50000 50000-150000 150000-300000 300000-500000 500000-ABOVE SBI 0 8 7 10 6 4 55 HDFC 2 4 9 8 9 3

INTERPRETATION:According to survey, compare to Income of SBI and HDFC banks. In SBI bank 10 customer income lie 150000-300000 and In HDFC bank 9 customer income between 50000-150000 and 300000-500000.

4. MOST IMPORTAT REASON CHOOSING BANK

FACTORS I have a traditional bank account with the same bank The brand name of the bank The excellent service offered by this bank ATM service Net banking facility Location advantage SBI 12 4 5 7 3 4 HDFC 3 6 12 5 2 7

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INTERPRETATION:According to survey, when I compare to most reason to chosen a particular bank. In SBI most of customer said the reason of chosen to traditional bank account and in HDFC most of the customer said reason to chosen bank for excellent service offered by this bank.

5. COMPARATIVE STUDY OF THE CUSTOMERS OF SBI AND HDFC BANK REGARDING THE ACCOUNT FACILITIES PROVIDED TO THEM
FACILITY Savings account Current account Fixed deposit NRI account SBI 18 5 12 0 HDFC 21 7 6 1

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INTERPRETATION:According to survey , Comparative Study Of The Customers Of SBI And HDFC Bank Regarding type of account, most of SBI customers have saving account and HDFC customers have also saving account.

6. COMPARATIVE STUDY OF THE TIME PERIOD OF CUSTOMERS DEALING WITH SBI AND HDFC BANK
YEARS Less than 1 year 1 to 2 years 3 to 5 years More than 5 years SBI 7 12 7 9 HDFC 7 9 13 6

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INTERPRETATION:According to survey, when I compare to time period of customers dealing with SBI and HDFC bank. IN SBI bank Most of customers dealing with bank 1 to 2 years and IN HDFC bank 3 to 5 years.

7. COMPARITIVE STUDY OF REASON THAT MAKE CUSTOMER TO TYPICALLY VISIT BANK BRANCH
REASONS To make a deposit To get advice for investment options To inquire about a balance To withdraw cash SBI 14 2 7 12 HDFC 17 3 5 10

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INTERPRETATION:According to survey, when I compare reason that make customer to typically visit bank branch. In SBI bank most of the customer visit the branch to make a deposit and in HDFC bank customer also visit to make a deposit .

8. COMPARITIVE STUDY OF MOST SATISFYING FACILITY

OFFERED BY THEM
FACILITY ATM Loan Early cheque clearance Preparation of drafts Interest package Net banking Phone banking SBI 13 7 2 3 3 3 4 HDFC 10 4 8 2 3 5 3

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INTERPRETATION:According to survey, I compare to most satisfying facility Offered by them. In SBI bank most of the customer satisfied the ATM facilities and Ii HDFC customer also satisfied the ATM facilities.

9. CUSTOMERS WANT TO SHIFT TO ANOTHER BANK IF THEY ARE PROVIDED WITH BETTER SERVICE
CHANGE YES NO SBI 6 29 HDFC 9 26

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INTERPRETATION:According to survey, when I compare customers want to shift to another bank if they are provided with better service. In SBI bank 6 said yes and 29 said no but in HDFC bank 9 said yes 26 said no.

10. COMPARISON REGARDING THE OVERALL SATISFACTION OF THE CUSTOMERS

SATISFCTION EXCELLENT GOOD SATISFACTORY AVERAGE BELOW AVERAGE SBI 8 6 18 3 0 HDFC 7 12 8 5 3

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INTERPRETATION:According to survey, when I compare to regarding the overall satisfaction of the customers. In SBI most of customer said customers satisfactory and in HDFC bank most of the customers said good.

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CHAPTER5 CONCLUSION, SUGGESTIONS & RECOMMENDATIONS

CONCLUSION5.1
After conducting market research for comparative study of customers satisfaction towards HDFC bank and state bank of India we came to know different needs of satisfaction level of most consumers, their valuable suggestions, and responses to the different questions. With this information we can conclude that Customer respondents is higher for SBI and HDFC banks which is provided by survey. Higher satisfaction level of SBI and HDFC banks.SBI and HDFC provides good service facilities benefit for the customers like ATM service Net banking facility Location advantage etc.

5.2 SUGGESTIONS AND RECOMMENDATIONS

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1. Both the customers from SBI and HDFC bank have suggested that the bank should open one of its branches in industrial area like focal point. 2. One of the most common suggestions was to lower down the minimum balance required in the saving s account. 3. Staff should be more co-operative to the customers. 4. Customers were not fully aware of the services and the various charges which they have to pay. Therefore Banks should try to give some more information to its existing customers

BIBLIOGRAPHY WEBSITE USED

http:// www.statebankofindia.com http://www.banknetindia.com/banking/index_1.htm http://www.asiatradehub.com/india/banking/finance.html http://www.finance.indiamart.com/investment_in_india/standard_chartered_bank.

BOOKS FOLLOWED

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Research methodology by C.R. Kothari

ANNEXURE QUESTIONNAIRE
Name____________________ 1.a )Gender Male b) Age group Less than 25 35-45 55-above 2. Occupation 66 25-35 45-55 Female

 Service Professional Housewife 3.Income Nil 50,000 to 1, 50,000 3, 00,000 to 5, 00,000

Business Student

Less than 50,000 1, 50,000 to 3, 00,000 5, 00,000 and above

4. What was the single most important reason that you chose this particular Bank? I have a traditional bank account with the same bank A brand name of the bank ATM service Net banking facility Location advantage 5. Which account facility you are availing in the Bank? Savings account Fixed deposit Less than 1 year 3 to 5 year Current account NRI account 1 to 2 years More than 5 years

6. Since how many years you are dealing with this Bank

7. What is the main reason that you typically visit your bank branch? To make a deposit To get advice for investment options To inquire about a balance To withdraw cash any other please 8. Which facility satisfies you most? ATM Loan Early cheque clearance 67 Interest package Net banking Phone banking

 Preparation of drafts 9.If you are provided with better services by optional bank. Would you like to move to other bank? Yes No

10. How would you rank the overall service? Excellent Satisfactory Suggestions If any______________________________________________ Signature Good Average below Average

Thank you very much for your time, cooperation & patient

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