CHAPTER-1 INTRODUCTION

1.1 INDUSTRY PROFILE

HISTORY OF BANKING IN INDIA
There are three different phases in the history of banking in India. 1) 2) 3) Pre-Nationalization Era. Nationalization Stage. Post Liberalization Era.

1) Pre-Nationalization Era:
In India the business of banking and credit was practices even in very early times. The remittance of money through Hundies, an indigenous credit instrument, was very popular. The hundies were issued by bankers known as Shroffs, Sahukars, Shahus or Mahajans in different parts of the country. The modern type of banking, however, was developed by the Agency Houses of Calcutta. During the early part of the 19th Century, ht volume of foreign trade was relatively small. Later on as the trade expanded, the need for banks of the European type was felt and the government of the East India Company took interest in having its own bank. The government of Bengal took the initiative and the first presidency bank, the Bank of Calcutta (Bank of Bengal) was established in 1840. In 1840, the Bank of Bombay and IN 1843, the Bank of Madras was also set up. These three banks also known as Presidency Bank. The Presidency Banks had their branches in important trading centers but mostly lacked in uniformity in their operational policies. In 1899, the Government proposed to
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amalgamate these three banks in to one so that it could also function as a Central Bank. However, the conditions obtaining during world war period (1914-1918) emphasized the need for a unified banking institution, as a result of which the Imperial Bank was set up in1921. The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of the Country. In 1949, the Banking Regulation act was passed and the RBI was nationalized and acquired extensive regulatory powers over the commercial banks.In 1950, the Indian Banking system comprised of the RBI, the Imperial Bank of India, Cooperative banks, Exchange banks and Indian Joint Stock banks.

2) Nationalization Stages:.
Nationalization of banks paved way for retail banking and as a result there has been an alt round growth in the branch network, the deposit mobilization After Independence, in 1951, the All India Rural Credit survey, committee of Direction with Shri. A. D. Gorwala as Chairman recommended amalgamation of the Imperial Bank of India and ten others banks into a newly established bank called the State Bank of India (SBI). The Government of India accepted the recommendations of the committee and introduced the State Bank of India bill in the Lok Sabha on 16 th April 1955 and it was passed by Parliament and got the presidents assent on 8 th May 1955. In 1959, the SBI (Subsidiary Bank) act was proposed and the following eight state-associated banks were taken over by the SBI as its subsidiaries. Name of the Bank 1. State Bank of Hyderabad Subsidiary with effect from 1st October 1959

2. State Bank of Bikaner 3. State Bank of Jaipur 4. State Bank of Saurashtra 5. State Bank of Patiala 6. State Bank of Mysore 7. State Bank of Indore 8. State Bank of Travancore

1st January 1960 1st January 1960 1st May 1960 1st April 1960 1st March 1960 1st January 1968 1st January 1960

With effect from 1st January 1963, the State Bank of Bikaner and State Bank of Jaipur with head office located at Jaipur. Thus, seven subsidiary banks State Bank of India formed the SBI Group. On 19th July 1969, then the Prime Minister, Mrs. Indira Gandhi announced the nationalization of 14 major scheduled Commercial Banks each having deposits worth Rs. 50 crore and above. Later the Government Nationalized six more commercial private sector banks with deposit liability of not less than Rs. 200 crores on 15th April 1980, viz. i) ii) iii) iv) v) vi) Andhra Bank. Corporation Bank. New Bank if India. Oriental Bank of Commerce. Punjab and Sind Bank. Vijaya Bank.

In 1969, the Lead Bank Scheme was introduced to extend banking facilities to every corner of the country. Later in 1975, Regional Rural Banks were set up to supplement the activities of the commercial banks and to especially meet the credit needs and of course employment. The first year after nationalization witnessed the total growth in the agricultural loans and the loans made to SSI by 87% and 48% respectively. The overall growth in the deposits and the advances indicates the improvement that has taken place in the banking habits of the people in the rural and semi-urban areas where the branch network has spread.

Consequences of Nationalization:
The quality of credit assets fell because of liberal credit extension policy. Political interference has been as additional malady. Poor appraisal involved during the loan meals conducted for credit disbursals. The credit facilities extended to the priority sector at concessional rates.

3) Post-Liberalization Era---Thrust on Quality and Profitability:

By the beginning of 1990, the social banking goals set for the banking industry made most of the public sector resulted in the presumption that there was no need to look at the fundamental financial strength of this bank. Revamping this structure of the banking industry was of extreme importance, as the health of the financial sector in particular and the economy was a whole would be reflected by its performance. The need for restructuring the banking industry was felt greater with the initiation of the real sector reform process in 1992. the reforms have enhanced
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the opportunities and challenges for the real sector making them operate in a borderless global market place. The route causes for the lackluster performance of banks, formed the elements of the banking sector reforms. Some of the factors that led to the dismal performance of banks were. Regulated interest rate structure. Lack of focus on profitability. Lack of transparency in the banks balance sheet. Lack of competition. Excessive regulation on organization structure and managerial resource. Excessive support from government.

Against this background, the financial sector reforms were initiated to bring about a paradigm shift in the banking industry, by addressing the factors for its dismal performance. In this context, the recommendations made by a high level committee on financial sector, chaired by M. Narasimham, laid the foundation for the banking sector reforms. The Narasimham Committee suggested that there should be functional autonomy, flexibility in operations, dilution of banking strangulations, reduction in reserve requirements and adequate financial infrastructure in terms of supervision, audit and technology..

Private Sector Banks

Private banking in India was practiced since the begining of banking system in India. The first private bank in India to be set up in Private Sector Banks

in India was Indus Ind Bank. It is one of the fPastest growing Bank Private Sector Banks in India. IDBI ranks the tenth largest development bank in the world. The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited, to set up a bank in the private sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995. ING Vaysya, yet another Private Bank of India was incorporated in the year 1930. Bangalore has a pride of place for having the first branch inception in the year 1934.
Private Sector Banks

Old Pvt. Sector Banks (25)

New Pvt. Sector Banks (9)

Subsequently 9 new commercial banks have been granted license to start banking operations. The new private sector banks have been very aggressive in business expansion and is also reporting higher profile levels taking the advantage of technology and skilled manpower.

Current scenario
Currently (2007), overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural
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India still remains a challenge for the private sector and foreign banks. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks), 29 private banks and 31 foreign banks.

Organizational Structure of Banks in India:

In India banks are classified in various categories according to dif rent criteria. The following charts indicate the banking structure:
Reserve Bank of India

Commercial Banks

Co-operative Banks

Development Banks

Nationalized

Private

Short-term credit

Long-term credit

Agricultural Credit

Urban Credit

EXIM

Industrial

Agricultural

Broad Classification of Banks in India:

1) The RBI: The RBI is the supreme monetary and banking authority in the country and has the responsibility to control the banking system in the
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country. It keeps the reserves of all scheduled banks and hence is known as the Reserve Bank.
2)

Public Sector Banks:

State Bank of India and its Associates (8) Nationalized Banks (19) Regional Rural Banks Sponsored by Public Sector Banks (196)

(3) Private Sector Banks:

Old Generation Private Banks (22) Foreign New Generation Private Banks (8) Banks in India (40)

(4) Co-operative Sector Banks:

State Co-operative Banks Central Co-operative Banks Primary Agricultural Credit Societies Land Development Banks State Land Development Banks

(5) Development Banks: Development Banks mostly provide long term

finance for setting up industries. They also provide short-term finance (for export and import activities) Industrial Finance Co-operation of India (IFCI) Industrial Development of India (IDBI) Industrial Investment Bank of India (IIBI)
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 Small Industries Development Bank of India (SIDBI) National Bank for Agriculture and Rural Development (NABARD)

Export-Import Bank of India

The Role of Reserve Bank of India (RBI) Bankers Bank:

The Reserve Bank of India (RBI) is the central bank of India, and was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. Since its inception, it has been headquartered in Mumbai. RBI is governed by a central board (headed by a Governor) appointed by the Central Government. The current governor of RBI is Dr.Y.Venugopal Reddy (who succeeded Dr. Bimal Jalan on September 6, 2003). RBI has 22 regional offices across India.

Main Objective: Monetary Authority

Formulates, implements and monitors the monetary policy. Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.

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Regulator and supervisor of the financial system

Prescribes broad parameters of banking operations within which the countrys banking and financial system functions.

Objective: maintain public confidence in the system, protect depositors interest and provide cost-effective banking services to the public

Supervisory Functions:
In addition to its traditional central functions, the Reserve bank has certain non-monetary functions of the nature of supervision of banks and promotion of sound banking in India. The supervisory functions of the RBI have helped a great deal in improving the standard of banking in India to develop on sound lines and to improve the methods of their operation.

Promotional Functions:
With economic growth assuming a new urgency since Independence, the range of the Reserve Banks functions have steadily widened. The Bank now performs a variety of developmental and promotional functions, which, at one time, were regarded as outside the normal scope of central banking. The Reserve Bank was asked to promote banking habit, extend banking facilities to rural and semi-urban areas, and establish and promote new specialized financing agencies.

Co-operative Banks:
The Co-operative bank has a history of almost 100 years. The Cooperative banks are an important constituent of the Indian Financial System,
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judging by the role assigned to them, the expectations they are supposed to fulfill, their number, and the number of offices they operate. The co-operative movement originated in the West, but the importance that such banks have assumed in India is rarely paralleled anywhere else in the world. While the co-operative banks in rural areas mainly finance agricultural based activities including farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and self-employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for self-employment, industries, small scale units, home finance, consumer finance, personal finance, etc.

There are two main categories of the co-operative banks. (a) Short term lending oriented co-operative Banks within this category
there are three sub categories of banks viz state co-operative banks, District co-operative banks and Primary Agricultural co-operative societies.

(b) Long term lending oriented co-operative Banks

level.

within the second

category there are land development banks at three levels state level, district level and village

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1.2 Company Profile

1.2.1 DEPOSIT SCHEMES - SB

(1)Saral Savings Scheme
. Basic feature of the account shall be as under:1. Such accounts shall remain operative even when these have Zero balance & can be opened in any branch of the bank "Saral Savings Account" can be opened with the initial deposit of Rs100/- and thereafter the balance may go below Rs 100/- and will continue to be operative with even zero balance, unless the account holder request to close the account. No charges shall be levied in this regard. 2. Target Customers a) Landless labour / Artisans in the rural areas/House wives not having regular income. b) Casual labour / Daily wage earners in construction / Industries etc. earning small amount daily. c) Students having no sound financial background, having no resources and least chances of the saving opportunities.

3.Introduction of the account. An account holder qualifying KYC norms whose account is at least six month old with satisfactory operations may introduce the account.. 4.Operational Stipulation:a) Cheque Book will not be issued to this account holder, however on requisition loose cheque may be issued . Manager cheque / Demand Draft / MT may be issued on request of the account holder after satisfaction that transaction is genuine but each instrument not to exceed Rs 3000/-. Usual bank charges to be levied for issue of these instruments. b) Number of withdrawals permitted --'FIVE' in a month and 'TWENTY' per half year.

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(2.) Saving Bank account

+ Such accounts can be opened by Individuals (singly or jointly), Associations, clubs, educational institutions. Minimum Balance in Account Computerized Branches I) Where cheque Book is not issued Rs. 500/II) Where cheque Book is issued Rs. 1000/I) Where cheque Book is not issued Rs. 250/II) Where cheque Book is issued Rs. 500/I) Account with or without cheque Book facility Rs.100/-

NonComputerized Branches Rural Branches

Maximum balance + Any Amount can be deposited. Rate of Interest / Eligibility for payment of interest Rate of Interest Payment schedule

3.5% or such rate as prescribed by the RBI from time Payable on half yearly rest on Daily product basis from 1st to time. April 2010

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RECURRING DEPOSIT SCHEME

Who can open an account + An individual who is not insolvent or insane, can open an account singly or jointly. + A minor can open Saving bank Account and the same can be ope rated by the natural guardian or by minor himself / herself, if he / she is above the age of 10 years. The account can also be opened jointly. + On attaining majority, the erstwhile minor should confirm the balance in his / her account and if the account is operated by the natural guardian / guardian, fresh specimen signature of erstwhile minor duly verified by the natural guardian / guardian would be obtained and kept on record for all operational purpose.

+ Such accounts can be opened by Individuals (singly or jointly), a firm, company, club, Association , Institution, Govt. or Semi Govt. Body, Co-operative societies, religious and charitable institutions etc. Minimum deposit in the Account - Minimum of Rs. 10/Maximum deposit in the Account - Maximum of any amount per month. Minimum and Maximum tenure Minimum tenure - Minimum period six months. Maximum tenure - Maximum 10 years. Rate of Interest + As per rate applicable to fixed Deposit for the respective maturity period. Periodicity of Interest + The interest is compounded at quarterly intervals but paid along with principal at the time of maturity of deposit.

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A) INTEREST RATES ON RUPEE DEPOSITS

REVISED RATES Effective From 04.08.2010 Above Rs 15 lac to Rs 1 Crore 2.50 2.75 3.25 4.25 5.25 5.75 6.25 7.10/ 7.25*

Maturity

UPTO Rs 15 lac

Above Rs. 1 crore

7 - 14 Days 15 - 30 Days 31 - 45 Days 46 - 90 Days 91 - 179 Days 180 -269 Days 270 - 364 Days 1 Year-2 Years Above 2 Years - <3 Years 3 Years -< 5 Years 5 years - 10 years

2.50# 2.75 3.25 4.25 5.25 5.75 6.00 7.10/ 7.25*

2.50 3.10 3.25 4.75 5.75 6.10 6.50 7.10

7.25/ 7.50**

7.25/ 7.50**

7.25

7.25 7.50

7.00 7.00

7.25 7.50

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NOTE: (i) Senior Citizens shall be given an additional benefit of 0.50% on deposits of less than Rs. One Crore, over and above the mentioned rates, but ONLY for the maturities of 180 days & above for fresh as well on renewal of deposits. (Refer RMD Circular No. 131/09 dated 20.11.2009).

ATM BRANCHES LIST

" Punjab & Sind Bank, a Nationalized Bank with the successful history of over 100 years has always worked in direction of offering its customers the very best. Our ATM cards are a step in this direction and enables Anywhere Anytime Banking to you. Presently ATM facility is available for our customers on following locations and to serve you better it will be our endeavor to add more and more locations." FAQs for ATM

ame

Br Code

Location

Address

R A0031 A0102 A0288 A0695 KHALSA COLLEGE,AMRITSAR CIVIL LINES, AMRITSAR GNDU, AMRITSAR RANJIT AVENUE,AMRITSAR AMRITSAR,143001 LAWRENCE ROAD, CIVIL LINES, AMRITSAR 12 UNIVERSITY,CAMPUS,AMRITSAR,143001 SCO-33, DISTT. SHOPING CENTRE AMRITSAR

ARH C0689 C0032 IFB CHANDIGARH SECTOR 17C CHANDIGARH SECTOR 17-B, CHANDIGARH SECTOR 17/C , CHANDIGARH 160017

D0480 D0612 D0878 D0877

M BLOCK,CON.CIR, NEW DELHI SIDHARTHA ENCLAVE, NEW DELHI PREET VIHAR, DELHI MAYUR VIHAR, DELHI

M-14 ,NEW DELHI, NEW DELHI-110001 7 SIDHARATH ENCLAVE NEW DELHI 110040 B-136, PREET VIHAR NEW DELHI-110092

D - 31 ACHARYA NIKETAN,MAYUR VIHAR, NEW DELHI - 11

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GOLD CARD SCHEME FOR EXPORTERS

Exports play a crucial role in a developing economy like India which attaches considerable importance to export promotion. With a view to further simplify access of Bank credit to exporters especially small and medium exporters and make it borrower friendly in terms of procedure and credit terms. The Gold Card holders would enjoy simpler and more efficient credit delivery mechanism in recognition of his good track record. The Gold Card Scheme has been introduced in our Bank, the details of which are as under: 1. The card offered by the bank will be known as "PSB EXPO GOLD CARD SCHEME Eligibility: 1. All credit worthy exporters dealing with the bank for a minimum period of three years with good track record. 2. Exporters whose accounts have been classified as 'Standard' continuously for a period of three years and there are no irregularities/adverse features in the conduct of the accounts will be considered as having good track record.

Fixation of Credit Limits : 1. Application for credit will be processed faster than other exporters. The time frame fixed for disposal of applications received for sanction of credit under the scheme is as follows:For disposal of fresh applications Renewal of limits Sanction of adhoc limits 25 days 15 days 07 days

2. PCFC requirements of the PSB Expo Gold Card holders

PSB ICICI BANK CREDIT CARD

The credit card business is today one of the most dynamic and rapidly evolving businesses in the retail finance segment. If run judiciously can emerge as one of the most profitable asset product for any financial institution as also a key retention tool. Our Bank has been making efforts to provide value added products & Services to our esteemed clients. It is our quest to provide the very best to our esteemed Customers. The launch of new Co-branded Credit card with ICICI Bank is a step towards this mission. About the Card: The "PUNJAB & SIND BANK-ICICI BANK Credit Card" comes in three variants : Blue, Silver and Gold card. The eligibility criteria in terms of Annual Income of the applicant is as follows:

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Eligibility Salaried Self Employed

Blue Card Rs.60000/-p.a Rs.50000/-p.a

Silver Card

Gold Card

Rs.60000/- p.a Rs.120000/-p.a Rs.50000/- p.a Rs.100000/-p.a

1.3 VISION & MISSION

Corporate Vision
We envision to emerge as a strong vibrant Bank through synchronization of the human, financial and technological resources.

Corporate Mission
To put in place the effective Risk Management and Internal Control Systems. To adopt and operationalise high-level technology standards. To strive to achieve excellence in Customer Service. To achieve the highest standards of transparency and accountability in the conduct of banking business. To adopt professional approach in effectively managing financial as well as nonfinancial risks. To maximize profitability and profits of the Bank with due compliance of prudential guidelines.

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1.4 OWNERSHIP PATTERN

SHRI PARVEEN KUMAR ANAND EXECUTIVE DIRECTOR

DIRECTORS SHRI A. BHATTACHARYA DIRECTOR (Ministry of Finance, Deptt. of Financial Services, New Delhi) SHRI B. P. KANUNGO (RBI Nominee Director) SHRI SANDIP GHOSE, ADDITIONAL DIRECTOR (Regional Director, RBI New Delhi)

GENERAL MANAGERS

SARDAR GURCHARAN SINGH REKHI (Chief General Manager) SARDAR HARCHARAN SINGH MAKKER SARDAR HARCHARN SINGH LAMBA

(Posted at H.O.)

(Posted at H.O.) (Posted at H.O.)

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SARDAR PARAMJIT SINGH GHAWRI SARDAR JASPAUL SINGH KOCHAR SARDAR GURVINDER SINGH BINDRA SARDAR KULWANT SINGH SUCHDEVA SARDAR GURPAL SINGH MALIK SARDAR HARVINDER PAL SINGH

(Posted at H.O.) (Posted at H.O.) (Posted at L.H.O. Chandigarh) (Posted at H.O.) (Posted at Z.O. KOLKATTA) (Posted at Z.O. MUMBAI)

SARDAR MANJIT SINGH SHRI DINESH KUMAR GUPTA

(Posted at H.O.) (CVO - Posted at H.O)

1.5 Competitors information:

ICICI Bank Punjab National Bank State Bank of India

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1.6 PRODUCTS AND SERVICES OFFERED BY BANKS Broad Classification of Products in a bank:
The different products in a bank can be broadly classified into: Retail Banking. Trade Finance. Treasury Operations.

Retail Banking and Trade finance operations are conducted at the branch level while the wholesale banking operations, which cover treasury operations, are at the hand office or a designated branch.

Retail Banking:
Deposits Loans, Cash Credit and Overdraft Negotiating for Loans and advances Remittances Book-Keeping (maintaining all accounting records) Receiving all kinds of bonds valuable for safe keeping

Trade Finance:
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Issuing and confirming of letter of credit. Drawing, accepting, discounting, buying, selling, collecting of bills of exchange, promissory notes, drafts, bill of lading and other securities.

Treasury Operations:
Buying and selling of bullion. Foreign exchange Acquiring, holding, underwriting and dealing in shares, debentures, etc. Purchasing and selling of bonds and securities on behalf of constituents. The banks can also act as an agent of the Government or local authority. They insure, guarantee, underwrite, participate in managing and carrying out issue of shares, debentures, etc.

Common Banking Products Available:

Some of common available banking products are explained below:

1) Credit Card: Credit Card is post paid or pay later card that draws from a
line-money made available by the card issuer (bank) and gives one a the amount is not paid full by the end of the period, one is charged interest.

credit

grace period to pay. If

A credit card is nothing but a very small card containing a means of identification, such as a signature and a small photo. It authorizes the holder to change goods or services to his account, on which he is billed. The bank receives the bills from the merchants and pays on behalf of the card holder.

2)Debit Cards: Debit Card is a prepaid or pay now card with some stored

value.

Debit

Cards quickly debit or subtract money from ones savings account,or if one were taking out cash. Every time a person uses the card, the merchant who in turn can get the money transferred to his account from the bank of the buyers, by debiting an exact amount of purchase from the card. To get a debit card along with a Personal Identification Number (PIN). .3)Automatic

Teller Machine:

The introduction of ATMs has given the customers the

facility of round the clock banking. The ATMs are used by banks for making the cu stomers dealing 23

easier. ATM card is a device that allows customer who has an ATM card to perform routine banking transaction at any time without interacting with human teller. ATMs are currently becoming popular in India that enables the customer to wi thdraw their money 24 hours a day and 365 days. The advantages of ATMs are many. It increases existing business and generates new business. It allows the customers. To transfer money to and from accounts. To view account information. To order cash. To receive cash.

Advantages of ATMs: To the Customers

ATMs provide 24 hrs., 7 days and 365 days a year service. Service is quick and efficient Privacy in transaction Wider flexibility in place and time of withdrawals.

4)

E-Cheaques:

The e-cheaques consists five primary facts. They are the consumers, the

merchant, consumers bank the merchants bank and the e-mint and the clearing process. Electronic version of cheaques are issued, received and processed. A typical electronic cheque transaction takes place in the following manner: The customer accesses the merchant server and the merchant server presents its goods to the customer. The consumer selects the goods and purchases them by sending an e-cheque to the merchant. The merchant validates the e-cheque with its bank for payment authorisation. The consumers bank updates the consumers account with the withdrawal information.

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The e-chequing is a great boon to big corporate as well as small retailers. Most major banks accept e-cheques. Thus this system offers secure means of collecting payments, transferring value and managing cash flows.

5)

Electronic Funds Transfer (EFT):

Many modern banks have computerised

their cheque handling process with computer networks and other electronic equipments. These banks are dispensing with the use of paper cheques. The system called electronic fund transfer (EFT) automatically transfers money from one account to another. In big companies pay is not disbursed by issued cheques or issuing cash. The payment office directs the computer to credit an employees account with the persons pay.

6) Telebanking:

Telebanking refers to banking on phone services.. a customer can access

information about his/her account through a telephone call and by giving the coded Personal Identification Number (PIN) to the bank. Telebanking is extensively user friendly and effective in nature. To get a particular work done through the bank, the users may leave his instructions in the form of message with bank. Facility to stop payment on request. One can easily know about the cheque status. Information on the current interest rates. Information with regard to foreign exchange rates. Request for a DD or pay order. D-Mat Account related services. And other similar services.

7)

Mobile Banking: A new revolution in the realm of e-banking is the emergence of mobile

banking. On-line banking is now moving to the mobile world, giving everybody with a mobile phone access to real-time banking services, regardless of their location. But there is much more to mobile banking from just on-lie banking. It provides a new way to pick up information and interact with the banks to carry out the relevant banking business. The potential of mobile banking is limitless and is expected to be a big success. Booking and paying for travel and even tickets is also expected to be a growth area.

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8)

Internet Banking:

Internet banking involves use of internet for delivery of banking

products and services. With internet banking is now no longer confirmed to the branches where one has to approach the branch in person, to withdraw cash or deposits a cheque or request a statement of accounts. In internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. The Internet Banking now is more of a normal rather than an exception due to the fact that it is the cheapest way of providing banking services. As indicated by McKinsey Quarterly research, presently traditional banking costs the banks, more than a dollar per person, ATM banking costs 27 cents and internet banking costs below 4 cents approximately. ICICI bank was the first one to offer Internet Banking in India.

Benefits of Internet Banking:

Reduce the transaction costs of offering several banking services and diminishes the need for longer numbers of expensive brick and mortar branches and staff. Increase convenience for customers, since they can conduct many banking transaction 24 hours a day. Increase customer loyalty. Improve customer access. Attract new customers. Easy online application for all accounts, including personal loans and mortgages

Financial Transaction on the Internet:

Electronic Cash:
Companies are developing electronic replicas of all existing payment system:

cash, cheque, credit cards and coins.

Automatic Payments:

Utility companies, loans payments, and other businesses use on automatic

payment system with bills paid through direct withdrawal from a bank account.

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Direct Deposits:

Earnings (or Government payments) automatically deposited into bank accounts,

saving time, effort and money.

Stored Value Cards:

Prepaid cards for telephone service, transit fares, highway tolls, laundry

service, library fees and school lunches.

Point of Sale transactions:

efficient.

Acceptance of ATM/Cheque at retail stores and restaurants for

payment of goods and services. This system has made functioning of the stock Market very smooth and

Cyber Banking: It refers to banking through online services. Banks with web site Cyber branches
allowed customers to check balances, pay bills, transfer funds, and apply for loans on the Internet.

9)

Demat: Demat is short for de-materialisation of shares. In short, Demat is a process

where at the customers request the physical stock is converted into electronic entries in the depository system. In January 1998 SEBI (Securities and Exchange Board of India) initiated DEMAT ACCOUNTANCY System to regulate and to improve stock investing. As on date, to trade on shares it has become compulsory to have a share demat account and all trades take place through demat.

How to Operate DEMAT ACCOUNT?

One needs to open a Demat Account with any of the branches of the bank. After opening an account with any bank, by filling the demat request form one can handover the securities. The rest will be taken care by the bank and the customer will receive credit of shares as soon as it is confirmed by the Company/Register and Transfer Agent. There is no physical movement of share certification any more. Any buying or selling of shares is done via electronic transfers. 1) If the investor wants to sell his shares, he has to place an order with his broker and give a Delivery Instruction to his DP (Depository Participant). The DP will debit hi s account with the number of shares sold by him.

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2) If one wants to buy shares, he has to inform his broker about his Depository Account Number so that the shares bought by him are credited in to his account. 3) Payment for the electronic shares bought or sold is to be made in the same way as in the case of physical securities.

IV. BANKING SERVICES

Banking covers so many services that it is difficult to define it. However, these basic services have always been recognized as the hallmark of the genuine banker. These are The receipt of the customers deposits The collection of his cheques drawn on other banks The payment of the customers cheques drawn on himself

There are other various types of banking services like:

1) Advances Overdraft, Cash Credit, etc. 2) Deposits Saving Account, Current Account, etc. 3) Financial Services Bill discounting etc. 4) Foreign Services Providing foreign currency, travelers cheques, etc. 5) Money Transmission Funds transfer etc. 6) Savings Fixed deposits, etc. 7) Services of place or time ATM Services. 8) Status Debit Cards, Credit Cards, etc.

Customer Services in Commercial Banks:

Customer service is the service provided in support of a banks core products. Customer service often includes answering questions; handling complaints. Customer service can occur on site (as when an onstage employee helps a customer or answers a question) or it can occur over the phone or the Internet. Quality customer service is essential to building cordial customer relationship.

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Banking being a service industry, a lot depends on efficient and prompt customer service. Customer service is the most important duty of the banking operations. Prompt and efficient service with smile will develop good public relations reduce complaints and increase business.

Why is Customer Service Important?

Changing customer expectations:

Today the customer is more demanding and

more sophisticated than he or she was thirty years ago.

The increased importance of customer service: With changing customer

expectations, competitors are seeing customer service as a competitive weapon with which they differentiate their products and services.

The need for a relationship strategy:

To ensure that a customer service

strategy that will create a value preposition for customers should be formulated implemented and controlled. It is necessary to give it a central role and not one that is subsumed in the various elements of the marketing mix. The customer is the kingpim in growth organizations like commercial banks. Only those institutions which work according to his dictates will flourish. Quality, Consistency and Durability at low price are the final expectations of a customer. Quality will have to be unambiguous, of world class quality. Quality cannot be of minimum acceptable standards. Customer responsiveness must be quick and also competent. Speed, performance and cost will be the new values mantra for success. The ten key areas of customers services to be attended timely and regularly are: i. ii. iii. iv. v. vi. vii. viii. ix. Submission of statement of A/Cs to customers Updating of savings pass books. Teller system efficiency. Cleanliness and Upkeep of premises. Intermediate Credit for institution cheques/land bills. Advance intimation to customers for rewards of Term Deposits Receipts on maturity. Advance for Debit/credit to accounts. Punctuality of staff. Handling of complaint register.

29

x.

Maintain a complaint register. Customers dissatisfaction in the banking industry is neither recent nor unknown. This is

mainly due to delays in handling transactions across the counter in collections, update of passbooks supply of statements of accounts, etc. Failure to provide prompt and efficient customer service is likely to lead to reduction in the number of customers and they may have to face closure. To event such situation the following improvements in the customer services may be carried out: 1) Personal relations of the bank employee with customers will improve customer satisfaction. 1 service with smile should be the motto of every bank employee. 2) Rapid customer services should be provided through automation of work and simplification of procedures. 3) ATMs may be introduced in all the branches of the banks, based upon the volume of transactions. This shall facilitate non-stop banking. 4) Credit Cards Services, Debit Card Services, which should be provided to the customers, must a link service with all the banks and branches if possible to facilitate the customer and the business organizations. 5) E-mail service made freely available at all banking centers. 6) Foreign Exchange transactions are to be extended to all the branches to facilitate trade and industries. 7) All the customers are not homogenous in their needs. Hence need based schemes may be introduced. 8) Totally deregulated interest rate structure should be there. 9) The banking staff must be trained to understand the customers psychology, so they may provide customer service in a qualified manner. 10) Educating the customers will increases better utilisation of banking services.

V.

BANK MARKETING:
The banking business is essentially other peoples money and bankers brain. The

secret of its success lies in satisfying customer needs for which the banks have to rediscover the marketing cmocept.

30

It is right to mention that bank marketing is a managerial process by which services are matched with markets. The matching of services with market is meant formulation of overall marketing strategies which suit the taste, temperament, needs and requitements of customers. In view of the above, marketing of banking services is concerned with product, promotion, pricing, and place. In addition, it is also concerned with people, process and physical appearance.

Objectives of Bank Marketing:

Profitability Providing high return on investment Achieving certain market share/growth Development of an image Developing new products to meet emerging customer requirements. Increase in deposits and loans Directing customers to certain products Increasing awareness Increasing customer base through greater customer satisfaction.

VI. ROLE OF INFORMATION TECHNOLOGY (IT) IN THE BANKING SECTOR

Banking environment has become highly competitive today. To be able to survive and grow in the changing market environment banks are going for the latest technologies, which

31

is being perceived as an enabling resource that can help in developing learner and more flexible structure that can respond quickly to the dynamics of a fast changing market scenario. It is also viewed as an instrument of cost reduction and effective communication people and institutions associated with the banking business. Information Technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products and services. The customers can view the accounts; get account statements, transfer funds and purchase drafts by just punching on few keys. The smart cards i.e., cards with micro processor chip have added new dimension to the scenario. IT is increasingly moving from a back office function to a prime assistant in increasing the value of a bank over time. IT does so by maximizing banks of pro-active measures such as strengthening and standardising banks infrastructure in respect of security, communication and networking, achieving inter branch connectivity, moving towards Real Time gross settlement (RTGS) environment the forecasting of liquidity by building real time databases, use of Magnetic Ink Character Recognition and Imaging technology for cheque clearing to name a few. Indian banks are going for the retail banking in a big way

E-Banking:E-banking

made its debut in UK and USA 1920s. It becomes prominently

popular during 1960, through electronic funds transfer and credit cards. The concept of webbased baking came into existence in Eutope and USA in the beginning of 1980. In India e-banking is of recent origin. The traditional model for growth has been through branch banking. Only in the early 1990s has there been a start in the non-branch banking services. The new pribate sector banks and the foreign banks are handicapped by the lack of a strong branch network in comparison with the public sector banks. Credit Cards Debit Cards
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 ATM E-Cheques EFT (Electronic Funds Transfer) D-MAT Accounts Mobile Banking Telephone Banking Internet Banking EDI (Electronic Data Interchange)

Benefits of E-banking:
To the Customer:
Anywhere Banking no matter wherever the customer is in the world. Balance enquiry, request for services, issuing instructions etc., from anywhere in the world is possible. Anytime Banking Managing funds in real time and most importantly, 24 hours a day, 7days a week. Convenience acts as a tremendous psychological benefit all the time. Brings down Cost of Banking to the customer over a period a period of time. Cash withdrawal from any branch / ATM On-line purchase of goods and services including online payment for the same.

To the Bank:
Innovative, scheme, addresses competition and present the bank as technology driven in the banking sector market Reduces customer visits to the branch and thereby human intervention Inter-branch reconciliation is immediate thereby reducing chances of fraud and misappropriation On-line banking is an effective medium of promotion of various schemes of the bank, a marketing tool indeed. Integrated customer data paves way for individualised and customised services.

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Impact of IT on the Service Quality:

The most visible impact of technology is reflected in the way the banks respond strategically for making its effective use for efficient service delivery. This impact on service quality can be summed up as below: With automation, service no longer remains a marketing edge with the large banks only. Small and relatively new banks with limited network of branches become better placed to compete with the established banks, by integrating IT in their operations. The technology on one hand serves as a powerful tool for customer servicing, on the other hand, it itself results in depersonalising of the banking services. This has an adverse effect on relationship banking. A decade of computerization can probably never substitute a simple or a warm handshake.

Impact of IT on Banking System:

The banking system is slowly shifting from the Traditional Banking towards relationship banking. Traditionally the relationship between the bank and its customers has been on a one-to-one level via the branch network. This was put into operation with clearing and decision making responsibilities concentrated at the individual branch level. The head office had responsibility for the overall clearing network, the size of the branch network and the training of staff in the branch network. The bank monitored the organisations performance and set the decision making parameters, but the information available to both branch staff and their customers was limited to one geographical location.

Traditional Banking Sector

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CUSTOMER

CUSTOMER

CUSTOMER

BANK BRANCH

BANK BRANCH

BANK BRANCH

CLEARING DECISION

CLEARING DECISION

CLEARING DECISION

CENTRAL CLEARING

HEAD OFFICE

The modern bank cannot rely on its branch network alone. Customers are now demanding new, more convenient, delivery systems, and services such as Internet banking have a dual role to the customer. They provide traditional banking services, but additionally offer much greater access to information on their account status and on the banks many other services. To do this banks have to create account information layers, which can be accessed both by the bank staff as well as by th customers themselves. The use of interactive electronic links via the Internet could go a ling way in providing the customers with greater level of information about both their own financial situation and about the services offered by the bank.

The New Relationship Oriented Bank

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CUSTOMER

TELEPHONE, BRANCH, ELECTRONIC BANKING, etc

SHARED INFORMATION

CLEARING SYSTEM

HEAD OFFICE RISK MONITOIRING

Impact of IT on Privacy and Confidentiality of Data:

Data being stored in the computers, is now being displayed when required on through internet banking mobile banking, ATMs etc. all this has given rise to the issues of privacy and confidentially of data are: The data processing capabilities of the computer, particularly the rapid throughput, integration, and retrieval capabilities, give rise to doubts in the minds of individuals as to whether the privacy of the individuals is being eroded. Customers feel threatened about the inadequacy of privacy being maintained by the banks with regard to their transactions and link at computerised systems with suspicion. Aside from any constitutional aspect, many nations deem privacy to be a subject of human right and consider it to be the responsibility of those who concerned with computer data processing for ensuring that the computer use does not revolve to the stage where different data about people can be collected, integrated and retrieved quickly. Another important responsibility is to ensure the data is used only for the purpose intended.
36

VII. RECENT TRENDS IN BANKING

Today, we are having a fairly well developed banking system with different classes of banks public sector banks, foreign banks, private sector banks both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the fountain Head of the system. During the last 39 years since 1969, tremendous changes have taken place in the banking industry. The banks have shed their traditional functions and have been innovating, improving and coming out with new types of the services to cater to the emerging needs of their customers. The major challenges faced by banks today are as to how to cope with competitive forces and strengthen their balance sheet. Today, banks are groaning with burden of NPAs. It is rightly felt that these contaminated debts, if not recovered, will eat into the very vitals of the banks. Another major anxiety before the banking industry is the high transaction cost of carrying Non Performing Assets in their books. The resolution of the NPA problem requires greater accountability on the part of the corporate, greater disclosure in the case of defaults, an efficient credit information sharing system and an appropriate legal framework pertaining to the banking system so that court procedures can be streamlined and actual recoveries made within an acceptable time frame. The banking industry cannot afford to sustain itself with such high levels of NPAs thus, lend, but lent for a purpose and with a purpose ought to be the slogan for salvation. homes and operating through internet. This would be the case of banking reaching the customers. In the days to come, banks are expected to play a very useful role in the economic development and the emerging market will provide ample business opportunities to harness. Human Resources Management is assuming to be of greater importance. As banking in India will become more and more knowledge supported, human capital will emerge as the finest assets of the banking system. Ultimately banking is people and not just figures.

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VIII. STRAINS AND CHALLNGES

Liberalisation process has increasingly exposed Indian Industry to international competition and banking being a service industry is also not an exception. Banking Sector in India too faces same strains and challenges at local, national and international level. Indian Banks, functionally diverse and geographically widespread, have played a crucial role in the socio-economic progress of the country after independence. However, the growth led to strains in the operational efficiency of banks and the accumulation of nonperforming assets (NPAs) in their loan portfolios. Intense Competition: The RBI and Government of India kept banking industry open for the participants of private sector banks and foreign banks. The foreign banks were also permitted to set up shop on India either as branches or as subsidiaries. Due to this lowered entry barriers many new players have entered the market such as private banks, foreign banks, non-banking finance companies, etc. The foreign banks and new private sector banks have spearheaded the hitech revolution. Technological Up gradation: Already electronic transfers, clearings, settlements have reduced translation times. To face competition it is necessary for banks to absorb the technology and upgrade their services. However use of High-Tech sophisticated technology leaves the predominantly rural, poor and even illiterate mans in the lurch to which the level of automation and efficiency of services are immaterial. Privacy and Safety: Among the most important aspects, of savings, i.e., safety liquidity and profitability, safety has to be accorded top most priority. The safety aspect assumes more significance in the emerging scenario as the economic loss caused internationally by these types of crimes might risk area and any lacunae is safety would result in erosion of confidence and the same might possibly paralyse the entire network. The areas among other things, which might endanger security in e-banking can be:

38

 Changes in input data such as changing the amount in ledges, increasing the limits in accounts or face value of cheaques. Though these trends could be detected consequently, prevention is a major problem with these types of crimes. Use of stolen or falsified cards in ATM machines. Human Resources Management: In the recent past the human resource Policies in banks were mainly guided by the comcept of permanent employment and its necessary concomitants of creating career paths, terminal benfits, etc. for the employees. In todays fast-changing world of employee mobility both horizontally and vertically and value systems, the public sector banks need to hire the right talent at market related compensation and to shed surplus manpower/staff. Thus many banks are going for URS schemes to reduce the burden of excessive staff. Schemes like VRS are going to change the nature of workforce with many senior and experienced persons opting for it. The key elements that shall provide a competitive edge to banking sector will not be physical assets but knowledge assets and information. Therefore, banks must understand how to retain knowledge based employees and prevent them to migrating to some other organisation. Banks must believe in people, customer orientation, and continuous improvement of excellence. Therefore it becomes necessary for banks to encourage all employees to take risks and work towards continuous improvements and breakthroughs. Successful banks overcoming the challenges will be those that harness technology in a customer friendly yet cost effective way. This requires enormous internal and external management and the crux of the solution lies in blending human resources with information technology.

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IX. CASE STUDY CO-OPERATIVE BANK AND ITS SERVICES SARASWAT CO-OPERATIVE BANK LIMITED
The Bank has a very humble but a very inspiring beginning. On 14th September 1918, "The Saraswat Co-operative Banking Society" was founded. Mr. J.K. Parulkar became its first Chairman, Mr. N.B. Thakur, the first Vice-Chairman, Mr. P.N. Warde, the first Secretary and Mr. Shivram Gopal Rajadhyaksha, the first Treasurer. These were the people with deep and abiding ideals, faith, vision, optimism and entrepreneurial skills. These dedicated men in charge of the Society had a commendable sense of service and duty imbibed in them. Even today, our honourable founders inspire a sense of awe and respect in the Bank and amongst the shareholders. The Society was initially set up to help families in distress. Its objective was to provide temporary accommodation to its members in eventualities such as weddings of dependent members of the family, repayment of debt and expenses of medical treatment etc. The Society was converted into a full-fledged Urban Co-operative Bank in the year 1933. The Bank has the unique distinction of being a witness to History. The Bank, which was originally founded in 1918, i.e. close on the heels of the Russian Revolution, also witnessed as a Society and as Bank-the First World War, the Second World War, India's freedom Movement and the glorious chapter of post-independence India. During this cataclysmic cavalcade of history, the Bank as a financial institution and its members could not of course remain unaffected by the economic consequences of the major events. The two wars in particular brought in their wake, paucities of all kinds and realities and stand by its members in distress as a solid bulwark of strength.

40

The Founder Members and the later-day management's of the Bank continued to demonstrate their unwavering faith in the destiny of the common man and the co-operative movement and they encouraged the shareholder to save despite all odds. MISSION STATEMENT: "To emerge as one of the premier and most preferred banks in the country by adopting highest standards of professionalism and excellence in all the areas of working.

MILESTONES:

Thanks to these sustained and assiduous efforts over 25 years after its inception, the Bank had gained Strong foundation in terms of its membership, resources, assets and profits. By 1942, the Bank was fulfilling all the banking needs of its customers. During the late fifties, the Bank grew from strength to strength. The Bank had established five branches within the city of Mumbai and one each at Pune and Belgaum. In its 50th year, the Bank chose a bee motif to symbolise the Bank's emblem - a fitting and appropriate characteristics of a Bank that believed in hard work, a search for all that is good, a team spirit to achieve its objectives and a selfless service to its members and customers. The Bank has grown in stature, progressed in its social and economic objectives and produced an image of what an ideal bank should be. Resultantly, in the year 1977-78, the Bank's gross income crossed the Rs.3.00 crore mark for the first time.

Last two decades the bank has witnessed a steady growth in the business. The bank has a network of 86 fully computerised branches covering five states viz. Maharashtra, Gujarat, Madhya Pradesh, Karnataka and Goa. The Bank is providing 24- hour service through ATM at 41 locations.

41

In 1988 the bank was conferred with "Scheduled" status by Reserve Bank of India.The bank is the first co-operative bank to provide Merchant Banking services. The bank got a permanent license to deal in foreign exchange in 1978. Presently the Bank is having correspondent relationship in 45 countries covering 9 currencies with over 125 banks SERVICES PROVIDED Saraswat Co-operative Bank being the No.1 co-operative bank in Asia, our efforts are always directed towards developing and offering competitive and innovative products and services. In the wholesale banking business, the Saraswat Co-operative Bank Ltd. provides a wide range of products from a traditional term loans to short term products like Bills discounting under Letter of Credit etc. The Bank also offers a bouquet of Retail Loan Products such as Vastu Siddhi Home Loan, Saraswati Education Loan, Car Loan etc. and wide array of Deposit schemes with customer friendly features and attractive Rate of Interest. With a view of fulfilling all the needs of the customers under one roof Bank has entered into tie-ups with various premium institutions, through which we are offering third party products like Life and non-Life Insurance, Mutual Funds and Demat Services.

Following are the Services Provided by the Saraswat Bank PERSONAL

Deposits Scheme Personal Loans

1.

Deposits Scheme

Saraswat Bank provides information of it's various deposit schemes customers can avail of with the bank

42

 CUBS Deposit Current Deposit Elite Savings Janhit Account (No frills account) Savings Deposit Co-operative Societies Savings for Kids (CUBS)

Features:
a) You should be a minor/student (upto the age of 21 years) to become 'CUBS' account holder. b) Initial deposit of Cubs account is Rs 50/- and subsequent deposits in multiples of Rs 10/- no periodic compulsion for subsequent Deposit. c) Starting with a small amount of Rs. 50/-, a CUB Account holder has to save Rs. 500 /- over a period of one year. d) Facility to deposit cash in school premises on predetermined days. e) After completion of 14 years of age minor/student can operate the account Cheque book facility not available.

Benefits
"Free Gift" for all account holders. Earn Interest @ 3.5 p.a. every quarter possess specially designed passbook.

Minimum Balance:
Account opening - Rs. 50/- with further deposit of Rs. 10/- Rs. 500/- after one year of opening account.

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 Current Deposits

Features:
Minimum Average Balance. Eligibility - Individual, Businessmen, Organizations. Minimum Balance of Rs 5000/- . Free ATM cards. Non-Maintenance of minimum average quarterly balance require to pay service charges of Rs. 200/- per month. If account is closed within 6 months Rs. 30/- plus Rs. 2/- per unused cheaques.

Elite Savings
Eligibility: Individuals, Minor by guardian, Organisations, Co-operative Societies. Minimum Balance:
Rs. 5000/- (Average Quarterly Balance)

Rate of Interest: 3.50% p.a. Penalty for Non-maintenance of minimum balance: Minimum quarterly average
balance: Below Rs. 4000/- to Rs. 4999/- - Rs. 50 per quarter.Below Rs. 4000/- - Rs. 100 per quarter.

Special features / facilities:

Free Personal Accident Insurance Cover of Rs. 2.00 Lakhs for one year. Free Utility Bills Payment facility. Free Issue of Demand Draft / Pay Order (one occasion per month without ceiling on maximum amount) Free ATM Card.

Janhit Account (No Frills Account)

44

Eligibility:
1) Persons whose balances do not exceed Rs 50,000/- in all the accounts taken together. 2) Total credits to the Janhit account should not exceed Rs 1 lakh in a year. 3) Once a customer opens a Janhit Account with the Bank, he/she will have to close all other transaction accounts with any other bank within a period of 60 days from the date of opening the Janhit Account with our bank. 4) The initial deposit amount required to open account would be Rs.250/-

Savings Deposits Minimum Average Balance

Rs. 1000 /- with or without Cheque Book Free ATM card

Interest
3.5% p.a. with quarterly rest

Penalty / Service Charges

Non-Maintenance of minimum average quarterly balance of Rs 1000/- require to pay Rs 50/- per month If account is closed within 6 months Without cheque book - Rs. 10 /With cheque book - Rs. 15 /- plus Rs. 2 per unused cheque

Co-operative Societies
Eligibility Co-operative societies

Minimum Amount
Minimum quarterly average balance of Rs. 15000/in Saving/Current Account Minimum Rs. 3.00 lacs in Term Deposit

Rate Of Interest
0.5% extra interest as compared to General Public for Term Deposit.

45

For Saving Account 3.5% For Current Account Nil

Special Features/Facilities
Free Affinity Card Free Cheque Collection Service. Free delivery of Statement of Account (once in a month) Free Utility Bill Payment (Easy Pay Scheme) Free transfer of Funds from the account of member of the Society to Societys account for monthly maintenance Free issue of D.D./P.O. upto Rs. 25000/- each.

IX. Personal Loans

Saraswat Co-operative Bank offers various loans to its customers, one can opt for any of the below listed loans for their assortment of needs.

Medical Loan Purpose

Term Loan for acquiring Nucleus Cochlear Implant

Banking Relation
Previous banking relations are not compulsory. Applicant should be residing in the city where the branch is located.

Eligibility
Hearing Impaired individual OR their Parents

46

Limit of Loan
Rs. 10.00 Lakhs

100% of the cost of equipment and hospitalisation and allied charges 70% of the Market value based on valuation by approved valuer of the commercial

EMI
Fixed Monthly Installments: ( For Rs 1.00 Lakh ) Year 1 2 3 4 5

Amount 8839 4661 3274 2585 2175

Repayment Period Maximum 5 Years

Security
Equitable mortgage of residential / commercial premises Pledge of tangible securities viz. NSCs, KVPs.LIC policies, FDRs, Gold or any other approved securities 2 Guarantors of well placed means

47

 Property Loan
Purpose Acquiring another asset, for any other purpose, but end use should be ensured.

Limit of Loan Minimum - Rs.2 lakhs Maximum - Rs. 50 Lakhs

Basis of Advance a) 25 times of net salary in case of salaried person Or b) 3 times of net cash accruals.(Net of tax and drawing plus depreciation) Or c) 60% of agreement cost (If the property is less than 3 years old.). In other cases, 60% of value as per valuation report.

a,b,c Whichever is lower

Eligibility a) Individual who are salaried employees having minimum net salary of Rs.10000/- p.m. (The income of the spouse may be added) b) Professional, Self-Employed and others who are income tax assessee having net annual taxable income of Rs.150000/- for at least 3 years continuously. c) Firm/Company, whose net annual taxable income is Rs.150000/- p.a. and firm/company, is in operation for last 3 years and making cash profit for last 3 years, at the above level.

Rate of Interest Term loan - 12.50% on Daily Reducing Balance Cash credit - 13% on Daily Reducing Balance

48

Repayment Period Term Loan - Maximum 5 years Cash Credit - with reducing limit (in 60 monthly installments) subject to renewal every year.

Security Equitable Mortgage of Residential, commercial or industrial property.

Guarantor: Need not be obtained however in case of firms, companies, guarantee of partners, directors to be obtained.

Home Loan
Purpose of Loans Purchase of flat / bungalow Limits of Loans Maximum Rs.25.00 lakhs. Basis of Advance/ Eligibility. 95% of cost of land & construction or cost of flat + registration charges + stamp duty. 100% of cost on case to case basis with 10% collateral security in the form of approved liquid securities like Term Deposit, Govt. Securities, NSC, KVP, LIC etc.

Option I(Regular Repayment) - 60 times of net monthly salary (avg. for the last three months)Or 3 times of Net Cash accruals (average for the last 2-3 years net profit after adding back of depreciation) of applicant, spouse and close blood relative
49

Option II (Bullet Repayment) & Option III (Progressive Repayment)- 65 times of net salary (avg. for the last three months) or 3 times of net cash accruals (average for the last 2-3 years net profit after adding back of depreciation) of the applicant, spouse, and dependent blood relative, if applicant opts for Bullet payment mode. Repayment Period Maximum 15 years

Rate of Interest
Flexi Fixed : 11.00% p.a. - Varying every 3 years Floating : 11.50% p.a. Fixed : 12.50% p.a.

CORPORATE

Customer is not an intervention; he is the very reason for our existence. The Bank realises this. We provide a wide array of commercial and electronic Banking products to corporate/ mid corporate/SME. Despite rapid growth in credit portfolio, Banks asset quality has shown constant improvement. Your Bank has a wide exposure to various industries. We are providing various facilities from funded to none funded from short term to long term ensuring that you get finance as per your needs.

Mid Corporate Products Small & Medium Enterprises (SMEs)

1)

Mid Corporate Products.

Bank provides variety of credit facilities to its Corporate Clients as under: Working Capital
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The Bank with a team of technically qualified competent customer driven relationship managers possessing wide industry experience in various segments, the Bank has taken lot of efforts to understand customers & empathizing with their needs.

They can offer you working capital finance by way of cash credit or loans suitably structured to your need and risk profile in consortium or as a lead banker. Our working capital solutions are based on financial, quantitative & qualitative evaluation of your business through our technically qualified experts.

Term Loan
The Bank provides term finance/term loans for business expansion, up gradation of existing facilities etc to ease the pressures on margins of the company .The Bank is providing structured term loans to meet your short term as well as long term funding requirements. We offer specific solution so as to match repayment with your cash flows to repay the debt thereby enhancing your profitability.

2) Small & Medium Enterprises (SMEs)

For a business on the growth phase with a wide range of opportunities to explore, timely availability of credit is essential to scale new heights. At Saraswat Bank we see ourselves as partners to Clients business enabling you to focus on your business needs.

Working Capital

The Bank with a team of technically qualified competent customer driven relationship managers possessing wide industry experience in various segments. The Bank has taken lot of efforts to understand customers & empathizing with their needs.

The can offer you working capital finance by way of cash credit or loans suitably structured to your need and risk profile in consortium or as a lead banker. Their working capital solutions are based on financial, quantitative & qualitative evaluation of your business through our technically qualified experts.
51

Import Finance

Bank is providing import finance to its valuable customers by providing letter of credit facility for its customers to purchase their raw materials. These are generally provided for days. 90 to 180

SERVICES
Saraswat Co-operative Bank provides information of various Value added services that the Bank provides for it's esteemed Customers under this section.

EASY PAY
Here is one more exciting facility the Bank has offered to relieve you, its esteemed client, from their valuable time standing in a queue for routine utility bill payments.All they have to do is to walk into any of the branch and register themselves under: Easy Pay scheme for all their recurring utility bill payments such as Telephone, Electricity Bills, Cellular Phone Bills, Insurance Premium & many more. Once the customers are registered all their future bills will be paid automatically through their bank account with bank.Any Customer can download the form and submit it to nearby branch.

ATM SERVICES
Please do not waste the valuable "Time" for "Money", as the "Time" itself is "Money". The Saraswat Co-operative Bank issue ATM card to all their clients who open account with the Bank.a Saraswat Bank ATM cardholder, the account holder enjoy the privilege and convenience of withdrawing cash at their convenience at time during day and night on all 365 days in a year. They can draw cash from ATMs of Saraswat Bank as well as over 2461 ATMs of 20 members Banks in "BANCS" network. For drawing cash from the ATMs of Consortium banks, no charges are levied.

52

INSURANCE
It is the Banks earnest endeavor to offer suite of new and competitive financial products and services. The Bank has for this purpose tied up with various insurance companies. The details of tie-up and products offered are given below:

[A] LIFE INURANCE.

For Life Insurance products, we have entered into a tie-up with M/s. HDFC Standard Life Insurance Company Limited. We offer following products:

1) Endowment Plan:
This being a popular savings plan is useful for meeting all long/ short-term financial needs and also covers the risk of the applicant's life. Tax benefit under Sec 80 C is also available.

2) Childrens Double benefit plan:

It is the most popular plan which helps you save and secure your child's future to meet expenses for education, marriage etc. It is also known as double benefit plan as on death of life insured the beneficiary (child) gets the sum assured on death of applicant as well as on maturity of the policy. Tax benefit under Sec 80 C is also available.

3) Term Assurance plan:

It is purely life risk cover plan. On death of the life insured the nominee gets the policy amount. Tax benefit under Sec 80 C is available.

4) Regular Personal Pension Plan:

It is plan, which provides annuity at the retirement age. This plan is a with profit pension plan suitable for everyone to help provide regular financial security to the family. Plan takes care of retirement age, return on investment, inflation etc. Tax benefit under Sec 80 C available.

53

[B]

NON-LIFE INURANCE:
For Non-Life Insurance we have a tie-up with M/s. Bajaj Alliance General Insurance Co Ltd. Under the arrangement we offer following insurance products:

1) Health guard:
This plan provides for reimbursement of Hospitalisation expenses incurred for illness/ diseases or injury sustained. The key features are lowest premium, takes care of pre and post hospitalisation expenses, ambulance charges, family discount, cashless facility with network of 600 hospitals across India. Tax benefit under Sec 80 D is available.

2) Travel Companion:
It is an Overseas Travel Insurance that covers reimbursement of medical expenses at abroad, along with loss of passport/ baggage during overseas travel.

3) Personal Accident Insurance: It covers risk of death on accident. 4) Vehicle Insurance:

vehicle. It insures your vehicle incase of damage or loss to the

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X.

CONCLUSION

The banking scenario has changed drastically. The changes which have taken place in the last ten years are more than the changes took place in last fifty years because of the institutionalisation, liberalisation, globalisation and automation in the banking industry. Indian banking system has several outstanding achievements to its credit, the most striking of which is its reach. Indian banks are now spread out into the remote corners of our country. In terms of the number of branches, Indias banking system is one of the largest in the world. According to the Banker 2004, India has 20 banks within the worlds top 1000 out of which only 6 are within the top 500 banks. Today banking sector is marked by high customer expectations and technological innovations. Technology is playing a crucial role in the day to day functioning of the banks. These banks that have harnessed and leveraged technology best have a strategic advantage. To face competition it is necessary for banks to absorb the technology and upgrade their services. In todays context banks are following the strategy of relationship banking than mass banking which is need of the hour. The customer services are playing a very significant role in banking business. In India major events leading to deregulation, liberalisation and privatisation have unleashed forces of competition, making the banks run for their business, not only to create the customer, but more difficult to run for their business, not only to create the customer, but more difficult to retain the customer. Prompt and efficient customer service, thus, has become very significant. Relationship banking is the new paradigm for survival and success, embracing a share of customer approach to growth by identifying, protecting and expanding customer relationship.

XI BIBLIOGRAPHY Websites Visited www.google.com www.answers.com

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CHAPTER-2 REVIEW OF LITERATURE

56

REVIEW OF LITERATURE

JOSHI(1980) Punjab and Sind Bank(P&SB) was set up to Household savings including funds from the Capital Market into this sector. P&SB emerged as the largest mortgage Finance institution in the country. With the main objective to develop significant expertise in retail mortgage loans to different s market segments His study also revealed that there was a large corporate client base for bank related facilities and to supported in the promotion of home ownership. P&SB residential bank stock and promoted home ownership. The study also depicted the increase flow of resources for sind bank through the integration of sind banking financial institutions with the domestic market. It has developed a strong market reputation, large shareholder base and a unique consumer franchise and was respected as indias premier sind banking company in india as well as in the international markets.

BOLESLAV(1930) examined the evolution of the p&SB in India, as industry became the main tool of the Federal P&SB policy that encouraged the new construction of Single-Family homes. His study also revealed that the incentives provided to home owners-e.g., cheap mortgage capital and the mortgage interest deduction-may serve the policy goals only in the short terms. In the long term, the incentives were not only ineffective but also harmful. They lead to economic distortions and dislocations such as the bifurcation of the central cities and surbubs. The paper also recommended to phase mortgage interest Deduction.
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 WARNOCK(2000) Examined the extent to which markets enabled the provision of P&SB bank across a wide range of countries. The Study revealed that was a major purchase requiring long-term financing, and the factors that were associated with well functioning P&SB systems were those that enabled the provision of long-term finance. The Study also found that countries with stronger legal rights for borrowers and lenders, deeper credit information systems and a more stable macroeconomic environment have deeper P&SB bank systems. The Study also examined the another potential factor that the existence of sizeable government securities markets might enable the development of emerging markets of P&SB systems. FRANCIS(1998) The study done by him revealed that while other countries this mantled their segmented this banking system and linked to capital markets through deregulated depositories and it was only india which linked to capital markets through depository ,deregulation and securitization as elsewhere securitization had not developed. The Study also provided exhaustive empirical research and detailed analyses both micro and macro level of current status and future growth potential of P&SB bank industry in india, its backward and forward link ages, financing structure and nature of underlining risk in the housing market in india. ANAND ASHISH(2001) The study revealed that it was a high flying sector and was expected to grow at phenomenal growth rate(expected 36%).It was also observed that the banks and financial institutions had brought changes to their strategies. Further liberal tax rates by government, low and competitive interest rates had made P&SB as
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really competitive. The study also depicted the development, performance, challenges and problems. DAVID(2008)Examined in his study taken from 2001-2007 that in this period their was increase use of home loan as compared to private mortgage insurance. He has divided his study in 4 categories. Section1 Revealed that why people were going more for home loans than primary. The main reason for this that now home loans market provide piggybank loans for those people who do not have 20% of down payment.Section2 Described the factors responsible for growth of home loans.Section3 Explained the measures in changes of type of loans.Section4 Examined the financial status single lien and multiple lien household. BHATTACHARYA(2003) The study done by him revealed that initially it was only P&SB bank and some cooperative banks which were providing hosing finance services. But only P&SB survived as a leader. Previously in the housing finance markets was like dalda in the retailers market as people in the housing loan market knew only P&SB. But the trend changed with the entry of banks and financial institutions compared to others. It had the low cost advantage apart from having a strong distribution network. Over last one year it has simplified the procedures to a great extent. No body knew SBI a couple of years back but today SBI is the second largest lender in this market. It had the immense potential in the market and it would be the no1 P&SB company next year.

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CHAPTER-3 RESEARCH METHODOLOGY

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3.1 0bjectives 0f study

1. To compare various housing finance schemes provided by P & SB Bank and analyse the criteria on the basis of which housing loan is provided by both the banks. 2. To evaluate the customers perceptions towards housing finance schemes of P & SB Bank. 3. To analyse the customers satisfactions towards schemes of housing finance providing by the bank.
3.1.1 PRIMARY OBJECTIVES:
To open new savings accounts by convincing customers and to promote the benefits of those which are provided by the bank.

To find the different way of convincing customers.

To study brand image of the bank. To increase the business of the bank.

3.1.2 SECONDARY OBJECTIVES:

To determine the need and purpose of a sales executive. To understand the deciding criteria for people to become sales executive. To offer suggestions based upon the findings.

3.2 Data Source

The research plan call for gathering secondary data, primary data or both. Secondary data are those that were collected for another purpose and already exist somewhere whereas primary data are those collected for a specific purpose for a specific research objective. In the present study these are:
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i) Primary data The primary data is collected during the survey with the help of questionnaires. On the basis of primary data the analysis and interpretation is done.

ii) Secondary data

The secondary data were collected from published articles, journals, internet.

3.3 Statistical tools used

The statistical tools used are questionnaires. 140 questionnaires were distributed and 100 were considered of those respondents who have availed the housing finance schemes in the past.

3.4 Variables Studied

The information was collected y contacting the customers and bank officials.

3.5 Limitations Of Study

1. The sample size taken is small and may not be sufficient to predict the results with 100% accuracy. 2. There was limitation of time to conduct such a big survey in limited available time.

3. The present study is based on data from Amritsar, its result may not be applicable to other
areas.

4. Ignorance and reluctant attitude of customers was also a big survey in limited available time.

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CHAPTER -4 DATA ANALYSIS AND INTERPRETATION

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Q1.Your Age?
TABLE Serial No. 1. 2. 3. 4. Age Category 18-23 Years 24-29 Years 30-35 Years 35 Years and above Total Base 200 respondents GRAPH Number of Respondents 40 70 60 30 200 Percentage 20% 35% 30% 15% 100%

15%

20%

18-23 Years 24-29 Years 30% 35% 30-35 Years 35 & above

Interpretation From the table and graph above it can be seen that 20% respondents age are 18 to 23 years. 35% respondents age are 27 to 29 years. 30% respondents age are 30 to 35 years. 15% respondents age are 35 to above years.

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Q2. Marital Status? TABLE Sr. No. 1 2 Category Married Unmarried Total No. of Respondents 140 60 200 Percentage 70% 30% 100%

GRAPH

30%

Married Unmarried 70%

Interpretation From the table and graph above it can be seen that
70% respondents are married. 30% respondents are unmarried.

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Q3. Educational Qualification?

TABLE Sr. No. 1 2 3 Category Under graduate Graduate Post graduate Total No. of Respondents 50 80 70 200 Percentage 25% 40% 35% 100% Base 200 respondents GRAPH

25% 35% Under graduate Graduate Post graduate

40%

Interpretation From the table and graph above it can be seen that 25% respondents are Under graduate. 40% respondents are Graduate.
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35% respondents are Post graduate.

Q4. Number Of years Are You in Amritsar? TABLE Sr. No. 1 2 Category Less than five years More than five years Total No. of Respondents 78 122 200 Percentage 39% 61% 100% Base 200 respondents GRAPH

39% Less than five years 61% More than five years

Interpretation From the table and graph above it can be seen that 39% respondents are in Amritsar for less than five years.
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61% respondents are in Amritsar for more than five years.

Q5. Your Occupation? TABLE Sr. No. 1 2 3 Category Business Profession Service Total No. of Respondents 40 108 52 200 Percentage 20% 54% 26% 100% Base 200 respondents GRAPH

26%

20%

Business Profession Service

54%

Interpretation
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From the table and graph above it can be seen that 20% respondents Occupation is Business. 26% respondents Occupation is Profession. 54% respondents Occupation is Service.

Q6. Your annual household income? TABLE Sr. No. 1 2 3 4 Category Less than 2 lacs Between 2 to 5 lacs Between 5to 8 lacs More than 8 lacs Total No. of Respondents 98 62 30 10 200 Percentage 49% 31% 15% 5% 100% Base 200 respondents GRAPH

5% 15% Less than 2 lacs 49% Between 2 to 5 lacs Between 5to 8lacs More than 8 lacs 31%

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Interpretation From the table and graph above it can be seen that 49% respondents annual household income is less than 2 lacs. 31% respondents annual household income is between 2 to 5 lacs. 15% respondents annual household income is between 5 to 8 lacs. 5% respondents annual household income is more than 8 lacs.

Q7. Are you a member of a club/gymkhana? TABLE Sr. No. 1 2 Category Yes No Total No. of Respondents 84 116 200 Percentage 42% 58% 100% Base 200 respondents GRAPH

42% Yes No 58%

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Interpretation From the table and graph above it can be seen that 42% respondents are member of a club/gymkhana. 58% respondents are not member of a club/gymkhana.

Q8. What is your perception about different products/services provided by P&SB bank? TABLE Sr. No. 1 2 4 Category Lucrative Not lucrative No idea Total No. of Respondents 50 120 30 200 Percentage 25% 60% 15% 100% Base 200 respondents GRAPH

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15%

25% Lucrative Not lucrative

60%

No idea

Interpretation From the table and graph above it can be seen that 25% respondents perception about different products is lucrative. 60% respondents perception about different products is not lucrative. 15% respondents have no idea.

Q9. Do you want to open an account with P&SB bank? TABLE Sr. No. 1 2 3 Category Yes No Will tell later No. of Respondents 10 160 30 Percentage 5% 80% 15%

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Total

200

100% Base 200 respondents

GRAPH

5%

15% No Yes 80% Will tell later 30

Interpretation From the table and graph above it can be seen that 80% respondents are not interested to open an account with the bank. 5% respondents are interested to open an account with the bank. 15% of the respondents say that they will tell later.

Q10. Do you have all the documents which are required to open an account? TABLE Sr. No. 1 Category Yes No. of Respondents 120 Percentage 60%

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No Total

80 200

40% 100% Base 200 respondents

GRAPH

29%

Lucrative 71% Not lucrative

Interpretation From the table and graph above it can be seen that 60% respondents have all the documents which are required to open an account with the bank. 25% respondents do not have all the documents which are required to open an account with the bank

Q11. Are you aware that the bank provides you a free Dmat account if you open a new savings account with P&SB bank?
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TABLE Sr. No. 1 2 Category Yes No Total No. of Respondents 40 160 70 Percentage 20% 80% 100% Base 200 respondents GRAPH

29%

Lucrative 71% Not lucrative

Interpretation From the table and graph above it can be seen that 20% respondents are aware that the bank provides a free Dmat account with new savings account. 40% respondents are not aware of it.

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Q12.Are you aware of different terms and conditions which are very much essential to maintain an account at P&SB Bank? TABLE Sr. No. 1 2 Category Yes No Total No. of Respondents 25 175 200 Percentage 12% 88% 100% Base 200 respondents GRAPH

29%

Lucrative 71% Not lucrative

Interpretation From the table and graph above it can be seen that
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12% respondents are familiar with different terms and conditions which are very much essential to maintain account with the bank. 88% respondents have no idea about it.

Q13. Do you know about P&SB Banks recruitment policies related to sales executives? TABLE Sr. No. 1 2 Category Yes No Total No. of Respondents 82 118 200 Percentage 41% 59% 100% Base 200 respondents GRAPH Knowing about HDFC Bank's recruitment policies

41% Yes 59% No

Interpretation From the table and graph above it can be seen that 41% respondents are known about P&SB Banks recruitment policies related to sales executives. 59% respondents are not known about P&SB Banks recruitment policies related to sales executives.

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CHAPTER-5 FINDINGS

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5.1 CONCLUSION
P&SB Bank, the banking arm of P&SB is expected to go on stream. The bank already has good number of employees on board and is recruiting Sales Executives heavily to take the headcount to many more. It is on the brim of increasing its customers through its attractive schemes and offer.

The project opportunities provided was market segmentation and identifying prospective customers in potential geographical location and convincing them to open an account so that new Business Opportunities of the bank can be explored. Through this project, it could be concluded that people are not much aware about the various products of the bank and many of them not interested to open an account at all. services was considered as unsought good which require hard core selling, but in changing trend in income and people becoming financially literate, the demand for banking sector is increasing day by day. According to my findings Companys promotional activities for recruiting sales executives are also very less. So, at last the conclusion is that there is tough competition ahead for the company from its major competitors in the banking sector. Last but not the least I would like to thank P&SB Bank for giving me an opportunity to work in the field of Marketing. I hope the company finds my analysis relevant.

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5.2 LEARNING EXPERIENCE:

The process of recruitment for Sales Executives of P&SB Bank. Different products and services provided by the bank. Customers perception about the different products. The brand image of the bank. What are the problems faced by these sales executives daily basis. How to communicate with the customers. Different techniques of dealing with the customers. How to convince and convert a customer into a real customer.

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REFERENCES

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REFERENCES
Garnett, David(1999), Housing Finance a basic guide, Hind Law House Deihi. Williamson, john(2003)Growth of Housing Finance, oxford university press, India. Logan William(2000)Introduction to Housing Facts and principles, Housing social Welfare, Reference vol-12 septt,pp10. Nijaguna Rudrayya Bhusnur Math(2006) A comparative study of cross-seling practices in public and private sector banks in india (journal of Financial Services Marketing) vol 10,pp123-134.. Warnock(2000) Comparative Study of home installment Loan Services between public and private bank httpn://ssrn.com/abstract=1321665 Gulko boleslav(1930) A critical analysis and comparison with conventional Mortgage httpn://ssrn.com/abstract=1483524 Joshi Manoj (1980) Consumption and Investment Motives in Housing Wealth Accumulation of Spanish Households httpn://ssrn.com/abstract=1597126

Scott Francis,(1980). A Study of the housing finance industry http://medwelljournals.com/abstract/?doi=sscience.2007.84.92 Berstain David (2008) Housing Finance development in India.http://www.finmark.org.za/documents/19_Rust_HFA.pdf Bhattacharya(2003) Macroeconomics and Housing: http:/www.econ.cuhk.edu.hk/~discusspaper/00004.pdf

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 Anand ashish(2001) A study on Housing Finance A Basic Guide http:/www.pide.org.pk/pdf/seminar/seminar68.pdf http:/www.alexa.com/siteinfo/p&sbbank.com http:/www.p&sbindia.com http:/www.google search engine.com http:/www.housingfinance.com

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QUESTIONNAIRE

84

QUESTIONNAIRE FOR CUSTOMERS Dear Sir/Madam,

I am a student of Global Institute of Management ,Amritsar and presently doing a project on OPENING SAVINGS ACCOUNT BY MEETING CUSTOMERS. I request you to kindly fill the questionnaire below and I assure you that the data generated shall be kept confidential. Name: .. Address: .. Contact No :( O) (M) City: ...............Pin: .State: . 1. Your Age: ____________________ 2. Education Qualification. Undergraduate Graduate Post graduate .

3. Marital Status. Married Single

No. of Children: __________

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4. Number Of years Are You in Amritsar?. Less than five years More than five years Business Profession Service

5. Occupation.

(Please mention below the type of business/profession you are in incase of service please mention your organization name and designation)

6.Your annual household income. <than 2 lack Between 2 to 5 lack Between 5 to 8 lack >than 8 lack

7. Are you a member of a club/gymkhana? Yes No

If yes, Name of the club /gymkhana_______________________________________

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8. What is your perception about different products and services offered by P&SB Bank? Lucrative Not lucrative No idea

9. Do you want to open an savings account with P&SB Bank? Yes No Will tell later

10. Do you have all the documents which are required to open an account? Yes No

11. Are you aware of that P&SB Bank provide you a free Demat account if you open a new savings account with the bank? Yes No

12. Are you aware of different terms and conditions which are very much essential to maintain an account at P&SB Bank? Yes
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No

13. Do you know about P&SB Banks recruitment policies related to sales executives? Yes No

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