A REPORT ON MARKET STRUCTURE OF BANK OFINDIA

A REPORT ON MARKET STRUCTURE OF

BANK OF INDIA

SUBMITTED TO: PROF. SNIGDHA TRIPARTY PREPARED BY:

Salani sah 12202151 Reetika Nanda-12202150 Pallabi Naha-12202141 Rashmi Singh-12202148 Stitapragya Rout-12202165 Piyush Jain-12202142 Prabhudatta Behera-12202143

SEC-C KIIT SCHOOL OF MANAGEMENT,BHUBNESHWAR SUBMITTED ON -15.11.2012

DECLARATION
We hereby declare that the project report titled "A Report on market structure of Bank of India" is our own work and has been carried out under the guidance of Prof. Snigdha Tripathy, KIIT School of Management , Bhubaneswar . All necessary steps has been taken to keep this report flawless and we sincerely regret any unintended discrepancies in this report .

Thank You, Members of Group- , Roll no- 12202151, 12202150, 12202148, 12202143,12202143,12202141

Date : 15.11.2012 Place : Bhubaneswar

ACKNOWLEDGEMENT

We would like to place on record our gratitude to all those who helped and supported us during our project. We express indebtedness to Mr Manoranjan Das, Marketing Manager of Bank Of India Zonal Office, Bhubaneswar(Nayapalli), for the valuable guidance provided to us for undertaking the study, on the topic entitled Market Structure of Banking institutions. We are extremely grateful for their painstaking interest in our work in spite of busy corporate activities. We also extend our gratitude to Prof Snigdha Triparty , Kiit School Of Management for her constant inspiration and encouragement for this study. It is a pleasure to thank my friends for their moral support. Date : 15.11.2012 Place : Bhubaneswar

EXECUTIVE SUMMARY

This report proposes to study the market structure of banking institution. The findings of our report is solely based on the primary data collection method i.e. Direct personal interview, in which we have interviewed Mr Manoranjan Das, Zonal Marketing manager of Bank of India. The scope of our survey was limited to the Zonal branch of Bank of India located in Nayapalli , and several other banks such as Axis bank ,IDBI,HDFC, SBI, Syndicate bank ,Bhubneswar. The data was collected through personal interaction with Mr Manoranjan Das, Zonal Marketing Manager of Bank of India, who gladly responded to all the question asked by us. His responses were thoroughly analysed and the main findings of the study is that, the market structure of banking institution is that of a Monopolistic market . We conclude from our study that Banking institution are considered to be Monopolistic .

INTRODUCTION
1.1. HISTORY Banking in India originated in the last decades first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1770; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. Bank of India was founded on September 7, 1906 by a group of eminent businessmen from Mumbai. In July 1969 Bank of India was nationalized along with 13 other banks. Beginning with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has made a rapid growth over the years. It has evolved into a mighty institution with a strong national presence and sizable international operations. In business volume, Bank of India occupies a premier position among the nationalized banks. Merchants in Calcutta established the Union Bank in 1839, but it failed in 1840 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that issues stock and requires shareholders to be held liable for the company's debt) It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla.

1.3. PURPOSE This report attempts to laid down appropriate reasons for which the market structure of banking institution is said to be a monopolistic market-structure.

1.4. SCOPE The primary data collection method used, in which we have interviewed Mr Manoranjan Das, marketing Manager of Bank of India, Nayapalli (Zonal Office) to

collect relevant data. We also collected the data of several other banks such as Axis bank, IDBI,SBI,HDFC, Syndicate bank ,etc. The data collected were analysed to study the market-structure of banking institution. 1.5. LIMITATION Time constraint. The study was confined to Bhubaneswar area. 1.6 REPORT ORGANIZATION The introduction includes background of the company, purpose of the study, source of the survey and limitations of the study. Further, the report convey about the aim and scope of the study. To fulfil the aim of the study, data was collected through Direct personal interview method(primary Method). Then, the data has been analyzed thoroughly to arrive at a conclusion. Methods of analysis include data both primary and secondary data analysis and conclusion is based on data analysis. The report then mentions about the findings, conclusion and recommendations.

OBJECTIVE AND SCOPE OF STUDY

The objective of our study are as follows : To know the Market structure of banking institution. To analyse the characteristics of the market prevailing in relation to the banking institution Scope of study The area of our survey is limited to the Zonal head office of Bank Of India Nayapalli, Bhubaneswar , Odisha .We interviewed Mr Manoranjan Das , Zonal Marketing Manager of Bank Of India, to get relevant data about the market structure of a banking institution.

REVIEW OF LITERATURE

In economics, the different ways to categorize the Market structure are: 1. numbers and size of buyers and sellers 2. product differentation 3. conditions to entry and exit The market can be of different types: 1. 2. 3. 4. Monopoly market Perfect competitive market Monopolistic market Oligopoly market

MONOPOLY MARKETThe characteristics of a monopoly market areas follows: i. ii. iii. iv. sole supplier of a product strong entry barrier seller is the price-maker information symmetry does not exist

PERFECT COMPETETIONThe features of a perfectly competitive market are: i. ii. iii. iv. v. large numbers of buyers and sellers no entry barriers homogeneous product price is determined by demand and supply existence of information symmetry

MONOPOLISTIC MARKET-

A market is said to be a monopolistic market, if there are: i. ii. iii. iv. v. relatively large number of buyers and sellers selling cost Heterogeneous product free entry and exit independent decision about price and output

OLIGOPOLY MARKETThe distinct feature of this market are as follows: i. ii. iii. iv. few sellers product can be homogeneous(pure oligopoly) or heterogeneous product(differentiated oligopoly) independent decision in relation to price and output barriers to entry

METHODOLOGY AND RESEARCH DESIGN

Primary data sources were used to gather information about the Market Structure of banking institution. In our study the research instrument which was used was the Direct Personal Interview method. The survey area was confined to the zonal office of Bank Of India, Bhubaneswar .We interviewed Mr Manoranjan Das to collect relevant data about the market structure of Bank Of India. We also collected the data of several other banks such as Axis bank, IDBI,SBI,HDFC, Syndicate bank ,etc. Sampling method was used to conduct the study. The data collected were analysed Data so collected was then analysed using various statistical tools such as pie-chart , bargraphs ,etc. The findings of our study is that , the banking institutions possess the characteristics of a monopolistic market as there are: relatively large numbers of buyers and sellers heterogeneous product selling cost and complete dissemination of market free entry and exit

Sampling plan: a. Sampling method: Stratified Random Sampling b. Sample size: 5 c. Sample unit: Banks in Bhubaneswar Sources of data: a. Primary data : Direct personal interview b. Secondary data: Internet , articles, journals

DATA ANALYSIS AND INTERPRETATION

1. Percentage share of bank branches in Bhubaneswar

SHARE OF BRANCHES

24% 30% BANK OF INDIA AXIS BANK IDBI HDFC 16% 16% 14% SBI

Interpretation:

SBI has the highest percentage share at Bhubaneswar in terms of total number of branches with IDBI being the lowest.

2. Barrier to Entry in the market

ENTRY BARRIER

LOW

35%

MEDIUM

40%

ENTRY BARRIER

HIGH

25%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Interpretation: Overall barrier to entry in the market is high in case of Banking Sector. It is higher in case of PSUs in comparison with Private Sector Banks.

3. Total advertisement expenses of different Banks

ADVERTISEMENT EXPENSES (Rs)

20000000 20000000 18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 BANK OF INDIA SBI HDFC AXIS BANK 3000000 8000000 7000000 ADVERTISEMENT EXPENSES (Rs)

Interpretation: The highest amount spent on advertisement is by SBI Bank followed by HDFC Bank, Axis Bank and Bank of India respectively.

CONCLUSION

RECOMMENDATIONS

BIBLIOGRAPHY