Particulars

Chapter No

Introduction
1.1 Introduction to industry
1.2Introduction to Organization
1.3Introduction to Topic

LITERATURE REVIEW ????

Research Methodology
3.0 Research Methodology
3.1 Statement of the problem
3.2 Justification of the study
3.3 Objective of the study
3.4 Scope of the study
3.5 Research design
3.6 Collection of data
3.7 Sources of Data Collection
3.8 Sampling technique
3.9 Analytical tool used in study ?????

Data Analysis and Interpretation

Suggestions & Conclusion

5.1 Findings???
5.2 Conclusion
5.2 Suggestion
5.3 Limitations of study

CHAPTER 1
INTRODUCTION

1.1 INTRODUCTION TO INDUSTRY

INTRODUCTION TO BANKING IN INDIA

The banking section will navigate through all the aspects of the Banking System in India. It will
discuss upon the matters with the birth of the banking concept in the country to new players
adding their names in the industry in coming few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association (IBA) and
top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined under three
separate heads with one page dedicated to each bank.
However, in the introduction part of the entire banking cosmos, the past has been well explained
under three different heads namely:

History of Banking in India

Nationalization of Banks in India

Scheduled Commercial Banks in India

The first deals with the history part since the dawn of banking system in India.
Government took major step in the 1969 to put the banking sector into systems and it
nationalized 14 private banks in the mentioned year. This has been elaborated in
Nationalization Banks in India. The last but not the least explains about the scheduled and

unscheduled banks in India. Section 42 (6) (a) of RBI Act 1934 lays down the condition
of scheduled commercial banks. The description along with a list of scheduled
commercial banks are given on this page

HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact,
Indian banking system has reached even to the remote corners of the country. This is one of the
main reasons of India's growth process.

The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalisation of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or
for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient
bank transferred money from one branch to other in two days. Now it is simple as instant
messaging or dials a pizza. Money has become the order of the day.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases. They are as
mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.

New phase of Indian Banking System with the advent of Indian Financial

& Banking Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These
three banks were amalgamated in 1920 and Imperial Bank of India was established which started
as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore
were

set

up.

Reserve

Bank

of

India

came

in

1935.

During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the
functioning and activities of commercial banks, the Government of India came up with The
Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive
powers for the supervision of banking in India as the Central Banking Authority.
During those days public has lesser confidence in the banks. As an aftermath deposit

mobilisation was slow. Abreast of it the savings bank facility provided by the Postal department
was

comparatively

safer.

Moreover,

funds

were

largely

given

to

traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after independence. In 1955,
it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially
in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI
and to handle banking transactions of the Union and State Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July,
1969, major process of nationalization was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were
nationalized.

Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.

The following are the steps taken by the Government of India to Regulate Banking Institutions in
the Country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.

Phase III

This phase has introduced many more products and facilities in the banking sector in its reforms
measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his
name

which

worked

for

the

liberalisation

of

banking

practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a
satisfactory service to customers. Phone banking and net banking is introduced. The entire
system became more convenient and swift. Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It is sheltered from any crisis
triggered by any external macroeconomics shock as other East Asian Countries suffered. This is
all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not
yet fully convertible, and banks and their customers have limited foreign exchange exposure.

SCHEDULED COMMERCIAL BANKS IN INDIA

The commercial banking structure in India consists of:

Scheduled Commercial Banks in India

Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been included in the Second
Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in
this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act.
As on 30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918
branches. The scheduled commercial banks in India comprise of State bank of India and its
associates (8), nationalized banks (19), foreign banks (45), private sector banks (32), cooperative banks and regional rural banks.

"Scheduled banks in India" means the State Bank of India constituted under the State Bank of
India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary
Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under
section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of
1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of
India Act, 1934 (2 of 1934), but does not include a co-operative bank".

"Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of
the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".

The following are the Scheduled Banks in India (Public Sector):

State Bank of India

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Saurashtra

State Bank of Travancore

Andhra Bank

Allahabad Bank

Bank of Baroda

Bank of India

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

Indian Overseas Bank

Indian Bank

Oriental Bank of Commerce

Punjab National Bank

Punjab and Sind Bank

Syndicate Bank

Union Bank of India

United Bank of India

UCO Bank

Vijaya Bank

The following are the Scheduled Banks in India (Private Sector):

ING Vysya Bank Ltd

Axis Bank Ltd

Indusind Bank Ltd

ICICI Bank Ltd

South Indian Bank

HDFC Bank Ltd

Centurion Bank Ltd

Bank of Punjab Ltd

IDBI Bank Ltd

The following are the Scheduled Foreign Banks in India:

American Express Bank Ltd.

ANZ Gridlays Bank Plc.

Bank of America NT & SA

Bank of Tokyo Ltd.

Banquc Nationale de Paris

Barclays Bank Plc

Citi Bank N.C.

Deutsche Bank A.G.

Hongkong and Shanghai Banking Corporation

Standard Chartered Bank.

The Chase Manhattan Bank Ltd.

Dresdner Bank AG.

BANKING SERVICES IN INDIA

With years, banks are also adding services to their customers. The Indian banking industry is
passing through a phase of customers market. The customers have more choices in choosing their
banks. A competition has been established within the banks operating in India.
With stiff competition and advancement of technology, the services provided by banks have
become more easy and convenient. The past days are witness to an hour wait before withdrawing
cash from accounts or a cheque from north of the country being cleared in one month in the
south.
This section of banking deals with the latest discovery in the banking instruments along with the
polished version of their old systems.

BANK ACCOUNT

The most common and first service of the banking sector. There are different types of bank
account in Indian banking sector. The bank accounts are as follows:

Bank Savings Account - Bank Savings Account can be opened for eligible person /
persons and certain organizations / agencies (as advised by Reserve Bank of India (RBI)
from time to time)

Bank Current Account - Bank Current Account can be opened by individuals /

partnership firms / Private and Public Limited Companies / HUFs / Specified Associates /
Societies / Trusts, etc.

Bank Term Deposits Account - Bank Term Deposits Account can be opened by
individuals / partnership firms / Private and Public Limited Companies / HUFs/ Specified
Associates / Societies / Trusts, etc.

Bank Account Online - With the advancement of technology, the major banks in the
public and private sector has faciliated their customer to open bank account online. Bank
account online is registered through a PC with an internet connection. The advent of bank
account online has saved both the cost of operation for banks as well as the time taken in
opening an account.

PLASTIC MONEY

Credit cards in India are gaining ground. A number of banks in India are encouraging people to
use credit card. The concept of credit card was used in 1950 with the launch of charge cards in
USA by Diners Club and American Express. Credit card however became more popular with use
of magnetic strip in 1970.
Credit card in India became popular with the introduction of foreign banks in the country.
Credit cards are financial instruments, which can be used more than once to borrow money or
buy products and services on credit. Basically banks, retail stores and other businesses issue
these.

LOANS
Banks in India with the way of development have become easy to apply in loan market. The
following loans are given by almost all the banks in the country:

Personal Loan

Car Loan or Auto Loan

Loan against Shares

Home Loan

Education Loan or Student Loan

In Personal Loan, one can get a sanctioned loan amount between Rs 25,000 to 10, 00,000
depending upon the profile of person applying for the loan. SBI, ICICI, HDFC, HSBC are some
of

the

leading

banks

which

deals

in

Personal

Loan.

Almost all the banks have jumped into the market of car loan which is also sometimes termed as
auto loan. It is one of the fast moving financial products of banks. Car loan / auto loan are
sanctioned to the extent of 85% upon the ex-showroom price of the car with some simple paper
works

and

small

amount

of

processing

fee.

Loan against shares is very easy to get because liquid guarantee is involved in it.

Home loan is the latest craze in the banking sector with the development of the infrastructure.
Now people are moving to township outside the city. More number of townships is coming up to
meet the demand of 'house for all'. The RBI has also liberalised the interest rates of home loan in
order to match the repayment capability of even middle class people. Almost all banks are
dealing in home loan. Again SBI, ICICI, HDFC, HSBC are leading.

The educational loan rather to be termed as student loan, is a good banking product for the mass.

Students with certain academic brilliance, studying at recognised colleges/universities in India

and abroad are generally given education loan / student loan so as to meet the expenses on tuition
fee/ maintenance cost/books and other equipment.

MONEY TRANSFER
Beside lending and depositing money, banks also carry money from one corner of the globe to
another. This act of banks is known as transfer of money. This activity is termed as remittance
business. Banks generally issue Demand Drafts, Banker's Cheques, Money Orders or other such
instruments for transferring the money. This is a type of Telegraphic Transfer or Tele Cash
Orders.
It has been only a couple of years that banks have jumped into the money transfer businesses in
India. The international money transfer market grew 9.3% from 2003 to 2004 i.e. from US$213
bn. to US$233 bn. in 2004. Economists say that the market of money transfer will further grow at
a cumulative 12.1% average growth rate through 2009.

FUTURE OF BANKING IN INDIA

A healthy banking system is essential for any economy striving to achieve good growth and yet
remain stable in an increasingly global business environment. The Indian banking system has
witnessed a series of reforms in the past, like deregulation of interest rates, dilution of
government stake in PSBs, and increased participation of private sector banks. It has also
undergone rapid changes, reflecting a number of underlying developments. This trend has
created new competitive threats as well as new opportunities. This paper aims to foresee major
future banking trends, based on these past and current movements in the market.
Given the competitive market, banking will (and to a great extent already has) become a process
of choice and convenience. The future of banking would be in terms of integration. This is

already becoming a reality with new-age banks such as YES Bank, and others too adopting a
single-PIN. Geography will no longer be an inhibitor. Technology will prove to be the
differentiator in the short-term but the dynamic environment will soon lead to its saturation and
what will ultimately be the key to success will be a better relationship management.

OVERVIEW

If one were to say that the future of banking in India is bright, it would be a gross
understatement. With the growing competition and convergence of services, the customers (you
and I) stand only to benefit more to say the least. At the same time, emergence of a multitude of
complex financial instruments is foreseen in the near future (the trend is visible in the current
scenario too) which is bound to confuse the customer more than ever unless she spends hours
(maybe days) to understand the same. Hence, I see a growing trend towards the importance of
relationship managers. The success (or failure) of any bank would depend not only on tapping
the untapped customer base (from other departments of the same bank, customers of related
similar institutions or those of the competitors) but also on the effectiveness in retaining the
existing

base.

India has witness to a sea change in the way banking is done in the past more than two decades.
Since 1991, the Reserve Bank of India (RBI) took steps to reform the Indian banking system at a
measured pace so that growth could be achieved without exposure to any macro-environment
and systemic risks. Some of these initiatives were deregulation of interest rates, dilution of the
government stake in public sector banks (PSBs), guidelines being issued for risk management,
asset classification, and provisioning. Technology has made tremendous impact in banking.
Anywhere banking and Anytime banking have become a reality. The financial sector now
operates in a more competitive environment than before and intermediates relatively large
volume of international financial flows. In the wake of greater financial deregulation and global
financial integration, the biggest challenge before the regulators is of avoiding instability in the
financial system.

RISK MANAGEMENT
The future of banking will undoubtedly rest on risk management dynamics. Only those banks that have
efficient risk management system will survive in the market in the long run. The effective management of
credit risk is a critical component of comprehensive risk management essential for long-term success of a
banking

institution.

Although capital serves the purpose of meeting unexpected losses, capital is not a substitute for
inadequate decontrol or risk management systems. Coming years will witness banks striving to create
sound

internal

control

or

risk

management

processes.

With the focus on regulation and risk management in the Basel II framework gaining prominence, the
post-Basel II era will belong to the banks that manage their risks effectively. The banks with proper risk
management systems would not only gain competitive advantage by way of lower regulatory capital
charge, but would also add value to the shareholders and other stakeholders by properly pricing their
services,

adequate

provisioning

and

maintaining

robust

financial

structure.

The future belongs to bigger banks alone, as well as to those which have minimized their risks
considerably.

1.2 INTRODUCTION TO COMPANY

Punjab National Bank of India, the first Indian bank started only with Indian capital, was
nationalized in July 1969 and currently the bank has become a front-line banking institution in
India with 4525 Offices including 432 Extension Counters. The corporate office of the bank is at
New Delhi. Punjab National Bank of India has set up representative offices at Almaty
(Kazakhistan), Shanghai (China) and in London and a full fledged Branch in Kabul
(Afghanistan).

Punjab National Bank with 4497 offices and the largest nationalized bank is serving its 3.5 crore
customers with the following wide variety of banking services:

Corporate banking

Personal banking

Industrial finance

Agricultural finance

Financing of trade

International banking

Punjab National Bank has been ranked 38th amongst top 500 companies by The Economic
Times. PNB has earned 9th position among top 50 trusted brands in India.
Punjab National Bank India maintains relationship with more than 200 leading international
banks world wide. PNB India has Rupee Drawing Arrangements with 15 exchange companies in
UAE and 1 in Singapore

HISTORY OF THE BANK

Punjab National Bank (PNB) was registered on May 19, 1894 under the Indian Companies Act with its
office in Anarkali Bazaar Lahore. The Bank is the second largest government-owned commercial bank in
India with about 4,500 branches across 764 cities. It serves over 37 million customers. The bank has been
ranked 248th biggest bank in the world by Bankers Almanac, London. The bank's total assets for financial
year 2007 were about US$60 billion. PNB has a banking subsidiary in the UK, as well as branches in
Hong Kong and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai.

1895: PNB commenced its operations in Lahore. PNB has the distinction of being the first Indian
bank to have been started solely with Indian capital that has survived to the present. (The first
entirely Indian bank, the Ouch Commercial Bank, was established in 1881 in Faizabad, but failed
in 1958.) PNB's founders included several leaders of the Swadeshi movement such as Dyal Singh
Majithia and Lala HarKishen Lal, [1] Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C. Jessawala,
Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively
associated with the management of the Bank in its early years.

1904: PNB established branches in Karachi and Peshawar.

1940: PNB absorbed Bhagwan Dass Bank, a scheduled bank located in Delhi circle.

1947: Partition of India and Pakistan at Independence. PNB lost its premises in Lahore, but
continued to operate in Pakistan.

1951: PNB acquired the 39 branches of Bharat Bank (est. 1942); Bharat Bank became Bharat
Nidhi Ltd.

1961: PNB acquired Universal Bank of India.

1963: The Government of Burma nationalized PNB's branch in Rangoon (Yangon).

September 1965: After the Indo-Pak war the government of Pakistan seized all the offices in
Pakistan of Indian banks, including PNB's head office, which may have moved to Karachi. PNB
also had one or more branches in East Pakistan (Bangladesh).

1960s: PNB amalgamated Indo Commercial Bank (est. 1933) in a rescue.

1969: The Government of India (GOI) nationalized PNB and 13 other major commercial banks,
on July 19, 1969.

1976 or 1978: PNB opened a branch in London.

1986 The Reserve Bank of India required PNB to transfer its London branch to State Bank of
India after the branch was involved in a fraud scandal.

1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a rescue. The acquisition added
Hindustan's 142 branches to PNB's network.

1993: PNB acquired New Bank of India, which the GOI had nationalized in 1980.

1998: PNB set up a representative office in Almaty, Kazakhstan.

2003: PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. Rao Bahadur
T.M. Appu Nedungadi, author of Kundalatha, one of the earliest novels in Malayalam, had
established the bank in 1899. It was incorporated in 1913, and in 1965 had acquired selected
assets and deposits of the Coimbatore National Bank. At the time of the merger with PNB,
Nedungadi Bank's shares had zero value, with the result that its shareholders received no payment
for their shares.
PNB also opened a representative office in London.

2004: PNB established a branch in Kabul, Afghanistan.

PNB also opened a representative office in Shanghai.
PNB established an alliance with Everest Bank in Nepal that permits migrants to transfer funds
easily between India and Everest Bank's 12 branches in Nepal.

2005: PNB opened a representative office in Dubai.

2007: PNB established PNBIL - Punjab National Bank (International) - in the UK, with two
offices, one in London, and one in South Hall. Since then it has opened a third branch in
Leicester, and is planning a fourth in Birmingham. Gatin Gupta became Chairmen of Punjab
National Bank.

2008: PNB opened a branch in Hong Kong.

2009: PNB opened a representative office in Oslo, Norway.

.
ACHIEVEMENTS

Punjab National Bank announced its Q1FY2010 results on 29 July 2009, delivering
62% y-o-y growth in net profits to Rs832 crore (Rs512cr), substantially ahead of

expectations on account of large treasury gains, apart from healthy operating

performance.

While the banks deposit growth was reasonably robust at 4.4% sequentially and
26.5% y-o-y, unlike the peers its growth in advances also remained strong at 38% yo-y.

In spite of being at the forefront of PLR cuts, the bank posted a healthy growth in Net
Interest Income (NII) of 29% y-o-y.

Other Income surged 113% y-o-y, driven by strong treasury gains of Rs355 crore
during the quarter in line with industry trends, even as Fee income was also robust at
45% y-o-y, on the back of strong balance sheet growth.

Operating expenses were higher than expected on account of Rs150 crore of

provisions for imminent wage hikes.

Gross and Net NPA ratios remained stable sequentially at 1.8% and 0.2%, with the
bank not adopting the guidelines of treating floating provisions as part of tier 2 capital
instead of adjusting against NPAs on express permission from the

VISION AND MISSION

Vision

To evolve and position the bank as a world class, progressive, cost effective and customer
friendly institution providing comprehensive financial and related services.

Integrating frontiers of technology and serving various segments of society especially weaker
section.

Commited to excellence in serving the public and also excelling in corporate values

Mission

To provide excellent professional services and improve its position as a leader in financial
and related services.

Build and maintain a team of motivated workforce with high work ethos.

Use latest technology aimed at customer satisfaction and act as an effective catalyst for socio
economic development.

VALUES AND ETHICS

Bonding and Integrity

Ethical conduct

Periodic disclosure

Confidentiality and fair dealing

Compliance with rules and regulations

PRODUCTS AND SERVICES

Savings Fund Account - Total Freedom Salary Account, PNB Prudent Sweep, PNB Vidyarthi SF
Account, PNB Mitra SF

Account Current Account - PNB Vaibhav, PNB Gaurav, PNB Smart Roamer

Fixed Deposit Schemes - Spectrum Fixed Deposit Scheme, Anupam Account, Mahabachat Schemes,
Multi Benefit Deposit

Scheme Credit Schemes - Flexible Housing Loan, Car Finance, Personal Loan, Credit Cards

Social Banking - Mahila Udyam Nidhi Scheme, Krishi Card, PNB Farmers Welfare Trust

Corporate Banking - Gold Card scheme for exporters, EXIM finance

Business Sector - PNB Karigar credit card, PNB Kushal Udhami, PNB Pragati Udhami, PNB Vikas
Udhami
Apart from these, and the PNB also offers locker facilities, senior citizens schemes, PPF schemes and
various E-services.

AWARDS AND DISTINCTIONS

Ranked among top 50 companies by the leading financial daily, Economic Times.

Ranked as 323rd biggest bank in the world by Bankers Almanac (January 2006), London.

Earned 9th place among India's Most Trusted top 50 service brands in Economic TimesA.C Nielson Survey.

Included in the top 1000 banks in the world according to The Banker, London.

Golden Peacock Award for Excellence in Corporate Governance - 2005 by Institute of

Directors.

FICCI's Rural Development Award for Excellence in Rural Development 2005

ORGANIZATIONAL STRUCTURE

S W O TANALYSIS

Strength

Weakness

Opportunities

Threats

STRENGTH

Wide network
Large number of customers
Fast adaptability to technology
Brand image

WEAKNESS

Casual behaviour
Corruption and red tapism
Slow decision making due to large hierarchy
High gross NPA

OPPORTUNITIES

Home to home banking services

Diversification towards other fields
Globalization

THREATS

Stiff competition from SBI and other private players.

1.3INTRODUCTION TO TOPIC
CUSTOMER SATISFACTION
Customer satisfaction refers to the extent to which customers are happy with the products and
services provided by a business.

Customer satisfaction levels can be measured using survey techniques and questionnaires

DEFINITIONS:
Definition 1: Customer satisfaction is equivalent to making sure that product and service
performance meets customer expectations.

Definition 2: Customer satisfaction is the perception of the customer that the outcome of a
business transaction is equal to or greater than his/her expectation.

Definition 3: Customer satisfaction occurs when acquisition of products and/or services provides
a minimum negative departure from expectations when compared with other acquisitions.

Gaining high levels of customer satisfaction is very important to a business because

satisfaction customers are most likely to be loyal and to make repeat orders and to use a wide
range of services offered by a business
There are many factors which lead in high levels of customer satisfaction including.
Products and services which are customer focused and hence provide high levels of value for
money.

What is clear about customer satisfaction is that customers are most likely to appreciate
the goods and services that they buy if they are made to feel special. This occurs when they feel
that the products and services that they buy have been specially produced for them or for people
like them.

BENEFITS OF CUSTOMER SATISFACTION

The importance of customer satisfaction and support is increasingly becoming a vital

business issue as organization realize the benefits of Customer Relationship Management (CRM)
for providing effective customer service. Professionals working within customer-focused
business or those running call centers or help desks, need to keep informed about the latest

customer satisfaction techniques for running a valuable customer service function. From small
customer service departments to large call centers, the importance of developing a valued
relationship with customers using CRM is essential to support customer and long-term business
growth.

What Do Customers Want?

Before we begin to create tools to measure the level of satisfaction, it is important to develop a
clear understanding of what exactly the customer wants. We need to know what our customers
expect from the products and services we provide.
Customer expectations have two types
Expressed
Implied

Expressed Customer Expectations are those requirements that are written down n the contract
and agreed upon by both parties for example, product specifications and delivery requirements.
Suppliers performance against these requirements is most of the items directly measurable.

Implied Customer Expectations are not written or spoken but are the ones the customer would
expect the supplier to meet nevertheless. For example, a customer would expect the service
representative who calls on him to be knowledgeable and competent to solve a problem on the
spot.

There are many reasons why customer expectations are likely to change overtime. Process
improvements, advent of new technology, changes in customers priorities, improved quality of
service provided by competitors are just a few examples.

The customer is always right. Suppliers job is to provide the customer what he/she wants, when
he/she wants it. Customer satisfaction is customers perception that a supplier has met or
exceeded their expectations.

WHAT CONSTITUTES SATISFACTION?

We cannot create customer satisfaction just by meeting customers requirements fully because
these have to be met in any case. However failing short is certain to create dissatisfaction
Major Attributes of customer satisfaction in banking industry can be summarized as:

Product quality
Premium Outflow
Return on Investment
Services
Responsiveness and ability to resolve complaints and reject reports.
Overall communication, accessibility and attitude.

WHAT ARE THE TOOLS?

Customer expectations can be identified using various methods such as:
Periodic contract reviews
Market research
Telephonic interviews
Personal visits
Warranty records

 Informal discussions
Satisfaction surveys

Depending upon the customer base and available resources, we can choose a method that is
most effective in measuring the customers perceptions. The purpose of the exercise is to identify
priorities for improvements. We must develop a method or combination of methods that helps to
continually improve service.

CUSTOMER SATISFACTION SURVEYS

Formal survey has emerged as by far the best method of periodically the customer satisfaction.
The survey are not marketing tools but an informationgaining tool. Enough homework needs
to be before embarking on the actual survey. This includes:

Defining Objectives of the Survey

Design Survey approach
Develop questionnaires and forms
Administer Survey (Email, Telephone or Post)
Method of compiling data and analyzing the findings
Format of the report to present the findings

There is no point in asking irrelevant questions on a customer satisfaction questionnaire. The

basic purpose is to find out what we are doing right or wrong. Where is the scope for
improvement, where do we stand vis--vis other suppliers. How we can serve the customer
better?

A customer satisfaction measurement survey should at least identify the following

objectives:
Importance to customers (Customers priorities)
Customers perception of suppliers performance
Your performance relative to customers priorities.
Priorities for improvement

Survey forms should be easy to fill out with minimum amount of time and efforts on
customers part. They should be designed to actively encourage the customer to complete the
questions. Yet they must provide accurate data should also be sufficiently reliable for
management decision making. This can be achieved by incorporating objective type questions
where customer has to rate on scale of say 1 to 10. For repeated surveys, you could provide the
rating that was previously accorded by the customer. This works like a reference point for the
customer.

Space should always be provided for the customers own opinions this enables them to
state any additional requirements or report any shortcomings that are not covered by the
objective questions.

Normally, we deal various personnel at various levels in the customers organizationthe

buyer, user, receiving inspector, finance and purchase person etc. surveying a number of
respondents for each customer gives a complete perspective of customer satisfaction. It may be
necessary to device a different questionnaire for each of them.

Respondents must be provided a way to express the importance they attach to various
survey parameters. Respondents should be asked to give a weighting factor, again on a rating
scale of say, 1 to 10, for each requirement. This gives a better indication of relative importance of
each parameter towards overall customer satisfaction and makes it easier for suppliers to
prioritize their action plans by comparing the performance rating (scores) with importance rating
(weighing).

CHAPTER 2

LITER
ATURE REVIEW
CONSUMER RESEARCH IN DIFFERENT DISCIPLINES

A considerable body of literature exists on consumption, consumer behaviour and consumer

decision making process.

Most of the consumer research focused on adopter categories, habits, attitudes and intentions
rather that on actually measuring the satisfaction level with the service.

CONSUMER SATISFACTION PROCESS

The paramount goal of marketing is to understand the customer and to influence buying
behaviour.

The process can be depicted as follows:-

Need recognition- realization of the difference between the desired and the current
situation that serves as a trigger for entire process.

Search for information.

Pre purchase alternative evaluation.

Consumption(utilization of the procured option)

Post purchase alternative re-evaluation.

Divestment(disposal of the unconsumed product and its remnants)

WAYS FOR MAINTAINING RELATIONS WITH THE

CUTOMERS ADOPTED BY

PNB

The ability of the banking industry to achieve the socio-economic objectives and in the process
bringing more and more customers into its fold will ultimately depend on the satisfaction of the
customers. We have a strong belief that a satisfied customer is the foremost factor in developing
our business.
A need was felt by us at Punjab National Bank that in order to become more customers friendly
the Bank should come out with Charter of its services for the customers. Citizens' Charter
concept was considered as a base instrument to fill this need and accordingly this document was
prepared. This document was made in consultation with the users and highlights our Bank's
commitments towards the customer satisfaction, thus ensuring accountability and responsibility
amongst its officials and staff. This Code for customers not only explains our commitment and
responsibilities along with the redressed methods but also specifies the obligation on the part of
customers for healthy practices in Customer-Banker relationships.
This is not a legal document creating rights and obligations. The Code has been prepared to
promote fair banking practices and to give information in respect of various activities relating to
customer service.
We wish to acknowledge the initiative taken by the Ministry of Finance, Government of India
and Ministry of Administrative Reforms and Public Grievances for encouraging us to bring out
this Code.
We maintain constant consultations with our clientele through various Seminars, Customer
Meets, etc. to evaluate improve and widen the range of service to customer. However, all our
customers are requested to keep us informed of their experiences about the various services

rendered by the Bank and feel free to comment on this Code. We intend to bring it out in many
Regional Languages in subsequent years.

COMMON PRACTICES FOLLOWED BY PNB BRANCHES

Display business hours.

Render courteous services.

Attend to all customers present in the banking hall at the close of business hours.

Provide separate 'Enquiry' or 'May I help you' counter at large branches.

Offer nomination facility to all deposit accounts (i.e. account opened in individual capacity)
and all safe deposit locker hirers (i.e. individual hirers).

Display interest rates for various deposit schemes from time to time.

Notify change in interest rates on advances.

 Provide details of various deposit schemes/services of the Bank.

Issue Demand Drafts, Pay Orders, etc.

Display Time-Norms for various banking transactions.

Pay interest for delayed credit of outstation cheques, as advised by Reserve Bank of India
(RBI) from time to time.

Accord immediate credit in respect of outstation and local cheques upto a specified limit
subject to certain conditions, as advised by RBI from time to time.

Provide complaint/suggestion box in the branch premises.

Display address of Regional/Zonal and Central Offices as well as Nodal Officer dealing with
customer grievances/complaints.

CHAPTER 3

RESEARCH METHODOLOGY
3.0 REASERCH METHODOLOGY

A descriptive study tries to discover answers to the questions who, what, when, where, and,
sometimes, how. The researcher attempts to describe or define a subject, often by creating a profile of a
group of problems, people, or events.
Such studies may involve the collection of data and the creation of a distribution of the number of times
the researcher observes a single event or characteristic (the research variable), or they may involve
relating the interaction of two or more variables.

Organizations that maintain databases of their

employees, customers, and suppliers already have significant data to conduct descriptive studies using
internal information. Yet many firms that have such data files do not mine them regularly for the decisionmaking insight they might provide.

This descriptive study is popular in business research because of its versatility across disciplines.
In for-profit, not-for-profit and government organizations, descriptive investigations have a broad appeal
to the administrator and policy analyst for planning, monitoring, and evaluating. In this context, how
questions address issues such as quantity, cost, efficiency, effectiveness, and adequacy.
Descriptive studies may or may not have the potential for drawing powerful inferences. A descriptive
study, however, does not explain why an event has occurred or why the variables interact the way they do.

3.1 STATEMENT OF THE PROBLEM

This Study will help us to understand the consumers satisfaction about banking services and
products. This study will help banks to understand, how a consumer selects, organizes and interprets the
Quality of service and product offered by banks.
The market is more aware and realistic about investment and returns from financial products. In this
background this study tries to analyze the customer satisfaction towards banking services in general and
PNB in particular.

3.2 JUSTIFICATION OF STUDY

The deeper the company understands of consumers needs and satisfaction, the earlier the product or
service is introduced ahead of competition, the greater the expected contribution margin. Hence the study
is very important.

This study will help companies to customize the service and product, according to the
consumers need.

This study will also help the companies to understand the experience and expectations of
the existing customers.

3.3 OBJECTIVE OF THE STUDY

To have an insight into the attitudes and behaviors of customers.
To find out the differences among perceived service and expected service.
To produce an executive service report to upgrade service characteristics.
To understand consumers preferences.
To access the degree of satisfaction of the consumers

3.4 SCOPE OF THE STUDY

This study is limited to the consumers with in panipat city. The study will be able to reveal the
preferences, needs, satisfaction of the customers regarding the banking services, It also help banks to
know whether the existing products or services the are offering are really satisfying the customers needs.
It will also help bank to improve their service and can make customers more satisfy.

3.5 COLLECTION OF DATA

To know the response, the researcher used questionnaire method. It has been designed as a
primary research instrument. Questionnaires were distributed to respondents and they were asked
to answer the questions given in the questionnaire.

The questionnaires were used as an instrumentation technique, because it is an important

method of data collection. The success of the questionnaire method in collecting the information
depends largely on proper drafting. So in the present study questions were arranged and
interconnected logically. The structured questionnaire will reduce both interviewers and
interpreters bias.

Further, coding and analysis was done for each questions response to reach into findings,
suggestions and finally to the conclusion about the topic.

3.5 RESEARCH DESIGN

Every decision poses unique needs for information, and relevant strategies can be developed based on the
information gathered through research. Research is the systematic objective and exhaustive search for and
study of facts relevant to the problem
Research design means the framework of study that leads to the collection and analysis of data. It
is a conceptual structure with in which research is conducted. It facilitates smooth sailing of various
research operations to make the research as effective as possible.

3.6 COLLECTION OF DATA

Data is collected from the various sources for the research. Collection of data is the process of
gathering information on targeted variable which helps to answer questions and to come on h
evaluate outcome.

3.7 SOURCE OF DATA COLLECTION

Various sources of data collection are:PRIMARY DATA
Primary data are those collected by the investigator himself for the first time and thus they are original in
character, they are collected for a particular purpose.
A well-structured questionnaire was personally administrated to the selected sample to collect the primary
data.

SECONDARY DATA
Secondary data are those, which have already been collected by some other persons for their purpose and
published. Secondary data are usually in the shape of finished products.

Two types of secondary data were collected for the preparation of the project work:
Internal Data was generated from companys brochures, manuals and annual reports
External Data, on the other hand, was generated from magazines, research books, intranet and internet
(websites).

3.8 SAMPLING TECHNIQUE

A sample is a representative part of the population. In sampling technique, information is
collected from a representative part of the universe and the conclusions are drawn on that basis
for the entire universe.

A convenience sampling technique was used to collect data from the respondents.

SAMPLE METHOD

Convenience sampling method is used for the survey of this project. It is a non-probability
sample. This is the least reliable design but normally the cheapest and easiest to conduct .In this
method Researcher have the freedom to choose whomever they find, thus the name convenience.
Example includes informal pools of friends and neighbours or people responding to a
newspapers invitation for readers to state their position on some public issue.

SAMPLE SIZE
Sample size denotes the number of elements selected for the study. For the present study, 100
respondents were selected at random. All the 100 respondents were the customers of different
branches of PNB.

CHAPTER 4

ANALYSIS
&INTERPRETATION
TABLE 4.1
SHARE OF DIFFERENT TYPES OF ACCOUNTS

SL. No.

NATURE OF

NUMBER OF

PERCENTAGE OF

ACCOUNTS

RESPONDENTS

RESPONDENTS

1.

Saving A/Cs

78

78%

2.

Current A/Cs

9%

3.

Fixed Deposits

4%

4.

Loans

3%

5.

Others

6%

100

100%

Total

Graph - 4.1
Classification based on nature of A/Cs

Saving A/Cs

Current A/Cs

Fixed Deposits

Loans

Others

Analysis: Above table shows that 78% respondents have Saving A/Cs, and 9% have Current
A/Cs and rest of the respondents have 13% share of other A/Cs in total (which includes fixed
deposits, loans, and other products)

Interpretation: This means most of the respondents are having Saving A/Cs which means the
bank deposits are enriching as Saving A/Cs share is most.

TABLE 4.2

SATISFACTION OF RESPONDENTS WITH SERVICES OFFERED BY PNB BRANCH

SL. No.

RESPONSE

NUMBER OF

PERCENTAGE OF

RESPONDENTS

RESPONDENTS

1.

Satisfied

89

89%

2.

Not satisfied

11

11%

100

100 %

TOTAL

Analysis: From the above table it could be inferred that 89% of the consumers are satisfied with
the service and quality of products of their bank. Only 11% of consumers are not satisfied.

Interpretation: Most of the respondents are satisfied with the service offered by PNB. Presently
the bank offers varieties of services and the customers are getting a good rate of return from their
deposits. Customers are getting good service from the bank.

TABLE4.3

RATINGS OF THE SERVICES OFFERED BY THE RESPONDENTS LIFE

INSURANCE COMPANY

NUMBER OF

PERCENTAGE OF

RESPONDENTS

RESPONDENTS

EXCELLENT

05

5%

2.

VERY GOOD

09

9%

3.

GOOD

76

76%

4.

AVERAGE

06

6%

5.

POOR

04

4%

100

100 %

SL. No.

RATINGS

1.

TOTAL

Graph - 4.3
Classification based on Rating of the service offered by PNB branches

6
EXCELLENT

4 5

VERY GOOD

GOOD

AVERAGE

POOR

76

Analysis: From this table it could be inferred that 76% of the consumers have rated service
offered as good, 9% of them have rated them as very good, and 05% of them have rated as
excellent and average while only 4% have rated as poor
.
Interpretation: Service offered by the bank is improving day by day. Returns consumers are
getting are also attractive. Majority of the customers rates good, very good and excellent because
of the customer service offered by the bank. Banks are providing a good service to the customers
due to increased competition in the market. This may be the reason for more satisfaction
TABLE 4.4

TABLE SHOWING MOTIVE BEHINDTHE SELECTING PNB

SL.NO

ATTRIBUTE

SCORE

RANK

1.

Brand name

56

2.

Customer service

30

3.

Interest

12

4.

Others

Graph - 4.4
Motive behind the Selecting of PNB

60

56

50
Brand name
No. of
respondents

40Customer service

30

Interest

Others

30

12

20

10

0
Motives

Analysis: This table show the strengths and weaknesses of the brand, and what are the important
criteria or factors on which decision-making is done. From this table we can infer that consumers
give more importance for Brand name, secondly they prefer satisfaction, and then returns on
investment.

Interpretation: This purely shows that people are now looking forward for better customer
service in addition to the brand name in which they are investing and the returns they are getting.

TABLE 4.5

CONSUMERS WILLINGNESS TO RECOMMEND THEIR LIFE INSURANCE

COMPANY TO OTHERS

SL. No.

RESPONSES

NUMBER OF

PERCENTAGE OF

RESPONDENTS

RESPONDENTS

1.

Recommended

92

92%

2.

Not recommended

08

8%

100

100 %

TOTAL

Graph - 4.5
Classification based on the willingness to recommend PNB branch services to other banks

recommended

Not recommended

Analysis: From this table it can be noted that the majority of consumers (92%) would like to
recommend their bank services to others and only 8% of consumers would not like to
recommend it to others.

Interpretation: Since the competition has increased in the field of benefits and service of
banking. So customers are getting good service, so that they are willing to recommend their bank
services to others.

TABLE 4.6

CONSUMERS WILLINGNESS TO SHIFT THEIR A/Cs TO OTHER BANKS

SL. No.

RESPONSES

NUMBER OF

PERCENTAGE OF

RESPONDENTS

RESPONDENTS

1.

Shift

8%

2.

Doesnt shift

92

92%

100

100 %

TOTAL

Graph - 4.6
Classification based on the willingness of respondents to shift their A/Cs to other banks

Shift

Doesn't shift

Analysis: From this table it can be noted that the majority of consumers (92%) doesnt like to
shift their A/Cs to other banks.

Interpretation: The reason can be increasing customer satisfaction and quality services offered
by the bank.

CHAPTER 5

SUGGESTIONS&CONCLUSIONS

5.1 CONCLUSIONS
The

project

entitled

A STUDY TO UNDERSTAND

THE

CUSTOMER

SATISFACTION AT PNB has helped me in studying satisfaction about services and products
offered to consumers.

Since the opening up of the banking sector, private banks are in the fray each one trying
to cover more market share than the other.

Yet, PNB is far behind SBI. PNB must also be alert what with Private Banks (ICICI,
HDFC) breathing down its neck.

I am sure the bank will find my findings relevant and I sincerely hope it uses my
suggestions enlisted, which I hope will take them miles ahead of competition.

In short, I would like to say that the very act of the concerned management at PNB in
giving me the job of critically examining consumer satisfaction towards financial products and
services of the company is a step in their continual mission of making all round improvements as
a means of progress.

5.2 SUGGESTION
With regard to banking products and services, consumers respond at different rates, depending
on the consumers characteristics. Hence I PNB should try to bring their new product and
services to the attention of potential early adopters.

Due to the intense competition in the financial market, PNB should adopt better strategies
to attract more customers.

Return on investment company reputation and premium outflow are most preferred
attributes that are expected by the respondents. Hence greater focus should be given to
these attributes.

 PNB should adopt effective promotional strategies to increase the awareness level among
the consumers.

PNB should ask for their consumer feedback to know whether the consumers are really
satisfied or dissatisfied with the service and product of the bank. If they are dissatisfied,
then the reasons for dissatisfaction should be found out and should be corrected in future.

The PNB brand name has earned a lot of goodwill and enjoys high brand equity. As there
is intense competition, PNB should work hard to maintain its position and offer better
service and products to consumers.

The bank should try to increase the Brand image through performance and service then,
only the customers will be satisfied.

Majority of the people find banking important in their life, so PNB should employ the
strategies to convert the want in to need which will enrich their business.

5.3 LIMITATION OF THE STUDY

Although the study was carried out with extreme enthusiasm and careful planning there are several
limitations, which handicapped the research viz,

1.

Time Constraints:
The time stipulated for the project to be completed is less and thus there are chances that some
information might have been left out, however due care is taken to include all the relevant information
needed.

2.

Sample size:
Due to time constraints the sample size was relatively small and would definitely have been more
representative if I had collected information from more respondents.

3.

Accuracy:
It is difficult to know if all the respondents gave accurate information; some respondents tend to give
misleading information.

4. It was difficult to find respondents as they were busy in their schedule, and collection of data was very
difficult. Therefore, the study had to be carried out based on the availability of respondents.