(i)

Certificate

This is to certify that Fazle Hussain Wadiwala, a student of Doctor of

Philosophy, has worked for the thesis titled “A STUDY ON INNOVATIVE

BANKING POLICIES FOR DEPOSIT MOBILISATION AND ITS

IMPACT”, under my guidance, for the Degree of Doctor of Philosophy,

University of Mumbai, Mumbai.

I further certify that the above work was duly approved by me and this

work is the result of the candidate’s independent study and efforts.

DR. MOHAMMAD. KHALIL AHMED

Name & Signature of Ph.D. Research Guide

Place: Mumbai

Date: …………………
 (ii)

Statement by the Candidate

As required by the University Ordinance 770, I wish to state that the

work embodied in this thesis titled “A STUDY ON INNOVATIVE BANKING

POLICIES FOR DEPOSIT MOBILISATION AND ITS IMPACT” forms my

own contribution to the research work carried out under the guidance of DR.

MOHD. KHALEEL AHMED at the K.P.B. Hinduja College of Commerce

and Economics, Charni Road, Mumbai - 400004. This work has not been

submitted for any other degree of this or any other University. Whenever

references have been made to previous works of others, it has been clearly

indicated as such and included in the Bibliography.

Fazle Hussain Wadiwala

Name and Signature of the Candidate

Certified by

DR. MOHAMMAD. KHALIL AHMED

Signature of the Guide

 (iii)

Place: Mumbai

Date: ………………….

Preface

Money is compressed work, stored energy, which can be exchanged for goods
and services. If exchange is delayed, money can be saved or invested so that it will
create more money in the future, i.e. a penny saved is a penny earned. What happens in
practice is that entities in need of money (such as individuals, households, businesses
or government) access available savings (from households or other companies) through
financial intermediaries (like banks, money market and capital market). Banks provide
various loans and advances to industries, corporates and individuals. The interest
received on these loans is their main source of income. Thus, banks thrive on savings
and saving comes from idle cash or from those postpone, sacrifice or forego spending
resulting into future assets or wealth.

The significance of banking has increased all over the world with the rise in
income levels and growth in the volume of financial transactions. There has been a
transition in the outlook of banking from class banking to mass banking. The role of
commercial banks in this sphere is substantial. Currently, this is a zenith stage for
banking revolution showing economic success for the developing countries like that of
ours, i.e. India. Indian banks have introduced innovative schemes like Differential Rate
of Interest Scheme (DRI) and have come to finance new schemes such as Integrated
Rural Development Programme (IRDP), Self-employment to Educated Unemployed
Youth (SEEUY) and Prime Ministers Rozgar Yojana (PMRY). All these schemes need
money which can be generated from mobilisation of savings of individuals and
households. Bank deposits are the main source of funds for banking sector. Banks are
the intermediaries that direct the excess cash balances of individuals and households
 (iv)

from unproductive to productive channels. In the post-liberalisation and privatization

era, the competition among banks has intensified with the establishment of number of
private sector banks and foreign banks in India. The direct effect of this is increasing
competition for meagre savings of households intensifying the competition among
banks to mobilise more and more savings. In this scenario, the banks are compelled to
use innovative practices to mobilise limited household savings with a view to divert it
to productive channels. Against this background, the present study aims to study the
various factors that affect the choice of banks by general public for saving their hard-
earned money and policies framed by banks to capitalise on these factors to mobilise
deposits from general public. The present thesis is divided into the following six
chapters as under:
CHAPTER 1 INTRODUCTION
The first chapter mainly deals with theoritisation of the issue under consideration.
It traces the evolution of banking and also highlights the role and importance of banks,
types of deposits and factors affecting deposit mobilisation functions of a bank.

CHAPTER 2 REVIEW OF LITERATURE

Review of literature analyses the available research work directly or indirectly
related to the problem under consideration. This helps the researcher to get in-depth
knowledge about the research problem and helps to identify research gaps, if any.

CHAPTER 3 PROFILE OF RESEARCH AREA

Profiling a research area is important as the various economic, geographical,
social and cultural factors have bearing on the outcome of the researcher. This chapter
outlines the profile of the research area and the Indian banking sector.

CHAPTER 4 RESEARCH METHODOLOGY

This chapter explains the various components of research methodology such as
research objectives, research hypotheses, data need and data source. It justifies the
universe and sampling methods and technique.

CHAPTER 5 DATA ANALYSIS AND PRESENTATION

This chapter analyses the responses of the respondents collected through field
survey and interprets the same. The chapter also establishes the various research
 (v)

hypotheses using the appropriate statistical tools.

CHAPTER 6 CONCLUSIONS AND SUGGESTIONS

This chapter summarises the various findings of the research study and outlines
the conclusion derived thereof. The chapter also gives suggestions to various
stakeholders for effective mobilisation of various types of deposits by banks.

Acknowledgements

The humungous task of completing this research thesis is possible

only because of unconditional support received from the following

people. I take this opportunity to thank each and every one of them from

the bottom of my heart.

First and foremost, I would like to express my heartfelt gratitude to my

guide DR. MOHD. KHALEEL AHMED for his encouragement, constant

guidance and mentorship throughout the tenure of my research work.

I would like to thank Dr. Minu Madlani, the Principal, Dr.

Kuldeep Sharma, the Ph.D. Research Centre Co-ordinator and the

support staff and library staff at K.P.B Hinduja College of Commerce for

helping and supporting me in every possible way in completing my

research work.
 (vi)

I would also like to thank the Management of Burhani College, the

Academic Director of Fazlani L’academie Globale, Mr. Hosh

Dohadwala and the Management of Fazlani L’academie Globale for

giving me laxity in my regular lecture timings, whenever it was necessary

and allowing me to accommodate my field works during my College

Hours, throughout my Research tenure.

I would like to express my indebtedness to Dr. Khushpat. S. Jain

for his assistance provided in statistical analysis, the administrative

staff and senior officials at the University of Mumbai. Despite their hectic

schedules, they found the time to attend to all my queries patiently.

I am very thankful to the managers and employees of various banks

along with their Depositors who in spite of their hectic schedules took out

time to respond to my questionnaire and assist me in my data collection.

Last but not the least, I am forever grateful to my parents, my family

and my colleagues for their blessings and patient understanding during this

research journey. A special mention to my father and mother for pushing me

to take up this journey and my wife and children for creating a conducive

environment to complete my research thesis.

Fazle Hussain Wadiwala

 (vii)

Contents

Chapter TITLE Page No.

No.
Certificate (i)
Statement by the Candidate (ii)
Preface (iii)
Acknowledgements (vi)
List of Tables (viii)
List of Figures (xii)
Abbreviations (xvi)
1.
2.
3.
4.
5.
Bibliography 254-269
Appendix–I Questionnaire 270-283
Appendix–II Synopsis -
 (viii)

List of Tables

Table Title of the Table Page

No. No.
 (ix)

List of Figures

Fig. No. Title of the Figure Page

 (x)

Abbreviations