A

SUMMER TRAINING PROJECT REPORT

ON

CUSTOMER PERCEPTION TOWARDS

COOPERATIVE BANK
Submitted in partial fulfilment for
MASTER OF BUSINESS ADMINISTRATION

Submitted To

Submitted By

DEPARTMENT OF

Priyanka

HCTM COLLEGE

Roll No.

KAITHAL

Univ Roll No
MBA 3rd Sem

KURUKSHETRA UNIVERSITY, KURUKSHETRA

Session(2015-17)

DECLARATION
I MS. Priyanka, hereby declares that the summer training report entitled CUSTOMER PERCEPTION
TOWARDS COOPERATIVE BANK is a bonafide work carried by me. To the best of my knowledge and
belief the matter embodied in this report has not been submitted earlier for award of any degree or diploma.

Date:

Signature of the student

Priyanka

ii

To whom it may concern

This is to certify that the summer training reportCUSTOMER PERCEPTION TOWARDS
COOPERATIVE BANK done by MS. Priyanka Roll no. 17153239 is a bonafide work carried out by him
under my guidance. To the best of my knowledge and belief, the matter embodied in this report has not been
submitted in our college earlier for award of any degree or diploma.

Date:

Name and Signature of Faculty Guide

iii

ACKNOWLEDGEMENT
I would like to fully acknowledge my gratitudes & thanks to all panellists who took active part in
accomplishing my project.
It is opportunity of immense pleasure to study under the guidance of MR. PARDEEP CHAWLA Manager
of Main Bazar Branch of Co-Operative Bank Kaithal and MR. NAVEEN RAI (HOD) and MRS. PREETY
KHATRI (LEC. In MBA Deptt.) of HCTM COLLEGE KAITHAL under whose supervision and
guidance, I could accomplish the research work.
I am also thankful to all other staff members who helped me in giving me all the required information in the
co-operative manner. I gained very much in training and had excellent experience while this time period.
Finally I am highly indebted to my parents and my family members for help given to me to complete my
research work.

iv

PREFACE
MBA is a stepping-stone to the management carrier and to develop good manager. It is necessary that the
theoretical must be supplemented with exposure to the real environment. Theoretical Knowledge just
provides the base and its not sufficient to produce a good manager thats why practical Knowledge is
needed.
Therefore the research product is an essential requirement for the student of MBA. This research project
not only helps the student to utilize his kills properly but also provides a chance to the organization to find
out talent among the budding managers in the very beginning.
Project Report of financial Statement Analysis of The Kaithal Central Co-operatives bank Ltd. Kaithal
creates a sense of Critical Analysis of a real management situation to which a management trainee is going
exposes too. This gives an opportunity to apply their conceptual theoretical and imaginative skills to real life
situation and to evaluate the result thereof.
This project report is written on account of what i learnt and experience during my studies while
accomplishing MBA. This helps me in boosting up my confidence and determination which help me to face
any situation in years to come.
I wish those who going through it, will not only find it reliable but also will find useful information.
In accordance with the requirement of MBA course, i have summer training research project on the topic
the financial statement analysis of the KAITHAL CENTRAL CO-OPERATIVE BANK LTD;KAITHAL.
While preparing this project report, i got an opportunity to learn many valuable things.

Table of Contents
Chapter
No.

Page No.
Title

1.1) Industry profile

1.2) Introduction to Cooperative Bank
1.3) Central Cooperative Bank
1.4) National Financial Institution
1.5) SWOT Analysis of Cooperative Bank
1.6) Introduction to Customer Perception

II

2.1) Research Methodology

2.2) Objectives of the study
2.3) Limitations of study

III

3.1) Analysis and Interpretation of data

IV

4.1) Findings
4.2) Recommendations
4.3) Conclusion
APPENDIX
Bibliography
Questionnaire

CHAPTER-1
INTRODUCTION AND COMPANY PROFILE
vi

1.1 INTRODUCTION TO BANKING

HISTORY
Banking is nearly as old as civilization. The history of banking could be said to have started with the
appearance of money. The first record of minted metal coins was in Mesopotamia in about 2500 B.C. the
first European banknotes, which were handwritten appeared in1661, in Sweden. Cheque and printed paper
money appeared in the 1700s and 1800s, with many banks created to deal with increasing trade.
The history of banking in each country runs in lines with the development of trade and industry, and with the
level of political confidence and stability. The ancient Romans developed an advanced banking system to
serve their vast trade network, which extended throughout Europe, Asia and Africa.
Modern banking began in Venice. The word bank comes from the Italian word ban co, meaning bench,
because moneylenders worked on benches in market places. The bank of Venice was established in 1171 to
help the government raise finance for a war.
At the same time, in England merchant started to ask goldsmiths to hold gold and silver in their safes in
return for a fee. Receipts given to the Merchant were sometimes used to buy or sell, with the metal itself
staying under lock and key. The goldsmith realized that they could lend out some the gold and silver that
they had and charge interest, as not all of the merchants would ask for he gold and silver back at the same
time. Eventually, instead of charging the merchants, the gold smiths paid them to deposit their gold and
silver.
The bank of England was formed in 1694 to borrow money from the public for the government to finance
the war of Augsburg against France. By 1709, goldsmith were using bank of England notes of their own
receipts.
New technology transformed the banking industry in the 1900s round the world, banks merged into larger
and fewer groups and expanded into other country. The word BANK" is derived from the 'Bancus' or
'Banque', which means a bench. In the early days the European moneylenders and moneychangers used to sit
on the benches and exhibit coins of different countries in big heaps for the purpose of changing and lending
money, :

Definition: A Banking company is defined as a company, which transacts the business of banking in India.
As per Banking Regulation Act 1949 Section 5(b) "Banking means, accepting for the purpose of
lending or investment, of deposits of money from the public, repayable on demand or otherwise, and
withdrawal by cheque, draft, or otherwise."

vii

BANKING STRUCTURE IN INDIA

In todays dynamic world banks are inevitable for the development of a country. Banks play a pivotal role in
enhancing each and every sector. They have helped bring a draw of development on the worlds horizon and
developing country like India is no exception.
Banks fulfills the role of a financial intermediary. This means that it acts as a vehicle for moving finance
from those who have surplus money to (however temporarily) those who have deficit. In everyday branch
terms the banks channel funds from depositors whose accounts are in credit to borrowers who are in debit.
Without the intermediary of the banks both their depositors and their borrowers would have to contact each
other directly. This can and does happen of course. This is what has lead to the very foundation of financial
institution like banks.
Before few decades there existed some influential people who used to land money. But a substantially high
rate of interest was charged which made borrowing of money out of the reach of the majority of the people
so there arose a need for a financial intermediate.
The Bank have developed their roles to such an extent that a direct contact between the depositors and
borrowers in now known as disintermediation.
Banking industry has always revolved around the traditional function of taking deposits, money transfer and
making advances. Those three are closely related to each other, the objective being to lend money, which is
the profitable activity of the three. Taking deposits generates funds for lending and money transfer services
are necessary for the attention of deposits. The Bank have introduced progressively more sophisticated
versions of these services and have diversified introduction in numerable areas of activity not directly
relating to this traditional trinity.

INDIAN BANKING INDUSTRY ANALYSIS

The banking scenario in India has been changing at fast pace from being just the borrowers and lenders
traditionally, the focus has shifted to more differentiated and customized product/service provider from
regulation to liberalization in the year 1991, from planned economy to market.
Economy, from licensing to integration with Global Economics, the changes have been swift. Almost all the
sector operating in the economy was affected and banking sector is no exception to this. Thus the whole of
the banking system in the country has undergone a radical change. Let us see how banking has evolved in
the past 57 years of independence after independence in 1947 and proclamation in 1950 the country set
about drawing its road map f or the future public ownership of banks was seen inevitable and SBI was
created in 1955 to spearhead the expansion of banking into rural India and speed up the process of
magnetization.
Political compulsions brought about nationalization of bank in 1969 and lobbying by bank employees and
their unions added to the list of nationalized banks a few years later.
Slowly the unions grew in strength, while bank management stagnated. The casualty was to the customer
service declined, complaints increased and bank management was unable to item the rot.
In the meantime, technology was becoming a global phenomenon lacking a vision of the future and the
banks erred badly in opposing the technology up gradation of banks. They mistakenly believed the
technology would lead to retrenchment and eventually the marginalization of unions.
The problem faced by the banking industry soon surfaced in their balance sheets. But the prevailing
accounting practices unable banks to dodge the issue.
The rules of the game under which banks operated changed in 1993. Norms or income Recognition, Assets
classification and loan loss provisioning were put in place and capital adequacy ratio become mandatory.
The cumulative impact of all these changes has been on the concept of state ownership in banks. It is
Increasingly becoming clear that the state ownership in bank is no longer sustainable. The amendment of
banking regulation act in 1993 saw the entry of new private sector banks and foreign banks.

10

FUNCTIONS OF BANKS
1. Primary Functions
(a) Acceptance of deposits
(b) Making Loans and Advances

Loans

Overdrafts

Cash Credit

Discounting of Bills of Exchange

2. Secondary Functions
(a)

Agency Functions

Collection of cheques and bills etc

Collection of interest and dividend

Making payment on behalf of customers. Purchase and sale of securities.

Facility of transfer of funds

To act as trustee and executor

(b) Utility Functions

Safe custody of customers valuable articles and securities.

Underwriting facility

Issuing of Travelerscheque and letter of credit

Facility of foreign exchange

Providing trade information

IMPORTANCE OF A BANK
SAFETY OF MONEY:
The money with the bank remains in safe custody there is always risk in keeping cash with ones own self. It
may be lost or stolen. Businessman likes to keep money with a bank to avoid risks of money the customer
need not keep large some of money.

11

 IT CULTIVATES HABIT OF SAVING:

Banks cultivates the habit of saving in the Bank on the one hand are safe and on the other earned interest for
the depositor who prompted to safe and deposit money in their banks accounts.
FINANCIAL HELP TO CUSTOMER:
Banks allows overdraft facilities to their customer so whenever a customer needs

money he can even

withdraw more money then the balance in his account. Bank also grants loans and credit facilities to their
customers.
SAFE CUSTODY OF VALUABLE ARTICLES:
Valuable articles deals security etc. can also be deposited in the bank for safe custody. Safe deposit vaults are
provided by bank storing for these valuables.
OTHER INFORMATION:
By opening an account with a bank, the customers may also take advantages of various other services
providing by the banks, such a purchase and sale of securities, travelers cheque etc.

CLASSIFICATION ON BASIS OF OWNERSHIP

On the basis of ownership banks are of the following types:
1. PUBLIC SECTOR BANK
Public sector banks are those banks that are owned by the Government. The Govt. runs these Banks.
In India 14 banks were nationalized in 1969 & in 1980 another 6 banks were also nationalized.
Therefore in 1980 the number of nationalized bank is 20. But at present there are 9 banks are
nationalized. All these banks are belonging to public sector category. Welfare is their principle
objective.
2. PRIVATE SECTOR BANKS
These banks are owned and run by the private sector. Various banks in the country such as ICICI
Bank, HDFC Bank etc. An individual has control over there banks in preparation to the share of the
banks held by him.

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3. CO-OPERATIVE BANKS
Co-operative banks are those financial institutions. They provide short term & medium term' loans to
there members. Co-operative banks are in every state in India -Its branches at district level are known
as the central co-operative bank. The central co-operative bank in turn has its branches both in the
urban & rural areas. .Every state cooperative bank is an apex bank, which provides credit facilities to
the central co-operative bank. It mobilized financial resources from richer section of urb3n
population by accepting deposit and creating the credit like commercial bank and borrowing from the
money mkt. It also gets funds from RBI.

1.2 INTRODUCTION OF THE CO-OPERATIVE BANK

Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative
banking institutions take deposits and lend money in most parts of the world. The Cooperative banks have a
history of almost 100 years. The Cooperative banks are an important constituent of the Indian Financial
System, judged by the role assigned to them, the expectations theyre supposed to fulfill, their number, and
the number of offices they operate. The cooperative movement originated in the West, but the importance
that such banks have assumed in India is rarely paralleled anywhere else in the world. Their role in rural
financing continues to be important even today, and their business in the urban areas also has increased
phenomenally in recent years mainly due to the sharp increase in the number of primary cooperative banks.
While the cooperative 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 selfemployment, industries, small scale units, home finance, consumer finance, personal finance, etc.
DEFINITION
A cooperative bank is a financial entity which belongs to its members, who are at the same time the owners
and the customers of their bank.

13

ORIGIN OF COOPERATIVE BANKS IN INDIA

The origins of the cooperative banking movement in India can be traced to the close of nineteenth century
when, inspired by the success of the experiments related to the cooperative movement in Britain and the
cooperative credit movement in Germany, such societies were set up in India. They are the primary
financiers of agricultural activities, some small-scale industries and self-employed workers. The Anyonya
Cooperative Bank in India is considered to have been the first cooperative bank in Asia. Cooperative
movement is quite well established in India. The first legislation on cooperation was passed in 1904. In 1914
the Maclagen committee envisaged a three tier structure for cooperative banking. Primary Agricultural
Credit Societies (PACs) at the grass root level, Central Cooperative Banks (CCBs) at the district level and
State Cooperative Banks (SCBs) at state level or Apex Level. The firs turban cooperative bank in India was
formed nearly 100 years back in Baroda. In the beginning of 20th century, availability of credit in India,
more particularly in rural areas, was almost absent. Agricultural and related activities were starved of
organized, institutional credit. The rural folk had to depend entirely on the money lenders, who lent often at
usurious rates of interest. The cooperative banks arrived in India in the beginning of 20th Century as an
official effort to create a new type of institution based on the principles of cooperative organization and
management, suitable for problems peculiar to Indian conditions. These banks were conceived as substitutes
for money lenders, to provide timely and adequate short-term and long-term institutional credit at reasonable
rates of interest. In the formative stage Cooperative Banks were Urban Cooperative Societies run on
community basis and their lending activities were restricted to meeting the credit requirements of their
members. The concept of Urban Co-operative Bank was first spelt out by Mehta Bhansali Committee in
1939 which defined on Urban Cooperative Bank. Provisions of Section 5 (CCV) of Banking Regulation Act,
1949 (as applicable to Co-operative Societies) defined an Urban Cooperative Bank as a Primary Cooperative Bank other than a Primary Cooperative Society was made applicable in1966.

FEATURES OF COOPERATIVE BANK

Cooperative Banks are organized and managed on the principal of co-operation, self-help, and mutual
help. They function with the rule of "one member, one vote". Function on "no profit, no loss" basis.

Cooperative banks, as a principle, do not pursue the goal of profit maximization.

Cooperative bank performs all the main banking functions of deposit mobilization, supply of credit and
provision of remittance facilities. Cooperative Banks provide limited banking products and are
functionally specialists in agriculture related products. However, cooperative banks now provide housing
loans also.
14

Cooperative bank do banking business mainly in the agriculture and rural sector

Cooperative banks are perhaps the first government sponsored, government-supported, and governmentsubsidized financial agency in India. They get financial and other help from the Reserve Bank of India
NABARD, central government and state governments.

Cooperative Banks belong to the money market as well as to the capital market.

Primary agricultural credit societies provide short term and medium term loans.

Cooperative banks are financial intermediaries only partially. The sources of their funds(resources) are:
a) Central and state government,
b) The Reserve Bank of India and NABARD,
c) Other co-operative institutions,
d) Ownership funds and,
e) Deposits or debenture issues.

It is interesting to note that intra-sectoral flows of funds are much greater in cooperative banking than in
commercial banking. Inter-bank deposits, borrowings, and credit from a significant part of assets and
liabilities of cooperative banks. This means that intra-secrotal competition is absent and intra-sectoral
integration is high for cooperative bank.

Cooperative Banks are subject to CRR and liquidity requirements as other scheduled and non-scheduled
banks are. However, their requirements are less than commercial banks.

Since 1966 the lending and deposit rate of commercial banks have been directly regulated by the Reserve
bank of India.

PRODUCTS AT A GLANCE:
1. ACCOUNT AND DEPOSITS
Saving Accounts:

Regular savings account

Saving plus account
Saving max account
Salary account
Pension Saving bank account
Current Accounts:

Trade current account

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 Premium current account

Regular current account
Fixed deposits

Regular fixed deposit

Super saver account
2. LOANS

Personal loans
Home loans
Two wheeler loans
New car loans
Used car loans
Educational loans
Loan against property
Tractor loans

3. INSURANCE

Car insurance
Home insurance
Building insurance
Contents insurance
Breakdown cover
4. INVESTMENTS

Unit trust
Investment bond
Ethical investments
Pension

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1.3 CENTRAL CO-OPERATIVE BANK

The Kurukshetra Central Co-op. Bank Ltd. Kurukshetra came into existence on 1.4.1973 with the Primary
objective of inculcating banking habits among the rural masses. The Bank has its jurisdiction throughout
the Kurukshetra District. At the time of registration, the bank had only 4 branches. Keeping in the view
the persistence demand from the rural masses, the bank has been opening new branches for the facility of
its customers. The total branches as on date stands to 21 with 2 extension counters. Out of these 21
branches 16 branches are rural and 5 branches are urban. But due to restricting of PACS the bank is going
to open 23 branches at PACS level in addition to previous 21 branches. The bank initially functioned for
accepting deposits and advancing loans to the agricultural sector. Today with the changing scenario, the
bank has also diversified its functions and has also entered into the Non-Farm Sector to compete with other
commercial banks. From the last more than 10 years, the bank has financing loans under individual
financing scheme for 22 broad categories specified by RBI/NABARD. Besides this, for small road
transport operator can also be advanced loans up to this limit. For agro based projects loans for higher
amount are also considered.
Keeping deposits in the Co-operative Banks is also beneficial for the customers as .5% extra interest is
allowed on all deposits. The borrowers also get finance at cheaper rates than the commercial banks.
During the past years, the bank has taken special steps to provide loans to the rural artisans and weaker
sections of the society.
The bank was adjudged best bank among all Districts Central Co-op. Banks in Haryana State during the
year 1995-96 by the NABARD. One Shield and Rs. 5.00 lacks were given to the bank for welfare of the
staff.

17

1.4 NATIONAL FINANCIAL INSTITUTIONS

1. NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT (NABARD)

(A) Formation

Formed on the recommending of CRAFICARD, i.e. The Committee for Reviewing Arrangements
for Institutional Credit for Agricultural and Rural Development. This committee was headed by
Mr. B. Siva Raman.

Came into existence on 12th July, 1982 by an Act of Parliament.

(B) Credit Function

Though there is no legal bar for NABARD to provide credit directly to people in rural areas,
NABARD does not provide such direct credits. It extends credit through banks by way of refinance.

NABARD provides re-finance assistance to Commercial Banks, RRBs, State Cooperative Banks,
and Land Development Banks. Re-finance is given against credit for promotion of agricultural,
industry and services sector in rural areas.

Both short-terms and long-term loans are eligible for re-finance. The Commercial Banks are
however not given re-finance against short-terms credits.

As per NABARD Act, NABARD is authorized to extend credit with repayment period up-to 25
years.

Repayment period of short-term assistance should not exceed 18 months, medium practice restricted
to 15 years.

Rural area for the purpose of NABARD Act means villages/town with population not exceeding
50,000 people.

Re-finance is available uniformly @ 50% of the loan amount extended by banks.

C) Regulatory Function

NABARD is vested with the powers to regulate the functioning of RRBs and Cooperative Banks,
branch opening proposals of RRBs and Cooperative Banks are to be routed through NABARD. The
inspection of these banks is also conducted by NABARD.
18

D) Development Function
Vikash Volunteer Vahini

NABARD has introduced a scheme to educate borrowers regarding proper utilization of bank
advances and its repayment. For this purpose it has started Vikash Volunteer Vahini with the
cooperation of financing banks. Farmers and Artisans, who have successfully put into practice the
principle of development through banks credit, are drafted together to disseminate financial
discipline among rural borrowers.

E) Self Help Group

A Self Help Group is voluntarily formed by around 10 to 20 rural poor to conveniently save out of
their earning by contributing to a common fund. The proceeds of the fund is lent to members of
their productive and other credit needs.

The internal saving mobilized forms the corpus of group and the group decides the rate of interest to
be given on saving and to be charged on credits. The group should maintain simple records like

minute book, membership records. It should open a saving bank account with a bank.

Self Help Group may be organized by voluntary agencies or NGOs or by initiative of a bank.

The Self Help Group may borrow from a bank after remaining in active existence for at least six
months. The finance can be given directly to the SHG or to the NGO for on lending to the group.
The quantum of finance should be maximum two times of the savings of the group and can be up to
four times in exceptional circumstances.

NABARD provides 100% refinance to bank on their lending to SHG/NGOs.

All advances to SHGs are treated as priority sector advances.

2. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)

Set up on 2nd April, 1990 as a wholly owned subsidiary of IDBI with its headquarters at Lucknow. It
is decided to delink SIDBI from IDBI.

The authorized capital of SIDBI is Rs. 250 crores.

SIDBI provides (i) Direct finance to small scale industrial activities, (ii) Refinance to banks against
their finance to SSIs, (iii) NIF assistance.

A TDMFS

TDMFS stands for Technology Development and Modernization Fund Scheme.

19

SIDBI maintains this fund and provides direct finance to SSI units which are in operation for
minimum three years for up gradation of their technology.

3. NATIONAL HOUSING BANK (NHB)

National Housing Bank is the apex bank for housing finance.

It came into existence on 9.7.1988.

It is formed under National Housing Bank Act, 1987.

The entire share capital of NB is held by RBI.

The authorized capital of this bank is Rs. 500 crores and paid up capital is Rs. 200 crores.

Apart from share capital, National Housing Bank can raise resources through issue of bonds,
borrowing from Central Government and accepting term deposit from Central Government.

National Housing Bank promotes housing finance institutions and provides financial and other
support to them.

1.5 SWOT ANALYSIS OF CO-OPERATIVE BANK

In order to better understand the cooperative banks and the environment in which they function (taking into
consideration Fund management, Risk management, Asset and Liability management), a SWOT analysis has
been undertaken.

STRENGTHS
:

Cooperative banks have less number of branches and that to in a small area. Thus it is easier for them
to control and regulate their overall operation.

These banks have limited and known customer base, which give them more potential to control credit
risk

These banks are free from market risk arising due to fluctuations in the market

These banks are free from risk arising out of Para-banking activities.

As these banks are localized they are able to maintain a personal touch with depositors and
borrowers.

These banks can avail of cheaper labor and thus can maintain low costs.

20

WEAKNESS

These banks suffer from dual accountability to both the regulators (RBI) and the state government.

These banks suffer from lack of corporate governance. The BOD as well as the staff members lacks
professional banking knowledge and expertise.

These banks have very limited avenues for expanding and diversifying loan as well as investment
portfolios.

Banks are unable to raise additional capital by making public issue of capital.

Reluctance of state government to give up control over cooperative banks and political involvement
in the management of banks further worsens the state of these banks.

Lack of internal control systems makes these banks vulnerable to fraud and scams.

The cooperative spirit no more exists in these banks. The distance between the members and the
cooperatives has widened.

Smaller size and lesser profit make it difficult for the banks to adopt latest MIS systems and other
technologies.

OPPORTUNITIES

These banks have the opportunity to tap local resources for mobilizing deposits and granting
advances.

They can provide better customized services thus leading to longer relationships and customer
satisfaction.

As these banks are area specific, it will be easier for them to consolidate information necessary for
putting in place ALM systems.

THREATS

These banks face serious threats form then private banks and foreign banks, which use advanced
techniques and technologies for risks and fund management. As public sector banks have also joined
the competition, cooperative banks face threats form these banks too.

Cooperative banks suffer from threats of frauds, scams and misinterpretations as well as from lack of
professionalism

21

1.6 INTRODUCTION TO CUSTOMER PERCEPTION

WHAT IS CUSTOMER PERCEPTION?

Customer Perception is an important component of an organizations relationship with their customers.
Customer perception is a mental state which results from the customers comparison of expectations prior to
a purchase with performance perception after a purchase. Strong customer service helps an organization to
reach up to customers expectations. Customer Perception on Service: Customer Service is the service
provided in support of a companys core products. Customer Service most often includes answering
questions, taking orders, dealing with billing issues, handling complaints, and perhaps scheduling
maintenance or repairs. Customer Service can occur on site, or it can occur over the phone or via the
internet. Many companies operate customer service call centers, often staffed around the clock. Typically
there is no charge for customer service. Quality customer service is essential to building customer
relationships. It should not, however, be confused with the services provided for sale by a company. Services
tend to be more intangible than manufactured products. There is a growing market for services and
increasing dominance of services in economies worldwide. There are generally two types of customer
expectations. The highest can be termed as desired service: the level of service the customer hopes to
receive. The threshold level of acceptable service which the customers will accept is adequate service. Yet
there is hard evidence that consumers perceive lower quality of service overall and are less satisfied.
Possible reasons may be:

With more companies offering tiered service based on the calculated profitability of different market
segments, many customers are in fact getting less service than they have in past.

Increasing use by companies of self-service and technology-based service is perceived sales service
because no human interaction or human personalization is provided.

Technology-based services (Automated Voice Systems, Internet-Based Services and Technology

Kiosks) are hard to implement, and there are many failures and poorly designed systems in place.

Customer expectations are higher because of the excellent service they receive from some
companies. Thus they expect the same from all and are frequently disappointed

Organizations have cut costs to the extent that they are too lean and are too understaffed to provide
quality service.

22

The intensely competitive job market results in less skilled people working in frontline service jobs;
talented workers soon get promoted or leave for better opportunities

Many companies give lip service to customer focus and service quality; but they fail to provide the
training , compensation, and support needed to actually deliver quality service

Delivering consistent, high-quality service is not easy, yet many companies promise it.

.
The gaps model positions the key concepts, strategies, and decisions in services marketing in a manner that
begins with the customer and builds the organizations tasks around what is needed to close the gap between
customer expectations and perceptions.
The central focus of the gaps model is the customer gap, the difference between customer expectations and
perceptions. Firms need to close this gap- between what customers expect and receive in order to satisfy
their customers and build long term relationships with them. To close this all important customer gap, the
model suggests that four gaps- the provider gaps- need to be closed.
The following four provider gaps, shown below are the underlying causes behind the customer gap:
Gap 1: Not knowing what customers expect.
Gap 2: Not selecting the right service designs and standards.
Gap 3: Not delivering to service standards.
Gap 4: Not matching performance to promises.

23

The key points for each gap can be summarized as follows:

. Gap 1: Not knowing what customers expect:

CUSTOMER EXPECTATION

24

 Inadequate marketing research orientation

Lack of upward communication
Insufficient relationship focus
Inadequate service recovery

COMPANY PERCEPTION OF CUSTOMER EXPECTATION

Gap 2: Not selecting the right service designs and standards.

CUSTOMER-DRIVEN SERVICE DESIGN & STANDARDS

Poor service design

Absence of customer-driven standard
Inappropriate physical evidence and services cape

MANGEMENT PERCEPTIONS OF CUSTOMER EXPECTATION

Gap 3: Not delivering to service standards.

CUSTOMER-DRIVEN SERVICE DESIGN & STANDARDS

Deficient in human resource policies

Customers who do not fulfills roles
Problems with service intermediaries
Failure to match supply and demand

SERVICE DELIVERY
25

Gap 4: Not matching performance to promises.

SERVICE DELIVERY

Lack of integrated services marketing communication

Ineffective management of customer expectation
Over promising
Inadequate horizontal communication

EXTERNAL COMMUNICATIONS TO CUSTOMERS

Methods of assessing customer perception

1. SURVEY
Our experience suggests that providing the customer with a survey is the most frequently used
method to obtain customer feedback. These vary in length and focus with the most common categories
for questions covering:
1. Quality of product,
2. Timeliness of delivery
3. Price
4. Responsiveness & flexibility
5. Service quality
6. Cooperativeness of Customer Service Representatives and/or Sales Representatives
7. Innovation and creativity

8. Vastness of service offerings

26

Potential Strengths:

Relatively easy to coordinate the distribution.

Relatively in expensive.

Potential Weaknesses:

Response rate is not usually stellar. We have not performed a

format study to define an average

response rate, but we are told that if you do really well, a company might approach 50%.

You cant control who responds and who does not.

So, you may not necessarily obtain a

representative perspective of the overall customer base.

Poorly crafted questions may create a built-in bias by leading the respondent to answer in a certain
way. This is an issue with all methods of assessment, but with a survey there is no opportunity for
two-way communication that might resolve misunderstanding.

2. FEEDBACK CARDS
These are attached to the product, or to an invoice, and focus on the quality of a product shipment. Areas
of focus typically include:
1. Product quality
2. Condition of the product when it arrived
3. Timeliness
4. Packaging
Potential Strengths:

Inexpensive to execute. The cards are attached to something that is already going to be shipped or
mailed.

Because it is smaller in size and therefore less burdensome to complete, the recipient may be more
inclined to return it.
Potential Weaknesses:

The size of the card restricts the number of questions that can be listed.

Although directions for distribution (who should complete it) are included on the card, the card often
does not hit its intended target.

Sometimes the receiving department throws away the card.

27

You cant control who responds and who does not. So, it is unlikely that you obtain a representative
perspective of the overall customer base.

3. FOCUS GROUPS
A focus group session is a meeting conducted with a variety of customers to assess a product or service.
Meetings can also focus on service or process issues. The automobile industry conducts what it calls 20
Groups where it brings a group of twenty customers together for the purpose of discussion. In a traditional
Market Research sense, the results generated in a focus group are not considered scientific and are used to
further hone other research instruments like a survey. We know of Graphic Arts firms that use the concept
with a twist by bringing buyers and prepress/customer service representatives together for the purpose of
improving file transfers and/or job related communication.

Potential Strengths:

Sometimes a customer will think of an idea with others present that he/she otherwise would not.

Generates a good deal of input in a short span of time.

Potential Weaknesses:

If not facilitated properly (focus on the outcomes and actionable items), the meeting can turn messy.
When this happens, it is worse than if nothing was attempted.

Sometime individuals in a group are subjected to group think and support the viewpoints of others
rather than voice their own.

4. FACE TO FACE INTERVIEWS\

You may see these being executed at shopping mall. Shoppers are escorted into a room where a prepared
survey is completed which usually includes both open-ended questions and those that require a rating. In the
Graphics Arts world a company often relies on the sales force to obtain the customers perception by sitting
down and having customer-supplier meetings.
It is important to use interviewers that are independent of the process. It is not unusual for ownership to say,
My sales force has a handle on the customer. After all, thats what I pay them for and they dont get paid
unless they keep the customer happy.

Ill restate the point that interviewer independence is mission

critical.

Potential Strengths:

The setting provides an opportunity to clarify questions and discussion topic.

Because

communication is two-way. The interviewer can check-in for both non verbal and vocal cues.
28

The interviewee might be more attentive and thorough in answering questions when an interviewer is
involved.

Potential Weaknesses:

The interviewer is constrained by geography. Either the interviewer visits the interviewee or viceversa. So to obtain wider coverage can be expensive.

The interviewer may enter bias into the activity, by either saying too much (leading the interviewee),
not listening well, or by not accurately or comprehensively recording responses.

5. TELEPHONE INTERVIEWS
These are not telephone solicitations. Rather these are contacts made with

existing customers for the

purpose of assessing their perception of how well a company is meeting their needs. With intelligent
crafting of both questions and sequence (the nesting of questions), a tremendous amount of useful and
actionable information can be gleaned. As previously stated, it is critical to use interviewers who are
completely independent so as not to filter the information.
Potential Strengths:

The setting provides an opportunity to clarify questions and discussion topics because
communication is two-way. The interviewer can check-in for vocal cues.

The interviewer is not constrained by geography.

The interviewee might be more attentive and thorough in answering questions when an interviewer is
involved.

Potential Weaknesses:

The interviewer may enter bias into the activity, by either saying too much

(leading the interviewee), not listening well, or by not accurately or

Comprehensively recording responses.

6. CUSTOMER COMPLAINT PROCESS

By customer complaint process I mean a formal process. Generally a company implements a form or
electronic recording method for capturing a complaint. Responsibilities are assigned to individuals to
resolve the immediate issue. The log of complaints is analyzed to determine patterns and root causes of
customer perceptions for the purpose of permanently eliminating the condition causing the complaints.
Potential Strengths:
29

If a company genuinely listens to the complaining customer, it is hearing an unsolicited cry for help
and there is no better substitute for that perception.

Proper handling of the complaint can lead to a save which may improve the relationship.
Potential Weaknesses:

Making this method the only source of customer perception. Often times customers do not complain;
they just never do business with you again.

30

31

CHAPTER-2
RESEARCH METHODOLOGY

32

2.1 RESEARCH METHODOLOGY

Meaning of Research
Research is any organized inquiry carried out to provide information for solving problems. Business research
is a systematic inquiry that provides information to take business decisions.
Definition
Research comprises of defining and redefining hypothesis or suggesting solution, collecting, organizing and
evaluating data making deductions and reaching conclusions. By Clifford Woody
The term Research Methodology here comprises of all research activities carried on in connection with the
Analysis Customer Perception towards of central co-operative bank.
The basis purpose of Research Methodology is to describe the research procedure. It helps the researchers to
the way to move on for carrying the study.
Research Design
Research Design is exploratory and descriptive which helps me to explore the factors influencing the
perception of the customers and to describe the gap between the banks at various levels.
Sample Size
The study aimed to survey 100 samples from the Kurukshetra District. Sampling Design was such to have an
analysis of the Customer Perception towards Cooperative Banks. The respondents were selected on the basis
of convenience sampling.

2.2 OBJECTIVES OF THE STUDY

To analyze the Customer Perception towards Kurukshetra Central Co-operative Bank.
To know about the different factors of the bank which influence the customer perception?
To understand and compare the level of Advertisement impact on customers followed by Co-operative
Bank.
33

 To study that, customer prefers the computerized banking or not.

To study that, there is influence of image or brand of the bank on the customer
To have a comparison that if the customer is differing in his perception for a Government oriented bank
and private Bank.
Data Collection:
Both primary and secondary data have been collected for meeting the objectives of the current study.
a) For the purpose of the collection of the primary data,
Personal interview of the respondents was conducted. An unbiased, undisguised structured questionnaire was
prepared which was administered to the respondent for the purpose of getting the information. With the
reference of certain previously carried studies, certain statements for getting out the customer perception
were formulated.
b) For the purpose of secondary data,
The main sources of secondary data in the study are from:

Banks Detail Books

Website

Book

Analysis Techniques
The questionnaire is having the alternative choices. Questions having alternative choices have been analyzed
by taking percentages analysis technique.

34

2.3 LIMITATIONS OF THE STUDY

Some respondents were hesitant in providing the complete information.
The findings of the study are based on the expressed opinion of the respondents.
Difficulty was faced in getting the responses to various questions because the customer could not
devote enough time to us and the communication problem was there.
This study only relates to one organization, so conclusion drawn may not find its utility in all other
banks.
Even the employees of the bank hesitate to give the complete and accurate data.

35

CHAPTER-3
ANALYSIS &INTERPRETATION OF DATA
3.1 DATA ANALYSIS AND INTERPRETATION

3. 1 what is your age?

Age
18-23 years
24-29 years
30-35 years
35 and above
Total

No of respondents

Percentage

8%

22

22%

33

33%

37

37%

100

100%

36

Interpretation:
From the table and graph above it can be seen that 8% respondents age are 18 to 23 years. 22% respondents
age are 24 to 29 years. 33% respondents age are 30 to 35 years. 37% respondents age are 35 to above
years.

3.2 What is your gender?

Gender

No. of respondents

Percentage

Male

72

72%

Female

28

28%

Total

100

100%

37

Interpretation:
From the above data it is observed that 72% respondents are male and 28% are female so it is conclude that
majority of respondents are males.

3.3 What is your occupation?

Category

NO.OF.RESPONDENT

PERCENTAGE

Businessman

24

24%

Job holders

18

18%

Farmers

47

47%

Others

11

11%

TOTAL

100

100%

38

Interpretation:
Out of the respondent customers 47% customers are farmers. Cooperative bank has majority of farmers
customer because it is mainly a rural sector bank. It does not mean that it has less percentage of customers of
the businessman and the salaried employees. Businessman and job holders are 24% and 18% respectively
and remaining 11% are students and housewives.

3.4 According to you banking is?

PARTICULARS

NO.OF.RESPONDENT

PERCENTAGE

Saving Scheme

50

50%

Money Security

32

32%

18

18%

100

100%

Financial Security
Family
All the above

for

39

Interpretation:
From the above data, it is observed that 50% respondents of cooperative bank think banking as a saving
scheme and 32% respondents thinks banking as financial security for family and remaining 18% thinks
financial security for family.

3.5 Which type of account do you have in cooperative bank?

PARTICULARS

NO.OF.RESPONDENT

PERCENTAGE

Saving A/c

47

47%

Fixed Deposit

28

28%

Both

17

17%

Others

8%

TOTAL

100

100%

40

Interpretation:
From the above data, it is observed that 47% respondents have saving account and 28% have fixed deposit.
17% have both saving a/c and fixed deposit and remaining 8% have current and recurring account.

3.6 Have you taken ever any loan from cooperative bank?

PARTICULARS

NO.OF.RESPONDENT

PERCENTAGE

Yes

63

63%

No

37

37%

TOTAL

100

100%

41

Interpretation:
The majority of the customers have taken loan from cooperative bank. 63% of the respondents have taken
loan from this bank and remaining 37% customers said that they dont have taken any loan from this bank.

3.7 Which types of interest rate do you prefer?

PARTICULARS

NO.OF.RESPONDENT

PERCENTAGE

Yearly

13

13%

Half yearly

51

51%

Monthly

36

36%

100

100%

TOTAL

42

Interpretation:
51% of the respondents preferred half yearly interest of rate, 36 % customers are preferred monthly interest
of rate and remaining 13% preferred yearly rate of interest in cooperative bank.

3.8 Do you avail any appreciation from bank for being a good customer?
PARTICULARS

NO.OF.RESPONDENT

PERCENTAGE

Yes

22

22%

No

78

78%

TOTAL

100

100%

43

Interpretation:
From the above data it is observed that only 22% of customer avail appreciation from bank for being a good
customer and remaining 78% customers said that they dont get any kind of appreciation from the bank.

3.9 How do you come to know about the scheme and services of the Co-operative bank?
PARTICULARS
Personal visit
Advertisement
Words of mouth
Others
TOTAL

NO.OF.RESPONDENT

PERCENTAGE

51
13
24
12
100

51%
13%
24%
12%
100%
44

Interpretation:
Data shows that 51% of the
respondents

from

the

Cooperative Bank come to

know about the schemes and
services of the bank by
visiting personally. 24% by
the words of mouth, 13%
from the advertisement and
remaining 12% from the
other source come to know
about

the

schemes

and

services of the bank.

3.10 Do you agree that

image of bank has its
influence on the customers?
PARTICULARS

NO.OF.RESPONDENT PERCENTAGE

Agree

58

58%

Disagree

42

42%

100

100%

TOTAL

45

Interpretation:
Majority of the respondents from Cooperative Bank that image or brand of the bank has its influence on
customers. 58% of respondents out of 100 are agreed that customer consider the brand of the bank while
going for the banking. It can be interpreted that it might influence the decision of customers and prospects.

3.11 What is your perception about different schemes and services offered by Co-operative Bank?

PARTICULARS
Lucrative
Non Lucrative

No.

of PERCENTAGE

respondents
25

25%

60

60%
46

No idea

15

15%

TOTAL

100

100%

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. Remaining 15%
respondents has no idea.

3.12 Do you think that Computerized Banking is essential for modern banks?

PARTICULARS
Strongly Disagree
Somewhat Disagree
Neutral
Somewhat Agree

NO.OF.RESPONDENT

PERCENTAGE

02
09
17
29

2%
9%
17%
29%
47

Strongly Agree
TOTAL

43
100

43%
100%

Interpretation
Major part of the Cooperative bank agrees and strongly agrees to the need of computerized system in the
bank. Cooperative bank still using the manual books for accounts instead of computerized banking.

3.13 Do you think customer differs in his perception for a Government bank and Private bank?
PARTICULARS
Strongly Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Strongly Agree

NO.OF.RESPONDENT
0

PERCENTAGE
0%

9
31
40
20

9%
31%
40%
20%
48

TOTAL

100

100%

Interpretation:
Majority of the respondents from the Cooperative bank agree that customer differ in his perception for a
govt. bank and private bank. 40% of customers are agreed on this statement and no customer is disagreeing
regarding this and 31% have neutral advice about this statement.

3.14 What are the weak points of the Central Co-operative bank facility?
PARTICULARS

NO.OF.RESPONDENT

PERCENTAGE

No Online Facility

54

54%

No ATM Facility

19

19%

Low interest Rate

27

27%

TOTAL

100

100%
49

Interpretation:
Among the 100 respondents, 54% respondents say that the weak point of cooperative bank is that, it is not
online, 19% say that it does not provide ATM facility and remaining 27% respondents say that it provides
low interest rates.

CHAPTER-4
Findings Conclusions & Recommendations
4.1 FINDINGS

50

 Majority of the customers are belong to the age category above than 35 and less number of customer
belongs to age category 18 to 23.
Majority of the customer of Cooperative bank are male, only 28% customers are female.
Majority of customer from Cooperative bank belong to agricultural background. The reason behind,
it is that cooperative bank is a rural bank.
Most of the customers consider banking as a saving scheme thats why majority of customers having
saving account in the cooperative bank.
The majority of the customers have taken loan from cooperative bank. 63% of the respondents have
taken loan from this bank. The reason may be the Cooperative bank as a main rural lending bank and
it has majority of farmers customer and remaining 37% customers said that they dont have taken
any loan from this bank.

Majority of the respondents from the Cooperative Bank come to know about the schemes and
services of the bank by visiting personally. Cooperative bank is lacking in its advertisement. Word of
mouth is also a information source. Reason may be interpreted that bank do not pay attention to
advertisement and also the customer prefer to visit the bank personally for the detail of banking
services offered.

Most of the customer of Cooperative Bank is from agriculturist background so that half yearly
interest of rate is preferred, because of their crop cycle. Salaried employee and businessman
preferred to pay monthly rate of interest. 51% of the respondents preferred half yearly interest of rate
and only 13% preferred yearly interest of rate.

Less no of respondents from Cooperative bank says that they have received positive appreciation
from the bank for being a good customer, while the majority denies it. There is a set of procedure in
the bank that if you are a good customer as you timely pay your installment and interest, you will get
some rebate in the percentage of interest but there is no such procedure in the Cooperative bank.
Majority of the respondents from Cooperative Bank that image or brand of the bank has its influence
on customers. 58% of respondents out of 100 are agreed that customer consider the brand of the bank
while going for the banking. It can be interpreted that it might influence the decision of customers
and prospects
Majority of the respondents have non lucrative perception about the schemes and services of
Cooperative Bank and 15% customers have no idea about this..
Essentiality of computerized bank is agreed by the cooperative bank customer because Cooperative
bank still using the manual books for accounts instead of computerized banking.
Majority of the customer agree that whatever it is a Government Bank and Private Bank, customer
perception is different about the both type of bank. The reason may be interpreted that the customer

51

feels that there is a genuine difference between a govt. bank and a Private bank regarding the
services, rate of interest, infrastructure and other factors.
Majority of the respondent said that the most weak point of Cooperative bank is that it is not online
and other said weak point it has low interest rate.

4.2 RECOMMENDATIONS
More mass awareness campaign should be organized to in order to enhance market share of bank. So
bank should concentrate on its advertisement itself.
Bank should refocus on its interest rate as responded by people. Periodic review of the interest should
be done.
There should be computerized system in the bank as it will reduce the time wastage of manual work and
will lead to the better performance in the bank.
Training of employee should be there to meet the needs of the time.
Proper posting of staff should be done.
Customer satisfaction must be top priority of the bank.
Maximum practical exposure should be provided to the job trainees so that they may handle the various
queries of the customers efficiently.
Communication gap within the bank and the head office should be reduced.
Online facility should be provided by the cooperative bank to the customers.
Bank is also advise to have proper internal control measure for monitoring its functions and
transactions.

52

CONCLUSION
The project was undertaken to analyze the customer perception towards the Cooperative Bank. The study
concludes that Cooperative Bank, which was established mainly for the services of rural sector, still is not
the line to its goal. It is lacking at its various elements, particularly at the branch levels, which reveals the
edge of other public and private sector bank over the Cooperative Bank, the line at which the bank is
lacking behind. Indiscipline and lack of commitment in this bank makes people trust in the cooperative
sector and casualty.
Some of the Cooperative Banks are forward looking and have developed sufficient core competencies to
challenge state and private banks. But there is shortage of staff in some Cooperative Banks and the
traditional manual banking which is affecting the business and customer service. People are still unaware
of the services provided by cooperative bank due to lack of advertisement.
In this way, by keeping in mind the certain shortcomings, appropriate measures to overcome should be
adopted. So that the real purpose of the Cooperative Bank must be realized with the competitive advantage
and the gap between the customer perceptions of the Cooperative Bank.

BIBLOGRAPHY
53

BOOKS
PHILIP KOTLER, MARKETING MANAGEMENT
C.R.KOTHARI, Research Methodology, Vishaka Prakashan, New Delhi, 1990.
Banking law and practice, P.N Varshney, Sultan Chand and sons, Valarie Z, Mary B. 4 th
edition Services Marketing Chapter 2 Theory of Gap: Tata McGraw-Hill
Kothari, C.R., Research Methodology, Vishaka Prakashan, New Delhi, 1990
Avadhani V.A, Marketing and Financial Services, Himalayas publishing house Pvt. Ltd., 2002
Banking Law and Practice, P.N Varshney, Sultan Chand and sons, Educational Publishers,
New Delhi.

WEBSITES
www.google.com
www.CO-OPBANK.com
Wikipedia

54

ANNEXURE
Dear Respondent,
I would be extremely thankful if you spare some time in answering the following questions. All the
facts disclose by you will be used for academic purpose only.
Personal Details:-

a) Name

_________________________________

b) Address

_________________________________

c) Gender

_________________________________

d) Age

________________________________

e) Occupation
Business
Farmers

Job holder
Other

Q1. According to you Banking is?

a) A saving scheme with good return
b) Money security
c) A financial security for the family
d) All the above
Q2. Which type of account do you have? Please tick.
a) Saving account
b) Fixed deposit
c) Both
d) Others
Q3. Have you taken ever any loan from this bank?
a) Yes

b) NO

Q4. Which type of interest rate do you prefer?

a) Yearly

b) Half yearly

c) Monthly

55

Q5. Do you avail any appreciation from this bank for being a good customer?
a) Yes

b) No

Q6. How do you come to know about the schemes and services of co-op bank?
a)

Personal visit

b)

Advertisement

c)

Words of mouth

d)

Other

Q7. Do you agree that image of the bank has its influence on the customers?
Agree

Disagree

Q8. What is your perception about different schemes and services offered by Co-operative bank?
Lucrative

Non lucrative

No idea

9. Do you think that computerized banking is essential of modern banks?

a) Strongly Disagree
b) Somewhat Disagree
c) Somewhat Agree
d) Neutral
d) Strongly Agree
Q10. Do you think customer differs in his perception for a Government bank and Private bank?
a) Strongly Disagree
b) Somewhat Disagree
c) Somewhat Agree
d) Neutral
e) Strongly Agree
Q11. According to you what are the weak points of Central Co-operative bank facility?
a) Not Online facilities
b) Not ATM facility
c) Low interest rate
d) All the above
e) No any weak point

56

Q12. Any suggestion for CENTRAL CO-OPERATIVE BANK.

______________________________________________________
______________________________________________________

Thank you for sparing your valuable time

57