CONSUMER BEHAVIOUR TOWARDS

CO-OPERATIVE BANKS

Universal Business School

Karjat, Mumbai

Submitted To: Guruprasd M

Submitted by:
| Atul Gurav (PGDM 2) | Shubham Parsekar (PGDM 2) |

| Shrey Sood (PGDM 2) | Teja Mulagala (PGCM 5)

| Sourabh Mayabhate (PGDM 2)|

Date of Submission: 23-April-2016

 DECLARATION

We hereby declare that the work embodied in this project is our original
work. It is submitted in partial fulfilment of the curriculum for the degree of
Post Graduate Diploma in Management at Universal Business, Karjat
Mumbai.

We further state that no part of this report has been submitted for any other
degree / diploma or any title equal in importance to any other university.

Sr.No Roll No. Batch Names Signature

1 1510 PGDM 2 ATUL GURAV
2 1537 PGDM 2 SHREY SOOD
3 1539 PGDM 2 SHUBHAM PARSEKAR
4 1542 PGDM 2 SOURABH MAYABHATE
5 1505 PGCM 5 TEJA MULAGALA

Place: Universal Business School Date: April 23, 2016

 CERTIFICATE

This is to certify that the project entitled Consumer Behaviour of Co-

operative Banks is an original assignment performed by this group of
students under my guidance.

This project is submitted by the students for the assessment procedure of

the Post Graduate Diploma in Management at Universal Business School,
Karjat - Maharashtra.

UNIVERSAL BUSINES SCHOOL Project Guide

KARJAT MAHARASHTRA PROF. GURUPRASAD M

 ACKNOWLEDGEMENT

We take this opportunity to thank all those involved in completing our

project. We would like to express our gratitude to Prof. Guruprasad M. for

guiding and helping us in making of this project and giving his valuable time

in explaining and providing his valuable input. Our words indeed would

hardly suffice her contribution.

We also like to thank the librarian of our college and the library staff for

their co-operation during the project work.

We also thank Dean- Prof Bibhas B for his stimulating support.

Finally, we thank the Branch Managers and staff for providing the necessary
information for the successful completion of project.
 TABLE OF CONTENTS
Topic Page No
Executive Summary 01
1. Industry Overview
1.1 Meaning & Definition 02
1.2 Introduction to topic 03
1.3 Importance of Co-Operative banking 04
1.4 Difference between Commercial Bank & Co-Op Bank 05
1.5 Structure of Co-Operative Bank System 06

2. Introduction to Topic
2.1 Project Title
2.2 Research Objective 11
2.3 Literature Review
2.4 Hypothesis 12
2.5 Limitations 13

3. Methodology
3.1 Type of Research
3.2 Collection Data 14
3.3 Sampling Units, Tools 15

4. Research Findings
4.1 Questionnaire Analysis 16
4.2 Analysis of Interview with Bank Managers 33
5. Conclusion 38
6. Recommendation 39
References
Appendix
 EXECUTIVE SUMMARY

Research topic assigned to our group as a part of Marketing Research Project

was Customer Behaviour towards Co-operative Banks. The objective of our
study was to understand customer behaviour as well as to understand whether
they are aware about the services and facilities offered by the Co-operative
Banks. The survey we conducted was confined to Karjat area, we reffered to
Five Co-operative banks and our sample size was 80.

Methodology used was Primary as well Secondary data. Type of study we

implemented was Exploratory as well as descriptive study. As per the Research
findings, many of the Respondents prefer co-operative banks over Nationalised
banks due to higher interest rate on deposits, preference given to local and
friendly approach of the bank towards their customers.So this clearly proves our
hypothesis is true.

Various Suggestion are provided in the report like Bringing awareness in the
housewives as they drive the family, to start with the internet and mobile
banking facility, etc. There were even several limitations to our study we
conducted like Time constraints , area , respondents, language barrier, genuinity
of information, insecurity towards providing personal information like phone
number , name and address.

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 1.0 INDUSTRY OVERVIEW OF CO-OPERATIVE BANK

1.1 DEFINATION: CO-OPERTIVE BANKING

A Co-operative bank, as its name indicates is an institution consisting

of a number of individuals who join together to pool their surplus savings for
the purpose of eliminating the profits of the bankers or money lenders with a
view to distributing the same amongst the depositors and borrowers.

The Co-operative Banks Act, of 2007 (the Act) defines a co-operative bank
as a co-operative registered as a co-operative bank in terms of the Act whose
members.

1. Are of similar occupation or profession or who are employed by a

common employer or who are employed within the same business
district; or

2. Have common membership in an association or organisation,

including a business, religious, social, co-operative, labour or
educational group; or

3. Have common membership in an association or organisation,

including a business, religious, social, co-operative, labour or
educational group; or

4. Reside within the same defined community or geographical area.

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1.2 INTRODUCTION CO-OPERATIVE BANK

A co-operative bank is a financial entity which belongs to its members, who

are at the same time the owners and the customers of their bank. This
banks provide financial assistance to locals of the community and protects
them against the debt trap of the money lenders and Traditional savakars.
They are the main reason for breaking the monopoly of moneylenders. Co-
operative banks in India came into existence with the enactment of the
Agricultural Credit Co-operative Societies Act in 1904. Co-operative bank
form an integral part of banking system in India. Under the act of 1904, a
number of co-operative credit societies were started. Owing to the increasing
demand of co-operative credit, anew act was passed in 1912, which was
provided for establishment of co-operative central banks by a union of
primary credit societies and individuals.
Importance given to co-operative banks in India is very much high compared
to other parts of 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 co-operative banks. Co-operative bank regulated by Reserve Bank
of India, NABARD & Apex bank. They are governed by the Banking
Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

They provide financial assistance to Rural as well as Urban areas.

Rural Farming, personal finance, cattles, housing.

Urban personal, housing, Business purpose, Self-employment.

Co-operative banks provides various services which include loans, deposits,

lockers, Overdraft, ATM, etc. The distinctive features of Co-operative banks
is attributed mainly to their much better contacts with the local people,

3
 personal interaction with customers, and their ability to catch the nerve of the
local client. The total deposits and landings of Co-operative banks are much
more than the Old Private Sector Banks and the New Private Sector Banks.

1.3 IMPORTANCE OF CO-OPERATIVE BANKS

Co-operative bank is a financial entity belonging to its members who are
its customers as well, providing them with a wide range of banking and
financial services.
Main motive is not to generate profit but to provide the best possible
products and services to its members and also non-members.
Co-operative bank reduces banking exclusion and foster economic growth
of country, by increasing banking access in areas or markets where other
areas are less present SMEs, farmers in rural area, middle or low income
households in urban areas.
Co-operative banks are deeply rooted inside local areas and communities.
They are involved in local development and contribute to the sustainable
development of their communities.
Criteria for getting loan from Co-operative banks are less stringent than
for a loan from a Commercial bank.
The exponential growth of co-operative banks in India is attributed mainly
to their much better local reach, personal interaction with customers and
their ability to catch the nerve of the local clientele.

4
1.4 DIFFERENCE BETWEEN COMMERCIAL BANK & CO-OP
BANKS
Commercial banks are required to be registered under Banking
Regulation Act, 1949.
Whereas co-operative banks are required to be registered under the Co-
operatives societies Act of 1904.
Commercial banks are subject to the control of the Reserve Bank of
India.
Co-operative banks are subject to the rules laid down by the Registrar
of co-operative Societies.
Commercial banks in India are on a larger scale. They have branch
system hence they have branches all over country.
Co-operative banks follow only unit- bank system and are relatively on
a much smaller scale. The coverage of co-operative banks is not
countrywide.
Commercial banks in India are of two types i.e. Private and Public
sector banks.
Co-operative banks are private sector banks.
Co-operative banks have lesser scope in offering a variety of banking
services than commercial banks.
Co-operative banks offer a higher rate of interest to their depositors
than commercial banks.
Commercial banks operates to earn profit. Whereas co-operative banks
operate mainly to service its members and the society.
Massive funds are available for disposal with the commercial banks,
whereas limited funds are available with the co-operative banks.

5
1.5 STRUCTURE OF CO-OPERATIVE BANKS

CO-OPERATIVE BANKS

RURAL CO-OPERATIVE BANKS URBAN CO-OPERATIVE BANKS

SHORT- TERM RURAL CO- LONG -TERM RURAL CO-

OPERATIVES OPERATIVES

STATE CO- CENTRAL CO- PRIMARY AGRICULURE

OPERATIVE BANK OPERATIVE BANK CREDIT SOCIETY

SHORT CO-OPERATIVE OPERATIVE PRIMARY CO-OPERATIVE

AGRICULTURE AND RURAL AGRICULTURE AND RURAL
DEVELOPMENT BANKS DEVELOPMENT BANKS

The Co-operative banking structure in India comprises of:

Urban Co-operative Banks

Rural Co-operatives Banks

6
Some co-operative banks are scheduled banks, while others are non- scheduled
banks. For instance, State Co-operative banks and some Urban Co-operative
banks are scheduled banks but other co-operative banks are non-scheduled
banks.

Scheduled banks are those banks which have been included in the second
schedule of the Reserve bank of India act of 1934. The banks
included in this schedule list should fulfil two conditions.

The paid capital and collected funds of bank should not be less than Rs.
5 lac.
Any activity of the bank will not adversely affect the interests of
depositors.

Every Scheduled bank enjoys the following facilities.

Such bank becomes eligible for debts/loans on bank rate from the RBI
Such bank automatically acquire the membership of clearing house.

TWO CATEGORIES OF CO-OPERATIVE BANKS (INDIA)

1.5.1 Urban Co-operative Banks:
Urban Co-operative Banks is also referred as Primary Co-operative
banks by the Reserve Bank of India. Among the non-agricultural credit
societies urban co-operative banks occupy an important place. This
bank is started in India with the object of catering to the banking and
credit requirements of the urban middle classes.
As per RBI Urban Co-operative banks are small sized co- operatively
organized banking units which operate in metropolitan, urban and
semi-urban centres to cater mainly to the needs of small borrowers,
viz. owners of small scale industrial units, retail traders, professional
and salaries classes.

7
 Urban Co-operative banks mobilize savings from the middle and lower
income groups and purvey credit to small borrowers, including weaker
sections of the society. These banks organize on a limited liability
basis, generally extend their area of operation over a town. The main
functions of these banks are to promote thrift by attracting deposits
from members and non-members and to advance loans to the
members. It is registered under Co-operatives Societies Act of the
respective state Governments. Prior to 1966, Urban Co-operative
banks were exclusively under the purview of State Government.
From March 1, 1966 certain provisions of Banking

Regulation Act have been made applicable to these banks.

Consequently, the RBI became the regulatory a supervisory authority
of Urban Co-operative Banks for their related operations. Managerial
aspects of such banks continue to remain with State Governments
under the respective Co- operative Societies Act. These banks with
multi-presence are regulated by the Central Governments and
registered under Multi-State Co-operative Societies Act. The RBI
extends refinance to Urban Co-operative Banks at bank rate against
their advances to tiny and cottage industrial units. These banks grants
sizeable loans and advances under priority sector for lending to small
business enterprises, retail trade, road and water transport operators
and professional and self-employed persons. Urban Co-operative
banks are mostly located in towns and cities and cater to the credit
requirement of the urban clientele.

1.5.2 Rural Co-operatives Banks:

Rural Cooperative Banking plays an important role in meeting the
growing credit needs of rural population of India. It provides
8
 institutional credit to the agricultural and rural sector. The inadequacy
of rural credit engaged the attention of RBI and Government
throughout the 1950s and 1960s. One important feature of providing
agriculture credit in India has been the existence of a widespread
network of rural financial institutions. The rural credit structure
consists of many types of financial institutions as large scale branch
expansion was undertaken to create a strong institution based in rural
area. It has served as an important instrument of credit delivery in rural
and agricultural areas. The separate structure of rural Co- operative
sector for long-term and short-term loans has enabled t h e s e
institutions to develop a specialized institution for rural credit
delivery. The volume of credit flowing through these institution has
increased.

The Rural Co-operative structure has traditionally been bifurcated

into two parallel wings, i.e.

A. Short-term Rural Co-operatives

B. Long-term Rural Co-operatives.

A. Short-term Rural Co-operatives

This bank provides finance to farmers and rural people mainly for crop
and other personal use. There are 3 types of societies at various levels

- Village level The Primary Agricultural credit societies: The primary

co-operative society is an association of borrowers and non borrowers
residing in a particular locality. The funds are derived from loans of
central co-operative banks , share capital and deposits of its members.
This deposits in return utilised for giving loan to its members for
purchase of fertilizers , pesticides , cattles, etc.

9
- District level ( middle) Central Co-operative Banks: This are the
federation of primary credit societies in a district and are of two types
Those having membership of primary societies only
Those having membership of societies as well as individuals.

This banks obtain funds from deposits ,share capital and provide the
same as finance to member socities within the limits of borrowing
capacity of socities

- State level (high) State Co-operative bank: The state co-operative

bank is federation of central co-operative bank and acts as a watchdog
of the co-operative banking structure in the state. Its funds are obtained
from share capital, deposits, loans and overdrafts from Reserve Bank
of India. The state co-operative banks does not directly lend to the
farmers but to the following banks

B Long-term Rural Co-operatives:

This bank provide typically medium and long term loans for
agriculture, personal financing, and housing. This bank does not
directly lend to the farmers but to this two types of banks
- State Co-operative Agriculture and development banks (state Level)
- Primary Co-operative Agriculture and Rural Development Banks
(taluka level)

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 2.0 CONSUMER BEHAVIOUR OF CO-OPERATIVE BANKS

2.1 INTRODUCTION

The purpose of the report is to find the consumer behaviour in context to the
cooperative banks. The whole study is done to analyse that what drives the
customers to open an account in the cooperative banks. To make the report,
many inputs were required and the same were fulfilled by conducting surveys
in which the customers of the banks were asked to fill the questionnaires. Also,
the managers were approached and their insights were asked regarding the
respective banks functioning. These two sources gave us the tremendous
information by which we were able to prepare the report. In the report, every
essentiality is covered which would make our research and the survey
complete.

2.2 OBJECTIVES
To find whether customers are aware of the services and facilities which
the cooperative banks are offering.
To understand customer behaviour in context to the cooperative banks.

2.3 LITERATURE REVIEW

Dr. S. Velanganni in his research (Comparative study on customers

perception on service quality in cooperative banks) paper discussed that
the banks are exercising vigilance to identify the needs of the customer and
monitoring their moves and reactions towards the actions taken by the banks
to please them. To win the customers and having a competitive edge over
others, banks are possessing a broad mechanism to gauge the changing needs

11
 of the customers. The customers prefer the banks where there is a sense of
personal touch in the services provided.

Dr. Snehalkumar H Mistry (2013): Focused on the factors that affect

customer satisfaction in banks and analysing their effects. It stated that the
customer satisfaction is the key for many banks to survive the competition.
Customers gives third preference to the assurance factor which included
services as on of the component. Now a days, banks give training to their
employees which help them to give personalised services.

S.Sivesan (2012): Founded the impact of the service quality on customers

satisfaction in the banking sectors. He stated that the service quality is inter-
related to the customers satisfaction. The administrative body should identify
the primary quality services determinants which matches and manages the
customers expectations.

Robert Johnston (1997): In his study entitled as, Identifying the critical
determinants of service quality in retail banking found out that increasing the
speed of the processing information, delighting customers, such as the
reliability of equipment, will lessen dissatisfaction among the customers.

2.4 HYPOTHESIS
Customers prefer cooperative banks due to the minimal interest rate
charged by the banks on the loans extended and good rate of interest
given on the deposits.
Customers prefer cooperative banks due to the hassle-free
documentation of the loans.
Mostly people from the unorganised sectors prefer cooperative banks.

12
2.5 LIMITATIONS
Time Constraints: The survey was conducted only on one day due to time
constraints. Also, customers because of being busy could not give the
essential time required for the questionnaires.
Reluctance: People were reluctant to share the information as they were
insecure about the same. They believed that their privacy would be
affected by giving the information required.
Language barrier: Only one person in the group knew effluent Marathi
language. Hence, it posed as a problem to communicate.
Restricted Area: Due to the time constraints, the research was restricted to
KARJAT city area only. This limited our area to conduct the research.
Limited number of banks: Only 5 banks could be visited as in KARJAT
only 5 cooperative banks were present.
Lack of Knowledge: The respondents lacked the knowledge of the
services provided by the banks. Hence, the complete true analysis was not
possible.
Misinterpretation of Data: The data was misinterpreted by the respondents
which in between acted as a barrier.
Authenticity Doubtful: The information provided by the respondents may
be false which may not lead to the authentic results.
Findings of research may change due to area, age and other factors of
respondents.
Sample size was restricted to 80 instead of 100
Branch staff was reluctant to share the information.
The findings are solely based on information provided by respondents so
it may be subjected to bias and prejudice of the respondents.

13
 3.0 METHODOLOGY

The purpose of our project work was to study the Consumer Behaviour of Co-

Operative Banks. We used following type of research method:

1. Exploratory Research

2. Descriptive Research

Thus keeping this in mind we adopted the following research methodology.

1. Primary data: Primary data was collected by means of following ways.

- Structured Questionnaire: Our questionnaire was consist of open

ended as well as close ended questionnaire.

- Observations: Personal Touch of staff in service & Efficient Service.

- Interview: Interview schedules with the officials and the employees

of Co-operative Banks

2. Secondary data: The data was collected by means of review of

literature from books. We have also collected some valuable inputs for

our project from various text books, reference book, newspapers and

from our college library.

The whole work was divided among the group members and finally all this

information was collected, analysed and compiled to prepare a final report.

Conducting of personal interviews and questionnaire methods were the major

source of getting information for conducting our project work.

Sampling Size 80 respondents & 5 Bank Managers

14
 Sampling Method: Simple Random Sampling

Sampling Location Karjat City

Tools: SPSS, MS excel & MS Word

15
 4.0 RESEARCH FINDINGS

Frequency
40

35
35
30

25 27
20

15
16
10

5
2
0
0 to 3 4 to 6 6 to 9 10 to 12

Fig 1: Years of association with Co-Op Bank

Nearly 44% of the respondents where the research was conducted, we came to
an understanding that customers attachment with the co-operative bank ranges
between 0 to 3 years.

Most of the respondents told us that the co-operative banks are not providing Net
Banking as these days most of the transactions like bill payment, Insurance
payment are done through internet.
In order for posting the transactions in the passbook, co-operative does not have
kiosks like other Nationalized Banks does where as one can interact with the
kiosk and get the transactions posted with the help of barcode attached to the
passbook
Many youngsters of the survey felt that co-operative banks are not having any tie
up with paytm or freecharge whereas they can recharge on the go with other
Private or Nationalized Banks
As the co-operative banks came into the picture to help especially farmers and
other small businesses. However most of them feel that bank should provide
credit card facilities which they feel handy.

16
On performing the Survey of 80 respondents, it is clear from the chart and cross
tabulation that nearly 72.8% of them are having Savings account.

17
18
Survey conducted on 80 respondents, nearly 57% of the sample size informed
us that they have opened the bank account due to Savings.

19
Out of 80 respondents, it is very surprising that nearly 50% of them have never
opted for any loan. However, 30% of the respondents have taken Agriculture
loan.

20
Among the random customer samples, only 80% feel that the bank is catering to
all their needs whether it is support or services. 20% of the people feel that the
banks should improve against other National and Private Banks.

21
Among the 80 sample size, almost nearly 92.5% people use ATM. However only
2.5% claim that they enjoy both ATM and Net Banking which provided by the
Co-operative Bank.

22
Out of all the respondents. 98.8% of the respondents recommend this bank to
others which clearly shows that they are happy with the respective banks and
appreciate other opting for the services of the co-operative bank.

23
80% of the 80 respondents opted the particular co-operative banks services as
referred by the trustworthy sources. Only 12.5% opted for the co-operative bank
services via advertising and remaining others through relatives .

24
57.5% of the 80 respondents rated the bank as 8 which clearly shows that they
are happy with services provided by bank. On an average nearly 8.05 rating was
received overall.

25
Surprisingly 41.3% of the surveyed customers declared that they go for
Nationalized or Private Bank.

26
Out of the 80 respondents who participated in the Survey SEC E2 prefer DNS
Bank which is nearly 42.9% and whereas SEC A1 prefer GP Parsi Bank.

27
We can observe from the Table and Graph that SEC E2 who are unskilled
labour and farmers accommodate to 38.1% female and 61.9% male out of the
80 respondents.

28
As per the Statistics most of the customers who have the bank accounts fall in
the range of 26-35 years which is nearly 47.5%.

29
We can observer form the survey that 22.9% of the Male are associated with GP
Parsi Bank. However, Women nearly 60% has an account with DNS Bank.

30
This Frequency Table shows that 26-35 years aged customers are more
compared to any other based on the surveyed data.

This Frequency table shows us that 57.5% customers have rated 8.0 for Co-
operative Banks based on their experience.

Respondents told us that at times waiting time is very high in co-operative banks
especially during last week and first week of month. Even during festival times.
No proper Queue maintenance as it is highly unorganized and no token system.
They faced issues during Cheque clearance as manager is not available and need
to wait for lot of time and no clue about the Manager.
Customers did not appreciated that staff behaviour as they were rude at times and
not supporting. Proper information was not provided during emergency.

31
Customers love to be associated to be Co-operative banks as it is boon for
farmers and people who run small business near and around Karjat. They are
very much attracted by the fact that these banks offers low interest on loans and
reasonable interest rate on savings. Respondents told that they like the friendly
nature of the bank and they feel like their own bank.

Most of the Nationalized or Private Banks have lot of documentation or

verification which is very hectic for one to full whereas Co-operative banks
documentation procedure is minimal to reduce the complexity.

The average rating was 8.075 on a scale of 1-10 where 1 being the worst and 10
being the superior.

Inference from the survey revealed that the service which are not provided by
co-operative banks are provided by Nationalized Banks. Most of the services
include like connection with IRCTC, booking movies etc. Credit card facilities
are provided by the bank which comes very handy during purchasing online
through EMI via popular e-commerce sites.

32
4.2 An Interaction with the managers:

GP PARSI BANK

Mr. Sanjay Gaikwad, the assistant manager gave his valuable insights on their
everyday working, customer relationship maintenance and what all factors play
a vital role in the working of the company. The points discussed by him were:

- Role of politicians: Politicians are actively involved while determining

the management committee resulting into favouritism and corruption.
- Pane cooperative bank scam affected the working of the overall
banking structure of the cooperative banks.
- A cooperative banks strength is the service they provide to the
customer as the trust factor is less. The bank is providing all the
facilities such as NET BANKING etc. To enhance the customer
experience, personal attention is paid heed.
- Grass root people are paid more attention: The minimum account
balance is Rs. 1000 to open an account. But if the person has monetary
issues, an account will also be opened with a meagre amount of Rs.
100
- The hierarchical order is followed in the decision making process, i.e.
the orders are descend downwards.
- Quick handling of grievances takes palace. Inquiry start on the spot
and reverting back is also done immediately.

Loan requirements:

- Proof of the businesses along with 2 guarantors are required.

Documents are fully scrutinised and are required in full. If a person is
lacking in some documents and requires a loan upto the amount of
Rs.10, 00,000, an affidavit of Rs.100 is required to be submitted in lieu
of the documents. The loan processing time would take 5-6 days.

33
 - The Non-Performing-Assets of the nationalised banks is more than the
cooperative banks but due to their vast size, the effect is easily borne
by them.

Competitive advantage:

- The rate of interest on loans and deposits are good for the customers in
comparison to the nationalised banks.
- As compared to the other cooperative banks, GP PARSI bank gives
more personal services than any other banks which acts as a
competitive advantage for the bank against the other banks in the same
segment.
- Businessmen would not maintain a savings account but would
maintain a current account for the transactions.

The customers for the bank: The prime customers are retired people, jewellers
usually use the locker facility and deposits from the middle class.

DNS Bank

The manager of the bank treated us very well and explained the working of their
respective branch. The insights provided by the manager were as follows:

- Pane cooperative bank affected their working

- The strategic advantage of the bank was on the good rate of interest it
has on the deposits.
- The bank has many tie-ups with other banks (nationalised) so as to
facilitate the transactions in the states where the banks branch is not
available.
- Loan duration is usually a month process to be processed.

The bank is providing all the facilities such as NEFT/RTGS transfers, DMAT
account facilities etc.

34
The prime customers of the bank are: Farmers, middle class, housewives and
businessman.

Raigad District Cooperation Bank Ltd.

Mr. Jadhav, the branch manager gave us the valuable information about the
banks working which was helpful for our report:

Customer Base:

Farmers are their prime and loyal customers as the bank provides crop loans a
0% Interest. This also serves as a competitive advantage for the bank.

Pensioners: People come on regular bases to collect the pension.

The other competitive advantage the bank has its smooth functioning i.e. people
prefer this bank over others as there is rush at any given day. Also, people are
familiar with the banks staff as the majority of the employees are from the same
region (Karjat). Hence, people get a sense of the personal touch in the services
provided by the bank.

The bank provides augmented services such as NEFT/RTGS transfers. Net/

mobile banking is yet to come but will be launched shortly as claimed by the
bank.

As claimed by the manager of the bank, the current budget of 201 has not
affected the working of the bank to a greater extent.

Alibag Cooperative Bank Ltd.

Mr. Rajendera Patil, the bank manager equipped us with the useful information
about the bank. Following are the inputs provided:

Customer base:

35
The majority of the customers are the businessmen.

The competitive advantage factors:

Bank gives high interest rates on the deposits.

The minimum bank account amount to be kept is Rs.500 only unlike the other
banks claiming the amount to be Rs.1000.

The presence of a large number of ATMs and also tie-ups with the nationalised
banks for the ATM facility across nation.

Quick services provided

Locker facility provided.

Other factors:

Net banking is not provided by the bank.

Facilitates NEFT/RTGS transfers.

Challenge for the bank is striving against the competition. Hence, more
marketing is done for the same.

Annasaheb Mahad Co-Operative Limted

According to our analysis, this was the busiest bank on the day we went for the
survey. Despite being busy, the manager gave us 10 minutes of his precious time
to talk about the banks working:

This is the oldest cooperative bank in the region

Over the years, the bank has done very well to maintain the trust of the people
well which was very much evident by the rush in the bank.

The bank has evolved over the years by keeping the pace with technologies. The
of late banking advancements have been adopted by the bank well

36
The only concern for the manager is the limited working space of the bank. Due
to this, the customers have to wait for longer durations. The management is
thinking to shift to a bigger premise soon.

The other prominent factors such as: good rate of interest, personal touch in the
services provided etc. is well taken care by the bank.

The overall analysis could be summed by taking the prominent factors into
consideration from the information derived from the managers:

The people of the region give prime importance to the rate of interest provided
the banks.

The quick provision of services by the banks is a very crucial factor.

The mode of providing the services used by the banks drives people for or against
the bank. The level of personal touch in the services provided is a driving factor
for many customers.

Although the cooperative banks are small in size compared to their counterparts,
the nationalised banks, yet the advancements in the banking facilities are very
well adopted by the former ones.

37
 5.0 Conclusion

The findings from the survey conducted and interaction with the managers
were in line with the hypothesis put up by the team. One of the main driving
force for the customers was the interest rates. The customers preferred the
banks which provided more specialised services. The above factors are also
the driving force for the customers to choose co-operative banks over the
nationalised banks. Mostly people from the agricultural background had a
bank account in the co-operative bank. Business man especially jewellers
used the current account in order to deal with the business transactions. In
context to the findings from the research conducted, the hypothesis hold true.

38
 6.0 Recommendations

1. Bank should try to implement and adopt to technological changes and start
services like Internet Banking, Mobile Banking through Apps.
2. Installation of ATM machines in and around Karjat should be considered
immediately as people always regret extra charges paid for using ATM
cards in different ATM machines.
3. Intense marketing has to be done to include the villagers in financial system
and inculcate the habit of savings for their future purpose. For this they
should target housewives through launching a campaign during any
festival or cultural festival or a health campaign.
4. Target housewives through self-help groups as women are the actual
drivers of the family, and influencing them would result in converting
prospects into customers.
5. Try to focus on expansion. Set up new branches in different corners of the
state.
6. Focus on comfort of the customers, irrespective of their age, gender, sex,
status. Improve the bank atmosphere. Installation of Air conditioner, new
display screens for the Token number and announcements, focusing on the
safety and security aspects will improve customers confidence and will
help in retaining him
7. To reduce the waiting queue for most common purpose of updating of pass
book, install kiosk and even keep the traditional technique of updating over
the counter for the unfamiliar ones.
8. In order to resolve customer issues and their grievances, have a manager in
charge familiar with the local language as well as having good banking and
financial knowledge to ease their transactions.

39
 REFERENCE

[1] Andrew Campbell (2007), "Bank insolvency and the problem of non-
performing loans", Journal of Banking Regulation, 25-45.
[2] Beaver, W. H. (1966), "Financial ratios as predictor of failure-empirical
research in accounting", Journal of Accounting Research, No. 4, 71-111.
[3] Bhaskaran R and Praful Josh P (2000), Non Performing Assets (NPAs) in
Co-operative Rural Financial System: A major challenge to rural development,
BIRDs Eye View Dec.2000.
[4] Chander Ramesh and Chandel Jai Kishan (2010), Financial Viability of an
Apex Cooperative Credit Institution- A Case Study of the HARCO Bank, Asia-
Pacific Business Review Vol. VI, No.2, April-June 2010, pp 61-70
[5] Chandra, Buddhadeb (2006), Performance of Burdwan Central Co-operative
Bank in the Development of the District (1988-89 to 1998-99), Finance India,
September, 2006.
[6] Dutta Uttam and Basak Amit (2008), Appraisal of financial performance of
urban cooperative banks- a case study. The Management Accountant, case
study, March 2008, 170-174.
[7] Fulbag Singh and Balwinder Singh (2006), "Funds management in the central
cooperative banks of Punjab- an analysis of financial margin", The ICFAI Journal
of Management, Vol. 5, 74-80.
[8] Geeta Sharma and Ganesh Kawadia (2006), "Efficiency of urban co-operative
banks of Maharashtra: A DEA Analysis", The ICFAI Journal of Management,
Vol. 5, Issue 4.
[9] Harish Kumar Singla (2008), "Financial performance of banks in India", The
ICFAI Journal of Management, Vol. 7, Issue 1.
[10] Jain (2001),Comparative study of performance of District Central Co-
operative Banks (DCCBs) of Western India i.e. Maharashtra, Gujarat &
Rajasthan for the year 1999-2000 from the point of view of net profit/loss,
NAFSCOB Bulletin, April-June 2001
 Appendix

UNIVERSAL BUSINESS SCHOOL,

KARJAT-MAHARASHTRA

We the students of UNIVERSAL BUSINESS SCHOOL are doing market research project on
Customer Behavior of Co-Operative Bank. This questionnaire is framed to collect information
which will be kept confidential. Only the analysis and conclusion will be disclosed in the project
report.

Name: _________________________________________
Age: _________ Qualification: ___________________________
Designation: _________________________
Address: ____________________________________________
Telephone No: _____________________
Name of Interviewer: _________________ Date of Interview: ________________

SEC Grid
Occupation Literate School: School: SSC/ Some Graduate/ Graduate/
upto 5-9 yrs HSC college post- post graduate
4yrs but not graduate professional
graduate general
1 2 3 4 5 6 7
Unskilled workers
Skilled workers
Petty traders
B2Shop owners
Businessmen
With number of
employees.
None
1 to 9
10+
Selfemployed
professionals
Clerical/salesman
Supervisory level
Officers/Executives:
Junior
Middle/senior
 1. Since, how many years you are associated with this bank?
__________________________________

2. What kind of account you are holding in the bank?

a) Current b) FD c) SA d) CC

3. Why you have opened an Account in this bank?

a) Low interest rate on Loans b) Savings
c) Locker Facilities d) Others _____________

4. Have you ever taken any loan? Yes, which type of loan?
a) Education b) Agriculture c) Personal d) Housing e) ______

5. Do you think you bank caters to all your banking need?

a) Yes b) No

6. If No, then please specify: _____________________________________

7. Have you opted for below mentioned services?

a) ATM b) Net Banking c) Mobile Banking

8. If No, _______________________________________________

9. What are the bad experiences encountered by you in cooperative bank?

10. Why you prefer Co-operative Bank over Nationalized bank?

___________________________________________________________

11. Would you recommend this bank to others?

a) Yes b) No

Reason, ____________________________________________________

12. How you came to know about this bank?

a) Referral b) advertisement c) campaign d) ______________

13. Rate on services provided by your Bank.

14. Do you have any other Bank a/c in Nationalize/Private Bank?

a) Yes b) No

15. Which service attracted you to do so?

THANK YOU