COMPARATIVE STUDY OF PUBLIC SECTOR BANK V/S PRIVATE

SECTOR BANK

A Project Submitted to
University of Mumbai for partial completion of the degree of
Bachelor in Commerce (Banking and Insurance)
Under the Faculty of Commerce

By

PRIYANKA KAMBLE
ROLL NO-16

Under the Guidance of

MINAL GANDHI

VES College of Arts, Science and Commerce

Sindhi Society, Chembur.

April, 2019
COMPARATIVE STUDY OF PUBLIC SECTOR BANK V/S PRIVATE
SECTOR BANK

A Project Submitted to
University of Mumbai for partial completion of the degree of
Bachelor in Commerce (Banking and Insurance)
Under the Faculty of Commerce

By

PRIYANKA KAMBLE
ROLL NO-16

Under the Guidance of

MINAL GANDHI

VES College of Arts, Science and Commerce

Sindhi Society, Chembur.

April, 2019
 VES College of Arts, Science and Commerce
Sindhi Society, Chembur.

Certificate

This is to certify that Ms/Mr Priyanka kamble has worked

and duly completed her/his Project Work for the degree of Bachelor in Commerce (Banking
and Insurance) under the Faculty of Commerce in the subject of Banking & Insurance
and her/his project is entitled, “comparative study of public sector bank v/s private sector
bank” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that no
part of it has been submitted previously for any Degree or Diploma of any University.

It is her/ his own work and facts reported by her/his personal findings and
investigations.

Mrs. Minal Gandhi Mrs. Dr Anita Kanwar

Guidance Teacher Principal

Name and signature of Name and signature of

External Examiner Course coordinator

Date of submission:
 Declaration

I the undersigned Miss/ Mr. Priyanka kamble here by, declare that the work
embodied in this project work titled Comparative Study Of Public Sector Bank
V/S Private Sector Bank forms my own contribution to the research work
carried out under the guidance of Minal Gandhi is a result of my own research
work has not been previously submitted to any other University for other Degree
/ Diploma to this or any other university.

Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

Certified by

Minal Gandhi Priyanka Kamble

 Acknowledgment

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.

I would like to thank my Principal, Dr.Anita kanwar for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Coordinator Minal Gandhi, for her moral support
and guidance.

I would also like to express my sincere gratitude towards my project guide Minal
Gandhi whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me
in the completion of the project especially my parents and Peers who supported me
throughout my project.
 EXICUTIVE SUMMARY

The objective of study is to have a comparative study of public sector bank & private sector
bank in India & also find out The most preferred banking sector among them.

For the above study a Qestionaire was designed & the same was provided to the respondents
for their valuable responses.

Here, All the aspects of study was included introduction to bank, Types of bank, what is public
sector bank, private sector bank, & comparative study of public sector bank v/s private sector.
A case study was based on ICICI bank v/s HDFC bank to justified the banking sector. & also
study taken comparative study of customer satisfaction in banking sector & to know which
banking sector provided more E- banking services.

This project will highlight more in Indian banking sector.

 INDEX

Sr No. Title Of The Chapter Page

No
Chapter-1 Research Design 1

Chapter-2 Introduction To Bank 2-7

2.1 Meaning
2.2 Defination
2.3 Features
2.4 History Of Banking
2.5 Importance Of Banking
2.6 Advantages & Disadvantages Of Banking
Chapter-3 Types Of Bank 8-25
3.1 Central Bank
A) Functions Of Central Bank
3.2 Commercial Bank
A) Type Of Commercial Bank
B) Types Of Loans Advances
C) Functions Of Commercial Bank
D) Types Of Commercial Bank
E) Types Of Credit Offered By Commercial Bank
3.3 Co-Operative Bank
3.4 Development Bank
3.5 Regional Rural Bank
3.6 Industrial Bank
3.7 Agriculture Bank
3.8 Saving Bank
3.9 Foreign Exchange
 3.10 Exchange Bank
3.11 Private Banker
3.12Chit Fund

Chapter-4 What Is Public Bank 26-32

4.1 Introduction
4.2 How Public Bank Work
4.3 Advantages & Disadvantages
4.4 Functions
Chapter-5 What Is Private Bank 33-48

5.1 Introduction
5.2 Defination
5.3 Role
5.4 Type
5.5 Advantages & Disadvantages
5.6 Functions
Chapter-6 Distinguish Between Private & Public Bank 49-50

Chapter-7 Case Study On (Icici Bank Vs Hdfc Bank) 51

Chapter-8 Comparative Study Of Customer Satisfaction In 52

India In Public Sector & Private Sector Bank

Chapter-9 Comparative Study Of E-Banking Services 53-54

Provided By Public & Private Sector Bank

Chapter-10 Services Provided By Public Bank & Private 55-68

Bank
Chapter-11 Survey And Analysis 69-79

Conclusion 80
Suggestion & Recommendations 81
Bibliography 82
Annexure 83
 CHAPTER-1: RESEARCH DESIGN
PURPOSE Of STUDY:
The main purpose of project is to know about how many people have bank a/c. & to find out
what people mostly preferred to have a/c an public sector bank Or private sector banks.

OBJECTIVE Of STUDY:
1. To study the usage of various products and & services of public & private sector banks

2. To find & compare the satisfaction level of customers in public sector as well as private
sector bank.

3. To study the problem faced by customer.

4. To study the factor infulencing the choice of a bank for availing services.

5. To get suggestions for improvements or change in the services of public & private sector
banks.
RESEARCH METHODOLOGY
For the purpose of analyzing the data it is necessary to collect the vital information. There are
two types of data, this are-
1. Primary Data.
2. Secondary Data.
Primary Data- The data was collected from survey. The survey questionnaire was filled from
customers through conducting a survey of 50customers.
Secondary Data- Secondary data was collected from social networking sites, newspaper,
internet etc.
RESEARCH LIMITATIONS
In undertaking the study, a number of problems were faced. Thus the study has several
limitations which are:

1. The sample size for survey was small. The survey was conducted only of 50
respondents.

2. The results from the survey may be inaccurate or biased.

3. The accuracy of the findings of study depends upon the correctness of the responses
provided by the respondents.
4. There was lack of time on the part of respondents.

1
 CHAPTER -2

INTRODUCTION OF BANK:

financial institution and a financial intermediary that accepts deposits and channels those
deposits into lending activities, either directly by loaning or indirectly through capital markets.

A bank may be defined as an institution that accepts deposits, makes loans, pays checks, and
provides financial services. A bank is a financial intermediary for the safeguarding,
transferring, exchanging, or lending of money. A primary role of banks is connecting those
with funds, such as investors and depositors, to those seeking funds, such as individuals or
businesses needing loans. A bank is the connection between customers that have capital deficits
and customers with capital surpluses.

Banks distribute the medium of exchange. Banking is a business. Banks sell their services to
earn money, and they must market and manage those services in a competitive field. Banks are
financial intermediaries that safeguard, transfer, exchange, and lend money and like other
businesses that must earn a profit to survive. Understanding this fundamental idea helps you to
understand how banking systems work, and helps you understand many modern trends in
banking and finance.

2.1MEANING:

Banking means transacting business with bank; depositing or withdrawing funds or requesting
a loan etc.

2.2 DEFINITION:

Banking has been defined as " Accepting for the purpose of lending & investment, of deposit
of money form the public, repayable on demand order or otherwise and withdraw able by
cheque, draft or otherwise. "

2.3 Features of a Bank ↓

1. Dealing in Money

Bank is a financial institution which deals with other people's money i.e. money given by
depositors.

2
2. Individual / Firm / Company

A bank may be a person, firm or a company. A banking company means a co which is in the
business of banking.

3. Acceptance of Deposit

A bank accepts money from the people in the form of deposits which are usually repayable on
demand or after the expiry of a fixed period. It gives safety to the deposits of its customers. It
also acts as a custodian of funds of its customers.

4. Giving Advances

A bank lends out money in the form of loans to those who require it for different purposes.

5. Payment and Withdrawal

A bank provides easy payment and withdrawal facility to its customers in the form of cheques
and drafts, It also brings bank money in circulation. This money is in the form of cheques,
drafts, etc.

6. Agency and Utility Services

A bank provides various banking facilities to its customers. They include general utility
services and agency services.

7. Profit and Service Orientation

A bank is a profit seeking institution having service oriented approach.

8. Ever increasing Functions

Banking is an evolutionary concept. There is continuous expansion and diversification as

regards the functions, services and activities of a bank.

9. Connecting Link

A bank acts as a connecting link between borrowers and lenders of money. Banks collect
money from those who have surplus money and give the same to those who are in need of
money.

3
10. Banking Business

A bank's main activity should be to do business of banking which should not be subsidiary to
any other business.

11. Name Identity

A bank should always add the word "bank" to its name to enable people to know that it is a
bank and that it is dealing in money.

2.4 History of banking:

The history of banking began with the first prototype banks which were the merchants of the
world, who made grain loans to farmers and traders who carried goods between cities. This
was around 2000 BC in Assyria, India and Sumeria. Later, in ancient Greece and during the
Roman Empire, lenders based in temples made loans, while accepting deposits and performing
the change of money. Archaeology from this period in ancient China and India also shows
evidence of money lending.

Many histories position the crucial historical development of a banking system to medieval and
Renaissance Italy and particularly the affluent cities of Florence, Venice and Genoa. The Bardi
and Peruzzi Families dominated banking in 14th century Florence, establishing branches in
many other parts of Europe.The most famous Italian bank was the Medici bank, established by
Giovanni Medici in 1397. The oldest bank still in existence is Banca Monte dei Paschi di Siena,
headquartered in Siena, Italy, which has been operating continuously since 1472.

The development of banking spread from northern Italy throughout the Holy Roman Empire,
and in the 15th and 16th century to northern Europe. This was followed by a number of
important innovations that took place in Amsterdam during the Dutch Republic in the 17th
century, and in London since the 18th century. During the 20th century, developments in
telecommunications and computing caused major changes to banks' operations and let banks
dramatically increase in size and geographic spread. The financial crisis of 2007–2008 caused
many bank failures, including some of the world's largest banks, and provoked much debate
about bank regulation.

4
2.5 THE IMPORTANCE OF THE BANKING SYSTEM

The banking sector was always deemed to be one of the most vital sectors for the economy to
be able to function. Its importance as the “lifeblood” of economic activity, in collecting
deposits and providing credits to states and people, households and businesses is undisputable.

Banks are one of the most important economic wing of any country. In this modern time, money
and its necessity is very important. A developed financial system of the country ensures to
attain development. A bank provides valuable services to a country. To attain development
there should be a good developed financial system to support not only the economic but also
the society. So, a bank plays a vital role in the socio economic matters of the country. Some of
the important role of banks in the development of a country is briefly showing below.

1. PROMOTE SAVING HABITS OF THE PEOPLE:

Bank attracts depositors by introducing attractive deposit schemes and providing rewards or
return in the form of interest. Banks provide different kinds of deposit schemes to its customers.
It enable to create banking habits or saving habits among people.

2.CAPITAL FORMATION AND PROMOTE INDUSTRY:

Capital is one of the most important part of any business or industry. It is the life blood of
business. Banks increase capital formation by collecting deposits from depositors and convert
these deposits in to loans advances to industries.

3.SMOOTHING OF TRADE AND COMMERCE FUNCTIONS:

In this modern era trade and commerce plays vital role between any countries. So, the money
transaction should be user friendly. A bank helps its customers to sent funds to anywhere and
receive funds from anywhere of the world. A well developed banking system provides various
attractive services like mobile banking, internet banking, debit cards, credit cards etc. these
kinds of services fast and smooth the transactions. So, bank helps to develop trade and
commerce

4.GENERATE EMPLOYMENT OPPORTUNITY:

Since a bank promote industry and investment, they automatically generate employment
opportunity. So, a bank enables an economy to generate employment opportunity.

5
5.SUPPORT AGRICULTURAL DEVELOPMENT:

Agricultural sector is one of the integral part of any economy. Food self sufficiency is the major
challenge and goal of any country. Bank promote agricultural sector by providing loans and
advances with low rate of interest compared to other loans and advances schemes.

6.APPLYING OF MONITORY POLICY:

Monitory policy is an important policy of any government. The major aim of monitory policy
is to stabilize financial system of the country from the dangerous of inflation, deflation, crisis
etc.The recent increase in repo rate to 6.5% is just an example of the same.

7.BALANCED DEVELOPMENT:

Modern banks are spreading its operations throughout the world. We can see number of big
banks like citi bank,Baroda bank etc. It helps a country to spread banking activities in rural and
semi urban areas. With the spread of banking operations around the country,bank helps to attain
balanced development by promoting rural areas. It plays vital role in the socio- economic
development of the country. A developed banking system enables the country to attain
balanced development without any special consideration of rich and poor, cities and rural areas
etc.

So in a developing country like India, banking sector holds a major responsibility towards
stabilising the socio-economic conditions of the country!!!

2.6 Advantages & disadvantages of banking:

Advantages:

-Liquidity

-Safe place to deposit money

-Earn interest on deposits

-Permits many individuals and business to obtain loans for major purchases and investments

-Money pooling allows banks to use leverage to increase the money supply and fuel economic
growth

6
Disadvantages:

-Use of leverage means everybody cannot withdraw deposit at the same time, which would
cause a run of the banks and precipitate bank failures and depression
-Individuals cannot compete with banks to earn high interest on debts of similar quality

7
 CHAPTER 3

TYPES OF BANKS

3.1 .Central Bank

Every country has its own Central Bank. The Central bank aims at non-profit functioning. It
regulates the monetary and credit system of the country. Central Bank acts as controller,
supervisor, and regulator of the activities of commercial banks and other financial institutions
in the country. The Central bank is considered as the apex institution of the country’s money
market.

a)Functions of Central Bank

⦿ Note issue

⦿ Credit control

8
⦿ It acts as a banker to the banks

⦿ It acts as a banker to the government

⦿ It maintains the foreign exchange reserves of the country

⦿ It maintains the Gold reserves of the country

3.2 Commercial Banks:

Commercial banks are the banks that accept money in the form of deposits from the public and
give loans and advances to its customers by charging interest. They mobilize small savings and
promote the growth of trade and commerce. Generally, commercial banks lend money for a
short period only. They only provide working capital to the organizations. But in recent times
commercial banks are providing long-term capital also to the organizations.

a) There are several types of deposits which are accepted by the commercial
banks like

⦿ Savings Deposits

⦿ Current Deposits

⦿ Fixed Deposits

⦿ Seasonal Deposits

⦿ Recurring Deposits, etc

b) The Commercial banks give different types of loans and advances to the
businessmen like

⦿ Cash Credits

⦿ Overdrafts

⦿ Loans

⦿ Discounting Bills

9
d) Commercial Banks: It’s Functions and Types –

Commercial banks are the most important components of the whole banking system.

A commercial bank is a profit-based financial institution that grants loans, accepts deposits,
and offers other financial services, such as overdraft facilities and electronic transfer of funds.

According to Culbertson,

“Commercial Banks are the institutions that make short make short term bans to business and
in the process create money.”

In other words, commercial banks are financial institutions that accept demand deposits from
the general public, transfer funds from the bank to another, and earn profit.

Commercial banks play a significant role in fulfilling the short-term and medium- term
financial requirements of industries. They do not provide, long-term credit, so that liquidity of
assets should be maintained. The funds of commercial banks belong to the general public and
are withdrawn at a short notice; therefore, commercial banks prefers to provide credit for a
short period of time backed by tangible and easily marketable securities. Commercial banks,
while providing loans to businesses, consider various factors, such as nature and size of
business, financial status and profitability of the business, and its ability to repay loans.

Commercial banks are of three types, which are as follows:

(a) Public Sector Banks:

Refer to a type of commercial banks that are nationalized by the government of a country. In
public sector banks, the major stake is held by the government. In India, public sector banks
operate under the guidelines of Reserve Bank of India (RBI), which is the central bank. Some
of the Indian public sector banks are State Bank of India (SBI), Corporation Bank, Bank of
Baroda, Dena Bank, and Punjab National Bank.

(b) Private Sector Banks:

Refer to a kind of commercial banks in which major part of share capital is held by private
businesses and individuals. These banks are registered as companies with limited liability.
Some of the Indian private sector banks are Vysya Bank, Industrial Credit and Investment
Corporation of India (ICICI) Bank, and Housing Development Finance Corporation (HDFC)
Bank.

10
(c) Foreign Banks:

Refer to commercial banks that are headquartered in a foreign country, but operate branches in
different countries. Some of the foreign banks operating in India are Hong Kong and Shanghai
Banking Corporation (HSBC), Citibank, American Express Bank, Standard & Chartered Bank,
and Grindlay’s Bank. In India, since financial reforms of 1991, there is a rapid increase in the
number of foreign banks. Commercial banks mark significant importance in the economic
development of a country as well as serving the financial requirements of the general public.

e) Functions of Commercial Banks:

Commercial banks are institutions that conduct business for profit motive by accepting public
deposits for various investment purposes.

The functions of commercial banks are broadly classified into primary functions and secondary
functions, which are shown in Figure-1:

Functions of Commercial Banks

The functions of commercial banks (as shown in Figure-1) are discussed as follows:

(a) Primary Functions:

Refer to the basic functions of commercial banks that include the following:

(i) Accepting Deposits:

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Implies that commercial banks are mainly dependent on public deposits.

11
There are two types of deposits, which are discussed as follows:

(1) Demand Deposits:

Refer to kind of deposits that can be easily withdrawn by individuals without any prior notice
to the bank. In other words, the owners of these deposits are allowed to withdraw money
anytime by simply writing a check. These deposits are the part of money supply as they are
used as a means for the payment of goods and services as well as debts. Receiving these
deposits is the main function of commercial banks.

(2) Time Deposits:

Refer to deposits that are for certain period of time. Banks pay higher interest on rime deposits.
These deposits can be withdrawn only after a specific time period is completed by providing a
written notice to the bank.

Types of Accounts

(3) Advancing Loans:

Refers to one of the important functions of commercial banks. The public deposits are used by
commercial banks for the purpose of granting loans to individuals and businesses. Commercial
banks grant loans in the form of overdraft, cash credit, and discounting bills of exchange.

(b) Secondary Functions:

Refer to crucial functions of commercial banks. The secondary functions can be classified
under three heads, namely, agency functions, general utility functions, and other
functions.These functions are explained as follows:

(1) Agency Functions:

Implies that commercial banks act as agents of customers by performing various functions,
which are as follows:

(i) Collecting Checks:

Refer to one of the important functions of commercial banks. The banks collect checks and
bills of exchange on the behalf of their customers through clearing house facilities provided by
the central bank.(ii) Collecting Income:

12
Constitute another major function of commercial banks. Commercial banks collect dividends,
pension, salaries, rents, and interests on investments on behalf of their customers. A credit
voucher is sent to customers for information when any income is collected by the bank.

(iii) Paying Expenses:

Implies that commercial banks make the payments of various obligations of customers, such
as telephone bills, insurance premium, school fees, and rents. Similar to credit voucher, a debit
voucher is sent to customers for information when expenses are paid by the bank.

(2) General Utility Functions:

Include the following functions:

(i) Providing Locker Facilities:

Implies that commercial banks provide locker facilities to its customers for safe keeping of
jewellery, shares, debentures, and other valuable items. This minimizes the risk of loss due to
theft at homes.

(ii) Issuing Traveler’s Checks:

Implies that banks issue traveler’s checks to individuals for traveling outside the country.
Traveler’s checks are the safe and easy way to protect money while traveling.

(iii) Dealing in Foreign Exchange:

Implies that commercial banks help in providing foreign exchange to businessmen dealing in
exports and imports. However, commercial banks need to take the permission of the central
bank for dealing in foreign exchange.

(iv) Transferring Funds:

Refers to transferring of funds from one bank to another. Funds are transferred by means of
draft, telephonic transfer, and electronic transfer.

(3) Other Functions:

Include the following:

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(i) Creating Money:

Refers to one of the important functions of commercial banks that help in increasing money
supply. For instance, a bank lends Rs. 5 lakh to an individual and opens a demand deposit in
the name of that individual.

Bank makes a credit entry of Rs. 5 lakh in that account. This leads to creation of demand
deposits in that account. The point to be noted here is that there is no payment in cash. Thus,
without printing additional money, the supply of money is increased.

(ii) Electronic Banking:

Include services, such as debit cards, credit cards, and Internet banking.

Commercial Bank in India

f) Types of Credit Offered by Commercial Banks:

A commercial bank offers short-term loans to individuals and organizations in the form of bank
credit, which is a secured loan carrying a certain rate of interest.

There are various types of bank credit provided by a commercial bank, as shown in Figure-2:

Showing Types of Bank Credit

Bank Loan:

Bank loan may be defined as the amount of money granted by the bank at a specified rate of
interest for a fixed period of time. The commercial bank needs to follow certain guidelines to
extend bank loans to a client. For example the bank requires the copy of identity and income
proofs of the client and a guarantor to sanction bank loan. The banks grant loan to clients
against the security of assets so that, in case of default, they can recover the loan amount. The
securities used against the bank loan may be tangible or intangible, such as goodwill, assets,
inventory, and documents of title of goods.

The advantages of the bank loan are as follows:

a. Grants loan at low rate of interest

b. Involves very simple process of loan granting

c. Requires minimum document and legal formalities to pass the loan

14
d. Involves good customer relationship management

e. Consumes less time because of modern techniques and computerization

f. Provides door-to-door facilities

In addition to advantages, the bank loan suffers from various imitations, which are as follows:

a. Imposes heavy penalty and legal action in case of default of loan

b. Charges high rate of interest, if the party fails to pay the loan amount in the allotted time

c. Adds extra burden on the borrower, who needs to incur cost in preparing legal documents
for procuring loans

d. Affects the goodwill of the organization, in case of delay in payment

Cash Credit:

Cash credit can be defined as an arrangement made by the bank for the clients to withdraw cash
exceeding their account limit. The cash credit facility is generally sanctioned for one year but
it may extend up to three years in some cases. In case of special request by the client, the time
limit can be further extended by the bank.

The extension of the allotted time depends on the consent of the bank and past performance of
the client. The rate of interest charged by the bank on cash credit depends on the time duration
for which the cash has been withdrawn and the amount of cash.

The advantages of the cash credit are as follows:

a. Involves very less time in the approval of credit

b. Involves flexibility as the cash credit can be extended for more time to fulfill the need of the
customers.

c. Helps in fulfilling the current liabilities of the organization

d. Charges interest only on the amount withdrawn by the customer. The interest on cash credit
is charged only on the amount of cash withdrawn from the bank, not on the total amount of
credit sanctioned.

The cash credit is one of the most important instruments of short-term financing but it has some
limitations.

15
These limitations are mentioned in the following points:

a. Requires more security for the approval of cash

b. Imposes very high rate of interest

c. Depends on the consent of the bank to extend the credit amount and the time limit

Bank Overdraft:

Bank overdraft is the quickest means of the short-term financing provided by the bank. It is a
facility in which the bank allows the current account holders to overdraw their current accounts
by a specified limit. The clients generally avail the bank overdraft facility to meet urgent and
emergency requirements. Bank overdraft is the most popular form of borrowing and do not
require any written formalities. The bank charges very low rate of interest on bank overdraft
up to a certain time.

The advantages of the bank overdraft are as follows:

a. Involves no documentation for the extension of overdraft amount

b. Imposes nominal interest on the overdraft amount

c. Charges fee only on the amount exceeding the account limit

The disadvantages of the bank overdraft are as follows:

a. Incurs high cost for the clients, if they fail to pay the amount of overdraft for a longer period
of time

b. Hampers the reputation of the organization, if it fails to pay the amount of overdraft on time

c. Allows the bank to deduct overdraft amount from the customers’ accounts without their
permission

Discounting of Bill:

Discounting of bill is a process of settling the bill of exchange by the bank at a value less than
the face value before maturity date. According to Sec. 126 of Negotiable Instruments, “a bill
of exchange is an unconditional order in writing addressed by one person to another, signed by
the person giving it, requiring the person to whom it is addressed to pay on demand or at fixed
or determinable future time a sum certain in money to order or to bearer.”

16
The facility of discounting of bill is used by the organizations to meet their immediate need of
cash for settling down current liabilities.

Conditions laid down by the bank for discounting of bill are as follows:

a. Must be intended to specific purpose

b. Must be enclosed with the signature of the two persons (company, bank or reputed person)

c. Must be less than the face value

d. Must be produced before the maturity period.

3.3Co-operative Banks:

Co-operative Banks are the banks that usually provide short term, medium term, long term
credit to agricultural purposes. Co-operative Banks also provides loans to small-scale artisans.
Co-operative Banks usually provide credit facilities to farmers, small-scale industries, etc at a
cheaper rate of interest. Co-operative Banks are mainly situated in rural areas and can also be
seen in urban areas.

Co-Operative Banks are small financial institutions that offer lending facility to the small
businesses in both urban and non-urban regions. These are monitored and regulated by the
Reserve Bank of India (RBI) and come under the Banking Regulations Act, 1949 as well as
the banking laws act, 1965.

The Co-Operative Banks have a huge significance for the small businesses as these have around
67% penetration in villages and account for 46% of the net funding for the rural businesses
through support for processing, housing, warehousing, transport, dairy, etc.

There are 4 types of co-operative banks in India:

Central Co-Operative Banks

These banks are organized and operated at the district level and can be of two types:

Co-operative Banking Union

Mixed control Co-operative Bank

In the first, the members of the bank are the co-operative societies only. However, in the
second, the members can be co-operative societies as well as individuals.

17
The central co-operative banks lend money mainly to the affiliated primary societies with
typical loan tenure lending between 1 to 3 years.

State Co-Operative Banks

These banks are organized and operated at the district level and rest at the top of the hierarchy
in the co-operative credit structure.

With the help of State Co-operative Banks (SCBs), the RBI funds the co-operative institutions.
These banks also get loans at an interest rate 1% to 2% lower than the standard bank rate.

Primary Co-Operative Banks

These offer credit services in the urban and semi-urban regions. Thus, they are not considered
as agricultural credit societies.

Primary Co-Operative Banks receive concessional refinance service from RBI and IDBI from
time to time for them to offer housing loans and other types of loans that can be used by small
businesses.

3.4 Development Banks

Land Development Banks

The land development banks are divided into three tiers which are primary, state, and central.
These offer credit services to the farmers for developmental purposes. They used to be
regulated by the RBI as well as the state governments. However, this responsibility was
recently transferred to the National Bank for Agricultural and Rural Development (NABARD).

18
Meaning of Development Banks

Development banks are specialized financial institutions. They provide medium and long-term
finance to the industrial and agricultural sector. They provide finance to both private and public
sector. Development banks are multipurpose financial institutions. They do term lending,
investment in securities and other activities. They even promote saving and investment habit
in the public.

Definition of development bank:

"Development banks are financial institutions established to lend (loan) finance (money) on
subsidized interest rate. Such lending is sanctioned to promote and develop important sectors
like agriculture, industry, import-export, housing and allied activities."

Development Banks in India

Development banking was started after the World War II. It provided finance to reconstruct
the buildings and industries which were destroyed in the war.

In India, development banking was started immediately after independence.

The arrangement of development banks in India is depicted below.

development banks in India

19
Development banks in India are classified into following four groups:

Industrial Development Banks : It includes, for example, Industrial Finance Corporation of

India (IFCI), Industrial Development Bank of India (IDBI), and Small Industries Development
Bank of India (SIDBI).

Agricultural Development Banks : It includes, for example, National Bank for Agriculture
& Rural Development (NABARD).

Export-Import Development Banks : It includes, for example, Export-Import Bank of India

(EXIM Bank).

Housing Development Banks : It includes, for example, National Housing Bank (NHB).

Industrial Finance Corporation of India (IFCI) is the first development bank in India. It started
in 1948 to provide finance to medium and large-scale industries in India.

3.5 REGIONAL RURAL BANK

Regional Rural Bank. Regional Rural Banks (RRBs) also known as Gramin banks, are Indian
scheduled banks (Government banks) operating at regional level in different States of India.
They have been created with a view of serving primarily the rural areas of India with basic
banking and financial services.

Reginal rural bank:

Regional Rural Banks (RRBs) also known as Gramin banks, are Indian scheduled banks
(Government banks) operating at regional level in different States of India. They have been
created with a view of serving primarily the rural areas of India with basic banking and financial
services. However, RRBs may have branches set up for urban operations and their area of
operation may include urban areas too.

The area of operation of RRBs is limited to the area as notified by Government of India
covering one or more districts in the State. RRBs also perform a variety of different functions.
RRBs perform various functions in following heads:

Providing banking facilities to rural and semi-urban areas.

Carrying out government operations like disbursement of wages of MGNREGA workers,

distribution of pensions etc.

Providing Para-Banking facilities like locker facilities, debit and credit cards.
20
List of Regional Rural banks

Andhra Pradesh

Andhra Pradesh Grameena Vikas Bank

Andhra Pragathi Grameena Bank

Chaitanya Godavari Grameena Bank

Saptagiri Grameena Bank

Arunachal Pradesh

Arunachal Pradesh Rural Bank

Assam

Assam Gramin Vikash Bank

Bihar

Dakskin Bihar Gramin Bank

Uttar Bihar Gramin Bank

Chhattisgarh

Chhattisgarh Rajya Gramin Bank

Gujarat

Baroda Gujarat Gramin Bank

Saurashtra Gramin Bank

Haryana

Sarva Haryana Gramin Bank

Himachal Pradesh

Himachal Pradesh Gramin Bank

Jammu and Kashmir

Ellaquai Dehati Bank

21
J&K Grameen Bank

Jharkhand

Jharkhand Gramin Bank

Vananchal Gramin Bank

Karnataka

Karnataka Gramin Bank

Karnataka Vikas Grameena Bank

Kerala

Kerala Gramin Bank

Madhya Pradesh

Madhyanchal Gramin Bank

Narmada Jhabua Gramin Bank

Central Madhya Pradesh Gramin Bank

Maharashtra

Vidharbha Konkan Gramin Bank

Maharashtra Gramin Bank

Manipur

Manipur Rural Bank

Meghalaya

Meghalaya Rural Bank

Mizoram

Mizoram Rural Bank

Nagaland

Nagaland Rural Bank

22
Odisha

Utkal Grameen bank

Odisha Gramya Bank

Puducherry

Puduvai Bharathiar Grama Bank

Punjab

Punjab Gramin Bank

Rajasthan

Baroda Rajasthan Kshetriya Gramin Bank

Rajasthan Marudhara Gramin Bank

Tamil NaduPallavan Grama Bank

Pandyan Grama Bank

Telangana

Telangana Grameena Bank

Tripura

Tripura Gramin Bank

Uttar Pradesh

Prathama UP Gramin Bank

Aryavart Bank

Baroda UP Gramin Bank

Kashi Gomti Samyut Gramin Bank

Purwachal Gramin bank

Uttarakhand

Uttarakhand Gramin Bank

23
West Bengal

Bangiya Gramin Vikas Bank

Paschim Banga Gramin Bank

Uttarbanga Kshetriya Gramin Bank

3.6Industrial Banks:

Industrial banks are also called as Investment Banks. Industrial banks provide long-term loans
to the industries. Industries require long-term capital for buying machinery, construction of
buildings, expansion of operations, etc. These capital required by industries is provided by
industrial banks for industrialists to grow their businesses. Industrial banks accept long-term
deposits from the public. They secure capital by issuing shares and debentures.

3.7 Agricultural Banks:

Agricultural Banks are the banks which provide agricultural credit to the farmers. The
Agricultural Development Banks provide medium term and long term credit. Some examples
of Agricultural Banks in India are Agricultural Finance Corporation, Agricultural Refinance
and Development Corporation, National Bank for Agricultural and Rural Development
(NABARD).Agricultural Banks are established by the government to promote agricultural
credit in the country.

3.8 Savings Bank:

Savings Banks mainly concentrates on the mobilization of savings of the people. In India Post
offices run by Postal department act as savings banks. Since Commercial banks are providing
these facilities of savings banks to the public, the need for separate savings bank is fading.

3.9 Foreign Exchange Banks:

Foreign Exchange Banks are the banks which provide finance for foreign trade These banks
accept deposits from the public. Foreign Exchange Banks are specialized banks in providing
credit for the foreign trade. These banks usually have their branches in foreign countries for
uninterrupted functioning of their service But in recent times commercial banks are also
financing foreign trade.

24
3.10 Exchange Banks:

Exchange Banks are the banks which operate by financing the imports and exports of the
country. These banks are mainly concerned with providing foreign exchange to their customers
and help to promote international trade. They also offer to discount of foreign bills of exchange
to their customers.

3.11 Private Bankers:

Private Bankers are the individuals who do banking business individually or as a partnership.
It is purely an unorganized sector.Most of the private bankers do not receive or accept any
deposits from the public, they do banking business with their own capital. They lend money to
the people for high-interest rates.

3.12 Chit Funds:

There are chit funds in India. They provide finance to trade and commerce. However, they
cannot be called as banks in the regular sense. The Chit fund business is very large in a country
like India. it is also an unorganized sector in India.

25
 CHAPTER-4

WHAT IS PUBLIC BANK:

4.1Introduction

A public bank is a bank, a financial institution, in which a state, municipality, or public actors
are the owners. It is an enterprise under government control. Prominent among current public
banking models are the Bank of North Dakota, the German public bank system, and many
nations’ postal bank systems.

Public or 'state-owned' banks proliferated globally in the late 19th and early 20th centuries as
vital agents of industrialisation in capitalist and socialist countries alike; as late as 2012, state
banks still owned and controlled up to 25 per cent of total global banking assets.

Proponents of public banking argue that policymakers can create public-sector banks to reduce
the costs of government services and infrastructure; protect and aid local banks; offer banking
services to people and entities underserved by private-sector banking; and promote particular
kinds of economic development reflecting polities’ shared notions of social good. The 2015
Addis Ababa Financing for Development Action Agenda noted that public banks should have
an important role in achieving the new Sustainable Development Goals. Increasingly, major
international financial institutions are recognising the positive and catalytic role public banks
can serve in the coming low carbon climate resilient transition. Further, international NGOs
and critical scholars argue that public banks can play a significant role in financing a just and
equitable energy transition.

4.2 How Public Banks Work:

Public banks come in a variety of models. A public bank might be capitalized through an initial
investment by the city or state, as well as through tax and fee revenue. A public bank, like a
private bank, can take tax revenues and other government income as deposits, create money in
the form of bank credit, and lend at very low interest rates. Where private banks are committed
by their business model to take advantage of low interest rates by charging higher rates to
borrowers, a public bank has no shareholders to pay, and so can pass the low rates onto
borrowers such as public agencies, local businesses, residents, and students.

Public banks can also partner with (underwriting or guaranteeing the loans of) local banks to
fund projects that might otherwise go unfunded. Such partnering with local banks leads

26
practitioners of public banking to say, like Bank of North Dakota President Eric Hardmeyer,
that public banks are partners, rather than competitors, with local private financial institutions.

Public savings banks, such as postal banks, typically offer individual savings accounts, savings
bonds, remittances and other services. Around three out of four postal systems worldwide offer
such banking services, and such a system existed in the United States from 1911 to 1967.

4.3 Advantages and Disadvantages of Public Sector Banks:

Public sector banks are those financial institutions in which government holds more than 51
percent stake and also has controlling power of the bank. Public sector banks are the backbone
of the financial system of the country, in order to understand more about public sector banks
let’s look at some of the advantages and disadvantages of public sector banks –

Advantages of Public Sector Banks

1.FIXED DEPOSIT:

The first and foremost advantage of public sector banks is that they are safe and people keeping
money in fixed deposit and in saving account do not have to worry about the safety of their
funds as chances of default by public sector banks is next to nil as government ten Every
country has its own Central Bank. The Central bank aims at non-profit functioning. It regulates
the monetary and credit system of the country. Central Bank acts as controller, supervisor, and
regulator of the activities of commercial banks and other financial institutions in the country.
The Central bank is considered as the apex institution of the country’s money market.

ds to bail out these banks in case they are in financial stress and hence as far as individual is
concerned his or her money will be safe even if bank has financial problem.

2 SAVING ACCOUNT:

Another advantage of these banks is that there are less hidden charges and also lower limit of
amount to be held as minimum deposit as far saving account is concerned, so for example in
case of private banks minimum balance to be maintained is anywhere between 5000 to 20000
rupees whereas in case of public sector banks it is 1000 rupees and in case of student account
and no frill accounts it is 0.

3. As far as employees are concerned these banks are more beneficial because of job security
and once an individual gets into public sector bank he or she does not need to worry about
retrenchment which is the case with private sector banks, though at higher levels of
27
management private banks pay higher remuneration to its employees but at lower levels the
exploitation is more in case of private banks as compared to public sector banks.

Disadvantages of Public Sector Banks

1. TECHNOLOGY:

The biggest disadvantage of public sector banks is that in terms of technology they lag far
behind as compared to private sector banks so if you are one of those who do his or her majority
of work online than public sector bank is not his or her cup of tea. Although public sector banks
are trying their best by upgrading their technology still private sector banks hold an edge over
them.

2. Another disadvantage of public sector banks is that if you go in public sector banks
excepting that you will get all information at one seat which is the case with private sector
banks then you will be disappointed because in public sector banks one individual keep doing
same work for years resulting in he or she losing touch with other areas of banking.

3 LOANS:

Due to government share in public sector banks there is lot of government intervention and due
to it these banks have to give loans not on the basis of merit of project but due to political
pressure resulting in that loan becoming NPA which will result in loss for the bank. Another
area of distress due to government intervention is opening various no frills account due to
government seeking political mileage, also opening branches in far-flung areas due to
government financial inclusion program affects the profitability of the banks.

As one can see from the above that public sector has both advantages as well as disadvantages
and for an economy like India they are very important because of large unbanked population
and also due to the state of the Indian economy which requires not only fast growth but an
inclusive growth where everybody benefits and not some sections of society.

4.4 Functions of Public Sector Banks:

The main functions of commercial banks are accepting deposits from the public and advancing
them loans. However, besides these functions there are many other functions which these banks
perform. All these functions can be divided under the following heads:

28
1. Accepting deposits

2. Giving loans

3. Overdraft

4. Discounting of Bills of Exchange

5. Investment of Funds

6. Agency Functions

7. Miscellaneous Functions

(i) Accepting Deposits:

The most important function of commercial banks is to accept deposits from the public. Various
sections of society, according to their needs and economic condition, deposit their savings with
the banks.

For example, fixed and low income group people deposit their savings in small amounts from
the points of view of security, income and saving promotion. On the other hand, traders and
businessmen deposit their savings in the banks for the convenience of payment.

Therefore, keeping the needs and interests of various sections of society, banks formulate
various deposit schemes. Generally, there ire three types of deposits which are as follows:

i. (a) Current Deposits:

The depositors of such deposits can withdraw and deposit money whenever they desire. Since
banks have to keep the deposited amount of such accounts in cash always, they carry either no
interest or very low rate of interest. These deposits are called as Demand Deposits because
these can be demanded or withdrawn by the depositors at any time they want. Such deposit
accounts are highly useful for traders and big business firms because they have to make
payments and accept payments many times in a day.

i(b) Fixed Deposits:

These are the deposits which are deposited for a definite period of time. This period is generally
not less than one year and, therefore, these are called as long term deposits. These deposits

29
cannot be withdrawn before the expiry of the stipulated time and, therefore, these are also called
as time deposits.

These deposits generally carry a higher rate of interest because banks can use these deposits
for a definite time without having the fear of being withdrawn.

i(c) Saving Deposits:

In such deposits, money upto a certain limit can be deposited and withdrawn once or twice in
a week. On such deposits, the rate of interest is very less. As is evident from the name of such
deposits their main objective is to mobilise small savings in the form of deposits. These
deposits are generally done by salaried people and the people who have fixed and less income.

3.3(ii) Granting Loans:

The second important function of commercial banks is to advance loans to its customers. Banks
charge interest from the borrowers and this is the main source of their income.

Banks advance loans not only on the basis of the deposits of the public rather they also advance
loans on the basis of depositing the money in the accounts of borrowers. In other words, they
create loans out of deposits and deposits out of loans. This is called as credit creation by
commercial banks.

Modern banks give mostly secured loans for productive purposes. In other words, at the time
of advancing loans, they demand proper security or collateral. Generally, the value of security
or collateral is equal to the amount of loan. This is done mainly with a view to recover the loan
money by selling the security in the event of non-refund of the loan.

At limes, banks give loan on the basis of personal security also. Therefore, such loans are called
as unsecured loan. Banks generally give following types of loans and advances:

ii(a) Cash Credit:

In this type of credit scheme, banks advance loans to its customers on the basis of bonds,
inventories and other approved securities. Under this scheme, banks enter into an agreement
with its customers to which money can be withdrawn many times during a year. Under this set
up banks open accounts of their customers and deposit the loan money. With this type of loan,
credit is created.

30
ii(b) Demand loans:
These are such loans that can be recalled on demand by the banks. The entire loan amount is
paid in lump sum by crediting it to the loan account of the borrower, and thus entire loan
becomes chargeable to interest with immediate effect.

ii(c) Short-term loan:

These loans may be given as personal loans, loans to finance working capital or as priority
sector advances. These are made against some security and entire loan amount is transferred to
the loan account of the borrower.

3.3(iii) Over-Draft:

Banks advance loans to its customer‘s upto a certain amount through over-drafts, if there are
no deposits in the current account. For this banks demand a security from the customers and
charge very high rate of interest.

3.3(iv) Discounting of Bills of Exchange:

This is the most prevalent and important method of advancing loans to the traders for short-
term purposes. Under this system, banks advance loans to the traders and business firms by
discounting their bills. In this way, businessmen get loans on the basis of their bills of exchange
before the time of their maturity.

3.3(v) Investment of Funds:

The banks invest their surplus funds in three types of securities—Government securities, other
approved securities and other securities. Government securities include both, central and state
governments, such as treasury bills, national savings certificate etc.

Other securities include securities of state associated bodies like electricity boards, housing
boards, debentures of Land Development Banks units of UTI, shares of Regional Rural banks
etc.

3.3(vi) Agency Functions:

Banks function in the form of agents and representatives of their customers. Customers give
their consent for performing such functions. The important functions of these types are as
follows:

31
(i) Banks collect cheques, drafts, bills of exchange and dividends of the shares for their
customers.

(ii) Banks make payment for their clients and at times accept the bills of exchange: of their
customers for which payment is made at the fixed time.

(iii) Banks pay insurance premium of their customers. Besides this, they also deposit loan
installments, income-tax, interest etc. as per directions.

(iv) Banks purchase and sell securities, shares and debentures on behalf of their customers.

(v) Banks arrange to send money from one place to another for the convenience of their
customers.

3.3(vii) Miscellaneous Functions:

Besides the functions mentioned above, banks perform many other functions of general utility
which are as follows:

(i) Banks make arrangement of lockers for the safe custody of valuable assets of their customers
such as gold, silver, legal documents etc.

(ii) Banks give reference for their customers.

(iii) Banks collect necessary and useful statistics relating to trade and industry.

(iv) For facilitating foreign trade, banks undertake to sell and purchase foreign exchange.

(v) Banks advise their clients relating to investment decisions as specialist

(vi) Banks does the under-writing of shares and debentures also.

(vii) Banks issue letters of credit.

(viii) During natural calamities, banks are highly useful in mobilizing funds and donations.

(ix) Banks provide loans for consumer durables like Car, Air-conditioner, and Fridge etc.

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 CHAPTER-5

WHAT IS PRIVATE BANK:

5.1 INTRODUCTION

Private banking is banking, investment and other financial services provided by banks to high-
net-worth individuals (HNWIs) with high levels of income or sizable assets. The term "private"
refers to customer service rendered on a more personal basis than in mass-market retail
banking, usually via dedicated bank advisers. It does not refer to a private bank, which is a non-
incorporated banking institution.

Private banking forms a more exclusive (for the especially affluent) subset of wealth
management. At least until recently, it largely consisted of banking services (deposit taking
and payments), discretionary asset management, brokerage, limited tax advisory services and
some basic concierge-type services, offered by a single designated relationship manager.

5.2 DEFINE PRIVATE BANK:

The term private banking refers to a customized line of banking & financial services offered to
private individual banking clients that earn high levels of income and/ or owning sizable
investment assets, such as 'High Net Worth Individuals' (HNWIs). Such private services are
distinctive from retail banking services offered or standard wealth management in that clients
are assigned a relationship managers or private banker that specifically deal with them
personally. In general, it is a valued added banking service in comparison to traditional banking
that offers more sophisticated products and more personalized customer service.

5.3 ROLE OF PRIVATE BANK:

The private sector is the engine of growth. Government plays a central role in supporting
economic growth and reducing poverty. It needs to provide good policy, strong institutions and
efficient public goods and services to ensure the private sector can thrive and the benefits of
growth reach all citizens.

5.4 TYPES OF PRIVATE BANK:

Private Sector Banks in India

Private Sector Banks refer to those banks where most of the capital is in private hands. In India,
there are two types of private sector banks viz. Old Private Sector Banks and New Private

33
Sector Banks. Old private sector banks are those which existed in India at the time of
nationalization of major banks but were not nationalized due to their small size or some other
reason. After the banking reforms, these banks got license to continue and have existed in India
along with new private banks and government banks.

Contents

1.Old Private Banks

2.New Private Sector Banks in India

Old Private Banks:

At present, there are 12 old private sector banks in India as follows:

1. Catholic Syrian Bank

2. City Union Bank
3. Dhanlaxmi Bank
4. Federal Bank
5. Jammu and Kashmir Bank
6. Karnataka Bank
7. Karur Vysya Bank
8. Lakshmi Vilas Bank
9. Nainital Bank
10. Ratnakar Bank
11. South Indian Bank
12. Tamilnad Mercantile Bank

Among the above, Nainital Bank is a subsidiary of the Bank of Baroda, which has 98.57%
stake in it.

Defunct Private Banks:

Some other old generation private sector banks in India have merged with other banks. For
example, Lord Krishna Bank merged with Centurion Bank of Punjab in 2007; Sangli Bank
merged with ICICI Bank in 2006; Centurion Bank of Punjab merged with HDFC in 2008.More
recently, in 2016, the ING Vysya Bank merged with Kotak Mahindra Bank, creating the fourth
largest private sector bank in India.

34
New Private Sector Banks in India:
The new private sector banks were incorporated as per the revised guidelines issued by the RBI
regarding the entry of private sector banks in 1993. At present, there are nine new private sector
banks as follows:

1. Axis Bank
2. Development Credit Bank (DCB Bank Ltd)
3. HDFC Bank
4. ICICI Bank
5. IndusInd Bank
6. Kotak Mahindra Bank
7. Yes Bank
8. IDFC
9. Bandhan Bank of Bandhan Financial Services.

Kindly note that all the old and new banks listed above are scheduled commercial banks

5.5 ADVANTAGES & DISADVANTAGE OF PRIVATE BANK:

Advantages:

1.Service of private bank is very fast and accurate.

2.You can update details at any branch .

3.Coustomer services is very good

Disadvantages:-

1.In private bank transaction charge is high

2.In public bank you can update details or any query at only and only your home branch where
you have opened Your account.

4.6 Functions of Private sector banks:

The private sector banks play a vital role in the Indian economy. They indirectly motivate the
public sector banks by offering a healthy competition to them. The following are their
functions:

35
4.3(i) Offering high degree of Professional Management:

The private sector banks help in introducing a high degree of professional management and
marketing concept into banking. It helps the public sector banks as well to develop similar skill
and technology.

4.3(ii) Creates healthy competition:

The private sector banks provide a healthy competition on general efficiency levels in the
banking system.

4.3(iii) Encourages Foreign Investment:

The private sector banks especially the foreign banks have much influence on the foreign
investment in the country.

4.3(iv) Helps to access foreign capital markets:

The foreign banks in the private sector help the Indian companies and the government agencies
to meet out their financial requirements from international capital markets. This service
becomes easier for them because of the presence of their head offices/other branches in
important foreign centres. In this way they help a large extent in the promotion of trade and
industry in the country.

4.3(v) Helps to develop innovation and achieve expertise:

The private sector banks are always trying to innovate new products avenues (new schemes,
services, etc.) and make the industries to achieve expertise in their respective fields by offering
quality service and guidance.

They introduce new technology in the banking service. Thus, they lead the other banks in
various new fields. For example, introduction of computerised operations, credit card business,
ATM service, etc.

The commercial banks serve as the king pin of the financial system of the country. They render
many valuable services. The important functions of the Commercial banks can be explained
with the help of the following chart.

36
Primary Functions

The primary functions of the commercial banks include the following:

A. Acceptance of Deposits

1. Time Deposits:

These are deposits repayable after a certain fixed period. These deposits are not withdrawn able
by cheque, draft or by other means. It includes the following.

(a) Fixed Deposits:

The deposits can be withdrawn only after expiry of certain period say 3 years, 5 years or 10
years. The banker allows a higher rate of interest depending upon the amount and period of
time. Previously the rates of interest payable on fixed deposits were determined by Reserve
Bank. Presently banks are permitted to offer interest as determined by each bank. However,
banks are not permitted to offer different interest rates to different customers for deposits of
same maturity period, except in the case of deposits of Rs. 15 lakhs and above.

These days the banks accept deposits even for 15 days or one month etc. In times of urgent
need for money, the bank allows premature closure of fixed deposits by paying interest at
reduced rate. Depositors can also avail of loans against Fixed Deposits. The Fixed Deposit
Receipt cannot be transferred to other persons.

(b) Recurring Deposits:

In recurring deposit, the customer opens an account and deposit a certain sum of money every
month. After a certain period, say 1 year or 3 years or 5 years, the accumulated amount along
with interest is paid to the customer. It is very helpful to the middle and poor sections of the
people. The interest paid on such deposits is generally on cumulative basis. This deposit system
is a useful mechanism for regular savers of money.

(c) Cash Certificates:

Cash certificates are issued to the public for a longer period of time. It attracts the people
because its maturity value is in multiples of the sum invested. It is an attractive and high
yielding investment for those who can keep the funds for a long time.

It is a very useful account for meeting future financial requirements at the occasion of marriage,
education of children etc. Cash certificates are generally issued at discount to face value. It

37
means a cash certificate of Rs. 1, 00,000 payable after 10 years can be purchased now, say for
Rs. 20,000.

2. Demand Deposits:

These are the deposits which may be withdrawn by the depositor at any time without previous
notice. It is withdraw able by cheque/draft. It includes the following:

(a) Savings Deposits:

The savings deposit promotes thrift among people. The savings deposits can only be held by
individuals and non-profit institutions. The rate of interest paid on savings deposits is lower
than that of time deposits. The savings account holder gets the advantage of liquidity (as in
current a/c) and small income in the form of interests.

But there are some restrictions on withdrawals. Corporate bodies and business firms are not
allowed to open SB Accounts. Presently interest on SB Accounts is determined by RBI. It is
4.5 per cent per annum. Co-operative banks are allowed to pay an extra 0.5 per cent on its
savings bank deposits.

(b) Current Account Deposits:

These accounts are maintained by the people who need to have a liquid balance. Current
account offers high liquidity. No interest is paid on current deposits and there are no restrictions
on withdrawals from the current account.

These accounts are generally in the case of business firms, institutions and cooperative bodies.
Nowadays, banks are designing and offering various investment schemes for deposit of money.
These schemes vary from bank to bank.

It may be stated that the banks are currently working out with different innovative schemes for
deposits. Such deposit accounts offer better interest rate and at the same time withdraw able
facility also. These schemes are mostly offered by foreign banks. In USA, Current Accounts
are known as 'Checking Accounts' as a cheque is equivalent to check in America.

B. Advancing of Loans

The commercial banks provide loans and advances in various forms. They are given below:

38
1. Overdraft:

This facility is given to holders of current accounts only. This is an arrangement with the
bankers thereby the customer is allowed to draw money over and above the balance in his/her
account. This facility of overdrawing his account is generally pre-arranged with the bank up to
a certain limit.

It is a short-term temporary fund facility from bank and the bank will charge interest over the
amount overdrawn. This facility is generally available to business firms and companies.

2. Cash Credit:

Cash credit is a form of working capital credit given to the business firms. Under this
arrangement, the customer opens an account and the sanctioned amount is credited with that
account. The customer can operate that account within the sanctioned limit as and when
required.

It is made against security of goods, personal security etc. On the basis of operation, the period
of credit facility may be extended further. One advantage under this method is that bank charges
interest only on the amount utilized and not on total amount sanctioned or credited to the
account.

Reserve Bank discourages this type of facility to business firms as it imposes an uncertainty on
money supply. Hence this method of lending is slowly phased out from banks and replaced by
loan accounts. Cash credit system is not in use in developed countries.

3. Discounting of Bills:

Discounting of Bills may be another form of bank credit. The bank may purchase inland and
foreign bills before these are due for payment by the drawer debtors, at discounted values, i.e.,
values a little lower than the face values.

The Banker's discount is generally the interest on the full amount for the unexpired period of
the bill. The banks reserve the right of debiting the accounts of the customers in case the bills
are ultimately not paid, i.e., dishonored.

The bill passes to the Banker after endorsement. Discounting of bills by banks provide
immediate finance to sellers of goods. This helps them to carry on their business. Banks can
discount only genuine commercial bills i.e., those drawn against sale of goods on Credit. Banks
will not discount Accommodation Bills.

39
4. Loans and Advances:

It includes both demand and term loans, direct loans and advances given to all type of
customers mainly to businessmen and investors against personal security or goods of movable
or immovable in nature. The loan amount is paid in cash or by credit to customer account which
the customer can draw at any time. The interest is charged for the full amount whether he
withdraws the money from his account or not. Short-term loans are granted to meet the working
capital requirements where as long-term loans are granted to meet capital expenditure.

Previously interest on loan was also regulated by RBI. Currently, banks can determine the rate
themselves. Each bank is, however required to fix a minimum rate known as Prime Lending
Rate (PLR).

Classification of Loans and Advances

Loans and advances given by bankers can be classified broadly into the following categories:

(i) Advances which are given on the personal security of the debtor, and for which no tangible
or collateral security is taken; this type of advance is given either when the amount of the
advance is very small, or when the borrower is known to the Banker and the Banker has
complete confidence in him (Clean Advance).

(ii) Advances which are covered by tangible or collateral security. In this section of the study
we are concerned with this type of advance and with different types of securities which a
Banker may accept for such advances (Secured Advance).

(iii) Advances which are given against the personal security of the debtor but for which the
Banker also holds in addition the guarantee of one or more sureties. This type of advance is
often given by Banker to persons who are not known to them but whose surety is known to the
Banker. Bankers also often take the personal guarantee of the Directors of a company to whom
they agree to advance a clean or unsecured loan.

(iv) Loans are also given against the security of Fixed Deposit receipts.

5. Housing Finance:

Nowadays the commercial banks are competing among themselves in providing housing
finance facilities to their customers. It is mainly to increase the housing facilities in the country.
State Bank of India, Indian Bank, Canara Bank, Punjab National Bank, has formed housing
subsidiaries to provide housing finance.

40
The other banks are also providing housing finances to the public. Government of India also
encourages banks to provide adequate housing finance.

Borrowers of housing finance get tax exemption benefits on interest paid. Further housing
finance up to Rs. 5 lakh is treated as priority sector advances for banks. The limit has been
raised to Rs. 10 lakhs per borrower in cities.

6. Educational Loan Scheme:

The Reserve Bank of India, from August, 1999 introduced a new Educational Loan Scheme
for students of full time graduate/post-graduate professional courses in private professional
colleges.

Under the scheme all public sector banks have been directed to provide educational loan up to
Rs. 15,000 for free seat and Rs. 50,000 for payment seat student at interest not more than 12
per cent per annum. This loan is on clean basis i.e., without calling for security.

This loan is available only for students whose annual family income does not exceed Rs. 1,
00,000. The loan has to be repaid together with interest within five years from the date of
completion of the course. Studies in respect of the following subjects/areas are covered under
the scheme.

(a) Medical and dental course. (b) Engineering course. (c) Chemical Technology.(d)
Management courses like MBA. (e) Law studies. (f) Computer Science and Applications.

This apart, some of the banks have other educational loan schemes against security etc., one
can check up the details with the banks.

7. Loans against Shares/Securities:

Commercial banks provide loans against the security of shares/debentures of reputed

companies. Loans are usually given only up to 50% value (Market Value) of the shares subject
to a maximum amount permissible as per RBI directives. Presently one can obtain a loan up to
Rs.10 lakhs against the physical shares and up to Rs. 20 lakhs against dematerialized shares.

8. Loans against Savings Certificates:

Banks are also providing loans up to certain value of savings certificates like National Savings
Certificate, Fixed Deposit Receipt, Indira Vikas Patra, etc. The loan may be obtained for
personal or business purposes.

41
9. Consumer Loans and Advances:

One of the important areas for bank financing in recent years is towards purchase of consumer
durables like TV sets, Washing Machines, Micro Oven, etc. Banks also provide liberal Car
finance.

These days banks are competing with one another to lend money for these purposes as default
of payment is not high in these areas as the borrowers are usually salaried persons having
regular income? Further, bank's interest rate is also higher. Hence, banks improve their profit
through such profitable loans.

10. Securitization of Loans:

Banks are recently trying to securities a part of their part of loan portfolio and sell it to another
investor. Under this method, banks will convert their business loans into a security or a
document and sell it to some Investment or Fund Manager for cash to enhance their liquidity
position.

It is a process of transferring credit risk from the banker to the buyer of securitized loans. It
involves a cost to the banker but it helps the bank to ensure proper recovery of loan.
Accordingly, securitization is the process of changing an illiquid asset into a liquid asset.

11. Others:

Commercial banks provide other types of advances such as venture capital advances, jewel
loans, etc.

1. Effective October 18, 1994 banks were free to determine their own prime lending rates
(PLRs) for credit limit over Rs. 2 lakh. Data relate to public sector banks.

2. The stipulation of minimum maturity period of term deposits was reduced from 30 days to
15 days, effective April 29, 1998. Data relate to public sector banks.

3. The change in the Bank Rate was made effective from the close of business of respective
dates of change except April 29, 1998.

4. Effective April 29, 1998.

42
C. Credit Creation

Credit creation is one of the primary functions of commercial banks. When a bank sanctions a
loan to the customer, it does not give cash to him. But, a deposit account is opened in his name
and the amount is credited to his account. He can withdraw the money whenever he needs.

Thus, whenever a bank sanctions a loan it creates a deposit. In this way the bank increases the
money supply of the economy. Such functions are known as credit creation.

Secondary Functions

The secondary functions of the banks consist of agency functions and general utility functions.

A. Agency Functions

Agency functions include the following:

(i) Collection of cheques, dividends, and interests:

As an agent the bank collects cheques, drafts, promissory notes, interest, dividends etc., on
behalf of its customers and credit the amounts to their accounts.

Customers may furnish their bank details to corporate where investment is made in shares,
debentures, etc. As and when dividend, interest, is due, the companies directly send the
warrants/cheques to the bank for credit to customer account.

(ii) Payment of rent, insurance premiums:

The bank makes the payments such as rent, insurance premiums, subscriptions, on standing
instructions until further notice. Till the order is revoked, the bank will continue to make such
payments regularly by debiting the customer's account.

(iii) Dealing in foreign exchange:

As an agent the commercial banks purchase and sell foreign exchange as well for customers as
per RBI Exchange Control Regulations.

(iv) Purchase and sale of securities:

Commercial banks undertake the purchase and sale of different securities such as shares,
debentures, bonds etc., on behalf of their customers. They run a separate 'Portfolio Management
Scheme' for their big customers.

43
(v) Act as trustee, executor, attorney, etc:

The banks act as executors of Will, trustees and attorneys. It is safe to appoint a bank as a
trustee than to appoint an individual. Acting as attorneys of their customers, they receive
payments and sign transfer deeds of the properties of their customers.

(vi) Act as correspondent:

The commercial banks act as a correspondent of their customers. Small banks even get travel
tickets, book vehicles; receive letters etc. on behalf of the customers.

(vii) Preparations of Income-Tax returns:

They prepare income-tax returns and provide advices on tax matters for their customers. For
this purpose, they employ tax experts and make their services, available to their customers.

B. General Utility Services

The General utility services include the following:

(i) Safety Locker facility:

Safekeeping of important documents, valuables like jewels are one of the oldest services
provided by commercial banks. 'Lockers' are small receptacles which are fitted in steel racks
and kept inside strong rooms known as vaults. These lockers are available on half-yearly or
annual rental basis.

The bank merely provides lockers and the key but the valuables are always under the control
of its users. Any customer cannot have access to vault.

Only customers of safety lockers after entering into a register his name account number and
time can enter into the vault. Because the vault is holding important valuables of customers in
lockers, it is also known as 'Strong Room'.

(ii) Payment Mechanism or Money Transfer:

Transfer of funds is one of the important functions performed by commercial banks. Cheques
and credit cards are two important payment mechanisms through banks. Despite an increase in
financial transactions, banks are managing the transfer of funds process very efficiently.

Cheques are also cleared through the banking system. Correspondent banking is another
method of transferring funds over long distance, usually from one country to another. Banks,

44
these days employ computers to speed up money transfer and to reduce cost of transferring
funds.

Electronic Transfer of funds is also known as 'Chequeless banking' where funds are transferred
through computers and sophisticated electronic system by using code words. They offer Mail
Transfer, Telegraphic Transfer (TT) facility also.

(iii) Traveller cheques:

Traveller‘s Cheques are used by domestic traveller as well as by international travellers.

However the use of traveller's cheques is more common by international travellers because of
their safety and convenience. These can be also termed as a modified form of traveller's letter
of credit. A bank issuing travellers cheques usually have banking arrangement with many of
the foreign banks abroad, known as correspondent banks. The purchaser of traveller's cheques
can encase the cheques from all the overseas banks with whom the issuing bank has such an
arrangement.

Thus traveller's cheques are not drawn on specific bank abroad. The cheques are issued in
foreign currency and in convenient denominations of ten, twenty, fifty, one hundred dollar, etc.
The signature of the buyer/traveller is written on the face of the cheques at the time of their
purchase.

The cheques also provide blank space for the signature of the traveller to be signed at the time
of encashment of each cheque. A traveller has to sign in the blank space at the time of drawing
money and in the presence of the paying banker.

The paying banker will pay the money only when the signature of the traveller tallies with the
signature already available on the cheque.

A traveller should never sign the cheque except in the presence of paying banker and only when
the traveller desires to en-cash the cheque. Otherwise it may be misused. The cheques are also
accepted by hotels, restaurants, shops, airlines companies for respectable persons.

Encashment of a traveller cheque abroad is tantamount to a foreign exchange transaction as it

involves conversion of domestic currency into a foreign currency.

When a traveller cheque is lost or stolen, the buyer of the cheques has to give a notice to the
issuing bank so that stop order can be issued against such lost/stolen cheques to the banks
where they are permitted to be encased.

45
It is also difficult to the finder of the cheque to draw cash against it since the encasher has to
sign the cheque in the presence of the paying banker. Unused travellers cheques can be
surrendered to the issuing bank and balance of cash obtained.

The issuing bank levies certain commission depending upon the number and value of travellers
cheques issued.

(iv) Circular Notes or Circular Letters of Credit:

Under Circular Letters of Credit, the customer/traveller negotiates the drafts with any of the
various branches to which they are addressed. Thus the traveller can obtain funds from many
of the branches of banks instead only from a particular branch. Circular Letters of Credit are
therefore a more useful method for obtaining funds while travelling to many countries.

It may be noted that travellers letter of credit are usually paid for in advance. In other words,
the traveller first makes payments to the issuing bank before obtaining the Circular Notes.

(v) Issue "Travellers Cheques":

Banks issue travellers cheques to help carry money safely while travelling within India or
abroad. Thus, the customers can travel without fear, theft or loss of money.

(vi) Letters of Credit:

Letter of Credit is a payment document provided by the buyer's banker in favour of seller. This
document guarantees payment to the seller upon production of document mentioned in the
Letter of Credit evidencing dispatch of goods to the buyer.

The Letter of Credit is an assurance of payment upon fulfilling conditions mentioned in the
Letter of Credit. The letter of credit is an important method of payment in international trade.
There are primarily 4 parties to a letter of credit.

The buyer or importer, the bank which issues the letter of credit, known as opening bank, the
person in whose favour the letter of credit is issued or opened (The seller or exporter, known
as 'Beneficiary of Letter of Credit'), and the credit receiving/advising bank.

The Letter of Credit is generally advised/sent through the seller's bank, known as Negotiating
or Advising bank. This is done because the conditions mentioned in the Letter of Credit are, in
the first instance; have to be verified by the Negotiating Bank. It is mostly used in international
trade.

46
(vii) Acting as Referees:

The banks act as referees and supply information about the business transactions and financial
standing of their customers on enquiries made by third parties. This is one on the acceptance
of the customers and help to increase the business activity in general.

(viii) Provides Trade Information:

The commercial banks collect information on business and financial conditions etc., and make
it available to their customers to help plan their strategy. Trade information service is very
useful for those customers going for cross-border business. It will help traders to know the
exact business conditions, payment rules and buyers' financial status in other countries.

(ix) ATM facilities:

The banks today have ATM facilities. Under this system the customers can withdraw their
money easily and quickly and 24 hours a day. This is also known as 'Any Time Money'.
Customers under this system can withdraw funds i.e., currency notes with a help of certain
magnetic card issued by the bank and similarly deposit cash/cheque for credit to account.

(x) Credit cards:

Banks have introduced credit card system. Credit cards enable a customer to purchase goods
and services from certain specified retail and service establishments up to a limit without
making immediate payment. In other words, purchases can be made on credit basis on the
strength of the credit card.

The establishments like Hotels, Shops, Airline Companies, Railways etc., which sell the goods
or services on credit forward a monthly or fortnightly statements to the bank.

The amount is paid to these establishments by the bank. The bank subsequently collects the
dues from the customers by debit to their accounts. Usually, the bank receives certain service
charges for every credit card issued. Visa Card, BOB card are some examples of credit cards.

(xi) Gift Cheques:

The commercial banks offer Gift cheque facilities to the general public. These cheques received
a wider acceptance in India. Under this system by paying equivalent amount one can buy gift
cheque for presentation on occasions like Wedding, Birthday.

47
(xii) Accepting Bills:

On behalf of their customers, the banks accept bills drawn by third parties on its customers.
This resembles the letter of credit. While banks accept bills, they provide a better security for
payment to seller of goods or drawer of bills.

(xiii) Merchant Banking:

The commercial banks provide valuable services through their merchant banking divisions or
through their subsidiaries to the traders. This is the function of underwriting of securities. They
underwrite a portion of the Public issue of shares, Debentures and Bonds of Joint Stock
Companies.

Such underwriting ensures the expected minimum subscription and also convey to the investing
public about the quality of the company issuing the securities. Currently, this type of services
can be provided only by separate subsidiaries, known as Merchant Bankers as per SEBI
regulations.

(xiv) Advice on Financial Matters:

The commercial banks also give advice to their customers on financial matters particularly on
investment decisions such as expansion, diversification, new ventures, rising of funds etc.

(xv) Factoring Service:

Today the commercial banks provide factoring service to their customers. It is very much
helpful in the development of trade and industry as immediate cash flow and administration of
debtors' accounts are taken care of by factors. This service is again provided only by a separate
subsidiary as per RBI regulations.

48
 Chapter-6

DISTINGUISH BETWEEN PRIVATE SECTOR BANKS V/S PUBLIC

SECTOR BANKS

Private sector bank Public sector bank

1.Meaning
Private banking is banking, investment and A public bank is a bank, a financial
other financial services provided by banks to institution, in which a state, municipality, or
high-net-worth individuals (HNWIs) with public actors are the owners. It is an
high levels of income or sizable assets. ... It enterprise under government control. ...
does not refer to a private bank, which is a Further, international NGOs and critical
non-incorporated banking institution. scholars argue that public banks can play
significant role in financing a just and
2 Objectives equitable energy transition.
Usually, to increase profit.
Usually, to achieve define the service levels.
3 ownership and control
Buyer's are responsible to directors, who in
turn are responsible to shareholders, the Buyers are responsible Ultimately to the
owners of the organization. general public, the "owners" Of
organization.
4.Legal & regulatory environment
Activities are regulate by company law,
employment law, product Libality l aw etc.
Most of this applies equally to public sector,
5. Competition but additional regulations are present too( eg
There is usually strong competition between compulsory competitive tendering)
many different firms.
6. Publicity There is usually no competition.
Confidentiality applies in dealings between
suppliers and buyers.
7. Budgetary limits

49
Investment is constrained Only by
availability of attractive opportunity;
funding can be found if prospects are good.
8. Sources of finance
Typically this comes from shareholders and
lenders..
9. Information exchange
Private sector buyers do not exchange
information with other firms, because of
confidentiality and competition.
10. Defined procedures
Private sector buyers can cut red tape when
speed of action is necessary.
50
Confidentiality is limited because of public
interest in discoluse.
Investment is constrained by externally
imposed spending limits.
Ultimately the source of public funding is
the tax payer.
Public sector buyers are willing to exchange
notes.
Public sector buyers are often constrained to
follow established procedures.
 CHAPTER-7

CASE STUDY ON ICICI& HDFC BANK:

ICICI Bank began its retail banking venture in mid-1999. By January 2000, it had moved on
to introducing home loans, car loans, personal loans and credit cards. Realising the need for a
bigger retail deposit base, the bank started building a branch and an ATM network. The
acquisition of Bank of Madura in March 2001 added 263 branches, many of them in cities
where ICICI Bank did not have a presence. The merger of the erstwhile financial institution
ICICI Limited with the bank in April 2002, gave it a ready-made corporate clientele. The flip
side was that ICICI Bank had Rs. 10,000 crore of restructured assets for which it had to make
provisions. ICICI Bank's assets in the retail space stand at Rs 56,000 crore. In comparison, the
tally for HDFC Bank is Rs. 18,000 crore (Rs. 180 billion). ICICI Bank also leads HDFC Bank
in almost every

segment they are present in. But that's just the current update. On the other hand, HDFC Bank
kick started its operations in 1995 with a focus on corporate banking, targeting the top-end of
the market. HDFC Bank ventured into retail lending in 1998, a year before ICICI Bank. But in
products like credit cards, it was slow to get off the mark. For instance, its credit cards were
launched only two years ago.17

Mar-2015. SBI SBH HDFC ICICI

Bank Bank
Type Public Sector Public Private Private
Sector Sector Sector
Year of Incorporation 1806 1941 1994 1994
Branches 15,054 1800 4,070 4,101
ATMs 44,929 2,380 13,269 11,962
Cities NA NA 211 2287
Employees 2,28,296 17000 72000 69401
Retail assets (Rs.crore) 20,48,080 767 18000 56000

51
 CHAPTER-8

CUSTOMER'S SATISFACTION IN PUBLIC AND PRIVATE SECTOR

BANKS IN INDIA: A COMPARATIVE STUDY.

Banking is to be considered as pure financial service industry and responsible for the economic
development of an economy upto great extent. Satisfaction of customers is the vital for
retaining existing customers and attracting prospective customers to widen the level of
operational activities in any concern. In India, Private and Public banks are rendering financial
services. The Policies and Strategies of Private and Public banks are different that leads
variation in the customers’ satisfaction level. This paper tries to measure satisfaction level of
customers of Public and Private Banks and factors responsible for variation in customers’
satisfaction between Private and Public banks in India. The objective of the research is to get
the satisfaction level, variations in satisfaction level and reasons responsible for variations in
satisfaction level or dissatisfaction in public and private banks. This research is based on
primary information obtained from customers of Public and Private sectors banks in India.
Overall, Customers of Private and Public sector banks are satisfied except some tangibles and
behavioural factors of the banks employees due to the policies, strategies for tangibles and
inefficiency of the employees. So, there are need to consider tangibles and behavioural factors
of the employees to enhance the level of satisfaction in Public banks.

52
 CHAPTER-9

COMPARATIVE STUDY OF E-BANKING SERVICES PROVIDED BY

PUBLIC AND PRIVATE SECTOR BANK

E-banking with Service Quality:

In this era of stiff competition, public and private sector banks in India have realized the
importance of achieving high levels of customer satisfaction by providing service quality of
world class. Banks operating in these three sectors are consequently putting a lot of pressure
due to increase in competition. Various strategies are formulated to retain the customers and
the key of it is to increase the service quality level. Service quality is particularly essential in
the banking services context because it provides high level of customer satisfaction and hence
it becomes a key to competitive advantage as well as it leads to customer retention. In addition,
service quality has a significant impact on a bank‟s success and performance. Nowadays,
service quality has received added attention because of its relationship with costs, financial
performance, customer satisfaction and customer retention. Due to the dawn of e-banking,
quality of service has been enhanced as compared to conventional banking services. Internet
banking, Mobile banking, automated teller machine, electronic fund transfer has totally altered
the way of providing services by the banks. As customers are now technology savvy, therefore,
it becomes indispensable to consider the use of technology to react to their continuous needs.

The penetration of ATMs in India increased in 2012-13 with the total number of ATMs
crossing 1 lakh clocking a double digit growth during the year. This growth was driven
primarily by private sector banks with their share in total ATMs picking up rapidly to about 38
per cent. So far, debit cards have been a more popular mode of electronic money than credit
cards in India. While public sector banks have been frontrunners in issuing debit cards, new
private sector banks continue to lead in the number of credit cards issued. As the service quality
improves, the probability of customer loyalty increases.20 Bank automation and electronic
banking is invading at a rapid pace and private sector and foreign sector banks have an
advantage of adopting it at a faster pace than the public sector banks and it also has to capture
the pace. E-banking is an improvement over traditional banking system because it has reduced
the cost of transaction processing and thereby improving the payment efficiency and also
improving the banker customer relationship. The relationship between e-banking and service

53
quality can be studied with the level of customer satisfaction and loyalty. E-banking plays a
pivotal role in providing satisfaction to the customers. Banks should discover innovative ways
of making electronic services more accessible and by allowing the customer to verify the
accuracy of the e-banking transactions. Most importantly, profitable e-banking requires a
strong focus not only on the acquisition of new customers but also on the retention of existing
customers, since the acquisition costs in online banking exceed that of traditional off line
business by 20-40 per cent. Consequently, establishing long-term customer relationships is a
prerequisite for generating positive customer value on the internet. During the last few years,
these findings have led to the development of simple banking web sites into wide-ranging e-
banking portals offering a great variety of services. In order to enhance customer loyalty,
portals are required to put a strong emphasis on their customers‟ quality demands, which are
steadily increasing over time. Most importantly, satisfaction has been recognized as a key path
to long-term profitability. These findings hold especially true for the financial services, where
reducing the defection rate by 5 per cent can boost profits up to 80 per cent.

54
 CHAPTER-10

SERVICES PROVIDED BY PUBLIC SECTOR BANK AND PRIVATE

SECTOR BANK

5.6 Public Sector Banks in India:

Central Bank: 1. Reserve Bank of India (RBI).

Public Sector Banks (Nationalised banks):

1. State Bank of India (SBI) 2. State Bank of Bikaner & Jaipur 3.State Bank of Hyderabad
4.State Bank of Indore 5.State Bank of Mysore 6.State Bank of Patiala 7.State Bank of
Saurashtra 8.State Bank of Travancore 9.Bank of India 10.Canara Bank 11.Central Bank of
India 12.Corporation bank 13.Indian Bank 14.Indian overseas bank 15.Syndicate Bank
16.UCO Bank 17.Allahabad Bank 18.Andhra Bank 19.Bank of Baroda 20.Bank of
Maharashtra 21.Dena Bank 22.Oriental Bank of Commerce 23.Punjab & Sind Bank 24.Union
Bank of India 25.United Bank of India 26.Vijaya Bank 27. IDBI Bank

5.8 State Bank of India Services:

State Bank of India Services is most varied and innovative amongst all its
contemporaries. State Bank of India Services includes a host of products and services to suit
all types of consumers.

Products & Services:

Personal Banking

NRI Services

Agriculture

International

Corporate

SME

Domestic Treasury

55
SBI Retail Banking:

The following services are provided under Retail Banking:-

Term Deposits.

Recurring Deposits.

Housing Loan.

Educational Loan.

Personal Loan.

For Pensioners.

Against Mortgage of Property.

Against Shares & Debentures.

Plus Scheme.

Medi-Plus Scheme.

Rates of Interest.

State Bank of India Loans:

State Bank of India Loans disburses the following loan-products through its wide

network of branches in India and abroad.7

Loans to employees to buy shares of their companies.

Home loans.

SBI Saral Personal loans.

Easy travel loans.

Gram Nivas scheme.

Car loan.

Education loans.

Property loans.

Loan to pensioners.

56
 Loan against shares and debentures.

Loan for earnest money deposits.

Festival loans.

Medi-plus scheme.

Teachers-plus scheme.

Tribal -plus scheme.

Credit khazana.

Rent plus.

SBI career loans.

On-line Products and Services offered by SBI:

E-Ticketing, E-Tax, RTGS/NEFT, E-Payment, Fund Transfer,

Third Party Transfer, Demand Draft, Cheque Book Request, Account Opening Request,
Account Statement, Transaction Enquiry, De-mat Account Statement.

SBI is pioneer in internet banking. But it does not mean to say that implement of new
technology is always advantages because actual use of

technology is also important.

5.9 State Bank of Hyderabad:

State Bank of Hyderabad had been constituted as Hyderabad State Bank on 8th August

1941 under Hyderabad State Bank Act, 1941. It served as the central bank of the erstwhile

State of Hyderabad, covering present-day Telangana region of Andhra Pradesh, Hyderabad-

Karnataka of Karnataka and Marathwada of Maharashtra. Their functions include managing

the currency and public debt, leaving aside the usual functions of commercial banking. Gun

foundry in Hyderabad saw the first branch of the bank on 5th April, 1942. It was in the year

1953 that the Bank overtook the assets and liabilities of the Hyderabad Mercantile Bank Ltd.

and started conducting Government and Treasury business as RBI's agent. Then right in 1956,

the Bank was taken over by RBI as its first subsidiary and the name got rechristened from

57
Hyderabad State Bank to State Bank of Hyderabad. More transition waited for the bank as the

bank became a subsidiary of the State Bank of India from1st October 1959 and presently it is

the largest Associate Bank of State Bank of India. All the branches of the State Bank of

Hyderabad are completely intertwined under Core Banking Solutions - with a wide product

and service range for its customers. Latest technologies like Internet Banking, ATMs - all

customers are entitled to these facilities.

5.10 Products and Services offered by SBH:

The broad range of services and products can be classified as follows:

A) Deposits
B) Advances
C) NRI Services D) International Banking
E) Merchant Banking.
F) Services.

A. Deposits: The State Bank of Hyderabad is offering the following different types of deposits
to suit the needs of various categories of customers.

1. Term Deposit Schemes

2. Term Deposit Schemes qualifying for the Income Tax benefit
3. Current Account
4. Savings Account

B. Advances: SBH has designed several Loan products to cater to the requirements of the
Customers. The following are different types of advances are offered by the bank to suit
the requirements of the different types of customers.

1. Personal Advances
2. Commercial and institutional advances
3. Advances to Micro Small and Medium Enterprises (MSME)

58
 4. Agricultural Advances
5. Other Agricultural advances.

C. NRI Services: The following services are offered by SBH to the NRIs.

(i) Global Link Services (GLS)

(ii) NRI Loan Products
(iii) NRI Deposits

D) International Banking: SBH has developed expertise in international trade over the
years. They offer comprehensive facilities to exporters, importers, NRIs, and others through
their 66 authorized branches. The Bank has a full-fledged department at Mumbai offering a
wide range of services, an integrated treasury at Mumbai, and a large network of
correspondents across the world. Swift/Routing Numbers are given for sending Remittance in
USD.

E) Merchant Banking: State Bank of Hyderabad is one of the pioneers among the public
sector banks to offer Merchant Banking Services since

1983. The Bank is offering the 162 services / products through their Branch Network and are
holding the various required licenses

/registrations for carrying out these activities.

F) Services: The Bank provides following various services to its customers to make the
transaction easy and convenient.

1. ATM Services.
2. Mobile Banking Services.
3. New Pension System(NPS).
4. RBI‟s Electronic Funds Transfer (EFT) system.
5. Internet Banking.
6. RTGS / NEFT / SBGRPT.
7. Cash Management Product (CMP).

59
 8. Safe Custody Lockers.
Internet Banking services are made available through www.onlinesbh.com to the Net
Banking Customers. Various measures have been taken by the Bank to provide a safe and
secure environment to perform online Banking Bank‟s Websitewww.sbhyd.com. Details of
all Services & Products offered by the Bank are provided on the website. In addition, complete
details of service charges, interest rates, branch locator, product information, time norms for
various Banking transactions have been provided. The Bank also enabled online submission
of application for education loan by students pursuing higher studies. Bank has also enabled
filing of customer grievances online.

5.11 Industrial Credit and Investment Corporation of India (ICICI)

Bank:

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46 per cent through a public offering of shares in India in fiscal 1998. ICICI was
formed in 1955 at the initiative of the World Bank, the Government of India and representatives
of Indian industry. The principal objective was to create a development financial institution for
providing medium-term and long-term project financing to Indian businesses. In the 1990s,
ICICI transformed its business from a development financial institution offering only project
finance to a diversified financial services group offering a wide variety of products and
services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In
1999, ICICI become the first Indian company and the first bank or financial institution from
non-Japan Asia to be listed on the NYSE.

ICICI Bank is India's second-largest bank with total assets of Rs.

4,736.47 billion (US$ 93 billion) at March 31, 2012 and profit after tax

Rs. 64.65 billion (US$ 1,271 million) for the year ended March 31, 2012. The Bank has a
network of 2,791 branches and 10,021 ATMs in India, and has a presence in 19 countries,
including India. ICICI Bank serves over 24 Million customers throughout the world. It is

60
considered as one of the „Big Four Banks‟ in India along with State Bank of India, HDFC
Bank and Axis Bank.

ICICI Bank provides a wide array of banking products and financial services to its retail
and corporate customers. It has a wide variety of delivery channels and specialized affiliates
and subsidiaries that ensure the flow of its offerings in the areas like investment banking,
venture capital, life and non-life insurance and asset management. This bank is also India's
largest credit card issuer. The equity share of ICICI Bank is listed on various stock exchanges.
ICICI Bank also has the largest international balance sheet among all the banks in India. It is
also expanding its business in the overseas market at an enviable pace.

ICICI Group offers a wide range of banking products and financial services to corporate
and retail customers through a variety of delivery channels and through its specialised group
companies and subsidiaries in the areas of personal banking, investment banking, life and
general insurance, venture capital and asset management. With a strong customer focus, the
ICICI Group Companies have maintained and enhanced their leadership positions in their
respective sectors.

1. ICICI Prudential Life Insurance: ICICI Prudential Life

Insurance is a joint venture between ICICI Bank, a premier financial powerhouse, and
prudential plc, a leading international financial services group headquartered in the
United Kingdom. ICICI Prudential Life was amongst the first private sector insurance
companies to begin operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority

(IRDA). ICICI Prudential Life's capital stands at Rs. 47.91 billion

(as of March 31, 2012) with ICICI Bank and Prudential plc holding 74% and 26% stake
respectively. For FY 2012, the company garnered Rs.140.22 billion of total premiums
and has underwritten over 13 million policies since inception. The company has assets
held over Rs. 707.71 billion as on March 31, 2012.

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2. ICICI Lombard General Insurance Company: ICICI Lombard General Insurance
Company, is a joint venture between ICICI Bank Limited, India's second largest bank
with consolidated total assets of over USD 91 billion at March 31, 2012 and Fairfax
Financial Holdings Limited, a Canada based USD 30 billion diversified financial services
company engaged in general insurance, reinsurance, insurance claims management and
investment management. ICICI Lombard GIC Ltd. is the largest private sector general
insurance company in India with a Gross Written Premium (GWP) of Rs. 5,358 crore for
the year ended March 31, 2012. The company issued over 76 lakh policies and settled
over 44 lakh claims and has a claim disposal ratio of 99 per cent (percentage of claims
settled against claims reported) as on March 31, 2012.

3. ICICI Securities Ltd: ICICI Securities Ltd is the largest integrated securities firm
covering the needs of corporate and retail customers through investment banking,
institutional broking, retail broking and financial product distribution businesses. Among
the many awards that ICICI Securities has won, the noteworthy awards for 2012 were:

Asia money `Best Domestic Equity House for 2012; 'BSE IPF D&B

Equity Broking Awards 2012' under two categories:- Best Equity

Broking House - Cash Segment and Largest E-Broking House; the

Chief Learning Officer Award from World HRD Congress for Innovation in Learning
category. IDG India's CIO magazine has recognized ICICI Securities as a recipient of
CIO 100 award in 2009, 2010, 2011 and 2012. I-Sec won this awards 4 times in a row
for which the CIO Hall of Fame award was additionally conferred in 2012.

4. ICICI Securities Primary Dealership Limited: ICICI Securities

Primary Dealership Limited is the largest primary dealer in Government Securities. It is
an acknowledged leader in the Indian fixed income and money markets, with a strong
franchise across the spectrum of interest rate products and services - institutional sales
and trading, resource mobilisation, portfolio management services and research. One of
the first entities to be granted primary dealership license by RBI, It has made pioneering
contributions since inception to debt market development in India. It is also credited with
pioneering debt market research in India. It is one of the largest portfolio managers in

62
 the country and amongst PDs, managing the largest AUM under discretionary portfolio
management.

5. ICICI Prudential Asset Management: ICICI Prudential Asset Management is the third
largest mutual fund with average asset under management of Rs. 688.16 billion and a
market share (mutual fund ) of 10.34 per cent as on March 31, 2012. The Company
manages a comprehensive range of mutual fund schemes and portfolio management
services to meet the varying investment needs of its investors through117 branches and
196 CAMS official point of transaction acceptance spread across the country.

6. ICICI Venture: ICICI Venture is one of the largest and most successful alternative asset
managers in India with funds under management of over US$ 2 billion. It has been a
pioneer in the Indian alternative asset industry since its establishment in 1988, having
managed several funds across various asset classes over multiple economic cycles. ICICI
Venture is a wholly owned subsidiary of ICICI Bank.

Products:

ICICI Bank provides a variety of banking products for all its customers. The major
product of ICICI bank is its excellent customer service.

Consumer banking: ICICI offers number of products for individuals.

Deposits - Saving account, Recurring account, Fixed deposit account, special accounts for
senior citizens and also teenagers.

Cards - Credit cards, Travel card

Insurance: Life Insurance, Car Insurance, Home Insurance and others

Investment: Tax Solutions, Mutual Funds, PPF, Student Solutions and Forex

5.13 Housing Development Finance Corporation (HDFC) Bank:

The Housing Development Finance Corporation Limited, popularly called HDFC Bank,
was set up in India in the month of August in the year 1994 with the name “HDFC Bank
Limited”. This was the 1st organization to be approved by R. B. I. (Reserve Bank of India) to
establish a private sector bank. This happened as a part of the liberalization of the banking

63
industry in the country by R. B. I. in the same year. However, this scheduled business bank
started its operations mainly from January, 1995. Headquartered in the city of Mumbai, this is
one of the main companies involved in housing finance. With an aim to be a world class bank,
this bank in India holds a good track record of performance in both national as well as global
markets. The bank had an

India network of 684 branches in 316 cities in India and over 1663

ATM's.

5.14 Products and Services of HDFC Bank:

NRI Banking:

This banking service includes opening of accounts, deposits, insurance, investments,

money transfer, loans as well as premium banking. These products are mainly meant for people
earning outside

India.

Personal Banking:

The personal banking service can again be sub-divided into the heads:

Accounts and Deposits: The bank offers different kinds of accounts to be opened with
them like current accounts, demat accounts, fixed deposits, recurring deposits, safety
lockers, salary accounts and savings accounts.

Cards: They have got credit, debit as well as prepaid cards of varied advantages, which
are widely used by people.

Insurance and Investment: This service offered by the bank includes mutual funds, life
insurances, tax saving options, general insurances, health insurances, bonds etc.

Loans: HDFC Bank provides loans for multi categories such as car (New and used),
commercial vehicle, education, gold, home, personal, retail-agriculture, tractor, two
wheeler and many more.

64
 Apart from these major services, personal banking of this bank includes many other
services, some of which are -ATM, Forex

Services, Insta Alerts, Mobile Banking, Net Banking, Phone Banking.

Wholesale Banking: This is mainly meant for banking transactions carried on by the
different government sectors, medium and small sized enterprises, corporate companies
and varied other financial trusts and institutions. Investment banking is even a part of
wholesale banking.

Home Loans: Home Loans offered by HDFC Bank encompasses a wide range of loan
options which are subject to various parameters like term of loan, financial status of the
individual seeking loan and the purpose of loan. Owing to these diversifications, HDFC
Home Loans have grown in popularity over the years.

The internet banking has been growing rapidly in India. The growth in recent year attracts
many banks internet services, the competition resulted into benefit to the customer. Due to
industrial base and educational institutes, majority of customers are using internet banking.

These customers are from service class. ICICI is the pioneer bank in India. Therefore ICICI
dominates in majority of the quality dimension.

However in case of quality dimension of „Privacy of Information‟, it seems that people of

India still trust public sector bank, i.e. SBI bank and SBH. The difference in service quality
arises mainly because of skilled human resource and culture of bank. ICICI and HDFC bank
has attracted young and efficient staff for the internet operations, while SBI and SBH still
suffers due to the rigid mentality of the old employees. However in last few years, SBI came
out as a leading Public Sector bank providing

online service to customers.

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5.15 Customer Oriented Services Provided by Public Sector and

Private Sector Banks:

A comparative study of the various customer oriented services provided by Public

Sector and Private Sector banks is shown in the table beneath. The table below gives a wide
view about the availability of the

services in the various Public and Private sector banks.

Table 5.5
Availability of Schemes and Services in the Various Public and Private Sector Banks.

Schemes Public sector banks Private sector banks

Sweep in
Facility in
Saving Not available in these banks Available in these banks
Account

De-mat Account
Available in some banks Available in these banks

No such condition is applicable over

Minor can only open an here. A
Minor Account account jointly with his minor can open an account
guardian independently

Special benefits are provided to the

Women account
No special benefits are provided
Account holders

These banks offer the customers to

These banks do not deal in gold invest in pure
Investments
investment gold

Online Shopping This facility is not available in This facility is available in these
these banks banks
Internet
Banking Not satisfactory Very efficient

66
 Time norms for providing the
services are quite long and
complicating have to wait for a
long time for
Time Norms getting these services as
in most cases these norms are not
followed.
Time norms for providing the
services are less. The customers do
not have to
wait for a long time to get these
services

Time norms for providing the

services are quite long and
complicating. The
customers have to wait
Time Norms for a long time for getting these
services as in most
cases these norms are not
followed
Time norms for providing the
services are less. The customers do
not have to
wait for a long time to get these
services.

All banks have this facility and are

Core Banking Not so efficient in public sector providing them efficiently.
Facilities banks

Interest Rates on Rate of return is low on deposits Rate of return is high on deposits
Deposits with the banks with the banks
Rate of interest levied on loans
and advances is
Rate of interest levied loans and
Interest Rate on low. Public sector banks are able
advances is high.
Loans and to provide as
Private sector banks offer more and
Advances better services as those by private
better to give the best to its customers
sector banks

Hours for customer dealing in

public sector
banks varies from bank to bank in Hours for customer dealing in private
Working Hours / some banks it is
sector banks is more i.e. 8 a.m. to 8
Customer Dealing 10 a.m. to 5 p.m. with a break for
p.m.
half an hour

Public sector banks are not much

dedicated
Sincerity and
towards their work and do not Private sector banks are dedicated
Dedication
give their towards their work and give their
Towards Their
customers the top priority expectations.
Work

Public sector banks are not able to Private sector banks have the
Customer satisfy their customer fully capability to get all the customers.
Satisfaction

67
 Such meetings are arranged from
Bankers Such meetings are not arranged time to time to know the
Customers very frequently. requirements of customers

Private sector banks advertise their

Banks Customers are sometime schemes very well to get their
Advertising unaware of services customer informed about
Regarding provided due to lack of banks them
Services advertising

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 CHAPTER -11

SURVEY AND IT’S ANALYSIS

INTERPRETATION:
2. 18-20 age group of people open an bank A/c 20-30 age group of people also open a bank
A/c other not prefer to opening an bank A/c.

INTERPRETATION:
3. Female is more than male. Female is 78% & male is 22% female prefer to open a bank
A/c more than male.

69
INTERPRETATION:

4. Mostly student prefer open a bank A/c & salaried people also open bank A/c & the less
house maker open bank A/c.

INTERPRETATION:

5. Below income group of 1 lakh open a bank A/c. 25% of people of income. Group of 1
lakh to 2 lakh open a bank A/c. Other people have less opening of A/c.

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INTERPRETATION:
6. 94% of people have bank A/c & 6 % of people do not have bank A/c.

INTERPRETATION:

7. People mostly prefer to open bank A/c in private bank Rather than public or cooperative.
As the percentage of private bank is more than other bank.

71
INTERPRETATION:
8. Most of the people open bank A/c in canera bank, and icici, kotak, central bank, bank of
India, hdfc more as compared to other bank.

INTERPRETATION:
9. Mostly people prefer to have saving A/c rather than current A/c, loan A/c, fixed deposit.
81.7% of people open saving A/c.

72
INTERPRETATION:
10. People's get many services from Bank but the mostly likely used service is ATM &
Online banking & mobile banking, telephone banking, credit card, others are also used by
many people but the ATM & Online banking is the most used services.

INTERPRETATION:
11. 95.4% of users are satisfied of using services provided by bank & others are not satisfied.

73
INTERPRETATION:
12. 73.2% people are using online banking rather than using other services. & 20.8% people
are not using online services.

INTERPRETATION:
13. Number of people use online banking because it is time saving & easy to use.

74
INTERPRETATION:
14. Opinion about computerization 64.6% is positive & 33.3% is can't say & less people are
negative about it.

INTERPRETATION:
15. 86.7% people have transaction tracking system updated on mobile phones & other don't
have tracking system.

75
INTERPRETATION:
16. It is very helpful for people who have bank A/c as 82.8% people said yes that it very
helpful & other don't feel helpful.

INTERPRETATION:
17. People feels that service quality of bank is good & excellent is 26.6% & Very good is
10.2% & bad is very less so all people feel that services quality of bank is good.

76
INTERPRETATION:

18. Most of the prefer investing in fixed deposit because it's give fixed return after a
particular time & fixed deposit percentage is 65.3% & Now a days people are investing in
mutual fund it give more interest than fixed deposit. Insurance shares & other investment are
also used but not that much of mutual fund & Fixed Deposit.

INTERPRETATION:

19. yes 73.3% of bank officer comparative rate for your investment & 26.6% are not give
competitive interest rate for your investment.

77
INTERPRETATION:
20. Mostly people prefer investing for 8 month to 1 year & 36.7 % people invest for less than
6 month. less people like to invest for long period.

INTERPRETATION:

21. 91.1% people have trust on bank because of the security they provide them & other 8.2 %
people don't trust the bank.

78
INTERPRETATION:

22. Yes, I would like to recommend the bank to my family relatives for security or growth of
money.

79
 CONCLUSION

The customers now days are not only exposed of what type of service is being provided by
banks in India but in the world as a whole. They expect much more than what is actually being
provided. So the new coming banking sector has to provide and cater to all the needs of the
customers otherwise it is difficult to survive in the competition coming up.

They not only expect the safety of money but also best ways to invest that money which need
needs to be fulfilled. Banks need to have a better outlook towards to actually what customers
are requiring. Entries of the private sector banks have made the competition tougher. If a bank
is not functioning properly it is being closed. So it is difficult to face these types of conditions.
Here a simple philosophy can work that customers are God and we need to follow this to
survive and serve better.

The banking sector is poised for explosive growth. In this, scenario, it is imperative that banks
adopt technology at an aggressive Pace, if they wish to remain competitive. Mani Mamallan
makes a case for banks to outsource their technology infrastructure requirement, thus enabling
early adoption and increased efficiencies. In the prevailing scenario, a number of banks have
adopt a new deployment strategy of infrastructure outsourcing, to lower the cost of service
channels. As a result, other banks too will need to align their reinvented business models. The
required changes at both the business and technology levels are enormous. In a highly
competitive banking markets, early adopters are profiting from increased efficiencies.

80
 RECOMMENDATIONS & SUGGESTIONS

For Public Sector Banks

• Bank staff should be customer friendly and highly motivated to serve the normal customer.

• As far as possible, banks should reduce its documentation process while providing loans.

• Computerization should be done in banks at all level and the operators should de properly
trained.

• Token system should be induced so as to minimize the waiting lines in the banks.

Comparative Study Between Public sector and Private Sector Banks Page 54

• Proper ambience in the banks can develop a healthy working culture.

• Quick services should be provided.

For Private Sector Banks

• 24 hours banking should be induced so as to facilitate the customers who may not have free
time in the day time. It will help in facing the competition more effectively.

• More ATM coverage should be provided for the convenience of the customers.

• Customer care services should be provided by banks.

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 BIBLIOGRAPHY

WEBSITES

www.google.com

www.scribd.com

www.shodhganga.in

www.banknetindia.com

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 ANNEXURE

1.NAME

2.AGE

3.GENDER

4.OCCUPATION

5.INCOME

6.DO YOU HAVE BANK ACCOUNT ?

7.IF, YES, THEN IN WHICH SECTOR YOU HAVE BANK ACCOUNT ?

8.WHICH BANK DO YOU HAVE ACCOUNT?

9.WHICH TYPE OF ACCOUNT DO YOU HAVE IN THIS PARTICULAR BANK ?

10. WHICH SERVICES DO YOU GET FROM YOUR BANK ?

11.ARE YOU SATISFIED WITH THE SERVICE PROVIDED BY THE YOUR BANK ?

12.ARE YOU USING ONLINE BANKING ?

13.WHAT ARE THE BENEFIT FROM THE ONLINE BANKING ?

14.WHAT IS YOUR OPINION ABOUT COMPUTERIZATION ?

15.DOES YOUR BANK HAVE A TRANSACTIONS TRACKING SYSTEM ?

16. IT IS HELPFUL FOR YOU ?

17.WHAT DO YOU FEEL ABOUT THE OVER ALL SERVICE QUALITY OF BANK ?

18.WHAT YOU PREFER FOR INVESTMENT

19.DO YOU THINK YOUR BANK OFFICERS COMPETITIVE INTEREST RATE FOR
YOUR INVESTMENT ?

20.IF YES THEN FOR WHAT TIME OF PERIOD DO YOU LIKE TO INVESTMENT ?

21.DO YOU TRUST ON YOUR BANK ?

22.WOULD YOU RECOMMEND YOUR BANK TO YOUR FRIENDS , RELATIVES ?

83