CHAPTER-1

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 INTRODUCTION

BANKING
A Bank is a financial institution that accepts the deposits from the public and creates credit. Lending activity
can be performed either directly or indirectly through capital markets. Due to their importance in the
financial system and influence on national economics, banks are highly regulated in most countries. Most
nations have institutionalized a system known as fractional reserve banking under which banks hold liquid
assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure
liquidity, banks are generally subject to minimum capital requirements based on an international set of
capital standards, known as the Basel Accords. Banking in its modern sense evolved in the 14th century in
the rich cities of Renaissance Italy but in many ways was a continuation of ideas and concepts
of credit and lending that had their roots in the ancient world. In the history of banking, a number of banking
dynasties — notably, the Medicis, the Fuggers, the Welsers, the Bahrenberg’s and the Rothschild’s — have
played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di
Siena, while the oldest existing merchant bank is Bahrenberg Bank.

HISTORY OF BANKING
Banking began with the first prototype banks of merchants of the ancient world, which made grain loans to
farmers and traders who carried goods between cities. This began around 2000 BC
in Assyria and Babylonia. Later, in ancient Greece and during the Roman Empire, lenders based in temples
made loans and added two important innovations: they accepted deposits and changed money. Archaeology
from this period in ancient China and India also shows evidence of money lending activity. The origins of
modern banking can be traced to medieval and early Renaissance Italy, to the rich cities in the north
like Florence, Lucca, Siena, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th-
century Florence, establishing branches in many other parts of Europe. One of the most famous Italian banks
was the Medici Bank, set up by Giovanni di Bicci de' Medici in 1397. The earliest known state deposit bank,
Banco di San Giorgio (Bank of St. George), was founded in 1407 at Genoa, Italy. Modern banking
practices, including fractional reserve banking and the issue of banknotes, emerged in the 17th and 18th
centuries. Merchants started to store their gold with the goldsmiths of London, who possessed private vaults,
and charged a fee for that service. In exchange for each deposit of precious metal, the goldsmiths
issued receipts certifying the quantity and purity of the metal they held as a bailee; these receipts could not
be assigned, only the original depositor could collect the stored goods. Gradually the goldsmiths began to

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lend the money out on behalf of the depositor, which led to the development of modern banking
practices; promissory notes (which evolved into banknotes) were issued for money deposited as a loan to the
goldsmith. The goldsmith paid interest on these deposits. Since the promissory notes were payable on
demand, and the advances (loans) to the goldsmith's customers were repayable over a longer time period,
this was an early form of fractional reserve banking. The promissory notes developed into an assignable
instrument which could circulate as a safe and convenient form of money backed by the goldsmith's promise
to pay, allowing goldsmiths to advance loans with little risk of default. Thus, the goldsmiths of London
became the forerunners of banking by creating new money based on credit. The Bank of England was the
first to begin the permanent issue of banknotes, in 1695. The Royal Bank of Scotland established the
first overdraft facility in 1728. By the beginning of the 19th century a bankers' clearing house was
established in London to allow multiple banks to clear transactions. The Rothschild’s pioneered international
finance on a large scale, financing the purchase of the Suez Canal for the British government.

Definition of Banking
 "banking business" means the business of receiving money on current or deposit account, paying and
collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes
such other business as the Authority may prescribe for the purposes of this Act; (Banking Act
(Singapore), Section 2, Interpretation).
 "banking business" means the business of either or both of the following:

1. Receiving from the general public money on current, deposit, savings or other similar account
repayable on demand or within less than [3 months] ... or with a period of call or notice of less than
that period;
2. Paying or collecting cheques drawn by or paid in by customers.

Standard business
Banks act as payment agents by conducting checking or current accounts for customers,
paying cheques drawn by customers in the bank, and collecting cheques deposited to customers' current
accounts. Banks also enable customer payments via other payment methods such as Automated Clearing
House (ACH), Wire transfers or telegraphic transfer, EFTPOS, and automated teller machines (ATMs).

3
Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by
issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on
current accounts, by making installment loans, and by investing in marketable debt securities and other
forms of money lending.

Banks provide different payment services, and a bank account is considered indispensable by most
businesses and individuals. Non-banks that provide payment services such as remittance companies are
normally not considered as an adequate substitute for a bank account.

Banks can create new money when they make a loan. New loans throughout the banking system generate
new deposits elsewhere in the system. The money supply is usually increased by the act of lending, and
reduced when loans are repaid faster than new ones are generated. In the United Kingdom between 1997 and
2007, there was an increase in the money supply, largely caused by much more bank lending, which served
to push up property prices and increase private debt. The amount of money in the economy as measured by
M4 in the UK went from £750 billion to £1700 billion between 1997 and 2007, much of the increase caused
by bank lending.[16] If all the banks increase their lending together, then they can expect new deposits to
return to them and the amount of money in the economy will increase. Excessive or risky lending can cause
borrowers to default, the banks then become more cautious, so there is less lending and therefore less money
so that the economy can go from boom to bust as happened in the UK and many other Western economies
after 2007.

Capital Risk
Banks face a number of risks in order to conduct their business, and how well these risks are managed and
understood is a key driver behind profitability, and how much capital a bank is required to hold. Bank capital
consists principally of equity, retained earnings and subordinated debt.

After the 2007-2009 financial crisis, regulators force banks to issue Contingent convertible
bonds (CoCos).These are hybrid capital securities that absorb losses in accordance with their contractual
terms when the capital of the issuing bank falls below a certain level. Then debt is reduced and bank
capitalization gets a boost. Owing to their capacity to absorb losses, CoCos have the potential to satisfy
regulatory capital requirement.[18][19]

Some of the main risks faced by banks include:

 Credit risk: risk of loss arising from a borrower who does not make payments as promised.[20]
 Liquidity risk: risk that a given security or asset cannot be traded quickly enough in the market to
prevent a loss (or make the required profit).

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 Market risk: risk that the value of a portfolio, either an investment portfolio or a trading portfolio, will
decrease due to the change in value of the market risk factors.
 Operational risk: risk arising from execution of a company's business functions.
 Reputational risk: a type of risk related to the trustworthiness of business.
 Macroeconomic risk: risks related to the aggregate economy the bank is operating in.[21]

The capital requirement is a bank regulation, which sets a framework within which a bank or depository
institution must manage its balance sheet. The categorization of assets and capital is highly standardized so
that it can be risk weighted.

Types of banks
 Commercial banks: the term used for a normal bank to distinguish it from an investment bank. After
the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas
investment banks were limited to capital market activities. Since the two no longer have to be under
separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that
mostly deals with deposits and loans from corporations or large businesses.
 Community banks: locally operated financial institutions that empower employees to make local
decisions to serve their customers and the partners.
 Community development banks: regulated banks that provide financial services and credit to under-
served markets or populations.
 Land development banks: The special banks providing long-term loans are called land development
banks (LDB). The history of LDB is quite old. The first LDB was started at Jhang in Punjab in 1920.
The main objective of the LDBs are to promote the development of land, agriculture and increase the
agricultural production. The LDBs provide long-term finance to members directly through their
branches.[25]
 Credit unions or co-operative banks: not-for-profit cooperatives owned by the depositors and often
offering rates more favourable than for-profit banks. Typically, membership is restricted to employees of
a particular company, residents of a defined area, members of a certain union or religious organizations,
and their immediate families.
 Postal savings banks: savings banks associated with national postal systems.
 Private banks: banks that manage the assets of high-net-worth individuals. Historically a minimum of
USD 1 million was required to open an account, however, over the last years many private banks have
lowered their entry hurdles to USD 350,000 for private investors.

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 Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are
essentially private banks.
 Savings bank: in Europe, savings banks took their roots in the 19th or sometimes even in the 18th
century. Their original objective was to provide easily accessible savings products to all strata of the
population. In some countries, savings banks were created on public initiative; in others, socially
committed individuals created foundations to put in place the necessary infrastructure. Nowadays,
European savings banks have kept their focus on retail banking: payments, savings products, credits and
insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also
differ from commercial banks by their broadly decentralized distribution network, providing local and
regional outreach – and by their socially responsible approach to business and society.
 Building societies and Landesbanks: institutions that conduct retail banking.
 Ethical banks: banks that prioritize the transparency of all operations and make only what they consider
to be socially responsible investments.
 A direct or internet-only bank is a banking operation without any physical bank branches, conceived and
implemented wholly with networked computers.

History of Banking in India

In the modern sense, originated in the last decades of the 18th century. Among the first banks were the Bank
of Hindustan, which was established in 1770 and liquidated in 1829-32; and the General Bank of India,
established in 1786 but failed in 1791.

The largest bank, and the oldest still in existence, is the State Bank of India (S.B.I). It originated as the Bank
of Calcutta in June 1806. In 1809, it was renamed as the Bank of Bengal. This was one of the three banks
funded by a presidency government, the other two were the Bank of Bombay and the Bank of Madras. The
three banks were merged in 1921 to form the Imperial Bank of India, which upon India's independence,
became the State Bank of India in 1955. For many years the presidency banks had acted as quasi-central
banks, as did their successors, until the Reserve Bank of India was established in 1935, under the Reserve
Bank of India Act, 1934.

6
Public Sector Bank
Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by a government.
The shares of these banks are listed on stock exchanges. There are a total of 21 Public Sector Banks in India.

Nationalised banks

1. Allahabad Bank
2. Andhra Bank
3. Bank of India
4. Bank of Baroda
5. Bank of Maharashtra
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10. Indian Bank
11. Indian Overseas Bank
12. Oriental Bank of Commerce
13. Punjab & Sindh Bank
14. Punjab National Bank
15. Syndicate Bank
16. UCO Bank
17. Union Bank of India
18. United Bank of India
19. Vijaya Bank
20. Industrial Development Bank of India (IDBI)
21. State Bank of India

Emergence of Public Sectors Banks in India

The Central Government entered the banking business with the nationalization of the Imperial Bank of
India in 1955. A 60% stake was taken by the Reserve Bank of India and the new bank was named as
the State Bank of India. The next major government intervention in banking took place on 19 July 1969
when the Indira Gandhi government nationalised an additional 14 major banks. The total deposits in the

7
banks nationalised in 1969 amounted to 50 cr. This move increased the presence of nationalised banks in
India, with 84% of the total branches coming under government control.

Private Sector Bank

The private-sector banks in India represent part of the Indian banking sector that is made up of both private
and public sector banks. The "private-sector banks" are banks where greater parts of state or equity are held
by the private shareholders and not by government. The private sector banks are split into two groups by
financial regulators in India, old and new. The old private sector banks existed prior to the nationalisation in
1969 and kept their independence because they were either too small or specialist to be included in
nationalisation. The new private sector banks are those that have gained their banking license since the
liberalisation in the 1990s.

1. Axis Bank
2. Bandhan Bank
3. Catholic Syrian Bank
4. City Union Bank
5. Dhanlaxmi Bank
6. DCB Bank
7. Federal Bank
8. HDFC Bank
9. HSBC Bank
10. ICICI Bank
11. IDFC Bank
12. Karnataka Bank
13. IndusInd Bank
14. Jammu and Kashmir Bank
15. Karur Vysya Bank
16. Kotak Mahindra Bank
17. City Bank
18. Nainital Bank
19. RBL Bank
20. South Indian Bank
21. Yes bank

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Some major policies given by the Banks

1. Saving Account Policy

Saving accounts are different types

 Saving plus Account: Saving plus account is for everyone anyone will open a saving plus
account. Where the account holder is compulsory to required a minimum balance of INR 25,000 in
our account at every time.
 Yuva Saving Account: Yuva saving account is for student which are studying they can only
open a Yuva saving account. There is no limit of minimum balance in this account. Yuva saving
account is open as zero balance account.
 Basic Saving Account: Basic saving account is open on zero balance account. This is open by
easily. This account is for anyone.
 Small Saving Account: Small saving account is account where the people saved his/her small
saving this account are same as other saving account. There is no limit of minimum amount in
account zero balance account.

2. Current Account policies of SBI and HDFC

Generally Current account is open by a Business men or a Business firm for daily transaction of the firm or
business. According to Reserve Bank of India (RBI) the minimum interest rate is 2% per annum. Both Bank
have provide different facilities to current account user.

3. Home Loan polices

Home loan is given for the purchasing of house. According to RBI maximum 90% have amount given to
bearer from the value of house. Different bank have different policies for home loan.

4. Vehicle loan or Car loan policy

Vehicle loan is given for purchasing a vehicle whenever is four wheeler or two wheeler. In other words Bank
is financer to purchasing a vehicle. Up to 90% of amount to total value of vehicle is finance by the bank.
Every bank has their different policies for the vehicle loan.

9
 5. Personal loan policy

Unsecured loans (called signature loans) are advanced on the basis of the borrower's credit-history and
ability to repay the loan from personal income. Repayment is usually through fixed amount installments over
a fixed term. Also called consumer loan.

6. Education loan or Student loan Policy

An education loan is credit or debt given by banks and financial services companies to students along with
their parents/relatives as co-borrower to finance the expenses of his or her studies.

7. Gold loan policy

Gold loan a form of debt financing whereby a potential gold producer borrows goldfrom a lending
institution, sells the gold on the open market, uses the cash for mine development, then pays back
the gold from actual mine production.

8. Fixed deposit policy

A fixed deposit (FD) is a financial instrument provided by banks which provides investors with a higher rate
of interest than a regular savings account, until the given maturity date.

9. Recurring deposit policy

Recurring Deposit is a special kind of Term Deposit offered by banks in India which help people with
regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn
interest at the rate applicable to Fixed Deposits.

10. Net banking and ATM card, Debit Card, Credit card

Debit Card: A payment card that deducts money directly from a consumer’s checking account to pay for
a purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases. In addition,
debit cards, also called check cards, offer the convenience of credit cards and many of the same consumer
protections when issued by major payment processors like Visa or MasterCard. Unlike credit cards, they do
not allow the user to go into debt, except perhaps for small negative balances that might be incurred if the
account holder has signed up for overdraft coverage. However, debit cards usually have daily purchase
limits, meaning it may not be possible to make an especially large purchase with a debit card.

10
Credit Card: A credit card is a card issued by a financial company giving the holder an option to borrow
funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing.
Interest usually begins one month after a purchase is made, and borrowing limits are pre-set according to the
individual's credit rating.

Net Banking: Online banking, also known as internet banking, e-banking or virtual banking, is an
electronic payment system that enables customers of a bank or other financial institution to conduct a range
of financial transactions through the financial institution's website.

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 Objectives of the Study
Every study has its own objectives. The aims and objectives of Study are as follow

 To compare the policies of SBI and HDFC

 To compare the policies of Government bank and Private Bank
 Which Bank has more satisfied customers.

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 Review of Literature
A literature review is a text of a scholarly paper, which includes the current knowledge including substantive
findings, as well as theoretical and methodological contributions to a particular topic. Literature reviews are
secondary sources, and do not report new or original experimental work.

Arvind Mahandhwa (ACME Institute of Management and Technology)

Banking is one of the famous industries in the world and every human being is aware from banking. Most
the human being is used the facilities of banking. Arvind Mahandhwa report was available on the internet
where he compares the personal loan policies of SBI and HDFC. In the conclusion of this report found that
both bank are good in term of customer satisfaction has an edge because it is the leading Government
regulated bank in India. HDFC is new to this segment (when compared to SBI). SBI is preferred because it is
a government bank. Procedure of loan financing is easy in HDFC Bank.

Loan Boss Your Financial Solution

Loan boss is a website where you can found all information about the loan policies of the Banks. They
compare the policies of the all banks and facilities given by the bank. According to his comparison private
bank facilities are good compare to government banks. The procedure of loan financing is easy in private
bank. So HDFC bank is more suitable according to policies and procedure but the people of India preferred
SBI because it is a government bank and largest bank of India.

Joseph M. et al (1999)
The study investigates role of technology on Australian banking sector and 300 customers were surveyed.
The findings suggested that except from convenience/accuracy and efficiency e banking services did not
match with importance rating specified by customers.

Lassar, et al (2000)
The study compared two models, that is , SERVQUAL and technical/functional quality model of technology
using 65 bank customers using SERPERF SCALE. The findings revealed that technical/functional quality
model was better than SERVQUAL because latter was lacking technical dimensions. 2 models were having
distinct and unique strength for measuring service quality aspects.

13
Bahia, K and J Nantel (2000)
The paper suggested an alternative scale for measuring service quality in retail banking. The study
developed a scale called as Banking Service Quality Scale which contained factors like effectiveness and
assurance, access, price, tangibles, service portfolio and reliability. This model was found to be more reliable
than SERVQUAL

Jamal, A., Naser, K., 2002

The study examined key drivers of customer satisfaction using 167 customers and it was found that core and
relational performances had impact on customer satisfaction and there was negative relationship between
customer expertise and customer satisfaction

Sureshchandar et al(2002)
The study examined relationship between service quality and customer satisfaction in Indian banking sector.
These were found to be independent but closely related. Both constructs vary significantly in core services
,human element, systematization of service delivery, tangibles and social responsibility

Dash et al(2007)
The study measured customer satisfaction through 5 service quality dimensions in Noida and Ghaziabad and
findings revealed that assurance was the most important dimension of service quality followed by reliability
and responsiveness. Tangibles was found to be least important.
Sharma S, et al (2007)
The study did a comparison of public and private banks with respect to perceptions of customers regarding
service quality. It was found out that service quality is associated with satisfaction and there was significant
difference between quality of services provided by banks. Banks in smaller cities are far behind big cities in
this regard Tracey Dagger

,Jillian Sweeney (2007)

The study consists of qualitative research to investigate the effect of consumption stage on service quality
perceptions and then development of hypothesis. The findings indicate the evidence that customers rely
more heavily on attributes that are search based in the initial stages of service experience and in later stages
consumption becomes important

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Dr.Vannirajan&B.Anbazagan(2007)
The study tries to make an assessment of SERVPERF scale in the Indian Retail banking sector by doing a
survey in banks at Madhurai. The study found that in public sector banks tangibles and assurance are most
important and in private sector banks reliability ,,responsiveness and tangibles are most important

P K Gupta(2008)
Objective of this study was to find out the behavior of customers with respect to internet banking vis-à-vis
conventional banking. The study found out that internet banking was found to be easier and speedier than
conventional banking and trust, accuracy and confidentiality were the most important factors here.

EllaineWallce&Leslie De Cheratatony(2009)
Study finds out the importance of ,assurance and reliability, customer orientation teamwork etc in
performance of . Also the study highlights criticality of branch& employee teamwork for performance.
Continuous commitment and service recovery were also found important

SachinMittal&RajnishJain(2010)
This paper is basically a literature review of banking industry and effect of IT based services on customer
satisfaction. The study highlights customer satisfaction levels among young customers in banking industry.
A survey indicates the gaps between customer’s expectations and perception with respect to IT based
banking services. Findings indicated need to improve the IT based services for enhancing customer
satisfaction

H.Emari et al(2011)
The main objective of this research was to determine the dimensions of service quality in the banking
industry of Iran. For this the study empirically examined the European perspective (i.e., Gronroos’s model)
suggesting that service quality consists of three dimensions, technical, functional and image. The results
from a banking service sample revealed that the overall service quality is identified more by a consumer’s
perception of technical quality than functional quality

Kumbhar, Vijay (2011)

It examined the relationship between the demographics and customers’ satisfaction in internet banking,. It
also found out relationship between service quality and customers’ satisfaction as well as satisfaction in
internet banking service provided by the public sector bank and private sector banks. The study found out
15
that overall satisfaction of employees, businessmen and professionals are higher in internet banking service.
Also it was found that there is significant difference in the customers’ perception in internet banking services
provided by the public and privates sector banks.

Kailash M (2012)
The paper compares public and private sector banks in Vijayawada city using SERVQUAL model. The
findings revealed that private sector banks have good services to customers and they retained customers by
providing better facilities. The study finds out importance of new products and services for banks for
retaining customers. The studies mentioned above clearly points out to the importance of having a structured
study on this where banks in different categories are compared with respect to the service quality aspect
which will help them to find out their core competencies and to capitalize on them and at the same time find
out the areas where they can improve. This is the major aim of my thesis.

ArchanaMathur (1988)
in her article “Customer Service in Public Sector Banks: A Comparative Study” studied the problems faced
by customers with regard to delayed service, lack of proper guidance and customer discrimination made by
bank staff. She suggests that the banks could solve all such problems if they go in for automation, and the
discrepancies made by bank staff could be reduced to a great extent.

Reichheld and Sasser (1990)

2 recognized the benefits that customer satisfaction provides by the retention of customers of a bank.
Theyadvocated that the longer a customer stays with a bank, the more utility the customer generates. This is
based on a number of factors that relate to the amount of time a customer spends with the bank. These
include high preliminary cost of introducing and attracting a new customer, increase in both value and
amount of purchases, customer better understands of the bank, and positive word-of-mouth promotion.

BiswaN.Bhattacharya (1991)
3 found out the reason for the poor quality of customer service in banks. The result showed that more than
fifty per cent of the customers who made complaints cited inefficient service as the main cause. The delay in
encashment of cheque was the next reason for customer complaints. The study pointed out that there was
considerable delay in the service rendered which resulted in total dissatisfaction among customers.

16
Dilshath (1992)

4 studied the extent of customer satisfaction with regard to the service rendered by the nationalized banks.
She found that customers were not satisfied at the cash counter due to long time taken for drawing money.
Customers were also dissatisfied because certain services like investment advice and tax advice were not
given to them and borrowerswere dissatisfied due to cumbersome procedural formalities in getting loans
sanctioned.

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 Research Methodology
Research Design

Research Design is a research plan which requires that what data are to be collected, what research techniques and instruments are
to be used how a sample is to be selected and how information is to be collected from this sample. A research design specifies the
methods and procedures for conducting particular study.

Broadly speaking, research design can be grouped into three categories- exploratory research, descriptive research and causal
research

Research Instruments

Descriptive research is used in this project report in order to understand the evolving competitive environment in the banking
sector in India and to make a comparatives study among few banks operating in public private and foreign sector. This is the most
popular type of research techniques, generally used in survey research design and most useful in describing the characteristics of
consumer’s behaviour. The method used were followings

 Questionnaire Method

 Direct Interaction with the user

 Data Collection

Modes Of Data Collection

 Primary Data: The sources of primary data is personal interviews

 Secondary Data: The sources of secondary data is books, magazines, newspaper, internet

Sample Size Planning

In bank there is not so many staff in one branch so the sample size of the study is not more

Sample Size is 100.

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 Limitations of the Study

1. This study is geographically restricted to Delhi city only

2. The sample size is small due to some specified reasons.
3. Finding is based on sample survey through questionnaire’s method.
4. Hence there is a scope for the respondents to be biased or, pretentious.
5. Respondent may give biased answers for the required data. Some of the respondents did not
like to respond.
6. In our study we have included only 100 customers due to lake of time.

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CHAPTER-2

20
 Organizational Profile

BANK PROFILE (STATE BANK OF INDIA {SBI})

State Bank of India (SBI) is an Indian multinational, public sector banking and financial services company.
It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of 2014-15, it had
assets of 20.480 trillion (US$300 billion) and more than 14,000 branches, including 191 foreign offices
spread across 36 countries, making it the largest banking and financial services company in India by
assets. The company is ranked 232nd on the Fortune Global 500 list of the world's biggest corporations as of
2016. SBI provides a range of banking products through its network of branches in India and overseas,
including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that
are located at important cities throughout India.

OPERATIONS
SBI provides a range of banking products through its network of branches in India and overseas, including
products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are
located at important cities throughout India.

DOMESTIC PRESENCE
SBI has 18,354 branches in India. In the financial year 2012–13, its revenue was ₹2.005
trillion (US$30 billion), out of which domestic operations contributed to 95.35% of revenue. Similarly,
domestic operations contributed to 88.37% of total profits for the same financial year.

Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by Government in August 2014,
SBI held 11,300 camps and opened over 3 million accounts by September, which included 2.1 million
accounts in rural areas and 0.88 million accounts in urban areas.
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International Presence
As of 2014–15, the bank had 191 overseas offices spread over 36 countries having the largest presence in
foreign markets among Indian banks. It has branches in Singapore, Moscow, Colombo, Dhaka, Frankfurt,
Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New
York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas and Bahrain, and
representative offices in Myanmar, Bhutan and Cape Town.

Others SBI Service Points

As of 31 March 2016,SBI has 49,577 ATMs & SBI group (including associate banks) has 58,541 ATMs.

Listings and shareholding

As on 31 March 2014, Government of India held around 58.59% equity shares in SBI. Life Insurance
Corporation of India is the largest non-promoter shareholder in the company with 14.99% shareholding.

Shareholders Shareholding[21]

Promoters: Government of India 58.60%

Banks & Insurance Companies 16.79%

FIIs/GDRs/OCBs/NRIs 12.04%

Mutual Funds & UTI 03.78%

Private Corporate Bodies 02.87%

Others 5.92%

Total 100.0%

22
The equity shares of SBI are listed on the Bombay Stock Exchange where it is a constituent of the BSE
SENSEX index and the National Stock Exchange of India where it is a constituent of the CNX Nifty.
Its Global Depository Receipts (GDRs) are listed on the London Stock Exchange.

Major competitors
Some of the major competitors for SBI in the banking sector are large private sector banks ICICI Bank, HDFC
Bank, Axis Bank, IndusInd Bank, small regional banks and other public sector banks Canara Bank, Bank of
India and Union Bank of India. However, in terms of average market share, SBI is by far the largest player in the
market.

State Bank of India

State Bank Bhavan at Nariman Point in Mumbai

Type Public

Traded as  NSE: SBIN

 BSE: 500112
 LSE: SBID
 BSE SENSEX Constituent
 CNX Nifty Constituent

Industry Banking, financial services

23
Founded  2 June 1806, Bank of Calcutta
 27 January 1921, Imperial Bank of India
 1 July 1955, State Bank of India
 2 June 1956, nationalization

Headquarters Mumbai, Maharashtra, India

Area served Worldwide

Key people Rajnish Kumar (Chairman)

Products Consumer banking, corporate

banking, finance and
insurance, investment banking, mortgage
loans, private banking, private equity,
savings, securities, asset
management, wealth management, credit
cards

Revenue ₹298,640.45 crore(US$46 billion)

(2017)

Operating ₹50,847.90 crore(US$7.8 billion)

income (2017)

Net income ₹10,484.10 crore(US$1.6 billion)

(2017)

Total assets ₹2,705,966.30 crore(US$410 billion)

(2017)

Total equity ₹144,274.65 crore(US$22 billion)

(2016)

Owner Government of India (61.23%)

Number of 209,567 (2017)

employees

Capital ratio 13.12% (2016)

Website sbi.co.in

24
BANK PROFILE (HDFC BANK)

HDFC Bank is an Indian banking and financial services company headquartered in Mumbai, Maharashtra.
It has about 76,286 employees including 12,680 women and has a presence in Bahrain, Hong Kong and
Dubai. HDFC Bank is the second largest private bank in India as measured by assets. It is the largest bank in
India by market capitalization as of February 2016. It was ranked 69th in 2016 BrandZ Top 100 Most
Valuable Global Brands.

In 1995 HDFC Bank was incorporated, with its registered office in Mumbai, India. Its first corporate office
and a full service branch at Sandoz House, Worli was inaugurated by the then Union Finance Minister, Dr.
Manmohan Singh.

As of June 30, 2016, the Bank’s distribution network was at 4,541 branches and 12,013 ATMs.

Products and services

Market leader in e-commerce, HDFC Bank provides a series of digital offerings like - 10 second personal
loan, Chillr, PayZapp, SME Bank, Watch Banking, 30-Minute Auto Loan, 15-minute Two-Wheeler Loan, e-
payment gateways, Digital Wallet, etc.

HDFC Bank provides a number of products and services which includes Wholesale banking, Retail banking,
Treasury, Auto (car) Loans, Two Wheeler Loans, Personal loans, Loan Against Property and Credit Cards.
The latest entry in the league is 'Project AI' under which HDFC Bank, over the next few weeks, would
deploy robots at select bank branches. These robots will offer options such as cash withdrawal or deposit,
forex, fixed deposits and demat services displaying on the screen to persons coming into the branch.

Acquisitions
HDFC Bank merged with Times Bank in February, 2000. This was the first merger of two private banks in
the New Generation Private Sector Banks category. In 2008, Centurion Bank was acquired by HDFC Bank.

25
HDFC Bank Board approved the acquisition of CBoP for Rs. 9,510 crore in one of the largest mergers in the
financial sector in India.

Listings and shareholding

The equity shares of HDFC Bank are listed on Bombay Stock Exchange and the National Stock Exchange of
India. Its American Depository Shares are listed on NYSE and the Global depository receipt are listed on
the Luxembourg Stock Exchange where two GDRs represent one equity share of HDFC Bank..

Shareholders (as of 31 December-2017) Shareholding

Promoter Group (HDFC) 21.57%

Foreign Institutional Investors (FII) 32.4%

Individual shareholders 8.5%

Bodies Corporate 7.5%

Insurance companies 5.38%

Mutual Funds/UTI 8.65%

NRI/OCB/Others 0.29%

Financial Institutions/Banks 2.75%

ADS/GDRs 18.78%

26
Type Public

Traded as BSE: 500180

NSE: HDFCBANK
NYSE: HDB
BSE SENSEX Constituent
CNX Nifty Constituent

Industry Banking, financial services

Founded August 1994

Headquarters Mumbai, Maharashtra, India

Area served India

Key people Aditya Puri (MD)

Products Credit cards, consumer banking, corporate

banking, finance and
insurance, investment banking, mortgage
loans, private banking, private
equity, wealth management[2]

Revenue ₹81,602 crore(US$12 billion) (2017)

Operating ₹25,732 crore(US$3.9 billion) (2017)

income

Net income ₹14,550 crore(US$2.2 billion) (2017)

Total assets ₹863,840 crore(US$130 billion) (2017)

Number of 84,325 (March 2017)

employees

Website HDFCBank.com

27
CHAPTER-3

28
 Analysis and Interpretation of Data
1. Which banks have better customer service facilities?

No. of Respondent Percentage Of

Respondents (%)
A) State Bank of India 30 30

B) HDFC 50 50
C) Any Other Public 10 10
Sector Bank
D) Any Other Private 10 10
Sector Bank
Total 100 100

Any other Private Column1

Sector Bank
10%
Any other Public
Sector Bank
10%

State Bank Of India

30%

HDFC
50%

Analysis

This is show that HDFC Bank has better customer services rather than the State Bank of India. The
employees of HDFC Bank treated their customer in very good manner. Also HDFC Bank provide the facility
of agent at home to their customers.

29
 2. Which Bank has good saving account facility and higher interest rate?

No. of Respondent Percentage of Respondent

(%)
A) State Bank Of India 50 50
B) HDFC Bank 25 25

C) Any other public 20 20

sector bank
D) Any other private 5 5
sector bank
Total 100 100

Any other
private Column1
sector bank
5%

Any other
public
sector bank
20%
State Bank Of India
50%

HDFC
25%

Analysis

HDFC bank gives up to 6% interest on saving accounts but the minimum balance required is 10,000 in
saving account. Middle class and lower class population in India is more for these peoples hard to save
10,000 in saving account so they don’t open saving account in HDFC Bank. The minimum balance required
for saving account in State Bank of India is 2,500 and interest rate is up to 4 %. And in other public sector
bank minimum balance requirement is start from 500. And in all private sector bank minimum balance
requirement is 10,000. Firstly peoples check the minimum balance requirement in account then check
interest rate in saving account.

30
 3. Which bank have good facilities provided to the Current account users?

No. of Respondent Percentage of Respondents

(%)
A) State Bank Of India 30 30
B) HDFC Bank 45 45

C) Both 5 5

D)Any other bank 20 20

Total 100 100

Column1

Any other bank

20%
Both
5% State Bank Of India
30%

HDFC Bank
45%

Analysis

HDFC bank provides better current account facilities to their customers. Current is basically used by the
business firms, companies, partnership business etc for the transactions of the organization. There is no limit
of transaction in the current account. HDFC bank has provide better facilities in current account in favour of
State Bank of India.

31
 4. Which bank have better home loan facilities?

No. of Respondent Percentage of

Respondent (%)
A) State Bank of India 45 45

B) HDFC Bank 25 25

C) Both 10 10

D) None 20 20
Total 100 100

Column1

None
20%

Both State Bank OF India

10% 45%

HDFC Bank
25%

Analysis

State Bank of India is largest bank of India most of the persons in India have trust on it. In Home loan case
the procedure is long in SBI rather than HDFC bank but people has choose SBI because of public sector
bank, trust.

32
 5. Which bank gives vehicle loan easily & in lower interest?

No. of Respondent Percentage of

Respondent (%)
A) State Bank of India 35 35

B) HDFC Bank 15 15

C) Any Other Private 15 15

Sector Bank
D) Any other Public 35 35
Sector Bank
Total 100 100

Column1

Any Other Public

Sector Bank State Bank Of India
35% 35%

HDFC Bank
15%
Any Other Privarte
Sector Bank
15%

Analysis

Most of the population of India have trust on the public sectors bank rather SBI or any other Public sector
bank.

33
 6. Which bank has less procedure for Personal loan?

No. of Respondent Percentage of

Respondent (%)
A) State Bank of India 20 20

B) HDFC Bank 50 50

C) Any Other Private 20 20

Sector Bank
D) Any Other Public 10 10
Sector Bank
Total 100 100

Any Other Public Column1

Sector Bank
10%

State Bank Of
India
Any Other
20%
Private Sector
Bank
20%

HDFC Bank
50%

Analysis

HDFC bank and all other private sectors bank have less paper work or say easy paper works for personal
loan rather than the SBI and any other public sector bank.

34
 7. Which bank has best policies for the education loan?

No. of Respondent Percentage Of

Respondents (%)
A) State Bank of India 60 60
B) HDFC Bank 10 15

C) Any Other Public 25 25

Sector Bank
D) Any Other Private 5 5
Sector Bank
Total 100 100

Any Other
Private Sales
Sector Bank
5%

Any Other Public

Sector Bank
25% State Bank of India
60%
HDFC Bank
10%

Analysis

HDFC bank or private sectors banks don’t give education loan easily. Public sectors bank or SBI give
education loan to student easily rather than the private banks.

35
 8. Who give Gold Loan easily?

No of Respondent Percentage Of
Respondent (%)
A) State Bank Of India 15 15
B) HDFC Bank 20 20
C) Any Other financial 60 60
Institution
D) Any other Banks 5 5
Total 100 100

Column1
Any Other Banks
5%

State
Bank Of
India
15%

HDFC Bank
Any Other Financial 20%
Institution
60%

Analysis

Any other financial institution like Muthoot Finance, Mannapuram Gold Loan, these institution give gold
loan easily and low interest rather than the banks.

36
 9. Which bank have better fixed deposit and recurring deposit policies for their
customers?

No. of Respondents Percentage Of

Respondents (%)
A) State Bank of India 45 45

B) HDFC Bank 15 15

C) Any other Public 25 25

Sector Banks
D) Any other Private 15 15
Sector Banks
Total 100 100

Any other Private

Column1
Sector Bank
15%

State Bank of India

Any other Public 45%
Sector Bank
25%

HDFC Bank
15%

Analysis

SBI and public sectors banks are maximum choice of the peoples in every bank related work in India. They
have trust on their public sector bank more than the private sector bank. And public sector bank have good
policies for their customers.

37
 10. Which Banks have most good technology for using of Debit card, Credit card,
Net Banking, Mobile Banking?

No. of Respondent Percentage Of

Respondents (%)
A) State Bank of India 30 30

B) HDFC Bank 20 20

C) Any other Public 30 30

Sector Bank
D) Any other Private 20 20
Sector Bank
Total 100 100

Column1

Any other
Private Sector
Bank
20%
State Bank Of India
30%
Any other Public
Sector Bank
30%
HDFC Bank
20%

Analysis

There is not so much difference in the online banking technology of the banks. So much similar software
machine are used for this works in every bank in India.

38
CHAPTER-4

39
 Key Findings
 HDFC Bank and other private bank give more interest in saving account rather than the State Bank
Of India and other public sector bank
 Minimum balance required in savings account in HDFC Bank and other private sector bank is rupee
10,000 but in State Bank of India minimum balance is rupee 2,500 and other public sector bank
minimum balance is 500.
 Customer service is fast in HDFC Bank and private sector bank in comparison of State Bank of India
and any other public sector bank.
 HDFC Bank and private sectors bank give home loan, vehicle loan very quickly but in education loan
these banks don’t to give easily.
 Gold loan is easily taken from any other financial institution in comparison of banks.
 State Bank of India is largest bank of India. All government employs salary accounts in State Bank
of India. Most of the population of India used State bank of India.
 Mostly private sector companies and business men used HDFC bank and Private sector banks
 There is not show many difference in the technology of using debit cards, credit cards, net banking in
public sector banks and private sector banks.

40
 Conclusion
India that has lot of money with it definitely offers a great potential for the companies where the chances of
outnumbering the urban areas in all aspects are very high. But only those companies would survive at these
places and win over the Delhi consumers who can spend time and money on understanding the needs of
them and come up with innovative ideas.

There is no more difference between the policies of the bank because all banks are under Reserve Bank of
India (RBI). RBI has made same policy for all banks and bank is compulsory to follow the instruction given
by the RBI. But RBI gives right to bank to take some changes in the policies. Interest rate should change but
not more a small point change in interest rate of all banking. Above we see the policies of HDFC and SBI
and we saw that a point margin on the interest rate on saving and borrowing between SBI and HDFC.

Almost all policies are same but some minor difference is in to use of policies or rules to apply the policy.
We found that HDFC bank send his agent to the customer home for solving the problem of customer. The
agent is go to home for opening a account or for sessions of loan. The easy way to banking is used by the
HDFC. But in case of SBI they use general way of banking they have branch of SBI and all work are doing
there. The main reason of SBI general banking is that SBI is government undertaking bank government have
control on it.

Most of the people in India have account on SBI because it is the biggest bank of India. SBI have branches
all over in India. In Rural and Urban both area SBI have branch. But HDFC have most concentrated in urban
area.

Different bank is good in different policies some policies are good by SBI and some are good by HDFC. The
interest on fixed deposit is more in SBI comparison in HDFC bank. And the time period and minimum and
maximum amount of fixed deposit is also good of SBI comparison to HDFC.

The loan facility is good in HDFC the simple procedure of loan. In SBI the procedure of loan is very long it
is not simple to taking a loan in SBI and the main problem is rush in the branch of SBI. You can go any
branch of SBI no should found rush in the branch most government employee’s salary account in the SBI.
For opening a saving account in SBI you have any guarantee which has account in the SBI it is difficult to
open a account in SBI to those people who has no any known person which have account in SBI.

Finally the conclusion is found that the both bank are good for people and both bank have good policies
according to the RBI guidelines. But from the answers of the questionnaire most people have choose the
State Bank of India (SBI).Because of the SBI is the government bank and HDFC is the Private bank.

41
 Suggestion and Recommendation
 State Bank of India and public sector banks improves there customer services.
 HDFC bank and private sector banks build trust in mind of peoples.
 HDFC bank and private sector banks reduce the minimum balance limit in saving accounts.
 All private sector or public sector banks help the peoples of India.
 All banks reduce the procedure of taking all from banks.

42
 Bibliography
Websites

 https://www.onlinesbi.com/
 https://www.hdfcbank.com/
 https://en.wikipedia.org/wiki/Bank
 https://en.wikipedia.org/wiki/Public_sector_banks_in_India
 https://en.wikipedia.org/wiki/Private-sector_banks_in_India
 https://en.wikipedia.org/wiki/State_Bank_of_India
 https://en.wikipedia.org/wiki/HDFC_Bank

Books

 Legal and Regulatory aspects of bank by Indian Institute of Banking and Finance 2nd edition.
 Principal and Practices of Banking by Indian Institute of Banking and Finance 3rd edition.

Newspapers

Magazines

43
 Annexure
Dear Madam/Sir,

I Karan Tripathi perusing BBA Sixth Semester from Delhi School of Professional Studies and Research. As
a part of my curriculum I am undergoing Project Report at A Study of Comparison Between Policies of
SBI and HDFC Bank. The information provided by you will be kept highly confidential and will be used
by me strictly for an analysis only.

1. Which banks have better customer service facilities?

a. State Bank of India
b. HDFC Bank
c. Any other public sector bank
d. Any other private sector bank
2. Which Bank has good saving account facility and higher interest rate?
a. State Bank of India
b. HDFC Bank
c. Any other public sector bank
d. Any other private sector bank
3. Which bank have good facilities provided to the Current account users?
a. State Bank of India
b. HDFC Bank
c. Both
d. Any other bank
4. Which bank have better home loan facilities?
a. State Bank of India
b. HDFC Bank
c. Both
d. None
5. Which bank gives vehicle loan easily & in lower interest?
a. State Bank of India
b. HDFC Bank
c. Any other public sector bank
d. Any other private sector bank

44
6. Which bank has less procedure for Personal loan?
a. State Bank of India
b. HDFC Bank
c. Any other public sector bank
d. Any other private sector bank
7. Which bank has best policies for the education loan?
a. State Bank of India
b. HDFC Bank
c. Any other public sector bank
d. Any other private sector bank
8. Who give Gold Loan easily?
a. State Bank of India
b. HDFC Bank
c. Any other financial institution
d. Any other banks
9. Which bank have better fixed deposit and recurring deposit policies for their
customers?
a. State Bank of India
b. HDFC Bank
c. Any other public sector bank
d. Any other private sector bank
10. Which Banks have most good technology for using of Debit card, Credit card, Net
Banking, Mobile Banking?
a. State Bank of India
b. HDFC Bank
c. Any other public sector bank
d. Any other private sector bank

45