TABLE OF CONTENT

PAGE NO.

SR.NO. PARTICULARS
CHAPTER-I :INTRODUCTION
1.

Introduction

2.

Meaning of Bank

3.

Function Of Bank

4.

Types of Bank

8
9

5.

Function of Commercial Bank

17

6.

Current Scenario

18

CHAPTER II : INTRODUCTION TO RBI

7.

21

RBI

CHAPTER III : INDUSTRY PROFILE

8.

24

Industry Profile

CHAPTER IV : OBJECTIVE OF STUDY

9.
Objective of the Study
CHAPTER V : RESEARCH METHODOLOGY
10.
Research Methodology

28

11.

32

Limitations

30
33

12.
Data Analysis & Interpretations
CHAPTER VI : SUMMARY AND RECOMMENDATIONS
52
13.
FINDING OF STUDY
14.

RECOMMENDATIONS & SUGGESTIONS

15.

CONCLUSION

53
54

INTRODUCTION

A healthy banking system is a pre- requisite for any sound economy. Banking
sector has under went a revolutionary revamp in India. Now a day it is witnessing
cut-throat competition. To sustain into the market banks have to change their
working methodology. This poses threats as well as challenge to banking
companies. Now according to RBI Feb. 2005 roadmap after April 1 st 2009 foreign
banks will have more freedom to run their operations in India.
In this scenario all banks would have to meet or exceed customers expectations.
Now customers dont look for only core and expected product rather they expect
augmented product. This requires banking companies to understand what exactly
customers want. At the same time innovative products are desirable in every sector
including banking. This is a fast changing world. Customers expectations from
any service are one of the most flexible things. It keeps changing every time.
What customers used to expect from banking services ten years back is entirely
different from what customers expect today. Because now the demographic
composition has changed, technology is advanced. Services being offered by banks
differ from one another. Customers judge the efficiency of banks on several
parameters. Now involvement of customers in decision making process is more
intensive. Now to sustain in market and be profitable companies are following
CRM concept. So maintaining a healthy relationship with customers acts as a
strong weapon. This could be achieved only when customers are not mere happy
rather they are delighted. For any customer to be delighted, their expectations must
be met and exceeded. For all these things knowing customers expectation is
necessary.

MeaningofBank

Youknowpeopleearnmoneytomeettheirdaytodayexpensesonfood,clothing,
educationofchildren,housing,etc.Theyalsoneedmoneytomeetfutureexpenses
on marriage, higher education of children, house building and other social
functions.Theseareheavyexpenses,whichcanbemetifsomemoneyissavedout
ofthepresentincome.Savingofmoneyisalsonecessaryforoldageandillhealth
whenitmaynotbepossibleforpeopletoworkandearntheirliving.Thenecessity
ofsavingmoneywasfeltbypeopleeveninoldendays.Theyusedtohoardmoney
intheirhomes.Withthispractice,savingswereavailableforusewheneverneeded,
butitalsoinvolvedtheriskoflossbytheft,robberyandotheraccidents.Thus,
peoplewereinneedofaplacewheremoneycouldbesavedsafelyandwouldbe
availablewhenrequired.Banksaresuchplaceswherepeoplecandeposittheir
savingswiththeassurancethattheywillbeabletoWithdrawmoneyfromthe
depositswheneverrequired.Peoplewhowishtoborrowmoneyforbusinessand
otherpurposescanalsogetloansfromthebanksatreasonablerateofinterest.
Bankisalawfulorganization,whichacceptsdepositsthatcanbewithdrawnon
demand.Italsolendsmoneytoindividualsandbusinesshousesthatneedit.Banks
alsorendermanyotherusefulserviceslikecollectionofbills,paymentofforeign
bills, safekeeping of jewellery and other valuable items, certifying the credit
worthinessofbusiness,andsoon.
Banks accept deposits from the general public as well as from the business
community.Anyonewhosavesmoneyforfuturecandeposithissavingsina
bank. Businessmen have income from sales out of which they have to make
paymentforexpenses.Theycankeeptheirearningsfromsalessafelydepositedin
bankstomeettheirexpensesfromtimetotime.

Functions of the Bank

FUNDAMENTAL DUTIES

Pursuant to the provisions of the Central Bank Law No: 1211, the Bank carries out
money and credit policy in accordance with the needs of the economy and so as to
maintain price stability. The Bank takes necessary measures to protect the domestic
and international value of the national currency and regulates its volume and
circulation. It also extends credits to banks and conducts open market operations in
order to regulate money supply and liquidity in the economy.
Moreover, the Bank determines the terms and types of deposits, as well as their
maturity dates and validity periods, and the parity of the national currency against
gold and foreign currencies. It manages gold and foreign exchange reserves and
trades in foreign exchange and precious metals on the stock exchange.
The Bank, in particular, carries out the duties of financial and economic advisor,
fiscal agent and treasurer to the Government.

FUNDAMENTAL POWERS
The Bank has the privilege of issuing banknotes in Turkey, and the authority to
take decisions on money and credit issues and to submit proposals to the
Government. The Bank determines the rediscount, discount and interest rates
applicable to its own transactions.

ADVISORY DUTIES
The Bank presents to the Government, when required, its views with regard to
measures to be taken on money and credit, and submits advisory opinions on
matters related to implementation of the Banking Law or on banking and credit
issues in general, upon request of the Government.
The Bank can also be consulted prior to any decision granting permission for the
establishment of banks and other financial institutions, as well as for the
liquidation of such institutions for which the power to liquidate rests with the
Government.
Typesof
Banks
Therearevarioustypesofbankswhichoperateinourcountrytomeetthefinancial
requirementsof different categoriesof peopleengaged inagriculture,business,
profession,etc.Onthebasisoffunctions,thebankinginstitutionsinIndiamaybe
dividedintothefollowingtypes:
CentralBank(RBI)
DevelopmentBanks
SpecializedBanks
CommercialBanks
CooperativeBanks
Nowletuslearnabouteachofthesebanksindetail.

CentralBank
Abankwhichisentrustedwiththefunctionsofguidingandregulatingthebanking
systemofacountryisknownasitsCentralbank.Suchabankdoesnotdealwith
thegeneralpublic.ItactsessentiallyasGovernmentsbanker;maintaindeposit
accountsofallotherbanksandadvancesmoneytootherbanks,whenneeded.
CommercialBanks
CommercialBanksarebankinginstitutionsthatacceptdepositsandgrantshort
termloansandadvancestotheircustomers.Inadditiontogivingshorttermloans,
commercial banks also give mediumterm and longterm loan to business
enterprises.
TypesofCommercialbanks
Commercialbanksareofthreetypesi.e.,
Publicsectorbanks,
Privatesectorbanks
Foreignbanks
(i)PublicSectorbanks

:
Among the Public Sector Banks in India, United Bank of India is one of the 14
major banks which were nationalised on July 19, 1969. Its predecessor, in the
Public Sector Banks, the United Bank of India Ltd., was formed in 1950 with the
amalgamation of four banks viz. Comilla Banking Corporation Ltd. (1914), Bengal
Central Bank Ltd. (1918), Comilla Union Bank Ltd. (1922) and Hooghly Bank
7

Ltd. (1932).

The following are the list of Public Sector Banks in India

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Bank of Maharastra

Canara Bank

Central Bank of India

Corporation Bank

Indian Bank

Indian Overseas Bank

Oriental Bank of Commerce

Punjab & Sind Bank

Punjab National Bank

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

List of State Bank of India and its subsidiary, a Public Sector Banks

State Bank of India

o

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

8

State Bank of Indore

State Bank of Mysore

State Bank of Saurastra

State Bank of Travancore

(ii)PrivateSectorsBanks:
Private banking
in India was practiced since the begining of banking system in India. The first
private bank in India to be set up in Private Sector Banks in India was IndusInd
Bank. It is one of the fastest growing Bank Private Sector Banks in India. IDBI
ranks the tength largest development bank in the world as Private Banks in India
and has promoted a world class institutions in India.
The first Private Bank in India to receive an in principle approval from the Reserve
Bank of India was Housing Development Finance Corporation Limited, to set up a
bank in the private sector banks in India as part of the RBI's liberalisation of the
Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank
Limited with registered office in Mumbai and commenced operations as Scheduled
Commercial Bank in January 1995.
List of Private Banks in India

Bank of Punjab

Bank of Rajasthan

Catholic Syrian Bank

Centurion Bank

City Union Bank

Dhanalakshmi Bank

Development Credit Bank

9

Federal Bank

HDFC Bank

ICICI Bank

IDBI Bank

IndusInd Bank

ING Vysya Bank

Jammu & Kashmir Bank

Karnataka Bank

Karur Vysya Bank

Laxmi Vilas Bank

South Indian Bank

United Western Bank

UTI Bank

(iii)ForeignBanks:
Thesebanksareregisteredandhavetheirheadquartersinaforeigncountrybut
operatetheirbranchesinourcountry.Someoftheforeignbanksoperatinginour
countryare HongKong and ShanghaiBanking Corporation(HSBC), Citibank,
AmericanExpressBank,Standard&CharteredBank,GrindlaysBank,etc.The
numberofforeignbanksoperatinginourcountryhasincreasedsincethefinancial
sectorreformsof1991.

DevelopmentBanks
Businessoftenrequiresmediumandlongtermcapitalforpurchaseofmachinery
andequipment,forusinglatesttechnology,orforexpansionandmodernization.
SuchfinancialassistanceisprovidedbyDevelopmentBanks.Theyalsoundertake
10

otherdevelopmentmeasureslikesubscribingtothesharesanddebenturesissued
bycompanies,incaseofundersubscriptionoftheissuebythepublic.Industrial
FinanceCorporationofIndia(IFCI)andStateFinancialCorporations(SFCs)are
examplesofdevelopmentbanksinIndia.

CooperativeBanks
Peoplewhocometogethertojointlyservetheircommoninterestoftenformaco
operative society under the Cooperative Societies Act. When a cooperative
societyengagesitselfinbankingbusinessitiscalledaCooperativeBank.The
societyhastoobtainalicencefromtheReserve BankofIndiabeforestarting
banking business. Any cooperative bank as a society is to function under the
overallsupervisionoftheRegistrar,CooperativeSocietiesoftheState.Asregards
bankingbusiness, thesocietymustfollowtheguidelinessetandissued bythe
ReserveBankofIndia.

SpecializedBanks
Therearesomebanks,whichcatertotherequirementsandprovideoverallsupport
for setting up business in specific areas of activity. EXIM Bank, SIDBI and
NABARDareexamplesofsuchbanks.Theyengagethemselvesinsomespecific
areaoractivityandthus,arecalledspecializedbanks.Letusknowaboutthem.

ExportImportBankofIndia(EXIMBank):
The Export-Import Bank Of India ranks high among the specialized financial
institutions in India. It was set up in the year 1981 to enhance International Trade
in India with the aid of a two-way approach. It offers financial assistance to the
11

exporters and importers and also by acting as a link between the various financial
institutions to ensure overall development of the Indian financial market. The bank
offers financial assistance to the various sectors like agriculture, export, import,
and film industry. For the agricultural sector the bank has arranged for unique
financial programs like posting shipment credit, terming loans etc. The category of
term loans are issued for modernization, purchase of equipments, acquisitions etc.
For the exporters the bank provides warehousing finance, export lines of credit
facilities. The funded capital scheme of the bank includes long-term working
capital, cash flow financing, and the non funded capital scheme include letter of
credit limits, guarantee limits. For the film industry the bank has arranged for cash
flow financing for film production, funds for exhibition in overseas market.

SmallIndustriesDevelopmentBankofIndia(SIDBI):

The Small Industries Development Bank of India also ranks high among the
specialized financial institutions in India. It was founded in the year 1990 to
develop the small-scale industry in India with the aid of advisory services. The
bank offers financial assistance to the small and medium scale industries and
coordinated the functioning of the other financial institutions that caters to the need
of the agro-industries in India. The Small Industries Development Bank of India
offers financial assistance for significant issues like infrastructure development,
rehabilitation for sick industrial units. The investors can take the advantage of the
unique fixed deposit scheme offered the bank. For the recently launched companies
the bank provides composite loan, technology up gradation fund, direct credit
12

scheme etc. The existing members are allowed direct credit scheme, credit linked
capital subsidy etc. For the up gradation of the standard of Indian women and to
help them achieve financial independence the bank offers two specialized financial
program named as marketing fund for women and Mahila Udhyam Nidhi. The
bank is located at Lucknow and Shri Rajender Mohan Malla acts as its Chairman
and managing director.

NationalBankforAgriculturalandRuralDevelopment(NABARD):
Itisacentralorapexinstitutionforfinancingagriculturalandruralsectors.Ifa
personisengagedinagricultureorotheractivitieslikehandloomweaving,fishing,
etc.NABARDcanprovidecredit,bothshorttermandlongterm,throughregional
ruralbanks.Itprovidesfinancialassistance,especially,tocooperativecredit,in
the field of agriculture, smallscale industries, cottage and village industries
handicraftsandalliedeconomicactivitiesinruralareas.
National Housing Bank:
The National Housing Bank was established in the year 1988 as per the guidelines
of the National Housing Bank Act, 1987 with a view to accelerate the growth of
the Housing Financing Institutions by providing them with financial and other
required assistance. The company extends financial assistance for entire
infrastructural development offers refinance to the existing housing finance
companies etc. The bank has set up specialized divisions like Development and
Risk Management, Project Finance, Refinancing Operations, Resource
Mobilization and Management etc. The head office is located at New Delhi and
Shri S. Sridhar acts as the Chairman & Managing Director of the bank.
13

FunctionsofCommercialBanks
Thefunctionsofcommercialbanksareoftwotypes.
Primaryfunctions
Secondaryfunctions.
Letusdiscussdetailsaboutthesefunctions.
Primaryfunctions
Theprimaryfunctionsofacommercialbankinclude:
a)Acceptingdeposits;and
b)Grantingloansandadvances.
Secondaryfunctions
In addition to the primary functions of accepting deposits and lending money,
banksperformanumberofotherfunctions,whicharecalledsecondaryfunctions.
Theseareasfollows
14

Issuinglettersofcredit,travelerscheque,etc.
Undertakingsafecustodyofvaluables,importantdocumentandsecurities
byprovidingSafedepositvaultsorlockers.
Providingcustomerswithfacilitiesofforeignexchangedealings.
Transferringmoneyfromoneaccounttoanother;andfromonebranchto
another
Branchofthebankthroughcheque,payorder,demanddraft.
Standing guarantee on behalf of its customers, for making payment for
purchaseofGoods,machinery,vehiclesetc.
Collectingandsupplyingbusinessinformation.
Providingreportsonthecreditworthinessofcustomers.
Providingconsumerfinanceforindividualsbywayofloansoneasyterms
forpurchaseOfconsumerdurablesliketelevisions,refrigerators,etc.
NewTrendsinBanking
Ebanking(ElectronicBanking)
AutomatedTellerMachine
DebitCard
CreditCard
NetBanking
PhoneBanking
Current Scenario

15

Currently (2011), overall, banking in India is considered as fairly mature in terms

of supply, product range and reach-even though reach in rural India still remains a
challenge for the private sector and foreign banks. Even in terms of quality of
assets and capital adequacy, Indian banks are considered to have clean, strong and
transparent balance sheets-as compared to other banks in comparable economies in
its region. The Reserve Bank of India is an autonomous body, with minimal
pressure from the government. The stated policy of the Bank on the Indian Rupee
is to manage volatility-without any stated exchange rate-and this has mostly been
true.
With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector, the demand for banking services-especially retail
banking, mortgages and investment services are expected to be strong. M&As,
takeovers, asset sales and much more action (as it is unraveling in China) will
happen on this front in India.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time
an investor has been allowed to hold more than 5% in a private sector bank since
the RBI announced norms in 2005 that any stake exceeding 5% in the private
sector banks would need to be vetted by them.
Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector
banks (that is with the Government of India holding a stake), 29 private banks
(these do not have government stake; they may be publicly listed and traded on
stock exchanges) and 31 foreign banks. They have a combined network of over
53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a
rating agency, the public sector banks hold over 75 percent of total assets of the
16

banking industry, with the private and foreign banks holding 18.2% and 6.5%
respectively.

17

Reserve Bank of India

This quarterly review is set in the context of a deteriorating global economic
outlook and heightened uncertainty about the global financial sector. In fact, there
has been a rapid and marked downturn in the global economic outlook since the
Reserve Banks Mid-term Review in October 2008. The continued bad news from
large international financial institutions on a regular basis renews concerns as to
when the global financial sector might attain a semblance of stability.
The initial hope that the crisis could be contained in the financial sector has been
belied. With all the advanced economies the US, Europe and Japan firmly in
recession, the crisis has fully transmitted from the financial sector to the real
economy. The loss of confidence in the global financial markets has set off a chain
of deleveraging, declining asset values, falling income, contracting demand and
rising unemployment. Governments and central banks around the world are
responding to the crisis with bold and unconventional initiatives. Even so, there is
18

a contentious debate on whether these measures are adequate and appropriate, and
when, if at all, they will begin to have an impact.

The Indian economy experienced a cyclical moderation in growth accompanied by

high inflation in the first half of 2011. There is now distinct evidence of further
slowdown as a consequence of the global downturn. The knock-on effects of the
global financial crisis, economic slowdown, and falling commodity prices are
affecting the Indian economy in several ways. Capital flow reversals intensified in
September and October 2010 though they have stabilised since then; international
credit channels continue to be constrained; capital market valuations remain low;
industrial production growth has slackened; export growth has turned negative
during October-November 2010; and overall business sentiment has deteriorated.
Bank Rate
The Bank Rate has been kept unchanged at 6.0 per cent.
Repo Rate/Reverse Repo Rate
The repo rate under the LAF has been kept unchanged at 5.5 per cent.
The reverse repo rate under the LAF has been kept unchanged at 4.0 per cent.
The Reserve Bank has the flexibility to conduct repo/reverse repo auctions at a
fixed rate or at variable rates as circumstances warrant.
The Reserve Bank retains the option to conduct overnight or longer term
repo/reverse repo under the LAF depending on market conditions and other
relevant factors. The Reserve Bank will continue to use this flexibly including the
right to accept or reject tender(s) under the LAF, wholly or partially, if deemed fit,
so as to make efficient use of the LAF in daily liquidity management.

19

Cash Reserve Ratio

The cash reserve ratio (CRR) of scheduled banks has been kept unchanged at 5.0
per cent of NDTL.
Liquidity Facilities
The Reserve Bank has allowed banks to avail liquidity support under the LAF for
the purpose of meeting the funding requirements of mutual funds (MFs), nonbanking financial companies (NBFCs) and housing finance companies (HFCs)
through relaxation in the maintenance of SLR up to 1.5 per cent of their NDTL.

20

INDUSTRY PROFILE
If th"ere is one aspect in which we can confidentially assert that India is ahead of
China, it is in the robustness and soundness of our banking system." Indian banks
have been rated higher than Chinese banks by international rating agency Standard
& Poor's.
With the credibility of the Indian banking system on a high, a number of Indian
banks are now leveraging it to expand overseas. State Bank of India, the countrys
largest bank has acquired 76 per cent stake in a Kenyan bank, Giro Commercial
Bank, for US$ 7 million. Canara Bank is helping Chinese banks recover their huge
non-performing assets (NPA).
To meet the challenges of going global, the Indian banking sector is implementing
internationally followed prudential accounting norms for classification of assets,
income recognition and loan loss provisioning. The scope of disclosure and
21

transparency has also been raised in accordance with international practices. India
has complied with almost all the Core Principles of Effective Banking Supervision
of the Basel Committee. Some Indian banks are also presenting their accounts as
per the U.S. GAAP. The roadmap for adoption of Basel II is under formulation.
The use of technology has placed Indian banks at par with their global peers. It has
also changed the way banking is done in India. Anywhere banking and Anytime
banking have become a reality. The financial sector now operates in a more
competitive environment than before and intermediates relatively large volume of
international financial flows.
The Indian banking industry is currently in a transition phase. On the one hand,
the public sector banks, which are the mainstay of the Indian banking system, are
in the process of consolidating their position by capitalizing on the strength of their
huge networks and customer bases. On the other, the private sector banks are
venturing into a whole new game of mergers and acquisitions to expand their
bases.
The system is slowly moving from a regime of large number of small banks to
small number of large banks. The new era will be one of consolidation around
identified core competencies.
In India, one of the largest financial institutions, ICICI, took the lead towards
universal banking with its reverse merger with ICICI Bank a couple of years ago.
Another mega financial institution, IDBI, has also adopted the same strategy and
has already transformed itself into a universal bank. This trend may lead to
promoting the concept of a financial super market chain, making available all types

22

of credit and non-fund facilities under one roof or specialized subsidiaries under
one umbrella organization.
Without a sound and effective banking system in India it cannot have a healthy
economy. The banking system of India should not only be hassle free but it should
be able to meet new challenges posed by the technology and any other external and
internal factors.
For the past three decades India's banking system has several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer
confined to only metropolitans or cosmopolitans in India. In fact, Indian banking
system has reached even to the remote corners of the country. This is one of the
main reason of India's growth process
The government's regular policy for Indian bank since 1969 has paid rich
dividends with the nationalization of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for
getting a draft or for withdrawing his own money. Today, he has a choice. Gone are
days when the most efficient bank transferred money from one branch to other in
two days. Now it is simple as instant messaging or dial a pizza. Money have
become the order of the day.
The first bank in India, though conservative, was established in 1786. From 1786
till today, the journey of Indian Banking System can be segregated into three
distinct phases. They are as mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking

sector Reforms.
23

New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.

24

4. OBJECTIVE OF THE PROJECT

Every research starts with a problem. Here in our case we studied customers
expectation from banking services. Because banking system is the backbone of any
economy. And in India with the opening of banking sector competition is very
intense. To sustain into the market a bank has to know what customers expect from
banks in order to satisfy them.
A bank which will better understand the customers expectation will have
competitive edge over others.

25

The objective of doing this study can be classified into two groups i.e. primary and
secondary, which are as follows:
Primary Objective:
To know what customers expect from banking services
Secondary Objectives:

To know the decision making process of people while selecting a bank.

To find out the customers level of awareness about the banks.

To know about the various factors that motivate/attract customers towards

banks .

26

5. RESEARCH METHODOLOGY
INTRODUCTION
Research is an academic activity and as such the term should be used in
technical sense. According to Clifford Woody research comprises defining
and redefining problems, formulating hypothesis or suggested solutions,
collecting organizing and evaluating data; making deduction and reaching
conclusion and at last carefully testing the conclusions to determine whether
they fit the formulating hypothesis.
The main aim of the research is to find out the truth which is hidden and
which has not been discovered as yet.
RESEACH DESIGN
Research design is an arrangement of conditions for collection and analysis
of data in manner that aims to combine relevance to the research purpose
with economy in procedure of data. It is a blue print specifying every stage
of action in the course of research.
The research design is adopted in this study for secondary data is
exploratory and analytical in nature. Exploratory research aims to gain
familiarity and new insight into any phenomenon while analytical research
27

aims at analyzing the current scenario and thereby using that to project the
future performance. This research aims at studying the historical
performance of the company in bancassurance and it also evaluates the
future prospects of the company.
Descriptive research design is used for collecting primary data. It is
concerned with the research studies with a focus on the portrayal of the
characteristics of a group or individual or a situation. The main objective of
such studies is to acquire knowledge. The major purpose of descriptive study
is description of the state of affairs, as it exists at present.
SAMPLING
Sampling may be defined as a selection of some part of an aggregate or
totality on the basis of which a judgment or inference about the aggregate or
totality is made.

SAMPLING DESIGN
A sampling plan is a definite plan for obtaining a sample given population.
There different methods of sampling. Here convenience sampling technique
is used.
CONVENIENCE SAMPLING
This method of sampling is involves selecting the sample elements using
some convenient method without going through the rigor of sampling
method. The researcher may make use of any convenient base to select the
required number of samples. Accordingly the area selected for the study was
Malout.
SAMPLE SIZE
Sample size refers to the number of items to be selected for the universe to
constitute a sample. The total samples size taken to be 100.
METHODS OF DATA COLLECTION
PRIMARY DATA
Primary data is the data collected for the first time through field survey this
has been used to collect the data for the purpose of this study.
28

METHOD OF PRIMARY DATA COLLECTION

The method followed is obtaining the primary data was through the
structured questionnaire:
The researcher had used a questionnaire for obtaining the primary data for
analysis. A questionnaire is a form prepared and distributed to secure
responses to certain questions. Here a well structured questionnaire has been
prepared with all the important details regarding bancassurance.
SECONDARY DATA
It refers to the information or facts already collected. Such data are collected
with the objective of understanding the past status of any variable. Here
secondary data has been used for making a financial analysis.
METHODS OF SECONDARY DATA COLLECTION
Annual reports
Journals and magazines
Internet

LIMITATIONS
There was a sincere attempt to conduct the survey in the most efficient and
scientific manner possible. But the survey does have limitations.
The area of research was limited to 100 customers.
Some of respondents were not willing to give information.
Respondents may have been biased.
The survey was conducted in only some area of BATHINDA City.

29

DATA ANALYSIS & INTERPRETATION

PRODUCT
Banks offer different products such as saving a/c, current a/c, credit/debit card,
home loan, personal loan, education loan, vehicle loan, safety deposit lockers, loan
against property, overdraft facility, cash credit, etc.
But now only traditional products are not sufficient to keep banks competitive. So
product innovation is required.
Customer expectations are rising. They want banks to come up with some new
products along with ensuring efficient availability of existing products.

30

Some of the customers expectations from banks regarding products are as follows:
Private banks should offer education loans
Banks should offer free investment services
Rural banking
Core banking by all the nationalised as well as private banks
Bill payment of other institutions
Hassle-free loan to farmers and SMEs
Tie-up with more other banks
Home banking

Q.1. Which is the best location for opening Bank Branch?

Awareness
Residential
Shopping
Commercial
Hosp/Schools/Colleges

Respondents
20%
29%
23%
28%

31

Graph 1 Bank Location

Interpretation:The above graph shows customers expectations regarding location of branch. 29%
customers want branches at shopping complexes , 28% feel branches should be
located at institutional areas. 23% customers expect that brach to be located in
commercial areas followed by 20% who prefer residential areas for bank branches.

Q. 2. How close customers expect Bank Branches to be located?

Category

Under an

Under an

Under an

Area of

area of 1km

area of 1-

area of 2-

more than 4

Student
Business

17
19

2km
7
1

4km
1
0

km
0
4

Man
Salaried
Self

9
13

12
7

4
5

0
1

32

Employed

Graph 2 Bank Location

Interpretation:The above graph indicates how close customers expect bank branches to be located
at. This graph shows the expected distance of bank branch category wise. Most of
the customers in the entire category except salaried people, want it within one
kilometer.Only salaried people say in majority that branch should be between one
to two kilometer of area. Only some businessmen are there who say branch could
be up to five kilometer.

33

So from the above data it can be concluded that customers want banks at their
door-steps. They dont want to travel to avail banking services. They accord
immense importance to accessibility.

Q.3. How close customers expect ATM distance to be located at Kilometer?

Category

Under an

Under an

Under an

Area of

area of 1km

area of 1-

area of 2-

more than 4

Student
Business

23
21

2km
2
0

4km
0
0

km
0
4

Man
Salaried
Self

19
14

4
11

2
0

0
0

34

Employed

Graph 3 ATM Distance

Interpretation:The above graph shows the expectations of customers regarding ATM distance.
The break up above is also shown category wise. Most of the responses came in
favor of less than one kilometer. There were 25 responses in each category.

35

From the above data it can be interpreted that accessibility is the most important
factor. ATMs are used more frequently now a day. So customers expect them to be
available wherever they are.

Q.4.Do you expect banks to advertise and make you aware about new schemes
and offer?
Awareness
Respondents
Yes
97%
No
3%

36

Graph 4 Need of Promotion for Bank

Interpretation:The above graph shows what customers expect from banks regarding promotions.
97 % respondents expect banks to carry out various promotional activities to attract
more and more customers. Simultaneously they should do advertising on regular
interval to make customers aware about different new offers. Whereas 3%
customers feel that banks dont need to do promotions.
Customers expect themselves to be educated by banks in order to avail new
technology driven services smoothly. For this purpose customers feel that banks
may organize various events.
Q.5. What are the sources of promotion of Bank?
Medium
Radio
Television
Newspaper
Internet
Billboards
Mobile

No Of Responses
10%
35%
30%
5%
17%
3%

37

Graph 5 MEDIA OF PROMOTION

Interpretation:The above graph shows that10% respondent are in favors of radio is the best way
of promotion while 35% view of TV ,30% of newspaper,5% of internate,17% of
billboard and rest are of favor of mobile which is only 3 %.
Q.6 What are the characteristics of the Bank employees?

Characteristics
Appearance
Communication
Modesty
Empathy
Efficiency
Problem Handling

No Of Responses
10
17
13
12
23
25

38

Graph 6 Employees Characteristics

Interpretation:The above graph shows how much importance customers accord to different
characteristics of employees. The respondents were asked multiple answer
questions People is one of the extended P of service marketing. For offering any
service people (employee) play a very crucial role. Employees characteristics can

39

be bifurcated into appearance, communication, modesty, empathy, efficiency, and

problem handling.
Customers expect employees of a bank to have all above mentioned characteristic
but as far as importance to all these factors is concerned it is different for each
factor. As the above graph indicates that customers accord greatest importance to
the problem- handling ability of employee followed by communication, efficiency,
modesty, empathy and appearance respectively.
Q.7. What are the physical evidence of the respondents?
Rating Scale
Very high
High
Average
Low

Percentage Of Responses
14
31
54
1

1%

14%

Very High
High
Average
54%

31%

40

Low

Graph 7 Physical Evidence

Interpretation:The above graph shows the extent of customer expectation from banks in terms of
physical evidence. Although physical evidence is important because it creates a
kind of impression. But what matters for customers is service not physical
evidence much.
Respondents were asked to rate their expectation from physical evidence on a four
point scale. This ranges from very high to very low.
This is evident from the graph as the majority of customers (54%) give it average
rating on five point scale.
But there is a set of people who accord greater importance to this. Because 31 % of
customers have high expectations from the physical evidence. Even there are 14 %
customers who give it very high rating. So this is very important for them. There
are very few customers (1%) to whom physical evidence doesnt matter at all.

Q.8. What are the preferences of Banks?

Types Of Banks
Private
Nationalized
Co-operative
MNCs

Preference
44
50
3
3

41

Graph 8 Preferences of Banks

Interpretation:The above graph depicts the preference of customers among different kind of
banks i.e., nationalized, private, co-operative and MNCs.
It can be drawn from the graph that still 50% of customers prefer nationalized
banks.
The reasons specified by customers who prefer to go with nationalized banks are as
follows:
Trust
Transparency
Financial stability

42

Then if we see preference regarding private banks, 44% prefer private banks. The
reasons are as follows:
Flexibility
High spread of ATMs
Good service (customized)
Accessibility
Professional attitude
As far as co-operative banks & MNCs are concerned, preference goes 3% for each.
Reason for opting co-operative banks is they help in need and easily approachable.
The only reason given for preferring MNC banks is their worldwide presence.

Q.9. What are the selection of Banks?

Criteria
Brand Name
Variety of Products
Employee of Bank
Customer Service
Ease in availing services
Interest Rate
Automated Services
Accessibility
Process

No Of Responses
35
16
7
11
6
3
4
6
12

43

Graph 9 Criteria for Selection of Banks

Interpretation:Gone are the days when people used to select the bank nearest to their house. Now
peoples selection of bank undergoes a decision making process. Before selecting a
bank customers consider different criteria.
In the survey respondents were asked to consider nine selection criteria i.e. Brand
name, variety of products, employee of bank, customer service, ease in availing
services, interest rate, automated services, accessibility and process.
Customers accord importance to different criteria differently in the following
sequence:
Customer service, interest rate
Accessibility
Brand name
44

Automated services
Ease in availing services
Process

Q10. Which Banks you aware of?

Banks
SBI
UTI
PNB
BOB
`ICICI
HDFC
OBC
Standard Chartered
City Bank
HSBC

TOM Awareness in %
43
4
3
3
33
5
1
3
1
4

45

Interpretation:The above graph measures the awareness of customers about different banks.
This depicts the Top of the mind (TOM) awareness. This signifies if somebody is
asked to name a bank which bank comes first in his mind.
Here in this survey SBI tops the list, because its name came first in the mind of
43%. Only ICICI bank is somewhat close to this because 33% customers are there
in whose mind this bank is TOM

46

47

FINDING OF THE STUDY

Only half of the people have bank account.
Location play important role in the promotion of bank.
ATM facility is necessary for customer.
News paper, Internet, Television play vital role in the promotion of bank.
Most of the people prefer nationalize bank.
People prefer nationalize bank due to Trust, Transparency and Financial
stability.
More customers aware of SBI and ICICI bank.
Customers accord greatest importance to the problem-handling ability of
employee followed by communication, efficiency, modesty, empathy, and
appearance respectively.

RECOMMENDATION
48

More automated services could do wonders. So focus should be on

technology driven services
The number of employees should be increased because less customer
pressure per employee will ensure better service
Proper training to employee
Customers should be educated
Bank should get involved in some social activities
More return on fixed deposit will prevent customers to overlook investment
in banks
Banking services should be in customers reach
Some services should be outsourced
Hassle-free transaction- processing time should be reduced
Product innovation
Communicate effectively with customers regularly
Banks should act as a one stop shop
Charges levied should be rational
In case of online banking adequate security arrangements should be ensured

49

CONCLUSION
Indian banks may be falling over each other to show that they are the most valued
by customers or have the best services, but banking in India is yet to become
customer driven. Although trust, quality of services, and ease of access do
determine the choice of bank. Brand recognition of private banks remains limited.
State Bank of India dominates the mind space almost as a single monolith. The
only private bank that has any significant brand recall is ICICI Bank.
The govt. policy of getting public sector banks to open branches across India,
irrespective of commercial logic, meant that these banks enjoyed a high level of
public trust. But in the future, public sector banks cannot hope to bank on trust
alone. Now even private banks are gaining customers trust. Private sector banks,
except foreign banks, can now compete with public sector bank on the trust factor.
Now in the stiff competitive environment every bank more or less offer same
service. So in this scenario they will go with those banks which are near and
doesnt require them to travel. So ease of accessibility is being accorded greater
importance. So banks have to make their presence felt everywhere somehow.
Before selecting a bank customers accord different weightage to different
parameters. But most importantly they look for customer service and interest rate.
In a developing country like India price is always an important factor. Most of the
customers are not satisfied with the charges levied by banks especially hidden
charges. Pricing could be a differentiating factor.

50

Only conventional products are no longer sufficient to keep customers intact and
attract new customers. So banking companies should come up with some new
products. As now banking industry is ready to open up the industry to welcome
foreign banks. To compete with them Indian banks especially PSU banks should
work on the line of private & foreign banks.
Customers give due importance to different advertisement programme using
various media. They even want banks to get involved in social awareness
programme.
Customers tend to switch to the bank whose customer support service is good.
Banks can offer good services only when they have efficient people (employee).
Smart and friendly employee at bank can make workings at bank an enjoyable
experience for customers.
So overall it can be said that today customers expectation from banking services is
sky-touching and it keeps changing with the changes taking place in the
environment. So all the banks have to be innovative and adaptive to sustain into a
competitive and fast changing environment.

51

52

BIBLIOGRAPHY
BOOKS: Service Marketing A book by Ravishankar
Research Methodology A book by Kothari C. R
JOURNALS: India Today
Economic Times

WEBSITES: www.rbi.gov.in
www.wikipedia.com
www.purrsue.com

53

QUESTIONNAIRE
54

Dear sir/ madam,

I am pleased to introduce myself as a MBA student as a part of my curriculum, I am conducting a
study on CUSTOMERS EXPECTATION FROM BANKING SERVICES. So, I hereby
request you kindly spare your valuable time to fill this questionnaire which will help me in my
project work
Name of respondent :
Address: -

.
..

Phone No.

Gender :

Male

Female

Occupation :

Q.1. Which is the best location for opening Bank Branch?

1. Residential
3. Shopping

2. commercial..
4. Hosp/schools/colleges

Q. 2. How close customers expect Bank Branches to be located?

1.
2.
3.
4.

Student(under area of 1km)

Business man(under area of1km- 2km.
Salaried(under area of 2km-4km
Self employee(under area of more than 4km

Q.3. How close customers expect ATM distance to be located at Kilometer?

55

1.
2.
3.
4.

Student(under area of 1km)

Business man(under area of1km- 2km.
Salaried(under area of 2km-4km
Self employee(under area of more than 4km

Q.4.Do you expect banks to advertise and make you aware about new schemes and offer?
1. Yes..

2. No.

Q.5. What are the sources of promotion of Bank?

1. Radio..
3. News paper
5. Billboards

2 .Television.
4. Internet
6. Mobile

Q.6 What are the characteristics of the Bank employees?

1. Appearance..
3. Modesty..
5. Efficiency..

2.Communication..
4. Empathy.
6. Problem handling.

Q.7. What are the physical evidence of the respondents?

1. Very high..
3. Averages..

2. High..
4. Low..

Q.8. What are the preferences of Banks?

1. Private..
3. Co-operative.

2 .Nationalized
4. MNCs

Q.9. What are the selection of Banks?

1.
3.
5.
7.
9.

Brand name.
Employed bank
Ease in availing services
Automated services..
Process.

2. Variety of Producty.
4. Customer service..
6. Interest Rate
8.Accessibility.

Q10. Which Banks you aware of?

56

1. SBI..
2. UTI.
3. PNB..
5. ICICI..
6. HDFC 7. OBC
9. City Bank. 10. HSBC

57

4. BOB.
8. Standard chartered.