Sbi and Hdfc“COMPARATIVE STUDY OF CUSTOMER’S SATISFACTION TOWARDS HDFC BANK AND STATE BANK OF INDIA

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CHAPTER 1

CHAPTER 1 INDUSTRY PROFILE

INDUSTRY PROFILE

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1.1INTRODUCT

1.1INTRODUCTION TO

ION TO INDIAN BANKING SYSTEM

INDIAN BANKING SYSTEM

HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy. 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 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. new challenges posed by the technology and any other external and internal factors. For the

For the past three decades past three decades IndiaIndia's banking 's banking systesystem m has several outstandihas several outstanding ng achieachievementsvements to its credit. The most striking is its extensive reach. It is no longer confined to only 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 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 reasons of India's growth to the remote corners of the country. This is one of the main reasons of India's growth process.

process. The The government's government's regular regular policy policy for for Indian Indian bank bank since since 1969 1969 has has paid paid richrich dividends with the nationalization of 14 major private banks of India. Long time ago; an dividends with the nationalization of 14 major private banks of India. Long time ago; an account holder had to wait for hours at the bank counters for getting a draft or for 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 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 efficient bank transferred money from one branch to other in two days. Now it is simple as

as ininststanant t memessssagagining g or or didialals s a a pipizzazza. . MoMoney ney hahas s bebecocome me ththe e ororder of der of ththe e daday.y. The first bank in India, though conservative, was established in 1786. From 1786 till 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. today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below:

They are as mentioned below:

•

• Early phase from 1786 to 1969 of Indian BanksEarly phase from 1786 to 1969 of Indian Banks •

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

Reforms. Reforms.

•

• New New phase phase of of Indian Indian Banking Banking System System with with the the advent advent of of Indian Indian Financial Financial &&

Banking Sector Reforms after 1991. Banking Sector Reforms after 1991.

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PHASE I

The General Bank of India was set up in the year 1786. Next come Bank of Hindustan The General Bank of India was set up in the year 1786. Next come Bank of Hindustan and Bengal Bank. The

and Bengal Bank. The East India Company estabEast India Company establishelished Bank d Bank of Bengal (1809), Bank of of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National

National Bank Bank Ltd. Ltd. was was set set up up in in 1894 1894 with with headquarters headquarters at at Lahore. Lahore. Between Between 1906 1906 andand 1913, Bank of India, Central Bank of India, Bank of Baroda, Canera Bank, Indian. 1913, Bank of India, Central Bank of India, Bank of Baroda, Canera Bank, Indian. Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935During the Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935During the fir

first st phasphase e the the grogrowth wth was was ververy y sloslow w and and banbanks ks alsalso o expexperieriencenced ed perperiodiodic ic faifailurlureses between

between 1913 1913 and and 1948. 1948. There There were were approximately approximately 1100 1100 banks, banks, mostly mostly small. small. ToTo streamline the functioning and activities of commercial banks, the Government of India streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with

India was vested with extensextensive powers for ive powers for the supervisithe supervision of on of bankinbanking g in India in India .Duri.Duringng th

thosose e daday’y’s s pubpublilic c hahas s lelesssser er coconfnfididencence e in in ththe e babanksnks. . As As an an afaftetermrmatath h dedepospositit mobilization was slow. Abreast of it the savings bank facility provided by the Postal mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. department was comparatively safer. Moreover, funds were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after independence. Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State as the principal agent of RBI and to handle banking transactions of the Union and State Govern

Governments all over the ments all over the countrcountry .Seven banks formiy .Seven banks forming subsiding subsidiary of State Bank of ary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. India Gandhi major carried out. It was the effort of the then Prime Minister of India, Mrs. India Gandhi major com

commermerciacial l bankbanks s in in the the councountry try werwere e natnationionalialized zed SecSecond ond phasphase e of of natnationionalializatzationion Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step

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brought

brought 80% 80% of of the the banking banking segment segment in in India India under under Government Government ownership.ownership. The following are the steps taken by the Government of India to Regulate Banking: The following are the steps taken by the Government of India to Regulate Banking:

•

• 1949: Enactment of Banking Regulation Act.1949: Enactment of Banking Regulation Act. •

• 1955: Nationalization of State Bank of 1955: Nationalization of State Bank of India.India. •

• 1959: Nationalization of SBI subsidiaries.1959: Nationalization of SBI subsidiaries. •

• 1961: Insurance cover extended to deposits.1961: Insurance cover extended to deposits. •

• 1969: Nationalization of 14 major banks.1969: Nationalization of 14 major banks. •

• 1971: Creation of credit guarantee corporation.1971: Creation of credit guarantee corporation. •

• 1975: Creation of regional rural banks.1975: Creation of regional rural banks. •

• 1980: Nationalization of seven banks with 1980: Nationalization of seven banks with deposits over 200 cores.deposits over 200 cores.

After the nationalization of banks, the branches of the public sector bank India rose to After the nationalization of banks, the branches of the public sector bank India rose to ap

apprproxoximimatatelely y 80800% 0% in in dedepoposisits ts anand d adadvavancnces es totook ok a a huhuge ge jujump mp by by 1111,0,00000%.%. Banking in the sunshine of Government ownership gave the public implicit faith and Banking in the sunshine of Government ownership gave the public implicit faith and iimmmmeennsse e ccoonnffiiddeenncce e aabboouut t tthhe e ssuussttaaiinnaabbiilliitty y oof f tthheesse e iinnssttiittuuttiioonnss..

PHASE III

This phase has introduced many more products and facilities in the banking sector in its This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under

reforms measure. In 1991, under the chairmanship of M the chairmanship of M Narasimham, a committee wasNarasimham, a committee was set up by his name which worked for the liberalizations of banking practices.

set up by his name which worked for the liberalizations of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone ba

to give a satisfactory service to customers. Phone banking and net banking nking and net banking isis introduced. The entire system became mor

introduced. The entire system became more convenient and swift. Time ie convenient and swift. Time is given more s given more .. Importance than money the financial system of

Importance than money the financial system of India has shown a great deal India has shown a great deal of resilience.of resilience. It is sheltered from any crisis triggered by any external macroecono

It is sheltered from any crisis triggered by any external macroeconomics shock as other mics shock as other East Asian Countries suffered. This is all due to a flexible exch

East Asian Countries suffered. This is all due to a flexible exchange rate regime, theange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks foreign reserves are high, the capital account is not yet fully convertible, and banks

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1.2 Banking system in India

The Indian banking can be broadly categorized into nationalized (government owned), The Indian banking can be broadly categorized into nationalized (government owned), private

private banks banks and and specialized specialized banking banking institutions. institutions. The The Reserve Reserve Bank Bank of of India India acts acts aa centralized body monitoring any discrepancies and shortcoming in the system. Since the centralized body monitoring any discrepancies and shortcoming in the system. Since the nationalization

nationalization of banks of banks in 1969, in 1969, the publithe public sector c sector banks or banks or the natithe nationalized banks onalized banks havehave acquired a place of prominence and has since then seen tremendous progress. The need to acquired a place of prominence and has since then seen tremendous progress. The need to become

become highly highly customer customer focused focused has has forced forced the the slow-moving slow-moving public public sector sector banks banks toto adopt a fast track approach. The unleashing of products and services through the net has adopt a fast track approach. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to galvanized players at all levels of the banking and financial institutions market grid to look anew at their existing portfolio offering. Conservative banking practices allowed look anew at their existing portfolio offering. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting al higher valuation when compared to banks in other Asian countries (viz. now quoting al higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the ‘high in approach and armed with efficient branch networks focus primarily on the ‘high re

revevenunue’ e’ ninichche e reretatail il sesegmgmentents. s. ThThe e InIndidian an babankinking ng hahas s fifinanalllly y woworkrked ed up up to to ththee competitive dynamics of the ‘new’ Indian market and is addressing the relevant issues to competitive dynamics of the ‘new’ Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization. Banks that employ IT solutions are take on the multifarious challenges of globalization. Banks that employ IT solutions are perceived

perceived to to be be ‘futuristic’ ‘futuristic’ and and proactive proactive players players capable capable of of meeting meeting the the multifariousmultifarious requirements of the large customer’s base. Private Banks have been fast on the uptake requirements of the large customer’s base. Private Banks have been fast on the uptake and are reorienting their strategies using the internet as a medium The Internet has and are reorienting their strategies using the internet as a medium The Internet has emerged as the new and challenging frontier of marketing with the conventional physical emerged as the new and challenging frontier of marketing with the conventional physical world tenets being just as applicable like in any other marketing medium. The Indian world tenets being just as applicable like in any other marketing medium. The Indian banking

banking has has come come from from a a long long way way from from being being a a sleepy sleepy business business institution to institution to a a highlyhighly proactive and

proactive and dynamic entity. dynamic entity. This transformation has been This transformation has been largely brought about largely brought about by theby the large dose of liberalization and economic reforms that allowed banks to explore new large dose of liberalization and economic reforms that allowed banks to explore new business

business opportunities opportunities rather rather than than generating generating revenues revenues from from conventional conventional streams streams (i.e.(i.e. borrowing

borrowing and and lending). lending). The The banking banking in in India India is is highly highly fragmented fragmented with with 30 30 bankingbanking units contributing

units contributing to almost 50% to almost 50% of deposits of deposits and 60% of advances. and 60% of advances. Indian nationalizedIndian nationalized banks (banks owned by

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mobil

mobilizatiization. on. The Indian banking can be The Indian banking can be broadlbroadly categorizy categorized into nationalized into nationalized, privateed, private specialized banking institutions The Reserve Bank of India act as a centralized body specialized banking institutions The Reserve Bank of India act as a centralized body mon

monitoitorinring g any discany discreprepancancies and shorties and shortcomcoming in ing in the systthe system. em. It is It is the forethe foremosmostt monitoring body in

monitoring body in the Indian fithe Indian financial sector. nancial sector. The nationalized banks The nationalized banks (i.e. government-(i.e. government-owned banks) continue to dominate t

owned banks) continue to dominate the Indian banking arena. he Indian banking arena. Industry estimatIndustry estimates indicatees indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector that out of 274 commercial banks operating in India, 223 banks are in the public sector and 51 are in the private sec

and 51 are in the private sector. tor. The privatThe private sector bank grie sector bank grid also includd also includes 24 foreignes 24 foreign banks

banks that havthat have started e started their optheir operations here. erations here. Under Under the ambit the ambit of the of the nationalized banknationalized bankss come the speciali

come the specialized banking instized banking institutitutions. ons. These co-opeThese co-operatiratives, rural banks focus onves, rural banks focus on areas of agriculture, rural development etc., unlike commercial banks these co-operative areas of agriculture, rural development etc., unlike commercial banks these co-operative banks

banks do nodo not lend t lend on on the bthe basis of asis of a prime a prime lending rate. lending rate. They also They also have have various tax various tax sopssops because

because of of their their holding holding pattern pattern and and lending lending structure structure and and hence hence have have lower lower overheads.overheads. This enables them t

This enables them to give a marginallo give a marginally higher percentage on savings y higher percentage on savings deposits. deposits. Many of Many of these cooperative banks diversified into specialized areas (catering to the vast retail these cooperative banks diversified into specialized areas (catering to the vast retail audien

audience) like car finance, housce) like car finance, housing loans, tring loans, truck finance etc. uck finance etc. in order to keep pace within order to keep pace with their public sector and private counterparts, the co-operative banks too have invested their public sector and private counterparts, the co-operative banks too have invested heavily in information technology to offer high-end

heavily in information technology to offer high-end computerized banking servicescomputerized banking services

TYPES OF BANKS

CentralBank

The

The Reserve Bank of IndiaReserve Bank of India is the central Bank that is fully owned by the Government. Itis the central Bank that is fully owned by the Government. It is

is govgovererned ned by by a a cecentntraral l boaboard rd (h(heaeadeded d by by a a GoGovevernrnoror) ) apappoipointnted ed by by ththe e CeCentntrarall Government. It issues guidelines for the functioning of all banks operating within the Government. It issues guidelines for the functioning of all banks operating within the country.

country.

CO-OPERATIVESECTOR::---The co-operative sector is very much useful for rural people. CO-OPERATIVESECTOR::---The co-operative banking The co-operative sector is very much useful for rural people. The co-operative banking sector is divided into the following categories.

sector is divided into the following categories. a.

a. StStatate ce co-o-opopereratativive Be Bankankss b.

b. Central co-operative banksCentral co-operative banks c.

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Development Banks/Financial Institutions

• • IFCIIFCI • • IDBIIDBI • • ICICIICICI • • IIBIIIBI • • SCICI Ltd.SCICI Ltd. • • NABARD NABARD •

• Export-Import Bank of IndiaExport-Import Bank of India •

• National Housing Bank National Housing Bank •

• Small Industries Development Bank of IndiaSmall Industries Development Bank of India •

• North Eastern Development Finance Corporation North Eastern Development Finance Corporation

1.3PRIVATE SECTOR BANKS

Private Sector Banks

1

1.. HHDDFFC C BBaannk k 2

2.. IICCIICCI BI Baannk k 3.

3. FFededeerraal Bl Baank nk 4.

4. INING VG Viisasas Bs Banank k 5.

5. AxAxis Bis Bank (ank (foformrmererly Uly UTI BTI Banank)k) 6

6. . YYees s BBaannk k 7.

7. BaBank nk of of RaRajajaststhahann 8.

8. BhBhararat at OvOvererseseas as BaBank nk 9.

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11.

11. City City Union Union Bank Bank 12.

12. DeveloDevelopment Crpment Credit Baedit Bank nk 13.

13. DhanalDhanalakshmi akshmi Bank Bank 14.

14. Ganesh Ganesh Bank of KBank of Kurundwurundwadad 15.

15. IndIndusIusInd Bannd Bank k 16.

16. Jammu & Jammu & KashmiKashmir Bank r Bank 17.

17. KarnatKarnataka Bank Laka Bank Limitimiteded 18.

18. Karur Karur Vysya Vysya Bank Bank 19.

19. Kotak MKotak Mahindrahindra Bank a Bank 20.

20. LakshmLakshmi i VilaVilas s Bank Bank 21.

21. NaiNainitnital Bank al Bank 22.

22. RatRatnakanakar Bank r Bank 23.

23. SBI CommerSBI Commercial and Internacial and International Bank tional Bank 24.

24. South South Indian Indian Bank Bank 25.

25. AmaziAmazing Mercang Mercantilntile Bank e Bank 26.

26. Punjab Punjab NatioNational Banal Bank nk 27.

27. RupRupee Bee Bank ank 28.

28. SarSaraswaswat Bank at Bank 29.

29. TamilTamilnad Mercanad Mercantile Bantile Bank nk 30.

30. Thane JaThane Janata Sahnata Sahakari Bakari Bank ank 31.

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MAJOR PLAYERS IN PRIVATE SECTOR BANKS ICICI Bank:

---ICICI Banking is commercial Banking arm of ---ICICI group. It received its banking license ICICI Banking is commercial Banking arm of ICICI group. It received its banking license from RBI on May 17 may 1994 and its branch was started in Madras in June 1994. ICICI from RBI on May 17 may 1994 and its branch was started in Madras in June 1994. ICICI Bank has a network of about 560 branches and extension counters and over 1,900 ATMs. Bank has a network of about 560 branches and extension counters and over 1,900 ATMs. ICICI Bank offers a

ICICI Bank offers a wide range of wide range of bankinbanking g producproducts and ts and finanfinancial servicecial services s to corporateto corporate and retail customers through wide variety of delivery channels and through its specialized and retail customers through wide variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to cross border needs of clients and leverage on its domestic in fiscal 2002 to cater to cross border needs of clients and leverage on its domestic banking

banking strengths strengths to to offer offer product product internationally. internationally. ICICI ICICI Bank’s Bank’s equity equity shares shares are are listedlisted in India on the Stock Exchange, Mumbai and the National Stock Exchange of India in India on the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts are listed on New York

Limited and its American Depositary Receipts are listed on New York Stock Exchange. ItStock Exchange. It is the first bank to start Internet banking service in India. In 1999, ICICI become the first is the first bank to start Internet banking service in India. In 1999, ICICI become the first Indian Company and the first bank or financial institution from non-Japan Asia to be Indian Company and the first bank or financial institution from non-Japan Asia to be listed on NYSE

listed on NYSE

UTI Bank:

-UTI Bank: - UTI Bank was the first of the UTI Bank was the first of the new private banks to have new private banks to have begun operatibegun operationsons in 1994, after the government of India allowed new private banks to be established. The in 1994, after the government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Bank was promoted jointly by the Administrator of the specified undertaking of the United Trust of India(UTI-I), Life Insurance Corporation of India(LIC) and General United Trust of India(UTI-I), Life Insurance Corporation of India(LIC) and General Insurance Corporation Ltd. and its associates viz. National Insurance Company Ltd., The Insurance Corporation Ltd. and its associates viz. National Insurance Company Ltd., The New

New India India Assurance Assurance Corporation, Corporation, The The Oriental Oriental Insurance Insurance Corporation Corporation and and UnitedUnited Insurance Company Ltd. The bank today is capitalized to the extent of Rs.278.12 cores Insurance Company Ltd. The bank today is capitalized to the extent of Rs.278.12 cores with public holding at 56.18 %. The bank’s registered office is at Ahmadabad and its with public holding at 56.18 %. The bank’s registered office is at Ahmadabad and its central office is at Mumbai. The bank has wide network of more than 350 branch offices central office is at Mumbai. The bank has wide network of more than 350 branch offices and Extension Counters. The Bank has network of over 1657 ATMs providing 24hrs a and Extension Counters. The Bank has network of over 1657 ATMs providing 24hrs a day banking convenience to its customers. The bank was setup with capital of Rs.115 day banking convenience to its customers. The bank was setup with capital of Rs.115 cor

core, e, witwith h UTI UTI contcontribributiuting ng Rs.Rs.100 100 corcore, e, LICLIC-Rs-Rs.7..7.5 5 corcore e and and itits s foufour r subsubsidsidiariariesies contributing Rs. 1.5 core each.

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HDFC Bank

:----:---- HDFC Bank is heaHDFC Bank is headquartdquartered in Mumbai ered in Mumbai Bank at presBank at present has anent has an enviable network

enviable network of over of over 495 branches s495 branches spread over pread over 218 cities 218 cities across Indiacross India. All a. All branchesbranches are linked on an online real-time basis. Customers in over 120 locations are also serviced are linked on an online real-time basis. Customers in over 120 locations are also serviced through Telephone Banking. The Bank’s expansion plans take into account the need to through Telephone Banking. The Bank’s expansion plans take into account the need to have

have a a prepresensence ce in in all all majmajor or indindustustririal al and and comcommermerciacial l centcenters ers whewhere re its corporits corporateate custom

customers are located as ers are located as well as the well as the need to need to build a strong retail customebuild a strong retail customer base r base for bothfor both deposits and loan products. Being a clearing/settlement bank to various leading stock deposits and loan products. Being a clearing/settlement bank to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and act

active member base. ive member base. The authorThe authorizeized d capicapital tal of of HDFHDFC C Bank is Bank is Rs.Rs.450 core 450 core (Rs(Rs.4.5.4.5 billion).

billion). The The paid-up paid-up capital capital is is Rs.309.9 Rs.309.9 core core (Rs.3.09 (Rs.3.09 billion). billion). The The HDFC HDFC Group Group holdsholds 22.2% of the bank’s equity and about 19.5% of the equity is held by the ADS Depository. 22.2% of the bank’s equity and about 19.5% of the equity is held by the ADS Depository. The Bank

The Bank has made has made substsubstantial efforantial efforts and ts and investinvestments in acquiring the ments in acquiring the best technolbest technologyogy available internationally, to build the infrastructure for a world class bank.

available internationally, to build the infrastructure for a world class bank.

1.4 PUBLIC SECTOR BANKS

a.

a. State BState Bank of Iank of India and ndia and its asits associasociate banks cte banks called talled the Stathe State Bank Gre Bank Groupoup b.

b. 20 nationalized banks20 nationalized banks c.

c. RegionRegional rual rural bral banks anks mainlmainly spony sponsored sored by publby public seic sector ctor banksbanks

PUBLIC SECTOR BANKS (NATIONALIZED BANKS

):):

1. State Bank of India (SBI) 1. State Bank of India (SBI)

2.State Bank of Bikaner & Jaipur 2.State Bank of Bikaner & Jaipur 3.State Bank of Hyderabad

3.State Bank of Hyderabad 4.State Bank of Indore 4.State Bank of Indore 5.State Bank of Mysore 5.State Bank of Mysore 6.State Bank of Patiala 6.State Bank of Patiala 7.State Bank of Saurashtra 7.State Bank of Saurashtra 8.

8. State State Bank Bank of of TravancoreTravancore 9.

9. Bank Bank of of IndiaIndia 10. Canara Bank 10. Canara Bank 11. Centr

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12. Corporation bank 12. Corporation bank 13. Indian Bank 13. Indian Bank

14. Indian overseas bank 14. Indian overseas bank 15.Syndicate Bank 15.Syndicate Bank 16.UCO Bank 16.UCO Bank 17. Allahabad Bank 17. Allahabad Bank 18.Andhra Bank 18.Andhra Bank 19.Bank

19.Bank of of BarodaBaroda 20. Bank of Maharashtra 20. Bank of Maharashtra 21. Dena Bank

21. Dena Bank

22.Oriental Bank of Commerce 22.Oriental Bank of Commerce 23.

23. Punjab & Punjab & Sind Sind Bank Bank 24. Union Bank of India 24. Union Bank of India

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CHAPTER 2

CHAPTER 2 COMPANY PROFILE

COMPANY PROFILE

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2.1EVOLUTION OF SBI

The origi

The origin n of the of the StaState Bank te Bank of India goes back of India goes back to the to the firfirst decadst decade e of the of the ninnineteeteententhh century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.Three century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on

India on 27 27 JanuarJanuary y 1921. Primari1921. Primarily ly Anglo-Anglo-IndiaIndian n creatcreations, the ions, the three presidthree presidency banksency banks came into existence either as a result of the compulsions of imperial finance or by the felt came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary needs of local European commerce and were not imposed from outside in an arbitrary manner to modernize India's economy. Their evolution was, however, shaped by ideas manner to modernize India's economy. Their evolution was, however, shaped by ideas culled from similar developments in Europe and England, and was influenced by changes culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework. of the Indian economy to the economy of Europe and the global economic framework.

The eight banking subsidiaries are:

1-State Bank of Bikaner and

1-State Bank of Bikaner and Jaipur (SBBJ)Jaipur (SBBJ) 2-State Bank of Hyderabad (SBH)

2-State Bank of Hyderabad (SBH) 3-State Bank of India (SBI)

3-State Bank of India (SBI) 4-State Bank of Indore (SBIR) 4-State Bank of Indore (SBIR) 5-State Bank of Mysore (SBM) 5-State Bank of Mysore (SBM) 6-State Bank of Patiala (SBP) 6-State Bank of Patiala (SBP) 7-State Bank of Saurashtra (SBS) 7-State Bank of Saurashtra (SBS) 8-State Bank of Travancore (SBT) 8-State Bank of Travancore (SBT)

2.2 PRODUCTS AND SERVICES PROVIDED BY SBI

•

• Savings AccountsSavings Accounts •

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LOANS

•

• Personal LoansPersonal Loans •

• Home LoansHome Loans •

• Two Wheeler LoansTwo Wheeler Loans •

• New Car Loans New Car Loans •

• Used Car LoansUsed Car Loans •

• Overdraft against Car Overdraft against Car •

• Express LoansExpress Loans •

• Gold LoanGold Loan •

• Educational LoanEducational Loan •

• Loan against SecuritiesLoan against Securities •

• Loan against PropertyLoan against Property •

• Loans against Rental ReceivablesLoans against Rental Receivables

CARDS

•

• Credit CardsCredit Cards •

• Debit CardsDebit Cards

ACCESS YOUR BANK

•

• Net Banking Net Banking •

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2.3 SWOT ANALYSIS

::

STRENGTHS:

1. Brand Name

1. Brand Name: SBI Bank has earned a reputation in the market over the period: SBI Bank has earned a reputation in the market over the period of time (Being the oldest bank

of time (Being the oldest bank in India tracing history back to 1806)in India tracing history back to 1806)

2. Market Leader

2. Market Leader: SBI is ranked at 380 in 2008 Fortune Global 500 list, and: SBI is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in 2008 Forbes Global 2000. With an asset base of $126 billion and its ranked 219 in 2008 Forbes Global 2000. With an asset base of $126 billion and its reach, it is a regional banking behemoth.

reach, it is a regional banking behemoth.

3. Wide Distribution Network

3. Wide Distribution Network : Excellent penetration in the country with more: Excellent penetration in the country with more tha

than n 10010000 00 corcore e brabranchnches es and more and more thathan n 5100 branc5100 branches of hes of assassociociate ate banbanksks (subsidiaries).

(subsidiaries).

4. Diversified Portfolio

4. Diversified Portfolio: SBI Bank has all the products under its belt, which help: SBI Bank has all the products under its belt, which help it to extend the relationship with existing customer. SBI Bank has umbrella of it to extend the relationship with existing customer. SBI Bank has umbrella of products to offer their customers, if

products to offer their customers, if once customer has once customer has relationship with the bank.relationship with the bank. Some Products, which SBI Bank

Some Products, which SBI Bank is offering are: Retail Banking Business Bankingis offering are: Retail Banking Business Banking Merchant Establishment Services (EDC Machine) Personal loans & Car loans Merchant Establishment Services (EDC Machine) Personal loans & Car loans Insurance Housing Loans Government Owned: Government owns 60% stake in Insurance Housing Loans Government Owned: Government owns 60% stake in SBI. This gives SBI an edge

SBI. This gives SBI an edge over private banks in terms of customer security.over private banks in terms of customer security.

5. Low Transition Costs

5. Low Transition Costs-SBI offers very low transition costs w-SBI offers very low transition costs which attracts smallhich attracts small customers.

customers.

WEAKNESSES:

1. The existing hierarchical management structure of the bank, although strength 1. The existing hierarchical management structure of the bank, although strength in some respects, is a barrier to change.

in some respects, is a barrier to change.

2.Though SBI cards are the 2nd largest player in the credit card industry, it has 2.Though SBI cards are the 2nd largest player in the credit card industry, it has the highest no performing assets (NPAs) in the industry, which stand out to be at the highest no performing assets (NPAs) in the industry, which stand out to be at 16.28 % (Dec 2007).

16.28 % (Dec 2007). 3.

3.ModernisationModernisation: SBI lags with respect to private players in terms of : SBI lags with respect to private players in terms of modernisation of its processes, infrastructure, centralisation, etc.

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OPPORTUNITIES:

1. Merger of associate banks with SBI:

1. Merger of associate banks with SBI: Merger of all the associate banks (likeMerger of all the associate banks (like SBH, SBM, etc) into SBI will create a

SBH, SBM, etc) into SBI will create a mega bank which streamlines operationsmega bank which streamlines operations and unlocks value.

and unlocks value.

2. Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will further 2. Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will further increase its reach.

increase its reach.

3. Increasing trade and business relations and a large number of expatriate 3. Increasing trade and business relations and a large number of expatriate populations offers a great opportunity to expand on foreign soil.

populations offers a great opportunity to expand on foreign soil.

THREATS

::

1. Advent of MNC banks

1. Advent of MNC banks: Large numbers of MNC banks are mushrooming in: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market can increase the level of competition and prove a potential threat for the market share of SBI bank.

share of SBI bank.

2. Consumer expectations have increased many folds in last few years and the 2. Consumer expectations have increased many folds in last few years and the bank has not been responsive enough to meet them on time.

bank has not been responsive enough to meet them on time.

3. Private Banks have started venturing into the rural and semi-urban sector, 3. Private Banks have started venturing into the rural and semi-urban sector, which used to be the bastion of the State Bank and other PSU banks

which used to be the bastion of the State Bank and other PSU banks 4.

4. EmployeEmployee e StrikeStrike: There was an employee strike in the year 2006 which: There was an employee strike in the year 2006 which disrupted SBI’s activities. This can be repeated in the

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2.4 OVERVIEW OF HDFC BANK

HDFC Bank began operations in 1995

HDFC Bank began operations in 1995 with a simple mission: to be a with a simple mission: to be a "World-class Indian"World-class Indian Bank". They realized that only a single-minded focus on product quality and service Bank". They realized that only a single-minded focus on product quality and service excellence would help them to get there. HDFC Bank, one amongst the firsts of the new excellence would help them to get there. HDFC Bank, one amongst the firsts of the new generation, tech-savvy commercial banks of India, was set up in august 1995 after the generation, tech-savvy commercial banks of India, was set up in august 1995 after the Reserve Bank of India allowed setting up of Banks in the private sector. The Bank was Reserve Bank of India allowed setting up of Banks in the private sector. The Bank was promoted by

promoted by the Housing the Housing Development Finance Development Finance Corporation Limited, Corporation Limited, a premier a premier housinghousing finance company (set up in 1977) of India. Net Profit for the year ended March 31, 2006 finance company (set up in 1977) of India. Net Profit for the year ended March 31, 2006 was up 30.8% to Rs 870.8 cores. Currently (2007), HDFC Bank has 583 branches located was up 30.8% to Rs 870.8 cores. Currently (2007), HDFC Bank has 583 branches located in 263 cities of India, and all branches of the bank are linked on an online real-time basis. in 263 cities of India, and all branches of the bank are linked on an online real-time basis. The bank offers many innovative products & services to individuals, corporate, trusts, The bank offers many innovative products & services to individuals, corporate, trusts, governm

governments, ents, partnepartnershirships, ps, financfinancial ial instinstitutitutions, ions, mutuamutual l fundsfunds, , insurinsurance ance companicompanies.es. Bank also has over 1471 ATMs. In the next few months the number of branches and Bank also has over 1471 ATMs. In the next few months the number of branches and ATM

ATMs s shoshould uld go go up up subsubstastantintiallally. y. The The HouHousinsing g DevDeveloelopmepment nt FinFinance ance CorCorporporatiationon Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India

India. . HDFC Bank commenced operationHDFC Bank commenced operations as s as a Scheduled Commercia Scheduled Commercial Bank al Bank in Januaryin January 1995.HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build 1995.HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of sound customer franchises across distinct businesses so as to be the preferred provider of banking

banking services services for for target target retail retail and and wholesale wholesale customer customer segments, segments, and and to to achieveachieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the professional integrity, corporate governance and regulatory committed to maintain the professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values Operational compliance. HDFC Bank's business philosophy is based on four core values Operational Ex

Excecellllenencece, , CuCuststomomer er FoFocucus, s, PrPrododucuct t LeLeadaderershship ip anand d PePeopoplele. . ThThee HousingHousing Develop

Development ment Finance Corporation LimitedFinance Corporation Limited (HDFC(HDFC)) was amongst the first to receivewas amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector,

private sector, as part as part of the of the RBI's liberalization RBI's liberalization of the of the Indian Banking Indian Banking Industry in Industry in 1994.1994. Inc

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ACTIVITIES

HDFC Bank mainly provides three kinds of banking services: HDFC Bank mainly provides three kinds of banking services:

a.

a. PePerrsosonanal Bal Banknkiingng b.

b. NRI BankingNRI Banking c.

c. WhWhololesesalale e BaBanknkiningg

The following are the products and services provided by the HDFC bank The following are the products and services provided by the HDFC bank

•

• HDFC Bank HDFC Bank provides provides loans loans like like Personal Personal LoansLoans , , HoHome me LoLoanans s , , EdEducucatatioionanall

Loans , Two Wheeler Loans , New car Loans, Used Car Loans, Overdraft Against Loans , Two Wheeler Loans , New car Loans, Used Car Loans, Overdraft Against Car, Express Loans, etc.

Car, Express Loans, etc.

•

• HDFC Bank HDFC Bank provides provides Credit, Credit, Debit Debit and and Prepaid Prepaid Cards Cards to to help help you you meet meet your your

financial objectives. financial objectives.

•

• HDFC Bank HDFC Bank provides facilities like provides facilities like Mutual FundsMutual Funds,, InsuranceInsurance , , General General & & HealthHealth

In

Insusurranancece, , BoBondnds s , , FiFinanancnciial al PlPlananniningng, , KnKnowowllededge ge CeCentnterer, , EqEquiuittieies s && Derivatives, Mudra Gold bar.

Derivatives, Mudra Gold bar.

If you need to deal in foreign currency and keep tabs on exchange rates every now and If you need to deal in foreign currency and keep tabs on exchange rates every now and then, transfer funds to India, make payments etc., HDFC Bank

then, transfer funds to India, make payments etc., HDFC Bank has a range of productshas a range of products and services that you can choose from to transact smoothly, efficiently and in a timely and services that you can choose from to transact smoothly, efficiently and in a timely manner.

manner. HDFC Bank

HDFC Bank has designed two programs to make banking easier for the customers andhas designed two programs to make banking easier for the customers and they are

they are

•

• HDFC Bank HDFC Bank Preferred ProgrammePreferred Programme •

• HDFC Bank HDFC Bank Classic Programme.Classic Programme. •

• HDFC Bank HDFC Bank offers Private Banking services to high net worth individuals andoffers Private Banking services to high net worth individuals and

institutions. institutions.

•

• HDFC Bank HDFC Bank offers you quick, economical and convenient options to remit andoffers you quick, economical and convenient options to remit and

transfer funds to India. transfer funds to India.

•

• CorporCorporate Banking ate Banking reflreflects HDFC ects HDFC Bank Bank ’s’s strengths in providing our corporatestrengths in providing our corporate

clients in India, a wide array of commercial, transactional and electronic banking clients in India, a wide array of commercial, transactional and electronic banking products.

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•

• HDFC Bank HDFC Bank acts as an active medium between the government and the customersacts as an active medium between the government and the customers

by means of various services. by means of various services.

Distribution network

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 684 branches spread over 316 cities across India. All branches are linked on an of over 684 branches spread over 316 cities across India. All branches are linked on an onl

online ine reareal-tl-time ime basbasis. is. CusCustomtomers ers in in oveover r 120 120 loclocatiations ons are are alsalso o serservicviced ed thrthroughough Telephone Banking. The Bank's expansion plans take into account the need to have a Telephone Banking. The Bank's expansion plans take into account the need to have a presence in all major industrial and commercial centers where its corporate

presence in all major industrial and commercial centers where its corporate customers arecustomers are located as well as the need to build a strong retail customer base for both deposits and located as well as the need to build a strong retail customer base for both deposits and loan products. Being a

loan products. Being a clearclearing/sing/settlemettlement bank ent bank to various leading stock to various leading stock exchangeexchanges, thes, the Bank has branches in the

Bank has branches in the centers where the NSE/BSE centers where the NSE/BSE have have a strong and active mema strong and active member ber base.

base. The The Bank Bank also also has has a a network network of of about about over over 1,740 1,740 networked networked ATMs ATMs across across thesethese cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American

international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American ExpressExpress Credit/Charge cardholders.HDFC Bank operates in a highly automated environment in Credit/Charge cardholders.HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank's branches terms of information technology and communication systems. All the bank's branches have online connectivity, which enables the bank to offer speedy funds transfer facilities have online connectivity, which enables the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also provided to retail customers through the to its customers. Multi-branch access is also provided to retail customers through the branch

branch network network and and Automated Automated Teller Machines. Teller Machines. The The Bank Bank has has made made substantial effortssubstantial efforts and investments in acquiring the best technology available internationally, to build the and investments in acquiring the best technology available internationally, to build the inf

infrasrastrutructucture re for for a a worworld ld claclass ss bankbank. . In In terterms ms of of sofsoftwatware, re, the the CorCorporporate ate BanBankinkingg business is

business is supported by supported by Flex cube, Flex cube, while the while the Retail Banking Retail Banking business by business by Fin ware, Fin ware, bothboth from I-flex Solutions Ltd. The systems are open, scalable and

from I-flex Solutions Ltd. The systems are open, scalable and web-enabled. The Bank hasweb-enabled. The Bank has prioritized its

prioritized its engagement engagement in technology in technology and and the the internet as internet as one one of its of its key key goals and goals and hashas already made significant progress in web-enabling its core businesses. In each of its already made significant progress in web-enabling its core businesses. In each of its businesses,

businesses, the the Bank Bank has has succeeded succeeded in in leveraging leveraging its its market market position, position, expertise expertise andand technology to create a competitive advantage and build market share.

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2.5PRODUCTS AND SERVICES PROVIDED BY HDFC BANK

SAVINGS ACCOUNTS

 Regular Savings AccountRegular Savings Account

 Savings Plus AccountSavings Plus Account

 Savings Max AccountSavings Max Account

 No Frills Account No Frills Account

 Retail Trust AccountRetail Trust Account

 Salary AccountsSalary Accounts

 PayrollPayroll

 ClassicClassic

 Regular Regular

 PremiumPremium

 Defense Salary AccountDefense Salary Account

 Kid's Advantage AccountKid's Advantage Account

 Pension Saving Bank AccountPension Saving Bank Account

 Family Savings GroupFamily Savings Group

CURRENT ACCOUNTS

 Plus Current AccountPlus Current Account

 Trade Current AccountTrade Current Account

 Premium Current AccountPremium Current Account

 Regular Current AccountRegular Current Account

 Reimbursement Current AccountReimbursement Current Account

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FIXED DEPOSITS

 Regular Fixed DepositRegular Fixed Deposit

 Super Saver AccountSuper Saver Account

 Sweep-in AccountSweep-in Account

LOANS

 Personal LoansPersonal Loans

 Home LoansHome Loans

 Two Wheeler LoansTwo Wheeler Loans

 New Car Loans New Car Loans

 Used Car LoansUsed Car Loans

 Overdraft Against Car Overdraft Against Car

 Express LoansExpress Loans

 Gold LoanGold Loan

 Educational LoanEducational Loan

 Loan Against SecuritiesLoan Against Securities

CARDS

 Credit CardsCredit Cards

 Silver Credit CardSilver Credit Card

 Gold Credit CardGold Credit Card

 Platinum Plus Credit CardPlatinum Plus Credit Card

 Debit CardsDebit Cards

 Easy Shop International Debit CardEasy Shop International Debit Card

 Easy Shop Gold Debit CardEasy Shop Gold Debit Card

 Easy Shop International Business Debit CardEasy Shop International Business Debit Card

ACCESS YOUR BANK

 Net Banking Net Banking

 Mobile BankingMobile Banking

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 Phone BankingPhone Banking

2.6 2.6 SWOT ANALYSIS

SWOT ANALYSIS

STRENGTHS:

-1.

1. RiRighght st sttrratategegy fy for or ththe re rigight ht prprododucuctts.s.

2.

2. Superior Superior customer servicecustomer service vs. competitors.vs. competitors.

3 3.. GGrreeaat t BBrraannd d IImmaaggee.. 4. 4. PrPrododucuctts hs havave ree reququiirered acd accrcredediitatatitionon.. 5. 5. HiHigh gh dedegrgree ee of of cucuststomomer er sasattisisfafactctiionon.. 6 6.. GGooood d ppllaacce e tto o wwoorrk k 7.

7. LoLower wer rerespsponsonse te timime we witith eh efffficicieient nt anand ed effffecectitive sve serervivicece..

8. 8. DedDedicicatated wed wororkfkfororce ace aimimining at mg at makakining a log a long-ng-teterm crm carareeeer in tr in the fhe fieieldld..

WEAKNESS:

– – 1. 1. SoSomme ge gapaps is in rn ranange ge fofor cr cererttaiain sn secectotorrs.s. 2. 2. CuCussttomomer ser serervivice sce sttafaff nf neeeeds ds trtraiaininingng.. 3 3.. PPrroocceessssees s aannd sd syysstteemmss, e, ettcc 4 4.. MMaananaggeemmenent ct coovveer ir innssuuffffiicciieenntt.. 5.

5. SectSector or grogrowth wth is is consconstratraineined bd by ly low ow uneunemplmploymoyment ent levlevels els and and comcompetpetitiition on for for

staff staff OPPORTUNITIES: OPPORTUNITIES: – – 1 1.. PPrrooffiit mt maarrggiinns ws wiilll bl be ge goooodd.. 2 2.. CCououlld ed exxtteennd td to oo ovveerrsseeaas bs brrooaaddlly.y. 3 3.. NNew ew ssppececiiaalliisst t aapppplliicacattiioonnss.. 4 4.. CCououlld sd seeeek bk beetttteer cr cususttoommeer dr deeaallss.. 5.

5. FasFast-t-trtracack cark careeeer devr develelopopmement oppnt opporortutuninitities on an ines on an induduststryry-w-widide base basisis..

6.

6. An aAn applpplied ied resresearearch cch cententer ter to co creareate ote opporpportuntunitiities es for for devdeveloelopinping tg techechniqniques ues toto

provide added-value services.

THREATS:

-1 1.. LLeeggiissllaattiioon cn coouulld id immppaacctt.. 2 2.. GGrreeaat t rriissk k iinnvvoollvveedd

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3. 3. VeVery ry hihigh cgh comompepetititition pon prerevavaililining ig in tn the ihe indndusustrtry.y. 4. 4. VuVulnlnererabable tle to reo reacactitive ave attttacack by mk by majajor cor comompepetititotorsrs.. 5. 5. LaLack of ck of ininfrfrasastrtrucuctuture ire in run ruraral arl areaeas cos coululd cod consnstrtraiain inn inveveststmementnt.. 6. 6. HiHigh gh volvolumume/e/lolow cw cosost mt mararkeket it is is intntenensesely ly cocompmpetetititivive.e.

2.7 LITERATURE REVIEW

1. Denise K. Conroy

1. Denise K. Conroy :- In his study titled (Customer satisfaction measures in the public:- In his study titled (Customer satisfaction measures in the public se

sectctoror: : whwhat at do do ththey ey tetell ll usus?)?) attemptattempts s to to devdevise ise cuscustomtomer er satsatisfisfactaction ion meameasursures,es, according to him there are a number of factors which can affect the interpretation of according to him there are a number of factors which can affect the interpretation of results - the nature of the customer, service provision, service quality and, for the public results - the nature of the customer, service provision, service quality and, for the public sector, the extent to which consumer sovereignty exists. Resources may be better directed sector, the extent to which consumer sovereignty exists. Resources may be better directed towards setting and maintaining high levels of standard of service. This study addresses towards setting and maintaining high levels of standard of service. This study addresses the difficulties and highlights the complex nature of a customer or service beneficiary the difficulties and highlights the complex nature of a customer or service beneficiary who can be, at the same time, a taxpayer, voter, recipient of financial benefits, with who can be, at the same time, a taxpayer, voter, recipient of financial benefits, with expe

expectactatiotions ns of of the the publpublic ic secsector tor and and its deliveits delivery ry agenagent, t, yet yet canncannot ot chochoose ose anotanother her provider.

provider.

2.

2. Harry Nowka, Southwestern Oklahoma State University, Nancy Buddy, SouthwesternHarry Nowka, Southwestern Oklahoma State University, Nancy Buddy, Southwestern Oklahoma State University Robert Reeder, Southwestern Oklahoma S

Oklahoma State University Robert Reeder, Southwestern Oklahoma State University andtate University and Daniel Hart, Southwestern Oklahoma State University in their study titled (Customer Daniel Hart, Southwestern Oklahoma State University in their study titled (Customer Responses: A Comparative Study) wants to determine various variables which influence Responses: A Comparative Study) wants to determine various variables which influence customers of a bar and grill. This comparative analysis includes customer responses with customers of a bar and grill. This comparative analysis includes customer responses with com

comparparisoisons ns madmade e to to the the majmajor or comcompetpetitoitor's r's cuscustomtomer er resresponponsesses, , stustudent dent cuscustomtomer er responses, and responses of a panel of non customers assembled to assess potential responses, and responses of a panel of non customers assembled to assess potential customer responses. This study indicates that location can be a significant deterrent to customer responses. This study indicates that location can be a significant deterrent to expansion of the customer base. The personality of the owner can have a positive impact expansion of the customer base. The personality of the owner can have a positive impact on

on cuscustomtomer er flflow. ow. AnaAnalyslysis is of of spespendinding ng patpatterterns ns indindicaicates tes thathat t foofood d and and pool werepool were underutilized. The male/female ratio was a determinate of cu

underutilized. The male/female ratio was a determinate of customer flow.stomer flow.

3. Dawn Iacobucci, Amy Ostrom, Kent

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two studies that rely on divergent methodologies to examine whether or not quality and two studies that rely on divergent methodologies to examine whether or not quality and satisfaction have distinct antecedent causes, consequential effects, or both (i.e., whether satisfaction have distinct antecedent causes, consequential effects, or both (i.e., whether or not they should be considered a single construct, or distinct, separable constructs). or not they should be considered a single construct, or distinct, separable constructs). They focus on consumers’ understanding and use of the words

They focus on consumers’ understanding and use of the words qualityquality andand satisfaction; satisfaction; inin both studies,

both studies, respondents report respondents report whether or whether or not they not they think quality think quality and satisfaction and satisfaction differ,differ, and if so, on what dimensions or under what circumstances. In the first study, they use and if so, on what dimensions or under what circumstances. In the first study, they use the qualitative “critical incident” technique to elicit service attributes that are salient to the qualitative “critical incident” technique to elicit service attributes that are salient to respondents when prompted to consider quality and satisfaction as distinct. The code the respondents when prompted to consider quality and satisfaction as distinct. The code the responses to these open-ended survey questions to examine whether quality can be teased responses to these open-ended survey questions to examine whether quality can be teased apart from satisfaction, from the respondents’ (consumers’) perspective. In the second apart from satisfaction, from the respondents’ (consumers’) perspective. In the second study, to triangulate on the qualitative data, they experimentally manipulated a number of study, to triangulate on the qualitative data, they experimentally manipulated a number of service attributes drawn from both the first study and from the literature to see whether or service attributes drawn from both the first study and from the literature to see whether or not they have differential impacts on judgments of quality and satisfaction. They did not not they have differential impacts on judgments of quality and satisfaction. They did not presuppose that

presuppose that quality and quality and satisfaction differ—rather, they satisfaction differ—rather, they asked respondents asked respondents to make to make aa judgment either of quality or of satisfaction, defining the term as t

judgment either of quality or of satisfaction, defining the term as they saw fit.hey saw fit. 4.

4. Entrees D. Athanassopoulos:-Entrees D. Athanassopoulos:-In this study titledIn this study titled (Customer Satisfaction Cues To(Customer Satisfaction Cues To Sup

Support port MarkMarket et SegmSegmentaentation tion and and ExpExplain lain SwiSwitchitching ng BehBehavioavior)r) examexamineined d thethe customer satisfaction cues in retail banking services in Greece. The study proposes an customer satisfaction cues in retail banking services in Greece. The study proposes an instrument of customer satisfaction that contains service quality and such other attributes instrument of customer satisfaction that contains service quality and such other attributes as price, convenience, and innovation. The proposed framework of customer satisfaction as price, convenience, and innovation. The proposed framework of customer satisfaction was verified empirically yielding four distinct facets for business customers and five for was verified empirically yielding four distinct facets for business customers and five for ind

indiviividuadual l cuscustomtomersers. . The The perperforformanmance ce impimpliclicatiations ons of of the the cuscustomtomer er satsatisfisfactactionion instrument are also explored. What is shown is that customer segments, in fact, yield instrument are also explored. What is shown is that customer segments, in fact, yield statistically different satisfaction scores, which verifies the managerial value of customer statistically different satisfaction scores, which verifies the managerial value of customer segmentation practices. Finally, the facets of customer satisfaction as explanatory cues segmentation practices. Finally, the facets of customer satisfaction as explanatory cues for the switching behavior of individual and business customers were tested successfully. for the switching behavior of individual and business customers were tested successfully.

5.

5. ReRengngasasamamy y ElElanango go anand d ViVijajaya ya KuKumamar r GuGuidide:e:-- In In ththeieir r ststududyy titled(Atitled(A Co

Compmparaarativtive e StuStudy dy on on the the SeServrvice ice QuQualiality ty and and CuCustostomemer r SatSatisfisfacactiotion n amamonongg Pri

Privatevate, , PubPublic lic and and ForForeigeign n BanBanks)ks) focfocuseuses s on on the the serservicvice e quaqualitlity y and and cuscustomtomer er satisfaction among the private, public and foreign banks in India. An analysis is carried satisfaction among the private, public and foreign banks in India. An analysis is carried

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out to examine the level of awareness among customers and to identify the best sector out to examine the level of awareness among customers and to identify the best sector which provides qualitative customer service. This becomes relevant in the context of which provides qualitative customer service. This becomes relevant in the context of recommendations of various committees constituted by the Government of India and the recommendations of various committees constituted by the Government of India and the RBI, from time to time, to suggest measures to improve customer service systems of the RBI, from time to time, to suggest measures to improve customer service systems of the public

public sector sector commercial commercial banks banks of of India. India. A A well-structured well-structured questionnaire questionnaire is is used used toto collect the views of respondents across the three banking sectors. The survey instrument collect the views of respondents across the three banking sectors. The survey instrument includes various dimensions, pertaining to the quality of customer services in terms of includes various dimensions, pertaining to the quality of customer services in terms of banking

banking personnel, personnel, convenient convenient working working hours, hours, Web-based Web-based services, services, error error free free value- value-added services and efficient grievance redressed mechanism etc. Apart from the basic added services and efficient grievance redressed mechanism etc. Apart from the basic statistical tools

statistical tools such as measures such as measures of central tendency, of central tendency, authors also use authors also use `factor analysis'`factor analysis' and the `One-way ANOVAs' classification. The idea behind this is to extract the relevant and the `One-way ANOVAs' classification. The idea behind this is to extract the relevant factors and analyze whether there is any significant difference with respect to service factors and analyze whether there is any significant difference with respect to service quality within the three banking sectors. The results indicate that the level of awareness quality within the three banking sectors. The results indicate that the level of awareness among the

among the customcustomers improved significers improved significantly during the antly during the study period. It study period. It is interestis interesting toing to note that the results are consistent with the previous studies conducted on customer note that the results are consistent with the previous studies conducted on customer service aspects, and it has been observed that the foreign and the new generation private service aspects, and it has been observed that the foreign and the new generation private sector banks are serving the customers better. This has larger implications on the public sector banks are serving the customers better. This has larger implications on the public sector commercial banks in India with respect to customer service delivery aspects. It is sector commercial banks in India with respect to customer service delivery aspects. It is high time the public sector commercial banks made efforts to revamp their approach high time the public sector commercial banks made efforts to revamp their approach towards customers, so as to perform better and derive competitive advantage in the long towards customers, so as to perform better and derive competitive advantage in the long run.

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CHAPTER3

RESEARCH METHODOLOGY

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3.

1 1 RESEARCH

RESEARCH METHODOLOGY

METHODOLOGY

It describes the data collection method, the sampling plan, the tools of investigation, It describes the data collection method, the sampling plan, the tools of investigation, planning and

planning and testing of testing of questionnaire and questionnaire and the limitations of the limitations of the study. the study. The study The study requiresrequires the data to be collected from two different sources i.e. the primary source and the the data to be collected from two different sources i.e. the primary source and the secondary source. The primary data is collected with the help of structured questioners secondary source. The primary data is collected with the help of structured questioners which is being modified &

which is being modified & relireliable and able and the secondarthe secondary y data through the various journaldata through the various journals,s, newspapers and websites

newspapers and websites

3.2OBJECTIVES OF THE STUDY

1.

1. To studTo study the pry the prefereeference of cunce of customestomers regrs regardinarding SBI bank g SBI bank and HDFand HDFC bank.C bank. 2.

2. To analyTo analyze which faze which facilicility inflty influences tuences the customhe customer most wher most while seile selectilecting a Bank.ng a Bank. 3.

3. To comTo compare tpare the varhe various ious serviservices prces provided ovided by thby these bese banks.anks. 4.

4. To make To make aware about aware about the various the various services proviservices provided by ded by the banks.the banks. 5.

5. To know To know the which the which type of type of facilities facilities preferred by preferred by customerscustomers

DATA SOURCE:

(a)

Primary Data

:-:- Primary data was collected by means of questionnairesPrimary data was collected by means of questionnaires

(b)

Secon

Secondary

dary data

data

: : - - SeSeconcondadary ry dadata ta cocollllectected ed by by rerefeferrrrining g to to varvarioious us boobooksks,, newspapers, magazines, journals and internet (details in bibliography)

newspapers, magazines, journals and internet (details in bibliography)