Indian banking industry (i.e.) publicsectorbanks are mainly facing two problems. That is inefficiency and competition from private banks. These problems can be tackled effectively by giving energy boosters like training and development, motivation of employees and by creating goals etc. So the banking industry should follow the target market, understand the real customer needs and satisfaction. Similarly bankers should take care of 7P’is of Bank Service Marketing Mix. So its 0n time for publicsectorbanks to focus on some aspects like rural development, staff coordination, and employee’s job satisfaction which will help
Increasing number of competitors, low switching costs from one bank to another and near identical products, has decreased the customers loyalty towards their banks. The consumers mostly select banks based on their convenience in terms of location and distance to their offices or homes. The pressures of cut throat competition and aggressive marketing have contributed to the growth of CRM in the Financial Services Sector. Analysts have reported an increase in customer retention of 5% has helped increase Profitability by 35% in banking business. Banking industry, being a service industry with regular interaction with human beings is a bigger challenge for the implementation of CRM. “Customers are drifting away from Face-to-Face to virtual banking and from Branch specific to Anywhere banking.”Banks have started recognizing that they can no longer hold on to a customer with one or two specific products but must encompass the entire customer relationship towards a client’s expectations. Private Banks have projected themselves as extraordinarily 'Customer Centric' in what they believe to be highly customized services to the High Net Worth Individuals. As against this PublicSectorBanks are perceived as institutions for “Aam Adami” and economic development. Despite this distinction CRM is equally important for both. This study brings out the some of the distinguishing features of both under CRM.
CONCLUSION increase the earnings, to reach an optimal balance between returns and risk. It was When the banks’ performance is also observed in the study that publicsector compared across the CAMEL ratios, a few banks were not utilizing their resources banks such as Bank of Maharashtra, Punjab optimally. The business per employee and & Sind Bank, Dena Bank, South Indian Bank, profit per employee ratios in publicsector State Bank of India etc. were found to have banks are too low. Hence it is necessary for poor rankings in more than 70% of ratios publicsectorbanks improve the ranks comparisons. productivity/efficiency of employees, either
Abstract: Banking companies in the service sector exhibit the problem of distinct results in terms of efficiency. This problem is a cause of concern for many big organizations in the service sector like hotels, courier companies, hospitals, banks and so on. In particular, the last decade has observed continuous amendment in regulation, technology and competi- tion in the global financial services industry, and Indian banks are no exception. To measure the stability, sustainability and profitability of the banking system, it is therefore crucial to scale the operations of banks performing in India. A well- organized banking system will provide an extensive way to higher economic growth in any country. Thus, evaluating the technical efficiency is important to depositors, owners, potential investors, managers and to policy makers. The present study investigates the technical efficiency of publicsectorbanks in India by considering the study period between 2008-09 and 2010-11and using the data extracted from RBI website (www.rbi.org.in) and IBA website (www.iba.org.in). For this purpose, the data envelopment analysis (DEA) was used with two input variables (Interest expenses and operating expenses) and two output variables (interest income and other income). The efficiency scores were calculated for a sample of twenty- six publicsectorbanks operating in India. The result shows that Corporation Bank, State Bank of India and IDBI were con- sistently performed efficiently in all the years under study.
Yi (1990) in his study titled ‘A Critical Review of Consumer Satisfaction’ stated that customer satisfaction is a collective outcome of perception, evaluation and psychological reactions to the consumption experience with a product or service. Kangis and Voukelatos (1997) in their paper titled ‘Private and PublicBanks: a Comparison of Customer Expectations and Perceptions’ reported the findings of a survey among customers of private sectorbanks and publicsectorbanks in Greece on service quality perceptions and expectations. It was found that services offered by private sectorbanks had a more favorable influence on actual perceptions of quality received than that of publicsectorbanks. It was suggested that banks should look carefully at each one of the dimensions of customers’ perceptions. Frust et al., (2000) in their study titled ‘Who Offers Internet Banking’ investigated how national banks offering Internet banking performed relative to other national banks with respect to profitability, cost efficiency and other characteristics. The study revealed that the Institutions with Internet banking outperformed non-Internet banks in terms of profitability. It was concluded that revolutionary developments in information and communication technology would continue to have a profound impact on the banking and financial industry. Ramayah and Ling (2002) in their study titled ‘An Exploratory Study of Internet Banking in Malaysia’ conducted a study on Internet banks of Malaysia. It was opined that the main driving factor for the adoption of Internet banking was the extent of Internet connectivity as it was the pioneer to Internet banking. It was found that more than 90% of the respondents indicated that they had some form of Internet access. It was also observed that the banks had been successful in promoting and creating awareness of the products and services that were being offered through
The Table 4 clearly explains that the net NPA of Private sectorbanks in decreasing trend, but in publicsectorbanks it shows the increasing trends. During the period of 2009-10, 2010-11, 2011-12, the net NPA of private sectors banks is in decreasing trends. But the publicsectorbanks shows increasing trends in the same period. During 2012-13, the net NPA of Publicsectorbanks increased by 51.77 per cent than that of previous year, but it is 30 per cent for private sectorbanks. During 2012-13, percentage of NPA in Advances is less than zero for the private sectorbanks, but it is 2 per cent for publicsectorbanks. Hence, it can be understood that the private sectorbanks control its level of NPA than the PublicSectorbanks.
The introduction to the marketing concept to banking sectors can be traced back to American Banking Association Conference of 1958. Banksmarketing can be defined as the part of management activity, which seems to direct the flow of banking services profitability to the customers. The marketing concept basically requires that there should be thorough understanding of customer need and to learn about market it operates in. Further the market is segmented so as to understand the requirement of the customer at a profit to the banks.
2) Recapitalization need will come down: The requirement in terms of recapitalization for government of India is also increasing. In the year 2014 the government of India announced that they will provide a recapitalization of around 70,000 cr but in a span of 5 years that is through budgetary allocation. In the first two years they allocated 25,000 cr and in the next two years they allocated 10,000 cr . So basically government of India said they will provide recapitalization till 2019. But over a period of time the government of India is realised that this amount of 70,000 cr is not sufficient for the banking sector. As a result of this last year itself the government of India has extended this particular idea of recapitalization from 70,000 cr to more than 2.1 lakh cr. 3) Regulatory burden will come down: It is becoming burned for RBI to regulate all the participants in the banking sector. On one side RBI has to regulate differentiated banks, RBI has to regulate regional rural banks, RBI has to regulate scheduled commercial banks which are private sectorbanks as well as publicsectorbanks. Since the number of banking units have kept on increasing the burden to regulate also has increased on the shoulders of RBI. So What if the number of banks under the publicsectorbanks are reduced the burden on the shoulders of RBI will also come down. So regulatory burden on RBI also will come down.
allowed new banks to be started in the private sector as per the recommendations of Narasimham committee. There was the domination of Indian banking industry by publicsectorbanks. But now the situations have changed new generation banks with use of technology and professional management has gained a rational position in the banking industry. Brijesh K. Saho, Anandeep Singh (2007), this paper attempts to scrutinize, the performance trends of the Indian commercial banks for the period: 1997-98 - 2004-2005. Our broad empirical findings are pinpointing in many ways. First, there is a signal of an affirmative gesture about the effect of the reform process on the performance of the Indian banking sector by the increasing average annual trends in technical efficiency for all ownership groups. Second, the higher cost efficiency accrual of private banks over nationalized banks indicate that nationalized banks, though old, do not reflect their learning experience in their cost minimizing behavior due to X-inefficiency factors arising from government ownership. This finding also highlights the possible stronger disciplining role played by the capital market indicating a strong link between market for corporate control and efficiency of private enterprise assumed by property right hypothesis. And, finally, concerning the scale elasticity behavior, the technology and market-based results differ significantly supporting the empirical distinction between returns to scale and economies of scale, often used interchangeably in the literature. Vradi, Vijay, Mauluri, Nagarjuna (2006), in his study on´” Measurement of efficiency of banks in India” concluded that in modern world performance of banking is more important to stable the economy in order to see the efficiency of Indian banks. We have
Despite, mass acceptance of the concept of CSR reporting by banking sector around the globe, Indian banks are not responding in the expected manner. According to some critics, Indian financial institutions are concerned to the exclusion of all other considerations about the ecology of their balance- sheets and, therefore, focused on ever-greening their assets. From the results of this study it can be concluded that CSR activities are not more than 10 per year except few banks and among all activities focus on Community welfare is highest, followed by employee welfare and financial literacy where environment protection activities are negligible or just 1 or 2 per year. Except PNB, SBI and Syndicate Bank from publicsector and ICICI & HDFC from Private sector others are not doing well in CSR practices. But collectively private sectorbanks are performing better than the publicsectorbanks in community development, employee welfare and environment protection but as far as financial literacy is concerned, it is publicsectorbanks which are performing better through credit counselling of masses in rural areas by opening financial literacy and Credit Counselling Centres. There is negative relationship between CSR variables and ROA & ROE but in case of ROA community and employee welfare have positive impact. There are again mixed results because in case of ROA some CSR variables have significant impact while in case of ROE no variable witness significant impact. Hence it can be concluded that financial performance may get affected by CSR to some extent but on the other side it can be drawn from the results that if the banks start following CSR practice to the desired extent then these may have significant impact on their financial performance.
this study the authors used CAMEL Approach was applied to evaluate the financial performance of selected publicsectorbanks. Based on the set indicator as defined by CAMEL framework the financial performance evaluated with the help of various ratios. On the basis of Camel model, the researchers found that Bank of Baroda and PNB were considered the most stable banks. Indian Bank and IDBI banks, Canara Bank & SBI were considered average, and the Union Bank, Bank of India, Syndicate Bank & CBI were considered below average, and were closely monitored to ensure their viability.
) Pointed Out There Is A Significance Difference In The Customers’ Perception In Internet Banking Services Provided By The Public And Private SectorBanks. Private SectorBanks Are Providing Better Service Quality Of Internet Banking That The PublicSectorBanks. Haq And Muhammad (2012) Compared Public And Private SectorBanks Of Pakistan By Evaluating Their Customer Satisfaction. The Research Shows That Customer Satisfaction Varies From Person To Person. Lau Et. Al. (2013) Identified The Interrelationships Between Service Quality, Customer Satisfaction And Customer Loyalty In The Retail Banking Sector In Hong Kong Based On SERVQUAL Model. The Results Indicate That The Five SERVQUAL Dimensions Have A Positive Influence On Customer Satisfaction. The Study Suggests That SERVQUAL Is A Suitable Instrument For Measuring Service Quality In The Retail Banking Sectors. Nagabhushanam (2013) Identified The Degree Of Importance Attached To Various Dimensions Of Service Quality By The Customers; And Found That Foreign Banks Are Rated High By The Customers In All The Service Quality Dimensions. PublicSectorBanks Have Been Rated Second In All Parameters Except That Of ‘Responsiveness’ And Private Banks Stands The Last In All The Parameters. Many Studies Have Shown That Service Quality Is The Key Determinant Of Customer Satisfaction. These Frontages The Pertinent Questions Relating To Whether The Banks Are Offering The Services As Per Customer’s Requirements, Whether Customers Are Satisfied With These Services. Against This Backdrop, The Present Study Is An Attempt To Examine Empirically The Quality Of Services Delivered By Commercial Banks And The Extent Of Impact On Customer Satisfaction.
On the similar lines, Anita Makkar and Shveta Singh during May 2013 in their paper “Analysis of the Financial Performance of Indian Commercial Banks: A Comparative Study” have used CAMEL ratings and t-test methodology for the period from 2006-07 to 2010-11. They suggested that there is need for overall improvement in publicsectorbanks and also established a difference in the capital adequacy, asset quality and earning capacity of public and private sectorbanks in India.
theoretical foundation of the study is based on various secondary sources such as texts book on service quality, articles, quality magazines, and published papers. For the purpose of the study, a questionnaire was designed on 5 point Likert scale, where '1' represents SD (strongly disagree) and '5' represents SA (strongly agree), and the total 410 respondents were asked to respond to the statements in the SERVQUAL scale. Questionnaire consisted of 26 questions related to five dimensions of service quality in which the customers of various banks responded against their expectations and perceptions. Questionnaires were personally delivered by hand at workplaces and homes, which was used as a method for data collection. The respondents (220 of publicsectorbanks and 190 of private sectorbanks) were required to record their perceptions and expectations of the service of the respective publicsector Bank and private sectorbanks in Lucknow. Three publicsectorbanks-SBI, PNB and BOB and three private sectorbanks –HDFC, ICICI and Axis were selected for the study. The study is based on the assumption that all banks belong to the same category. This categorization was based on the responses of the customers.
The forgoing analysis reveals that thought there is phenomenal development in various banking sectors yet the public sectors in particular is still lagging behind major thrust areas such as asset quality, business per employee capital adequacy requirements, and profitability etc. Some suggestions and recommendations for improvement in performance of publicsectorbanks are given below. Higher operating cost is a major obstacle affecting the profitability of publicsectorbanks. . PublicSectorBanks are lagging behind in Human Resource Development practices as compared to foreign and private sectorbanks. PublicSectorBanks should devise continuous and compulsory training and development program in their organizations to inculcate professional work culture, and interpersonal skills. Efforts should also be made for making for making the staff technical. Human resource development is a critical factor which can play major role in enhancing business per employee and profit per employee. Assets quality reflects the soundness of financial institutions. PublicSectorBanks should disburse their funds in quality assets to reduce NPA level. As the risk profile of banks lending is adequate attention to quality of lending so that credit expansion could be on sustainable basis building upon higher profitability while ensuring financial stability. Information technologies have become a driver along with business enabler. PublicSectorBanks required considerable investment on computerization of branch networks and their operations to get quick and greater access to information.. Strong internal control and supervision mechanism can play an important role in ensuing quality of assets and reduction in NPA lever. For financial stability, an efficient and sound risk management system is a pre-requisite..
Abstract: Banks are the strongest pillars of any economy. As their very nature of business like providing loans, Banks attract different types of default risks. Banks face credit risk, operational risk and market risk. In banks, Capital is crucial and vigorous to maintain the survival of bank. Capital Adequacy indicates that banks have adequate capital to maintain all of its liabilities and risks. So, capital adequacy requires in banks to build investors’ confidence and prevent bank from bankruptcy. In this present paper researcher analysed CRAR of selected PublicSectorBanks, Private SectorBanks and Foreign Banks in India with an objective to compare within selected banks that which bank is highly adequate in terms of their capital management. The time period of the study is from 2008 to 2016. For objective of this study; tool and techniques are CAMELs criteria, rank and correlation. Banks are selected on the basis of market capitalization rate. This paper has resulted that ICICI bank is highly consistent in maintenance of CRAR.
The main purpose of this paper is to predict the NPAs of the scheduled commercial banks and publicsectorbanks of the Indian banking sector. It can thereby be used to predict NPAs of scheduled commercial banks and publicsectorbanks and gauge the crisis is facing. There are many forecasting methods which can be used to predict the variable of interest. They are broadly divided into two categories such as Regression models and Time-series based methods. Under the regression model, there are two methods have been followed namely Simple Linear Regression (SLR) and Multiple Linear Regression (MLR). There are five methods such as Moving Average (MA), Simple Exponential Smoothing (SES), Holt, and Holt- winter method (HW) comes under time series. As far as the regression models are concerned they have used for forecasting future events. Depends on the tendency of independent variables, they predict the tendency for the dependent variable. Since the study was aimed to predict the NPAs of scheduled commercial banks and publicsectorbanks of Indian banking sector in 2020 in association with external economic factors such as gross advances and loans (GA&L) gross domestic product (GDP), repo rate (RR) and inflation rate (IR) regression models are considered as the best suit in this particular circumstances. SLR could not be used because it gives the value of the dependent variable (Gross NPA’s) in terms of only one independent variable. According to the study, NPA is an attribute of various factors so the SLR method was unable to provide desirable results. Hence, the MLR method has been chosen for the present study.
The present paper intents to cockeye the impact of Merger and Acquisitions (M&A) on surviving Bank with a particular focus on Indian Overseas Bank functioning in Publicsector which acquired Bharat Overseas Bank Ltd, Federal Bank Ltd, one of the popular Private Sector Bank acquired Ganesh Bank of Kurandwada Ltd .Researcher purposefully selected these two banks for the present study. This is so because, acquisition of Bharat Overseas Bank by Indian Overseas Bank falls under the category of Forced Merger, whereas acquisition of Ganesh Bank of Kurandwada Ltd by Federal Bank Ltd falls under category of Compulsory Merger. In addition to this, researcher felt it relevant to select these entities as one of them involves merger of private bank with publicsector bank and another deals with merger of private sector bank with private sector bank. The present study is purely based on secondary data. To make impact study of merger data relating to both acquiring banks are collected by categories them into pre merger period of Five years (2001 to 2005 and 2002 to 2006 of both Banks) And post merger period of Five years (2007 to 2011 and 2008 to 2012 of both Banks) excluding year of merger in each case treating the same transition period. And so categorized data is systematically Compiled, Classified, Tabulated, and Analyzed and interpreted by using appropriate statistical tools and techniques. To be more specific Paired T-test has been applied to conclude the hypotheses set for the present study. The lines of investigation followed under present study are based on Profitability, Management Efficiency and Solvency parameters of impact evaluation. There are three variants of merger and acquisition in Indian banking sector based on nature of banking entities involved either as target bank or as acquiring bank(Public bank and Private), namely I) Publicsectorbanks with Publicsectorbanks (03); ii) Private sectorbanks with Publicsectorbanks (24); and iii) Private sectorbanks with Private sectorbanks (14).
The population of this study consists of all customers of Canara Bank and Axis Bank. Random sampling has been applied to collect data from the customers of two banks residing in selected cities of Uttar Pradesh. The size of the sample is 231 customers. So far data collection is concerned; a well designed questionnaire set on a five point Likert-scale has been used to collect data from customers living in living in Aligarh, Agra, Mathura, and Hathras. Lastly, independent sample t-test has been used to test the hypotheses of the study.
Indian customers are moving towards Internet banking, slowly but steadily have started providing Internet banking services. There is a clear need to develop a better understanding of how customers appraise these services and helping hand up satisfaction. Customer satisfaction is one of the main aspects determining the success or failure of any internet banking services. Customers' satisfaction has tended to lag behind because practitioners have focused mainly on issues of usability and measurement of use. Therefore, customer perception and preferences on internet banking have a significant impact on bank's success. As India is taking massive leaps towards globalization E-banking is the sector to be studied with great interest. The question of how attitude towards elements of existing banking service might influence the consumer's decision to use internet banking has not been investigated. As customers get more and more educated, getting insight about modern banking via internet banking has go forward as primary area of concern for all leading and upcoming banks in India. This study provides an insight analysis on this aspect. The research will assist bank direction to ascertain a better understanding of customers' satisfaction towards internet banking offered by the both Banks.