1

A COMPARATIVE STUDY BETWEEN PRIVATE SECTOR BANKS AND

PUBLIC SECTOR BANKS WITH RESPECT TO CACHAR DISTRICT

A Thesis Submitted in

Partial Fulfilment of the Requirements for the Degree of

Master of Business Administration

Deepanjan Das
MBA-12-122


Under the supervision of
Mr.Shubrangshu Baruah




Department of Management Studies

NATIONAL INSTITUTE OF TECHNOLOGY SILCHAR
(2012-2014)


2


DECLARATION


Thesis Title: A Comparative Study between Private Sector Banks and Public Sector
Banks with respect to Cachar District
Degree for which the Thesis is submitted: Master of Business Administration

I declare that the presented thesis represents largely my own ideas and work in my own
words. Where others ideas or words have been included, I have adequately cited and listed
in the reference materials. The thesis has been prepared without resorting to plagiarism. I
have adhered to all principles of academic honesty and integrity. No falsified or fabricated
data have been presented in the thesis. I understand that any violation of the above will
cause for disciplinary action by the Institute, including revoking the conferred degree, if
conferred, and can also evoke penal action from the sources which have not been properly
cited or from whom proper permission has not been taken.


----------------------------
(Signature)
Deepanjan Das
MBA-12-122

Date:









3


CERTIFICATE
________________________________________________________________


This id to certify that the work contained in the thesis entitled A Comparative Study between
Private Sector Banks and Public Sector Banks with respect to Cachar District is a bona fide
work of Deepanjan Das (MBA-12-122) and Bishwadip Das (MBA-12-108) for the award of
Masters of Business Administration, which has been carried out in the Department of
Management Studies, National Institute of Technology, Silchar under my supervision and this
work has not been submitted elsewhere for a degree.







May 2014 Mr.Shubrangshu Baruah
Silchar Assistant Professor
Department of Management Studies
NIT Silchar, India











4


Acknowledgements

I take this opportunity to render my deep sense of gratitude to my supervisor, Mr
ShubhrangshuBaruah,Assistant Professor, Department of Management Studies for his
constant and valuable guidance in the truest sense throughout the course of the work. It was
his encouragement and support from the initial to the final level enabled me to develop an
understanding of the topic. Every time I had a problem, I would rush to him for his advice,
and he would never ever let me down. His timely suggestions helped me to circumvent all
sorts of hurdles that I had to face throughout my work. I am deeply indebted for his
motivation and guidance. I would also like to extend my sense of gratitude to Mr.Ashim
Kumar Das, Head, Department of Management Studies for his constant motivation and
inspiration. Thanks go out to all our friends as they have always been around to provide
useful suggestions, companionship and created a peaceful research environment. I wish to
acknowledge the continuous support and blessings of my parents which made this work
possible. Although they were physically far away from me, their immense faith and wish is
gratefully acknowledged. Finally I believe this research experience will greatly benefit my
career in the future.





Deepanjan Das














5













Dedicated to
Department of Management Studies
National Institute of Technology, Silchar













6

Executive Summary


The objective of the study is to have a comparative study of the PSU Banks and Private Sector Banks in Cachar
District and also to find out the most preferred Banking Sector among them.

For the above study a questionnaire was designed and the same was provided to the respondents for their
valuable inputs. Some of the inputs were taken from Qualtrics Survey Software and others were provided in the
form of hard copies.

All the aspects of the study included introduction of the study, objective of the study, research methodology,
literature review, data interpretation and analysis, findings, suggestions and recommendations.

The study suggests that in this part of the country the Public Sector Banks are ahead of the Private Sector Banks.
The main reasons according to our study are the trust and reliability factor (DICGC assurance on deposits) and
the location of the branch (Financial Inclusion policy of Reserve Bank of India)

The data collection of the study was mainly taken from primary source i.e. Questionnaire. And secondary
sources of the data i.e. internet and KiranPrakashan Books and Arihant Books.














7

Table of Contents
List of Table (i)
List of Figure (ii)
Chapter 1: Page no.
1.1 Introduction to Banking.11
1.2 Banking in India12
1.3 History of banking in India13
1.4 Adoption of Banking Technology.19
1.5 Expansion of Banking Infrastructure20
1.6 Types of Bank.24
1.7 Function of Commercial banks.....27
1.8 Public Sector Banks...27
1.9 Private Sector Banks......30
1.10 Business of Banking..31
Chapter 2:
2.1 Objectives of the Study...33
2.2 Literature Review....35
2.3 Research methodology....36
2.4 Personal details of Respondents......38

Chapter 3:
3.1 Limitations of the Study.44
Chapter 4:
4.1 Data Interpretation and Analysis........46

8

Chapter 5:

Findings of the Study..55
Chapter 6:

Suggestions given by the respondents60
Chapter 7:

Recommendations ..63
Chapter 8:

Conclusions.66
Chapter 9:

Annexure..68

References...72












9

List of Tables
Table no. Title Page no.
Table 1 Branches and ATMs of Commercial Bank.20
Table 2 Age of the respondents38
Table 3 Gender of the respondents...39
Table 4 Highest educational qualification ...40
Table 5 Occupation of the respondents41
Table 6 Place of Domicile ....42
Table 7 Awareness regarding PSU and Private Banks.43
Table 8 Banking Sector Preferred..47
Table 9 Types of Account..48
Table 10 Preferred Banks..49
Table 11 Reason for choosing a particular Banking Sector.50
Table 12 Services Availed ....51
Table 13 Satisfaction Level of Respondents....52
Table 14 Reason for choosing PSU Bank53
Table 15 Reason for choosing Private bank.54











10

List of Figures
Figure no. Title Page no.
Figure 1 Business of Banking...31
Figure 2 Functioning of a Bank32
Figure 3 Age of the respondents...38
Figure 4 Gender of the respondents..39
Figure 5 Highest educational qualification...40
Figure 6 Occupation of the respondents...41
Figure 7 Place of Domicile.42
Figure 8 Awareness regarding PSU and Private Banks.43
Figure 9 Banking Sector Preferred.47
Figure 10 Types of Account.48
Figure 11 Preferred Banks49
Figure 12 Reason for choosing a particular Banking Sector.50
Figure 13 Services Availed ..51
Figure 14 Satisfaction Level of Respondents52
Figure 15 Reason for choosing PSU Bank53
Figure 16 Reason for choosing Private bank.54








11

1.1 Introduction to Banking
Bank is defined in many ways by various authors in the book son economics and commerce.
It is very difficult to define a bank; because a bank performs multifarious functions may be
defined in many ways according to their functions. The evolution of different types of banks,
each specializing in a particular field, gives emphasis on each and every kind of bank. A
general and comprehensive definition to cover all types of banking institutions would be
unscientific and probably impossible. Each type of bank should have its own definition,
explaining its specialized functions. Legislators have understood this difficulty and that is
why the bill of exchange Act 1882 (England) defines
A bank includes a body of persons, whether incorporated or not, who carry on the business
of banking
From this definition it is clear to us that any institution, which performs the various banking
functions, may be termed as bank. But in practice it is found that many banking functions
wary from time to time and country to country. It is not possible on the part of a single bank
to perform all the banking functions at a time. So there originated numbers of specialized
banks with the objective of performing one or more functions. As for example, Central Bank,
Commercial bank, Industrial Bank, Agricultural Bank, Co-operative Bank etc., are seen in the
practical field.
Dr. Herbert L. Hart has defined a banker as
A banker is one who in the ordinary course of business honours cheques drawn upon him
by persons for whom he receives money on current account
According to Sir John Paget
No one and nobody corporate and otherwise can be a banker who does not (i) take deposit
accounts (ii) take current accounts (iii) issue and pay cheques drawn upon him(iv) collect
cheques crossed and uncrossed for his customers
Hilton banking commission defines bank or banker in the following words:
Every person, firm or company using in the description or its title, bank or banker or
banking and accepting deposits of money subject to withdrawal by cheque, draft or order
In view of the above definitions, a simple and short definition can be given as
12

Bank is an institution, which deals in money and credit
According to this precise definition a bank accepts deposits from public and makes advances
and loans to them. In practice bank receives deposits of money in savings and current
accounts at lower rate of interest or profit and gives on credit to needy persons and
businessmen at a higher rate of interest or profit. It also transfers money for the clients from
one city or country to another and also performs various other agency services for earnings.

1.2 Banking in India
Banking in India in the modern sense originated in the last decades of the 18th century. The
first banks were Bank of Hindustan (1770-1829) and The General Bank of India, established
1786 and since defunct.
The largest bank, and the oldest still in existence, is the State Bank of India, which originated
in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal.
This was one of the three presidency banks, the other two being the Bank of Bombay and
the Bank of Madras, all three of which were established under charters from the British East
India Company. The three banks merged in 1921 to form the Imperial Bank of India, which,
upon India's independence, became the State in 1955. For many years the presidency banks
acted as quasi-central banks, as did their successors, until the Reserve Bank of India was
established in 1935.
In 1969 the Indian government nationalized all the major banks that it did not already own
and these have remained under government ownership. They are run under a structure know
as 'profit-making public sector undertaking' (PSU) and are allowed to compete and operate
as commercial banks. The Indian banking sector is made up of four types of banks, as well as
the PSUs and the state banks; they have been joined since the 1990s by new private
commercial banks and a number of foreign banks.
Banking in India was generally fairly mature in terms of supply, product range and reach-
even though reach in rural India and to the poor still remains a challenge. The government
has developed initiatives to address this through the State Bank of India expanding its branch
network and through the National Bank for Agriculture and Rural Development with things
like microfinance.
13

Indian Banking Industry currently employees 1,175,149 employees and has a total of 109,811
branches in India and 171 branches abroad and manages an aggregate deposit of 67504.54
billion (US$1.1 trillion or 820 billion) and bank credit of 52604.59 billion (US$880 billion
or 640 billion). The net profit of the banks operating in India was 1027.51 billion
(US$17 billion or 12 billion) against a turnover of 9148.59 billion (US$150 billion or
110 billion) for the fiscal year 2012-13.
1.3 Historyof banking in India
In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC). Later
during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in use, which
was an order on a banker desiring him to pay the money of the note to a third person, which
corresponds to the definition of a bill of exchange as we understand it today. During the
Buddhist period, there was considerable use of these instruments. Merchants in large towns
gave letters of credit to one another.
Colonial era
During the period of British rule merchants established the Union Bank of Calcutta in 1829,
first as a private joint stock association, then partnership. Its proprietors were the owners of
the earlier Commercial Bank and the Calcutta Bank, who by mutual consent created Union
Bank to replace these two banks. In 1840 it established an agency at Singapore, and closed
the one at Mirzapore that it had opened in the previous year. Also in 1840 the Bank revealed
that it had been the subject of a fraud by the bank's accountant. Union Bank was incorporated
in 1845 but failed in 1848, having been insolvent for some time and having used new money
from depositors to pay its dividends.
The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock
bank in India, it was not the first though. That honour belongs to the Bank of Upper India,
which was established in 1863, and which survived until 1913, when it failed, with some of
its assets and liabilities being transferred to the Alliance Bank of Simla.
Foreign banks too started to appear, particularly in Calcutta, in the 1860s.
The Comptoird'Escompte de Paris opened a branch in Calcutta in 1860, and another
in Bombay in 1862; branches in Madras and Pondicherry, then a French possession,
followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading
port in India, mainly due to the trade of the British Empire, and so became a banking centre.
14

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in
1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in
Lahore in 1895, which has survived to the present and is now one of the largest banks in
India.
Around the turn of the 20th Century, the Indian economy was passing through a relative
period of stability. Around five decades had elapsed since the Indian Mutiny, and the social,
industrial and other infrastructure had improved. Indians had established small banks, most of
which served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks
and a number of Indian joint stock banks. All these banks operated in different segments of
the economy. The exchange banks, mostly owned by Europeans, concentrated on financing
foreign trade. Indian joint stock banks were generally under capitalized and lacked the
experience and maturity to compete with the presidency and exchange banks. This
segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the
times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into
separate and cumbersome compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by
the Swadeshi movement. The Swadeshi movement inspired local businessmen and political
figures to found banks of and for the Indian community. A number of banks established then
have survived to the present such as Bank of India, Corporation Bank, Indian Bank,Bank of
Baroda, Canara Bank and Central Bank of India.
The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South
Canara ( South Kanara ) district. Four nationalised banks started in this district and also a
leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle
of Indian Banking".
During the First World War (19141918) through the end of the Second World War (1939
1945), and two years thereafter until the independence of India were challenging for Indian
banking. The years of the First World War were turbulent, and it took its toll with banks
simply collapsing despite the Indian economy gaining indirect boost due to war-related
15

economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in
the following table:

Years
Number of banks
that failed
Authorised Capital
( Lakhs)
Paid-up Capital
( Lakhs)
1913 12 274 35
1914 42 710 109
1915 11 56 5
1916 13 231 4
1917 9 76 25
1918 7 209
1


Post-Independence
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralysing banking activities for months. India's independence marked the end of a regime of
the Laissez-faire for the Indian banking. The Government of India initiated measures to play
an active role in the economic life of the nation, and the Industrial Policy Resolution adopted
by the government in 1948 envisaged a mixed economy. This resulted into greater
involvement of the state in different segments of the economy including banking and finance.
The major steps to regulate banking included:
The Reserve Bank of India, India's central banking authority, was established in April 1935,
but was nationalised on 1 January 1949 under the terms of the Reserve Bank of India
(Transfer to Public Ownership) Act, 1948 (RBI, 2005b).
16

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India".
The Banking Regulation Act also provided that no new bank or branch of an existing bank
could be opened without a license from the RBI, and no two banks could have common
directors.

Nationalization in the 1960s
Despite the provisions, control and regulations of the Reserve Bank of India, banks in India
except the State Bank of India (SBI), continued to be owned and operated by private persons.
By the 1960s, the Indian banking industry had become an important tool to facilitate the
development of the Indian economy. At the same time, it had emerged as a large employer,
and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, the
then Prime Minister of India, expressed the intention of the Government of India in the
annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on
Bank Nationalization."
[7]
The meeting received the paper with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an ordinance
('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969') and
nationalised the 14 largest commercial banks with effect from the midnight of 19 July 1969.
These banks contained 85 percent of bank deposits in the country.
[7]
Jayaprakash Narayan, a
national leader of India, described the step as a "masterstroke of political sagacity." Within
two weeks of the issue of the ordinance, the Parliament passed the Banking Companies
(Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9
August 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated
reason for the nationalisation was to give the government more control of credit delivery.
With the second dose of nationalisation, the Government of India controlled around 91% of
the banking business of India. Later on, in the year 1993, the government merged New Bank
of India with Punjab National Bank. It was the only merger between nationalised banks and
resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until
the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth
rate of the Indian economy.
17


Liberalization in the 1990s
In the early 1990s, the then government embarked on a policy of liberalization, licensing a
small number of private banks. These came to be known as New Generation tech-savvy
banks, and included Global Trust Bank (the first of such new generation banks to be set up),
which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed
Axis), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy
of India, revitalised the banking sector in India, which has seen rapid growth with strong
contribution from all the three sectors of banks, namely, government banks, private banks and
foreign banks.
The next stage for the Indian banking has been set up with the proposed relaxation in the
norms for foreign direct investment, where all foreign investors in banks may be given voting
rights which could exceed the present cap of 10% at present. It has gone up to 74% with
some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time, were
used to the 464 method (borrow at 4%; lend at 6%; go home at 4) of functioning. The new
wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.
All this led to the retail boom in India. People demanded more from their banks and received
more.
Current period
All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934
are Scheduled Banks. These banks comprise Scheduled Commercial Banks and Scheduled
Co-operative Banks. Scheduled Commercial Banks in India are categorised into five different
groups according to their ownership and/or nature of operation. These bank groups are:
State Bank of India and its Associates
Nationalised Banks
Private Sector Banks
Foreign Banks
18

Regional Rural Banks.
In the bank group-wise classification, IDBI Bank Ltd. is included in Nationalised Banks.
Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled
Urban Cooperative Banks.
By 2010, banking in India was generally fairly mature in terms of supply, product range and
reach-even though reach in rural India still remains a challenge for the private sector and
foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered
to have clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region. The Reserve Bank of India is an autonomous body, with minimal
pressure from the government.
With the growth in the Indian economy expected to be strong for quite some time-especially
in its services sector-the demand for banking services, especially retail banking, mortgages
and investment services are expected to be strong. One may also expect M&As, takeovers,
and asset sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake
in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has
been allowed to hold more than 5% in a private sector bank since the RBI announced norms
in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by
them.
In recent years critics have charged that the non-government owned banks are too aggressive
in their loan recovery efforts in connexion with housing, vehicle and personal loans. There
are press reports that the banks' loan recovery efforts have driven defaulting borrowers to
suicide.

1.4 Adoption of banking technology
The IT revolution has had a great impact on the Indian banking system. The use of computers
has led to the introduction of online banking in India. The use of computers in the banking
sector in India has increased many fold after the economic liberalisation of 1991 as the
country's banking sector has been exposed to the world's market. Indian banks were finding it
19

difficult to compete with the international banks in terms of customer service, without the use
of information technology.
The RBI set up a number of committees to define and co-ordinate banking technology. These
have included:
In 1984 was formed the Committee on Mechanisation in the Banking Industry (1984) whose
chairman was Dr. C Rangarajan, Deputy Governor, Reserve Bank of India. The major
recommendations of this committee were introducing MICR technology in all the banks in
the metropolises in India. This provided for the use of standardized cheque forms and
encoders.
In 1988, the RBI set up the Committee on Computerisation in Banks (1988) headed by Dr. C
Rangarajan. It emphasized that settlement operation must be computerized in the clearing
houses of RBI in Bhubaneshwar, Guwahati, Jaipur, Patna and Thiruvananthapuram. It further
stated that there should be National Clearing of inter-city cheques at
Kolkata, Mumbai, Delhi, Chennai and MICR should be made operational. It also focused on
computerisation of branches and increasing connectivity among branches through computers.
It also suggested modalities for implementing on-line banking. The committee submitted its
reports in 1989 and computerisation began from 1993 with the settlement between IBA and
bank employees' associations.
In 1994, the Committee on Technology Issues relating to Payment systems, Cheque
Clearing and Securities Settlement in the Banking Industry (1994) was set up under
Chairman W S Saraf. It emphasized Electronic Funds Transfer (EFT) system, with the
BANKNET communications network as its carrier. It also said that MICR clearing should be
set up in all branches of all those banks with more than 100 branches.
In 1995, the Committee for proposing Legislation on Electronic Funds Transfer and other
Electronic Payments (1995) again emphasized EFT system.
Total numbers of ATMs installed in India by various banks as on end June 2012 is
99,218. The New Private Sector Banks in India are having the largest numbers of ATMs,
which is followed by off-site ATMs belonging to SBI and its subsidiaries and then by
Nationalised banks and Foreign banks. While on site is highest for the Nationalised banks of
India.
20

Table no. 1
Branches and ATMs of Scheduled Commercial Banks as on end March 2005

Bank type
Number of
branches
On-site
ATMs
Off-site
ATMs
Total
ATMs
Nationalised banks 33,627 3,205 1,567 4,772
State Bank of India 13,661 1,548 3,672 5,220
Old private sector
banks
4,511 800 441 1,241
New private sector
banks
1,685 1,883 3,729 5,612
Foreign banks 242 218 582 800
TOTAL 53,726 7,654 9,409 17,645

1.5 Expansion of Banking Infrastructure
As per Census 2011, 58.7% households are availing banking services in the country. There
are 102,343 branches of Scheduled Commercial Banks (SCBs) in the country, out of which
37,953 (37%) bank branches are in the rural areas and 27,219 (26%) in semi-urban areas,
constituting 63% of the total numbers of branches in semi-urban and rural areas of the
country. However, a significant proportion of the households, especially in rural areas, are
still outside the formal fold of the banking system. To extend the reach of banking to those
outside the formal banking system, Government and Reserve Bank of India (RBI) are taking
various initiatives from time to time some of which are enumerated below:
Opening of Bank Branches: Government had issued detailed strategy and guidelines on
Financial Inclusion in October 2011, advising banks to open branches in all habitations of
21

5,000 or more population in under-banked districts and 10,000 or more population in other
districts. Out of 3,925 such identified villages/habitations, branches have been opened in
3,402 villages/habitations (including 2,121 Ultra Small Branches) by end of April, 2013.
Each household to have at least one bank account: Banks have been advised to ensure service
area bank in rural areas and banks assigned the responsibility in specific wards in urban area
to ensure that every household has at least one bank account.
Business Correspondent Model: With the objective of ensuring greater financial inclusion
and increasing the outreach of the banking sector, banks were permitted by RBI in 2006 to
use the services of intermediaries in providing financial and banking services through the use
of Business Facilitators (BFs) and Business Correspondents (BCs). Business correspondents
are retail agents engaged by banks for providing banking services at locations other than a
bank branch/ATM. BCs and the BC Agents (BCAs) represent the bank concerned and enable
a bank to expand its outreach and offer limited range of banking services at low cost,
particularly where setting up a brick and mortar branch is not viable. BCs as agents of the
banks, thus, are an integral part of the business strategy for achieving greater financial
inclusion. Banks had been permitted to engage individuals/entities as BC like retired bank
employees, retired teachers, retired government employees, ex-servicemen, individual owners
of kirana/medical/fair price shops, individual Public Call Office (PCO) operators, agents of
Small Savings Schemes of Government of India, insurance companies, etc. Further, since
September 2010, RBI had permitted banks to engage "for profit" companies registered under
the Indian Companies Act, 1956, excluding Non-Banking Financial Companies (NBFCs), as
BCs in addition to individuals/entities permitted earlier. According to the data maintained by
RBI, as in December, 2012, there were over 152,000 BCs deployed by Banks. During 2012-
13, over 183.8 million transactions valued at 165 billion (US$2.8 billion) had been
undertaken by BCs till December 2012.
Swabhimaan Campaign: Under "Swabhimaan" - the Financial Inclusion Campaign launched
in February 2011, banks had provided banking facilities by March, 2012 to over 74,000
habitations having population in excess of 2000 using various models and technologies
including branchless banking through Business Correspondents Agents (BCAs). Further, in
terms of Finance Minister's Budget Speech 2012-13, the "Swabhimaan" campaign has been
extended to habitations with population of more than 1,000 in North and to habitations which
22

have crossed population of 1,600 as per census 2001. About 40,000 such habitations have
been identified to be covered under the extended "Swabhimaan" campaign.
Setting up of Ultra Small Branches (USBs): Considering the need for close supervision and
mentoring of the Business Correspondent Agents (BCAs) by the respective banks and to
ensure that a range of banking services are available to the residents of such villages, Ultra
Small Branches (USBs) are being set up in all villages covered through BCAs under
Financial Inclusion. A USB would comprise of a small area of 100 sq ft (9.3 m
2
) - 200 sq ft
(19 m
2
) where the officer designated by the bank would be available with a laptop on pre-
determined days. While the cash services would be offered by the BCAs, the bank officer
would offer other services, undertake field verification and follow up on the banking
transactions. The periodicity and duration of visits can be progressively enhanced depending
upon business potential in the area. A total of over 50,000 USBs have been set up in the
country by March, 2013.
Banking Facilities in Unbanked Blocks: All the 129 unbanked blocks (91 in North East States
and 38 in other States) identified in the country in July 2009, had been provided with banking
facilities by March 2012, either through Brick Mortar Branch or Business Correspondents or
Mobile van. As a next step it has been advised to cover all those blocks with BCA and Ultra
Small Branch which have so far been covered by mobile van only.
USSD Based Mobile Banking: National Payments Corporation of India (NPCI) worked upon
a "Common USSD Platform" for all banks and telcos who wish to offer the facility of Mobile
Banking using Unstructured Supplementary Service Data (USSD) based Mobile Banking.
The Department helped NPCI to get a common USSD Code *99# for all telcos. More than 20
banks have joined the National Uniform USSD Platform (NUUP) of NPCI and the product
has been launched by NPCI with BSNL and MTNL. Other telcos are likely to join in the near
future. USSD based Mobile Banking offers basic Banking facilities like Money Transfer, Bill
Payments, Balance Enquiries, Merchant Payments etc. on a simple GSM based Mobile
phone, without the need to download application on a phone as required at present in the
IMPS based Mobile Banking.



23

Steps taken by Reserve Bank of India (RBI) to strengthen the Banking Infrastructure
RBI has permitted domestic Scheduled Commercial Banks (excluding RRBs) to open
branches in tier 2 to tier 6 cities (with population up to 99,999 as per census 2001) without
the need to take permission from RBI in each case, subject to reporting.
RBI has also permitted SCBs (excluding RRBs) to open branches in rural, semi-urban and
urban centres in North Eastern States and Sikkim without having the need to take permission
from RBI in each case, subject to reporting.
Regional Rural Banks (RRBs) are also allowed to open branches in Tier 2 to Tier 6 centres
(with population up to 99,999 as per Census 2001) without the need to take permission from
RBI in each case, subject to reporting, provided they fulfill the following conditions, as per
the latest inspection report:
CRAR of at least 9%;
Net NPA less than 5%;
No default in CRR / SLR for the last year;
Net profit in the last financial year;
CBS compliant.
Domestic SCBs have been advised that while preparing their Annual Branch Expansion Plan
(ABEP), they should allocate at least 25% of the total number of branches proposed to be
opened during the year in unbanked Tier 5 and Tier 6 centres i.e. (population up to 9,999)
centres which do not have a brick and mortar structure of any SCB for customer based
banking transactions.
RRBs have also been advised to allocate at least 25% of the total number of branches
proposed to be opened during a year in unbanked rural (Tier 5 and Tier 6) Centres).
New private sector banks are required to ensure that at least 25% of their total branches are in
semi-urban and rural centres on an ongoing basis.


24

1.6 Types of Banks
Central bank
Development Bank
Investment Bank
Cooperative Credit Bank
Regional Rural Bank
Non Banking Financial Companies
Central Bank
The money market that acts as the central monetary authority of the country, serving as the
government bank as well as the bankers bank is known as a central bank of the country. The
main functions of central bank of a country are functions of note issue, bankers to
government, bankers bank etc.The RBI as the central bank of the country is the centre of the
Indian financial and monetary system. It has been guiding, monitoring, and regulating,
controlling, and promoting destiny of the IFS. It is quite young compared with such central
banks as the Bank of England, Risks bank of Sweden, and the Federal Reserve Board of the
U.S.
Main Functions of The Reserve bank of India
As the central banking authority of India, the reserve Bank of India performs the following
traditional functions of the central bank:
It provides currency and operates the clearing system for the government and banks.
It formulates and implements monetary and credit policies.
It functions as the governments and bankers bank
It supervises the operations of credit institutions.
It regulates foreign exchange transactions.
It moderates the fluctuations in the exchange value of the rupee.
25


In addition to the traditional functions of the central banking authority, the Reserve bank of
India performs several functions aimed at developing the Indian financial system:
It seeks to integrate the unorganized financial sector with the organized financial
sector.
It encourages the extension of the commercial banking system in the rural areas.
It influences the allocation of credit.
It promotes the development of new institutions.
Development Banks
A development bank may be defined as a financial institution concerned with providing all
types of financial assistance to business units in the form of loans, underwriting, investment
and guarantee operations and promotional activities-economic development in general and
industrial development in particular.A development bank is basically a term lending
institution. It is a multipurpose financial institution with a broad development outlook. The
concept of development banks in a post independence phenomenon in India. With the end of
II World War there was an urgent need for speed industrial development in India. The usual
agencies that provided finance for large industries were inadequate. So the govt. of India
came forward to set-up a series of financial institution to provide funds to industries. The
industrial finance corporation of India, the first development bank was established in 1948.
Subsequently many other institutions were set-up. Ex. IDBI, IFCI, SIDBI etc.
Investment Banks
Financial intermediaries that acquire the savings of people and direct these funds into the
business enterprises seeking capital for the acquisition of plant and equipment and for
holding inventories are called investment banks.
Features:-Long term financing, Security, merchandiser, Security middlemen, Insurer,
Underwriter
Functions: - Capital formation, Underwriting, Purchase of securities, Selling of securities,
Advisory services, Acting as dealer.
26

Cooperative Banking Sector
These banks play a vital role in mobilizing savings and stimulating agricultural
investment.Co-operativecredit institutions account for the second largest proportion of 44.6%
of total institutional credit of Rs.3854000 corer to agricultural and allied activities in the rural
sector in 1998 to 99.
Types of Co-operative Banking sector
The co-operative sector is very much useful for rural people. The co-operative banking sector
is divided into the following categories.
State co-operative Banks
Central co-operative banks
Primary Agriculture Credit Societies
Non Banking Finance companies
According to RBI it means financial institutions which is a company and a non banking
institution and which has as its principal business the receiving of deposits under any
schemes or arrangement or in any other manner or lending in any manner.
Merchant Banks
Institution that render wide range of services such as the management of customers
securities, portfolio management, counseling, insurance, etc are called Merchant Banks.
Functions: - Sponsoring issues, Loan syndication, Servicing of issues, Portfolio,
management, arranging fixed deposits, helps in merger& acquisition.
Commercial Banks
Commercial banks comprising public sector banks, foreign banks, and private sector banks
represent the most important financial intermediary in the Indian financial system.
The changes in banking structure and control have resulted dueto wider geographical spread
and deeper penetration of rural areas, higher mobilization of deposits, reallocation of bank
credit to priority activities, andlower operational autonomy for a bank management.
27

The largest commercial Banks in India, (SBI), was set up in 1955 when the Imperial Bank
was nationalized and merged with some banks of the princely states. In 1969, in one fell
swoop, the fourteen largest privately owned commercial banks were nationalized.
Subsequently, several other privately owned commercial banks were nationalized. As a
result of these actions, public sector commercial banks, dominate the commercial banking
scene in the country.
1.7 Functions of commercial banks
Saving mobilization
Special loans
Bills discount
Credit creation
Agencies function
General utility function
1.8 Public Sector Banks in Cachar District
State Bank of India .
17 out of 20 nationalized banks except Andhra Bank , Bank of Maharashtra and
BharatiyaMahila Bank.
Regional rural banks, Assam GrameenVikasBank,sponsored by United Bank of India

Regional rural Bank
They are oriented towards meeting the needs of the weaker section of the rural population
consisting of small and marginal farmers, agricultural laborerand small entrepreneurs. These
banks were set up after the nationalization of banks in 1969.
REGIONAL RURAL BANKS ACT, 1976 ACT NO. 21 OF 1976 [9th February, 1976.] An
Act to provide for the incorporation, regulation and winding up of Regional Rural Banks with
a view to developing the rural economy by providing, for the purpose of development of
28

agriculture, trade, commerce, industry and other productive activities in the rural areas, credit
and other facilities, particularly to the small and marginal farmers, agricultural laborers,
artisans and small entrepreneurs, and for matters connected therewith and incidental thereto.
Definition of Public Sector Bank
Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by
a government. The shares of these banks are listed on stock exchanges. There are a total of 21
PSBs in India..
Emergence of Public Sector Banks
The Central Government entered the banking business with the nationalization of the
Imperial Bank Of India in 1955. A 60% stake was taken by the Reserve Bank of India and the
new bank was named as the State Bank of India. The seven other state banks became the
subsidiaries of the new bank when nationalised on 19 July 1960.
[2]
The next major
nationalisation of banks took place in 1969 when the government of India, under prime
minister Indira Gandhi, nationalised an additional 14 major banks. The total deposits in the
banks nationalised in 1969 amounted to 50 crores. This move increased the presence of
nationalised banks in India, with 84% of the total branches coming under government
control.
[3]

The next round of nationalisation took place in April 1980. The government nationalised six
banks. The total deposits of these banks amounted to around 200 crores. This move led to a
further increase in the number of branches in the market, increasing to 91% of the total
branch network of the country. The objectives behind nationalisation where:
To break the ownership and control of banks by a few business families,
To prevent the concentration of wealth and economic power,
To mobilize savings from masses from all parts of the country,
To cater to the needs of the priority sectors.....



29

List of PSU Banks in Cachar District
Allahabad Bank
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
IDBI Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab National Bank
Punjab & Sind Bank
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank
State Bank of India



30

1.9 List of Private sector Bank in Cachar District
The private-sector banks in India represent part of the Indian banking sector that is made up
of both private and public sector banks. The "private-sector banks" are banks where greater
parts of stake or equity are held by the private shareholders and not by government.
Banking in India has been dominated by public sector banks since the 1969 when all major
banks were nationalised by the Indian government. However since liberalisation in
government banking policy in 1990s, old and new private sector banks have re-emerged.
They have grown faster and bigger over the two decades since liberalisation using the latest
technology, providing contemporary innovations and monetary tools and techniques
The private sector banks are split into two groups by financial regulators in India, old and
new. The old private sector banks existed prior to the nationalisation in 1969 and kept their
independence because they were either too small or specialist to be included in
nationalisation. The new private sector banks are those that have gained their banking license
since the liberalisation in the 1990s.

List of Private Banks in Cachar District

Axis Bank
Federal Bank
HDFC Bank
ICICI Bank
IndusInd Bank
Yes Bank



31

1.10 Business of Banking

Figure no.1




32



Figure no.2











33









Chapter 2



















34

2.1 OBJECTIVES OF THE STUDY

This study has been conducted with a variety of important objectives in mind. The following
provides us with the chief objectives that have tried to achieve through the study. The extent
to which these objectives have been met could judged from the conclusions and suggestions,
which appear in the later of this study.

The Chief Objectives of this study (with respect to Cachar District) are:-

1. To find the banking sector largely preferredby the customers.

2. To find out the factors which influences the customers to choose a bank.

3. To study the problems faced by the customers in public as well as private sector banks and
also to compare between them.












35

2.2 LITERATURE REVIEW
A literature review provides an overview and a critical evaluation of a body of literature
relating to a research topic or a research problem. It analyses a body of literature in order to
classify it by themes or categories, rather than simply discussing individual works one after
the other.
A literature review often forms part of a larger research project such as within a thesis, or it
may be an independent written work, such as a synthesis written paper.
PURPOSE OF A LITERATURE REVIEW -
A literature review situates our topic in relation to previous researches and illuminates a spot
for our research. It accomplishes several goals
Provides background for topic using previous research.
Shows we are familiar with previous, relevant research.
Evaluates the depth and breadth of the research with regards to our topic.
Determines relating questions or aspects of our topic in need of research.

In our research the main source of information has been the questionnaire filled up by the
respondents as well as the internet. The topic of our research comparative study of the PSU
banks and private banks for Cachar district has not been published earlier. So the main
argument of the topic whether PSU banks or private banks rule in the Cachar district has been
the main focus. The internet, questionnaire served by us to the respondents, website of
particular banks have been the major source of information. Few worth literatures like
kiranprakashan bank books, Arihants banking knowledge have been very valuable.
The facts and figures have provided in these respective books and have been very helpful to
us.







36

2.3 RESEARCH METHODOLOGY
Research is an art of scientific investigation. In other words research is a scientific and
systematic search for pertinent information on a specific topic. The logic behind taking
research methodology into consideration is that one can have knowledge regarding the
method and procedure adopted for achievements of objective of the project. With the
adoption of this others can also evaluate the results too.
The methodology adopted for studying the objective of the project was surveying the bank
account holders of the Cachar district. So keeping in view the nature of requirement of the
study to collect all the relevant information regarding the comparison of public sector banks
and the private sector banks direct personal interview method with the help of structured
questionnaire was adopted for collection of primary data.
Secondary data has been collected through the various magazines and newspaper and by
surfing on internet and also by visiting the websites of Indian Banking Association.

SAMPLE DESIGN A sample design is a definite plan for obtaining a sample from a given
population.It refers to the techniques or the procedures that the researchers would adopt in
selecting items for the samples.Sampledesignmay as well lay down the number of items to be
included in the sample i.e the size of the sample. Sample design is determine before data are
collected. Here we select the population as sample in our sample design. The selected
respondents should be as representatives of the total population.

POPULATION The persons holding bank accounts in the cachar district were taken into
consideration.
DATA COLLECTION
Data was collected by using two main methods i.e. primary data and secondary data.
PRIMARY DATA primary data is the data which is used or collected for the first time and
it is not used by anyone in the past. There are number of sources of primary data from which
the information can be collected. We took the following resources for our research.
37

a) QUESTIONNAIRE This method of data collection is quite popular, particularly in case
of big enquiries. Here in our research we set 15 simple questions and requested the
respondents to answer these questions with correct information.

SECONDARY DATA Secondary data is the data which is available in readymade form
and which has already been used by other people for various purposes. The sources of
secondary data are newspaper, internet, websites of IBA, journals and other published
documents.

SAMPLE PLAN

SAMPLE SIZE - Keeping in mind all the constraints the size of the sample of our study was
selected as 80.
SAMPLING UNIT State bank of India, Tarapur branch in Cachar district. Due to nature of
study we also visited various branches of SBI, UBI, ICICI, AXIS etc in Cachar district.
SAMPLING TECHNIQUE Stratified convenient sampling. All the bank account holders
were taken into considerations. Research was conducted on clear assumptions that the
respondents would give frank and fair answer in a pragmatic way without any bias.
SAMPLING DESCRIPTION In order to understand the nature and characteristics of
various respondents in this study, the information was collected and analyzed according to
their socio - economic background like education, occupation, age, gender, place of domicile
etc .This descriptions show that these respondents that have been included in the study belong
to different background and this in turn enhances the capability and accuracy of the study.




38

2.4 PERSONAL DETAILS OF RESPONDENTS

a) AGE
Figure no.3

Table no.2
PARTICULARS NO. OF RESPONDENTS
BELOW 20 7
20-30 41
31-44 21
45 and above 11

ANALYSIS AND INTERPRETATION From the above result we come to know that out
of 80 respondents, 7 are below 20 years of age, 41 belongs to 20 30 years, 21 belong to 31
44, 11 belong to 45 and above years of age. This shows that majority of our respondents are
young people between the age 20 to 30.



AGE
Below 20
20 - 30
31 - 44
45 and above
39

b) GENDER
Figure no.4

Table no.3
PARTICULARS NO. OF RESPONDENTS
MALE 56
FEMALE 24

ANALYSIS AND INTERPRETATION From the above result it can be inferred that
majority of our respondents are male, number being 56 as compared to 24 females in a total
of 80.





GENDER
MALE
FEMALE
40

c) HIGHEST EDUCATIONAL QUALIFICATION

Figure no.5


Table no. 4
PARTICULARS NO. OF RESPONDENTS
UPTO MATRIC 9
GRADUATE AND PROFESSIONAL 43
POST GRADUATE 23
ILLITERATE 5


ANALYSIS AND INTERPRETATION From the above result it can be inferred that
majority of our respondents are graduate and professionals, number being 43, while the
second most respondents are post graduates with number being 23. Illiterates are 5 and up to
metric level education are 9 in our total tally of 80 respondents.

Highest educational qualification
upto matric
graduate and professional
post graduate
illiterate
41

d) OCCUPATION

Figure no.6


Table no.5

PARTICULARS NO. OF RESPONDENTS
BUSINESSMAN 14
GOVT. 37
STUDENT 22
OTHERS 7

ANALYSIS AND INTERPRETATION The above result shows that 37 of our
respondents are govt. employees while the second most respondents are students, number
being 22.Businessman comprises 14 and others are 7 in our total respondents of 80.

OCCUPATION
BUSINESSMAN
GOVT.
STUDENT
OTHERS
42



e) PLACE OF DOMICILE
Figure no.7


Table no.6
PARTICULARS NO. OF RESPONDENTS
URBAN 52
RURAL 28

ANALYSIS AND INTERPRETATION From the above results it can be inferred that
majority of our respondents are urban people, number being 52 out of 80, while rural people
are 28.



PLACE OF DOMICILE
URBAN
RURAL
43



f) AWARE OF THE DIFFERENCE BETWEEN PSU BANKS AND PRIVATE BANKS
Figure no.8

Table no.7
PARTICULARS NO. OF RESPONDENTS
YES 41
NO 27
PARTIALLY 12

ANALYSIS AND INTERPRETATIONS From the above result it can be said that
regarding the awareness between public sector and private sector banks with respect to
differences, the responses are mixed.41 respondents are aware of the differences which
comprises 50 % of the tally while 27 people dont know the difference between PSU banks
and private banks. 12 are those who are not sure.


AWARENESS
YES
NO
PARTIALLY
44






Chapter 3















45

LIMITATIONS OF THE STUDY

Due to constraints of time and resources the study is likely to suffer from certain limitations.
Some of them are mentioned below so that the findings of the study are understood in proper
perspective.
The limitations of the study are

1) Some of the respondents of the survey were unwilling to share information.

2) The research was carried out in a short period of time so. Therefore the sample size and
other parameters were selected accordingly so as to finish the work in given time frame.

3) The information given by the respondents might be biased because some of them might
not be interested in providing correct information.

4) The officials of the bank supported me a lot but did not have sufficient time to clear all the
points elaborately.

5) Since the sample unit is a semi urban place i.e. Cachar district with less presence of private
sector banks, hence the result is likely to tilt a bit towards the public sector banks.




46





Chapter 4















47

DATA ANALYSIS AND INTERPRETATION
Analysis of data collected
1) The respondents were asked about which banking sector services they avail. The
result is as follow
Table no.8
BANKING SECTOR NO. OF RESPONDENT
PUBLIC 62
PRIVATE 14
BOTH 4

ANALYSIS AND INTERPRETATION
Figure no.9


From the above pie chart it can be inferred that majority of our respondents avail public
sector banks.62 respondents out of 80 avail public sector services, which in itself is a very
thumping number. The number of private sector respondents is 14 and both sector users are
BANKING SECTOR
PUBLIC
PRIVATE
BOTH
48

minimal, number being 4. Hence it can inferred that public sector banks outweigh the private
sector banks with respect to customer in this particular region of Cachar district.
2) They respondents were asked regarding the account that they are maintaining in
their respective banks. Here is the result
Table no.9
ACCOUNT SAVING CURRENT FD SALARY
NO. OF
RESPONDENT
55 4 7 14

ANALYSIS AND INTERPRETATION From the above results it can be inferred that
majority of our respondents are availing saving bank account. Almost 70 % of our
respondents are saving bank account holders. Saving bank account holders are 55 out of 80
while the next best account that is maintained in this part of country is salary account,14 out
of 80,current account 4 and FD is 7. This means that in Cachar district majority of people
prefer saving bank account.
Figure no.10


TYPE OF ACCOUNT
ACCOUNT
SAVING
CURRENT
FD
SALARY
49

3) They respondents were asked regarding the Bank that they prefer the most
Table no.10
BANK PREFERRED NO. OF RESPONDENTS
UBI 21
SBI 43
ICICI 5
AXIS 9
OTHERS 2

ANALYSIS AND INTERPRETATION
Figure no.11


From the above pie-chart it can be said that almost 50% of our respondents like SBI, which is
a public sector bank, while the next best bank is UBI with 21 respondents which is again a
public sector bank. ICICI is liked by 5 while AXIS is preferred by 9 followed by others at 2.
Hence it can be safely inferred that out of 80 respondents 64 respondents prefer public sector
bank which is a staggering 80 % of the total number of respondents.
PREFERRED BANK
UBI
SBI
ICICI
AXIS
OTHERS
50

4) The respondents were asked regarding the reasons for choosing a particular
bank. Here are the results
Table no.11
REASON NO. OF RESPONDENTS
FRIENDLY BEHAVIOUR BY STAFF 4
TRUST/RELIABILITY 43
QUICK AND FAST SERVICES 9
LOCATION 24

ANALYSIS AND INTERPRETATION
Figure no.12


From the above pie-chart it can be inferred that almost 50% of our respondents i.e 43 out of
80 pick banks according to trust/reliability. The next best factor comes out to be location with
24 respondents. These two factors are the major hindrance in private sector banking that is
why they are lacking the competition in this part of the country. They have less presence in
rural areas while public sector banks have extensive reach and are following the financial
REASON
FRIENDLY BEHAVIOUR BY STAFF
TRUST/RELIABILITY
QUICK AND FAST SERVICES
LOCATION
51

inclusion policy of RBI. 4 respondents choose bank due to behavior towards customers and 9
respondents value the quick and fast services of the bank.

5) They respondents were asked regarding the services that they are availing from
their respective banks
Table no.12
SERVICES AVAILING NO. OF RESPONDENTS
ATM/DEBIT 66
MOBILE 3
INSURANCE 9
CREDIT CARD 2

ANALYSIS AND INTERPRETATION -

Figureno.13

From the above analysis it can be inferred that majority of the respondents use automated
teller machine (ATM) services that is being provided by all the banks except the RRBs. ATM
users are 66 out of 80 respondents which is more than 80%. Mobile banking is used by 3
respondents; insurance services are availed by 9 respondents while credit card services are
SERVICES
ATM/DEBIT CARD
MOBILE BANKING
INSURANCE
CREDIT CARD
52

used by 2 respondents. This shows that in this part of country they are more concerned with
the conservative way of using the bank and not ready to explore yet to other services.
6) The respondents were asked regarding their satisfaction level towards their bank

Table no.13
SATISFACTION LEVEL NO. OF RESPONDENTS
PRIVATE SECTOR BANK 12
PUBLIC SECTOR BANK 53
BOTH 15

ANALYSIS AND INTERPRETATION
Figure no.14

From the above result it can be inferred that the customers of public sector banks are satisfied
toward their banks with number being 53 while 12 respondents are satisfied towards their
private sector bank. There are 15 respondents who like both.


SATISFACTION LEVEL OF THE
RESPONDENTS
PRIVATE
PUBLIC
BOTH
53

7) The respondents were asked regarding the factor for choosing the public sector
banks
Table no.14
REASON FOR CHOOSING PSU BANK NO. OF RESPONDENTS
FRIENDLY BEHAVIOUR BY STAFF 0
TRUST/RELIABILITY 43
QUICK AND FAST SERVICES 1
LOCATION 22

ANALYSIS AND INTERPRETATION
Figure no.15

From the above analysis it can be inferred that the PSU banks are chosen by respondents
mainly due to 2 factors and that are Trust/Reliability and Location.
Out of 66 respondents those two factors alone comprises 65 respondents which is a
staggering number.Surprisingly not a single respondent gave the factor friendly behavior by
staff towards the customers which puts PSU banks in bad light. Due to financial inclusion
policy of RBI the PSU bank have wide range of coverage and thus are a step ahead of the
private banks. Also the amount deposited by customers is insured by DICGC (deposit
insurance and credit Guarantee Corporation) which is why trust factor is there in public sector
banks.
REASON FOR CHOOSING PSU BANK
FRIENDLY BEHAVIOUR BY STAFF
TRUST/RELIABILITY
QUICK AND FAST SERVICES
LOCATION
54

8) The respondents were asked regarding the factors for choosing the private sector
banks
Table no.15
ANALYSIS AND INTERPRETATION from the above analysis it can said that out of the
total 18 respondents, 50% of the respondents like private sector banks due to its quick and
fast services while 33 % of the respondents like the friendly behavior of the staff towards the
customers. Location is a factor for only 2 respondents while only one respondent have given
the reply as trust/reliability. It is quite surprising to see the trust factor so less in private sector
banks in these parts of country as the private sector deposits are also insured by DICGC but
maybe it is the awareness factor which is lacking in these districts respondents.
Figure no.16

REASON FOR CHOOSING PRIVATE BANK
FRIENDLY BEHAVIOUR BY STAFF
TRUST/RELIABILITY
QUICK AND FAST SERVICES
LOCATION
REASON FOR CHOOSING PRIVATE
BANK
NO. OF RESPONDENTS
FRIENDLY BEHAVIOUR BY STAFF 6
TRUST/RELIABILITY 1
QUICK AND FAST SERVICES 9
LOCATION 2
55














Chapter 5






56

FINDINGS OF THE STUDY

More number of people have account in public sector banks.

Majority of the respondents whether public sector or private sector banks have saving
banks account in their respective banks.


People want a change in the behaviour of the staff towards customers in public sector
banks.

There needs to be more awareness regarding the trust factor in private sector banks
and the amount deposited there in this part of country.


People are more satisfied with the public sector banks in this part of country. The
main reason for their satisfaction is Trust factor and the Location of the branch.

The private sector banks need to enhance the number of their branches and specially
cover the rural area so as to attract more customers. In addition they need to create
awareness among customers to enhance the trust factor in them.


The facility that was availed most was the ATM/Debit card facility whether in private
sector bank or in public sector bank.

Majority of the respondents do not want to shift from their current bank.

The most favoured bank in this part of country is the SBI and UBI.

57

From the above study it is clear that the respondents of public sector banks have
chosen the respective banks due to adequate branches i.e. location and due to the trust
factor.

From the above study it is clear that the respondents of private sector banks like them
because of the friendly behaviour of the staff as well as the quick and fast services
that is being provided.

As the public sector banks working under the financial inclusion policy of RBI hence
they have got more number of customers because they have no frill account now a
days called BSBDA (Basic saving bank deposit account)

From the above study it can be assured that BANCASSURANCE is still not a part in
this part of the country. Negligible amount of respondents have shown their interest in
this services along with mobile banking and credit card facility.

From the above study it can safely said that public sector banks wins over the private
sector banks but they also need to improve a lot.















58

FINDINGS OF THE STUDY WITH RESPECT TO THE OBJECTIVES .

1. To find the banking sector largely preferred by the customers.

It has been found that in Cachar district the PSU Banks are more preferred as compared to
Private Banks. The study suggests that out of the 80 respondents 62 of them have their
accounts in PSU Banks, also 4 of them have accounts in both PSU and Private Sector Banks
(refer to table no. 7 and graph no. 7).
Also it has been found that SBI and UBI are the most preferred ones in this part of the
country.
Out of the 66 respondents 64 of them have accounts alone in SBI & UBI with 43 in SBI and
21 in UBI (refer to Table no. 9 and Graph no. 9).

2. To find out the factors which influences the customers to choose a bank.


The main factors which influence the customers of Cachar district according to our study are
Trust/Reliability and Location (refer to Table no. 10 and Graph no. 10). According to our
study, out of the 80 respondents 43 of them voted for Trust/Reliability factor while 24 of
them considered location as a very important factor.
The other two factors quick and fast services and the friendly behaviour by staff attracted
meagre response.
Refer Table no. 13 and graph no. 13 the factors which influences the customers of this part
of the country for PSU Banks are Trust/reliability and Location with 43 and 22 respectively.
Refer Table no. 14 and Graph no. 14 the factors which influences the customers of this part
of the country for Private Banks are quick and fast services and the friendly behaviour by
staff.

59

3. To study the problems faced by the customers in public as well as private sector banks and
also to compare between them.

For PSU Banks

The main problems faced by the customers in PSU banks are unfriendly behaviour of the
staff towards them also the services provided to them are not quick enough.
Refer to Table no. 13 and Table no. 13
For Private Banks
The main problems faced by the customers in PrivateBanks trust/reliability and location.
Since the private sector banks do not have enough number of branches in this part of the
country hence they are facing the problem of including large number of customers.
The unawareness factor regarding the DICGC assurance to the private sector banks is what
leading to lack of trust/reliability in them.
Refer to table no. 14 and Graph no. 14











60















Chapter 6











61

SUGGESTIONS
Based on the study conducted there are some of the suggestions given by the customers.
These are the comments given by them regarding the improvement of banking services in
India.
Banks should obey RBI norms and should provide facilities as per the norms. While
the customers should be given prompt services and the bank officials should be
willingly serving the customers.

Bank should increase rate of saving accounts


Bank should provide loans at a lower interest rate and education loan should be given
with ease without much documentation.

Fair dealings with the customers. More contribution from the employee to the bank.
The staff should be co-operative, friendly and must be capable of understanding the
problem of customers.


Prompt dealing with permanent customer and speedy transaction without harassing
the customers.

Each branch of each bank should be computerized even in rural areas for speedy
transaction.


RTGS and NEFT can play a very important role in speedy transaction.

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

No limit of cash withdrawals should be there on customers
62



24 hour banking should be induced so as to facilitate the customers who dont have
time in the day time or in the week days. This will enhance the services
The charges for opening saving bank account in private bank are too high. This
should be taken care off.

Customers generally complain that full knowledge regarding products and services
are not given to them. Hence the bank should be fair enough in disclosing the proper
terms and conditions of the product and services.


The branch should promote cooperation and coordination among employees which
can enhance the rate of efficiency.

Knowledge of local language should be a must for employees of banks.


Maintenance of proper hierarchy should be there in the bank employees.

Customer relationship management in public sector banks should be given extra
importance.






\




63









Chapter 7



















64

RECOMMENDATION

FOR PUBLIC SECTOR BANKS

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

As far as possible the bank should reduce the documentation process while
providing loan.


Computerization should be done in banks at all levels and the operators should
be properly trained.

Token system should be introduced so as to reduce the waiting line in the
bank.


Proper ambience in the banks can develop a healthy work culture.

Should be flexible in providing interest of the deposited money.

Quick services should be provided.






65

FOR PRIVATE SECTOR BANKS

24 hours banking should be introduced so as to facilitate the customers who dont
have time in day time or week days.

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


Should reduce the amount while opening a new saving bank account.

Should maintain a proper recruitment policy like the PSU to attract genuine talent to
work for the customers. Rather than recruiting on internal recommendation they
should follow the IBPS for recruitment to get better talent and better services from
their employees.


Should enhance the number of branches in rural areas to attract more customers.

Should advertise extensively regarding their operations and services to garner faith in
them.












66














Chapter 8












67

CONCLUSION

From the above study we can conclude that the people of Cachar have more faith on PSU
Bank than Private sector Bank. The main reasons are as follows

Since Cachar district is a semi-urban place, so there are less number of branches of private
sector banks in this area and also the trust factor is less in case of private sector banks.
Whereas for PSU Banks they are working under the financial inclusion policy of the RBI and
thus have adequate number of branches in this place which Private Sector Banks do not.
Hence with respect to this place it is the PSU Bank mainly SBI & UBI as revealed in our
study which is far ahead of the Private Sector Banks with respect to customer base.
Since, banking industry is bound to grow extensively in the next few years; it is up to the
private sector banks to enhance the number of branches in the Cachar District to attract
customers of the said place.
For the PSU Bank in order to sustain the large customer base, they to change their view
regarding the customer relationship management (CRM). Their employees need to change
their behavior and attitude towards its customers in order to serve its customer whole
heartedly and willingly.









68












Chapter 9










69

APPENDIX

Questionnaire Format


70



71














72


References
Books :-
KiranPrakashan
Arihants How to crack Banking Interviews
Reports :-
Report on Securities research on the ICICI Bank and SBI
Report on Indian Economic Survey 2012-2013
Websites :-
www.iba.com
www.kiranprakashan.com
www.ibps.in