A PROJECT REPORT

ON

RETAIL BANKING PRACTICES

WITH REFERENCE TO

IN PARTIAL FULFILLMENT FOR THE AWARD OF

MASTER OF BUSINESS ADMINISTRATION
SUBMITTED
BY
RAHUL PRASAD
(ID NO.-02827515)
BABA FARID GROUP OFINSTITUTION
SUDDHOWALA DEHRADUN.

DEPARTMENT OF BUSINESS MANAGEMENT

UTTRAKHAND TECHNICAL UNIVERSITY

DEHRADUN.
2015-2017.

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DECLARATION

I, Mr. RAHUL PRASAD Student of M.B.A, B.F.I.T. GROUP OF

INSTITUTION, DEHRADUN. hereby declare that the Report on Summer
Training & project work entitled A STUDY ON RETAIL BANKING
PRACTICES OF CENTRAL BANK OF INDIA is been result of my own
work and has been carried out under supervision of PROF. Dr. VIPIN
CHOUDHARY(HOD OF MANAGEMENT).

I declare that this submitted work is done solely by me and to the best of my
knowledge; no such work has been submitted by any other person for the
award of post graduation degree or diploma.

I also declare that all the information collected from various secondary sources
has been duly acknowledged in this project report.

PLACE:

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RAHUL PRASAD

CERTIFICATE

This is to certify that RAHUL PRASAD has satisfactory completed the project
work entitled, A STUDY ON RETAILED BANKING PRACTICES OF
CENTRAL BANK OF INDIA, GUWAHATI, ASSAM . Based on the
declaration made by the candidate and me association as a guide for carrying
out this project work, I recommended this project for evaluation as a part of
the MBA programme of B.F.I.T. GROUP OF INSTITUTION, DEHRADUN.

Place: DEHRADUN
Date:

PROF: Dr. VIPIN

CHOUDHARY

Place: DEHRADUN
Date:

Dr

Director

ACKNOWLEDGEMENT
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My debts are many and I acknowledge them with much pride and delight. This
summer project was undertaken as a part of MBA Programme pursuing at
B.F.I.T. GROUP OF INSTITUTION, DEHRADUN. I would like to thank my
institute and Central Bank of India which has provided me with the
infrastructure and opportunity for doing this project work.
I am very great full to Mr. A.K. SINGH (MANAGER), who has given me the
permission to carry out this project work at their esteemed organization.
I am extremely great full to Dr. Dalpat Sarupria, Director of B.F.I.T. GROUP
OF INSTITUTION, DEHRADUN for his invaluable help and guidance
throughout my work. He kindly evinced keen interest in my work and
furnished some useful comments, which could enrich the work substantially.
I am very much thankful to my internal guide Prof. VIPIN CHOUDHARY for
her keen guidance and support.
In fact it is very difficult to acknowledge all the names and nature of help and
encouragement provided by them. I would never forget the help and support
extended directly or indirectly to me by all.

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TABLE OF CONTENTS

PARTICULARS

PAGE NO.

EXECUTIVE SUMMARY

INTRODUCTION

RESEARCH METHODOLOGY

10

INTRODUCTION TO BANKING SECTOR

12

INTRODUCTION TO CENTRAL BANK OF INDIA

18

INTRODUCTION TO RETAIN BANKING

24

INDUSTRY ANALYSIS

41

DATA ANALYSIS AND INTERPRETATION

47

FINDINGS

57

10

SUGGESTION

59

11

CONCLUSION

60

12

BIBLIOGRAPHY

61

EXECUTIVE SUMMARY

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I had a valuable experience doing my summer internship at Central Bank of

India in Guwahati. The duration for my internship was 45 days, starting from
20th June 2016 to 05th august 2016 in Guwahati Main branch and, I was
working on the RETAIL BANKING PRACTICES
My Project Guide was Mr. A.K. SINGH for Guwahati branch, respectively of
his department.
This was my First exposure to the corporate world and had an experience of
working in banking. I was working on the retail banking practices, which I feel
is the basic requirement of any bank. While working I observed the
significance of the loan/advances in a bank, its working. I also got to observe
various functions of the bank department.
The project, which was given to me in this period of my summer internship,
project was to know the retail banking practices. For that, I have to talk to
manager and try to understand concept of retail in the bank.
Thus during this internship-period working on project and simultaneously
observing has proved to be a great experience in all as I have got to see and
understand various situations of the employees. I would like to conclude by
saying that it is been a great learning for me through this internship. I
understand some realities of the bank , as, I was part of the everyday activities
of the organization. I also learned the fact that no department can work on its
own each department have to depend on other in one-way or the other.

INTRODUCTION
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Retail banking has become a very important component in the business mix of
banks. Retail banking offers multiple comfort factors for banks to do business.
Large and divergent customer base across income segment offers huge scope
for banks to develop and offer multiple products and services. In addition to
traditional products and services offered by banks over the years, the retail
model has undergone rapid innovation in the past decade with regard to
products, processes, people and technology.
Technology has become the driver for retail banking explosion, and technology
products like ATM, Internet Banking, Mobile Banking, Card products like
Debit Cards and Credit Cards and remittance products like RTGS and NEFT
are making their presence felt in retail space. Banks are embracing different
strategies, redesigning their conventional business silos, reengineering their
channels, product and services to increase the share of customer wallet.
A bank functions can be divided into various divisions like:
Retail/Personal Banking: This division provides a range of financial services to
individual customers and small companies. It operates mainly through branch
networks.
Retail banking includes routine transactions like deposits and withdrawals of
money; money transfer; foreign currency exchange and traveller's cheque
encashment. They also deal with personal and small loans, credit and
mortgages; insurance policies; investment schemes; pension funds; and advice
to customers on various financial matters. Apart from offering home loans, car
loans, educational loans, consumer loans, etc. they also develop various
deposit schemes and help people fill their coffers.
Corporate Banking: They deal with medium to large-scale companies and
government agencies. It could start at the local branch manager level, though
more complex dealings are routed through corporate divisions of clearing
banks and their merchant banking subsidiaries. Corporate banking deals with
credit and advances, trade finance, foreign exchange management, asset
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management, lease financing of heavy equipment, infrastructure, machinery,

credit risk assessment, etc. They also advise clients on matters such as
corporate mergers and acquisition, raising capital and business strategy
regarding competitors and outside factors.

Merchant Banking: Investment management is the primary activity of this

group. It could be on behalf of corporate clients, or institutional investors-like
pension funds, investment trusts, or those in the securities business. This group
also handles public issue and marketing of shares, debentures and other such
papers. It may also include other stock market functions like dematerialization
services, investment advisory services, etc. Merchant banking executives
research into capital market, advice and manage funds of various corporate
and individual customers.
Treasury group: This group takes care of the total funds of a bank including
Foreign exchange reserves. Responsibilities include bank portfolio
management dealing in foreign currency, etc. There are Forex (foreign
exchange) dealers in this group who exclusively deal with the foreign market.
They buy and sell foreign exchange at the minimum exchange cost thereby
earning maximum profit from the transactions.
Rural Banking: This group deals with the banking and credit needs of people
in the rural sector. Not all banks have this group and some banks have separate
Subsidiary companies for rural banking.
Product Management: This group conceptualizes various banking services
and then develops; implements and manages them. They have the
responsibility for a banking product (meaning services like personal loans,
home loans, credit cards, loans against shares, educational loans, etc.).
Apart from these main functional groups, there is an appraisal group to analys
eeconomic feasibility of industrial projects, the bank's exposure to financial
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risk and long term returns. There are internal auditors who audit the bank's
internal books of accounts.
There are various groups of professionals like lawyers, engineers, agricultural
Scientists, chartered accountant, company secretary, cost accountant and
economists who work in various departments in advisory capacities. They help
make decisions on issues that are legal, technical or economic in nature.

RESEARCH METHODOLOGY
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RESEARCH DESIGN
A research design is the arrangement of conditions for collection and analysis
of data in a manner that aims to combine relevance to the research purpose
with economy in procedure. It is the conceptual structure within which
research is conducted. It constitutes the blueprint for the collection,
measurement and analysis of data. My research design is descriptive in nature
as it involves studying the perceptions and expectations of customers in order
to measure the service quality provided by the service provider. The study thus
finds out the major areas of improvement so that company services to the
customers can be improved

STATEMENT OF THE PROBLEM

As there are immense opportunities of the retail banking in India. This
Dissertation is on the issues and challenges in the retail banking because of the
Competition of the various banks and the customer satisfaction of the services
Which the banks are providing and at the same time to solve the complaints of
the customer and maintaining the sound relationship for the future and by this
way to estimate the future growth of the retail banking.

OBJECTIVES

To study the issues and challenges in retail banking.

To study the recent trends in retail banking.
To ensure high satisfaction level and reduce percentage of
Complaints of customers in retail banking.
To estimate the future growth of Indian retail banking.
To understand Optimization of retail banking channels.
To suggest strategies for improvement in Customer Service.

DATA COLLECTION
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Data was collected from two sources-primary and secondary sources.

1. Primary data collection- The primary data was collected by means
Of survey. It was collected from different customers through
Questionnaire.
2. Secondary data collection-This data was collected from
Internet, Companys websites, Books & Magazines.
SAMPLE SIZE
Sample size was restricted to 100 respondents, since it was not possible to
cover the whole universe in the available time period.
SAMPLING METHOD
For this research Non- Probability Convenience Sampling has been used
because time limit for the completion of the work is limited and also managers
and employees were not available all the time.

INTRODUCTION TO BANKING SECTOR

HISTORY OF BANKING INDUSTRY:
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The Reserve Bank of India (RBI), as the central bank of the country, closely
monitors developments in the whole financial sector.
The banking sector is dominated by Scheduled Commercial Banks (SBCs). As
at end-March 2002, there were 296 Commercial banks operating in India. This
included 27 Public Sector Banks (PSBs), 31 Private, 42 Foreign and 196
Regional Rural Banks. Also, there were 67 scheduled co-operative banks
consisting of 51 scheduled urban co-operative banks and 16 scheduled state
co-operative banks.
Scheduled commercial banks touched, on the deposit front, a growth of 14%
as against 18% registered in the previous year. And on advances, the growth
was 14.5% against 17.3% of the earlier year.
State Bank of India is still the largest bank in India with the market share of
20% ICICI and its two subsidiaries merged with ICICI Bank, leading creating
the second largest bank in India with a balance sheet size of Rs. 1040bn.
Higher provisioning norms, tighter asset classification norms, dispensing with
the concept of past due for recognition of NPAs, lowering of ceiling on
exposure to a single borrower and group exposure etc., are among the
measures in order to improve the banking sector.
A minimum stipulated Capital Adequacy Ratio (CAR) was introduced to
strengthen the ability of banks to absorb losses and the ratio has subsequently
been raised from 8% to 9%. It is proposed to hike the CAR to 12% by 2004
based on the Basle Committee recommendations.
Retail Banking is the new mantra in the banking sector. The home loans alone
account for nearly two-third of the total retail portfolio of the bank. According
to one estimate, the retail segment is expected to grow at 30-40% in the
coming years.
Net banking, phone banking, mobile banking, ATMs and bill payments are the
new buzz words that banks are using to lure customers.
With a view to provide an institutional mechanism for sharing of information
on borrowers / potential borrowers by banks and Financial Institutions, the
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Credit Information Bureau (India) Ltd. (CIBIL) was set up in August 2000.
The Bureau provides a framework for collecting, processing and sharing credit
information on borrowers of credit institutions. SBI and HDFC are the
promoters of the CIBIL.
The RBI is now planning to transfer of its stakes in the SBI, NHB and
National bank for Agricultural and Rural Development to the private players.
Also, the Government has sought to lower its holding in PSBs to a minimum
of 33% of total capital by allowing them to raise capital from the market.
Banks are free to acquire shares, convertible debentures of corporate and units
of equity-oriented mutual funds, subject to a ceiling of 5% of the total
outstanding advances (including commercial paper) as on March 31 of the
previous year.
The finance ministry spelt out structure of the government-sponsored ARC
called the Asset Reconstruction Company (India) Limited (ARCIL), this pilot
project of the ministry would pave way for smoother functioning of the credit
market in the country. The government will hold 49% stake and private players
will hold the rest 51%- the majority being held by ICICI Bank (24.5%).
Banking in India, in the modern sense, originated in the last decades of the
18th century. Among the first banks were the Bank of Hindustan, which was
established in 1770 and liquidated in 1829-32; and the General Bank of India,
established in 1786 but failed in 1791.
The largest bank, and the oldest still in existence, is the State Bank of
India (S.B.I). It originated as the Bank of Calcutta in June 1806. In 1809, it
was renamed as the Bank of Bengal. This was one of the three banks funded
by a presidency government; the other two were the Bank of Bombay and
the Bank of Madras. The three banks were merged in 1921 to form
the Imperial Bank of India, which upon India's independence, became the State
Bank of India in 1955. For many years the presidency banks had acted as
quasi-central banks, as did their successors, until the Reserve Bank of
India was established in 1935, under the Reserve Bank of India Act, 1934.

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In 1960, the State Banks of India was given control of eight state-associated
banks under the State Bank of India (Subsidiary Banks) Act, 1959. These are
now called its associate banks. In 1969 the Indian government nationalised 14
major private banks. In 1980, 6 more private banks were nationalised. These
nationalised banks are the majority of lenders in the Indian economy. They
dominate the banking sector because of their large size and widespread
networks.
The Indian banking sector is broadly classified into scheduled banks and nonscheduled banks. The scheduled banks are those included under the 2nd
Schedule of the Reserve Bank of India Act, 1934. The scheduled banks are
further classified into: nationalised banks; State Bank of India and its
associates; Regional Rural Banks (RRBs); foreign banks; and other Indian
private sector banks. The term commercial banks refers to both scheduled and
non-scheduled commercial banks regulated under the Banking Regulation Act,
1949.
Generally banking in India is 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
(NBARD) with facilities like microfinance.

REFORMS IN THE BANKING SECTOR:

The first phase of financial reforms resulted in the nationalization of 14 major
banks in 1969 and resulted in a shift from Class banking to Mass banking. This
in turn resulted in a significant growth in the geographical coverage of banks.

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Every bank has to earmark a minimum percentage of their loan portfolio to

sectors identified as priority sectors. The manufacturing sector also grew
during the 1970s in protected environs and the banking sector was a critical
source. The next wave of reforms saw the nationalization of 6 more
commercial banks in 1980. Since then the number scheduled commercial
banks increased four-fold and the number of banks branches increased eightfold.
After the second phase of financial sector reforms and liberalization of the
sector in the early nineties, the Public Sector Banks (PSB) s found it extremely
difficult to complete with the new private sector banks and the foreign banks.
The new private sector banks first made their appearance after the guidelines
permitting them were issued in January 1993. Eight new private sector banks
are presently in operation. These banks due to their late start have access to
state-of-the-art technology, which in turn helps them to save on manpower
costs and provide better services.
During the year 2000, the State Bank of India (SBI) and its 7 associates
accounted for a 25% share in deposits and 28.1% share in credit. The 20
nationalized banks accounted for 53.5% of the deposits and 47.5% of credit
during the same period. The share of foreign banks ( numbering 42 ), regional
rural banks and other scheduled commercial banks accounted for 5.7%, 3.9%
and 12.2% respectively in deposits and 8.41%, 3.14% and 12.85% respectively
in credit during the year 2000.

CLASSIFICATION OF BANKS:
The Indian banking industry, which is governed by the Banking Regulation
Act of India, 1949 can be broadly classified into two major categories, non-

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scheduled banks and scheduled banks. Scheduled banks comprise commercial

banks and the co-operative banks. In terms of ownership, commercial banks
can be further grouped into nationalized banks, the State Bank of India and its
group banks, regional rural banks and private sector banks (the old / new
domestic and foreign). These banks have over 67,000 branches spread across
the country. The Indian banking industry is a mix of the public sector, private
sector and foreign banks. The private sector banks are again spilt into old
banks and new banks.

Banking System in India

Reserve bank of India (Controlling Authority)

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Development Financial institutions

IFCI IDBI ICICI

NABARD NHB

Commercial
operative
Banks

Banks

IRBI

ISIDBI

Regional Rural

Land Development

Co-

Banks

Banks

Banks

Public Sector Banks

SBI Groups
Banks

EXIM Bank

Private Sector Banks

Nationalized Banks

Indian Banks

Foreign

INTRODUCTION TO CENTRAL BANK OF INDIA

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Native name

Type

Public
company
BSE & NSE:CENTRALBK

Industry

Financial
Commercial banks

Founded

21 December 1911; 104 years

ago

Headquarters

Mumbai, Maharashtra, India

Key people

Shri. Rajeev Rishi, Chairman &

Managing Director

Revenue

283,030
million (US$4.2 billion)
15)

Number
employees

Website

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of

(2014-

42000(approx)

www.centralbankofindia.co.in

MISSION
To transform the customer banking experience into a fruitful and
enjoyable one.
To leverage technology for efficient and effective delivery of all banking
services.
To have bouquet of product and services tailor-made to meet customers
aspirations.
The pan-India spread of branches across all the state of the country will be
utilized to further the socio economic objective of the Government of India
with emphasis on Financial Inclusion.

VISION
To emerge as a strong, vibrant and pro-active Bank/Financial Super Market
and to positively contribute to the emerging needs of the economy through
consistent harmonization of human, financial and technological resources
and effective risk control systems.
Establish in 1911, Central Bank of India was the first Indian commercial
bank which was wholly owned and managed by Indians. The establishment
of the Bank was the ultimate realization of the dream of Sir Sorabji
Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first
Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride
felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of India
as the 'property of the nation and the country's asset'. He also added that
'Central Bank of India lives on people's faith and regards itself as the
people's own bank'.
During the past 99 years of history the Bank has weathered many storms
and faced many challenges. The Bank could successfully transform every
threat into business opportunity and excelled over its peers in the Banking
industry.
A number of innovative and unique banking activities have been launched
by Central Bank of India and a brief mention of some of its pioneering
services are as under:

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192

Introduction to the Home Savings Safe Deposit

Scheme to build saving/thrift habits in all

sections of the society.

OBJECTIVES

Manager of Exchange Control

Issuer Of Currency

To maintain Reserves

To maintain the currency and credit system of the country.

To give boost to the economy in the best ways possible.

FUNCTIONS

Supervises and controls all the Commercial banks in the country.

Acts as Bankers Bank

Acts as a Governments Bank.

Operating Monetary policy in the best way.

Offering Credit to the priority sector, Industries and Exports.

INTRODUCTION TO RETAIN BANKING

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Retail banking also known as Consumer Banking is the provision of

services by a bank to individual consumers, rather than to companies,
corporations or other banks. Services offered include savings and transactional
accounts, mortgages, personal loans, debit cards, and credit cards. The term is
generally used to distinguish these banking services from investment
banking, commercial banking or wholesale banking. It may also be used to
refer to a division or department of a bank dealing with retail customers.
In the US the term Commercial bank is used for a normal bank to distinguish it
from an investment bank. After the great depression, through the Glass
Steagall Act, the U.S. Congress required that banks only engage in banking
activities, whereas investment banks were limited to capital markets activities.
This separation was repealed in the 1990s. Commercial bank can also refer to
a bank or a division of a bank that mostly deals with deposits and loans from
corporations or large businesses, as opposed to individual members of the
public (retail banking)

Typical products offered by a retail bank include:

Transactional accounts

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Checking accounts (American english)

Current accounts (British english)

Savings accounts

Debit cards

ATM cards

Credit cards

Traveler's cheques

Mortgages

Home equity loans

Personal loans

Certificates of deposit/Term deposits

In some countries, such as the US, they may also offer more specialised accounts
such as:

Sweep accounts
Money market accounts
Individual Retirement Accounts (IRA's)

Sub-types of retail banks

Community development bank are regulated banks that provide financial
services and credit to underserved markets or populations.
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 Private Banks manage the assets of high-net-worth individuals.

Offshore banks are banks located in jurisdictions with low taxation and
regulation. Many offshore banks are essentially private banks.
Savings banks accept savings deposits.
Postal savings banks are savings banks associated with national postal
systems.

TRANSACTIONAL ACCOUNT
A transaction

account, checking

account, current

account or demand

deposit account is a deposit account held at a bank or other financial

institution. It is available to the account owner "on demand" and is available
for frequent and immediate access by the account owner or to others as the
account owner may direct. Access may be in a variety of ways, such as cash
withdrawals, use of cheques and debit by electronic transfer. In economic
terms, the funds held in a transaction account are regarded as liquid funds and
in accounting terms they are considered as cash.
Transaction accounts are operated by both businesses and personal users.
Depending on the country and local demand economics they may not earn any
or they can earn very high interest rates. Again depending on the country the
financial institution that maintains the account may charge the account holder
maintenance or transaction fees or offer the service free to the holder and
charge only if the holder uses an add-on service such as an overdraft.

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Features and access

All transaction accounts offer itemized lists of all financial transactions, either
through a bank statement or a passbook. A transaction account allows the
account holder to make or receive payments by:

ATM cards (withdraw cash at any I Automated Teller Machine)

Debit card (cashless direct payment at a store or merchant)

Cash money (coins and banknotes)

Cheque and money order (paper instruction to pay)

Direct debit (pre-authorized debit)

Electronic funds transfers (transfer funds electronically to another account)

Giro (funds transfer, direct deposit)

Standing order (automatic funds transfer)

SWIFT: International account to account transfer.

Online banking (transfer funds directly to another person via internet banking
facility)

Overdraft (agreed provision to borrow money when the account has a zero
balance)

Access

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Branch access
Customers may need to attend a bank branch for a wide range of banking
transactions including cash withdrawals and financial advice. There may be
restrictions on cash withdrawals, even at a branch. For example, withdrawals
of cash above a threshold figure may require notice.
Many transactions that previously could only be performed at a branch can
now be done in others ways, such as use of ATMs, online, mobile and
telephone banking.

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Cheques
Cheques where the traditional method of making withdrawals from a
transaction account. Today, cheques are not the most common ways of
accessing the funds in a transaction account, having being overtaken by
electronic fund transfers, they are still the most used method of transferring
funds by value.

Automated teller machines

Automated

teller

machines (ATMs)

enable

customers

of

a financial

institution to perform financial transactions without attending a branch. This

enables, for example, cash to be withdrawn from an account outside normal
branch trading hours. However, ATMs usually have quite low limits for cash
withdrawals, and there may be daily limits to cash withdrawals other than at a
branch.

Mobile banking
With the introduction of mobile banking a customer to perform banking
transactions and payments, to view balances and statements, and various other
facilities using their mobile phone. In the UK this has become the leading way
people manage their finances, as mobile banking has overtaken internet
banking as the most popular way to bank.

Internet banking
Internet or online banking enables a customer to perform banking transactions
and payments, to view balances and statements, and various other facilities.
This can be convenient especially when a bank is not open and enables
banking transactions to be effected from anywhere Internet access is available.
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Online banking avoids the time spent travelling to a branch and standing in
queues there. However, there are usually limits on the value of funds that can
be transferred electronically on any day, making it necessary to use a cheque to
affect such transfers when those limits are being reached.

Telephone banking
Telephone banking provides access to banking transactions over the telephone.
In many cases telephone banking opening times are considerably longer than
branch times.

Mail banking
A financial institution may allow its customers to deposit cheques into
their account by mail. Mail banking can be used by customers of virtual
banks (as they may not offer branches or ATMs that accept deposits) and by
customers who live too far from a branch.

Stores and merchants providing debit card access

Most stores and merchants now have to except debit card access for
purchasing goods if they want to continue operating, especially now that some
people only use electronic means of purchase. In the UK it is now reported that
1 in 7 people no longer carries or use cash.

SAVING ACCOUNT
Saving accounts are accounts maintained by retail financial institutions that
pay interestbut cannot be used directly as money in the narrow sense of
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a medium of exchange (for example, by writing a cheque). These accounts let

customers set aside a portion of their liquid assets while earning a monetary
return. For the bank, money in a savings account may not be callable
immediately.A savings account is an interest-bearing deposit account held at a
bank or another financial institution that provides a modest interest rate. Banks
or financial institutions may limit the number of withdrawals you can make
from your savings account each month, and they may charge fees unless you
maintain a certain average monthly balance in the account. In most cases,
banks do not provide checks with savings accounts.

BREAKING DOWN
'Savings Account'
In contrast to savings accounts, checking accounts allow you to write checks
and use electronic debit to access your funds, and checking accounts typically
do not have limits on the number of withdrawals or transactions you may make
each month. Savings accounts are generally for money that you don't intend to
use for daily expenses.

Advantages of Savings Accounts

Because savings accounts pay interest, it is more financially advantageous to
keep unneeded funds in a savings account than a checking account. In
addition, savings accounts are one of the most liquid investments outside of
demand accounts and cash. While savings accounts facilitate saving, they also
make it very easy to access your funds. In contrast, it is typically more difficult
to cash a bond, make a withdrawal from a retirement account, or sell stocks or
other assets.

Disadvantages of Savings Accounts

While the liquidity of a savings account is one of its key benefits, it makes the
funds too available, which could tempt you to spend them. Savings accounts
almost always pay lower interest rates than Treasury bills and certificates of
deposit (CDs). As a result, they should not be used for long-term holding
periods
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DEBITCARD
A debit card (also known as a bank card or check card) is a plastic payment
card that can be used instead of cash when making purchases. It is similar to
a credit card, but unlike a credit card, the money comes directly from the user's
bank account when performing a transaction.
Some cards may bear a stored value with which a payment is made, while
most relay a message to the cardholder's bank to withdraw funds from a
payer's designated bank account. In some cases, the primary account number is
assigned exclusively for use on the Internet and there is no physical card.
In many countries, the use of debit cards has become so widespread that their
volume has overtaken or entirely replaced cheques and, in some instances,
Cash

transactions.

The

development

of

debit

cards,

unlike credit

cards and charge cards, has generally been country specific resulting in a
number of different systems around the world, which were often incompatible.
Since the mid-2000s, a number of initiatives have allowed debit cards issued in
one country to be used in other countries and allowed their use for internet and
phone purchases. Unlike credit and charge cards, payments using a debit card
are immediately transferred from the cardholder's designated bank account,
instead of them paying the money back at a later date.Debit cards usually also
allow for instant withdrawal of cash, acting as the ATM card for withdrawing
cash. Merchants may also offer cash back facilities to customers, where a
customer can withdraw cash along with their purchase.
A payment card that deducts money directly from a consumers checking
account to pay for a purchase. Debit cards eliminate the need to carry cash or
physical checks to make purchases. In addition, debit cards, also called check
cards, offer the convenience of credit cards and many of the same consumer
protections when issued by major payment processors like Visa or MasterCard.
Unlike credit cards, they do not allow the user to go into debt, except perhaps
for small negative balances that might be incurred if the account holder has
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signed up for overdraft coverage. However, debit cards usually have daily
purchase limits, meaning it may not be possible to make an especially large
purchase with a debit card.

AUTOMATED TELLER MACHINE

An automated teller machine (ATM) is an electronic banking outlet, which
allows customers to complete basic transactions without the aid of a branch
representative or teller. Anyone with a credit card or debit card can access
most ATMs. The first ATM appeared in London in 1967, and in less than 50
years, ATMs spread around the globe, securing a presence in every major
country.
An ATM card is any payment card issued by a financial institution that enables
a customer to access an automated teller machine (ATM) in order to perform
transactions such as deposits, cash withdrawals, obtaining account
information, etc. ATM cards are known by a variety of names such as bank
card, MAC (money access card), client card, key card or cash card, among
others. Most payment cards, such as debit and credit cards can also function as
ATM cards, although ATM-only cards are also available. Charge and
proprietary cards cannot be used as ATM cards. The use of a credit card to
withdraw cash at an ATM is treated differently to a POS transaction, usually
attracting interest charges from the date of the cash withdrawal. Interbank
networks allow the use of ATM cards at ATMs of private operators and
financial institutions other than those of the institution that issued the cards.
ATM cards can also be used on improvised ATMs such as "mini ATMs",
merchants' card terminals that deliver ATM features without any cash

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drawer. These terminals can also be used as cashless scrip ATMs by cashing
the receipts they issue at the merchant's point of sale.
The first ATM cards were issued in 1967 by Barclays in London.

CREDIT CARD
A credit card is a payment card issued to users (cardholders) to enable the
cardholder to pay a merchant for goods and services, based on the cardholder's
promise to the card issuer to pay them for the amounts so paid plus other
agreed charges. The card issuer (usually a bank) creates a revolving
account and grants a line of credit to the cardholder, from which the cardholder
can borrow money for payment to a merchant or as a cash advance.
A credit card is a card issued by a financial company giving the holder an
option to borrow funds, usually at point of sale. Credit cards charge interest
and are primarily used for short-term financing. Interest usually begins one
month after a purchase is made, and borrowing limits are pre-set according to
the individual's credit rating.
A credit card is different from a charge card, where it requires the balance to
be repaid in full each month. In contrast, credit cards allow the consumers a
continuing balance of debt, subject to interest being charged. A credit card also
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differs from a cash card, which can be used like currency by the owner of the
card. A credit card differs from a charge card also in that a credit card typically
involves a third-party entity that pays the seller and is reimbursed by the buyer,
whereas a charge card simply defers payment by the buyer until a later date.

Technical specifications
The size of most credit cards is 85.60 mm 53.98 mm (3.370 in 2.125 in)
and rounded corners with a radius of 2.883.48 mm, conforming to
the ISO/IEC

7810

ID-1 standard,

the

same

size

as ATM

cards and

other payment cards, such as debit cards.

Credit cards have a printed or embossed bank card number complying with
the ISO/IEC 7812 numbering standard. The card number's prefix, called
the Bank Identification Number, is the sequence of digits at the beginning of
the number that determine the bank to which a credit card number belongs.
This is the first six digits for MasterCard and Visa cards. The next nine digits
are the individual account number, and the final digit is a validity check
code.Both of these standards are maintained and further developed by ISO/IEC
JTC 1/SC 17/WG 1. Credit cards have a magnetic stripe conforming to
the ISO/IEC 7813. Many modern credit cards have a computer chip embedded
in them as a security feature.In addition to the main credit card number, credit
cards also carry issue and expiration dates (given to the nearest month), as well
as extra codes such as issue numbers and security codes. Not all credit cards
have the same sets of extra codes nor do they use the same number of digits.

TRAVELLERS CHEQUE
A traveller's cheque is a medium of exchange that can be used in place of
hard currency. They can be denominated in one of a number of major world
currencies and are pre-printed, fixed-amount cheques designed to allow the
person signing it to make an unconditional payment to someone else as a result
of having paid the issuer for that privilege.
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They were generally used by people on vacation in foreign countries instead of

cash, as many businesses used to accept travellers cheques as currency. The
incentive for merchants and other parties to accept them lay in the fact that as
long as the original signature (which the buyer is supposed to place on the
cheque in ink as soon as they receive the cheque) and the signature made at the
time the cheque is used is the same, the cheque's issuer will unconditionally
guarantee payment of the face amount even if the cheque was fraudulently
issued, stolen, or lost. This means that a travellers cheque can never 'bounce'
unless the issuer goes bankrupt and out of business. If a travellers cheque
were lost or stolen, it could be replaced by the issuing financial institution.

MORTGAGE LOAN
A mortgage loan, also referred to as a mortgage, is used by purchasers of real
property to raise funds to buy real estate; by existing property owners to raise
funds for any purpose while putting a lien on the property being mortgaged.
The loan is "secured" on the borrower's property. This means that a legal
mechanism is put in place which allows the lender to take possession and sell
the secured property ("foreclosure" or "repossession") to pay off the loan in the
event that the borrower defaults on the loan or otherwise fails to abide by its
terms. The word mortgage is derived from a "Law French" term used
by English lawyers in the middle Ages meaning "death pledge", and refers to
the pledge ending (dying) when either the obligation is fulfilled or the property
is taken through foreclosure. Mortgage can also be described as "a borrower
giving consideration in the form of collateral for a benefit (loan)."
Mortgage borrowers can be individuals mortgaging their home or they can be
businesses mortgaging commercial property (for example, their own business
premises, residential property let to tenants or an investment portfolio). The
lender will typically be a financial institution, such as a bank, credit
union or building society, depending on the country concerned, and the loan
arrangements can be made either directly or indirectly through intermediaries.
Features of mortgage loans such as the size of the loan, maturity of the loan,
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interest rate, method of paying off the loan, and other characteristics can vary
considerably. The lender's rights over the secured property take priority over
the

borrower's

other creditors which

means

that

if

the

borrower

becomes bankrupt or insolvent, the other creditors will only be repaid the debts
owed to them from a sale of the secured property if the mortgage lender is
repaid in full first. In many jurisdictions, it is normal for home purchases to be
funded by a mortgage loan. Few individuals have enough savings or liquid
funds to enable them to purchase property outright. In countries where the
demand for home ownership is highest, strong domestic markets for mortgages
have developed. An alternative to mortgages that meets the requirements
of Sharia (Islamic law), is the Islamic mortgage. Sharia prohibits interest, so
Islamic mortgages are structured to avoid it by using other strategies such as
markup of the purchase price.

HOME EQUITY LOAN

A home equity loan is a type of loan in which the borrower uses the equity of
his or her home as collateral. The loan amount is determined by the value of
the property, and the value of the property is determined by an appraiser from
the lending institution. Home equity loans are often used to finance major
expenses such as home repairs, medical bills, or college education. A home
equity loan creates a lien against the borrower's house and reduces actual home
equity.
Most home equity loans require good to excellent credit history, reasonable
loan-to-value and combined loan-to-value ratios. Home equity loans come in
two types: closed end(traditionally just called a home-equity loan) and open
end (aka a home-equity line of credit). Both are usually referred to as second
mortgages, because they are secured against the value of the property, just like
a traditional mortgage. Home equity loans and lines of credit are usually, but
not always, for a shorter term than first mortgages. Home equity loan can be
used as a person's main mortgage in place of a traditional mortgage. However,
one cannot purchase a home using a home equity loan; one can only use a
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home equity loan to refinance. In the United States, in most cases it is possible
to deduct home equity loan interest on one's personal income taxes.
There is a specific difference between a home equity loan and a home equity
line of credit (HELOC). A HELOC is a line of revolving credit with an
adjustable interest rate whereas a home equity loan is a onetime lump-sum
loan, often with a fixed interest rate. With a HELOC the borrower can choose
when and how often to borrow against the equity in the property, with the
lender setting an initial limit to the credit line based on criteria similar to those
used for closed-end loans. Like the closed-end loan, it may be possible to
borrow up to an amount equal to the value of the home, minus any liens. These
lines of credit are available up to 30 years, usually at a variable interest rate.
The minimum monthly payment can be as low as only the interest that is due.
Typically, the interest rate is based on the prime rate plus a margin.

UNSECURED DEBTS
In finance, unsecured debt refers to any type of debt or general obligation that
is not protected by a guarantor, or collateralized by a lien on specific assets of
the borrower in the case of a bankruptcy or liquidation or failure to meet the
terms for repayment.
In the event of the bankruptcy of the borrower, the unsecured creditors will
have a general claim on the assets of the borrower after the specific pledged
assets have been assigned to the secured creditors. The unsecured creditors
will usually realize a smaller proportion of their claims than the secured
creditors.
In some legal systems, unsecured creditors who are also indebted to the
insolvent debtor are able (and in some jurisdictions, required) to set-off the
debts, which actually puts the unsecured creditor with a matured liability to the
debtor in a pre-preferential position.
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Under risk-based pricing, creditors tend to demand extremely high interest

rates as a condition of extending unsecured debt. The maximum loss on a
properly collateralized loan is the difference between the fair market value of
the collateral and the outstanding debt. Thus, in the context of secured lending,
the use of collateral reduces the size of the "bet" taken by the creditor on the
debtor's creditworthiness. Without collateral, the creditor stands to lose
the entire sum outstanding at the point of default, and must boost the interest
rate to price in that risk. Where high interest rates are considered usurious,
unsecured loans are either not made at all, or are made by loan sharks unafraid
of the law.
Unsecured loans are often sought out in cases where additional capital is
required although existing (but not necessarily all) assets have been pledged to
secure prior debt. Secured lenders will more often than not include language in
the loan agreement that prevents debtor from assuming additional secured
loans or pledging any assets to a creditor. Their use has been in decline since
the 1990s. Around this time, a variety of more convenient alternatives, such
as credit cards, debit cards and automated teller machines, became more
widely available and were easier for travelers to use. Traveler's cheques are no
longer widely accepted and cannot easily be cashed, even at the banks that
issue them. Other factors that have led to a decline in travellers cheques
include the fees charged by the issuer and agent, as well as the less
favourable foreign exchange rate commonly used on travellers cheques,
especially compared to those on credit card transactions.

CERTIFICATE OF DEPOSIT
A certificate of deposit (CD) is a time deposit, a financial product commonly
sold in the United States and elsewhere by banks, thrift institutions, and credit
unions.
CDs are similar to savings accounts in that they are insured "money in the
bank" and thus virtually risk free. In the USA, CDs are insured by the Federal

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Deposit Insurance Corporation (FDIC) for banks and by the National Credit
Union Administration (NCUA) for credit unions. They differ from savings
accounts in that the CD has a specific, fixed term (often one, three, or six
months, or one to five years) and, usually, a fixed interest rate. The bank
intends that the customer hold the CD until maturity, at which time they can
withdraw the money and accrued interest.
In exchange for the customer depositing the money for an agreed term,
institutions usually grant higher interest rates than they do on accounts that
customers can withdraw from on demandthough this may not be the case in
an inverted yield curve situation. Fixed rates are common, but some
institutions offer CDs with various forms of variable rates. For example, in
mid-2004, interest rates were expected to riseand many banks and credit
unions began to offer CDs with a "bump-up" feature. These allow for a single
readjustment of the interest rate, at a time of the consumer's choosing, during
the term of the CD. Sometimes, financial institutions introduce CDs indexed to
the stock market, bond market, or other indices.
Some features of CDs are

A larger principal should/may receive a higher interest rate.

A longer term usually earns a higher interest rate, except in the case of

an

inverted yield curve (e.g., preceding a recession).

Smaller institutions tend to offer higher interest rates than larger ones.

Personal CD accounts generally receive higher interest rates than business CD

accounts.

Banks and credit unions that are not insured by the FDIC or NCUA generally
offer higher interest rates.
CDs typically require a minimum deposit, and may offer higher rates for larger
deposits. The best rates are generally offered on "Jumbo CDs" with minimum
deposits of $100,000.

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The consumer who opens a CD may receive a paper certificate, but it is now
common for a CD to consist simply of a book entry and an item shown in the
consumer's periodic bank statements. That is, there is often no "certificate" as
such. Consumers who want a hard copy that verifies their CD purchase may
request a paper statement from the bank, or print out their own from the
financial institution's online banking service.

TIME DEPOSIT
A time deposit or term deposit is a deposit with a specified period of maturity
and earns interest. It is a money deposit at an institution that cannot be
withdrawn for a specific term or period of time (unless a penalty is paid).
[

When the term is over it can be withdrawn or it can be held for another term.

Generally speaking, the longer the term the better the yield on the money. In its
strict sense, certificate deposit is different from that of time deposit in terms of
its negotiability: CDs are negotiable and can be rediscounted when the holder
needs some liquidity, while time deposits must be kept until maturity.
The opposite, sometimes known as a sight deposit or "on call" deposit, can be
withdrawn at any time, without any notice or penalty: e.g., money deposited in
a checking account in a bank.
The rate of return is higher than for savings accounts because the requirement
that the deposit be held for a prespecified term gives the bank the ability to
invest it in a higher-gain financial product class. However, the return on a time
deposit is generally lower than the long-term average of that of investments in
riskier products like stocks or bonds. Some banks offer market-linked time
deposit accounts which offer potentially higher returns while guaranteeing
principal.
A time deposit is an interest-bearing bank deposit that has a specified date of
maturity. A deposit of funds in a savings institution is made under an
agreement stipulating that (a) the funds must be kept on deposit for a stated

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period of time, or (b) the institution may require a minimum period of

notification before a withdrawal is made.
"Small" time deposits are defined in the U.S. as those under $100,000, while
"large" ones are $100,000 or greater in size. The term "jumbo CD" is
commonly used in the United States to refer to large time deposits.
In the U.S., banks are not subject to a reserve requirement against their time
deposit holdings.

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INDUSTRY ANALYSIS
Competitive Forces Model:
(Porters Five Force Model):

(2)

Potential Entrants is
high as development
financial institutions as
well as private and
Foreign Banks have

(5)

(1)

(4)

Organizing power of
the supplier is high.
With the new financial
instruments they are
asking higher return on
the investments

Rivalry among existing

firms has increased with
liberalization. New
products and improved
customer services is the
focus.
(3)

Bargaining power
of buyers is high as
corporate can raise
funds easily due to
high Competition.

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The
threat
of
substitute product is
very high like credit
unions and investment
houses. There are other
substitutes as well banks
like mutual funds, stocks,

1. Rivalry among existing firms

With the process of liberalization, competition among the existing banks has
increased. Each bank is coming up with new products to attract the customers
and tailor made Loans are provided. The quality of services provided by banks
has improved drastically.
2. Potential Entrants
Previously the development financial Institutions mainly provided project finance and
development activities. But they now entered into retail banking which has
resulted into stiff competition among the exiting players.
3. Threats from Substitutes
Competition from the non-banking financial sector is increasing rapidly. The
threat of substitute product is very high like credit unions and in investment
houses. There are other substitutes as well banks like mutual funds, stocks,
government securities, debentures, gold, real estate etc.
4. Bargaining Power of Buyers
Corporate can raise their funds through primary market or by issue of GDRs,
FCCBs. As a result they have a higher bargaining power. Even in the case
of personal finance, the buyers have a high bargaining power. This is mainly
because of competition.
5. Bargaining Power of Suppliers
With the advent of new financial instruments providing a higher rate of
returns to the investors, the investments in deposits is not growing in a
phased manner. The suppliers demand a higher return for the investments.
6. Overall Analysis
The key issue is how banks can leverage their strengths to have a better
future. Since the availability of funds is more and deployment of funds is
less, banks should evolve new products and services to the customers. There
should be a rational thinking in sanctioning Loans, which will bring down.
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SWOT ANALYSIS:
The banking sector is also taken as a proxy for the economy as a whole. The
performance of bank should therefore, reflect Trends in the Indian Economy.
Due to the reforms in the financial sector, banking industry has changed
drastically with the opportunities to the work with, new accounting standards
new entrants and information technology. The deregulation of the interest rate,
participation of banks in project financing has changed in the environment of
banks.
The performance of banking industry is done through SWOT Analysis. It
mainly helps to know the strengths and Weakness of the industry and to
improve will be known through converting the opportunities into strengths. It
also helps for the competitive environment among the banks.

A. STRENGTHS
1. Greater securities of Funds:
Compared to other investment options banks since its inception has been a
better avenue in terms of securities. Due to satisfactory implementation of
RBIs prudential norms banks have won public confidence over several years.
2. Banking network:
After nationalization, banks have expanded their branches in the country,
which has helped banks build large networks in the rural and urban areas.
Private banks allowed to operate but they mainly concentrate in metropolis.
3. Large Customer Base:
This is mainly attributed to the large network of the banking sector. Depositors
in rural areas prefer banks because of the failure of the NBFCs.
4. Low Cost of Capital
Corporate prefers borrowing money from banks because of low cost of capital.
Middle income people who want money for personal financing can look to
banks as they offer at very low rates of interests. Consumer credit forms the
major source of financing by banks.

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B. WEAKNESS
1. Basel Committee
The banks need to comply with the norms of Basel committee but before that
it is challenge for banks to implement the Basel committee standard, which are
of international standard.
2. Powerful Unions
Nationalization of banks had a positive outcome in helping the Indian
Economy as a whole. But this had also proved detrimental in the form of
strong unions, which have a major influence in decision-making. They are
against automation.
3. Priority Sector Lending
To uplift the society, priority sector lending was brought in during
nationalization. This is good for the economy but banks have failed to manage
the asset quality and their intensions were more towards fulfilling government
norms. As a result lending was done for non-productive purposes.
4. High Non-Performing Assets
Non-Performing Assets (NPAs) have become a matter of concern in the
banking industry. This is because reduced to meet the international standards
of change in the total outstanding advances, which has to be reduced to meet
the international standards.

C. OPPORTUNITIES
1. Universal Banking
Banks have moved along the value chain to provide their customers more
products and services. like home finance, Capital Markets, Bonds etc. Every
Indian bank has an opportunity to become universal bank, which provides
every financial service under one roof.
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2. Differential Interest Rates

As RBI control over bank reduces, they will have greater flexibility to fix their
own interest rates which depends on the profitability of the banks.
3. High Household Savings
Household savings has been increasing drastically. Investment in financial
assets has also increased. Banks should use this opportunity for raising funds.
4. Untapped Foreign Markets
Many Indian banks have not sufficiently penetrated in foreign markets to
generate satisfactory business therefore, it can be concluded clear opportunity
exists in such markets.
5. Interest Banking
The advance in information technology has made banking easier. Business can
Effectively carried out through internet banking.

D.THREATS
1. NBFCs, Capital Markets and Mutual funds
There is a huge investment of household savings. The investments in NBFCs
deposits, Capital Market Instruments and Mutual Funds are increasing.
Normally these instruments offer better return to investors.
2. Changes in the Government Policy
The change in the government policy has proved to be a threat to the banking
sector. Due to some major changes in policies related to deposits mobilization
credit deployment, interest rates- the whole scenario of banking industry may
change.

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3. Inflation
The interest rates go down with a fall in inflation. Thus, the investors will shift
his investments to the other profitable sectors.

4. Recession
Due to the recession in the business cycle the economy functions poorly and
this has proved to be a threat to the banking sector. The market oriented
economy and globalization has resulted into competition for market share. The
spread in the banking sector is very narrow. To meet the competition the banks
has to grow at a faster rates and reduce the overheads. They can introduce the
new products and develop the existing services

DATA ANALYSIS AND INTERPRETATION

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Q1. What products and services does your bank offer to you?

S.
No.

[Type text]

Product
and
services

Percenta
ge (%)

Saving
A/C

100

Current
A/C

100

Demat
A/C

50

Forex
sevice

40

Net
bankin
g

90

Home
loan

100

Electro
nic
transfer

100

Mutual
fund

60

ATM

100

10

Persona
l loan

60

Product and services offered by banks

100

100

100

100

100

100

90

90
80
70
60

60

60

50

50

40

40
30
20
10
0

Interpretation:
The sample size out of 100 respondents 100% peoples are said that their banks
provide all financial services.

[Type text]

Q2. Does your bank inform you timely about the new products and

services?
S
.
N
o
.

D
e
t
a
i
l
s

P
e
r
c
e
n
t
a
g
e
(
%
)

Y
e
s

8
5

N
o

1
5

Information about products and services

100

85

80
60
40

15

20
0

Interpretation:
[Type text]

YES

NO

The sample size out of 100 respondents, 85% says that Yes bank inform them
timely about the new products and services and 15% says No.

Q3. What is the frequency of transaction you are making with your

bank?

[Type text]

S
.
N
o
.

Details

Percentage (%)

Daily

20

Week

40

Month

30

Year

More
than 1
year20

Frequency of transaction
40
40
35
30
25
20
15
10
5
0

30
20
7

Interpretation:
The sample size out of 100 respondents 20% peoples are transacting money
daily, 40% peoples are transacting weekly 30% are transacting monthly, 7%
are transacting yearly and 3% are transacting more than one year.
Q4. Why did you select that particular institution?

[Type text]

Reason

%Age

Easy Accessibility

39

Prompt Services

14

Existing
Customers

19

Others

28

Interpretation: The above figure depicts that out of the total sample of 100
respondents, it is found that 39% of the respondents come to a particular
institution due to easy accessibility while 28% of the respondents are
recommended by some one to avail loan from a particular institution, and only
14% respondents opt because of prompt services while 19% are the existing
customers.

Q5. According to you, does your bank provide core banking facility for

the customers?

S
.
N
o
.

[Type text]

D
e
t
a
i
l
s

P
e
r
c
e
n
t
a

g
e
(
%
)
1

Y
e
s

6
0

N
o

4
0

Core Banking Facility

60
60
40

50
40
30
20
10
0

Yes

no

Interpretation: The above figure depicts that out of the total sample of 100
respondents, it is found that 60% of the respondents says Yes while 40% of the
respondents says No.
[Type text]

Q6. What problems did you face while opening an account?

Response

%Age

Lengthy Procedure

20

Terms & Conditions

21

Attitude of the staff

04

Timely Credit

24

Others

31

Interpretation: The above figure depicts that out of the total sample of 100
respondents, it is found that 31% of the respondents faced the problem of more
documentation formalities while availing the home loans. 24% of the
respondents faced the problem of time involved in the disbursement process
[Type text]

followed by other problems like terms & conditions, lengthy procedure and
attitude of the staff.

Q7. Are you satisfied with the services provided by Central Bank of

India?

Response

%age

Yes

80

No

20

Interpretation: The above figure depicts that majority of the customers are
satisfied with the services provided by central bank and only 20% of the
customers that are not satisfied with those services.

[Type text]

Q8. If no what do you think could be the solution to improve the

shortcomings?

Response
Better
service

%age
30%

quality
Cordial

staff

30%

behaviour
Reduction

in

40%

complexity

in

processes
Others

[Type text]

0%

Interpretation: The above figure depicts that 40% of the customers are saying
that there should be reduction in complexity in processes while 30% of the
customers saying that cordial staff behaviour should be there and there should
be better service quality.

Q9. How do you rate Central Bank of India regarding services?

Response

%Age

Excellent

16

Very

47

Good

Interpretation :
[Type text]

Average

32

Poor

From the above graph it is clear that out of 100 respondents, 16% respondents
have rated the home loan facility of Central Bank of India as Excellent
followed by 47% rated it as Very Good, 32% rated it as Average and rest of
them rated it as Poor.

FINDINGS

Retail Product Satisfaction

Product features and availability of a wider product range under one roof

Product innovation is significant factor for foreign bank customers

Retail Channel Satisfaction

Availability, accessibility and functionality

Ease of banking and convenience is favored by the customer

Loss of customer relationships and deposits to banks with extensive online

services, virtual banks, and non-banks.

Retail Service Satisfaction

Reliability, responsiveness, convenience, frontline employee satisfaction, and

competence of the Bank are found most important contributors in Customer
satisfaction.

Ease of use, accuracy and security are prime factors define the satisfaction of
online customers

Findings on Demographic characteristics

Women enlightenment towards banking services

Old is Gold- Customer with longer years of a/c holding

[Type text]

Education plays an important role

Business brings more business

High income created more needs and less satisfaction

New private sector banks are becoming new destination of bank customers

Saving is at higher side in customers mind

3 S behind choosing a Bank - Security, Strength and Speed

Techno readiness

Increased awareness and uses of ATM and Net banking

Among non users it is mainly due to fear and insecurity

Online banking preferred as the fastest means of any transaction

Excitement towards retail bank technology is high

Gaining high-tech knowledge

Human touch experience still beats the speed and convenience of online
banking to some extent.

Customer prefer remote channel for obtaining information and routine

transaction, but still believe in branch banking for purchase action.

[Type text]

SUGGESTIONS

Create the culture and organizational model needed to promote greater

commitment, accountability and competency

need to provide easily accessible mechanisms, appropriate financial advice and

customizing services

Create a better, consistent customer experience across channels

Improve the Branch - the ultimate destination for purchase action

Improve the online experience ease of use and accuracy

Make better use of customer information- need to develop products and services
that their clients need before the clients even know they need them

Shift from customer volume based strategies to customer value based strategies.

Inbound Customer Marketing- Focus on specific customers and situations

respond properly and Integrate transversal customer information throughout
channels

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CONCLUSION

There is a need of constant innovation in retail banking. In bracing for

tomorrow, a paradigm shift in bank financing through innovative products and
mechanisms involving constant up gradation and revalidation of the banks
internal systems and processes is called for. Banks now need to use retail as a
growth trigger. This requires product development and differentiation,
innovation and business process reengineering, micro-planning, marketing,
prudent pricing, customization, technological up gradation, home / electronic /
mobile banking, cost reduction and cross-selling. While retail banking offers
phenomenal opportunities for growth, the challenges are equally daunting. How
far the retail banking is able to lead growth of the banking industry in future
would depend upon the capacity building of the banks to meet the challenges
and make use of the opportunities profitably. However, the kind of technology
used and the efficiency of operations would provide the much needed
competitive edge for success in retail banking business. Furthermore, in all
these customers interest is of paramount importance. So, it is vital for banks to
improve their customer services and cut off predatory lending strategies,
particularly in the area of interest on credit cards. Finally we say that retail
banking is one of the most tremendous areas now days to be looked after by the
banking industry as it contributes 7% to our GDP and 14% to employment.

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BIBLIOGRAPHY

WEB SITES:

www.rbi.org.in
www.centralbankof india.com
www.indianbankassociation.com
www.scird.com
www.project99.com

BOOKS:
Credit and banking By: K. C. Nanda

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