A

Comprehensive research project

On
“Customers Perception on Banking Services. ”
Submitted To:

SMJV CENTENARY
1915 - 2015
C K SHAH VIJAPURAWALA INSTITUTE OF MANAGEMENT, Vadodara.
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
Under
Gujarat Technological University
UNDER THE GUIDANCE OF

Faculty Guide:

Ms. Savitha K
Associate Professor Submitted By
Rinkal.P.Darji
Enrolment No:097050592046

M.B.A PROGRAMME

Affiliated to Gujarat Technological University

Ahmedabad
April 2011

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 A single flower cannot make a garland or a single star can not make the
beautiful shiny sky at the night, same way a research work can never be
outcome of a single individual’s talent or efforts. It is just like climbing a high
peak, step by step, accompanied with bitterness, hardships, frustration,
encouragement and trust and with so many people’s kind help. When I found
myself at the top enjoying beautiful scenery, I realized that it was, in fact,
teamwork that got me there. Though it will not be enough to express my
gratitude in words to all those people who help me, I would still like to give my
heartbound thanks to all these people.

First of all, I would like to give my sincere thanks to my guide, Associate

Professor Ms. Savitha K .

Thank you is a small word to my Parents, my fiancé SANJAY, and my

sister who not only supported me, but also inspired me, during the course of my
study. It was their blessings that gave me courage to face the challenges and
made my path easier.

Last, but not the at least, I would like to thank Dr. Rajesh Khajuria ,
Director of my institution - C.K.Shah Vijapurwala Institute of Management,
Vadodara where I am student.

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 I, Rinkal Darji , hereby declare that the report for “comprehensive project”
entitled “Consumer perception of Banking sector” is result my own work and my
indebtedness to other work publications, references, if any, have been duly
acknowledged.

PLACE: VADODARA Rinkal Darji

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 The grand project helps me to understand practical aspects of business
management in a better way, as part of M.B.A program at C K SHAH
VIJAPURAWALA INSTITUTE OF MANAGEMENT, VADODARA.

“Research regarding customers‟ perception on banking services. I have selected

two banks State Bank of India and Bank of Baroda. Research is based on statistical
method. It is the systematic and objective identification, collection, analysis,
dissemination, and use of information for the purpose of customer‟s satisfaction level
with the State Bank of India or Bank of Baroda.”

To be a student of MBA is a matter of pride because we are in a field, which helps

us to develop from a normal human being into a disciplined, and dedicated professional.
One has to be a good learner to sharpen knowledge in the particular field to achieve and
attain the desired goals and heights. I conducted this survey to know what customers
expect and perceive with the banking services. To gather this information, I used
questionnaires as the research and data collection tools. The responses were collected
from 60 respondents.

I had learned a lot during my Grand Project on “Customers Perception on

Banking Services.” and I hope this will be helpful to find out the satisfaction or
dissatisfaction level with the banking services.

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 The commercial banking sector plays an important role in the mobilization of
deposits and disbursement of credit to various sectors of the economy. Banks provides
various types of services to satisfy the customers to the maximum level. The modern
banking industry has brought in greater business diversification. Banks are now entering
into investments, underwriting of securities, portfolio management & the Insurances
business. Technology and competition are on the increase in Banking services, therefore
to survive in the market, banks try utmost to ensure their customer are with them.

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 Table of content

Ch. No Descriptions Pg. No.

1 Executive Summary 5
2 Introduction to the topic 7
3 Role of Social Network 10
4 General industry overview 12
5 Major players of the industry 28
6 Review of Literature 31

7 Marketing 3.0(From Products to Customers to the 34

Human Spirit)
8 Objectives of Study 48

9 Research Methodology 50

10 Research Analysis 72

11 Research Finding 78

12 Suggestions & Recommendation 80

13 Conclusion 82
14 Bibliography 84

15 Annexure 85

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 Introduction and statement of the problem
I have selected the topic “Customers Perception on Banking Services”.

In this topic I tried to cover the expectations of the customers on banking services
and against it whatever they perceived from the Banks. In the real the expectations of the
customers are very high, but sometimes banks are not able to provide all the services as
per their expectations due to some limitations or reasons.

Scope and Importance of the study

This study will address the current services provided by the bank, the gap
between the customer expectations, perceptions and the actual state of performance. The
results of the study would be to recognize the problems in the system and thus provide
key areas where improvement is required for better performance and success ratio.

Research Objectives

(1) To find out the level of expectation of the customers and the level of perception of the
customers from the services offered by the banks.

(2) To investigate whether the banks provides the services as per the expectation of the
customers.

(3) To evaluate the pattern of the banks in providing the services and to examine its
effects on the level of customers expectations and their perceptions.

(4) Finally to suggest measures for improvement based on the findings of the study.

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 Data Sources

 Primary Data:

It is collected through structured questionnaire by conducting survey.

 Secondary Data:

Internet, journals, books, magazines

Method of Analysis

 The method of analysis followed in the study is descriptive as well as analytical.

 For analyzing the data and to arrive at logical conclusions, mathematical tools like
Weighted average method has been used.
 The different services provide by the banks and customers expectation and
perceived have been find out on the basis of data collected from the customers.

Research Design

My research is Descriptive in nature as the banking industry is well-

developed in India and lot of research has already been done in this area.

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 Research tool

 SERVQUAL Analysis.

SERVQUAL is an instrument for measuring how customers perceive the quality

of a service. In the mid-1980s Berry and his colleagues, Parasuraman and Zeithaml began
to investigate what determines service quality and how it is evaluated by customers. As a
result of their study they developed the SERVQUAL instrument for measuring service
quality, which initially included 10 service quality dimensions, which were later reduced
to the following five: tangibles, reliability, responsiveness, assurance and empathy.

The instrument is based on the idea of the disconfirmation model, in other words
on the comparison of customers‟ expectations with their experiences from the service.
Usually, the five dimensions of the instrument are described through the use of 20
attributes and “respondents are asked to state (on a five point scale from “Strongly
disagree” to “Strongly agree”) what they expected from the service and how they
perceived the service.”

This instrument has been widely used by researchers, but still, there are some
controversies in its applicability across different service industries. In some studies the
five dimensions of the instrument (determinants) have been found to be unstable across
different types of services. Therefore, the SERVQUAL tool should be applied very
carefully and the set of determinants and attributes used should be adapted to the specific
situation.

Limitations of the Study

 Respondents may give biased answers for the required data. Some of the
respondents did not like to respond.
 In my study I have included 30 customers of each bank.

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 HISTORY OF BANKING IN INDIA

There are three different phases in the history of banking in India.

1) Pre-Nationalization Era.
2) Nationalization Stage.
3) Post Liberalization Era.

1) Pre-Nationalization Era:

In India the business of banking and credit was practices even in very early times.
The remittance of money through Hundies, an indigenous credit instrument, was very
popular. The hundies were issued by bankers known as Shroffs, Sahukars, Shahus or
Mahajans in different parts of the country.

The modern type of banking, however, was developed by the Agency Houses of
Calcutta and Bombay after the establishment of Rule by the East India Company in 18th
and 19th centuries.

th
During the early part of the 19 Century, at volume of foreign trade was relatively
small. Later on as the trade expanded, the need for banks of the European type was felt
and the government of the East India Company took interest in having its own bank. The
government of Bengal took the initiative and the first presidency bank, the Bank of
Calcutta (Bank of Bengal) was established in 180. In 1840, the Bank of Bombay and IN
1843, the Bank of Madras was also set up.

These three banks are also known as “Presidency Bank”. The Presidency Banks
had their branches in important trading centers but mostly lacked in uniformity in their
operational policies. In 1899, the Government proposed to amalgamate these three banks
in to one so that it could also function as a Central Bank, but the Presidency Banks did
not favor the idea. However, the conditions obtaining during world war period (1914-
1918) emphasized the need for a unified banking institution, as a result of which the

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Imperial Bank was set up in1921. The Imperial Bank of India acted like a Central bank
and as a banker for other banks.

The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of
the Country. In 1949, the Banking Regulation act was passed and the RBI was
nationalized and acquired extensive regulatory powers over the commercial banks.

In 1950, the Indian Banking system comprised of the RBI, the Imperial Bank of
India, Cooperative banks, Exchange banks and Indian Joint Stock banks.

2) Nationalization Stages:

After Independence, in 1951, the All India Rural Credit survey, committee of
Direction with Shri. A. D. Gorwala as Chairman recommended amalgamation of the
Imperial Bank of India and ten others banks into a newly established bank called the
State Bank of India (SBI). The Government of India accepted the recommendations of
th
the committee and introduced the State Bank of India bill in the Lok Sabha on 16 April
th
1955 and it was passed by Parliament and got the president‟s assent on 8 May 1955. The
st
Act came into force on 1 July 1955, and the Imperial Bank of India was nationalized in
1955 as the State Bank of India.

The main objective of establishing SBI by nationalizing the Imperial Bank of

India was “to extend banking facilities on a large scale more particularly in the rural and
semi-urban areas and to diverse other public purposes.”

In 1959, the SBI (Subsidiary Bank) act was proposed and the following eight
state-associated banks were taken over by the SBI as its subsidiaries.

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 Name of the Bank Subsidiary with effect from
st
1) State Bank of Hyderabad 1 October 1959
st
2) State Bank of Bikaner 1 January 1960
st
3) State Bank of Jaipur 1 January 1960
st
4) State Bank of Saurashtra 1 May 1960
st
5) State Bank of Patiala 1 April 1960
st
6) State Bank of Mysore 1 March 1960
st
7) State Bank of Indore 1 January 1968
st
8) State Bank of Travancore 1 January 1960

With effect from 1st January 1963, the State Bank of Bikaner and State Bank of
Jaipur with head office located at Jaipur. Thus, seven subsidiary banks State Bank of
India formed the SBI Group.

The SBI Group under statutory obligations was required to open new offices in rural
and semi-urban areas and modern banking was taken to these unbanked remote areas.

th
On 19 July 1969, then the Prime Minister, Mrs. Indira Gandhi announced the
nationalization of 14 major scheduled Commercial Banks each having deposits worth Rs.
50 crore and above. This was a turning point in the history of commercial banking in
India.

Later the Government Nationalized six more commercial private sector banks
th
with deposit liability of not less than Rs. 200 crores on 15 April 1980, viz.

 Andhra Bank
 Corporation Bank
 New Bank in India
 Oriental Commercial Bank
 Punjab and Sind Bank
 Vijaya Bank

In 1969, the Lead Bank Scheme was introduced to extend banking facilities to
every corner of the country. Later in 1975, Regional Rural Banks were set up to
supplement the activities of the commercial banks and to especially meet the credit needs
of the weaker sections of the rural society.

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 Nationalization of banks paved way for retail banking and as a result there has
been an alt round growth in the branch network, the deposit mobilization, credit disposals
and of course employment.

The first year after nationalization witnessed the total growth in the agricultural
loans and the loans made to SSI by 87% and 48% respectively. The overall growth in the
deposits and the advances indicates the improvement that has taken place in the banking
habits of the people in the rural and semi-urban areas where the branch network has
spread. Such credit expansion enabled the banks to achieve the goals of nationalization, it
was however, achieved at the coast of profitability of the banks.

3) Post-Liberalization Era---Thrust on Quality and Profitability:

By the beginning of 1990, the social banking goals set for the banking industry
made most of the public sector resulted in the presumption that there was no need to look
at the fundamental financial strength of this bank. Consequently they remained
undercapitalized. Revamping this structure of the banking industry was of extreme
importance, as the health of the financial sector in particular and the economy was a
whole would be reflected by its performance.

The need for restructuring the banking industry was felt greater with the initiation
of the real sector reform process in 1992. The reforms have enhanced the opportunities
and challenges for the real sector making them operate in a borderless global market
place. However, to harness the benefits of globalization, there should be an efficient
financial sector to support the structural reforms taking place in the real economy. Hence,
along with the reforms of the real sector, the banking sector reformation was also
addressed.

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 Private Sector Banks
Private banking in India was practiced since the beginning of banking system in
India. The first private bank in India to be set up in Private Sector Banks in India was
IndusInd Bank. It is one of the fastest growing Bank Private Sector Banks in India. IDBI
ranks the tenth largest development bank in the world as Private Banks in India and has
promoted a world class institutions in India.

The first Private Bank in India to receive an in principle approval from the
Reserve Bank of India was Housing Development Finance Corporation Limited, to set up
a bank in the private sector banks in India as part of the RBI's liberalization of the Indian
Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with
registered office in Mumbai and commenced operations as Scheduled Commercial Bank
in January 1995.

ING Vysya, yet another Private Bank of India was incorporated in the year 1930.
Bangalore has a pride of place for having the first branch inception in the year 1934.
With successive years of patronage and constantly setting new standards in banking, ING
Vysya Bank has many credits to its account.

Entry of Private Sector Banks:

There has been a paradigm shift in mindsets both at the Government level in the
banking industry over the years since Nationalization of Banks in 1969, particularly
during the last decade (1990-2000). Having achieved the objectives of Nationalization,
the most important issue before the industry at present is survival and growth in the
environment generated by the economic liberalization greater competition with a view to
achieving higher productivity and efficiency in January 1993 for the entry of Private
Sector banks based on the Nationalization Committee report of 1991, which envisaged a
larger role for Private Sector Banks.

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 The RBI prescribed a minimum paid up capital of Rs. 100 crores for the new bank
and the shares are to be listed at stock exchange. Also the new bank after being granted
license under the Banking Regulation Act shall be registered as a public limited company
under the companies Act, 1956.

Subsequently 9 new commercial banks have been granted license to start banking
operations. The new private sector banks have been very aggressive in business
expansion and is also reporting higher profile levels taking the advantage of technology
and skilled manpower. In certain areas, these banks have even our crossed the other
group of banks including foreign banks.

Overview of Banking:

Banking Regulation Act of India, 1949 defines Banking as “accepting, for the
purpose of lending or of investment of deposits of money from the public, repayable on
demand or otherwise or withdrawable by cheque, draft order or otherwise.” The Reserve
Bank of India Act, 1934 and the Banking Regulation Act, 1949, govern the banking
operations in India.

Broad Classification of Banks in India:

1) The RBI:

The RBI is the supreme monetary and banking authority in the country and has
the responsibility to control the banking system in the country. It keeps the reserves of all
scheduled banks and hence is known as the “Reserve Bank”.

2) Public Sector Banks:

 State Bank of India and its Associates (8)
 Nationalized Banks (19)
 Regional Rural Banks Sponsored by Public Sector Banks (196)

3) Private Sector Banks:

 Old Generation Private Banks (22)

 Foreign New Generation Private Banks (8)
 Banks in India (40)

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4) Co-operative Sector Banks:

 State Co-operative Banks

 Central Co-operative Banks
 Primary Agricultural Credit Societies
 Land Development Banks
 State Land Development Banks

5) Development Banks:

Development Banks mostly provide long term finance for setting up industries.
They also provide short-term finance (for export and import activities)
 Industrial Finance Co-operation of India (IFCI)
 Industrial Development of India (IDBI)
 Industrial Investment Bank of India (IIBI)
 Small Industries Development Bank of India (SIDBI)
 National Bank for Agriculture and Rural Development (NABARD)
 Export-Import Bank of India

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 Role of Banks:

Banks play a positive role in economic development of a country as repositories

of community‟s savings and as purveyors of credit. Indian Banking has aided the
economic development during the last fifty years in an effective way. The banking sector
has shown a remarkable responsiveness to the needs of planned economy. It has brought
about a considerable progress in its efforts at deposit mobilization and has taken a
number of measures in the recent past for accelerating the rate of growth of deposits. As
recourse to this, the commercial banks opened branches in urban, semi-urban and rural
areas and have introduced a number of attractive schemes to foster economic
development.

The activities of commercial banking have growth in multi-directional ways as

well as multi-dimensional manner. Banks have been playing a catalytic role in area
development, backward area development, extended assistance to rural development all
along helping agriculture, industry, international trade in a significant manner. In a way,
commercial banks have emerged as key financial agencies for rapid economic
development.

By pooling the savings together, banks can make available funds to specialized
institutions which finance different sectors of the economy, needing capital for various
purposes, risks and durations. By contributing to government securities, bonds and
debentures of term-lending institutions in the fields of agriculture, industries and now
housing, banks are also providing these institutions with an access to the common pool of
savings mobilized by them, to that extent relieving them of the responsibility of directly
approaching the saver. This intermediation role of banks is particularly important in the
early stages of economic development and financial specification. A country like India,
with different regions at different stages of development, presents an interesting spectrum
of the evolving role of banks, in the matter of inter-mediation and beyond.

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 Commercial banks provide short-term and medium-term financial assistance. The
short-term credit facilities are granted for working capital requirements. The medium-
term loans are for the acquisition of land, construction of factory premises and purchase
of machinery and equipment. These loans are generally granted for periods ranging from
five to seven years. They also establish letters of credit on behalf of their clients
favouring suppliers of raw materials/machinery (both Indian and foreign) which extend
the banker‟s assurance for payment and thus help their delivery. Certain transaction,
particularly those in contracts of sale of Government Departments, may require
guarantees being issued in lieu of security earnest money deposits for release of advance
money, supply of raw materials for processing, full payment of bills on the assurance of
the performance etc. Commercial banks issue such guarantees also.

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 PRODUCTS AND SERVICES OFFERED BY BANKS

Broad Classification of Products in a bank:

 Retail Banking
 Trade Finance
 Treasury Operations

Retail Banking and Trade finance operations are conducted at the branch level
while the wholesale banking operations, which cover treasury operations, are at the hand
office or a designated branch.
Retail Banking:
o Deposits
o Loans, Cash Credit and Overdraft
o Negotiating for Loans and advances
o Remittances
o Book-Keeping (maintaining all accounting records)
o Receiving all kinds of bonds valuable for safe keeping

Trade Finance:
o Issuing and confirming of letter of credit
o Drawing, accepting, discounting, buying, selling, collecting of bills of
exchange, promissory notes, drafts, bill of lading and other securities

Treasury Operations:
o Buying and selling of bullion
o Foreign exchange Acquiring, holding, underwriting and dealing in shares,
debentures, etc.
o Purchasing and selling of bonds and securities on behalf of constituents.

The banks can also act as an agent of the Government or local authority. They
insure, guarantee, underwrite, participate in managing and carrying out issue of shares,
debentures, etc.

Apart from the above-mentioned functions of the bank, the bank provides a whole
lot of other services like investment counseling for individuals, short-term funds
management and portfolio management for individuals and companies. It undertakes the
inward and outward remittances with reference to foreign exchange and collection of
varied types for the Government.

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 Common Banking Products Available:

Some of common available banking products are explained below:

1) Credit Card:

Credit Card is “post paid” or “pay later” card that draws from a credit line-
money made available by the card issuer (bank) and gives one a grace period to pay.
If the amount is not paid full by the end of the period, one is charged interest.
A credit card is nothing but a very small card containing a means of
identification, such as a signature and a small photo. It authorizes the holder to
change goods or services to his account, on which he is billed. The bank receives the
bills from the merchants and pays on behalf of the card holder.
These bills are assembled in the bank and the amount is paid to the bank by
the card holder totally or by installments. The bank charges the customer a small
amount for these services. The card holder need not have to carry money/cash with
him when he travels or goes for purchasing.
Credit cards have found wide spread acceptance in the „metros‟ and big cities.
Credit cards are joining popularity for online payments. The major players in the
Credit Card market are the foreign banks and some big public sector banks like SBI
and Bank of Baroda. India at present has about 3 million credit cards in circulation.

2) Debit Cards:

Debit Card is a “prepaid” or “pay now” card with some stored value. Debit
Cards quickly debit or subtract money from one‟s savings account, or if one were
taking out cash.
Every time a person uses the card, the merchant who in turn can get the
money transferred to his account from the bank of the buyers, by debiting an exact
amount of purchase from the card. To get a debit card along with a Personal
Identification Number (PIN).
The major limitation of Debit Card is that currently only some 3000-4000
shops country wide accepts it. Also, a person can‟t operate it in case the
telephonelines are down.

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3) Automatic Teller Machine:

The introduction of ATM‟s has given the customers the facility of round the clock
banking. The ATM‟s are used by banks for making the customers dealing easier.
ATM card is a device that allows customer who has an ATM card to perform routine
banking transaction at any time without interacting with human teller. It provides
exchange services. This service helps the customer to withdraw money even when the
banks ate closed. This can be done by inserting the card in the ATM and entering the
Personal Identification Number and secret Password.

ATM‟s are currently becoming popular in India that enables the customer to
withdraw their money 24 hours a day and 365 days. It provides the customers with
the ability to withdraw or deposit funds, check account balances, transfer funds and
check statement information. The advantages of ATM‟s are many.

 To transfer money to and from accounts.

 To view account information.
 To order cash.
 To receive cash.

Advantages of ATM’s:

 To the Customers

o ATM‟s provide 24 hrs., 7 days and 365 days a year service

o Service is quick and efficient
o Privacy in transaction
o Wider flexibility in place and time of withdrawals.
o The transaction is completely secure – you need to key in Personal
Identification Number (Unique number for every customer).

 To Banks

o Alternative to extend banking hours.

o Crowding at bank counters considerably reduced.
o Alternative to new branches and to reduce operating expenses.
o Relieves bank employees to focus an more analytical and innovative work.
o Increased market penetration.

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 ATM‟s can be installed anywhere like Airports, Railway Stations, Petrol Pumps,
Big Business arcades, markets, etc. Hence, it gives easy access to the customers, for
obtaining cash.

The ATM services provided first by the foreign banks like Citibank, Grind lays
bank and now by many private and public sector banks in India like ICICI Bank, HDFC
Bank, SBI, UTI Bank etc.

4) E-Cheques:

The e-cheques consists five primary facts. They are the consumers, the merchant,
consumer‟s bank the merchant‟s bank and the e-mint and the clearing process. This
chequering system uses the network services to issue and process payment that
emulates real world chequeing. The payer issue a digital cheques to the payee ant the
entire transactions are done through internet. Electronic version of cheques are issued,
received and processed. A typical electronic cheque transaction takes place in the
following manner:

 The customer accesses the merchant server and the merchant server presents its
goods to the customer.

 The consumer selects the goods and purchases them by sending an e-cheque to
the merchant.

 The merchant validates the e-cheque with its bank for payment authorization.

 The merchant electronically forwards the e-cheque to its bank.

 The merchant‟s bank forwards the e-cheque to the clearing house for cashing.

 The clearing house jointly works with the consumer‟s bank clears the cheque and
transfers the money to the merchant‟s banks.

 The merchant‟s bank updates the merchant‟s account.

 The consumer‟s bank updates the consumer‟s account with the withdrawal
information.

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 The e-chequeing is a great boon to big corporate as well as small retailers. Most
major banks accept e-cheques. Thus this system offers secure means of collecting
payments, transferring value and managing cash flows.

5) Electronic Funds Transfer (EFT):

Many modern banks have computerized their cheque handling process with
computer networks and other electronic equipments. These banks are dispensing with
the use of paper cheques. The system called electronic fund transfer (EFT)
automatically transfers money from one account to another. This system facilitates
speedier transfer of funds electronically from any branch to any other branch. In this
system the sender and the receiver of funds may be located in different cities and may
even bank with different banks. Funds transfer within the same city is also permitted.
The scheme has been in operation since February 7, 1996, in India.

The other important type of facility in the EFT system is automated clearing
houses. These are the computer centers that handle the bills meant for deposits and
the bills meant for payment. In big companies pay is not disbursed by issued cheques
or issuing cash. The payment office directs the computer to credit an employee‟s
account with the person‟s pay.

6) Tele banking:

Tele banking refers to banking on phone services.. a customer can access

information about his/her account through a telephone call and by giving the coded
Personal Identification Number (PIN) to the bank. Telebanking is extensively user
friendly and effective in nature.

To get a particular work done through the bank, the users may leave his
instructions in the form of message with bank.

 Facility to stop payment on request

 One can easily know about the cheque status

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  Information on the current interest rates
 Information with regard to foreign exchange rates
 Request for a DD or pay order
 D-Mat Account related services
 And other similar services

7) Mobile Banking:

A new revolution in the realm of e-banking is the emergence of mobile banking.

On-line banking is now moving to the mobile world, giving everybody with a mobile
phone access to real-time banking services, regardless of their location. But there is
much more to mobile banking from just on-lie banking. It provides a new way to pick
up information and interact with the banks to carry out the relevant banking business.
The potential of mobile banking is limitless and is expected to be a big success.
Booking and paying for travel and even tickets is also expected to be a growth area.

According to this system, customer can access account details on mobile using the
Short Messaging System (SMS) technology6 where select data is pushed to the
mobile device. The wireless application protocol (WAP) technology, which will
allow user to surf the net on their mobiles to access anything and everything. This is a
very flexible way of transacting banking business.

Already ICICI and HDFC banks have tied up cellular service provides such as
Airtel, Orange, Sky Cell, etc. in Delhi and Mumbai to offer these mobile banking
services to their customers.

8) Internet Banking:

Internet banking involves use of internet for delivery of banking products and
services. With internet banking is now no longer confirmed to the branches where one
has to approach the branch in person, to withdraw cash or deposits a cheque or
request a statement of accounts. In internet banking, any inquiry or transaction is
processed online without any reference to the branch (anywhere banking) at any time.

24
 The Internet Banking now is more of a normal rather than an exception due to
the fact that it is the cheapest way of providing banking services. As indicated by
McKinsey Quarterly research, presently traditional banking costs the banks, more
than a dollar per person, ATM banking costs 27 cents and internet banking costs
below 4 cents approximately. ICICI bank was the first one to offer Internet Banking
in India.

Benefits of Internet Banking:

 Reduce the transaction costs of offering several banking services and diminishes
the need for longer numbers of expensive brick and mortar branches and staff.
 Increase convenience for customers, since they can conduct many banking
transaction 24 hours a day.
 Increase customer loyalty.
 Improve customer access.
 Attract new customers.
 Easy online application for all accounts, including personal loans and mortgages

9) Demat:

Demat is short for de-materialisation of shares. In short, Demat is a process where

at the customer‟s request the physical stock is converted into electronic entries in the
depository system.

In January 1998 SEBI (Securities and Exchange Board of India) initiated

DEMAT ACCOUNTANCY System to regulate and to improve stock investing. As
on date, to trade on shares it has become compulsory to have a share demat account
and all trades take place through demat.

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 BANKING SERVICES

Banking covers so many services that it is difficult to define it. However, these
basic services have always been recognized as the hallmark of the genuine banker which
are as follow

 The receipt of the customer‟s deposits

 The collection of his cheques drawn on other banks
 The payment of the customer‟s cheques drawn on himself

There are other various types of banking services like:

1) Advances – Overdraft, Cash Credit, etc.

2) Deposits – Saving Account, Current Account, etc.
3) Financial Services – Bill discounting etc.
4) Foreign Services – Providing foreign currency, travelers cheques, etc.
5) Money Transmission – Funds transfer etc.
6) Savings – Fixed deposits, etc.
7) Savings – Fixed deposits, etc.
8) Status– Debit Cards, Credit Cards, etc

Customer Services in Commercial Banks:

Customer service is the service provided in support of a bank‟s core products.

Customer service often includes answering questions; handling complaints. Customer
service can occur on site (as when an onstage employee helps a customer or answers a
question) or it can occur over the phone or the Internet. Quality customer service is
essential to building cordial customer relationship.

Banking being a service industry, a lot depends on efficient and prompt customer
service. Customer service is the most important duty of the banking operations. Prompt
and efficient service with smile will develop good public relations reduce complaints and
increase business. Why is Customer Service Important?

Changing customer expectations: Today the customer is more demanding and

more sophisticated than he or she was thirty years ago.

26
 The increased importance of customer service: With changing customer
expectations, competitors are seeing customer service as a competitive weapon with
which they differentiate their products and services.

The need for a relationship strategy: To ensure that a customer service strategy
that will create a value preposition for customers should be formulated implemented and
controlled. It is necessary to give it a central role and not one that is subsumed in the
various elements of the marketing mix.

The customer is the kingpin in growth organizations like commercial banks. Only
those institutions which work according to his dictates will flourish. Quality, Consistency
and Durability at low price are the final expectations of a customer. Quality will have to
be unambiguous, of world class quality. Quality cannot be of minimum acceptable
standards. Customer responsiveness must be quick and also competent. Speed,
performance and cost will be the new values “mantra” for success.

The ten key areas of customer‟s services to be attended timely and regularly are:

i. Submission of statement of A/Cs to customers

ii. Updating of savings pass books
iii. Teller system efficiency
iv. Cleanliness and Upkeep of premises
v. Intermediate Credit for institution cheques/land bills
vi. Advance intimation to customers for rewards of Term Deposits Receipts
on maturity
vii. Advance for Debit/credit to accounts
viii. Punctuality of staff

27
 PEST ANALYSIS

POLITICAL/ LEGAL ENVIROMENT

Government and RBI policies affect the banking sector. Sometimes looking into
the political advantage of a particular party, the Government declares some measures to
their benefits like waiver of short-term agricultural loans, to attract the farmer‟s votes. By
doing so the profits of the bank get affected. Various banks in the cooperative sector are
open and run by the politicians. They exploit these banks for their benefits. Sometimes
the government appoints various chairmen of the banks. Various policies are framed by
the RBI looking at the present situation of the country for better control over the banks.

ECONOMICAL ENVIROMENT

Banking is as old as authentic history and the modern commercial banking are
traceable to ancient times. In India, banking has existed in one form or the other from
time to time. The present era in banking may be taken to have commenced with
establishment of bank of Bengal in 1809 under the government charter and with
government participation in share capital. Allahabad bank was started in the year 1865
and Punjab national bank in 1895, and thus, others followed.

Every year RBI declares its 6 monthly policy and accordingly the various
measures and rates are implemented which has an impact on the banking sector. Also the
Union budget affects the banking sector to boost the economy by giving certain
concessions or facilities. If in the Budget savings are encouraged, then more deposits will
be attracted towards the banks and in turn they can lend more money to the agricultural
sector and industrial sector, therefore, booming the economy. If the FDI limits are
relaxed, then more FDI are brought in India through banking channels.

28
SOCIAL ENVIROMENT

Before nationalization of the banks, their control was in the hands of the private
parties and only big business houses and the effluent sections of the society were getting
benefits of banking in India. In 1969 government nationalized 14 banks. To adopt the
social development in the banking sector it was necessary for speedy economic progress,
consistent with social justice, in democratic political system, which is free from
domination of law, and in which opportunities are open to all. Accordingly, keeping in
mind both the national and social objectives, bankers were given direction to help
economically weaker section of the society and also provide need-based finance to all the
sectors of the economy with flexible and liberal attitude. Now the banks provide various
types of loans to farmers, working women, professionals, and traders. They also provide
education loan to the students and housing loans, consumer loans, etc.

Banks having big clients or big companies have to provide services like
personalized banking to their clients because these customers do not believe in running
about and waiting in queues for getting their work done. The bankers also have to provide
these customers with special provisions and at times with benefits like food and parties.
But the banks do not mind incurring these costs because of the kind of business these
clients bring for the bank.

TECHNOLOGICAL ENVIROMENT

Technology plays a very important role in bank‟s internal control mechanisms as

well as services offered by them. It has in fact given new dimensions to the banks as well
as services that they cater to and the banks are enthusiastically adopting new
technological innovations for devising new products and service.

29
 The latest developments in terms of technology in computer and
telecommunication have encouraged the bankers to change the concept of branch banking
to anywhere banking. The use of ATM and Internet banking has allowed „anytime,
anywhere is banking‟ facilities. Automatic voice recorders now answer simple queries,
currency accounting machines makes the job easier and self-service counters are now
encouraged. Credit card facility has encouraged an era of cashless society. Today
MasterCard and Visa card are the two most popular cards used world over. The banks
have now started issuing smartcards or debit cards to be used for making
payments. These are also called as electronic purse. Some of the banks have also started
home banking through telecommunication facilities and computer technology by using
terminals installed at customers home and they can make the balance inquiry, get the
statement of accounts, give instructions for fund transfers, etc. Through ECS we can
receive the dividends and interest directly to our account avoiding the delay or chance of
loosing the post.

Today banks are also using SMS and Internet as major tool of promotions and
giving great utility to its customers. For example SMS functions through simple text
messages sent from your mobile. The messages are then recognized by the bank to
provide you with the required information. All these technological changes have forced
the bankers to adopt customer-based approach instead of product-based approach.

30
 Review of literature
Currently, technological changes are causing banks to rethink their strategies for
services offered to both commercial and individual customers. Moreover, banks that
excel in quality service can have a distinct marketing edge since improved levels of
service quality are related to higher revenues, increased cross-sell ratios and higher
customer retention (Bennett and Higgins, 1993), and expanded market share (Bowen and
Hedges, 1993). Moreover, the banks understand that customers will be loyal if they can
produce greater value than competitors.

It is indeed true that delivery of high-service quality to customers offers firms an

opportunity to differentiate themselves in competitive markets (Karatepe et al., 2005).In
contrast, high quality of service leads to customer satisfaction and loyalty and greater
willingness to suggest and or recommend to someone else, reduction in customer
complaints, and improved customer retention rates to a great extent ( Bitner, 1990;
Headley and Miller, 1993; Zeithaml et al., 1996; Danaher, 1997). In recent years, The
financial sector has developed rapidly interims of size, structure and the variety of
consumer and business-to-business products and services around the world in general and
gulf region, in particular. In addition, many retail banks face huge challenges such as
technological advancement, competitive products, and services and thus, in order to
survive and compete effectively, banks must recognize the customer perceptions of the
service quality, academicians and practitioners have given more attention to this area as
it assumed that service quality is a critical measure of firm performance (Lasser et al.,
2000; Yavas and Yasin, 2001; Bick et al., 2004; And Reassen and Olsen, 2008 and Liang
et al., 2009). However, service quality is abstract and elusive and lacks objective
measures(Karatepe et al., 2005). Therefore, in order to identify the firms‟ strengths and/or
weaknesses, customer perceptions of service quality as a basic instrument. Therefore, the
objective of the paper is to test a service quality instrument by using retail banking
services in emerging countries.

31
 Indeed,( Reassen and Olsen, 2008 and Liang et al., 2009) researchers argue that
high levels of customer satisfaction lead to customer retention, especially in markets that
are highly competitive and saturated, such as financial services. Moreover in the present
competitive banking environment, most of the banks offer the same or similar products
around the world and service quality is a vital means to differentiate them selves in the
market place. ,The curare search contribute toward understanding the relationship among
customer services, customer satisfaction, and customer perception argue that high levels
of customer satisfaction lead to customer retention, especially in markets that are highly
competitive and saturated, such as financial services Moreover, in the present competitive
banking environment, most of the banks offer the same or similar products around the
world and service quality is a vital means to differentiate themselves in the market place.

32
33
 STATE BANK OF INDIA

History of State Bank of India

The evolution of State Bank of India can be traced back to the first decade of the
19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2
June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2
January 1809. It was the first ever joint-stock bank of the British India, established under
the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay
(established on 15 April 1840) and the Bank of Madras (established on 1 July 1843)
followed the Bank of Bengal. These three banks dominated the modern banking scenario
in India, until when they were amalgamated to form the Imperial Bank of India, on 27
January 1921.

An important turning point in the history of State Bank of India is the launch of the
first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian
economy in general and the rural sector of the country, in particular. Until the Plan, the
commercial banks of the country, including the Imperial Bank of India, confined their
services to the urban sector.

34
 Moreover, they were not equipped to respond to the growing needs of the
economic revival taking shape in the rural areas of the country. Therefore, in order to
serve the economy as a whole and rural sector in particular, the All India Rural Credit
Survey Committee recommended the formation of a state partnered & state sponsored
bank.

The State Bank of India emerged as a pacesetter, with its operations carried out by
the 480 offices comprising branches, sub offices and three Local Head Offices, inherited
from the Imperial Bank. Instead of serving as mere repositories of the community's
savings and lending to creditworthy parties, the State Bank of India catered to the needs
of the customers, by banking purposefully. The bank served the heterogeneous financial
needs of the planned economic development.

Branches

The corporate center of SBI is located in Mumbai. In order to cater to different

functions, there are several other establishments in and outside Mumbai, apart from the
corporate center. The bank boasts of having as many as 14 local head offices and 57
Zonal Offices, located at major cities throughout India. It is recorded that SBI has about
10000 branches, well networked to cater to its customers throughout India.

ATM Services

SBI provides easy access to money to its customers through more than 8500
ATMs in India. The Bank also facilitates the free transaction of money at the ATMs of
State Bank Group, which includes the ATMs of State Bank of India as well as the
Associate Banks – State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank
of Indore, etc. You may also transact money through SBI Commercial and International
Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card.

35
 Subsidiaries

The State Bank Group includes a network of eight banking subsidiaries and
several non-banking subsidiaries. Through the establishments, it offers various services
including merchant banking services, fund management, factoring services, primary
dealership in government securities, credit cards and insurance.

The eight banking subsidiaries are

 State Bank of Bikaner and Jaipur (SBBJ)
 State Bank of Hyderabad (SBH)
 State Bank of India (SBI)
 State Bank of Indore (SBIR)
 State Bank of Mysore (SBM)
 State Bank of Patiala (SBP)
 State Bank of Saurashtra (SBS)
 State Bank of Travancore (SBT)

Products and Services

State Bank of India offers a wide range of services in the Personal Banking Segment
which are indexed here

 eZ-trade@sbi
 SBI VISHWA YATRA FOREIGN TRAVEL CARD
 PAY ROLL CARDS
 ATM SERVICES
 GIFT CARDS
 GIFT CHEQUES
 INTERNET BANKING
 FOREIGN INWARD REMITTANCE
 LOCKER

36
Online Trading
SBI‟s value proposition is based on Unmatched Expertise, State-Of-Art
Technology And Operational Ease that will redefine the way India trades. State Bank
of India in alliance with SBI Cap Securities Limited and Motilal Oswal Securities
Limited offers an online trading account which will let you trade from the comfort of
your home or office either through the internet. This service provides you with a 3-in1
account which is an integrated platform of savings bank a/c, demat a/c and an online
trading a/c to give you a convenient and paper free trading experience under one roof.

eZ -Pay Card

Payment of salaries to employees who will be required to work at different locations

is generally a difficult proposition for Employers as a single Banking arrangement can
not be made for all employees. The SBI eZ-Pay card , a prepaid plastic card issued in
Indian Rupees in association with VISA international, is the right solution in such cases.
Periodical payments like salary, payment of TA/ Medical/ incentives etc. can be loaded
on to the card from a single point and the funds are available to the employees
immediately.

The SBI eZ-Pay card is a Pre-paid ATM-cum-Debit card usable at all VISA-enabled
ATMs through PIN and at Merchant establishments/ Point of Sale through PIN/
Signature, in India, Nepal & Bhutan. The cardholder need not visit any Branch to
withdraw his money. Balance enquiry can be made either through ATM or through
Internet free of charge.

Mobile banking services

Away from home, bills can be paid or money sent to the loved ones or balance
enquiries done anytime 24x7!!! That is what SBI Freedom offers -convenience, simple,
secure, anytime and anywhere banking.

37
 The service is presently available on java enabled mobile phones over SMS/ GPRS/
WAP as also non java phones with GPRS connection. The service can be availed over the
free GPRS facilities offered by various mobile service providers.

ATM Services

State Bank offers convenience of over 8000 ATMs in India, the largest network in
the country and continuing to expand fast! This means that you can transact free of cost at
the ATMs of State Bank Group (This includes the ATMs of State Bank of India as well
as the Associate Banks – namely, State Bank of Bikaner & Jaipur, State Bank of
Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State
Bank of Saurashtra, and State Bank of Travancore) and wholly owned subsidiary viz. SBI
Commercial and International Bank Ltd., using the State Bank ATM-cum-Debit (Cash
Plus) card.

Gift Cards

Presenting Gifts to Employees is an integral and unique culture in India.

Traditionally, gifts have been given to employees in the form of cash or kind. With the
advancement of Banking, Gift Cheque were introduced, allowing the employees to use
the money according to their wishes. These cheques, however, are accepted at the issuing
bank branches only. The SBI Gift Card, issued in association with VISA International, is
one such product which gives the comfort of convenience and wide acceptability.

Gift Card is a Pre-paid Plastic Card supported by Magnetic-strip based technology. It

is usable at all VISA enabled Merchant Establishments and POS by signature/ PIN. It is a
perfect substitute for Gift Vouchers sold by many retail houses as its use is not restricted
to any particular Merchant Establishment/ Point of Sale.

Sbi Yuva Card

SBI Yuva Card is an International Debit Card on VISA platform, exclusively

designed for vibrant youth of India between 18-30 years of Age. The card can be used at

38
ATMs for cash withdrawal at all ATMs under bilateral arrangement. It can be used for
dining, shopping and traveling at POS/MEs. This Card is available in all our branches
free of cost. You can not only draw cash at ATM but also swipe it for. This card is PIN
based on ATM and signature based at POS/MEs. This card can „be used for e-commerce
i.e. for shopping through internet by using VbV (Verified by VISA) certified internet
websites.

Internet banking

Simple, fast and convenient - anytime -anywhere - always open. You can now check
your account balances, view your account, request for cheque book, drafts, Bankers
cheques, stop cheque payment and issue standing instructions. You can also transfer
funds to your other accounts at the Branch, request for third party transfers, invest and
renew Term Deposits.

RBIEFT

Inter-bank Electronic Funds Transfer facility of the Reserve Bank of India (RBI -
EFT) is available with our branches in the clearing zone of Service Branches at Kolkata,
Mumbai ,New Delhi and Chennai.

What's New?

 E-Payment of Motor Vehicle Taxes & Fees of West Bengal Govt.

 SBI Fx Trade: Currency Future Trading
 Viewing of Tax Credit Statement (Form 26AS).
 Payment of 'National Permit' fee
 Request for a Gift Card online.
 Open Term deposit accounts online and get e-TDR/e-STDR receipts instantly.
 Access your pension slip through enquiry menu.
 Enquire about tax deducted on the interest earned by your deposits.
 Online NRI e-Z trade 3 in 1 account introduced.
 Transfer funds to any Bank from your SBI Account using RTGS/NEFT Facility.

39
 Value Added Services

 Online fee collection facility for Staff Selection Commission (SSC) and Union
Public Service Commission (UPSC).
 Discover a Simple, Secure and Convenient way to pay all your Utility Bills at
Online SBI.
 e-Rail reservation service using SBI accounts.
 Mutual Funds investments handled with SBI accounts.
 SBI e-Tax: Online payment facility for retail users and corporate.
 VISA Money Transfer.

Personal Banking

 Account Statement
 Funds Transfer
 Demat Account Statement
 Bill Payment
 Cheque Book Request
 TDS Enquiry

40
 BANK OF BARODA

History of Bank of Baroda

Prior to independence from the British Rule, the ancient India was ruled by
princely states, scattered over the width and breadth of the large Indian nation. The
Maharajas of the inner States of colonial India contributed to the welfare of their
respective regions as well as the Indian nation as a whole. Their vision and foresight in
founding various financial, charitable, social and philanthropic organizations during their
time is still cherished by any one going into the history of modern India and its
achievements in every walk of life.

The Maharaja of Baroda, a princely state of British India, by name Sir Sayyajirao
Gaekwad III, had the same vision in establishing a bank for servicing the public at large
and the citizens of Baroda State, a Guajarati population in particular. On 20th July 1908,
Bank of Baroda was established under the rules of Companies Act 1897, in a small
building at Baroda, by the Maharaja with a paid up capital of Rs.10 lakhs. The guidelines
set by the Maharaja for the bank was to serve the people of the State of Baroda as well as
the neighboring regions with money lending, saving, transmission and encouraging the
development of arts, science, commerce and trade for the people.

41
 The success story of the Bank of Baroda is studded with many a leaps and strides
it made in the International presence, apart from establishing branches all over the Indian
nation, by acquisition of already popular banking entities, as also commencing new
commercial banking establishments, in the unique Guajarati style. During the years of
1908 to 2007 (and the century year being round the corner) Bank of Baroda‟s growth
owes to the excellence in rendering financial products and services to the national and
international population. Countries beginning from America to Zambia, in the
alphabetical order have been enjoying the services of Bank of Baroda as of today.

A brief statistics will reveal the magnitude of growth Bank of India has achieved
today : fifth largest bank in India; total assets over 1,78,000 crores; number of offices
and branches 2800; more than 1000 ATMs, notwithstanding affiliates, subsidiaries and
delivery channels all over the world.

Mission statement

To be a top ranking National Bank of International Standards committed to augmenting

stake holders' value through concern, care and competence.

Bank of Baroda believes in the strength and integrity of relationships built with its
customers like you. With over 102 years of experience in the banking industry and a wide
network of over 3365 branches all over the country, we have always been active in
extending financial support and adapting to your changing needs.
BOB‟s Deposit Products, Retail Loans, Credit Cards and Debit Cards help
customers with growing financial needs. With facilities like Lockers it ensures that
customers‟ valuables are safe with BOB.

BOB„s countrywide branches offer convenience and ease in operating account

wherever the customer is. It‟s 24-hour ATMs enable customer to withdraw cash, check
account balance and request for a new cheque book even after banking hours.

42
 Services of BOB

Business Banking Services

Customized services for unique requirements

The small and medium business enterprise is one of the fastest growing sectors in
the country. Bank of Baroda offers various products and services that meet the specific
requirements of such enterprises and help them grow.
In addition to tailor-made products, you can depend on the strength of our nation-
wide network and facilities that will enable you to conduct your business smoothly,
without geographical constraints.
Be it Deposits, Loans & Advances, Collection Services, Working Capital Finance,
Term Finance, Non-Fund based Facilities, Trade Finance, Merchant Banking or other
such aspects of banking, we have a solution to help customer‟s business run smoothly
and efficiently.

Corporate Banking Services

Supporting corporate growth

With services ranging from Working Capital Finance, Short Term Corporate
Loans, Project Finance to Cash Management and Merchant Banking, Bank of Baroda
Corporate Banking offers various options that help fund and enable corporations in
investment and expansion plans. These products also offer merchant banking and cash
management solutions.

43
 BOB‟s global presence, large-scale operability, highly networked systems and
local market penetration allow customers to reap financial benefits to the maximum.

Treasury Operations

In the changing economic environment of the country in particular and the globe
in general, Bank of Baroda was the premier public sector bank in India to set up a
Specialized Integrated Treasury Branch (SITB) in Mumbai and the integrated approach
initiated by the Bank in its treasury operations is now being emulated by other peer
banks.

Bank of Baroda has consciously adopted a focused approach towards improving

efficiency and profitability by successfully integrating the operations of different
financial markets, viz. Domestic Money, Investments, Foreign Exchange and Derivatives
and has made its mark as an important player in the market-place.

The SITB at Mumbai, equipped with the State-of-the-art technology, with modern
communication facilities, handles all types of financial transactions, both for managing
its resources and deployments and effective compliance of regulatory requirements.

44
 Rural Banking Services

Strengthening the rural economy

Rural India contributes a major chunk to the economy every year. To give this
sector a stronghold on finance and to enable economic independence, Bank of Baroda has
special offerings that extend credit facilities to small and marginal farmers, agricultural
labourers and cottage industry entrepreneurs.

With the objective of developing rural economy through promotion of agriculture,

trade, commerce, industry and extending credit facilities particularly to small and
marginal farmers, agricultural labourers and small entrepreneurs, Bank of Baroda, over
the years, has reached out to larger part of rural India. BOB extend loans for agricultural
activities and a host of services for farmers well tuned to the rural market, and aim to
make a Self Reliant Rural India.

45
NRI Services

BOB offer a red carpet welcome to all NRI's to bank with them. As a premier
nationalised bank in India, with comprehensive banking experience world-wide, and by
virtue of our consistent track record of profit making since 1908,we are confident of
meeting all customers banking requirements.

BOB‟s wide network of foreign branches, offices and Correspondent Relations at

convenient business locations all round the world, which is the largest among any bank in
India, will ensure a smooth and safe banking experience.

BOB continue to cherish its rich ethnic traditional values and culture, during its
personal interface. Yet BOB speedily repositioning ourselves in the e-millennium era of
banking in India, to take care of your changing needs and expectations. Its information
technology strategies are directed towards enabling employees to provide customers with
a state of the art customer convenience, thereby facilitating a global banking experience.

Eligibility - FOR NON-RESIDENT INDIANS ONLY

 Different meaning under different statutes

 FERA, 1973 and I.T. Act 1961 had different definitions
 Includes NRI and other non-resident foreign nationals
 NRI includes non-resident Indian nationals and also non-resident Persons of
Indian origin
 Under FERA, emphasis in determining residential status was based on purpose of
stay outside India and not on duration of stay outside India.

46
 Products of BOB

Deposit products

 Account Opening Form (Individuals)

 Baroda Advantage Savings Bank Account
 Baroda Super Savings Bank Account
 Baroda Subh Savings Account
 Baroda Centenary Savings Bank Account
 Baroda Bachat Mitra
 Account Opening Form (Non-Individuals)
 Savings Account
 Current Account
 Fixed Deposit
 Baroda Tax Saving term deposit
 Fast Access
 Recurring Deposits
 Yatha Shakti Jama Yojana
 NRI Fixed Deposit Account
 NRE Savings Bank Account
 Resident Foreign Currency (RFC) Account

Retail Loans

 Home Loan
 Home Loan (NRIs/PIOs)
 Home Improvement Loan
 Baroda Additional Assured Advance to Residents/NRIs/PIOs
 Education Loan
 Baroda Career Development
 Baroda Loan for training , skill up gradation of construction workers
 Car Loan
 Baroda Car loan to HNIs/Corporates
 Baroda Loan to Defense Pensioners
 Loan to Pensioners
 Baroda Loan for Earnest Money Deposit
 Baroda Personal Loan
 Baroda Consumer Durables
 Baroda Loan for two wheelers
 Baroda Loan for laptop and personal computer
 Traders Loan
 Baroda Ashray Loan
 Salary Advantage Savings Account

47
Rural & Agri Banking
 Baroda Kisan Credit Card

SME Products

 SME Loan

Services

 Net Banking - Corporate

 Net Banking - Personal
 Debit cum ATM Card
 Demat - Individuals/NRI/Foreign Nationals
 Demat- Corporates

Cash Management Services

 Application Form for Baroda Cash Management Services

 Application Form for availing Collection/Payment
 Application Form for Internal Fund Transfer
 Application Form for Internet Facility
 Application Form for Liquidity Management
 Application Form for availing Lock-Box (Invoice) Management
 Application Form for availing PDC Management
 Application Form for Resetting Password
 Paying-in-Slip

Business Tie-ups

 India First Life Insurance Co. Ltd

 Baroda Pioneer Asset Management Co.
 Kotak Mahindra Mutual Fund
 IDFC Mutual Fund
 UTI Mutual Fund
 Birla Sun life Mutual Fund
 Reliance Mutual Fund
 Sundaram BNP Paribas AMC Ltd.
 Franklin Templeton Investments
 Western Union Money Transfer
 Baroda RemitXpress
 National Insurance Company Limited
 HDFC Standard Life Insurance

48
 Subsidiaries

Domestic Overseas
 BOBCARDS Ltd.  Bank of Baroda (Botswana)
Ltd.
 NATIONAL Bank Ltd
 Bank of Baroda (Kenya) Ltd.
 BOB Capital Markets Ltd.
 Bank of Baroda (Uganda) Ltd.

 Bank of Baroda (Guyana) Ltd.

 Bank of Baroda (UK) Ltd.

 Bank of Baroda (Tanzania) Ltd

 Bank of Baroda (Trinidad &

Tobago) Ltd.

 Bank of Baroda (Ghana) Ltd.

49
 Data classification & Interpretation of BOB:-

Calculation of Servqual Scores of Customer perceptions towards Technological development of

BOB.
Dimensions Statement Expectation Perception GAP Score Average for
Score Score Dimensions
Reliability 1 4.57 3.77 0.20
2 4.17 3.63 0.54 0.67
3 4.43 3.17 1.26
Tangibility 4 4.43 3.77 0.66
5 3.73 3.17 0.56
6 4.23 3.97 0.26
0.63
7 4.10 3.27 0.83
8 3.93 3.47 0.46
9 4.20 3.20 1.00
Responsiveness 10 4.37 3.27 1.10
11 4.00 3.07 0.93 0.99
12 3.90 2.97 0.93
Assurance 13 4.27 2.97 1.30
14 4.10 3.27 0.83 0.98
15 4.00 3.20 0.80
Empathy 16 4.20 3.17 1.03
17 4.07 3.63 0.44
18 3.70 2.83 0.87 0.64
19 3.83 3.19 0.64
20 4.23 3.99 0.24
Un weighted Average SERVQUAL score 0.782

50
 Bank of Baroda

SERVQUAL Weighted
Dimension Score

Reliability 0.67
Tangibility 0.63
Responsiveness 0.99
Assurance 0.98
Empathy 0.64
Points
Weight age given by respondents of BOB to different dimension
1. The appearance of the banks physical facilities, equipment, 20
technological support, personnel and communication materials.

2. The knowledge and politeness of the bank's employees and their 16

ability to convey trust and confidence

3. The banks readiness to help customers and provide prompt 22

service.

4. The bank's ability to perform the promised service consistently 17

and accurately

5. The caring individual attention the bank provides its customers. 25

Total: 100

51
 Weightage Score of Customer Perception of
BOB
0.99 0.98
1
0.8 0.67 0.63 0.64
0.6
0.4
0.2
0

Gap score Dimension

Minimum Responsiveness
Maximum Tangibility

Bank of Baroda

SERVQUAL Score 5- Score Weighting Weighted

Dimension from from from Score
Table 1 table 1 Table 2

Reliability 0.67 2.00 20 0.40

Tangibility 0.63 3.77 16 0.60

Responsiveness 0.99 2.96 22 0.65

Assurance 0.98 2.93 17 0.50

Empathy 0.64 3.22 25 0.81

Average weighted score 0.592

52
 SERVQUAL Weighted
Dimension Score

Reliability 0.40
Tangibility 0.60
Responsiveness 0.65
Assurance 0.50
Empathy 0.81

BOB
0.9 0.81
0.8
0.65
0.7 0.6
0.6 0.5
0.5 0.4
0.4

0.3

0.2

0.1

Gap score Dimension

Minimum Reliability
Maximum Empathy

53
 Data classification & Interpretation of SBI:-

Calculation of Servqual Scores of Customer perceptions towards Technological

development of SBI.
Dimensions Statement Expectation Perception GAP Average for
Score Score Score Dimensions
Reliability 1 4.20 3.93 0.27
2 4.27 3.94 0.33 0.44
3 3.83 3.10 0.73
Tangibility 4 4.23 4.03 0.20
5 4.00 3.07 0.93
6 4.20 3.67 0.53
0.47
7 4.30 4.20 0.10
8 3.80 3.13 0.67
9 3.83 3.47 0.36
Responsiveness 10 3.83 3.00 0.83
11 4.00 2.97 1.03 0.93
12 3.53 2.60 0.93
Assurance 13 4.17 4.00 0.17
14 4.30 3.20 1.10 0.63
15 4.33 3.70 0.63
Empathy 16 4.13 3.20 0.93
17 4.33 3.37 0.96
18 4.22 3.17 1.05 0.82
19 3.97 3.53 0.44
20 4.53 3.80 0.73
Un weighted Average SERVQUAL score 0.658

54
 State Bank of India

SERVQUAL Weighted
Dimension Score
Reliability 0.44
Tangibility 0.47
Responsiveness 0.93
Assurance 0.63
Empathy 0.82

Weightage Score of Customer Perception of SBI

1 0.93
0.9 0.82
0.8

0.7 0.63
0.6
0.47
0.5 0.44

0.4

0.3

0.2

0.1

0
Reliability Tangibility Responsiveness Assurance Empathy

Gap score Dimension

Minimum Reliability
Maximum Responsiveness

55
Weight age given by respondents of SBI to different dimension Points

1. The appearance of the banks physical facilities, equipment, 23

technological support, personnel and communication materials.

2. The knowledge and politeness of the bank's employees and their 26

ability to convey trust and confidence

3. The banks readiness to help customers and provide prompt 13

service.

4. The bank's ability to perform the promised service consistently 18

and accurately

5. The caring individual attention the bank provides its customers. 20

Total: 100

SERVQUAL Score 5- Score Weighting Weighted

Dimension from from from Score
Table 1 table 1 Table 2

Reliability 0.44 1.33 23 0.31

Tangibility 0.47 2.79 26 0.73

SBI 0.93 2.79 13 0.36
Responsiveness

Assurance 0.63 1.90 18 0.34

Empathy 0.82 4.11 20 0.82

Average weighted score 0.512

56
 Weighted
SERVQUAL Score
Dimension

Reliability 0.31
Tangibility 0.73
Responsiveness 0.36
Assurance 0.34
Empathy 0.82

SBI

0.9 0.82
0.8 0.73

0.7
0.6
0.5
0.36 0.34
0.4 0.31
0.3
0.2
0.1
0
Reliability Tangibility Responiveness Assurance Empathy

Gap score Dimension

Minimum Reliability
Maximum Emapathy

57
 Reliability

BANK GAP SCORE

SBI 0.44

BOB 0.67

0.7

0.6

0.5

0.4
Reliability
0.3

0.2

0.1

0
SBI BOB

Reliability
Gap score Bank
Minimum SBI
Maximum BOB

58
 Tangibility

BANK GAP SCORE

SBI 0.47

BOB 0.63

0.7 0.63

0.6
0.47
0.5

0.4

0.3

0.2

0.1

0
SBI BOB

Tangibility
Gap score Bank
Minimum SBI
Maximum BOB

59
 Responsiveness
BANK GAP SCORE

SBI 0.93
BOB 0.99

Responsiveness

0.99
0.98
0.97
0.96
0.95
0.94
0.93
0.92
0.91
0.9
SBI BOB

Responsiveness
Gap score Bank
Minimum SBI
Maximum BOB

60
 Assurance

BANK GAP SCORE

SBI 0.63
BOB 0.98

Assurance

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
SBI BOB

Assurance
Gap score Bank
Minimum SBI
Maximum BOB

61
 Empathy
BANK GAP SCORE
SBI 0.82
BOB 0.64

Empathy

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
SBI BOB

Empathy
Gap score Bank
Minimum BOB
Maximum SBI

62
 Comparison of gap score

Dimension Banks

BOB SBI

Reliability 0.67 0.44

Tangibility 0.63 0.47

Responsiveness 0.99 0.93

Assurance 0.98 0.63

Empathy 0.64 0.82

1
0.9
0.8
0.7
0.6
0.5
0.4 SBI
0.3 BOB
0.2
0.1
0

63
 Unweighted average Gap
Bank
score

SBI 0.658

BOB 0.782

Unweighted gap score

0.782
0.8
0.78
0.76
0.74
0.72
0.7 0.658
0.68
0.66
0.64
0.62
0.6
0.58
SBI BOB

SBI is having minimum un weighted average servqual score and BOB is having
maximum un weighted average score.

64
 Reliability

Bank weighted score

SBI 0.31
BOB 0.40

0.4
0.4

0.35 0.31

0.3

0.25

0.2

0.15

0.1

0.05

0
SBI BOB

Reliability
Weighted score Bank
Maximum BOB
Minimum SBI

65
 Tangibility

Bank weighted score

SBI 0.73
BOB 0.60

0.8 0.73

0.7
0.6
0.6

0.5

0.4

0.3

0.2

0.1

0
SBI BOB

Tangibility
Weighted score Bank
Maximum SBI
Minimum BOB

66
 Responsiveness
Bank weighted score
SBI 0.36
BOB 0.65

0.7 0.65

0.6

0.5
0.36
0.4

0.3

0.2

0.1

0
SBI BOB

Responsiveness
Weighted score Bank
Maximum BOB
Minimum SBI

67
 Assurance

Bank weighted score

SBI 0.39
BOB 0.50

Assurance
0.5

0.5
0.39
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
SBI BOB

Assurance
Weighted score Bank
Maximum BOB
Minimum SBI

68
 Empathy

Bank weighted score

SBI 0.82
BOB 0.81

Empathy

0.82
0.822
0.82
0.818
0.816
0.814 0.81
0.812
0.81
0.808
0.806
0.804
SBI BOB

Empathy
Weighted score Bank
Maximum SBI
Minimum BOB

69
 Comparison of Weighted score

Dimension Banks

BOB SBI

Reliability 0.40 0.31

Tangibility 0.60 0.73

Responsiveness 0.65 0.36

Assurance 0.50 0.34

Empathy 0.81 0.82

0.9 0.820.81
0.8 0.73
0.65
0.7 0.6
0.6 0.5
0.5 0.4
0.36 0.34
0.4 0.31
SBI
0.3
BOB
0.2
0.1
0

70
 Bank Avg weighted score
SBI 0.512
BOB 0.592

Comparision of Ave.weighted score

0.6

0.58

0.56

0.54

0.52

0.5

0.48

0.46
SBI BOB

BOB is having highest average weighted score between two banks.

71
 General Questions
1) In which Bank do you have the Bank Account?

Account Holders

SBI
100% 100% BOB

2) What is the purpose behind opening the account?

37%
Saving
Security
63%

72
3) Are you aware about the following facilities providing by banks?

ATMs
RTGS, ECS, OLTAS, OTHERS

50%
ATM
RTGS,ECS,OTHERS
100%

4) Among these facilities, which facilities are you using?

4% 1%

10%
ATM
RTGS
ECS
OLTAS
95%

73
5) Do you think that banks provide all the types of facilities as per your needs?

33%
YES
NO
67%

6) Do you think that banks are responsible to enhance your standard of living?

9%

YES
22%
NO
69% CAN'T SAY

74
7) What is the effect of banking facilities on your life?

EFFECT YES NO SOMETIMES

Saving of time
Saving of money
Withdrawal of money
as per requirement
Smooth transaction

Time Saving

72%
Money Saving
98%

87%
Withdrawal of
money as per
requirement
100%
Smooth Transaction

8) Are you satisfied with all banking facilities?

5%
9%

YES
NO
TO SOME EXTENT

86%

75
9) Which type of service do you prefer the most from the banks?

ATM services
Internet banking
Mobile banking
Retail banking

3%

9%
6% ATMs
Mobile Banking
Internet Banking
Retail Banking
82%

10) Your Account Decisions are influenced by:

Oneself
Market research
Friends/relatives

4%

22% One self

Friend/Relatives
Market Reserch
74%

76
11) Which factors do you consider before opening account or in purchasing new plan in a
particular bank?

Finance position
Goodwill
Current Market Position
Future prospects
Services provided

Financial Position

14%
23% Current Market
Position
10%
Goodwill

18% Service Provided

35%
Future Prospects

12) Which bank is more secure according to you?

SBI BOB

32%
SBI
BOB
68%

77
 Key Findings for general questions

 According to respondents the most preferred banking service is ATM and other
services like mobile banking, internet banking and Retail banking are less preferable.

 Most of the respondent‟s account decisions are influenced by themselves.

 Most important factor which respondent consider before opening an account is

Service provides by the banks followed by Future prospects, goodwill, financial
position and current market position.

 According to respondents most secure bank is SBI than BOB.

Key Findings for Servqual questions

Gap Score

 For SBI bank, the gap score for Reliability is minimum followed by Tangibility,
Assurance, Empathy and Responsiveness.

 For BOB bank, the gap score for Tangibility is minimum followed by Empathy,
Reliability, Assurance, and Responsiveness.

Weight for five dimensions

 For SBI bank, the highest weight is given to Tangibility followed by Reliability,
Empathy, Assurance and Responsiveness.

 For BOB bank, the highest weight is given to Empathy followed by Responsiveness,
Reliability, Assurance and Tangibility.

78
Weighted score

 For SBI bank, the highest weighted score is of dimension Empathy followed by
Tangibility, Responsiveness, Assurance and Reliability.

 For BOB bank, the highest weighted score is of dimension Empathy followed by
Responsiveness, Tangibility, Assurance and Reliability.

Comparison amongst banks on different dimensions

Comparison of gap score

Dimension Banks

BOB SBI

Reliability 0.67 0.44

Tangibility 0.63 0.47

Responsiveness 0.99 0.93

Assurance 0.98 0.63

Empathy 0.64 0.82

 For Reliability, the minimum gap score is for SBI than BOB.

 For Tangibility, the minimum gap score is for SBI than BOB.

 For Responsiveness, the minimum gap score is for SBI than BOB.

 For Assurance, the minimum gap score is for SBI than BOB.

 For Empathy, the minimum gap score is for BOB than SBI.

79
 Unweighted average Gap
Bank
score

SBI 0.658

BOB 0.782

 SBI is having minimum unweighted average Gap score than BOB.

Comparison of Weighted score

Dimension Banks

BOB SBI

Reliability 0.40 0.31

Tangibility 0.60 0.73

Responsiveness 0.65 0.36

Assurance 0.50 0.34

Empathy 0.81 0.82

 For Reliability, the highest weighted score is of BOB than SBI.

 For Tangibility, the highest weighted score is of SBI than BOB.

 For Responsiveness, the highest weighted score is of BOB than SBI.

 For Assurance, the highest weighted score is of BOB than SBI.

 For Empathy, the highest weighted score is of SBI than BOB.

Bank Avg. weighted score

SBI 0.512
BOB 0.592

 BOB is having highest average weighted score than SBI

80
 CONCLUSION

 ATM is the most preferred service than other services.

 The most common purpose behind opening a bank account is saving of money.

 All the sample size customers aware about ATMs. And only few customers are aware
about other facilities like RTGS, ECS, OLTAS and others.

 All most sample size customers are using ATMs and other facilities which are
mentions above are rarely used by them.

 Mostly all customers believe that bank provides all the services as per their needs.

 Out of 60 sample size customers, 69% customers think that banks are responsible for
enhancing their standard of living.

 Effect of banking facilities on your life (out of 60 sample size)

 100% believes that banks are best for money saving.

 All most (98%) believes that banking facilities are helpful in saving time of
money transaction.
 87% believes that they can withdraw the money as per their requirement.
 72% believes that Banks are helpful in smooth money transactions.

 Most the people are satisfied with all the banking facilities.

 Account opening decisions are mostly influenced by own self.

 The service provide by the bank is the major factor for customers before opening
account. And the other factors like future prospective, goodwill, market situation are
less preferable by the customers.

 SBI is the more secure Bank than BOB.

81
 RECOMMENDATIONS

For SBI

 SBI should shows sincere interest in solving a customer‟s problem pertaining to any
delay in transaction or mistakes done by users.

 SBI should emphasize on improving their services on Responsiveness and Assurance.

 In villages, the SBI employees are not properly trained and able to guide about the
use of technology.

 The SBI should maintain sufficient and easy to use online banking facilities.

 The employees must shows willingness to help the customers.

 The employees must be good in explaining the various technological products and
services which the bank provides.

 The employees should never too busy to respond to customers request.

 The ATM facility of SBI is good as compared to BOB but it must have to maintain it.

 The SBI should improve in responsiveness as well as assurance towards the

customers.

For BOB

 BOB should improve its ATM facilities compared to SBI.

 BOB should emphasize on improving their services on Tangibility and Assurance.

 The BOB should improve in its home delivery services.

 SBI and BOB should improve their services on empathy dimension.

 The bank must show sincere interest while the customer has the problem.

 Specially in Mehasana district the employees are not well trained and not able to
properly guide the customers.

82
 The bank should increase the number of ATMs in Mehasana district.

 The bank should develop the time saving technology facility like Phone banking and
Mobile banking.

 Some customers believe that the bank is not showing so much interest to maintain
long term customer relationship so the bank must be maintain a good relationship
with the customers.

 The bank should has different properly identified counters.

83
 BIBLIOGRAPHY

List of web-sites.

1. www.statebankofindia.com
2. www.onlinesbi.com
3. www.bankofbaroda.com
4. www.bobibanking.com
5. www.rbi.org.in
6. www.banknetindia.com

List of books

1. Introduction to Banking by Vijayaragavan Iyengar

2. Banking and Insurance by O.P.Agarawal 2nd revised edition
3. Role of Banks in the development of rural area by C.Krishnan

84
 Annexure (Questionnaire)
Questionnaire
Dear Madam / Sir

I am a student of C K SHAH VIJAPURAWALA INSTITUTE OF

MANAGEMENT,VADODARA, presently working on the Comprehensive Project which
is the part of our syllabus of 4th sem. MBA and I have selected the topic “Customers
Perception on Banking Services”. And for that I have selected SERVQUAL Analysis of
Banking services and comparative analysis of customer satisfaction of various banks.

Our Questionnaire format is as below

85
 Questionnaire
“CUSTOMERS PERCEPTION ON BANKING SERVICES”

Prepared By (MBA SEM.4): Guide:

RINKAL.P. Darji Asso. Prof. Savitha K

NAME :

OCCUPATION :

ADDRESS :

AGE :

SERVQUAL QUESTIONS

The following questionnaire relate to your feelings about the services

provided by SBI OR BOB. Please show the extent to which you believe
this bank has the feature described in the statement. Here, we are
interested in a number from 1 to 5 that shows your Expectations and
Perceptions about the bank.

86
 You should rank each statement as follows:

Strongly Disagree N Strongly Agree

1 2 3 4 5

Particulars E-Score P-score

Reliability

1. The Bank provides timely service in relation to ATM,

RTGS, NEFT, ECS etc

2. The Bank provides required and accurate information

when needed about the usage and operation of various
banking technology

3. The Bank shows sincere interest in solving a customer’s

problem pertaining to any delay in transaction or mistake
by user

Tangibility

4. The Bank has accessible materials like forms, broachers,

stationary associated with system services.

5. The employees are properly trained and able to guide

about the use of technology

6. The Bank has different properly identified counters.

7. The Bank has good ATM’s services

8. The Bank maintains sufficient and easy to use Online

Banking facility

9. The Bank is well equipped with the time saving

technology facility like phone banking and mobile
banking.

Responsiveness

87
10.Employees are good in explaining the various
technological products and services the Bank provides.

11.Employees in the bank are always willing to help you.

12.Employees in the bank are never too busy to respond to

your request.

Assurance

13.Customers feel safe about their transactions done by

Internet banking, RTGS, NEFT, Mobile Banking etc

14.Employees are competent and knowledgeable.

15.The Bank maintains good systems for its efficient

functioning

Empathy
16.The Customers get individual attention

17.The bank has operating hours convenient to all its

customers.
18.The Bank has reliable Home delivery services.

19.The bank has your best interests at in providing quick and

effective banking services
20.The Bank maintains long term customer relationships.

88
 Weight age given by respondents to different dimension Points

1. The appearance of the banks physical facilities,

equipment, technological support, personnel and
communication materials.
2. The knowledge and politeness of the bank's employees
and their ability to convey trust and confidence

3. The banks readiness to help customers and provide

prompt service.

4. The bank's ability to perform the promised service

consistently and accurately

5. The caring individual attention the bank provides its

customers.

Total: 100

Other General Questions are as below:

 In which Bank do you have the Bank Account?
 What is the purpose behind opening the account?
 Are you aware about the following facilities providing by banks?
 ATMs
 RTGS, ECS, OLTAS, OTHERS
 Among these facilities, which facilities are you using?
 Do you think that banks provide all the types of facilities as per your needs?
 Do you think that banks are responsible to enhance your standard of living?
 What is the effect of banking facilities on your life?

EFFECT YES NO SOMETIMES

Saving of time
Saving of money
Withdrawal of money as per
requirement
Smooth transaction

89
 Are you satisfied with all banking facilities?
 Which type of service do you prefer the most from the banks?

ATM services
Internet banking
Mobile banking
Retail banking

 Your Account Decisions are influenced by:

Oneself
Market research
Friends/relatives

 Which factors do you consider before opening account or in purchasing new plan in a
particular bank
Finance position
Goodwill
Current Market Position
Future prospects
Services provided

 Which bank is more secure according to you?

SBI BOB

90
91