Consumer behaviour towards co-op banks-project report

DECLARATION

We hereby declare that the work embodied in this project is our original

work. It is submitted in partial fulfilment of the curriculum for the degree of

Post Graduate Diploma in Management at Universal Business, Karjat –

Mumbai.

We further state that no part of this report has been submitted for any other

degree / diploma or any title equal in importance to any other university.

Sr.No Roll No. Batch Names Signature

1 1510 PGDM 2 ATUL GURAV

2 1537 PGDM 2 SHREY SOOD

3 1539 PGDM 2 SHUBHAM PARSEKAR

4 1542 PGDM 2 SOURABH MAYABHATE

5 1505 PGCM 5 TEJA MULAGALA

Place: Universal Business School Date: April 23, 2016

CERTIFICATE

This is to certify that the project entitled “Consumer Behaviour of Co-

operative Banks” is an original assignment performed by this group of

students under my guidance.

This project is submitted by the students for the assessment procedure of

the Post Graduate Diploma in Management at Universal Business School,

Karjat - Maharashtra.

UNIVERSAL BUSINES SCHOOL Project Guide

KARJAT – MAHARASHTRA PROF. GURUPRASAD M

ACKNOWLEDGEMENT

We take this opportunity to thank all those involved in completing our

project. We would like to express our gratitude to Prof. Guruprasad M. for

guiding and helping us in making of this project and giving his valuable time

in explaining and providing his valuable input. Our words indeed would

hardly suffice her contribution.

We also like to thank the librarian of our college and the library staff for

their co-operation during the project work.

We also thank Dean- Prof Bibhas B for his stimulating support.

Finally, we thank the Branch Managers and staff for providing the necessary

information for the successful completion of project.

TABLE OF CONTENTS

Topic Page No

Executive Summary 01

1. Industry Overview

1.1 Meaning & Definition 02

1.2 Introduction to topic 03

1.3 Importance of Co-Operative banking 04

1.4 Difference between Commercial Bank & Co-Op Bank 05

1.5 Structure of Co-Operative Bank System 06

2. Introduction to Topic

2.1 Project Title

11

2.2 Research Objective

2.3 Literature Review

2.4 Hypothesis 12

2.5 Limitations 13

3. Methodology

3.1 Type of Research

14 3.2 Collection Data

3.3 Sampling Units, Tools 15

4. Research Findings

4.1 Questionnaire Analysis 16

4.2 Analysis of Interview with Bank Managers 33

5. Conclusion 38

6. Recommendation 39

References

Appendix

1

EXECUTIVE SUMMARY

Research topic assigned to our group as a part of Marketing Research Project

was “Customer Behaviour towards Co-operative Banks”. The objective of our

study was to understand customer behaviour as well as to understand whether

they are aware about the services and facilities offered by the Co-operative

Banks. The survey we conducted was confined to Karjat area, we reffered to

Five Co-operative banks and our sample size was 80.

Methodology used was Primary as well Secondary data. Type of study we

implemented was Exploratory as well as descriptive study. As per the Research

findings, many of the Respondents prefer co-operative banks over Nationalised

banks due to higher interest rate on deposits, preference given to local and

friendly approach of the bank towards their customers.So this clearly proves our

hypothesis is true.

Various Suggestion are provided in the report like Bringing awareness in the

housewives as they drive the family, to start with the internet and mobile

banking facility, etc. There were even several limitations to our study we

conducted like Time constraints , area , respondents, language barrier, genuinity

of information, insecurity towards providing personal information like phone

number , name and address.

2

1.0 INDUSTRY OVERVIEW OF CO-OPERATIVE BANK

1.1 DEFINATION: CO-OPERTIVE BANKING

A Co-operative bank, as its name indicates is an institution consisting

of a number of individuals who join together to pool their surplus savings for

the purpose of eliminating the profits of the bankers or money lenders with a

view to distributing the same amongst the depositors and borrowers.

The Co-operative Banks Act, of 2007 (the Act) defines a co-operative bank

as a co-operative registered as a co-operative bank in terms of the Act whose

members.

1. Are of similar occupation or profession or who are employed by a

common employer or who are employed within the same business

district; or

2. Have common membership in an association or organisation,

including a business, religious, social, co-operative, labour or

educational group; or

3. Have common membership in an association or organisation,

including a business, religious, social, co-operative, labour or

educational group; or

4. Reside within the same defined community or geographical area.

3

1.2 INTRODUCTION – CO-OPERATIVE BANK

A co-operative bank is a financial entity which belongs to its members, who

are at the same time the owners and the customers of their bank. This

banks provide financial assistance to locals of the community and protects

them against the debt trap of the money lenders and Traditional savakars.

They are the main reason for breaking the monopoly of moneylenders. Co-

operative banks in India came into existence with the enactment of the

Agricultural Credit Co-operative Societies Act in 1904. Co-operative bank

form an integral part of banking system in India. Under the act of 1904, a

number of co-operative credit societies were started. Owing to the increasing

demand of co-operative credit, anew act was passed in 1912, which was

provided for establishment of co-operative central banks by a union of

primary credit societies and individuals.

Importance given to co-operative banks in India is very much high compared

to other parts of the world. Their role in rural financing continues to be

important even today, and their business in the urban areas also has increased

phenomenally in recent years mainly due to the sharp increase in the number

of primary co-operative banks. Co-operative bank regulated by Reserve Bank

of India, NABARD & Apex bank. They are governed by the Banking

Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

They provide financial assistance to Rural as well as Urban areas.

Rural – Farming, personal finance, cattle’s, housing.

Urban – personal, housing, Business purpose, Self-employment.

Co-operative banks provides various services which include loans, deposits,

lockers, Overdraft, ATM, etc. The distinctive features of Co-operative banks

is attributed mainly to their much better contacts with the local people,

4

personal interaction with customers, and their ability to catch the nerve of the

local client. The total deposits and landings of Co-operative banks are much

more than the Old Private Sector Banks and the New Private Sector Banks.

1.3 IMPORTANCE OF CO-OPERATIVE BANKS

Co-operative bank is a financial entity belonging to its members who are

its customers as well, providing them with a wide range of banking and

financial services.

Main motive is not to generate profit but to provide the best possible

products and services to its members and also non-members.

Co-operative bank reduces banking exclusion and foster economic growth

of country, by increasing banking access in areas or markets where other

areas are less present – SME’s, farmers in rural area, middle or low income

households in urban areas.

Co-operative banks are deeply rooted inside local areas and communities.

They are involved in local development and contribute to the sustainable

development of their communities.

Criteria for getting loan from Co-operative banks are less stringent than

for a loan from a Commercial bank.

The exponential growth of co-operative banks in India is attributed mainly

to their much better local reach, personal interaction with customers and

their ability to catch the nerve of the local clientele.

5

1.4 DIFFERENCE BETWEEN COMMERCIAL BANK & CO-OP

BANKS

Commercial banks are required to be registered under Banking

Regulation Act, 1949.

Whereas co-operative banks are required to be registered under the Co-

operatives societies Act of 1904.

Commercial banks are subject to the control of the Reserve Bank of

India.

Co-operative banks are subject to the rules laid down by the Registrar

of co-operative Societies.

Commercial banks in India are on a larger scale. They have branch

system hence they have branches all over country.

Co-operative banks follow only unit- bank system and are relatively on

a much smaller scale. The coverage of co-operative banks is not

countrywide.

Commercial banks in India are of two types i.e. Private and Public

sector banks.

Co-operative banks are private sector banks.

Co-operative banks have lesser scope in offering a variety of banking

services than commercial banks.

Co-operative banks offer a higher rate of interest to their depositors

than commercial banks.

Commercial banks operates to earn profit. Whereas co-operative banks

operate mainly to service its members and the society.

Massive funds are available for disposal with the commercial banks,

whereas limited funds are available with the co-operative banks.

6

1.5 STRUCTURE OF CO-OPERATIVE BANKS

I

The Co-operative banking structure in India comprises of:

Urban Co-operative Banks

Rural Co-operatives Banks

CO-OPERATIVE BANKS

URBAN CO-OPERATIVE BANKS RURAL CO-OPERATIVE BANKS

LONG -TERM RURAL CO-

OPERATIVES

SHORT- TERM RURAL CO-

OPERATIVES

SHORT CO-OPERATIVE OPERATIVE

AGRICULTURE AND RURAL

DEVELOPMENT BANKS

PRIMARY CO-OPERATIVE

AGRICULTURE AND RURAL

DEVELOPMENT BANKS

PRIMARY AGRICULURE

CREDIT SOCIETY

CENTRAL CO-

OPERATIVE BANK

STATE CO-

OPERATIVE BANK

7

Some co-operative banks are scheduled banks, while others are non- scheduled

banks. For instance, State Co-operative banks and some Urban Co-operative

banks are scheduled banks but other co-operative banks are non-scheduled

banks.

Scheduled banks are those banks which have been included in the second

schedule of the Reserve bank of India act of 1934. The banks

included in this schedule list should fulfil two conditions.

The paid capital and collected funds of bank should not be less than Rs.

5 lac.

Any activity of the bank will not adversely affect the interests of

depositors.

Every Scheduled bank enjoys the following facilities.

Such bank becomes eligible for debts/loans on bank rate from the RBI

Such bank automatically acquire the membership of clearing house.

TWO CATEGORIES OF CO-OPERATIVE BANKS (INDIA)

1.5.1 Urban Co-operative Banks:

Urban Co-operative Banks is also referred as Primary Co-operative

banks by the Reserve Bank of India. Among the non-agricultural credit

societies urban co-operative banks occupy an important place. This

bank is started in India with the object of catering to the banking and

credit requirements of the urban middle classes.

As per RBI Urban Co-operative banks are “small sized co- operatively

organized banking units which operate in metropolitan, urban and

semi-urban centres to cater mainly to the needs of small borrowers,

viz. owners of small scale industrial units, retail traders, professional

and salaries classes.”

8

Urban Co-operative banks mobilize savings from the middle and lower

income groups and purvey credit to small borrowers, including weaker

sections of the society. These banks organize on a limited liability

basis, generally extend their area of operation over a town. The main

functions of these banks are to promote thrift by attracting deposits

from members and non-members and to advance loans to the

members. It is registered under Co-operatives Societies Act of the

respective state Governments. Prior to 1966, Urban Co-operative

banks were exclusively under the purview of State Government.

From March 1, 1966 certain provisions of Banking

Regulation Act have been made applicable to these banks.

Consequently, the RBI became the regulatory a supervisory authority

of Urban Co-operative Banks for their related operations. Managerial

aspects of such banks continue to remain with State Governments

under the respective Co- operative Societies Act. These banks with

multi-presence are regulated by the Central Governments and

registered under Multi-State Co-operative Societies Act. The RBI

extends refinance to Urban Co-operative Banks at bank rate against

their advances to tiny and cottage industrial units. These banks grants

sizeable loans and advances under priority sector for lending to small

business enterprises, retail trade, road and water transport operators

and professional and self-employed persons. Urban Co-operative

banks are mostly located in towns and cities and cater to the credit

requirement of the urban clientele.

1.5.2 Rural Co-operatives Banks:

Rural Cooperative Banking plays an important role in meeting the

growing credit needs of rural population of India. It provides

9

institutional credit to the agricultural and rural sector. The inadequacy

of rural credit engaged the attention of RBI and Government

throughout the 1950s and 1960s. One important feature of providing

agriculture credit in India has been the existence of a widespread

network of rural financial institutions. The rural credit structure

consists of many types of financial institutions as large scale branch

expansion was undertaken to create a strong institution based in rural

area. It has served as an important instrument of credit delivery in rural

and agricultural areas. The separate structure of rural Co- operative

sector for long-term and short-term loans has enabled these

institutions to develop a specialized institution for rural credit

delivery. The volume of credit flowing through these institution has

increased.

The Rural Co-operative structure has traditionally been bifurcated

into two parallel wings, i.e.

A. Short-term Rural Co-operatives

B. Long-term Rural Co-operatives.

A. Short-term Rural Co-operatives

This bank provides finance to farmers and rural people mainly for crop

and other personal use. There are 3 types of societies at various levels

- Village level – The Primary Agricultural credit societies: The primary

co-operative society is an association of borrowers and non borrowers

residing in a particular locality. The funds are derived from loans of

central co-operative banks , share capital and deposits of its members.

This deposits in return utilised for giving loan to its members for

purchase of fertilizers , pesticides , cattle’s, etc.

10

- District level ( middle) – Central Co-operative Banks: This are the

federation of primary credit societies in a district and are of two types

Those having membership of primary societies only

Those having membership of societies as well as individuals.

This banks obtain funds from deposits ,share capital and provide the

same as finance to member socities within the limits of borrowing

capacity of socities

- State level (high) – State Co-operative bank: The state co-operative

bank is federation of central co-operative bank and acts as a watchdog

of the co-operative banking structure in the state. Its funds are obtained

from share capital, deposits, loans and overdrafts from Reserve Bank

of India. The state co-operative banks does not directly lend to the

farmers but to the following banks

B Long-term Rural Co-operatives:

This bank provide typically medium and long term loans for

agriculture, personal financing, and housing. This bank does not

directly lend to the farmers but to this two types of banks

- State Co-operative Agriculture and development banks (state Level)

- Primary Co-operative Agriculture and Rural Development Banks

(taluka level)

11

2.0 CONSUMER BEHAVIOUR OF CO-OPERATIVE BANKS

2.1 INTRODUCTION

The purpose of the report is to find the consumer behaviour in context to the

cooperative banks. The whole study is done to analyse that what drives the

customers to open an account in the cooperative banks. To make the report,

many inputs were required and the same were fulfilled by conducting surveys

in which the customers of the banks were asked to fill the questionnaires. Also,

the managers were approached and their insights were asked regarding the

respective bank’s functioning. These two sources gave us the tremendous

information by which we were able to prepare the report. In the report, every

essentiality is covered which would make our research and the survey

complete.

2.2 OBJECTIVES

To find whether customers are aware of the services and facilities which

the cooperative banks are offering.

To understand customer behaviour in context to the cooperative banks.

2.3 LITERATURE REVIEW

Dr. S. Velanganni in his research (Comparative study on customers

perception on service quality in cooperative banks) paper discussed that

the banks are exercising vigilance to identify the needs of the customer and

monitoring their moves and reactions towards the actions taken by the banks

to please them. To win the customers and having a competitive edge over

others, banks are possessing a broad mechanism to gauge the changing needs

12

of the customers. The customers prefer the banks where there is a sense of

personal touch in the services provided.

Dr. Snehalkumar H Mistry (2013): Focused on the factors that affect

customer satisfaction in banks and analysing their effects. It stated that the

customer satisfaction is the key for many banks to survive the competition.

Customers gives third preference to the assurance factor which included

services as on of the component. Now a days, banks give training to their

employees which help them to give personalised services.

S.Sivesan (2012): Founded the impact of the service quality on customer’s

satisfaction in the banking sectors. He stated that the service quality is inter-

related to the customer’s satisfaction. The administrative body should identify

the primary quality services determinants which matches and manages the

customers expectations.

Robert Johnston (1997): In his study entitled as, “Identifying the critical

determinants of service quality in retail banking” found out that increasing the

speed of the processing information, delighting customers, such as the

reliability of equipment, will lessen dissatisfaction among the customers.

2.4 HYPOTHESIS

Customers prefer cooperative banks due to the minimal interest rate

charged by the banks on the loans extended and good rate of interest

given on the deposits.

Customers prefer cooperative banks due to the hassle-free

documentation of the loans.

Mostly people from the unorganised sectors prefer cooperative banks.

13

2.5 LIMITATIONS

Time Constraints: The survey was conducted only on one day due to time

constraints. Also, customers because of being busy could not give the

essential time required for the questionnaires.

Reluctance: People were reluctant to share the information as they were

insecure about the same. They believed that their privacy would be

affected by giving the information required.

Language barrier: Only one person in the group knew effluent Marathi

language. Hence, it posed as a problem to communicate.

Restricted Area: Due to the time constraints, the research was restricted to

KARJAT city area only. This limited our area to conduct the research.

Limited number of banks: Only 5 banks could be visited as in KARJAT

only 5 cooperative banks were present.

Lack of Knowledge: The respondents lacked the knowledge of the

services provided by the banks. Hence, the complete true analysis was not

possible.

Misinterpretation of Data: The data was misinterpreted by the respondents

which in between acted as a barrier.

Authenticity Doubtful: The information provided by the respondents may

be false which may not lead to the authentic results.

Findings of research may change due to area, age and other factors of

respondents.

Sample size was restricted to 80 instead of 100

Branch staff was reluctant to share the information.

The findings are solely based on information provided by respondents so

it may be subjected to bias and prejudice of the respondents.

14

3.0 METHODOLOGY

The purpose of our project work was to study the Consumer Behaviour of Co-

Operative Banks. We used following type of research method:

1. Exploratory Research

2. Descriptive Research

Thus keeping this in mind we adopted the following research methodology.

1. Primary data: Primary data was collected by means of following ways.

- Structured Questionnaire: Our questionnaire was consist of open

ended as well as close ended questionnaire.

- Observations: Personal Touch of staff in service & Efficient Service.

- Interview: Interview schedules with the officials and the employees

of Co-operative Banks

2. Secondary data: The data was collected by means of review of

literature from books. We have also collected some valuable inputs for

our project from various text books, reference book, newspapers and

from our college library.

The whole work was divided among the group members and finally all this

information was collected, analysed and compiled to prepare a final report.

Conducting of personal interviews and questionnaire methods were the major

source of getting information for conducting our project work.

Sampling Size – 80 respondents & 5 Bank Managers

15

Sampling Method: Simple Random Sampling

Sampling Location – Karjat City

Tools: SPSS, MS excel & MS Word

16

4.0 RESEARCH FINDINGS

Fig 1: Years of association with Co-Op Bank

Nearly 44% of the respondents where the research was conducted, we came to

an understanding that customers’ attachment with the co-operative bank ranges

between 0 to 3 years.

Most of the respondents told us that the co-operative banks are not providing Net

Banking as these days most of the transactions like bill payment, Insurance

payment are done through internet.

In order for posting the transactions in the passbook, co-operative does not have

kiosks like other Nationalized Banks does where as one can interact with the

kiosk and get the transactions posted with the help of barcode attached to the

passbook

Many youngsters of the survey felt that co-operative banks are not having any tie

up with paytm or freecharge whereas they can recharge on the go with other

Private or Nationalized Banks

As the co-operative banks came into the picture to help especially farmers and

other small businesses. However most of them feel that bank should provide

credit card facilities which they feel handy.

35

27

16

20

5

10

15

20

25

30

35

40

0 to 3 4 to 6 6 to 9 10 to 12

Frequency

17

On performing the Survey of 80 respondents, it is clear from the chart and cross

tabulation that nearly 72.8% of them are having Savings account.

19

Survey conducted on 80 respondents, nearly 57% of the sample size informed

us that they have opened the bank account due to Savings.

20

Out of 80 respondents, it is very surprising that nearly 50% of them have never

opted for any loan. However, 30% of the respondents have taken Agriculture

loan.

21

Among the random customer samples, only 80% feel that the bank is catering to

all their needs whether it is support or services. 20% of the people feel that the

banks should improve against other National and Private Banks.

22

Among the 80 sample size, almost nearly 92.5% people use ATM. However only

2.5% claim that they enjoy both ATM and Net Banking which provided by the

Co-operative Bank.

23

Out of all the respondents. 98.8% of the respondents recommend this bank to

others which clearly shows that they are happy with the respective banks and

appreciate other opting for the services of the co-operative bank.

24

80% of the 80 respondents opted the particular co-operative banks services as

referred by the trustworthy sources. Only 12.5% opted for the co-operative bank

services via advertising and remaining others through relatives.

25

57.5% of the 80 respondents rated the bank as 8 which clearly shows that they

are happy with services provided by bank. On an average nearly 8.05 rating was

received overall.

26

Surprisingly 41.3% of the surveyed customers declared that they go for

Nationalized or Private Bank.

27

Out of the 80 respondents who participated in the Survey SEC E2 prefer DNS

Bank which is nearly 42.9% and whereas SEC A1 prefer GP Parsi Bank.

28

We can observe from the Table and Graph that SEC E2 who are unskilled

labour and farmers accommodate to 38.1% female and 61.9% male out of the

80 respondents.

29

As per the Statistics most of the customers who have the bank accounts fall in

the range of 26-35 years which is nearly 47.5%.

30

We can observer form the survey that 22.9% of the Male are associated with GP

Parsi Bank. However, Women nearly 60% has an account with DNS Bank.

31

This Frequency Table shows that 26-35 years aged customers are more

compared to any other based on the surveyed data.

This Frequency table shows us that 57.5% customers have rated 8.0 for Co-

operative Banks based on their experience.

Respondents told us that at times waiting time is very high in co-operative banks

especially during last week and first week of month. Even during festival times.

No proper Queue maintenance as it is highly unorganized and no token system.

They faced issues during Cheque clearance as manager is not available and need

to wait for lot of time and no clue about the Manager.

Customers did not appreciated that staff behaviour as they were rude at times and

not supporting. Proper information was not provided during emergency.

32

Customers love to be associated to be Co-operative banks as it is boon for

farmers and people who run small business near and around Karjat. They are

very much attracted by the fact that these banks offers low interest on loans and

reasonable interest rate on savings. Respondents told that they like the friendly

nature of the bank and they feel like their own bank.

Most of the Nationalized or Private Banks have lot of documentation or

verification which is very hectic for one to full whereas Co-operative banks

documentation procedure is minimal to reduce the complexity.

The average rating was 8.075 on a scale of 1-10 where 1 being the worst and 10

being the superior.

Inference from the survey revealed that the service which are not provided by

co-operative banks are provided by Nationalized Banks. Most of the services

include like connection with IRCTC, booking movies etc. Credit card facilities

are provided by the bank which comes very handy during purchasing online

through EMI via popular e-commerce sites.

33

4.2 An Interaction with the managers:

GP PARSI BANK

Mr. Sanjay Gaikwad, the assistant manager gave his valuable insights on their

everyday working, customer relationship maintenance and what all factors play

a vital role in the working of the company. The points discussed by him were:

- Role of politicians: Politicians are actively involved while determining

the management committee resulting into favouritism and corruption.

- Pane cooperative bank scam affected the working of the overall

banking structure of the cooperative banks.

- A cooperative bank’s strength is the service they provide to the

customer as the trust factor is less. The bank is providing all the

facilities such as NET BANKING etc. To enhance the customer

experience, personal attention is paid heed.

- Grass root people are paid more attention: The minimum account

balance is Rs. 1000 to open an account. But if the person has monetary

issues, an account will also be opened with a meagre amount of Rs.

100

- The hierarchical order is followed in the decision making process, i.e.

the orders are descend downwards.

- Quick handling of grievances takes palace. Inquiry start on the spot

and reverting back is also done immediately.

Loan requirements:

- Proof of the businesses along with 2 guarantors are required.

Documents are fully scrutinised and are required in full. If a person is

lacking in some documents and requires a loan upto the amount of

Rs.10, 00,000, an affidavit of Rs.100 is required to be submitted in lieu

of the documents. The loan processing time would take 5-6 days.

34

- The Non-Performing-Assets of the nationalised banks is more than the

cooperative banks but due to their vast size, the effect is easily borne

by them.

Competitive advantage:

- The rate of interest on loans and deposits are good for the customers in

comparison to the nationalised banks.

- As compared to the other cooperative banks, GP PARSI bank gives

more personal services than any other banks which acts as a

competitive advantage for the bank against the other banks in the same

segment.

- Businessmen would not maintain a savings account but would

maintain a current account for the transactions.

The customers for the bank: The prime customers are retired people, jewellers

usually use the locker facility and deposits from the middle class.

DNS Bank

The manager of the bank treated us very well and explained the working of their

respective branch. The insights provided by the manager were as follows:

- Pane cooperative bank affected their working

- The strategic advantage of the bank was on the good rate of interest it

has on the deposits.

- The bank has many tie-ups with other banks (nationalised) so as to

facilitate the transactions in the states where the bank’s branch is not

available.

- Loan duration is usually a month process to be processed.

The bank is providing all the facilities such as NEFT/RTGS transfers, DMAT

account facilities etc.

35

The prime customers of the bank are: Farmers, middle class, housewives and

businessman.

Raigad District Cooperation Bank Ltd.

Mr. Jadhav, the branch manager gave us the valuable information about the

bank’s working which was helpful for our report:

Customer Base:

Farmers are their prime and loyal customers as the bank provides crop loans a

0% Interest. This also serves as a competitive advantage for the bank.

Pensioners: People come on regular bases to collect the pension.

The other competitive advantage the bank has its smooth functioning i.e. people

prefer this bank over others as there is rush at any given day. Also, people are

familiar with the bank’s staff as the majority of the employees are from the same

region (Karjat). Hence, people get a sense of the personal touch in the services

provided by the bank.

The bank provides augmented services such as NEFT/RTGS transfers. Net/

mobile banking is yet to come but will be launched shortly as claimed by the

bank.

As claimed by the manager of the bank, the current budget of 201 has not

affected the working of the bank to a greater extent.

Alibag Cooperative Bank Ltd.

Mr. Rajendera Patil, the bank manager equipped us with the useful information

about the bank. Following are the inputs provided:

Customer base:

36

The majority of the customers are the businessmen.

The competitive advantage factors:

Bank gives high interest rates on the deposits.

The minimum bank account amount to be kept is Rs.500 only unlike the other

banks claiming the amount to be Rs.1000.

The presence of a large number of ATMs and also tie-ups with the nationalised

banks for the ATM facility across nation.

Quick services provided

Locker facility provided.

Other factors:

Net banking is not provided by the bank.

Facilitates NEFT/RTGS transfers.

Challenge for the bank is striving against the competition. Hence, more

marketing is done for the same.

Annasaheb Mahad Co-Operative Limted

According to our analysis, this was the busiest bank on the day we went for the

survey. Despite being busy, the manager gave us 10 minutes of his precious time

to talk about the bank’s working:

This is the oldest cooperative bank in the region

Over the years, the bank has done very well to maintain the trust of the people

well which was very much evident by the rush in the bank.

The bank has evolved over the years by keeping the pace with technologies. The

of late banking advancements have been adopted by the bank well

37

The only concern for the manager is the limited working space of the bank. Due

to this, the customers have to wait for longer durations. The management is

thinking to shift to a bigger premise soon.

The other prominent factors such as: good rate of interest, personal touch in the

services provided etc. is well taken care by the bank.

The overall analysis could be summed by taking the prominent factors into

consideration from the information derived from the managers:

The people of the region give prime importance to the rate of interest provided

the banks.

The quick provision of services by the banks is a very crucial factor.

The mode of providing the services used by the banks drives people for or against

the bank. The level of personal touch in the services provided is a driving factor

for many customers.

Although the cooperative banks are small in size compared to their counterparts,

the nationalised banks, yet the advancements in the banking facilities are very

well adopted by the former ones.

38

5.0 Conclusion

The findings from the survey conducted and interaction with the managers

were in line with the hypothesis put up by the team. One of the main driving

force for the customers was the interest rates. The customers preferred the

banks which provided more specialised services. The above factors are also

the driving force for the customers to choose co-operative banks over the

nationalised banks. Mostly people from the agricultural background had a

bank account in the co-operative bank. Business man especially jewellers

used the current account in order to deal with the business transactions. In

context to the findings from the research conducted, the hypothesis hold true.

39

6.0 Recommendations

1. Bank should try to implement and adopt to technological changes and start

services like Internet Banking, Mobile Banking through Apps.

2. Installation of ATM machines in and around Karjat should be considered

immediately as people always regret extra charges paid for using ATM

cards in different ATM machines.

3. Intense marketing has to be done to include the villagers in financial system

and inculcate the habit of savings for their future purpose. For this they

should target housewives through launching a campaign during any

festival or cultural festival or a health campaign.

4. Target housewives through self-help groups as women are the actual

drivers of the family, and influencing them would result in converting

prospects into customers.

5. Try to focus on expansion. Set up new branches in different corners of the

state.

6. Focus on comfort of the customers, irrespective of their age, gender, sex,

status. Improve the bank atmosphere. Installation of Air conditioner, new

display screens for the Token number and announcements, focusing on the

safety and security aspects will improve customer’s confidence and will

help in retaining him

7. To reduce the waiting queue for most common purpose of updating of pass

book, install kiosk and even keep the traditional technique of updating over

the counter for the unfamiliar ones.

8. In order to resolve customer issues and their grievances, have a manager in

charge familiar with the local language as well as having good banking and

financial knowledge to ease their transactions.

REFERENCE

[1] Andrew Campbell (2007), "Bank insolvency and the problem of non-

performing loans", Journal of Banking Regulation, 25-45.

[2] Beaver, W. H. (1966), "Financial ratios as predictor of failure-empirical

research in accounting", Journal of Accounting Research, No. 4, 71-111.

[3] Bhaskaran R and Praful Josh P (2000), “Non Performing Assets (NPAs) in

Co-operative Rural Financial System: A major challenge to rural development”,

BIRD‟s Eye View Dec.2000.

[4] Chander Ramesh and Chandel Jai Kishan (2010), “Financial Viability of an

Apex Cooperative Credit Institution- A Case Study of the HARCO Bank”, Asia-

Pacific Business Review Vol. VI, No.2, April-June 2010, pp 61-70

[5] Chandra, Buddhadeb (2006), “Performance of Burdwan Central Co-operative

Bank in the Development of the District (1988-89 to 1998-99)”, Finance India,

September, 2006.

[6] Dutta Uttam and Basak Amit (2008), “Appraisal of financial performance of

urban cooperative banks- a case study.” The Management Accountant, case

study, March 2008, 170-174.

[7] Fulbag Singh and Balwinder Singh (2006), "Funds management in the central

cooperative banks of Punjab- an analysis of financial margin", The ICFAI Journal

of Management, Vol. 5, 74-80.

[8] Geeta Sharma and Ganesh Kawadia (2006), "Efficiency of urban co-operative

banks of Maharashtra: A DEA Analysis", The ICFAI Journal of Management,

Vol. 5, Issue 4.

[9] Harish Kumar Singla (2008), "Financial performance of banks in India", The

ICFAI Journal of Management, Vol. 7, Issue 1.

[10] Jain (2001),“Comparative study of performance of District Central Co-

operative Banks (DCCBs) of Western India i.e. Maharashtra, Gujarat &

Rajasthan for the year 1999-2000 from the point of view of net profit/loss”,

NAFSCOB Bulletin, April-June 2001

Appendix

UNIVERSAL BUSINESS SCHOOL,

KARJAT-MAHARASHTRA

We the students of UNIVERSAL BUSINESS SCHOOL are doing market research project on

Customer Behavior of Co-Operative Bank. This questionnaire is framed to collect information

which will be kept confidential. Only the analysis and conclusion will be disclosed in the project

report.

Name: _________________________________________

Age: _________ Qualification: ___________________________

Designation: _________________________

Address: ____________________________________________

Telephone No: _____________________

Name of Interviewer: _________________ Date of Interview: ________________

SEC Grid

Occupation Literate School: upto 4yrs

School: 5-9 yrs

SSC/ HSC

Some college but not

graduate

Graduate/post-

graduate general

Graduate/ post graduate professional

1 2 3 4 5 6 7

Unskilled workers

Skilled workers

Petty traders

B2Shop owners

Businessmen With number of employees.

None

1 to 9

10+

Selfemployed professionals

Clerical/salesman

Supervisory level

Officers/Executives:

Junior

Middle/senior

1. Since, how many years you are associated with this bank?

__________________________________

2. What kind of account you are holding in the bank?

a) Current b) FD c) SA d) CC

3. Why you have opened an Account in this bank?

a) Low interest rate on Loans b) Savings

c) Locker Facilities d) Others _____________

4. Have you ever taken any loan? Yes, which type of loan?

a) Education b) Agriculture c) Personal d) Housing e) ______

5. Do you think you bank caters to all your banking need?

a) Yes b) No

6. If No, then please specify: _____________________________________

7. Have you opted for below mentioned services?

a) ATM b) Net Banking c) Mobile Banking

8. If No, _______________________________________________

9. What are the bad experiences encountered by you in cooperative bank?

10. Why you prefer Co-operative Bank over Nationalized bank?

___________________________________________________________

11. Would you recommend this bank to others?

a) Yes b) No

Reason, ____________________________________________________

12. How you came to know about this bank?

a) Referral b) advertisement c) campaign d) ______________

13. Rate on services provided by your Bank.

14. Do you have any other Bank a/c in Nationalize/Private Bank?

a) Yes b) No

15. Which service attracted you to do so?

THANK YOU

Consumer behaviour towards co-op banks-project report

Marketing

Transcript of Consumer behaviour towards co-op banks-project report