Final Research Print

A Comparative Study of Customer Satisfaction towards Services offered by SBM and KBL in Tumkur City

CHAPTER 1

1.1 INTRODUCTION

Finance is the life blood of trade, commerce and industry. Now-a-days,

banking sector acts as the backbone of modern business. Development of any country

mainly depends upon the banking system.

ORIGIN OF BANK

The term bank is either derived from old Italian word banca or from a French

word banque both mean a Bench or money exchange table. There seem so to be no

uniformity amongst the economist about the origin of the word ‘Bank’.

It has been believed that the word ‘Bank’ has been derived from the German

word ‘Bank’ which means joint stock of firm or from the Italian word ‘Banco’ which

means a heap or mound.

In India the ancient Hindu scriptures refers to the money - lending activities in

Vedic period. They performed most of those functions which banks perform in modern

times. During Ramayana and Mahabharata eras also banking had become a full-

fledged business activity.

BANK

A bank is an institution which accepts deposits from the general public and

extends loans to the households, the firms and the government.

Banks are that institutions which operates in money. Thus, they are money traders.

With the process of development, functions of banks are also increasing and

diversifying.

In simple words, bank refers to an institution that deals in money. This

institution accepts deposits from the people and gives loans to those who are in need.

Besides dealing in money, bank these days perform to various other functions, such as

credit creation, agency job and general service.

Now, the banks are not nearly the traders of money, they also create credit.

Their activities are therefore, is such an institution which accepts deposits from the

people, given loans creates credit and undertakes agency work.

Dept. Of PG Studies in commerce, SSCASC, Tumakuru 2015-16 1


BANKING

In simple words, Banking can be defined as the business activity of accepting

and safeguarding money owned by other individuals and entities, and then lending out

this money in order to earn a profit.

Banking business has done wonders for the world economy. The simple

looking method of accepting money deposits from savers and then lending the same

money to borrowers, banking activity encourages the flow of money to productive use

and investments. This in turn allows the economy to grow.

Banking systems can be defined as a mechanism through which the money supply of

the country is created and controlled.

As per Section 5(b) of the Banking Regulation Act, 1949, "banking" means the

accepting, for the purpose of lending or investment, of deposits of money from the

public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or

otherwise. is called banking.

DEFINITIONS OF BANK

1. Dictionary meaning of the Word ‘Bank’ -The oxford dictionary defines a

bank as “an establishment for custody of money received from or on behalf of

its customers. Its essential duty is to pay their drafts on it. its profits arises from

the use of the money left employed by them”.

2. The Webster’s Dictionary Defines a bank as “an institution which trades in

money, establishment for the deposit, custody and issue of money, as also for

making loans and discounts and facilitating the transmission of remittances

from one place to another”.

3. According to Prof. Kinley, “A bank is an establishment which makes to

individuals such advances of money as may be required and safely made, and

to which individuals entrust money when it required by them for use”

4. Indian Banking Companies Act - “Banking Company is one which transacts

the business of banking which means the accepting for the purpose of lending

or investment of deposits money from the public repayable on demand or

otherwise and with drawable by cheque, draft, order or otherwise”.



1.2 HISTORY OF INDIAN BANKING SYSTEM

The first bank in India, called The General Bank of India was established in the

year 1786. The East India Company established The Bank of Bengal/Calcutta (1809),

Bank of Bombay (1840) and Bank of Madras (1843). The next bank was Bank of

Hindustan which was established in 1870. These three individual units (Bank of

Calcutta, Bank of Bombay, and Bank of Madras) were called as Presidency Banks.

Allahabad Bank which was established in 1865, was for the first time completely run

by Indians. Punjab National Bank Ltd. was set up in 1894 with head quarters at

Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of

Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. In 1921, all

presidency banks were amalgamated to form the Imperial Bank of India which was run

by European Shareholders. After that the Reserve Bank of India was established in

April 1935.

At the time of first phase the growth of banking sector was very slow. Between

1913 and 1948 here were approximately 1100 small banks in India. To streamline the

functioning and activities of commercial banks, the Government of India came up with

the Banking Companies Act, 1949 which was later changed to Banking Regulation

Act 1949 as per amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India

was vested with extensive powers for the supervision of banking in India as a Central

Banking Authority. After independence, Government has taken most important steps

in regard of Indian Banking Sector reforms. In 1955, the Imperial Bank of India was

nationalized and was given the name "State Bank of India", to act as the principal

agent of RBI and to handle banking transactions all over the country. It was

established under State Bank of India Act, 1955. Seven banks forming subsidiary of

State Bank of India was nationalized in 1960. On 19th July, 1969, major process of

nationalization was carried out. At the same time 14 major Indian commercial banks

of the country were nationalized. In 1980, another six banks were nationalized, and

thus raising the number of nationalized banks to 20. Seven more banks were

nationalized with deposits over 200 Crores. Till the year 1980 approximately

80Percent of the banking segment in India was under government’s ownership. On the

suggestions of Narsimhan Committee, the Banking Regulation Act was amended in

1993 and thus the gates for the new private sector banks were opened.



The following are the major steps taken by the Government of India to

Regulate Banking institutions in the country:-

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major Banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 Crores..

1.3 FEATURES OF BANKS

1. Dealing in money: The banks accept deposits from the public and advancing them

as loans to the needy people. The deposits may be of different type’s current, fixed,

savings, etc. accounts. The deposits are accepted on various terms and conditions.

2. Individual / Firm / Company: A bank may be a person, firm or a company. A

banking company means a company which is in the business of banking.

3. Acceptance of Deposit : A bank accepts money from the people in the form of

deposits which are usually repayable on demand or after the expiry of a fixed period. It

gives safety to the deposits of its customers. It also acts as a custodian of funds of its

customers.

4. Giving Advances: A bank lends out money in the form of loans to those who

require it for different purposes.

5. Payment and Withdrawal: A bank provides easy payment and withdrawal facility

to its customers in the form of cheques and drafts, It also brings bank money in

circulation. This money is in the form of cheques, drafts, etc.

6. Agency and Utility Services: A bank provides various banking facilities to its

customers. They include general utility services and agency services.



7. Profit and Service Orientation: A bank is a profit seeking institution having

service oriented approach.

8. Ever increasing Functions: Banking is an evolutionary concept. There is

continuous expansion and diversification as regards the functions, services and

activities of a bank.

9. Connecting Link: A bank acts as a connecting link between borrowers and lenders

of money. Banks collect money from those who have surplus money and give the

same to those who are in need of money.

10. Banking Business: A bank's main activity should be to do business of banking

which should not be subsidiary to any other business.

11. Name Identity: A bank should always add the word "bank" to its name to enable

people to know that it is a bank and that it is dealing in money.

12. Commercial in nature: Since all the banking functions are carried on with the

aim of making profit, it is regarded as a commercial institution.

1.4 IMPORTANCE OF BANKS

Banks play an important role in the economic growth of a country. In the

modern set up, banks are not to be considered dealers in money but as the leaders of

development. The importance of bank for a country’s economy can be explained in

following ways:

i. Banks by playing attractive interest rate on deposits try to promote thrift and

savings in an economy.

ii. The investment of these savings in productive channel results in capital

formation.

iii. The scattered small savings in the country can be put to optimum use by

commercial banks. Banks utilize this amount by giving loans to industrial

houses and the government.

iv. By providing funds to the entrepreneurs, bank help in increasing productivity

of capital.



v. Banks help in remitting money from one place to another. The cheque, bank

draft, letter of credit, bills, hundies enable traders to transfer large sums of

money from one place to another.

vi. By their ability to create credit, the banks have placed at the disposal of the

nation a large amount of money. The bank can increase the supply of money

through credit creation.

vii. With the growth of banking activity, employment opportunity in the country

has increased to a considerable extent.

viii. The banks help in capital formation in the country. A high rate of saving and

investment promote capital formation.

ix. Money deposited in the bank and other precious items are now absolutely safe.

For keeping valuables, banks are providing locker facilities. Now people are

free from any type of risks.

1.5 NEED OF THE BANKS

Before the establishment of banks, the financial activities were handled by

money lenders and individuals. At that time the interest rates were very high. Again

there were n security of public savings and no uniformity regarding loans. So as to

overcome such problems the organized banking sector was established, which was

fully regulated by the government. The organized banking sector works within the

financial system to provide loans, accept deposits and provide other services to their

customers. The following functions of the bank explain the need of the bank and its

importance:

i. To provide the security to the savings of customers.

ii. To control the supply of money and credit

iii. To encourage public confidence in the working of the financial system, increase

savings speedily and efficiently.

iv. To avoid focus of financial powers in the hands of a few individuals and

institutions.

v. To set equal norms and conditions (i.e. rate of interest, period of lending etc) to

all types of customers.



1.6 TYPES OF BANKS

There are various types of banks which operate in our country to meet the

financial requirements of different categories of people engaged in agriculture,

business, profession etc

1. Central Bank: A central bank functions as the apex controlling institution in the

banking and financial system of the country.

It functions as the controller of credit, banker’s bank and also enjoys the monopoly of

issuing currency on behalf of the government. A central bank is usually control and

quite often owned, by the government of a country. The Reserve Bank of India (RBI)

is such a bank within an India.

2. Commercial Banks: It operates for profit. It accepts deposits from the general

public and extends loans to the households, the firms and the government. The

essential characteristics of commercial banking are as follows:

- Acceptance of deposits from public

- For the purpose of lending or investment

- Repayable on demand or lending or investment.

- Withdrawal by means of an instrument, whether a cheque or otherwise.

Another distinguish feature of commercial bank is that a large part of their deposits are

demand deposits withdraw able and transferable by cheque.

3. Development Banks: It is considered as a hybrid institution which combines in

itself the functions of a finance corporation and a development corporation. They also

act as a catalytic agent in promoting balanced and viable development by assuming

promotional role of discovering project ideas, undertaking feasibility studies and also

provide technical, financial and managerial assistance for the implementation of

project.

In India ‘Industrial Development Bank on India’ (IDBI) is the unique example of

development bank. It has been designated as the principal institution of the country for

co-ordinating the working of the institutions engaged in financing, promoting or

development of industry.



4. Co-operative Banks: The main business of co-operative banks is to provide finance

to agriculture. They aim at developing a system of credit. Agriculture finance is a

special field. The co-operative banks play a useful role in providing cheap exit

facilities to the farmers. In India there are three wings of co-operative credit system

namely –

1) Short term,

(ii) Medium-term,

(iii) Long term credit

Co-operative banks at the state level. At the intermediate level (district level)

these are central co-operative banks, which are generally established for each district.

At the base of the pyramid there are primary agricultural societies at the village level.

The long term exit is provided by the central land development Bank established at the

state level. Initially, these banks used to advance loans on mortgage of land for the

purpose of securing repayment of loans.

5. Specialized Banks: These banks are established and controlled under the special act

of parliament. These banks have got the special status. One of the major bank is

‘National Bank for Agricultural and Rural development’ (NABARD) established in

1982, as an apex institution in the field of agricultural and other economic activities in

rural areas. In 1990 a special bank named small industries development Bank of India

(SIDBI) was established. It was the subsidiary of Industrial development Bank of

India. This bank was established for providing loan facilities, discounting and

rediscounting of bills, direct assistance and leasing facility.

6. Indigenous Bankers: That unorganised unit which provides productive,

unproductive, long term, medium term and short term loan at the higher interest rate

are known as indigenous bankers. These banks can be found everywhere in cities,

towns, mandis and villages.

7. Rural Banking: A set of financial institution engaged in financing of rural sector is

termed as ‘Rural Banking’. The polices of financing of these banks have been

designed in such a way so that these institution can play catalyst role in her process of

rural development. Example: Regional rural banks (RRB’s)



8. Saving Banks: These banks perform the useful services of collecting small savings

commercial banks also run “saving bank” to mobilise the savings of men of small

means. Different countries have different types of savings bank viz. Mutual savings

bank, Post office saving, commercial saving banks etc.

9. Export - Import Bank: These banks have been established for the purpose of

financing foreign trade. They concentrate their working on medium and long-term

financing. The Export-Import Bank of India (EXIM Bank) was established on January

1, 1982 as a statutory corporation wholly owned by the central government.

10. Foreign Exchange Banks: These banks finance mostly to the foreign trade of a

country. Their main function is to discount, accept and collect foreign bulls of

exchange. They also buy and self foreign currencies and help businessmen to convert

their money into any foreign currency they need. Over a dozen foreign exchange

banks branches are working in India have their head offices in foreign countries.

1.7 PRODUCTS AND SERVICES OFFERD BY BANKS

Deposits:

A bank accepts deposits from the public. People can deposit their cash balances

in either of the following accounts to their convenience:-

a) Fixed Deposit Account: Cash is deposited in this account for a fixed period. The

depositor gets receipts for the amount deposited. It is called Fixed Deposit Receipt.

The receipt indicates the name of the depositor, amount of deposit, rate of interest and

the period of deposit. This receipt is not transferable. If the depositor stands in need of

the amount before the expiry of fixed period, he can withdraw the same after paying

the discount to the bank.

b) Savings Account: This type of deposit suits to those who just want to keep

their small savings in a bank and might need to withdraw them occasionally. Banks

provide a certain rate of interest on the minimum balance kept by the depositor during

the month.



c) Current Account: This type of account is kept by the businessman who are required

to withdraw money every new and then. Banks do not pay any interest on this account.

Any sum or any number of withdrawals can be presented by such an account holder.

SERVICES PROVIDED BY BANKING ORGANIZATIONS

Banking Regulation Act in India, 1949 defines banking as “Accepting” for the

purpose of lending or investment of deposits of money from the public, repayable on

demand and withdraw able by cheques, drafts, orders etc. as per the above definition a

bank essentially performs the following functions:-

a) Accepting Deposits or savings functions from customers or public by

providing bank account, current account, fixed deposit account, recurring

accounts etc.

b) The payment transactions like lending money to the public. Bank provides an

effective credit delivery system for loanable transactions.

c) Provide the facility of transferring of money from one place to another place.

For performing this operation, bank issues demand drafts, banker’s cheques,

money orders etc. for transferring the money. Bank also provides the facility of

Telegraphic transfer or tele- cash orders for quick transfer of money.

d) A bank performs a trustworthy business for various purposes.

e) A bank also provides the safe custody facility to the money and valuables of

the general public. Bank offers various types of deposit schemes for security of

money. For keeping valuables bank provides locker facility. The lockers are

small compartments with dual locking system built into strong cupboards.

These are stored in the bank’s strong room and are fully secured.

f) Banks act on behalf of the Govt. to accept its tax and non-tax receipt. Most of

the government disbursements like pension payments and tax refunds also take

place through banks.

COMMON PRODUCTS OFFERS BY BANK

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 10 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). When he makes a purchase, he enters this

number on the shop’s PIN pad. When the card is swiped through the electronic

terminal, it dials the acquiring bank system – either Master Card or Visa that

validates the PIN and finds out from the issuing bank whether to accept or decline

the transaction. The customer never overspread because the amount spent is debited

immediately from the customers account. So, for the debit card to work, one must

already have the money in the account to cover the transaction. There is no grace

period for a debit card purchase. Some debit cards have monthly or per transaction

fees. Debit Card holder need not carry a bulky checkbook or large sums of cash

when he/she goes at for shopping. This is a fast and easy way of payment one can

get debit card facility as debit cards use one’s own money at the time of sale, so

they are often easier than credit cards to obtain.

3) Automated 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 are 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. It increases existing business and generates new business. It allows the

customers.

To transfer money to and from accounts.

To view account information.

To order cash.

To receive cash.

Advantages of ATM’s:

To the Customers

ATM’s provide 24 hours., 7 days and 365 days a year service.

Service is quick and efficient

Privacy in transaction

Wider flexibility in place and time of withdrawals.

The transaction is completely secure – you need to key in Personal

Identification Number (Unique number for every customer).

To Banks

Alternative to extend banking hours.

Crowding at bank counters considerably reduced.

Alternative to new branches and to reduce operating expenses.

Relieves bank employees to focus an more analytical and innovative work.

Increased market penetration.



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.

4) E-Cheques: The E-cheques consists five primary facts. They are the consumers,

the merchant, cheaqing system uses the network services to issue and process

payment that emulates real world chaquing. The payer issue a digital cheaques to

the payee ant the entire transactions are done through internet. Electronic version

of cheaques 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.

The e-chequing 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

equipment’s. 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) Telebanking: Telebanking 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 Number (PIN Identification) to the bank. Telebanking is

extensively user friendly and effective in nature they are:

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.

Information on the current interest rates.

Information with regard to foreign exchange rates.

Request for a DD or pay order.

De 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) technology

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.

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. 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. 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) De-mat: Demat is short for de-materialization 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 ACCOUNT 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.

10) Core banking: Core banking is a banking service provided by a group of

networked bank branches where customers may access their bank account and perform


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basic transactions from any of the member branch offices. Core banking is often

associated with retail banking and many banks treat the retail customers as their core

banking customers. Businesses are usually managed via the Corporate banking

division of the institution. Core banking covers basic depositing and lending of money.

Normal core banking functions will include transaction accounts, loans, mortgages and

payments. Banks make these services available across multiple channels like ATMs,

Internet banking, mobile banking and branches.

1.8 OVERVIEW OF THE BANKING INDUSTRY

Banking in India originated in the last decades of the 18th century. The oldest

bank in existence in India is the State Bank of India, a government-owned bank that

traces its origins back to June 1806 and that is the largest commercial bank in the

country. Central banking is the responsibility of the Reserve Bank of India, which in

1935 formally took over these responsibilities from the then Imperial Bank of India,

relegating it to commercial banking functions. After India's independence in 1947, the

Reserve Bank was nationalized and given broader powers. In 1969 the government

nationalized the 14 largest commercial banks; the government nationalized the six next

largest in 1980.Currently, India has 88 scheduled commercial banks (SCBs) - 27

public sector banks (that is with the Government of India holding a stake), 29 private

banks (these do not have government stake; they may be publicly listed and traded on

stock exchanges) and 31 foreign banks. They have a combined network of over 53,000

branches and 17,000 ATMs.

Liberalization:

In the early 1990s, the Narsimha Rao government embarked on a policy

of liberalization, licensing a small number of private banks. These came to be known

as New Generation tech- savvy banks and included Global Trust Bank (the first of

such new generation banks to be setup), which later amalgamated with Oriental Bank

of Commerce, UTI Bank (now re-named as Axis Bank ),ICICI Bank and HDFC Bank.

This move, along with the rapid growth in the economy of India, revitalized the

banking sector in India, which has seen rapid growth with strong contribution from all

the three sectors of banks, namely, government banks, private banks and foreign

banks. The next stage for the Indian banking has been setup with the proposed

relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in


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banks may be given voting rights which could exceed the present cap of 10Percent,at

present it has gone up to 49Percent with some restrictions. The new policy shook the

Banking sector in India completely. Bankers, till this time, were used to the 4-6-4

method (Borrow at 4 Percent;Lend at 6 Percent;Go home at 4) of functioning. The new

wave in a modern outlook and tech-savvy methods of working for traditional banks.

All this led to the retail boom in India. People not just demanded more from their

banks but also received more.

Nationalization:

By the 1960s, the Indian banking industry has become an important tool to

facilitate the development of the Indian economy. At the same time, it has emerged as

a large employer, and a debate has ensued about the possibility to nationalize the

banking industry. Indira Gandhi, the-then Prime Minister of India expressed the

intention of the GOI in the annual conference of the All India Congress Meeting in a

paper entitled "Stray thoughts on Bank Nationalization."

The paper was received with positive enthusiasm. Thereafter, her move was

swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest

commercial banks with effect from the midnight of July 19,1969. Jayaprakash

Narayan, a national leader of India, described the step as a "master stroke of political

sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the

Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received

the presidential approval on 9 August, 1969.A second dose of nationalization of 6

more commercial banks followed in 1980. The stated reason for the nationalization

was to give the government more control of credit delivery. With the second dose of

nationalization, the GOI controlled around 91 Percent of the banking business of India.

Later on, in the year 1993, the government merged New Bank of India with Punjab

National Bank .It was the only merger between nationalized banks and resulted in the

reduction of the number of nationalized banks from 20 to 19. After this, until the

1990s, the nationalized banks grew at a pace of around 4Percent, closer to the average

growth rate of the Indian economy. The nationalized banks were credited by some,

including Home minister P. Chidambaram, to have helped the Indian economy

withstand the global financial crisis of 2007-2009.

Current Scenario



Currently, overall banking in India is considered as fairly mature in terms of

supply, product range and reach even though reach in rural India still remains a

challenge for the private sector and foreign banks. Well- computerized foreign banks

are beginning to compete seriously with the nationalized banks. They aim at a

profitable and wealthy part of the market and, in contrast to the nationalized banks, do

not recognize any social responsibilities to small account holders or to a rural and semi

urban clientele. Almost 80Percent of the businesses are still controlled Public Sector

Banks (PSBs). PSBs are still dominating the commercial banking system.

The bank system is facing the challenges with stiff competition and advancement of

technology; the services provided by banks have become more easy and convenient.

The competitive character has been promoted by facilitating the entry of foreign

banks. The country is flooded with foreign banks and their ATM stations. Efforts are

being put to give a satisfactory service to customers. Phone banking and net banking

are introduced. The entire system has become more convenient and swift. Time is

given more importance than money.

1.9 RECENT DEVELOPMENTS IN INDIAN BANKING SECTOR

a) Pradhan Mantri Jan Dhan Yojana:

The Pradhan Mantri Jan- Dhan Yojana or more popularly known as PMJDY

scheme is planning on revolutionizing the traditional banking system in India by

providing the banking opportunity and insurance coverage to all including the poor. It

is an initiative taken by the Prime Minister Narendra Modi who started this ambitious

project to help the poor become more financially confident through this venture and

allowing every citizen the right to have their own bank account and insurance

coverage which was previously impossible for most of the population under poverty.

The purpose of this scheme will definitely benefit the overall economy of the country

and the scheme provides some lucrative benefits which should certainly be availed and

considered. Here is listed some important benefits of the Pradhan Mantri Jan Dhan

Yojna (PMJDY) scheme which would certainly inspire the country to a more

prosperous future for all.



Life insurance Benefit: Under the PMJDY scheme the account holders will be given

worth Rs.30000 insurance coverage if they comply with certain specification of the

scheme which includes opening an account by January 26, 2015 and having an

accidental insurance coverage of over Rs. 100000.

Loan benefits: The account holder can take loan benefit of up to Rs.5000 from the

bank after six months from opening the account. Though the amount might seem

insignificant for many but we have to realize the scheme is directed mostly towards

people below the poverty line and who are struggling desperately to sustain their

everyday living. The loan benefit can be a scintilla of hope for those people who could

utilize the loan amount and invest it in a more profitable outcome, particularly in

farming or other agricultural prospect.

Mobile banking facilities: Though the technology of using smart phones to conduct

our bank transactions is not novel anymore but the PMJDY scheme will allow its

account holders to avail the same facilities of checking balance and transferring funds

through a normal cell phone which is more affordable to the general economy.

Below are some unique features of this scheme.

I. The main aim of this scheme is to bring the population to the banking

system, who are out of banking service and debit card service.

II. This scheme is for rural as well as urban people.

III. Once an account opened under this scheme then account holder get a debit

card. This debit card is under RuPay Scheme. RuPay is Indian version of the

card network owned by the National Payments Corporation of India. It is

exactly like Visa or Mastercard service.

IV. The account holder will get Rs.30,000 insurance coverage from LIC.

V. Cardholders will get Rs.1,00,000 accidental insurance coverage from HDFC

Ergo. Insured will get this amount in case of permanent disability or death.

VI. However, do remember that accident insurance will be available only in case

of active debit cards.

VII. Card considered only in case cardholder swiped it within 45 days of claim.


http://www.basunivesh.com/2014/04/24/best-accidental-insurance-policy-in-india-how-to-choose-them/

http://www.basunivesh.com/2014/05/17/lics-online-term-plan-e-term-review-and-benefit/


VIII. Once an account active for 6 months and linked to Aadhar identity, then

account holder will be eligible for an overdraft facility of up to Rs.2, 500 and

may increase up to Rs.5, 000 depending on the Bank’s decision.

b) NEFT (National Electronic Fund Transfer):

NEFT enables funds transfer from one bank to another but works a bit

differently than RTGS. NEFT is slower than RTGS. The transfer is not direct and RBI

acts as the service provider to transfer the money from one account to another. You

can transfer any amount through NEFT, even a rupee.

c) RTGS (Real time gross settlement):

RTGS system is funds transfer systems where transfer of money or securities

takes place from one bank to another on a "real time" and on "gross" basis.

Settlement in "real time" means payment transaction is not subjected to any waiting

period. The transactions are settled as soon as they are processed. Minimum &

Maximum Limit of RTGS: 2 lakh and no upper limit.

d) PAHAL SCHEME:

*More than 60 Percent of LPG customers in the country have joined the PAHAL

scheme for receiving cash subsidy, so that they can buy cooking gas (LPG) at market

price.

*over 9 crore consumers, out of a total customer base of 15.33 crore have joined the

direct benefit transfer for LPG(DBTL) scheme.

*The PAHAL was launched on November 15,2014, in 54 districts and in the rest of

the country on January 1 2015.

*The scheme aims to transfer the subsidy on LPG directly in to the bank accounts of

over 15 crore LPG consumers.



1.10 CHALLENGES OF BANKING INDUSTRY

The banking industry in India is undergoing a major change due to the

advancement in Indian economy and continuous deregulation.

1. Deregulation: This continuous deregulation has given rise to extreme competition

with greater autonomy, operational flexibility, and decontrolled interest rate and

liberalized norms and policies for foreign exchange in banking market. The

deregulation of the industry coupled with decontrol in the interest rates has led to entry

of a number of players in the banking industry. Thereby reduced corporate credit off

which has resulted in large number of competitors battling for the same pie.

2. Modified New rules: As a result, the market place has been redefined with new

rules of the game. Banks are transforming to universal banking, adding new channels

with lucrative pricing and freebees to offer. New channels squeezed spreads,

demanding customers better service, marketing skills heightened competition, defined

new rules of the game pressure on efficiency. Need for new orientation used customer

loyalty. Bank has led to a series of innovative product offerings catering to various

customer segments, specifically retail credit.

3. Efficiency: Excellent efficiencies are required at banker's end to establish a balance

between the commercial and social considerations Bank need to access low cost funds

and simultaneously improve the efficiency and efficacy. Owing to cutthroat

competition in the industry, banks are facing pricing pressure, have to give thrust on

retail assets.

4. Diffused customer loyalty: Attractive offers by MNC and other nationalized banks,

customers have become more demanding and the loyalties are diffused. Value added

offerings bound customers to change their preferences and perspective.

5. Misaligned mindset: These changes are creating challenges, as employees are

made to adapt to changing conditions. The employees are resisting to change and the

seller market mindset is yet to be changed. These problems coupled with fear of



uncertainty and control orientation. Moreover banking industry is accepting the latest

technology but utilization is far below from satisfactory level.

6. Competency gap: The competency gap needs to be addressed simultaneously

otherwise there will be missed opportunities. Placing the right skill at the right place

will determine success. The focus of people will be doing work but not providing

solutions, on escalating problems rather than solving them and on disposing customers

instead of using the opportunity to cross sell.

Strategic Options to cope with the Challenges

Dominant players in the industry have embarked on a series of strategic and

Tactical initiatives to sustain leadership.

The major initiatives incorporate:

a) Focus on ensuring reliable service delivery through Investing on and implementing

right technology.

b) Leveraging the branch networks and sales structure to mobilize low cost current and

savings deposits.

c) Making aggressive for a ways in the retail advances segments of home and personal

loans.

d) Implementing initiatives involving people, process and technology to reduce the

fixed costs and the cost per transaction.

e) Focusing on fee based income to compensate foe squeezed spread.

f) Innovating products to capture customer 'mind share' to begin with and later the

wallet share.

g) Improving the asset quality as Basel II norms.

Present Challenges facing by indian banking sector.

As banks develop their strategies for giving customers access to their accounts

through various advanced services like e-banking, mobile banking and net banking,

they should also regard this emerging platform as a potential catalyst for generating

operational efficiencies and as a vehicle for new revenue sources.



Banking industry’s opportunities includes:

*A growing economy,

*Banking deregulation,

*Increased client borrowing,

*An increase in the number of banks,

*An increase in the money supply,

“The major challenges faced by banks today are as to how to cope with

competitive forces and strengthen their balance sheet.” Today, banks are groaning with burden of :

1) NPA‟s: It is rightly felt that these contaminated debts, if not recovered, will eat into

the very vitals of the banks.

2) High transaction costs: A major concern before the banking industry is the high

transaction cost of carrying non- performing assets in their books. The growth led to

strains in the operational efficiency of banks and the accumulation of non-performing

assets (NPA‟s) in their loan portfolios.

3) IT revolution: The Indian banks are subject to tremendous pressures to perform as

otherwise their very survival would be at stake. The application of IT and e-banking is

becoming the order of the day with the banking system heading towards virtual

banking.

4) Timely technological up gradation: Already electronic transfers, clearings,

settlements have reduced translation times. To face competition it is necessary for

banks to absorb the technology and upgrade their services.

5) Intense Competition: The RBI and Government of India kept banking industry open

for the participants of private sector banks and foreign banks. The foreign banks were

also permitted to set up shop on India either as branches or as subsidiaries. Due to this

lowered entry barriers many new players have entered the market such as private

banks, foreign banks, non-banking finance companies, etc. The foreign banks and new



private sector banks have spearhead the hi-tech revolution. For survival and growth in

highly competitive environment banks have to follow the prompt and efficient

customer service, which calls for appropriate customer centric policies and customer

friendly procedures.

6) Privacy and Safety: Among the most important aspects of savings, i.e., safety,

liquidity and profitability, safety is at the top most priority. The areas which might

endanger security in e-banking can be:

* Credit risk

*Liquidity,

* interest rate risk,

*market risks

*Legal risk

7) Global banking: The impact of globalization becomes challenges for the domestic

enterprises as they are bound to compete with global players. If we look at the Indian

Banking Industry, then we find that there are 36 foreign banks operating in India,

which becomes a major challenge for Nationalized and private sector banks.

8) Financial inclusion: Financial inclusion has become a necessity in today‟s

business environment. Whatever is produced by business houses, that has to be under

the check from various perspectives like environmental concerns, corporate

governance, social and ethical issues. In India, RBI has initiated several measures to

achieve greater financial inclusion, such as facilitating no-frills accounts and GCCs for

small deposits and credit.

1.11 FUTURE PROSPECTS OF BANKING INDUSTRY

Some of the key developments which could shape the future are:

a) Basel III: India figures among the very few countries which have issued final

guidelines on Basel III implementation so far. The Reserve Bank of India has

given five years for the gradual achievement of Basel III global banking standard.

But it seems a tall order for many banks. The challenges of implementing Basel III

are further accentuated by the fact that the law mandates the Central government to


http://businesstoday.intoday.in/story/banking-stocks-may-3-basel-iii-norms-will-hit-profit/1/24552.html

http://businesstoday.intoday.in/story/banking-stocks-may-3-basel-iii-norms-will-hit-profit/1/24552.html


hold a majority share in public sector banks (PSBs), which control more than 70

per cent of the banking business in India. Further, the high fiscal deficit is likely to

limit the government's ability to infuse capital in the PSBs to meet Basel III

guidelines, which will require approximately Rs 4.05 trillion to Rs 4.25 trillion

over the next five to six years. (One trillion equals to Rs 100,000 crore.) The high

capital requirement will also add pressure on return of equity of banks.

b) New banks: New banks could have a significant impact on the Indian banking

system. Given the huge unbanked population, there is surely a Although there has

been little progress on the draft norms for issuing new banking licences, the entry

of scope for more banks .

c) Foreign banks: RBI has been keen on allowing foreign banks a larger role in the

Indian banking system since February 2005, when it first issued the road map for

presence of foreign banks in India. In May 2012, the government also facilitated

the process by proposing to exempt foreign banks from the 30 per cent tax on

capital gains and stamp duty while converting branches into a new entity. RBI has

also mandated foreign banks with 20 and more branches to achieve priority sector

targets and sub-targets at par with their domestic counterparts.

d) Developing Corporate Bond Markets: Developing corporate bond markets is an

important link in a well developed financial market. Although the government has

taken some steps in this direction, a lot more needs to be done.

e) Unique Identification (UID) Project: Among the many initiatives, the

government's UID project is likely to have significant impact. Given the numbers

out of the reach of organised banking, it can prove to be transformational by giving

banks an access to a large untapped customer base. The whole range of

government payments - under subsidies and benefits of various welfare schemes -

will be routed through banks.

f) Social Media: This adds another dimension for banks to manage their relationship

with customers. It already had over 45 million users in India in 2011, which is

expected to grow to over 88 million by the next year with over 75 per cent under


http://businesstoday.intoday.in/story/10-year-bond-yield-softening-india/1/189655.html

http://businesstoday.intoday.in/story/10-year-bond-yield-softening-india/1/189655.html

http://businesstoday.intoday.in/story/rbi-d-subbarao-on-bank-licenses-groundwork-still-pending/1/189920.html


the age of 35, according to media reports. Although banks in India have been a

little late in using social media, they have been making fast progress.

With increasing volume and complexity of the banking business, it will be imperative

for the regulator to move gradually towards more offsite monitoring than onsite.

Technology will play a much larger role in the overall supervision of the banking

system. There are likely to be transformational changes in the entire regulatory system

for financial services.

Growth Rate of Indian Banking Industry

With current growth rate Indian banking industry will be 3rd largest by 2025

with China at first rank and US at second rank (Considering total banking assets as

barometer).

Growth Rate of Indian Banking

Indian banks are lacking at the number of saving accounts per branch.

Large PSU banks, Foreign banks, New generation private banks have around

1000-1500 saving accounts per branch.

Small PSU banks and old generation private banks have around 500-1000 saving

accounts per branch.

This number can certainly be improved as banks have CASA (current account

saving account) as their major source of funds.

Diversifying in new channels

In early 2000’s banks major revenue was from cash and cheque services.

Today banks are diversifying. Their revenues are coming from ATM card,

Mobile- POS(point of sale), Credit cards (POS),Online banking.

The banks investing in these new channels will emerge as winners.



Operating model change

Foreign banks, New generation private banks are the banks adapting to new

technology quickly and effectively. They are offering Services like centralized

inward clearing, outward clearing, account opening.

Comparatively large and small PSU banks and old generation private banks are not

aggressively investing in technology. These banks can improve their operating

model by adapting to new technology and services.

Future Landscape of Indian Banking

Liberalization and de-regulation process started in 1991-92 has made a sea

change in the banking system. From a totally regulated environment, we have

gradually moved into a market driven competitive system. Our move towards global

benchmarks has been, by and large, calibrated and regulator driven. The pace of

changes gained momentum in the last few years. Globalization would gain greater

speed in the coming years particularly on account of expected opening up of financial

services under WTO. Four trends change the banking industry world over, viz.

1) Consolidation of players through mergers and acquisitions,

2) Globalisation of operations,

3) Development of new technology and

4) Universalisation of banking.

With technology acting as a catalyst, we expect to see great changes in the

banking scene in the coming years.

Human Resources Development would be another key factor defining the

characteristics of a successful banking institution. Employing and retaining

skilled workers and specialists, re-training the existing workforce and promoting

a culture of continuous learning would be a challenge for the banking

institutions.



CHAPTER 2

RESEARCH DESIGN

2.1 INTRODUCTION TO RESEARCH

In simple words research refers to Searching for a new ideas, systematic study

of a research, identification of a problem to get a better solution, infact it is a scientific

method, study of particular problem to finding out solution, and collecting analyzing

the information etc

“Research is an organized, systematic, databased, objective, scientific, enquiry, or

investigation in to a specific problem, undertaken for the purpose of findings answers

of solution to it”

“Human activity engaged in intellectual persuite of discovering something new

(innovation)” is called research.

Research is a Systematic search for answer to a questions and solution to a problems.

it is a purposive investigation. It seeks to find explanation to unexplained phenomena

to clarify the doubtful facts and to correct the misconceived facts. How is this search

made ? what are the possible methods or approaches.

MEANING OF RESEARCH DESIGN

A research design is the arrangement of conditions for collection and

analysis of data in a manner that it aims to continue relevance to the research purposes

with economy in procedure. In fact, the research design in the conception structure

within which research is conducted, blueprint of research design includes collection

measurement and analysis of data.

It is a plan and structure of investigation so conceived obtain answer to research

questions. is called research design.



DEFINITION OF RESEARCH DESIGN

A research Design is a logical and systematic plan prepared for directing a

Research study. It specifies the objectives of the study. The Methodology and

Techniques to be adopted for achieving the objective.

It is the plan structure and strategy of investigation conceived so as to obtain answer to

research questions the plan is the overall scheme or program of research. A research

design is the program that guides the investigator in the process of collecting analyzing

and interpreting observation. It provides a systematic plan of procedure for the

Researcher to follow.

STEPS IN RESEARCH DESIGN

The research process proceeds in six phases as under:

Specifying the problem

Framing research design

Planning a sample

Collecting the data

Analyzing the data

Preparing the report

Figure 2.1: Steps in Research process



2.2 INTRODUCTION TO INDIAN BANKING SYSTEM

Indian banking is the lifeline of the nation and its people. Banking has helped

in developing the vital sectors of the economy and show in a new dawn of progress on

the Indian horizon. The sector has translated the hopes and aspirations of millions of

people into reality.

Today, Indian banks can confidently compete with modern banks of the world. Before

the 20th century, usury, or lending money at a high rate of interest, was widely

prevalent in rural India. Entry of Joint stock banks and development of Cooperative

movement have taken over a good deal of business from the hands of the Indian

money lender, who although still exist, have lost his threatening teeth.

In the Indian Banking System, Cooperative banks exist side by side with

commercial banks and play a supplementary role in providing need-based finance,

especially for agricultural and agriculture-based operations including farming, cattle,

milk, hatchery, personal finance etc. along with some small industries and self-

employment driven activities.

Generally, co-operative banks are governed by the respective co-operative acts of state

governments. But, since banks began to be regulated by the RBI after 1st March 1966,

these banks are also regulated by the RBI after amendment to the Banking Regulation

Act 1949. The Reserve Bank is responsible for licensing of banks and branches, and it

also regulates credit limits to state co-operative banks on behalf of primary co-

operative banks for financing Small scale industrial (SSI) units.

The banking system of a country plays an important role in the economic development

of any country. Banking system comprises of the banking institutions functioning in

the country. Banking system comprises from the central bank to all banking

institutions which are functioning and providing financial facilities to any

developmental sector like agriculture, industries, trade, housing etc.

Under the Indian banking structure central bank in the name of the Reserve

Bank of India which regulates, directs and controls the banking institutions. Separate



institutions are functioning to meet the financial requirement of the different sectors of

the economy. Indigenous bankers and moneylenders do dominant in the unorganized

sector. Regional Rural Banks are meeting the requirement of the rural population.

Cooperatives are working to meet the requirement of medium, short and long-term

credit for agriculture sector. Development banks are meeting the business and

industrial requirements.

Thus, we can say that the structure of Indian banking system has an international level

banking system which can meet the economic requirements of globalized world.

The Indian banking structure has a wide and comprehensive form. Apex institutions in

the form of banking institutions are playing important role in the country. The chief

regulator of banking system in our country is the Reserve bank of India. Industrial

Development Bank of India (IDBI) is an apex body in the industrial sector. National

Bank of Agriculture and Rural Development (NABARD) has been working as an apex

institution for the agriculture and rural development. Import-Export Bank of India

(EXIM) is an Apex body of international trade. National Housing Bank (NHB) is an

apex institution in field of housing construction. Thus these four apex institutions are

accelerating the banking system by providing refinance facilities to commercial banks

and other financial institutions along with other banking services.

2.3 LIST OF BANKS OPERATED IN INDIA

Public-sector banks

There are currently 27 public sector banks in India out of which 19 are

Nationalized banks and 6 are State Bank of India and its associate banks.

State Bank and its associates

1. State Bank of India.

2. State Bank of Bikaner and Jaipur.

3. State Bank of Hyderabad.

4. State Bank of Mysore.

5. State Bank of Patiala.

6. State Bank of Travancore.


http://en.wikipedia.org/wiki/State_Bank_of_Travancore

http://en.wikipedia.org/wiki/State_Bank_of_Patiala

http://en.wikipedia.org/wiki/State_Bank_of_Mysore

http://en.wikipedia.org/wiki/State_Bank_of_Hyderabad

http://en.wikipedia.org/wiki/State_Bank_of_Bikaner_and_Jaipur

http://en.wikipedia.org/wiki/State_Bank_of_India


http://en.wikipedia.org/wiki/Nationalisation

http://en.wikipedia.org/wiki/Public_sector


Nationalized banks

1. Allahabad Bank.

2. Andhra Bank.

3. Bank of Baroda.

4. Bank of India.

5. Bank of Maharashtra.

6. Canara Bank.

7. Central Bank of India.

8. Corporation Bank.

9. Dena Bank.

10. Indian Bank.

11. Indian Overseas Bank.

12. Oriental Bank of Commerce.

13. Punjab & Sind Bank.

14. Punjab National Bank.

15. Syndicate Bank.

16. UCO Bank.

17. Union Bank of India.

18. United Bank of India.

19. Vijaya Bank.

Other public sector banks

1. Bharatiya Mahila Bank.

2. IDBI Bank.

3. Post Bank of India.(proposed)

Private-sector banks

Old private sector banks

1. Catholic Syrian Bank.

2. City Union Bank.

3. Dhanlaxmi Bank.

4. Federal Bank.


http://en.wikipedia.org/wiki/Federal_Bank

http://en.wikipedia.org/wiki/Dhanlaxmi_Bank

http://en.wikipedia.org/wiki/City_Union_Bank

http://en.wikipedia.org/wiki/Catholic_Syrian_Bank

http://en.wikipedia.org/wiki/Post_Bank_of_India

http://en.wikipedia.org/wiki/IDBI_Bank

http://en.wikipedia.org/wiki/Bharatiya_Mahila_Bank

http://en.wikipedia.org/wiki/Vijaya_Bank

http://en.wikipedia.org/wiki/United_Bank_of_India

http://en.wikipedia.org/wiki/Union_Bank_of_India

http://en.wikipedia.org/wiki/UCO_Bank

http://en.wikipedia.org/wiki/Syndicate_Bank

http://en.wikipedia.org/wiki/Punjab_National_Bank

http://en.wikipedia.org/wiki/Punjab_%26_Sind_Bank

http://en.wikipedia.org/wiki/Oriental_Bank_of_Commerce

http://en.wikipedia.org/wiki/Indian_Overseas_Bank

http://en.wikipedia.org/wiki/Indian_Bank

http://en.wikipedia.org/wiki/Dena_Bank

http://en.wikipedia.org/wiki/Corporation_Bank

http://en.wikipedia.org/wiki/Central_Bank_of_India

http://en.wikipedia.org/wiki/Canara_Bank

http://en.wikipedia.org/wiki/Bank_of_Maharashtra

http://en.wikipedia.org/wiki/Bank_of_India

http://en.wikipedia.org/wiki/Bank_of_Baroda

http://en.wikipedia.org/wiki/Andhra_Bank

http://en.wikipedia.org/wiki/Allahabad_Bank


5. ING Vysya Bank. (merged with Kotak Mahindra Bank in April 2015)

6. Jammu and Kashmir Bank.

7. Karnataka Bank.

8. Karur Vysya Bank.

9. Lakshmi Vilas Bank.

10. Ratnakar Bank.

11. South Indian Bank.

12. Tamilnad Mercantile Bank.

New private sector banks

1. Axis Bank.

2. Development Credit Bank.

3. HDFC Bank.

4. ICICI Bank.

5. IndusInd Bank.

6. Kotak Mahindra Bank.

7. Yes Bank.

Regional rural banks

Karnataka

1. Kaveri Grameena Bank.

2. Karnataka Vikas Grameena Bank.

3. Pragathi Krishna Gramin Bank.

2.4 REVIEW OF LITRATURE

Anne m smith (1990) studied the four distinguishing characterstics of services

a) inseparability b)intangibility c)heterogeneity d) perishability And how it effects

client’s perceptions of quality services from banks. The study revealed that

intensifiying competation and increasing customer expectations have created a climate

where quality is consider to be a major strategic variable for improving customer

satisfaction and there by contributing to the profitability of financial service providers.


http://en.wikipedia.org/wiki/Karnataka_Vikas_Grameena_Bank

http://en.wikipedia.org/wiki/Yes_Bank

http://en.wikipedia.org/wiki/Kotak_Mahindra_Bank

http://en.wikipedia.org/wiki/IndusInd_Bank

http://en.wikipedia.org/wiki/ICICI_Bank

http://en.wikipedia.org/wiki/HDFC_Bank

http://en.wikipedia.org/wiki/Development_Credit_Bank

http://en.wikipedia.org/wiki/Axis_Bank

http://en.wikipedia.org/wiki/Tamilnad_Mercantile_Bank

http://en.wikipedia.org/wiki/South_Indian_Bank

http://en.wikipedia.org/wiki/Ratnakar_Bank

http://en.wikipedia.org/wiki/Lakshmi_Vilas_Bank

http://en.wikipedia.org/wiki/Karur_Vysya_Bank

http://en.wikipedia.org/wiki/Karnataka_Bank

http://en.wikipedia.org/wiki/Jammu_and_Kashmir_Bank

http://en.wikipedia.org/wiki/Kotak_Mahindra_Bank

http://en.wikipedia.org/wiki/ING_Vysya_Bank


Aurora and malhotra (1997) says the level of customer satisfaction and some

marketing strategies in both private and public sector banks in India they have found

six factors of customer satisfaction in public sector banks like a)routine operations

b)situational c)price d)environmental e)technology f)interactive. But in private sector

banks they found seven factors in total having staff factor as the first ranked and

situational factor as the lowest ranked items ,instead of price factor ,promotional factor

has been explored by researchers in private sector banks as compared to public sector,

private sector bank customers level of satisfaction is comparatively more. Proper

training and development of bank staff , regular market survey , personalizing the

service, efforts to avoid long queues in bank and attractive environment are key

suggested strategies in public sector bank.

Swamy B.N.A. (2001) analyzes the comparative performance of different bank

groups in India over the period 1995 to 2000 and studies the impact of deregulation

and competition in a liberalized economy. The study concludes that share of public

sector banks in assets of all scheduled commercial banks is the highest but recorded

steady decline whereas new private sector banks have succeeded to enhance their

share in assets witnessed deterioration in the profit performance. Although, public

sector banks have succeeded to reduce cost and NPAs but still have high costs and

NPAs as compared to new private sector and foreign banks which reflect the

favourable effect of technology adoption by private banks. Overall, profit performance

of foreign banks is superior mainly due to greater share of income generated from fee-

based activities.

Singh S. (2004) empirically studies the appraisal of customer services of

Public sector banks in terms of level of customer service and satisfaction determined

by brand, location and design, variety of services, rates and changes, systems and

procedures etc. The study concludes that staff behaviour is very polite and services are

provided even in the late hours. Study reveals that 62 percent respondents answer that

immediate credit is not given for outstation cheques, 93 percent feel that they do not

hold periodical meetings and services are not provided according to the given

schedules. It concludes that services of private sector banks are better than the services

of public sector banks.



Mishra J.K. and Jain M. (2007) study various dimensions of customer

satisfaction in nationalized and private sector banks. Two-stage factor analysis is

computed to arrive at the dimensions of customer satisfaction. The study analyzes ten

factors and five dimensions of customer satisfaction for nationalized and private sector

banks respectively. The study concludes that satisfaction of the customers is an

invaluable asset for the modern organizations, providing unmatched competitive edge,

it helps in building long term relationship as well as brand equity. The best approach

to customer retention is to deliver high level of customer satisfaction that result in,

strong customer loyalty.

Rangaswamy Elango & Vijay Kumar Gudep (2008) in the article entitled,

“A Comparative Study on the Service Quality and Customer Satisfaction among

Private, Public and Foreign Banks”, referred to the recommendations on customer

service by several committees of Government of India which urged the Public Sector

Banks to design effective customer service systems. The study involved various

dimensions of quality of customer services in banks i..e banking personnel,

convenience of working hours, web based services, error free value added services and

efficient grievance redressal mechanism. The study was considered necessary in view

of the change in customer’s needs like access to deposits anywhere, anytime, speedy

transfer of funds, quick remittances and bill collections fast screening of credit

proposals without involving paper work. The results of the study indicated that the

level of awareness of customers improved. It further revealed that the new generation

private sector and foreign banks are fore-runners in customer services and the

implications are for the public sector banks, who should improve their approach

towards customers to perform better.

Hugar S.S. and Vaz N.H. (2008) evaluate the customer orientation in public

sector banks for 5 public sector, 3 new private sector and 3 foreign banks are selected.

The study concludes that new private sector banks have more ATMs at the end of

March 2006 followed by SBI group where 77.5 percent branches are fully

computerized and 18.2 percent are partially computerized. Business per employee and

profits per employee are higher in foreign banks where SBI has received more number



of complaints followed by ICICI. The study also suggests adopting CRM by public

sector banks to stand strong in competitive environment.

Review of literature is made to know the gap between earlier research

findings and present study. There is a gap in the earlier researchers findings regarding

banking service. They concentrate only on “a comparative study of customer

satisfaction and services towards public and private sector banks. Or SBI and ICICI

bank Or SBI and HDFC bank etc…But earlier study’s is not concentrate on “A

comparative study of customer satisfaction towards services offered by State bank of

Mysore and Karnataka bank in Tumkur city”. To fill this gap researcher will conduct

this study.

2.5 STATEMENT OF THE PROBLEM

In today’s competation the core objective of all organizations or banks is

to satisfy customers. it is the choice of empowered customer to decide the fate of any

product or services in the organization. Only those organizations that continuously

moniter and meet changing customer needs will win by cutting costs and restructuring

for quicker response to the customer demands.

“The present objective of the study is to interpret the customer services provided

by state bank of Mysore (SBM) and Karnataka bank (KBL) and compare with each

other”

It will help in understanding the preferred customer changing attitude towards the

customer services provided to them by these banks.

“”so the present study will give idea about how clients are satisfaction about customer

services provided by state bank of Mysore and Karnataka banks in Tumkur city

branches””



2.6 OBJECTIVES OF THE STUDY

The following are the objectives of the present study they are as follows:

1) To study the customer services provided by Karnataka Bank and State Bank of

Mysore.

2) To know the customers attitude towards State Bank of Mysore and Karnataka

Bank services.

3) To measure the level of satisfaction of the customers towards the services

rendered by public and private sector banks.

4) To study the preferences and priorities towards types of services provide by

public and private sector banks.

5) To identify the weak areas which need the improvements so that quality of

services of banks can be Enhanced.

2.7 SCOPE OF THE STUDY

The scope of the present study is limited to customer satisfaction towards

various services offered by State Bank of Mysore and Karnataka Bank in tumkur city

branch. therefore it includes all other branches in the selected banks.

2.8 NEED /SIGNIFICANCE OF THE STUDY

1. To identify the satisfaction level of customer towards different types of service

attributes, by identifying their critical factors.

2. To study about the bank about their customized products and services,

according to the consumers needed.

3. To study the experience and expectations of the existing customers.

4. To study to improve the current standards of services.

5. To study the scope of introducing new types of services.

6. To study about the business tactics followed to stand against the competitors.



2.9 RESEARCH METHODOLOGY

Research methodology is a systematic and logical study for a problem which

provides the suitable information to solve the problem. This helps a researcher to

obtain a suitable solution to a particular problem.

Survey method is adopted for the present study. The study involves collection of data

from customers of State bank of Mysore and Karnataka bank around the Tumkur city.

The data was collected by structured questionnaire from accountholders of SBM and

KBL in Tumkur city.

2.10 PERIOD OF THE STUDY

The present study was conducted through primary data from 15th January 2015

to 20th April 2015.

2.11 SOURCES OF DATA

Researcher conducted this study by getting information through these

sources. The sources are primary data and secondary data.

The present study is choosen to collect the primary data through using questionnaire

cum interview methodology.

And secondary data is collected through

*Internet.

*Banking website.

*Banking journals, magazines.

*Information given by the banking people.



2.12 SAMPLE DESIGN

It is the subject on which measurement is taken. A part of the population is

known as sample. The process of drawing a sample from a larger population is called

sampling.

It includes majorly Population, sample size, and sample techniques:

a) Population: All those customers who are having Account in the State Bank of

Mysore and Karnataka Bank in Tumkur city branch.

b) Sample Size: In the present study ‘a sample size of 120 Respondents was

chosen.

60 respondents from State bank of Mysore (SBM)

60 respondents from Karnataka bank. (KBL)

c) Sample techniques: Convenient sampling method is used for the present study.

2.13 OPERATIONAL DEFINITION OF THE STUDY

1. Customer

The term “Customer” of a bank is not defined by law. Ordinarily a person who

has an account in a bank is considered its customer. A customer for a bank is any

individual who uses the services of the bank. It may be maintaining accounts or

depositing cash or availing loans etc. Customer is a person who is using any or all of

the services offered by the bank. For example:

a) A Person who has deposited 10,000 in the bank in a FD.₹b) A Person who has taken a Loan of 100,000 from the bank.₹c) A Person who has a checking account with the bank etc.



2. Satisfaction

The fulfillment of a desire, needs is called satisfaction. Customer is the king in

banking industry. Therefore he must satisfy with the services of bank. Customer

satisfaction is the difference between customer expectation from bank and the

actual. Customer satisfaction is a marketing term that measures how products or

services supplied by a company meet a customer’s expectation

Customer satisfaction is important because it provides marketers and business

owners with a metric that they can use to manage and improve their businesses.

Here are the top five reasons why customer satisfaction is so important:

I. It’s a leading indicator of consumer repurchase intentions and loyalty

II. It’s a point of differentiation

III. It increases customer lifetime value

IV. It reduces negative word of mouth

V. It’s cheaper to retain customers than acquire new ones.

3. Customer Service.

Customer service is an extremely important part of maintaining ongoing

client relationships that are key to continuing revenue. For this reason, many

companies have worked hard to increase their customer satisfaction levels. Often

there are many more people working behind the scenes at a company than there are

customer service representatives, yet it is primarily the personnel that interact

directly with customers that form customers' perceptions of the company as a

whole.

4. Comparative study.

It refers to the appear to be something when compared with others and

involving the act of looking at the ways that things are alike or different.

Comparative research is a research methodology in the social sciences that

aims to make comparisons across different countries or cultures.



5. Bank

A bank is a place where money can be saved or loaned out from. Someone's

money can be placed in the bank for safe keeping. Or the bank can give out loans to

people for an agreement to pay the bank back at a later time, usually with interest. The

people who run a bank are called bankers. Banks also can use the money they have

from deposit accounts to invest in businesses in order to make more money.

2.14 ANALYSIS METHOD

In the present study Analysis is done on the basis of responses taken from the

respondents by making use of tables, charts, diagrams, graphs.

2.15 LIMITATIONS OF THE STUDY

The study is restricted to tumkur city only.

The greater limitation of the study is time factor.

Personal bias.

Respondents may or may not give the accurate information.

The views of respondent generally vary from time to time.

2.16 CHAPTER LAYOUT

The study report consists of number of chapters. The chapter headings are

given below:

Chapter 1: Introduction to Banking Industry.

Chapter 2: Research Design.

Chapter 3: Profile of the Selected Banks.

Chapter 4: Data Analysis and Interpretation.

Chapter 5: Summary of Findings and Conclusions.

Chapter 6: Suggestions.



CHAPTER 3

PROFILE OF THE BANKS.

State Bank of Mysore:(SBM)

Logo

3.1 History and Origin of SBM

In 1913, at the instance of Sir M. Visvesvaraya, the Engineer Statesman, a state aided

Bank, under the patronage of His Highness the Maharaja of Mysore, Sri Krishnaraja

Wodeyar IV, was established.This was "MYSORE BANK LTD". During 1953,

"Mysore Bank" was appointed as an agent of Reserve Bank of India to undertake

Government business and treasury operations, and in March 1960, it became a

subsidiary of the State Bank of India under the State Bank of India (subsidiary Banks)

Act 1959. Now our bank is an Associate Bank under State Bank Group.

The Bank has grown progressively, right from its inception and has declared

uninterrupted profits from the beginning. "MYSORE BANK", as it is popularly

known, is constantly committed to serve it's customers. Our dedicated service to

clientele has brought recognition to "MYSORE BANK" .



Bharata Ratna Sir.M. Visvesvaraya- Our Founder

“To give real service, you must add something which cannot be bought or measured

with money” - Sir M. Visvesvarayya

YEAR WISE EVENTS OF SBM

Year - Event

1913 - The Bank was established as 'Bank of Mysore Ltd.', on 19 May, with

an authorised capital of Rs.20.00 lakhs.

Commenced its business on 2 October 1913.

1953 - During the year, the Bank was appointed as an Agent of Reserve Bank

of India to conduct Government business & treasury operations.

1959 - With effect from 10 September, the Bank was constituted as State Bank

of Mysore as a Subsidiary of State Bank of India, under State Bank of India

[Subsidiary Banks] Act, 1959 enacted through an Act of Parliament, [Act No.

38 of 1959s].

1959 -The bank has formulated schemes for financing coffee planters/coffee

traders against coffee curers certificate, financing coffee traders, coffee

exporters & coffee curers who also engage in trading.

The Bank actively participated in all Government sponsored schemes and

contributed its share of financial assistance or the economically weaker

sections through Prime Minister Rojgar Yojna & other schemes.

The Bank has sponsored two Regional Rural Banks, Cauvery Grameena Bank

& Kalpatharu Gameena Bank which were merged to form Kaveri-Kalpatharu



Gramin Brank, headquartered at Mysore with more than 250 branches for

growth of agriculture & rural industries.

The Bank, as part of State Bank Group has been engaged in financing

agriculture and MSME in 1960 & introduced the concept of need based rather

than security oriented finance & the Entrepreneur scheme under which

technically qualified persons were financed the entire requirement up to Rs.2

laks.

The Bank has 3 specialized SSI (small scale industrial) branches to assist the

SSI units & proposes to establish 3 more such 551 branches shortly.

The Bank has correspondent & agency arrangements all over the world &

offers spot services in 18 major approved currencies.

State Bank of Mysore handles a significant part of day-to-day banking business

of both the Central & State Governments in the State of Karnataka & is a

Banker to various Public Sector Undertakings in various sectors of Economy.

The Bank has been actively participating in welfare banking needs of public

through its community services.

The Bank is a member of society for worldwide Inter Bank Financial

Telecommunication [SWIFTs] which was established to offer cost effective &

fast transmission of financial messages globally, 2 branches of Bank are

presently covered under the scheme and an additional 15 branches are

proposed to be covered under SWIFT shortly.

1992 - The State Government has also taken up vigorously 'ASHRAYA', a new

housing scheme for weaker sections & 'VISHWA', a new rural & cottage

industry scheme. A new programme called 'AKSHAYA' has also been

launched to help the children in primary education. The Konkan Railway

Project & the New Mangalore Port Project are also progressing satisfactorily.

1994 - Several important measures have been introduced in the busy season

credit policy of November 1993 & slack season credit policy of May 1994,

announced by Reserve Bank of India.

2000 - Mr. M. Sitarama Murty has been appointed as Managing Director, of

Bank.

2001 - State Bank of Mysore has opened a foreign exchange cell at its

Hirehally Industrial estate branch in Tumkur district to enable small-scale

industrialists to manage their foreign exchange transactions.



2002

Enters the market with a coupon of 6.4Percent per annum for its Tier-II

capital bonds issue of Rs.60cr on a private placement basis.

Slashes interest rate on domestic term deposits & on NRE deposits by 25-

50 basis points.

2003

Considers new method of appraisal for lending to the agricultural sector

more on the lines of industrial credit given to trade & commerce.

Declared a dividend of 40Percent on equity capital for year ended.

Ties up with HMT Ltd & launches SBM-HMT Agri Farm Scheme, to

promote agricultural mechanisation in south India.

Maruti Udyog forges alliances with SBM to offer car finance.

2004

Mr. Vijayanand assumes charges as Managing Director of bank from

01/03/2004

State Bank of Mysore has joined the Real Time Gross Settlement Systems

[RTGSs] network that facilitates inter-bank funds settlement on 22 July.

2005 : 100Percent computerization and Core Banking Solutions (CBS)

introduced.

2005 : SBM unveils new single window system.

2006 : Mr P.P. Pattanayak has assumed charge as Managing Director of State

Bank of Mysore. Mr Pattanayak was earlier Deputy Managing Director

[DMDs] & Chief Credit Officer of State Bank of India, Mumbai.

2009 : The Company splits its share with face value from Rs.100/- to Rs.10/-.

2009 : Sri Dilip Mavinkurve takes charge as Managing Director of the Bank.

He was earlier Chief General Manager of the Bank.



2010 -State Bank Of Mysore Issues Rights in the Ratio of 3:10

2011 -State Bank of Mysore recommended dividend of Rs. 10/- per share.

2012 : Shri Sharad Sharma takes charge as Managing Director of the bank.

2012 -State Bank of Mysore has declared an interim dividend of Rs. 10/- only

(Rupees Ten only) per share.

2013 : The Bank celebrated its Centenary year during the period 2nd October

2012 to 1st October 2013.

2013 -State Bank of Mysore has approved declaration of Interim Dividend at

Rs. 11.50 per share with face value of Rs. 10.

2014 -State Bank of Mysore has declared an Interim Dividend at the rate of Rs.

3.00 per equity share of Rs. 10/- each (i.e. 30Percent).

3.2 SBM BRIEF PROFILE

State Bank of Mysore

State Bank of Mysore's logo

Native name: ಮೈ�ಸೂರು ಬ್ಯಾಂಕ ್

Type: Public sector


http://en.wikipedia.org/wiki/Public_sector

http://en.wikipedia.org/wiki/Types_of_business_entity

http://en.wikipedia.org/wiki/File:State_bank_of_mysore.png


Traded as:

BSE: 532200

NSE: MYSOREBANK

ISIN: INE651A01020

Industry:Banking, Insurance, Capital Markets

and allied industries

Predecessor: The Bank of Mysore Ltd.

Founded:

2 October 1913;

101 years ago as The Bank of

Mysore Ltd.

Founder: Sir M.Vishweshwaraiah

Headquarters: Bangalore

Number of

locations:

976 Branches and 9 Extension

counters

Head Office: Bangalore

Area served: Across India

Key people:

Chairman: Arundhati Bhattacharya.

Managing Director: Sharad Sharma.

Products:

Deposits, Personal Banking

Schemes, C & I Banking Schemes,

Agri Banking Schemes, SME

Banking Schemes

Services: Loans, Deposits, Mobile Banking,

ATM Services, NRI Services, Real


http://en.wikipedia.org/wiki/Real-time_gross_settlement

http://en.wikipedia.org/wiki/Automated_teller_machine

http://en.wikipedia.org/wiki/Mobile_Banking

http://en.wikipedia.org/wiki/Small_and_medium_enterprises

http://en.wikipedia.org/wiki/Small_and_medium_enterprises

http://en.wikipedia.org/wiki/Personal_banking

http://en.wikipedia.org/wiki/Personal_banking

http://en.wikipedia.org/wiki/Deposit_(finance)

http://en.wikipedia.org/wiki/Arundhati_Bhattacharya

http://en.wikipedia.org/w/index.php?title=Across_India&action=edit&redlink=1

http://en.wikipedia.org/wiki/Bangalore

http://en.wikipedia.org/wiki/Bangalore

http://en.wikipedia.org/wiki/Sir_M_V

http://en.wikipedia.org/wiki/Capital_Markets

http://en.wikipedia.org/wiki/Insurance

http://en.wikipedia.org/wiki/Banking

http://www.isin.org/isin-preview/?isin=INE651A01020

http://en.wikipedia.org/wiki/International_Securities_Identification_Number

http://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=MYSOREBANK&section=7

http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India

http://www.bseindia.com/stock-share-price/x/y/532200/

http://en.wikipedia.org/wiki/Bombay_Stock_Exchange

http://en.wikipedia.org/wiki/Ticker_symbol


Time Gross Settlement (RTGS)

Transactions, National Electronic

Fund Transfer (NEFT), Internet

Banking, Debit Card[1]

Total equity: 3988 Crores as on 31 Mar 2014

Number of

Employees:

10,627 (as on 30 Jun 2014)

3,588 supervisory staff

7,039 non-supervisory staff

Parent:State Bank of India (holds

90.00Percent shares)

Slogan: Working for a better Tomorrow

Website: statebankofmysore.co.in

MISSION

A premier commercial Bank in Karnataka, with all India presence, committed to provide

consistently superior and personalized customer service backed by employee pride and

will to excel, earn progressively high returns for its shareholders and be a responsible

corporate citizen contributing to the well being of the society.

3.3 CURRENT SCENARIO OF SBM

State Bank of Mysore was established in the year 1913 as Bank of Mysore Ltd.

under the patronage of the erstwhile Govt. of Mysore, at the instance of the banking

committee headed by the great Engineer-Statesman, Dr. Sir M.Visvesvaraya.

Subsequently, in March 1960, the Bank became an Associate of State Bank of India.


http://statebankofmysore.co.in/

http://en.wikipedia.org/wiki/Slogan


http://en.wikipedia.org/wiki/Parent_company

http://en.wikipedia.org/wiki/Equity_(finance)

http://en.wikipedia.org/wiki/State_Bank_of_Mysore#cite_note-1

http://en.wikipedia.org/wiki/National_Electronic_Fund_Transfer

http://en.wikipedia.org/wiki/National_Electronic_Fund_Transfer

http://en.wikipedia.org/wiki/Real-time_gross_settlement


State Bank of India holds 92.33Percent of shares. The Bank's shares are listed

in Bangalore, Chennai and Mumbai stock exchanges.The Bank has widespread

network of 1,002 Branches (as on 31.12.2014) and 9 Extension Counters spread all

over India including 20 Small and Medium Enterprise Branches, 4 Industrial Finance

Branches, 3 Corporate Accounts Branches, 7 Specialized Personal & Services Banking

Branches, 9 Agricultural Development Branches, 3 Government Business Branches, 2

Specialized NRI Branches, offering wide range of services to the customers besides 5

Service Branches and 1 Asset Recovery Branch rendering backup support to the Bank.

Branch Network

The Bank has widespread network of 1,002 Branches (as on 31.12.2014) and 9

Extension Counters spread all over India including 20 Small and Medium Enterprise

Branches, 4 Industrial Finance Branches, 3 Corporate Accounts Branches, 7

Specialized Personal & Services Banking Branches, 9 Agricultural Development

Branches, 3 Government Business Branches, 2 Specialized NRI Branches, offering

wide range of services to the customers besides 5 Service Branches and 1 Asset

Recovery Branch rendering backup support to the Bank.

Financial Profile

The Paid up Capital of the Bank as on 31.12.2014 is Rs 48.01 crores of which

State Bank of India holds 90Percent share. The Bank has achieved a Capital Adequacy

Ratio of 11.65Percent under Basel-III guidelines. The Bank has an enviable track

record of continuously earning profits and payment of uninterrupted dividend since its

inception in 1913. The Bank earned a net profit of Rs. 273 crores for the nine months

period ended December 2014.

Business Profile

Total Deposits of the Bank as at the end of December 2014 stood at Rs 63,890

crores and the total Advances stood at Rs 50,728 crores including an export credit

of Rs 1,684 crores. The Bank is a major player in Foreign Exchange dealings also and



has recorded a merchant turnover of over Rs 34,846 crores and a trading turnover of

over Rs 2,38,403 crores for the nine months period ended December 2014.

Human Resources

The Bank has a dedicated workforce of 10,341 employees consisting of 3,540

supervisory staff and 6,801 non-supervisory staff (as on 31.12.2014). The skill and

competence of the employees have been kept updated to meet the requirement of our

customers keeping in view the changes in the business environment.

With over 10,200 employees worldwide, spread over five main regional centres, 11

operational shore bases, several construction yards and onboard our offshore fleet, we

can confidently supply floating production solutions through the entire product

lifecycle, from engineering to procurement, construction, installation, operation and

relocation.

The Group is committed to conducting business in a sustainable way over the long-

term by developing close relationships with local people, communities and businesses

in host countries, and by safeguarding the natural environment. It is our goal and

driving ambition to be the trusted partner of choice for the world’s energy companies.

Organizational Setup

While the Chairman of State Bank of India is also the Chairman of the Bank,

The Managing Director is assisted by two Chief General Manager and 13 General

Managers.

Investor Relations

State Bank of Mysore has over 30,000 esteemed Shareholders and Investors on

its records. In its endeavor to impart certain key information, the Bank is providing

this exclusive window “Investor Relations”. The window provides information on

Shareholding Pattern of Bank as at the end of each quarter, Quarterly Financial

Statements, Annual Reports of the Bank, Photo clippings of the important events and



other information of importance. This window also has an archive, which provides

information of historical importance.

This window also provides a unique opportunity to Shareholders and Investors to track

the share price movement of the Bank and also air their grievances by clicking

‘Grievances Redressal’ Icon.

Corporate Social Responsibility

SBM firmly believes that sustainable growth can only be achieved in

partnership with the community in which it operates. SBM Group ploughs back

2Percent of its profits annually in the community through Corporate Social

Responsibility (CSR) initiatives. The areas of intervention of SBM are: Health &

Wellness, Education, Environment, Sports, Leisure & Arts and the Empowerment of

vulnerable groups, all of which have an educational dimension. Education is key for

the development of the individual and the country. The ultimate goal is to combat

social ills and poverty by providing the opportunity to vulnerable groups to acquire

skills so as to be economically independent. SBM also fosters a culture of volunteering

among staff through awareness, opportunities and company support.

3.4 SWOT analysis of SBM

The SWOT analysis is an extremely useful tool for understanding and

decision-making for all sorts of situations in business and organizations. SWOT is an

acronym for Strengths, Weaknesses, Opportunities, Threats. SWOT analysis is perfect

for business planning, strategic planning, competitor evaluation, marketing, business

and product development and research reports. The SWOT analysis enables companies

to identify the positive and negative influencing factors inside and outside of a

company or organization.

This sample SWOT analysis for State Bank of Mysore can provide a

competitive advantage.

Strengths

-High growth rate

-Monetary assistance provided



-High profitability and revenue

Weaknesses

- Competitive market

-Unknown

-Tax structure

-Small business units

-Investments in research and development

Opportunities

-New markets

-Global markets

-Venture capital

-Growing demand

-Growth rates and profitability

-Income level is at a constant increase

-New acquisitions

Threats

-Increase in labor costs

-Tax changes

-Financial capacity

-Price changes

-Growing competition and lower profitability

-External business risks

-Government regulations

-Increasing costs

State Bank of Mysore is the first Karnataka–based Bank with fully networked

branches. The bank is fully on 'CORE BANKING SOLUTION' from 31.12.2005. In



record time of one calendar year, the bank completed the exercise of converting all the

branches to Core Banking to provide the convenience of anytime, anywhere banking

to all our valued customers.

State Bank of Mysore embarked upon the latest Banking Technology platform by

implementing the Core Banking Solutions (CBS) across all its branches, with an

objective of providing banking convenience to the customers.

3.5 PRODUCTS AND SERVICES OFFERED BY STATE BANK OF

MYSORE:

Deposits

State Bank of Mysore offers a range of products and services to its customers.

Different types of deposits are offered:

• My bank Surakhshna:

A unique deposit scheme linked with insurance cover has been introduced.

Insurance cover to a maximum of Rs. 5 lakh on deposits held for 5 years and

more.

• Saving Plus:

In order to provide value added services to our Personal Segment customers, a

new specialized auto sweep product for Personal Segment savings bank

customers has been introduced.

• Saral Savings Bank account (No Frills account):

This account comes with very low minimum balances as well as low / nil

charges, to cater to the needs of individual from the vast sections of population



who are, otherwise, not fulfilling certain conditions of our existing Savings

Bank requirements.

• SBM Tax Saver Scheme (Tax saving scheme under Sec 80c of the IT act):

A Bank Term Deposit Scheme 2006 has been introduced by the Central

Government commencing from the financial year 2006–07 wherein time

deposits made upto Rs.1.00 lakh for a period of 5 years are exempted from

payment of Income tax under Sec 80C

New Deposit Schemes

Mybank sanchay Savings Bank Account

Centenary Liquid Term Deposit

Mybank Suraksha Savings Account

Mybank Suraksha Savings Plus Account

Mybank Suraksha Time Deposit Account

Multi Option Deposit Scheme

Savings Bank account

Term Deposits

Reinvestment Deposits

Recurring Deposits

Harsha Deposit

Public Provident Fund Scheme

Reverse Mortgage Scheme - New Personal Segment scheme to provide a source

of additional income for senior citizens who own self acquired House property in

India

Savings Plus Scheme

Internet Banking- e-TDR / e-STDR- Open Term deposit accounts online and get

receipts instantly.


http://www.statebankofmysore.co.in/whats-new/197.html#E-TDR

http://www.statebankofmysore.co.in/whats-new/197.html#E-TDR

http://www.statebankofmysore.co.in/whats-new/196.html

http://www.statebankofmysore.co.in/advances/personal-banking-/reverse-mortgage-scheme-.html




E-RD- Open Recurring Deposit accounts online.

ADVANCES

A range of loans and advances products are offered by the bank. Following are the list

of advances provided by State Bank of Mysore:

Personal Banking schemes

Commercial & Institutional Banking schemes

Agricultural Banking schemes

Micro and Small Enterprises schemes (MSE)

Personal Banking Schemes:

Personal Loan

Mortgage Loan

Housing Loans

Happy Home

Gnanamitra Education Loan

Loan for purchase of residential site / plot

MYBANK ADHYAPAK - Personal loan scheme to teachers

MYBANK ARAKSHAK - Personal loan scheme to police personnel

MYBANK UTSAV - Personal loan scheme to celebrate Festivals

SBM Car Loan Scheme - For purchase of new and used cars

SANJEEVINI - product scheme for high cost treatment

MYBANK SAMACHAR - personal loan scheme for Journalists

GAGAN MITRA - New personal loan for Pilot & Air hostess training

Mybank Udyogi Gnanamitra - New personal segment advance for

employed persons to undertake higher studies

Commercial & Industrial Banking Schemes:

Scheme for Trades -Liberalised Trade Finance


http://www.statebankofmysore.co.in/whats-new/197.html#E-RD


Handy Loans Scheme

Corporate Loan

Current Account Plus

Rent Plus

SBM Paryatan Plus

SBM School Plus

Fair Practices Code for lenders

Terms and Conditions letter for industrial advances

Agricultural Banking Schemes:

Kisan Gold Card Scheme

Kisan Credit Card Scheme

Gramin Bhandaran Yojana (GBY)

Scheme for Combined Harvesters

Kisan Chakra Scheme

Agriclinics and Agri business cente` (ABC 10 dated 30.08.01)

Solar Photo Voltaic Pumpsets(SPV) for Irrigations

Scheme for purchase of land for agricultural purposes

Scheme for development of Vanilla

Establishment of Bio-Fertiliser Units (Model Scheme)

Produce Marketing Loan (PML)

Drip Irrigation

Sprinkler Irrigation

Farm Mechanisation- SBM Agri Farm Scheme

Swarna Mitra Scheme

My Krishigen

Scheme for cultivation of Gherkins

Scheme for financing LPG connection in rural areas

Scheme for financing to tenant farmers & Oral lessees

Rain water harvesting scheme for SC/ST farmers

Scheme for financing of Jatropha plantation

Scheme for financing to cultivation of patchouli

General Credit Card

Micro and Small Enterprises Schemes (MSE):

Definition of Micro, Small & Medium Enterprises (MSME)



Credit Guarantee Fund Trust Scheme for Micro, Small & Medium

Enterprises (MSEs)

Loans to Micro and Small Enterprises (MSEs)

Retail Trade- Advances to Retail Traders

MSEs- Service Sector (Small Business Enterprises)

Professionals & Self-Employed persons

Transport Operators

Laghu Udyami Credit Card Scheme

Stree Shakthi package for Women entrepreneurs

MyBank Sanchari Suvidha

Annapurna

Mybank Doctor

Flexi (SSI) Term Loan

SME Credit Plus

Green Auto

Swarojgar Credit Card scheme

Mybank Professional Plus

Artisans Credit card (ACC)

Stand-by-line of Credit (Term Loan) for SSI and C&I Borrowers

Reimbursement Facility under Term Loans: (SIB and C&I Segment

borrowers)

"Sooryadeepa": Scheme for Financing Solar Home-lighting system

Forex or NRI Services

State Bank of Mysore offers the following forex services to NRIs:

NRI Deposits

Money Transfer to India through Western Union

Remittance facility through State Bank of India, New York Branch

Remittance to India -Global Link Service (GLS)

International Banking – Forex services

Proforma for foreign currency remittances

Account opening form for non–resident Indians

Interest rates on NRE Deposits and schemes



Details of its correspondent Banks –Exchange companies with Draft drawing

arrangement with the Bank –Money Transfer to India Through Western

Union –Remittance facility through State Bank of India, New York Branch

Cross-Selling

State Bank of Mysore, following Bancassurance model, has entered into tie-ups with

companies like SBI Life Insurance Company etc. It is also a Corporate Agent of

National Insurance Company.

State Bank of Mysore cross-sells the following products:

SBI Life

SBI Mutual Funds

SBI Cards

Dhanvanthari Bima Policy

Other Services

Cash Key

To meet unforeseen expenses, without premature withdrawal of term deposit.

Immediate overdraft facility is available

ATM Facility

Round the clock ATM facility for customers of Bangalore city and different

parts of the country.

Interest Rates: Schemes and interest rates are subject to changes from time to

time

3.6 AWARDS AND ACHIEVEMENTS OF STATE BANK OF MYSORE



Awards to Banks for Excellence in MSE Lending

• Special Award to State Bank of Mysore

Awards to Banks for Excellence in Micro Lending

• Special Award to State Bank of Mysore

. International Recognition & Ratings

SBM continues to be recognised, both in Mauritius and internationally, for superior

achievements. Recent recognition includes the following awards:

SBM was recognised as "Bank of the Year - Mauritius" by The Banker in 2014

SBM has been awarded "Best Retail Bank in Africa" by African Banker

Awards 2014

SBM was recognised as "Bank of the Year - Mauritius" by The Banker in 2013

SBM has been awarded "Best Bank, Mauritius : 2013" by Capital Finance

International (CFI.co)

SBM has been awarded "Best Bank in Mauritius" in the Euromoney Awards

for Excellence 2013

SBM won the award for Corporate Governance Disclosures for the

PricewaterhouseCoopers Corporate Reporting Awards 2013

SBM has been conferred the award of "Best Bank Mauritius : 2012" by Capital

Finance International (CFI.co)

SBM has been elected as top rated Bank in Mauritius for its range of

investment products and first in servicing of clients in the High Net Worth

category by the annual Euromoney Private Banking Survey 2012

SBM won the award in the Risk Management Disclosures category for the

PricewaterhouseCoopers Corporate Reporting Awards 2012



SBM has been designated Best Local Bank by the annual Euromoney Private

Banking Survey 2011

SBM won the Best Private Bank Award by the African Banking Awards 2010

presented by Emeafinance

SBM won the Online Reporting category for the PricewaterhouseCoopers

Corporate Reporting Awards 2011

SBM has been awarded the 'Overall Winner' in the BDO CSR Awards 2010 as

well as the 'Winner' in the Education and Sports category

The bank is also rated D+ on Bank Financial Strength Rating (BFSR).

KARNATAKA BANK (KBL)

LOGO

3.7 HISTORY AND ORIGIN OF KARNATAKA BANK

Karnataka Bank was incorporated on 18 February 1924, and commenced

business on 23 May 1924. Its founders established it at Mangalore, a coastal town in



the Dakshina Kannada district of Madras Presidency. Among the founders, who

created the bank to serve the South Kanara region, was B. R. Vysaray Achar.[10]

Another important personality associated with the bank was K. S. N. Adiga, who

served as Chairman from 1958 to 1979.

In the 1960s Karnataka Bank acquired three smaller banks. In 1960 Karnataka

Bank acquired the Sringeri Sharada Bank, which was established in 1942 and which

had four branches when Karnataka acquired it. Four years later, Karnataka Bank took

over the assets and liabilities of the Chitradurga Bank (also known as Chitladurg

Bank), which was established in 1868 in Mysore State and was the oldest bank in

Mysore. Lastly, in 1966 Karnataka Bank took over the assets and liabilities of the

Bank of Karnataka, in Hubli. Bank of Karnataka had been established in 1946 and

had opened one branch in Belgaum in 1947. At the time of this acquisition, Bank of

Karnataka had 13 branches.

In 2000, Karnataka Bank signed a memorandum of understanding with Infosys

Technologies to develop a core-banking solution called FINACLE. Over 221 branches

were networked up to March 31, 2004. The main motto of this programme is

"Anytime/Anywhere banking". In 2002, the bank concluded a pact with Corporation

Bank for sharing its ATMs. A year later, the bank introduced the Moneyplant card that

allows customers to withdraw money from any of their Karnataka bank accounts.

3.8 Karnataka Bank brief profile

Karnataka Bank Limited

"Your Family Bank. Across India"

Type Public

Traded asBSE: 532652

NSE: KTKBANK

Industry Banking, Financial services

Founded 1924

Headquarters Mangalore, karnataka, India


http://en.wikipedia.org/wiki/File:KarnatakaBank.jpg


Key people P Jayarama Bhat (MD)

Products

Retail banking, corporate banking,

finance and insurance, mortgage

loans,

Revenue 750587 crores(March 2014)

Profit 317.00 crores (31.12.2014)

Total assets 47028.80 crores(May 2014)

Number of

employees6084+

Website KARNATAKAbank.com

3.9 CURRENT POSITION OF KBL

Karnataka Bank is a major private sector banking institution based in the

coastal city of Mangalore in Karnataka, India. The Reserve Bank of India has

designated Karnataka Bank as an A1+-class scheduled commercial bank.

The bank now has a national presence with a network of some 670 branches

across 21 states and two Union territories. It has over 6084 employees and 6.7 million

customers, including farmers and artisans in villages and small towns throughout the

country. Its shares are entirely privately owned by some 1,29,862 shareholders.

The total business turnover of the Bank was 75,087 crore as on 31st

December 2014, an increase of 12.51Percent over the preceding year. The total assets

of the Bank increased from 41526.38 crore to 47028.80 crore recording a growth of

13.25Percent for the year 2013-14

Karnataka Bank has been striving to keep pace with advances in banking

technology by adopting core banking and Internet banking, and establishing its

"MoneyPlant" [900+ automated teller machine] system.

The bank has the Best Bank Award for "Managing IT Risk" under small bank

category for the year 2010-11, instituted by Institute for Development and Research in

Banking Technology (IDRBT). Shri Anand Sinha, deputy governor, Reserve Bank of



India and chairman, IDRBT presented the award to Shri P. Jayarama Bhat, managing

director at a function held in Hyderabad on 4 August 2011 in the presence of Shri B.

Sambamurthy, director, IDRBT.

In August 2008, Karnataka Bank received the Sun and NDTV Green IT

Award. Sun Microsystems and NDTV gave the award to in recognition of the bank's

"green policies" and use of earth-friendly technology such as solar power.

VISION

Bank is a professional managed with good track record of

customer loyalty and consistent profitability. The bank has the resilience to face the

new challenges successfully and achieve the goals in vision by its

management. Adopting ethical management practices, Bank reiterates its commitment

to national and social priorities, present financial and above of all else improve and

innovate to meet the challenges posed by a customer driven banking industry.

MISSION

The Miss ion s ta tement of any organiza t ion genera l ly

represent s i t s long term goals and strategies. Every organisation must

have its own mission, which describes present business scope of the

organisation. The mission statement of Karnataka Bank Ltd is as follows.“To be a

technology savvy, customer centric progressive bank with a n a t i o n a l

p r e s e n c e , d r i v e n b y t h e h i g h e s t s t a n d a r d s o f c o r p o r a t e

governance and guided by sound ethical values”.

Quality Policy

The Quality policy of Karnataka Bank Ltd is of providing Quick and Better

service and their by achieving Customer Satisfaction.

Corporate Goal



The Bank has envisaged to achieve a total business turnover of Rs. 28, 500

Crore, comprising of a deposit target of Rs. 17, 000 crore and advance

targe t of Rs . 1 ,500 Crore for the year ending March 31, 2 0 0 8 . T h e

B a n k i s c o n f i d e n t o f a c h i e v i n g t h e s a m e t h r o u g h

b e t t e r customer services and operational efficiency. Besides, the Bank has plans to

increase i t s to ta l number of bus iness uni ts to 580, by increas ing the

total number of branches to 430 and own ATM network to 150 by March2008

Office

The Head office of Karnataka Bank Ltd has a central air condition system

which helps the employees to escape from the heat of Mangalore City.

Canteen

The Bank provides canteen facility to all its employees and it is

situated inside the Bank premises.

System

T h e B a n k i s o n e o f t h e f e w b a n k s i n t h e c o u n t r y w h i c h

u s e s F i n i c a l S o f t w a r e w h i c h i n t u r n h e l p s t h e b a n k t o s e r v e

i t s c u s t o m e r s m o r e efficiently. The Bank also provides internet facility to its

employees.

THE BOARD OF DIRECTORS OF KARNATAKA BANK LTD.

Name Ananthakrishna

Designation

Chairman & CEO

S.R.Hedge Director

M.Sitarama Murty Director

D Harshendra Kumar Director

P Jayarama Bhat Managing Director

M Bheema Bhat Director

R.V Shastri Director



S.V.Manjunath Director

H Ramamohan Director

TECHNOLOGY OF THE BANK

Over the years, KARNATAKA Bank has focused on one task, one mission -

To Give You the Best in Services and In Products. Among other Banks, it was

KARNATAKA Bank which first realized the importance of having a Centralized

Banking System and was among the first to deploy the Core Banking System in the

year 2000. This system enabled bank to store and processes all the customers' accounts

from one single place - the Data Center at Bangalore. To ensure that customers have

the best, bank has deployed the State-Of-Art technology from the best players in the

Industry like Infosys, Sun and Wipro. These systems provide the highest reliability

thus enabling the bank to offer to the customers Non-Stop services of the highest

order. Bank has taken a lead and implemented a Disaster Recovery Center. This center

will replicate the Banks Centralized Banking system and all its data. This center will

also be the backup for the ATM operations. In the event of a natural disaster in

Bangalore, this center will immediately come into force and provide full continuous

service.

CORPORATE GOVERNANCE

Bank is committed to the best practices of corporate governance to protect the

interest of all the stakeholders of the bank, viz shareholders, depositors, customers and

employees and society at large and aims to maintain transparency at all levels.

SOCIAL INITIATIVES



As a responsible corporate citizen, it has been the vision of KARNATAKA

Bank to empower community through socio- economic development of the poorer

people in the society. As part of its Corporate Social Responsibility (CSR), initiatives,

the bank has been contributing its best for promotion of public interest by encouraging

community development by focusing on financial inclusion, rural development,

education, health care, housing, environment etc. The bank’s initiatives in this area are

channelled through institutions /organizations that specialize in these activities.

In pursuit of rural orientation, the bank has adopted Amasebail village in Udupi

district where it is acting as a channelizing and monitoring agency for the utilization of

funds by the beneficiaries. In line with its corporate mission, the bank attaches due

importance to ethics in business and obligations to the society. The bank has also

sponsored social awareness programmes like de-addiction programme aiming at social

amelioration .

3.10 TABLE SHOWING THE SWOT ANALYSIS OF KARNATAKA BANK

Karnataka Bank

Parent Company Karnataka Bank

Category Banking and Financial Services

Sector Banking and finance

Tagline/ Slogan Your family bank across India

USP Customer centric services

STP

Segment Individual and Industry banking

Target Group Urban Sector

Positioning Complete Banking solutions

SWOT Analysis

Strength 1. Over 670 branches across 21states and 2 Union

Territories



2. Emphasis on customer satisfaction

3. Has over 6087employees and 6.7 million customers,

including farmers and artisans in villages and small

towns throughout the country

4. Quick Remit, a facility to make money transfer easy

for Non-Resident Indians living in Canada, USA and the

UK

Weakness

1. Less reach across country in terms of ATM’s,

branches as compared to bigger banks

2. Brand visibility is less due to lack of advertising

Opportunity

1. International banking in areas with good pockets of

Indian population

2. Rural banking and more services for the rural areas

Threats

1. Economic slowdown

2. Highly competitive environment

3. Stringent Banking Norms

Competition

Competitors

1. Indian bank

2. Union Bank of India

3. Federal bank

4. Dhanalakshmi Bank

5. Lakshmi vilas Bank

6. Karur Vysya Bank .

Other way of SWOT analysis of bank:

The SWOT analysis is an extremely useful tool for understanding and

decision-making for all sorts of situations in business and organizations. SWOT is an

acronym for Strengths, Weaknesses, Opportunities, Threats. SWOT analysis is perfect



for business planning, strategic planning, competitor evaluation, marketing, business

and product development and research reports. The SWOT analysis enables companies

to identify the positive and negative influencing factors inside and outside of a

company or organization.

This sample SWOT analysis for Karnataka Bank can provide a competitive

advantage.

Strengths

-Domestic market

-Experienced business units

-Monetary assistance provided

Weaknesses

-Tax structure

Opportunities

-New markets

-Growing demand

-Global markets

-Venture capital

-Growing economy

-New acquisitions

Threats

-Price changes

-Increase in labor costs

-Government regulations

3.11 PRODUCTS AND SERVICES OFFERED BY KARNATAKA BANK

The well devised range of products and services of the Karnataka Bank include:

Personal Banking



Savings Bank Accounts

Current Accounts

Moneyplant ATMs

Deposit Products

Loans

- Vidyanidhi Education loan scheme

- Car finance scheme

- Apna Ghar home loans

- Varthak loans

- Scheme for salaried persons

- Easy ride

- Udyog mithra

- Krishi card

- K-Power

- Niveshan loans

VISA Debit Card

Business Banking

Working Capital Finance

Term Loans

Infrastructure Finance

Fund based and non-fund based Business Finance Products

Insurance Services

Life insurance products of MetLife India Insurance Co. Pvt. Ltd.

General Insurance products of Universal Sompo General Insurance Co. Ltd.

Internet Banking

Retail Customers - balance enquiry, recording stop-payment instructions,

balance transfer instructions, requests for Cheque books, account opening,

payment of BSNL Mobile, Water bills, Electricity.



Corporate Clients -

Import/ Export Credit facilities, Inland Trade, Requests for Forward Contracts,

corporate account, Bank Guarantee

Cyberkids (special facility for 12-18 years old kids)

Money Transfer

Real Time Gross Settlement (RTGS)

Western Union Money Transfer (WUMT)

NEFT-Customers Facilitation Centres

NRI Banking

Forex Facilities for Residents (Individuals) and Non Resident Indians (NRIs)

Other Services

In August 2008,the Karnataka Bank introduced Quick Remit, a facility to make

money transfer easy for Non-Resident Indians living in Canada, USA and the UK. The

bank also runs a 24-hour Internet banking service called Money click.

Karnataka Bank offers multi-branch banking, deposit schemes as Abhyudaya

cash certificate, fixed deposits, ready money deposit, Soulabhya deposit, cumulative

deposit, Platinum lakhpathi, insurance linked savings bank deposit, K-Flexi deposit,

resident foreign currency (domestic) account, NRI services, Senior Citizens Deposit

Scheme and loan schemes as Vidyanidhi education loans, Apna ghar home loans, car

finance scheme, Varthak loans, Easy ride, Scheme for salaried persons, Udyog mithra,

Niveshan loans, Krishi card, K-Power, Lease ‘n’ Encash, Suvarna Nidhi, InstaCash

and VahanaMitra.

THE SERVICES PROVIDED BY THE KARNATAKA BANK LTD.

(a) LOANS



1. KBLVIDYANIDHI (Education Loan Scheme)

2. KBL EASY RIDE (For Two Wheelers)

3. KBL CAR FINANCE (For New and Second Hand Cars)

4. VAHANA MITHRA (Finance for Commercial Vehicle)

5. KBL VARTHAK (Loan Scheme for Traders)

6. KBL UDYOG MITHRA (Loan Scheme for Professionals)

7. KBL Salaried Persons Loan (Scheme for Financing Salaried persons)

8. K-POWER (Personal Loans)

9. KBL INSTA CASH (For Consumption Purposes)

10. KBL APNA GHAR (Home Loan)

B) DEPOSITS

1. Tax Planner: New tax saving deposit Schemes

2. Abhyudaya Cash Certificate: A growth oriented scheme with maximum returns

3. Fixed Deposits: A high interest deposit scheme

4. Soulabhya Deposit: A flexible 'twin gain' Deposit Scheme

5. Cumulative Deposit: A monthly deposit scheme

6. Insurance linked Savings Bank Deposit: Free accident insurance coverage

7. Resident Foreign Currency (Domestic) Account

8. NRI Services: Wide range of Deposit schemes for Non-Resident Indians

9. Senior Citizens Deposit Scheme: Respecting our elders

(C) INSURANCE

1) Life insurance with MetLife India Insurance Co. Ltd., an affiliate of MetLife, the 140

year old, largest life insurance company in the USA.

2) General insurance with Universal Sompo General Insurance Co.

(D) MUTUAL FUNDS

M/s Franklin Templeton Asset Management India (P) ltd

M/s Tata Asset Management Ltd

M/s ICICI Prudential Asset Management Company Ltd.



(E) DEMAT SERVICES

(F) FUNDS TRANSFER SERVICES WITH WESTERN UNION MONEY

TRANSFER

ATM services (Visa classic Debit Card, Visa Gold Debit Card, and Student prepaid

card)

(G)MOBILE BANKING SERVICES

3.12 AWARDS AND ACHIEVEMENTS OF KARNATAKA BANK

"ABP News - BFSI [Banking Financial Services & Insurance] Best Bank Award"

under the Category of Private Sector Banks.

"Federation of Indian Export Organisations [FIEO] Southern Region Excellence

Award 2012-13" under the category of Best Performing Financial Institution,

Southern Region, for its excellent export performance during the year 2012-13.

"Runner Up" of ASSOCHAM Social Banking Excellence Award 2013 under the

"Private Sector Banks Category".

Sunday Standard FINWIZ -2013 Best Bankers Awards under the following 3

categories:

1. Best Bank for Customer Friendliness under the category of Midsized Banks.

2. Best Banker for Customer Orientation under the category of Private Sector Banks

3. Best Banker for HR under the category of Private Sector Banks

IDRBT Banking Technology Excellence Awards 2012-13 among Small Banks,

under the following categories

1. Best Bank Award for Managing IT Risks

2. Best Bank Award for use of IT for business innovation



IBA Banking Awards

1. 2nd Runner-up under Best Financial Inclusion Initiative

2. 2nd Runner-up under Best Risk Management and Facility Initiative

Runner-up national award for the BEST BANKER FOR CUSTOMER

FRIENDLINESS among the midsized Banks

Other Awards

2009 – Karnataka Bank has joined hands with HMT Ltd for financing purchase

of tractors and the finance will be extended under bank's 'KBL – HMT Sarathi'

scheme.

2010 – Karnataka Bank Ltd has received a special award for use of 'IT

(information technology) for internal effectiveness' for 2009.

2011 – Karnataka Bank offers Online Trading Services in alliance with

Way2Wealth Brokers Pvt. Ltd.

2012 – Karnataka Bank receives National Award for being the best banker

among middle–sized banks in customer friendliness.

Karnataka Bank receives I.B.A. Banking Technology Awards 2011.

Karnataka Bank Bags Two I.B.A. Awards.

Karnataka Bank launches Current & Savings Accounts campaign.

Karnataka Bank introduces revised Kisan Credit Card scheme for farmers.

Karnataka Bank bags IBA Banking Technology Award 2012–13

2013 – Best Bankers Awards Social Banking Excellence Award 20132nd

Runner–up under Best Financial Inclusion Initiative2nd Runner–up under Best



Risk Management and Facility Initiative BFSI [Banking Financial Services &

Insurance] Best Bank Award .

CHAPTER 4

ANALYSIS AND INTERPRETATION OF DATA

The analysis of data is like heart of project. It involves skilled task, after

collecting research data, it is necessary to analysis and interpret them analysis comes

before interpretation. But these two are interviewed that they cannot be regarded as

two separate operations, it depends upon researchers own judgment and skills, both

qualitative and quantitative aspects are used, % were intensively used, for this purpose

questionnaires was prepared on basis of information obtained the analysis and

interpretation is done.

The project was basically focused on studying the customer satisfaction and

services provided by State Bank of Mysore(SBM) and Karnataka Bank limited(KBL)

in tumkur city. The report is presented in a comprehensive manner so that reader can

get quick view about the outcomes of this project in terms of data analysis and

interpretation.

Data has been collected through several customers belonging to tumkur city.

The collected data has been processed and analyzed according to the outline defined in

research methodology chapter.

The Microsoft excel software was used for this analysis, data was presented in

tabular form, graphical and narrative forms, in analyzing the data , descriptive

statistical tools such as column graph, line graph, bar graph, and area graph etc.



Table 4.1: Gender wise Classification of Respondents

Gender State bank of Mysore Karnataka bank

Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Male 38 63 35 58

Female 22 37 25 42

TOTAL 60 100 60 100

Source: Survey Data

Table 4.1 says, the Sample size is comprised of 120 respondents [60

respondents from State Bank of Mysore (SBM) and 60 respondents from Karnataka

Bank Limited (KBL)] out of 60 respondents of SBM 63 percent are male and 37

percent are female respondents, And 58 percent of male and 42 percent of female

respondents of KBL.

From this we can understand that male respondents are more compared to female

respondents in both SBM and KBL.



MALE FEMALE

63

37

58

42

% of respondents SBM % of repondents KBL

Graph 4. 1: Gender wise Classification of Respondents

Table 4.2: Age Group of Respondent

Age

(years)

State Bank of Mysore Karnataka Bank

Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

18-25 22 37 15 25

26-35 8 13 11 18

36-40 7 12 10 17

Above 40 23 38 24 40

TOTAL 60 100 60 100

Source: Survey Data

Table 4.2 shows the distribution of respondents on the basis of their age in

which majority of customers or account holders belongs to the age group of Above 40

years for both the banks. i.e SBM have 38 Percent of customers and KBL have

40Percent of customers. Similarly 37 Percent , 13 Percent , and 12 Percent , of SBM

and 25 Percent , 18 Percent , and 17 Percent , of KBL, who belongs to the age group of

18-25 , 26-35 , 36-40 , respectively



SSLC PUC UG PG

37

13 12

38

25

18 17

40

Age% of respondents SBM % of repondents KBL

Table 4.2: Age Group of Respondent

Table 4.3: Educational Qualification of Respondents

Education State Bank of Mysore Karnataka Bank

Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

SSLC 8 13 6 10

PUC 10 17 11 18

UG 15 25 21 35

PG 14 23 16 27

Proffesional

education

13 22 6 10

TOTAL 60 100 100

Source: Survey Data

Table 4.3 gives the description of respondents qualification , Graduates or

degree holders are more 25 Percent of SBM and 35 Percent of KBL. Followed by 23

Percent, 22 Percent, 17 Percent, and 13 Percent, of SBM for PG, Proffesional

education, PUC and SSLC. In the same way 27 Percent, 18 Percent, 10 Percent, and

10 Percent, of KBL for PG, PUC and Proffesional education and others respectively.



SSLC PUC UG PG Proffesional education0

5

10

15

20

25

30

35

13

17

2523 22

10

18

35

27

10

% of Respondents SBM % of Respondents KBL

Graph 4.3: Educational Qualification of Respondents

Table 4.4: Occupation Group of Respondents

Occupation State Bank of Mysore Karnataka Bank

Number of

Respondents

% of

Respondents

Number of

Respondent

s

% of

Respondents

Government

Employee

16 27 11 18

Private Employee 12 20 14 23

Businessman 7 12 15 25

Others

(Student and

Home maker)

25 41 20 34

TOTAL 60 100 60 100

Source: Survey Data

Table 4.4 indicates that students and home maker are use more banking

services 41 Percent of SBM and 34 Percent of KBL, and followed by 27 Percent,

20Percent, and 12Percent, of SBM for Government employee, Private employee,

Businessman. In the same way 25 Percent, 23 Percent, and 18 Percent, of KBL for



Businessman, Private employee, Government employee, respectively. As the reason,

in both SBM and KBL bank offers facility to open Zero balance account. And also

Government employee preferred SBM compare to KBL because they concentrate

safety on deposits in nationalized banks compare to private bank. And Businessman

prefer Karnataka bank compare to SBM because KBL provides more number of loans,

overdraft facilities through easily procedure compare to SBM.

Government Employee Private Employee Businessman Others(Student and Home maker)

2720

12

41

1823 25

34

Occupation% of Respondents SBM %of Respondents KBL



Graph 4.4: Occupation Group of Respondents

Table 4.5: Income-Wise Categorization of the Respondents

Income

(in rupees)


Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Up to ₹

100000

24 40 17 28

100000-

300000

22 37 21 35

300000-

500000

10 17 17 28

More than

500000

4 6 5 9

TOTAL 60 100 60 100

Source: Survey Data

Table 4.5 indicates that income level of below 100000 customers are use more

banking services in SBM. But income level of 100000-300000 customer are use more

banking services in KBL. And more than 500000 income level of customers are least

% 6Percent and 9Percent in SBM and KBL. As the reason that medium income level



of respondents choose use of banking services in SBM compare to KBL in tumkur

city.

Up to 100000 100000-300000 300000-500000 more than 5000000

5

10

15

20

25

30

35

40

4037

17

6

28

35

28

9


Graph 4.5: Income Categorization of the Respondents

Table 4.6: Type of Account hold in a Bank of the Respondents

Type of Account State Bank of Mysore Karnataka Bank

Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Savings account 52 87 39 65

Current account 3 5 9 15

Fixed deposits

account

5 8 10 17

Others 0 0 2 3

TOTAL 60 100 60 100

Source: Survey Data

Table 4.6 deficits that Savings account holders are more in both SBM and KBL

of 87 Percent and 65 Percent. Followed by 8 Percent, 5 Percent, of SBM for fixed

deposits account and current account. In the same way 17 Percent, 15 Percent, and 3

Percent, of KBL for Fixed deposits account, Current account and others respectively.

Because all the majority of customers are open savings bank account to save the



money and get more interest on deposits, that’s why both SBM and KBL having more

Savings account holders.

Savings account Current account Fixed deposits account Others0

10

20

30

40

50

60

70

80

90

% of Respondents SBM % of Respondnts KBL

Graph 4.6: Type of Account hold in a Bank of the Respondents

Table 4.7: Period of holding Bank Account

Months/Years State Bank of Mysore Karnataka Bank

Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Less than 6

months

5 8 1 2

6 months to less

than 1 year

7 12 2 3

1 year to less than

3 year

11 18 20 33

3 year to less than

5 year

13 22 21 35

5 years or more 24 40 16 27

TOTAL 60 100 60 100

Source: Survey Data



Table 4.7 says that the customers are having account up to 5 years or

more(40Percent) in SBM compare to the customers having account 3years to lessthan

5years (35Percent) in KBL. As the reason is that SBM was old public sector bank and

it is associate bank of SBI, it was open in the year 1913, as its celebrates centenary

year in 2013. and KBL is the private sector bank and it was established in 1924, that’s

why SBM is having more number of old customers, to satisfy their needs.

Less than 6 months 6 months to less than 1 year

1 year to less than 3 year

3 year to less than 5 year

5 year or more

8

12

18

22

40

2 3

3335

27

% of Respondnts SBM % of Respondents KBL

Table 4.8: Respondents opinion on the services provided by their Bank

Particulars State Bank of Mysore Karnataka Bank

Number of

Respondent

s

% of

Respondents

Number of

Respondents

% of

Respondents

Yes 50 83 50 83

No 10 17 10 17

TOTAL 60 100 60 100

Source: Survey Data

From the above the table shows that out of 120 respondents for both the banks

says that SBM and KBL is Satisfied all banking needs to 50 respondents from each

bank i.e 83 Percent. And only (17Percent) 10 respondents says that SBM and KBL



does not satisfied their banking needs, so we understand that majority of customers are

satisfied with services provided by SBM and KBL in tumkur city.


83 83

17 17

Yes No

Graph 4.8: Respondents opinion on the services provided by their Bank

Table 4.9: Facilities given more importance by banks

Facilities State bank of Mysore Karnataka bank

Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Loan facilities 13 22 12 20

Overdraft facilities 4 6 10 17

ATM facilities 34 57 30 50

Others 9 15 8 13

TOTAL 60 100 60 100

Source: Survey Data

Table 4.9 clears that ATM facilities is given more importance in both the banks

i.e 57 Percent of SBM and 50 Percent of KBL, followed by 22 Percent, 15 Percent,



and 6 Percent, of SBM for Loan facilities, Overdraft facilities, and others facilities

respectively, in the same way 20 Percent, 17 Percent, and 13 Percent, of KBL for Loan

facilities, Overdraft facilities and others banking facilities etc. as the reason that

majority of the customers are draw the money in ATMs, that’s why ATM facilities is

more importance for each bank customer.

Loan facilities

Overdraft facilities

ATM facilities

Others

22

6

57

15

20

17

50

13

% of Respondents KBL % of Respondents SBM

Graph 4.9: Facilities given more importance by banks

Table 4.10: Interest Rates provided by Banks on Deposits

Rate of

interest


Number of

Respondent

s

% of

Respondents

Number of

Respondents

% of

Respondents

3%-5% 17 28 8 13

5%-7% 12 20 21 35

7%-9% 25 42 18 30

Above 9% 6 10 13 22

TOTAL 60 100 60 100

Source: Survey Data



Table 4.10 understand that SBM and KBL is providing different interest rates

on deposits, SBM is providing more interest rate to customers i.e 7Percent-9Percent

for 42Percent of respondents and KBL is providing interest rate to customers i.e

5Percent-7Percent for 35Percent of respondents. As it says that SBM is providing

more interest rate on deposits compare to KBL from above the table.

3%-5% 5%-7% 7%-9% Above 9%0

5

10

15

20

25

30

35

40

45

% of Respondents SBM% of Respondents KBL

Graph 4.10: Interest Rates provided by Banks on Deposits

Table 4.11: Respondents satisfied with the interest rate provided by the bank


Number of

Respondent

s

% of

Respondents

Number of

Respondents

% of

Respondents

Yes 41 68 52 87

No 19 32 8 13

TOTAL 60 100 60 100

Source: Survey Data



From above the table it clearly understand that respondents or customer of both

the banks are satisfied with the interest rate provided by the bank i.e 68 Percent and 87

Percent of SBM and KBL. And remaining 32 Percent and 13 Percent of customers of

SBM and KBL does not satisfied with the interest rate provided by the bank. As the

reason is that they expect more interest rate on deposits.

% of Respondents SBM % of Respondents KBL0

10

20

30

40

50

60

70

80

90

100

6887

32

13

Yes No

Graph 4.11: Respondents satisfied with the interest rate provided by the bank

Table 4.12: Respondents taken any loan from bank


Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Yes 22 37 26 43

No 38 63 34 57

TOTAL 60 100 60 100

Source: Survey Data



Table 4.12 deficits that majority of the customers in both the banks does not

take any loan from bank i.e 63 Percent of SBM and 57 Percent of KBL, only 37

Percent and 43 Percent of SBM and KBL customers are taken loan from bank, as the

reason that majority of customers are to avoid credit from bank because they think

bank charges high interest rate on loans.

% of Respondents SBM % of Respondnts KBL

37 43

63 57

Yes No

Graph 4.12: Respondents taken any loan from bank

Table 4.13: Purpose of taken loan

Purpose SBM KBL

Number of

Respondents

Number of

Respondents

Housing loan 3 8

Vehicle loan 6 4

Educational loan 8 6

Personal loan 5 8

TOTAL 22 26

Source: Survey Data



From the Table 4.13 shows that only 22 respondents are taken loan from SBM

in that 8 respondents are taken educational loan, 6 respondents are taken vehicle loan,

and 5 respondents are taken personal loan, and least only 3 respondents are taken

housing loan in SBM. In the same way out of 26 respondents majority of respondents

(8) taken housing loan and personal loan,followed by 6 and 4 respondents for

educational and vehicle loan in KBL.

ParticularsHousing

loan Vehicle loan Educational loan Personal

loan TOTAL

0

5

10

15

20

25

30

Graph 4.13: Purpose of taken loan

Table 4.14: Respondents satisfied with the interest rate charged by the bank for

loan


Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Yes 20 91 20 77

No 2 9 6 23

TOTAL 22 100 26 100



Source: Survey Data

Table 4.14 clears that 91Percent and 77Percent of customers are satisfied with

the interest rate charged by the bank for loan in both the banks. And 9Percent and

23Percent of SBM and KBL customers are not satisfied with the interest rate charged

by the bank for loan, as the reason is that they expected to reduce the interest rate for

loan.


10

20

30

40

50

60

70

80

90

100

9177

923

Yes No

Graph 4.14: Respondents satisfied with the interest rate charged by the bank for

loan

Table 4.15: Services are used by Respondents through an ATM


Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Cash withdrawal 49 82 42 70

Bills payment 2 3 4 8

Cash deposits 5 8 7 12

Accounts transfer 3 5 7 12

Others 1 2 0 0



TOTAL 60 100 60 100

Source: Survey Data

Table 4.15 shows that majority of the respondents or customers use cash

withdrawal services through an ATM , in both the banks i.e 82 Percent of SBM and

70Percent of KBL customers. Followed by 8Percent, 5 Percent, 3 Percent, and 2

Percent, of SBM for cash deposits, accounts transfer, bills payment and others

respectively, in the same way 12 Percent, 12 Percent, and 8 Percent, of KBL for cash

deposits, accounts transfer and bills payment etc, as the is that more number of

customers wants to draw the money in ATM easily, instead of going to bank and

withdraw the money through cheques, ATMs provides 24 hours in a day and 365 days

in a year gives services to customers.

Cash withdrawel Bills payment Cash deposits Accounts transfer Others0

10

20

30

40

50

60

70

80

90


Graph 4.15: Services are used by Respondents through an ATM

Table 4.16: The Problems faced by Respondents while using an ATM


Number of

Respondent

s

% of

Respondents

Number of

Respondents

% of

Respondents

The number of ATM

is not enough

9 15 13 22



The maximum

withdraw amount is

limit

22 36 14 23

ATM working too

slowly

4 7 6 10

ATM not able to

print slip when

demanded

4 7 11 18

No any problem 21 35 16 27

TOTAL 60 100 60 100

Source: Survey Data

Table 4.16 reavels that the maximum number of customers are facing the

problem while using the ATM is “the maximum withdraw amount is limit” in SBM

ATMs, customers are expect more amount to withdraw in ATMs. And majority of

respondents says “No any problems” are facing while using an ATM in KBL ATMs.

So we understand that the KBL ATMs provides good service compare to SBM ATMs

in tumkur city.



The number of ATM is not enough

The maximum withdraw amount is limit

ATM working too slowly

ATM not able to print slip when demanded

No any problem

0 5 10 15 20 25 30 35 40

% of Respondnts KBL% of Respondents SBM

Graph 4.16: The Problems faced by Respondents while using an ATM

Table 4.17: Types of services are provided through mobile banking




Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

SMS alerts 43 72 38 63


Booking ticket 7 12 6 10

Know the cheque

details

2 3 5 9

Mobile recharge 2 3 6 10

Others 3 5 3 5

TOTAL 60 100 60 100

Source: Survey Data

Table 4.17 tells that SBM provides SMS alerts services to 72 Percent of

customers and KBL also provides SMS alerts services to 60 Percent of customers

through mobile banking. And KBL provides least bills payment services to 3 Percent

of customers and SBM also provides least mobile recharge and know the cheque

details services to 3Percent of customers out of 100 Percent. As the reason is that SMS

alerts is very important for every customer in a bank because banks provides services

in order to customer withdraw money in ATMs and cash deposited in a bank, through

sending SMS information to customers mobile phones.



SMS alerts

Bills payment

Booking ticket

Know the cheque details

Mobile recharge

Others

0 10 20 30 40 50 60 70 80

% of Respondents KBL% of Respondnts SBM

Graph 4.17: Types of services are provided through mobile banking

Table 4.18: Services are provided through internet banking




Number of

Respondents

% of

Respondents

Number of

Respondent

s

% of

Respondents


Fund transfer 18 30 15 25

Online trading 12 20 7 12

Ticket booking 9 15 10 17

Others 6 10 8 13

TOTAL 60 100 60 100

Source: Survey Data

Table 4.18 deficits that 33 Percent of respondents use bills payment services

through internet banking by KBL followed by 25 Percent, 17 Percent, 13 Percent, and

12 Percent, of KBL for fund transfer, Ticket booking, online trading, and other

services. In the same way 30Percent of respondents use Fund transfer services through

internet banking by SBM followed by 25 Percent, 20 Percent, 15 Percent, and 10

Percent, of SBM for Bills payment, Online trading, Ticket booking, and others

respectively, so we can say that majority of SBM customers are use Fund transfer

services and KBL customer are use more Bills payment services through internet

banking.

Bills payment

Fund transfer

Online trading

Ticket booking

Others

25

30

20

15

10

33

25

12

17

13

% of Respondnts KBL % of Respondents SBM

Graph 4.18: Services are provided through internet banking



Table 4.19: Charges for not maintaining minimum balance in the account


Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Yes 37 62 30 50

No 23 38 30 50

TOTAL 60 100 60 100

Source: Survey Data

From the Table 4.19 we can understand that majority of the customers are says

SBM is charging amount for not maintaining minimum balance in the account

(62Percent) and 38 Percent of SBM customers says does not charge any amount for

not maintaining minimum balance in the account, but KBL customers says 50:50

percent for charging and not charging amount for maintaining minimum balance in the

account. So compare to SBM the KBL is best because not charging so much amount

for not maintaining minimum balance also.

% of Respondents SBM % of Respondnts KBL0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

6250

3850

Yes No

Graph 4.19: Charges for not maintaining minimum balance in the account



Table 4.20: Use of the service of Alternative bank


Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Yes 29 48 26 43

No 31 52 34 57

TOTAL 60 100 60 100

Source: Survey Data

From the Table 4.20 it clears that more number of customers are not use

service of Alternative bank in both SBM (52Percent) and KBL (57Percent) and

remaining 48 Percent (SBM) and 40 Percent (KBL) customers are use the services of

alternative bank, as the reason that the customers are depends purely on services

provided by those who are having account in their respective banks.

% of Respondnts SBM % of Respondents KBL0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

48 43

52 57

Yes No

Graph 4.20: Use of the service of Alternative bank

Table 4.21: Respondents opinion on overall services quality of banks




Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Excellent 5 8 18 30

Very good 15 25 8 13

Good 37 62 22 37

Average 3 5 9 15

Poor 0 0 3 5

TOTAL 60 100 60 100

Source: Survey Data

Table 4.21 inferred that SBM and KBL customers says Good regarding overall

services quality of bank i.e SBM (62Percent) KBL (37Percent) followed by 25

Percent, 8 Percent, and 5 Percent, of SBM for Very good, Excellent, and Average and

No customer says Poor regarding overall service quality of SBM bank. In the same

way 30 Percent, 15 Percent, 13 Percent and 5 Percent, of KBL for Excellent, Average,

Very good, and 5Percent customers says Poor services quality of KBL bank. So we

can understand that SBM customers are more satisfied with overall service quality of

bank compare to KBL customers.

Excellent Very good Good Average Poor

8

25

62

5

0

30

13

37

15

5


Graph 4.21: Respondents opinion on overall services quality of banks



Table 4.22: When you think of your bank what comes first in your mind


Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Customer service 29 48 25 42

Personalized

service

3 5 11 18

Wide branch

network

19 32 13 22

Computerized

banking

9 15 9 15

Others 0 0 2 3

TOTAL 60 100 60 100

Source: Survey Data

Table 4.22 understand that majority of customers says customer services comes

first in mind providing services of both SBM (48Percent) and KBL (42Percent) and

says wide branch network service comes first in mind (32Percent) of SBM and

(22Percent) of KBL and some customers says computerized banking services comes

first in mind provided by both SBM and KBL (15Percent each) and some remaining

customers says personalized services 18 Percent of KBL and 5 Percent of SBM. So we

can understand that both SBM and KBL customers prefers customer services comes

first in mind because excellent customer services is very important for any bank

customers.



Customer service

Personalized service

Wide branch network

Computerized service

Others

0 5 10 15 20 25 30 35 40 45 50

48

5

32

15

0

42

18

22

15

3

% of Respondents KBL % of Respondents SBM

Graph 4.22: You think of your bank what comes first in your mind



Table 4.23: Would you Recommend this bank to your Friends, Relatives, etc


Number of

Respondents

% of

Respondents

Number of

Respondents

% of

Respondents

Yes 49 82 54 90

No 11 18 6 10

TOTAL 60 100 60 100

Source: Survey Data

Table 4.23 easily clears that 82Percent and 90Percent of customers of both

SBM and KBL says to recommend this banking services to friends relatives etc. and

remaining 18Percent and 10Percent of customers says does not recommend this

banking services to friends, relatives etc. so we can understand the above table is that

majority of both bank customers are highly satisfied with banking services that’s why

they recommend these banks to their friends, relatives etc.


10

20

30

40

50

60

70

80

90

100

8290

1810

Yes No

Graph 4.23: Would you Recommend this bank to your Friends, Relatives, etc



4.24: Table showing the rate of the following services provided by bank as per

preference

Particulars STATE BANK OF

MYSORE

MORE

PREFERED

MODERATE LESS

PREFERED

TOTAL

ATM

Service

44 15 1 60

Internet

Banking

10 28 22 60

Mobile

Banking

18 20 22 60

De-Mat

Service

3 18 39 60

Core-

Banking

6 20 34 60

Source: Survey Data

Table 4.24 describes that most of the respondents preferred ATM services of

SBM (44) because of its wide range network available in many places like in small

towns and villages also. And very less preferred De-mat service of SBM (39) because

customers are not open any De-mat account in SBM and do not buying and selling of

shares through De-mat service by SBM.



ATM Ser

vice

Internet B

anking

Mobile Banking

De-Mat S

ervice

Core-Bankin

g

0

5

10

15

20

25

30

35

40

45

STATE BANK OF MYSORE MORE PREFERED STATE BANK OF MYSORE MODERATE STATE BANK OF MYSORE LESS PREFERED

4.24: Graph showing the rate of the following services provided by bank as per

preference



4.24 A: Table showing for Karnataka bank

Particulars KARNATAKA BANK

MORE

PREFERED

MODERATE LESS

PREFERED

TOTAL

ATM

Service

44 15 1 60

Internet

Banking

16 28 16 60

Mobile

Banking

13 29 18 60

De-Mat

Service

6 15 39 60

Core-

Banking

6 28 26 60

Source: Survey Data

From above the table shows that majority if the customers preferred ATM

service of KBL (44) and customers are moderate satisfies with mobile banking,

internet banking, core-banking, because core-banking service is a most important

factor while doing transaction in the banks, core-banking service of KBL is good and

accepted by customers. And KBL customers also less preferred towards De-mat

service provided by Karnataka bank.



ATM Se

rvice

Internet B

anking

Mobile Bankin

g

De-Mat S

ervice

Core-Bankin

g

0

5

10

15

20

25

30

35

40

45

KARNATAKA BANK MORE PREFERED KARNATAKA BANK MOD-ERATE KARNATAKA BANK LESS PREFERED

4.24 A: Graph showing the rate of the following services provided by bank as per

preference



Table 4.25: Name of Bank in which customer is respond

Bank Name Number of

Respondents

% of Respondents

State Bank of Mysore 60 50

Karnataka Bank 60 50

TOTAL 120 100

Source: Survey Data

Table 4.25 shows that equal respondents are taken from both the banks

50Percent from each bank SBM and KBL which helps in the research to know the

satisfaction level of respondents.

Number of respondents Percentage of respondents44

46

48

50

52

54

56

58

60

62

State bank of MysoreKarnataka bank

Graph 4.25: Name of Bank in which customer is respond



CHAPTER-5

SUMMARY OF FINDINGS AND CONCLUSION

This chapter puts together all the information gathered from the first four

chapters. The objectives, literature reviewed, the methodology and the data analyzed

in the previous chapters.

The analysis and interpretation of data gives some important findings. The study found

that there is a significance difference exists between both banks. The main findings of

the study conducted disclosed below:

1. From the study it was found that 48 Percent respondents are saying the reason

to choose the services of the SBM bank is because they are good in effective

customer service.

2. 32 Percent respondents to choose the SBM bank is because the bank is

providing wide branch network to the customers.

3. The income level of the respondents who are having an account in SBM bank

falling under the income level of below Rs.1 Lakh Yearly.

4. The age group of Above 40 years respondents mostly is having an account in

SBM bank.

5. The male gender is mostly having an account in SBM bank.

6. Many of respondents to choose savings account in SBM bank.

7. Majority of the respondents are having account Five years or more in SBM

bank , because SBM is a old public sector bank.

8. Most of respondents taking Educational loan through SBM bank, because they

satisfied with interest rate charged by SBM.

9. Many of the respondents are not aware of the many services rendered by the

SBM bank. The few are deposit of cash in ATM, end of the day balance in

mobile, etc.

10. Some of the respondents to choose the KBL bank is because the bank is more

reliable to the customers.

11. Many of the respondents are saying the reason to choose the services of the

KBL bank is because they are good in efficient customer service and efficient

complaint handling.



12. The income level of the respondents who are having an account in KBL bank

falling under the income level of Rs. 1 – 3 Lakhs Yearly.

13. The age group of Above 40 years respondents mostly is having an account in

KBL bank.

14. The male gender is mostly having an account in KBL bank.

15. Majority of the respondents are having account 3 years to less than 5 years in

KBL bank .

16. Most of respondents taking Housing loan and Personal loan equally through

KBL bank, because they satisfied with interest rate charged by KBL.

17. Both the banks gives more importance to ATM facilities to the customers of

SBM and KBL.

18. KBL customers are more satisfied with the interest rate provided on bank

deposits compare to SBM customers.

19. SBM customers are most satisfied with the interest rate charged on bank loan

compare to KBL customers.

20. Both the banks customers use more cash withdrawal services through an ATM

compare to other services.

21. Most of the SBM customers are faced problem through an ATM is “the

maximum withdraw amount is limit.” But KBL customers are not faced any

problem through an ATM from the above study.

22. SBM is charging nominal amount for not maintaining minimum balance in the

account to the customers, but KBL is not charging any amount even Zero

balance in the account.

23. Many of the respondents are not aware of the many services rendered by the

KBL bank. The few are deposit of cash in ATM, request for cheque book in

ATM, end of the day balance in mobile, etc.

24. SBM and KBL customers would recommend this banking services to their

friends, relatives, etc.



CONCLUSION

Customers now days are not only exposed of what type of service is being

provided by banks in India but in the world as a whole. They expect much more than

what is actually being provided. So the now coming days SBM and KBL bank have to

provide and cater to all the needs of the customers otherwise it is difficult to survive in

the competition coming up.

They not only expect the safety of money but also best ways to invest that

money which need to be fulfilled. SBM and KBL bank need to have a better outlook

towards to actually what customers are requiring. Entries of the private sector banks

have made the competition tougher. If a bank is not functioning properly it is being

closed. So it is difficult to face these types of conditions. Here a simple philosophy can

work that customers are God and we need to follow this to survive and serve better.

The SBM and KBL bank are poised for explosive growth. In this, scenario, it is

imperative that banks adopt technology at an aggressive Pace, if they wish to remain

competitive. Money makes a case for these banks to outsource their technology

infrastructure requirement, thus enabling early adoption and increased efficiencies

In the prevailing scenario, a number of banks have adopt a new development

strategy of infrastructure outsourcing, to lower the cost of service channels. As a

result, other banks too will need to align their reinvented business models. The

required changes at both the business and technology levels are enormous. In a highly

competitive banking market ,early adopters are profiting from increased efficiencies.

It can also be concluded that SBM customers are more satisfied towards

various services offered by SBM, when compare to KBL customers of tumkur city.

Because SBM is one of the major public sector or nationalized bank, it is one of the

associate bank of SBI, it is owned and managed by government. But KBL is also

major private sector bank, it is owned and managed by private people or owners, here

no government interference.

Now a days bank customers are look safety on money deposited in a bank,

money safety is more in SBM because in case of bank is closed or winds up the



government is take responsibility to give back amount of deposits to customers. But in

KBL money safety is less compare to SBM, because in case of bank is closed or winds

up the owner or private people may or may not be given back deposits amount to

customers. So that’s why majority of bank customers preferred to open account or

deposits money or doing any bank transaction in public sector or nationalized banks.

CHAPTER-6

SUGGESTIONS

After conducting a study on customer satisfaction and services. The researcher has

identified some facts based on questionnaires and interview. This may help to increase

satisfaction level of customers based on proceedings.

a) Banks should obey the RBI norms and provide facilities as per the norms,

While the customer must be given prompt services and the bank officer should

not have any fear on mind to provide the facilities as per RBI norms to the

units going sick.

b) Banks should increase the interest rate of saving account.

c) Banks should provide loan at the lower interest rate and education loans should

be given with ease without much documentation. All the banks must provide

loans against shares.

d) Fair dealing with the customers. More contribution from the employee of the

bank. The staff Should be co-operative, friendly and must be capable of

understanding the problems of customers.

e) Internet banking facility must be made available to customer free of cost in

both banks.

f) Prompt dealing with permanent customers and speedy transaction without

arassing the customers.

g) Each section of both banks should be computerized even in rural areas also.

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

i) No limit on cash withdrawals on ATM cards.



j) The bank should bring out new schemes at time-to-time so that more people

can be attracted. Even some gifts and prizes may be offered to the customers

for their retention.

k) 24 hours banking should be induced so as to facilitate the customers who may

not have a free time in the daytime. It will help in facing the competition more

effectively.

l) Customers generally complain that full knowledge is not granted to them. Thus

the bank should properly disclose the features of the product and services to the

customers. Moreover door to door services can also be introduced by SBM and

KBL bank.

m) The need of the customer should properly be understood so that customer feels

satisfied. The relationship value should be maintained.

n) The branch should promote cooperation and coordination among employees

which help them in efficient working.

o) Maintenance of proper hierarchy should be done. A good hierarchy set up can

ensure better results within the bank.

p) Banking sector is improving by leaps but still it needs to be improved. Proper

and efficient relationship staffs having knowledge for banking, customer

friendly atmosphere, and better rate of interest are need of the customer.


Final Research Print

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