A PROJECT REPORT ON

COMPARATIVE STUDY OF SERVICE QUALITY AND CUSTOMER

SATISFACTION
IN PUBLIC AND PRIVATE SECTOR BANKS

PREPARED BY
PRIYANKA SANDEEP CHALKE
T.Y.B.B.I SEM - V
2017 - 2018
UNDER THE GUIDANCE OF
PROF. JAYA DUDANI

SUBMITTED TO
KHAR EDUCATION SOCIETY'S COLLEGE OF COMMERCE &
ECONOMICS

S.V ROAD, NEXT TO KHAR POLICE STATION,

KHAR WEST, MUMBAI - 400052.

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 DECLARATION

I MISS PRIYANKA SANDEEP CHALKE the student of T.Y.B.B.I Semester- V

(2017 - 2018), hereby declare that I have completed the project on
"COMPARATIVE STUDY OF SERVICE QUALITY AND CUSTOMER
SATISFACTION IN PUBLIC AND PRIVATE SECTOR BANKS ". The
information submitted is true and original to the best of my knowledge.

______________
(Signature of student)
. PRIYANKA CHALKE

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 CERTIFICATE

This is to Certify that PRIYANKA SANDEEP CHALKE, Roll no. I-302 of TYBBI,
semester-V (2017-2018) has successfully completed the project on
"COMPARATIVE STUDY OF SERVICE QUALITY AND CUSTOMR
SATISFACTION IN PUBLIC AND PRIVATE SECTOR BANKS "under the
guidance of Prof. Jaya Dudani.

_____________ __________________
Internal Guide. Head of Department /
Course Co-ordinator

________________ __________________
External Examiner. Principal

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 PAGE
NO. TABLE OF CONTENT NO.
Chapter 1 INTRODUCTION TO BANKING INDUSTRY 06
1.1.1 Reforms in banking sector 07
1.1.2 Banking Structure in India 08

1.2 SERVICE QUALITY IN BANKING SECTOR 10

1.3 CURRENT SCENERIO IN BANKING SECTOR 11

1.3.1 Growth in banking sector 11
1.3.2 Growth in market size 12

1.4 SWOT ANALYSIS IN BANKING SECTOR 14

Chapter 2 SERVICE 16
2.1 Characteristics of service 17
2.2 Classification of service 19
2.3 Types of provided of service 20
2.4 Scope of service

Chapter 3 SERVICE QUALITY 23

3.1 Needs and Importance of service quality 23
3.2 Measuring service quality in banking industry 26
3.3 Consumer service in bank 26

Chapter 4 CONSUMER SATISFACTION 29

5 INTRODUCTION TO PUBLIC SECTOR BANKS 31

5.1 State bank of India 31
5.2 union bank of India 34

Chapter 6 INTRODUCTION TO PRIVATE SECTOR BANK 36

6.1 ICICI BANK 36
6.2 HDFC BANK 43

Chapter 7 OBJECTIVE OF THE STUDY 45

7.1 Significance of study 45

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 Chapter 8 RESEARCH METHODOLOGY 46
8.1 Research design 46
8.2 Data collection method 46
8.3 Analysis of study 47
8.4 Limitation of study 48
Chapter 9 CONCLUSION 49

Chapter 10 FINDING 49

Chapter 11 RECOMMENDATION 50

Chapter 12 BIBLIOGRAPHY 50

Chapter 13 QUESTIONNAIRE 52

CHAPTER:1
INTRODUCTION TO BANKING INDUSTRY:
The Indian economy is emerging as a one of the strongest economy of the world with
the GDP growth of more than 8 % every year. A strongest banking industry is
important in every country and can have a significant affect in supporting economic
development through efficient financial services. Banking sector play a vital role in
growth and development of Indian economy. After liberalization the banking industry
in India under gone major changes. The process of liberalization and globalization has
strongly influenced the Indian banking sector. A stable and efficient banking sector is
an essential precondition to increase the economic level of a country. Liberalization
policy introduced in the banking sector in India led to consolidated competition,
efficient allocation of resources and introducing innovative methods for mobilizing of
saving. The ability of banks to analyze its financial position for improving its

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competitive position in the market place. Most banks in India are currently focusing
an expanding their service network. A growing Indian economy, expanding their
various segments. After the recommendations of Narshinham Committee report with
the entry of many private players. Indian banking industry has transformed into a
customer oriented market. It now consists of multiple products and customer groups
and various channels of distribution. It is well known fact that an effective and
efficient banking system is important for the long-run growth and development of the
economy. So, there is needed to make a comprehensive study into performance of
banks in India. A Banking Sector performs three primary functions in economy, the
operation of the payment system, the mobilization of savings and the allocation of
saving to investment products. Banking industry has been changed after reforms
process.
The Government has taken this sector in a basic priority and this service sector has
been changed according to the need of present days. Banking sector reforms in India
Strive to Banking industry has been changed after reforms process. The Government
has taken this sector in a basic priority and this service sector has been India Strive to
Banking industry has been changed after reforms process.
After, liberlization, privatization and globalization (LPG) policy enactment, Indian
banking industry has undergone tremendous quantative changes. International banks
are coming to market which are competing with local banks irrespective with that they
are private sector banks, or public sector banks. Various banks are available with new
offers, schemes and services with wide range of products. Customers has wide range
of choices where proper information can be gathered at cheap cost and can take the
advantage of such competitiveness. In the era of globalization customers has more
rights to choose right product according to their profile, opportunities available for
their money.
In the organized segment, banking system occupies an important place in nations
economy. It plays a pivotal role in the economic development of a country and forms
the core of the money market in an advanced country. Banks has to deal with many
customers every day and render various types of services to its customers. It's a well
known fact that no business can exist without customers.

1.1.1 REFORMS IN BANKING SECTOR:

The first phrase of financial reforms resulted in the nationalisation of 14 major banks
in 1969 and resulted in a shift from class banking to Mass banking. This in turn
resulted in a significant growth in the geographical coverage of Banks. Every bank
has to earmark a minimum percentage of their loan portfolio to sectors identified as
"priority sectors ". The manufacturing sector also grew during the 1970s in protected
envious and the banking sector was critical source. The next wave of reforms saw the
nationalisation of 6 more commercial banks in 1980. Since then the number scheduled
commercial banks increased four-fold and the number of banks branches increased
eight-fold.

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After the second phrase of financial sector reforms and liberalization of the sector in
the early nineties, the Public Sector Banks (PSB) found it extremely difficult to
complete with the new private sector banks and the foreign banks. The new private
sector banks first made their appearance after the guidelines permitting them were
issued in January 1993. Eight new private sector came into existence.
From the 1991 India economic crisis to its status of third largest economy in the world
by 2011, India has grown significantly in terms of economic development. So has its
banking sector. During this period, recognising the evolving needs of the sector, the
Finance Ministry of Government of India (GOI) set up various committees with the
task of analysing India's banking sector and recommending legislation and regulations
to make it more effective, competitive and efficient.[1] Two such expert Committees
were set up under the chairmanship of M. Narasimham. They submitted their
recommendations in the 1990s in reports widely known as the Narasimham
Committee-I (1991) report and the Narasimham Committee-II (1998) Report. These
recommendations not only helped unleash the potential of banking in India, they are
also recognised as a factor towards minimising the impact of global financial crisis
starting in 2007. Unlike the socialist-democratic era of the 1960s to 1980s, India is no
longer insulated from the global economy and yet its banks survived the 2008
financial crisis relatively unscathed, a feat due in part to these Narasimham
Committees

1.1.2 BANKING STRUCTURE IN INDIA :

The Indian banking industry, which is governed by the Banking Regulation Act of
India, 1949 can be broadly classified into two major categories, non-sheduled banks
and scheduled banks. schedule banks comprises of commercial banks and the
cooperative Banks. In term of ownership, commercial banks can be further grouped
into nationalized banks, the state bank of India and it's group banks, regional rural
banks and private sector banks. These banks have over 67,000 branches spread across
the country. In India banking industry is a mix of the public sector, private sector and
foreign banks.

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Reserve Bank of India (RBI) :

The country had no central bank prior to the establishment of the RBI. The RBI is the
supreme monetary and banking authority in the country and controls the banking
system in India. It is called the Reserve Bank’ as it keeps the reserves of all
commercial banks.

Scheduled & Non - scheduled Banks :

A scheduled bank is a bank that is listed under the second schedule of the RBI Act,
1934. In order to be included under this schedule of the RBI Act, banks have to fulfill
certain conditions such as having a paid up capital and reserves of at least 0.5 million
and satisfying the Reserve Bank that its affairs are not being conducted in a manner
prejudicial to the interests of its depositors. Scheduled banks are further classified into
commercial and cooperative banks. Non- scheduled banks are those which are not
included in the second schedule of the RBI Act, 1934. At present these are only three
such banks in the country.

Commercial Banks :

Commercial banks may be defined as, any banking organization that deals with the

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deposits and loans of business organizations. Commercial banks issue bank checks
and drafts, as well as accept money on term deposits. Commercial banks also act as
moneylenders, by way of installment loans and overdrafts. Commercial banks also
allow for a variety of deposit accounts, such as checking, savings, and time deposit.
These institutions are run to make a profit and owned by a group of individuals.
Scheduled Commercial Banks (SCBs):
Scheduled commercial banks (SCBs) account for a major proportion of the business
of the scheduled banks. SCBs in India are categorized into the five groups based on
their ownership and/or their nature of operations. State Bank of India and its six
associates (excluding State Bank of Saurashtra, which has been merged with the SBI
with effect from August 13, 2008) are recognised as a separate category of SCBs,
because of the distinct statutes (SBI Act, 1955 and SBI Subsidiary Banks Act, 1959)
that govern them. Nationalised banks and SBI and associates together form the public
sector banks group IDBI ltd. has been included in the nationalised banks group since
December 2004. Private sector banks include the old private sector banks and the new
generation private sector banks- which were incorporated according to the revised
guidelines issued by the RBI regarding the entry of private sector banks in 1993.
Foreign banks are present in the country either through complete branch/subsidiary
route presence or through their representative offices.

Types of Scheduled Commercial Banks:

Public Sector Banks:

These are banks where majority stake is held by the Government of India.
Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc

Private Sector Banks:

These are banks majority of share capital of the bank is held by private individuals.
These banks are registered as companies with limited liability. Examples of private
sector banks are: ICICI Bank, Axis bank, HDFC, etc.

Foreign Banks:

These banks are registered and have their headquarters in a foreign country but
operate their branches in our country. Examples of foreign banks in India are: HSBC,
Citibank, Standard Chartered Bank, etc

Regional Rural Banks:

Regional Rural Banks were established under the provisions of an Ordinance

promulgated on the 26th September 1975 and the RRB Act, 1976 with an objective to
ensure sufficient institutional credit for agriculture and other rural sectors. The area of

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operation of RRBs is limited to the area as notified by GOI covering one or more
districts in the State.
RRBs are jointly owned by GOI, the concerned State Government and Sponsor Banks
(27 scheduled commercial banks and one State Cooperative Bank); the issued capital
of a RRB is shared by the owners in the proportion of 50%, 15% and 35%
respectively.
Cooperative Banks.

Cooperative Banks :

A co-operative bank is a financial entity which belongs to its members, who are at the
same time the owners and the customers of their bank. Co-operative banks are often
created by persons belonging to the same local or professional community or sharing
a common interest. Co-operative banks generally provide their members with a wide
range of banking and financial services (loans, deposits, banking accounts, etc).
They provide limited banking products and are specialists in agriculture-related
products.
Cooperative banks are the primary financiers of agricultural activities, some small-
scale industries and self-employed workers.

Types of cooperative Banks :

 Primary Urban Co-op Banks

 Primary Agricultural Credit Societies
 District Central Co-op Banks
 State Co-operative Banks
 Land Development Banks

1.2 SERVICE QUALITY IN BANKING SECTOR :

Like many other financial services is facing a rapidlychanging market, new

technologies uncertainties, fierce competition andmore demanding customers and the
changing climate has present anunpreceedented set of challenges. Banking is a
customer oriented servicesindustry, therfore, the customer is the focus and customer
services is thedifferentiating factors.

1.3 CURRENT SECENERIO OF BANKING INDUSTRY IN INDIA:

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 Growth in Banking Sector Deposits:

1.
1.
1.
1.
During FY06–17, deposits grew at a CAGR of 12.03 per cent and reached 1.54
trillion by FY171.
2. Strong growth in savings amid rising disposable income levels are the major
factors influencing deposit growth.
3. Access to banking system has also improved over the years due to persistent
government efforts to promote banking-technology and promote expansion in
unbanked and non-metropolitan regions.
4. At the same time India’s banking sector has remained stable despite global
upheavals, thereby retaining public confidence over the years.
5. Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY), have also
increased. As on November 9, 2016, US$ 6,971.68 million were deposited,
while 255.1 million accounts were opened.

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently
capitalised and well-regulated. The financial and economic conditions in the country
are far superior to any other country in the world. Credit, market and liquidity risk
studies suggest that Indian banks are generally resilient and have withstood the global
downturn well.
Indian banking industry has recently witnessed the roll out of innovative banking
models like payments and small finance banks. RBI’s new measures may go a long
way in helping the restructuring of the domestic banking industry.

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Market Size:
The Indian banking system consists of 27 public sector banks, 26 private sector
banks, 46 foreign banks, 56 regional rural banks, 1,574 urban cooperative banks and
93,913 rural cooperative banks, in addition to cooperative credit institutions. Public-
sector banks control more than 70 per cent of the banking system assets, thereby
leaving a comparatively smaller share for its private peers. Banks are also
encouraging their customers to manage their finances using mobile phones.

ICRA estimates that credit growth in India’s banking sector would be at 7-8 per cent
in FY 2017-18.

Investments/development:
Key investments and developments in India’s banking industry include:

1. The Reserve Bank of India (RBI) has proposed to allow banks to invest in real
estate investment trusts (REITs) and infrastructure investment trusts (InvITs)
which is expected to benefit both real estate and banking sector in diversifying
investor base and investment avenues respectively.
2. The Canada Pension Plan Investment Board (CPPIB) and the Caisse de Depot
Quebec (CDPQ) have acquired a 1.5 per cent stake in Kotak Mahindra Bank from
Mr Uday Kotak, Executive vice-chairman and Managing director, Kotak
Mahindra Bank, for a total consideration of Rs 2,254 crore (US$ 350.0 million).
3. Fullerton India Credit Co Ltd, a non-banking finance company (NBFC), has raised
Rs 500 crore (US$ 75 million) through masala bonds, to support its onward
lending and other financing activities.
4. The Insurance Regulatory and Development Authority of India (IRDA) has
allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds, that
are issued by banks to augment their tier 1 capital, in order to expand the pool of
eligible investors for the banks.
5. Qatar’s Doha Bank plans to apply to the Qatar Central Bank and Reserve Bank of
India for permission to establish a local subsidiary in India, with the vision to
create a retail branch network in India.
6. Fairfax Financial Holdings, a Canada-based financial services firm, has received
an approval from the RBI to acquire a majority 51 per cent stake in Kerala-based
Catholic Syrian Bank for Rs 1,000 crore (US$ 150 million), which will be the first
takeover of an Indian bank by a non-banking financial entity, after RBI tweaked
ownership norms.
7. India Post has received the final license from RBI to start its payment bank
operations, thus becoming the third entity in India after Bharti Airtel and Paytm to
receive payment bank license from RBI.
8. Microfinance firm Ujjian Financial Services Ltd has announced starting of

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 banking services across its branches under the name of Ujjian Small Finance Bank
Ltd, thus becoming the largest among five small banks which are scheduled to
start their operations or have already started.

Government intervention:
The government and the regulator have undertaken several measures to strengthen
the Indian banking sector.

1) Government of India has decided to amend Section 35 A of the Banking

Regulation Act that will allow the Reserve Bank of India (RBI) to direct banks for
the recovery of non-performing assets (NPAs)
2) The Reserve Bank of India (RBI) has proactively instructed banks to increase their
levels of provision on the loans provided to the telecom sector as a prudent
measure, which will help to shore up provisions for future recognition of any non-
performing assets arising out of the sector.
3) The RBI has allowed banks in India to raise funds through issuance of rupee-
denominated bonds overseas, also called masala bonds, within the current limit of
Rs 2,44,323 crore (US$ 36.6 billion) set for foreign investment in corporate
bonds.
4) The Ministry of labour and Employment has successfully opened around
3,840,863 bank accounts as on December 26, 2016, for workers especially in the
unorganised sector, as part of its campaign to promote and ensure cashless transfer
of wages to workers.
5) The National Bank for Agriculture and Rural Development (NABARD) plans to
provide around 200,000 point-of-sale (POS) machines in 100,000 villages and
distribute Rupee cards to over 34 million farmers across India, to enable farmers
to undertake cashless transactions.
6) The Government of India’s indigenous digital payments application, BHIM
(Bharat Interface for Money), has recorded 18 million downloads since its launch
on December 30, 2016, according to Mr. Amitabh Kant, Chief Executive Officer,
NITI Aayog.
7) The Ministry of Finance has lowered the threshold for making electronic
payments to suppliers, contractors or institutions from Rs 10,000 (US$ 150) to Rs
5,000 (US$ 75), in order to attain the goal of complete digitisation of government
payments.

1.4 SWOT ANALYSIS IN BANKING SECTOR:

The banking industry is one of the most dynamic industry because of the amount of

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money and transactions involved. Everyone needs loans and everyone wants to save
money and increase it with interest as well.

Strengths in the SWOT analysis of Banking:

1) Banking is as old as Human race :

Banking industry is the driving force to any nation. It helps in shaping the life of
human race may be some time merely by Exchange (which was called barter
system), or by transaction or by facilitating advances.

2) Source of employment & GDP growth :

There is a consensus among economists that development of the financial system
contributes to economic growth. Financial development creates enabling
conditions for growth through either a supply-leading (financial development
spurs growth) or a demand-following. It is this industry which continuously works
to secure financial stability, facilitate international trade, promote employment, &
reduce poverty around the world.

3) Hedge from risk :

Whether it is natural calamity or man-made calamity banks mitigate the after
effect of the destruction by providing financial support to the victims to stand –up
& lead a peaceful life again.

4) Diversified services:
Banking industry offer services from CASA to insurance, to loan, to investment.

5) Connecting People:
With the advent of new age technological advancement Banks have made the life
of the common man easier. People can transact on real time basis in many places.

6) Changing from mere savings & loan facilitator role:

Top priorities of banks now days include regulatory compliance, improving asset
quality, enhancing customer centricity, focusing on digital convergence, and
tackling competition from non-banks. Banks are therefore making business and
technology investments to change their business models.

Weaknesses in the SWOT analysis of Banking:

1) Lack Of coordination:
The global banking industry faces short-term uncertainty due to the debt crises
that challenge several major economies. Industry assets stand at $143 trillion
(2013)&the EU is the largest regional market, with over 57% of the global market.
Volatility in different market/Currencies has created problems for the banks in
order to work properly across the borders.

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2) Vulnerable to risk:
Since this sector deals with finances, it is the most risky sector which can change
the fate of any business/Industry.

3) High NPAs:
Rise in Retail & corporate NPA’s (Non-performing assets) is the single major issue
this sector is going through worldwide.

4) Cant reach to Under-penetrated market:

Due to several conflicting objectives of government & banks which goes hand in
hand, rural areas of developing nations are still not in the shadow of banks.
Although PMJDY (PradhanMantri Jan DhanYojna) implemented by the Indian
banks got acknowledged by World Bank for financial inclusion but the Idea is not
fully capitalized even in the home country.

Opportunities in the SWOT analysis of Banking:

1) Expansion:
Penetrating to the rural markets & bringing the rural masses under the purview of
organized banking will be the objective of the Banks in decades to come.

2) Changing Socio-cultural & demographic factors:

Given the demographic shifts resulting from changes in age profile and household
income, consumers will increasingly demand enhanced institutional capabilities
and service levels from banks.

3) Rise in private sector banking:

Banking Industry across the world is highly regulated &lead by PSU’s with their
respective central banks. With the advent of private sector banks this sector is
going through structural & functional changes mainly due to the adaptation of the
advanced technologies & increased competition thereby benefiting to the end
customers.

Threats in the SWOT analysis of Banking:

1) Recession:
It is one of the major threats to the financial system of the nation. Traumatic
shock of Economic crises & collapse of the several businesses can affect the banks
and vice-versa.

2) Stability of the system:

Failure of some weak banks has often threatened the stability of the system.

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3) Competition:
Competition from NBFC’s (Non-banking financial companies) like insurance
companies & mutual fund companies can affect the business of Banks.

CHAPTER 2:
SERVICE:

PHILIP KOTLER defines services as, "Any act or performance that one party offers
to another that is essentially intangible and does not result in ownership of anything.
It's production may or may not be tied to a physical product".

Cannon (1998), viewed services as those separately identified, essentially intangible

activities which provide want satisfaction and which are not necessarily tied to the
sales of a product or another service.

In the option of Etzel, Walker, and Stanton (1997), service are the identifiable,
intangible activities that are the main object of a transaction designed to provide want
satisfaction to customers.

Jobber (2001), viewed a service as any deed, performance or effort carried out for the
customer.

According to Palmer (2000), services are products which are essentially intangible
and cannot be owned.

McCarthy and Perreault (1993), defined service as a deed performed by one party for
another.

From the definitions as presented by the various authorities, it is clear that they all
emphasis that service is essentially intangible. This means that a service cannot be
seen physical but the customer experiences it.

The idea of service therefore is focused on the intangibility element and which
essentially provides want satisfaction to the customer.

Services are economic activities that create value and provide benefits for customer’s
specific times and places, as a result of bringing about a desired change in – or on
behalf of – the recipient of the service. Service is those separately identifiable,
essentially intangible activities which provide want-satisfaction, and that are not
necessarily tied to the sale of a product or another service. To produce a service may
or may not require the use of tangible goods. However when such use is required,
there is no transfer of title (permanent ownership) to these tangible goods.

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One common method of defining a service is to distinguish between the ‘core’ and
‘peripheral’ elements of that service. The ‘core’ service offering is the ‘necessary
outputs of an organisation which are intended to provide the intangible benefits
customers are looking for’. Peripheral services are those which are either
‘indispensable for the execution of the core service or available only to improve the
overall quality of the service bundle.

2.1 CHARACTERISTICS OF SERVICES:

The characteristics of service are stated below -

 Intangibility
 Perishability
 Inseprability
 Heterogeneity
 Lack of Ownership
 Simultaneity
 Quality measurement
 Nature of demand
 Pricing of service

It has been explained briefly as below -

1) Intangibility:
Services are intangible we cannot touch them are not physical objects. According
to Carman and Uhl, a consumer feels that he has the right and opportunity to see,
touch, hear, smell or taste the goods before they buy them. This is not applicable
to services. The buyer does not have any opportunity to touch smell, and taste the
services. While selling or promoting a service one has to concentrate on the
satisfaction and benefit a consumer can derive having spent on these services.

2) Perishability :
Services too, are perishable like labor, Service has a high degree of perish ability.
Here the element of time assumes a significant position. If we do not use it today,
it labor if ever. If labor stops working, it is a complete waste. It cannot be stored.
Utilized or unutilized services are an economic waste. An unoccupied building, an
unemployed person, credit unutilized, etc. are economic waste. Services have a
high level of perishability.

3) Inseparability:
Services are generally created or supplied simultaneously. They are inseparable.
For an e.g., the entertainment industry, health experts and other professionals
create and offer their service at the same given time. Services and their providers
are associated closely and thus, not separable. Donald Cowell states ‘Goods are

17
 produced, sold and then consumed whereas the services are sold and then
produced and consumed’. Therefore inseparability is an important characteristic of
services which proves challenging to service management industry.

4) Heterogeneity:
This character of services makes it difficult to set a standard for any service. The
quality of services cannot be standardized. The price paid for a service Pricing of
services. Quality of services cannot be standardized.

5) Ownership:
In the sale of goods, after the completion of process, the goods are transferred in
the name of the buyer and he becomes the owner of the goods. But in the case of
services, we do not find this. The users have only an access to services. They
cannot own the service.

6) Simultaneity:
Services cannot move through channels of distribution and cannot be delivered to
the potential customers and user. Thus, either users are brought to the services or
providers go to the user. It is right to say that services have limited geographical
area. According to Carman, “Producers of services generally have a small size
area of operations than do the producers of items. largely because the producer
must to get the services or vice- versa.”

7) Quality Measurement:
A service sector requires another tool for measurement. We can measure it in
terms of service level. It is very difficult to rate or quantify total purchase. E.g. we
can quantify the food served in a hotel but the way waiter serves the customer or
the behaviour of the staff cannot be ignored while rating the total process.

8) Nature of demand:
Generally, the services are fluctuating in nature. During the peak tourist seasons
there is an abnormal increase in the demand of services. Therefore, while
identifying the salient features of services one cannot ignore the nature of demand.
E.g. tourists go to hill stations during summer season wherein public transport
utilities are used substantially. This indicates that flexibility is the important
feature of service.

9) Pricing of services:
Quality of services cannot be standardized. The pricing of services are usually
determined on the basis of demand and competition. For example, room rents in
tourist spots fluctuate as per demand and season and many of the service providers
give off-season discounts.

2.2 CLASSIFICATION OF SERVICE:

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Service can be classified in several ways. Various authors have tried to classify service
on the basis of different features /aspects such as the Market segments ,tangibility
factor ,Skills type ,etc. they are listed below :
 Market segments
 Degree of tangibility
 Skills of service provider
 Degree of regulations
 Degree labor intensiveness
 Degree of customer contact

India's total export are dominated by high skilled services such as software business
services and communication services

 Market segment :
Market segment service can be classified on the basis of market segment they are
catering to. Thus we can have services catering to end consumer such as the hair salon
and beauty service, repairs and maintainance service and legal services etc.

 Degree of tangibility :
Services are classified on the basis of tangiblity. The term tangible mean they cannot
be touched, smelled, or taste.
Rental goods (Hotel rooms and car)
Owned goods (TV repairs, etc)
Non -owned goods (collage education, etc,)

 Skills of the service provider :

Services can be provided by highly skilled labour and unskilled labour. Thus service
can be classified as -
Professional service (legal, medical, management, etc)
Non -professional service (taxi, security, shoe shining, laundry, cleaning service, etc )

 Goals of the service provider -

Services are differentiated on the basis of the goods they provide whether they are
profit making or non profit making.
Profit making :(Airlines, hotel, insurance, etc)
Non -profit making :(Indian postal service, NGO, public library, religious place, etc)

 Degree of regulations -
Services are also classified according to the extents of government regulations on
them.
High Regulation -(Airlines, railways and roadways)
Limited Regulations -(hospitality sector)
Absence Regulation-(beauty service, personal service, etc)

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  Degree of labour intensiveness-
Service can be equipment based or people based-

(A) Equipment based -

Completely automated service -(ATM, coffee vending machine,etc)
Skilled operators -(Airlines, Crane machine, Railway, etc)
Unskilled operators -(Movie theaters, Dry cleaning, etc)

(B) People based service-

Unskilled labour -(Security Guard, Cleaning service, etc)
Skilled labour -(Printing, Catering, etc)
Professional -(Lawyer, Doctor, Management, consultant, HR consultant service, etc)

 Degree of customer contact -

Services of categorised on the basis of customer contact.
High contact -where customers spend time, days, weeks, months, years like education
and hospitality service
Low contact -low contact service is one which the contact with service system range
for few minutes to some hours like applicance repair service, postal service, etc.

2.3 TYPES OF PROVIDER OF SERVICE:

This is another way of classifying service and it is in term of the kind of organization
providing them. Service providers may include businesses, government and non-
government or not-for-profit making organizations. Business organizations offer
goods and services in order to earn a profit
Government organization also provides service; include mass transport, state lotteries
and the military.

The not-for-profit making organizations also use marketing to help them identify
needs and target services build support for causes and solicit contributions.

A service provider (SP) provides organizations with consulting, legal, real estate,
communications, storage, processing. Although a service provider can be an
organizational sub-unit, it is usually a third party or outsourced supplier, including
telecommunications service providers (TSPs), application service providers (ASPs),
storage service providers (SSPs), and internet service providers (ISPs).[citation
needed] A more traditional term is service bureau (esp. 1960s to 1980s).

IT professionals sometimes differentiate between service providers by categorizing

them as type I, II, or III.[1] The three service types are recognized by the IT industry

20
although specifically defined by ITIL and the US Telecommunications Act of 1996

Type I: internal service provider

Type II: shared service provider
Type III: external service provider
Type III SPs provide IT services to external customers and subsequently can be
referred to as external service providers (ESPs)[2] which range from a full IT
organization/service outsource via managed services or MSPs (managed service
providers) to limited product feature delivery via ASPs (application service
providers).

Types :

1) Application service provider (ASP)

2) Network service provider (NSP)
3) Internet service provider (ISP)
4) Managed service provider (MSP)
5) Storage service provider (SSP)
6) Telecommunications service provider (TSP)
7) SAML service provider
8) Master managed service provider (MMSP)
9) Managed Internet service provider (MISP)
10) Online service provider
11) Payment service provider (PSP)
12) Software, platform, infrastructur service provider in cloud computing
13) Application software service provider in a service-oriented architecture

2.4 SCOPE OF SERVICE :

The phrase "service industry" connotes economic activity which takes the salable
form primarily or exclusively of a personal service rather than a material commodity
the industries which provide material commodities being designated as agriculture,
manufacturing, construction, and the like. The borderlines of even this simple division
are perplexing: it is not evident that a firm assembling purchased parts creates
material commodities in a manner different from a restaurant preparing and serving
food, although the Census calls the former establishment manufacturing and the latter
trade. As we have said, the division between the broad categories is more difficult
than significant, and without further ado we list (in Table 16) the industries which we
shall term the service industries.
The list is commonplace in that we include none of the industries conventionally
assigned to the commodity-producing categories. It is nonliteral at least to the extent
that we omit transportation and other public utilities providing nonmaterial products,
simply because they have been treated in earlier National Bureau studies.' A scope of
services may be a bespoke document, drafted for a particular project, or may be

21
prepared based on standard pro-forma documents available from organisations such as
the Royal Institute of British Architects, the Royal Institute of Chartered Surveyors,
the Construction Industry Council and the Association for Consultancy and
Engineering.
A scope of services may:

1) List the fullest range of services that may be provided, and then items are struck
through if they are not being provided within the fee.
2) Offer a tick box system to indicate whether services are being provided or not.
3) Include a list specifically setting out services that will not be provided.
4) Provide options, such as; to ‘carry out’ services or to ‘organise’ them; to provide
cost consultancy services or not and so on.
5) Indicate the basis on which the services will be charged, for example, ‘T’
indicating time-based, or ‘LS’ indicating a lump sum fee.

CHAPTER 3
SERVICE QUALITY :

Service quality (SQ), in its contemporary conceptualisation, is a comparison of

perceived expectations (E) of a service with perceived performance (P), giving rise to
the equation SQ=P-E.[1] This conceptualistion of service quality has its origins in the
expectancy-disconfirmation paradigm.

A business with high service quality will meet or exceed customer expectations whilst
remaining economically competitive. Evidence from empirical studies suggests that
improved service quality increases profitability and long term economic
competitiveness. Improvements to service quality may achieved by improving
operational processes; identifying problems quickly and systematically; establishing
valid and reliable service performance measures and measuring customer satisfaction
and other performance outcomes.

Definition:

22
From the viewpoint of business administration, service quality is an achievement in
customer service.[5] It reflects at each service encounter. Customers form service
expectations from past experiences, word of mouth and marketing communications.
[6] In general, customers compare perceived service with expected service, and which
if the former falls short of the latter the customers are disappointed.
The measurement of subjective aspects of customer service depends on the
conformity of the expected benefit with the perceived result. This in turns depends
upon the customer's expectation in terms of service, they might receive and the
service provider's ability and talent to present this expected service. Successful
companies add benefits to their offering that not only satisfy the customers but also
surprise and delight them. Delighting customers is a matter of exceeding their
expectations.

Pre-defined objective criteria may be unattainable in practice, in which case, the best
possible achievable result becomes the ideal. The objective ideal may still be poor, in
subjective terms.

Service quality can be related to service potential (for example, worker's

qualifications); service process (for example, the quickness of service) and service
result (customer satisfaction).

3.1 Needs and importance of service quality:

Service quality is the crucial theme of this research, so it important to understand what
the service quality is, what the benefits are and why it is needed to measure service
quality. There has been extensive literature available on service quality in its
measurement in various private and public sectors across the globe. Most of the
literature is available on either banking, airlines, hotels and restaurant sectors.
Customer satisfaction, service quality and loyalty are most important factors in today
global economic downturn for retention, profitability and productivity of the business
as a whole. Service quality contribution is the most important factor to investigate the
outcome of the customer expected and perceived service attributes of any business.
Whether manufacturing, service or retail firms quality of service is of great
importance to both customers and companies.
Increase competition, highly educated consumers, and increase in standard of living
are forcing many businesses to view their customer service strategy. Many businesses
firms are challenging more efforts to retain existing customers rather than to acquire
new ones since the cost of acquiring new customers in greater than cost of retaining
existing customers.
There is enough evidence that demonstrates the strategic benefits of quality in
contributing to market share and return on investment. Maximizing customer
satisfaction through quality customer service has been described the ultimate weapon.
In all industries when competitors are roughly matched, those with stress on

23
customer's point of view may be sound and interesting at this junction. Such an
analysis will provide a bank, a quantitative estimate of those services being perceived
with intricate details such as weather banks are meeting the expectations of consumer
or not.

Dimensions of service quality :

1. Tangibility
2. Reliability
3. Responsiveness
4. Communication
5. Credibility
6. Security
7. Competency
8. Courtesy
9. Understanding
10. Assesibility

The dimension of service quality is listed below gives example of how these are used
by customers to evaluate service quality.

1. Tangibles:
The physical appearance of the facilities, staff, buildings, etc., e.g. Does the
equipment appear modern? How clean is the waitress’s apron?

2. Reliability:
The ability to reproduce the same level of service again and again e.g.. Is feedback
regarding student progress always given? Are messages always passed on?

3. Responsiveness:
The speed with which queries etc. and dealt with e.g.. Are letters replied to by return
of post, or does it take a month? Is feedback on assignments given within a week in
time for students to assimilate the information, or does the feedback come too late,
after the examination has been taken?

4. Communication:
The clarity and understandability of the information given to the client, e.g. Does the
doctor take the time to explain in terms the patient can understand, what is going to
happen next? Does the solicitor explain clearly what the legal jargon means?

5. Credibility:
The trustworthiness of the service provider, e.g. Does the newspaper reporter report
all the facts or only those which support his/her argument? Does the financial adviser
present all the options or only those which earn him/her the most commission?

24
6. Security:
The physical safetyana of the customer or privacy of client information, e.g. Are the
medical records of patients kept confidential? Are the stands in the football ground
strong enough to support the weight of all the supporters?

7. Competence:
The actual technical expertise of the service provider, e.g. Is the doctor really
qualified to perform heart surgery? Does the financial adviser have sufficient
knowledge of all the relevant tax regulations?

8. Courtesy:
The attitude of the service provider and manner adopted by the server, e.g.. Is the
receptionist friendly, helpful and polite? Does the doctor treat the patient as an inferior
being?

9. Understanding:
How well the provider of the service understands the client’s needs e.g. .Does the
bank recognize that most clients cannot get to the bank in working hours? Are there
mirrors positioned in the hotel bathrooms which allow guests to see the back of their
hair?

10. Access:
How easy is it to reach the service provider, geographically or by phone, e.g Are there
car parking facilities close to the solicitor’s office? Does it always take five attempts
to get the solicitor on the phone?

3.2 Measuring service quality in banking industry:

Customer is vital for the development of trade, industry and service sector particularly
in financial services. Therefore the significance of customer service in the banking
industry came in to force to compete in the market driven environment. Measuring
service quality in the service sector particularly in banking sector is more difficult
than measuring the quality of manufacturing goods. The services sector as a whole is
very heterogeneous and what is heterogeneous may hold true for one service and may
not hold for another service sector.
Each bank is having variety of services. Due to this differentiation, service is this
industry would not be standardized, moreover this service are intangible in nature
which could not be compared as seen.
3.3 Consumer services in banks:
Customer service has great significance in the banking industry. The banking system
in India today has perhaps the largest outreach for delivery of financial services and is
also serving as an important conduit for delivery of financial services. While the
coverage has been expanding day by day, the quality and content of dispensation of

25
customer service has come under tremendous pressure mainly owing to the failure to
handle the soaring demands and expectations of the customers.
The vast network of branches spread over the entire country with millions of
customers, a complex variety of products and services offered, the varied institutional
framework –all these add to the enormity and complexity of banking operations in
India giving rise to complaints for deficiencies in services. This is evidenced by a
series of studies conducted by various committees such as the Talwar Committee,
Goiporia Committee, Tarapore Committee, etc., to bring in improvement in
performance and procedure involved in the dispensation of hassle-free customer
service.
Reserve Bank, as the regulator of the banking sector, has been actively engaged from
the very beginning in the review, examination and evaluation of customer service in
banks. It has constantly brought into sharp focus the inadequacy in banking services
available to the common person and the need to benchmark the current level of
service, review the progress periodically, enhance the timeliness and quality,
rationalize the processes taking into account technological developments, and suggest
appropriate incentives to facilitate change on an ongoing basis through
instructions/guidelines. Depositors' interest forms the focal point of the regulatory
framework for banking in India. There is a widespread feeling that the customer does
not get satisfactory service even after demanding it and there has been a total
disenfranchisement of the depositor.
There is, therefore, a need to reverse this trend and start a process of empowering the
depositor.

Customer Service: Institutional Framework

Need for Board's involvement:

Matters relating to customer service should be deliberated by the Board to ensure that
the instructions are implemented meaningfully. Commitment to hassle-free service to
the customer at large and the Common Person in particular under the oversight of the
Board should be the major responsibility of the Board.

Customer Service Committee of the Board:

Banks are required to constitute a Customer Service Committee of the Board and
include experts and representatives of customers as invitees to enable the bank to
formulate policies and assess the compliance thereof internally with a view to
strengthening the corporate governance structure in the banking system and also to
bring about ongoing improvements in the quality of customer service provided by the
banks.

Role of the Customer Service Committee:

26
Customer Service Committee of the Board, illustratively, could address the
following:-
formulation of a Comprehensive Deposit Policy
Issues such as the treatment of death of a depositor for operations of his account
Product approval process with a view to suitability and appropriateness
Annual survey of depositor satisfaction
Tri-enniel audit of such services.
Besides, the Committee could also examine any other issues having a bearing on the
quality of customer service rendered.

Monitoring the implementation of awards under the Banking Ombudsman

Scheme:

The Committee should also play a more pro-active role with regard to complaints or
grievances resolved by Banking Ombudsmen of the various States.
The Scheme of Banking Ombudsman was introduced with the object of enabling
resolution of complaints relating to provision of banking services and resolving
disputes between a bank and its constituent through the process of conciliation,
mediation and arbitration in respect of deficiencies in customer service. After detailed
examination of the complaints / grievances of customers of banks and after perusal of
the comments of banks, the Banking Ombudsmen issue their awards in respect of
individual complaints to redress the grievances. Banks should ensure that the Awards
of the Banking Ombudsmen are implemented expeditiously and with active
involvement of Top Management.
Further, with a view to enhancing the effectiveness of the Customer Service
Committee, banks should also
a) place all the awards given by the Banking Ombudsman before the Customer
Service Committee to enable them to address issues of systemic deficiencies existing
in banks, if any, brought out by the awards; and
b) place all the awards remaining unimplemented for more than three months with the
reasons therefore before the Customer Service Committee to enable the Customer
Service Committee to report to the Board such delays in implementation without valid
reasons and for initiating necessary remedial action.

Standing Committee on Customer Service:

The Committee on Procedures and Performance Audit of Public Services (CPPAPS)

examined the issues relating to the continuance or otherwise of the Ad hoc
Committees and observed that there should be a dedicated focal point for customer
service in banks, which should have sufficient powers to evaluate the functioning in
various departments. The CPPAPS therefore recommended that the Ad hoc
Committees should be converted into Standing Committees on Customer Service.
On the basis of the above recommendation, banks are required to convert the existing

27
Ad hoc Committees into a Standing Committee on Customer Service. The Ad hoc
Committees when converted as a permanent Standing Committee cutting across
various departments can serve as the micro level executive committee driving the
implementation process and providing relevant feedback while the Customer Service
Committee of the Board would oversee and review / modify the initiatives. Thus the
two Committees would be mutually reinforcing with one feeding into the other. The
constitution and functions of the Standing Committee may be on the lines indicated
below-
i) The Standing Committee may be chaired by the CMD or the ED and include non-
officials as its members to enable an independent feedback on the quality of customer
service rendered by the bank.
ii) The Standing Committee may be entrusted not only with the task of ensuring
timely and effective compliance of the RBI instructions on customer service, but also
that of receiving the necessary feedback to determine that the action taken by various
departments of the bank is in tune with the spirit and intent of such instructions.
iii) The Standing Committee may review the practice and procedures prevalent in the
bank and take necessary corrective action, on an ongoing basis as the intent is
translated into action only through procedures and practices.
iv) A brief report on the performance of the Standing Committee during its tenure
indicating, inter alia, the areas reviewed, procedures / practices identified and
simplified or introduced may be submitted periodically to the Customer Service
Committee of the Board. With the conversion of the Ad hoc Committees into Standing
Committees on Customer Service, the Standing Committee will act as the bridge
between the various departments of the bank and the Board / Customer Service
Committees of the Board.

CHAPTER 4
CUSTOMER SATISFACTION:

A customer can be defined as a user or potential user of banking services. A customer

would include an account holder, or a person carrying out casual business transaction
with a bank, or a person on his own initiative, may come within the banking fold
(Talvar committee Report 1976).
The efficiency of banking sector depends upon how best it can deliver service to its
target customer. In order to service in this competitive environment and provide
continuous customer satisfaction, the provider of banking service now required to
continuously improve service quality. The globalization of Indian economy has truly
called for much more disciplined on the part of Indian banking sector to improve the
overall quality of customer service through smart use, absorption and adoption of
flexible and appropriate information technology.
It is seen that 5% increase in customer retention can increase profitability by 35% in
banking business, 50% in insurance and brokerage, and 125% in customer credit card
market. Therefore banks are not stressing on customer retention and increasing market

28
share.
A favourable climate for excellent service manifests itself in employees behavior, for
example, being attentive to customers, speaking favourable about the organization and
it's service. With frequent employees customer contacts, customer are more often
exposed to such positive behavior, which in turn affect costumes satisfaction.
To sum off the adoption of technology in Banks is increasing with growing use of
Internet, electronic commerce, and various other banking innovations. Evaluation of
technology in Banks taking place at an enormous place and it is only question of time
before banks Commit them on full scale technology up gradation, aiding their growth
and adding their competitive features. The computer and the communication age is
opening up a flood of new opportunities that are redefining the very concept of
traditional banking. It is for the individual bank to reinvest themselves and
configuration their business processes and practices in turn with growing customers
expectations in an ever increasing competitive environment. There is no way a bank
can remain lukewarm to new technology and products and yet hope to grow because it
is a choice of survival or extinction.
In such a competitive environment, financial institutions are forced to examine the
performance because their survival in the dynamic economy of the coming years will
be dependent upon their overall deficiencies. In response banking firm have been
trying to adopt and to adjust themselves to improve their efficiencies in the changing
social and economic environment. The efficiencies of a banking sector depends upon
how best it can deliver service to its target customers or how far the expectations of
customer are met. Any service to be provided to the customers can be differentiated
by the service provider from rest of the service providers if it posseses some unique
selling proposition. The customer compare the perceived service with the expectated
service. The customer perceives the service quality to be high if it is perfect on his
expectation. This perception leads to customer satisfaction with the related service. In
the present time, customer satisfaction is an interesting and dynamic concept. It is a
concept which varies from time to time. What is considered as good customer service
today may be termed as bad tomorrow. it strategies therefore, need to be proper
consonance with banks marketing strategies. Customer are now demanding an
individualistic and are no longer willing to accept delay in transactions. A customer
centric view has replaced the earlier product centric view.
Therefore it becomes imperative to service providers to meet or exceed the target
customer's satisfaction with quality of services expected by them. Hence a present
research will attempt to study customer's perception of quality of services, both
transaction based and IT enables in term of its constituent factor in public sector and
private sector banks.

29
CHAPTER 5
INTRODUCTION TO PUBLIC BANKS

5.1 STATE BANK OF INDIA:

State Bank of India (SBI) is an Indian multinational, public sector banking and
financial services company. It is a government-owned corporation with its
headquarters in Mumbai, Maharashtra. On 1st April, 2017, State Bank of India, which
is India's largest Bank merged with five of its Associate Banks (State Bank of Bikaner
& Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and
State Bank of Travancore) and Bharatiya Mahila Bank with itself. This is the first ever
large scale consolidation in the Indian Banking Industry. With the merger, State Bank
of India will enter the league of top 50 global banks with a balance sheet size of ₹33
trillion, 278,000 employees, 420 million customers, and more than 24,000 branches
and 59,000 ATMs. SBI's market share will increase to 22 percent from 17 per cent.[5]
It has 198 offices in 37 countries; 301 correspondents in 72 countries.[6] The
company is ranked 232nd on the Fortune Global 500 list of the world's biggest
corporations as of 2016.

Products:
Consumer banking, corporate banking, finance and insurance, investment banking,
mortgage loans, private banking, private equity, savings, securities, asset
management, wealth management, credit cards.

Revenue:
Increase ₹298,640.45 crore (US$47 billion) (2017)
₹273,461.13 crore (US$43 billion) (2016)

30
History:
The roots of the State Bank of India lie in the first decade of the 19th century, when
the Bank of np later renamed the Bank of Bengal, was established on 2 June 1806.
The Bank of Bengal was one of three Presidency banks, the other two being the Bank
of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on
1 July 1843). All three Presidency banks were incorporated as joint stock companies
and were the result of royal charters. These three banks received the exclusive right to
issue paper currency till 1861 when, with the Paper Currency Act, the right was taken
over by the Government of India. The Presidency banks amalgamated on 27 January
1921, and the re-organised banking entity took as its name Imperial Bank of India.
The Imperial Bank of India remained a joint stock company but without Government
participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of
India, which is India's central bank, acquired a controlling interest in the Imperial
Bank of India. On 1 July 1955, the imperial Bank of India became the State Bank of
India. In 2008, the Government of India acquired the Reserve Bank of India's stake in
SBI so as to remove any conflict of interest because the RBI is the country's banking
regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This
made SBI subsidiaries of eight that had belonged to princely states prior to their
nationalization and operational takeover between September 1959 and October 1960,
which made eight state banks associates of SBI. This with the first Five Year Plan,
which prioritised the development of rural India. The government integrated these
banks into the State Bank of India system to expand its rural outreach. In 1963 SBI
merged State Bank of Jaipur (est. 1943) and State Bank of Bikaner (est.1944).

SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911),
which SBI acquired in 1969, together with its 28 branches. The next year SBI
acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years
later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in
1916 in Gwalior State, under the patronage of Maharaja Madho Rao Scindia. The
bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja. The
new bank's first manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank
of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the
State Bank of Travancore, already had an extensive network in Kerala.

There has been a proposal to merge all the associate banks into SBI to create a "mega
bank" and streamline the group's operations.

The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from seven
to six. On 19 June 2009, the SBI board approved the absorption of State Bank of

31
Indore. SBI holds 98.3% in State Bank of Indore. (Individuals who held the shares
prior to its takeover by the government hold the balance of 1.7%.)

The acquisition of State Bank of Indore added 470 branches to SBI's existing network
of branches. Also, following the acquisition, SBI's total assets will approach ₹10
trillion. The total assets of SBI and the State Bank of Indore were 9,981,190 million
as of March 2009. The process of merging of State Bank of Indore was completed by
April 2010, and the SBI Indore branches started functioning as SBI branches on 26
August 2010.

On 7 October 2013, Arundhati Bhattacharya became the first woman to be appointed

Chairperson of the bank. Mrs. Bhattacharya received an extension of two years of
service to merge into SBI the five remaining associated banks.

Recent awards and recognition :

1) SBI was ranked as the top bank in India based on tier 1 capital by The Banker
magazine in a 2014 ranking.
2) SBI was ranked 232nd in the Fortune Global 500 rankings of the world's biggest
corporations for the year 2016.
3) SBI was named the 29th most reputed company in the world according to Forbes
2009 rankings
4) SBI was 50th Most Trusted brand in India as per the Brand Trust Report 2013, an
annual study conducted by Trust Research Advisory, a brand analytics company
and subsequently, in the Brand Trust Report 2014, SBI finished as India's 19th
Most Trusted Brand in India.

Vision mission and Values:

The State Bank of India was set up in 1921 as Imperial Bank of India.
Its name changed as State Bank of India on 1955.
It become nationalized Bank in 1956.

VISION
1) My SBI.
2) My Customer first.
3) My SBI: First in customer satisfaction

MISSION
1) Will be punctual, polite and proactive with our customers
2) Will create products and services that help our customers achieve their goals
3) Will absorb state of the art technology to drive excellence
4) Will speak the language of young India
5) Will offer quality in services to those abroad as much as we do to those in India
6) Will go beyond the call of duty to make our customers feel valued

32
7) Will be of service even in the outmost part of our country

VALUES
1) Will always be honest, transparent and ethical
2) Will do everything we can to contribute to the community we work in
3) Will nurture pride in India
4) Will respect our customers and fellow associates
5) Will learn and we will share our learning
6) Will never take the easy way out
7) Will be knowledge driven

5.2 UNION BANK OF INDIA:

Union Bank of India (UBI; BSE: 532477) is one of the largest government-owned
banks of India (the government owns 63.44% of its share capital). It is listed on the
Forbes 2000, and has assets of USD 13.45 billion. All the bank's branches have been
networked with its 6909 ATMs as on 30 September 2015. Its online Telebanking
facility are available to all its Core Banking Customers - individual as well as
corporate. As of September 2016, UBI has 4214 branches. Four of these are overseas
in Hong Kong, Dubai International Financial Centre, Antwerp, and Sydney
(Australia). UBI also has representative offices at Shanghai, Beijing and Abu Dhabi.
Lastly, UBI operates in the United Kingdom through its wholly owned subsidiary,
Union Bank of India (UK).

Products:
Consumer banking, corporate banking, finance and insurance, investment banking,
mortgage loans, private banking, wealth management.

Revenue:
₹32,198.80 crore (US$5.0 billion)(2016)

History:

Union Bank of India (Union Bank) was registered on 11 November 1919 as a limited
company in Mumbai and was inaugurated by Mahatma Gandhi. At the time of India's
Independence in 1947, Union Bank of India had only four branches - three in Mumbai
and one in Saurashtra, all concentrated in key trade centres. After Independence, the

33
growth is accelerated and by the time the Indian government nationalized it in 1969, it
had 240 branches. Shortly after nationalzsation, Union Bank of India acquired
Belgaum Bank, a private sector bank established in 1930 that had itself merged in a
bank in 1964, the Shri Jadeya Shankarling Bank (Bijapur; incorporated on 10 May
1948). Then in 1985 Union Bank of India acquired Miraj State Bank, which was
established in 1929, and which had 26 branches. In 1999 the Reserve Bank of India
requested that Union Bank acquire Sikkim Bank in a rescue after extensive
irregularities had been discovered at the non-scheduled bank.
Union Bank began its international expansion in 2007 with the opening of
representative offices in Abu Dhabi, United Arab Emirates, and Shanghai in Peoples
Republic of China. The next year, Union Bank established a branch in Hong Kong, its
first branch outside India. In 2009, Union Bank opened a representative office in
Sydney, Australia.
At present, the offshore banking operations of Union Bank of India are led by its
branches in Hong Kong and newly opened branch in Dubai at Dubai International
Financial Centre.

Vision and mission of Union Bank of India :

Vision:
To become the Bank of first choice in our chosen areas by building beneficial and
lasting relationships with customers through a process of continuous improvement.

Mission:
1) To be a customer centric organization known for its differentiated customer
service
2) To offer a comprehensive range of products to meet all financial needs of
customer
3) To be a top creator of shareholder wealth through focus on profitable growth
4) To be a young organization leveraging on technology and experienced workforce
5) To be the most trusted brand, admired by all stakeholders
6) To be a leader in area of Financial Inclusion

Awards:
IBA Best Technology Bank of the year 2015-16

Highlights for FY 2016-2017 :

Total Business of ₹ 6,80,076 crore as on March 31, 2017, an increase of 9.61%.
Total Deposits of ₹ 3,78,392 crore as on March 31, 2017, an increase of 10.41%.
Gross Advances of ₹ 3,01,684 crore as on March 31, 2017, an increase of 8.63%.
Share of CASA deposit improved to 34.44% as on March 31, 2017 from 32.35% as of
March 31, 2016.
In Advances as of March 31, 2017, RAM sector (Retail, Agriculture & MSME)

34
increased by 15.19% and contributes more than 53.80% of domestic loan book.
Non Interest Income increased by 36.70% from ₹ 3,632 crore to ₹ 4,965 crore.
Core Fee Income increased from ₹ 1,879 crore to ₹ 2,068 crore.
Net Interest Income increased by 7.08% from ₹ 8,314crore to ₹ 8,903 crore.
Operating Profit for FY 2016-17 increased by 29.85% to ₹ 7430 crore from ₹ 5722
crore in FY 2015-16.
Capital Adequacy Ratio (CRAR) under Basel III stood at 11.79% as on March 31,
2017 against the minimum regulatory requirement of 9.00%. Common equity tier 1
ratio stood at 7.71%.
Pan India presence- Network of 4282 (including 4 overseas branches) and 7518 ATMs
as on March 31, 2017.

Financial Result Data :

Shareholder's Funds
₹19,760 crore (US$3.1 billion) (31 March 2015)
Total Deposits
₹316,869 crore (US$49 billion) (31 March 2015)
Total Borrowings
₹35,359 crore (US$5.5 billion) (31 March 2015)
Total Investments
₹94,092 crore (US$15 billion) (31 March 2015)
Total Assets
₹381,615 crore (US$60 billion) (31 March 2015)
Reserves & Surplus
₹250,125 crore (US$39 billion) (31 March 2015)

CHAPTER 6
INTRODUCTION TO PRIVATE BANK:
6.1 ICICI BANK:

ICICI Bank, stands for Industrial Credit and Investment Corporation of India, is an
Indian multinational banking and financial services company headquartered in
Mumbai, Maharashtra, India, with its registered office in Vadodara. In 2014, it was the
second largest bank in India in terms of assets and third in term of market
capitalisation. It offers a wide range of banking products and financial services for
corporate and retail customers through a variety of delivery channels and specialised
subsidiaries in the areas of investment banking, life, non-life insurance, venture
capital and asset management. The bank has a network of 4,850 branches and 14,404
ATMs in India, and has a presence in 19 countries including India.

35
The bank has subsidiaries in the United Kingdom and Canada; branches in United
States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Oman, Dubai International
Finance Centre, China and South Africa; and representative offices in United Arab
Emirates, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has
also established branches in Belgium and Germany.

ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public

offering of shares in India in 1998, followed by an equity offering in the form of
American Depositary Receipts on the NYSE in 2000. ICICI Bank acquired the Bank
of Madura Limited in an all-stock deal in 2001 and sold additional stakes to
institutional investors during 2001-02.

In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group, offering a wide
variety of products and services, both directly and through a number of subsidiaries
and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and
the first bank or financial institution from non-Japan Asia to be listed on the NYSE.

In 2000, ICICI Bank became the first Indian bank to list on the New York Stock
Exchange with its five million American depository shares issue generating a demand
book 13 times the offer size.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI
Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January
2002, by the High Court of Gujarat at Ahmedabad in March 2002 and by the High
Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.

In 2008, following the 2008 financial crisis, customers rushed to ICICI ATMs and
branches in some locations due to rumours of adverse financial position of ICICI
Bank. The Reserve Bank of India issued a clarification on the financial strength of
ICICI Bank to dispel the rumours.

Product:
Credit cards, consumer banking, corporate banking, finance and insurance, investment
banking, mortgage loans, private banking, wealth management, personal loans,
payment solutions, Trade and Retail Forex.

Revenue:
US$11.4 billion (2017)

History:
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial

36
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank
was reduced to 46% through a public offering of shares in India in fiscal 1998, an
equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's
acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001,
and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal
2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government
of India and representatives of Indian industry. The principal objective was to create a
development financial institution for providing medium-term and long-term project
financing to Indian businesses.

In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of subsidiaries
and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and
the first bank or financial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that
the merger of ICICI with ICICI Bank would be the optimal strategic alternative for
both entities, and would create the optimal legal structure for the ICICI group's
universal banking strategy. The merger would enhance value for ICICI shareholders
through the merged entity's access to low-cost deposits, greater opportunities for
earning fee-based income and the ability to participate in the payments system and
provide transaction-banking services. The merger would enhance value for ICICI
Bank shareholders through a large capital base and scale of operations, seamless
access to ICICI's strong corporate relationships built up over five decades, entry into
new business segments, higher market share in various business segments,
particularly fee-based services, and access to the vast talent pool of ICICI and its
subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI
Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January
2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High
Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.
Consequent to the merger, the ICICI group's financing and banking operations, both
wholesale and retail, have been integrated in a single entity.

Recent awards and recognition:

Awards - 2015

37
1) ICICI Bank won an award in the BFSI Leadership Summit & Awards in the 'Best
Phone Banking for End-users' category[84]
2) ICICI Bank won in six categories and was the first runner-up in one category
among Private Sector Banks at IBA Banking Technology Awards, 2015. The bank
was declared winner in the six categories of Best Technology Bank of the Year,
Best use of Data, Best Risk Management Initiatives, Best use of Technology in
Training, Human Resources and e-Learning initiatives, Best Financial Inclusion
Initiative and Best use of Digital and Channels Technology. ICICI Bank was the
first runner-up in Best use of Technology to Enhance Customer Experience[85]
3) ICICI Bank has been declared as the first runner up at Outlook Money Awards
2015 in the category of ‘Best Bank’
4) ICICI Bank has been adjudged the ‘Best Retail Bank in India’ by The Asian
Banker. It has also emerged winners in the categories of ‘Best Internet Banking
Initiative’ and ‘Best Customer Risk Management Initiative’ awards given by The
Asian Banker.
5) ‘Best Local Trade Finance Bank in India’ at Global Trade Review Asia Leaders in
Trade Awards 2015.
6) ‘Best Foreign Exchange Bank’in India, at Finance Asia’s 2015 Country Banking
Achievement Awards.
7) ‘Best Private Sector Bank’ under ‘Global Business’ category at the Dun &
Bradstreet Banking Awards 2015.
8) ‘Best Website Design’ in Asia-Pacific at Global Finance 2015 World’s Best Digital
Bank Awards.
9) Winner at the National Energy Conservation Awards 2015 under the ‘Office
Buildings’ category (energy consumption of over 1 million units per annum).
10) First among private sector banks in The Economic Times Brand Equity’s Most
Trusted Brands survey 2015.
11) Runner up in the categories of ‘Immediate Payment Service’, ‘Cheque Truncation
System’ and ‘National Financial Switch’ at the National Payments Excellence
Awards 2015 organised by the National Payments Corporation of India. The Bank
was also felicitated with a special award for issuing the largest number of RuPay
Platinum cards.

Awards - 2016

1) ‘Best Retail Bank in India’ at the Asian Banker International Excellence in Retail
Financial Services Awards 2016. ICICI Bank has won this award three years in a
row.
2) Gold awards in the ‘Bank’ and ‘Credit card issuing Bank’ segments under Finance
category in the Reader’s Digest Trusted Brand 2016 Survey.
3) First in The Brand Trust Report, India Study 2016 by Trust Research Advisory
under the ‘Banking Financial Services and Insurance’ category.
4) Winner at the ‘Global Safety Awards 2016’ organised by the Energy and
Environment Foundation. This award is sponsored by Ministry of Petroleum &

38
 Natural Gas and Ministry of Coal, Government of India.

Awards - 2017

Ms. Chanda Kochhar was conferred with the Nirbhaya Puraskar, part of a nationwide
movement founded by the women’s rights activist Manasi Pradhan.
ICICI Bank won the third prize in the ‘Service Sector-Mega: Banking, Financial
Services and Insurance’ category at the National Awards for Excellence in Cost
Management.
ICICI Bank was felicitated as one of the winners of the Best Performance Award from
NABARD for initiatives implemented under its Self Help Group (SHG) Bank
Linkages Programme in Tamil Nadu for financial year 2017. The bank has won this
award for three years in a row.
ICICI Bank won the award in the ‘Best Private Sector Bank - Rural Reach’ category
at the ‘Dun & Bradstreet Banking Awards 2017.
ICICI Bank won all five awards in ‘Commercial Building’ category at the State Level
Energy Conservation Award, organised by Maharashtra Energy Development Agency
(MEDA).
Ms. Chanda Kochhar received the Dr. K.C.G. Verghese Excellence Award in the
‘Women Achievers’ category. She received the award in recognition of her
contribution towards the progressive growth and development in the banking sector
for more than two decades.
ICICI Bank won the award in the ‘Analytics & Big Data’ category at the IDRBT
Banking Technology Excellence Award for 2016 - 2017. The awards are organised by
the Institute for Development & Research in Banking Technology (IDRBT), an
institute established by the Reserve Bank of India (RBI).
Ms. Chanda Kochhar became the first leader to receive the Woodrow Wilson Award
for Global Corporate Citizenship by the Woodrow Wilson Centre located in
Washington, U.S.A.
ICICI Bank was declared runner-up in the 'Best Large Bank' category, according to
the Business world Best Bank Survey 2016.
ICICI Bank was recognised by the Ministry of Rural Development, Government of
India, for the funding provided to Self Help Groups across rural India. This funding
supported the growth of the National Rural Livelihood Mission programme initiated
by the Government.
ICICI Bank ranked first among the Points of Presence (POP) identified under
National Pension System (NPS) in Private Sector Banks. The awards were presented
during a conference organised by the Pension Fund Regulatory and Development
Authority.
ICICI Bank featured in the number one position in two benchmark surveys by
Forrester Research, a marquee American research agency. The Bank has earned the
top slot in the India Mobile Banking Functionality Benchmark Report 2017 with a
combined score of 70, which is 13 points ahead of its nearest competitor and 18 points
ahead of the national average. The Bank has received this top honour for the second

39
consecutive year. The Bank also topped the India Online Banking Functionality
Benchmark Report 2017. It scored 59 out of 100, which is 16 points ahead of its
nearest competitor and 14 points ahead of the national average. Both the reports
provide a benchmark for the current state of retail mobile banking and online banking
in India.
ICICI Bank won the Website of the Year - India award at the ABF Retail Banking
Awards 2017. Asian Banking & Finance, a Singapore-based publication, organises
these awards.
ICICI Bank won the award in the ‘Best Bank for Payments in India’ category at The
Asian Banker Transaction Banking Awards 2017. The awards are organised by The
Asian Banker, a Singapore based publication. The Bank won this award for being one
of the pioneers in global payments innovation initiatives in India.
ICICI Bank won the Customer Experience in Financial Services 2017 award in the
‘Best Technology Implementation – Front-End’ category. These awards were
organised by Private Banker International, a Singapore-based publication which is
part of the trimetric group. The Bank won this award for the Touch & Pay feature on
its contactless cards using Host Card Emulation (HCE) technology.
ICICI Bank won two awards at the Intelligent Enterprise Awards 2017 organised by
The Indian Express in the ‘Storage’ and ‘Enterprise Applications’ categories. ICICI
Bank won the award in the ‘Storage’ category for the Enterprise Storage & Backup
transformation project that improves disaster recovery & compliance across
operations. This award in the ‘Enterprise Applications’ category was won for APP360
– a one-stop solution that enables the Bank to manage the complex infrastructure
across applications in an efficient way.
ICICI Bank won the award in the ‘End Users of IT’ category for Chatbot on iMobile
and Software Robotics at the IMC Digital Technology Awards 2016
ICICI Bank emerged as the ‘Best Bank for SMEs’ at the Asiamoney India Banking
Awards 2017. The Bank has won this award for its automation initiative ‘COLORS’
(Corporate Loan Origination System). COLORS is a system deployed within the
Bank. It has an end-to-end automated workflow right from logging in an application
to disbursing the loan to SMEs.
ICICI Bank won the Gold Award in the ‘Banks and Credit Cards’ category, as per the
Readers Digest Trusted Brand Survey 2017.
ICICI Bank won the ‘Best Retail Bank in India’ award for the fourth consecutive year
at the Asian Banker Excellence in Retail Financial Services International Awards
2017.
ICICI Bank received two awards at the National Payments Excellence Awards 2016 in
the ‘Large Bank’ category organised by NPCI (National Payments Corporation of
India). The Bank was declared winner for the ‘Immediate Payment System’ (IMPS)
application and first runner up for ‘Cheque Truncation System’ (CTS).
ICICI Bank’s Pockets has been selected as ‘App of the year’ for 2015-16 at the FE
Best Banks awards organised by The Financial Express.
Ms. Chanda Kochhar featured as an Evergreen Woman Leader in ‘BW’s Most
Influential Women’ list by Business World magazine.

40
Ms. Chanda Kochhar voted as the ‘Favorite Female Business Icon’ by women
professionals aged 29 years and above, according to nationwide survey conducted by
Talentedge, a Delhi based education technology firm.
ICICI Bank received runners-up awards in the categories of ‘Lean’, ‘DFSS’ (Design
For Six Sigma) and ‘DMAIC’ (Define, Measure, Analyze, Improve, and Control) at
the Six Sigma Case Study Presentation Contest 2017 organised by the Indian
Statistical Institute, Bangalore.
ICICI Bank has been voted as the 'Top Borrower in Asia – India' for the fifth
consecutive year and the 'Most Impressive Investment grade Financial Institution
from Asia' in the online poll conducted by FinanceAsia magazine in 2016.
ICICI Bank won the 'Best Company to Work for' Award of Business Today magazine
in the Banking, Financial Services and Insurance sector.
ICICI Bank was declared winner in four categories and first runner-up in one category
among 'Large Banks' at the IBA Banking Technology Awards 2017. The Bank won the
award for the 'Best Technology Bank of the Year'. It also won awards in the categories
of 'Best Use of Analytics for Business Outcome', Best Use of Digital and Channels'
and 'Best Payments Initiative'. The Bank was declared first runner-up in the category
of 'Best IT Risk and Cyber Security Initiatives'.
ICICI Bank was awarded the ‘Gold category’ recognition at the Energy And
Environment Foundation Global Safety Award 2017. This is the highest award
received by a bank in the Financial Sector – Banking/Non-Banking Finance
Companies, for its constant effort towards encouraging safe work practices across
operations.
ICICI Bank won two awards at the Asset Triple A Country Awards 2016. The Bank
won the Best Bond House-Domestic Award in the 'Best House' category and the Best
Syndicated Loan Award in the 'Best Deal' category respectively.
ICICI Bank won two awards for its Tax Payment Through Alternate Channels and
Smart Vault projects at Finnoviti 2017, a conference and award ceremony organised
by the Banking Frontiers magazine to recognise innovations in the Indian Banking,
Financial Services & Insurance (BFSI) industry.
ICICI Bank ranked first among private sector banks in India as per Brand Equity's
'Most Trusted Brands of 2016' survey. Brand Equity is a supplement of The Economic
Times. The Bank is the only private sector bank to be featured among the top 100
brands in this survey.
ICICI Foundation won the 'Best CSR & Sustainability Practices Award for 2016' at
the 4th Asia Business Responsibility Summit.

Vision and mission of ICICI Bank :

Vision:
1) To be the leading provider of financial services in India and a major global bank.

Mission:
1) We will leverage our people, technology, speed and financial capital to:

41
2) be the banker of first choice for our customers by delivering high quality, world-
class products and services.
3) expand the frontiers of our business globally.
4) play a proactive role in the full realisation of India’s potential.
5) maintain a healthy financial profile and diversify our earnings across businesses
and geographies.
6) maintain high standards of governance and ethics.
7) contribute positively to the various countries and markets in which we operate.
8) create value for our stakeholders.

6.2 HDFC BANK :

HDFC (housing development financial corporation) Bank Limited is an Indian

banking and financial services company headquartered in Mumbai, Maharashtra. It
has 84,325 employees[6] and has a presence in Bahrain, Hong Kong and Dubai.
HDFC Bank is India’s largest private sector lender by assets. It is the largest bank in
India by market capitalization as of February 2016.It was ranked 69th in 2016 BrandZ
Top 100 Most Valuable Global Brands
HDFC Bank was incorporated in August 1994. As of June 30, 2017, the Bank had a
nationwide distribution network of 4,727 branches and 12,225 ATM's in 2,666
cities/towns.
HDFC Bank was amongst the first to receive an 'in-principle' approval from the
Reserve Bank of India (RBI) to set up a bank in the private sector from Housing
Development Finance Corporation Limited (HDFC), in 1994 during the period of
liberalisation of the banking sector in India. HDFC India was incorporated in August
1994 in the name of 'HDFC Bank Limited'. HDFC India commenced operations as a
Scheduled Commercial Bank in January1995.
HDFC India deals in varieties of products like home loan, standard life insurance,
mutual fund, securities, credit cards, etc. HDFC has branch offices in all major cities
in India like Calcutta, Chennai, Delhi, Bangalore, Hyderabad, Ahmedabad apart from
HDFC Mumbai.

Organizational Goals:

1) Develop close relationships with individual households.

2) Maintain its position as the premier housing finance institution in the country,

42
3) Transform ideas into viable and creative solutions.
4) Provide consistently high returns to shareholders.
5) To grow HDFC's main goals are
6) Through diversification by leveraging off the Existing client.

Products :
Credit cards, consumer banking, corporate banking, finance and insurance, investment
banking, mortgage loans, private banking, private equity, wealth management[2]

Revenue :
₹74,373 crore (US$12 billion) (2016)

History :
The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced
operations as a Scheduled Commercial Bank in January 1995. The Housing
Development Finance Corporation (HDFC) was amongst the first to receive an 'in
principle' approval from the Reserve Bank of India (RBI) to set up a bank in the
private sector, as part of the RBI's liberalization of the Indian Banking Industry in
1994.
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable
network of over 1416 branches spread over 550 cities across India. All branches are
linked on an online real–time basis. Customers in over 500 locations are also serviced
through Telephone Banking. The Bank also has a network of about over 3382
networked ATMs across these cities.
The promoter of the company HDFC was incepted in 1977 is India's premier housing
finance company and enjoys an impeccable track record in India as well as in
international markets. HDFC has developed significant expertise in retail mortgage
loans to different market segments and also has a large corporate client base for its
housing related credit facilities. With its experience in the financial markets, a strong
market reputation, large shareholder base and unique consumer franchise, HDFC was
ideally positioned to promote a bank in the Indian environment.
The shares are listed on the Bombay Stock Exchange Limited and The National Stock
Exchange of India Limited. The Bank's American Depository Shares ( ADS ) are
listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the
Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock
Exchange.
On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank
was formally approved by Reserve Bank of India to complete the statutory and
regulatory approval process. As per the scheme of amalgamation, shareholders of
CBOP received 1 share of HDFC Bank for every 29 shares of CBOP.
The merged entity now holds a strong deposit base of around Rs. 1,22,000 crore and
net advances of around Rs. 89,000 crore. The balance sheet size of the combined
entity would be over Rs. 1,63,000 crore. The amalgamation added significant value to

43
HDFC Bank in terms of increased branch network, geographic reach, and customer
base, and a bigger pool of skilled manpower.
In a milestone transaction in the Indian banking industry, Times Bank Limited
(another new private sector bank promoted by Bennett, Coleman & Co. / Times
Group) was merged with HDFC Bank Ltd., effective February 26, 2000. This was the
first merger of two private banks in the New Generation Private Sector Banks. As per
the scheme of amalgamation approved by the shareholders of both banks and the
Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank
for every 5.75 shares of Times Bank.
HDFC Bank offers a wide range of commercial and transactional banking services
and treasury products to wholesale and retail customers.

CHAPTER 7
OBJECTIVE OF THE STUDY:

1) The objective of this study is to compare the public sector banks and privatebanks
in terms of customer satisfaction and to find out the various reasons of customer
dissatisfaction in these banks.
2) To measure the awareness and satisfaction level of the banking customers.
3) To identify the better banking sector between the public and private sector banks.
4) To identify the weak areas which need to improvements so that quality of services
of Banks can be enhanced.

7.1 Significance of Study:

Satisfied customer are central to optimal performance and financial returns. In many
place in the world business organization have been elevating the role of the customer
to that of a key stakeholder over the past 20 years. Customer are viewed as a group
whose satisfaction with the enterprise must be uncorporated in strategic planning
efforts. Forward-looking companies are finding value in directly measuring and
tracking customer satisfaction (CS) as an important strategic success indicator.
Evidence is mounting that placing a high priority on CS is critical to improved
organisational performance in a global market place.With better understanding of
customers perception, companies can determine the actions required to meet the
customers needs. They can identify their own strengths and weaknesses, where they
stand in comparis onto their competiton, chart out path future progress and
improvments in the work practices and processes used within the company.

The research work when completed, will give me an insight into a practical situation.
However, it will also indicate how to combat the marketing problems the banks with
regards to the level of customer’s satisfaction. In addition, it will serve as a source of
reference fo similar research in future.

44
Finally, it is also intend to facilitate the effort of policy makers to come out with
policies that will embody effective customer satisfaction strategies.

CHAPTER 8
RESEARCH METHODOLOGY:

8.1 Research design :

Research methodology deals with a systematic methods that can be adopted to solve
research problems. Methodology is a crucial step in any research because it directly
influences the whole research and it's findings. The present study will be carried out to
gain an insight into the customer satisfaction level with the quality of services
provided by public sector and private sector banks.

Scope of the study-

The scope of the study is to confied in comparing the Public sector and Private sector
banks in term of consumer satisfaction. The study will be undertaken on the basis of
sample survey.

8.2 Data collection method-

The date have been collected from primary source and secondary source through
questionnaire.

Data collection tool-

 Secondary data :
The data is collected through various websites and books as a source of secondary
data tool.

 Primary data:
The primary data has been collected by the way of designed structured questionnaire
to the relevent questions related to the study.

Type of questionnaire: Structured questionnaire.

8.3 ANALYSIS OF DATA :

45
The collected data in the study has been presented and analysed using the various
factors dimisions and consumer satisfaction level in public and private sector banks.

Analysis of public sector banks :

Service Quality Dimensions

Analysis of private sector banks :

Service Quality Dimensions

Explanation :

The satisfaction level of employees approach is too low in public sector banks as
compared to private sector banks.

46
Where as the employee approach is highest in private sector banks.

If we compare the service quality dimensions in terms of reliability the public banks
have comparitavely higher satisfaction level .
Hence people go for public sector banks mostly for trust factor.

The dissatisfaction level in the term of responsiveness is high. Because the servey
says that sometimes customer do not get quick response and request are not handled
promptly. It is totally opposite in private sector banks.

The ATM security facilities shows the greatest difference in public and private banks.
The survey says that the private sector banks are much more advance in the term of
security of ATM and online filing as compared to public sector banks.

The customer service is too low in public sector banks as on the other hand it's
comparatively very high in private sector banks.

Hence the customer satisfaction level is high in private banks as compared to public
sector banks.
People prefer private sector banks for service quality than the public sector banks.
The satisfaction level differ from the attribute people value the most in banks , their
age group, requirement and it differ from branch to branch of the bank.

8.4 LIMITATION OF STUDY:

The states below are the limitations of the project -
1) This study is geographically restricted to Mumbai city only.
2) The sample size is small due to specific reason.
3) The study is restricted to few number of Banks. So the competitive scenario could
not be studied.
4) Finding are based on sample survey through questionnaire method.
5) All the answers given by the respondent has been assumed true.

CHAPTER 9
CONCLUSION:

60% of the customers are not using mobile banking in private sector banks whereas
40 % of the customers are not using the mobile in public sector banks.
70% of the customer of Private Banks are satisfied with the behavior of the staff out
of which 60% are very satisfied and 40% are highly satisfied. Whereas 60% of the
customers of Public Sector Banks are satisfied with the behavior of the staff out of
which 75% are very satisfied.
65% of the customers are using internet banking in Private Sector banks and rest 35%

47
are not using because this service is not provided by their banks (e.g. any bank)
whereas 80% of the customers are using ATM banking in private sector banks out of
which 30% are satisfied and 70%are highly satisfied. This shows a very high rate of
customer satisfaction level in Private sector banks.
In Public sector banks 65% of the customers are satisfied and 80% are very satisfied
with ATM banking whereas in Private sector banks 30% of the customers are very
satisfied and 70% of the customers are highly satisfied with the service.

CHAPTER 10
FINDING:
Consumer satisfaction level is higher in private sector banks as compared with the
public sector banks.

Reason for dissatisfaction in public sector banks -

1) Behariour and attitude of the staff in public banks is a first reason of customer
dissatisfaction.
2) Time taken to process the transactions is the secondary reason if customer
dissatisfaction.
3) Many other services are provided by the public sector banks are not up to the mark
when compared with the public sector banks.
4) Continuous services are not provided by the ATM machines installed by various
public sector banks.
5) The passbook updating machines many a times do not provide continuous service.
6) Many a time ATM machines do not function continuously and found in out of
service.
7) The middle age group who use online banking to carry out transaction find online
banking a little confusing.
8) It sometimes takes a lot of time in getting the work done from the bank.
9) One more reason for dissatisfaction in public sector banks is they need to improve
on customer support connectivity.

CHAPTER 11
RECOMMENDATIONS:
 The staff should be adequately trained to deal with the customer on one to one
basis.
 Many public sector banks need to revive their infrastructure to have pace with
the competing environment.
 Many of services need improvement in public sector banks e.g ATM facilities
 Staff should be adequately trained to encourage face to face dealing.
 Staff should be friendly and approachable.
 Clearly defined customer policy should be adopted by the banks.
 Customers needs should be anticipated in advance so that they can be
helped out in a better way.

48
  Treat your customers like your friends and they'll always comes back.
 Honour your promise.
 When the customer needs help they must have direct connection to customer
support executive.
 Should bring advancement in technology.
 The banks should ask for their customer feedback to know whether the
customers are really satisfied or dissatisfied with service and the products of
the Banks.

CHAPTER 12
Bibliography -

Internet -
http://www.yourarticlelibrary.com
https://googleweblight.com/i?u=https://www.marketing91.com
http://googleweblight.com/i?u=http://www.learnmarketing.net
http://googleweblight.com/i?u=http://www.bms.co
https://www.ibef.org/industry/banking-india.aspx
https://en.m.wikipedia.org/wiki/State_Bank_of_India&grqid=9bMrd7Ib&hl=en-IN
http://management.ind.
https://www.designingbuildings.co.uk/wiki/Scope_of_services
https://www.icicibank.com/aboutus/awards.page
https://googleweblight.com/i?
u=https://en.m.wikipedia.org/wiki/Union_Bank_of_India&grqid=C9gxsRCi&hl=en-
IN
https://www.linkedin.com
https://en.m.wikipedia.org/wiki/Service_quality
http://www.yourarticlelibrary.com

Book- Marketing in Banking and Insurance

- Romeo S. Mascarenhas.

49
CHAPTER 13
Questionnaire

Thank you for allowing us to communicate with you.

I am a student of khar Education Society’s College of Commerce &
Economics, Khar west. Conducting a Research under Corporative study of Service
Quality and consumer Satisfaction in public banks and private banks as a part of
our course curriculum under Bachelor in Banking and Insurance ( B.B.I.)
Please answer the questions as honest as possible, We assure you that all
responses will be held strictly confidential. This survey is purely for the purpose of
research in academics and not to be shared with any individual or company
without your consent.

PERSONAL DETAILS :

1)Name: _______________________________________________________________________

2)Address: ______________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

3) Contact Number:________________________
4) E-mail Id:_______________________________
5) Age:
A. Below 18 Years B. 18-26 Years C. 27-40 Years

D. 41-50 Years E. 51-60 Years F. Above 60

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6) Gender: A. Male B. Female

7) Education:
A. Illiterate B. High school C. Intermediate
D. Degree E. Master’s Degree F. Others

8) Profession:
A. Govt. Employee B. Private Employee C. Business
D. Student E. Housewife F. Others

9) Annual Income:
A. Less than 1.5 Lakhs B. 1.5 Lakhs to 2.5 Lakhs
C. 2.5 Lakhs to 3.5 Lakhs D. 5 Lakhs and above

10) Type of Account:

A. Saving Bank Account B. Current Bank Account
C. Recurring Bank Account D. Others

11) Name of the Bank & Branch :____________________________________________________

_______________________________________________________________________________

12) Which attribute of bank do you value the most?

A. Quality of Service B. Technology used C. Trust

D. Location E.Type of Bank
F. Others ( Please Specify ):____________________________________

13) Consumer level of usage of technology ( Tick all that are applicable )
A. Connection to Internet for Financial Transaction
B. Use E-mail C. ATM Debit/Credit Service
D. Online Banking E. Electronic Fund Transfer
F. Others (Please Specify):_________________________________

Satisfaction level regarding the various service Quality Dimensions:

At what level do you are Satisfied with the following service Quality dimension?

Tick any option that represents your answer.

A. Tangibility Satisfied Neutral Dissatisfied

1. Bank has up to date Equipment & Technology.

2. Location of the bank

3. Sufficient Numbers of ATMs

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 4. Cash counting machine
5. Employee approach
6. Guide signs Indicating as to which counter are offering
which service

B. Reliability Satisfied Neutral Dissatisfied

1. Information provided on website
2. Up to date Content
3. Wide range of product and service provided

C. Responsiveness Satisfied Neutral Dissatisfied

1. Customer Service Representative
2. Bank performance the service right in the first time.
3. Quick confirmation
4. Request are hand led promptly.

D. Assurance Satisfied Neutral Dissatisfied

1. Employee of the bank has the knowledge to answer
customer question
2. Politeness and friendly staff
3. Empolyees are always willing to help you
4. Experienced management staff

E. Empathy Satisfied Neutral Dissatisfied

1. Time Hard work of employee
2. Helpdesk, Call centres of banks

F. Security Satisfied Neutral Dissatisfied

1. Security for ATMs
2. Online Filing
3. Privacy Confidentials of the bank
4. Care in collection of personal information

G. Consumer Service Satisfied Neutral Dissatisfied

1. Customer friendly environment in bank
2. Customer feedback service
3. Capable of solving complains adequality
4. Special service for elder and disables
5. Brouchers to educate new users

14) Are you satisfied with the overall technologies and service provided by your bank?

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 A. Yes B. No C. Cannot say

15) What problem do you face in the terms of service Quality when you deal with your bank?
(Please specify)_______________________________________________________________

16) What Suggestion you can give to the development of service Quality to the Indian banking
Sector?______________________________________________________________________

Signature of Customer

Thank you for your Valueable Time, Cooperation, Patience and Information.

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