PROJECTREPORT ON

“A STUDY OF FINANCIAL SERVICE OFFERED

BY BANKS–BANK OF BARODA”

A PROJECT BY
SHUBHAM JAGDISH GAIKAR
ROLL NO: 212206024

UNDER THE GUIDANCE

OFASSTPROF. KAPIL SIR

SINDHU EDUCATION SOCIETY’S

SWAMI HANSMUNI MAHARAJ DEGREE
COLLEGEOF COMMERCE
NETAJI ROAD, ULHASNAGAR –421004.
2021-22
 INDEX

Chapter Content Page

No. No.

1. Introduction 1 to 26

2. ResearchMethodology 27 to 30

3. LiteratureReview 31 to 49

4. DataAnalysis 50 to 70

5. Conclusionand Suggestion 71 to 80

6. Bibliography

7. Questionnaire
ChapterNo. 1
Introduction.
Chapter1 :Introduction

1.1 Whatexactly doesfinancialservicesmeans.

Financial Services is a term used to refer to the services provided by the

financemarket. Financial Services is also the term used to describe organizations that
dealwiththemanagementofmoney.ExamplesaretheBanks,investmentbanks,insuranceco
mpanies, credit card companies and stock brokerages.These are the types of
firmscomprising the market, that provide a variety of money and investment
relatedservices. Financial services are the largest market resource within the world, in
termsof earnings.Financial Services can also be termed as, any service or product of
afinancial nature that is the area under discussion to, or is governed by a
measuremaintained by a Party or by a public body that exercises regulatory or
supervisoryauthority delegated by law.Financial Services are generally not limited to
the field ofdeposit-taking, loan and investment services, but is also present in the
fields ofinsurance, estate, trust and agency services, securities, and all forms of
financial ormarketintermediationincludingthedistribution offinancialproducts.

Aligned with a background of sharp risk, market and regulatory

pressures,Financial Services organizations are striving to grow and enhance their
shareholdervalues.Day by day the customer needs and expectations are growing.
Thus,mark inincreasing personal wealth, a mature population and the desire that can
more easily bereached to the personalized financial products and services. Intense
competition hassqueezed market margins and forced most companies to cut costs
while enhancing thequality of customer choice and service.As Financial Services
organizations strive tobecome more innovative and entrepreneurial, the war for talent
is intensifying. Therisks increase as the products become more complex, the
organizations and thebusiness environment ever more uncertain. At the same time,
regulation is
thetighteninghighlightwithinthereachofpublicandgovernmentpressureforimproved
supremacy, transparency and accountability.In this environment, the winners will
becompanies that can turn the challenges into opportunities to build stronger and
moreenduring customer relationships, sharpen their process efficiency, unlock talent
andcreativity, use improved risk management processes to deliver more
sustainablereturns and use used regulatory demands as a catalyst for strengthening
the businessandenhancing marketconfidence.

The fast pace of change aspect element within the global Financial
Servicesmarket has created the need for a new generation of solutions that can
operate in realtime with a very flawless reliability.The challenges faced by the
Financial Servicesmarket are forcing market participants to keep pace with
technological,advances, andto become more proactive and efficient while keeping in
mind to reduce costs andrisks.

The market in Financial Services is not only a powerful economic force, but
canalsobeconsideredasadriverofotherindustries'success,standards,andoperations.Virt
ually each and every company uses financial services institutions for not onlytheir
own, but their customers business purposes, and the practices, regulations
andstandards thatthemarketadopts affects theway thattheirowncustomers.

To have an effective network strategy in place enables the Financial

Servicesorganizations to become more customer-oriented. This helps to increase
theirprofitability, enhance the alertness factor, also lessen total ownership costs, and
dealwith used business challenges.There are many companies working with
financialorganizations worldwide to develop a sound networking strategy for
connectingcompanies with customers, suppliers, partners, and employeestoo .Thus,
concludinghere that the Financial Services market is diverse and dynamic. An ever-
changingversatile, high-growth market, Financial Services consist of everything
fromindividual or group consultants to banks, credit cards and alternative
financingproviders. Businesses that have differing needs and the diversity and range
of thefinancial services market has several selections available to better suit them
all.Thereisalotyoucanlearnabout
theFinancialServicesindustry.Itisanexciting,importantindustry that has a direct impact
on the way businesses operate and grow, andsubsequently,theeconomy of
ournationtoo.
 Financial services are the economic services provided by the finance
industry,which encompasses a broad range of businesses that manage money,
including creditunions, banks, creditcard companies, insurance companies,
accountancy companies,consumer-finance companies, stock brokerages, investment
funds, individualmanagers and some government-sponsored enterprises. Financial
services companiesare present in all economically developed geographic locations
and tend to cluster inlocal, national, regional and international financial centers.A
financial system is anetworkoffinancial
institutions,financialmarkets,financialinstrumentsandfinancialservices to facilitate the
transfer of funds. The system consists of savers,intermediaries, instruments and the
ultimate user of funds. The level of economicgrowth largely depends upon and is
facilitated by the state of financial systemprevailing in the economy. Efficient
financial system and sustainable
economicgrowtharecorollary.Thefinancialsystemmobilizesthesavingsandchannelizest
hem into the productive activity and thus influences the pace of
economicdevelopment.Economicgrowthishamperedforwantofeffectivefinancialsystem
.
Broadly speaking, financial system deals with three inter-related and
interdependentvariables, i.e., money, credit and finance.The financial system
provides channels totransfer funds from individual and groups who have saved
money to individuals
andgroupwhowanttoborrowmoney.Saver(refertothelender)aresuppliers
offundstoborrowers inreturnwithpromises ofrepaymentofevenmorefunds inthefuture.
Borrowers are demanders of funds for consumer durables, house, or business
plantand equipment, promising to repay borrower funds based on their
expectation ofhaving higher incomes in the future. These promises are financial
liabilities for theborrower-that is, both a source of funds and a claim against the
borrower’s futureincome.

FINANCIALSERVICESININDIA:ANOVERVIEW

The role being played by the Private Financial Institutions in the

socioeconomicdevelopmentofthestateis
throughtheirfinancialservices.Tohaveabetterideaandunderstanding about the
functioning and services of these Private FinancialInstitutions it would be more
helpful to make a broader watch towards the FinancialServices in India.
 Financial services are an important component of the financial system.
FinancialServices fulfill the needs of financial institutions, financial markets and
financialinstruments.Thesmoothfunctioningoffinancialsystemwilldependupontheran
geof financial services extended by the providers. Financial services contribute a lot
tothe efforts of speeding up the process of economic growth and development.
Thefinancial services industry is growing at a very fast rate. “Financial services in
Indiahave witnessed remarkable changes in the recent past after the implementation
ofLiberalizations,PrivatizationsandGlobalizations(LPG)Policyintheeconomy.
Policiesof thegovernment,rapid developmentintheInformationandCommunication
Technologyinthefinancialservicessectorcreatedradicalchangesinrespectoffirms,genera
tionofinnovativefinancialproducts andfinancialmarkets.”

“In fact, the efficiency of the emerging financial system primarily depends upon
thequality and range of the package of financial services largely provided by the
non-banking financial companies. Although some of these services in India are at
thenascent stage, they represent developments of considerable significance for
thefinancialsystems.”

A bank is a financial institution that provides banking and other financial services
totheir customers. A bank is generally understood as an institution which
providesfundamental banking services such as accepting deposits and providing
loans.
Therearealsononbankinginstitutionsthatprovidecertainbankingserviceswithoutmeeting
the legal definition of a bank. Banks are a subset of the financial services industry.
Abanking system also referred as a system provided by the bank which offers
cashmanagement services for customers, reporting the transactions of their accounts
andportfolios, throughout the day. The banking system in India should not only be
hasslefree but it should be able to meet the new challenges posed by the technology
and anyother external and internal factors. For the past three decades, India’s banking
systemhas severaloutstandingachievementstoits credit.

The Banks are the main participants of the financial system in India. The
Bankingsector offers several facilities and opportunities to their customers. All the
bankssafeguards the money and valuables and provide loans, credit, and payment
services,suchascheckingaccounts,moneyorders,andcashier’scheques.Thebanksalsooffe
rinvestmentandinsuranceproducts.As avarietyofmodels forcooperationand
integration among finance industries have emerged, some of the
traditionaldistinctions between banks, insurance companies, and securities firms
havediminished.Inspiteofthesechanges,bankscontinue tomaintainandperform
theirprimaryroleis accepting deposits andlending fundsfromthesedeposits.

Banking services are regarded as one of the important service. Banks

providefinancial services to the customers. Due to the rising competition and
liberalizationthe banking industry has become the buyer’s market. Banks need to
create anddevelop the services which can satisfy the consumer needs. Customer
satisfaction is avery important construct in today’s market and it is directly
influenced by servicequality as per earliest studies. Therefore, the present research
work has been carriedoutto analyzetheruralcustomers’ attitudetowards
publicsectorbanks.

Banking in India is so convenient and hassle free that one (individual, groups
orwhateverthecasemaybe)caneasilyprocess
transactionsasandwhenrequired.Themostcommon services offered by banks in
Indiaareasfollows:

1. Bank
accounts:Itisthemostcommonserviceofthebankingsector.Anindividualcanopen abank
accountwhich canbeeither savings,currentortermdeposits.

2. Loans: You can approach all banks for different kinds of loans. It can be a
homeloan,carloan, andpersonalloan,loanagainstsharesandeducationalloans.

3. Money Transfer: Banks can transfer money from one corner of the globe to
theotherby issuing demanddrafts, money ordersorcheques

4. Creditanddebitcards:Mostbanksoffercreditcardstotheircustomerswhichcanbeu
sedto purchaseproducts and services, orborrowmoney.

5. Lockers:Mostbankshavesafedepositlockerswhichcanbeusedbythecustomersforstori
ng valuables,likeimportantdocuments orjewellery.

Customerservicestrategiesinbankingsector

Today,bankingsectorisseenasacatalystineconomicgrowthofacountryand,lotisexpected
from the banking fraternity. The recognition of banking, as a tool for allinclusive
growth by economists, financial planners, reformist etc has made it
animportantsectorintheGovernment’splanningofeconomicgrowth.Thebanking
sectorinIndiaisthereforewitnessingtremendouschangesbecauseofpolitical,socialandeco
nomicchanges thataretakingplacedomesticallyandinternationally.

The concept of banking, which was earlier restricted to accepting of deposits

frompublicforthepurposeof,has
alsoundergoneseachange.Todaythebankingsectorisseen as a vehicle for all inclusive
economic growth, social responsibility andequivdistributionof nationalresources.

Today banks are wooing existing customers, prospective customers by offering

newfacilities, products, and services in order to retain/increase their base in market.
Theway the banking has changed, so has the customer changed. The customer of
today isnot what he was yesterday. Today the customer is more knowledgeable,
demanding,analyticalandawareofhisrights.Itis
thereforeachallengingtaskbeforethebankingsector to revisit their entire working
modules, up gradation of skills, technology, andpolicies so that they are competent to
withstand the international competitiveenvironment in future.All customers from
different backgrounds have differentexpectations. Unless the service standards fit to
each person’s expectations, he willnot be satisfied. Therefore one has to understand
each type of customer thoroughly tobeableto providecustomer specificservices.

1.2 Characteristics

Thecharacteristics offinancialservicesareasfollows:

1. Intangibility:

Thebasiccharacteristicsoffinancialservicesarethattheyareintangibleinnature.For
financial services to be successfully created and marketed, the institutionsproviding
them must have a good image and the confidence of its clients. Quality
andInnovativeness of the services are the focal points for building credibility and,
gainingofthetrustof theclients.

2. CustomerOrientation:

The institutions providing financial services study the needs of the customers
indetail. Based on the results of the study, they come out with innovative
financialstrategiesthatgivedueregardtocosts,liquidity,andmaturityconsiderationsf
orvariousfinancialproducts.This way,financialservices arecustomer-oriented.
3. Inseparability:

The functions of producing and supplying financial services have to be carried

outsimultaneously.

4. Perish-ability:

Financialserviceshavetobecreatedanddeliveredtothetargetclients.Theycannotbestored.
Theyhavetobesuppliedaccordingtotherequirements ofcustomers.
Hence,it isimperativethattheprovidersoffinancial servicesensurea
matchbetweendemandand supply.

5. Dynamism:

The financial services must be dynamic. They have to be constantly defined

andrefined. On the basis of socio-economic changes occurring in the economy,
such asdisposable income, standard of living, level of education, etc., financial
servicesinstitutions must be proactive in nature and evolve new services by
visualizing theexpectations of themarket.

1.3 HistoryaboutBankof Baroda.

MaharajaSayajiraoGaekwadIII thefounderofBank ofBaroda.

The bank was founded by the Maharaja of Baroda, Maharaja SayajiraoGaekwad

IIIon20July1908.Thebank,alongwith13othermajorcommercialbanks
ofIndia,wasnationalised on 19 July 1969, by the Government of India and has been
designated asaprofit-making publicsector undertaking (PSU).

Thebank,alongwith13othermajorcommercialbanksofIndia,wasnationalisedon 19
July 1969, by the Government of India and has been designated as a profit-
makingpublicsector undertaking (PSU).

ThebankwasfoundedbytheMaharajaofBaroda,MaharajaSayajiraoGaekwadIIIon
20July 1908.

In 1961, Bob merged in New Citizen Bank of India. BoB also opened a branch
inFiji.Thenextyearitopenedabranch inMauritius.BankofBarodaIn1963, BoB
acquiredSuratBankingCorporationinSurat,Gujarat.In1965,BoBopenedabranchinGuya
na.In1969,theIndiangovernmentnationalised14topbanks includingBoB.

Theterm"financialservices"becamemoreprevalentintheUnitedStatespartlyasa result
of the Gramm-Leach-Bliley Act of the late 1990s, which enabled differenttypes of
companies operating in the U.S. financial services industry at that time tomerge.

Companies usually have two distinct approaches to this new type of business.
Oneapproach would be a bank which simply buys an insurance company or an
investmentbank, keeps the original brands of the acquired firm, and adds the
acquisition to itsholding company simply to diversify its earnings. Outside the U.S.
(e.g. Japan), non-financial services companies are permitted within the holding
company. In thisscenario, each company still looks independent, and has its own
customers, etc. In theother style, a bank would simply create its own brokerage
division or insurancedivision and attempt to sell those products to its own existing
customers, withincentives for combining allthingswithonecompany

Bank ofBaroda, VijayaBankand DenaBanktobemerged withbanks

Bank of Baroda is an Indian state-owned International banking and

financialservices company headquartered in Vadodara (earlier known as Baroda) in
Gujarat,India. It is the second largest bank in India, next to State Bank Of India.
Itsheadquarters is in Vadodara, it has a corporate office in the Mumbai. The
governmentproposed the merger of three banks — Bank of BarodaNSE 0.64 %,
Vijaya Bank andDena Bank —aimed at creating the country’s third-biggest
lender.That’s seen aspreparing the ground for consolidation among the remaining 17
state-owned lendersthat have been a drain on the exchequer and marking the next big
move in bankingreforms .Theboardsofthethreebanks willnow consider theproposal.

Finance Minister NirmalaSitharaman today announced a big consolidation

ofpublicsectorbanks:10publicsectorbanks tobemergedintofour.Under
theschemeofamalgamation, Indian Bank willbemerged

Last year, the government had approved the merger of Vijaya Bank and
DenaBank with Bank of Baroda (BoB) that become effective from April 1, 2019. In
2017,theStateBankofIndiaabsorbedfiveofits associates andtheBharatiyaMahilaBank.
 The combined entity will have a strong presence .across the nation with more
than34%of low-costdeposits, acapitalbuffer ofnearly 12%and abusiness book ofRs
14.82 lakh crore. Bank of Baroda is the biggest of the three with Rs 10.29 lakh
croreoftotalbusiness,followedbyVijayaBankatRs 2.79lakhcroreandDenaBankatRs
1.72 lakh crore. “The government has suggested this to the banks to consider
theseproposals,andhopefullyshortlytheboardswillmeet
andafteradequateconsultationwilltakeadecision,”said financeminister.ArunJaitley

The consolidation was proposed by the alternative mechanism

comprisingChairperson Arun Jaitley and cabinet ministers Piyush Goyal and
NirmalaSitharaman.

Jaitleyobservedthatthegovernmentisseekingtoensurethatthere
isnomergerofrelativelyweakbanks andthatithasheldtalks withtheReserveBankofIndia.

“You can have two well-performing banks absorbing a third one, and
hopefullycreating a mega bank which will be sustainable, whose lending ability will
be farhigher,” he said, adding that nobody should have a worry because this
amalgamatedentity will increase banking operations. “Its (merged entity) ability
toincrease.banking operations. “Its (merged entity) ability to increase and expand
willbeinevitable.”

Themergerproposalwasmadepublicaftermarketsclosed.BankofBarodaended0.41%
up Rs 135.10 on the BSE. Vijaya Bank rose 0.93% to Rs 59.80 while DenaBank fell
0.62% to Rs 15.95. The finance ministry said in a release that the
envisagedamalgamationwillbefirsteverthree-
wayconsolidationofbanksinIndia.“Themerger will help improve operational efficiency
and customer services,” financialservices secretary Rajiv Kumar said, adding that the
merger would involvesynergiergies inthebranch network,low-costdeposits and
subsidiaries.

Hesaidemployeeswouldbeprotected,brandequitywillbepreservedandthatthegovernment
willcontinueto providecapitalsupporttothemergedentity.

FinancialServicesRenderedbyBankofBaroda

1. IssuanceofDebitCards andCreditCards:
BanksissuedebitcardsandcreditcardsasaffiliatesofMasterCardWorldwideandVISAInc.
whohaveaglobalnetworkforcreditcardanddebitcardoperations.
Master Card Inc., widely known as Master Card Worldwide is a
multinationalcorporationbasedintheUSA.Itsprincipalbusinessistoprocesspaymentsbet
weenthe banks of different merchants selling various merchandise, and the banks
ofpurchaserswhouseitsMasterCardbranddebitandcreditcardstomakepurchases.

Likewise, VISA Inc. operates the world’s largest retail electronic payment
networkand is one of the most recognised global financial services brand. It
processespayments between the banks of the merchants and the banks of the
purchasers, whopurchase merchandise by using debit/credit cards bearing the brand
of VISA. MasterCard and VISA Card?are accepted by the merchant establishments
of 170 countriestheworldover.UsingaSwitch,theATMsofthebanks
canalsobeconnectedwiththecomputers of Master Card and Visa and cash withdrawal
and deposit through ATMsis also processed by them. Through their computers,
Master Card and Visa settle theinterbank claims for the use of ATMs by their
cardholders. Banks nowadays issueATM-cum-DebitCardsinstead of only DebitCards.

To reiterate once more, banks all over the world issue debit and credit cards
asaffiliates of Master Card worldwide or VISA Inc. There is an agreement between
thebanks and the Master Card Worldwide, whereby the banks are licensed to issue
creditcardsandATM-cum-
debitcardswiththelogoMasterCard.AsimilaragreementwithVISA Inc. allows the user
banks to issue cards bearing the VISA Logo. Banks have topay a certain amount of
fees to Master Card and VISA Inc. for using their logo on thecards issued by them.

The computers of the banks are linked to the computers of these

internationalorganizations at various centers. The cards issued by the banks bear the
logo of eitherVISA or Master Card and can be used all over the world, unless
restricted to somespecific countries. The Merchant Establishments (MEs) which
include shops,showrooms and selling outlets of different consumer items, clubs, and
associationsand other organizations, etc., are approached by different banks for
accepting
thecardsfromtheircustomerstowardspaymentfortheirpurchasesofgoodsandservicesfro
m them.The card-issuing banks provide an Electronic Data Capturing
(EDC)MachinetotheMEs forswipingtheCreditorATM-cum-Debitcards as andwhen
tendered by the card holders for purchases. The ME swipes the card in the
EDCmachineandawaitsauthorisationforacceptingthecard.Uponauthorization,theEDCm
achinegeneratesaslipto besigned bythecard holders.

These slips are bunched together by the particular ME and deposited with
theirbanker. The banks deduct a pre-determined percentage from the amount of the
slipsand credit the balance in the account of the merchant establishment. The
commissiondeducted by the banks is shared among the banks with whom the seller of
goods andservices (ME) maintains account, the card-issuing bank and the Master
CardWorldwide or VISA Inc., as the case may be.The bank branch paying to the
MEclaimstheamountfrom.’thedesignatednodalbranchandgets
reimbursed.Thenodalbranch, in turn, claims and receives the fund from Master Card
or Visa Inc. throughthesettlementsystemoftheircomputers locatedindifferentparts
oftheworld.
Ultimately, the card-issuing banks recover the amount from their customers to
whomthe cards are issued. In case of ATM-cum-Debit cards, the amount is
recovered fromthe customers’ accounts instantly.The banks can maximize their
earnings by issuingmoreandmoredebitorcreditcards and
byropinginmaximumnumberofMEs.
When a bank acquires business generated from its own card used at its own
MemberEstablishment (ME) its earnings is optimum, as it has to share the
commission onlywithMaster Card Worldwideor VISAInc.

However, the card holders are free to go to any shop or outlet who accepts cards
and,therefore,anotherbankentersintothe transaction.Thisgivesrisetoasituationwherethe
inter-bank settlement is called for. The said settlement of payments is donethrough a
settlement agency appointed by Master Card or VISA for a particularcountry. For
example, in India, the settlement of payments among the banks issuingMaster Card is
done through the Bank of India, Mumbai. Similarly, the Bank
ofAmerica,Mumbaifunctionsas thesettlementbankfor VISA cardpayments.

2. DepositoryParticipant(DP):

Till theendofthepreviouscentury,thejointstockcompanies/corporatesusedtoissuetheir
stocks, shares and other securities in the form of physical scrip. The
Governmentbonds and company debentures were also issued in physical form. The
physical formof these shares and securities was beset with the possibility of frauds
and forgery bytheeconomicoffendersoperating allover thecountry.
Often the share scrip and security certificates are sent through a post office by
acompany to the shareholder, it is fraught with the chance of being intercepted by
thefraudsters. It was often done in connivance with the postal staff, and the scrips
werebeing sold in an unauthorized manner to another person. The bona fide
shareholder isputtoanenormousdifficulty
andanxietyforthepossiblelossofthesharecertificates.

He has to go through a series of formalities to get the duplicate shares from the
shareissuing company. This apart, the number of companies going for public issue
hasincreased manifold during the last decades resulting in a phenomenal increase in
thenumber of share certificates and other securities.With the huge growth in the
volumeof trade in shares and securities, the settlement process of stock exchanges has
beenput to tremendous pressure, making it almost impossible to settle the
transactionwithin the prescribed settlement date. This situation threatened to stand in
the way ofthe healthy growth of the capital market and the investment scenario in
thecountry.With a view to overcoming the predicaments stated above, the concept
ofdematerialisingthesharesandsecuritiesandopeningofdepositoryaccounts(Demat)was
developed and implemented. Under the depository system, there will be nomovement
of shares and securities in the physical form and the investors will
getcreditoftheirshares and securities inadepositoryaccountelectronically.

Existing holders of shares and securities were advised to dematenahse their

physicalholdings and get them credited in a Demat account opened with a
DepositoryParticipant (DP). Purchase and sale of securities and shares is effected by
debiting andcrediting the said Demat account through electronic mode. The system of
depositoryhas helped in eliminating the physical movement of shares and securities
and therelative frauds almost completely.For this purpose two depositories, viz.,
NationalSecurity Depository Ltd. (NSDL) and Central Depository Services Ltd.
(CDSL) havebeen set up in the country. The investors were asked to open depository
account(Demat account) with any of these two depositories through a Depository
Participant(DP). All the commercial banks have entered into an agreement with these
twodepositories to act as their Depository Participant and the investors are required
toopen their Demat depository account through their banks acting as DP.DP is
basicallyanagentofNSDLorCDSL.Themodus operandiofdepositoryfunctionis
justlikeanordinarybankaccount,i.e.,witheverypurchaseofshares andsecurities,the
depositoryaccountoftheinvestorgetscredited,andwitheverysalethedepositoryaccountisd
ebited.

The investor receives a statement of the depository account at a particular

interval,depicting the shares and securities held by him on the date of the statement. It
can
besaidthattheinvestorisholdingthesharesandsecuritiesindigitalform.Theinvestorscan
also view their holding portfolio through the Internet.Apart from an annual fee,the
banks acting as DP recovers the commission at a certain rate for every debit in
thedepository account from the investor. Thus, with a large number of
depositoryaccounts with regular operations by way of purchase and sale of shares and
securities,thebanks actingas DP canearnconsiderableamountoffees andcommission.
Moreover, simultaneously with opening of depository account, the investors are
alsorequiredtoopenasavings
orcurrentaccount,wherebythecustomerbaseofthebankalsoincreases.

3. SafeDepositLocker:

The business of letting out of lockers in the Safe Deposit Vault (SD V) is a very
oldform of service rendered by the banks. A locker is a small safe installed inside
theSDV which is leased out to the customers (lessees) against payment of an
annualcharge known as locker rent.The customers can keep their valuables in the
lockerwhich can be opened by a pair of keys; one is held by the customer and the
other is inthe custody of the officer-in-charge of the safe deposit vault, who is known
ascustodianofthelockers.The keywiththe custodianiscalledthe
MasterKey,whichiscommonforall the lockersinsidethe SDV.The
lockerscanbeofdifferent sizesand the annual rent varies as per the size of the
locker.Safe Deposit Vault is a roomwith concrete walls on all sides, including the
ceiling and the floor. It has only onedoor, made of thick plates of steel. The doors are
specially engineered for safe depositvaultsandmanufactured byreputed makersof
locks.Thisdoor isextremely heavy,and so much so, that often it requires more than one
person to pull the door to open orclose it. The keys of the safe deposit vault are kept
under dual control – the ManagerandtheCashier.Thetwokeys
aredifferentandthedooroftheSDVcannotbeopenedbyonekey.

The customer who wants to operate his locker comes to the bank and marks
hisattendancebysigningtheattendanceregistermeantforthelesseesofsafedeposit
lockers.Insomeofthebanks,thereis
asystemofpasswordtoberememberedbythecustomerandhis/heridentity is
verifiedbythesignatureas wellas thepassword.
After the identity is established, the custodian escorts the customer to the
particularlocker allotted to him/her.The custodian first opens the master lock by
his/her masterkey and leaves the place. The customer completes the operation in the
locker and thenlocksitbythekeyheldbyhim,andthemasterlockgets automaticallylocked.
Lockers can be rented in a single name or joint names with operational
instructionssimilar to those given in deposit accounts.The locker can be operated
jointly, either orsurvivor, former or survivor, etc. Lockers are normally given to the
bank’s customersafter completing the KYC norms.If the rent for the locker remains
unpaid for morethan two years, the bank can drill open the locker after giving notice
to the customer.The locker is drill- opened in presence of the custodian and another
senior officer ofthe bank and the articles, if any, are put in a suitable cover which is
sealed and signedby both the custodian and the officer and kept in a dual custody.
After the locker isdrilled open, its locks and the customer’s key are changed and the
locker is leased outto some other customer.The defaulter customer is notified to call
on the bank and paythe arrear locker rent and the cost of drill opening by the bank and
take delivery of thearticles taken out from the locker. The legal relationship between
the bank and thecustomeravailingof thelockerfacility is thatof aLessorand Lessee.

4. Safe Custody

The service of safe custody is being offered by the banks almost from the inception
ofbanking business. Customerscan hand oversealed boxesto thebanksfor safecustody.
The banks offer this service against specific annual fees, depending on thesize of the
box or the article handed over for safe custody. The bank issues a safecustody receipt
to the customer, evidencing the acceptance of the box or the articlefrom the customer.
The customer has to surrender the receipt duly discharged fortaking delivery of the
box/article given to the bank for safe keeping.The safe custodyaccounts can be
opened either in a single name or in joint names with operationalinstruction as
‘jointly’, ‘either or survivor’, etc. In a safe custody account, it is
thebank’sresponsibilitytoreturntheboxorarticlewithitssealsintact.Incasetheboxorthe
article is opened or the seals are tampered while in bank’s custody, the
depositor(customer) can claim compensation from the bank.Though it is one of the
oldestservicesofferedbythebanks,manyofthebanks havestoppedrenderingthisservice
forvariousreasons,includingthesecurityproblem.Incaseofsafecustody,thebankdoes
not know the contents inside the sealed packet or the box and no declaration
ofthecontentsiskepton record.

5. CapitalMarketsServices:

With the introduction of financial reform and the process of dis-

intermediationtogether with the deregulation of the interest rates, more and more
companies andcorporate bodies are availing of the opportunity of direct access to the
capital marketfor raising funds. Instead of approaching the banks and financial
institutions, thecompanies are raising funds from the investors spread all over the
places by resortingto the public issue of shares and securities.The banks with a large
network of branchesfind themselves in a uniquely placed position to earn profit by
rendering differentforms of services to the companies and corporates planning to raise
funds from theinvestors directly.The companies going for public issue cannot reach
the individualinvestors located at various places in the country or abroad. In this
situation, the widebranch network becomes the USP for the banks, who can be easily
reached by theinvestors for thepurposeof investmentin thecompanies.

6. DistributionofThird-PartyProducts:

Earnings of the banks from the traditional banking activities of deposit, credit
andremittance are shrinking every year. There is continuous pressure on the
spreadbetween cost of funds paid to the depositors and the yield on advances made
by thebanks. The situation has forced the banks to look for new avenues of earning
bymarketing and selling of different types of financial products on behalf of
theirprincipals. This activity has proved to be one of the most remunerative sources
ofincome for the banks.The third- party products generally sold by the banks
throughtheir vast network of branches are:(i) Insurance products,(ii) Mutual funds,
(iii)Governmentbonds, and(iv)Goldcoins.

7. PortfolioManagement:

The word Portfolio means a collection or a bunch of certain things, generally

differenttypes of assets. The assets can be of various nature viz. Real Estates, Gold,
FinancialAssetsetc.RealEstates includevacantland,constructedhouses,multi-storied
building,flatsinhighrisebuildings,officepremisesetc.Goldincludepuregoldindifferentsh
apes viz. bricks,bar,biscuits,coin, jewelleryetc.

Similarly Financial Assets include deposit in Banks and Post Offices, investment
inshares & securities, bonds, mutual funds. Life Insurance Policy, Foreign
Exchangeetc.Investmentinshares,securities&bondscanbeindifferentsectorsofeconomi
cactivity like agriculture, industry, service sector etc. Industries include
varioussegments viz., iron & steel, textile, jute, plantation, information technology,
banks,power,engineering &severalotheractivities.

An investor with his surplus/investable money is in the look-out for good

investmentavenues. But, he may not be having expertise to analyse, research and
understand theinvestment climate and the prospect of growth of his investment in
various industries.Investment decision calls for a skill to analyse the financials and
other working resultsof various sectors of the economy together with the future
prospect of variousindustries.An investor often does not possess the said skill and the
capability. Even ifhe possesses the skill he may not have enough time to devote on the
subject and underthe circumstances, he looks for a Portfolio Manager who can do the
job on his behalfagainst payment of an agreed amount of fees.The investor places a
certain amount ofmoney for investment purpose at the disposal of the Portfolio
Manager who takes theinvestment decision and manages the portfolio with the
objective of maximizing thegrowth of the portfolio. However, the investments are
subject to Market Risk and theinvestor is required to bear the risk.A Portfolio
Manager is a person who makesinvestment decision using money other people have
placed under his or her control. Inother words, it is a financial career involved in
investment management. They
workwithateamofanalystsandresearchers,andareultimatelyresponsibleforestablishing
an investment strategy, selecting appropriate investments and allocatingeach
investment properly for a fund-or asset-management vehicle.Portfolio Managersare
presented with investment ideas from internal buy-side analysts and sell-sideanalysts
from investment banks. It is their job to sift through the relevant
informationandusetheirjudgmenttobuyandsellsecuritiesand/orotherassets..Throughout
each day, they read reports, talk to company managers and monitor industry
andeconomic trends looking for the right company or asset and time to invest
theportfolio’s capital.Portfolio managers make decisions about investment mix
andpolicy,matchinginvestmentstoobjectives,assetallocationforindividualsand
institutions, and balancing risk against performance.Portfolio management is
aboutstrengths, weaknesses, opportunities and threats in the choice of debt vs.
equity,domestic vs. international, growth vs. safety, and other trade-offs
encountered in theattempttomaximizereturn atagiven appetitefor risk.

In the case of mutual and exchange-traded funds (ETFs), there are two forms
ofportfolio management: passive and active. Passive management simply tracks
amarketindex,commonlyreferredtoasindexingorindexinvesting.Activemanagement
involves a single manager, co-managers, or a team of managers whoattempt to beat
the market return by actively managing a fund’s portfolio throughinvestment
decisions based on research and decisions on individual holdings. Closed-
endfundsaregenerally actively managed.

ServicesProvidedbythe Financial System

1. RiskSharing:

Financial system provides risk sharing by allowing savers to hold many assets. It
alsomeans financial system enables individuals to transfer risk. Financial markets
cancreate instruments to transfer risk from savers to borrowers who do not
likeuncertainty in returns or payments to savers or investors who are willing to bear
risk.The ability of the financial system to provide risk sharing makes savers more
willingto buy borrowers’ IOUs. This willingness, in turn, increases borrowers’ ability
to raisefunds in thefinancialsystem.

2. Liquidity:

The second service that financial system provides for savers and borrowers
isliquidity, which is the ease with which an asset can be exchanges for money
topurchase other assets or exchanges for goods and services. Most of the savers
viewthe liquidity as a benefit. If an individual need their assets for their own
consumptionandinvestment,theycanjustexchangeit.Liquidassetsallowanindividualorfi
rmtorespondquicklytonew opportunities
orunexpectedevents.Bonds,stocks,orchecking accounts are created by financial
assets, which have more liquid than cars,machineryand realestate.

3. Information:
The third service of financial system is collection and communication of
informationor we can say that it is the facts about borrowers an expectations about
returns onfinancial assets. The first informational role the financial system plays is to
gatherinformation.Thatincludesfindingoutaboutprospectiveborrowers
andwhattheywilldo with borrowed funds. Another problem that exists in most
transactions isasymmetric information. This means that borrowers posses information
about theiropportunities or activities that they don’t disclose to lenders pr creditors
and can takeadvantage of this information. The second informational role that
financial
systemplaysiscommunicationofinformation.Financialmarketsdothatjobbyincorporating
information into the prices of stocks, bonds, and other financial assets. Savers
andborrowers receive the benefits of information from the financial system by looking
atasset returns. As long as financial market participants are informed, the
informationworksits
wayintoassetreturnsandprices1.Whatdoyoumeanbyfinancialservices?

The term “financial services” in a broad sense mean “mobilizing and

allocatingsaving”. Thus, it includes all activities involved in the transformation of
saving intoinvestment. Write any two features of financial services. it is a customer-
intensiveindustry. Identification of need and wants of customer is the first step. It
will help thefinancial service firms to design the financial strategy, which gives due
respect tocosts,liquidity and maturity consideration.

FunctionsofFinancialServices

• Mobilizationoffunds

• EffectiveDeploymentoffunds

• Provisionofneedbasedservices...

Financial services can be defined as the products and services offered by

institutions.The Concept of Financial Services is Explain – their Meaning, Definition,
Functions,CharacteristicsorFeatures,andScope.Likebanksofvariouskindsforthefacilitat
ionof various financial transactions and other related activities in the world of
financelike loans, insurance, credit cards, investment opportunities, and money
managementas well as providing information on the stock market and other issues
like markettrends.
Meaning of Financial Services is the economic services provided by the
financeindustry, which encompasses a broad range of businesses that manage
money,including credit unions, banks, credit card companies, insurance
companies,accountancy companies, consumer-finance companies, stock brokerages,
investmentfunds, individual managers and some government-sponsored
enterprises.Theircompanies are present in all economically developed geographic
locations and tend tocluster in local, national, regional and international financial
centers such as London,New York City, and Tokyo.

1.4 DefinitionofFinancialServices:

Services and products provided to consumers; and businesses by financial

institutionssuch as banks, insurance companies, brokerage firms, consumer finance
companies,and investment companies all of which comprise the financial
servicesindustry.Facilities such as savings accounts, checking accounts, confirming,
leasing,and money transfer, provided generally by banks, credit unions, and
financecompanies. Financial Services may simply define as services offered by
financial andbanking institutions like the loan, insurance, etc.The financial services
concerns withthe design and delivery of financial instruments and advisory services
to individualsand businesses within the area of banking and related institutions,
personal financialplanning, investment, real assets, and insurance, etc.Financial
services refer toservices provided by the finance industry. The finance industry
encompasses a broadrange of organizations that deal with the management of money.
Among theseorganizations are banks, credit card companies, insurance companies,
consumerfinance companies, stock brokerages, investment funds, and some
government-sponsoredenterprises.

1.5 Types

Whatarethedifferenttypesoffinancialservices providebybankofbaroda

Economic services provided by bank are known as finance services to a broad

rangeof businesses entities including insurance companies, credit card companies,
creditunions companies, personal finance, stock brokerages, investment,
accountancy,government companies and many more enterprises. Banking provides
number ofvariousdifferenttypes
offinancialservicestopersonalcustomers.Servicesdobanks
offerarelistedbelow:Herewewilldiscuss aboutdifferenttypesoffinanceservicesprovidedby
banksand financialinstitutions:

1. CurrentAccounts:

Current accounts are also called as business bank accounts which are one of
thefrequently used accounts mainly used for settlement of short-term financial needs.
Itenables services like handling pay-in and pay-out on day-to-day basis. For
example:payoutfundsforsalaries,payingdaily/monthlyelectricitybills,waterbills,telepho
ne bills, daily pay-in and pay-out of business transactions, loan for business,invoice
financing, Transferring funds to other accounts, payroll services, drafting day-to-day
business cheques, debit card for using cash in most restaurants and stores,business
finance, checking accounts, withdrawal of cash using ATM, etc. Apart fromthis bank
also provide online transfers, cash transactions, business credit cards,business
overdraft, to smoothen your business financial needs. Now a day, banks alsoprovide
facility for opening a current account online and switch bank accounts onlineas well.
Online banking is one of important types of financial services provided bybanks in
recentdays.

2. Savings accounts:

A savings accounts are one of the type of the bank account suitable for
buildingsociety, unions or an individual used for accumulating funds for both short-
termfinancial needs like holidays, weddings, parties, etc and long-term financial
needs
likesavingforbuyinghouse,childrenretirementplans,etc.Banksoffervariousoptionson
saving account types. Saving account can be opened with the tiny amount of fundand
can be used for saving regular deposits on which bank provides savings accountswith
high interest on regular basis. Account holder also get facilities like: Cashtransfers,
online transactions, small business loans, cheques, debit cards, credit
cardswithdrawals and drafts to smoothly manage your daily cash needs. For all
theaccounts, online banking provides online savings account statements to
keepfrequentlycheck on your funds.

3. OverdraftFacilities:

Bankoverdraftmeans
bankprovideshorttermcreditfundtosmoothenoutcashflowforbusiness needs.An
individualorabusinesscangetin touchwithbank
representative toknowtheoverdraftceilinglimitpermittedforyouraccount.Youcan
borrow up to the permitted amount for which bank charges interest on
theoverdrawnfund.Itis thealso calledo/d facilities.

4. FinancialServices:

Bank provides best high yield savings options with the intension to get appreciated
inspecified time frame. In other words, investment means allocating funds with
intendto multiple funds over a period of time. Investment schemes provided by the
bankoffer comparatively better returns then the high yield savings accounts like
fixeddepositsandcertaininvestmentoptionscanofferhighreturnswithincreasinglevelofri
sk, bank also provides brokerage services to buy and sell financial securities,
banksalsoprovideonlinetradingplatformfortradingsecurities andmanymoreservices.

5. InvestmentServices:

Banks provide asset management services to the clients who are registered with
theSecuritiesandExchangeBoardasaRegisteredInvestmentAdvisorsandfocusingonbui
lding capital for customers through their investments. Banks also provide
custodyservices for safe keeping and dealing in world’s securities linked with
customersportfolioandvariousotherinvestmentfacilitiestoassistclientsinvestmentneed
s.

6. ForeignExchangeFacilities:

Many large banks also provide foreign exchange broking and services to
thecustomer around the world. These Foreign exchange services consist of
currencyexchangewhere customercanexchangedifferent currencynotes,wire
transferwherecustomers can pay or transfer funds to the customer located outside
countries,remittance services where migrant employees can transfer money to their
homecountry. This is one of largest types of financial services provided by banks as
itinvolves daily billions of foreignexchangetransactions.

7. InsuranceFacilities:

Bank facilitates insurance for their customers to cover their risk by merely
payingsmall amount as a part of premium. Insurance covers risk for your assets,
health,etc.Break up of insurance options provided by bank includes: Car Insurance
whichcoversthecostofrepair, damages orreplacementfortheft,HomeInsurancecover
loss due to damage by natural calamities, fire or burglary,Travel Insurance
includesdamageofluggage,delayedorcancelledfights,lossortheftofmoneyorpassportand
illness or injury during travelling, Health Insurance provide medical or
hospitalexpenses coverage in case of sick or accident, Payment Protection insurance
coversyour repayments on a personal loan or mortgage loan in occurrence of
accident,illness,death or redundancy.

8. MortgageFacilities:

Therearedifferenttypesofservicesprovidedbybankstocustomerslikeloansforpurchasing
assets against of security. It is also termed as secured loans wherecustomers can repay
the loan amount in monthly installments over years like:purchasingcar, buying
property, etc.

9. PensionsSchemes:

Banksofferpensionplansasanoptiontowardsretirementinvestmentswhereyoucan
contribute small amount monthly and upon retirement you will get chunk of
largemoney post retirement as a retirement funds. A pension schemes are long-
termsavingsplansofferedbybanks.Usuallyretirementplannersgofor
theseschemesoncetheystartearninggoodsalaryandbanks
encouragepeopletocommencepensionschemesothattheycan enjoysamestandardof
livingpostretirement.

10. OnlineBankingFacilities:

Oneoftheimportanttypesoffinancialservices providedbybanksinmoderndaysisonline
banking services to the customers so that they have easy access to theirproducts and
services. Online banking is very convenient medium of banking whichsaves lot of
time and money of the customer. Mostly all banks have online bankingfacilities.
Customer can do number of things online like: check balances, statements,bills,
savings interest calculators, transfer money, recharge phones, pay bills,viewcredit
card summary, loan summary, overdraft settlements, buy shares, mutualfunds,
derivatives, checking account promotions, apply for services like fixed
depositschemes,retirementschemes, pensionschemesandmanymore.

1.6 Selectionandproblem
1.Excessive/hiddenfees

Often times, customers aren’t aware they can opt out of certain coverages, such
asoverdraftprotection.Youcanchoosetonotusethis service,whichallows purchases togo
through even if you don’t have sufficient funds to cover it, but you will be
chargedroughly $35 per transaction.If you choose not to use this, your debit card will
simplybe declined if you don’t have enough funds. It’s important to be aware of these
kindsofprogramsandthe feesassociatedwithyourbank.Ifyou’re unsureorhavequestions,
calling your bank is always a good idea to get a clearer picture of fees
youcouldgetchargedfor,ortoquestionfeesyouweren’taware
ofoptinginto,suchastheoverdraftprotection fee.

2. Badcustomerservice

It’s certainly frustrating when bank employees don’t know how to resolve
anissue.Getting switched from person to person, and being put on hold multiple
timescan test anyone’s temper.Unfortunately, there’s not much you can do except try
toremain calm and get the issue fixed as soon as possible. Speaking to a manager
isalways best, but sometimes even the manager won’t be much help either.Lashing
outat bank workers will not help the situation. Staying cool and collected is the best
waytomovethingsforward.

3. Checks/fundsbouncing

It’s important to keep all of your transaction receipts and emails. Luckily
forMadeline, she saved her deposit slips to prove her case.If the bank doesn’t agree
totake off the fees, as in Madeline’s case, try speaking to various people in the
branchand on the phone. Remember to write down the times, dates and names of
customerservicerepsandmanagersyouspeakwith.Whenitcomestocustomerserviceonth
ephone, another unsatisfied customer said he would hang up and redial until he
spokewithsomeoneknowledgeableor willingto negotiate.

4. Mostexpensivedebitschargedfirst

“They charge overdraft fees on authorizations, even though the amount has not
beenactually captured by the merchant. They take charges from high to low,
regardless oforder,soifyouareoverdrawnby$20.00with3transactions
for$5andonefor$50,
they will always take out the $50 first, leaving you a $26 fee for EACH of the
otherWhile bank customers feel it’s a sneaky way banks can “get” them and charge
fees,the best way to avoid this is to make sure you have a decent amount of extra
cash inyouraccounts.Whilebankcustomers feelit’s asneakywaybanks
can“get”themandcharge fees, the best way to avoid this is to make sure you have a
decent amount ofextra cash in your accounts.Think of it this way, keeping an extra
$100 in yourchecking account may save you money in the long run (overdraft fees
are around $35apop!), whilegiving you peaceof mind.

1.7 Functionsof FinancialServices:

The following functions of financial services below are;Facilitating

transactions(exchange of goods and services) in the economy. Mobilizing savings
(for which theoutlets would otherwise be much more limited).The following scope
of Financialservices, and cover a wide range of activities. They can broadly classify
into two,namely:

1 Traditional Activity: Traditionally, the financial intermediaries have

beenrendering a wide range of services encompassing both capital and money
marketactivities. They can group under two heads, viz.Fund based activities and
Non-fundbasedactivities.

A. Fund based activities: The traditional services which come under fund
basedactivities are the following: Underwriting or investment in shares, debentures,
bonds,etc. of new issues (primary market activities).Dealing with secondary
marketactivities. Participating in money market instruments like commercial
papers,certificates of deposits, treasury bills, discounting of bills, etc. Involving in
equipmentleasing,hirepurchase, venturecapital, seedcapital,etc.

B. Non-fund based activities: Financial intermediaries provide services-based

onnon-fund activities also. This can calls “fee-based” activity. Today
customers,whether individual or corporate, not satisfy mere provisions of finance.
They expectmore from their companies. Hence a wide variety of services, are being
providedunder this head.Managing the capital issue i.e. management of pre-issue and
post-issue activities relating to the capital issued by the SEBI guidelines and thus
enablingthepromoterstomarkettheirissue.Makingarrangements
fortheplacementofcapital
and debt instruments with investment institutions.The arrangement of funds
fromfinancial institutions for the client’s project cost or his working
capitalrequirements.Assistingintheprocessofgettingall Government
andotherclearances.

2. Modern Activities: Besides the above traditional services, the

financialintermediaries render innumerable services in recent times. Most of them are
like thenon-fund based activities. Because of the importance, these activities have
been inbrief under the head “New-financial-products-and-services”. However, some
of themodern services provided by them are given in brief hereunder.Rendering
projectadvisory services right from the preparation of the project report until the
raising offundsforstartingtheprojectwithnecessaryGovernmentapprovals.Acting
astrusteesto the debenture holders.Recommending suitable changes in the
managementstructure and management style to achieve better results.Structuring the
financialcollaborations/joint ventures by identifying suitable joint venture partners
andpreparing joint venture agreements.Rehabilitating and restructuring sick
companiesthrough an appropriate scheme of reconstruction and facilitating the
implementationof the scheme.Hedging of risks due to exchange rate risk, interest rate
risk, economicrisk, and political risk by using swaps and other derivative
products.Managing in-portfolio of large Public Sector Corporations.Undertaking risk
management serviceslike insurance services, buy-back options, etc.Advising the
clients on the questions ofselecting the best source of funds taking into consideration
the quantum of fundsrequired, their cost, lending period, etc.Guiding the clients in
the minimization of thecost of debt and the determination of the optimum debt-equity
mix.Promoting creditrating agencies for rating companies that want to go public by
the issue of the debtinstrument.
ChapterNo. 2

Research Methodology.
Chapter : 2 Researchmethodology.

2.1 Objectives

Theobjectiveofthestudyisas follow

1 . To examine the essential dimensions of service quality i.e. Rather –

reliability ,assurance,tangibles,empathyandresponsivenessofBOBanditseffectoncusto
mer’s satisfaction.

2. To find out the level of perception of the customers from the service quality by
thebanks.

3. Toknowwhichservicequalitydimensionofthebankisperformingwell.

4. .Maintain thepublic’sconfidenceinthefinancial service.

5. Facilitatethedeterrenceoffinancialcrimes.
6. Supervise financial services licensees in accordance with legislation,
regulationsandcodes.
7. Ensureperiodicevaluationofthelegislativeandregulatoryframeworkinaccordancewith
developments in thefinancialservicessector.
8. Promotebestpractices,mutualassistanceandexchangeofinformationbymaintainingcont
actandforgingrelationswithforeignregulatoryauthorities,internationalassociationsofreg
ulatoryauthoritybodiesorgroupsrelevanttoitsfunctions.
9. Facilitatethedevelopmentofthefinancialservicessector.

10. To identify which dimension of service quality needs improvement so that

thequalityof serviceof BOB is enhanced.
2.2 Hypothesis
Hypotheses: Hypotheses were formulated and tested for significance to prove
theobjectives in scientificmanner.
1. Ho:Servicequalityratingisindependentofvariablessuchasage,gender,employment,in
come,city,typeof accountanddurationof accountheld.
H1: Service quality rating is dependent of variables such as age, gender,
employment,income,city,typeof accountand durationofaccountheld.
2. Ho: Service quality perceptions will have a positive effect on customer
satisfaction.H2:Servicequalityperceptionswillnothaveapositiveeffectoncustomersatisf
action.
3. Ho:Accessoffinancialservicestodeprivedindividualhasrevenue.
H3:Accessoffinancialservicestodeprivedindividualhasnorevenue.
4. Ho:Overallcustomersatisfactionusingafinancialservicequalitydoesnotdifferbasedon
demographiccharacteristics.
H4:Overallcustomersatisfactionusingafinancialservicequalitydiffersbasedondemographicc
haracteristics.

2.3 Scopeofthe study.

1. GeographicalscopeisconfinedtoUlhasnagarcity.
2. This study will analyze customer satisfaction in bank of Baroda only. The
findingsofthestudymaybecometheguidelineforcustomergeneralthatmaybeusingbankin
gservicesin any otherpartof thecountry.
3. Inthepresentscenariomajortechnicalchangesareundergoinginfinancialrevolution
through the new information-processing technology. Especially in
financesectorithasasignificantrolefor overalldevelopment.
4. After identifying the subject (research area) and referring the relevant literatures,
ithas been found that in most of the literature, the information technologies have a
wideapplicationarea.financesectormajorchangeshavebeenmade.
5. Due to these drastic changes we have chosen to do the study on cooperative
banksystem.

2.4 Limitationofthestudy.
Each study cannot be free from limitations. Some limitations likewise, the
limitationof time, areas, economic, efforts, scope as well as the method of the study.
Somelimitations for presentresearch workareasunder.
1. StudyislimitedtoUlhasnagarcityonly.
2. Scope of this study is wider but sample size is limited to account holders of Bank
ofBaroda.Theyarecovered inthisstudy only.
3. This research study based on secondary datacollected fromannual reports ofvarious
banksand related websites. The limitation of the secondary dataanditsfindings depend
entirely on theaccuracy of such data.
4. The data, which is used for his study is based on annual report of the bank
andsecondary data collected from published reports from time to time. Therefore
thequality of this research depends on quality and reliability of data published in
annualreports.
5. Resultsofthisresearchareconfinedandlimitedtothebanks.
6. Thestudyis limitedtofew yearsonly.
2.5 SourceofData

PrimaryS

econdary

1. Primary:

Inthisstudythequestionnairesmethodhavebeenusedtocollectprimarydata.

2. Secondary:

Secondary means which are already available like annual Report, Magazines,
Internet,andBooksetcs.

Samplingplan.

1. SamplingUnit –Itconsistaccountholders.

2. Samplingsize-60A/cholderwerequestioned.
ChapterNo. 3

LiteratureReview.
Chapter no.3: LiteratureReview.

Aliteraturereviewisatextwrittenbysomeonetoconsiderthecriticalpointsofcurrent
knowledge including substantive findings, as well as theoretical
andmethodologicalcontributionstoaparticulartopic.

Literature reviews are secondary, and as such, do not report any new or
originalexperimental work. Also a literature review can be interpreted as a review
of anabstractaccomplishment.

Most often associated with academic-oriented literature, such as a or peer-

reviewed article, a literature review usually precedes a research proposal and
resultssection. Its main goals are to situate the current study within the body of
literature andto provide context for the particular reader. Literature reviews are a
staple for researchin nearly every academic field. A systematic review is a focused on
a
researchquestionthattriestoidentif1y,appraise,selectandsynthesizeallhighqualityresearc
hevidence relevant to that question. A systematic review aims to provide an
exhaustivesummary of current literature relevant to a research question. The first step
of asystematic review is a thorough search of the literature for relevant papers.
TheMethodology sectionofthereviewwilllist the data base and citationindexessearched
such as Web of Science, Embassy, as well as any hand searched individualjournals.
Next, the titles and the abstracts of the identified articles are checked againstpre-
determined criteria for eligibility and relevance. Thus, we can say that review
ofliterature is the process of reading, analyzing, evaluating, and summarizing
scholarlymaterials aboutaspecifictopic.

The outcome of the studies varies depending on the scope and need of the
study.Ithasbeenattributedtoseveralfactorsi.e.thedeclineoftraditionalbankingactivities
means deposit taking and lending, poorly performing debts like arising from
poorlending decisions, and for domestic banks, depressed property prices and
importantlocal industrial sectors performing badly, make it necessary to analyze of
bankperformance tend to be short-term and narrow in their outlook and seldom
attempt toexplain the underlying trends and processes of change, thus, the broad
competitiveforces of information technology, globalization and deregulation are de
establishingthe banking industry leading to irrevocable charges on a much greater
scale than hasoccurred in the past. Following literature gives us an idea about the
studies ofuniversal banking with reference to private and public sector banks. It also
gives us anidea about the comparison of both private and public sector banks. These
studies arelistedinalphabetsequentialorders which aredescribeas under.

AdaletMuge(2009) examinedthatbankingcrisis usinga bank-leveldatasetnearabout

the period of 1931. It specifically focused on the link among banking structureand
financial stability. The universality of banks, a key characteristic of the
bankingsystem, it showed, to increase the probability of bank failure after controlling
forotherbank-levelcharacteristics and macro-economicvariables.

Adams Adewale Adegoke Alawiye and Babatunde Afolabi (2013) focused

onthe arguments for universal banking especially for efficient services to customers
andalsoforfinancialsystemsstabilityandprofitability,while,the
comparativepracticeofuniversal banking in some notable countries of the world was
also x-rayed becauseuniversal banking is a superstore for financial products under a
single roof. Corporatebodies can lot of opportunities of universal banking system are
yet to be fullyexploited universal banking being a worldwide banking business
phenomenon iscontinually been subjected to research efforts over the last century
everywhere in theworld. Universal banking is the panacea to resuscitate and revamp
the business ofbanking back to recovery, efficiency and windfall profitability. This is
especially sofrom India and across all the established financial markets and financial
systemsthrough the world, the impact of universal banking on the growth and
development ofthe banking industry cannot be underestimated. Therefore, universal
banking ispreferable to split banking system is that which provides greater financial
systemsstabilityand alsooffer bettersolutionsforcustomerservices
 Albertazzi Ugo (2006) developed a used to show the provision of incentives in
auniversalbank,whichisregardedasacommonagentservingdifferentcustomerswith
potentially conflicting interests for example, it may buy assets on behalf ofinvestors
and sell assets on behalf of issuing firms. The customers offer incentiveschemes to the
bank and they behave non-cooperatively. The bank decides a level ofeffort and, when
firewalls are absent, a level of collusion, modeled as a costly andunproductive
redistribution of wealth among the customers. Actually absence offirewalls the
equilibrium incentive scheme are steeper, means the level of effort ishigher and may
compensate the ex-post inefficiency of collusion. It showed not
toholdinthepresenceofoneinexperiencedplayerwhodoes notrecognizetheexistenceof
the conflict of interest. The model allows drawing result about the desirability
offirewallsorofsoftermeasures liketheimpositionoftransparencyrequirements

Banerji Sanjay and Basu Parantap (2009) analyzed that, relative

performanceof a fully integrated financial system with respect to a stand-alone
system where thereis strict separation among depositories and under writing activities
where both systemvulnerabletoproblemsofmoralhazard. Inother
words,asimpleintertemporalmodel with moral hazard and uninsured risk, if financial
contracts are properlywritten, the integration in financial markets could give risk to
greater risk sharingarrangement and could eliminate the equity risk premium
attributed to informationalasymmetrybetweenthelenders and theborrowers.

Cameron Colleen W. (1995) focused for differential performance applied to

dataforuniversal andnon-universalbanksexposedthatthe performance ofuniversalbanks
was not superior to that of the non-universal banks, therefore, does not
supporttheperformancetheoryas abasis fortheglobaltrendtowardsuniversalbanking.
Slightly,thereisimpliedsupportforthetheorywhichlossofcomparativeadvantageby
commercial banks in the credit market and an increasingly competitive globalmarket
for financial services are both pushing major countries to adopt the universalmodel.
Thus, relatively new universal banks in those countries were convergingtowards
theperformancelevels ofother establisheduniversalsystems

Canals Jordi (1996) found the need for corporate renewal because in the
lastduration of 10 years, so many universal banks means large, diversified
bankinggroupshaveexperiencedadramaticroleineconomicperformanceinmanyindustri
al
countries, and focused of universal banks and have proposed alternatives such as
theconcept of core banking or the functional approach and due to above cause,
theseproposal are useful but incomplete, universal banks have to consider all the
elementsofcorporatestrategy,suchasanyotherdiversifiedcompany,includingthepositioni
ng of each business unit in its market, the development of basic
capabilitieswhichwillallowthoseunitstodifferentiatethemselvesfromcompetitionsandsu
staina competitive advantage, the relationship among each units and the corporate
centreandalso theorganizationalstructurewhich willsupporttheuniversalbank.

Chaitanya, Krishna V (2005) observed that, since 1990 the financial

sectorreforms were introduced the banking sector saw the emergence of new
generation ofprivate sector banks, and these banks gained at most popularity as they
havetechnology edge and better business models, and when compared to public
sectorbanks. Thus, the most important thing is they able to attract more volumes
simplybecause they meet their customers’ requirements under one roof, and focused
onunderstanding the concept of universal banking in India attempts to explain
theregulatory role and requirements key duration and maturity distinction and
theoptimaltransactionpathwhichgivesanoverviewoftheinternational
experienceandargues in favor of developing a strong domestic financial system in
order to competeintheglobalmarket.

Cheang Nicholas (2004) found the different types of financial products

andservicesbreakinourdailyactivities,andamajorgroupoffinancialinstitutions,bankshav
ebeenexpandingtheirservicescope,thus, universalbankswhichprovideavariety of
financial products and services in one house, have experienced growingpopularity in
some industrialized countries. In Macao, banking institutions haveassumed a key role
in the simplistic financial sector. Local commercial banks havemade effort to
diversify their products and services, but a lengthy process is expectedfor their
transition into truly universal banks, and also found that the current
structureandpractices ofthelocalmarket andcontributetothislengthytransformation

Damjanovic Tatiana, Damjanovic Vladislav and Nolan Charles

(2012)focused on a stylized macroeconomic model is developed with an
indebted,heterogeneous investment banking sector funded by borrowing from a
retail bankingsector.TheGovernmentguarantees retaildeposits
andalsoshowedthefinancial
factor can more very sharply from safe to risky investment strategies that the
degreeof competitiveness is important for risk premier. The benefits of universal
bankingriseinthevolatilityofidiosyncraticshockstotradingstrategy.Therefore,theoptima
ldegree of competitiveness of separate banking firms is lower than for
universalbanking

Drucker and Puri (2005) found that issuers derive benefits from
concurrentlending and underwriting, which may also mean lending and underwriting
in
quicksuccession.Inparticular,theirviewisthatbothuniversalbanksandinvestmentbanksc
ompete for such deals, but through different channels, while universal banks aremore
likely to offer discounted yield spreads on concurrent loans, investment
banksaremorelikelytodiscounttheunderwriterspreadforaseasonedequityoffering.
Regarding the former, the authors report that, unlike investment-grade
borrowers,non-investment-grade borrowers receive significantly lower yield
spreads onconcurrentloans relativetomatchednon-concurrentloanyieldspreads

Vashisht (1987), in his doctoral work titled, “Performance Appraisal

ofCommercial Banks in India”, evaluated the performance of public sector banks
withregard to six indicators, viz. branch expansion, deposit, credit, priority
sectoradvances, DRI advances, and net profit over the period 1971-83. The researcher
hasusedcompositeweightedgrowthindextorankthebanksasexcellent,good,fairandpoor.
In order to improve the performance, he has suggested developing
marketingstrategies fordepositmobilization,profitplanning andSWOTanalysis.

Singh (1990), in his research study titled, “Productivity in Indian

BankingIndustry”, discussed the trends and changes in the productivity with
particularattention on employee and branch productivity in the Indian banking
industry. Theresearcher used seventeen indicators to analyze productivity trends.
Banking beingservice industry, greater attention has been paid to employee
productivity. He hasmade cross-sectional and inter-temporal analysis on the basis of
these indicators andthesehavebeen dividedintothreecategories

Amandeep (1991), in her thesis titled, “Profits and Profitability of

IndianNationalized Banks” opined that the banks have become an instrument to
meeteffectively the needs of the development of the economy to effect the
totalsocioeconomictransformation.Ithas adverselyaffectedtheprofitabilityofthebank
operations. According to the researcher, the profitability of a bank is determined
andaffected mainly by two factors: spread and burden. The other factors
determiningbank’s profitability are credit policy, priority sector lending, massive
geographicalexpansion, increasing establishment expenses, low non-fund income,
depositcompositionetc.Shehaschosen11factorsaffectingabank’sprofitabilitytoidentifyt
he most significant variable affecting its profitability. The study recommended
thebanks to focus their attention on the management of spread, burden,
establishmentexpenses, non-fund income and deposit composition. The banks need to
adequatelycharge for various non-fund services (like merchant banking, consultancy,
andfactoringservices)withpropercostbenefitanalysis,tohavemaximumprofitability.

Krishna (1996), in his article titled, “Profitability Analysis: An Overview”,

hasdefined the profitability analysis in detail. According to the researcher, it is a
rateexpressing profit as a percentage of total aspects or sales or any other variable
torepresent assets or sales. What should be used in the numerator and the
denominatortocomputetheprofitratedependsupontheobjectiveforwhichitis
beingmeasured.

Ramamurthy (1998), in his technical paper on the profitability and

productivityin Indian banking stated that the banking structure and profitability
structure of thebankingsystemacrossthecountry haveabearingontheprofitability
ofthebanks.
When banks are considered as groups in terms of big, medium and small,
biggerbankshavegreaterscopeforeconomies
ofscale.Theauthoropinedthatoneofthemain determinants of banks’ profitability is the
network of branches, frequentlytermed as franchise strength. The researcher
concluded that Indian banks have-LiteratureHigher interestspreadsthan banks abroad.

Malhotra (1999) in her study, “Banking Sector Reforms: Experience of

PSBs”,has analyzed the performance of PSBs as a result of banking sector reforms.
Thestudy is divided into two parts. In the first part, a brief review of banking reforms
hasbeen made. The major reforms being deregulation of lending/deposit
ratesderegulation of entry, revamping of branch licensing policy, measures to
improve thefinancial health, measures to improve the operating efficiency and
reservepreemption. In the second part, the researcher has discussed the impact of
bankingsector reforms on PSBs, after dividing the reform period of 1992-98 into two
phases.Phase-Ipertains totheperiod1992-93 to1995-96,and Phase-IItotheperiod
thereafter. The profitability of the banks became negative from 0.28 per cent in 1991-
92 to -0.99 per cent in 1992-93 and further 1.15 per cent in 1993-94. The
situationstarted improving in 1994-95 but the negative trend continued again in 1995-
96 (-0.07per cent), however, the profitability has improved during 1996-97 and 1997-
98. Thestudybroughtthattherehas been apositiveeffect.

Ram Mohan (2002) evaluated the performance of public sector banks

(PSBs)since deregulation in both absolute and relative terms and also highlighted the
reasonunderlyingtheimproved performanceof PSBs. Theauthor
mentionedthatthebanking system has neither collapsed nor there has been any
banking crisis. Oneimportant point that advocates the improved performance of PSBs
is the improvementin declining spreads of PSBs. The author measured performance
of PSBs during theperiod 1991-92 to 1999-00 on the basis of key performance
indicators like interestspread, intermediation cost, non- Literature 19 performing
assets, provision andcontingencies and net profits as percentage to total assets. But in
the relativeperformance he makes a comparison between public sector banks, private
sector andforeign banks from 1994-95 to 1999-00. In this category he also made
comparison ofthe performance of PSBs and old private sector banks during the same
period. Theauthor concluded that partly due to regulatory norms, the government-
owned bankshavehadminimalexposuretorisky assets suchas realestateand
stockmarket.
Another reason for survival of banks in the deregulation era was that the
governmentwisely stayed away from the move towards full-blown capital
convertibility. In hisarticle, the author also talked of recapitalization requirement of
PSBs. Not the least,government ownership facilitates recapitalization of banks at
outset of reforms andthis has arguably precipitated costlier bailouts down the road.
Further, it wasexplainedthatthegovernmenthadnochoicebuttoinfusefunds
inthebankingsector,thefiscalsituationnotwithstanding,thanks tomandatoryBaselnorms
forbanks.

Pathak (2003), while comparing the financial performance of private

sectorbanks since 1994-95, explained that the private sector banks have delivered a
newbankingexperience.Lookingtothegrowingpopularityofservicesprovidedbythem,the
ir public sector counterparts have started emulating them. He studied theperformance
of these banks in terms of financial parameters like deposits, advances,profits, return
on assets and productivity. In this paper, the author made an attempt
tohaveaninsightintothefinancialoperationoftheseinstitutions.A sampleof5banks
has been taken for financial analysis. Financial track record of all these banks
wasevaluated, and their financial performance was compared. The working of all
theconstituentswassatisfactorybuttheHDFCBankemergedasatopperformeramongthemf
ollowed closely by theBank.

Kalita (2004), in his article titled, “Post-1991 Banking Sector Reforms in

India:Policies and Impact” stated that the banking sector reforms in India were started
as afollow up measure of the economic liberalization and financial sector reforms in
thecountry. The banking sector being the life line of the economy was treated
withutmost importance in the financial sector reforms. The reforms were aimed at to
makethe Indian banking industry more competitive, versatile, efficient and
productive,
tofollowinternationalaccountingstandardsandtofreefromthegovernment'scontrolintheb
ankingindustry startedin theearly 1990s havebeen continuedtillnow.Firstly,in his
paper the author highlighted the major reform measures and policies regardingthe
banking industry formulated by the Government of India and the Central Bank
ofIndia (i.e. Reserve Bank of India) during the last fifteen years. Secondly, the
authorstudied the major impact of those reforms upon the banking industry. But at the
sametime, the reforms have failed to bring up a banking system which is at par with
theinternational level and still the Indian banking sector is mainly controlled by
thegovernment as public sector banks being the leader in all the spheres of the
bankingnetwork in the country. The author concluded that the banking sector in India
hasprovided a mixed response to the reforms initiated by RBI and the Government
ofIndia since 1991.TheIndianbankingsystemisgrowingina robustmanner.Thesector
has responded positively in the field of enhancing the role of market
forces,measuresofprudentialregulationsofaccounting,incomerecognition,provisioning
and exposure, introduction of CAMELS supervisory rating system, reduction of
NPAsand regarding the up gradation of technology. The financial sector reforms
havebrought the Indian financial system closer to the global standards. But it can be
statedwithout any hesitation that Indian banking sector has still a long way to go to
catch upwiththeircounterparts.

Ram Mohan and Ray (2004), in their article titled, “Comparing Performance
ofPublic and Private Sector Banks: A Revenue Maximization Efficiency
Approach”made a comparison of performance among three categories of banks -
public, privateandforeignbanks -usingphysicalquantitiesofinputandoutputs
andcomparingthe
revenue maximization efficiency of banks during 1992-00. The findings of the
studyshowed that public sector banks performed significantly better than the private
sectorbanks but in no way different from foreign banks. In this study, a comparison
ofpublic, private and foreign banks in India has been made using data
envelopmentanalysis (DEA). In DEA, physical quantities of inputs and outputs are
used. Thereforemeasures of efficiency based on output-input quantities may be more
suitable. In theIndian context, the approaches of using deposits and loans as output
have beenappropriate in the nationalized era when maximizing these was indeed the
Literature21objective ofa bank.But
themainbusinessofthebanksistomaximizetheirprofits. Interest expense and operating
expense are treated as input when amount tomaximizing revenue. Finally they
concluded that the superior performance of PSBs
istobedescribedhighertechnicalefficiencyratherthanhigherallocateefficiency.

Bansal (2005), in his research work, attempted to find out the impact
ofliberalization on productivity and profitability of public sector banks in India.
Theresearcher evaluated the productivity and profitability of 27 PSBs in the
postliberalization period, i.e., from 1991-02. The productivity of all the PSBs has
beenmeasured on the basis of employee productivity (labor productivity),
branchproductivity and overall productivity. The researcher ranked different banks
from allthe three levels of productivity. While measuring productivity he used
parameters likeDeposit, Advances, Business, Total Income, Total Expenditure,
Burden, Spread andNet Profit. The study brought out that from the overall
productivity angle, BOB, BOI,SBI, COB, OBC have been the top rankers, whereas
the ranking of SBBJ, SB, AIIB,SBM and UCB was far from satisfactory. As far as
SBI group is concerned, SBIremained the leader followed by SBOP in almost every
year of study. Whilemeasuring profitability of all the PSBs, the trend analysis results
showed that netprofits in absolute terms have increased for majority of the PSBs but
profitability haswitnessed a decline. But a few banks have improved their profitability
over the periodof study. The main reason for the declining trend in profitability is due
to increasedcompetition which has been resulting in a narrowing spread. While
measuringprofitability, theresearcherusedvariousratioslikeinterestincome,
interestexpended,spread, non-interest income, non-interest expenditure, burden and
net profits toworkingfunds
ratios.Theresearcheralsousedratioslikeinterestincometototal
incomeratios,interestexpandedtototalexpenditure
ratioandstaffexpendituretooperatingexpenditureratio ontheprofitability performanceof
banks.

Leeladhar (2006), in his paper titled, “Indian Banking - The Challenges

Ahead”revealed that in the recent years, there has been a considerable widening
anddeepeningoftheIndianfinancialsystem,ofwhichbankingisasignificantcomponent.
The growing role of the financial sector in the allocation of resources hassignificant
potential advantages for the efficiency with which our economy functions.Given the
significance of the Indian banking system, one cannot afford to underplaythe
importance of a strong and resilient banking system. The enhanced role of thebanking
sector in Indian economy, the increasing levels of deregulation and theincreasing
levels of competition have placed numerous demands on banks. Operatingin this
demanding environment has exposed banks to various challenges like
customerservice, branch banking, competition, technology, Basel-II
implementations,improving risk management systems, implementation of new
accounting standards,transparency and disclosures, supervision of financial
conglomerates, know yourcustomer (KYC) guidelines and corporate governance The
author concluded that it iscrucial for the banking industry to meet the increasingly
complex savings andfinancial needs of the economy by offering a wider and flexible
range of
financialproductstailoredforalltypesofcustomers.Withtheincreasinglevelsofglobalizati
on of the Indian banking industry, evolution of universal banks andbundling of
financial services, competition in the banking industry will intensifyfurther. Strong
capital positions and balance-sheets place banks in a better position todeal with and
absorb the economic shocks. Banks need to supplement this withsophisticated and
robust risk management practices and the resolve to
facecompetitionwithoutdilutingtheoperatingstandards.

Mohan(2006)inhispapertitled“ReformsProductivityandEfficiencyin
Banking: The Indian Experience” observed that the objective of reforms in general
isto accelerate the growth momentum of the economy, defined in terms of per
capitaincome. Not surprisingly, therefore performance of the banking sector
hasrepercussionsacrossthelengthandbreadthoftheeconomy.Financialintermediationis
essential to the promotion of both extensive and intensive growth. Thusdevelopment
of the financial system is essential to the generation of
higherproductivityandeconomicgrowth.Theauthorhighlightedhow doesproductivityin
banking influence the rest of the economy. Recent research has provided
robustevidencesupportingthe viewthat
financialdevelopmentscontributeeconomicgrowth. A basic indicator of financial
development is the contribution of financerelated activities to GDP and the process of
financial deepening. The author believedthat financial deepening is easier to measure;
analyzing productivity and efficiencychanges in banking is more complex and needs
to be viewed in relation to thechanging contours of the banking industry in India. The
transformation of the bankingsector in India to be viewed in the light of overall
economic reforms process alongwith the rapid changes that have been taking place in
the globalized environmentwithin which banks operate. The author also compared the
banks of major Asiancountries in terms of spread (net interest margin), intermediation
cost (operatingexpense),non-interestincomeandnetprofitfrom1996to 2004.Theauthor
concludedthat over the reform period more and more banks have begun to get listed
on the stockexchange, which in its wake has led to greater market discipline as well as
governanceaspect.The patternofefficiencyandtechnologicalchange
witnessedinIndianbankingcanbeviewedasconsistentwithexpectationsinanindustryunde
rgoingrapid change in response to the forces of deregulation. As deregulation
gathersmomentum, commercial banks would need to devise imagination ways of
augmentingtheir incomes and more importantly their fee-income so as to raise
efficiency
andproductivitylevels.Inrelationtochangeofeconomicenvironment(marketprospects), a
few pioneering banks might adjust quickly to seize the
emergingopportunities,whileothersrespond cautiously.

Shahul Hameedu (2014) in his study titled, “Financial Inclusion - Issues

inMeasurement and Analysis”, explains that financial inclusion is delivery of
bankingservices of an affordable cost to the vast sections of disadvantaged and low
incomegroups. As banking services are in the nature of public good, it is essential
thatavailability of banking and payment services to the entire population
withoutdiscrimination is the prime objective of the public policy. The banking
industry hasshowntremendous growthinvolumeandcomplexityduringthelastfew
decades.
Despite making significant improvements in all the areas relating to
financialviability, profitability and competitiveness, there are concerns that banks
have notbeen able to include vast segment of the population, especially the
underprivilegedsectionsofthesociety,intothefoldofbasicbankingservices.Internationall
yefforts
are being made to study the causes of financial exclusion and designing strategies
toensurefinancialinclusionofthepooranddisadvantaged.Thereasonsmayvaryfromcount
ry to country and hence the strategy could also vary but all out efforts are beingmade
as financial inclusion can truly lift the financial condition and standards of
lifeofthepoor and thedisadvantaged.

Subramanian and Swami (1994) in their paper, Comparative performance

ofpublic sector banks in India” Prjanan, have analyzed and compared the efficiency
insixpublicsectorbanks,fourprivatesectorandthreeforeignbanks fortheyear1996-
97. Operational efficiency is calculated in terms of total business and
salaryexpenditureperemployee.Theanalysisrevealedthat
higherperemployeesalarylevelneed not result in poor efficiency and business per
employee efficiency co-efficientwas also calculated. Among the PSBs, Bank of
Baroda registered the high efficiencyand operating profit per employee. Among the
private sector banks Indus Bankfollowed by Citibank Registered highest and second
highest operating profit peremployee respectively. However, among the Nationalized
Banks there existed widevariations in efficiency.

Saumitra N. Bhaduri (2002) “Determinants of capital structure choice: a

studyof the Indian corporate sector” Existing empirical research on capital structure
hasbeen largely confined to the United States and a few other advanced countries.
Thispaper attempts to study the capital structure choice of Less Developed
Countries(LDCs) through a case study of the Indian Corporate sector. The objective is
todevelop a model that accounts for the possibility of restructuring costs in attaining
anoptimalcapitalstructureand
addressesthemeasurementproblemthatarisesduetotheunobservable nature of the
attributes influencing the optimal capital structure. Theevidence presented here
suggests that the optimal capital structure choice can beinfluenced by factors such as
growth, cash flow, size, and product and industrycharacteristics.
Theresultsalsoconfirmtheexistenceof restructuringcostsinattainingan
optimalcapitalstructure.15

Singh R (2003) “Profitability management in banks under

deregulateenvironment” has analyzed profitability management of banks under the
deregulatedenvironmentwithsomefinancialparametersofthemajorfourbankgroupsi.e.p
ublicsectorbanks,oldprivatesectorbanks,new privatesectorbanks andforeignbanks,
profitabilityhasdeclinedinthederegulatedenvironment.Heemphasizedtomakethebankin
g sector competitive in the deregulated environment. They should
prefernoninterestincomesources.18

Simon H. Kwan (2003) investigated operating performance in Asian

countries.After controlled for loan quality, liquidity, capitalization, and output mix,
per unitbanks operating costs are found to vary significantly across Asian countries
and overtime. His further analysis reveals that the country rankings of per unit labour
andphysical capital costs are highly correlated, suggesting that there exist
systematicdifferences in bank operating efficiency across Asian countries. However,
thismeasure of operating efficiency is found to be unrelated to the degree of openness
ofthe banking sector. His research also identified that Asian banks‟ operating costs
werefound to decline from 1992 to 1997, indicating that the banks were improving
theiroperatingperformanceover time.

Singla H.K. (2008) “financial performance of banks” has examined that

howfinancial management plays a crucial role in the growth of banking. It is
concernedwithexaminingtheprofitabilitypositionoftheselectedsixteenbanksofbankerin
dexfor a period of six years (2001-06). The study reveals that the profitability
positionwasreasonableduringtheperiodofstudywhencomparedwiththepreviousyears.
Strongcapitalpositionandbalancesheetplace,Banks
inbetterpositiontodealwithandabsorb theeconomicconstantoveraperiod of time.2

Ade Salman and Riko Hendrawan (2009) Banks were known to have
volatilecapital structure caused by their financial liquidity. This paper aims to
examine theimpact of capital structure towards performance of two group of banks,
conventionaland Islamic banks, by using profit efficiency approach. Two stages
procedure wereemployed. In the first stage we measure profit efficiency score for
each bank inIndonesia during year 2002-2008 by using distribution free approach
(DFA). In thesecond stage we employ banks‟ capital ratio to measure their impact
towards theirperformance. Output from the first stage indicate that banks average
profit efficiencyscores equal to The output also indicate the Islamic banks in
Indonesia succeed
toplacetheirpositionattop20%highestprofitefficiencyscore.Resultfromthesecondstagei
ndicatethatbankcapitalratiohaveanegativeeffectontheirprofitefficiency.
 Ipshita Bansal & Kamal K. Gupta, (2012), in their article “Development Of
AnInstrument To Measure Internet Banking Service Quality In India” published
inJournal attempted to develop a reliable and valid instrument of measuring
Internetbanking service quality in India, and also analyses the impact of Internet
bankingservice quality dimensions on the Overall Internet Banking Service Quality
andcustomer satisfaction. Results of exploratory factor analysis (EFA) revealed
fivedimensions— Security/Privacy, Reliability, Efficiency, Responsiveness, and
SiteAesthetics. Findings indicate that all dimensions carry significant impact on
theOverallInternetBankingServiceQualityperceptions andcustomersatisfaction.
However,Security/
PrivacyandEfficiencydimensionscarrythemaximumimpactontheOverallInternetBankin
gServiceQualityandsatisfactionrespectively.

DannenbergandKellner(1998),intheirstudy,overviewedtheopportunitiesforeffect
ive utilizationoftheInternet withregardtothebankingindustry.Theauthors evaluated that
appropriate application of today‘s cutting edge technologycould ensure the success of
banks in the competitive market. They evaluated theservices of banks via internet as
websites provide sophisticated line of products andservices at low price. The authors
analyzed that transactions via internet reduce
theriskofdatalosstocustomers,chancetocutdownexpenses,higherflexibilityforbankempl
oyees,re-shapingthebanks‘imageinto aninnovativeandtechnologically
leadinginstitutes, etc. The researchers found that banks could move one step further
byentering into a strategic alliance with internet service provider. So, the bank
oftomorrow standsto befeasiblewith today‘stechnology

Singh and Malhotra (2007) made an attempt to discover factors affecting

abank‘s decision to adopt internet banking in India. The study was based on 88
bankscomprisingofpublic,privateandforeignbankscoveringfinancialyears
from1997to2005. The results of the study showed that large banks having high fixed
expenses,high income and expenditure tend to use more technology. Banks had used
internetbanking as complementary channel to existing branch network. However, the
privateandforeignbanks werequickadopter tointernetbankingthanpublicsectorbanks.
The adoption of this innovation by other banks increases the probability that
adecisiontoadaptwillbe madeasithasincreasedtheprofitabilityandproductivityofbanks.
 Rangarajan [1988] In 1988 another committee was constituted under
theRangarajan for making plans for computerization for the next five years from
1990-94for the banking industry. It identified the purpose of computerization as
improvementin customer service, decision making, housekeeping and profitability.
The committeeobserved that banking is a service industry and improved efficiency
will lead to afaster rate of growth in output and help to expand employment all
around. The workforceinthe
bankingindustrymust,therefore,lookuponcomputerizationasameanstoimprovecustomer
service

Kamaraj.K. and Dr. A.Somu (2013) investigates that IndianOverseas Bank

isone of the oldest nationalized commercialbanks in India. It has done many
yeomenservices to millionsof people in the nation in the form of priority
sectorlending andagricultural loans. Generally, the banking industryis an indicator for
manydevelopmental activities in thenation. The industry is more accountable to
publicandcomputations of made on the basis of business peremployee or profit
peremployee. Interest rates are highlyfluctuating and growth parameters are
staggering.Underthesecircumstances,thebankshavetoplayacautiousroleinacceptingdep
ositsand in lending operations. The scopefor banking industry is very bright and the
bankscan succeedonly if they perform well in this competitive environment.To
conclude,the present study bank, i.e., Indian OverseasBank has higher potential to
providebetterandqualityservicestothebillionsof peopleinIndia.

V. Srikanth (2014) investigates the financial performance ofan

investmentcompany in INDIA for a three-year periodfrom 2010 to 2013, which is
assessed usingcash flowstatement. The findings pointed out that overall
companyperformancereduced remarkably in the last year of the analysis.This study
principally emphasizeson how accountinginformation aids budgetary decision-makers
to evaluatethecompany financial performance, determine its futureobligations, and
make betterinvestmentdecisions

Faizan Mohsan (2011) in his paper titled "Impact of Customer Satisfaction

onCustomerLoyaltyandIntentionstoSwitch:EvidencefromBankingSector"revealedthat
customer satisfaction was positively correlated with customer loyalty
andnegativelycorrelated withcustomer intentionstoswitch
 Dash and Mahapatra (2006) gave an insight into the parameters of
customers'satisfaction and their measurement. The paper observed that the
customer'srequirementsmustbetranslatedandquantifiedintomeasurabletargets.Thisprov
ideda way to monitor improvements, and deciding upon the attributes that need to
beconcentratedin orderto improvecustomer's satisfaction.

Gouri Shankar, A. (2004) suggested that excelling and managing

customerrelationshipwas thefutureofanybusiness.Customerfocusingwas
nottobeviewedas just a business strategy but should become a corporate mission. The
challengingareas forbanks would beintheareaofpeople,technology andcompetition.

Rao, N.V. (2002) explained that customer service was becoming an

importantaspectingainingcompetitiveedgeforsurvivalwithgrowthandprofitsforbanks.T
hekey to success in the changed environment would be the banks’ ability to reach
theclientathisdoor step

Bahia, K and J Nantel (2000) - The paper suggested an alternative scale

formeasuring service quality in retail banking. The study developed a scale called
asBanking Service Quality Scale which contained factors like effectiveness
andassurance,access,price,tangibles,serviceportfolioandreliability.Thismodelwasfound
to bemorereliablethan service

Jamal, A., Naser, K.,2002-The study examined key drivers of

customersatisfactionusingcustomersanditwasfoundthatcoreandrelationalperformances
had impact on customer satisfaction and there was negative relationship
betweencustomerexpertiseand customersatisfaction

SureshChandratal (2002). - The study examined relationship between

servicequality and customer satisfaction in Indian banking sector. These were found
to beindependent but closely related. Both constructs vary significantly in core
services,human element, and systematization of service delivery, tangibles and
socialresponsibility.

Navdeep Aggarwal and Mohit Gupta (2003) - This study basically finds
outthe primary dimensions and sub dimensions of service quality. Informal
structuredinterviewsareconductedwithbranchmanagersandacademicianstoformulate
a
bankingservicequality model.Thestudy foundoutthatservicetimeand
personalinteractionsareveryimportantalongwithambienceforservicequality

Zhou, L( 2004)- The study analysed impact of service quality in banks

oncustomer satisfaction in china’s retail banking and it was found out that reliability
andassurance were the primary drivers of customer satisfaction. It was also found out
thatthereweresignificantvariations inexpectations andperceptions incustomers

Vashisht (1987) evaluated the performance of public sector banks on the basis
ofbranchexpansion,deposits,credit,prioritysectoradvances,differentialrateofinterest(D
RI) advances and net profit over the period pertaining to 1971-83. For the
studypurpose, the researcher ranked the banks as excellent, good, fair and poor by
usingcomposite weighted growth index. The study ranked Indian Overseas Bank on
the topand Dena Bank on the bottom among the banks taken under study. The
researchersuggested the development of marketing strategies for deposit mobilization,
profitplanning and SWOT analysis in order to improve the performance of public
sectorbanks.

Nayar (1992) studied the profitability and profit planning of nationalized

banksfor the years 1970 to 1986. Growth and trends in performance and profitability
wereanalyzed in terms of three main ratios, i.e., return on investment, deposit
mobilizationand profit margins. The study evaluated that in terms of deposits,
advances to prioritysector and number of branches, Central Bank of India ranked first
followed by Bankof India and Bank of Baroda. The maximum compounded annual
growth rate in termsof deposits was confined to the period 1976 to 1981 by all the
banks except CentralBank of India. Indian Overseas Bank recorded maximum return
on investmentfollowed by Central Bank and Bank of Baroda. Finally, she suggested
the variousmeasures to improve the profitability of commercial banks which
includedacceleration of recovery process, mixture of credit portfolio, control over
volume,deposit mobilization, diversification of activities into non-traditional banking
businesssuchasmerchantbanking andmutualfunds

Vyas (1992) made an attempt to measure, compare and analyze the

profitabilityof public sector banks, private sector banks and foreign sector banks
operating
inIndia.Thestudyevidencedthatpublicsectorbankshadlowprofitabilityascomparedto
private sector banks and foreign banks. Public sector banks suffered from poorasset
management and low exposure on non-fund based activities. The studyevaluated that
non-interest income was very high in the case of foreign banks ascompared to Indian
public sector banks and private sector banks. The researchersuggested that public
sector banks have to emphasize on the improvement of assetmanagement and
exposure to profit yielding services like merchant banking, mutualfunds, personal
advisory services, credit cards, personal banking and internationalbanking.
 Kaushik (1995) studied the social objectives and profitability of public
andprivate sector banks during the period 1973 to 1991. He compared the public
andprivatebankswiththehelpofvariousprofitabilityandproductivityindicatorsthroughrat
ios, average, correlation, regression and factor analysis. He found that public
sectorbanks were having lower profitability as compared to private sector banks.
Further, hefound that the various productivity indicators showed an increasing trend
during theperiod of study for all the banks though the increase was much higher in the
case ofprivatesectorbanks.Heconcludedthattheprofitabilityofpublicsectorbanksshowed
a declining trend due to social objectives not because of cost inefficiency andlow
productivity. He suggested that productivity could be increased with the help
ofinnovativebanking,improvedtechnological andmanagerial
knowledge,welleducatedand trainedmanpower and infrastructuralfacilities.

Sangmi, M. (2002) analyzed the profitability of ten selected commercial banks

inIndia. Five best performing banks were taken in Class-1 and five poor
performingbanks were taken in Class-2 categories. The period of study was from
1991-92 to1997-98. The profitability ratios like spread, burden, interest revenue, non-
interestrevenue,interestcost,manpowercostandfacilitycosthavebeencalculated.Thestud
y revealed that operating cost was higher in the case of Class-2 banks and in
thesebanks the profitability was affected due to low level of spread. These banks
requiredmore scientific attempts for the investment of funds. The researcher
suggested that theposition of operating cost can be improved with the introduction of
high leveltechnologyas wellas by improvingtheperemployeeproductivity.

Kumari (2003) studied the profitability and productivity of both public

andprivate sector banks in India. The study primarily based on the secondary
datacovering the time period from 1980 to 1999 by taking into account the 50% of
totalpublic and private sector banks in India. Various indicators relating to employee
andbranchproductivityaswellasratiosrelatingtofinancialproductivityandprofitabilityof
commercial banks have been employed for the purpose of study. The researcherfound
that in terms of deposit mobilization, branch expansion, credit deployment
andemployment generation both public and private sector banks have shown
increasingtrend. Bank-wise analysis revealed that private sector banks have shown
highergrowth as compared to public sector banks. The researcher suggested that
publicsector banks should improve their profitability and productivity performance
byadopting innovative modern technological changes, opening up of new
branches,adopting aggressive marketing strategies and by fixing responsibility of
officers forrecovery,etc.
ChapterNo. 4
Data Analysis.
Q1} Gender.

Gender Noof responses Percentage

Male 28 47%

Female 32 53%

Total 60 100%

Gender

Analysis:

It is observed that in the research on gender there are get 60 responses

inthat 28 response for male and 32 response for female and their
percentageis47%are male and 53%arefemale.
Q2}Age Group.

AgeGroup No.of responses Percentage

15 to 20 13 21.7%
20 to 25 36 60%
25 to 30 7 11.7%
30 &above 4 6.6%
Total 60 100

Agegroup

6.6%

21.7%
11.7%
15 to20
21 to25
26 to30
30& above

60%

Analysis:

It is observed that in the research of age group their number of

responsefor differentgroupslike15 to 20agesgot13responses, 21to25
got36
response,26to 30got 7 responseand30&above got4responses. Their
percentage is 21.7% are 15 to 20 year, 60% are21 to 25 year, 11.7%
for26 to30 year and 6.6% are 30 & above year. Total number of
response is60.
Q3}Whichkindofaccountdoyoumaintaininthisbank?

TypeofAccount No.of responses Percentage

CurrentA/c 7 11.7%
SavingA/c 49 81.7%
Nominal A/c 4 6.6%
Total 60 100%

Typeofaccounts

6.6%
11.7%

Current A/cSavingA/c
NominalA/c

81.7%

Analysis:

It is observed that in the research study on types of account

holders11.7% are current a/c holders, 81.7% are saving a/c holder and
6.6% arenominal a/c holders. And their response are 7 for current
account, 49 forsaving account and 4 for nominal account and total
number of responsesare 60.
Q4}Doyouthinkyourbankofferscompetitiveinterestrate?

Interestrate No.of responses Percentage

Yes 24 40%
No 15 25%
Maybe 21 35%
Total 60 100%

InterestRate

35%
40%

YesNo
Maybe
25%

Analysis:

It is observed that in the research study on a competitive interest rate

40%of people think yes, 25% of people think no, 35% of people think
maybe.Their responsesare24responsesfor yes,15 responsesfor no,
21responsesformaybe and totalnumberof response are60.
Q5}Doestheemployeesinthebankhavetheknowledgetoansweryour
question?

Knowledge answer No.of responses. Percentage.

toyour questions
Yes 37 61.7%
No 10 16.7%
Maybe 13 21.6%
Total 60 100%

Knownledge

21.6%
Yes
NoMaybe
16.7% 61.7%

Analysis:

It is observed that in the research study on knowledge of employee

toanswer your questions 40% of people think yes, 25% of people think
no,35% of people think maybe.Their responses are 37 responses for yes,
10responses for no, 13 responses for maybe and total number of
responseare 60.
Q6} Doesthebankoperatinghoursareconvenienttoallitscustomers?

Operating hours No.of responses Percentage

Yes 28 46.7%
No 13 21.7%
Maybe 19 31.6%
Total 60 100%

Operatinghours

31.6%

46.7%
YesNo
Maybe
21.7%

Analysis:

It is observed that in the research study on bank operating hours

areconvenient to customers 46.7% of people think yes, 21.7% of
peoplethink no, 31.6% of people think maybe. Their responses are 28
responsesfor yes, 13 responses for no, 19 responses for maybe and total
number ofresponseare 60.
Q7}Which channelyou useto accessyouraccount?

Channel accessa/c No.of responses Percentage

Direct Banking 19 32%
Net Banking 24 40%
Mobile Banking 17 28%
Total 60 100%

ChanneltoAccess

28% 32%
DirectBanking
Net BankingMobileBanking

40%

Analysis:

It is observed that in the research study on channel access by

customer32% of people think Direct Banking, 40% of people think Net
Banking,28% of people think Mobile Banking. Their responses are 19
responsesfor Direct banking, 24 responses for Net banking, 17
responses forMobilebanking andtotalnumberofresponseare 60.
Q8} Does traditional Banking provide more revenue than
onlinebanking?

Revenue No.of responses Percentage

Yes 25 42%
No 15 25%
Maybe 20 33%
Total 60 100%

Revenue

33%

42%
Yes
No

25% Maybe

Analysis:

It is observed that in the research study on traditional banking are

morerevenue than online banking to customers 42% of people thinks yes,
25%of people think no, 33% of people think maybe. Their responses are
25responses for yes, 15 responses for no, 20 responses for maybe and
totalnumberofresponseare 60.
Q9} When the bank promises to do something by a certain time,
itdoes so?

CertainPeriod No.of responses Percentage

StronglyDisagree 5 8%
Disagree 6 10%
Neutral 25 42%
Agree 17 28%
Strongly Agree 7 12%
Total 60 100%

CertainPeriod

12% 8%

10% StronglyDisagree
DisagreeNeutralAgree
StronglyAgree
28%

42%

Analysis:

It is observed that in the research study on bank promise to do

somethingin certain period of time to customers 8% of people thinks
StronglyDisagree, 10% of people think Disagree, 42% of people think
Neutral,28% of people think Agree, 12% of people think Strongly
Agree. Theirresponses are 5 responses for strongly disagree, 6 responses
for agree, 25responses for neutral, 17 response for agree, 7 response for
disagree andtotalnumberofresponse are 60.
Q10} When you have a problem, the bank shows a sincere interest
insolvingit?

Seriousattention No.ofresponses Percentage

StronglyDisagree 5 8%
Disagree 8 13%
Neutral 24 40%
Agree 16 27%
Strongly Agree 7 12%
Total 60 100%

Seriousattention

12% 8%
13%

27% StronglyDisagree
DisagreeNeutralAgree
StronglyAgree
40%

Analysis:

It is observed that in the research study on bank show a sincere interest

tosolving it8% of people thinks Strongly Disagree, 13% of people
thinkDisagree, 40% of people think Neutral, 27% of people think Agree,
12%of people think Strongly Agree. Their responses are 5 responses
forstrongly disagree, 8 responses for agree, 24 responses for neutral,
16response for agree, 7 response for disagree and total number of
responseare 60.
Q11} Does the materials associated with the service {such
aspamphletsorstatements}arevisuallyappealingatthebank?

Material No.of responses Percentage

associatedwith
service
Yes 28 47%
No 10 16%
Maybe 22 37%
Total 60 100%

Materialassociatedwithservices

37%

47% YesNo
Maybe

16%

Analysis:

It is observed that in the research study on materials associated with

theservice are visually appealing to customers 47% of people thinks
yes,16% of people think no, 37% of people think maybe. Their
responses are28 responses for yes, 10 responses for no, 22 responses for
maybe andtotalnumberofresponse are 60.
Q12}Doyouthinknumberofcountersavailableis sufficient?

No.of counters No.of responses Percentage

Yes 25 42%
No 18 30%
Maybe 17 28%
Total 60 100%

No.ofcounters

28%

42%

Yes
No
30% Maybe

Analysis:

It is observed that in the research study on number of counters

aresufficient in bank to customers 42% of people thinks yes, 30% of
peoplethink no, 28% of people think maybe. Their responses are 25
responsesfor yes, 18 responses for no, 17 responses for maybe and total
number ofresponseare 60.
Q13} Does the behavior of employees in the bank instills
confidenceinyou?

Instillsconfidence No.of responses Percentage

Yes 27 45%
No 14 23%
Maybe 19 32%
Total 60 100%

InstillsConfidence

32%
YesNo
45% Maybe

23%

Analysis:

It is observed that in the research study on behavior of employee instills

aconfidence in customers 45% of people thinks yes, 23% of people
thinkno, 32% of people think maybe. Their responses are 27 responses
for yes,14 responses for no, 19 responses for maybe and total number of
responseare 60.
Q14}Does thephysicalfeaturearevisuallyappealinginthebank?

PhysicalFeature No.ofResponses Percentage

Yes 25 42%
No 16 27%
Maybe 19 31%
Total 60 100%

PhysicalFeature

31%

42%
YesNo
Maybe
27%

Analysis:

It is observed that in the research study on physical feature are

visuallyappealing in bank for customers 42% of people thinks yes, 27%
of peoplethink no, 31% of people think maybe. Their responses are 25
responsesfor yes, 16 responses for no, 19 responses for maybe and total
number ofresponseare 60.
Q15}Does yourbankservice that isthetimeconstrained?

Time Constrained No.of responses Percentage

Yes 26 43%
No 15 25%
Maybe 19 32%
Total 60 100%

TimeConstrained

32%
Yes
43%
No
Maybe

25%

Analysis:

It is observed that in the research study on bank service are

timeconstrained for customers 43% of people thinks yes, 25% of people
thinkno, 32% of people think maybe. Their responses are 26 responses
for yes,15 responses for no, 19 responses for maybe and total number of
responseare 60.
Q16} Do you think that there is adequate staff at the bank to
meetyourrequirements?

AdequateStaff No.of responses Percentage

Yes 30 50%
No 14 23%
Maybe 16 27%
Total 60 100%

AdequateStaff

27%

50%
YesNo
Maybe
23%

Analysis:

It is observed that in the research study on the bank staff is adequate

tomeet thecustomers’ requirements 50% of people thinks yes, 23%
ofpeople think no, 27% of people think maybe. Their responses are
30responsesforyes, 14responses for no, 16responsesformaybe
andtotalnumberofresponse are 60.
Q17} Do you get SMS alerts form the bank for every transaction
withthebank?

SMSAlerts No.of responses Percentage

Yes 35 58%
No 15 25%
Maybe 10 17%
Total 60 100%

SMSAlerts

17%

Yes
58%
No
25% Maybe

Analysis:

It is observed that in the research study on every transaction to the

bankdo the customer get sms alert 58% of people thinks yes, 25% of
peoplethink no, 17% of people think maybe. Their responses are 35
responsesfor yes, 15 responses for no, 10 responses for maybe and total
number ofresponse are60.
Q18}Isthebankfollowsfairandsimplifiedpricingprocedures?

Fairand Simplified No.of responses Percentage

StronglyDisagree 6 10%
Disagree 9 15%
Neutral 26 43%
Agree 13 22%
Strongly Agree 6 10%
Total 60 100%

FairandSimplified

10% 10%

15%
22%
Stronlgy DisagreeDisagree
Neutral
Agree
StronglyAgree
43%

Analysis:

It is observed that in the research study ondoes the bank follow fair
andsimplified policy towards customer10% of people thinks
StronglyDisagree, 15% of people think Disagree, 43% of people think
Neutral,22% of people think Agree, 10% of people think Strongly
Agree. Theirresponses are 6 responses for strongly disagree, 9 responses
for agree, 26responses for neutral, 13 response for agree, 6 response for
disagree andtotalnumberofresponse are 60.
Q19} Do you consider the charges levied by the bank reasonable
forprovidingthe following services?

ChargesLevied No.of responses Percentage

Yes 20 33%
No 16 27%
Maybe 24 40%
Total 60 100%

Chargedlevied

33%
40%
Yes
NoMaybe

27%

Analysis:

It is observed that in the research study on charges levied by

bankreasonable for providing the services 33% of people thinks yes, 27%
ofpeople think no, 40% of people think maybe. Their responses are
20responsesforyes, 16responses for no, 24responsesformaybe
andtotalnumberofresponse are 60.
Q20}Are yousatisfiedwithusingofmanualbanking?

Satisfied No.of responses Percentage

Yes 27 45%
No 16 27%
Maybe 17 28%
Total 60 100%

Satisfied

28%

45%
Yes
No
27%
Maybe

Analysis:

It is observed that in the research study on customer are satisfied by

usingamanualbanking45%ofpeoplethinksyes,27%ofpeoplethinkno,28%
of people think maybe. Their responses are 27 responses for yes,
16responses for no, 17 responses for maybe and total number of
responseare 60.
ChapterNo. 5
ConclusionsandSuggestions.
Chapterno.5:Conclusionsandsuggestion.

5.1 CONCLUSION

Customers for financial services are changing in terms of their wants,

needs,desires, expectations and problems and financial service providers have to
understandwhotheircustomersare,whattheyprefer,whytheybuy,whomakes
thedecisionandhow theconsumer usestheproductand service.

In conformity with these changes, there should be changes in the Bank's

services,training, attitudes and images, marketing strategies and patterns of
organization andcontrol. New technology driven products blended with the
traditional ones andpersonalizedservicewillenablebanks
toextendavarietyoffinancialservicesunderoneroof.

The financial service industry in India consists of various Financial

Institutionssuch as finance companies, commercial banks, securities funds and
investment banks,mutual funds and insurance companies, etc. The basic function of
these financialinstitutions involves channelizing public money in a profitable manner
by bearingsufficient risk and in turn distributing profits by the way of interest and
dividends tothe investors. In the economy, may be categorized in different groups but
all of themface major kind of common risks such as liquidity risk, interest rate risk
due tomismatch between its asset and liabilities, credit risk in the form of not
honoringcontract by counterparty, operational risk arising due to carrying business,
externalandinternalfrauds, etc.

The world of finance has always had an intuitive understanding of risk.

Riskmanagement is a systematic way of protecting the concern‘s resources and
incomeagainst losses so that the aims of the business can be achieved without
interruption.RiskManagementistheprocessusedtosystematicallymanageexposurestoris
k.The
risk management approach encourages management to put exposures to loss in
abroad perspective, in which insurance is just one of the several possible solutions
totheproblem.RiskManagementisbestusedasapreventivemeasureratherthanasareactive
measure.

Risk management in financial institutions is no longer viewed only as a means

ofstaying out of financial trouble, but also increasingly as a proactive competitive
tool.The unabated escalation in the complexity of financial products and
servicesemphasizes the importance of sophisticated risk management systems for the
effectiveanalysis and control of financial exposures and, ever more, for the
proactiveoptimizationof risksversusreturns.

The failure of several financial institutions in recent decades heightens

theimportance of internal risk management best practices and regulatory risk
controls.While large, globally active banks are under regulatory pressure to comply
with theBasel Accord, banks, securities houses, insurance companies and other
financialinstitutions are driven by competitive pressures to optimize capital
utilization andrisk-adjustedpricing and performance.

Traditionally, risk management has been segregated into distinct

categories:liquidity risk, market risk, credit risk and operational risk. More and more,
theseboundaries
arebeingdissolvedtocreateaholisticviewofalltypesofdiversifiedrisksinherent in
transactions and portfolios. Further, the effects of the relationships amongthe various
risk types are being incorporated to create an integrated view of financialrisks. The
Financial Risk Management Practice provides solutions in asset liabilitymanagement,
market risk, credit risk and operational risk to banking and non-
bankingfinancialinstitutions.

Financial literacy, in that sense, enables an individual to improve the

managementof one's finances and avoid distress. At a very basic level, financial
education is aboutdisseminating knowledge and information about the products and
services offered bybanks and other institutions. The objective is to make people
aware of the risks andrewards so that they can make an informed choice. The country
naturally benefitsthrough higher savings and investments. Realizing the imperatives
as well as theadvantages, several countries have set up specialized bodies to spread
financialliteracy,supplementingtheworkdonebyregulators,financialinstitutions,non-
governmental organizations and other less formal agencies. India has no
nationwidestructured financial education programmer, but significant work is being
done by theRBI, SEBI, Indian Banks' Association, various self-regulatory
organizations and theBanking Code and Standards Board of India under the
financial inclusionprogrammers.

As far as India is concerned, financial literacy and awareness should go hand

inhand, if the very important socio-economic objective of financial inclusion is to
beachieved. The task is challenging because the majority of the population is
stillbeyond the pale of the banking system. Alternative financial delivery
channelsinvolvingtheuseofmoderntechnologyarebeingtriedoutbutbytheRBI.Thesewill
succeed only if financial literacy deepens. It is heartening that public sector
bankshave set up dedicated centers to promote financial literacy and, eventually,
inclusion.But the private sector banks will do well to follow this lead, only if they
confirm thatthis process will benefit them monetarily. They still wait for the feedback
to bereceived on the success of financial inclusion programmer initiated by the
publicsectorbanks.

In near future surely the private sector banks and other financial service renders
willrelatively be benefited from the new markets if they offer region specific products
andfinancial services. Several related benefits also will flow from concerted
programmersof spreading financial literacy. Consumers who are better informed will
demandaccountability and seek redresses of grievances. That, in turn, would enhance
theeffectiveness and integrity of financial markets. As financial education empowers
thecommon person, it reduces the government's burden in the matter of protecting
him orher from the elements of market failure arising from information asymmetries.
Forthese and other reasons, the RBI Governor has said financial literacy is not just
apublic good but a merit good to the functioning of financial institutions operating
inIndia.

From the detailed study, it has been inferred that the investment habit of a
largesection of Indian society is still unchanged especially in rural areas. For decades
theyhad never looked beyond the Government operated schemes for their
investmentneeds or they have not moved from banking savings and secure
investment schemestomoresophisticatedfinancial
marketoperationsliketradingorinvestmentinmutual
funds/debentures. By investing in zero-risk products, they have become slaves
ofprotectionist investment behavior and did not keep pace with the changing
marketorder.Moreover,commonmantodayisfearfulofinvestinginotherassetclasses.Ther
eason given by many for not investing or avoiding certain asset classes is lack
ofknowledgeaboutthoseassetclasses.

Further, the general negative perception that gets built-up by people around us
whofailed in their investment is passed on to the asset class, instead of the
faultyinvestment decisions made by those people. The point is, the investment
ideologywhich our parents and grandparents followed may not be suitable today.
There is aneed to evolve and acclimatize ourselves with changing times and it is
becomingincreasingly important. For the financial literacy programmer to take wings,
themarketswillhaveabigrole
toplay.Financialilliteracyisamajorstumblingblockinfurthering financial inclusion. This
has led to the financial illiterate segment
makingnegativesavingsinmanycases.Therefore,banksneedtoviewthesituationasnotano
bligation to be met but an opportunity that is to be woven into their businessstrategies.

StudyforFutureResearch

Financial inclusion is an idea whose time has finally come in India. It will
enablehundreds of millions of low-income people to improve their economic and
socialstatus by participating in the financial system. From this research work it has
inferredthat the financial literacy levels are extremely low among the different
segment ofpopulace in India. Even though microfinance institutions have expanded
very fast inthe last five years, they still only cover about one fifth of low-income
households
andtheyhavemetonlyonetenthofthecreditneedsofthepoor.Therefore,theresearcherconsi
ders thefollowingareaas thepotentialtopics forthefutureresearchers.

1. TostudytheFinancialEngineeringStrategiesand thesuccessoffinancial
inclusionprogrammer initiated by Reserve Bank of India among the low-income
urban citizensandto accesstheirlevelof financialliterature.

2. To measure the financial literature level and the development of personal

FinancialManagement and Operation Skills of the rural and urban unorganized
workers in Indiaandalso measuretheachievements in thesetgoal.
3. Tostudythesuccess offinancialinclusionschemes.

5.2 SUGGESTIONSFORFURTHERRESEARCH

Financial services will need to focus on customer's needs, attitudes. Values

andbehaviors. Customer research will help in understanding and anticipating
customerneeds that can be met through product development or through
differentiation. Thereis tremendous scope for further research along bank customers
and staff in the statewithhighestliteracy and banking habits.

It will enable monitoring of customer satisfaction with personal service and

withautomated service-delivery methods in order to pinpoint areas where service
qualitycan be enhanced. Internal marketing will also be challenged to use technology
to moreprecisely identify and segment markets and prospects that can be targeted with
aspecialoffer.

Thefinancialservicesectorhastotacklemanychallengesintheglobalisedfieldto
fulfill the ever growing financial demands of the economy. The main
challengesthathavetobemanaged bythefinancialagenciesareasfollows:

1. The financial service sector is fully geared to the task of "financial literacy"
asfinancial inclusion is the basic norm of financial market operations. However,
thissector faces many challenges like lack of qualified personnel. Hence, it is
veryimportant that proper and suitable training must be given to the various
financialintermediaries by the financial agencies, who in turn can educate
investors to makewiseinvestmentdecisions.

2. The introduction of new financial products and instruments will be of no use

unlessthe investor is aware of the merits and uses of the new and innovative products
andinstruments. Therefore, it is suggested that the bank and other financial agencies
mustcreatefinancialliteracyamongtheurban andruralmasses.

3. In India the whole financial system is undergoing a phenomenal change

inaccordance with the requirements of the national and global environments. It is
timethatthis sectorgaveuptheirorthodoxattitudeofkeepingaccounts inaconfidential
manner. Hence, this sector should opt for better levels of transparency in
theirtransactions. In other words, the disclosure requirements and the accounting
practiceshaveto bein linewiththeinternationalstandards of banking.

4. In the Indian scene, each financial intermediary seems to deal in different

financialservice lines without specializing in one or two areas. In other countries,
financialintermediaries like Newton's Solomon Brothers specialize in one or two
areas only.This helps them to achieve high levels of efficiency and excellence.
Hence, in Indiaalso, financial intermediaries can go for specialization, to gain more
knowledge oninvestors' behavior and design products/service according to their need.
™ Most of theintermediaries do not spend more time on research. It is very vital that
one shouldbuild up a proper data base on the basis of which one could embark upon
"financialliteracyamong potentialinvestmentpopulations''.

IMPORTANTSUGGESTIONS

Fewsuggestions inthecontextofstudyare:

1. Banks must conduct regular customer Surveys and customer meets to assess
thechangingneedsof customers.

2. Banksshoulddesignservicesandproductstosuittheunderlyingdimensionsofqualit
yservice,convenientlocation,lowcostand safety

3. With the newly acquired technology, banks should launch various value
addedservices and new technology driven products blended with the existing ones to
enablethebanktoextendavarietyof financialservices,allunderoneroof.

4. While the existing vanilla products will continue to find takers, the
competitiveenvironmentwillmakeitnecessarytointroduceproductsbyleveragingtechn
ologyonacontinuousbasisto suitemerging needs.

5. Marketing of insurance products/mutual funds credit cards in all branches to

beundertaken to satisfy the modem customers needs, so that the banks
transformthemselvesintoonestopshopsthatmeetallthebankingandfinancialneeds
ofthecustomer.
6. Banks are to pioneer new service delivery techniques to strengthen
bank'srelationshipswithbranchcustomersandtosuittheunderlyingdimensionsofsafety,
qualityof serviceand returns.

7. FacilitiesforancillaryserviceslikesafecustodyofarticlesandSafedepositlockersare to
be provided at all branches and customers should be made aware of theiravailability.

8. The design of the physical environment and the way in which tasks are
performedbycustomercontactpersonnelshouldbesuchthattheseplayavitalroleincreating
aparticular identify for the bank, shaping the nature of the customer's experience
andenhancingboth productivityand quality.

9. Customerloyaltycanbeenhancedthroughofferings
ofvalueaddedserviceslikeinstant credit of outstation checks, issuance of free check
books, issuance of freeATM cards, free accident insurance cover, free execution of
standing instructions,free collection or at par facility, payment of utility bills like
electricity, water andtelephone charges on due dates, payment of
monthly/quarterly education fee ofchildrenand paymentof insurancepremiumon
dates.

10. RegularCustomermeetsshouldbeheldforeffectiverelationshipbanking.

11. Promotional efforts should focus more on relationship building to

increasecustomer calls to win the mind share of customers so that they continue to
win
themindshareofcustomersthroughwordofmouthpublicity.Atthesametime,theheadoffic
e of the bank should supposal the efforts at the branch through
continuousadvertisementand publicity efforts.

12. Regular promotional efforts like customer meets, seminars, road shows
andcampaigns to be conducted to create awareness in customers regarding the
productsandbuild positiveimageaboutthebank..

13. All branches should be computerized and provision of technology

orientedproductslikeATMs
andTelebankingshouldbemadeavailablemorenumberofcustomerstomeettheexpe
ctations ofcustomers ontechnologicalchanges.

14. Banks should not treat ATMs as Unique Selling Propositions

butshouldcommoditiesthesamesothatmaximizingnumberofcustomers getthebenefit
of ATMs. Networking of branches to enable customers to access their
accountthrough any of these delivery channels - ATMs, Internet Banking, and
Telebanking -to have 'Any time, Anywhere Banking'. Banks can also go in for shared
networksystems so that the customers irrespective of the bank with whichhe
maintains theaccount. Can use any ATh4. More ATMs to be provided and they
should become partofATMnetworkso asto maximizereturn oninvestment.

15. CustomersshouldalsobeeducatedandencouragedtouseATMs
tomakebankingmorecustomer friendly andhasslefreeand tooptimizeutilization..

16. Networkingofbranchestoenable customersto accesstheiraccountsthroughanyof

these delivery channels - ATM, Internet banking and Telebanking. Core
bankingsolution (CBS) customers become 'Bank Customers' instead of being
'BranchCustomers'.

17. Technologyupgradationbywayofenhancedaccessanddeliverychannelsshouldsupple
ment the existing network and the branch unit should transform into
mostattractivemarketingoutletswithpersonalized consultancy services.

18. For,introductionofcorebankingsolutionandintegrationonacommonsite all theitems

of the group will facilitate cross selling of products while providing
'Anytime,AnywhereBanking'.

19. As part of the business process reengineering exercise, banks should adopt
singlewindow system in all its computerized branches. This also requires the
empoweringthefrontlinestaffto improvetheprocesstimefortransactions.

20. Intensiveeffortsshouldcontinuetobuilda
totallypositiveimagewithsafetyallsecurityaspectscomplemented by thetechno-
abilities.

21. Banksshouldfollowastrategyofgeographicaldominance,growingstrongerinmark
ets wherethey arealready stronger.

22. Banksshouldreframe their

marketingstrategieswithincreasedattentiontoretailbanking, where returns are higher,
default rate and probabilities are low, andrepaymentschedulesaremoreregularand
dependable.
23. The processes need to be reengineered as customers are demanding greater
controland convenience over banking transactions. Banks will have to take to heart
thephilosophy of 'Convenience Banking' and have a relook of all the processes from
thecustomer's side.

24. Banks should accept the concept of learning organizations where new skills
andknowledgearecontinuouslycreated,acquiredand assimilatedandeveryoneissetona
learning mode. Training programmers in banks should not only provide
jobknowledge but also inputs in the areas of management, marketing and
behavioralsciences.

25. Majortrainingprogrammersneedtobeintroducedforbankstaffinmarketingoffinanci
al services to enable skill development, reorient mindset and to
becomecustomercentric.

26. Re-skilling and redeployment of to optimize manpower utilization in the areas

of'marketing should be resorted to by redesignation of front line staff as
marketingassistants and allocatingspecificgoals in terms of marketshare.

27. Managers should be provided training in strategic marketing in premier

instituteslikeIndianInstituteofManagement,NationalInstituteofBankManagement,Bank
ersTraining College, Management Development Institute, Administrative Staff
CollegeofIndiaetc.

28. Being sent for training at national institutes of excellence should also serve as
amotivator for career building. Learning, unlearning and relearning are the only
threewaystoadvancement
incareerpaths.Midcareereducationhasbecomeimperativetoenableexecutivestoconstant
ly read, reflectand relate.

29. Technological developments should also be made employee friendly

byimplementing'CoreBankingSolution'torelieve
thestafffrommundaneactivitieslikeroutineandrepetitivestatements
sothattheycandevotemoretimetomarketing.

30. Qualityhasemergedastheallpervadingconcept
inthemanagementoforganizations in ahighly competitiveenvironment.
WEBILIOGRAPHY.

 www.researchgate.com
 www.streetdiectory.com
 www.mybanktracker.com
 www.dictionary.com
 www.sigc.edu
 www.slideshare.net
 www.owlgen.com
 www.elinext.com
 www.academia.edu
 www.citigroup.com
 www.shodhganga.inflibnet.ac.in
 www.academia.edu
 www.coursehero.com
 www.worldwidejournals.com
 www.scribd.com
 www.bankofbaroda.com
 www.livemint.com
 www.thehindu.com
 www.mdpi.com
 www.bseindia.com
 www.revistaespacios.com
 www.sachdevajk.com
 www.marketresearch.com
 www.equitymaster.com
 www.indianservices.in
 www.izito.co.in
 www.zapmeta.co
Questionnaire.

1.Name…………………………

2. Gender

o Female
o Male

3. AgeGroup.

o 15 to 20
o 21 to 25
o 26 to 30
o 30 & above

4. Which kind ofaccount doyou maintain inthisbank?

o CurrentA/c
o SavingA/c
o NominalA/c

5. Doyouthink yourbankofferscompetitiveinterestrate?

o Yes
o No
o Maybe

6. Does theemployees in thebank havetheknowledgetoansweryourquestion?

o Yes
o No
o Maybe

7. Doesthebankoperatinghoursareconvenienttoallitscustomer?

o Yes
o No
o Maybe
8. Whichchannelyouusetoaccess youraccount?

o DirectBanking
o NetBanking
o MobileBanking

9. Doestraditionalbankingprovidemorerevenuethanonlinebanking?

o Yes
o No
o Maybe

10. When thebankpromises todo somethingbyacertain time, itdoes so?

o StronglyDisagree
o Disagree
o Neutral
o Agree
o StronglyAgree

11. Whenyouhaveaproblem,thebankshowsasincereinterestinsolvingit?

o StronglyDisagree
o Disagree
o Neutral
o Agree
o StronglyAgree

12. Does the materials associated with the service {such as pamphlets
orstatements}arevisually appealing at thebank?

o Yes
o No
o Maybe
13. Doyouthinknumbersofcountersavailablearesufficient?

o Yes
o No
o Maybe

14. Doesthebehaviorofemployeesinthebankinstillconfidencein you?

o Yes
o No
o Maybe

15. Does thephysical featurearevisually appealingin thebank?

o Yes
o No
o Maybe

16. Doesyourbankservicethatis thetimeconstrained?

o Yes
o No
o Maybe

17. Do you think that there is adequate staff at the bank to meet
yourrequirements?

o Yes
o No
o Maybe

18. Do you get SMS alerts form the bank for every transaction with
thebank?

o Yes
o No
o Maybe
19. Isthebankfollowsfairandsimplifiedpricingprocedures?

o StronglyDisagree
o Disagree
o Neutral
o Agree
o StronglyAgree

20. Do you consider the charges levied by the bank reasonable for
providingthefollowing service?

o Yes
o No
o Maybe

21. Areyou satisfiedwith usingofmanualbanking?

o Yes
o No
o Maybe