This research is an empirical assessment of service quality in State Bank of Travancore. Service Quality is the degree of excellence in the service performance. It is the degree and direction of discrepancy of service quality. The difference between the service expectations and service perceptions of customers is what is termed as service quality gap. The study has been aimed at diagnosing the quality of service rendered by identifying the service quality gap in the regional branch of State Bank of Travancore in Thiruvananthapuram district and making necessary suggestions. The data for the study has been collected on the basis of simple random sampling method through a questionnaire prepared for the purpose of being filled in at interviews with customers. The data collected has been classified on the basis of age, gender, occupation, annual income and educational background for the purpose of analysis. The data collected was tabulated with care and thereafter analyzed suitably. The analysis has been done on the basis of STATISTICAL & RANK CORRELATION instrument. The basic assumption of it is that the customers evaluate a firm’s service quality by comparing their five perceptions and expectations. The scaling in SERVICE QUALITY is based on the five dimensions of service quality namely tangibility, reliability, responsiveness, assurance and empathy. The results of this study also offer support for the intuitive notion that improving service quality can increase the competitiveness of the organization. The report has been presented on the basis of the analysis made and suitable suggestion have been recommended.
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1 OF CONTENTS CHAPTER CONTENT PAGE NO Title page I Certificate II Declaration III Acknowledgment IV Abstract V Table of contents VI List of figures VII List of tables X I INTRODUCTION 1.1 Introduction 2 1.2 Title of Study 2 1.3 Objectives of Study 3 1.4 Research Design 3 1.5 Scope of Study 5 1.6 Limitation 5 II LITERATURE REVIEW 2.1 Concept Service Quality 7 2.2 Customer’s Expectation 8 2.2.1 Expected Service 9 2.3 Zone of Tolerence 10 2.4 Customer Perception 12 2.5 Customer Satisfaction Vs Service Quality 13 2.6 Customer Satisfaction 14 2.7 Determinants of Customer Satisfaction 14 2.8 Outcome of Customer Satisfaction 15 2.9 Service Quality 17 2.10 Service Quality Dimensions 18 2.11 Gap Model 20 2.11.1 Closing Customer Gap 21 2.12 Methods of Measuring Service Quality 21 2.13 Brand Loyality 22 III INDUSTRY PROFILE 3.1 Invention of Banking 25 3.2 Evolution of Banking Industry 25 3.3 Post Independence Scenario 26 3.4 Indian Banking 27
Transcript
1
OF CONTENTS
CHAPTER
CONTENT
PAGE
NO
Title page I
Certificate II
Declaration III
Acknowledgment IV
Abstract V
Table of contents VI
List of figures VII
List of tables X
I INTRODUCTION
1.1 Introduction 2
1.2 Title of Study 2
1.3 Objectives of Study 3
1.4 Research Design 3
1.5 Scope of Study 5
1.6 Limitation 5
II LITERATURE REVIEW
2.1 Concept Service Quality 7
2.2 Customer’s Expectation 8
2.2.1 Expected Service 9
2.3 Zone of Tolerence 10
2.4 Customer Perception 12
2.5 Customer Satisfaction Vs Service Quality 13
2.6 Customer Satisfaction 14
2.7 Determinants of Customer Satisfaction 14
2.8 Outcome of Customer Satisfaction 15 2.9 Service Quality 17
2.10 Service Quality Dimensions 18
2.11 Gap Model 20
2.11.1 Closing Customer Gap 21
2.12 Methods of Measuring Service Quality 21
2.13 Brand Loyality 22
III INDUSTRY PROFILE
3.1 Invention of Banking 25
3.2 Evolution of Banking Industry 25
3.3 Post Independence Scenario 26
3.4 Indian Banking 27
2
3.5 Banks in Economy 27
3.6 Other Highlights 28
IV COMPANY PROFILE
4.1 SBT History 30
4.2 Memorable Milestone 31
4.3 SBTMI 32
4.4 Products & Services 34
4.5 Other Products & Services 49
4.6 SBT Services 51
4.7 SBT Launches Life Insurance 52
V DATA ANALYSIS & INTERPRETATION 55
5.1 Statistical Analysis 86
VI FINDINGS & SUGGESTIONS
6.1 Findings 92
6.2 Suggestions 94
VII CONCLUSION
7.1 Conclusion 96
ABBREVIATIONS 98
BIBLIOGRAPHY 99
APPENDIX 100
3
LIST OF FIGURES
Figure no CONTENT Page No
2.1 Level of Service Quality Expectation 10
2.2 Zone of Tolerance for a Customer 11
2.3 Different Zone of Tolerance for Different Service
Dimensions
12
2.4 Customer Perception of Quality & Customer
Satisfaction
14
2.5 Relation between Customer Satisfaction & Loyality 16
2.6 Gap Model of Service Quality 21
5.1 Chart Showing Accounts Maintenance 55
5.2 Chart Showing Awareness About Services 56
5.3 Chart Showing Sex wise Classification 58
5.4 Occupation wise Classification 59
5.5 Income wise Classification 60
5.6 Education wise Classification 62
5.7 Response of Staff for Loans 63
5.8 Perfection of ATM 65
5.9 Awareness Through Forms & Brochures 66
5.10 Account Opening Time 68
5.11 Mobile Banking Facility 69
5.12 Knowledge of Staff 71
5.13 Banking Time 73
5.14 General Behavior of Staff 74
5.15 Account with Other Banks 75
5.16 Response of Staff Towards Customer’s Enquiry 78
5.17 Improving Quality of Service 80
5.18 Deposit & Advance Schemes 82
5.19 Mistakes Made By Staff of SBT 83
4
5.20 Opinion About Website 85
LIST OF TABLES
Table no CONTENT Page no
5.1 Accounts Maintained 54
5.2 Awareness About Service 56
5.3 Sex wise Classification 58
5.4 Occupation wise Classification 59
5.5 Income wise Classification 60
5.6 Education wise Classification 61
5.7 Response of Staff for Loans 63
5.8 Perfection of ATM 64
5.9 Awareness Through Forms & Brochures 66
5.10 Account Opening Time 67
5.11 Mobile Banking Facility 69
5.12 Knowledge of SBT Staff 71
5.13 Satisfaction Towards Banking Time 72
5.14 General Behavior of Staff 74
5.15 Account with other Bank 75
5.16 Customer’s Enquiry 78
5.17 Improving Quality of Service 80
5.18 Deposits & Advances Schemes 81
5.19 Mistakes Made By SBT Staff 83
5.20 Opinion About Website 84
Testing of Hypothesis 1 87
Testing of Hypothesis 2 88
Rank Correlation 89
5
CHAPTER I
INTRODUCTION
6
1.1 INTRODUCTION
This research is an empirical assessment of service quality in State Bank of
Travancore. Service Quality is the degree of excellence in the service performance. It is the
degree and direction of discrepancy of service quality. The difference between the service
expectations and service perceptions of customers is what is termed as service quality gap.
The study has been aimed at diagnosing the quality of service rendered by
identifying the service quality gap in the regional branch of State Bank of Travancore in
Thiruvananthapuram district and making necessary suggestions.
The data for the study has been collected on the basis of simple random sampling
method through a questionnaire prepared for the purpose of being filled in at interviews with
customers. The data collected has been classified on the basis of age, gender, occupation, annual
income and educational background for the purpose of analysis. The data collected was tabulated
with care and thereafter analyzed suitably. The analysis has been done on the basis of
STATISTICAL & RANK CORRELATION instrument. The basic assumption of it is that the
customers evaluate a firm’s service quality by comparing their five perceptions and expectations.
The scaling in SERVICE QUALITY is based on the five dimensions of service quality namely
tangibility, reliability, responsiveness, assurance and empathy.
The results of this study also offer support for the intuitive notion that improving
service quality can increase the competitiveness of the organization. The report has been
presented on the basis of the analysis made and suitable suggestion have been recommended.
1.2 TITLE OF THE STUDY
“Assessment of Service Quality in State Bank of Travancore”
OBJECTIVES OF THE STUDY
The study has been aimed at attaining the following objectives;
To understand the existing Service Quality system in SBT.
To investigate whether the Service Quality of SBT is Capable of addressing all demands
made by customer.
To identify the difference between Expectation & Perception of customers in
Service Quality offered by SBT.
7
1.4 RESEARCH DESIGN
Once the problem has been carefully defined, the researcher needs to
establish the plan that will outline the investigation to be carried out. The research design
indicates the steps that have been taken and in what sequence they occurred.
a) SOURCES OF DATA
Primary data and secondary data were collected for the purpose of the study.
Primary sources
Primary sources of data were collected through questionnaire prepared for the purpose
filled in at interviews with customers.
Secondary sources
Secondary sources of data for the study were collected from official website of the
organization and from books and other published sources.
b) SAMPLING DESIGN
Universe of the study
The study has been conducted at the Main Branch of State Bank of Travancore in
Thiruvananthapuram.
Sample Frame
Sample frame or source list is the frame from which the sample is drawn for the study. It
represents the whole population. Here the sample includes the customers of the bank.
Sample Size
The Sample Size collected for the study is 10
.
8
Sampling Technique
The simple random sampling method was used for the primary data collection. Simple
random sampling is the basic sampling technique where we select a group of subjects (a sample)
for study from a larger group (a population). Each individual is chosen entirely by chance and
each member of the population has an equal chance of being included in the sample. Every
possible sample of a given size has the same chance of selection; i.e. each member of the
population is equally to be chosen stage in the sampling process.
c) DATA ANALYSIS TECHNIQUE
The data collected was tabulated with care and there after analyzed suitably. The
analysis was done on the basis of the Statistical analysis, Rank analysis. These survey instrument
is used for measuring customer satisfaction with respect to different aspects of service quality.
1.5 SCOPE OF THE STUDY
The banking industry is in the current scenario is booming and undergoing a rapid
growth. The emergence of new generation private and foreign banks in the Indian banking sector
has raised the competitiveness in the industry. The study aims at identifying the extend to which
the service quality in a bank affects its competitiveness. The outcome of the study reveals the
current perception about the bank rooted in the minds of the customers which could be useful in
formulating the strategies in future operations of the organization, for the attainment of its goals
in this competitive scenario.
1.6 LIMITATIONS OF THE STUDY
Chances of biased responses from the customers
The study has been conducted in only Thiruvananthapuram branch of State Bank
of Travancore
9
CHAPTER II
LITERATURE REVIEW
10
2.1 SERVICE QUALITY: IMPORTANCE IN THE PAST TWO
DECADES The service sector is expanding at an increasing rate and is becoming intensely
competitive (Chen, Gupta and Rom, 1994; Johnson, Dotson and Dunlap, 1988). As such, service
quality has become a very important issue in marketing and has received much attention since
the deregulation, and thus increased competition, of many service industries (e.g.: banking and
telecommunications in the 1980’s and utilities in the 1990’s). Service quality has become so
important that some businesses, not only need high levels of service quality for success, but in
some cases, need it for survival (Buzzel and Gayle, 1987; Chen, Gupta and Rom, 1994; Ford
Motor Company, 1990; Germano, 1992; Hauser and Clausing, 1988; Howcroft, 1993; Kearns
and Nadler, 1992; Kettinger and Lee, 1995; Koska, 1990; Lovelock, 1983; Phillips, Chang and
Buzzel, 1983; Rudie and Wansley, 1985; Rust, Zahorik and Keiningham, 1995; Schmenner,
1986; Thompson,
Service quality is so important that companies have gone to great efforts to evaluate and
keep records of service quality levels (Hauser and Clausing, 1988; Phillips, Chang and Buzzell,
1983; Zeithaml, Parasuraman and Berry, 1990). It is essential to determine how to achieve high
service quality and how to communicate the benefits of service quality (Howcraft, 1993).
Companies such as Federal Express and Xerox are well aware of the importance and have
received rewards for their hard work in providing quality services (Germano, 1992; Kearns and
Nadler, 1992). By offering high levels of service quality, the Hospital Corporation of America
and Ford Motor Company are another two well know companies that have benefited in terms of
higher returns on investment and higher profits (Ford Motor Company, 1990; Koska, 1990).
Service quality is also important to businesses from a referral and repeat customers
perspective. If service providers do not perform up to the expected level of the customer, it
negatively affects service quality ratings (Brown and Swartz, 1989). This can cause negative
word-of-mouth communications to run rampant. Conversely, if service providers perform at or
above the customer’s expectation, positive word-of-mouth is spread. That in turn, leads to repeat
customers and referrals. Service quality survey instruments identify the level of services
provided by a company, so that improvements can be made according to the identified results.
Thus, the better companies understand how their customers evaluate their services.
11
Upper management certainly recognizes the importance of service quality. Chen, Gupta
and Rom (1994) found that executives believe that improving the levels of product and service
quality was the most crucial challenge faced by the firms, and they act accordingly. Many
companies felt the need to see the quantifiable financial benefits of service quality over other
company investments. Rust, Zahorik and Keiningham (1995) provided this justification by
creating a method to quantify service quality. The authors were able to suggest where additional
investments should be made so that it would be deemed worthwhile and, at the same time,
determine the optimal expenditure level. Researchers have varying suggestions for uses of
service quality measurement instruments. Some researchers recommend using service quality
instruments in order to spot problems, determine how to correct the problems and to evaluate the
improvements (Kettinger and Lee, 1995). Others believe that companies should use service
quality surveys to be warned of possible problems that could lead to departing customers
(Zeithaml, Berry and Parasuraman, 1996). Additionally, these same researchers suggest using the
survey to modify service offerings to be consistent with what the customer wants. Given the
importance of service quality to the business sector, Taylor As competition intensifies, many
businesses continue to seek profitable ways in which they differentiate themselves from
competitors. One way to ensure a firm's success, or even just survival, is to differentiate from the
competition by delivering a high degree of service quality (Rudie and Wansley, 1985;
Thompson, DeSouza and Gale, 1985). Lovelock (1983) believes that in order to become
effective managers in the service area, they must improve marketing and development skills.
Schmenner (1986) warned that service businesses should not consider themselves to be
drastically different and remain cut off from each other, because this could increase their fatality
rate. As an alternative, businesses in the service area should consider themselves to be similar,
instead of exclusive businesses on their own (Schmenner, 1986).
2.2 CUSTOMER’S EXPECTATIONS
Customer’s expectations are beliefs about service delivery that function as standards or
reference points against which performance is judged. Because customers compare their
perceptions of performance with these reference points when evaluating service, quality,
thorough knowledge about customer expectations is critical to service providers. Knowing what
12
the customer expects To say that expectations are reference points against which service delivery
is compared is only a beginning. The level of expectation can vary widely depending on the
reference point the customer holds. Although everyone has an intuitive sense of what
expectations are, service providers need a far more thorough and clear definition of expectations
in order to comprehend, measure, and manage them.
2.2.1 EXPECTED SERVICE: LEVELS OF EXPECTATIONS
Consumers hold different types of expectations about service. The highest can be termed
desired service:
It is the level of service the customer hopes to receive – the “wished for” level of
performance from any service provider. Desired service is a blend of what the customer believes
“can be” & “should be”. The expectations reflect the hopes and wishes of these consumers:
without these hopes and wishes and the beliefs that they may be fulfilled, they would probably
not have purchased the desired service or product. Customers hope to achieve their service
desires but recognize that this is not always possible. We called the threshold level of acceptable
service adequate service – the level of service the customer will accept. Adequate service
represent the “minimum tolerable expectation” the bottom level of performance acceptable to
customers.
Desired service expectations seem to be the same for the service providers within
industry categories or subcategories that are viewed as similar by customers. The adequate
service expectation level, on the other hand, may vary
13
Fig 2.1 Levels of service quality expectations
2.3 THE ZONE OF TOLERANCE
Services are heterogeneous in that performance may vary across providers, across
employees from the same provider, and even with the same service employee. The extent to
which customers recognize and are willing to accept the service with variation is called the zone
of tolerance and shown in figure 2.2. If service drops below adequate service – the minimum
level considered acceptable – customers will be frustrated and their satisfaction with the
company will be undermined. If service performance is higher than these zone of tolerance at
the top end – where performance exceeds desired service – customers will be very delighted and
HIGH
LOW
LOW
Ideal expectations or
desires
Normative “should”
expectations
Experience based norms
Acceptable expectations
Minimum tolerable
expectations
“as expensive as this
restaurant is, it ought to
have excellent food and
service”
“most times this
restaurant is very good,
but when it gets buzy the
service is slow.
“I expect this restaurant to
serve me in an adequate
manner”
“Everyone says this
restaurant is as good as
one in France and I want to
go somewhere very special
for my anniversary
“I expect terrible service
from this restaurant but
come because the price is
low.
14
probably be quite surprised as well. One might consider the zone of tolerance as the range of
window in which customers do not particularly notice the service performance. When it falls
outside the range, the service gets the customer’s attention in either positive or negative way
Fig 2.2 Zone of tolerance for a customer
Customer’s service expectations are characterized by a range of level, bounded by
desired and adequate service, rather than a single level. This tolerance zone, representing the
difference between desired service and the level of service considered adequate, can expand and
contract within a customer. Marketer must try to understand not just the size and boundary
levels for the zone of tolerance but also when and how the tolerance level fluctuates with a given
customers.
Another aspect of variability in the range of reasonable service is that different customers
possess different tolerance zones. Some customers have narrow zones of tolerance, requiring a
tighter range of service from providers, where as other customers allow a greater range of
service.
An individual customer’s zone of tolerance increases or decreases depending on a
number of factors, including company – controlled factors such as price. When prices increase,
customers tend to be less tolerant of poor service and vice versa.
2.3.1 ZONES OF TOLERANCE VARY FOR SERVICE DIMENSIONS
Customer’s tolerance zones also vary for different service attributes or dimensions. The
more important the factor, the narrower the zone of tolerance is likely to be. In general,
Desired Service
Zone of Tolerance
Adequate Service
15
customers are likely to be less tolerant about un-reliable service than other service deficiencies,
which means that they have higher expectations for this factor.
In addition to higher expectations for the most important service dimensions and
attributes, customers are likely to be less willing to relax these expectations than those for less
important factors, making the zone of tolerance for the most important service dimensions
smaller and the desired and adequate service levels higher.
Fig.2.3 Different zones of tolerance for different service dimensions
The fluctuations in the individuals customer’s zone of tolerance is more a function of
changes in the adequate service level, which moves readily up and down due to situational
circumstances, than in the desired service level, which tends to move upward incrementally due
to accumulated experiences. Desired service is relatively idiosyncratic and stable compared with
adequate service, which moves up and down in response to competition and other factors.
Leve
ls o
f Ex
pec
tati
on
Desired Service
Zone of Tolerance
Adequate Service
Desired Service
Zone of Tolerance
Adequate Service
Most important factors Least important factors
16
2.4 CUSTOMER PERCEPTION
Perceptions are always considered relative expectations. Because expectations are
dynamic, evaluation may also shift over the time – from person to person from culture to
cultures.
Customers perceive the services in terms of the quality of the service and how satisfied
they are allover with their experiences. These customers – oriented terms – quality and
satisfaction – have been the focus of attention for executives and researchers alike over the last
decade or more. Companies today organize so that they can compete more effectively by
distinguishing themselves with respect to service quality and improved customer satisfaction
.2.5 CUSTOMER SATISFACTION VS SERVICE QUALITY
Fig. 2.4 Customer perception of Quality and Customer Satisfaction
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Interaction
quality
Physical
environment
quality
Outcome
quality
Service quality
Product quality
Price
Situational
factors
Customer
satisfaction
Personal
factors
17
Although they have certain things in common, satisfaction is generally viewed as a
broader concept, whereas service quality assessment focuses specially on dimensions of service.
Based on this view perceived service quality is a component of customer satisfaction.Service
quality is a focused evaluation that reflects the customer’s perceptions of elements of service
such as interaction quality, physical environment quality, and outcome quality. These elements
are in turn evaluated based on specific service quality dimensions: Reliability, assurance,
responsiveness, empathy and tangibles. Satisfaction, on the other hand, is more inclusive: it is
influenced by perception of service quality, product quality and price as well as situational
factors and personal factors.
2.6 CUSTOMER SATISFACTION
Satisfaction is the customer’s fulfillment response. It is a judgment that a product or a
service feature, or the product or service itself, provides a pleasurable level of consumption –
related, fulfillment. In minimal technical terms, this definition can be translated to mean that
satisfaction is the customers evaluation of a product or service in It is also important to recognize
that, to measure the customer satisfaction at a particular point of time as if it were static,
satisfaction is a dynamic, moving target that may evolve over the time, influenced by a variety of
factors. Particularly when product usage or the service experience takes place over the time,
satisfaction may be highly variable depending on which point the usage or experience cycle is
focused on.
2.7 DETERMINANTS OF CUSTOMER SATISFACTION
Customer satisfaction is influenced by specific product or service features and by
perception of quality as suggested in Fig 2.6. Satisfaction is also influenced by customers
Product and service features: Customer satisfaction with a product or service is
influenced significantly by the customer’s evaluation of product or service features. Customers
of services will make trade – offs among different service features depending on the type of
service being evaluated and the criticality of the service.
Customer emotions: Customer’s emotions can also affect their perceptions of
satisfaction with products and services. These emotions can be stable, pre-existing emotions.
Attributions for service success or failure: Attributions – the perceived causes of
events – influence perceptions of satisfaction as well. When they have been surprised by an
18
outcome (the service is either much better or much worse than expected) consumers tend to look
for the reasons, and their assessments of the reasons can influence their satisfaction.
Perceptions of equity or fairness: Customer satisfaction is also influenced by
perceptions of equity and fairness. Customers ask themselves: have I been treated fairly
compared with other customers? Did other customers get better treatment, better prices, or better
quality service? Did I pay a fair price for the service? Was I treated well in exchange for what I
paid and the effort I expended?
Other customers, family members and coworkers: In addition to product and service
features and one’s own individual feelings and beliefs, consumer satisfaction is often influenced
by other people like other customers, family members and co-workers.
2.8 OUTCOMES OF CUSTOMER SATISFACTION
Individual firms have discovered that increasing the levels of customer satisfaction can be
linked to customer loyalty and profits. There is an important relationship between customer
satisfaction and customer loyalty. This relationship is particularly strong when customers are
very satisfied. Thus firms that simply aim to satisfy customers may not be doing enough to
endanger loyalty – they must instead aim to more than satisfy or even to delight their customers.
At the opposite end of the satisfaction spectrum, researchers have also found that there is a
strong link between dissatisfaction and disloyalty – or defection. Loyalty can fall off
precipitously when customers reach a particular level of dissatisfaction or when they are
dissatisfied with service.
19
Fig 2.5 Relationship between customer satisfaction and loyalty in competitive industry
2.9 SERVICE QUALITY
Service quality is a critical element of customer perception. In the case of pure
services, service quality will be the dominant element in customers’ evaluations. In cases where
customer service or services are offered in combination with a physical product, service quality
also determine customers satisfaction.Customers judge the quality of services based on their
perceptions of the technical outcome provided, the process by which that outcome was delivered,
and the quality of the physical surroundings where the service is delivered. Similarly, a
restaurant customer will judge the service on her perceptions of the meal (technical outcome
quality) and on how the meal was served and how the employees interacted with here
(interaction qualify) the décor and surroundings (physical environmental quality) of the
restaurant will also impact on customer service quality.
Service quality is defined as how well the service meets or exceeds the customers’
expectations on a consistent basis (Crosby, 1979; Parasuraman, Zeithaml and Berry, 1985). The
difficulty, however, is that service quality, unlike product quality, is more abstract and elusive,
0 1 2 3 4 5
20
80
60
100
40
Very
dissatisfied Dis-satisfied Neither
satisfied nor
dissatisfied
Very
satisfied
Satisfied Most
satisfied
20
because of features unique to services: intangibility, inseparability, heterogeneity (Parasuraman,
Zeithaml and Berry, 1985) and perishability (Kasper and Lemmink, 1989) and is therefore
difficult to measure. To remedy this difficulty, Parasuraman, Zeithaml and Berry (1985)
established the “gap model”. Parasuraman, Zeithaml and Berry (1985) conducted focus groups
and interviewed executives. In doing so, they identified five "gaps" that can cause quality
problems in organizations. The first gap is the consumer expectations-management perceptions
gap. This gap resulted from the discrepancies between the perceptions of executives and the
perceptions of consumers on things like privacy and security issues. Basically, the executives did
not understand the customers’ expectations. Service firms also experienced problems in
providing services as quickly as the customers wanted. This created the second gap, which is
called the management perception-service quality specification gap. The third gap is the service
quality specification service gap.
Executives realize that this gap includes the vital role of the contact personnel. This is a
difficult aspect of providing services, because of the inconsistency in the behavior of personnel.
The fourth gap is the service delivery-external communications gap. This gap forms, based on
the capability of the firm to deliver what is promised and to completely inform consumers of all
the things the service firm is doing that benefit customers. Firms should not promise the
customer more than the service firm is capable of delivering. These problems in quality created
gap five. The fifth gap is the difference between the expectations customers have and the
perceptions of service actually received and is pertinent to providing high levels of service
quality. That is, Gap 5 is the expected service-perceived service gap.
2.10 SERVICE QUALITY DIMENSIONS
Research suggests that customers do not perceive quality in a uni-dimensional way,
but rather judge quality based on multiple factors relevant to the context. For example, quality of
automobiles is judged by factors such as reliability, serviceability, prestige, durability,
functionality, and ease of use, where as quality of food products might be assessed on other
dimensions (flavour, freshness, aroma and so on). Similarly, specific dimensions of service
quality have been identified through the pioneering research of Parasuraman, Seithaml, and
Berry. Their research identified five specific dimensions of service quality that apply across a
21
variety of service contexts. The five dimensions defined here are shown in figure 2.6 as criteria
by which interaction, physical environment outcome quality is judged.
Reliability: ability to perform the promised service dependably and accurately
Responsiveness: Willingness to help customers and provide prompt service
Assurance: Employees’ knowledge and courtesy and their ability to inspire trust
and confidence.
Empathy: Caring, individualized attention given to customers.
Tangibles:Appearance of physical facilities, equipments. Personnel and written
materials.
2.10.1 RELIABILITY
Delivering on promises –Of the five dimensions reliability has been
consistently shown as the most important determinant of perception of service quality among US
customers. Reliability is defined as the ability to perform the promised service dependably and
accurately. In its broadest sense, reliability means that the company delivers on its promises –
promises about delivery, service provision, problem resolution, and pricing. Customers want to
do business with companies that keep their promises, particularly their promises.
2.10.2 RESPONSIVENESS
Responsiveness is the willingness to help customers and to provide prompt
service. This dimension emphasizes attentiveness and promptness in dealing with customer
request, questions, complaints, and problems. Responsiveness communicated to customers by
the length of the time they have to wait for assistance, answers to questions, or attention to
problems. Responsiveness also captures the notion of flexibility and ability to customize the
service, to customer needs.
2.10.3 ASSURANCE
Assurance is defined as employees’ knowledge and courtesy and the ability of
the firm and its employees to inspire trust and confidence. This dimension is likely to be
particularly important for services that the customer perceives as involving high risk and/ or
about which they feel uncertain about their ability to evaluate outcomes
22
2.10.4 EMPATHY
Empathy is defined as the caring, individualized attention the firm provides its
customers. The essence of empathy is conveyed through personalized or customized service,
that the customers feel that are unique and special. Customers want to be understood by and
important to firms that provide service to them. Small service firms often know customers by
name and build relationship that reflects their personal knowledge of customer requirements and
references. When such a small firm competes with larger firms.
2.10.5 TANGIBLES
Tangibles are defined as the appearance of physical facility, equipment, personal,
and communication material. All of these provide physical representation or images of the
services that customer particularly new they will use to evaluate quality. Service industries that
emphasize tangibles in their strategies include hospitality services where the customer visits the
establishment to receive the service, such as restaurants and hotels,retail stores. All though
tangibles are often used by service companies to enhance their image, provide continuity, signal
quality to customers, most companies combine tangibles with another dimensions to create a
service quality strategy for the firm. For example: Giffi Lube emphasis both responsiveness and
tangibles – providing fast, efficient service and comfortable, clean waiting area. In contrast,
firms that don’t pay attention to the tangibles dimensions of the service strategy can confuse and
even destroy on otherwise good strategy.
2.11 THE INTEGRATED GAPS MODEL OF SERVICE QUALITY
Effective service marketing is a complex understanding involving many different
skills and tasks. Executives of services organizations have long been confused about how to
approach this complicated topic in an organized manner. The gaps model positions the key
concepts, strategies, and decisions in services marketing in a manner that begins with the
customer and builds the organization’s tasks around what is needed to close the gap between
customer expectations and perceptions. The integrated gaps model of service
The following four provider gaps shown below the horizontal line in Figure 2.6 are
the
Gap 1: Not knowing what customers expect
Gap 2: Not selecting the right service designs and standards
23
Gap 3: Not delivering to service standards
Gap 4: Not matching performance to promise.
Fig. 2.6 Integrated gaps model of service quality
2.11.1 CLOSING THE CUSTOMER GAP
Above the center horizontal line in figure 2.6 are the two boxes that correspond
to customer expectations and customer perceptions. Customer perceptions are subjective
assessments of actual service experiences: customer expectations are the standards of or
reference points for, performance against which service experiences are compared. The sources
of customer expectations consists of marketer controlled factors, such as advertising, as well as
factors that the marketer has limited ability to affect, such as innate personal needs. Ideally,
expectations and perceptions are identical: customers perceive that they get what they think they
will and should. In practice, a customer gap typically exists.
Expected
service
Perceived
service
Service delivery
Service delivery
Customer-driven service
designs and standards
Company perceptions of consumer
expectations
External
communications to
customers
Customer
Cu
sto
mer
gap
Company
GAP 2
GAP 3
GAP 1
GAP 4
24
2.12 METHODS OF MEASURING SERVICE QUALITY
One of the most versatile, powerful, prominent and sophisticated techniques
available for analyzing complex relationships in causal modeling is SEM (Structural Equation
Modeling). SEM has been used in psychology (Anderson and Gerbing, 1988; Hansell and White,
1991), sociology (Lavee, 1988; Lorence and Mortimer, 1985), child development (Anderson,
1987; Biddle and Marlin, 1987) and management (Tharenou, Latimer, and Conroy, 1994).
Specifically, SEM assesses the structural and measurement models of the multivariate
theoretical problem. SEM combines the features of multiple regression, factor analysis and path
analysis to allow the examination of complex relationships. It provides a simultaneous estimation
of the model as a whole, the estimation of causal relationships among latent constructs with
multiple indicators. Inclusion of both measurement and structural properties of theoretical
models, measurement of non-recursive causation, measurement of direct as well as indirect
effects, inclusion of measurement error and correlation of residuals.
SEM requires the researcher to provide a starting point called the hypothesized model.
From there, SEM provides feedback through a series of iterative modification indices that guides
the researcher to the final model, which maximizes explanatory power (Arbuckle and Wothke,
1999; Biddle and Marlin, 1987; Hair, Anderson, Tatham and Black, 1995; Joreskog, 1973; 1978;
Joreskog and Sorbom, 1984). The overall model is assessed using goodness-of-fit criteria. The
first measure, a chisquare test, indicates the model’s overall fit. A second indicator of the
model’s fit is the ratio, chi-square/degrees of freedom. If the ratio is below 5.0 when the sample
size is greater than 200 (or below 3.0 when the sample size is less than 200), the model’s fit is
good (Kettinger and Lee, 1995).
Individual relationships are examined for statistical significance as well. The effects of
the exogenous variables on the endogenous variables (gamma paths) and the effects of the
endogenous variables on the endogenous variables (beta paths) are estimated using regression
coefficients. Each path forms its own hypothesis. All causal relationships should be significant at
the 95% confidence level.
2.13 BRAND LOYALTY
The degree to which consumers are committed to particular brands of goods or services
depend on no. of factors: the cost of changing brands(switching cost), the availability of
25
substitutes, the perceived risk associated with the purchase, and the degree to which they have
obtained satisfaction in the past etc. It may be more costly to change brands as awareness of
substitutes is limited, and because higher risks may accompany services, consumers are more
likely to remain customers of particular companies with services or goods. Greater search costs
and monetary costs may be involved in changing brands of services than in changing brands of
goods. Because of the difficulty in obtaining information about services, customers may be
unaware of alternative or substitutes for their brands, or they may be uncertain about the ability
of alternatives to increase satisfaction over present brands. If consumers perceive greater risks
with services, as is hypothesized here, they probably depend on brand loyalty to a greater extent
than when they purchase products. Brand loyalty, described as a means of economizing decision
effort by substituting habit for repeated, deliberate decision, functions as a device for reducing
the risks for consumer decisions.
Final reason for consumers being more brand loyal with services, is the recognition of
the need for repeated patronage in order to obtain optimum satisfaction from the seller.
Becoming a regular customer allows the seller to gain knowledge of the customer’s tastes and
preferences, ensures better treatment, and encourages more interest in the consumer’s
satisfaction. Thus a consumer may exhibit brand loyalty to cultivate a satisfying relationship
with the seller. This is more pre-dominant in the case of corporate consumers, who regularly
make purchases, year after year.
Brand loyalty has two sides. The fact that a service provider’s own customers are brand
loyal is not a problem. The fact that the customers of the provider’s competitors are difficult to
capture, however, creates special challenges. The marketer may need to direct communications
and strategy to the customers of competitors, emphasizing attributes and strengths that he or she
possesses and the competitor lacks. Marketers can also facilitate switching from competitors’
services by reducing switching costs.
26
CHAPTER III
INDUSTRY PROFILE
27
3.1 THE INVENTION OF BANKING
The history of credit and banking goes back much further than the history of coins.
Nevertheless the story of the origins of money goes back even further still. The invention of
banking preceded that of coinage. Banking originated in Ancient Mesopotamia where the royal
palaces and temples provided secure places for the safekeeping of grain and other commodities.
Receipts came to be used for transfers not only to the original depositors but also to third parties.
Eventually private houses in Mesopotamia also got involved in these banking operations and
laws regulating them were included in the code of Hammurabi.
In Egypt too the centralization of harvests in state warehouses also led to the development of a
system of banking. Written orders for the withdrawal of separate lots of grain by owners whose
crops had been deposited there for safety and convenience, or which had been compulsorily
deposited to the credit of the king, soon became used as a more general method of payment of
debts to other persons including tax gatherers, priests and traders. Even after the introduction of
coinage these Egyptian grain banks served to reduce the need for precious metals, which tended
to be reserved for foreign purchases, particularly in connection with military activities.
3.2 EVOLUTION OF BANKING INDUSTRY IN INDIA
Organized banking was active in India since the establishment of the General Bank
of India in 1786. After independence, the Reserve Bank of India (RBI) was established as the
central bank and in 1955, the Imperial Bank of India, the biggest bank at the time, was taken
over by the government to form state-owned State Bank of India (SBI). RBI had undertaken an
exercise to merge weak banks to strong banks and the total number of banks thus reduced from
566 in 1951 to 85 in 1969. With the objective of reaching out to masses and meeting the credit
needs of all sections of people, the government nationalized 14 large banks in 1969 followed by
another 6 banks in 1980. This period saw enormous growth in the number of branches and the
bank’s branch network became wide enough to reach the weakest sections of the society in a
country like India. SBI's network of 9033 domestic branches and 48 overseas offices is
considered to be one of the largest for any bank in the world. The economic reforms unleashed
by the government in early nineties included banking sector too, to a significant extent. Entry of
28
new private sector banks was permitted under specific guidelines issued by RBI. A number of
liberalization and de-regulation measures aimed at consolidation, efficiency, productivity, asset
quality, capital adequacy and profitability have been introduced by the RBI to bring Indian banks
in line with International best practices. With a view to giving the state-owned banks operational
flexibility and functional autonomy, partial privatization has been authorized as a first step,
enabling them to dilute the stake of the government to 51 percent.
As of March 31, 2003, there were a total of 289 scheduled commercial banks in India.
This chart illustrates how the banks were structured in Indian banking industry. It gives the
banking measures of deposits, advances and net profit as at March 31, 2003 for the key
constituents namely, public sector banks, private sector banks (new - which came into existence
after liberalization of nineties and old - which were in existence from before), foreign banks and
regional rural banks. Even though regional rural banks number 196, they have a minuscule share
of 3.4 per cent of customer deposits and 3 per cent of net profit of the industry total. Similarly,
the older private sector banks are mostly regional players and enjoyed a small share. The public
sector banks including the State Bank group (SBI and its subsidiaries) dominate the industry with
77 per cent share of the deposits and 70 per cent share of net profit. Excluding SBI group, public
sector banks still command a very high share of close to 50 per cent share of the total industry in
terms of deposits.
3.3 POST INDEPENDENCE SCENARIO
The post independence scenario is also known as the second phase of Indian Banking
Scenario. During the post independence period there felt a need for nationalized of banks.
Mainstream banking in India was being controlled by few industrialists mostly
serving the narrow interest of industries to which they were connected and catering to the
needs of a certain class of customers - this termed as "class banking". A liberal credit policy was
not followed in lending to the priority and neglected sectors, including Agriculture and SSI.
Thus, a need was felt literally overhaul the Indian banking system to serve the needs of the
economically weaker sections of the society across the length and breadth of the country.
Several social control measures were contemplated to overcome the deficiencies outlined above
the in the working of banks in India. The first step towards achieving this objective was taken
when banking laws (amendment) act was passed in December 1968. However the ultimate step
29
was taken by GOI through an ordinance in July 1969 when 14 major commercial banks were
nationalized. These banks had deposit, which constituted 87.5% of total deposits of the
scheduled banks in the private sector as on 31-12-1968. The bank nationalization bill was passed
in the parliament as the banking companies (acquisitions and transfer of undertaking) act 1970.
Six more banks were nationalized in 1980. Thus the measure was taken to achieve the desired
social and economic objectives.
3.4 INDIAN BANKING- A CHALLENGES AHEAD
In recent years, there has been a considerable widening and deepening of the Indian
financial system, of which banking is a significant component. With greater liberalization, the
financial system has come to play a much larger role in the allocation of resources than in the
past and its role in future can be expected to be much larger than at present.
The growing role of the financial sector in the allocation of resources has significant
potential advantages for the efficiency with which our economy functions. Consequently, the
adverse consequences of malfunction of the financial system are likely to be more severe than
they used to be in the past. Hence, all the efforts are focused at ensuring greater financial
stability. Given the significance of the Indian banking system, one cannot afford to underplay the
importance of a strong and resilient banking system.
3.5 BANKS IN THE ECONOMY
A bank raises funds by attracting deposits, borrowing money in the inter-bank
market, or issuing financial instruments in the money market or a capital market. The bank then
lends out most of these funds to borrowers. However, it would not be prudent for a bank to lend
out all of its balance sheet. It must keep a certain proportion of its funds in reserve so that it can
repay depositors who withdraw their deposits. Bank reserves are typically kept in the form of a
deposit with a central bank. This behavior is called fractional-reserve banking and it is a central
issue of monetary policy. Note that under Basel I (and the new round of Basel II), banks no
longer keep deposits with central banks, but must maintain defined capital ratios.
30
Asset liability management duly audited
A need for widening the range of products and services was felt in Indian banking
industry. The range of products and services now offered include securitization, venture capital
assistance, factoring, forfeiting, hire purchase and leasing, custodial service, portfolio
management, retail banking etc.
3.6 Other highlights
The innovative process of banking for improved customer service matching
international standards through infusion of technology includes Electronic Fund transfer, Tele-
banking, 7-day week banking, credit/debit cards; ATMs etc. Thus the professional banker must
be conserving with the dynamics of innovation in commercial banking.
31
CHAPTER IV
COMPANY PROFILE
32
STATE BANK OF TRAVANCORE
4.1 BRIEF HISTORY
State Bank of Travancore was originally established as Travancore Bank Ltd. In
1945 sponsored by the erstwhile Princely State of Travancore.Under a special statute of the
Indian Parliament(SBI subsidiary Banks Act1959) it has been made an Associate of the State
Bank of India and a member of State Bank Group, the largest banking group in india.The
Regd.office/ Head Office at Poojapura, Trivandrum. Their objective was primarily to extend
financial assistance to the local weavers who were crippled by a crisis in the handloom industry
through mobilising small savings from the community. The bank collected as low as 2 annas
daily at the doorsteps of the depositors through its Agents under its Pigmy Deposit Scheme
started in 1948. This scheme is the Bank's brand equity today and the Bank collects around Rs. 2
crore per day under the scheme.
The progress of State Bank of Travancore has been synonymous with the phase of
progressive banking in India. Spanning over 60 years of pioneering expertise, the Bank has
created for itself a solid customer base comprising customers of two or three generations. Being
firmly rooted in rural India and understanding the grassroot realities, the Bank's perception had
vision of future India. It has been propagating innovations in Banking and also has been
receptive to new ideas, without however getting uprooted from its distinctive socio-economic
and cultural ethos. Its philosophy of growth by mutual sustenance of both the Bank and the
people has paid rich dividends. The Bank has been operating as a catalyst of development across
the country with particular reference to the common man at the individual level and in rural/semi
urban centres at the area level.
The Bank is well equipped to meet the challenges of the 21st century in the areas of
information technology, knowledge and competition. A comprehensive IT plan is being put in
place and the skills and knowledge of the Bank's personnel are being upgraded through a variety
of training programmes to promote customer delight in every sphere of its activity. The Bank has
launched an ambitious technology plan called Centralised Banking Solution (CBS) whereby 500
of our strategic branches with their ATMs are being networked nationwide over a 4 year period.
33
4.2 MEMORABLE MILESTONES IN AN 62-YEAR JOURNEY
Growing Far And Wide
1945 On 10.11.1945, the business of the Bank commenced in Travancore with the name
"Travancore Bank Ltd.," .
1948 First branch of the Bank opened at Travancore Dakshina .
1957 Bank became a member of the Clearing House for the first time at Bombay.
1969 29 branches opened in a single day in rural areas.
1971 200th branch opened at Trisshur in Kerala
1972 Entered Foreign Exchange business by opening Foreign Exchange Department at
Bombay.
1974 Name of the Bank changed from "Travancore Bank Ltd." to "State Bank of
Travancore".
1976 Economic Research Department set up. One of the first few Banks to emphasise on
research in Banking even before nationalisation.
1979 Bank had 306 branches at the time of nationalisation of which 66% State Bank of
Travancore in Rural and Semi Urban centres.
1980 First Staff Training College started at Head Office
1981 First specialised branch in Foreign Exchange opened at Kerala.
1982 Opened a branch Centralised NRE Saving Bank Account Opening at NRI Branch
Ernakulam.
1986 First overseas branch opened at Saudi on 17.8.86.
1991 First Specialised Industrial Finance Branch opened at Mumbai.
1999 Bank raised Capital of Rs.125 Crore in Oct.1999 from more than 4 lakh shareholders
2000 First Specialised Capital Market Services branch opened at Mumbai
2001 First branch under CBS (Core Banking Solution) started operation at Bangalore.
2002 Centralised Banking Solution under the brand name "SBT-e-banking" launched at
34
Delhi, Mumbai, Bangalore and Kerala.
2003 Toll Free Voice Mail System for redressal of grievances introduced.
2004 Utility bill payment services through Internet banking introduced.
2005 Introduced On-line reservation of Railway Tickets through Indian Railway Catering
& Tourism Corporation Ltd. (IRCTC) for Internet banking customers of our Bank.
2005 Bank approached the Capital Market with Rs.5 Crore equity shares at a premium of
Rs.40 through Book building route Bank collected Rs.250 Crore and the issue was
oversubscribed by 29.275 times.
2005 Implementation of Venture Capital Scheme of SMALL FARMERS AGRI-
BUSINESS CONSORTIUM (SFAC) Entered into MOU with SFAC for promoting
of investments in Agri-business products.
2006 500th Branch of StateBank of Travancore in Karnataka opened at Navnagar,
Bagalkot.
2006 600th Branch of SBT opened at Tondiarpet, Chennai on 23.03.2006.
2006 Branches opened for the first time in 19 additional districts
2007 Branches opened for the first time in 13 additional districts
2008 Branch network expanded to 16 States and UTs
2008 Branches opened for the first time in 6 new districts
4.3 STATE BANK OF TRAVANCORE MANAGEMENT
INSTITUTE(SBTMI)
SBTMI- An Overview
STATE Bank of Travancore Management Institute (SBTMI), located at
ERNAKULAM, in the backdrop of luxuriant SeaSide, is the apex training institution of SBT for
honing skills in banking and management for the bank's executives and senior personnel. The
Institute was set up in November 1987. The institute has a sprawling campus of 15 acres,
offering a panoramic view of the green valley on the east and Arabian Sea in the west. The fully
residential Institute, with all modern infrastructure expected in an Institution of this nature, like
35
well-equipped classrooms, library, computer laboratory, conference hall and auditorium, also
offers a variety of recreation facilities, including a modern gymnasium, 5-hole golf course, mini-
cricket ground, volleyball courts, indoor games, jogging track and so on. Shady fruit bearing
trees, medicinal plants, rose garden and other recreational facilities are provided to rejuvenate the
body and mind The hostel has 65 fully air-conditioned and tastefully furnished rooms
Training Centres & their activities
SBT, under its wings, has Two Training Centres, at Trivandrum and Ernakulam, apart
from a Training Manager. While Training Centres cater to the training needs of Middle
Management, Junior Management and Workmen employees, Training Manager imparts training
mainly to Workmen employees. Like SBT, Training Centres are also well equipped with all
modern learning aids, like computer lab, library, multi-media projectors, seating arrangements to
facilitate "Adult Learning Principles"
Training Programmes
Training activities of the Bank are governed by the policies and procedures laid
down in the Training Manual. Training programmes are classified into two categories, general
programmes and special programmes. 40 General Programmes, in branches like Risk
Management, Credit Management, Recovery Management, Internal Control Management,
Human Resource Management, Marketing and Quality Improvement, Foreign Exchange,
Information Technology, are identified and their course contents, target groups are listed in the
Training Manual. Special programmes are designed based on the recommendations of the
Departments at Head Office and Corporate Office, taking into account the Corporate Goals,
Policies, requirements, business plans and strategies, target group etc.
Training Methodology
"Adult Learning Principles" is practised in all training programmes, where the
emphasis is on group synergy through activities like group discussion, case studies, problem-
solving exercises etc.
36
E-Learning Initiatives
The Bank has taken its first step in e-learning initiative with the uploading of
reading materials on "Export Finance", Agricultural Lending and Financing SSI on its Intranet
MOU with M/s CMC Limited
The Bank has signed a MOU with M/s CMC Ltd., a Tata Consultancy Services
Group company, to make State Bank of Travancore Institute Management (SBTIM) a Centre of
Excellence of global standards. Under the tie-up high quality management training in Banking
and Finance will be offered with specialisation in Financial Management, Marketing, Human
Resource Management, Communication, Information Technology etc
4.4 PRODUCTS & SERVICES
Bank offers a number of varied products under Deposits, Advances to suit the needs
of all types of customers. Details of products are available in each category under this head. We
offer other services for our customers like Cash Management Services and Gift Cheques.
Bank also have various delivery channels like ATM, Telebanking, Internet Banking
offering specialised products and services at selected branches / centres under Centralised
Banking Solution.
DEPOSIT PRODUCTS
A) Operative Deposit Products
i. Savings Bank Account
These accounts are designed to help the individuals (personal customers) to
inculcate the habit of saving money and to meet their future requirement of money. Amounts can
be deposited/withdrawn from these accounts by way of cheques / withdrawal slips. It helps the
customers to keep minimum cash at home besides earning interest.
These accounts can be opened by eligible person/s and certain organisations /
agencies (as approved by the Reserve Bank of India (RBI)
37
As required by law, while opening SB account, the Bank will satisfy itself about
the identity. including verification of address, of a person/s seeking to open an account, to assist
in protecting the prospective customer/s, members of the public and ourselves against fraud and
other misuses of the banking system
The Bank requires a satisfactory introduction of the person/s opening the account
by a person acceptable to the Bank
The Bank is required to obtain two recent photographs of the person/s opening the
account, as per RBI directives
The Bank is required to obtain Permanent Account Number (PAN) or General
Index Register (GIR) Number or alternatively obtain declaration in Form No.60 or 61 as per the
Income Tax Act (vide Section 139 A) from the person/s opening the account
The Bank will provide to the prospective customers details of the documents
required for identification of the person/s opening the account in addition to a satisfactory
introduction. Documents normally accepted are the current gas / telephone / electricity bill or
voter's identity card or driving licence or passport etc
The account holder is required to maintain certain minimum balance in the
account, as specified by the Bank from time to time, separately for computerised and non-
computerised branches and also depending on, whether account holder wants to avail the cheque
book facility or not. Non-compliance of this would attract service charges. Interest at 3.50% p.a.
is presently paid on half yearly basis depending on minimum balance between the 10th day and
last day of the month, with a minimum of Re.1/-.
Cheques, dividend warrants drawn in the name of account holder/s will only be
collected through this account. Instruments endorsed in favour of the account holder/s will not be
collected through savings bank account
Business transactions shall not be routed through Savings Bank Account. If
routed, the Bank will recover the interest paid and may also close the account. The Bank has the
right to close any undesirable/unremunerative account without giving any reason by a simple
notice to the account holders.
38
ii) Current Account
Current Accounts can be opened by individuals, partnership firms, private and
public limited companies, HUFs/specified associates, societies, trusts, etc
As required by law, while opening this account, the Bank will satisfy itself about
the identity, including verification of address, of a person/s seeking to open an account, to assist
in protecting the prospective customer/s, members of the public and ourselves against fraud and
other misuses of the banking system
The Bank requires a satisfactory introduction of the person/s opening the account
by a person acceptable to the Bank.
The Bank is required to obtain two recent photographs of the person/s opening /
operating the account, as per R B I directives
The Bank is required to obtain Permanent Account Number (PAN) or General
Index Register (GIR) Number or alternatively obtain declaration in Form No.60 or 61 as per the
Income Tax Act (vide Section 139 A) from the person/s opening the account (i.e. including
partners of Registered / Unregistered partnership as also Registered / Incorporated bodies /
companies
Minimum balance as stipulated from time to time will be required to be
maintained.
No interest is paid on credit balances kept in current account.
Service charges are levied for Ledger folio used, Cheque books issued, Non-
maintenance of minimum balance, Return of cheques etc.
For opening special types of current accounts like for Executors, Administrators,
Trustees, Liquidators etc., the Branch Manager may be contacted who will help in opening these
types of accounts.
As per RBI directive, the applicant (i.e. account opener) should declare in the
account opening form or separately that he is not enjoying any credit facility with any Bank and
if he does enjoy any facility / facilities, he should declare full particulars thereof indicating the
name of the bank and name of the branch wherefrom he has availed these facilities.
iii) SBT-Super Premium Savings Bank Account
The salient features of the new scheme are furnished below:
39
All person(s) / associations who are eligible to open a Savings Bank Account can open
accounts under this scheme.
Monthly average minimum balance of Rs.1,00,000/- is to be maintained under the
scheme.
Sweep-in / sweep-out facility at all our e-banking branches.
B) Special products in SBT E-banking
i) Premium Savings Account
The Bank has introduced a Premium Savings Account at e-banking branches that
combines full safety, easy liquidity and highest possible interest. The salient features of the
scheme are as under
A unique 'Sweep out, Sweep in' facility offered at our e-banking branches ensures
that while the customer's money earns solid interest as a fixed deposit, it turns liquid to meet his
urgent needs. That too at no extra cost.
Average monthly balance of Rs.10000/-to be maintained in the Premium Savings
Account.
Balance available in the account in excess of Rs.10000/-on any day gets
automatically swept out into a fixed deposit for 180 days in units of Rs.1000/-.
In the event of shortfall in SB for meeting your clearing cheques or for other
urgent needs, the fixed deposit is swept back into the Premium Savings Account in required
number of units of Rs. 1000/- free of cost.
No penalty is charged for breaking the fixed deposit prematurely. However, the
amount swept out earns interest for the period run at the applicable rate.
Even while breaking the fixed deposit, only the most recently converted fixed
deposit is first broken to minimise interest loss to the customer.
Only those amounts swept out of your Premium Savings Account are eligible for
sweep in and not other fixed deposits.
When fixed deposits mature at the end of 180 days, the Bank will renew the
principal every 180 days while crediting the interest to the savings account. Rs.100/-per month is
levied as service charges whenever the monthly average balance in the Premium Savings
Account goes below Rs.10000/-
40
ii) Special Premium Savings Account
The Bank has introduced a Special Premium Savings Account at e-banking
branches that combines full safety, easy liquidity and highest possible interest. The salient
features of the scheme are as under
A unique 'Sweep out, Sweep in' facility offered at our e-banking branches ensures
that while the customer's money earns solid interest as a fixed deposit, it turns liquid to meet his
urgent needs. That too at no extra cost.
Average monthly balance of Rs.20000/-to be maintained in the Special Premium
Savings Account.
Balance available in the account in excess of Rs.20000/-on any day gets
automatically swept out into a fixed deposit for 1 year 1 day in units of Rs.1000/-.
In the event of shortfall in SB for meeting your clearing cheques or for other
urgent needs, the fixed deposit is swept back into the Special Premium Savings Account in
required number of units of Rs. 1000/- free of cost.
No penalty is charged for breaking the fixed deposit prematurely. However, the
amount swept out earns interest for the period run at the applicable rate.
Even while breaking the fixed deposit, only the most recently converted fixed
deposit is first broken to minimise interest loss to the customer.
Only those amounts swept out of your Special Premium Savings Account are
eligible for sweep in and not other fixed deposits.
When fixed deposits mature at the end of 1 year 1 day, the Bank will renew the
principal every 1 year 1 day while crediting the interest to the savings account. Rs.100/-per
month is levied as service charges whenever the monthly average balance in the Special
Premium Savings Account goes below Rs.20000/-
41
iii) Multi-City Current Account
2 variants of Multi-City Current Accounts are SBT Silver Current Account and SBT
Platinum Current Account .
iv) SBT Flexi Current Account
“SBT Flexi Current Account” combines the liquidity of Current Account with the
earning capacity of Term Deposits. The account is available at SBT Branches and provides for
Sweep-out Sweep-in Facility. Amounts in excess of the prescribed threshold amount of Rs. 1.00
lakh is automatically swept out to Term Deposit and funds from the Term Deposit is Swept in to
the Flexi Current Account as and when there is a shortfall in the balance in the account.
v) Multi-City SB Account
This facility is to be offered to high net-worth Savings Bank customers of the Bank.
The minimum average balance(MAB) to be maintained in the account is Rs.25,000/-.
All third party cheques shall be crossed ‘Account Payee’ and will be payable at par at all
our CBS branch centres.
No upper limit for transaction through A/C Payee cheques.
Self-cheques can be paid in cash upto an aggregate limit of Rs.50,000/- in a day at all the
SBT branches other than the home branch.
C) Term Deposit Products
i) Fixed Deposit
A regular interest earning scheme. A flexible and convenient deposit scheme
which ensures that your money never remains idle. Even very small amounts earn interest for
very short periods. Yes. You can deposit an amount of just Rs.1000/- for a period as short as 15
days and make it grow.
Salient features of the scheme are:
Minimum deposit Rs.1000/-
42
Deposits accepted for periods ranging from 15 days to 120 months.
Option available for receiving monthly interest at discounted rates or quarterly
interest.
Premature withdrawal of deposit is permitted any time subject to payment of
prescribed penalty.
Loans available upto a maximum of 95% of the deposit amount depending on the
length of the unexpired period of the deposit.
Senior Citizens (above 60 years of age) are eligible for an additional interest of
1%.
Nomination facility available.
The rates of interest on deposits are as fixed by the Bank from time to time.
