INDEX SR NO PARTICULARS PG NO 1 Overview of Banking 1.1 Introduction to Banks 1.2 History of Banks 1.3 Functions of Banks 1.4 Banking Products 1.5 Introduction to Financial Services 1.6 Features of Financial Services 1.7 Importance of Financial Services 1.8 Sources of Revenue 1.9 Objectives of Financial Services 1.10 Causes of Financial Innovation 1.11 Present Scenario of Financial Services 2 Channels through which Products & Services are offered 2.1 Branches 2.2 Mobile Banking 2.3 Telephone Banking 2.4 Internet Banking 2.5 ATM 3 Products & Services of Banks
Transcript
INDEX
SR NO PARTICULARS PG NO
1 Overview of Banking
1.1 Introduction to Banks
1.2 History of Banks
1.3 Functions of Banks
1.4 Banking Products
1.5 Introduction to Financial Services
1.6 Features of Financial Services
1.7 Importance of Financial Services
1.8 Sources of Revenue
1.9 Objectives of Financial Services
1.10 Causes of Financial Innovation
1.11 Present Scenario of Financial Services
2 Channels through which Products & Services are offered
2.1 Branches
2.2 Mobile Banking
2.3 Telephone Banking
2.4 Internet Banking
2.5 ATM
3 Products & Services of Banks
3.1 Deposits
3.2 Credit Cards
3.3 Loans
3.4 Investments
4 Innovative Financial Products & Services
5 Overview of Central Bank
5.1 History of Central Bank
5.2 Introduction of Central Bank
5.3 Products and Services
5.4 Awards and Recognitions
6 Data Analysis & Interpretation
7 Conclusion
8 Suggestion
9 Bibliography
10 Annexure
OVERVIEW OF BANKING
1.1 INTRODUCTION TO BANK
A bank has been described as an institution engaged in accepting deposits and granting
loans. It is the institution which deals in money and credit. It can also be described as an
institution which borrows idle resources, makes fund available to those who need it and
helps in cheap remittance of money from one place to another. In the modern time term
bank is used in wider term. Now it does not refer only to particular place of lending and
depositing money but it also acts as an agent which looks after the various financial
problems of its customers.
1.2 HISTORY OF BANKS:
The banking system in India is based on British banking company which is largely
branch banking. Commercial banks in India were started during the latter half of 19th
century Bank of Bengal, Bank of Bombay and Bank of Madras were later amalgamated
to form one bank called as Imperial bank of India under the Imperial bank of India Act
1920. The Imperial bank carried with business of commercial bank manages the public
debt office of central and state government. The second half of 19th century saw
establishment of Bank of Baroda, Allahabad bank, and Punjab National Bank. These
banks were set up by merchants and traders to combined trading with banking. These led
to the series if failures of banks. The strengthening of banking system took place after the
establishment of Reserve Bank of India, 1939 as is empowers to regulate the banking
money, inspection of mergers and acquisition in terms of Banking Companies Act 1949
which later came to be known as Banking Regulation Act 1949.
1.3 FUNCTIONS OF BANKS
Though borrowing and lending constitute the main functions of banking, yet they are not
only functions of commercial banks. Commercial banks are involved in diversified
activities and perform varieties of function. The functions of a modern bank are classified
under the following heads:
‘
CHART: FUNCTION OF BANKS
1.4 BANKING PRODUCTS
Banks in India have traditionally offered mass banking products. Most common deposit
products being Savings Bank, Current Account, Term deposit Account and lending
products being Cash Credit and Term Loans. Due to Reserve Bank of India guidelines,
Banks have had little to do besides accepting deposits at rates fixed by Reserve Bank of
India and lend amount arrived by the formula stipulated by Reserve Bank of India at rates
prescribed by the latter. PLR (Prime lending rate) was the benchmark for interest on the
lending products. But PLR itself was, more often than not, dictated by RBI. Further,
remittance products were limited to issuance of Drafts, Telegraphic Transfers, and
Bankers Cheque and Internal transfer of funds.
In view of several developments in the 1990s, the entire banking products structure has
undergone a major change. As part of the economic reforms, banking industry has been
deregulated and made competitive. New players have added to the competition. IT
revolution has made it possible to provide ease and flexibility in operations to customers.
Rapid strides in information technology have, in fact, redefined the role and structure of
banking in India. Further, due to exposure to global trends after Information explosion
led by Internet, customers - both Individuals and Corporate - are now demanding better
services with more products from their banks. Financial market has turned into a buyer's
market. Banks are also changing with time and are trying to become one-stop financial
supermarkets.
A few foreign & private sector banks have already introduced customized banking
products like Investment Advisory Services, SGL II accounts, Photo-credit cards, Cash
Management services, Investment products and Tax Advisory services. A few banks have
gone in to market mutual fund schemes. Eventually, the Banks plan to market bonds and
debentures, when allowed. Insurance peddling by Banks will be a reality soon. The recent
Credit Policy of RBI announced on 27.4.2000 has further facilitated the entry of banks in
this sector. Banks also offer advisory services termed as 'private banking' - to "high
relationship - value" clients.
CENTRAL BANK OF INDIA
INTRODUCTION
Central Bank of India, a government-owned bank, is one of the oldest and largest
commercial banks in India. It is based in Mumbai. The bank has 3,563 branches and
270 extension counters across 27 Indian states and three Union Territories.
Mr. M.V TANKSALE has been appointed as Chairman & Managing Director, Central
Bank of India with effect from June 29, 2011. Prior to his appointment as Chairman &
Managing Director, Central Bank of India Shri Tanksale was the Executive Director,
Punjab National Bank since March 2009. Central Bank of India, one of the leading Public
Sector Banks in the country has paid a Dividend of 192.66 crore to the Government of
India for the Financial Year 2010-11. Shri M V Tanksale, Chairman & Managing
Director, Central Bank of India has handed over the Dividend Cheque of 192.66 crore to
(Centre) Hon’ble Union Finance Minister Shri Pranab Mukherjee on 19/08/2011 at New
Delhi.
Central bank of India is one of 18 Public Sector banks in India to get
recapitalisation finance from the government over the next 24 months. The infusion of
funds will improve the financial health of the banks as their capital adequacy ratio (CAR)
will be raised more than desired level of 12 percent. The increase in CAR of the banks
will also enable them to lend more money. The CAR of Central Bank of India was less
than 12 percent as on 30 June 2006.
The wholly owned public sector bank, based in Mumbai, will convert an amount of 800
crore out of its 1,124.14-crore total equity capital into perpetual non-cumulative
preference shares. The preference shares would carry an annual floating coupon rate of
eight per cent, which would be benchmarked to 100 basis points above the repo rate. It
will shore up the balance-sheet of the bank and enable it to raise capital from the markets.
For financial year 2008-2009, Central Bank of India's Q3 standalone net profit went up
at 353.26 crore from 201.01 crore (YoY). The bank's standalone net interest income,
NII was up at 671.94 crore versus 544.85 crore (YoY).
Central Bank of India has approached the Reserve Bank of India (RBI) for permission to
open representative offices in five locations - Singapore, Dubai, Doha, London and Hong
Kong. This is the first time the bank is venturing an independent overseas foray after the
Sethia scam in the 1970s forced the bank to close down its London office. RBI had then
asked the other two banks, who had operations in London, to close down.
As on 31 March 2011, the bank's reserves and surplus stood at 6,868.85 crore. Its total
business at the end of the last fiscal amounted to 2, 09, 757.33 crore. The bank had a
staff strength of 37,241 as on Nov 2006.
Central Bank of India partnered with TCS [Tata Consultancy Services] for its Core
Banking Solution. The solution set to be implemented will include B@NCS from
from China Systems and treasury from TCS. With all of its branches in the core banking
system (CBS).
HISTORY OF THE BANK
Central Bank of India is one of the oldest commercial banks of India, and reportedly is
the first truly Indian bank which was totally owned and established by Indian without any
foreign help.
Sir Sorabji Pockhanawala was the founder of the bank, who had always dreamt of
establishing a thoroughly Indian bank, who was so happy and excited about the project
that he reportedly termed the Central Bank of India as “property of the nation and the
country’s asset”. The first Chairman of the bank was Sir Pherozesha Mehta, a yet another
Indian enthusiast. In the year 1969 the bank was nationalized by the Government of
India.
Key Attributes
Central Bank of India claims to be the first bank to be conferred with the National Award
for Excellence in Micro and Small Enterprises (MSE) Lending for the year 2007-08.
The bank entered a partnership with Kotak Mahindra Assets Management Company in
December 2008, under which all the Kotak Mutual Fund products will be made available
through Central Bank of India branches.
Products and Services
Central Bank of India offers a host of banking services to its customers including Regular
Banking Services such as Deposits and Loans, International Banking Services, and other
services including Central card Electronic Cards, Debit Cards, No-Frills Savings Deposit
Account under the name Cent Bachat Khata, and Finance options for domestic and
international tours under the name Cent Safar.
Presence in India
Central Bank of India has a strong presence in the country with over 3000 branches and
more than 250 extension counters nationwide as of April 2009. The headquarters of the
bank are located in Mumbai, the financial capital of India, along with 16 other zonal
offices established in different cities of the nation, including Agra, Ahmadabad, Bhopal,
Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Lucknow, Mumbai Metro Zonal
Office, Muzaffarpur, Nagpur, New Delhi, Patna, Pune and Raipur
OVERVIEW OF THE BANK
Established in 1911, Central Bank of India was the first Indian commercial bank which
was wholly owned and managed by Indians. The establishment of the Bank was the
ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder of the Bank. Sir
Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was
the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of
India as the 'property of the nation and the country's asset'. He also added that 'Central
Bank of India lives on people's faith and regards itself as the people's own bank'.
During the past 99 years of history the Bank has weathered many storms and faced many
challenges. The Bank could successfully transform every threat into business opportunity
and excelled over its peers in the Banking industry.
A number of innovative and unique banking activities have been launched by Central
Bank of India and a brief mention of some of its pioneering services are as under:
1921 Introduction to the Home Savings Safe Deposit Schemeto build saving/thrift
habits in all sections of the society.
1924 An Exclusive Ladies Department to cater to the Bank's women clientele.
1926 Safe Deposit Locker facility and Rupee Travellers' Cheques.
1929 Setting up of the Executor and Trustee Department.
1932 Deposit Insurance Benefit Scheme.
1962 Recurring Deposit Scheme.
Subsequently, even after the nationalisation of the Bank in the year 1969, Central Bank
continued to introduce a number of innovative banking services as under:
1976 The Merchant Banking Cell was established.
1980 Central card, the credit card of the Bank was introduced.
1986 'Platinum Jubilee Money Back Deposit Scheme' was launched.
1989 The housing subsidiary Cent Bank Home Finance Ltd. was started with its
headquarters at Bhopal in Madhya Pradesh.
1994 Quick Cheque Collection Service (QCC) & Express Service was set up to
enable speedy collection of outstation cheques.
Further in line with the guidelines from Reserve Bank of India as also the Government of
India, Central Bank has been playing an increasingly active role in promoting the key
thrust areas of agriculture, small scale industries as also medium and large industries. The
Bank also introduced a number of Self Employment Schemes to promote employment
among the educated youth.
Among the Public Sector Banks, Central Bank of India can be truly described as an All
India Bank, due to distribution of its large network in 27 out of 29 States as also in 3 out
of 7 Union Territories in India. Central Bank of India holds a very prominent place
among the Public Sector Banks on account of its network of 3967 branches and 27
extension counters at various centres throughout the length and breadth of the country.
Customers' confidence in Central Bank of India's wide ranging services can very well be
judged from the list of major corporate clients such as CENTRAL BANK OF , IDBI,
UTI, LIC, HDFC as also almost all major corporate houses in the country
VISION AND MISSION
Vision
To be the leading provider of financial services in India
A major global bank.
Mission
We will leverage our people, technology, speed and financial capital to:
Be the banker of first choice for our customers by delivering high quality, world-class
products and services.
Expand the frontiers of our business globally.
Play a proactive role in the full realisation of India’s potential.
Maintain a healthy financial profile and diversify our earnings across businesses
and geographies.
Maintain high standards of governance and ethics.
Contribute positively to the various countries and markets in which we operate.
Create value for our stakeholders
OBJECTIVES OF CENTRAL BANK OF INDIA
The Central Bank of India is one of the oldest Banks in India.
The objectives of the Central Bank of India are as follows:
To help ensure the monetary stability of the country-
To assist in regulating the financial system of the country,
To formulate, implement and monitor the monetary policy. - To maintain the
liquidity in the country-
To ensure adequate flow of credits. - Prescribes parameters for banking in the
country.
Maintain public confidence in the system- To manage the foreign exchange
Management Act. - To facilitate external trade.
Issue and exchange currency-
Maintain supply of currency.
Own and operate the depository and exchange for government bonds. –
Banker to the government
RESEARCH METHODOLOGY
According to Green and Tall “A research design is the specification of the methods and
procedures for acquiring the information needed. It is the overall operational pattern or
framework of the project that stipulates which information is to be collected, from where
it is to be collected and by what procedures”
This research process based on primary data analysis and secondary data analysis will be
clearly defined to meet the objectives of the study.
I chose the primary sources to get the data. A questionnaire was designed in
accordance with our mentor in Shirts. I chose a sample of about 30 corporate
customers
I collected some data from the secondary sources like published Company
documents, internet etc.
Research Design
“A research design is the arrangement of conditions for collections and analysis of data in
a manner that aims to combine relevance to the research purpose with economy in
procedures”. It is a descriptive cross sectional design .It is the conceptual structure with
in which research is conducted; it constitutes the blueprint for the collection,
measurement and analysis of data.
It is needed because it facilitates the smooth sailing of the various research operations,
thereby making research as efficient as possible yielding maximal information with
minimal expenditure of effort, time and money.
In the preliminary stage, my research stage constituted of exploratory study by which it
is clear that the existence of the problem is obvious .So, I can directly head for the
conclusive research.
Sampling Plan
“Sampling plan” is a distinct phase of research process. In this stage I have to determine
who is to be sampled, how large should be the needed sample and how sampling unit is to
be selected.
Population
In my research, I have defined my population as a complete set of customers of Sagar
City.
Sample Survey
As compared to census study, a sample study has been conducted by us because of:
Wide range of population, it was impossible to cover the whole population
Time and money constraints.
Sample Unit
In this survey I took the list of customers from the dealers of Shirts
Sampling Technique
Sampling technique implies the method of choosing the sample items, the two methods of
selecting sample are:
Probability method. Non-probability method.
“Probability method” is those in which every item of the universe has an equal chance of the inclusion in the sample. “Non-probability methods” are those that do not provide every item in the universe with known cause of being included in the sampl
DATA SOURCES
Research is totally based on primary data. Secondary data can be used only for the
reference. Research has been done by primary data collection, and primary data has
been collected by interacting with various people. The secondary data has been
collected through various journals and websites and some special publications of
BIRLA.
SAMPLING
i. Sampling Procedure
The sample is selected in a random way, irrespective of them being investor or not or availing the services or not. It was collected through mails and personal visits to the known persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using the measures of central tendencies like mean, median, mode. The group has been selected and the analysis has been done on the basis statistical tools available.
ii. Sample Size
The sample size of my project is limited to 200 only. Out of which only 135 people
attempted all the questions. Other 65 not investing in MFs attempted only 2
questions.
iii. Sample Design
Data has been presented with the help of bar graph, pie charts, line graphs etc.
ECONOMIC SCENARIO OF THE BANK TO EXPAND OVERSEAS
GLOBAL DEVELOPMENTS
The after effects of the financial crisis of the 2008 have continued to impact global
economy. The recovery process which started since then is beginning to freeze and the
sovereign debt crisis in the euro zone area has started threatening the very survival of the
Euro Zone. The global economy grew by 3.9% in 2011 against 5.3% in 2010 and
expected to further fall to 3.5% in 2012 as per the International Monetary Fund’s (IMF)
April2012 update of the World Economic Outlook (WEO). Gross domestic product
(GDP) growth in advanced economies declined to 1.6 % in 2011 compared to 3.2 % in
2010 and again expected to fall to 1.4% in 2012. Similar trend is seen in emerging
economies as they slowed to 6.2% in 2011 compared to 7.5 % in 2010 and likely to fall to
5.7% in 2012.
DOMESTIC ECONOMY
Indian Economy in 2011-12 was surrounded by concerns of high inflation, bourgeoning
fiscal deficit and pronouncing current account deficit. The Economic growth moderated
to6.5% as per revised estimates of CSO against 8.4% seen in 2010-11. The growth has
been disappointing on account of current uncertain global conditions and one of the worst
performances in domestic industrial sector.
All the three sectors viz. agriculture, industry and services slowed down in 2011-
12.Agriculture and allied agriculture growth fell to 2.8% against a high achievement of
7% in2010-11, despite a record food grain production of 250 million tons in 2011-
12.Thecontribution of agriculture and allied activities to GDP is only 14% but slow-down
in agriculture growth has severe impact on the employment in this sector, that has a share
in employment as high as 55%. The growth in services sector including construction
sector is estimated to grow at 8.5 % in 2011-12 as against 9.2% in 2010-11 reflecting the
down-turn in construction growth.
This is on account of slow recovery in the US and Europe and due to tight monetary
policy affecting the overall investors’ confidence. The month-wise growth inIIP exhibited
high volatility on account of fluctuation in growth of capital goods. The growth in capital
goods declined from 37% in June 2011 to negative 25% in October 2011.The growth in
Index of eight core industries viz. Coal, Crude oil, Natural gas etc.contributing 38% to
the IIP has also fell to 4.3% during April-March 2011-12 compared to6.6% during the
corresponding period of the previous year. On external front, the merchandise exports in
2011-12 has increased by 21% amounting to$304 billion, thereby surpassing the
indicative target of $300 billion set for the year. The imports however too increased by
32% amounting to $488 billion resulting in trade deficit of $184 billion. This has
widened current account deficit (CAD) to US$ 53.7billion (4.0% of GDP) from US$ 39.6
billion (3.3 % of GDP) in April-December 2010.
The Rupee against dollar has fallen sharply during the year. In beginning of the financial
year the exchange rate was at Rs. 44.37 /$ fell to Rs. 52.68/$ in December11rose
moderately to Rs.51.76 /$ in March12. This has been primarily because of the large
current account deficit and balance of payments deficit.
PERFORMANCE OF THE CENTRAL BANK IN INDIA
BUSINESS
As on 31st March 2012, the total business of the Bank was Rs. 346898 crore, registering a
growth of 11.63% from the previous year figure of Rs. 310763 crore. The operating profit
reached to Rs. 2815 crore from previous year figure of Rs. 2591 crore, marking a growth
of 8.65%. The Bank has posted net profit of Rs. 533 crore in 2011-12 as against Rs. 1252
crore in previous year.
RESOURCE MOBILISATION
The total deposits as on March 31, 2012 stood at Rs. 196173 crore, registering a growth
rate of 9.38 % over previous year. Savings Bank Deposits increased to Rs. 52595 crore
in2011-12 from Rs. 47645 crore in last year. Current Deposits declined from Rs. 15431
crore in 2010-11 to Rs. 12680 crore in 2011-12. The share of CASA deposits to total
deposits was 33.27 per cent. Term Deposits increased to Rs. 130898 crore with y-o-
growth of 12.57 per cent from Rs. 116280 crore in 2010-11.
INTRODUCTION TO FINANCIAL SERVICES
The Indian financial services industry has undergone a metamorphosis since 1990.
During the late seventies & eighties, the Indian financial services industry was dominated
by commercial banks and other financial institution which cater to the requirements of
the Indian industry. The economic liberalization has brought in a complete transformation
in the Indian financial services industry.
The term “Financial Services” in a broad sense means “mobilizing and allocating
savings”. Thus it includes all activities involved in the transformation of savings into
investment. The ‘financial service’ can also be called ‘financial intermediation’. Financial
intermediation is a process by which funds are mobilized from a large number of savers
and make them available to all those who are in need of it and particularly to corporate
customers. Thus, financial service sector is a key area and it is very vital for industrial
developments. A well developed financial services industry is absolutely necessary to
mobilize the savings and to allocate them to various investable channels and thereby to
promote industrial development in a country. Financial services, through network of
elements such as financial institution, financial markets and financial instruments, serve
the needs of individuals, institutions and corporate. It is through these elements that the
functioning of the financial system is facilitated. Considering its nature and importance,
financial services are regarded as the fourth element of the financial system.
1.6 FEATURES OF FINANCIAL SERVICE
Customer-Oriented: Like any other service industry financial service industry is
also a customer-oriented one. That customer is the king and his requirements must
be satisfied in full should be the basic tenent of any financial service industry. It
calls for designing innovative financial products suitable to varied risk-return
requirements of customer.
Intangibility: Financial services are intangible and therefore, they cannot be
standardized or reproduced in the same form. Hence, there is a need to have a
track record of integrity, reputation, good corporate image and timely delivery of
services.
Simultaneous Performance: Yet another feature is that both production and
supply of financial services have to be performed simultaneously. Therefore, both
suppliers of services and consumers should have a good rapport, clear-cut
perception and effective communication.
Dominance of Human Element: Financial services are dominated by human
element and thus, they are people-intensive. It calls for competent and skilled
personnel to market the quality financial products. But, quality cannot be
homogenized since it varies with time, place and customer to customer.
Perishability: Financial services are immediately consumed and hence
inventories cannot be created. There is a greater need for balancing demand and
supply properly. In other words, marketing and operations should be closely inter-
linked..
1.11 PRESENT SCENARIO OF FINANCIAL SERVICES
Conservatism to dynamism:
At present, the financial system in India is in a process of rapid transformation,
particularly after the introduction of reforms in the financial sector. The main
objective of the financial sector reforms is to promote an efficient, competitive
and diversified financial system in the country. This is essential to raise the
allocative efficiency of available savings and to promote the accelerated growth
of the economy as a whole. The emergence of various financial institution and
regulatory bodies has transformed the financial services sector from being a
conservative industry to a very dynamic one.
Emergence of Primary Equity Market: The capital markets have become a
popular source of raising finance. The aggregate funds raised by the industries
have gone from Rs. 5976 crore in 1991-92 to Rs. 32382 crore in 2006-07. Thus
the primary market has emerged as an important vehicle to channelize the savings
of the individuals and corporates for productive purposes and thus to promote the
industrial & economic growth of our nation.
VARIOUS CHANNELS THROUGH WHICH PRODUCTS &
SERVICES ARE OFFERED BY BANKS
CHARTS: VARIOUS CHANNELS OF SERVICES
2.1 BRANCHES
A branch, banking center or financial center is a retail location where a bank, credit
union, or other financial institution offers a wide array of face-to-face and automated
services to its customers.
In the period from 1100-1300 banking started to expand across Europe and banks began
opening ‘branches’ in remote, foreign locations to support international trade.
Historically, branches were housed in imposing buildings, often in a neo-classical
architecture style. Today, branches may also take the form of smaller offices within a
larger complex, such as a shopping mall.
Traditionally, the branch was the only channel of access to a financial institution’s
services. Services provided by a branch include cash withdrawals and deposits from a
demand account with a bank teller, financial advice through a specialist, safe deposit box
rentals, bureau de change, insurance sales, etc. As of the early 21st Century, features such
as Automated Teller Machine (ATM), telephone and online banking, allow customers to
bank from remote locations and after business hours. This has caused financial institution
to reduce their branch business hours and to merge smaller branches into larger ones.
They converted some into mini-branches with only ATMs for cash withdrawal and
depositing; computer terminals for online banking and cheque depositing machines.
Some financial institutions, to show a friendlier image, offer a boutique or coffee house-
like environment in their branches, with sit-down counters, refreshments, interactive
displays. Some branches also have drive-through teller windows or ATMs.
2.2 MOBILE BANKING
Mobile banking also known as M-Banking, SMS Banking is a term used for performing
balance checks, account transactions, payment etc. Over the last few years, the mobile
and wireless market has been one of the fastest growing markets in the world and it is
still growing at a rapid pace. With mobile technology, banks can offer services to their
customers such as doing funds transfer while travelling, receiving online updates of stock
price or even performing stock trading while being stuck in traffic.
A specific sequence of SMS messages will enable the system to verify if the client has
sufficient funds in his or her wallet and authorize a deposit or withdrawal transaction at
the agent.
Many believe that mobile users have just started to fully utilize the data capabilities in
their mobile phones. In Asian countries like India, China, where mobile infrastructure is
comparatively better than the fixed-line infrastructure, and in European countries, where
mobile phone penetration is very high, mobile banking is likely to appeal even more.
2.3 TELEPHONE BANKING
Telephone banking is a service provided by a financial institution , which allows its
customers to perform transactions over the telephone. Most telephone banking services
use an automated phone answering system with phone keypad response or voice
recognition capability. To guarantee security, the customer must first authenticate
through a numeric or verbal password or through security questions asked by a live
representative.
With the obvious exception of cash withdrawals & deposits, it offers virtually all the
features of an automated teller machine: account balance information and list of latest
transactions, electronic bill payments, funds transfers between a customer’s accounts.etc
Usually, customers can also speak to alive representative located in a call centre or a
branch, although this feature is not always guaranteed to be offered 24/7. In addition to
the self-service transactions listed earlier, telephone banking representatives are usually
trained to do what was traditionally available only at the branch: loan applications,
investments purchases and redemptions, cheque book orders, debit card replacements,
change of address, etc
Banks which operate mostly or exclusively by telephone are known as phone banks. They
also help modernize the user by using special technology.
2.4 INTERNET BANKING
Internet banking or E-banking means any user with a personal computer and a browser
can get connected to his bank -s website to perform any of the virtual banking functions.
In internet banking system the bank has a centralized database that is web-enabled. All
the services that the bank has permitted on the internet are displayed in menu. Any
service can be selected and further interaction is dictated by the nature of service. The
traditional branch model of bank is now giving place to an alternative delivery channels
with ATM network. Once the branch offices of bank are interconnected through
terrestrial or satellite links, there would be no physical identity for any branch. It would a
borderless entity permitting anytime, anywhere and any how banking
INTERNET BANKING SERVICES
1) Bill Payment Service: You can facilitate payment of electricity and telephone
bills, mobile phone, credit card and insurance premium bills as each bank has tie-
ups with various utility companies, service providers and insurance companies,
across the country. To pay your bills, all you need to do is complete a simple one-
time registration for each biller. You can also set up standing instructions online
to pay your recurring bills, automatically. Generally, the bank does not charge
customer for online bill payment.
2) Fund Transfer: You can transfer any amount from one account to another of the
same or any another bank. Customers can send money anywhere in India. Once
you login to your account, you need to mention the payee’s account number, his
bank and the branch. The transfer will take place in a day or so, whereas in a
traditional method, it takes about three working days.
2.5 AUTOMATED TELLER MACHINE (ATM)
Automated Teller Machine is a mechanism which enables the customer to withdraw
money from his account without visiting the bank branch. An ATM card is issued to the
customer by the bank in order to make cash withdrawals at cash machine. This service
helps the ATM customer to withdraw money even when the banks are closed. This can be
done by inserting the card in the ATM and entering the Personal Identification Number &
secret password.
ATMs act as off-site branches of banks and provide almost all services that are available
from a manually operated branch. The customer can, not only withdraw cash, but also
deposit money, get account statements, enable transfer of funds etc. The customer who
wants to deposit cash should put the notes in the pouch available at the ATM counter
close it, seal it by signing & put it in the slot provided for this purpose. The bank staff
will collect the packet when they come for loading cash in the machine & credit the
amount to the account. However, the customer has to sign an undertaking with the bank
that he would not dispute on the amount credited. ATM has gained prominence as a
delivery channel for banking transactions in India. Now customers will not be levied any
fee on cash withdrawals using ATM & debit cards issued by other banks. This will in
turn increase usage of ATMs in India. ATM allows customers:
To view account information
To deposit cheques or cash
To order cheques and receive cash.
VARIOUS PRODUCTS & SERVICES OF BANKS
3.1 Deposits
Banks provide various deposit schemes for keeping the savings of people. Some of these
schemes are common in nature. Banks have to comply with the ‘Know Your Customer’
(KYC) norms introduced by the Reserve Bank of India while opening & allowing
operations in the accounts. A few deposit schemes offered by banks are as follows:
CHART: TYPES OF DEPOSITS
1) Current Account:
Current account is primarily meant for businessmen, firms, companies and public
enterprises etc. that have numerous daily banking transactions. Individuals
generally do not open this account. Current accounts are meant neither for the
purpose of earning interest nor for the purpose of savings but only for
convenience of business hence they are non-interest bearing accounts. In a current
account, a customer can deposit & withdraw any amount of money any number of
times, as long as he has funds to his credit.
As per RBI directive, banks are not allowed to pay any interest on the balances
maintained in Current Accounts. However, in case of death of the account holder
his legal heirs are paid interest at the rates applicable to Savings bank deposit
from the date of death till the date of settlement. Because of the large number of
transactions in the account and volatile nature of balances maintained, banks
usually levy certain service charges for opening a Current Account.
2) Fixed Deposits:
Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit
Account, a certain sum of money is deposited in the bank for a specified time
period with a fixed rate of interest. The rate of interest for Bank Fixed Deposits
depends on the maturity period. It is higher in case of longer maturity period.
There is great flexibility in maturity period & it ranges from 15 days to 5 years.
The interest can be compounded quarterly, half-yearly or annually and varies
from bank to bank. Loan facility is available against bank fixed deposits upto 75-
90 % Premature withdrawal is permissible but it involves loss of interest.
Fixed deposits with banks are nearly 100% safe as all the banks operating in the
country, irrespective of whether they are nationalized, private or foreign are
governed by the RBI’s rules & regulations and give due weightage to the interest
of the investors.
3) Savings Bank Account:
Savings Bank accounts are meant to promote the habit of saving among the
citizens while allowing them to use their funds when required. The main
advantage of Savings Bank Account is its high liquidity and safety. Savings Bank
Account earn moderate interest. The rate of interest is decided and periodically
reviewed by the government of India. Savings Bank Account can be opened in the
name of an individual or in joint name of the depositors.
The minimum balance to be maintained in an ordinary savings bank account
varies from bank to bank. It is less in case of public sector banks and
comparatively higher in case of private banks. Savings Bank Account can now be
accessed through ATM’s & internet.
3.2 CREDIT CARDS:
Credit cards are innovative ones in the line of financial services offered by commercial
banks. Credit card culture is a old hat in the western countries. In India, it is relatively a
new concept that is fast catching on. Since the plastic money has today become as good
as legal tender more people are using them in their day-to-day activities. A credit card is
a card or mechanism which enables cardholders to purchase goods, travel and dine in a
hotel without making immediate payments. It is a convenience of extended credit without
formality. Credit cards can be classified as follows:
CHART: TYPES OF CREDIT CARDS
OLD CREDIT CARDS NEW CREDIT CARDS
s
INNOVATIVE FINANCIAL PRODUCTS AND SERVICES
1) Merchant Banking:
A merchant banker is a financial intermediary who helps to transfer capital from
those who possess it to those who need it. Merchant banking includes a wide range
of activities such as management of customer securities, portfolio management,
project counseling and appraisal, underwriting of shares and debentures, loan
syndication, acting as banker for the refund orders, handling interest and dividend
warrants etc. Thus, a merchant banker renders a host of services to corporate and
thus promotes industrial development in the country.
2) Loan Syndication:
This is more or less similar to ‘consortium financing’. But, this work is taken up by
the merchant banker as a lead manager. It refers to a loan arranged by a bank
called lead manager for a borrower who is usually a large corporate customer or a
Government Department. The other banks who are willing to lend can participate
in the loan by contributing an amount suitable to their own lending policies. Since
a single bank cannot provide such a huge sum of loan, a number of banks join
together and form a syndicate.
3) Leasing:
A lease is an agreement which a company or a firm acquires a right to make use of
capital asset like machinery, on payment of a prescribed fee called “rental
charges”. The lessee cannot acquire any ownership to the asset, but he can use it
and have full control over it. He is expected to pay for all maintenance charges and
repairing and operating cost. In countries like the U.S.A., the U.K. and Japan
equipment leasing is very popular and nearly 25% of plant and equipment is being
financed by leasing companies. In India also, many financial companies have
started equipment leasing business by forming subsidiary companies.
DATA ANALYSIS AND INTERPRETATION
Q1) Awareness of people regarding various types of financial services provided
by the banks
Interpretation
From the above chart we came to know that, overall percentage of service class people
having complete knowledge about different types of services provided by the bank is
37%, those having some idea about it is 46% and the percentage of people having no
awareness of various services provided by the bank is 17%. It can reasonably, be
concluded that nearly 85% of the population is having awareness about newly introduced
services.
Q2 Awareness of various banking services provided by banks
Interpretation
Banks constitute various channels through which services are provided in terms of
ATMs, Debit Card, Credit Card, Phone Banking, Mobile Banking, Internet Banking etc,
of which the first six have been covered. Amongst these ATM scores the largest used
service status (26.03%) as indicated by above figures. Close on the heels is Debit card
(17.75%), Credit card (14.79%), while phone banking lags behind by scoring the least
(11.83 %.)
Q 3) Sources from which the respondents get the knowledge about the innovative
financial services.
Interpretation
The above table indicates the percentage distribution of awareness avenues, the major
are in favour of advertisements, which score 34% among different avenues such as
personal visit, executives of the banks, advertisements and friend/relatives. While the
least score is for personal visit and that of other sources.
Q4) Is your Bank following the Know Your Customer (KYC) norms in providing
services.
Interpretation
The above table indicates the KYC norms followed by the banks. The banks are
providing the customer with proper information about various banking services.
The banks are trying to find the expected service of the customer.
Q5) Growth rate of credit cards
Interpretation
The above table indicates the growth rate of credit cards, which scores 0.3
million in the year 2008 and it has grown upto 0.6 million in 2009.The growth
rate is 100%. This indicates that the distribution of credit cards is on large scale.
The CENTRAL BANK OF Bank is considered as largest issuer of credit cards.
CONCLUSION
The project of Financial Services of Banks was undertaken at Central Bank of India
Working under this project I learned various services in detail which banks generally
follow.
It also helped in gaining knowledge about different concepts provided under different
services .
The Financial Services of the Banks has become very vital in the smooth operation of the
banking activities. The Project work has certainly enriched the knowledge about the
effective management of the various services in Banking Sector.
Lastly as according to data collection we conclude that given findings and suggestions
need to be considered which can prove to be effective to the Banks.
SUGGESTIONS
Prevention against frauds of Credit Cards
To take necessary action against defaulters
Providing with proper information relating to various services
Guidance for investment in various securities in order to protect the interest of
investors.
Approaching the customers for investment in innovative financial services.
Special schemes to be provided on some types of services
