Rohit Final P-1

Date of submission: 30th April, 2013

Project report on

“Customer Satisfaction level in banks : Comparison between Private and Nationalized Banks”

Submitted in partial fulfillment of the requirement for the reward of Degree of

MASTER OF BUSINESS ADMINISTRATION

Session 2011-2013

Punjabi University, Patiala

Supervised By: Submitted by:

Dr .Raj Kumar Gautam Rohit Bansal

MBA II(Sem 4 rth )

Roll no. 2918

PUNJABI UNIVERSITY REGIONAL CENTRE FOR INFORMATION TECHNOLOGY & MANAGEMENT,

MOHALI

1

GUIDE’S CERTIFICATE

This is to certify that ROHIT BANSAL the student of MBA 2nd has carried out the project report as per the syllabus of Punjabi university Patiala on “Customer Satisfaction level in banks: Comparison between Private and Nationalized Banks.” under my guidance.

Dr. Raj Kumar Gautam

2

DECLARATION

I Rohit Bansal, the student of MBA in Punjabi University Regional Centre for IT &

Management, Mohali completed my project “Customer Satisfaction level in banks:

Comparision between Private and Nationalized Banks” under the guidance of Dr. Raj

Kumar Gautam, Professor of Punjabi University Regional Centre for IT & Management,

Mohali. It is carried out by me for the partial fulfillment of the course requirements of Masters

of Business Administration. It is the original work done by me and the information provided in

the study is authenticated to the best of my knowledge.

Further I want to convey that no copy of this project is submitted by me in any other university

for award of any other degree or diploma etc.

ROHIT BANSAL

MBA II (Semester 4th)

3

ACKNOWLEDGEMENT

Concentration, dedication, hard work and application are essential but not the only factor to achieve the desired goal.

The project report on “Customer Satisfaction level in banks: “Comparison between Private and Nationalized Banks” has been given to me as part of the curriculum in 2-Years Masters Degree in Business Administration.

A large number of individuals have contributed to project. This project is a humble attempt to sketch down the contribution of all those persons who have directly or indirectly given their precious time and help along with proper guidance for making this report in the following shape.

I express my deep and sincere gratitude to Dr. Raj Kumar Gautam, Professor, Punjabi University Regional Centre for Information Technology and Management, Mohali for his extensive and valuable guidance that was available to me.

I have tried my best to present this information as clearly as possible.

I am thankful to all my friends and batch mates for their help in completing this report work. Finally, I am thankful to my entire family members for their great support and encouragement.

Date : Rohit Bansal30 April, 2013 MBA II 4 th sem

Roll no 2918

4

EXECUTIVE SUMMARY

One of the important functions of the Bank is to accept deposits from the public for the

purpose of lending and as such depositors are the major stakeholders of the Banking System. The

depositors and their interests form the key area of the regulatory framework for banking in India

and this has been enshrined in the Banking Regulation Act, 1949. The Reserve Bank of India is

empowered to issue directives/advices on interest rates on deposits and other aspects regarding

conduct of deposit accounts from time to time. With liberalization in the financial system and

deregulation of interest rates, banks are now free to formulate deposit products within the broad

guidelines issued by RBI. This policy document on deposits outlines the guiding principles in

respect of formulation of various deposit products offered by the Bank and terms and conditions

governing the conduct of the account.

This research report deals with the comparison of products and services of private and

Nationalized banks like Axis Bank, ICICI Bank, State Bank of Patiala and Punjab National

Bank.

5

Chapter 1

INTRODUCTION TO

INDIAN BANKING SECTOR

6

1. INTRODUCTION

The Indian banking can be broadly categorized into nationalized (government owned),

private banks and specialized banking institutions. The Reserve Bank of India acts a centralized

body monitoring any discrepancies and shortcoming in the system. Since the nationalization of

banks in 1969, the public sector banks or the nationalized banks have acquired a place of

prominence and has since then seen tremendous progress. The need to become highly customer

focused has forced the slow-moving public sector banks to adopt a fast track approach. The

unleashing of products and services through the net has galvanized players at all levels of the

banking and financial institutions market grid to look anew at their existing portfolio offering.

Conservative banking practices allowed Indian banks to be insulated partially from the Asian

currency crisis.Indian banks are now quoting al higher valuation when compared to banks in

other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems

linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are

nimble footed in approach and armed with efficient branch networks focus primarily on the ‘high

revenue’ niche retail segments.

The Indian banking has finally worked up to the competitive dynamics of the ‘new’

Indian market and is addressing the relevant issues to take on the multifarious challenges of

globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive

players capable of meeting the multifarious requirements of the large customers base. Private

banks have been fast on the uptake and are reorienting their strategies using the internet as a

medium The Internet has emerged as the new and challenging frontier of marketing with the

conventional physical world tenets being just as applicable like in any other marketing medium.

The Indian banking has come from a long way from being a sleepy business institution to

a highly proactive and dynamic entity. This transformation has been largely brought about by

the large dose of liberalization and economic reforms that allowed banks to explore new business

opportunities rather than generating revenues from conventional streams (i.e. borrowing and

lending). The banking in India is highly fragmented with 30 banking units contributing to almost

50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the

government) continue to be the major lenders in the economy due to their sheer size and

7

penetrative networks which assures them high deposit mobilization. The Indian banking can be

broadly categorized into nationalized, private banks and specialized banking institutions.

Banks are using electronic medium of delivery to save expenses. Development in

technology has enabled banks to perform the repetitive to work without error and at a lower cost.

Value addition to each of the products is only way to attract customers. Competition has

provided choice to customers. Today’s customer’s compare the offers are available in the market

and select the ones, which give better value. Banks should attract long term deposits to ensure

that there is no asset liability mismatch. Banks are now funding long-term assets like loans for

infrastructure / housing with long gestation / repayment schedule with long-term liabilities. Long

term deposits result in matching of assets and liabilities.

In the service industry like ‘Banking’, promotion assumes all the more important position as

what we really sell is ‘abstract’ thing, i.e., service with the interest rates, range of products, being

more or less same, the service given through proper promotion channels makes all the difference

between two Banks in marketing context.

Promotion can thus mean ‘communicating with the buyer (customer). In order to strengthen his

attitudes that are favorable to the (Bank’s) sellers’ offering and to change his attitudes, which are

unfavorable to the sellers. This pre-supposes ensuring that such buyers become satisfied

customers of the Bank – now or later.

The objectives of “Promotion” are:

1. Informing / telling / educating potential customer.

2. Informing existing customers about new products / services.

3. Following up with existing / potential customers for schemes introduced.

4. Approaching a new segment of customer to attract them to promote new scheme.

The following communication channels used in India by banks:

a. PRESS: Advertisements, Press releases and Interviews.

b. TELEVISION: Advertisements, Press releases and Interviews.8

c. RADIO: Advertisements, Press releases and Interviews.

d. PARTICIPATION IN FAIRS: Exhibitions, Seminars and Conventions.

e. POSTERS: Banners, Leaflets at delivery points / City centers.

f. ADVERTISEMENTS through ATM screens and Internet sites.

Mature markets, technological developments and deregulation in many countries have led to

increased competition. Consequently, banks operating in mass-markets will have to concentrate

on cost-savings in order to stay competitive. These and other factors have encompassed

acquisitions and mergers throughout the industry. It has all resulted in major redundancies in the

banking industry. In terms of employment, retail banking is a shrinking industry. The strategies

for retail lending of the commercial banks are:

– Technology impact on product / service scenario

– The changes in distribution plans

– The outsourcing or contracting-out

– Deregulation

– Privatization

– Different distribution channels to different customers.

Marketing is a dynamic process. It is modified continuously in relation with the changing

environment strategies which worked a few years back may not work now and strategies will

have to be rethought for present day applications.

It is not enough for banks to take a short-term view of market but it is rather essential that they

take a long-term (future) view and accordingly devise their plans and strategies. In the changing

economic scenario a flexible and customer resources, market position and market share and what

it wants to be (in future) vis-à-vis the future changes in the market and future needs of the

customer.

9

MAJOR BANKING SERVICES :

1) Automatic teller machine (ATM)

2) Attitude of the employees

3) Cheque processing period

4) Credit card facility

5) Customer convenience facility

6) Loan processing period

7) One widow service

8) Online banking facility

9) Phone banking

10) Anywhere banking

The study will give an overview of the innovative services offered by the private banks in

Chandigarh to stay ahead of the competition. Most of these banks took the help of proprietary

processes and technology to launch innovative products to woo customers and differentiate

themselves from the competition. Banks also started using their ATMs as a means of

differentiating their services, making them more accessible and attractive to consumers. They

added bill payment and credit card payment options at the ATMs. In addition, the banks used

service personnel as a means of differentiation.

10

CHAPTER 2

REVIEW

OF

LITERATURE

11

2. REVIEW OF LITERATURE

Customer satisfaction is an important theoretical as well as practical issue for most

marketers and consumer researchers (Churchill and Suprenant, 1982; Moutinho and Goode,

1995; Naser et al., 1999; Piercy, 1994). Customer satisfaction is a major outcome of marketing

activity whereby it serves as a link with various stages of consumer buying behavior. For

instance, if customers are satisfied with a particular service offering after its use, then they are

likely to engage in repeat purchase and try line extensions (East, 1997). Customer satisfaction is

widely recognized as a key influence in the formation of consumers' future purchase intentions

(Taylor and Baker, 1994). Satisfied customers are also likely to tell others of their favourable

experiences and thus engage in positive word of mouth advertising (File and Prince, 1992;

Richens, 1983). This positive word of mouth advertising is particularly useful in collectivist

Asian cultures like that of Pakistan where social life is structured in a way to improve social

relationships with others in the society (see Hofstede, 1980; Hall and Hall, 1987). Dissatisfied

customers, on the other hand, are likely to switch brands and engage in negative word of mouth

advertising.

A recent study conducted by Levesque and McDougall (1996) confirmed and reinforced

the idea that unsatisfactory customer service could lead to a drop in customer satisfaction and

willingness to recommend the service to a friend. This would lead to increase in switching by

customers. So, the significance of customer satisfaction and customer retention in strategy

development for a 'market oriented' and 'customer focused' firm cannot be underestimated (see

Kohli and Jaworski, 1990 for further discussion). Customer satisfaction can be considered as the

essence of success in today's highly competitive world of business. Customer satisfaction is

increasingly becoming a corporate goal as more and more companies strive for quality in their

products and services (Bitner and Hubbert, 1994). In this context, an understanding of

'determinant of customer satisfaction' (Churchill and Suprenant, 1982; Levesque and McDougall,

1996) is of great significance to marketers. The current paper reports findings from a recently

conducted study which looked into the significance and importance of various determinants of

customer satisfaction in retail banking.

Customer satisfaction is generally described as the full meeting of one's expectations.

Customer satisfaction is the feeling or attitude of a customer towards a product or service after it

has been used. A review of the existing literature indicates that there can be potentially many

antecedents of customer satisfaction, as the dimensions underlying satisfaction judgements are 12

global rather than specific (Taylor and Baker, 1994; Patterson and Johnson, 1993; Rust and

Oliver, 1994). The customer satisfaction literature has paid a great deal of attention to the

confirmation paradigm, which concerns the comparison of product or service performance

expectations and evaluations (Goode and Moutinho, 1995). The confirmation model treats

satisfaction as a meeting of customer expectations (East, 1997; Oliver 1989) and is generally

related to habitual usage of products (East, 1997). However, research on customer satisfaction

has moved towards the disconfirmation paradigm which views satisfaction with products and

brands as a result of two cognitive variables: prepurchase expectations and disconfirmation

(Churchill and Surprenant, 1982; Peter and Olson, 1996). According to Peter and Olson (1996),

"prepurchase expectations are beliefs about anticipated performance of the product;

disconfirmation refers to the differences between prepurchase expectations and post-purchase

perceptions" (p.509). In an earlier study, Churchill and Surprenant (1982) reported that

disconfirmation positively affected satisfaction. That is, when subjects perceived the product

performing better than expected, they were more satisfied (Churchill and Surprenant, 1982).

Further empirical research supports the notion that satisfaction is caused by expectations and

requires considerable cognitive effort on the part of customers (Bearden and Teel, 1983;

Moutinho and Goode, 1995; Cadotte et al., 1987).

In the service literature, strong emphasis is placed on the importance of service quality

perceptions and the relationship between customer satisfaction and service quality (see for

example Bitner and Hubbert, 1994; Cronin and Taylor, 1992; Taylor and Baker 1994; Rust and

Oliver, 1994). Service quality has been described as a form of attitude that results from the

comparison of expectations with performance (Cronin and Taylor, 1992; Parasuraman et al.,

1985). Gronroos (1982) argued that customers, while evaluating the quality of a service, compare

the service they expect with perceptions of the services they actually receive. It has been argued

that the quality of service is not a unidimensional construct. Rather, service quality incorporates

various dimensions that relate to both core and augmented service offerings (Bitran and Lojo,

1993; Gronroos, 1984; Lewis, 1993). Parasuraman et al. (1985; 1988) initially described five

dimensions of service quality: reliability, tangibles, responsiveness, assurance and empathy.

Parasuraman et al. (1991a) argued that reliability was mainly concerned with the outcome of

service whereas tangibles, responsiveness, assurance and empathy were concerned with the

service delivery process. The customers not only judge the accuracy and dependability (i.e.

reliability) of the delivered service but they] also judge the other dimensions as the service is

being delivered (Parasuraman et al., 1991a). Customer satisfaction can thus be based not only on

13

the judgement of customers towards the reliability of the delivered service but also on customers'

experiences with the service delivery process. On the basis of their review of service quality

literature, McDougall and Levesque (1994), however, argued that there were two overriding

dimensions to service quality. The first one being the core or outcome aspects (contractual) of

the service, and the second being the relational or process aspects (customer-employee

relationship) of the service.

It is generally accepted that customer satisfaction often depends on the quality of product or

service offering (Anderson and Sullivan, 1993; Levesque and McDougall, 1996). For this reason,

research on customer satisfaction is often closely associated with the measurement of quality

(East, 1997). Thus, both service quality and customer satisfaction share a close relationship,

though they are normally conceptualise as unique (or separate) constructs (Bitner and Hubbert,

1994; Cronin and Taylor, 1992; Patterson and Johnson, 1993; Taylor and Baker, 1994). There is

some empirical evidence suggesting that service quality is a causal antecedent of customer

satisfaction (see for example, Cronin and Taylor, 1992; Woodside et al., 1989). However, there

is very little empirical research demonstrating the importance of service quality dimensions in

determining customer satisfaction (Fisk et al., 1993; Levesque and McDougall, 1996). In a recent

study, Levesque and McDougall 1996 found that the performance of the service provider on core

and relational dimensions of service was an important driver for customer satisfaction in retail

banking in the UK. However, in a non-Western context, the link between core and relational

dimensions of service and customer satisfaction is yet to be established empirically. The current

paper aims to fill this gap in the literature.

Moreover, the literature dealing with services outlines some major characteristics of service

that make them unique and different from physical products (Bitran and Lojo, 1993; LeBlanc

and Nguyen, 1988; Parasuraman et. al., 1985; Zeithaml and Bitner, 1996). Services are often

characterized by their intangibility, inseparability, heterogeneity, and perishability. The

implications of these characteristics are that it is often difficult for customers to evaluate services

at preconsumption, consumption and post consumption stages of the consumer decision-making

(Legg and Baker, 1996). Because of the intangible nature of services, it becomes difficult for an

organization to understand how its customers perceive and evaluate the quality of its services

(Parasuraman et. al., 1985; Zeithaml, 1981). Customers, however, make inferences about the

service quality on the basis of tangibles (the buildings, the physical layout etc.) that surround the

14

service environment. Support for this argument comes from empirical evidence suggesting that

the tangible, physical surroundings of the service environment can have a significant impact on

customers affective responses and their behavioral intentions (Wakefield and Blodgett, 1999).

Dabholkar et al. (1996) reported similar findings that the tangible aspects of department stores do

influence customers' perceptions of service quality. Hence, there are reasonable grounds to

assume that customer satisfaction is also related to customers' evaluation of physical

surroundings of the service environment.

15

CHAPTER 3

BANK

PROFILES

16

3. BANK PROFILES

3.1 AXIS BANK

India’s third largest private-sector bank

Market View of Axis Bank’s Stock Price (17th March, 2011)

Current Stock Price: Rs. 1292.70

52 Week-High Stock Price: Rs. 1608

52 Week Low Stock Price: Rs. 1112

Latest P/BV: 3.30

Latest P/E: 16.93

Axis Bank, formerly UTI Bank, is India’s third largest

private-sector bank after the significantly larger ICICI Bank

and HDFC Bank. It is engaged in Large & Mid Corporate

Banking, Retail Banking, SME banking, Agri-business

banking, International Banking, treasury etc. It has the largest

EDC (Electronic Data Capturing) network, the third largest

ATM network and the fourth largest base of debit cards in

India.

As of 31st December, 2010 it had a very wide network of more than 1281 branches including

169 Service Branches and over 5303 ATMs. With a customer base of over 150 lakh, it also has

overseas branches at Singapore, Hong Kong and Dubai and representative offices at Shanghai

and Dubai.

Since its inception, Axis Bank has been jointly promoted by UTI-I, LIC, GIC and four other PSU

insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company

Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. Promoters

17

hold 37.35% stake in Axis Bank as on 31st December, 2010 out of which UTI-I holds 23.72%

stake, LIC 9.58%, and GIC 1.87%.

Above charts show, Axis Bank’s net advances are skewed towards the corporate segment, of

which the financial industry, infra, power, and metal together make up around 42%. Only 20% of

the net advances are in retail banking, with a major exposure to the housing segment followed

auto loans. Each of them (corporate and retail banking) contribute 23% to the net revenue of the

Bank.

How has the financial performance of Axis Bank Ltd been?

The net interest income (NII) of Axis Bank, over the last 10 years, has rocketed by 54.8% CAGR

from Rs. 98 Cr. in FY01 to Rs. Rs. 5004 Cr. in FY10; and its total income has grown by

34.9%CAGR. During the same period its book value and EPS have jumped by 37% and 28%

resp.18

http://stockshastra.moneyworks4me.com/wp-content/uploads/2011/03/1-image.png

The bank has maintained its net profit to total fund ratios between 1 and 1.25 during FY05 to

FY08, whereas in the last two financial years, this ratio has been above 1.25. This increasing

trend of net profit to total fund ratio shows that it has continuously increased its efficiency of

utilizing funds. The non-performing assets (NPA) to net advances ratio has also shown a

decreasing trend from 3.46% in FY02 to 0.4% in FY10 which shows the bank has continuously

increased its assets quality. It has also maintained a very good capital adequacy ratio (CAR) of

15.8% at the end of FY10, well above the RBI guide line of 9%, which indicates that it can easily

cover all the associated risks.

Hence, the 10 YEAR X-RAY of Axis Bank is Green (Very Good).

Why are these parameters necessary and sufficient for a bank’s analysis? Click here to

know

What can we expect in the future? Here is the analysis of Axis Bank Ltd..

In the short-term

Axis Bank’s target for FY11: -

• Business growth(Advances + Deposits) of 25%

• Opening 200-250 new branches and 1000 new ATMs

Axis Bank has reported a strong performance in December, 2010 quarter:

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• It has shown a 36% jump in the Net Profit at Rs. 891.36 Cr. and a 28% rise in the Net Interest

Income to Rs. 1733.12 Cr. on the back of robust 46% credit growth.

• The other income of the Bank inched up by 16% to Rs. 1147.71 Cr. mainly on the back of

21% jump in the fee income at Rs. 968 Cr.

• CAR has decreased to 12.46% in Q3 FY11, compared to 16.8% in the same quarter last year

• Its Net Interest Margin (NIM) stood at 3.81% during Q3 FY11, compared to 4% during

Q2FY10 (much higher than the industry standard of 2-2.5%)

• The net NPAs of Axis Bank stood at 0.29% in Q3 FY11, which is amongst the lowest in the

banking industry; the provision coverage ratio stood at 82.69%, much higher than the regulatory

requirement of 70%

Advances of the Bank have reported a strong growth of 46% on y-o-y basis and 12% on q-

o-q basis to Rs. 123547 Cr. in the December 2010 quarter. The growth in the advances was

driven by 69% jump in the corporate segments at Rs. 70518 Cr. and 33% rise in the retail

segment at Rs. 25204 Cr. Agri& microfinance loan book grew by 24% to Rs. 10772 Cr. and

SME by 9% to Rs. 17053 Cr. Exposure to the Microfinance institutions is around 1% of advance

book and that of telecom (mainly 2G license advances) constitutes 6% of total advance book.

For the nine months ended December 2010, Axis Bank has reported 37% rise in the NII at Rs

4861.99 Cr., 19% in fee-based income at Rs. 2559 Cr., and 6% in the other income at Rs 3181.73

Cr. compared to that of corresponding quarter last year respectively. In FY11, so far, it has

opened 142 branches and 1010 ATMs. Thus, the bank is on line to achieve its target for FY11.

20

Increasing cost of funds is a cause for

concern:

The RBI has increased the Repo rate, Reverse

repo rate, and CRR in the last one and a half

year in several phases to control inflation. This

has lead to lower loanable fund availability in

the bank and continuous increase in cost of

funds, which can be seen in the chart. As, the

inflation rate is still on the higher side, tight

monetary policy is expected to continue in the short-term. So, we expect that the cost of funds

will also increase further in the short-term, which will keep margins under pressure.

RBI, recently, has increased provisioning percentage on housing, real estate, and many other

types of loans. This will affect the profitability of the bank because, in the retail segment, it

finances almost 70% advances in housing.

Considering above factors, we expect that the short-term future prospects of Axis Bank will

be Orange (‘Somewhat Good’)

In the long-term

Strength of Axis Bank:

• It is India’s third largest private bank, with 1281 branches and 5303 ATMs, and a

customer base of over 150 Lakh as on 31st Dec, 2010

• It has the largest EDC network, the third largest ATM network, and the fourth largest

base of debit cards in India.

• It already has branches in Singapore, Hong Kong and Dubai International Financial Centre.

About 14% of the bank’s asset book is from international operations. It is further going to set up

a subsidiary in London and upgrade its representative office in Shanghai to a branch.

• 100% core banking facilities with advanced technology

• On-line trading facilities in alliance with Geojit BNP Paribas

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In Jan 2011, Axis Bank, , announced the

launch of AxisDirect, an online trading

platform – a product of its wholly-owned

subsidiary, Axis Securities and Sales Ltd.

AxisDirect will offer trading in cash,

derivatives, IPO segments through NSE and

BSE; and provide well-researched information

about various corporate, access to independent

third-party research, stock research and analysis tools.

Axis Bank has maintained a very good Current Account Savings Account (CASA) ratio,

above 40% in the last three years, which is higher than the industry standard of 35-40%.

CASA plays a very significant role in keeping cost of funds low and margins high. Only

four other banks – SBI, PNB, HDFC Bank, and ICICI Bank – have more that 40% CASA

ratio.

Product strategy designed to benefit customers:

To beat the market, Axis Bank is adopting different product strategies. Recently, it has extended

the repayment period of the standard home loan to the maximum tenure of 25 years. In the step

down product (a type of home loan product), the customer has to pay a higher EMI when the

combined family income is higher and a lower EMI when the family income has reduced over a

period of time. Apart from this, the Bank has given option to its customers to close the loan

before its maturity with no prepayment penalty.

Banking Sector – Heading towards a high-performing sector:

The banking sector is poised to grow in line with the growth of the economy. The Indian

economy is expected to have a high growth in the long-term and so is the Indian banking sector,

which is currently in consolidation stage. According to Mckinsey Report on India Banking 2010,

‘The banking index has grown at a compounded annual rate of over 51% since April 2001 as

compared to a 27% growth in the market index for the same period (2001 to 2010)’. The report

says that the Indian banking sector is heading towards a high-performing sector. Axis Bank,

22

being the third largest private bank in India, is ready to take full advantage of this growth

opportunity.

Financial Inclusion Program:

Under Financial Inclusion Program, RBI is taking initiative to provide banking services at

affordable costs to the weaker sections of society or the unbanked segment, which does not have

any access to the formal banking system. As of now, it is estimated that 60% of the Indian

population does not have access to formal banking facility and RBI is keen on achieving 100%

financial inclusion for sustaining equitable growth. Axis Bank is taking following initiatives

under this Program:

Targets to cover 12,000 villages in the next 5 years: Axis Bank plans to cover 5,500

villages for financial inclusion by March 2011 and scale it up to 12,000 villages in five

years time. It is looking at opening 18-lakh no-frills accounts, Rs. 40 Cr. of deposits, and

Rs. 10 Cr. of advances. The 18-lakh account would include 12-lakh accounts that they

have already opened for government-sponsored scheme. The bank is looking at several

low-cost delivery models such as smart card, mobile banking and point of transaction

device.

Tie up with Janalakshmi Social Services to tap urban poor: To tap unbanked

population in urban areas, Axis Bank has tied up with a Bangalore-based microfinance

institution, Janalakshmi Social Services. Janalakshmi will use its client base to provide

banking services of Axis Bank and will work as business correspondent to sell other

products of the Bank. This service would be spread from Bangalore to 50 other cities in

the near future.

MOU with Idea to test a Branchless Banking Model: Axis Bank has signed a

Memorandum of Understanding with Idea Cellular to test a ‘Branchless Banking’ model

through a mobile enabled remittance pilot. Idea will act as a ‘Business Correspondent’ of

Axis Bank to provide an entire range of financial products and services offered by the

Bank, through the mobile operator’s retail outlets. Idea’s network will help Axis Bank

gain access to widespread distribution reach and a low-cost delivery channel for offering

financial products and services, based on the mobile platform. On the other hand, Idea

23

can offer value-added services to its customers by offering financial products and

services.

There is still a question mark on the viability of Financial Inclusion Program which

primarily targets the low-income group. This leaves little scope of high margins under this

program. However, this initiative is expected to help in economic development, and hence is

expected to be fruitful in the long-term.

Diversified into non-banking financial services:

Axis Bank has started non-banking financial services to carry out investment and lending

activities with a focus on infrastructure and other activities. It has five wholly-owned

subsidiaries:

1. Axis Securities and Sales Ltd. – to market credit cards , retail asset products and online

trading facilities

2. Axis Private Equity Ltd. – to manage equity investments & provide venture capital to

support businesses

3. Axis Trustee Services Ltd. – to engage in trusteeship activities

4. Axis Asset Management Companies Ltd. – to carry on the activities of managing mutual

fund business

5. Axis Mutual Fund Trustee Ltd. – to act as the trustee for the mutual fund business

Acquisition of Enam’s investment banking business expected to fill the gap in their

portfolio:

Axis Bank has acquired Enam’s investment banking and institutional broking businesses for R.s

2,064 Cr. in a stock-swap deal. Pursuant to the scheme and in consideration for the proposed

demerger, Enam shareholders will receive 5.7 shares of Axis Bank for every 1 share held in

Enam; translating into an approximately 3.37% shareholding in Axis Bank. While the acquisition

appears to be at a slight premium, it will help Axis Bank fill a key gap in portfolio, increase fee-

based income and bring significant long-term benefits. Also, as these businesses are profit-

making and enjoy one of the highest margins in the industry, they will contribute to Axis Bank’s

profits and will be earnings accretive.

Risks & Concerns24

• Low exposure in high-margin retail banking

• New Bank License would hamper banks’ profits: RBI is providing banking licenses to

selected NBFCs from 2011. This would increase competition among banks which would

consequently hampers their profits

• RBI, in Bancon 2010 held in Mumbai, has indicated that Indian Banks should operate

at lower margin, in line with global standard. They should decrease lending rate and increase

savings rate to help in achieving double digit economic growth. RBI may also increase Capital

Adequacy Ratio benchmark from 2013.

• As the banks have mainly financial assets, they have to manage several risks such as credit

risk, market risk, liquidity risk, country risk etc. So, banking business, as a whole, is considered

as risky business

• Government regulation increases uncertainty in the banking sector: The Government of

India frequently changes monetary policies by changing CRR, repo rate, reverse repo rate etc. to

maintain stability in the economy. It increases uncertainty in the banking sector.

Considering the strong position that Axis Bank has established for itself in the banking

industry and its recent acquisition of Enam, we can expect that the long-term future

prospects of Axis Bank will be Green (Very Good).

25

3.2 ICICI BANK

Country’s largest private sector lender ICICI Bank (ICICIBANK.NS : 904.9 -23.8) grew its net

profit by 16.8% to Rs 1,026 crore for the quarter ended June 2010 riding on lower non-

performing assets (NPA) and operating expenses. It had posted a profit of Rs 878 crore in the

year-ago period.

However, the bank’s total income fell 18.7% to Rs 7,493 crore during the quarter against Rs

9,223 crore in the corresponding quarter last year.

“We have now started growing our assets. Even during this quarter, while the growth appears to

be only about 7%, our corporate book has grown by almost 30%,” MD and CEO

ChandaKochhar said. “There was a healthy growth in home and car disbursements and cash

accruals also looked healthy. Approvals will translate into disbursements in the second half of

calendar year 2010,” she added.

The bank is expecting a 20% growth in advances during the current fiscal. Its net non-performing

assets decreased 25% to Rs 3,514 crore on June 30, 2010 from Rs 4,667 crore last year, while the

net non-performing asset ratio decreased to 1.62% during the reporting period from 2.19% in the

year-ago quarter. The bank’s provisioning coverage ratio was 64.8% during the period as

compared to 51.1% in the corresponding period of the last fiscal.

Operating expenses (including direct marketing agency expenses) decreased 2% to Rs 1,461

crore from Rs 1,494 crore in the corresponding quarter of the last fiscal while provisions

decreased 40% to Rs 798 crore from Rs 1,324 crore.

Kochhar said the bank’s net interest margin is pegged at 2.8%. She, however, did not reveal the

cost of funds and yield on advances. “We would like to maintain our NIM at this level,” she said.

Net interest income of the bank in the reporting period increased marginally to Rs 1,991 crore

compared to Rs 1,985 crore in the same quarter a year ago while non-interest income reduced to

Rs 1,680 crore from Rs 2,090 crore. Fee income increased 7% to 1,413 crore from 1,319 crore in

the year-ago period.

Though the bank’s total deposits have fallen to Rs 2,00,913crore during the reporting period as

compared to Rs 202,017 crore as on March 31, 2010, its CASA (Current Account and Savings

Account) deposits increased 32 % to Rs 84,618 crore as on June 30, 2010 from Rs 63,977 crore

last year. “We have reduced our high-cost term deposits in recent months. We would like to

grow our deposits again as the demand for resources have gone up,” said Kochhar. The bank’s

loan book increased to Rs 184,378 crore compared to Rs 181,206 crore as on March 31, 2010.

26

ICICI’s treasury income, generated mainly from investments in government securities, declined

drastically to Rs 104 crore in the quarter as compared to Rs 714 crore in the year-ago period.

Capital adequacy stood at 20.2 % while provisioning coverage ratio increased to 64.8 % from

51.1 % in the first quarter last fiscal. The bank will continued to invest in expansion of its branch

network to enhance its deposit franchise and create an integrated distribution network for both

asset and liability products. “We are yet to finalise how many branch licenses we would seek

from the Reserve Bank for this year,” Kochhar said. ICICI Bank currently has branch network of

2,016 branches. Asked to comment on the delay in acquisition of Bank of Rajasthan, Kochhar

said, “Our earlier acquisitions had also taken time to be completed.”

Performance

ICICI Bank reported PAT of Rs1452 crore up 44.4% y-o-y and 1.1% q-o-q in linewith our

expectations; driven by core earnings and lower provisioning expenses.Net interest income is up

by 23.4% y-o-y and 8.6% q-o-q driven by 19.4% y-o-yloan growth and 10bps margin expansion

on q-o-q basis. Fee income saw strongtraction during the quarter, grew 17.8% y-o-y and 10.2%

q-o-q driven by higheractivity in wholesale and international businesses. Asset quality further

improvedduring the quarter. Provision coverage ratio stood at healthy level of 76%despite 17.8%

decline in provisioning expenses during the quarter. Expandedbranch network kept steady CASA

growth, resulting into 45.1% CASA ratio.Consolidated earnings up 16.9% y-o-y to Rs 1568

crore driven by core operatingperformance including one off of Rs200 crore loss in general

insurance business.

Strong core operating performance: Net interest income is up 23.4% y-o-yand 8.6% q-o-q

driven by strong sequential loan growth at 5% and 10bpsmargin improvement. Fee income has

continued to show good momentumgrowing at 17.8% y-o-y and 10.2% q-o-q to Rs 1,791 cr

driven by wholesale andinternational businesses. Treasury reported Rs196 crore loss vsRs 196

croregains in Q4FY10 on account of MTM on security receipt portfolio during thequarter.

Provisioning expenses declined 61.2% y-o-y and 17.4% q-o-q due tosharp improvement in asset

quality. The bank has excess standard assetprovision amounting to Rs. 400 crore. We expect NII

to grow 18% CAGR in linewith loan book growth and stable margins. Strong NII growth,

healthy feeincome growth, improving branch productivity, lower loan loss provision willdrive

27

earnings in medium term in our view. We expect earnings to grow 20%CAGR over FY11-

FY13E driven by core operating performance.

Strong sequential loan growth: Loan Book expanded 19.4% y-o-y(excluding BOR – 16% y-o-

y) and 4.7% q-o-q primarily driven by corporate loanbook. Corporate loan book grew 71% y-o-y

and 5% q-o-q contributing 66% tototal loan book on incremental basis. Retail loan book saw

subdued growth at6% y-o-y during the quarter. SME loan book grew at healthy pace of 25% y-o-

yreflecting better macro environment for growth in these segments. We expectloan book to grow

19.8% over FY11-FY13E driving NII growth.

Asset quality trends continue to improve: Broad asset quality trends haveshowed further

improvement as net addition to Gross NPA was almost zeroduring the quarter. Gross NPA and

Net NPA stood at 4.47% and 1.11%respectively with provision coverage ratio at 76%.

Consolidated earnings growth: Consolidated PAT increased 17% y-o-y despiteof lower

contribution from capital market linked businesses and loss in generalinsurance business.

Valuation & Recommendation: ICICI Bank has performed well on most of theoperating

parameters during the quarter. Robust NII growth, strong fee incomegrowth and lower loan loss

provisioning were key drivers for earning growthduring the quarter. Focus on profitable growth,

improving liability franchise,better branch productivity and improving asset quality emerged key

mediumterm positive trends for the bank. At Rs 1,031, the stock is trading at 16x FY12earnings

and 1.8x FY12 core book, attractive risk reward in our view. Wemaintain our BUY rating on

the stock with target price of Rs1325 (upside28.5%).

28

29

3.3 STATE BANK OF PATIALA

State Bank of India is an India-based bank. In addition to banking, the Company, through its

subsidiaries, provides a range of financial services, which include life insurance, merchant

banking, mutual funds, credit card, factoring, security trading, pension fund management and

primary dealership in the money market. It operates in four business segments: Treasury,

Corporate/Wholesale Banking, Retail Banking and Other Banking Business. The Treasury

segment includes the investment portfolio and trading in foreign exchange contracts and

derivative contracts. The Corporate/Wholesale Banking segment comprises the lending activities

of Corporate Accounts Group, Mid Corporate Accounts Group and Stressed Assets Management

Group. The Retail Banking segment consists of branches in National Banking Group, which

primarily includes personal banking activities, including lending activities to corporate

customers having banking relations with branches in the National Banking Group.

The rich heritage of State Bank of Patiala dates back to the year 1917, when it was founded by

Late His Highness Bhupinder Singh, Maharaja of erstwhile Patiala state, with one branch by

the name of 'Chowk Fort, Patiala' to begin with. The Bank, then known as the 'Patiala State

Bank' was state owned and setup for the explicit purpose of fostering growth of agriculture,

trade and industry. The constitution, scope and operations of the Bank underwent a sea change

with the formation of the Patiala and east Punjab States Union (PEPSU) in 1948.The Bank was

then reorganized and brought under the control of Reserve Bank of India.

It was christened as the Bank of Patiala. Another milestone in history of the Bank was its

becoming a subsidiary of the State Bank of India on 1st April,1960 when it was named as the

State Bank of Patiala and since then it has grown significantly both in size and volume of

business. During these glorious years, the Bank has been playing an important role in banking

sphere.

Bank has now added a golden chapter to its history by fully networking all its brances on Core

Banking Solutions on 08.08.2005 and become the first fully networked Public Sector Bank in

the country.

State Bank of Patiala, headquartered at Patiala in Punjab, has shown an all-round performance

for the financial year 2010-11.

30

http://www.statebankofindia.com/

According to a senior official, the bank has recorded a quantum jump in its gross profit for the

year ended March 31, 2011, at Rs 2,122.46 crore as against Rs 1,402.6 crore last year, registering

a growth of 51.33 per cent. In fact, the gross profit of the bank has doubled during the two-year

period from March 2009 to March 2011. The bank’s operating profit increased by 34.53 per cent

from Rs 1,307 crore to Rs 1,759 crore. The net profit for the year ended March 31, 2011 was Rs

652.96 crore as against Rs 550.89 crore for the previous year thereby registering a growth of

18.53 per cent. The Net Interest Income of the Bank has also increased by 52.10 per cent.

Total business of the bank has crossed Rs 1,20,000crore as on March 31, 2011. Total deposits

stood at Rs 68,066.05 crore and advances at Rs 51,433.20 crore. The Bank is BASEL-II

Compliant with Capital Adequacy Ratio of 13.41 per cent, as against the regulatory requirement

of 9 per cent. The TIER-I capital is 8.65 per cent of Risk Weighted Assets (RWA). Net Interest

Margin of the Bank has improved from 2.44 per cent to 3.55 per cent, registering a growth of

111 basis points. Earnings per share of the Bank has also increased from Rs 200 to Rs 222 for the

last financial year. The Returns on Assets is 0.80 compared to 0.72 as on last financial year. The

business per employee of the Bank increased from Rs. 895.21 lakh to Rs 956.30 lakh and the

profit per employee increased from Rs 4.44 lakh as on March 31, 2010 to Rs 5.20 lakh. During

the year 2010-11, the Bank has opened 123 branches and has a network of 1,008 branches

covering 20 states and union territories. In the coming year the Bank proposes to open 60 more

branches. The Bank has achieved benchmarks stipulated by the government of India in Priority

Sector advances, Weaker Section advances, Agricultural lending and percentage of Micro

segment advances out of total MSE advances. The Bank is in the fore front of financing

agricultural activities in the state. The Bank gives loans to farmers at the rate of 4 per cent up to a

loan amount of Rs 3.00 lakh under Kissan Credit Card Scheme, who repay the loans in time.

Besides this the Bank also finances uptoRs 10.00 lakh under Kissan Gold Card Scheme for

general needs of the farmers at attractive interest rates. Similarly, Bank gives loan to people

living below the poverty line under Differential Rate of Interest scheme at 4 per cent interest.

The Bank will soon start sale of Gold coins and proposes to introduce the facility of ASBA

expand to help investors.

For 1QFY2011, State Bank of India’s (SBI) standalone net profit grew 25.1% yoy and 56.1%

qoq, which exceeded our estimates on account of better-thanestimated NII and lower operating

expenses. Robust operating performance with reasonable asset quality was the key highlight of

the result. We maintain an Accumulate rating on the stock.31

Robust operating performance: The bank’s net advances increased 20.4% yoy and 3.4% qoq

to Rs6,53,220cr, while total deposits grew 6.8% yoy and 1.4% qoq to Rs8,15,297cr during

1QFY2011. Reported net interest margin (NIM) improved by 22bp qoq and 88bp yoy to 3.18%

during the quarter despite a hit of 12bp due to change in the method of calculation of SA interest.

The margin expansion was underpinned by improvement in the CASA ratio to 47.5% as of

1QFY2011 from 38.5% as of 1QFY2010 and from 46.7% as of 4QFY2010 coupled with

shedding of high-cost bulk deposits. Gross NPAs were up by 6.6% qoq and net NPAs increased

1.9% qoq to Rs20,825cr and Rs11,074cr, respectively. NPA provision coverage ratio including

technical write-offs improved to 60.7% compared to 59.2% as of 4QFY2010.

Outlook and Valuation: Due to strong CASA and fee income, SBI’s core RoEs have improved

over the past few years and unlike virtually all other PSBs, actual FY2010 RoEs are below core

levels due to low asset yields, providing scope for upside as the CD ratio improves and yields

normalise to sectoral averages. SBI is trading at 2.1x FY2012E ABV while excluding value of

insurance and capital market subsidiaries, it is trading at 1.7x FY2012E ABV v/s its 5-year range

of 1.3-2.0x and median of 1.7x. We believe this provides reasonable upside, especially in light of

its dominant position and reach, strong growth and superior earnings quality. We maintain an

Accumulate on the stock, with a Target Price of Rs3,185.

32

Advances grow in line with industry, deposits growth lags

During the quarter, net advances of the bank increased 20.4% yoy and 3.4% qoq to

Rs6,53,220cr, underpinned by strong growth in large corporate advances of 34.7% yoy and

growth in home loans of 29.8% yoy. Loan book of the bank continues to be well diversified with

no segment accounting for more than 21% of the total loan book. The growth in advances was

driven by the telecom related lending (Rs7,000cr) and upturn in textiles, iron and steel, auto,

33

infrastructure and gems &jewellery industry. Going forward, the credit demand from the large

and mid corporate segments is expected to be strong, with sanctions in pipeline of Rs14,798cr

and Rs7,791cr, respectively.

Deposits of the bank went up from Rs7,63,563cr in 1QFY2010 to Rs8,15,297cr in 1QFY2011

recording a yoy growth of 6.8%, driven by CASA growth of 28.9% and retail term deposits

growth of 10.2%, despite shedding of high-cost bulk deposits by 51.4%. Current deposits

increased 12.5% yoy, while savings deposits rose 33.9% yoy. Savings bank deposits grew at an

average of Rs9,232cr per month during the quarter to Rs71,806cr as of 1QFY2011 leading to an

improvement in CASA ratio from 38.5% as of 1QFY2010 to 47.5% as of 1QFY2011 (46.7% in

4QFY2010). As a result, NII increased by 45.4% yoy and 8.7% qoq to Rs7,304cr in 1QFY2011.

34

NIM continues its ride on growth path

The bank’s reported NIM has been in an upward trend since hitting a low of 2.30% in

1QFY2010 from which it has improved by 88bp to 3.18% in 1QFY2011. Even on a sequential

basis, NIM has expanded by 22bp despite the 12bp hit due to the switch in calculation method of

savings deposits interest. The improvement in NIMs was driven by increase in the CD ratio to

80.1% (from 78.6% in 4QFY2010), shedding of bulk deposits and increase in CASA ratio.

35

Reasonable asset quality

SBI’s asset quality suffered slightly during the quarter as gross NPAs rose 6.6% qoq to

Rs20,825cr, while net NPAs increased 1.9% qoq to Rs11,074cr partly due to the net increase in

gross NPAs from agricultural advances of Rs683cr, which included Rs354cr towards the Agri

Debt Waiver scheme. The gross and net NPA ratio remained steady sequentially at 3.1% and

1.7%, respectively.

The gross slippages during the quarter were Rs4,081cr, which came primarily from the agri,

retail and SME portfolios. The annualised slippage ratio stood at 2.6% compared to 2.2% in

FY2010. The bank’s corporate and SME portfolio accounted for more than 56.0% of the total

gross NPAs of Rs20,825cr. The provision coverage ratio including technical write-offs improved

from 59.2% as of 4QFY2010 to 60.7% as of 1QFY2011.

Out of the cumulative standard restructured assets under the RBI Special Dispensation Scheme

which stood at Rs16,796cr as of 4QFY2010, Rs158cr turned into NPAs during the quarter taking

the cumulative slippages from restructured book to Rs1,774cr (10.6% of the restructured loan

book). The bank’s restructured loans outside the RBI scheme stood at Rs12,900cr, indicating

cumulative restructuring/net worth of 43.1% compared to sector average of 68.3%.

36

Provisioning expenses rose substantially on a yoy basis to Rs1,551cr in 1QFY2011, on the back

of higher NPA provisions (Rs1,733cr) and lower write-back of investment provisions (Rs298cr).

Operating expenses under control

Operating expenses declined 19.5% qoq and 1.2% yoy to Rs4,859cr driven by a 14.4% qoq and

9.9% yoy fall in staff expenses. Decrease in operating expenses coupled with robust operating

performance improved the cost-to-income ratio to 44.2% compared to 53.7% in 4QFY2010 and

57.2% in 1QFY2010. There was a write-back of Rs845cr from excess provision on wage

revision during the quarter. The bank made a provision of Rs1,100cr for gratuity during

1QFY2011 against the estimated liability of Rs2,200cr for FY2011E for the increase in gratuity

ceiling.

37

Comfortable capital adequacy

The bank has continued to maintain comfortable capital adequacy ratio of above 13.5%. As of

1QFY2011, the overall capital adequacy stood at 13.54% with tier I forming more than 72.3% of

the total CAR.

The bank is likely to come out with a rights issue by the end of FY2011 to sustain the CAR at

comfortable levels. The government has already approved diluting its stake to 51% from the

existing stipulated dilution level of 55%. This provides significant headroom for dilution with the

existing government holding at 59.4%.

38

Muted non-interest income, supported strongly by fee income

Total non-interest income growth was muted at 3.4% yoy on account of 75.5% yoy decline in

profit on sale of investments. Non-interest income excluding profit on sale of investments was up

by 23.0% yoy. Fee income went up 29.4% yoy, driven by robust growth in loan processing

charges, non-fund based business, government business and cross-selling. Forex income

increased 6.8% yoy to Rs503cr. Growth in other non-interest income was driven by the 42.0%

growth in recoveries from written-off accounts.

39

Outlook and Valuation

Due to strong CASA and fee income, SBI’s core RoEs have improved over the past few years

and unlike virtually all other PSBs, FY2010 RoEs are below core levels due to low asset yields,

providing scope for upside as the CD ratio improves and yields normalise to sectoral averages.

At CMP, SBI is trading at 2.1x FY2012E ABV while excluding value of insurance and capital

market subsidiaries, it is trading at 1.7x FY2012E ABV v/s its 5-year range of 1.3-2.0x and

median of 1.7x. We believe this provides reasonable upside, especially in light of its dominant

position and reach, strong growth and superior earnings quality. We maintain an Accumulate on

the stock, with a Target Price of Rs3,185.

40

3.4 PUNJAB NATIONAL BANK

With over 60 million satisfied customers and more than 5100 offices including 5 overseas

branches, PNB has continued to retain its leadership position amongst the nationalized banks.

The bank enjoys strong fundamentals, large franchise value and good brand image. Besides

being ranked as one of India's top service brands, PNB has remained fully committed to its

guiding principles of sound and prudent banking. Apart from offering banking products, the bank

has also entered the credit card, debit card; bullion business; life and non-life insurance; Gold

coins & asset management business, etc. PNB has earned many awards and accolades during the

year in appreciation of excellence in services, Corporate Social Responsibility (CSR) practices,

transparent governance structure, best use of technology and good human resource management.

Since its humble beginning in 1895 with the distinction of being the first Swadeshi Bank to have

been started with Indian capital, PNB has achieved significant growth in business which at the

end of March 2011 amounted to Rs 5,55,005 crore. PNB is ranked as the 2nd largest bank in the

country after SBI in terms of branch network, business and many other parameters. During the

FY 2010-11, with 39.16% share of CASA to domestic deposits, the Bank achieved a net profit of

Rs 4433 crore. Bank has a strong capital base with capital adequacy ratio of 12.42% as on

Mar’11 as per Basel II with Tier I and Tier II capital ratio at 8.44% and 3.98% respectively. As

on March’11, the Bank has the Gross and Net NPA ratio of 1.79% and 0.85% respectively.

During the FY 2010-11, its ratio of Priority Sector Credit to Adjusted Net Bank Credit at 40.67%

& Agriculture Credit to Adjusted Net Bank Credit at 19.30% was also higher than the stipulated

requirement of 40% & 18% respectively.

The Bank has been able to maintain its stakeholders’ interest by posting an improved NIM of

3.96% in Mar’11 (3.57% Mar’10). The Earning per Share improved to Rs 140.60 (Rs 123.86

Mar’10) while the Book value per share improved to Rs 661.20 (Rs 514.77 Mar’10). Punjab

National Bank continues to maintain its frontline position in the Indian banking industry. In

particular, the bank has retained its NUMBER ONE position among the nationalized banks in

terms of number of branches, Deposit, Advances, total Business, Assets, Operating and Net

profit in the year 2010-11. The impressive operational and financial performance has been

brought about by Bank’s focus on customer based business with thrust on CASA deposits,

Retail, SME &Agri Advances and with more inclusive approach to banking; better asset liability

management; improved margin management, thrust on recovery and increased efficiency in core

41

operations of the Bank. The performance highlights of the bank in terms of business and profit

are shown below:

Rs. In Crore

Parameters Mar'09 Mar'10 Mar'11 CAGR(%)

OperatingProfit 5690 7326 9056 26.16

NetProfit 3091 3905 4433 19.76

Deposit 209760 249330 312899 22.14

Advance 154703 186601 242107 25.10

TotalBusiness 364463 435931 555005 23.40

Bank always looked at technology as a key facilitator to provide better customer service and

ensured that its ‘IT strategy’ follows the ‘Business strategy’ so as to arrive at “Best Fit”. The

Bank has made rapid strides in this direction. All branches of the Bank are under Core Banking

Solution (CBS) since Dec’08, thus covering 100% of its business and providing ‘Anytime

Anywhere’ banking facility to all customers including customers of more than 3200 rural & semi

urban branches. The Bank has also been offering Internet banking services to its customers

which also enables on line booking of rail tickets, payment of utilities bills, purchase of airline

tickets, etc. Towards developing a cost effective alternative channels of delivery, the Bank with

5050 ATMs has the largest ATM network amongst Nationalized Banks.

With the help of advanced technology, the Bank has been a frontrunner in the industry so far as

the initiatives for Financial Inclusion is concerned. With its policy of inclusive growth, the

Bank’s mission is “Banking for Unbanked”. The Bank has launched a drive for biometric smart

card based technology enabled Financial Inclusion with the help of Business

Correspondents/Business Facilitators (BC/BF) so as to reach out to the last mile customer. The

Bank has started several innovative initiatives for marginal groups like rickshaw pullers,

vegetable vendors, dairy farmers, construction workers, etc. Bank has launched a welfare scheme

of adoption of village viz., “PNB VIKAS”. Under the scheme, Bank has selected 117 villages

(60 in lead districts and 57 in non lead district) in different circles for all-round improvement in

the living standards of the villagers. Besides, Bank has formed “PNB PRERNA”, an association

of the wives of the Bank’s senior management. The association through its voluntary initiatives

has undertaken activities like distribution of food to the poor and needy, provision of computers,

books, stationary items to poor girl students at various orphanages and schools etc.

42

Backed by strong domestic performance, the Bank is planning to realize its global aspirations.

Bank has opened one branch each at Kabul and Dubai, two branches at Hong Kong and an Off

Shore Banking Unit at Mumbai. In addition to the above, Bank has Representative offices at

Almaty, Dubai, Shanghai and Oslo, a wholly owned subsidiary in UK with 7 branches and a

subsidiary each in Kazakhstan & Bhutan, and joint venture with Everest Bank Ltd. Nepal.

During the year, Bank acquired majority equity stake of 63.64% in Dana Bank of Kazakhstan.

For 3QFY2011, PNB posted moderate net profit growth of 1.4% qoq and 7.8% yoy to

Rs.1,090cr, in line with our estimates of Rs.1,100cr. However, the bank reported higher

provisioning expenses, over 30% above estimates, which were offset by higher non-interest

income. We recommend Accumulate on the stock.

Strong business growth but pressure on asset quality persists: During the quarter, advances

grew by 6.0% qoq (29.8% yoy) to Rs.221,252cr, while deposits grew by 5.7% qoq (23.5% yoy)

to Rs.288,873cr. Asset quality continued to be under pressure, with gross NPAs rising by 12.8%

qoq and net NPAs increasing by 10.5% qoq. On a qoq basis, the annualised slippage ratio

increased by 14bp to 2.1%. The CASA ratio dropped to 39.1% from 40.6% in 2QFY2011. Yield

on funds increased by 10bp qoq to 8.25%, aided by the 100bp increase in base rate, which was

higher-than-peer average of ~70bp, while the cost of funds increased by 15bp sequentially to

4.54%. Reported NIMs expanded by 7bp sequentially to 4.13%. Consequently, NII increased by

7.6% sequentially to Rs.3,203cr (a healthy 37.5% increase yoy). The non-interest income

increased by 17.4% yoy to Rs.857cr, despite a 44.6% reduction in treasury gains. Operating

expenses increased substantially by 7.3% qoq and 37.7% yoy, led by the 46.9% yoy increase in

employee costs and 19.0% yoy increase in other operating expenses.

Outlook and valuation: Post the recent correction in the stock, it is trading at 1.5x FY2012E

ABV of Rs.741 v/s its five-year range of 1.1–1.6x and median of 1.4x. We recommend an

43

Accumulate rating on the stock with a Target Price of Rs.1,259 (earlier Rs.1,341), valuing it at a

multiple at 1.7x FY2012E ABV

44

Strong business growth

During the quarter, advances grew sequentially by 6.0% (29.8% yoy) to Rs.221,252cr, while

deposits grew sequentially by 5.7% to Rs.288,873cr (23.5% yoy). On a yoy basis, saving

deposits increased by 23.7% to Rs.89,860cr, while current deposits rose by 15.5% to

Rs.22,945cr. Overall CASA deposits increased to Rs.112,806cr in 3QFY2011 from Rs.92,492cr

in 3QFY2010, recording growth of 22%. However, sequentially, CASA deposits only grew by

45

1.6% as compared to the 8.4% increase in term deposits. Consequently, the CASA ratio dropped

to 39.1% from 40.6 in 2QFY2011.

The bank saw robust 76.5% yoy growth in overseas gross advances to Rs.10,817cr (4.8% of

overall gross advances) from Rs.6,973cr (3.7% of overall gross advances), partly due to

concentrated efforts on overseas expansion and partly due to a small base effect.

The bank increased its exposure to the infrastructure sector to Rs.33,787cr (up 49.7% yoy and

comprising 15.3% of overall advances) from Rs.22,567cr (10.8% of overall advances) in

3QFY2010.

46

NIMs high, but likely to come down going forward

During the quarter, the yield on funds increased by 10bp sequentially to 8.25%, aided by the

100bp increase in base rate, which was higher-than-peer average of ~70bp, while the cost of

funds increased by 15bp sequentially to 4.54%. Reported NIMs expanded by 7bp sequentially to

4.13%. Consequently, NII increased by 7.6% sequentially (a healthy 37.5% increase you) to

Rs.3,203cr.

The bank has continuously maintained high reported NIMs at ~4% over the last year. However,

going forward, with rising cost of funds, we expect calculated FY2012E NIMs to moderate by

~25bp to 3.5% from 3.8% in FY2011E.

47

Healthy core non-interest income

Non-interest income increased by 17.4% yoy to Rs.857cr, despite a 44.6% reduction in treasury

gains. Non-interest income, excluding treasury gains, gained healthy 34.4% yoy to Rs.770cr.

Recoveries from written-off accounts grew by strong 59.7% yoy to Rs.123cr.

Asset quality pressures persist

PNB’s gross NPAs increased, in absolute terms, by 12.8% qoq to Rs.4,541cr and net NPAs rose

by 10.5% qoq to Rs.1,575cr. Gross slippages for the quarter stood at Rs.977cr (Rs.911cr in

2QFY2011), indicating an annualised slippage ratio of 2.1% (2.0% in 2QFY2011). Gross NPA

ratio deteriorated to 2.0% (as against 1.9% in 2QFY2011). Net NPA ratio remained stable at

48

0.7%. The bank’s provision coverage ratio including technical write-offs stood at 77.2% (77.1%

in 2QFY2011).

The bank made provisions of Rs.555cr towards NPAs in 3QFY2011, compared to Rs.359cr in

2QFY2011 and Rs.329cr in 2QFY2010. Provision for investments stood at Rs.44cr, compared to

Rs.65cr in 2QFY2011.

49

Operating costs rise due to employee benefit provisions

Operating expenses increased by substantial 7.3% qoq and 37.7% yoy, driven by the 46.9% yoy

increase in employee costs and 19.0% yoy increase in other operating expenses. The cost-to-

income ratio stood at 42.1% (43.2% in 2QFY2011 and 40.6% in 3QFY2010).

The increase in employee expenses was attributable to provisions (Rs.360cr) made on account of

gratuity (Rs.125cr) and second pension option (Rs.235cr) during the quarter. Management

indicated that the total second option pension provision liability is expected to be ~Rs.3,600cr as

against earlier estimates of Rs.2,500cr. We have accordingly raised our operating expense

estimates for FY2012 from Rs.7,014cr to Rs.7,427cr.

Comfortable capital adequacy

The bank’s CAR stood at 11.9% at the end of 3QFY2011, with tier-I ratio of 7.6%. Including the

nine-month profit till 3QFY2011, CAR stands at healthy 13.3% with tier-I of 9.0%.

50

Investment arguments :

Strong CASA legacy, but losing market share

PNB has a structural advantage of having a high CASA ratio of 39.1%, which is driven by strong

rural and semi-urban presence, especially in North India (total of 4,787 branches and 4,400

ATMs). This should act as a strong cushion in the current rising rate environment, and we have

accordingly factored in a moderate ~25bp decline in calculated NIMs in FY2012E to 3.5% from

3.8% in FY2011E. That said, the bank is losing market share like most other PSBs on account of

slow branch expansion and competition from private banks – savings market share was down by

50bp to 7.1% during FY2007–10.

Higher slippages in 3QFY2011

On a qoq basis, the annualised slippage ratio increased by 14bp to 2.1%. Fresh additions stood at

Rs.977cr (higher by Rs.66cr compared to 2QFY2011) and deductions stood at Rs.460cr (lower

by Rs.39cr compared to 2QFY2011). Provisions for NPAs increased by 54.6% qoq to Rs.555cr

(Rs.359cr in 2QFY2011) to compensate for high slippages witnessed in this quarter.

51

Asset quality continued to be under pressure, with gross NPAs rising by 12.8% qoq and net

NPAs increasing by 10.5% qoq. The provision coverage ratio including technical write-offs

stood at 77.2% compared to 77.1% in 2QFY2011. Management is expecting better recoveries

and upgradation in the coming quarters, which could curb the recent increase in slippages.

In our view, the bank’s strategy of high growth in advances at relatively high yields could

contribute to relatively higher deterioration in asset quality and NIM compression going forward.

52

CHAPTER 4

SIGNIFICANCE OF

THE STUDY

53

4. SIGNIFICANCE OF THE STUDY

For achieving the marketing of services, need of every bank is to provide satisfied and

efficient services to the consumer so as to:-

– achieve competitive advantage by creating value for the customers

– ensure that enough value is created in the sale to bring customers back for more

– build and maintain mutually satisfying relationship with customers.

Main scope of the bank for the marketing of services through different channels is to

provide the best they can do to secure and retain the customers and for:-

a. Efficient and courteous customer service

b. Attractive and innovative schemes

c. Developing subsidiary services

d. Aggressive personalized selling strategy

54

CHAPTER 5

OBJECTIVE OF

STUDY

55

5. OBJECTIVE OF STUDY

The objectives of study are as follows:

To know the perception of the consumers about the quality, features, services and products of

the various private banks and nationalized banks.

To assess the preference of customers regarding different private and nationalized banks

present in the market.

To know the effectiveness of ATM of various banking services on the customers.

To know the different strategies of marketing adopted by different banks through their

websites and its performance.

To study availing loan through banks for needs and their future prospects.

56

CHAPTER 6

RESEARCH METHODOLOGY

57

6. RESEARCH METHODOLOGY

Research Plan:

The research study is descriptive in nature. The established objectives were kept in mind during

the study, however no hypothesis was formed as the study was more in the form of descriptive

design attempting to analyze the attitude of respondents towards the project.

Literature Survey:

In order to be familiar with the topic and to know the views of various experts of marketing, a

literature survey done. The intention behind this was to get full knowledge about the topic.

Data Collection:

The Core finding of the study was based upon the information collected through primary data i.e.

information was collected from respondent with the help of structured questionnaire.

Measurement Technique:

A structured questionnaire was administrated for the purpose of obtaining information from the

respondents. Much care been taken to put the related to the subject, the questionnaire was

contain closed ended logical questions.

MODE OF DATA COLLECTION :

The study is based on both Primary and Secondary data which includes:

a) Primary Data: The Primary Data was gathered through questionnaires.

b) Secondary Data: Secondary Data was gathered from internet websites on banking services.

58

c) Sample Size

100 Samples were taken.

100 Customers (25 each fromAxis Bank, ICICI Bank, State Bank of Patiala and Punjab

National Bank )

SAMPLE DESIGN:

A sample design is a definite plan determined before any data are actually collected for obtaining

a sample from a given population. It includes:

Universe: Universe refers to the total of the items or units in any field of inquiry.

In my study, Universe is: All the Banks and marketing of their services.

Population: Population refers to the total of items about which information is desired.

In my study, Population is Consumer of Private and Nationalised banks in

Mohali.

Sample Size: The sample consists of Axis Bank, ICICI Bank, State Bank of Patiala and

Punjab National Bank, Mohali.

Sample Unit: Sample unit may be a geographical one such as state, district, village etc.

or it may be an individual also. I have selected a unit i.e. consumer for

conducting the research.In my study, sample unit is Consumer of Private

and Nationalized bank in Mohali.

Sampling technique: In the study the sample was chosen on the basis of convenience sample.

Contact Method: The respondents sampling personally and a structured questionnaire was

got filled from them. a report questionnaire was prepared to interview the

customers.

59

CHAPTER 7

Data Analysis and Interpretation

60

7. Data Analysis and Interpretation

Section - A

Gender:

TABLE: 1

Male 83

Female 17

GRAPH: 1

83%

17%

GENDER

Male Female

INTERPRETATION: According to 100 respondents 83% of them are male and rest 17% of

them are females.

61

Age in Years:

TABLE: 2

Below 30 60

30 but below 45 25

45 but below 60 11

Above 60 4

GRAPH: 2

60

25

114

Chart Title

Below 30 30 but below 45 45 but below 60 Above 60

INTERPRETATION: According to 100 respondents 60% of them are below 30 years, 25% of

them are 30 but below 45 years, 11% of them are 45 but below 60 years and rest 4% of them are

above 60 years of age.

Education: 62

TABLE: 3

Below matric 7

Matric but under Graduate 16

Graduate 42

Post Graduate 20

Professional Degree 15

GRAPH: 3

7% 16%

42%

20%

15%

EDUCATIONBelow matric Matric but under Graduate Graduate Post Graduate

Professional Degree

INTERPRETATION: According to 100 respondents 7% of them are below matric, 16% of

them are matric but under graduate, 42% of them are graduates, 20% of them are post graduate

and rest 15% of them are having professional degree.

63

Yearly Income:

TABLE: 4

Below 2 lac 20

2 to 5 lac 67

5 to 8 lac 11

Above 8 lac 2

GRAPH: 4

20%

67%

11%2%

YEARLY INCOME

Below 2 lac 2 to 5 lac 5 to 8 lac Above 8 lac

INTERPRETATION: According to 100 respondents 20% of their yearly income is below 2 lac,

67% of their yearly income is 2 to 5 lac, 11% of their yearly income is 5 to 8 lac and rest their

yearly income is above 8 lacs.

64

Occupation:

TABLE: 5

Businessman 33

Service Man 26

Agriculturist 12

Professional 27

Any other 2

GRAPH: 5

33%

26%12%

27% 2%

OCCUPATION

Businessman Service Man Agriculturist Professional Any other

INTERPRETATION: According to 100 respondents 33% of them are businessman, 26% of

them are service man, 12% of them are agriculturist, 27% of them are professional and rest 2%

of them are any other.

65

Section - B

Q1. In which of the following bank you have an account?

TABLE: 1

Axis Bank 25ICICI Bank 25State Bank of Patiala 25Punjab National Bank 25

GRAPH: 1

25%

25%25%

25%

Axis Bank ICICI BankState Bank of Patiala Punjab National Bank

INTERPRETATION: According to 100 respondents 25% of them are having a/c in Axis Bank,

25% of them are having a/c in ICICI Bank, 25% of them are having a/c in State Bank of Patiala,

and rest 25% of them are having a/c in Punjab National Bank.

66

Q2. Which type of accounts you have with the bank?

TABLE: 2

Axis Bank ICICI BankState Bank of Patiala

Punjab National Bank

Saving A/c 19 18 16 15Fixed Deposit A/c 5 6 7 6current A/c 1 4 3 3Loan A/c 0 2 3 1

GRAPH: 2

Axis Bank ICICI Bank State Bank of Patiala Punjab National Bank

1918 16 15

5

6 76

0 2 3 1

Saving A/c Fixed Deposit A/c current A/c Loan A/c

INTERPRETATION: According to 25 respondents of Axis Bank 19 of them are having saving a/c, 5 of them are having fixed a/c and rest 1 of them are having current a/c.

According to 25 respondents of ICICI Bank 18 of them are having saving a/c, 6 of them are having fixed a/c, 4 of them are having current a/c and rest 2 of them are having loan a/c in this bank.

According to 25 respondents of State Bank of Patiala Bank 16 of them are having saving a/c, 7 of them are having fixed a/c, 3 of them are having current a/c and rest 3 of them are having loan a/c in this bank.

According to 25 respondents of Punjab National Bank 15 of them are having saving a/c, 6 of them are having fixed a/c, 3 of them are having current a/c and rest 1 of them are having loan a/c in this bank.

67

Q3. Which of the following factors influenced you most while opening an account in the

Bank?

TABLE: 3

Axis Bank

ICICI Bank

State Bank of Patiala


Advertisement 5 7 3 6Advise of a friends 7 9 6 8Familiarity with bank employees 11 13 12 11Advise of existing customers of the bank 15 13 12 10Near to home/Office 8 10 9 7A/c of other family members 12 14 13 10Office salary transferred in the bank 5 3 4 6Brand name 9 13 5 6Any other 2 2 1 3

GRAPH: 3

Adve

rtise

men

t

Advi

se o

f a fr

iends

Fam

iliar

ity w

ith b

ank

emplo

yees

Advi

se o

f exi

sting

cust

omer

s of t

he...

Nea

r to

hom

e/O

ffice

A/c

of o

ther

fam

ily m

ember

s

Offi

ce sal

ary

tran

sfer

red in

the

bank

Brand n

ame

Any

other

5 7 11 15 8 12 5 9 2

7 9 13 13 10 14 313

2

3 6 12 12 9 134

5

1

6 8 11 10 7 106

63


INTERPRETATION: According to 25 respondents of Axis Bank 5 of them are influenced by

advertisement, 7 of them are influenced by Advise of friends, 11 of them are influenced by

Familiarity with bank employees, 15 of them are influenced by Advise of existing customers of

the bank, 8 of them are influenced by Near to home/Office, 12 of them are influenced by A/c of

other family members, 5 of them are influenced by Office salary transferred in the bank, 9 of

them are influenced by Brand name and rest 2 of them are influenced by Any other source.

According to 25 respondents of ICICI Bank 7 of them are influenced by advertisement, 9

of them are influenced by Advise of friends, 13 of them are influenced by Familiarity with bank

employees, 13 of them are influenced by Advise of existing customers of the bank, 10 of them 68

are influenced by Near to home/Office, 14 of them are influenced by A/c of other family

members, 3 of them are influenced by Office salary transferred in the bank, 13 of them are

influenced by Brand name and rest 2 of them are influenced by Any other source.

According to 25 respondents of State Bank of Patiala Bank 3 of them are influenced by






According to 25 respondents of Punjab National Bank 6 of them are influenced by






Q4. Which of the following service/products your bank provides(please tick)?

69

TABLE:4

Axis Bank ICICI Bank State Bank of Patiala


Saving A/c. 25 25 25 25Current A/c. 25 25 25 25Fixed Deposit A/c.

20 18 25 25

Semi Fixed Deposit(flexi) A/c.

10 12 5 7

Salary plus 7 9 3 5Housing Loan 22 19 15 20Educational Loan 8 6 14 12Consumer Loan 10 13 17 11Personal Loan 14 17 7 9Auto Loan 20 22 24 21Loan against Securities

8 5 11 10

Demat Services 15 12 8 7Over draft facility

5 4 7 3

Letter of credit 0 0 0 0Discounting of Bills

7 3 0 0

Internet Banking 15 17 21 16Mobile banking 25 25 22 23Home Banking 13 18 19 12ATM Facility 25 25 25 25Credit Cards 17 14 17 15Debit cards 12 16 13 17Locker Facility 7 8 10 9

GRAPH: 4

70

Saving A/c.

Current A

/c.

Fixed Deposit

A/c.

Semi Fixed Deposit(

fl...Salary p

lus

Housing Lo

an

Educational Loan

Consumer Loan

Personal Lo

an

Auto Loan

Loan against Securi...

Demat Services

Over draft facility

Letter of credit

Discounting of B

ills

Internet Bankin

g

Mobile banking

Home Banking

ATM Facility

Credit Cards

Debit cards

Locker Facili

ty

25 25 2010 7

228 10 14 20

8 150 5 0 7 15

2513

25 17 12 7

25 2518

129

19

613

1722

512

04

03

17

25

18

25

14 168

25 25

25

53

15

1417 7

24

11

8

0

7

00

21

22

19

25

1713

10

25 25

25

75

20

12

11 9

21

107

0

3

00

16

23

12

25

1517

9


INTERPRETATION: According to 25 respondents of Axis Bank all says that bank provides the service of Saving accounts and current accounts, 20 of them says that bank provides the services of fixed deposits a/c’s, 10 of them says that bank provides the services of semi fixed deposits accounts, 7 of them says that bank provides the services of share plus, 22 of them says that bank provides the services of housing loan, 8 of them says that bank provides the services of education loan, 10 of them says that bank provides the services of consumer loan, 14 of them says that bank provides the services of personal loan, 20 of them says that bank provides the services of auto loan, 8 of them says that bank provides the services of loan against securities, 15 of them says that bank provides the services of Demat a/c, 5 of them says that bank provides the facilities of overdrafts, There is no response for the facility of Letter of Credit, 7 of them says that bank provides the services of Discounting of bills, 15of them says that bank provides the services of Internet banking, 25 of them says that bank provides the services of mobile banking, 13 of them says that bank provides the services of home banking, 25 of them says that bank provides the facility of ATMs, 17 of them says that bank provides the facility of Credit cards, 12 of them says that bank provides the facility of Debit cards, 7 of them says that bank provides the Locker facilities.

According to 25 respondents of ICICI Bank all says that bank provides the service of Saving accounts and current accounts, 18 of them says that bank provides the services of fixed deposits a/c’s, 12 of them says that bank provides the services of semi fixed deposits accounts, 9 of them says that bank provides the services of share plus, 19 of them says that bank provides the services of housing loan, 6 of them says that bank provides the services of education loan, 13of

71

them says that bank provides the services of consumer loan, 17 of them says that bank provides the services of personal loan, 22 of them says that bank provides the services of auto loan, 5 of them says that bank provides the services of loan against securities, 12 of them says that bank provides the services of Demat a/c, 4 of them says that bank provides the facilities of overdrafts, There is no response for the facility of Letter of Credit, 3 of them says that bank provides the services of Discounting of bills, 17of them says that bank provides the services of Internet banking, 25 of them says that bank provides the services of mobile banking, 18 of them says that bank provides the services of home banking, 25 of them says that bank provides the facility of ATMs, 14 of them says that bank provides the facility of Credit cards, 16 of them says that bank provides the facility of Debit cards, 8 of them says that bank provides the Locker facilities.

According to 25 respondents ofState Bank of PatialaBank all says that bank provides the service of Saving accounts,Current accounts and fixed deposits a/c’s, 5 of them says that bank provides the services of semi fixed deposits accounts, 3 of them says that bank provides the services of share plus, 15 of them says that bank provides the services of housing loan, 14 of them says that bank provides the services of education loan, 17 of them says that bank provides the services of consumer loan, 7 of them says that bank provides the services of personal loan, 24 of them says that bank provides the services of auto loan, 11 of them says that bank provides the services of loan against securities, 8 of them says that bank provides the services of Demat a/c, 7 of them says that bank provides the facilities of overdrafts, There is no response for the facility of Letter of Credit and Discounting of bills, 21of them says that bank provides the services of Internet banking, 22 of them says that bank provides the services of mobile banking, 19 of them says that bank provides the services of home banking, 25 of them says that bank provides the facility of ATMs, 17of them says that bank provides the facility of Credit cards, 13 of them says that bank provides the facility of Debit cards, 10 of them says that bank provides the Locker facilities.

According to 25 respondents ofPunjab NationalBank all says that bank provides the service of Saving accounts,Current accounts and fixed deposits a/c’s, 7 of them says that bank provides the services of semi fixed deposits accounts, 5 of them says that bank provides the services of share plus, 20 of them says that bank provides the services of housing loan, 12 of them says that bank provides the services of education loan, 11 of them says that bank provides the services of consumer loan, 9 of them says that bank provides the services of personal loan, 21 of them says that bank provides the services of auto loan, 10 of them says that bank provides the services of loan against securities, 7 of them says that bank provides the services of Demat a/c, 3 of them says that bank provides the facilities of overdrafts, There is no response for the facility of Letter of Credit and Discounting of bills, 16of them says that bank provides the services of Internet banking, 23 of them says that bank provides the services of mobile banking, 12 of them says that bank provides the services of home banking, 25 of them says that bank provides the facility of ATMs, 15of them says that bank provides the facility of Credit cards, 17 of them says that bank provides the facility of Debit cards, 9 of them says that bank provides the Locker facilities.

Q5. How do you generally come to know about the existing or new services/ products offered by your bank?

72

TABLE: 5

Axis Bank

ICICI Bank



Through advertisement 7 9 6 8Through staff of the bank 9 12 8 11Through manager of the bank 5 11 4 7Through funds 4 10 3 5Through existing customers of the bank 3 6 4 3Through website of your bank 4 9 6 8Through customer meetings 3 7 2 5Any other 2 3 1 2

GRAPH: 5

Thro

ugh a

dverti

sem

ent

Thro

ugh st

aff o

f the

bank

Thro

ugh m

anag

e of t

he ban

k

Thro

ugh fu

nds

Thro

ugh e

xisti

ng cu

stom

ers o

f the

bank

Thro

ugh w

ebsit

e of y

our ban

k

Thro

ugh cu

stom

er m

eetings

Any oth

er7 9 5 4 3 4 3 2

9 12 11 10 6 9 7 36 8 4 3 4

6 2 18 11 7 5 3 8 5 2


INTERPRETATION: According to 25 respondents of Axis Bank 7 of them say that they come

to know about the existing or new services/ products offered by bank through advertisement, 9 of

them say that they come to know about the existing or new services/ products offered by bank

through staff of the bank, 5 of them say that they come to know about the existing or new

services/ products offered by bank through manager of the bank, 4 of them say that they come to

know about the existing or new services/ products offered by bank through funds, 3 of them say

that they come to know about the existing or new services/ products offered by bank through

existing customers of the bank, 4 of them say that they come to know about the existing or new

services/ products offered by bank through website of your bank, 3 of them say that they come to

know about the existing or new services/ products offered by bank through customer meetings

73

and rest 2 of them say that they come to know about the existing or new services/ products

offered by bank through Any other sources.

According to 25 respondents of ICICI Bank 9 of them say that they come to know about

the existing or new services/ products offered by bank through advertisement, 12 of them say


staff of the bank, 11 of them say that they come to know about the existing or new services/

products offered by bank through manager of the bank, 10 of them say that they come to know

about the existing or new services/ products offered by bank through funds, 6 of them say that

they come to know about the existing or new services/ products offered by bank through existing

customers of the bank, 9 of them say that they come to know about the existing or new services/

products offered by bank through website of your bank, 7 of them say that they come to know

about the existing or new services/ products offered by bank through customer meetings and rest

3 of them say that they come to know about the existing or new services/ products offered by

bank through Any other sources.

According to 25 respondents of State Bank of Patiala Bank 6 of them say that they come

to know about the existing or new services/ products offered by bank through advertisement, 8 of










offered by bank through Any other sources..

According to 25 respondents of Punjab National Bank 8 of them say that they come to

know about the existing or new services/ products offered by bank through advertisement, 11 of




74







offered by bank through Any other sources..

75

Q6. Do they send you regular statements?

TABLE: 6



Yes 20 25 11 17

No 5 0 14 8

GRAPH: 6


20

25

11

17

5

0

14

8

Yes No

INTERPRETATION: According to 25 respondents of Axis Bank 20 of them say yes they send

regular statement and rest 5 of them say no they do not send regular statement.

According to 25 respondents of ICICI Bank 20 of them say yes they send regular

statement and rest 5 of them say no they do not send regular statement.

According to 25 respondents of State Bank of Patiala 20 of them say yes they send


According to 25 respondents of Punjab National Bank 20 of them say yes they send


76

Q7. At the time of selection of bank how would you rate the following factors?

TABLE: 7

Most Important Important

Neither important nor un-important.

Un- Important

Most Un- Important

Location of branches. 12 19 37 11 21Layout of branches. 21 32 29 10 8Promity of place of resident/ employment/business/ knowledgeable 23 39 20 11 7Behaviour of Staff. 29 33 38 0 0Familiarity with bank employees. 27 38 35 0 0Working Hours available. 21 37 36 6 0Qualities of services. 39 42 19 0 0No. of ATM’s 37 46 17 0 0Selling arrangements. 29 32 39 0 0Higher rate of interest on deposits. 36 40 24 0 0Lower rate of interest on Loans. 43 57 0 0 0Reasonable service charges. 19 27 40 40 4Minimum Balanced requirements. 12 17 39 39 10Any other specify 0 0 0 0 0

GRAPH: 7

Loca

tion of branch

es.

Layo

ut of b

ranches.

Promity of p

lace of re

sident/

employment/b

usiness/

knowledgeable

Behaviour o

f Staff.

Familia

rity w

ith bank e

mployees.

Working Hours

availa

ble.

Qualities o

f servi

ces.

No. of A

TM’s

Sellin

g arrangements.

Higher rate of in

terest on deposit

s.

Lower r

ate of interest

on Loans.

Reasonable servi

ce ch

arges.

Minimum Balance

d require

ments.

Any other s

pecify

12 21 23 29 27 21 39 37 29 36 4319 12 0

1932 39 33 38 37

42 4632

4057

27 170

3729 20 38 35 36

19 1739 24

0

40 39

0

1110 11

0 0 6 0 0 0 0 040 39

0

21 8 7 0 0 0 0 0 0 0 0 4 10

0

Most Important Important Neither important nor un-important. Un Important

Most Un Important

INTERPRETATION: According to the 100 respondentsof banks 12 of them say that location of branches is most important at the time of selection of bank, 19 of them say that location of

77

branches is important at the time of selection of bank, 37 of them say that location of branches is neither important nor unimportantat the time of selection of bank, 11 of them say that location of branches is unimportantat the time of selection of bank, and rest 21 of them say that location of branches is most unimportantat the time of selection of bank

According to the 100 respondentsof banks 21 of them say that Layout of branches is most important at the time of selection of bank, 32 of them say that Layout of branches is important at the time of selection of bank, 29 of them say that Layout of branches is neither important nor unimportantat the time of selection of bank, 10 of them say that Layout of branches is unimportantat the time of selection of bank, and rest 8 of them say that Layout of branches is most unimportantat the time of selection of bank.

According to the 100 respondentsof banks 23 of them say that Promity of place of resident/ employment/business/ knowledgeable is most important at the time of selection of bank, 39 of them say that Promity of place of resident/ employment/business/ knowledgeable is important at the time of selection of bank, 20 of them say that Promity of place of resident/ employment/business/ knowledgeable is neither important nor unimportantat the time of selection of bank, 11 of them say that Promity of place of resident/ employment/business/ knowledgeable is unimportantat the time of selection of bank, and rest 7 of them say that Promity of place of resident/ employment/business/ knowledgeable is most unimportantat the time of selection of bank.

According to the 100 respondentsof banks 29 of them say that Behaviour of Staff is most important at the time of selection of bank, 33 of them say that Behaviour of Staff is important at the time of selection of bank, and rest 38 of them say that Behaviour of Staff is neither important nor unimportantat the time of selection of bank.

According to the 100 respondentsof banks 27 of them say that familiarity with bank employees is most important at the time of selection of bank, 38 of them say that familiarity with bank employees is important at the time of selection of bank, and rest 35 of them say that familiarity with bank employees is neither important nor unimportantat the time of selection of bank.

According to the 100 respondentsof banks 21 of them say that working hours available is most important at the time of selection of bank, 37 of them say that working hours available is important at the time of selection of bank, 36 of them say that working hours available is neither important nor unimportantat the time of selection of bank, and rest 6 of them say that working hours availableis unimportant at the time of selection of bank.

According to the 100 respondentsof banks 39 of them say that qualities of service is most important at the time of selection of bank, 42 of them say that qualities of service is important at the time of selection of bank, and rest 19 of them say that qualities of service is neither important nor unimportantat the time of selection of bank.

78

According to the 100 respondentsof banks 37 of them say that no. of ATM’s is most important at the time of selection of bank, 46 of them say that no. of ATM’s is important at the time of selection of bank, and rest 17 of them say that no. of ATM’sis neither important nor unimportantat the time of selection of bank.

According to the 100 respondentsof banks 29 of them say that selling arrangements is most important at the time of selection of bank, 32 of them say that selling arrangements is important at the time of selection of bank, and rest 39 of them say that selling arrangementsis neither important nor unimportantat the time of selection of bank.

According to the 100 respondentsof banks 36 of them say that higher rate of interest on deposits is most important at the time of selection of bank, 40 of them say that higher rate of interest on deposits is important at the time of selection of bank, and rest 24 of them say that higher rate of interest on deposits is neither important nor unimportantat the time of selection of bank.

According to the 100 respondentsof banks 43 of them say that lower rate of interest on loans is most important at the time of selection of bank, and rest 57 of them say that lower rate of interest on loans is important at the time of selection of bank.

According to the 100 respondentsof banks 19 of them say that reasonable service charges is most important at the time of selection of bank, 27 of them say that reasonable service is important at the time of selection of bank, 40 of them say that reasonable service is neither important nor unimportantat the time of selection of bank, 10 of them say that reasonable service is unimportant at the time of selection of bank and rest 4 of them say thatreasonable service is most unimportant at the time of selection of bank.

According to the 100 respondentsof banks 12 of them say that minimum balanced requirements is most important at the time of selection of bank, 17 of them say that minimum balanced requirements is important at the time of selection of bank, 39 of them say that minimum balanced requirements is neither important nor unimportantat the time of selection of bank, 22 of them say that minimum balanced requirements is unimportant at the time of selection of bank and rest 10 of them say thatminimum balanced requirements is most unimportant at the time of selection of bank.

79

Q8. How often do you use ATM in a month?

TABLE: 8



Less then 3 times 7 1 9 65 times 11 12 9 105 to 10 times 5 9 6 7More then 10 2 3 1 2

GRAPH: 8


7

1

96

11

12

9

10

5

9

67

2 31 2

Less then 3 times 5 times 5 to 10 times More then 10

INTERPRETATION: According to 25 respondents of Axis Bank 7 of them say that they use

their ATM Less than 3 times, 1 of them say that they use their ATM 5 times in a month, 9 of

them say that they use their ATM 5 to 10 times in a month and rest 6 of them say that they use

their ATM more than 10in a month.

According to 25 respondents of ICICI Bank 11 of them say that they use their ATM Less

than 3 times, 12 of them say that they use their ATM 5 times in a month, 9 of them say that they

use their ATM 5 to 10 times in a month and rest 10 of them say that they use their ATM more

than 10 in a month.

According to 25 respondents of State Bank of Patiala Bank 5 of them say that they use

their ATM Less than 3 times, 9 of them say that they use their ATM 5 times in a month, 6 of

80

them say that they use their ATM 5 to 10 times in a month and rest 7 of them say that they use

their ATM more than 10in a month.

According to 25 respondents of Punjab National Bank 2 of them say that they use their

ATM Less than 3 times, 3 of them say that they use their ATM 5 times in a month, 1of them say

that they use their ATM 5 to 10 times in a month and rest 2 of them say that they use their ATM

more than 10in a month.

81

Q9. Have you even faced any problem with ATM ?

TABLE: 9

Axis Bank

ICICI Bank



Waiting in long Que 5 4 6 5Inserting card in correctly 3 2 4 2Limit on daily withdrawal 3 2 3 3Light problem 0 0 1 0ATM working too slowly 1 2 1 1Incorrect amount of cash dispensed 1 1 2 1ATM not able to prints slips when demanded 2 1 3 2Balance deducted but cash does not received 1 1 2 1Currency is not proper 2 1 1 2No choice of currency option 1 1 1 1None of the above 6 10 1 7any other 0 0 0 0

GRAPH: 9

Waiting in

long Q

ue

Inserting c

ard in

corre

ctly

Limit o

n daily with

drawal

Light p

roblem

ATM worki

ng too slo

wly

Incorrect a

mount of ca

sh dispen

sed

ATM not a

ble to prin

ts slip

s when

deman

ded

Balance

deducte

d but cash does

not recei

ved

Currency

is not p

roper

No choice

of curre

ncy option

None of th

e above

any o

ther

5 3 30

1 1 2 1 2 1 60

4 2 2

0

21 1 1

1 110

0

6 4 31

12 3 2 1 1 1

0

5 2 30

1 1 2 1 2 1 7

0


INTERPRETATION: According to 25 respondents of Axis Bank 5 of them say that they faced

problems with ATM’s due to Waiting in a long que, 3 of them say that they faced problems with

ATM’s due to Inserting card Incorrectly, 3 of them say that they faced problems with ATM’s

82

due to the Limit on daily withdrawals, There is no respondent faced problem with ATM’s due to

Light problem, 1 of them says that they faced a problem with ATM’s due to ATM working too

slowly, 1 of them says that they faced a problem with ATM’s due to Incorrect amount of cash

dispensed, 2 of them say that they faced problem with ATM’s due to ATM is not able to prints

slips when demanded, 1 of them says that they have a problem due to Balance deduct but cash

does not received, 2 of them say that they have a problem due to Currency is not proper in

ATM’s machines, 1 of them says that they have a problem due to No choice of currency option

in ATM’s machines, 6 of them say that they have no problem of the above, There is no response

for any other option.

According to 25 respondents of ICICI Bank 4 of them say that they faced

problems with ATM’s due to Waiting in a long que, 2 of them say that they faced problems with

ATM’s due to Inserting card Incorrectly, 2 of them say that they faced problems with ATM’s

due to the Limit on daily withdrawals, There is no respondent faced problem with ATM’s due to

Light problem, 2 of them say that they faced a problem with ATM’s due to ATM working too

slowly, 1 of them says that they faced a problem with ATM’s due to Incorrect amount of cash

dispensed, 1 of them says that they faced problem with ATM’s due to ATM is not able to prints

slips when demanded, 1 of them says that they have a problem due to Balance deduct but cash

does not received, 1 of them says that they have a problem due to Currency is not proper in

ATM’s machines, 1 of them says that they have a problem due to No choice of currency option

in ATM’s machines, 10 of them say that they have no problem of the above, There is no

response for Any other option.

According to 25 respondents of State Bank of Patiala 6 of them say that they

faced problems with ATM’s due to Waiting in a long que, 4 of them say that they faced

problems with ATM’s due to Inserting card Incorrectly, 3 of them say that they faced problems

with ATM’s due to the Limit on daily withdrawals, 1 of them says that he faced problem with

ATM’s due to Light problem, 1 of them says that they faced a problem with ATM’s due to ATM

working too slowly, 2 of them say that they faced a problem with ATM’s due to Incorrect

amount of cash dispensed, 3 of them says that they faced problem with ATM’s due to ATM is

not able to prints slips when demanded, 2 of them say that they have a problem due to Balance

deduct but cash does not received, 1 of them says that they have a problem due to Currency is

not proper in ATM’s machines, 1 of them says that they have a problem due to No choice of

83

currency option in ATM’s machines, 1 of them says that they have no problem of the above,

There is no response for Any other option.

According to 25 respondents of Punjab National Bank 5 of them say that they

faced problems with ATM’s due to Waiting in a long que, 2 of them say that they faced

problems with ATM’s due to Inserting card Incorrectly, 3 of them say that they faced problems

with ATM’s due to the Limit on daily withdrawals, None of the respondent faced problem with

ATM’s due to Light problem, 1 of them says that they faced a problem with ATM’s due to ATM

working too slowly, 1 of them says that they faced a problem with ATM’s due to Incorrect

amount of cash dispensed, 2 of them says that they faced problem with ATM’s due to ATM is

not able to prints slips when demanded, 1 of them says that they have a problem due to Balance

deduct but cash does not received, 2 of them say that they have a problem due to Currency is not

proper in ATM’s machines, 1 of them says that they have a problem due to No choice of

currency option in ATM’s machines, 7 of them say that they have no problem of the above,

There is no response for Any other option.

84

Q10. Your opinion regarding information displayed on site ?

TABLE: 10

Axis BankICICI Bank



Sufficient 12 17 5 11In Sufficient 4 2 6 3

GRAPH: 10


1217

5

11

42

6

3

Sufficient In Sufficient

INTERPRETATION: According to 16 respondents of Axis Bank 12 of them say that there is sufficientinformation displayed on site and rest 4 of them say that there is in sufficient information displayed on site

According to 19 respondents of ICICI Bank 17 of them say that there is sufficientinformation displayed on site and rest 2 of them say that there is in sufficient information displayed on site

According to 11 respondents of State Bank of Patiala Bank 5 of them say that there is sufficientinformation displayed on site and rest 6 of them say that there is in sufficient information displayed on site

According to 14 respondents of Punjab National Bank 11 of them say that there is sufficientinformation displayed on site and rest 3 of them say that there is in sufficient information displayed on site

85

Q11. Have you ever availed or tried to avail the loan from bank?

TABLE: 11



Yes 7 11 10 9No 18 14 15 16

GRAPH: 11


711 10 9

1814 15 16

Yes No

INTERPRETATION: According to 25 respondents of Axis Bank 7 of them say yes they have availed or tried to avail the loan from bank and rest 18 of them say no they have not availed or tried to avail the loan from bank.

According to 25 respondents of ICICI Bank 11 of them say yes they have availed or tried to avail the loan from bank and rest 14 of them say no they have not availed or tried to avail the loan from bank.

According to 25 respondents of State Bank of Patiala Bank 10 of them say yes they have availed or tried to avail the loan from bank and rest 15 of them say no they have not availed or tried to avail the loan from bank.

According to 25 respondents of Punjab National Bank 16 of them say yes they have availed or tried to avail the loan from bank and rest 9 of them say no they have not availed or tried to avail the loan from bank.

86

Q12. Was the disbursed amount sufficient to meet your needs?

TABLE: 12



Yes 3 4 3 4No 4 7 7 5

GRAPH: 12


3 4 34

4 7 75

Yes No

INTERPRETATION: According to 7 respondents of Axis Bank 3 of them say yes the disbursed amount sufficient to meet their needs and rest 4 of them say no the disbursed amount is not sufficient to meet their needs.

According to 11 respondents of ICICI Bank 4 of them say yes the disbursed amount sufficient to meet their needs and rest 7 of them say no the disbursed amount is not sufficient to meet their needs.

According to 10 respondents of State Bank of Patiala Bank 3 of them say yes the disbursed amount sufficient to meet their needs and rest 7 of them say no the disbursed amount is not sufficient to meet their needs.

According to 9 respondents of Punjab National Bank 4 of them say yes the disbursed amount sufficient to meet their needs and rest 5 of them say no the disbursed amount is not sufficient to meet their needs.

87

If No tick the other sources from where you raise extra money to fulfill your needs

TABLE:



Any other bank 0 1 1 0Friends & relatives 2 3 4 3Financial institution 1 2 1 1Any other 1 1 1 1

GRAPH:


01 1

0

2

34

3

12

11

11 1 1

Any other bank Friends & relatives Financial institution Any other

INTERPRETATION: According to 4 respondents of Axis Bank 1 of them say that friends and

relatives raise extra money to fulfill their needs, 1 of them say that financial institutional raise

extra money to fulfill their needs and rest 1 of them say that any other source raise extra money

to fulfill their needs.

According to 7 respondents of ICICI Bank 1 of them say that any other bank raise extra

money to fulfill their needs, 3 of them say that friends and relatives raise extra money to fulfill

their needs, 2 of them say that financial institutional raise extra money to fulfill their needs, and

rest 1 of them say that financial institutional raise extra money to fulfill their needs.

88

According to 7 respondents of State Bank of Patiala Bank 9 of them say they are highly

satisfactory regarding the overall working of their bank, 7 of them say they are satisfactory

regarding the overall working of their bank, 6 of them say they are neither satisfied nor

dissatisfactory and rest 3 of them say they are dissatisfactory regarding the overall working of

their bank.

According to 5 respondents of Punjab National Bank 12 of them say they are highly




their bank.

89

Q13. What is your opinion regarding the overall working of your bank ?

TABLE: 13



Highly Satistory 11 14 9 12Satisfactory 4 5 7 5Neither Satisfactory nor Dissatisfactory

7 4 6 6

Dissatisfactory 3 2 3 2Highly Dissatisfactory 0 0 0 0

GRAPH: 13

Highly

Satisto

ry

Satisfa

ctory

Neither

Satisfa

ctory

nor Diss

atisfa

ctory

Dissatisfa

ctory

Highly

Dissati

sfacto

ry

11 4 7 30

14 5 4 2

0

9 7 6 3

0

12 5 6 2

0


INTERPRETATION: According to 25 respondents of Axis Bank 11 of them say they are

highly satisfactory regarding the overall working of their bank, 4 of them say they are

satisfactory regarding the overall working of their bank, 7 of them say they are neither satisfied

nor dissatisfactory and rest 3 of them say they are dissatisfactory regarding the overall working

of their bank.

According to 25 respondents of ICICI Bank 14 of them say they are highly satisfactory

regarding the overall working of their bank, 4 of them say they are satisfactory regarding the

overall working of their bank, 5 of them say they are neither satisfied nor dissatisfactory and rest

2 of them say they are dissatisfactory regarding the overall working of their bank.

90

According to 25 respondents of State Bank of Patiala Bank 9 of them say they are highly




their bank.

According to 25 respondents of Punjab National Bank 12 of them say they are highly




their bank.

91

Q14. In Your opinion the working of your bank over a period of time?

TABLE: 14



Improved 11 14 12 13Remained same 12 10 11 11Deteriorated 2 1 2 1

GRAPH: 14


1114

12 13

1210

1111

2 1 2 1

Improved Remained same Deteriorated

INTERPRETATION: According to 25 respondents of Axis Bank 11 of them say they are

improved while for working of their bank over a period of time, 12 of them say that they

remained same while for working of their bank over a period of time, and rest 2 of them say they

are deteriorated while for working of their bank over a period of time.

According to 25 respondents of ICICI Bank 14 of them say they are improved while for

working of their bank over a period of time, 10 of them say that they remained same while for

working of their bank over a period of time, and rest 1 of them say they are deteriorated while for

working of their bank over a period of time.

According to 25 respondents of State Bank of Patiala Bank 12 of them say they are

improved while for working of their bank over a period of time, 11 of them say that they 92

remained same while for working of their bank over a period of time, and rest 2 of them say they

are deteriorated while for working of their bank over a period of time.

According to 25 respondents of Punjab National Bank 13 of them say they are improved

while for working of their bank over a period of time, 11 of them say that they remained same

while for working of their bank over a period of time, and rest 1 of them say they are deteriorated

while for working of their bank over a period of time.

93

Q15. Give your opinion regarding future prospects of your bank?

TABLE: 15



Very bright 14 19 12 15Bright 7 5 9 8Neither bright or dull 4 1 4 2Dull 0 0 0 0Very dull 0 0 0 0

GRAPH: 15

Very bright Bright Neither bright or dull

Dull Very dull

14 74

0 0

195

1

0 0

129

4

0 0

15 82

0 0


INTERPRETATION: According to 25 respondents of Axis Bank 14 of them say that they are

very bright regarding future prospects of their bank, 7 of them say that they are bright regarding

future prospects of their bank, and rest 4 of them say that they are neither bright or dull regarding

future prospects of their bank.

According to 25 respondents of ICICI Bank 19 of them say that they are very bright

regarding future prospects of their bank, 5 of them say that they are bright regarding future

prospects of their bank, and rest 1 of them say that they are neither bright or dull regarding future

prospects of their bank.

According to 25 respondents of State Bank of Patiala Bank 12 of them say that they are

very bright regarding future prospects of their bank, 9 of them say that they are bright regarding

94

future prospects of their bank, and rest 4 of them say that they are neither bright or dull regarding

future prospects of their bank.

According to 25 respondents of Punjab National Bank 15 of them say that they are very

bright regarding future prospects of their bank, 8 of them say that they are bright regarding future

prospects of their bank, and rest 2 of them say that they are neither bright or dull regarding future

prospects of their bank.

95

CHAPTER 8

FINDINGS &

RECOMMENDATIONS

96

FINDINGS

Most of the respondents are male.

Most of the respondents of them are below 30 .

Most of the respondents of them are graduates.

Most of the respondents of their monthly income is 2 to 5 lac

Most of the respondents of them are businessman.

Most of the respondents of Axis Bank of them are having saving a/c,

o Most of the respondents of ICICI Bank of them are having saving a/c.

o Most of the respondents of State Bank of Patiala Bank of them are having saving

a/c,

o Most of the respondents of Punjab National Bank of them are having saving a/c.

Most of the respondents of Axis Bank of them are influenced by Advise of existing

customers of the bank, 8 of them are influenced by Near to home/Office.

o Most of the respondents of ICICI Bank of them are influenced by A/c of other

family members.

o Most of the respondents of State Bank of Patiala Bank of them are influenced by

A/c of other family members, 4 of them are influenced by Office salary

transferred in the bank.

o Most of the respondents of Punjab National Bank of them are influenced by

Familiarity with bank employees.

Most of the respondents of Axis Bank of them say that they come to know about the

existing or new services/ products offered by bank through staff of the bank.

o Most of the respondents of ICICI Bank of them say that they come to know about

the existing or new services/ products offered by bank through staff of the bank.

o Most of the respondents of State Bank of Patiala Bank of them say that they come

to know about the existing or new services/ products offered by bank through

staff of the bank.

o Most of the respondents of Punjab National Bank of them say that they come to

know about the existing or new services/ products offered by bank through staff

of the bank.

97

.

Most of the respondents of banks of them say that location of branches is neither

important nor unimportantat the time of selection of bank.

o Most of the respondents of banks of them say that Layout of branches is important

at the time of selection of bank.

o Most of the respondents of banks of them say that Promity of place of resident/

employment/business/ knowledgeable is important at the time of selection of

bank

o Most of the respondents of banks of them say that Behavior of Staff is neither


o Most of the respondents of banks of them say that familiarity with bank

employees is important at the time of selection of bank.

o Most of the respondents of banks of them say that working hours available is

important at the time of selection of bank.

o Most of the respondents of banks of them say that qualities of service is


o Most of the respondents of banks of them say that no. of ATM’s is important at

the time of selection of bank.

o Most of the respondents of banks of them say that selling arrangements is neither


o Most of the respondents of banks say that higher rate of interest on deposits is


o Most of the respondents of banks of them say that lower rate of interest on loans

is important at the time of selection of bank.

o Most of the respondents of banks of them say that reasonable service is neither


o Most of the respondents of banks of them say that minimum balanced

requirements is unimportant at the time of selection of bank

Most of the respondents of Axis Bank of them say yes they are an ATM user.

o Most of the respondents of ICICI Bank of them say yes they are an ATM user.

o Most of the respondents of State Bank of Patiala Bank of them say yes they are an

ATM user.98

o Most of the respondents of Punjab National Bank of them say yes they are an

ATM user.

Most of the respondents of Axis Bank say that they use their ATM 5 to 10 times in a

month.

o Most of the respondents of ICICI Bankof them say that they use their ATM 5

times in a month.

o Most of the respondents of State Bank of Patiala Bank of them say that they use

their ATM 5 times in a month.

o Most of the respondents of Punjab National Bank say that they use their ATM 5

times in a month.

Most of the respondents of Axis Bank of them say no they have not availed or tried to

avail the loan from bank.

o Most of the respondents of ICICI Bank say no they have not availed or tried to

avail the loan from bank.

o Most of the respondents of State Bank of Patiala Bank of them say no they have

not availed or tried to avail the loan from bank.

o Most of the respondents of Punjab National Bank of them say yes they have

availed or tried to avail the loan from bank.

Most of the respondents of Axis Bank of them say no the disbursed amount is not

sufficient to meet their needs.

o Most of the respondents of ICICI Bank of them say no the disbursed amount is

not sufficient to meet their needs.

o Most of the respondents of State Bank of Patiala of them say no the disbursed

amount is not sufficient to meet their needs.

o Most of the respondents of Punjab National Bank say no the disbursed amount is

not sufficient to meet their needs.

o Most of the respondents say that friends and relatives raise extra money to fulfill

their needs.

o Most of the respondents of ICICI Bank 1 of them say that friends and relatives

raise extra money to fulfill their needs, 1 of them say that financial institutional

raise extra money to fulfill their needs and rest 1 of them say that any other source

raise extra money to fulfill their needs.

99

o Most of the respondents of State Bank of Patiala Bank of them say they are highly

satisfactory regarding the overall working of their bank.

o Most of the respondents of Punjab National Bank of them say they are highly


Most of the respondents of Axis Bank of them say they are highly satisfactory regarding

the overall working of their bank.

o Most of the respondents of ICICI Bank of them say they are highly satisfactory

regarding the overall working of their bank.

o Most of the respondents of State Bank of Patiala of them say they are highly


o Most of the respondents of Punjab National Bank of them say they are highly

satisfactory regarding the overall working of their bank,.

Most of the respondents of Axis Bank say that they remained same while for working of

their bank over a period of time.

o Most of the respondents of ICICI Bank of them say they are improved while for

working of their bank over a period of time.

o Most of the respondents of State Bank of Patiala Bank of them say they are

improved while for working of their bank over a period of time.

o Most of the respondents of Punjab National Bank of them say they are improved

while for working of their bank over a period of time.

Most of the of Axis Bank of them say that they are very bright regarding future prospects

of their bank.

o Most of the of ICICI Bank of them say that they are very bright regarding future

prospects of their bank

o Most of the of State Bank of Patiala Bank of them say that they are very bright

regarding future prospects of their bank.

o Most of the of Punjab National Bank of them say that they are very bright

regarding future prospects of their bank.

100

RECOMMENDATIONS

Some suggestions are given here for both the private and nationalized sector banks. It

also includes some of the customer's suggestions which has been received from the open ended

questions.

Most of the private sector bank customers are of the view that branch network should

be increased.

Cash should be arranged in such a manner that customers need not to wait. For this

purpose more cash counters should be opened and therefore more personnel should be

employed to man these counters.

Many of the schemes are not much known to the customers. Hence some proper

advertisement media like TV. Papers and magazines etc. have to be used to reach the

information to the customers.

Proper timeliness should be maintained regarding the dispatch of monthly statements

Staff members of the bank must engage frequent meetings with the customers, with

this they will be able to realize the real difficulties faced by the customers.

The employees should attend to the customer's grievances and problems promptly and

sympathetically.

Outstation cheques should be handled efficiently with minimum possible time.

For saving account holders, instead monthly statements, computerized passbooks

should be issued to them as it is easier to handle.

Private sector banks should make advances less costly.

101

LIMITATIONS

Due to the non availability of list of customers of each bank and time constraint,

convenience sampling has been done and different no. of customers from each banks has

been selected at random, as a result of which equal number of customers in different

categories cannot be taken.

It is assume that the banks selected for the study will represent the whole of the private

and nationalized sector banks.

Knowledge of people about the bank is limited .They are required much more knowledge

about the bank.

102

CONCLUSION

"OLD ORDER CHANGES"- Time changes, and we with time. The old order has

changed yielding place to new, and we must have new need for the new hour. Change is

challenge. To face challenge and to get good result are a sign of good management. In the past,

the commercial banks were transactions on commercial loan theory. The modern banking has

been rendered many services-opening of branches where finds potentiality for deposit and

granting loans and advances to trade, business and industry against security working in

convenience hours, providing several agency and utility services to the clientele, in addition to

rendering service to the urban sectors. It is needless to say that the modern commercial banks are

oriented to customer needs and wants and his convenience and comfort as well.

The modern banking is contending for the welfare of human beings. Quality and

experience of service is being taken to determine its value. Optimum use of services things on

the cooperation, commitment and involvement of employees in the programmed. Now, a day,

banks found themselves in a highly competitive and rapidly changing environment with

competition. Those banks whether private sector or nationalized sector banks, which can cope

with the changing environment and can satisfy the customers, needs can survive in the economy.

The rule of the game nowadays is the "Survival of the fittest."

Earlier most of the private sector banks were providing better services and satisfy their

customers. But now some of the nationalized sector banks also come forward and providing

better services to satisfy their clienteles. Punjab national bank, the other nationalized sector

banks is also providing the same type of services as that of other private sector banks are

providing, but the services of that banks are not as efficient and satisfying as that of the private

sector banks. This may be because of the customer’s perception regarding better services of

private sector banks and it takes time to change the opinion. Nationalized sectors banks if

providing the similar types of services as that of private sector banks, are much more better than

the private sector banks as they have wider branch network, all they have to do is to change their

attitude towards their customers and open minded policy regarding various schemes.

103

BIBLIOGRAPHY

BOOKS AND JOURNALS

Angelini, P. and N. Cetorelli. 2000. “Bank Competition and Regulatory Reform: The

Case of the Italian Banking Industry.” Bank of Italy Temi di discussione, No. 380.

Bikker, J. and K. Haaf. 2002. “Competition, Concentration and Their Relationship: An

Empirical Analysis of the Banking Industry.” Journal of Money, Credit and Banking 35:

2191–214.

Guzman, M. 2000. “Bank Structure, Capital Accumulation and Growth: A Simple

Macroeconomic Model.” Economic Theory 16: 421–55.

Husain, F., Computerization and Mechanism in Indian Banks, New Delhi, Deep and

Deep Publications, 1988.

“India’s Best banks”, Business Today, February 26, 2006

Johri and Jauhari, Role of Computers in Banking Operation Systems, New Delhi,

Himalaya Publication House, 1994.

Joshi, N.C., Indian Banking, New Delhi, Ashian Publication House,2003.

Khan, M.Y., Indian Financial System, New Delhi, Tata McGraw-Hill Publishers, 2004.

Kotari, C.R., Research Methodology: Methods and Techniques, New Delhi, New Age

International Publications, 2006.

Mithani, D.M., Money Banking, International Trade and Public Finance, New Delhi,

Himalaya Publishing House, 1994.

Murthy, C.S., Fundamentals of Information Technology, New Delhi, Himalaya

Publishing House, 1999.

Pathak, Bharti V., Indian Financial System, New Delhi, Pearson Publications, 2003.

Payne (1999) the Essence Of the services marketing, PHI, New Delhi.

Rao (2005) services Marketing, Pearson Education Pvt. Ltd, Delhi

Selvam. M.” customer satisfaction of Banking services: an overview” SAJOPS, July-Dec.

2005

Subrahmanya.K.N. (1985), Modern banking in India, Deep and Deep publications, New

Delhi

104

“Services Marketing”- S.M JHA

WEBSITES

www.economictimes.com

www.financialexpress.com

http://moneymatters.blog.com/tag/icici-bank-performance/

http://www.valuenotes.com/uploads/article_pdf/A064631305803433.pdf

http://www.sbp.co.in/about-us/about-us.htm

http://www.business-standard.com/india/news/state-bankpatialas-gross-profitby-

5133/434371/

http://www.stockmarketsreview.com/recommendations/state_bank_of_india_1qfy2010_performance_highlights_and_result_update_20100820_33034/

https://www.pnbindia.in/en/ui/Profile.aspx http://www.stockmarketsreview.com/recommendations/

punjab_national_bank_3qfy2011_performance_highlights_and_results_update_20110128_95988/

105

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https://www.pnbindia.in/en/ui/Profile.aspx




http://www.business-standard.com/india/news/state-bankpatialas-gross-profitby-5133/434371/

http://www.business-standard.com/india/news/state-bankpatialas-gross-profitby-5133/434371/

http://www.valuenotes.com/uploads/article_pdf/A064631305803433.pdf

http://moneymatters.blog.com/tag/icici-bank-performance/

ANNEXURE: QUESTIONNAIRE

Name: _________________________________ Gender: Male/ Female

Age in Years- a) Below 30b) 30 but below 45c) 45 but below 60d) Above 60

Education:

a) Below matric

b) Matric but under graduate

c) Graduate

d) Post graduate

e) Professional degree

Yearly Income :

a) Below 2 lac

b) 2 to 5 lacc) 5 to 8 lacd) Above 8 lac

Occupation:

a) Businessman

b) Service Man

c) Agriculturistd) Professional

e) Any other

Q1. In which of the following bank you have an account?

a) Axis Bank

b) ICICI Bank

c) State Bank of Patiala

d) Punjab National Bank

Q2. Which type of accounts you have with the bank?


Saving A/c

Fixed Deposit A/c

current A/c

Loan A/c

106

Q3. Which of the following factors influenced you most while opening an account in the Bank?

Axis BankICICI Bank



Advertisement

Advise of a friends

Familiarity with bank employees

Advise of existing customers of the bank

Near to home/Office

A/c of other family members

Office salary transferred in the bank

Brand name

Any other

4. Which of the following services/products your bank provides(please tick)?

Axis Bank ICICI Bank State Bank of PatialaPunjab National Bank

Saving A/c.

Current A/c.

Fixed deposit A/c

Semi fixed deposit (Flexi) A/c.

Salary Plus

Housing loan

Educational loan

Consumer Loan

Personal Loan

Auto Loan

Loan against securities

Axis ICICI State Bank of Punjab National Bank107

Bank Bank Patiala

Demat Services

Over draft facility

Letter of credit

Discounting of bills

Internet Banking

Mobile banking

Home banking

ATM facility

Credit cards

Debit Cards

Locker facility

5. How do you generally come to know about the existing or new services/ products offered

by your bank?

Axis BankICICI Bank



Through advertisement

Through staff of the bank

Through manager of the bank

Through funds

Through existing customers of the bank

Through website of your bank

Through customer meetings

Any other

108

6. Do they send you regular statements?


Yes

No

7. At the time of selection of bank how would you rate the following factors?

Most Important

Important

Neither important nor un-important.

Un Important

Most Un Important

Location of branches.

Layout of branches.

Promity of place of resident/ employment/busin

109

ess/ knowledgeable

Behaviour of Staff.

Familiarity with bank employees.

Working Hours available.

Qualities of services.

No. of ATM’s

Selling arrangements.

Higher rate of interest on deposits.

Lower rate of interest on Loans.

Reasonable service

110

charges.

Minimum Balanced requirements.

Any other specify

8. How Often do you use ATM in a month ?

Axis BankICICI Bank State Bank of Patiala Punjab National Bank

Less then 3 times

5 times

5 to 10 times

More then 10

9. Have you even faced any problem with ATM ?

Axis Bank

ICICI Bank



Waiting in long Que

Inserting card in correctly

Limit on daily withdrawal

Light problem

ATM working too slowly

Incorrect amount of cash dispensed

ATM not able to prints slips when demanded

Balance deducted but cash does 111

not received

Currency is not proper

No choice of currency option

None of the above

any other

10. Your opinion regarding information displayed on site ?


Sufficient

Insufficient

11. Have you ever availed or tried to avail the loan from bank?


Yes

No

If yes please answer

12. Was the disbursed amount sufficient to meet your needs ?



Yes

No

112

If no tick the other sources from where you raise extra money to fulfill your needs



Any other bank

Friends & relatives

Financial institution

Any other

13. What is your opinion regarding the over all working of your bank ?



Highly Satisfactory

Satisfactory

Neither Satisfactory nor Dissatisfactory

Dissatisfactory

Highly Dissatisfactory

14. In Your opinion the working of your bank over a period of time ?

Axis BankICICI Bank



Improved

Remained same

Deteriorated

113

15. Give your opinion regarding future prospects of your bank ?



Very bright

Bright

Neither bright or dull

Dull

Very dull

114

Date post:	15-May-2017
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