Project Report On Comparative Analysis of Private Sector Bank on Basis of Current Account, Saving Account & Fixed Deposit

Chapter-1

Introduction

Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit, and they also attract most of the savings from the popu lation. Dominated by public sector, the banking industry has so far acted as an efficient partner in the growth and the development of the country. Driven by the socialist ideologies and the welfare state concept, public sector banks have long been the supporters of agriculture and other priority sectors. They act as crucial channels of the government in its efforts tonsure equitable economic development. The Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts 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 Nonperforming 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 Indian banking has come from a long way from being a sleepy business institution to highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks toexplore 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 penetrative networks which assures them high deposit mobilization. The Indian banking can be broadly categorized into nationalized, private banks and specialized banking institutions. The Reserve Bank of India acts as a centralized body monitoring any discrepancies and shortcoming in the system. It is the foremost monitoring body in the Indian financial sector. The nationalized banks (i.e. government-owned banks) continue to dominate the Indian banking arena. Industry estimates indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that have started their operationshere.The liberalize policy of Government of India permitted entry to private sector in the banking, the industry has witnessed the entry of nine new generation private banks.

The major differentiating parameter that distinguishes these banks from all the other banks in the Indian banking is the level of service that is offered to the customer. Their focus has always centered around the customer understanding his needs, preempting him and consequently delighting him with various configurations of benefits and a wide portfolio of products and services.
These banks have generally been established by promoters of repute or by high value domestic financial institutions. The popularity of these banks can be gauged by the fact that in a short span of time,these banks have gained considerable customer confidence and consequently have shown impressive growth rates. Today, the private banks corner almost four per cent share of the total share of deposits. Most of the banks in this category are concentrated in the high-growth urban areas in metros (that account for approximately 70% of the total banking business). With efficiency being the major focus, these banks have leveraged on their strengths and competencies viz. Management, operational efficiency and flexibility, superior product positioning and higher employee productivity skills.

Current account:
In this type of account person can deposit there money any time and can withdrew it anytime. In this kind of account no Interest is paid. Moreover some banks charge/take service charges for providing the facility. This type of account is mostly opened by the Business community.

Saving account:
In this type of account account holder can deposit its money any time but cannot withdrew the same as in current account, he cannot withdrew before certain period of time. In these type of account rate of Interest is nominal generally 4 percent moreover the rate of interest given for the deposit of the account holder is calculated on the minimum balance the account holder had in his account from 12 to last day of the particular month but rate is low when compared to rate of Interest in Term deposit

Term deposit:
In this type of account person deposit it money for certain period of time say for year and he generally cannot withdraw it before completion of that period. If the current account or saving account for a bank is less then it means its cost of deposit is more whereas those banks who maintain a balance in all these three accounts (i.e. current account , saving account , time deposit) it means that they balance to maintain a good profitability and minimum cost of borrowing Earlier the rate of interest on deposits was regulated but now they are not. and thus for this purpose banks prepare ALP i.e. assets liability planning and management..

DEFINITION OF BANK
The Oxford dictionary defines the Bank as, An establishment for the custody of money, which it pays out, on a customers order.

According to Whitehead,
A Bank is defined as an institution which collects surplus

funds from the public, safeguards them, and makes them available to t h e t r u e owner when required and also lends sums be their true owners to those who are in need of funds and can provide security.

Banking

Company

in

India

has

been

defined

in

the

Banking

Companies

act1949, O n e w h i c h t r a n s a c t s t h e b u s i n e s s o f b a n k i n g w h i c h m e a n s t h e accepting, for the purpose of lending or investment of the deposits of money from the public, repayable on demand, or otherwise and withdra w able becheque, draft, order or otherwise. T h e b a n k i n g s ys t e m i s a n i n t e g r a l s u b s ys t e m o f t h e f i n a n c i a l s ys t e m . I t represents an important channel of collecting small savings form t h e households and lending it to the corporate sector. T h e I n d i a n b a n k i n g s ys t e m h a s R e s e r v e B a n k o f I n d i a ( R B I ) a s t h e a p e x body for all matters relating to the banking system. It is the central Bank of India. It is also known as the Banker To All Other Banks.

IMPORTANCE OF BANKS
Today banks have become a part and parcel of Kodak Bank's life. There was a time when dwellers of the city alone could enjoy their services. Now banks o f f e r a c c e s s t o e v e n a common man and their activities extend to areas

hitherto untouched. Banks cater to the needs of agr i c u l t u r a l i s t s , industrialists, traders and to all the other sections of the society.

Immoderat e , t h e b a n k i n g c o n s t i t u t e s t h e f u n d a m e n t a l b a s i s o f e c o n o m i c g r o w t h . Thus, they accelerate the economic growth of a country and steer the wheels of the economy towards its goals of self reliance in all arouses Kodak Bank's interest in various men and the activities connected with it. fields. It naturally knowing more about the Bank and the

Objectives of the study

. Significance of the study
This study is helpful to find out the strengths and the weakness of their deposits and mobilization schemes of bank and how to overcome its weakness. This study provides useful inputs to find out the current position of Kotak Mahindra Bank in comparison to its competitors.

Objectives of Study
The objectives of undergoing study are as follows; 1.Study and analyze the market share of financial products of different banks. 2.Possible improvements to be brought in for the development of their future business.
The Chief Objectives of this study are:

1.To find the bank sector that is largely availed by the customer. 1.To study the factors the factors influencing the choice of a bank for 3.availing services. 1.To find and compare the satisfaction level of customers in public sector 5.as well as in private sectors bank. 1.To study the problem faced by customer.

1.To get suggestions for improvement or change in the services of publican private sector banks. 1.To study what do people expect in the new era of banking.

Industry Profile BANKING SECTOR IN INDIA Introduction The liberalization brought in 1991 has swept the economic landscape of the country. The automobile industry is one of the invisible faces of liberalization .For the people who were used to many years of Ambassador cars with various models not different in anyway except a few changes in every model, the arrival of Maruti heralded the beginning of a new experience in automobile comfort. It was the same with BajajChetak. Its obnoxious horn and the tilt and start symbolized the deplorable technology to which an Indian consumer was treated. We are thus living in the era of change. Banking sector is no different. The changes in banking in the last decade are unparalleled when compared to the entire period of banking history in India. Profitability,

which remained a taboo for bankers for years since independence, has become a bu zzword today. Our banks modeled on British banks, which erected awesome building to scare the public in the garb of being a sentinel of public money, today go for boutique banking to be as close to public as possible. Thus, competition fuelled by technology drives banking today. It is becoming increasingly clear that ' Technology ' alone can make bankers sail through the competition.

Computerization of branches, introduction of cash management products, remote access login for corporate,

Banking Company is defined as a company, which transacts the business of banking in India . The Banking Regulation Act defines the business of banking by stating the essential functions of a banker .It also states the various other businesses a banking company may be engaged in and prohibits certain businesses to be performed by it. mobile banking, Internet banking and ATM banking are a few ways by which bankers use technology today to beat the competition.