RESEARCH REPORT

on
SERVICE QUALITY ANALYSIS IN BANKING SECTOR WITH SPECIAL
REFERENCE TO
SBI AND AXIS BANK

Submitted in partial fulfilment for the award of

Master of Business Administration

By

ABHISHEK SINGH
System Id. -2013014034
Batch 2013-15
Under the Supervision of

MRIDUL DHARWAL

Sharda University
School of Business Studies

DECLARATIONFORM

IherebydeclarethattheResearchReportWorkentitled,SERVICE QUALITY
ANALYSIS IN BANKING SECTOR WITH SPECIAL REFERENCE TO SBI
AND AXIS BANK, submittedbyme,ABHISHEKSINGHSystemid.2013014034
forthepartialfulfillmentoftheMaster of Business Administration (MBA)toSharda
university,GreaterNoidaismyownoriginalworkandhasnotbeensubmitted
earliereithertoShardaUniversityortoanyotherInstitutionforthefulfillmentofthe
requirementforanycourseofstudy.Ialsodeclarethatnochapterofthismanuscript
inwholeorinpartisliftedandincorporatedinthisreportfromanyearlier/other
workdonebymeorothers.

Place:SchoolofBusinessStudies
Date:

SignatureofStudent:ABHISHEK
NameofStudent:ABHISHEKSINGH

Certificate by Faculty Guide

This is to certify that MR.ABHISHEK SINGH, student of MBA Batch 2013-15,
System id.- 2013014034 has successfully completed his/her Research Report on
SERVICE QUALITY ANALYSIS IN BANKING SECTOR WITH SPECIAL
REFERENCE TO SBI AND AXIS BANK . This Report is submitted in partial

fulfilment for the award of Management of Business Administration. His / Her work
is original and authentic and to the best of my knowledge has not been copied from
anywhere.
I wish him/her all the best in life.

MRIDUL DHARWAL

Faculty Guide

INTRODUCTION
A SNAPSHOT OF THE BANKING INDUSTRY:
The Reserve Bank of India (RBI), as the central bank of the country, closely monitors developments
in the whole financial sector.
The banking sector is dominated by Scheduled Commercial Banks (SCBs). As at end-March 2002,
there were 296 Commercial banks operating in India. This included 27 Public Sector Banks (PSBs),
31 Private, 42 Foreign and 196 Regional Rural Banks. Also, there were 67 scheduled co-operative
banks consisting of 51 scheduled urban co-operative banks and 16 scheduled state co-operative
banks.
Scheduled commercial banks touched, on the deposit front, a growth of 14% as against 18%
registered in the previous year. And on advances, the growth was 14.5% against 17.3% of the earlier
year.
State Bank of India is still the largest bank in India with the market share of 20% ICICI and its two
subsidiaries merged with ICICI Bank, leading creating the second largest bank in India with a
balance sheet size of Rs. 1040bn.
Higher provisioning norms, tighter asset classification norms, dispensing with the concept of past
due for recognition of NPAs, lowering of ceiling on exposure to a single borrower and group
exposure etc., are among the measures in order to improve the banking sector.
A minimum stipulated Capital Adequacy Ratio (CAR) was introduced to strengthen the ability of
banks to absorb losses and the ratio has subsequently been raised from 8% to 9%. It is proposed to
hike the CAR to 12% by 2004 based on the Basle Committee recommendations.
Retail Banking is the new mantra in the banking sector. The home loans alone account for nearly

two-third of the total retail portfolio of the bank. According to one estimate, the retail segment is
expected to grow at 30-40% in the coming years.
Net banking, phone banking, mobile banking, ATMs and bill payments are the new buzz words that
banks are using to lure customers.
With a view to provide an institutional mechanism for sharing of information on borrowers /
potential borrowers by banks and Financial Institutions, the Credit Information Bureau (India) Ltd.
(CIBIL) was set up in August 2000. The Bureau provides a framework for collecting, processing and
sharing credit information on borrowers of credit institutions. SBI and AXIS are the promoters of the
CIBIL.
The RBI is now planning to transfer of its stakes in the SBI, NHB and National bank for Agricultural
and Rural Development to the private players. Also, the Government has sought to lower its holding
in PSBs to a minimum of 33% of total capital by allowing them to raise capital from the market.
Banks are free to acquire shares, convertible debentures of corporate and units of equity-oriented
mutual funds, subject to a ceiling of 5% of the total outstanding advances (including commercial
paper) as on March 31 of the previous year.
The finance ministry spelt out structure of the government-sponsored ARC called the Asset
Reconstruction Company (India) Limited (ARCIL), this pilot project of the ministry would pave way
for smoother functioning of the credit market in the country. The government will hold 49% stake
and private players will hold the rest 51%- the majority being held by ICICI Bank (24.5%).

INTRODUCTION TO SBI AND AXIS

STATE BANK OF INDIA
State Bank of Indias operating profit and net profit for Q213 surged 54.5% and 40.2% yoy,
respectively, exhibiting a strong performance.
Advances growth to slow down: SBI recorded a handsome 37% yoy growth in advances,
translating into an 18% sequential growth in the first half. However, this momentum is likely to
decelerate considerably in the second half of 2012-13.
Robust rise in deposits: State Bank of Indias deposit base surged 28% yoy and its CASA
ratio improved from 39.45% to 39.71% over the same period. On a quarterly basis, the banks
deposits grew by 10.3%.

Improvement in the credit-deposit ratio: The Banks credit-deposit ratio increased from
68.9% in Q213 to 73.8% this quarter. This was following a robust 37% yoy increase in
advances, which exceeded the 28% growth in deposits over the same period.
Increase in the NII and NIM: SBIs net interest income (NII) increased by 45% yoy to reach
Rs. 54.6 bn.
Profitability: The Banks ROE declined from 17.38% for H112 to 14.63% for H113.
The return on assets (annualized), however, increased from 0.99% in Q212 to 1.13% in
Q213.
The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size,
number of branches, market capitalization and profits is today going through a momentous phase of
Change and Transformation the two hundred year old Public sector behemoth is today stirring out
of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for
their money.

The bank is entering into many new businesses with strategic tie ups Pension Funds, General
Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition,
Advisory Services, structured products etc each one of these initiatives having a huge potential for
growth.

The Bank is forging ahead with cutting edge technology and innovative new banking models, to
expand its Rural Banking base, looking at the vast untapped potential in the hinterland and proposes
to cover 100,000 villages in the next two years.

It is also focusing at the top end of the market, on whole sale banking capabilities to provide Indias
growing mid / large Corporate with a complete array of products and services. It is consolidating its
global treasury operations and entering into structured products and derivative instruments. Today,
the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial
borrowings in the country. It is the only Indian bank to feature in the Fortune 500 list.

The Bank is changing outdated front and back end processes to modern customer friendly processes

to help improve the total customer experience. With about 8500 of its own 10000 branches and
another 5100 branches of its Associate Banks already networked, today it offers the largest banking
network to the Indian customer. The Bank is also in the process of providing complete payment
solution to its clientele with its over 8500 ATMs, and other electronic channels such as Internet
banking, debit cards, mobile banking, etc.

With four national level Apex Training Colleges and 54 learning Centres spread all over the country
the Bank is continuously engaged in skill enhancement of its employees. Some of the training
programs are attended by bankers from banks in other countries.
The bank is also looking at opportunities to grow in size in India as well as internationally. It
presently has 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries in India
SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI Cards - forming
a formidable group in the Indian Banking scenario. It is in the process of raising capital for its
growth and also consolidating its various holdings.

Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and take all
employees together on this exciting road to Transformation. In a recently concluded mass internal
communication programme termed Parivartan the Bank rolled out over 3300 two day workshops
across the country and covered over 130,000 employees in a period of 100 days using about 400
Trainers, to drive home the message of Change and inclusiveness. The workshops fired the
imagination of the employees with some other banks in India as well as other Public Sector
Organizations seeking to emulate the programme.

ABOUT SBI:

The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size,

number of branches, market capitalization and profits is today going through a momentous phase of
Change and Transformation the two hundred year old Public sector behemoth is today stirring out
of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for
their money. The Bank is forging ahead with cutting edge technology and innovative new banking
models, to expand its Rural Banking base, looking at the vast untapped potential in the hinterland
and proposes to cover 100,000 villages in the next two years.
It is also focusing at the top end of the market, on whole sale banking capabilities to provide Indias
growing mid / large Corporate with a complete array of products and services. It is consolidating its
global treasury operations and entering into structured products and derivative instruments. Today,
the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial
borrowings in the country. It is the only Indian bank to feature in the Fortune 500 list.
The Bank is changing outdated front and back end processes to modern customer friendly processes
to help improve the total customer experience. With about 8500 of its own 10000 branches and
another 5100 branches of its Associate Banks already networked, today it offers the largest banking
network to the Indian customer. The Bank is also in the process of providing complete payment
solution to its clientele with its over 8500 ATMs, and other electronic channels such as Internet
banking, debit cards, mobile banking, etc.
With four national level Apex Training Colleges and 54 learning Centres spread all over the country
the Bank is continuously engaged in skill enhancement of its employees. Some of the training
programes are attended by bankers from banks in other countries.
The bank is also looking at opportunities to grow in size in India as well as internationally. It
presently has 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries in India
SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI Cards - forming
a formidable group in the Indian Banking scenario. It is in the process of raising capital for its
growth and also consolidating its various holdings.

KEY AREAS OF OPERATION:

The business operations of SBI can be broadly classified into the key income generating areas such

as National Banking, International Banking, Corporate Banking, & Treasury operations. The
functioning of some of the key divisions is enumerated below:
a) CORPORATE BANKING
The corporate banking segment of the bank has total business of around Rs1,193bn. SBI has created
various Strategic Business Units (SBU) in order to streamline its operations.
These SBUs are as follows:
Corporate Accounts
Leasing
Project Finance
Mid Corporate Group
Stressed Assets Management
b) NATIONAL BANKING
The national banking group has 14 administrative circles encompassing a vast network of 9,177
branches, 4 sub-offices, 12 exchange bureaus, 104 satellite offices and 679 extension counters, to
reach out to customers, even in the remotest corners of the country. Out of the total branches, 809 are
specialized branches.
This group consists of four business group which are enumerated below:
Personal Banking SBU
Small & Medium Enterprises
Agricultural Banking
Government Banking
c) INTERNATIONAL BANKING
SBI has a network of 73 overseas offices in 30 countries in all time zones and correspondent
relationship with 520 international banks in 123 countries. The bank is keen to implement core
banking solution to its international branches also. During FY06, 25 foreign offices were
successfully switched over to Finacle software. SBI has installed ATMs at Male, Muscat and
Colombo Offices. In recent years, SBI acquired 76% shareholding in Giro Commercial Bank
Limited in Kenya and PT Indomonex Bank Ltd. in Indonesia. The bank incorporated a company SBI
Botswana Ltd. at Gaborone.

d) TREASURY
The bank manages an integrated treasury covering both domestic and foreign exchange markets. In
recent years, the treasury operation of the bank has become more active amidst rising interest rate
scenario, robust credit growth and liquidity constraints. The bank diversified its operations more
actively into alternative assets classes with a view to diversify the portfolio and build alternative
revenue streams in order to offset the losses in fixed income portfolio. Reorganization of the treasury
processes at domestic and global levels is also being undertaken to leverage on the operational
synergy between business units and network. The reorganization seeks to enhance the efficiencies in
use of manpower resources and increase maneuverability of banks operations in the markets both
domestic as well as international.
e) ASSOCIATES & SUBSIDIARIES
The State Bank Group with a network of 14,061 branches including 4,755 branches of its seven
Associate Banks dominates the banking industry in India. In addition to banking, the Group, through
its various subsidiaries, provides a whole range of financial services which includes Life Insurance,
Merchant Banking, Mutual Funds, Credit Card, Factoring, Security trading and primary dealership in
the Money Market.
e.1) Associates Banks:
SBI has seven associate banks namely
State Bank of Indore
State Bank of Travancore
State Bank of Bikaner and Jaipur
State Bank of Mysore
State Bank of Patiala
State Bank of Hyderabad
State Bank of Saurashtra
All associate banks have migrated to Core Banking (CBS) platform. Single window delivery system
has been introduced in all associate banks. SBIs seven associate banks are the first amongst the
public sector banks in India to get fully networked through CBS, providing anytime-anywhere
banking to its customers to facilitate a bouquet of innovative customer offerings.

e.2) Non-Banking Subsidiaries/Joint Ventures

i) SBI Life:
ii) SBI Capital Markets Limited (SBICAP)
iii) SBI DFHI LTD
iv) SBI Cards & Payments Services Pvt. Ltd. (SBICSPL)
v) SBI Funds Management (P) Ltd. (SBIFMPL)
f) Human Resources

NON BANKING SUBSIDIARIES:

The Bank has the following Non-Banking Subsidiaries in India :

SBI Capital Markets Ltd
SBI Funds Management Pvt Ltd
SBI Factors & Commercial Services Pvt Ltd

AXIS BANK
AXIS Bank:
Axis Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted jointly by
the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance
Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four 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.
The Bank today is capitalized to the extent of Rs. 403.63 crores with the public holding (other than
promoters and GDRs) at 53.72%.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The
Bank has a very wide network of more than 1100 branches and Extension Counters (as on 31st
December 2013). The Bank has a network of over 5055 ATMs (as on 31st December 2013)
providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM
networks in the country.
The Bank has strengths in both retail and corporate banking and is committed to adopting the best
industry practices internationally in order to achieve excellence.

Promoters
Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the country,
UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 crore, LIC Rs. 7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5 crore each.

Shareholding 24.09%
Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act, 1963, with a view to
encourage savings and investment. In December 2002, the UTI Act, 1963 was repealed with the
passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 by the Parliament,
paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st
February 2011. In accordance with the Act, the Undertaking specified as UTI I has been transferred
and vested in the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI),
who manages assured return schemes along with 6.75% US-64 Bonds, 6.60% ARS Bonds with a
Unit Capital of over Rs. 14167.59 crores.
The Government of India has currently appointed Shri K. N. Prithviraj as the Administrator of the
Specified undertaking of UTI, to look after and administer the schemes under UTI - I, where
Government has continuing obligations and commitments to the investors, which it will uphold.
Priority Banking Lounge:
As a Priority banking customer you will have access to an exclusive 'Priority Banking Lounge' at
branches. This will allow you to conduct your financial transactions in utmost comfort and
confidentiality through an exclusive Relationship Manager.
Dedicated Relationship Manager:

You will enjoy access to a dedicated Relationship Manager who will be your one point contact at
branch for all your banking transactions thus ensuring that you would neither have to move from one
counter to the other nor stand in queues to await your turn.

Home Banking:
Experience the convenience of our home banking facilities. Avail of free cash and cheque pick-up and
delivery at your office or residence.

Exclusive Priority Banking International Debit card:

This card allows you free access to all VISA ATMs in India. The card also comes with higher ATM
withdrawal limits, higher POS transaction limits at merchant establishments, enhanced insurance cover
and a host of special discounts and offers.
You also get Preferential Interest Rates and lowered Processing Fees on select Retail Loans.
Other Banking Privileges:

Enjoy a host of banking privileges like free at-par cheques, demand drafts and pay orders, free
passbook updates and monthly statements.
You would also be entitled to two free minor accounts, one free outward remittance per quarter and
free Mobile banking.
As a Priority Banking customer, there would be no issuance charges on Axis Bank's Travel Currency
Card.

Investment Privileges
Avail of assistance in financial planning. Investment advice, market information reports, and
invitations to investor meets are offered complimentary to you.
Lifestyle Privileges
However, it's not all about just financial services. We aim to provide a different Lifestyle experience
through special offers on premium brands, movie privileges, special events and lots more - especially

for our Priority Banking customers

Gold Credit Card
As an added privilege, Priority Banking customers may also apply for a Gold Standard Credit Card
and Gold Standard Secured Credit Card without any additional fee, subject to the applicable terms
and conditions.
Priority Banking customers would also be eligible for a 50% reduction on the Issuance Fee of Gold
Plus Credit Card and Gold Plus Secured Credit Card. Rs. 500 will be charged as the annual
maintenance charge for Priority Banking customers, subject to the applicable terms and conditions.

ABOUT AXIS BANKS PROFILE

About AXIS Bank

The Unit Trust Of India (UTI) is a statutory public sector investment institution set up in 1964.
It mobilizes the savings of the community through the sale of its units under its various unit
schemes..The.resources thus mobilized are invested by the UTI mainly in the shares and debentures
of the companies. Income received from this investment, after meeting the expenses of the Trust, is
distributed to unit holders annually as dividend.
The Unit Trust Of India has introduced a number of Unit schemes so far, the Unit scheme,1964,the
Unit Linked Insurance Plan, 1971, Unit Scheme for Charitable and Religious Trusts and Registered
Societies, 1981, the Income Unit Scheme, 1982, Monthly Income Unit Scheme, 1983 and Growth
and Income Unit Scheme, 1983.

Review of literature
Indian Banking industry is one of the most technologically advanced industries with vast networks of
branches empowered by strong banking systems, their wide range of product and effective
distribution channel capabilities. However, regulatory, structural and technological factors are
significantly changing the banking environment throughout the world. One of the most important
factors that is motivating the growth of the Indian banking institutions is the liberalization. The
financial sector reforms in India were designed to infuse greater competitive vitality in the banking
system. To achieve this objective, the Narsimhan Committee was formed. The Narsimhan
Committee report suggested wide ranging reforms for the Indian banking sector in 1992, including
the important one to introduce internationally accepted banking practices so as to enable Indian
banks to achieve service excellence. The Committee recommended a liberal policy towards the entry
norms of private sector banks and foreign banks into the Indian banking sector.

The Interest rate structure has been deregulated to a great extent and banks have been given a great
degree of freedom in determining their rate structure for deposits and advances, as well as their other
product range. Banking has also become more competitive in respect of branch network. The end
result is that market power is getting shifted from banks to their customers. Financial liberalization
has led to intense competitive pressures, and retail banks are consequently directing their strategies
towards increasing customer satisfaction and loyalty through improved service quality. With such a
high potential in the Indian banking industry, all banks are looking ahead to establish themselves as
the most preferred bank by the customers and this can only happen when they are able to
differentiate themselves on the basis of service quality being offered by their competitors. Retail
Banking has immense opportunities in a growing economy like India.

Research methodology

 RESEARCH DESIGN:
The methodology for the research study is descriptive and is as follows:
Research Approach: Quantitative research
Objectives:
The main objective of our project is:
To assess and compare the overall service performance of SBI and AXIS bank.
To know in which service quality dimension the bank is performing well and in which
dimension it needs improvement.
To know customers requirements or expectation for service.

Data Collection Method:

Data Collection Tool

Secondary data: Various websites, articles from magazines and news papers, books were used
for collecting secondary data.
Primary data: The primary data has been collected by the researchers by designing structured
questionnaire with the relevant question to the project study and research.
Type of questionnaire: Structured questionnaire.

ANALYSIS OF DATA:
The collected data in the study has been presented and analyzed using the various graphs
for satisfaction level, score of various factors on the particular dimensions, and overall dimension
score and is compared with other service.
Also data is analyzed through performance matrix.

LIMITAION OF STUDY:
The study was restricted to two banks, so the competitive scenario could not be studied.
Inadequate time was the major constraint during the whole project.
All the answers given by the respondents have been assumed true.

BENEFICIARIES OF PROJECT:

 Beneficiary of this project is to the bank, to improve the customer satisfaction in the
dimension in which they are lagging.
Key findings and analysis will helpful to them for provide better services to customers.
For researchers, to know the competitive advantage of both the banks and their services.