COMPARATIVE STUDY

OF
CUSTOMERS
SATISFACTION
TOWARDS HDFC BANK
AND STATE BANK OF
INDIA

DECLARATIO
N
Hereby we declare that the project report
entitled COMPARATIVE STUDY OF
CUSTOMERS SATISFACTION TOWARDS
HDFC BANK AND STATE BANK OF
INDIA submitted for the degree of Master
of Business Administration, our original
work and the project report has not
formed the basis for the award of any
diploma,

degree, associate ship, fellowship or

similar other titles. It has not been
submitted to any
other university or institution for the
award of any degree or diploma.
2

ABSTRACT
The present study was undertaken to know the preference of the customers
towards
HDFC Bank and State Bank of India (SBI). The main problem of the customers
is
they are not well aware of the services provided by their banks. The study
also force
on the customer perception that how the banking service can be improved.
In our
study we have used both primary sources of data as well as secondary
sources of

data. During project we came to know that both the banks are highly
preferred by the
customers but their preference is different up to some extent towards the
service of these
banks.
3

ACKNOWLEDGEMENT
No serious and lasting achievement or success one ever achieves without
the friendly
guidance and cooperation of so many people involved in work.
Foremost of all, I express my gratitude to the Almighty for his blessings and
for vesting

wisdom in all my wishes.

A feeling of elation insists us on expressing our heartiest gratitude to Mr.Amit
Mahendroo, who allowed doing our project under his supervision.
I place our thanks to all those who spared their time and made it convenient
for us to
complete the research. We deeply acknowledge their concern for our
research. Last but
not the least, we also wish to red cord our gratitude for any person, our
memory has
failed to recall, who rendered his/her/their support and services.
4

TABLE OF CONTENTS
Chapter 1

Banking Industry
1.1 Introduction to banking Industry 7-10
1.2 Banking system in India 10-12
1.3 Private Sector Bank 12-17
1.4 Public Sector Bank 17-18
Chapter 2
Company Profile
2.1 Overview on State Bank Of India 9-24
2.2 Services provided by State Bank Of India 24-25
2.3 SWOT analysis of SBI 25-26
2.4 Overview on HDFC Bank 26-34
2.5 Services provided by HDFC Bank 34-36
2.6 SWOT analysis of HDFC Bank 36-37
Chapter 3 3.1 Objectives 38
3.2 Scope 38
3.3 literature review 38-41
3.4 Research Methodology 41-42
3.5 Limitations of the study 42
Chapter 4 Data Analysis and Findings
4.1 State Bank Of India bank analysis 43-56
4.2 HDFC Bank analysis 57-71
4.3 Comparative analysis 72-83
Chapter 5 5.1 5.1Suggestions and recommendations 84
5.2 5.2 Assumptions 84
Appendix
6.1 Questionnaire 85-88
6.2 Bibliography 88
5

Chapter 1-BANKING
INDUSTRY
1.1Introduction to Indian Banking
System
History of Banking in India

Without a sound and effective banking system in India it cannot have a

healthy economy.
The banking system of India should not only be hassle free but it should be
able to meet
new challenges posed by the technology and any other external and internal
factors.
For the past three decades India's banking system has several outstanding
achievements
to its credit. The most striking is its extensive reach. It is no longer confined
to only
metropolitans or cosmopolitans in India. In fact, Indian banking system has
reached even
to the remote corners of the country. This is one of the main reasons of
India's growth
process.
The government's regular policy for Indian bank since 1969 has paid rich
dividends with
the nationalization of 14 major private banks of India
Not long ago, an account holder had to wait for hours at the bank counters
for getting a
draft or for withdrawing his own money. Today, he has a choice. Gone are
days when the
most efficient bank transferred money from one branch to other in two days.
Now it is
simple as instant messaging or dials a pizza. Money has become the order of
the day.
The first bank in India, though conservative, was established in 1786. From
1786 till
today, the journey of Indian Banking System can be segregated into three
distinct phases.
They are as mentioned below:
Early phase from 1786 to 1969 of Indian Banks
Nationalization of Indian Banks and up to 1991 prior to Indian banking
sector
Reforms.

New

phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.
6
To make this write-up more explanatory, I prefix the scenario as Phase I,
Phase II and
Phase III.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of
Hindustan
and Bengal Bank. The East India Company established Bank of Bengal
(1809), Bank of
Bombay (1840) and Bank of Madras (1843) as independent units and called
it Presidency
Banks. These three banks were amalgamated in 1920 and Imperial Bank of
India was
established which started as private shareholders banks, mostly Europeans
shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians,
Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between
1906 and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank,
Indian Bank,
and Bank of Mysore were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced
periodic
failures between 1913 and 1948. There were approximately 1100 banks,
mostly small. To
streamline the functioning and activities of commercial banks, the
Government of India
came up with The Banking Companies Act, 1949 which was later changed to
Banking
Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).
Reserve Bank of
India was vested with extensive powers for the supervision of banking in
India as the
Central Banking Authority.
During those days public has lesser confidence in the banks. As an
aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the
Postal
department was comparatively safer. Moreover, funds were largely given to
traders.
Phase II
Government took major steps in this Indian Banking Sector Reform after
independence.

In 1955, it nationalized Imperial Bank of India with extensive banking

facilities on a
large scale especially in rural and semi-urban areas. It formed State Bank of
India to act
as the principal agent of RBI and to handle banking transactions of the Union
and State
Governments all over the country.
Seven banks forming subsidiary of State Bank of India was nationalized in
1960 on 19th
7
July, 1969, major process of nationalization was carried out. It was the effort
of the then
Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the
country
were nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried
out in 1980
with seven more banks. This step brought 80% of the banking segment in
India under
Government ownership.
The following are the steps taken by the Government of India to Regulate
Banking
Institutions in the Country:
1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crores.
After the nationalization of banks, the branches of the public sector bank
India rose to
approximately 800% in deposits and advances took a huge jump by
11,000%.
Banking in the sunshine of Government ownership gave the public implicit
faith and
immense confidence about the sustainability of these institutions.
Phase III
This phase has introduced many more products and facilities in the banking
sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a
committee was
set up by his name which worked for the liberalizations of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are
being put

to give a satisfactory service to customers. Phone banking and net banking is

introduced.
The entire system became more convenient and swift. Time is given more
importance
than money.
The financial system of India has shown a great deal of resilience. It is
sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian
Countries
8
suffered. This is all due to a flexible exchange rate regime, the foreign
reserves are high,
the capital account is not yet fully convertible, and banks and their
customers have
limited foreign exchange exposure

1.2 Banking system in India

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
9
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 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 act 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 operations
here. Under the ambit of the nationalized banks come the specialized
banking
institutions. These co-operatives, rural banks focus on areas of agriculture,
rural
development etc., unlike commercial banks these co-operative banks do not
lend on the
basis of a prime lending rate. They also have various tax sops because of
their holding
pattern and lending structure and hence have lower overheads. This enables
them to give
a marginally higher percentage on savings deposits. Many of these
cooperative banks
diversified into specialized areas (catering to the vast retail audience) like
car finance,
housing loans, truck finance etc. in order to keep pace with their public
sector and
private counterparts, the co-operative banks too have invested heavily in
information
technology to offer high-end computerized banking services to its clients.

TYPES OF BANKS

Central Bank
The Reserve Bank of India is the central Bank that is fully owned by the
Government. It
is governed by a central board (headed by a Governor) appointed by the
Central
Government. It issues guidelines for the functioning of all banks operating
within the
country.
10
Co-operative Sector
The co-operative sector is very much useful for rural people. The cooperative banking
sector is divided into the following categories.
a. State co-operative Banks
b. Central co-operative banks
c. Primary Agriculture Credit Societies
Development Banks/Financial Institutions
IFCI
IDBI
ICICI
IIBI
SCICI Ltd.
NABARD
Export-Import Bank of India

National Housing Bank

Small Industries Development Bank of India
North Eastern Development Finance Corporation

1.3 PRIVATE SECTOR BANKS

a. Old generation private banks
b. New generation private banks
c. Foreign banks operating in India
d. Scheduled co-operative banks
e. Non-scheduled banks

11
Private Sector Banks
1. HDFC Bank
2. ICICI Bank
3. Federal Bank
4. ING Vysya Bank
5. Axis Bank (formerly UTI Bank)
6. Yes Bank
7. Bank of Rajasthan
8. Bharat Overseas Bank
9. Catholic Syrian Bank
10. Centurion Bank of Punjab
11. City Union Bank
12. Development Credit Bank
13. Dhanalakshmi Bank
14. Ganesh Bank of Kurundwad
15. IndusInd Bank
16. Jammu & Kashmir Bank
17. Karnataka Bank Limited
18. Karur Vysya Bank
19. Kotak Mahindra Bank
20. Lakshmi Vilas Bank
21. Nainital Bank
22. Ratnakar Bank
23. SBI Commercial and International Bank
12
24. South Indian Bank
25. Amazing Mercantile Bank
26. Punjab National Bank
27. Rupee Bank
28. Saraswat Bank
29. Tamilnad Mercantile Bank
30. Thane Janata Sahakari Bank
31. Bassein Catholic Bank
After nationalization of 14 commercial banks in 1969, no new private banks
were

licensed by RBI in the country, though there was no legal bank on entry of
private sector
banks. The Narsimha committee report of 1991, has envisaged a larger role
for private
sector banks. In recognition of need to introduce greater competition with a
view to
achieving higher productivity and efficiency of banking system. RBI issued
few
guidelines in Jan 1993 for entry of private sector banks. It prescribed of
minimum paid up
capital of Rs.100 crores for new bank and shares to be listed at stock
exchanges new bank
after being granted license under Banking Regulation Act, shall be registered
as Public
ltd. Company under companies Act 1956. Subsequently nine new commercial
banks have
been granted license to start banking operations. The new private sector
banks have been
very aggressive in business expansion and are also reporting higher profit
levels taking
advantage of technical and skilled manpower. In certain areas, these banks
have been out
crossed the other group of banks including foreign banks.
GUIDELINES FOR PRIVATE SECTOR BANKS
The RBI issued guidelines regarding the formation and functioning of private
sector
banks in January 1993. These guidelines are as follows:
The banks shall be governed by the provisions of The Reserve Bank of
India Act,
1934 The Banking Regulations Act, 1949 other relevant statuaries.
13
Private sector banks are required to be registered as public limited
companies in
India.
The authority to grant a license lies with the RBI.
The shares of banks are required to be listed on stock exchanges.
Preference will be given to those banks whose headquarters are proposed
to be
located in a center that does not have headquarters of any other bank.
Maximum voting rights of an individual shareholder would be limited to
1% of
total voting rights.
The new bank would not be allowed to have as its director any person
who is
already a director in a banking company.

 The bank will be subject to prudential norms in respect of banking

operations,
accounting policies and other policies, as laid down by RBI. The bank will be
required to adhere to the following: Minimum paid up share capital of Rs. 1
bln.
Promoters' contribution as determined by the RBI Capital adequacy of 8% of
the
risk weighted assets Single borrower and group borrower exposure limits in
force
Priority sector lending Export credit Loan policy within overall policy
guidelines
laid down by the RBI.
The banks will be free to open branches anywhere once they satisfy the
capital
adequacy and prudential accounting norms.
The banks would not be allowed to have investments in subsidiaries,
mutual funds
and portfolio investments in other companies in excess of 20% of the banks'
own
paid up capital and reserves.
The banks would be required to use modern infrastructural facilities in
office
equipment, computer, telecommunications etc.
MAJOR PLAYERS IN PRIVATE SECTOR BANKS
ICICI Bank: ICICI Banking is commercial Banking arm of ICICI group. It
received its
banking license from RBI on may 17 may 1994 and its branch was started in
Madras in
June 1994. ICICI Bank has a network of about 560 branches and extension
counters and
over 1,900 ATMs. ICICI Bank offers a wide range of banking products and
financial
services to corporate and retail customers through wide variety of delivery
channels and
14
through its specialized subsidiaries and affiliates in the areas of investment
banking,life
and non-life insurance, venture capital and asset management. ICICI Bank
set up its
international banking group in fiscal 2002 to cater to cross border needs of
clients and
leverage on its domestic banking strengths to offer product internationally.
ICICI Banks
equity shares are listed in India on the Stock Exchange, Mumbai and the
National Stock

Exchange of India Limited and its American Depositary Receipts are listed on
New York
Stock Exchange. It is the first bank to start Internet banking service in India.
In 1999,
ICICI become the first Indian Company and the first bank or financial
institution from
non-Japan Asia to be listed on NYSE.
IDBI Bank: IDBI Ltd., the tenth largest development bank in the world has
promoted
world class institutions in India. IDBI promoted IDBI bank to mark the formal
foray of
the IDBI group into commercial Banking. IDBI begun with an equity capital
base of
Rs.1000 million, commenced its first branch at Indore in November 1995.
The birth of
IDBI took place after RBI issued guidelines for entry of new private sector
banks in
January 93. IDBI bank deployed Finacle, the e-age banking solution from
Infosys tio
consolidate its position, meet challenges and quickly seize new business
opportunities.
IDBI bank become the first to offer mobile refill/recharge using sms, launch of
ATM
next, which provide online information about News, cricket scores,
emergency numbers,
banks products on ATMs.
UTI Bank: UTI Bank was the first of the new private banks to have brgun
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
United Trust of India(UTI-I), Life Insurance Corporation of India(LIC) and
General
Insurance Corporation Ltd. and its associates viz.National Insurance
Company Ltd.,The
New India Assurance Corporation, The Oriental Insurance Corporation and
United
Insurance Company Ltd. The bank today is capitalized to the extent of
Rs.278.12 crores
with public holding at 56.18 %. The banks registered office is at Ahmedabad
and its
central office is at Mumbai. The bank has wide network of more than 350
branch offices
and Extension Counters. The Bank has network of over 1657 ATMs providing
24hrs a

day banking convenience to its customers. The bank was setup with capital
of Rs.115
crore, with UTI contributing Rs.100 crore, LIC-Rs.7.5 crore and its four
subsidiaries
15
contributing Rs. 1.5 crore each.
HDFC Bank: HDFC Bank is headquartered in Mumbai. The Bank at present
has an
enviable network of over 495 branches spread over 218 cities across India.
All branches
are linked on an online real-time basis. Customers in over 120 locations are
also serviced
through Telephone Banking. The Banks expansion plans take into account
the need to
have a presence in all major industrial and commercial centres where its
corporate
customers are located as well as the need to build a strong retail customer
base for both
deposits and loan products. Being a clearing/settlement bank to various
leading stock
exchanges, the Bank has branches in the centres where the NSE/BSE have a
strong and
active member base. The authorized capital of HDFC Bank is Rs.450 crore
(Rs.4.5
billion). The paid-up capital is Rs.309.9 crore (Rs.3.09 billion). The HDFC
Group holds
22.2% of the banks equity and about 19.5% of the equity is held by the ADS
Depository.
The Bank has made substantial efforts and investments in acquiring the best
technology
available internationally, to build the infrastructure for a world class bank.

1.4 Public Sector Banks

a. State Bank of India and its associate banks called the State Bank Group
b. 20 nationalized banks
c. Regional rural banks mainly sponsored by public sector banks
Public Sector Banks (Nationalized banks):
1. State Bank of India (SBI)
2. State Bank of Bikaner & Jaipur
3. State Bank of Hyderabad
4. State Bank of Indore
5. State Bank of Mysore
6. State Bank of Patiala
7. State Bank of Saurashtra
8. State Bank of Travancore
9. Bank of India
16

10. Canara Bank

11. Central Bank
of India
12. Corporation bank
13. Indian Bank
14. Indian overseas bank
15. Syndicate Bank
16. UCO Bank
17. Allahabad Bank
18. Andhra Bank
19. Bank of Baroda
20. Bank of Maharashtra
21. Dena Bank
22. Oriental Bank of Commerce
23. Punjab & Sind Bank
24. Union Bank
of India
25. United Bank of India
26. Vijaya Bank
27. IDBI Bank
17

Chapter 2: Company Profile

2.1 Overview of SBI
EVOLUTION OF SBI
The origin of the State Bank of India goes back to the first decade of the
nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June
1806. Three
years later the bank received its charter and was re-designed as the Bank of
Bengal (2
January 1809). A unique institution, it was the first joint-stock bank of British
India
sponsored by the Government of Bengal. The Bank of Bombay (15 April
1840) and the
Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks
remained
at the apex of modern banking in India till their amalgamation as the
Imperial Bank of
India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into
existence either
as a result of the compulsions of imperial finance or by the felt needs of local
European
commerce and were not imposed from outside in an arbitrary manner to
modernise

India's economy. Their evolution was, however, shaped by ideas culled from
similar
developments in Europe and England, and was influenced by changes
occurring in the
structure of both the local trading environment and those in the relations of
the Indian
economy to the economy of Europe and the global economic framework.
Establishment
The establishment of the Bank of Bengal marked the advent of limited
liability, jointstock
banking in India. So was the associated innovation in banking, viz. the
decision to
allow the Bank of Bengal to issue notes, which would be accepted for
payment of public
revenues within a restricted geographical area. This right of note issue was
very valuable
not only for the Bank of Bengal but also its two siblings, the Banks of
Bombay and
Madras. It meant an accretion to the capital of the banks, a capital on which
the
proprietors did not have to pay any interest. The concept of deposit banking
was also an
innovation because the practice of accepting money for safekeeping (and in
some cases,
18
even investment on behalf of the clients) by the indigenous bankers had not
spread as a
general habit in most parts of India. But, for a long time, and especially upto
the time that
the three presidency banks had a right of note issue, bank notes and
government balances
made up the bulk of the investible resources of the banks.
The three banks were governed by royal charters, which were revised from
time to time.
Each charter provided for a share capital, four-fifth of which were privately
subscribed
and the rest owned by the provincial government. The members of the board
of directors,
which managed the affairs of each bank, were mostly proprietary directors
representing
the large European managing agency houses in India. The rest were
government
nominees, invariably civil servants, one of whom was elected as the
president of the
board.
Business

The business of the banks was initially confined to discounting of bills of

exchange or
other negotiable private securities, keeping cash accounts and receiving
deposits and
issuing and circulating cash notes. Loans were restricted to Rs.one lakh and
the period of
accommodation confined to three months only. The security for such loans
was public
securities, commonly called Company's Paper, bullion, treasure, plate,
jewels, or goods
'not of a perishable nature' and no interest could be charged beyond a rate
of twelve per
cent. Loans against goods like opium, indigo, salt woollens, cotton, cotton
piece goods,
mule twist and silk goods were also granted but such finance by way of cash
credits
gained momentum only from the third decade of the nineteenth century. All
commodities,
including tea, sugar and jute, which began to be financed later, were either
pledged or
hypothecated to the bank. Demand promissory notes were signed by the
borrower in
favour of the guarantor, which was in turn endorsed to the bank. Lending
against shares
of the banks or on the mortgage of houses, land or other real property was,
however,
forbidden.
Indians were the principal borrowers against deposit of Company's paper,
while the
business of discounts on private as well as salary bills was almost the
exclusive
monopoly of individuals Europeans and their partnership firms. But the main
function of
19
the three banks, as far as the government was concerned, was to help the
latter raise loans
from time to time and also provide a degree of stability to the prices of
government
securities.
Major change in the conditions
A major change in the conditions of operation of the Banks of Bengal,
Bombay and
Madras occurred after 1860. With the passing of the Paper Currency Act of
1861, the
right of note issue of the presidency banks was abolished and the
Government of India

assumed from 1 March 1862 the sole power of issuing paper currency within
British
India. The task of management and circulation of the new currency notes
was conferred
on the presidency banks and the Government undertook to transfer the
Treasury balances
to the banks at places where the banks would open branches. None of the
three banks had
till then any branches (except the sole attempt and that too a short-lived one
by the Bank
of Bengal at Mirzapore in 1839) although the charters had given them such
authority. But
as soon as the three presidency bands were assured of the free use of
government
Treasury balances at places where they would open branches, they
embarked on branch
expansion at a rapid pace. By 1876, the branches, agencies and sub
agencies of the three
presidency banks covered most of the major parts and many of the inland
trade centres in
India. While the Bank of Bengal had eighteen branches including its head
office, seasonal
branches and sub agencies, the Banks of Bombay and Madras had fifteen
each.
The eight banking subsidiaries are:
1-State Bank of Bikaner and Jaipur (SBBJ)
2-State Bank of Hyderabad (SBH)
3-State Bank of India (SBI)
4-State Bank of Indore (SBIR)
5-State Bank of Mysore (SBM)
6-State Bank of Patiala (SBP)
7-State Bank of Saurashtra (SBS)
8-State Bank of Travancore (SBT)
20
HISTORY
Presidency Banks Act
The presidency Banks Act, which came into operation on 1 May 1876,
brought the three
presidency banks under a common statute with similar restrictions on
business. The
proprietary connection of the Government was, however, terminated, though
the banks
continued to hold charge of the public debt offices in the three presidency
towns, and the
custody of a part of the government balances. The Act also stipulated the
creation of

Reserve Treasuries at Calcutta, Bombay and Madras into which sums above
the specified
minimum balances promised to the presidency banks at only their head
offices were to be
lodged. The Government could lend to the presidency banks from such
Reserve
Treasuries but the latter could look upon them more as a favour than as a
right.
Bank of Madras
The decision of the Government to keep the surplus balances in Reserve
Treasuries
outside the normal control of the presidency banks and the connected
decision not to
guarantee minimum government balances at new places where branches
were to be
opened effectively checked the growth of new branches after 1876. The pace
of
expansion witnessed in the previous decade fell sharply although, in the case
of the Bank
of Madras, it continued on a modest scale as the profits of that bank were
mainly derived
from trade dispersed among a number of port towns and inland centres of
the presidency.
India witnessed rapid commercialisation in the last quarter of the nineteenth
century as its
railway network expanded to cover all the major regions of the country. New
irrigation
networks
in Madras, Punjab and Sind accelerated the process of conversion of
subsistence crops
into cash crops, a portion of which found its way into the foreign markets. Tea
and coffee
plantations transformed large areas of the eastern Terais, the hills of Assam
and the
Nilgiris into regions of estate agriculture par excellence. All these resulted in
the
expansion of India's international trade more than six-fold. The three
presidency banks
were both beneficiaries and promoters of this commercialisation process as
they became
involved in the financing of practically every trading, manufacturing and
mining activity
in the sub-continent. While the Banks of Bengal and Bombay were engaged
in the
21

financing of large modern manufacturing industries, the Bank of Madras went

into the
financing of large modern manufacturing industries, the Bank of Madras went
into the
financing of small-scale industries in a way which had no parallel elsewhere.
But the
three banks were rigorously excluded from any business involving foreign
exchange. Not
only was such business considered risky for these banks, which held
government
deposits, it was also feared that these banks enjoying government patronage
would offer
unfair competition to the exchange banks which had by then arrived in India.
This
exclusion continued till the creation of the Reserve Bank of India in 1935.
AWARDS
Chairman Mr. O P Bhatt, has been declared the CNN-IBN Indian of the Year
2007 in the
Business category ahead of Vijay Mallya and the Ambanis .
After much deliberation, the jury voted for the maverick banker Shri O P
Bhatt, at the
helm of the State Bank of India since 2006, as the CNN-IBN's businessman of
the Year.
He has been credited with doing the impossible.
Shri Bhatt took over at a time when India's largest bank was faced with
tough
competition from fast growing private players. The mammoth challenge was
to arrest
SBI's falling market share, raise funds for expansion and look for new
avenues of growth.
In another daring move, Shri Bhatt has started the merger of all seven
associate banks
with the parent bank. Once the merger is completed, the combined entity
will have a
balance sheet of over 8 lakh crore rupees, and a countrywide network of
14,000 branches
- enough to take on global banks looking to penetrate the Indian market after
2009.
Bhatt is the only SBI chairman since liberalisation who has been given a five
year term.
He is setting himself some tough targets. One of the targets is to up SBI's
market share by
one per cent every year. Under him the bank is also looking at new business
streams like
general insurance, pension funds & mobile banking.

It's a vision to make SBI a truly global bank and the man behind that dream
is CNNIBN's
Indian of the Year in the Business category for 2007.
22
BEST BANK OF THE YEAR 2008
State Bank of India was adjudged the Best Bank of the Year 2008 by London
based The
Banker magazine of Financial Times Group.
This award is decided on the basis of intensive research and analysis of
financials and
performance of prominent Banks, and clearly SBI emerged as the winner &
Best Bank in
the country.
This years Annual Bank of the year 2008 awards presentation was held at
the Ballroom
of The Dorchester Hotel, London on 26th of November 2008 in an impressive
ceremony
attended by CEOs & Heads of commercial Banks from over 116 countries
2.2 PRODUCTS AND SERVICES PROVIDED BY SBI
Savings Accounts
Current Accounts
Fixed Deposits
Loans
Personal Loans
Home Loans
Two Wheeler Loans
New Car Loans
Used Car Loans
Overdraft Against Car
Express Loans
Gold Loan
Educational Loan
Loan Against Securities
Loan Against Property
Loans Against Rental Receivables
Cards
23
Credit Cards
Debit Cards
Access Your Bank
NetBanking
ATM
2.3 SWOT analysis:
Strengths:
1.BRAND NAME: SBI Bank has earned a reputation in the market over the

period of time(Being the oldest bank in India tracing history back to 1806)
2.Market Leader: SBI is ranked at 380 in 2008 Fortune Global 500 list, and
ranked 219 in 2008 Forbes Global 2000. With an asset base of $126 billion
and its
reach, it is a regional banking behemoth.
3.Wide Distribution Network: Excellent penetration in the country with
more
than 10000 core branches and more than 5100 branches of associate banks
(subsidiaries).
4. Diversified Portfolio: SBI Bank has all the products under its belt, which
help
it to extend the relationship with existing customer. SBI Bank has umbrella of
products to offer their customers, if once customer has relationship with the
bank.
Some Products, which SBI Bank is offering are: Retail Banking Business
Banking
Merchant Establishment Services (EDC Machine) Personal loans & Car loans
Insurance Housing Loans
Government Owned: Government owns 60% stake in SBI. This gives SBI an
edge over private banks in terms of customer security.
5. Low Transition Costs-SBI offers very low transition costs which attracts
small
customers.
Weaknesses:
1.The existing hierarchical management structure of the bank, although
strength
in some respects, is a barrier to change.
24
2.Though SBI cards are the 2nd largest player in the credit card industry, it
has
the highest non performing assets (NPAs) in the industry, which stand out to
be at
16.28 % (Dec 2007).
3. Modernisation: SBI lags with respect to private players in terms of
modernisation of its processes, infrastructure, centralisation, etc.
Opportunities:
1. Merger of associate banks with SBI: Merger of all the associate banks
(like
SBH, SBM, etc) into SBI will create a mega bank which streamlines operations
and unlocks value.
2. Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will
further
increase its reach.
3. Increasing trade and business relations and a large number of expatriate
populations offers a great opportunity to expand on foreign soil.
Threats:

1. Advent of MNC banks: Large numbers of MNC banks are mushrooming

in
the Indian market due to the friendly policies adopted by the government.
This
can increase the level of competition and prove a potential threat for the
market
share of SBI bank.
2. Consumer expectations have increased many folds in last few years and
the
bank has not been responsive enough to meet them on time.
3. Private banks have started venturing into the rural and semi-urban sector,
which
used to be the bastion of the State Bank and other PSU banks
4. Employee Strike: There was an employee strike in the year 2006 which
disrupted SBIs activities. This can be repeated in the future.

2.4 Overview of HDFC BANK

HDFC Bank began operations in 1995 with a simple mission: to be a "Worldclass Indian
Bank". They realized that only a single-minded focus on product quality and
service
excellence would help them to get there.
25
HDFC Bank, one amongst the firsts of the new generation, tech-savvy
commercial banks
of India, was set up in august 1995 after the Reserve Bank of India allowed
setting up of
Banks in the private sector. The Bank was promoted by the Housing
Development
Finance Corporation Limited, a premier housing finance company (set up in
1977) of
India. Net Profit for the year ended March 31, 2006 was up 30.8% to Rs 870.8
crores.
Branch network
Currently (2007), HDFC Bank has 583 branches located in 263 cities of India,
and all
branches of the bank are linked on an online real-time basis. The bank offers
many
innovative products & services to individuals, corporates, trusts,
governnments,
partnerships, financial institutions, mutual funds, insurance companies. The
bank also has
over 1471 ATMs. In the next few month the number of branches and ATMs
should go up
substantially.
Recognition

Over a decade of its operations, HDFC Bank has been recognized, rated and
awarded by
a number of organizations, which includes: Best Domestic Bank in India in
The Asset
Triple A Country Awards 2005, 2004 and 2003. Company of the Year Award
in The
Economic Times Awards for Corporate Excellence 2004-05.
Asiamoney's Awards for Best Domestic Commercial Bank as well as Best
Cash
Management Bank - India in 2005. The Asian Banker Excellence in Retail
Banking Risk
Management Award in India for 2004. Finance Asia Best Bank - India in
2005, "Best
Domestic Commercial Bank India in 1999, 2000 and 2001 respectively and
Best
Local Bank India in 2002 and 2003.
Business Today Best Bank in India in 2003 and 2004. Best Overall
Local/Domestic Bank India in the Corporate Cash Management Poll
conducted by
Asiamoney magazine. Selected by Business World as "one of India's Most
Respected
Companies" as part of The Business World Most Respected Company Awards
2004. In
2004, Forbes Global named HDFC Bank in its listing of Best under a Billion,
100 Best
Smaller Size Enterprises in Asia/Pacific and Europe. In 2004, HDFC Bank won
the
26
award for Operational Excellence in Retail Financial Services -India as part
of the
Asian Banker Awards 2003. In 2003, Forbes Global named HDFC Bank in its
ranking of
Best Under a Billion, 200 Best Small Companies for 2003. The Financial
Express
named HDFC Bank the Best New Private Sector Bank 2003 in the FE-Ernst
& Young
Best Banks Survey 2003.
Outlook Money named HDFC Bank the Best Bank in the Private Sector for
the year
2003. NASSCOM and economictimes.com have named HDFC Bank the Best
IT User in
Banking at the IT Users Awards 2003.
Euromoney magazine gave HDFC Bank the award for "Best Bank India in
1999,
Best Domestic Bank in India in 2000, and Best Bank in India in 2001 and
2002.

Asiamoney magazine has named us Best Commercial Bank in India 2002

For its use of
information technology, HDFC Bank has been recognized as a
Computerworld Honors
Laureate and awarded the 21st Century Achievement Award in 2002 for
Finance,
Insurance & Real Estate category by Computerworld, Inc., USA. Its
technology initiative
has been included as a case study in their online global archives. Business
India named
HDFC Bank Indias Best Bank in 2000. In 2000, Forbes Global named HDFC
Bank in
its list of The 300 Best Small Companies in the world and as one of the 20
for 2001
best small companies in the world.
Profile
The Housing Development Finance Corporation Limited (HDFC) was amongst
the first to receive an 'in principle' approval from the Reserve Bank of India
(RBI) to set
up a bank in the private sector, as part of the RBI's liberalisation of the
Indian Banking
Industry in 1994. The bank was incorporated in August 1994 in the name of
'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced
operations
as a Scheduled Commercial Bank in January 1995.
Business focus
HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to
build sound customer franchises across distinct businesses so as to be the
preferred
provider of banking services for target retail and wholesale customer
segments, and to
achieve healthy growth in profitability, consistent with the bank's risk
appetite. The bank
is committed to maintain the highest level of ethical standards, professional
integrity,
27
corporate governance and regulatory compliance. HDFC Bank's business
philosophy is
based on four core values Operational Excellence, Customer Focus, Product
Leadership
and People
Corporate Details
The Housing Development Finance Corporation Limited ( HDFC ) was
amongst the

first to receive an 'in principle' approval from the Reserve Bank of India (RBI)
to set up a
bank in the private sector, as part of the RBI's liberalization of the Indian
Banking
Industry in 1994. Incorporated in August 1994 as HDFC Bank Limited , as
of December
31, 2006, the bank had a India network of 684 branches in 316 cities in India
and over
1663 ATM's.
Activities
HDFC Bank mainly provides three kinds of banking services:
Personal Banking
NRI Banking
Wholesale Banking
The following are the products and services provided by the HDFC bank
HDFC Bank provides loans like Personal Loans , Home Loans , Educational
Loans , Two Wheeler Loans , New car Loans, Used Car Loans, Overdraft
Against
Car, Express Loans, etc.
HDFC Bank provides Credit, Debit and Prepaid Cards to help you meet your
financial objectives.
HDFC Bank provides facilities like Mutual Funds , Insurance , General &
Health
Insurance, Bonds , Financial Planning, Knowledge Center, Equities &
Derivatives, Mudra Gold bar.
If you need to deal in foreign currency and keep tabs on exchange rates
every now and
then, transfer funds to India, make payments etc., HDFC Bank has a range of
products
and services that you can choose from to transact smoothly, efficiently and
in a timely
manner.
With HDFC Bank 's payment services, you can bid goodbye to queues and
paper work.
HDFC 's range of payment options make it easy to pay for a variety of
utilities and
services.
28
HDFC Bank has designed two programs to make banking easier for the
customers and
they are
HDFC Bank Preferred Programme
HDFC Bank Classic Programme.
HDFC Bank offers Private Banking services to high net worth individuals and
institutions.

HDFC Bank offers you quick, economical and convenient options to remit and
transfer
funds to India.
Corporate Banking reflects HDFC Bank 's strengths in providing our corporate
clients in
India, a wide array of commercial, transactional and electronic banking
products.
HDFC Bank acts as an active medium between the government and the
customers by
means of various services.
Performance
Profit & Loss Account : Year ended March 31, 2007
For the year ended March 31, 2007, the Bank earned total income of
Rs.8,405.3 crores as
against Rs.5,599.3 crores in the corresponding period of the previous year.
Net revenues
(net interest income plus other income) for the year ended March 31, 2007
were
Rs.5,225.8 crores, up 42.4% over Rs.3,669.8 crores for the year ended March
31, 2006.
Net Profit for year ended March 31, 2007 was Rs.1,141.5 crores, up 31.1%,
over the
corresponding year ended March 31, 2006.
Organization
Mr. Aditya Puri is the Managing Director of HDFC Bank .
Contact Details
Registered address: HDFC Bank House ,
Senapati Bapat Marg, Lower Parel,
Mumbai - 400 013,
India.
29
HDFC BANK AND CENTURION BANK OF PUNJAB MERGER
Merger of Centurion Bank of Punjab with HDFC Bank at share swap ratio of
1:29. The
Scheme of Amalgamation envisages a share exchange ratio of one share of
HDFC Bank
for twenty nine shares of Centurion Bank of Punjab.
The combined entity would have a nationwide network of 1,148 branches
(the largest
amongst private sector Banks) a strong deposit base of around Rs. 1,200
billion and net
advances of around Rs. 850 billion. The balance sheet size of the combined
entity would
be over Rs. 1,500 billion.
The share exchange ratio approved by the respective Boards was based on
the

recommendations made by M/s Dalal & Shah, Chartered Accountants, and

Ernst &
Young Private Ltd. who acted as independent joint valuers to the transaction.
The draft Scheme of Amalgamation, the due diligence report and any other
matters as
required will be considered by the Board of HDFC Bank in their meeting
scheduled on
February 28, 2008. The Board of CBOP will meet on the same day in order to
consider
the draft Scheme of Amalgamation and any other matters as required.
HDFC Banks Board noted that in the event of the merger of Centurion Bank
of Punjab
with HDFC Bank being approved at its meeting on February 28, 2008, it
would consider
making a preferential offer to its promoter Housing Development Finance
Corporation
(HDFC), to enable HDFC to maintain its percentage shareholding in the
merged entity.
HDFC Banks Board also noted that Mr. Rana Talwar has been offered a seat
on the
Board as non executive director and Mr. Shailendra Bhandari will be invited
to join the
Board as Executive Director.
Commenting on the proposed merger, Mr. Deepak Parekh, Chairman, HDFC
said, We
were amongst the first to get a banking license, the first to do a merger in
the private
sector with Times Bank in 1999, and now if this deal happens, it would be the
largest
merger in the private sector banking space in India. HDFC Bank was looking
for an
appropriate merger opportunity that would add scale, geography and
experienced staff to
its franchise. This opportunity arose and we thought it is an attractive route
to supplement
30
HDFC Banks organic growth. We believe that Centurion Bank of Punjab
would be the
right fit in terms of culture, strategic intent and approach to business.
Distribution network
HDFC Bank is headquartered in Mumbai. The Bank at present has an
enviable
network of over 684 branches spread over 316 cities across India. All
branches are linked
on an online real-time basis. Customers in over 120 locations are also
serviced through

Telephone Banking. The Bank's expansion plans take into account the need
to have a
presence in all major industrial and commercial centres where its corporate
customers are
located as well as the need to build a strong retail customer base for both
deposits and
loan products. Being a clearing/settlement bank to various leading stock
exchanges, the
Bank has branches in the centres where the NSE/BSE have a strong and
active member
base.
The Bank also has a network of about over 1,740 networked ATMs across
these cities.
Moreover, HDFC Bank's ATM network can be accessed by all domestic and
international
Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express
Credit/Charge cardholders.
HDFC Bank operates in a highly automated environment in terms of
information
technology and communication systems. All the bank's branches have online
connectivity, which enables the bank to offer speedy funds transfer facilities
to its
customers. Multi-branch access is also provided to retail customers through
the branch
network and Automated Teller Machines. The Bank has made substantial
efforts and
investments in acquiring the best technology available internationally, to
build the
infrastructure for a world class bank. In terms of software, the Corporate
Banking
business is supported by Flexcube, while the Retail Banking business by
Finware, both
from i-flex Solutions Ltd. The systems are open, scaleable and web-enabled.
The Bank has prioritized its engagement in technology and the internet as
one of its key
goals and has already made significant progress in web-enabling its core
businesses. In
each of its businesses, the Bank has succeeded in leveraging its market
position, expertise
and technology to create a competitive advantage and build market share.
AWARDS
31
2008
CNN-IBN
'Indian of the Year (Business)'
Nasscom IT User Award 2008

'Best IT Adoption in the Banking Sector'

Business India
'Best Bank 2008'
Forbes Asia
Fab 50 companies in Asia Pacific
Asian Banker Excellence in Retail Financial Services
Best Retail Bank 2008
Asiamoney
Best local Cash Management Bank Award voted by Corporates
Microsoft & Indian Express Group
Security Strategist Award 2008
World Trade Center Award of honour
For outstanding contribution to international trade services.
Business Today-Monitor Group survey
One of India's "Most Innovative Companies"
Financial Express-Ernst & Young Award
Best Bank Award in the Private Sector category
Global HR Excellence Awards - Asia Pacific HRM
Congress:
32
'Employer Brand of the Year 2007 -2008' Award - First Runner up, &
many more
Business Today
'Best Bank' Award
2007
Dun & Bradstreet American Express Corporate Best Bank Award 2007
'Corporate Best Bank' Award
The Bombay Stock Exchange and Nasscom Foundation's Business for Social
Responsibility Awards 2007
'Best Corporate Social Responsibility Practice' Award
Outlook Money & NDTV Profit
Best Bank Award in the Private sector category.
The Asian Banker Excellence in Retail Financial Services Awards
Best Retail Bank in India
Asian Banker
Our Managing Director Aditya Puri wins the Leadership Achievement
Award for
India
2.5 PRODUCTS AND SERVICES PROVIDED BY HDFC BANK
Savings Accounts
Regular Savings Account
Savings Plus Account
33
SavingsMax Account
No Frills Account
Retail Trust Account

 Salary Accounts
Payroll
Classic
Regular
Premium
Defence Salary Account
Kid's Advantage Account
Pension Saving Bank Account
Family Savings Group
Current Accounts
Plus Current Account
Trade Current Account
Premium Current Account
Regular Current Account
Reimbursement Current Account
RFC - Domestic Account
Fixed Deposits
Regular Fixed Deposit
Super Saver Account
Sweep-in Account
Loans
Personal Loans
Home Loans
Two Wheeler Loans
New Car Loans
Used Car Loans
34
Overdraft Against Car
Express Loans
Gold Loan
Educational Loan
Loan Against Securities
Cards
Credit Cards
Silver Credit Card
Gold Credit Card
Platinum Plus Credit Card
Debit Cards
EasyShop International Debit Card
EasyShop Gold Debit Card
EasyShop International Business Debit Card
Access Your Bank
NetBanking
MobileBanking
ATM
PhoneBanking

2.6 SWOT analysis

STRENGTH
1. Right strategy for the right products
2. superior customer service vs competitiors
3. great brand image
4. high degree of customer satisfaction
35
5. good place to work
6. lower response time with efficient & effective service
7. dedicated work force making a long term career in the field

WEAKNESSES

1. Customer service staff need training

OPPORTUNITIES

1) Profits margins will be good

2) Could extent to overseas broadly.
3) Could seek better customer deals

THREATS

Legislation could impact

great risk involved
very high competition prevailing in the industry
lack of infrastructure in rural areas could constrain
investment.
36
Chapter 3
3.1 OBJECTIVES OF THE STUDY
1. To know preference of customers regarding public sector banks and
private sector
banks.
2. to analyze which facility influences the customer most while selecting
Bank,
3. to compare the various services provided by these banks and
4. to make aware about the various services provided by the bank.
3.2 SCOPE OF THE PROJECT
Personal visit to the branches of SBI and HDFC banks was done to collect the
first hand
information. Study is done with the special reference to the area,
Chandigarh City.
3.3 LITERATURE REVIEW
1. Denise K. Conroy in his study titled (Customer satisfaction measures in
the public
sector: what do they tell us?) attempts to devise customer satisfaction
measures,
according to him there are a number of factors which can affect the
interpretation of
11
11
11
11

results - the nature of the customer, service provision, service quality and,
for the public
37
sector, the extent to which consumer sovereignty exists. Resources may be
better directed
towards setting and maintaining high levels of standard of service. This study
addresses
the difficulties and highlights the complex nature of a customer or service
beneficiary
who can be, at the same time, a taxpayer, voter, recipient of financial
benefits, with
expectations of the public sector and its delivery agent, yet cannot choose
another
provider.
2.Harry Nowka, Southwestern Oklahoma State University,
Nancy Buddy, Southwestern Oklahoma State University,
Robert Reeder, Southwestern Oklahoma State University and
Daniel Hart, Southwestern Oklahoma State University in their study
titled (Customer
responses: A COMPARATIVE STUDY) wants to determine various variables
which
influence customers of a bar and grill. This comparative analysis includes
customer
responses with comparisons made to the major competitor's customer
responses, student
customer responses, and responses of a panel of non customers assembled
to assess
potential customer responses. This study indicates that location can be a
significant
deterrent to expansion of the customer base. The personality of the owner
can have a
positive impact on customer flow. Analysis of spending patterns indicates
that food and
pool were underutilized. The male/female ratio was a determinate of
customer flow.
3. Dawn Iacobucci, Amy Ostrom, Kent Grayson in their study
titled(Distinguishing
Service Quality and Customer Satisfaction: The Voice of the
Consumer) presents
two studies that rely on divergent methodologies to examine whether or not
quality and
satisfaction have distinct antecedent causes, consequential effects, or both
(i.e., whether
or not they should be considered a single construct, or distinct, separable
constructs).

They focus on consumers understanding and use of the words quality and
satisfaction; in
both studies, respondents report whether or not they think quality and
satisfaction differ,
38
and if so, on what dimensions or under what circumstances. In the first
study, they use
the qualitative critical incident technique to elicit service attributes that
are salient to
respondents when prompted to consider quality and satisfaction as distinct.
they code the
responses to these open-ended survey questions to examine whether quality
can be teased
apart from satisfaction, from the respondents (consumers) perspective. In
the second
study, to triangulate on the qualitative data, they experimentally
manipulated a number of
service attributes drawn from both the first study and from the literature to
see whether or
not they have differential impacts on judgments of quality and satisfaction.
They did not
presuppose that quality and satisfaction differrather, they asked
respondents to make a
judgment either of quality or of satisfaction, defining the term as they saw
fit.
4. Antreas D. Athanassopoulos in his study titled (Customer
Satisfaction Cues To
Support Market Segmentation and Explain Switching Behavior)
examined the
customer satisfaction cues in retail banking services in Greece. The study
proposes an
instrument of customer satisfaction that contains service quality and such
other attributes
as price, convenience, and innovation. The proposed framework of customer
satisfaction
was verified empirically yielding four distinct facets for business customers
and five for
individual customers. The performance implications of the customer
satisfaction
instrument are also explored. What is shown is that customer segments, in
fact, yield
statistically different satisfaction scores, which verifies the managerial value
of customer
segmentation practices. Finally, the facets of customer satisfaction as
explanatory cues

for the switching behavior of individual and business customers were tested
successfully.
5. Rengasamy Elango and Vijaya Kumar Gudep in their study titled(A
Comparative
Study on the Service Quality and Customer Satisfaction among
Private, Public and
Foreign Banks) focuses on the service quality and customer satisfaction
among the
private, public and foreign banks in India. An analysis is carried out to
examine the level
of awareness among customers and to identify the best sector which
provides qualitative
customer service. This becomes relevant in the context of recommendations
of various
committees constituted by the Government of India and the RBI, from time
to time, to
39
suggest measures to improve customer service systems of the public sector
commercial
banks of India. A well-structured questionnaire is used to collect the views of
respondents
across the three banking sectors. The survey instrument includes various
dimensions,
pertaining to the quality of customer services in terms of banking personnel,
convenient
working hours, Web-based services, error free value-added services and
efficient
grievance redressal mechanism etc. Apart from the basic statistical tools
such as
measures of central tendency, The authors also use `factor analysis' and the
`One-way
Anova' classification. The idea behind this is to extract the relevant factors
and analyze
whether there is any significant difference with respect to service quality
within the three
banking sectors. The results indicate that the level of awareness among the
customers
improved significantly during the study period. It is interesting to note that
the results are
consistent with the previous studies conducted on customer service aspects,
and it has
been observed that the foreign and the new generation private sector banks
are serving
the customers better. This has larger implications on the public sector
commercial banks

in India with respect to customer service delivery aspects. It is high time the
public sector
commercial banks made efforts to revamp their approach towards
customers, so as to
perform better and derive competitive advantage in the long run.
3.4 RESEARCH METHODOLOGY
It describes the data collection method, the sampling plan, the tools of
investigation,
planning and testing of questionnaire and the limitations of the study. The
study requires
the data to be collected from two different sources i.e. the primary source
and the
secondary source. The primary data is collected with the help of structured
questioners
which is being modified & reliable and the secondary data through the
various journals,
newspapers and websites.
Data Source:
(a) Primary Data: Primary data was collected by means of questionnaires
(b) Secondary data: Secondary data collected by referring to various
books,
newspapers, magazines, journals and internet (details in bibliography)
Research Design
40
Present study enquired and brought forward the results concerning the set
objectives
specified before which relates to description of the state of affairs as a result
it clearly
states that it was a DESCRIPTIVE STUDY, which included fact finding
enquiries of
different kinds.
Sampling Design
Universe: - The universe was finite in this study, since the population of
Patiala City is
certain and can be counted.
Sampling Unit: - The sampling unit is an individual (non-staff member) who
is having
account in SBI and HDFC Banks.
Sample Size: - The sample size for the study was 70 individuals, non-staff
members of
SBI and HDFC Banks, Chandigarh Out of which 35 belongs to SBI and 35
belongs to
HDFC bank.
Sampling Procedure: - Due to the time and resource constraints the
convenience

sampling technique was used. The individuals were selected according to

convenience to
fill the questionnaires.

Research Instrument used: Questionnaires .

3.6 LIMITATIONS
Though every effort was made to make the report authentic in every sense,
yet there are
few factors which might have their influence on the final report.
1. There was time shortage. Time provided to us was very short which make
it
difficult for us to conduct survey at wider range.
2. Sometimes respondents did not respond well to all the questions in the
questionnaire.
3. Low cooperation from the bank executives make to struggle more, due to
which
we were forced to restrict our sample size to 80.
4. Some biasness might have occurred in analysis. Because of lack of expert
knowledge.
41
5. Best efforts were made to incorporate all-important variables in study, yet
chances
of some of variables not appearing in study are not ruled out.
6. Frequent developments in this sector can be a major reason of limitation in
the
study
7. Biasness in views of respondents cant be ruled out
8. Resistance to change sometimes affects view of respondents.

Chapter 4.1

FINDINGS
DATA ANALYSIS
STATE BANK OF INDIA
42

Sample Size 35
SAMPLE SIZE
SBI 35
HDFC 35

43
1. AGE GROUP AND DISTRIBUTION OF MALE AND FEMALE
CUSTOMERS
DEALING WITH SBI
(a) Age Group
AGE NO. OF PERSONS
LESS THAN 25 5
25-35 8
35-45 6
45-55 12
55 & ABOVE 4

44

NO. OF PERSONS
(a)Gender
GENDER
NO. OF
PERSONS
MALE 28
FEMALE 7

45
2. OCCUPATION OF THE CUSTOMERS OF SBI
OCCUPATION NO. OF

46

PERSONS
SERVICE 15
BUSINESMAN 6
PROFESSIONAL 3
STUDENT 8
HOUSEWIFE 3

3. DISTRIBUTION OF THE INCOME OF THE CUSTOMERS OF SBI

INCOME NO. OF PERSONS
NIL 8
LESS THAN 50000 5
50000-150000 7
150000-300000 5
300000-500000 6

47

500000-ABOVE 4

4. MOST IMPORTANT REASON FOR CHOOSING SBI

FACTORS
NO. OF
PERSONS
I have a traditional bank account with the same
bank 12
The brand name of the bank 4
The excellent service offered by this bank 5
ATM service 7

48

Net banking facility 3

Location advantage 4

5. ACCOUNT FACILITY AVAILING IN THE SBI

FACILITY NO. OF PERSONS
Savings account 18
Current account 5
Fixed deposit 12
NRI account 0

49
6. NO. OF YEARS, CUSTOMERS DEALING SBI
YEARS
NO. OF
PERSONS
Less than 1 year 7
1 to 2 years 12
3 to 5 years 7
More than 5 years 9

50
7. REASON FOR TYPICALLY VISITING THE BANK BRANCH
REASONS NO. OF

51

PERSONS
To make a deposit 14
To get advice for investment
options 2
To inquire about a balance 7
To withdraw cash 12

8. HOW WOULD YOU RATE THE FOLLOWING BANKING SERVICE

QUALITY ON SCALE OF 1-5 PROVIDED BY BANK WHERE 1-EXCELLENT,
2-GOOD, 3 ABOVE-AVERAGE, 4-AVERAGE, 5-BELOW AVERAGE
ACCE
SS
COMMU
NICATIO
N
Confiden
tiality Courtesy
Reliabilit
y Security
Responsi
veness
Waiting
time

52

EXCELLENT 13 7 15 12 14 17 9 5
GOOD 9 11 10 9 9 12 7 6
ABOVE
AVERAGE 6 13 6 7 4 4 12 4
AVERGE 5 3 3 5 5 1 5 9
BELOW
AVERAGE 2 1 1 2 3 1 2 11

9. WHICH FACILITY SATISFIES YOU MOST

FACILITY NO. OF PERSONS
ATM 13
Loan 7

Early cheque clearance 2

Preparation of drafts 3
Interest package 3
Net banking 3
Phone banking 4

53
10. IF YOU ARE PROVIDED WITH BETTER SERVICES BY OPTIONAL
BANK. WOULD YOU LIKE TO MOVE TO OTHER BANK
YES 6
NO 29

54
11. OVERALL SATISFACTION OF THE CUSTOMERS WITH THE
PERFORMANCE OF SBI
SATISFCTION
NO. OF
PERSONS
EXCELLENT 8
GOOD 6
SATISFACTORY 18
AVERAGE 3
BELOW AVERAGE 0

55
SATISFACTION LEVEL

Chapter 4.2
56

FINDINGS
DATA ANALYSIS
HDFC BANK
Sample Size 35
57
SAMPLE SIZE
HDFC 35
SBI 35
1. AGE GROUP AND DISTRIBUTION OF MALE AND FEMALE
CUSTOMERS
DEALING WITH HDFC
58
(a) Age Group

AGE NO. OF PERSONS

LESS THAN 25 4
25-35 12
35-45 7
45-55 9
55 & ABOVE 3

(b) Gender
59
GENDER
NO. OF
PERSONS
MALE 27
FEMALE 8

2. OCCUPATION OF THE CUSTOMERS OF HDFC

60
OCCUPATION
NO. OF
PERSONS
SERVICE 12
BUSINESMAN 13
PROFESSIONAL 5
STUDENT 3
HOUSEWIFE 2

61
3. DISTRIBUTION OF THE INCOME OF THE CUSTOMERS OF HDFC
INCOME NO. OF PERSONS
NIL 2
LESS THAN 50000 4
50000-150000 9
150000-300000 8
300000-500000 9
500000-ABOVE 3

4. MOST IMPORTANT REASON FOR CHOOSING HDFC

62
FACTORS NO. OF PERSONS

I have a traditional bank account with the same bank 3

The brand name of the bank 6

The excellent service offered by this bank 12
ATM service 5
Net banking facility 2
Location advantage 7

5. ACCOUNT FACILITY AVAILING IN THE HDFC

63
FACILITY NO. OF PERSONS
Savings account 21
Current account 7
Fixed deposit 6
NRI account 1

6. NO. OF YEARS, CUSTOMERS DEALING WITH HDFC

64

YEARS
NO. OF
PERSONS
Less than 1 year 7
1 to 2 years 9
3 to 5 years 13
More than 5 years 6

65
7. REASON FOR TYPICALLY VISITING THE BANK BRANCH
REASONS
NO. OF
PERSONS

To make a deposit 17

To get advice for investment

options 3
To inquire about a balance 5
To withdraw cash 10

66
8. HOW WOULD YOU RATE THE FOLLOWING BANKING SERVICE
QUALITY ON SCALE OF 1-5 PROVIDED BY BANK WHERE 1EXCELLENT, 2-GOOD, 3 ABOVE-AVERAGE, 4-AVERAGE, 5-BELOW
AVERAGE
AC
CE
SS
COMM
UNICAT
ION
Confiden
tiality
Courtes
y
Reliabili
ty
Securi
ty
Respons
iveness
Waiting
time
EXCE
LLEN
T 24 6 22 6 15 17 14 3
GOOD 6 12 22 10 8 7 8 2
ABOV
E
AVER
AGE 3 14 4 12 6 6 6 8
AVER
AGE 2 2 2 2 4 4 4 17
BELO
W
AVER
AGE 0 1 0 5 2 1 3 5

67
68
9. WHICH FACILITY SATISFIES YOU MOST
FACILITY
NO. OF
PERSONS
ATM 10
Loan 4
Early cheque clearance 8
Preparation of drafts 2
Interest package 3
Net banking 5
Phone banking 3

69
10. IF YOU ARE PROVIDED WITH BETTER SERVICES BY OPTIONAL
BANK. WOULD YOU LIKE TO MOVE TO OTHER BANK
YES 9
NO 26

70
11. OVERALL SATISFACTION OF THE CUSTOMERS WITH THE
PERFORMANCE OF HDFC BANK
SATISFCTION
NO. OF
PERSONS
EXCELLENT 7
GOOD 12
SATISFACTORY 8
AVERAGE 5
BELOW AVERAGE 3

SATISFACTION LEVEL
71

Chapter 4.3

DATA ANALYSIS
COMPARATIVE STUDY
OF
SBI
AND

HDFC BANK
Sample Size 70
72
1. COMPARATIVE STUDY OF AGE GROUP WITH GENDER OF
CUSTOMERS LINKING WITH SBI AND HDFC BANK
(a) AGE GROUP
AGE SBI HDFC
LESS THAN 25 5 4
25-35 8 12
35-45 6 7
45-55 12 9
55 & ABOVE 4 3

73
(b) GENDER

GENDER SBI HDFC

MALE 28 27
FEMALE 7 8

74
2. COMPARATIVE STUDY OF THE CUSTOMERS OF SBI AND HDFC
BANK REGARDING THEIR OCCUPATION
OCCUPATION SBI HDFC
SERVICE 15 12
BUSINESMAN 6 13
PROFESSIONAL 3 5
STUDENT 8 3
HOUSEWIFE 3 2

75
3. COMPARATIVE STUDY OF THE CUSTOMERS OF SBI AND HDFC
BANK REGARDING THEIR INCOME
INCOME SBI HDFC
NIL 0 2
LESS THAN 50000 8 4
50000-150000 7 9
150000-300000 10 8
300000-500000 6 9
500000-ABOVE 4 3

76
4 . COMPARITIVE STUDY OF MOST IMPORTANT REASON CHOOSING
THE PARTICULAR BANK
FACTORS SBI HDFC
I have a traditional bank account with the
same bank 12 3
The brand name of the bank 4 6
The excellent service offered by this bank 5 12

ATM service 7 5
Net banking facility 3 2
Location advantage 4 7

77
5. COMPARATIVE STUDY OF THE CUSTOMERS OF SBI AND HDFC BANK
REGARDING THE ACCOUNT FACILITIES PROVIDED TO THEM
FACILITY SBI HDFC
Savings account 18 21
Current account 5 7
Fixed deposit 12 6
NRI account 0 1

78
6. COMPARATIVE STUDY OF THE TIME PERIOD OF CUSTOMERS
DEALING WITH SBIAND HDFC BANK
YEARS SBI HDFC
Less than 1 year 7 7
1 to 2 years 12 9
3 to 5 years 7 13
More than 5 years 9 6

79
7. COMPARITIVE STUDY OF REASON THAT MAKE CUSTOMER TO
TYPICALLY VISIT BANK BRANCH
REASONS SBI HDFC
To make a deposit 14 17
To get advice for investment options 2 3
To inquire about a balance 7 5
To withdraw cash 12 10

80
8. COMPARITIVE STUDY OF MOST SATISFYING FACILITY
OFFERED BY THEM
FACILITY SBI HDFC
ATM 13 10
Loan 7 4
Early cheque clearance 2 8
Preparation of drafts 3 2
Interest package 3 3
Net banking 3 5
Phone banking 4 3

81
9. CUSTOMERS WANT TO SHIFT TO ANOTHER BANK IF THEY ARE
PROVIDED WITH BETTER SERVICE
CHANGE SBI HDFC
YES 6 9
NO 29 26

10. COMPARISON REGARDING THE OVERALL SATISFACTION

OF THE CUSTOMERS
82
SATISFCTION SBI HDFC

EXCELLENT 8 7
GOOD 6 12
SATISFACTORY 18 8
AVERAGE 3 5
BELOW AVERAGE 0 3

83

Chapter 5
5.1 Suggestions and Recommendations
1. Both the customers from SBI and HDFC bank have suggested that the
bank
should open one of its branch in industrial area like focal point.
2. One of the most common suggestion was to lower down the minimum
balance
required in the saving s account.
3. Staff should be more co-operative to the customers.
4. Customers were not fully aware of the services and the various charges
which
they have to pay. Therefore Banks should try to give some more information
to its
existing customers
Assumptions
The project report is based on the preference of the customers and the level
of satisfaction
towards SBI and HDFC bank. During project we come to know that both the
banks are
highly preferred by the customers but their preference is different up to
some extend
towards the service of these banks. Following are the assumptions of the
project.
1. Range of the survey is limited to Patiala city. It may not hold the same
result in
the different city.
2. The sample size for the survey is restricted up to 70. Out of Which 35
questionnaire was filled by the customers of SBI and 35 was filled by
customers
of HDFC bank.
3. Survey is done in a very short period of time. This may have impact on the
final
result of the survey.
84

Chapter 6

Appendix

QUESTIONNAIRE
CUSTOMER PREFERENCE TOWARDS SBI AND HDFC BANK
1. Name____________________

2. Gender
Male Female
3. Age
Less than 25 25-35
35-45 45-55
55-above
4. Occupation
Service Business
Professional Student
Housewife
5. Income
Nil Less than 50,000
50,000 to 1,50,000 1,50,000 to 3,00,000
3,00,000 to 5,00,000 5,00,000 and above

85
6. Bank you are dealing with
HDFC SBI
7. What was the single most important reason that you chose this particular Bank
I have a traditional bank account with the same bank
The brand name of the bank
The excellent service offered by this bank
ATM service
Net banking facility
Location advantage
Any other please specify_______________________________________
8. Which account facility you are availing in the Bank
Savings account Current account
Fixed deposit NRI account
9. Since how many years you are dealing with this Bank
Less than 1 year 1 to 2 years
3 to 5 years More than 5 years
10. What is the main reason that you typically visit your bank branch
(please choose the single most important reason)
To make a deposit
To get advice for investment options
To inquire about a balance
To withdraw cash
Any other please
specify______________________________________________

86
11. How would you rate the following banking service quality on scale of 1-5
provided
by bank where 1-excellent, 2-good, 3 above-average, 4-average, 5-below average
Access Communication
Confidentiality Courtesy
Reliability Security
Responsiveness Waiting time
12. Which facility satisfies you most
ATM Interest package
Loan Net banking
Early cheque clearance Phone banking
Preparation of drafts
13. If you are provided with better services by optional bank. Would you like to
move
to other bank.

Yes No
14. How would you rank the overall service
Excellent Good
Satisfactory Average Below Average
Suggestions
If any______________________________________________
signature
Thank you very much for your time, cooperation & patient

87
BIBLIOGRAPHY
WEBSITE USED
www.hdfcindia.com
www.statebankofindia.com
http://www.banknetindia.com/banking/index_1.htm
http://www.asiatradehub.com/india/banking/finance.html
http://www.en.wikipedia.org/wiki/Standard_Chartered_Bank
http://www.finance.indiamart.com/investment_in_india/standard_chartered_b
ank.
html
http://www.essays.se/about/literature+review+of+customer+satisfaction/
http://www.emeraldinsight.com
http://www.essays.se/about/literature+review+of+customer+satisfaction
http://www.essays.se/about/literature+review+of+customer+satisfaction/?
startrecord6
BOOKS FOLLOWED
Research methodology by C.R. Kothari
NEWS PAPERS
Business standard
Economic Times
88