1

A COMPARATIVE STUDY BETWEEN PRIVATE SECTOR BANKS AND

PUBLIC SECTOR BANKS WITH RESPECT TO CACHAR DISTRICT

A Thesis Submitted in

Partial Fulfilment of the Requirements for the Degree of

Master of Business Administration

Deepanjan Das
MBA-12-122

Under the supervision of

Mr.Shubrangshu Baruah

Department of Management Studies

NATIONAL INSTITUTE OF TECHNOLOGY SILCHAR

(2012-2014)
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DECLARATION

Thesis Title: A Comparative Study between Private Sector Banks and Public Sector
Banks with respect to Cachar District
Degree for which the Thesis is submitted: Master of Business Administration

I declare that the presented thesis represents largely my own ideas and work in my own
words. Where others ideas or words have been included, I have adequately cited and listed
in the reference materials. The thesis has been prepared without resorting to plagiarism. I
have adhered to all principles of academic honesty and integrity. No falsified or fabricated
data have been presented in the thesis. I understand that any violation of the above will
cause for disciplinary action by the Institute, including revoking the conferred degree, if
conferred, and can also evoke penal action from the sources which have not been properly
cited or from whom proper permission has not been taken.

----------------------------
(Signature)
Deepanjan Das
MBA-12-122

Date:
 3

CERTIFICATE
________________________________________________________________

This id to certify that the work contained in the thesis entitled A Comparative Study between
Private Sector Banks and Public Sector Banks with respect to Cachar District is a bona fide
work of Deepanjan Das (MBA-12-122) and Bishwadip Das (MBA-12-108) for the award of
Masters of Business Administration, which has been carried out in the Department of
Management Studies, National Institute of Technology, Silchar under my supervision and this
work has not been submitted elsewhere for a degree.

May 2014 Mr.Shubrangshu Baruah

Silchar Assistant Professor
Department of Management Studies
NIT Silchar, India
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Acknowledgements

I take this opportunity to render my deep sense of gratitude to my

supervisor, Mr ShubhrangshuBaruah,Assistant Professor, Department of
Management Studies for his constant and valuable guidance in the truest
sense throughout the course of the work. It was his encouragement and
support from the initial to the final level enabled me to develop an
understanding of the topic. Every time I had a problem, I would rush to
him for his advice, and he would never ever let me down. His timely
suggestions helped me to circumvent all sorts of hurdles that I had to face
throughout my work. I am deeply indebted for his motivation and
guidance. I would also like to extend my sense of gratitude to Mr.Ashim
Kumar Das, Head, Department of Management Studies for his constant
motivation and inspiration. Thanks go out to all our friends as they have
always been around to provide useful suggestions, companionship and
created a peaceful research environment. I wish to acknowledge the
continuous support and blessings of my parents which made this work
possible. Although they were physically far away from me, their immense
faith and wish is gratefully acknowledged. Finally I believe this research
experience will greatly benefit my career in the future.

Deepanjan Das
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Dedicated to
Department of Management Studies
National Institute of Technology, Silchar
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Executive Summary

The objective of the study is to have a comparative study of the PSU Banks and Private Sector Banks in Cachar
District and also to find out the most preferred Banking Sector among them.

For the above study a questionnaire was designed and the same was provided to the respondents for their
valuable inputs. Some of the inputs were taken from Qualtrics Survey Software and others were provided in the
form of hard copies.

All the aspects of the study included introduction of the study, objective of the study, research methodology,
literature review, data interpretation and analysis, findings, suggestions and recommendations.

The study suggests that in this part of the country the Public Sector Banks are ahead of the Private Sector Banks.
The main reasons according to our study are the trust and reliability factor (DICGC assurance on deposits) and
the location of the branch (Financial Inclusion policy of Reserve Bank of India)

The data collection of the study was mainly taken from primary source i.e. Questionnaire. And secondary
sources of the data i.e. internet and KiranPrakashan Books and Arihant Books.
 7

Table of Contents

List of Table (i)

List of Figure (ii)

Chapter 1: Page no.

1.1 Introduction to Banking.11

1.2 Banking in India12
1.3 History of banking in India13
1.4 Adoption of Banking Technology.19
1.5 Expansion of Banking Infrastructure20
1.6 Types of Bank.24
1.7 Function of Commercial banks.....27
1.8 Public Sector Banks...27
1.9 Private Sector Banks......30
1.10 Business of Banking..31

Chapter 2:

2.1 Objectives of the Study...33

2.2 Literature Review....35
2.3 Research methodology....36
2.4 Personal details of Respondents......38

Chapter 3:

3.1 Limitations of the Study.44

Chapter 4:

4.1 Data Interpretation and Analysis........46

Chapter 5:

Findings of the Study..55

Chapter 6:

Suggestions given by the respondents60

Chapter 7:
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Recommendations ..63
Chapter 8:

Conclusions.66
Chapter 9:

Annexure..68

References...72

List of Tables

Table no. Title Page no.

Table 1 Branches and ATMs of Commercial Bank.20
Table 2 Age of the respondents38
Table 3 Gender of the respondents...39
Table 4 Highest educational qualification ...40
Table 5 Occupation of the respondents41
Table 6 Place of Domicile ....42
Table 7 Awareness regarding PSU and Private Banks.43
Table 8 Banking Sector Preferred..47
Table 9 Types of Account..48
Table 10 Preferred Banks..49
Table 11 Reason for choosing a particular Banking Sector.50
Table 12 Services Availed ....51
Table 13 Satisfaction Level of Respondents....52
Table 14 Reason for choosing PSU Bank53
Table 15 Reason for choosing Private bank.54
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List of Figures
Figure no. Title Page no.
Figure 1 Business of Banking...31
Figure 2 Functioning of a Bank32
Figure 3 Age of the respondents...38
Figure 4 Gender of the respondents..39
Figure 5 Highest educational qualification...40
Figure 6 Occupation of the respondents...41
Figure 7 Place of Domicile.42
Figure 8 Awareness regarding PSU and Private Banks.43
Figure 9 Banking Sector Preferred.47
Figure 10 Types of Account.48
Figure 11 Preferred Banks49
Figure 12 Reason for choosing a particular Banking Sector.50
Figure 13 Services Availed ..51
Figure 14 Satisfaction Level of Respondents52
Figure 15 Reason for choosing PSU Bank53
Figure 16 Reason for choosing Private bank.54
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1.1

basis.

1.6 Types of Banks

Central bank

Development Bank

Investment Bank

Cooperative Credit Bank

Regional Rural Bank

Non Banking Financial Companies

Central Bank

The money market that acts as the central monetary authority of the country, serving as the
government bank as well as the bankers bank is known as a central bank of the country. The
main functions of central bank of a country are functions of note issue, bankers to
government, bankers bank etc.The RBI as the central bank of the country is the centre of the
Indian financial and monetary system. It has been guiding, monitoring, and regulating,
controlling, and promoting destiny of the IFS. It is quite young compared with such central
banks as the Bank of England, Risks bank of Sweden, and the Federal Reserve Board of the
U.S.

Main Functions of The Reserve bank of India

As the central banking authority of India, the reserve Bank of India performs the following
traditional functions of the central bank:

It provides currency and operates the clearing system for the government and banks.

It formulates and implements monetary and credit policies.

 11

It functions as the governments and bankers bank

It supervises the operations of credit institutions.

It regulates foreign exchange transactions.

It moderates the fluctuations in the exchange value of the rupee.

In addition to the traditional functions of the central banking authority, the Reserve bank of
India performs several functions aimed at developing the Indian financial system:

It seeks to integrate the unorganized financial sector with the organized financial
sector.

It encourages the extension of the commercial banking system in the rural areas.

It influences the allocation of credit.

It promotes the development of new institutions.

Development Banks

A development bank may be defined as a financial institution concerned with providing all
types of financial assistance to business units in the form of loans, underwriting, investment
and guarantee operations and promotional activities-economic development in general and
industrial development in particular.A development bank is basically a term lending
institution. It is a multipurpose financial institution with a broad development outlook. The
concept of development banks in a post independence phenomenon in India. With the end of
II World War there was an urgent need for speed industrial development in India. The usual
agencies that provided finance for large industries were inadequate. So the govt. of India
came forward to set-up a series of financial institution to provide funds to industries. The
industrial finance corporation of India, the first development bank was established in 1948.
Subsequently many other institutions were set-up. Ex. IDBI, IFCI, SIDBI etc.

Investment Banks
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Financial intermediaries that acquire the savings of people and direct these funds into the
business enterprises seeking capital for the acquisition of plant and equipment and for
holding inventories are called investment banks.

Features:-Long term financing, Security, merchandiser, Security middlemen, Insurer,

Underwriter

Functions: - Capital formation, Underwriting, Purchase of securities, Selling of securities,

Advisory services, Acting as dealer.

Cooperative Banking Sector

These banks play a vital role in mobilizing savings and stimulating agricultural
investment.Co-operativecredit institutions account for the second largest proportion of 44.6%
of total institutional credit of Rs.3854000 corer to agricultural and allied activities in the rural
sector in 1998 to 99.

Types of Co-operative Banking sector

The co-operative sector is very much useful for rural people. The co-operative banking sector
is divided into the following categories.

State co-operative Banks

Central co-operative banks

Primary Agriculture Credit Societies

Non Banking Finance companies

According to RBI it means financial institutions which is a company and a non banking
institution and which has as its principal business the receiving of deposits under any
schemes or arrangement or in any other manner or lending in any manner.

Merchant Banks

Institution that render wide range of services such as the management of customers
securities, portfolio management, counseling, insurance, etc are called Merchant Banks.

Functions: - Sponsoring issues, Loan syndication, Servicing of issues, Portfolio,

management, arranging fixed deposits, helps in merger& acquisition.
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Commercial Banks

Commercial banks comprising public sector banks, foreign banks, and private sector banks
represent the most important financial intermediary in the Indian financial system.

The changes in banking structure and control have resulted dueto wider geographical spread
and deeper penetration of rural areas, higher mobilization of deposits, reallocation of bank
credit to priority activities, andlower operational autonomy for a bank management.

The largest commercial Banks in India, (SBI), was set up in 1955 when the Imperial Bank
was nationalized and merged with some banks of the princely states. In 1969, in one fell
swoop, the fourteen largest privately owned commercial banks were nationalized.
Subsequently, several other privately owned commercial banks were nationalized. As a
result of these actions, public sector commercial banks, dominate the commercial banking
scene in the country.

1.7 Functions of commercial banks

Saving mobilization

Special loans

Bills discount

Credit creation

Agencies function

General utility function

1.8 Public Sector Banks in Cachar District

State Bank of India .

17 out of 20 nationalized banks except Andhra Bank , Bank of Maharashtra and

BharatiyaMahila Bank.

Regional rural banks, Assam GrameenVikasBank,sponsored by United Bank of India

Regional rural Bank

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They are oriented towards meeting the needs of the weaker section of the rural population
consisting of small and marginal farmers, agricultural laborerand small entrepreneurs. These
banks were set up after the nationalization of banks in 1969.

REGIONAL RURAL BANKS ACT, 1976 ACT NO. 21 OF 1976 [9th February, 1976.] An
Act to provide for the incorporation, regulation and winding up of Regional Rural Banks with
a view to developing the rural economy by providing, for the purpose of development of
agriculture, trade, commerce, industry and other productive activities in the rural areas, credit
and other facilities, particularly to the small and marginal farmers, agricultural laborers,
artisans and small entrepreneurs, and for matters connected therewith and incidental thereto.

Definition of Public Sector Bank

Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by
a government. The shares of these banks are listed on stock exchanges. There are a total of 21
PSBs in India..

Emergence of Public Sector Banks

The Central Government entered the banking business with the nationalization of the
Imperial Bank Of India in 1955. A 60% stake was taken by the Reserve Bank of India and the
new bank was named as the State Bank of India. The seven other state banks became the
subsidiaries of the new bank when nationalised on 19 July 1960. [2] The next major
nationalisation of banks took place in 1969 when the government of India, under prime
minister Indira Gandhi, nationalised an additional 14 major banks. The total deposits in the
banks nationalised in 1969 amounted to 50 crores. This move increased the presence of
nationalised banks in India, with 84% of the total branches coming under government
control.[3]

The next round of nationalisation took place in April 1980. The government nationalised six
banks. The total deposits of these banks amounted to around 200 crores. This move led to a
further increase in the number of branches in the market, increasing to 91% of the total
branch network of the country. The objectives behind nationalisation where:

To break the ownership and control of banks by a few business families,

To prevent the concentration of wealth and economic power,

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To mobilize savings from masses from all parts of the country,

To cater to the needs of the priority sectors.....

1.10 Business of Banking

( Banks)

Figure no.1
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Acting as Trustees
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Figure no.2

Chapter 2
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2.1 OBJECTIVES OF THE STUDY

This study has been conducted with a variety of important objectives in mind. The following
provides us with the chief objectives that have tried to achieve through the study. The extent
to which these objectives have been met could judged from the conclusions and suggestions,
which appear in the later of this study.

The Chief Objectives of this study (with respect to Cachar District) are:-

1. To find the banking sector largely preferredby the customers.

2. To find out the factors which influences the customers to choose a bank.

3. To study the problems faced by the customers in public as well as private sector banks and
also to compare between them.
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2.2 LITERATURE REVIEW

A literature review provides an overview and a critical evaluation of a body of literature
relating to a research topic or a research problem. It analyses a body of literature in order to
classify it by themes or categories, rather than simply discussing individual works one after
the other.

A literature review often forms part of a larger research project such as within a thesis, or it
may be an independent written work, such as a synthesis written paper.

PURPOSE OF A LITERATURE REVIEW -

A literature review situates our topic in relation to previous researches and illuminates a spot
for our research. It accomplishes several goals

Provides background for topic using previous research.

Shows we are familiar with previous, relevant research.
Evaluates the depth and breadth of the research with regards to our topic.
Determines relating questions or aspects of our topic in need of research.

In our research the main source of information has been the questionnaire filled up by the
respondents as well as the internet. The topic of our research comparative study of the PSU
 20

banks and private banks for Cachar district has not been published earlier. So the main
argument of the topic whether PSU banks or private banks rule in the Cachar district has been
the main focus. The internet, questionnaire served by us to the respondents, website of
particular banks have been the major source of information. Few worth literatures like
kiranprakashan bank books, Arihants banking knowledge have been very valuable.

The facts and figures have provided in these respective books and have been very helpful to
us.

2.3 RESEARCH METHODOLOGY

Research is an art of scientific investigation. In other words research is a scientific and

systematic search for pertinent information on a specific topic. The logic behind taking
research methodology into consideration is that one can have knowledge regarding the
method and procedure adopted for achievements of objective of the project. With the
adoption of this others can also evaluate the results too.

The methodology adopted for studying the objective of the project was surveying the bank
account holders of the Cachar district. So keeping in view the nature of requirement of the
study to collect all the relevant information regarding the comparison of public sector banks
and the private sector banks direct personal interview method with the help of structured
questionnaire was adopted for collection of primary data.

Secondary data has been collected through the various magazines and newspaper and by
surfing on internet and also by visiting the websites of Indian Banking Association.
 21

SAMPLE DESIGN A sample design is a definite plan for obtaining a sample from a given
population.It refers to the techniques or the procedures that the researchers would adopt in
selecting items for the samples.Sampledesignmay as well lay down the number of items to be
included in the sample i.e the size of the sample. Sample design is determine before data are
collected. Here we select the population as sample in our sample design. The selected
respondents should be as representatives of the total population.

POPULATION The persons holding bank accounts in the cachar district were taken into
consideration.

DATA COLLECTION

Data was collected by using two main methods i.e. primary data and secondary data.

PRIMARY DATA primary data is the data which is used or collected for the first time and
it is not used by anyone in the past. There are number of sources of primary data from which
the information can be collected. We took the following resources for our research.

a) QUESTIONNAIRE This method of data collection is quite popular, particularly in case

of big enquiries. Here in our research we set 15 simple questions and requested the
respondents to answer these questions with correct information.

SECONDARY DATA Secondary data is the data which is available in readymade form
and which has already been used by other people for various purposes. The sources of
secondary data are newspaper, internet, websites of IBA, journals and other published
documents.

SAMPLE PLAN

SAMPLE SIZE - Keeping in mind all the constraints the size of the sample of our study was
selected as 80.
 22

SAMPLING UNIT State bank of India, Tarapur branch in Cachar district. Due to nature of
study we also visited various branches of SBI, UBI, ICICI, AXIS etc in Cachar district.

SAMPLING TECHNIQUE Stratified convenient sampling. All the bank account holders
were taken into considerations. Research was conducted on clear assumptions that the
respondents would give frank and fair answer in a pragmatic way without any bias.

SAMPLING DESCRIPTION In order to understand the nature and characteristics of

various respondents in this study, the information was collected and analyzed according to
their socio - economic background like education, occupation, age, gender, place of domicile
etc .This descriptions show that these respondents that have been included in the study belong
to different background and this in turn enhances the capability and accuracy of the study.

2.4 PERSONAL DETAILS OF RESPONDENTS

a) AGE

Figure no.3
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AGE

Below 20
20 - 30
31 - 44
45 and above

Table no.2

PARTICULARS NO. OF RESPONDENTS

BELOW 20 7
20-30 41
31-44 21
45 and above 11

ANALYSIS AND INTERPRETATION From the above result we come to know that out
of 80 respondents, 7 are below 20 years of age, 41 belongs to 20 30 years, 21 belong to 31
44, 11 belong to 45 and above years of age. This shows that majority of our respondents are
young people between the age 20 to 30.

b) GENDER

Figure no.4
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GENDER

MALE
FEMALE

Table no.3

PARTICULARS NO. OF RESPONDENTS

MALE 56

FEMALE 24

ANALYSIS AND INTERPRETATION From the above result it can be inferred that
majority of our respondents are male, number being 56 as compared to 24 females in a total
of 80.

c) HIGHEST EDUCATIONAL QUALIFICATION

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Figure no.5

Highest educational qualification

upto matric
graduate and professional
post graduate
illiterate

Table no. 4

PARTICULARS NO. OF RESPONDENTS

UPTO MATRIC 9
GRADUATE AND PROFESSIONAL 43
POST GRADUATE 23
ILLITERATE 5

ANALYSIS AND INTERPRETATION From the above result it can be inferred that
majority of our respondents are graduate and professionals, number being 43, while the
second most respondents are post graduates with number being 23. Illiterates are 5 and up to
metric level education are 9 in our total tally of 80 respondents.

d) OCCUPATION

Figure no.6
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OCCUPATION

BUSINESSMAN
GOVT.
STUDENT
OTHERS

Table no.5

PARTICULARS NO. OF RESPONDENTS

BUSINESSMAN 14
GOVT. 37
STUDENT 22
OTHERS 7

ANALYSIS AND INTERPRETATION The above result shows that 37 of our

respondents are govt. employees while the second most respondents are students, number
being 22.Businessman comprises 14 and others are 7 in our total respondents of 80.

e) PLACE OF DOMICILE
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Figure no.7

PLACE OF DOMICILE

URBAN
RURAL

Table no.6

PARTICULARS NO. OF RESPONDENTS

URBAN 52

RURAL 28

ANALYSIS AND INTERPRETATION From the above results it can be inferred that
majority of our respondents are urban people, number being 52 out of 80, while rural people
are 28.

f) AWARE OF THE DIFFERENCE BETWEEN PSU BANKS AND PRIVATE BANKS

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Figure no.8

AWARENESS

YES
NO
PARTIALLY

Table no.7

PARTICULARS NO. OF RESPONDENTS

YES 41
NO 27
PARTIALLY 12

ANALYSIS AND INTERPRETATIONS From the above result it can be said that
regarding the awareness between public sector and private sector banks with respect to
differences, the responses are mixed.41 respondents are aware of the differences which
comprises 50 % of the tally while 27 people dont know the difference between PSU banks
and private banks. 12 are those who are not sure.
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Chapter 3

LIMITATIONS OF THE STUDY

 30

Due to constraints of time and resources the study is likely to suffer from certain limitations.
Some of them are mentioned below so that the findings of the study are understood in proper
perspective.

The limitations of the study are

1) Some of the respondents of the survey were unwilling to share information.

2) The research was carried out in a short period of time so. Therefore the sample size and
other parameters were selected accordingly so as to finish the work in given time frame.

3) The information given by the respondents might be biased because some of them might
not be interested in providing correct information.

4) The officials of the bank supported me a lot but did not have sufficient time to clear all the
points elaborately.

5) Since the sample unit is a semi urban place i.e. Cachar district with less presence of private
sector banks, hence the result is likely to tilt a bit towards the public sector banks.
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Chapter 4

DATA ANALYSIS AND INTERPRETATION

Analysis of data collected

 32

1) The respondents were asked about which banking sector services they avail. The
result is as follow
Table no.8

BANKING SECTOR NO. OF RESPONDENT

PUBLIC 62

PRIVATE 14

BOTH 4

ANALYSIS AND INTERPRETATION

Figure no.9

BANKING SECTOR

PUBLIC
PRIVATE
BOTH

From the above pie chart it can be inferred that majority of our respondents avail public
sector banks.62 respondents out of 80 avail public sector services, which in itself is a very
thumping number. The number of private sector respondents is 14 and both sector users are
minimal, number being 4. Hence it can inferred that public sector banks outweigh the private
sector banks with respect to customer in this particular region of Cachar district.
 33

2) They respondents were asked regarding the account that they are maintaining in
their respective banks. Here is the result

Table no.9

ACCOUNT SAVING CURRENT FD SALARY

NO. OF 55 4 7 14
RESPONDENT

ANALYSIS AND INTERPRETATION From the above results it can be inferred that
majority of our respondents are availing saving bank account. Almost 70 % of our
respondents are saving bank account holders. Saving bank account holders are 55 out of 80
while the next best account that is maintained in this part of country is salary account,14 out
of 80,current account 4 and FD is 7. This means that in Cachar district majority of people
prefer saving bank account.

Figure no.10

TYPE OF ACCOUNT

ACCOUNT
SAVING
CURRENT
FD
SALARY

3) They respondents were asked regarding the Bank that they prefer the most
Table no.10
 34

BANK PREFERRED NO. OF RESPONDENTS

UBI 21
SBI 43
ICICI 5
AXIS 9
OTHERS 2

ANALYSIS AND INTERPRETATION

Figure no.11

PREFERRED BANK

UBI
SBI
ICICI
AXIS
OTHERS

From the above pie-chart it can be said that almost 50% of our respondents like SBI, which is
a public sector bank, while the next best bank is UBI with 21 respondents which is again a
public sector bank. ICICI is liked by 5 while AXIS is preferred by 9 followed by others at 2.
Hence it can be safely inferred that out of 80 respondents 64 respondents prefer public sector
bank which is a staggering 80 % of the total number of respondents.

4) The respondents were asked regarding the reasons for choosing a particular
bank. Here are the results
 35

Table no.11

REASON NO. OF RESPONDENTS

FRIENDLY BEHAVIOUR BY STAFF 4
TRUST/RELIABILITY 43
QUICK AND FAST SERVICES 9
LOCATION 24

ANALYSIS AND INTERPRETATION

Figure no.12

REASON

FRIENDLY BEHAVIOUR BY
STAFF
TRUST/RELIABILITY
QUICK AND FAST
SERVICES
LOCATION

From the above pie-chart it can be inferred that almost 50% of our respondents i.e 43 out of
80 pick banks according to trust/reliability. The next best factor comes out to be location with
24 respondents. These two factors are the major hindrance in private sector banking that is
why they are lacking the competition in this part of the country. They have less presence in
rural areas while public sector banks have extensive reach and are following the financial
inclusion policy of RBI. 4 respondents choose bank due to behavior towards customers and 9
respondents value the quick and fast services of the bank.
 36

5) They respondents were asked regarding the services that they are availing from
their respective banks
Table no.12

SERVICES AVAILING NO. OF RESPONDENTS

ATM/DEBIT 66
MOBILE 3
INSURANCE 9
CREDIT CARD 2

ANALYSIS AND INTERPRETATION -

Figureno.13

SERVICES

ATM/DEBIT CARD
MOBILE BANKING
INSURANCE
CREDIT CARD

From the above analysis it can be inferred that majority of the respondents use automated
teller machine (ATM) services that is being provided by all the banks except the RRBs. ATM
users are 66 out of 80 respondents which is more than 80%. Mobile banking is used by 3
respondents; insurance services are availed by 9 respondents while credit card services are
 37

used by 2 respondents. This shows that in this part of country they are more concerned with
the conservative way of using the bank and not ready to explore yet to other services.

6) The respondents were asked regarding their satisfaction level towards their bank

Table no.13

SATISFACTION LEVEL NO. OF RESPONDENTS

PRIVATE SECTOR BANK 12
PUBLIC SECTOR BANK 53
BOTH 15

ANALYSIS AND INTERPRETATION

Figure no.14

SATISFACTION LEVEL OF THE RESPONDENTS

PRIVATE
PUBLIC
BOTH

From the above result it can be inferred that the customers of public sector banks are satisfied
toward their banks with number being 53 while 12 respondents are satisfied towards their
private sector bank. There are 15 respondents who like both.
 38

7) The respondents were asked regarding the factor for choosing the public sector
banks
Table no.14

REASON FOR CHOOSING PSU BANK NO. OF RESPONDENTS

FRIENDLY BEHAVIOUR BY STAFF 0
TRUST/RELIABILITY 43
QUICK AND FAST SERVICES 1
LOCATION 22

ANALYSIS AND INTERPRETATION

Figure no.15

REASON FOR CHOOSING PSU BANK

FRIENDLY BEHAVIOUR BY
STAFF
TRUST/RELIABILITY
QUICK AND FAST SERVICES
LOCATION

From the above analysis it can be inferred that the PSU banks are chosen by respondents
mainly due to 2 factors and that are Trust/Reliability and Location.

Out of 66 respondents those two factors alone comprises 65 respondents which is a

staggering number.Surprisingly not a single respondent gave the factor friendly behavior by
staff towards the customers which puts PSU banks in bad light. Due to financial inclusion
policy of RBI the PSU bank have wide range of coverage and thus are a step ahead of the
private banks. Also the amount deposited by customers is insured by DICGC (deposit
insurance and credit Guarantee Corporation) which is why trust factor is there in public sector
banks.
 39

8) The respondents were asked regarding the factors for choosing the private sector
banks

REASON FOR CHOOSING PRIVATE NO. OF RESPONDENTS

BANK

FRIENDLY BEHAVIOUR BY STAFF 6

TRUST/RELIABILITY 1

QUICK AND FAST SERVICES 9

LOCATION 2
Table no.15

ANALYSIS AND INTERPRETATION from the above analysis it can said that out of the
total 18 respondents, 50% of the respondents like private sector banks due to its quick and
fast services while 33 % of the respondents like the friendly behavior of the staff towards the
customers. Location is a factor for only 2 respondents while only one respondent have given
the reply as trust/reliability. It is quite surprising to see the trust factor so less in private sector
banks in these parts of country as the private sector deposits are also insured by DICGC but
maybe it is the awareness factor which is lacking in these districts respondents.

Figure no.16

REASON FOR CHOOSING PRIVATE BANK

FRIENDLY BEHAVIOUR BY
STAFF
TRUST/RELIABILITY
QUICK AND FAST
SERVICES
LOCATION
 40

Chapter 5

FINDINGS OF THE STUDY

 41

More number of people have account in public sector banks.

Majority of the respondents whether public sector or private sector banks have saving
banks account in their respective banks.

People want a change in the behaviour of the staff towards customers in public sector
banks.

There needs to be more awareness regarding the trust factor in private sector banks
and the amount deposited there in this part of country.

People are more satisfied with the public sector banks in this part of country. The
main reason for their satisfaction is Trust factor and the Location of the branch.

The private sector banks need to enhance the number of their branches and specially
cover the rural area so as to attract more customers. In addition they need to create
awareness among customers to enhance the trust factor in them.

The facility that was availed most was the ATM/Debit card facility whether in private
sector bank or in public sector bank.

Majority of the respondents do not want to shift from their current bank.

The most favoured bank in this part of country is the SBI and UBI.

From the above study it is clear that the respondents of public sector banks have
chosen the respective banks due to adequate branches i.e. location and due to the trust
factor.

From the above study it is clear that the respondents of private sector banks like them
because of the friendly behaviour of the staff as well as the quick and fast services
that is being provided.

As the public sector banks working under the financial inclusion policy of RBI hence
they have got more number of customers because they have no frill account now a
days called BSBDA (Basic saving bank deposit account)
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From the above study it can be assured that BANCASSURANCE is still not a part in
this part of the country. Negligible amount of respondents have shown their interest in
this services along with mobile banking and credit card facility.

From the above study it can safely said that public sector banks wins over the private
sector banks but they also need to improve a lot.

FINDINGS OF THE STUDY WITH RESPECT TO THE OBJECTIVES .

1. To find the banking sector largely preferred by the customers.

It has been found that in Cachar district the PSU Banks are more preferred as compared to
Private Banks. The study suggests that out of the 80 respondents 62 of them have their
accounts in PSU Banks, also 4 of them have accounts in both PSU and Private Sector Banks
(refer to table no. 7 and graph no. 7).

Also it has been found that SBI and UBI are the most preferred ones in this part of the
country.

Out of the 66 respondents 64 of them have accounts alone in SBI & UBI with 43 in SBI and
21 in UBI (refer to Table no. 9 and Graph no. 9).

2. To find out the factors which influences the customers to choose a bank.
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The main factors which influence the customers of Cachar district according to our study are
Trust/Reliability and Location (refer to Table no. 10 and Graph no. 10). According to our
study, out of the 80 respondents 43 of them voted for Trust/Reliability factor while 24 of
them considered location as a very important factor.

The other two factors quick and fast services and the friendly behaviour by staff attracted
meagre response.

Refer Table no. 13 and graph no. 13 the factors which influences the customers of this part
of the country for PSU Banks are Trust/reliability and Location with 43 and 22 respectively.

Refer Table no. 14 and Graph no. 14 the factors which influences the customers of this part
of the country for Private Banks are quick and fast services and the friendly behaviour by
staff.

3. To study the problems faced by the customers in public as well as private sector banks and
also to compare between them.

For PSU Banks

The main problems faced by the customers in PSU banks are unfriendly behaviour of the
staff towards them also the services provided to them are not quick enough.

Refer to Table no. 13 and Table no. 13

For Private Banks

The main problems faced by the customers in PrivateBanks trust/reliability and location.
Since the private sector banks do not have enough number of branches in this part of the
country hence they are facing the problem of including large number of customers.

The unawareness factor regarding the DICGC assurance to the private sector banks is what
leading to lack of trust/reliability in them.

Refer to table no. 14 and Graph no. 14

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Chapter 6
 45

SUGGESTIONS

Based on the study conducted there are some of the suggestions given by the customers.
These are the comments given by them regarding the improvement of banking services in
India.

Banks should obey RBI norms and should provide facilities as per the norms. While
the customers should be given prompt services and the bank officials should be
willingly serving the customers.

Bank should increase rate of saving accounts

Bank should provide loans at a lower interest rate and education loan should be given
with ease without much documentation.

Fair dealings with the customers. More contribution from the employee to the bank.
The staff should be co-operative, friendly and must be capable of understanding the
problem of customers.

Prompt dealing with permanent customer and speedy transaction without harassing
the customers.

Each branch of each bank should be computerized even in rural areas for speedy
transaction.

RTGS and NEFT can play a very important role in speedy transaction.

More ATM coverage should be provided for the convenience of the customers
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No limit of cash withdrawals should be there on customers

24 hour banking should be induced so as to facilitate the customers who dont have
time in the day time or in the week days. This will enhance the services
The charges for opening saving bank account in private bank are too high. This should
be taken care off.

Customers generally complain that full knowledge regarding products and services
are not given to them. Hence the bank should be fair enough in disclosing the proper
terms and conditions of the product and services.

The branch should promote cooperation and coordination among employees which
can enhance the rate of efficiency.

Knowledge of local language should be a must for employees of banks.

Maintenance of proper hierarchy should be there in the bank employees.

Customer relationship management in public sector banks should be given extra

importance.

Chapter 7
 47

RECOMMENDATION

FOR PUBLIC SECTOR BANKS

Bank staff should be customer friendly and highly motivated to serve the
normal customers.

As far as possible the bank should reduce the documentation process while
providing loan.

Computerization should be done in banks at all levels and the operators should
be properly trained.

Token system should be introduced so as to reduce the waiting line in the

bank.

Proper ambience in the banks can develop a healthy work culture.

Should be flexible in providing interest of the deposited money.

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Quick services should be provided.

FOR PRIVATE SECTOR BANKS

24 hours banking should be introduced so as to facilitate the customers who dont

have time in day time or week days.

More ATM coverage should be provided for convenience of the customers.

Should reduce the amount while opening a new saving bank account.

Should maintain a proper recruitment policy like the PSU to attract genuine talent to
work for the customers. Rather than recruiting on internal recommendation they
should follow the IBPS for recruitment to get better talent and better services from
their employees.

Should enhance the number of branches in rural areas to attract more customers.

Should advertise extensively regarding their operations and services to garner faith in
them.
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Chapter 8

CONCLUSION

From the above study we can conclude that the people of Cachar have more faith on PSU
Bank than Private sector Bank. The main reasons are as follows

Since Cachar district is a semi-urban place, so there are less number of branches of private
sector banks in this area and also the trust factor is less in case of private sector banks.
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Whereas for PSU Banks they are working under the financial inclusion policy of the RBI and
thus have adequate number of branches in this place which Private Sector Banks do not.
Hence with respect to this place it is the PSU Bank mainly SBI & UBI as revealed in our
study which is far ahead of the Private Sector Banks with respect to customer base.

Since, banking industry is bound to grow extensively in the next few years; it is up to the
private sector banks to enhance the number of branches in the Cachar District to attract
customers of the said place.

For the PSU Bank in order to sustain the large customer base, they to change their view
regarding the customer relationship management (CRM). Their employees need to change
their behavior and attitude towards its customers in order to serve its customer whole
heartedly and willingly.
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Chapter 9

APPENDIX

Questionnaire Format
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References

Books :-

KiranPrakashan

Arihants How to crack Banking Interviews

Reports :-

Report on Securities research on the ICICI Bank and SBI

Report on Indian Economic Survey 2012-2013

Websites :-

www.iba.com

www.kiranprakashan.com

www.ibps.in