SUMMER TRAINING REPORT

ON

“ SCOPE FOR IMPROVING PENSION BUSINESS OF SBI

v/s
OTHER PUBLIC SECTOR BANKS ”

AT

STATE BANK OF INDIA, LHO, BHUBANESWAR

Under the guidance of :

CORPORATE GUIDE :

MR. BIBEKANANDA MISHRA

AGM, GBD

STATE BANK OF INDIA, LHO

BHUBANESWAR

SUBMITTED BY:

SUBHASHIS PRIYADARSHI SAHOO

ROLL NUMBER : 9202041

SECTION : A

KIIT SCHOOL OF MANAGEMENT

1
Certificate from State Bank of India

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Subhashis Priyadarshi Sahoo, a student of KIIT School of

Management, Bhubaneswar, undertook a project on " SCOPE FOR IMPROVING PENSION
BUSINESS OF SBI v/s OTHER PUBLIC SECTOR BANKS " at State Bank of India, Local
Head Office, Bhubaneswar (Pincode-751001)

He has completed the project under the guidance of Mr. Bibekananda Mishra,
AGM, GBD, State Bank of India, LHO, Bhubaneswar. He is a sincere and hard-working
student with pleasant manners

We wish all success in his future endeavors.

SIGNATURE OF GUIDE SIGNATURE OF THE STUDENT

NAME- SUBHASHIS PRIYADARSHI SAHOO

DESIGNATION- ROLL NO. 9202060

COMPANY NAME- MBA- I.

KSOM, KIIT UNIVERSITY

BHUBANESWAR

2
 DECLARATION

I, Subhashis Priyadarshi Sahoo, studying at KIIT School of Management,

Bhubaneswar, hereby state that this summer internship project report titled
“SCOPE FOR IMPROVING PENSION BUSINESS OF SBI v/s OTHER PUBLIC
SECTOR BANKS ” carried out at State Bank of India ,Bhubaneswar is an
original work carried out by me under the guidance and supervision of the
industry guide and that the project or any part thereof has not been previously
submitted for a Degree/Diploma of any University/Institution elsewhere.

Date: Subhashis Priyadarshi Sahoo

Place: Bhubaneswar KIIT School of Management,
KIIT University
Bhubaneswar.

3
 Acknowledgement

It is my proud privilege to release the feelings of my gratitude to several persons who helped
me directly or indirectly to conduct this project work. I express my deep sense of gratitude to
my corporate guide Mr. Bibekananda Mishra AGM, SBI, Main Branch Bhubaneswar, for
his sincere guidance and inspiration in completing this project. I am extremely thankful to the
Director, Dean, Chairman and faculties of the KIIT School of Management, KIIT University
for their coordination and cooperation. I am extremely thankful to all the patient people who
responded to my questionnaire and provided me with valuable inputs. Finally I wish to thank
all my friends who have more or less contributed to the preparation of this project report. I
will be always indebted to them.

4
EXECUTIVE SUMMARY

The project titled " SCOPE FOR IMPROVING PENSION BUSINESS OF SBI v/s
OTHER PUBLIC SECTOR BANKS " was carried out for State Bank of India. Study of
the pension business of State Government employees (which includes civil servants, political
leaders , former MLAs and MPs, teachers of the aided Educational institutions, freedom
fighters, Defense personnel , Railways and Telecom employees etc.) of the Public Sector
Banks was done and specifically, steps were taken to determine the market share of SBI
among the other PSBs. the project also aimed at knowing the problems associated with the
PSBs and modes by which the market share of SBI could be further increased.

It was a great opportunity to work with SBI, which is India’s largest and the world’s
fifth largest bank, with more than 90 million customers, 15,000 branches and 7,000 ATMs in
India and 40 other countries We will get to know the organizational structure and various
business models of the company as we go further into the report.

The aspects covered in this project are history of banking industry in India, evolution
of SBI, its profile, corporate details of SBI, major competitors of SBI, performance of SBI,
role of treasuries and other PSBs, scheme of payment of pension and steps involved in the
payment of pension to the State Government employees.

Prior to this report, a survey was done in the different PSBs in and around
Bhubaneswar. The survey was done with the help of primary data collected directly from the
people through a questionnaire and selective questioning. The people who were surveyed
were mainly educated and earning people. The secondary data was collected from highly
reliable sources such as the State Treasury Office.

Based on the market survey and in-depth interview and secondary data collected from
reliable resources an analysis of the prospects of pension business of PSBs in the State of
Orissa was done and represented in the form of statistical diagram.

From the analysis, the market share of SBI in comparison with other PSBs of the
State of Orissa could be found approximately over the last three years. Apart from that, the
analysis revealed a lot about the likes and dislikes of the pensioners. The USPs of each and
every PSBs and features of the banks which made them a preferred choice over other banks.

5
TAble of contents

TOPICS PAGE NO.

1. Certificate 2
2. Declaration 3
3. Acknowledgement 4
4. Executive Summary 5

CHAPTER 1
1.1. Objectives of the project 8-9

CHAPTER 2
2.1. History of banking industry 10-13
2.2. Current scenario 13
2.3. Hierarchy of the banking industry 14
2.4. Evolution of SBI 15
2.5. Various Avatars of SBI 16

CHAPTER 3
3.1. Company Profile 17-20
3.2. Non- banking Subsidiaries 20
3.3. Corporate Details 21-22
3.4. Activities 23
3.5. Share Holding Pattern OF SBI 24
3.6. Major competitors 25

CHAPTER 4
4.1. SBI performance 26-28
4.2. SBI in comparison with 4 competitors 28

CHAPTER 5
5.1. Public Sector banks 29-30
5.2. Scheme of payment of pension and steps involved 31

CHAPTER 6
6.1.Research methodology 32-35
6.2. Limitations 36

CHAPTER 7
7.1. Data Analysis 37-51
(Tabulation & Interpretation)

6
CHAPTER 8
8.1. SWOT Analysis 52- 54
8.1. Findings 55
8.2. Suggestions & Recommendations 56

CHAPTER 9
9.1. Conclusion 57
9.2. Bibliography 58
9.3. Questionnaire 59-62

7
OBJECTIVE
S

8
CHAPTER: 1

1.1 OBJECTIVES OF THE PROJECT

primary objective:

1. To know the share of pension business of P.S.Bs with respect to state treasuries

2. To deduce the flaws associated with SBI in particular and various other Public Sector
Banks

3. Provide methods to improve the pension business of SBI in comparison to its competitors

SECONDARY OBJECTIVE:

1.To study about the history of banking industry in India

2. To study the complete structure and history of State Bank Of India.

3.To study the government transactions handled by the State bank of India on behalf of the
RBI.

4. To gain insights into the pension scheme activities of the State Bank Of India.

9
introductio
n

10
CHAPTER 2 :

2.1. early history OF THE BANKING INDUSTRY:

Banking in India originated in the last decades of the 18th century. The first banks
were The General Bank of India, which started in 1786, and the Bank of Hindustan, both of
which are now defunct. The oldest bank in existence in India is the State Bank of India,
which originated in the Bank of Calcutta in June 1806, which almost immediately became the
Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of
Bombay and the Bank of Madras, all three of which were established under charters from the
British East India Company. For many years the Presidency banks acted as quasi-central
banks, as did their successors. The three banks merged in 1925 to form the Imperial Bank of
India, which, upon India's independence, became the State Bank of India.

Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848
as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865
and still functioning today, is the oldest Joint Stock bank in India. When the American Civil
War stopped the supply of cotton to Lancashire from the Confederate States, promoters
opened banks to finance trading in Indian cotton. With large exposure to speculative
ventures, most of the banks opened in India during that period failed. The depositors lost
money and lost interest in keeping deposits with banks. Subsequently, banking in India
remained the exclusive domain of Europeans for next several decades until the beginning of
the 20th century.

Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The
Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay
in 1862; branches in Madras and Pondicherry, then a French colony, followed. Calcutta was
the mostactive trading port in India, mainly due to the trade of the British Empire, and so
became a banking center.

Around the turn of the 20th Century, the Indian economy was passing through a
relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the
social, industrial and other infrastructure had improved. Indians had established small banks,
most of which served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange
banks anda number of Indian joint stock banks. All these banks operated in different
segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on
financing foreign trade. Indian joint stock banks were generally under capitalized and lacked
the experience and maturity to compete with the presidency and exchange banks.

This segmentation let Lord Curzon to observe:

"In respect of banking it seems we are behind the times. We are like some old fashioned
sailing ship, divided by solid wooden bulkheads into separate and cumbersome
compartments."

11
 By the 1900s, the market expanded with the establishment of banks such as Punjab
National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which
were founded under private ownership. Punjab National Bank is the first Swadeshi Bank
founded by the leaders like Lala Lajpat Rai, Sardar Dyal Singh Majithia. The Swadeshi
movement in particular inspired local businessmen and political figures to found banks of and
for the Indian community.
A number of banks established then have survived to the present such as Bank of
India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of
India. The fervour of Swadeshi movement lead to establishing of many private banks in
Dakshina Kannada and Udupi district which were unified earlier and known by the name
South Canara ( South Kanara ) district. Four nationalised banks started in this district and
also a leading private sector bank. Hence undivided Dakshina Kannada district is known as
"Cradle of Indian Banking".

Post-independence EVENTS IN THE BANKING INDUSTRY :

The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralyzing banking activities for months. India's independence marked the end of a regime of
the Laissez-faire for the Indian banking. The Government of India initiated measures to play
an active role in the economic life of the nation, and the Industrial Policy Resolution adopted
by the government in 1948 envisaged a mixed economy. This resulted into greater
involvement of the state in different segments of the economy including banking and finance.
The major steps to regulate banking included:

 In 1948, the Reserve Bank of India, India's central banking authority, was
nationalized,
and it became an institution owned by the Government of India.

 In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank of
India (RBI) "to regulate, control, and inspect the banks in India."

 The Banking Regulation Act also provided that no new bank or branch of an existing
bank could be opened without a license from the RBI, and no two banks could have
common directors.

However, despite these provisions, control and regulations, banks in India except the State
Bank of India, continued to be owned and operated by private persons. This changed with the
nationalization of major banks in India on 19 July, 1969.

12
  Nationalization:

By the 1960s, the Indian banking industry has become an important tool to facilitate
the development of the Indian economy. At the same time, it has emerged as a large
employer, and a debate has ensued about the possibility to nationalize the banking industry.
Indira Gandhi, the then Prime Minister of India expressed the intention of changing
the face of banking industry of India Thereafter, her move was swift and sudden, and the an
ordinance was issued and through it, nationalized the 14 largest commercial banks with effect
from the midnight of July 19, 1969.

 Liberalization:

In the early 1990s, the then P.V. Narasimha Rao government embarked on a policy of
liberalization, licensing a small number of private banks. and included Global Trust Bank
(the first of such new generation banks to be set up), which later amalgamated with Oriental
Bank of Commerce, UTI Bank(now re-named as Axis Bank), ICICI Bank and HDFC Bank.
This move, along with the rapid growth in the economy of India, revitalized the banking
sector in India, which has seen rapid growth with strong contribution from all the three
sectors of banks, namely, government banks, private banks and foreign banks. The next stage
for the Indian banking has been setup with the proposed relaxation in the norms for Foreign
Direct Investment, where all Foreign Investors in banks may be given voting rights which
could exceed the present cap of 10%,at present it has gone up to 49% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The
new wave ushered in a modern outlook and tech-savvy methods of working for traditional
banks. All this led to the retail boom in India. People not just demanded more from their
banks but also received more.

2.2. Current scenario

Currently (2007), the overall banking in India is considered as fairly mature in terms
of supply, product range and reach - even though reach in rural India still remains a challenge
for the private sector and foreign banks. Even in terms of quality of assets and Capital
adequacy, Indian banks are considered to have clean, strong and transparent balance sheets -
as compared to other banks in comparable economies in its region. The Reserve Bank of
India is an autonomous body, with minimal pressure from the Government.

With the growth in the Indian economy expected to be strong for quite some time
especially in its services sector, the demand for banking services especially retail banking,
mortgages and investment services are expected to be strong. Mergers, acquisitions and
takeovers, are much more in action in India.

2.3. hierarchy of the banking industry in india

13
2.4. EVOLUTION OF SBI

14
Roots

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.

The establishment of the Bank of Bengal marked the advent of limited liability, joint-
stock 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, 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 up to 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.

2.5. Overview of various Avatars of SBI

15
16
Company
Profile

17
CHAPTER 3.

Company Profile

State Bank of India (SBI) started its business way back in 1806 as Bank of Bengal.
The bank was formed under an Act that was accordingly passed in parliament in May 1955.
SBI is the largest commercial bank in India with more than 14000 branches all over the
country. It is a colossal in terms of balance sheet size, number of branches, market
capitalization and profits. It has the distinction of being the strongest and amongst the most
profitable bank in the country. Net worth of SBI as on March 2000 stood at Rs. 12146 crore
(US$ 2784 million) and it has a deposit base of Rs 19,680.3 crore (US$45,121 million).

SBI plays a vital role in providing working capital and term finance to the Indian
industry. Due to its large network of branches, SBI has been able to garner a large chunk of
deposits from the rural sector.

The bank has wide international presence which it runs through its International
Banking Group (IBG) that has a network of 82 overseas offices spread over 32 countries
covering all time zones and which contributes 7% of total business for SBI. It has also got the
largest overseas network. which includes multiple locations in the US, Canada, and Nigeria.
The bank has other units devoted to capital markets, fund management, factoring and
commercial services and brokerage services. That is the reason as to why the bank has been
the largest banking institution (assets, deposits, branches and employees) in the country.

The bank also has various other interest in the financial services arena i.e. interest in
Life insurance, Capital Markets, Cards and Factoring. Further, 87% of its business is covered
under core banking solutions. The bank is well poised to meet the country’s growing
corporate, retail and infrastructure credit demand. Its can leverage its size to fund huge
investments and future merger and acquisition deals too. The bank has also unveiled plans to
raise over Rs 50,000 crore through debt and equity over the next 3 years to tap the growing
credit opportunity in India.

The Bank is actively involved since 1973 in non-profit activity called Community
Services Banking. All the branches and administrative offices throughout the country sponsor
and participate in large number of welfare activities and social causes

18
 3.1. Foreign Branches:

 Bahrain
 Bangladesh
 Belgium
 Canada
 Dubai
 France
 Germany
 Hong Kong
 Israel
 Japan
 People's Republic of China
 Republic of Maldives
 Singapore
 South Africa
 Sri Lanka
 Sultanate of Oman
 The Bahamas
 U.K.
 U.S.A
 Australia

Subsidiaries and Joint Ventures in foreign shores:

In addition to the foreign branches above, SBI has these wholly owned subsidiaries and
joint ventures:

 Nepal State Bank Limited

 SBI Mauritius

 Indian Ocean International Bank (Mauritius)

 SBI Canada

 SBI California

19
Foreign Subsidiaries:

 State bank of India International (Mauritius) Ltd.

 State Bank of India (California).

 State Bank of India (Canada).

3.2. Non- banking Subsidiaries

 SBI Capital Markets Ltd (SBICAP)

 SBI Funds Management Pvt. Ltd (SBI FUNDS)

 SBI DFHI Ltd (SBI DFHI)

 SBI Factors and Commercial Services Pvt. Ltd (SBI FACTORS)

 SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

20
3.3. Corporate Details:

State Bank of India is India's largest bank amongst all public and private sector banks
operating in India. State Bank of India owns and operates the following subsidiaries and Joint
Ventures :

State Bank Of India Credit Card

 State Bank Of India Online

 State Bank Of India USA

 State Bank Of India Services

 State Bank Of India Mutual Funds

 State Bank Of India Branch

 State Bank Of India NRI Account

Subsidiaries of State bank of india

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 Travancore (SBT)

21
Details of banking subsidiaries

3.4. Activities:

22
 State Bank of India administrative structure is well equipped to oversee the large
network of branches in India and abroad. The State Bank of India 14 Local Head Offices and
57 Zonal Offices are located at important cities spread throughout the country. The Corporate
Accounts Group is a Strategic Business Unit of the Bank set up exclusively to fulfil the
specialized banking needs of top corporate in the country.
The main activities of are into -

 Personal Banking

 NRI Services

 Agriculture

 International

 Corporate

 SME

 Domestic Treasury.

State Bank of India offers the following services to its customers

 SBI Vishwa- Yatra Foreign Travel Card.

 Broking Services

 ATM Services.

 Internet Banking.

 E-Pay.

 E-Rail

 Safe Deposit Lockers.

 MICR Codes

23

P&D
3.5. Share Holding Pattern OF sbi:

Many organizations have a stake in the State Bank Of India. It has a fixed share
holding pattern which is maintained and regulated mainly by the Reserve Bank Of India . It
can be illustrated with the help of a simple pie-chart.

As evident from the graph, the share holding pattern of SBI is clearly illustrated here.
It comprises of a major chunk i.e. around 60 % which is held by the RBI, 6 % of it by the
mutual funds /UTI , around 6.3% by the Financial Institutions/ Banks, Around 11.9% by the
overseas investors that include F.I.Is, O.C.Bs, N.R.Is and the rest 16 % by the issue of GDR
and other promoters.

3.6. MAJOR competitors:

24
 The financial sector in India has become stronger in terms of capital and the number of
customers. It has become globally competitive and diverse aiming, at higher productivity and
efficiency. Exposure to worldwide competition and deregulation in Indian financial sector has led
to the emergence of better quality products and services. Reforms have changed the face of
Indian banking and finance. The banking sector has improved manifolds in terms of capital
adequacy, asset classification, profitability, income recognition, provisioning, exposure limits,
investment fluctuation reserve, risk management, etc.

TOP 10 PLAYERS IN BANKING & FINANCE

• State Bank of India

• HDFC bank

• Citibank

• ICICI Bank

• Punjab National Bank

• Axis Bank

• Bank of India.

• Kotak Mahindra Bank

• Sundaram Bank

• Oriental Bank of Commerce

25
 performan
ce

OF

SBI

Chapter : 4

SBI performance in last five years on the basis of business per

employee(bpe) and profit per employee(ppe)

26
 State Bank of India (SBI) is all geared up to increase its business per employee and profit per
employee as it thinks that for SBI, these two parameters are among the lowest in the industry. On one
hand, the bank is trying to reduce its staff strength which would eventually improve the ratios; but on
the other, the bank is also going flat out to increase its customer base. SBI's generates Rs 2.99 crore of
business per employee, while its profit per employee is just about Rs 2.17 lakh. By contrast, majority
of the large public sector banks are better in terms of both these parameters. For instance, Canara
Bank has a business per employee (BPE) of Rs 4.42 crore, while Union Bank of India's BPE is at Rs
4.36 crore and Bank of Baroda's (BoB) Rs 3.51 crore.

These are according to their respective annual reports for 2005-06. On the other hand, Canara
Bank's profit per employee (PPE) is also on the higher side at Rs 3.02 lakh. The PPEs of Bank of
Baroda is at Rs. 2.13 lakh, respectively.

Parameter State Bank of Canara Bank Bank of Baroda

India(SBI)
Busines Per 2.99 crores 4.42 crores 4.36 crores
Employee(BPE) in
rupees

Profit Per Employee 2.17 lakhs 3.02 lakhs 2.13 lakhs

(PPE) in rupees

27
4.2. SBI IN COMPARISON WITH ITS 4 of its major COMPETITORS

28
public sector
banks
&
their role in
pension
disbursement

29
chapter 5.

public Sector banks :

The Public sector banks are the ones in which the government has a major holding.
Their activities are mostly influenced by the government They are divided into two groups
i.e. Nationalized Banks and State Bank of India and its associates. Among them, there are 19
nationalized banks and 8 State Bank of India associates.

The public sector banks have shown growth in their credits in comparison to their
private and foreign competitors. According to latest data released by the Reserve Bank of
India (RBI) in due course the depositors have withdrawn funds from private and foreign
banks and are investing their money with public sector banks which has resulted in a
significant decline in growth of deposits with private and foreign banks.

CHALLENGES FOR PUBLIC SECTOR BANKS IN INDIA

1. Implementation of latest technology with excellent standards.

2. To maintain profitability considering government norms and regulations

3. Corporate governance

4. Talent management/ Man power planning

5. Loan waiver: A new challenge

6. Risk management

7. Transparency and disclosures

8.Challenges in banking security

9.Competition with private sector banks

10.Growth in business

11.Enhancing customer service

12. Improving business

30
5.2. scHEME FOR PAYMENT OF PENSIONS TO THE STATE
GOVERNMENT PENSIONERS
BY PUBLIC SECTOR BANKS

steps involved:

• The pensioners select a public sector bank and a respective branch of their own
choice.

• Public Sector ,Bank selected for this purpose will immediately nominate a 'link
branch' at the head quarters of each district for co-ordinating the work connected with
the disbursements and accounting of pension payments by its various, branches in the
district.

• The name and address of the 'link branch' will be communicated, to the district
treasury Offices concerned and also to the Accountant-General under whose jurisdiction
the Treasury falls together with a complete list of other branches

• All treasuries and sub-treasuries in the State will take immediate action for
renewal of the disburser's half of the pension payment orders (P.P.Os) of the pensioners
under their payment wherever such P. P, Os. are torn or mutilated or exhausted

• The existing pensioners desirous of drawing their pension from Public Sector Banks
branch will apply in the form to the Treasury/Sub-Treasury, Officer from whom they are
receiving pension.

• Pensioners of the State Treasuries will draw from the treasuries situated in their
respective districts.

31
 research
methodolog
y
&
data
collection

chapter 6:

32
RESEARCH METHODOLOGY:
I. Statement of the Problem faced by SBI:

 Falling percentage in pension business over the last three years

 Increased level of competitiveness of other PSBs

 To find out the need of the customer and hence formulate the strategies to
improve the condition of customers and their level of satisfaction

II. Research objectives

 To find out the services that other bank give to their customer

 To generate the leads through the survey.

 To sort out the prospective leads from the data I have collected through the
survey and make suitable deductions

 To propose methods to increase the share of pension business

III. AREA OF FOCUS :

Pension market of the State of Orissa

Focus was laid on the pension business of State Government employees drawing their
salaries from treasuries and Public Sector Banks(P.S.Bs).

 Secondary Data was acquired from the Central Treasury Cell which records the
detailed data of all the districts and its State Government pensioners drawing their
pension from P.S.Bs or respective treasuries.

 It tabulated the number of State Government employees drawing their pensions from
the treasuries and the number of employees drawing their pension from other Public
Sector Banks (P.S.Bs)

33
IV. FACTORS TAKEN INTO CONSIDERATION:

 The region under focus is the State of Orissa

 People under consideration are the State Government employees which includes the
civil servants, political leaders , former MLAs and MPs, teachers of the aided
Educational institutions, freedom fighters, Defense personnel , Railways and
Telecom employees etc.

 Data available from Cenral Treasuries Cell, Bhubaneswar which accounts for the data
collected from the treasuries of all the districts.

 Maximum authentication of data was ensured and most recent available data was
taken into consideration.

V. Design of Research:

Data Collecting Technique & Tools:

Primary Data are those which are collected afresh and for the first time and thus
happened to be original in character. This method was used by means of personal interview.
The reason behind choosing this method was to have detailed information on the subject. It
also provides opportunity for selecting the sample for interviews. The interview conducted
were a mixture of structured and unstructured interviews. Scope was kept open for detailed
discussion at the discretion of the interviewee. Where there was a time crunch a structured
procedure was followed wherein predetermined questions were put forward.

Secondary Data means data that are already available i.e., the data already collected
and analyzed by other. To get a better understanding and to have a larger exposure on the
subject this method is used. This method uses data available in World Wide Web, articles,
financial reports published by Govt. of India. Support was also provided by the project guide
by giving inputs from his years of experience.

34
VI. sampling and COLLECTION OF PRIMARY DATA ONLY

 SOURCES OF DATA/TARGET POPULATION

It is basically primary in nature and the target population in this research refers to the
State government employees who draw their pension from SBI and other Public Sector
Banks. The respondents can be of any gender, any income level, any occupation and any
education
level.

 SAMPLING UNIT

State government employees who draw their pension from SBI and other Public
Sector Banks i.e. namely the United Commercial Bank, Bank of India, United Bank of India,
Indian Overseas Bank, Central Bank of India, Indian Bank, Bank Of Baroda, Andhra Bank
and Allahabad Bank.

 SAMPLING METHOD

For this research non-probability sampling was used. By Non - probability sampling,
the probability of any particular member of the population being chosen is unknown. The
element in the population does not have any probability attached to their being chosen as
sample subjects.

 SAMPLE SIZE

This research selects a total of 150 respondents with 15 selected for each of the 10
banks under observation. 15 State Government pensioners each from the 10 Public Sector
Banks were randomly picked only taking into consideration their ages which should be above
the pension liable age of 60 and above. The respondents can be any gender, any income level,
any occupation and any education level.

 DATA COLLECTION METHOD:

The approach was basically a structural way of questioning, with the help of printed
questionnaires.

 ANALYSIS OF DATA:

Data analysis was done with the help of appropriate statistical tools and interpretation would
be carried out subsequently.

35
6.2. LIMITATIONS
Although best of the efforts were made to conduct a prefect survey but still it faces certain
limitation. Following were certain limitation of this project.

1.The survey was conducted only on 150 respondents. (and 30 later for a in-depth analysis of the
features of SBI )

2. Some of the respondents did not answer all the questions.

3. Lack of availability of time ensured that the survey could not be conducted extensively and
a large sample size could not be taken.

4. The study confines itself to the respondents of Bhubaneswar region only. Hence findings
would not be relevant to other cities.

36
 DATA
ANALYSIS
&
Interpretation

chapter 7.

37
TABULAR REPRESENTATION OF COLLECTED DATA

1.GENDER OF THE RESPONDENTS:

GENDER FREQUENCY PERCENTAGE

MALE 126 84.00%
FEMALE 24 16.00%
TOTAL 150 100%

GRAPH :

INTERPRETATION:

Of the 150 respondents chosen, 126 of them are male while 24 of them are female. It
amounts to a percentage of 84 % male and 16 % female.

2.EDUCATIONAL OUALIFICATION OF THE RESPONDENTS

38
QUALIFICATION FREQUENCY PERCENTAGE
SCHOOL 5 3.33%
UG 92 61.33%
PG 15 10.00%
PROFESSIONAL 30 20.00%
COURSE
M.phil/PhD 8 5.33%
TOTAL 150 100%

GRAPH :

INTERPRETATION:

According to the sample taken the respondents interviewed were of varied

educational qualifications. 5 of them were school pass-outs, 15 were post graduates, 30 were
professionally educated and 8 of them were an M. Phil or a PhD holders. A significant
number of the respondents i.e. 92 were graduates.
It gives us an insight that people with varied educational qualifications availed the use
of Public Sector Banks for receiving their pension.

3.OCCUPATION OF THE RESPONDENTS :

39
OCCUPATION FREQUENCY PERCENTAGE
MLA,MP and POLITICAL 0 0%
LEADERS
TEACHERS 43 28.67%
RAILWAYS 16 10.67%
TELECOM 4 2.67%
FREEDOM FIGHTER 0 0%
OTHERS 87 58%
TOTAL 150 100%

GRAPH :

INTERPRETATION:

From my sample it is observed that people of varied occupation were considered for
the survey. People from varied fields such as academics, railways, telecom, defense etc were
taken into consideration. a large majority of the persons interviewed were teachers i.e. around
43 of them which amounts to roughly 29 %. There were 16 railway employees and 4 telecom
employees. The rest could not be grouped under a particular group.

4.SATISFACTION LEVEL WITH THE BANK OF THEIR CHOICE

40
SATISFACTION FREQUENCY PERCENTAGE
LEVEL
Strongly agree 6 4%
Agree 110 73.33%
Disagree 13 8.67%
Strongly Disagree 21 14.0%
TOTAL 150 100%

GRAPH :

INTERPRETATION:

From my sample it is observed that a majority of the people were satisfied with the
services provided by the bank and 110 which is nearly 73.33 % of them " agreed " and 8 of
them which is around 4 % "strongly agreed" to the services provided by the banks. But
another factor was that nearly 34 of them were not satisfied with the services and were
willing to change to another bank providing better services.

5.U.S.P OF THE BANKS ACCORDING TO THE RESPONDENTS

FEATURE FREQUENCY PERCENTAGE

41
Pension Processing speed 42 28%

Efficient customer service 44 29.33%

Surroundings 2 1.33%

Less paper work 26 17.33%

Transparency 4 2.67%
Close proximity to their 19 12.67%
home

Wide spread branches 13 8.67%

TOTAL 150 100%

GRAPH :

INTERPRETATION:
Of the sample interviewed, efficient customer service and pension processing speed
were the major USPs of the banks where nearly 28% each voted in favour of them. 26 of
them thought that less paper work involved in pension disbursement was their major USP.
Another 19 of them preferred their banks becouse of their bank's proximity to their homes.
Only 4 thought that ambience and sorroundings were the USPs of their banks.

6. MAIN ATTRACTIVE FEATURES OF SBI

42
 A separate questionnaire was circulated amongst 30 willing respondents who were the
customers of SBI. They were very kind enough to devote some of their valuable time to the
purpose of the survey. Focus was mainly laid on their opinion of the respondents about the
bank, its main features, flaws and ways of improving the services of SBI. It did not include
the 15 respondents (customers of SBI) who had already provided us with their views.

WHAT MADE YOU SELECT SBI AS YOUR BANK?

FEATURES FREQUENCY PERCENTAGE

Processing speed 4 8.88%

Reliability/ Trustworthiness 19 42.2%

Responsiveness and skills of 16 35.5%
the bank employees
Wide spread 6 13.3%
branches(Accessibility)
TOTAL 45 100%

GRAPH :

INTERPRETATION:

Here we see that out of a number of respondents of 45, 4 of them select SBI for its
processing speed, 19 for their reliablility/ trustworthiness, 16 for their responsiveness and
skills of the bank employees and 6 like it for its wide accesibility and reach. Its corresponding
percentages were also calculated and tabulated for reference.
So here we can say that the trustworthiness and reliablility factor has been a driving
force or the reason behind the success of SBI.

7. WAYS OF IMPROVING SBI AND ITS SERVICES

43
WAYS FREQUENCY PERCENTAGE
Improving the infrastructure 4 8.89%
Increasing the service hours 2 4.44%
Reducing processing time 15 33.33%
Friendly approach 4 8.89%
Lowering service charges 13 28.89%
Less paper work 7 15.56%
TOTAL 45 100%

GRAPH :

INTERPRETATION:

Out of the sample size of 45 a majority i.e. 15 think that by reducing the processing
time and 13 feel that by reducing the service charges SBI can be improved. 4 respondents feel
that by improving the the infrastructure and by having a friendly approach this can be
achieved. 7 of the respondents are in favour of lessening the paper work required for pension
disbursement while 2 of them opined that increasing the service hours may do the trick.

8. SATISFACTION LEVEL OF THE CUSOMERS WITH THE

SERVICES OF SBI

44
SATISFACTION FREQUENCY PERCENTAGE
LEVEL
Satisfactory 11 24.44%
Good 27 60.00%
Excellent 7 15.56%
TOTAL 45 100%

GRAPH :

INTERPRETATION:

The respondents were satisfied with the services provided by SBI with nearly 27 of
them which is 60 % of the total terming the services as good while 7 considered it excellent.
But 11 of the respondents were somewhat satisfied with the services of SBI and termed it
satisfactory. It shows that a majority of the people were satisfied by the services of SBI but
still some resentment existed.

9. PROBLEMS ASSOCIATED WITH SBI AND ITS SERVICES

45
NAME OF THE FREQUENCY PERCENTAGE
PROBLEM
Detailed paper work 8 17.78%
Delay 4 8.89%
Reduced pension amount 5 11.11%
Monopolized way of 15 33.33%
operation
Lack of personalized support 13 28.89%
TOTAL 45 100%

GRAPH :

INTERPRETATION:

Monopolized way of operation is considered as one of the main drawbacks of SBI

with nearly 15 of them naming it. 13 respondents stated lack of professionalism and personal
touch to being a shortcoming of SBI. Apart from that 8 confirmed detailed paper work and 5
stated reduced pension due to high service charges to be a deterrent for SBI customers. 4 said
that delay in pension disbursement to be a drawback of SBI.

46
 tabulation
&
analysis
of
secondar
y
data
47
SOURCES OF DATA

 Data was collected from the Central Treasury Building, Bhubaneswar for the most 3
recent years i.e. for 2006-07, 2007-08 and 2008-09.

 Data regarding SBI was collected from the Pension Processing Cell of SBI

48
for the year 2006-07

EVALUATION :

Total pensioners: 2,37991

Number of pensioners drawing from treasuries : 101396

Number of pensioners drawing from PSBs taken in total : 137568

Number of pensioners drawing only from SBI : 100423

Therefore Market share of SBI in 2006-07 : 72.998%

GRAPH :

INTERPRETATION :

In the year 2006-07 we see that the market share of SBI in comparison with other P.S.Bs is a
high figure. It is a market leader and commands nearly 72.998% nearly 73% of the total
market share.

for the year 2007-08

49
EVALUATION:

Total pensioners: 2,45,442

Number of pensioners drawing from treasuries : 105301

Number of pensioners drawing from PSBs taken in total : 140141

Number of pensioners drawing only from SBI : 104163

Therefore Market share of SBI in 2007-08 : 74.316%

GRAPH:

INTERPRETATION:

In the year 2007-08 we observe that the market share of SBI in comparison with other
P.S.Bs remains high but it rise of nearly 1.32% over its preceding year. with this increase it
has strengthened its position as the market leader by a distant margin commanding nearly
74.3 % of the total market share.

FOR THE YEAR 2008-09

50
EVALUATION:

Total pensioners: 253996

Number of pensioners drawing from treasuries : 106624

Number of pensioners drawing from PSBs taken in total : 147342

Number of pensioners drawing only from SBI : 112128

Therefore Market share of SBI in 2008-09 : 76.101%

GRAPH:

INTERPRETATION :

In the year 2008-09 we monitor a further rise in the market share of SBI by 1.79%
over its preceding year. over the years SBI has seen a steady rise in the market share and the
year 2008-09 was no different. It is the market leader by a distant margin with nearly 76.10%
of the total market share.

51
 swot analysis
Findings,

suggestions

&
recommendatio
ns
CHAPTER 8:

8.1.SWOT ANALYSIS :
Strengths:

52
  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)

 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.

 Wide Distribution Network: Excellent penetration in the country with more than
10000 core branches and more than 5100 branches of associate banks (subsidiaries).

 Diversified Portfolio: SBI Bank has all the products under its belt, which help it to
extend the relationship with existing customer‘s Bank has umbrella of products to
offer their customers, if once customer has relationship with the bank.

 Government Owned: Government owns 60% stake in SBI. This gives SBI an edge
over private banks in terms of customer security.

Weaknesses:

 The existing hierarchical management structure of the bank, although strength in

some respects, is a barrier to change.

 Though SBI cards are the 2nd largest player in the credit card industry, it has the
highest nonperforming assets. (NPA)

 Lack of modernisation: SBI lags with respect to private players in terms of

modernisation of its processes, infrastructure, centralisation, etc.

 SBI is currently operating at a lowest CAR(8%). Insufficient capital may restrict the
growth prospects of the bank going forward.

 Contribution of retail credit to total bank credit stood at 26%. Significant thrust on
growing retail book poses higher credit risk to the bank.

53
Opportunities:

 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

 Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will further
increase its reach.

 Increasing trade and business relations and a large number of expatriate

populations offers a great opportunity to expand on foreign soil.

 Global expansion: SBI already has expanded globally and has started its operations
internationally in 32 countries.

 Growing retail & SMEs thrust would lead to higher business growth.

 Micro Finance: there is a lot of growth opportunity in the area of micro finance.

 Strong economic growth would generate higher demand for funds pursuant to higher

Threats:

 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.

 Consumer expectations have increased many folds in last few years and the bank has
not been responsive enough to meet them on time.

 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

54
  Employee Strike: There was an employee strike in the year 2006 which disrupted
SBI‘s activities. This can be repeated in the future.

 Stiff competition, especially in the retail segment, could impact retail growth of SBI

 Slow down in domestic economy would pose a concern over credit off-take

 The changing interest rates and the changing policies of RBI

8.2. Findings:

 From this project it is found that SBI has the 1st place in the market in Orissa and
there is a great opportunity to compete with the other PSBs & to retain its customers
by fulfilling the requirement of customers.

 Most of SBI customers are satisfied with the services provided by the bank.

 Many of the respondents choose the services of the SBI because they are good in
efficient customer service.

 Many customers do not know about all the service & features of SBI.

 Most customers have shifted from other bank’s advance product to SBI because of
hidden charges.

 SBI bank is little bit below the line in customer complaints handling.

 High processing costs is also a dominant problem in case of SBI

 Most other PSBs have become customer centric resulting in stiff competition in the
last 3 years.

 Reduction in processing time and proper customer relations remains a top priority in
most branches with a very high percentage of respondents favouring it.

 There is a certain level of discontentment among the customers of other PSBs with
nearly 15 % of them dissatisfied with the services provided by their banks and this
should be an incentive for the SBI to tap into them.

55
 8.3. suggestions and recommendations

 Staff should be adequately trained to deal with customers on one to one basis.

 Bank can post a list of services that they are rendered to the customers inside the bank
premises.

 The bank can start personalized services such as birthday reminders, anniversaries to
ensure a rapport with the customers and reduce changeovers to other banks.

 In keeping with the trend of reducing market share of SBI, steps should be taken to
ensure that customers do not leave dissatisfied.

 Infrastructure should be revamped in accordance with the changing traditions and

customs.

 Should introduce flexible one window operations to ensure elderly customers are not
hassled in the least bit customer needs and background should be known beforehand
to enable smooth discharge of formalities.

 Employees should be more concerned about the fastest settlement of customer

problems.

 Should concentrate on effective customer complaints handling.

 High service charges should be disposed of or informed accurately to the customer

beforehand.

 Rural markets need to be tapped into which has a lot of potential for growth.

 New branches could be opened at places where people have to travel long distances to
access banking operations.

56
CHAPTER 9.

Conclusion

Banking sector in India has gone through a metamorphosis change in its concept
perception and outlook. expansion with quality has been a phenomenon in the operations of
the banking system. Bank being a service has to meet the need of the customers which vary
from place to place, time to time and purpose to purpose and also at the same time it has to
sustain the tough competition coming from all the four ends. The boom in the field of retail
banking and the intense competition among the banks to increase the customer base has
resulted in the growth of the banking sector and its modernization.

Managing customers is one of the main issues faced by banks. The demands and
expectations of the customers grow at a much faster rate than the banks can equip themselves
to be with them. If the service levels of the product levels are not up to the customer
satisfaction, there is always a danger that the customer might shift his transactions elsewhere.
for PSBs, the ongoing and future investments in technology are massive. It is expected that
the provision of financial services through a versatile technology platform will enable these
banks to acquire more customers, cut costs, and improve service delivery. At the same time it
can be concluded that they need to focus on the human resources in order to achieve the
maximum market share.

State bank of India has proved its existence through introducing various innovative
schemes and that also are considered as competitive in present market. In this span of time,
they have also come up with new strategies so as to compete in this fiercely competitive
market, so as to grab the market share. It has emerged as the market leader and has proved to
be largest banking organization in India. Within a very short period of time the achievement
made by SBI has been excellent. It has happened due to employee dedication towards the
organization, fastest growing Indian economy & brand image.

Apart from all the above, SBI believes in providing good customer services to their
customers which is a key factor for success in future. For improving the pension business the
aforesaid measures may be taken and attempts made at retention and improving the market
share

57
Bibliography

www.google.com

www.scribd.com

www.sbi.co.in

58
questionnaire

59
 Questionnaire

Name - _____________________________________
Gender- _____________________________________
Age - _____________________________________
Occupation - __________________________________
Contact Detail - _______________________________

Q1. From where do you draw your monthly pension ?

a) Treasuries
b) Public Sector Banks (P.S.Bs)

Q2. From which bank do you draw your monthly pension ?

a) SBI
b) Bank of Baroda
c) United Bank of India
d) Andhra Bank
e) UCO Bank
f) Indian Overseas Bank
g) Allahabad Bank
h) Other Banks, Specify (_____________)
i) Not applicable (for those drawing from treasuries)

Q3. From how many years you are associated with this bank?

a) Less than 1 year

b) 1-5 years
c) More than 5 years

60
Q4. Are you satisfied by the services provided by the banks ?

a)Strongly agree
b)Agree
c) Strongly disagree
d)Disagree

Q5. Which feature of the banks draws you towards them?

a) Pension Processing speed

b) Efficient customer service
c) Surroundings
d) Less paper work
e) Transparency
f) Close proximity to their home
g) Wide spread branches

questions 7-10 (for SBI customers only. others NA)

Q7. If you use SBI , then why?

________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________

Q8. Which feature of SBI do you like the most ?

a) Processing speed
b) Responsiveness and skills of the bank employees
c) Less paper work
d) Reliability/ Trustworthiness
e) Wide spread branches

61
Q9. What do you feel about the facilities provided by SBI do you like the most?

a) Satisfactory
b) Good
c) Excellent

Q10. What do you think are the problems associated with SBI and its services

a) Detailed paper work

b) Delay in disbursement of pension
c) Reduced pension amount
d) Monopolized way of operation
e) Lack of personalized service

Q11. Any suggestion you want to give for the betterment of SBI's services.

________________________________________________________________
________________________________________________________________
________________________________________________________________
____________________________________________________________

Q12. Are you planning to change your bank in the near future?

a) Yes
b) No
c) Not sure what to do

Thank you for your time.

62