Project on

Banks Emerging as Financial Supermarket: A

Study of Retail Banking Practices of
Central Bank in India

Presented by
Natasha Chhabra
MBA 3rd sem

Flow of presentation

Company profile

Research Objectives

Scope of the study

Research Methodology

Data Interpretation

Key Findings

Suggestions

Implications of the study

Recommendation for future research

COMPANY PROFILE
Central Bank of India (Marathi: ), a government-owned bank,
is one of the oldest and largest commercial banks in India. It is based
in Mumbai. The bank has 4600 branches and 4 extension counters across 27
Indian states and three Union Territories. At present, Central Bank of India has
overseas office at Nairobi, Hong Kong and a joint venture with Bank of India, Bank

of Baroda, and the Zambian government. The Zambian government holds 40 per
cent stake and each of the banks has 20 per cent. Recently it has also opened a
representative office at Nairobi, Kenya.
Central bank of India is one of 18 Public Sector banks in India to
get recapitalisation finance from the government over the next 24 months.
Central Bank of India has approached the Reserve Bank of India (RBI) for
permission to open representative offices in five more locations - Singapore, Dubai,

Doha and London [

HISTORY OF THE COMPANY

It was established on 21 December 1911 by Sir Sorabji Pochkhanawala with Sir
Pherozeshah Mehta as Chairman, and claims to have been the first commercial
Indian bank completely owned and managed by Indians.
By 1918 it had established a branch in Hyderabad. A branch in
nearby Secunderabad followed in 1925.

In 1923, it acquired the Tata Industrial Bank in the wake of the failure of
the Alliance Bank of Simla. The Tata bank, established in 1917, had opened a
branch in Madras in 1920 that became the Central Bank of India, Madras.
Central Bank of India was instrumental in the creation of the first Indian exchange
bank, the Central Exchange Bank of India, which opened in London in 1936.
However, Barclays Bank acquired Central Exchange Bank of India in 1938.

Banks

Financial Supermarket

Banks journey since 1 7 8 6 brought a revolutionary change in

banking in India. Banks have come a long way from depository
institute to a complete financial supermarket.

What is Retail Banking - It is the new mantra in the banking

sector. It refers to the dealings of a bank with its individual
customers
Retail Banking is the cluster of products and services that banks
provide to consumers and small businesses through branches, the
Internet, and other channels. As this definition implies, banks
organize their retail activities along three complementary
dimensions: customers served, products and services offered, and
the delivery channels linking customers to products and services.
Almeida, 2003

Objectives of Retail Banking:

Provide target customers a full range of financial products and banking services.
Give the customers a one stop window for all their banking requirements.

SCOPE FOR RETAIL BANKING IN INDIA:

All round increase in economic activity.
Increase in the purchasing power. The rural areas have the large purchasing power at their disposal and
this is an opportunity to market Retail Banking.
India has 200 million households and 400 million middleclass population more than 90% of the savings come from
the house hold sector. Falling interest rates have resulted in a shift. Now People Want To Save Less And Spend
More.
Nuclear family concept is gaining much importance which may lead to large savings, large number of banking
services to be provided are day-by-day increasing.
Tax benefits are available for example in case of housing loans the borrower can avail tax benefits for the loan
repayment and the interest charged for the loan.

Retail Finance Umbrella

Bankassurance
ATM
Call Center

Branch
Phone/ Internet
Banking

Customer

Channel

Products &
Services

Agency

BANK
Reliability

Demand

Research Objectives
To contemplate the emerging trends in Retail Banking in India
To assess the level of Bank customers Satisfaction in terms of
Techno-savvy Retail services offered by the banks
To examine the Opportunities and challenges for Banks

becoming the Financial Supermarket

To study the Retail Marketing Strategies in selected 12 Retail
Banks

To suggest the futuristic vision for Retail banking in India

Scope of the study

Study includes Public, Private and Foreign banks operating in
India
Bank branches within the city limits and situated in major towns
Emphasis on studying the retail practices of these banks
Profile of technologically aware customers and knowing their
preferences for selecting banks and their services
Degree of acceptance of technology for better services
Customer satisfaction generated from advanced products and
techno savvy banking services

Research Methodology
Research design
A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to
combine relevance to the research purpose with economy in procedure. It is the conceptual structure within which
research is conducted. It constitutes the blueprint for the collection, measurement and analysis of data. My
research design is descriptive in nature as it involves studying the perceptions and expectations of customers in
order to measure the service quality provided by the service provider. The study thus finds out the major areas of
improvement so that company services to the customers can be improved.
.
Method of Data Collection
The primary data was collected with the help of a structured, non disguised questionnaire. Secondary data was
collected from journals, magazines, newspapers, books & internet with a view to supplement the primary data. The
study of secondary sources made the with a view to supplement the primary data. The study of secondary sources
made the structuring of questionnaire easy.

Sample Sizes
The sample size undertaken in this research study is 80.

Types of Data
Primary Data:
The sources of primary data were structure questionnaires used in the research project.

Secondary data:
The sources of secondary data were internet, books, banks, articles newspapers, journals,
magazines etc.

Data Collection Approaches

Qualitative Approach

Step - 1

Step - 2

Result

Review of work on Retail Banking practices

Understanding various factors contributing in
customer satisfaction and bank service preferences

Personal interview with Bank managers and

executives

Draft Questionnaire developed

Multi Dimensional Scale developed
Direction for quantitative research

Data Collection Approaches

Quantitative Approach

Distribution of draft instrument to sample of

population
Step - 1

Survey refined & tested for reliability and validity

of constructs
Cronbach Coefficient Alpha > 0.7 - Reliable

Step - 2

Instrument pre testing

Final Instrument Development

DATA ANALYSIS AND INTERPRETATION

Q1. What products and services does your bank offer to you?
S Product and
. services
N
o
.

Percentage (%)

Product and services offered by banks

100

100

100

100

100

100

90

90

1 Saving A/C

100

80

2 Current A/C

100

70

50

60

40

50

5 Net banking

90

40

6 Home loan

100

30

7 Electronic
transfer
8 Mutual fund

100

20

9 ATM

100

1 Personal loan
0

60

3 Demat A/C
4 Forex sevice

60
50
40

10

60

Interpretation:
The sample size out of 80 respondents 100% peoples are said that their banks provides all financial services.

60

Q2. Does your bank inform you timely about the new products and services?
S.No.

Details

1
2

Yes
No

Percentage
(%)
85
15

Information about products and services

85
100
80
60

15

40
20
0
YES

NO

Interpretation:
The sample size out of 80 respondents, 85% says that Yes bank inform them timely about the new products and services and
15% says No.

Q3. What is the frequency of transaction you are making with your bank?
S.No.

Details

1
2
3
4
5

Daily
Week
Month
Year
More than 1
year20

Percentage
(%)
20
40
30
7
3

Frequency of transaction
40
40
30

35
30

20

25
20

15

10

5
0
Daily

Week

Month

Year

More than 1 year20

Interpretation:
The sample size out of 80 respondents 20% peoples are transacting money daily, 40% peoples are transacting weekly
30% are transacting monthly, 7% are transacting yearly and 3% are transacting more than one year.

Q4. According to you, does your bank provide core banking facility for the customers?
S.No.

Details

Percentage
(%)

Yes

60

no

40

Core Banking Facility

60
40

60
50
40
30
20
10
0
Yes

no

Interpretation:
sample size out of 80 respondents 60% peoples said yes, 40% peoples said no.

Presentation & Analysis of Data

Coding of data and preparation of Master Data Sheet

Tabulation, classification and graphical representation.

Mean and Standard deviation of the variables used in questionnaire

To measure customer satisfaction in terms of techno savvy Retail

banking services Factor Analysis was performed

Prior to factor analysis correlation matrix used to identify the

applicability of Factor analysis.

Discriminant analysis to find the highest contributing factors in

showing differences in satisfaction among three banking sectors.

Key Findings
Retail Product Satisfaction
Product features and availability of a wider product range under one roof
Product innovation is significant factor for foreign bank customers
Retail Channel Satisfaction
Availability, accessibility and functionality
Ease of banking and convenience is favored by the customer

Loss of customer relationships and deposits to banks with extensive online

services, virtual banks, and non-banks
Retail Service Satisfaction
Reliability, responsiveness, convenience, frontline employee satisfaction, and
competence of the Bank are found most important contributors in Customer
satisfaction.
Ease of use, accuracy and security are prime factors define the satisfaction of
online customers

Key Findings
Findings on Demographic characteristics Women enlightenment towards banking services

Old is Gold- Customer with longer years of a/c holding

Education plays an important role
Business brings more business

High income created more needs and less satisfaction

New private sector banks are becoming new destination of bank customers
Saving is at higher side in customers mind
3 S behind choosing a Bank - Security, Strength and Speed

Key Findings
Techno readiness
Increased awareness and uses of ATM and Net banking

Among non users it is mainly due to fear and insecurity

Online banking preferred as the fastest means of any transaction
Excitement towards retail bank technology is high

Gaining high-tech knowledge

Human touch experience still beats the speed and convenience of online
banking to some extent.
Customer prefer remote channel for obtaining information and routine
transaction, but still believe in branch banking for purchase action.

Suggestions

Create the culture and organizational model needed to promote greater commitment,
accountability and competency

Need to provide easily accessible mechanisms, appropriate financial advice and

customizing services

Create a better, consistent customer experience across channels

Improve the Branch - the ultimate destination for purchase action

Improve the online experience ease of use and accuracy

Make better use of customer information- need to develop products and services
that their clients need before the clients even know they need them

shift from customer volume based strategies to customer value based strategies.

Inbound Customer Marketing- Focus on specific customers and situations , respond

properly and Integrate transversal customer information throughout channels

Implications of the study

It presents an overall picture of present and emerging Retail Banking trends.
This study helps banks to develop the strategies to improve bank service

quality and enhance customer satisfaction.

It gives the blue print for area of improvements and also suggest customers
attitude towards Retail banking practices.

It suggest product innovation and market expansion strategies for banks

Helps in understanding of global market for Indian banks
Gives an understanding to the banks about what factors contribute to overall

customer satisfaction
The findings presented in this study can be used by both academician and
practitioners

Recommendations for future Research

Replicating the present study with other financial services or in other cultural

environment

More specific research could address each of the services provided in the
banking industry

More direct items on the behavioral aspects of customer satisfaction can be

closely examination by future researchers

Need to recognize varying levels of profitability between market segments, a

key criterion of which is the preferred mode of service delivery

Impact of service managed customer learning in changing attitudes and thus

profitability

CONCLUSION
This study has helped me to know the whole functioning of one of the major pillars of our
economy which is Banks. With the Advent of Globalization and Liberalization new ways to
improve customer relationship have emerged in front of the banks. These new ideas will
help them in acquiring new customers and maintaining the existing customer base. One of
the new fast emerging tools with banks to improve up on customer retention and
satisfaction is Retail Banking and by adopting this many banks have achieved growth in

their business like never before.

Thank you.!