BANKING STRUCTURE IN INDIA BANKING STRUCTURE IN INDIA Scheduled Banks in India (A) Scheduled Commercial Banks Public sector

Banks Private sector Foreign Banks in Regional Rural Bank Banks India (28) (27) (29) (102) Nationalized Old Private Bank Banks Other Public New Private Sector BanksBanks (IDBI)

SBI and its Associates (B) Scheduled Cooperative Banks Scheduled Urban Cooperative Scheduled State Cooperative Banks (55) Banks (31) Here we more concerned about private sector banks and competition among them. To day, there are 27 private sector banks in the banking sector: 19 old private sector banks and 8 new private sector banks. These new banks have brought in state-of-the-art technology and aggressively mar keted their products. The Public sector banks are facing a stiff competition from the new pr ivate sector banks. The banks which have been setup in the 1990s under the guidelines of the Narasim ham Committee are referred to as NEW PRIVATE SECTOR BANKS.

INTRODUCTION The banking section will navigate through all the aspects of the Banking System in India. It will discuss upon the matters with the birth of the banking concept in the country to new players adding their names in the industry in coming few years. The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Associati on (IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined under three separate heads with one page dedicated to each bank. However, in the introduction part of the entire banking cosmos, the past has bee n well explained under three different heads namely: History of Banking in India Nationalization of Banks in India Scheduled Commercial Banks in India The first deals with the history part since the dawn of banking system in India. Government took major step in the 1969 to put the banking sector into systems and it nationalize d 14 private banks in the mentioned year. This has been elaborated in Nationalization Banks in Indi a. The last but not the least explains about the scheduled and unscheduled banks in India. Secti on 42 (6) (a) of RBI Act 1934 lays down the condition of scheduled commercial banks. The descript ions along with a list of scheduled commercial banks are given on this page. HISTORY OF BANKING IN INDIA Without a sound and effective banking system in India it cannot have a healthy e conomy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achiev ements to its credit. The most striking is its extensive reach. It is no longer confined to on ly metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the r emote corners of the country. This is one of the main reasons of India's growth process.

The government's regular policy for Indian bank since 1969 has paid rich dividen ds with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for g etting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the mo st efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money have become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. T hey are as mentioned below: Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Re forms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991. To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III. Phase I The General Bank of India was set up in the year 1786. Next came Bank of Hindust an and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of B ombay (1840) and Bank of Madras (1843) as independent units and called it Presidency B anks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Pu njab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced perio dic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To str eamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 19 49 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those day s public has lesser confidence in the banks. As an aftermath depo sit mobilization was slow. Abreast of it the savings bank facility provided by the P ostal department was comparatively safer. Moreover, funds were largely given to traders. Phase II Government took major steps in this Indian Banking Sector Reform after independe nce. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a la rge scale especially in rural and semi-urban areas. It formed State Bank of India to act as the princ ipal agent of RBI and to handle banking transactions of the Union and State Governments all over t he country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 o n 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Go vernment ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: 1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crore. After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%. Banking in the sunshine of Government ownership gave the public implicit faith a nd immense confidence about the sustainability of these institutions. Phase III This phase has introduced many more products and facilities in the banking secto r in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are be ing put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than mone y. The financial system of India has shown a great deal of resilience. It is shelte red from any crisis triggered by any external macroeconomics shock as other East Asian Countries suf fered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the c apital account is not yet fully convertible, and banks and their customers have limited foreign exchan ge exposure. BANKS IN INDIA In India the banks are being segregated in different groups. Each group has thei r own benefits and limitations in operating in India. Each has their own dedicated target marke t. Few of them

only work in rural sector while others in both rural as well as urban. Many even are only catering in cities. Some are of Indian origin and some are foreign players. All these details and many more is discussed over here. The banks and its relati on with the customers, their mode of operation, the names of banks under different groups an d other such useful information s are talked about. One more section has been taken note of is the upcoming foreign banks in India. The RBI has shown certain interest to involve more of foreign banks than the existing one re cently. This step has paved a way for few more foreign banks to start business in India. Major Banks in India ABN-AMRO Bank Abu Dhabi Commercial Bank American Express Bank Andhra Bank Allahabad Bank Indian Overseas Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank JPMorgan Chase Bank

 Bank of Baroda Bank of India Bank of Maharastra Bank of Punjab Bank of Rajasthan Bank of Ceylon BNP Paribas Bank Canara Bank Catholic Syrian Bank Central Bank of India Centurion Bank China Trust Commercial Bank Citi Bank City Union Bank Corporation Bank Dena Bank Deutsche Bank Development Credit Bank Dhanalakshmi Bank Federal Bank HDFC Bank HSBC ICICI Bank IDBI Bank Indian Bank

 Karnataka Bank Karur Vysya Bank Laxmi Vilas Bank Oriental Bank of Commerce Punjab National Bank Punjab & Sind Bank Scotia Bank South Indian Bank Standard Chartered Bank State Bank of India (SBI) State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurastra State Bank of Travancore Syndicate Bank Taib Bank UCO Bank Union Bank of India United Bank of India United Bank Of India United Western Bank UTI Bank

Fact Files of Banks in India The first, the oldest, the largest, the biggest, get all such types of informati on s about Banking in India in this section. The first bank in India to be given an ISO Certification Canara Bank The first bank in Northern India to get ISO 9002 certification for their selected branches Punjab and Sind Bank The first Indian bank to have been started solely with Indian capital Punjab National Bank The first among the private sector banks in Kerala to become a scheduled bank in 1946 under the RBI Act South Indian Bank India's oldest, largest and most successful commercial bank, offering the widest possible range of domestic, international and NRI products and services, through its vast network in India and overseas State Bank of India India's second largest private sector bank and is now the largest scheduled commercial bank in India The Federal Bank Limited Bank which started as private shareholders banks, mostly Europeans shareholders Imperial Bank of India The first Indian bank to open a branch outside India in London in 1946 and the first to open a branch in continental Europe at Paris in 1974 Bank of India, founded in 1906 in Mumbai The oldest Public Sector Bank in India having branches all over Allahabad Bank

India and serving the customers for the last 132 years The first Indian commercial bank which was wholly owned and managed by Indians Central India Bank of Bank of India was founded in 1906 in Mumbai. It became the first Indian bank to open a branch outside India in London in 1946 and the first to open a branch in continental Eu rope at Paris in 1974. PUBLIC SECTOR BANKS Among the Public Sector Banks in India, United Bank of India is one of the 14 ma jor banks, which were nationalized on July 19, 1969. Its predecessor, in the Public Sector Banks, the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz. Camilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Camilla Union Bank Ltd. (1922) and Hooghly Bank Ltd.(1932). Oriental Bank of Commerce (OBC), Government of India Undertaking offers Domestic , NRI and Commercial banking services. OBC is implementing a GRAMEEN PROJECT in Dehradun District (UP) and Hanumangarh District (Rajasthan) disbursing small loa ns. This Public Sector Bank India has implemented 14 point action plan for strengthening of credit delivery to women and has designated 5 branches as specialized branches for wome n entrepreneurs. The following are the list of Public Sector Banks in India Allahabad Bank Andhra Bank Bank of Baroda

 Bank of India Bank of Maharastra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank List of State Bank of India and its subsidiary, a Public Sector Banks State Bank of India . State Bank of Bikaner & Jaipur . State Bank of Hyderabad . State Bank of Indore . State Bank of Mysore

. State Bank of Saurastra State Bank of Travancore INDIAN BANKING INDUSTRY The Indian banking market is growing at an astonishing rate, with Assets expecte d to reach US$1 trillion by 2010. An expanding economy, middle class, and technological inn ovations are all contributing to this growth. The country s middle class accounts for over 320 million People. In correlation wi th the growth of the economy, rising income levels, increased standard of living, and a ffordability of banking products are promising factors for continued expansion. The Indian banking market is growing at an astonishing rate, with Assets expecte d to reach US$1 trillion by 2010. An expanding economy, middle class, and technological innovati ons are all contributing to this growth. The Indian banking Industry is in the middle of an IT revolution, Focusing on th e expansion of retail and rural banking. Players are becoming increasingly custome r -centric in their approach, which has resulted in innovative methods of offering new bank ing products and services. Banks are now realizing the importance of being a big player and a re beginning to focus their attention on mergers and acquisitions to take advantage of

economies of scale and/or comply with Basel II regulation. Indian banking industry assets are expected to reach US$1 trillion by 2010 and are poised to receive a greater infusion of foreign capital, says Prathima Rajan, analyst in Celent's banking group and autho r of the report. The banking industry should focus on having a small number of large playe rs that can compete globally rather than having a large number of fragmented players." State Bank of India is the largest bank in India. It is also, measured by the nu mber of branch offices and employees, the second largest bank in the world.[citation needed] Th e bank traces its ancestry back through the Imperial Bank of India to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. The G overnment of India nationalised the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the Government took over the stake held by the Reserve Bank of India.SBI provides a range of banking products throu gh its vast network in India and overseas, including products aimed at NRIs. With an asset b ase of $126 billion and its reach, it is a regional banking behemoth. SBI has laid emphasis on reducing the huge manpower through Golden handshake schemes and computerizing its operations. The State Bank Group, with over 16000 branches , has the largest branch network in India. It has a market share among Indian commercial banks of about 20% in deposits and advances, and S BI accounts for almost one-fifth of the nation s loans.There are some other banks which gives challenging some how in the banking and service sectorthey are: . . . . . . . . . . Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank IDBI Bank

. Indian Bank . Indian Overseas Bank . Oriental Bank of Commerce . Punjab & Sind Bank . Punjab National Bank . Syndicate Bank . UCO Bank . Union Bank of India . United Bank of India . Vijaya Bank . Opportunity Matrix . . A Marketing opportunity is an area of interest in which a company can perform profitably. An opportunity can take many forms. Some of them are: . . 1) Buying process made easy- Internet shopping . 2) Meet the information needs of the customers in a better way. . 3) A company can customize the product which was originally offered in standard form.

The opportunities that fall under the first quadrant are higher on the side of s uccess probability and also on the attractiveness, so the company should tap those oppo rtunities as early as possible. . . The opportunities falling under the second quadrant should be

. tapped only after the success of the opportunities in the first quadrant. Althou gh the success probability is on the lower side still the attractiveness is on the high er side. . . The opportunities in the third quadrant are less important as compared to the opportunities in the first and second quadrant. Although the attractiveness is o n the lower side but the success probabilities of these opportunities are on the higher side . . . The opportunities in the fourth quadrant are negligible as the success probabili ty and attractiveness both are on the lower side . Threat Matrix. . . . An Environmental Threat is a challenge posed by an unfavourable trend or develop ment. In the absence of any defensive marketing action these threats may lead to deter ioration in sales and indirectly in the profits of the company. .

. The Threats falling under the first quadrant are harmful to the progress of the firm. . Their occurrence probability and also the seriousness is on the higher side. The refore the company should take immediate actions against these threats. . . The Threats falling under the second quadrant are also very harmful as their ser iousness of these threats is on the higher side, although the probability occurrence is o n the lower side.

. . The Threats coming under the third quadrant are less serious as compared to the threats in the first and second quadrant. The company should keep a backup plans for these threats as this can also affect the profitability of the company. . . The Threats under the fourth quadrant are negligible as the probability occurren ce and seriousness both are on the lower side of the matrix. RESEARCH METHODOLOGY Data Collection Techniques: This project consists of two parts. The first part is a study of the banking industry, SBI using secondary data sour ces. This secondary information has been sourced from the internet and from business relat ed magazines and newspapers. The second part of the study has been done using an exploratory research process and a structured questionnaire was developed for this purpose. For the collection of p rimary data this was the only method used. The reason I used this method is because a need was fe lt for the free influx of information about the products. Also this method allowed the use of sk ills gained in class. Sample Design: The population considered for the purpose of the survey was people residing in D elhi and the National Capital Region (NCR). Sampling Technique Used: Since the information required was not of a very technical nature and also looki ng at the scope of the project and the extent of the target segment, the sampling technique employe d was Convenience Sampling. I administered the questionnaires.

Sample Size: I have restricted the sample size to 50 respondents. This was done keeping in mi nd the time constraints and the fact that I felt that this number would be enough to serve t he information needs required to show the trends. Customer Satisfaction: Customer satisfaction is equivalent to making sure that product and service perf ormance meets customer expectations. It is the perception of the customer that the outcome of a business transaction is equal to or greater than his/her expectation. Customer satisfacti on occurs when the acquisition of products and /or services provides a minimum negative departure f rom expectations when compared with other acquisitions and when the marginal utility of a transaction is equal to or greater than preceding acquisitions. Customer satisfaction occurs when the perception of the reward from the purchase of goods or services by the customer meets or exceeds his/her perceived sacrifice. The perce ption is a consequence of matching past purchase and consumption experience with the curren t purchase. Customer Service and Satisfaction: When we talk about customer service and/or satisfaction, we talk about creativit y. Creativity allows us to handle or diffuse problems at hand or later on rather in the proces s of conducting the everyday business. We talk about how, or what, does the organization have to do to gain not only the sale but also the loyalty of the customer. We want to know the payoff of the transaction both in the short and long term. We want to know what our customers Want? We want to know if our customers are satisfied. Satisfaction, Of course, means that what we delivered t o a customer met the customer s Approval. We want to know if customers are delighted and willing to come Back, and so on. Fleiss 2 and Feldman 3 present examples of that delightfulness in their writings. Fleiss has written about Ben and Jerry s ice cream and Feldman has discussed excel lence in a cab ride. As important as delightfulness is, some of us minimize it, or even tot ally disregard it.

At this point, we fail. Some of the issues that will guarantee failure in sales, satisfaction, and loyalty are: Employees must adhere to a rigid chain of command Employees are closely supervised Conflict in whatever form is not allowed Rewards are based on carrot-and-stick principles Wrong objectives are measure. We must understand customer expectation levels concerning quality. We must also understand the strategy for customer service quality, and next we must understand the measu rement and feedback cycles of Customer satisfaction. The customer is the person or unit receiving the output of a process on the syst em. In fact, it is worth emphasizing that a customer can be the immediate, intermediate, or ultimat e customer. Also, a customer may be a person or persons, or a process or processes. Customer satisfaction, however, is when the customer is satisfied with a product/service that meets the customer s needs, wants, and expectations. There are at least three levels of customer expectations about quality: Level 1. Expectations are very simple and take the form of assumptions, must hav e, or take it for granted. For example, I expect the airline to be able to take off, fly to my des tination, and land safely. I expect to get the correct blood for my blood transfusion and I expect the bank to deposit my money to my account and to keep a correct tally for me. Level 2. Expectations are a step higher than that of level 1 and they require so me form of satisfaction through meeting the requirements and/or specifications. For example , I expect to be treated courteously by all airline personnel. I went to the hospital expecting t o have my hernia

repaired, to be in some pain after it was done, to be out on the same day, and t o receive a correct bill. And I went to the bank expecting the bank teller to be friendly, informati ve, and helpful with my transactions. Level 3. Expectations are much higher than for levels 1 and 2. Level 3 requires some kind of delightfulness or a service that is so good that it attracts me to it. For examp le, an airline gives passengers traveling coach class the same superior food service that other airli nes provide only for first-class passengers. In fact, I once took a flight where the flight atten dants actually baked cookies for us right there on the plane. When I went to the hospital, I expected staff to treat me with respect and they carefully explained things to me. But I was surprised when they called me at home the next day to find out how I was doing. And at my house closing, the b ank officer, representing the bank holding my mortgage, not only treated me with respect and answered all my questions about my new mortgage, but just before we shook hands to close the deal, he gave me a housewarming gift. Customer satisfaction surveys help to: Improve customer, client, or employee loyalty. React quickly to changes in the market. Identify and capitalize on opportunities. Beat the competition. Retain or gain market share. Increase revenue. Reduce costs. Data Analysis 1. WHICH OF THE FOLLOWING ATTR IBUTES COMPELLED YOU To MOST OPEN SAVING ACCOUNT IN ANY BANK?

2:-Which TYPE OF SERVICE PREFERS THE MOST by you? 3:-Which of following banks do you have account? 4:-WHAT TYPE OF ACCOUNT DO YOU HAVE IN BANK? 5:-How many services offered by your banks have been Used By you? 6:-How would you know about these services? 7:-What the people think about the Banks? 8:-What a respondent see in purchase of new plan from Banks?

(SBI) is the largest public sector bank in India SBI has branches and ATMs all over India, details of which are available at thei r website. State Bank of Hyderabad, State Bank of Patiala, State Bank of Saurashtr a, State Bank of Bikaner and Jaipur ,State Bank of Indore, State Bank of Mysore and State Bank of Travancore are the seven subsidary banks of SBI. As of March 2006, SBI holding in these banks varies from 74% to 100% , but is likely to decrease in fu ture. SBI has one of the largest network of ATMs in the Asia Pacific region. Many branches of State Bank of India are computerized. In places where the Reserve Bank of India, (RBI) the central bank of India does have an office, SBI carries out many of its funct ions. SBI timings vary according to location, for example the Powai, Mumbai branch of State Bank of India is open between 10.15 am to 2pm (Monday-Friday You can open a public provident fund (PPF) account at any State Bank of India br anch. PPF accounts are one of the few savings instruments which offer a high tax free interest rate of 8% per year. All deposits made on or before 5th of a month earn interest for the entire month. If you deposit a cheque in your PPF account on the 5th of the mont h, you will get interest for the month, though your account may be debited at a later d ate. The interest is credited to the account at the end of the accounting year in India. If you know an agent who is registered with that particular branch of State Bank , he will pay you back, a part of the commission he receives from the bank. So you can get back 0.5% -0.6% of the amount deposited immediately by cash. Usually larger the amoun t, the higher the commission paid back by the agent (it is negotiable) . The pay-in slip for PPF has 3 sections -depositors copy, agents copy and bank copy. The agents copy has to be given to the agent and he will give part of the commission. Earlier financial services firm like Blue-chip in Mumbai, would also give a commission of 0.25% , but they have stopped in the last 2 years. The minimum amount that can be invested in one year is Rs 500 and maximum amount is Rs 70000. This investment has a lock in period of 15 years. No withdrawals are a llow till

6 years after account opening and one withdrawal is allowed per year there after . It offers rebate under section 80C and the interest is tax free under section 10C. For cash withdrawals, you can either use a withdrawal slip or cheque. If an acco unt is inactive for a long time, State Bank of India does not charge any fee for reacti vation. However, they have a verification process, which may take a long time. Payment of income tax, advance tax, sales tax can be done at SBI branches. Foreign curre ncy drafts can also be obtained at the branches. Since SBI offers a variety of banki ng services, their branches are usually very crowded. State Bank of India has increase home loan interest rates by 25-75 basis points. Also no fixed rate loans will be available for periods more than 10 years. These changes have come into effect from March 1, 2006. SBI Railway Visa Card allows booking of railway tickets online at the Indian Rai lways website at zero transaction charges. Users of this credit card can get back up t o 10% of ticket fare as railway points. These points can be redeemed later, like frequent flyer miles offered by airlines. State Bank of India is the largest issuer of debit cards (M aestro) in India State Bank customers who have to wait a long time to process a bank transaction can register their complaint through a touch screen device for customer feedback ser vice at the branch. The information is recorded and processed in the central server. As of March 2006, it is implemented in 10 branches of SBI in Mumbai. When SBI employees go o n strike, the Reserve Bank of India takes over all clearing operations. However, b anking operations are affected since SBI has nearly 30% of the total customers of banks in India. Cheques/DD drawn on SBI was not cleared due to the strike. All government taxes like income tax, sales tax, service tax can be paid at any branch of SBI. State Bank of India has 52 foreign offices in 34 countries including Australia, UK, USA, Canada, Bahrain, Nigeria, Bangladesh, Nepal, and Bhutan Sri Lanka. These are use ful for foreign trade transactions like opening of Letter of Credit

STRENGTHS WEAKNESSES O P S O Strategies W O Strategies P O Strength: Large Capital base. Weakness: WorkforceR T Opportunity: Market Expansion. Responsiveness. U N Opportunity: Outsourcing of Non I Strategy: Deep Penetration into Core Business. T I Rural Market. Strategy: Outsource CustomerE Care & other E-Helps. S T H R E A T S S T Strategies Strength: Low operating costs Threat: Increased Competition from others Pvt. Banks. Strategy: Steps to Ensure Loyalty by old Customers. W T Strategies Weakness: Not Equal to International Standards. Threat: Entry of many Foreign Banks. Strategy: Consider additional benefits