to understand customers

8/3/2019 To Understand Customers

http://slidepdf.com/reader/full/to-understand-customers 1/44

FINAL REPORT

ON MANAGEMENT THESIS

“To understandcustomers’perception of servicesfor current account provided by

SBOP and HDFC”

By:-

Manju Bala7NBBT001



FINAL REPORTON MANAGEMENT

THESIS SEM-3“To understand customers’ perception of servicesfor current account provided by HDFC bank and

SBOP”

ICFAI NATIONAL COLLEGE

BATHINDA

Submitted To: - Submitted

By:-



Ms Poornima Garg Manju Bala

Roll

No:-7NBBT001

TABLE OF

CONTENT

Acknowledgements

Bank

Current Account

About HDFC

Current Account of HDFC

Customer Pattern

About SBOP

Current Account of SBOP

Summary

Objectives



(Manju

Bala)

INTRODUCTION ABOUTBANKING SECTOR

An organisation,usually a corporation,chartered by

state or federal government , which does most or

all of the following: recieves demand deposits and

time deposits ,honors instruments drawn on them ;

discounts notes ,makes loans, and invests in

securities, collect checks,drafts and notes,certifies



depositor’s checks and issues drafts and cashier’s

checks

WHAT IS BANK?A bank is a business that borrows from its customers oncurrent accounts repayable to its customer's cheques andcollects cheques for its customers' accounts. Banks mayalso issue bank notes, and lend money to customers on

current account (called overdraft), accept term depositsand make term loans and provide other financial services.Banks that issue notes are called Banks of Issue.

Currently in most jurisdictions the business of banking isregulated and banks require a license. Banking licensesare granted by bank regulatory authorities and providerights to conduct the most fundamental banking services

such as accepting deposits and making loans. There arealso financial institutions that provide certain bankingservices without meeting the legal definition of a bank, aso called non-banking financial company.

Banks have a long history, and have influencedeconomies and politics for centuries.

The word bank is derived from the Italian banca, which is

derived from a Germanic language and means “bench”. The terms “bankrupt” and "broke" are similarly derivedfrom banca rotta, which refers to an out-of-business bank,having its bench physically broken. Money lenders inNorthern Italy originally did business in open areas, or big



open rooms, with each lender working from his ownbench or table.

Traditionally, a bank generates profits from transaction

fees on financial services and from the interest it chargesfor lending. In recent history, with historically low interestrates limiting banks' ability to earn money by lendingdeposited funds, much of a bank's income is provided byoverdraft fees and riskier investments.

Banking in India originated in the first decade of 18thcentury with The General Bank of India coming intoexistence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldestbank in existence in India is the State Bank of India beingestablished as "The Bank of Calcutta" in Calcutta in June1806. Couple of decades later, foreign banks like HSBCand Credit Lyonnais started their Calcutta operations inthe 1850s. At that point of time, Calcutta was the mostactive trading port, mainly due to the trade of the BritishEmpire, and due to which banking activity took roots

there and prospered. The first fully Indian owned bankwas the Allahabad Bank set up in 1865.

By the 1900s, the market expanded with theestablishment of banks like Punjab National Bank, in 1895in Lahore; Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. Indianbanking sector was formally regulated by Reserve Bank

of India from 1935. After India's independence in 1947,the Reserve Bank was nationalized and given broaderpowers.



This is the model of banking structure in India that shows

the importance and authority of RBI and also existence of

Commercial Banks included foreign and Regional Rural,

Co-operative Banks included Urban Banks and State

Banks, Public Sector Banks, Private Sector Banks and

other Nationalized Banks in India.

The Reserve Bank of India (RBI), as the central bank of

the country, closely monitors developments in the wholefinancial sector

The banking sector is dominated by Scheduled

Commercial Banks (SCBs). As at end-March 2002, there

http://en.wikipedia.org/wiki/Image:Scheduled_banking_structure_in_India.png



were 296 Commercial banks operating in India. This

included 27 Public Sector Banks (PSBs), 30 Private, 40

Foreign and 196 Regional Rural Banks. Also, there were

68 scheduled co-operative banks consisting of 52scheduled urban co-operative banks and 16 scheduled

state co-operative banks.

Scheduled commercial banks touched, on the deposit

front, a growth of 14% as against 18% registered in the

previous year. And on advances, the growth was

14.5%against 17.3 % of the earlier year.

State Bank of India is still the largest bank in India with

the market share of 20%. ICICI and its two subsidiaries

merged with ICICI Bank, leading creating the second

largest bank in India with a balance sheet size of

Rs1040bn.

A minimum stipulated Capital Adequacy Ratio (CAR) was

introduced to strengthen the ability of banks to absorblosses and the ratio has subsequently been raised from

8% to 9%. It is proposed to hike the CAR to 12% by 2004

based on the Basle Committee recommendations.

Retail Banking is the new mantra in the banking sector.

The home loans alone account for nearly two-third of the

total retail portfolio of the bank. According to oneestimate, the retail segment is expected to grow at 30-

40% in the coming years



Net banking, phone banking, mobile banking, ATMs and

bill payments are the new buzz words that banks are

using to lure customers.

With a view to provide an institutional mechanism for

sharing of information on borrowers/ potential borrowers

by banks and Financial Institutions, the Credit Information

Bureau (India) Ltd. (CIBIL) was set up in August 2000. The

Bureau provides a framework for collecting, processing

and sharing credit information on borrowers of credit

institutions. SBI and HDFC are the promoters of the CIBIL.

The RBI is now planning to transfer of its stakes in the

SBI, NHB and National Bank for Agricultural and Rural

Development to the private players. Also, the

Government has sought to lower its holding in PSBs to a

minimum of 33 per cent of total capital by allowing them

to raise capital from the market.Banks are free to acquire shares, convertible debentures

of corporate and units of equity-oriented mutual funds,

subject to a ceiling of 5% of the total outstanding

advances (including Commercial Paper) as on March 31 of

the previous year.

The finance ministry spelt out structure of the

government-sponsored ARC called the Asset

Reconstruction Company (India) Limited (ARCIL), this pilot

project of the ministry would pave way for smoother

functioning of the credit market in the country. The



Government will hold 49% stake and private players will

hold the rest 51% - the majority being held by ICICI Bank

(24.5%).

Current Deposit a/c These accounts are meant purely to meet the

transaction needs of the customer and hence not

entitled to any interest from bank.

In addition, the bank also levy certain charges

for maintaining the accounts in the form of

ledger Fees, minimum balance Fees etc.

Minimum balance is also specified by each

bank.

This a/c is opened by a business organization

for meeting their business transactions.



Categories of Banks

The “Reserve Bank of India” governs theoperation of banks in India. In India, banks can be

classified into 3 categories

Public sector banks like State Bank of India,Bank of Baroda, Syndicate Bank, and CanaraBank. Government of India backs these, sodepositor’s money is safe. Public sector banks aresome of the oldest banks in India and have

reasonable charges for most services. Many of the branches of these banks are not networked,but they are slowly introducing internet banking,ATM cards and other facilities. Sometimes, ITrequirements are not correctly estimated and thisresults in problems for customers

Our experience is that they offer better servicecompared to all other types of banks. PublicProvident Fund (PPF) accounts, which offer taxfree returns, can be opened at State Bank of Indiabranches. If you do not operate an account (makea deposit or withdrawal) in the branch for a long



time - a period of more than one year, theaccount becomes inactive and additionalverification is required to make it active. You have

to periodically visit the branch to update yourpassbook, though some banks are now offeringinternet banking.

Most branches are open for a limited time in themorning, which is very inconvenient forcustomers, especially salaried employees with a9 to5 job, who have to reach office in time. Their

employees are unionized and often strike work

Co-operative banks: major banks includeAbhyudaya Bank, Bharat Co-op Bank.Maharashtra has the largest number of co-opbanks in India. In cities like Mumbai, these bankshave a large number of branches. They also havetimings convenient for working people - usuallyopen in the evening and on Sundays. They alsooffer a higher rate of interest compared to otherbanks. However, many co-op banks have shutdown and depositors have lost money, becauseof mismanagement by the Directors of thesebanks. Mutual funds dividends cannot be directlycredited to your account in these banks. If an

account is inactive for more than 1 year (no cashwithdrawal or deposit is made), these banksusually charge an additional amount to reactivateit.



If your account is debited for some bank charges,you should check with the bank manager and askthem the exact details. Many times, your account

is debited for services you have never used. Alsokeep a track of the cheque books that are issuedto your account. Bharat Co-op Bank issues chequebooks in denominations of 10 leaves and 25leaves only. They issue 30 cheque leaves freeevery 6 months. They often do not have chequebooks of 10 leaves available. So, if a customerhas already taken a cheque book of 10 leaves ,they are forced to take a cheque book of 25leaves and pay bank charges for taking more than30 cheque leaves (though this is the banks faultactually)

Private sector banks such as HDFC Bank,

HDFC bank, IDBI bank and UTI bank wereestablished less than 15 years ago. They havemade optimum use of technology and offerinternet banking, ATM and phone banking. Youcan access your account from any branch in India(usually at a charge). Mutual funds can directlycredit dividends, redemption amounts to your

account. Private and foreign banks cover 65% of the forex transactions in India



The minimum balance requirement is muchhigher in these banks, usually more than Rs 5000for a savings account. If you do not maintain the

minimum average quarterly balance (AQB) for athree month period, their bank charges aresubstantial - Rs 250 - Rs 500. Marketing executiveof some new banks like Kotak Mahindra is willingto reduce the AQB requirements to get morecustomers. It is advisable to check the balancesheets of these banks, before opening an amount.Bank statements are sent by post every month orevery 3 months, along with notifications aboutchanges in bank charges.

The air-conditioned branches of private banks arewell designed, but their staff is often indifferent tocustomers. Earlier these banks refused to giveany acknowledgement for cheques deposited (if

they lost the cheque - they were not responsible).Now the Reserve Bank of India has made itmandatory for them to give an acknowledgement.If you have deposited a cheque and it is notcredited to your account, they usually take 3 to 4days to find out where the cheque hasdisappeared. If a cheque has been deposited inan ATM, and not been credited to your account,these banks will only take any action, if it can beproved that the payees account has beendebited.



Before keeping large amounts in these banks, it isadvisable to check the financial status of thesebanks. Global Trust Bank was a private sector

bank, which was taken over by the public sectorOriental Bank of Commerce, due to financialproblems. Customers could not withdraw largeamounts from their bank accounts for some time.

Citibank, HSBC, Standard Chartered are some of

the foreign banks operating in India. However,they have a limited number of branches, usuallyin the main financial district of major cities.Citibank offers electronic fund transfer to otherbank, but the recipient does not have any way tofind out who has sent the amount. They also havevery high charges and for some types of accounts, you are charged for even a visit to thebranch. So if you have any problem, you can onlycontact their call center!

Recently the entire staff of Citibank’s Jaipurbranch was dismissed due to malpractices -article from “Economic Times on Citibank Jaipurproblem”

The Reserve Bank of India has established theBanking Ombudsman Scheme for inexpensiveand quick resolution of complaints against banks.Some banks like Syndicate Bank provide details of this scheme at their branch. Details of Banking



Ombudsman Scheme are available at the RBIwebsite and websites of some Indian and foreignbanks. Indian banks have a large number of

holidays and bank holidays are different in thevarious states in India.

Though 17 banks are authorized to import goldand resell to jewelers, exporters and retailcustomers, only HDFC bank, HDFC bank,Corporation Bank, Indusind Bank and Indian Bankare selling to retail customers as of March 2006.

The gold purchased from banks is 24 karat goldimported from PAMP refinery, Switzerland

According to a report by ICRA Limited, a rating

agency, the public sector banks hold over 75

percent of total assets of the banking industry, with

the private and foreign banks holding 18.5% and

6.5% respectively.



ABOUT

HDFC

HDFC Housing Development Finance

Corporation was established in August

1994 but it started operation as schedule

commercial bank in january 1995.

CEO & MD of HDFC Bank Ltd. is Aditya

Puri.

Its registered office in Mumbai

It won best Home Financer award& best

strategy award at Marketing& Advertising

Power in2005.



HDFC Bank now has a wide network of over

531 branches across 228 cities &over

thousand networked ATM’s. All fact &figure

highlighted the rapid growth of HDFC Bank

over the last nine years. This Bank adopted

the Corporate Governance Policy & keeping in

mind the importance of attaining fairness of

all stakeholders as well as achievingorganization efficiency



Types Of Current

AccountPlus Current Account

Trade Current Account

Premium Current Account

Regular Current Account

Reimbursement Current Account

RFC - Domestic Account

Flexi Current Account

Regular Fixed Deposit

http://www.hdfcbank.com/personal/accounts/plus_acc.htm

http://www.hdfcbank.com/personal/accounts/trade_acc.htm

http://www.hdfcbank.com/personal/accounts/premium_acc.htm

http://www.hdfcbank.com/personal/accounts/regularcc_acc.htm

http://www.hdfcbank.com/personal/accounts/reimbursement_acc.htm

http://www.hdfcbank.com/personal/accounts/rfc_acc.htm

http://www.hdfcbank.com/personal/accounts/flexi_account.htm

http://www.hdfcbank.com/personal/accounts/regular_fd.htm

http://www.hdfcbank.com/personal/accounts/plus_acc.htm

http://www.hdfcbank.com/personal/accounts/trade_acc.htm

http://www.hdfcbank.com/personal/accounts/premium_acc.htm

http://www.hdfcbank.com/personal/accounts/regularcc_acc.htm

http://www.hdfcbank.com/personal/accounts/reimbursement_acc.htm

http://www.hdfcbank.com/personal/accounts/rfc_acc.htm

http://www.hdfcbank.com/personal/accounts/flexi_account.htm

http://www.hdfcbank.com/personal/accounts/regular_fd.htm



HDFC Bank Plus Current Account Features &

Benefits

Free Account to account funds transfer between HDFC Bank accounts

Free payment and collection through RTGS.

Free payment and collection using NEFT (through Netbanking)

Free up to 50 Demand Drafts per month and can be issued from any

HDFC Bank Branch

Free up to 50 Pay Orders (PO) per month and can be issued from any

HDFC Bank Branch.

Free anywhere collection & payment transactions (clearing) within HDFC

Bank branch network (except Dahej), up to Rs.100 lacs per month.

Convenience to withdraw & deposit cash at all our branches*

300 "At Par" cheque leaves free per month.

Register for InstaAlert service and receive updates on your account as

and when the select transaction happens - all this without visiting the

branch or ATM!

Enjoy facilities like 24-hour Phone Banking, Net Banking and Mobile

Banking that helps you check your balance & transaction details, find out

the status of your cheque or stop cheque payment.

http://www.hdfcbank.com/personal/access/netbanking.htm

http://www.hdfcbank.com/personal/access/phonebanking.htm


http://www.hdfcbank.com/applications/misc/mobilebanking.asp









Trade Current Account Features & Benefits

Free Account to account funds transfer between HDFC Bank accounts.

Free RTGS/NEFT Transactions.

Free up to 30 Demand Drafts (DD) per month and can be issued from

any HDFC Bank Branch.

Free up to 30 Pay Orders (PO) per month and can be issued from any

HDFC Bank Branch.

Free anywhere collection & payment within HDFC Bank branch network

(except Dahej), up to Rs.50 lacs per month.

Convenience to withdraw & deposit cash at all our branches*

200 "At Par" cheque leaves per free month .

Register for InstaAlert service and receive updates on your account as

and when the select transaction happens - all this without visiting the

branch or ATM!

Enjoy facilities like 24-hour PhoneBanking, NetBanking and

MobileBanking that helps you check your balance & transaction details,

find out the status of your cheque or stop cheque payment.

RFC Domestic Account Features & Benefits









Convenient inter-city banking :

Deposit your local cheques in one branch of a city and have it

credited to your account at a branch in another city or make

payments across HDFC Bank locations using PAP chequefacility at a nominal rate

Free payments and collections through NEFT

Free RTGS collection. RTGS payment @ Rs.100/- per

transaction

S Inter-city Account to accounts funds transfer between HDFC

Bank accounts at a nominal charge of Rs.15/- per transactions

Free Demand Drafts (DD) above Rs.100,000/-. Demand drafts

up to Rs.50,000/- at flat cost of Rs.40/-. DDs above Rs.50,000/-

& up to Rs.100,000/- at nominal cost of Rs.25/- .

Free Pay Order (PO) above Rs.100,000/-. Pay Order up to

Rs.50,000/- at flat cost of Rs.40/-. POs above Rs.50,000/- & up

to Rs.100,000/- at nominal cost of Rs.25/- .

Payable at par cheque book at nominal price.

Register for InstaAlert service and receive updates on your

account as and when the select transaction happens - all this

without visiting the branch or ATM!

:

Flexi Current Account Features & Benefits



Enjoy dynamic free limits on Intercity Payments, Collections &

Funds Transfer as well as Cash Deposit at home location

branches based on the AMB maintainedFor example, you maintain an AMB of Rs.2,00,000/- in a

particular month. Your dynamic free transaction limits for that

month would be as per the following table

[



About State bank of

Patiala

COMPANY’S PROFILEOverview

State bank of Patiala is an associate bank of State

bank of India. SBOP is originally named Patiala

State Bank,an currently an associate bank of theState Bank of India was founded on 17 november

1917.SBOP was founded by Bhupinder Singh

Maharaja of the princely state of Patiala of

undevided India and the functions of the bank

included the normal functions of commercial

banks, as also some functions similar to functions

of central bank for the princely State of Patiala.

After India’s independence,the bank

was made a wholly owned subsidiary of the

government of Punjab. On 1 April 1960,SBOP was



accorded the status of an associate bank of State

Bank group. Presently, The State bank of Patiala

has a network of 830 service outlets including 750

branches in all major cities of India , but most of the branches are located in the India State of

Punjab , Haryana, Himachal Pardesh,Rajsthan

, Jammu & Kashmir,Delhi and Chandigarh.

State Bank offers you the convenience of over 5000 ATMs inIndia, already the largest network in the country and continuing toexpand fast!

This means that you can transact free of cost at the ATMs of State Bank Group (This includes the ATMs of State Bank of Indiaas well as the Associate Banks namely, State Bank of Bikaner &

Jaipur, State Bank of Hyderabad, State Bank of Indore, StateBank of Mysore, State Bank of Patiala, State Bank of Saurashtra,and State Bank of Travancore), using the State Bank Cash Pluscard.



Current accounts of SBOPThere are two types of current accounts



SUMMARY My title is “ To understand the customer ‘s

perception of services for current account

provided by HDFC and SBOP “. First of all I

prepared quationnaire to take the feed back

existing current account holder and take the

feedback from the current account holder of HDFC

bank and SBOP bank. It was very difficult to take

time from the customer to do the survey.

To complete my

project I took the sample of 50 customers . To do

the survey I selected the area.After my study I found

out that most of the customers of HDFC bank are

not fully satisfied with bank .Some of the bank are

not aware about the services of HDFC bank. Even

the current account holders of other bank are very

loyal to their existing bank and didn’t give the rightinformation . It is very difficult to find the existing

customers from the market.



OBJECTIVES To learn about the companies

To study the services of HDFC bank and SBOP

bank for current account

To know which bank provide best service in

current account



LIMITATION

It is very difficult to find exsisting

customers of HDFC bank and SBOP

Some times customer gives wrong

information

Lack of available data

Some time customers are busy in their

work & they refused to cooperate inproviding the information

Bank employees don’t have time for know

something for services of current account



METHODOLOGY Sample area :- Bathinda

Sample size :- 50

Tool used :- Personel interview of customers

and quitionnair

Sampling Technique :- Convienence sampling



Analysis

ervices for

urrent a/c

HDFC SBOP

ople like 30 20

I conducted survey of 50 people. Out of 50 ,

30 people have current account in HDFC and

20 people have current account in SBOP.



FINDINGS

I conducted survey of 50 people. Ifound that thoso

people who believe in government . They opened their

current account in SBOP. SBOP is the subsidiary of State

Bank Of India. HDFC provide better services for currentaccount rather than SBOP .Because HDFC is a private

player and bank is providing better services to customer

for more profit that’s why people believe in HDFC. HDFC

provide internet banking,mobile banking,local



cheques.HDFC provide locker facility ,pay orders,demand

draft.SBOP does not provide locker facility, pay order ,

demand draft.So that 30 people have current account in

HDFC bank and 20 people have current account in SBOP.

I conducted servey 50 people. Out of 50

people ,20 people have current account with

SBOP Bank .Out of 20 People 96% fully

satisfied with SBOP services for current

account and 4% people partial satisfied.



I conducted servey 50 people. Out of 50

people ,30 people have current account with

HDFC Bank .Out of 30People 88% fully

satisfied with HDFC services for current

account and 12% people partial satisfied.

Balance of Payments Accounts US

International Transactions, 2003(Millions of dollars)



Current Account

Exports of goods and

services

1,314,888

Imports of goods and

services –

1,778,117

Unilateral Current Transfers

–67,439

Capital Account

Capital account transactions

–3,079

Financial Account

US-owned assets abroad –

283,414

Foreign-owned assets in

the US

829,173

Statistical discrepancy –

12,012



Figure 18-4:

U.S. Macroeconomic Data,1964-1972



RECOMMENDATIONS• Bank should immediately solve the customer

problem

• Bank’s should make customer aware about the

charges of services

• HDFC bank require to provide fast service

• If company want to the edge over competitors then

SBOP bank requires to give something extra withcurrent facility to the customers



APPENDICES:-Q1. Do you have current account?

Ans. a) Yes b) No

Q2. In which bank have you current account?

Ans. a) HDFC b) SBOP

c) ICICI d) PNB e) othersQ3. Are you satisfied from this bank?

Ans. a) Yes b) No

Q4. Do you want to change your bank?

Ans. a) Yes b) No

Q5. Which bank you would like to choose?Ans. a) HDFC b) SBOP

c) ICICI d) PNB e) any others



Q6. What type of service is provided by HDFC bank

in current a/c?

Ans. a)Internet Banking b)Dimand draft

c)Locker d)Pay order

e) Cheques f) Mobile banking

g) Others

Q7. What type of service is provided by SBOP in

current account ?

Ans. a)Internet Banking b)Dimand draft

c)Locker d)Pay order

e) Cheques f) Mobile banking

g) Others

Q8. What type of service you expect from bank?

Ans. ____________________________________________________

Q9. How much minimum money do you require to

open a current a/c in HDFC ?

Ans. a) 1000 b)5000

c)More than 10000

to understand customers

Documents