FINAL REPORT ON MANAGEMENT THESIS To understand customersperception of services for current account provided by SBOP and HDFC

By:Manju Bala 7NBBT001

FINAL REPORT ON MANAGEMENT THESIS SEM-3

To understand customers perception of services for current account provided by HDFC bank and SBOP

ICFAI NATIONAL COLLEGE

BATHINDA

Submitted To: By:-

Submitted

Ms Poornima Garg No:-7NBBT001

Manju Bala Roll

TABLE OF CONTENT
Acknowledgements Bank Current Account About HDFC Current Account of HDFC Customer Pattern About SBOP Current Account of SBOP Summary Objectives

Limitation Methodology Findings Recommendation Appendices References

ACKNOWLEDGMENT
I am very thankful to ICFAI NATIONAL COLLEGE for giving me opportunity to undertake this final report. I like to thanks our center head Mrs Pooja Sharma and including others faculities Mrs Poorinima garg , Mrs Anchal garg who provided me proper guidence to do this project.And at the last but not the list I would like to thank all respondence of Bathinda who gave their precious time to provide all the usefull information .

(Manju Bala)

INTRODUCTION ABOUT BANKING 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

depositors checks and issues drafts and cashiers checks

WHAT IS BANK?
A bank is a business that borrows from its customers on current accounts repayable to its customer's cheques and collects cheques for its customers' accounts. Banks may also issue bank notes, and lend money to customers on current account (called overdraft), accept term deposits and 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 is regulated and banks require a license. Banking licenses are granted by bank regulatory authorities and provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. There are also financial institutions that provide certain banking services without meeting the legal definition of a bank, a so called non-banking financial company. Banks have a long history, and economies and politics for centuries. have influenced

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 derived from banca rotta, which refers to an out-of-business bank, having its bench physically broken. Money lenders in Northern Italy originally did business in open areas, or big

open rooms, with each lender working from his own bench or table. Traditionally, a bank generates profits from transaction fees on financial services and from the interest it charges for lending. In recent history, with historically low interest rates limiting banks' ability to earn money by lending deposited funds, much of a bank's income is provided by overdraft fees and riskier investments. Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Calcutta" in Calcutta in June 1806. Couple of decades later, foreign banks like HSBC and Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank set up in 1865. By the 1900s, the market expanded with the establishment of banks like Punjab National Bank, in 1895 in Lahore; Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. Indian banking sector was formally regulated by Reserve Bank of India from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.

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 whole financial sector

The banking sector is dominated by Scheduled Commercial Banks (SCBs). As at end-March 2002, there

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 52 scheduled 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 absorb losses 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 one estimate, the retail segment is expected to grow at 3040% 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 the operation 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 Canara Bank. Government of India backs these, so depositors money is safe. Public sector banks are some 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, IT requirements are not correctly estimated and this results in problems for customers Our experience is that they offer better service compared to all other types of banks. Public Provident Fund (PPF) accounts, which offer tax free returns, can be opened at State Bank of India branches. If you do not operate an account (make a deposit or withdrawal) in the branch for a long

time - a period of more than one year, the account becomes inactive and additional verification is required to make it active. You have to periodically visit the branch to update your passbook, though some banks are now offering internet banking. Most branches are open for a limited time in the morning, which is very inconvenient for customers, especially salaried employees with a 9 to5 job, who have to reach office in time. Their employees are unionized and often strike work

Co-operative banks: major banks include

Abhyudaya Bank, Bharat Co-op Bank. Maharashtra has the largest number of co-op banks in India. In cities like Mumbai, these banks have a large number of branches. They also have timings convenient for working people - usually open in the evening and on Sundays. They also offer a higher rate of interest compared to other banks. However, many co-op banks have shut down and depositors have lost money, because of mismanagement by the Directors of these banks. Mutual funds dividends cannot be directly credited to your account in these banks. If an account is inactive for more than 1 year (no cash withdrawal or deposit is made), these banks usually charge an additional amount to reactivate it.

If your account is debited for some bank charges, you should check with the bank manager and ask them the exact details. Many times, your account is debited for services you have never used. Also keep a track of the cheque books that are issued to your account. Bharat Co-op Bank issues cheque books in denominations of 10 leaves and 25 leaves only. They issue 30 cheque leaves free every 6 months. They often do not have cheque books of 10 leaves available. So, if a customer has already taken a cheque book of 10 leaves , they are forced to take a cheque book of 25 leaves and pay bank charges for taking more than 30 cheque leaves (though this is the banks fault actually)

Private sector banks such as HDFC Bank,

HDFC bank, IDBI bank and UTI bank were established less than 15 years ago. They have made optimum use of technology and offer internet banking, ATM and phone banking. You can access your account from any branch in India (usually at a charge). Mutual funds can directly credit dividends, redemption amounts to your account. Private and foreign banks cover 65% of the forex transactions in India

The minimum balance requirement is much higher in these banks, usually more than Rs 5000 for a savings account. If you do not maintain the minimum average quarterly balance (AQB) for a three month period, their bank charges are substantial - Rs 250 - Rs 500. Marketing executive of some new banks like Kotak Mahindra is willing to reduce the AQB requirements to get more customers. It is advisable to check the balance sheets of these banks, before opening an amount. Bank statements are sent by post every month or every 3 months, along with notifications about changes in bank charges. The air-conditioned branches of private banks are well designed, but their staff is often indifferent to customers. Earlier these banks refused to give any acknowledgement for cheques deposited (if they lost the cheque - they were not responsible). Now the Reserve Bank of India has made it mandatory for them to give an acknowledgement. If you have deposited a cheque and it is not credited to your account, they usually take 3 to 4 days to find out where the cheque has disappeared. If a cheque has been deposited in an ATM, and not been credited to your account, these banks will only take any action, if it can be proved that the payees account has been debited.

Before keeping large amounts in these banks, it is advisable to check the financial status of these banks. Global Trust Bank was a private sector bank, which was taken over by the public sector Oriental Bank of Commerce, due to financial problems. Customers could not withdraw large amounts 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, usually in the main financial district of major cities. Citibank offers electronic fund transfer to other bank, but the recipient does not have any way to find out who has sent the amount. They also have very high charges and for some types of accounts, you are charged for even a visit to the branch. So if you have any problem, you can only contact their call center! Recently the entire staff of Citibanks Jaipur branch was dismissed due to malpractices article from Economic Times on Citibank Jaipur problem The Reserve Bank of India has established the Banking Ombudsman Scheme for inexpensive and 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 RBI website and websites of some Indian and foreign banks. Indian banks have a large number of holidays and bank holidays are different in the various states in India. Though 17 banks are authorized to import gold and resell to jewelers, exporters and retail customers, only HDFC bank, HDFC bank, Corporation Bank, Indusind Bank and Indian Bank are selling to retail customers as of March 2006. The gold purchased from banks is 24 karat gold imported 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 ATMs. 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 achieving organization efficiency

Types Of Current Account

Plus Current Account Trade Current Account Premium Current Account Regular Current Account Reimbursement Current Account RFC - Domestic Account Flexi Current Account Regular Fixed Deposit

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.

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 cheque facility 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 maintained For 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

COMPANYS PROFILE Overview

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 the State 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 Indias 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 in India, already the largest network in the country and continuing to expand 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 India as well as the Associate Banks namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, and State Bank of Travancore), using the State Bank Cash Plus card.

Current accounts of SBOP

There 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 didnt give the right information . 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 in providing the information Bank employees dont 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
HDFC SBOP

Services for current a/c

People 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 current account rather than SBOP .Because HDFC is a private player and bank is providing better services to customer for more profit thats 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

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

Unilateral Current Transfers 67,439

Figure 18-4: U.S.

Macroeconomic Data, 1964-1972

RECOMMENDATIONS
Bank should immediately solve the customer problem

Banks 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 with current 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 c) ICICI b) SBOP d) PNB e) others

Q3. 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 c) ICICI b) SBOP d) PNB e) any others

Q6. What type of service is provided by HDFC bank in current a/c? Ans. a)Internet Banking c)Locker e) Cheques g) Others b)Dimand draft d)Pay order f) Mobile banking

Q7. What type of service is provided by SBOP in current account ? Ans. a)Internet Banking c)Locker e) Cheques g) Others b)Dimand draft d)Pay order f) Mobile banking

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 c)More than 10000 b)5000

Q10 How much minimum money do you require to open a current a/c in SBOP ? Ans . a) 1000 c)More than 10000 b)5000

REFERENCES
www.hdfcbank.com www.sbp.co.in Interact with customers through survey