MINOR PROJECT REPORT

ON
CUSTOMER BEHAVIOUR AND SATISFACTION
LEVELIN INDIAN RETAIL BANKING WITH
SPECIALREFERENCE TO STATE BANK OF INDIA

Submitted in partial fulfilment of the requirements

for the award of the degree of
Bachelor of Business Administration (BBA)

MAHARAJA SURAJMAL INSTITUTE

(Affiliated to Guru Gobind Singh Indraprastha University, Delhi)
C-4, Janakpuri, New Delhi-110058

SUBMITTED BY: SUBMITTED TO:

NIKITA KOCHHAR DR. ANITA SHARMA
BBA (GENERAL), SECTION A READER
THIRD SEMESTER
03921201716

1
 ACKNOWLEDGEMENT
I would hereby, make most of the opportunity by express my profound sense of gratitude and
reverse to all those who have helped and encouraged me towards the successful completion
of the project.
Firstly, I would like to express my thanks to GURU GOBIND SINGH INDRAPRASTHA
UNIVERSITY for giving me such a wonderful opportunity to widen the horizons of my
knowledge.
I would like to thank to my project guide DR. ANITA SHARMA for her immense guidance
and valuable help in completing the project.
Lastly, I would like to thank all the faculty members of MAHARAJA SURAJMAL
INSTITUTE for guiding me and supporting me in the completion of this project from time to
time.

Nikita Kochhar
03921201716
BBA(G) 3rd SEM

2
 TABLE OF CONTENTS
S NO. DESCRIPTION PAGE NO.
1. TITLE PAGE
2. CERTIFICATE
3. ACKNOWLEDGEMENT
4. EXECUTIVE SUMMARY
5. CHAPTER 1
INTRODUCTION
 OBJECTIVES OF THE STUDY
 RESEARCH METHODOLOGY
 RESEARCH DESIGN
 STATEMENT OF THE PROBLEM
 SCOPE OF THE STUDY
 NATURE OF RESEARCH
 DATA COLLECTION
 SAMPLING TECHNIQUE
 LIMITATIONS OF THE STUDY
 INTRODUCTION OF TOPIC

6. CHAPTER 2
PROFILE OF THE ORGANIZATION

7. CHAPTER 3
REVIEW OF LITERATURE

8. CHAPTER 4
DATA ANALYIS AND INTERPRETATION

9. CHAPTER 5
CONCLUSION AND RECOMMENDATIONS

10. ANNEXURE
 BIBLIOGRAPHY
 QUESTIONNAIRE

EXECUTIVE SUMMARY
3
The Financial Services is the backbone of service sector. It is an integral part of all the
businesses and social activities. This rapid transformation of services in the banking system
has led to the evolution of a highly competitive and complex market where there is a
continuous refinement of services. Hence the increased role of banking in India’s economic
development on the one hand and the changes in the business climate on the other has put
increased pressure on them. These changes are compelling the banks to reorganize
themselves to cope with the present conditions. The banking sector in India was

regulated to a certain extent in 1935 with Reserve Bank of India being

bestowed with the responsibility to act as a regulator. After the independence of
the country in 1947, the government of India realized that laissez faire policy cannot be
continued for an important sector like banking. Nationalization of banks, thus, can be
described as a stepping stone for the development. The Indian banking industry has
undergone radical changes due to liberalization and globalization measures undertaken since
1991. In the developing economy, Banking Sector plays a vital role. Indian Banking is the
lifeline of the nation and its people. Banking has helped in developing the vital sectors of the
economy. Today, Indian Banks can confidently compete with modern banks of the world.
Increased competition and greater choice have forced many banks to adapt their
business models to serve these changing needs. Retail Banking in India has fast emerged as
one of the major drivers of the overall banking industry and has witnessed enormous growth
in the recent past. Retail Banking is the cluster of products and services that banks
provide to customers and small businesses through branches, the Internet, and other
channels. Retail Banking has always been an integral part of the Banking activities world
over, but it is only in the recent past that it has gathered special momentum. It has become a
key area of strategic emphasis in the Indian Banking Industry, as evidenced by rising trends
in retail loan and deposit shares on commercial bank balance sheets and a continuing increase
in the number of bank branches. This report contains a brief description of State Bank of
India. This report attempts to understand customer behaviour and satisfaction level
towards the retail services provided by State Bank of India. It contains the finding and
analysis of the survey conducted to gather primary data to judge the importance of
various attributes that influence the overall satisfaction of the customer in different
manner and to the different extent. Banks are continuously striving to improve their
services in different market segments. Nevertheless, there has remained a gap between the
services offered by banks in the retail area and the expectations of their customers.

4
 CHAPTER 1

INTRODUCTION

5
1.1 TITLE OF PROJECT

“A Study on Customer Behaviour and Satisfaction Level in Indian Retail Banking with
special reference to STATE BANK OF INDIA”

1.2 OBJECTIVES
1. To go through the concept of Retail Banking in India.
2. To study the prospects, issues and challenges in Retail Banking.
3. To study the recent trends in retail banking.
4. To ascertain the perceptions of customers regarding the products and services
provided by the bank.
5. To analyze the satisfaction level of customers towards the products and services
provided by the bank (SBI) and to ensure high satisfaction level and reduce
percentage of complaints of customers in retail banking.

1.3 STATEMENT OF THE PROBLEM

As there are immense opportunities of the retail banking in India. This Dissertation is on the
issues and challenges in the retail banking because of the competition of the various banks
and the customer satisfaction of the services which the banks are providing and at the same
time to solve the complaints of the customer and maintaining the sound relationship for the
future and by this way to estimate the future growth of the retail banking. In the current
competitive world, banks must struggle their might to offer the best of the customer
satisfaction through various innovative strategies to survive in the industry. This study would
stand as a sincere attempt to critically examine and evaluate customer behaviour and
satisfaction level of customers dealing with SBI.

1.4 RESEARCH METHODOLOGY

Research methodology is a methodology for collecting all sorts of information and data
pertaining to the subject in question. The objective is to examine all the issues involved and
conduct situational analysis. The methodology includes the overall research design, sampling
procedures and fieldwork done and finally the analysis procedure. The methodology used in
the study is consisting of sample survey using both primary and secondary data.

6
This research follows the survey research methodology, a questionnaire was constructed to
study the customer behaviour, preference and satisfaction level of customers dealing with
SBI and awareness among the customers towards the retail services provided by the bank.
After pilot testing the questionnaire was administered to 100 persons. Here we take minimum
age as 18 years. The data was obtained through the use of structured questionnaire and
convenience sampling. The data were analyzed with percentage method and frequencies.
Charts and tables are also prepared.

1.5 RESEARCH DESIGN

The research design refers to the overall strategy that you choose to integrate the different
components of the study in a coherent and logical way, thereby, ensuring you will effectively
address the research problem; it constitutes the blueprint for the collection, measurement, and
analysis of data. In other words, it is the set of methods and procedures used in collecting and
analysing measures of the variables specified in the research problem. Research design is
simply the framework or plan for a study, used as a guide in collecting and analysing data.

1.6 NATURE OF RESEARCH

Research is basically of two types:
1. Descriptive research 2. Explorative research
My research design is Descriptive as Descriptive Research describes the characteristics of
certain groups/ samples/ populations. Estimate proportions in specified populations. Make
specific predictions. A descriptive research design was adopted for the study. It accounts for
both primary and secondary data.

1.7 SCOPE OF THE STUDY

The present study was undertaken to know the preference and satisfaction level of the
customer towards State Bank of India (SBI). The problem of the customer is they are not
aware of the services provided by their bank. The study also force on the customer perception
that how the banking services can be improved. In my study I have used both primary sources
of data as well as secondary sources of data.

1. The study is specific only to retail banking in India.

2. The study is confined to Delhi region only.
3. The study covers the service providers and users of – State Bank of India.

7
4. The study has put forward the Customers as well as acceptability behavior for the
services.
5. The scope of the study is to find out the – Customer Behavior and Satisfaction level in
Indian Retail Banking with special reference to STATE BANK OF INDIA.

1.8 DATA COLLECTION

Data for the present study was collected from two sources- Primary and Secondary Sources.

1. PRIMARY DATA COLLECTION – It consists of original information collected for

specific purpose. Primary data for this research was collected by means of survey. It was
collected from different customers through Questionnaire.
Questionnaire: Questionnaire is the method of data collection, which is very much
popular, particularly in big cities. Different modes of questions are put up on the paper
and the particular area in which the research is conducted is asked to fill their responses.
In this research, Questionnaires were prepared and customers of State Bank of India were
approached to fill up these questionnaires. The filled up information was later analysed to
obtain the required information.
2. SECONDARY DATA COLLECTION– It consists of information that already exists
somewhere and has been collected for some specific purpose in the study. The secondary
data for this study is collected from various sources like Internet, Company’s websites,
Newspaper and Magazines.

1.10 SAMPLE SIZE

Sample size was restricted to 100 respondents, since it was not possible to cover the whole
universe in the available time period. The data obtained from the structured questionnaire was
interpreted and recorded. The table and graph were constructed using data from the
questionnaire, which was then used for analysing the acquired data.

Questionnaire: Sample Size: Total sample size is 100

Area of Study- Delhi
Duration- 3 months

8
1.11 SAMPLING TECHNIQUE
Sampling is that part of statistical practice concerned with the selection of individual
observations intended to yield some knowledge about a population of concern, especially for
the purposes of statistical inference.

For this research Non- Probability Convenience Sampling has been used because time
limit for the completion of the work is limited, it was necessary for me to take a sample size
of 100 respondents. Under Non-probability sampling, the questionnaire addressed the basic
questions relating to the level of satisfaction with in customers. A random sample of 100
people was taken. I selected the respondents to the survey on the basis of judgement sampling
with convenience taken into account.

1.12 LIMITATIONS
1. The survey has been conducted only on 100 respondents.
2. The study is self-financed.
3. The study is limited to the customers of Delhi only.
4. Samples were selected conveniently.
5. The sample size does not represent the total population.
6. The accuracy of the findings of study depends upon the correctness of the responses
provided by the respondents.
7. Unwillingness of some respondents to provide information is another limitation.
8. A customer’s satisfaction towards the Branch is considered for study; hence the structure,
other concepts of the banks are excluded for the detail study.

1.13 INTRODUCTION OF BANKING

The business of banking is as old as the civilization itself. The mere fact that the Babylonians,
in 200 BC, lent money at higher rates of interest against gold and silver under the temple’s
safe custody stands proof for banking history. In ancient days, the main function of banks
was granting loans to individuals or the state in times of crisis. Banking in India
originated in the last decades of the 18 th century. The first banks were the General Bank of
India, which started in 1786 and the Bank of Hindustan in 1770. The oldest bank in
existence in India is the State Bank of India, a government owned bank that traces its

9
origin back to June 1806 and that is the largest commercial bank in the country. The passing
of the Joint Stock Company act in 1850 greatly helped in the establishment of many
commercial banks. Later in 1921, the Imperial Bank of India and in 1935 the Reserve Bank
of India were also established. After independence in 1947, the RBI was nationalized
enabling it with broader power. The government of India nationalized 14 large commercial
banks in 1969 and six more banks were added to the list in 1980.Today customers are now
becoming increasingly conscious of their rights and are demanding ever more than before.
The recent trends show that most of the banks are shifting from a “product-centric model”
to a “customer-centric model”. Since customer satisfaction has become one of the major
determinations of business growth. In this context, prioritization of performance and close
monitoring of the customer satisfaction are indispensable.
For any country, banking system plays a crucial role in the development of its vibrant
economy. Banking is an important segment of the all sectors and acts as a back bone of
economic progress. Banks are supposed to be more directly and positively related to the
performance of the economy. Banks act as a development agency and are the source of hope
and aspirations of the masses. Commercial banks are the major player to develop the
economy.

1.14 MEANING AND DEFINITION

Bank is an institution that deals in money and its substitutes and provides crucial financial
services. The principal type of banking in the modern industrial world is commercial banking
& central banking.
Banking Means “Accepting Deposits for the purpose of lending or Investment, of deposits of
money from the public, repayable on demand or otherwise, and withdraw able by cheque,
draft, and order or otherwise.”
Thus
A Bank:
 Accept deposits of money from public,
 Pays interest on money deposited with it.
 Lends or invests money
 Repays the amount on demand

10
1.15 BANKING SYSTEM IN INDIA

CENTRAL
BANK

NATIONALISED BANKS IN PRIVATE BANK

BANK INDIA

FOREIGN
BANKS

*CENTRAL BANK: RESERVE BANK OF INDIA*

1.16 CUSTOMER FOCUS OVER THE DECADES

Customer are now demanding multiple channels through which they can interact with their
providers including (i) Face to face contact (ii) Phone (iii) Websites e-mail mobile device etc.
Which has forced the banking sector to explore new distribution channels, so that ordinary
customer which have more information about multiple banking products than even before.
This is aimed not only to present the customer from taking their business elsewhere but also
to ensure that they are offered the product and services that are most appropriate and most
likely to result in new revenue for the bank. There is a phenomenal change and paradigm
shift towards customer focus over the past five decades. The banking business found standing
on the pillars of customer’s satisfaction it is pertinent that policy makers and branch manager
think over the problem on priority basis.

1.17 DECADE-FOCUS ON CUSTOMER

1950-1960 - Serving the customer

1960-1980 - Satisfying the customer

1980-1990 - Pleasing the Customer

1990-2000 - Delighting the customer

2000 and beyond - Retaining the customer

11
1.18 ROLE OF BANKS IN NEW ECONOMICS
From the economy point of view, the major task of banks and other financial institution is to
1) Act as an intermediate 2) Channeling savings to investment and 3) Consumption through
them, the investment requirement of savers are reconciled with the credit needs of investors
and consumers. In this, process of transaction is to be carried out efficiently it is essential that
the banks be involved. Indian banking has aided the economic development in an effective
way during the post-independence period. The banking sector has shown remarkable
responsiveness to the needs of the planned economy.

It has brought about a considerable progress in:

1) In its efforts at deposits mobilization and
2) It has taken several measures in the recent past to accelerate the rate of growth of deposits.
To achieve this wants, commercial banks opened a
1) Number of branches: a) Urban b) Semi urban c) Rural areas and
2) Introduced several attractive schemes
3) Free services to customer attract more customers.

1.19 RETAIL BANKING AN INTRODUCTION

Retail Banking is also known as Consumer Banking or Personal Banking is the delivery of
services by a bank to individual consumers, rather than to companies, corporations or other
banks.

“Retail banking is typically mass – market banking where individual customers use
local branches of larger commercial banks. Services offered include savings and
checking accounts, mortgages, personal loans, debit cards, credit cards and so”.

India too experienced a surge in retail banking after the financial sector reforms in early
nineties. There are various pointers towards this. Retail banking in India has fast emerged as
one of the major drivers of the overall banking industry and has witnessed enormous growth
in the recent past. Retail banking is the cluster of products and services that banks
provide to consumers and small businesses through branches, the Internet, and other
channels. In recent years, retail banking has become a key area of strategic emphasis in the
Indian banking industry, as evidenced by rising trends in retail loan and deposit shares on

12
commercial bank balance sheets and a continuing increase in the number of bank branches.
Across the globe, retail lending has been a spectacular innovation in the commercial banking
sector in recent years.

1.20 THE EVOLUTION OF RETAIL BANKING

Powerful forces are transforming the retail banking industry. Growth remains elusive, costs
are proving hard to contain and ROEs remain stubbornly low. Regulation is impacting
business models and economics. Technology is rapidly morphing from an expensive
challenge into a potent enabler of both customer experience and effective operations. Non-
traditional players are challenging the established order, leading with customer-centric
innovation. New service providers are emerging. Customers are demanding ever higher levels
of service and value. Trust is at an all-time low.

In the developed markets, banking over the years has evolved through following three distinct
phases. These three phases broadly coincide with the level of development in the real
economy in the respective jurisdictions.

a) Initial Phase: During this phase the banks were primarily engaged in offering the basic
intermediation service i.e. provision of savings facilities and credit for productive purposes
and also facilitate payment services including remittances.

b) Intermediate Phase: Apart from providing the services offered in the initial phase, the
banks additionally moved into lending for consumption purposes. The banks also started
offering certain para-banking services like insurance etc. The demand for such services arises
primarily on account of a transition of the economy from an investment (production) led
growth phase to a consumption led growth phase. At this stage of development of the
economy and the society, retail banking becomes relevant.

c) Advanced Phase: Apart from providing the services offered in the intermediate phase, the
banks have additionally started providing high-end savings & investment products, wealth
management products, and structured products to both individuals and corporates. In other
words, in this phase, the banking system additionally starts supporting the speculative
activities over and above for the production and consumption activities. Private banking, an
advanced version of retail banking for ‘classes’, becomes relevant at this stage.

13
1.21 WHY RETAIL BANKING?
 Changing customer demographic demands.

 Higher penetration of technology.

 Reduction of cost.

 Market demands and challenges.

 Needs of individual customers.

1.22 CHARACTERISTICS OF RETAIL BANKING:

 Multiple products

 Multiple channels of distribution

 Multiple customer groups

1. MULTIPLE PRODUCTS- The products included in retail banking are--

 Various types of deposits/accounts.
 Credit and debit cards
 Loans (Personal, Auto, Housing etc.)
 Insurance, mutual funds etc.

2. MULTIPLE CHANNELS OF DISTRIBUTION

 Internet banking
 Mobile banking
 Call centres

3. MULTIPLE CUSTOMER GROUPS

 Individual customers
 Petty businesses
 Small and Medium Enterprises (SMEs)

14
1.23 FEATURES OF RETAIL BANKING
1. CONSUMER BANKING FOCUS

Most retail banks focus on the needs of consumers versus commercial account holders. Teller
cages are most often dedicated to walk-in consumer patrons. Retail bank tellers are trained to
focus on consumer checking and savings needs. Branch managers are trained to offer
customer-service issues in regards to those accounts. Commercial account transactions are
typically limited to one to two separate stations dedicated to merchant accounts.

2. INTERNAL PROMOTIONS TO CROSS-SELL SERVICES

Retail banks utilize their internal and external space to promote and cross-sell services. Inside
of the bank, customers will see standing floor signs to promote interest rates on mortgages
and savings accounts. Desks that house deposit slips are typically topped with brochures
about various checking and savings instruments. Tellers might even wear a badge or button
that states “ask me about…” to promote new services.

3. CRM PRACTICES

Customer Relationship Management (CRM) techniques are growing in application among

most major retail banks. Websites assist and guide current and prospective customers to
branch locations. Site visitors are offered the opportunity to provide feedback about their
online banking experiences as well as their on-site banking experiences. Retail banks use this
information to track and monitor customer satisfaction, gauge the feasibility for new products
and services, and to identify areas for improvement of the customer service experience inside
of branches.

4. EXTENDED HOURS, SERVICES, LOCATIONS

Retail banks are often governed by state banking regulations in terms of hours of operation.
Banks deploy savvy strategies to make sure that no opportunity is missed to service
customers. Most understand that customer’s hours may not match bank hours. As a result,
most retail banks have ATM machines that can accommodate every banking need from
making a deposit and inquiring about account balances, to transferring funds between
checking and savings accounts. Banks are now also offering their services inside of major

15
grocery stores, retail super stores, gas stations and convenience stores, to make their services
accessible on a 24-hour basis so customers have “touch point” access to retail banking
services near where they work, live and shop.

5. NEW CUSTOMER INCENTIVES

Retail banks have a major marketing mission to increase new customers. They utilize many
advertising tactics and strategies to achieve their new customer goals. This often includes
broadcast television and radio advertising, print and magazine advertising, and public
relations efforts to sponsor national and local events. Some retail banks will provide a cash
reward up to several hundred dollars to open a new account. The overall goal is to increase
new accounts, among both prospective and existing customers. Banks capture information to
rate and rank new customers via information furnished on credit applications to assess credit
worthiness and approve new account applications.

1.24 SCOPE FOR RETAIL BANKING IN INDIA

1. All round increase in economic activity.

2. Increase in the purchasing power. The rural areas have the purchasing power at their
disposal and this is an opportunity to market Retail Banking.
3. India has 200 million households and 400 million middleclass population; more than
90% of the savings come from the household sector. Falling interest rates have
resulted in a shift, “Now People Want to Save Less and Spend More.”
4. 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.
5. 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.

1.25 ADVANTAGES OF RETAIL BANKING

1. RESOURCE SIDE
 Retail deposits are stable and constitute core deposits.
 They are interest insensitive and less bargaining for additional interest.
 They constitute low cost funds for the banks.

16
  Effective customer relationship management with the retail customers built a
strong customer base.
 Retail banking increases the subsidiary business of the banks.

2. ASSETS SIDE
 Retail banking results in better yield and improved bottom line for a bank.
 Retail segment is good revenue for funds deployment.
 Consumer loans are presumed to be of lower risk and NPA perception.
 Helps economic revival of the nation through increased production activity.
 Improves lifestyle and fulfils aspirations of the people through affordable credit.
 Innovative product development credit.
 Retail segment involves minimum marketing efforts in a demand - driven
economy.
 Diversified portfolio due to huge customer base enables bank to reduce their
dependence on few or single borrower
 Banks can earn good profits by providing non-fund based or fee based services
without deploying their funds.

1.26 DISADVANTAGES OF RETAIL BANKING

1. There can be problems in managing large number of clients, especially if IT
systems are not sufficiently robust.
2. The cost of maintaining branch networks and handling large number of low value
transactions tend to be relatively high.
3. Designing own and new financial products is very costly and time consuming for
the bank.
4. Customers now-a-days prefer net banking to branch banking. The banks that are
slow in introducing technology-based products, are finding it difficult to retain the
customers who wish to opt for net banking.
5. Customers are attracted towards other financial products like mutual funds etc.
6. Though banks are investing heavily in technology, they are not able to exploit it to the
maximum.

17
 7. Major disadvantages are monitoring and follow-up of huge volume of loan accounts
inducing banks to spend heavily on the human resource department.
8. Long term loans like housing loan, due to its long repayment term, can become NPA
in the absence of proper follow-up.
9. The volume of amount borrowed by a single customer is very low as compared to
wholesale banking. This does not allow banks to exploit the advantage of earning
huge profits from single customer as in case of wholesale banking.

1.27 OPPORTUNITIES IN RETAIL BANKING

1. Retail banking has immense opportunities in a growing economy like India. As the
growth story gets unfolded in India, retail banking is going to emerge a major driver.
How does the world view us? The BRIC report is viewing India as an economic
superpower. A.T. Kearney, a global management-consulting firm, recently identified
India as the ―second most attractive retail destination of 30 emergent markets.

2. The rise of Indian middle class is an important contributory factor in this regard. The
percentage of middle to high-income Indian households is expected to continue
rising. The younger population not only wields increasing purchasing power, but as
far as acquiring personal debt is concerned, they are perhaps more comfortable than
previous generations. Improving consumer purchasing power, coupled with more
liberal attitudes towards personal debt, is contributing to India‘s retail banking
segment.
3. The combination of above factors promises substantial growth in retail sector, which
at present is in the nascent stage. Due to bundling of services and delivery channels,
the areas of potential conflicts of interest tend to increase in universal banks and
financial conglomerates. Some of the key policy issues relevant to the retail-banking
sector are: financial inclusion, responsible lending, and access to finance, long-term
savings, financial capability, consumer protection, regulation and financial crime
prevention.

1.28 CHALLENGES TO RETAIL BANKING IN INDIA

18
Retail banking has vast opportunities in a growing country like India. A.T.Kearney, a global
management consulting firm, named India as the “second most attractive retail destination”
of 30 emergent markets. Indian middle class has a significant role to play in the development
of retail banking sector as the percentage of middle to high income group is continuously
rising. Banking experts’ opinion that certain challenges may obstruct this new revenue-
focused strategy, including:

1. The issue of money laundering is very important in retail banking. This compels all the
banks to consider seriously all the documents which they accept while approving the
loans.
2. Banks are expected to take utmost care to retain the ongoing trust of the public.
3. Customer service should be the end-all in retail banking. Someone has rightly said, “It
takes months to find as good customer but only seconds to lose one.” Thus, strategy of
Knowing Your Customer (KYC) is important. So the banks are required to adopt
innovative strategies to meet customer’s needs and requirements in terms of
services/products etc.
4. The efficiency of operations would provide the competitive edge for the success in retail
banking in coming years.
5. The customer retention is of paramount importance for the profitability of retail banking
business, so banks need to retain their customer in order to increase the market share.
6. One of the crucial impediments for the growth of this sector is the acute shortage of
manpower talent of this specific nature, a modern banking professional, for a modern
banking sector.
7. The dependency on technology has brought Information Technology Department’s
additional responsibilities and challenges in managing, maintaining and optimizing the
performance of retail banking networks. It is equally important that banks should
maintain security at the advanced level to retain the faith of the customer.
8. Difficulty and high cost of acquiring new customers in a matured market.
9. Less options for growth via acquisitions the banking industry continues to consolidate.
10. The issue of outsourcing has become very important in the recent past because various
core activities such as hardware and software maintenance, entire ATM setup and
operation (including cash, refilling), MIS and data center management, etc., are being
outsourced by Indian banks. That is why, before taking any decision on outsourcing
banks are expected to take utmost care to retain the ongoing trust of the public.

19
If all these challenges are faced by the banks with utmost care and deliberation, the retail
banking is expected to play a very important role in the coming years. Retail banking has
tremendous potential for growth, even though there are stiff challenges to be met. The banks
have to judiciously use the available technological facilities to earn competitive advantage by
creating successful products in their area of strength. If this is done successfully along with
proper care for customers’ security and confidence, the potential in retail banking can be
definitely realized.

1.29 RETAIL BANKING ACTIVITIES

Banks' activities can be divided into retail banking, dealing directly with individuals; business
banking, providing services to mid-size business; corporate banking dealing with large
business entities; private banking, providing wealth management services to High Net worth
Individuals; and investment banking, relates to helping customers raise funds in the Capital
Markets and advising on mergers and acquisitions. Banks are now moving towards Universal
Banking, which is a combination of commercial banking, investment banking and various
other activities including insurance. Technology has brought about strategic transformation in
the working of banks. With years, banks are also adding services to their customers. The
Indian banking industry is passing through a phase of customers market. The customers have
more choices in choosing their banks. With stiff competition and advancement of technology,
the service provided by banks has become more easy and convenient.

1. INTERNET BANKING (E-BANKING)

Internet banking (or E-banking) means any user with a personal computer and
browser can get connected to his banks website to perform any of the virtual banking
functions. In internet banking system the bank has a centralized database that is web
enabled. All the services that the bank has permitted on the internet are displayed in
menu. Any service can be selected and further interaction is dictated by the nature of
service. The traditional branch model of bank is now giving place to an alternative
delivery channels with ATM network. Once the branch offices of bank are
interconnected through terrestrial or satellite links, there would be no physical identity
for any branch. The Reserve Bank of India constituted a working group on Internet
Banking. The group divided the internet banking products in India into 3 types based
on the levels of access granted. They are:

20
 Information Only System
General purpose information like interest rates, branch location, bank products and
their features, loan and deposit calculations are provided in the banks website.
 Fully Electronic Transactional System
The system provides customer- specific information in the form of account
balances, transaction details, and statement of accounts. This system allows bi-
directional capabilities. Transactions can be submitted by the customer for online
update. This system requires high degree of security and control.
 Automated Teller Machine (ATM)
ATM is designed to perform the most important function of bank. It is operated by
plastic card with its special features. The plastic card is replacing cheques, personal
attendance of the customer, banking hour’s restrictions and paper based verification.

2. CREDIT CARD
The Credit Card holder is empowered to spend wherever and whenever he wants with
his Credit Card within the limits fixed by his bank. Credit Card is a post paid card. A
Credit card is a payment card issued to users as a system of payment. It allows the
cardholder to pay for goods and services based on the holder’s promise to pay for
them. The issuer of the card creates a revolving account and grants a line of credit to
the user from which the user can borrow money for payment to a merchant to the
user. A credit card's grace period is the time the customer has to pay the balance
before interest is assessed on the outstanding balance. Grace periods may vary, but
usually range from 20 to 55 days depending on the type of credit card and the issuing
bank.

3. DEBIT CARD
A Debit card (also known as a Check card or Bank card) that provides the cardholder
electronic access to his or her bank account(s) at a financial institution. Debit Card, on
the other hand, is a prepaid card with some stored value. The card can be used instead
of cash when making purchase when the card is accepted. Debit cards usually also
allow for install withdrawal of cash, acting as the ATM card for withdrawing cash.
The debit card transactions are routed through Visa or Master card networks in India
and overseas rather than directly via the issuing bank.

21
4. SMART CARD
Banks are adding chips to their current magnetic stripe cards to enhance security and
offer new service, called Smart Cards. Smart Cards allow thousands of times of
information storable on magnetic stripe cards.

5. CORE BANKING SOLUTIONS

Core Banking Solutions is new jargon frequently used in banking circles. The
advancement in technology especially internet and information technology has led to
new way of doing business in banking. The technologies have cut down time,
working simultaneously on different issues and increased efficiency. The platform
where communication technology and information technology are merged to suit core
needs of banking is known as Core Banking Solutions. Here computer software is
developed to perform core operations of banking like recording of transactions,
passbook maintenance, and interest calculations on loans and deposits, customer
records, balance of payments and withdrawal are done.

6. REAL TIME GROSS SETTLEMENT (RTGS)

RTGS is an electronic settlement system of Reserve Bank of India without
involvement of papers. To facilitate an Efficient, Secure, Economical, Reliable and
Expeditious System of Fund transfer and clearing in the Banking sector throughout
India. Real time gross settlement systems (RTGS) are a funds transfer mechanism
where transfer of money takes place from one bank to another on a "real time" and on
"gross" basis.

7. ELECTRONIC CLEARING SERVICE

Electronic Clearing Service is another technology enhancement happened in the
banking industry. The customer willing to use this facility is required to fill in the
mandate form from the corporate/any utility service institution for ECS mode of credit
and debit. The customer needs to prepare the payment date and submit it to the
“sponsor Bank” and after that everything happened electronically. So customers can
thereby make payments as well as receive all incomes electronically.

8. MOBILE BANKING

22
 Mobile banking (also known as M-Banking, e-banking, SMS Banking etc.) is a term
used for performing balance checks, account transactions, payments etc. via a mobile
device such as a mobile phone.

CHAPTER 2

COMPANY PROFILE

Type: Public

23
 NSE: SBIN
Traded as
BSE: 500112
LSE: SBID
BSE SENSEX Constituent
CNX Nifty Constituent
Industry Banking, financial services
Founded 2 June 1806, Bank of Calcutta
27 January 1921, Imperial Bank of India
1 July 1955, State Bank of India
2 June 1956, nationalization
Headquarters Mumbai, Maharashtra, India
Area served Worldwide
Key people Arundhati Bhattacharya(Chairman)
Products Consumer banking, corporate banking, finance and
insurance, investment banking, mortgage loans, private
banking, private equity, savings, securities, asset
management, wealth management, credit cards
Revenue ₹298,640.45 crores (US$47 billion) (2017)
₹273,461.13 crores (US$43 billion) (2016)
Operating income ₹50,847.90 crores (US$7.9 billion) (2017)
Profit ₹10,484.10 crores (US$1.6 billion) (2017)
₹9,950.65 crores (US$1.6 billion) (2016)
Total assets ₹2,705,966.30 crores (US$420 billion) (2017)
Total equity ₹144,274.65 crores (US$22 billion) (2016)
Owner Government of India (61.23%)
Number of employees 209,567 (2017)
207,739 (2016)
Website bank.sbi
USP SBI is a bank which every Indian can trust.

2.1 INTRODUCTION
State Bank of India (SBI) is an Indian multinational, public sector banking and financial
services company. It is a government-owned corporation with its headquarters in Mumbai,
Maharashtra. On 1st April, 2017, State Bank of India, which is India's largest Bank merged
with five of its Associate Banks (State Bank of Bikaner & Jaipur, State Bank of Hyderabad,
State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) and

24
BharatiyaMahila Bank with itself. This is the first ever large-scale consolidation in the Indian
Banking Industry. With the merger, State Bank of India will enter the league of top 50 global
banks with a balance sheet size of ₹33 trillion, 278,000 employees, 420 million customers,
and more than 24,000 branches and 59,000 ATMs. SBI's market share will increase to 22
percent from 17 per cent. It has 198 offices in 37 countries; 301 correspondents in 72
countries. The company is ranked 232nd on the Fortune Global 500list of the world's biggest
corporations as of 2016.

The bank traces its ancestry to British India, 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. Bank of Madras merged into the other two "presidency banks" in
British India, Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of India,
which in turn became the State Bank of India in 1955. Government of India owned the
Imperial Bank of India in 1955, with Reserve Bank of India (India's Central Bank) 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.

State Bank of India has 20% market share in deposits and loans among Indian commercial
banks.

2.2 HISTORY
The roots of the State Bank of India lie in the first decade of the 19th century, when the Bank
of np later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal
was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on
15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency
banks were incorporated as joint stock companies and were the result of royal charters. These
three banks received the exclusive right to issue paper currency till 1861 when, with the
Paper Currency Act, the right was taken over by the Government of India. The Presidency
banks amalgamated on 27 January 1921, and the re-organised banking entity took as its
name Imperial Bank of India. The Imperial Bank of India remained a joint stock company but
without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,
which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On
1 July 1955, the imperial Bank of India became the State Bank of India. In 2008,

25
the Government of India acquired the Reserve Bank of India's stake in SBI so as to remove
any conflict of interest because the RBI is the country's banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made
SBI subsidiaries of eight that had belonged to princely states prior to their nationalization and
operational takeover between September 1959 and October 1960, which made eight state
banks associates of SBI. Thisonewith the first Five Year Plan, which prioritised the
development ofrural India. The government integrated these banks into the State Bank of
India system to expand its rural outreach. In 1963 SBI merged State Bank of Jaipur (est.
1943) and State Bank of Bikaner (est.1944).

SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911), which
SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National
Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired
Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior State, under the
patronage of Maharaja Madho Rao Scindia. The bank had been the DukanPichadi, a small
moneylender, owned by the Maharaja. The new bank's first manager was Jall N. Broacha, a
Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was
the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in
Kerala.

There has been a proposal to merge all the associate banks into SBI to create a "mega bank"
and streamline the group's operations.

The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from seven to six.
On 19 June 2009, the SBI board approved the absorption of State Bank of Indore. SBI holds
98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the
government hold the balance of 1.7 %.)

The acquisition of State Bank of Indore added 470 branches to SBI's existing network of
branches. Also, following the acquisition, SBI's total assets will approach ₹10 trillion. The
total assets of SBI and the State Bank of Indore were ₹9,981,190 million as of March 2009.
The process of merging of State Bank of Indore was completed by April 2010, and the SBI
Indore branches started functioning as SBI branches on 26 August 2010.

26
On 7 October 2013, Arundhati Bhattacharya became the first woman to be appointed
Chairperson of the bank. Mrs. Bhattacharya received an extension of two years of service to
merge into SBI the five remaining associated banks.

2.3 MISSION, VISION & VALUES

VISION
 My SBI.
 My Customer first.
 My SBI: First in customer satisfaction
MISSION
 We will be prompt, polite and proactive with our customers.
 We will speak the language of young India.
 We will create products and services that help our customers achieve their goals.
 We will go beyond the call of duty to make our customers feel valued.
 We will be of service even in the remotest part of our country.
 We will offer excellence in services to those abroad as much as we do to those in
India.
 We will imbibe state of the art technology to drive excellence.
VALUES
 We will always be honest, transparent and ethical.
 We will respect our customers and fellow associates.
 We will be knowledge driven.
 We will learn and we will share our learning.
 We will never take the easy way out.
 We will do everything we can to contribute to the community we work in.
 We will nurture pride in India.

2.4 LOGO AND SLOGAN

LOGO

27
  The logo of the State Bank of India is a blue circle with a small cut in the bottom that
depicts perfection and the small man the common man – being the center of the
bank’s business. The logo came from the National Institute of Design(NID),
Ahmedabad and it was inspired by Kankaria Lake, Ahmedabad.

SLOGANS

 “PURE BANKING, NOTHING ELSE”

 “WITH YOU- ALL THE WAY”

 “A BANK OF THE COMMON MAN”

 “THE BANKER TO EVERY INDIAN”

 “THE NATION BANKS ON US”

 “BADE BANK KE BADE FAAYDE”

2.5 OPERATIONS
SBI provides a range of banking products through its network of branches in India and
overseas, including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs
and 57 Zonal Offices that are located at important cities throughout India.

2.5.1 Domestic Presence

SBI has 18,354 branches in India. In the financial year 2012–13, its revenue was ₹2.005
trillion (US$31 billion), out of which domestic operations contributed to 95.35% of revenue.
Similarly, domestic operations contributed to 88.37% of total profits for the same financial
year. Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by
Government in August 2014, SBI held 11,300 camps and opened over 3 million accounts by
September, which included 2.1 million accounts in rural areas and 1.57 million accounts in
urban areas.

2.5.2 International Presence

As of 2014–15, the bank had 191 overseas offices spread over 36 countries having the largest
presence in foreign markets among Indian banks. It has branches in Singapore, Moscow,
Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male
in the Maldives, Muscat, Dubai, New York, Osaka, Sydney and Tokyo. It has offshore

28
banking units in the Bahama and Bahrain and representative offices in Myanmar, Bhutan and
Cape Town. SBI has 7 retail banking branches in Singapore. SBI operates several foreign
subsidiaries or affiliates.

In 1982, the bank established a subsidiary, State Bank of India, which now has ten branches -
nine branches in the state of California and one in Washington, D.C. The 10th branch was
opened in Fremont, California on 28 March 2011. The other eight branches in California are
located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and
Bakersfield.

In January 2016, SBI opened its first branch in Seoul, South Korea following the continuous
and significant increase in trade due to the Comprehensive Economic Partnership
Agreement signed between New Delhi and Seoul in 2009.

2.6 ASSOCIATE BANKS

SBI has five associate banks.

 State Bank of Bikaner & Jaipur

 State Bank of Hyderabad
 State Bank of Mysore
 State Bank of Patiala
 State Bank of Travancore

SBI acquired the control of seven associate banks in 1960. The plans for making SBI a mega
bank with trillion-dollar business by merging associate banks started in 2008.

On 15 February 2017, the Union Cabinet approved the merger of five associate banks with
SBI. What was overlooked, however, were different pension liability provisions and
accounting policies for bad loans, based on regional risks.The State Bank of Bikaner &
Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank
of Travancore, and BharatiyaMahila Bank were merged with State Bank of India with effect
from 1 April 2017.

2.7NON-BANKING SUBSIDIARIES
Apart from its five associate banks, SBI also has the following non-banking subsidiaries:

 SBI Capital Markets Ltd

29
 SBI Funds Management Pvt Ltd
 SBI Factors & Commercial Services Pvt Ltd
 SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
 SBI DFHI Ltd
 SBI Life Insurance Company Limited
 SBI General Insurance

In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26% of
the remaining capital), to form a joint venture life insurance company named SBI Life
Insurance company Ltd. In 2004, SBI DFHI (Discount and Finance House of India) was
founded with its headquarters in Mumbai.

Other SBI service points

As of 31 March 2017, SBI group (including associate banks) has 59,291 ATMs.

2.8 LISTING AND SHAREHOLDING

As on 31 March 2017, Government of India held around 61.23% equity shares in SBI. Life
Insurance Corporation of India is the largest non-promoter shareholder in the company with
8.82% shareholding.

SHAREHOLDERS SHAREHOLDINGS

Promoters: Government of India 61.23%

FIIs/GDRs/OCBs/NRIs 11.17%

Banks & Insurance Companies 10.00%

30
 Mutual Funds & UTI 8.29%

Others 9.31%

Total 100.0%

The equity shares of SBI are listed on the Bombay Stock Exchange, where it is a constituent
of the BSE SENSEX index, and the National Stock Exchange of India, where it is a
constituent of the CNX Nifty. Its Global Depository Receipts (GDRs) are listed on
the London Stock Exchange.

2.9 EMPLOYEES
SBI is one of the largest employers in the country with 209,567 employees as on 31 March
2017, out of which there were 23% female employees and 3,179 (1.5%) employees with
disabilities. On the same date, SBI had 37,875 Scheduled Castes (18%), 17,069 Scheduled
Tribes (8.1%) and 39,709 Other Backward Classes (18.9%) employees. The percentage of
Officers, Associates and Sub-staff was 38.6%, 44.3% and 16.9% respectively on the same
date. Around 13,000 employees have joined the Bank in FY 2016-17. Each employee
contributed a net profit of ₹511,000 (US$8,000) during FY 2016-17.

2.10 RECENT AWARDS AND RECOGNITION

31
 Ranked as the top bank in India based on Ranked 232nd in the Fortune Global 500
tier 1 capital by The Banker Magazine as rankings of the world's biggest
2014 ranking. corporations for the year 2016.

SBI
Named the 29th most reputed company in
the world according to Forbes 2009
rankings.
50th Most Trusted brand in India as per
the Brand Trust Report 2013, an annual
study conducted by Trust Research
Advisory, a brand analytics company and
subsequently, in the Brand Trust Report
2014, SBI finished as India's 19th Most
Trusted Brand in India.

2.11 MAJOR COMPETITORS

Axis
Yes
Bank
ICICI
Bank
HDFC
Bank
PNB Bank SBI

2.12 PRODUCTS AND SERVICES

1. PERSONAL BANKING
2. AGRICULTURAL/ RURAL
3. NRI SERVICES
4. INTERNATIONAL BANKING
5. SME
6. CORPORATE BANKING
7. OTHER SERVICES

1. PERSONAL BANKING- State Bank of India offers a wide range of services in the
Personal Banking Segment. Their products are designed with flexibility to suit
people’spersonal requirements. They offer 24-hour facility through their ATMs - growing
speedily it has crossed the 21000 mark.

 Personal Banking

32
  Deposit Schemes
 Personal Finance
 Education Loan Web Platform for Students
 Services
 Gold Banking
 ASBA
 Apply Online
 Aadhaar Seeding
 State Bank Rewardz
 Wealth Management Service

2. AGRICULTURAL/ RURAL - State Bank of India is the pioneer and market leader in
Agri financing. With the network of 16,000 plus branches it cover more than 1.01 crore
farmers. Their services cover the whole range of agriculture and allied activities with
some of the unique features like:

 Low interest rates

 No intermediaries
 No hidden cost
 Quick loan sanction and disbursement
Agriculture

 Agricultural Banking
 State Bank Rewardz For Agricultural Rural
 Agri Debt Waiver / Debt Relief Scheme, 2008

Rural

 Micro Credit
 Regional Rural Banks
 Financial Inclusion
 Aadhaar-Seeding

3. NRI SERVICES - State Bank of India (SBI) is the largest commercial bank in India with
a network of over 24000 branches spread across the length and breadth of India. SBI
offers a wide range of banking products and services to corporate and retail customers.

33
 With the objective of serving the growth aspirations of the Indian corporate abroad and
meeting the banking needs of overseas Indians, SBI is now present in all time zones, and
has the largest overseas network among all Indian banks with 198 foreign offices spread
over 35 countries. This network, along with correspondent banking relationship with
more than 402 banks and 24 Exchange companies tie ups across all continents, goes into
making SBI a bank with global outreach. The Bank has 8 Foreign Banking Subsidiaries,
11 Non-Banking Subsidiaries and 7 Joint Ventures. It also has a team of dedicated
Relationship Managers in GCC (Middle East) to serve their large diaspora there. A
customer can apply for an NRE/NRO account through our online portal and post the
documents to us for processing. As an NRI, a person can also enjoy Internet banking
facilities and operate their accounts from anywhere in the world through our award
winning OnlineSBI web portal and SBI Anywhere mobile app.

4. INTERNATIONAL BANKING - 198 offices in 37 countries; 301 Correspondent

Banks across 72 countries.

An ideal business partner for individuals and institutions across the globe

 Wholesale Banking
 Retail Banking
 Global Trade Service
 Treasury Management

5. SERVICES –
 Cash Deposit Machine
 RTGS NEFT
 Service Charges and Fees
 SBI Quick – Missed Call Banking
 State Bank Buddy- Mobile Wallet
 ATM Services
 Internet Banking
 E Rail
 SBI NO QUEUE APP FAQ
 E Pay
 Safe Deposit Locker

34
2.13 SBI STP
SEGMENT: People who want to use their money for banking.
TARGET: People in India from both urban and rural areas.
POSITIONING:State Bank of India (SBI) bank for every Indian.

2.14 SWOT ANALYSIS

STRENGTHS
1. SBI is the biggest bank in India with more than 14000 branches.
2. State Bank of India (SBI) has a separate act for itself. Thus a special privilege for the
bank.
3. Biggest branch network in the country means good reach.
4. First public sector to move to CBS.
5. SBI has close to 300,000 people employed with it.
6. Backing of the Government of India gives a huge boost to the bank.
7. State Bank of India offers services like consumer banking, enterprise banking, insurance
etc.
8. It has a good brand visibility and awareness due to extensive marketing.
9. SBI has its presence in more than 35 countries with close to 200 offices.

WEAKNESSES
1. Immense competition means limited market share growth for SBI.

2. International presence is less as compared to global banks.

OPPORTUNITIES
1. Pool in talent to replace the going top management to serve the next generation.

2. State Bank of India (SBI) can make better use of CRM, technology and online space.

3. Expansion into rural areas too boost its business.

4. With focus on India going cashless, the bank can dominate the market with its
extensive reach.

THREATS

35
1. Consolidation among private banks can reduce market share for SBI.
2. New bank licenses by RBI can affect operations.
3. Foreign banks that have sophisticated products.
4. SBI operations are often disrupted by slow government decisions and red tapism.

CHAPTER 3

REVIEW OF
LITERATURE

36
Aurora and Malhotra (1997)studied the level of customer satisfaction and marketing
strategies in both private and public-sector banks in India. It revealed six factors of customer
satisfaction in public sector banks viz, routine operations, price, situational environmental
technology and interaction. But in private banking sector, they have foundfactors intotal,
having staff factors as the top ranked and situational factors as the lowest ranked items.
Instead of price factor, promotional factors have been explored by researchers. In private
sector banks, the customer level of satisfaction is comparatively more.

Dutta K. and Dutta A. (2009)investigated the perception of expectation of customers across

all the banks in India. Thisstudy showed that customers are most satisfied with the services of
foreign banks followed by private and public banks.This study suggested that Indian public
banks should improve their banking services.

Edwin M. & Fathima S. (2011)conducted a study on the impact of service quality and
customer satisfaction incommercial banks. This study shows that there is close link between
the customers’ perception on the service qualityfactor and customer satisfaction. It further
showed that the impact of the service quality factor on customer satisfaction isunique. It
brought the suggestion that bank managers have to formulate appropriate marketing strategies
to satisfy theircustomers.

Hallowell Roger (1996)carried out a study on customer satisfaction in banks and suggested
that banks should targetservice to only those who need it most. By adopting this strategy
customers will be retained for longer periods since the bank can satisfy customers better than
competitors.

Kotovalas and Siomkos (2006)conducted studies on customers’ satisfaction in Greek banks.

It revealed that there was adirect and positive correlation between perceiving service quality
and customers’ loyalty in the case of both private andpublic-sector banks. The significant
relationship has recorded demographic characteristics and perceived qualities of bothtypes of
banks. Customers of both banks were willing to express their complaints to the bank
employees. The resultrevealedthat bank’s promotional efforts, aimed at providing relevant
information to the public might increase loyalty level.

37
Naveen Kumar and V.K. Gangal (2011)examined customer satisfaction in new generation
banks showingcustomers’ expectations increasing rapidly in the banking industry of India.
New customers looked the best services at a reasonable price. The result revealed that, the
majority of Indian banks were not very diversified in terms of the product and servicesthey
offer. Further, it suggests that, in the competitive banking industry, banks have to implement
strategic focus customersatisfying aspects for retaining as many customers as possible.

Nirmaljeet Virk and Prabhjot Kaur Mahal (2012)carried out a study on customer
satisfaction in public and private banks in India. Private Banks managers maintain better
personal relationship with customers than the public bank managers and this factor
determines the customers’ satisfaction to a large extent.

Mahalakshmi and Sarvanaraj (2011)studied thecustomers’ satisfaction towards the

banking services in Trichy. Thisstudy showedthe key factors influencing customer’s selection
of a bank are range of service, rates, fees and pricescharged. It further showed that not only
superior service is sufficient to satisfy customers but also excellent front officeservices, value
added services, deposit oriented services and providing innovative productswill satisfy the
clients’ need.

Tyler K and Stanley (2001)in their research show that customer satisfaction in banking
depended onthe customers’relationship with officer or manger rather than the bank they
represented. Further this study shows that the attitude of bank officers or managers and their
relationship with customers lead to customer retention and satisfaction.

Uppal R.K. (2010)conducted studies on customer complaints and this research showed that
excellent customer serviceand customer satisfaction help to sustain business growth.
Furthermore it showed that customer complaints arecontinuously increasing in the public
sector banks adversely affectingcustomers’ satisfaction and performance.Thisresearch also
suggested that establishing a customer care centre in all banks would help solve customer
compliant on a priority basis.

38
 CHAPTER 4
DATA ANALYSIS AND
INTERPRETATION

39
 AGE GROUP AND DISTRIBUTION OF MALE AND FEMALE CUSTOMER
DEALING WITH STATE BANK OF INDIA(SBI)

TABLE 1
AGE FREQUENCY PERCENTAGE TOTAL
MALE FEMALE MALE FEMALE
18-25 21 9 21% 9% 30%
25-40 28 17 28% 17% 45%
40-60 11 9 11% 9% 20%
60 ABOVE 4 1 4% 1% 5%
TOTAL 64 36 64% 36% 100%

INTERPRETATION

When I did survey of 100 people, I came to know in the age between 25-40, there were more
people surveyed i.e.45%. In total, 64% males and 36% females are surveyed which concludes
more males are surveyed as compared to females. In the age between 18-25 and 40-60, same
no. of females have responded i.e. 9. In the category of 60 above, female count is just 1 as
compared to the male count which is 4.

 OCCUPATION
TABLE 2

40
 OCCUPATION FREQUENCY PERCENTAGE TOTAL
Age group and Gender of the Respondents
MALE FEMALE MALE FEMALE
70.00% 64.00%
Salaried 23 10 23% 10% 33%
60.00%
Businessman/ 14 3 14% 3% 17%
50.00%
women(s)
40.00% 36.00%
Professional 10 3 10% 3% 13%
30.00% 28.00%
Housewife/husband
21.00%
3 17 3% 17% 20%
20.00%Others 17.00%
14 3 14% 3% 17%
9.00% 11.00% 9.00%
10.00%TOTAL 64 36 64%4.00% 36% 100%
1.00%
0.00%
18-25 25-40 40-60 60 ABOVE TOTAL
MALE FEMALE

Occupation of the Respondents

17.00%
Others 3.00%
14.00%
20.00%
Housewife/husband 17.00%
3.00%
13.00%
Professional 3.00%
10.00%
17.00%
Businessman/women 3.00%
14.00%
33.00%
Salaried 10.00%
23.00%
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00%

Total Female Male

INTERPRETATION

From the above table indicates that majority of the respondents i.e. 33% of respondents are
salaried people. In the salaried category, there are 23% male which is quite more as compared
to female which are only 10%. In case of business, female share is quite low i.e. 3%. And
male share is 14%. Only 13% professional people are surveyed within which 10% are male

41
and 3% are female. 20% respondents are housewife/husband within that 3% is male and 17%
are female. 17% respondents are others within that 14% are male and 3% are female.

 EDUCATIONAL QUALIFICATION

TABLE 3

EDUCATIONAL FREQUENCY PERCENTAGE TOTAL

QUALIFICATION MALE FEMALE MALE FEMALE
Illiterate 0 2 0% 2% 2%
Up to 10th 4 4 4% 4% 8%
11th-12th 13 7 13% 7% 20%
Undergraduate 17 10 17% 10% 27%
Post graduate 19 9 19% 9% 28%
Diploma 11 4 11% 4% 15%
TOTAL 64 36 64% 36% 100%

Educational Qualification of the Respondents

27.00% 28.00%
30.00%

25.00%
20.00% 19.00%
20.00% 17.00%
15.00%
13.00%
15.00% 8.00% 11.00%
10.00% 9.00%
10.00% 4.00% 7.00%
2.00% 4.00% 4.00%
5.00% 2.00%
0.00%
0.00%
Illiterate Up to 10th 11th-12th Undergraduate Post graduate Diploma

Male Female Total

INTERPRETATION

The above graph reveals that 2% of respondents comes under the category of illiterates
(females only). 8% of respondents have studied upto 10 th standard. 20% of respondents have
studied till 12th standard within which 13% were male and 7% were female. 27% of
respondents were undergraduate within which 17% were male and 10% were female. 28% of

42
respondents were postgraduate within which 19% were male and 9% were female. 15%
respondents have done diploma within which 11% were male and 4% were female.

1. IMPORTANT REASON FOR CHOOSING SBI BANK

TABLE 4

SERVICE FREQUENCY PERCENTAGE

Traditional Account 17 17%
Brand Name 10 10%
Service 24 24%
ATM 10 10%
Net Banking 6 6%
Location 30 30%
Others 3 3%
TOTAL 100 100%

State Bank of India

Others
3% Traditional Account
17%
Location
30% Brand Name
10%

Net Banking
6% Service
ATM 24%
10%

Traditional Account Brand Name Service ATM

Net Banking Location Others

INTERPRETATION
When question was asked what are the most important reason for choosing SBI Bank then
17% choose SBI because they have traditional account, 10% choose because of its brand

43
name, 24% said because of its service, 10% choose because of its ATM, 6% for net banking,
30% said because of it is nearby their location, 3% for any other reason.

2. SERVICES TAKEN FROM THE BANK

TABLE 5
SERVICE FREQUENCY PERCENTAGE
Saving Account 80 80%
Current Account 13 13%
NRI Account 0 0%
Any Other 7 7%
TOTAL 100 100%

Services taken from the Bank

7%
13%

80%

Saving Account Current Account NRI Account Any Other

INTERPRETATION

According to my survey, 80% of the respondent uses SBI Bank for Saving A/C, 13% uses for
the Current A/C and 7% for any other services.

44
 OPINION ON BRANCH EXPERIENCE
3. THE BRANCH AMBIENCE & LAYOUT IS VERY FRIENDLY

TABLE 6

PARAMETER FREQUENCY PERCENTAGE

Very Good 80 80

Good 15 15

Satisfactory 3 3

Could be better 2 2

TOTAL 100 100

Branch Ambience
90
80
80

70

60

50

40

30
15
20

10 3 2 0
0 0 0 0 0 0
Very Good Good Satisfactory Could Be Better

Parameter

INTERPRETATION

45
80% were of the respondent responded that Branch ambience is very good, 15% were of the
responded that branch ambience is good while 3% responded that it is satisfactory & just
12% responded that it could be better. As 80% of respondents say branch ambience is very
good, so not too many respondents like the branch ambience.

4. THE BRANCH WAS CLEAN AND WELL MAINTAINED

TABLE 7

PARAMETER FREQUENCY PERCENTAGE

Very Good 80 80%

Good 14 14%

Satisfactory 4 4%

Could be better 2 2%

TOTAL 100 100%

90.00%

80.00%

70.00%

60.00%

50.00%
PARAMETER
40.00%

30.00%

20.00%

10.00%

0.00%
Very good Good Satisfactory Could be better

INTERPRETATION

46
80% were of the respondent opine that Branch cleanness is very good,14% were of the opine
that branch cleanness is good while 4% opine that it is satisfactory & just 2% opine that it
could be better.As 80% of respondents say branch cleanness is very good, so not too many
respondents like the branch cleanness.

5. SERVICE SATISFACTION

TABLE 8

SERVICES FREQUENCY PERCENTAGE

ATM 40 40%
Loan 7 7%
Early Check Clearance 7 7%
Net Banking 10 10%
Phone Banking 7 7%
Interest 7 7%
Any Other 22 22%
TOTAL 100 100%

SERVICE SATISFACTION

22%

40%
7%

7%

10%
7%
7%

ATM Loan Early Check Clearance Net Banking

Phone Banking Interest Any Other

INTERPRETATION
When questions were asked which service satisfies the customer the most then 40% said its
ATM because it is easy to use and nearby their location, 10% think that net banking is quite

47
better, 7% are satisfied with about interest rate which is offered by the bank, 7% think that
cheque get clear very early and 7% think that it is quite easy to take loan from SBI bank, 75%
think that its phone banking service is really good and rest of the 22% satisfied with its other
services.

6. REASON FOR TYPICALLY VISITING THE BRANCH

TABLE 9

REASON FREQUENCY PERCENTAGE

To make deposit 74 74%
To get advice for investment 0 0%
To enquire about balance 17 17%
To withdraw cash 6 6%
Any other reason 3 3%
TOTAL 100 100%

6% 3%

17%

74%

To make deposit To get advice for investment To enquire about balance

To withdraw cash Any other reason

INTERPRETATION

According to my survey, 74% respondent visits the branch for making deposit, 17% visits for
enquiring about balance, 3% to withdraw cash and rest of 3% for any other reason.

48
7. IF YOU ARE PROVIDED WITH BETTER SERVICE BY OPTIONAL BANK.
WOULD YOU LIKE TO MOVE TO OTHER BANK?
TABLE 10

VARIABLE FREQUENCY PERCENTAGE

Yes 55 55%
No 45 45%
TOTAL 100 100%

INTERPRETATION

When question was asked would you like to move to other bank, if you are provided with
good services then 55% wants to move in another bank while remaining 45% wants to stay
with the bank.

49
8. ARE YOU SATISFIED WITH YOUR FINANCIAL TRANSACTIONS WITH THE
BANK?

TABLE 11

PARAMETER FREQUENCY PERCENTAGE

Very Satisfied 36 36%
Satisfied 30 30%
Somewhat Satisfied 24 24%
Dissatisfied 10 10%
TOTAL 100 100%

SATISFACTION LEVEL TOWARDS FINANCIAL

TRANSACTIONS WITH THE BANK

10%
Very Satisfied
Satisfied
36% Somewhat Satisfied
24% Dissatisfied

30%

INTERPRETATION

According to my survey, 36% of respondent said that they are very satisfied with the
financial transactions of the bank while 30% said they are happy with the services, 24% think
its services are quite satisfied while remaining 10% are not satisfied with its services.

50
9. WHEN YOU THINK OF YOUR BANK WHAT COMES FIRST IN YOUR MIND?

TABLE 12

VARIABLE FREQUENCY PERCENTAGE

Personalized Service 13 13%
Wide Branch Network 63 63%
Customer Service 17 17%
Computerized Banking 7 7%
TOTAL 100 100%

ATTRACTIVENESS OF THE BANK

7% 13%
Prsonalized Service
17% Wide Branch Network
Customer Service
Computerized Service

63%

INTERPRETATION

When question was asked what comes first in your mind about SBI Bank, 63% said it has
wide branch network, 17% thinks its customer services, 13% said its personalized services
and 7% think its computerized banking.

51
10. ARE YOU ABLE TO USE BANKING SERVICES ONLINE?

TABLE 13

PARAMETER FREQUENCY PERCENTAGE

Yes 60 60%
No 40 40%
TOTAL 100 100%

EASY USAGE OF BANKING SERVICES ONLINE

NO YES
40% NO
YES
60%

INTERPRETATION

From the above figure, 60% respondents are able to use internet banking service while 40%
of respondents are not able to use.

52
11. WHAT IS THE MAJOR PURPOSE FOR WHICH YOU USE THE ONLINE
BANKING?
TABLE 14

PURPOSE FREQUENCY PERCENTAGE

Online Ticket Booking 16 16%
Online Bill Payment 33 33%
Balance Check 43 43%
Any Other 8 8%
TOTAL 100 100%

MAJOR PURPOSE FOR USING ONLINE BANKING

43.00%
45.00%
40.00%
33.00%
35.00%
30.00%
25.00%
20.00% 16.00%

15.00%
8.00%
10.00%
5.00%
0.00%
Online Ticket Booking Online Bill Payment Balance Check Any Other

INTERPRETATION

According to my survey, 60% of its customers who use internet banking of which 16% use
online banking to book tickets, 33% respondents use to make bill payment, 43% use for
checking balance only rest 8% use for other services like mobile recharge.

53
12. ARE YOU SATISFIED WITH ONLINE BANKING?

TABLE 15

PARAMETER FREQUENCY PERCENTAGE

Yes 58 58%
No 25 25%
Cannot Say 17 17%
TOTAL 100 100%

70%

60% 58%

50%

40%

30%
25%

20% 17%

10%
0%
0%
Yes No Cannot Say

SATISFACTION LEVEL TOWARDS ONLINE BANKING

INTERPRETATION

According to survey, 58% people are satisfied with its services while 25% are not satisfied
and remaining 17% are confused.

54
13. WHAT IS YOUR FEEDBACK REGARDING THE BANK’S CUSTOMER
REPRESENATATIVE?
TABLE 16

FEEDBACK FREQUENCY PERCENTAGE

Answer calls quickly 37 37%
Knowledge about banking product 13 13%
Knowledge about banking services 17 17%
Banking issues handled quickly 13 13%
Good communication 20 20%
TOTAL 100 100%

FEEDBACK REGARDING THE BANK'S CUSTOMER

SERVICE REPRESENTATIVE

20%

37%

13%

17% 13%

Answer calls quickly Knowledge about banking product Knowledge about banking services
Banking issues handled quickly Good communication

INTERPRETATION

When question was asked feedback of its customer services representative 37% people think
they answer call quickly, 13% think that they have good knowledge about banking product,
17% people think its customer service representative are well aware about its banking
services, 13% people think they handle customers query very nicely and rest 20% thinks
there communication skill is good.

14. OVERALL SERVICE QUALITY OF THE BANK

55
 TABLE 17
PARAMETER FREQUENCY PERCENTAGE
Excellent 37 37%
Good 23 23%
Satisfactory 13 13%
Average 20 20%
Below average 7 7%
TOTAL 100 100%

OVERALL SATISFACTION OF THE CUSTOMER

7%
Excellent
20% 37% Good
Satisfactory
Average
Below Average
13%

23%

INTERPRETATION

When question was asked about of its services, product, customer relationship 37% people
rated SBI is excellent in its offering, 23% people rated it as good and they are happy with its
overall services, 13% rated it as satisfactory but they are not much satisfied with some of its
services, 20% people rated it as average because they are happy with only its few services
and rest 7% rated it as below average.

15. WILL YOU RECOMMEND SBI BANK TO YOUR FRIENDS AND RELATIVES?

56
 TABLE 18

Parameter In numbers In percentage

Most Definitely 90 90

Yes 8 8

May Be 2 2

No 0 0

TOTAL 100 100

SBI BANK
100%
90%
80%
70%
60%
50% 90%
8%
40% 2%
30%
20%
10%
0%
Very Good
Good
Satisfactory 0%
Could be better

INTERPRETATION

90% of respondent opine that they will most definitely recommend SBI BANK to their
friends & relatives, 8% of respondent opine yes. Only 2% said may be. As 90% of respondent
opine that they will definitely recommend SBI BANK to their families & friends, maximum
number of respondent opine positive.

57
 CHAPTER 5
CONCLUSIONS AND
RECOMMENDATIONS

5.1 SUMMARY OF FINDINGS

58
1. The most important reason for choosing SBI Bank is because of its locational advantage
i.e. 30% choose SBI because it is nearby their location and 24% choose because of its
services.
2.80% of the respondent uses SBI Bank for Saving A/C, 13% uses for the Current A/C and
7% for any other services.
3. 80% were of the respondent opine that Branch ambience is very good. As 80% of
respondents say branch ambience is very good, so not too many respondents like the branch
ambience.
4. 80% were of the respondent opine that Branch cleanness is very good. As 80% of
respondents say branch cleanness is very good, so not too many respondents like the branch
cleanness.
5. Regarding service satisfaction, 40% said its ATM because it is easy to use and nearby their
location.
6. 74% respondent visits the branch for making deposit, 17% visits for enquiring about
balance, 3% to withdraw cash and rest of 3% for any other reason.
7. Regarding customers switching behaviour, 55% wants to move in another bank while
remaining 45% wants to stay with the bank.
8. 36% of respondent said that they are very satisfied with the financial transactions of the
bank.
9. When question was asked what comes first in your mind about SBI Bank, 63% said it has
wide branch network.
10. 60% respondents are able to use internet banking service while 40% of respondents are
not able to use.
11. 60% of its customers who use internet banking of which 33% respondents use to make
bill payment and43% use for checking balance only.
12. 58% people are satisfied with its services while 25% are not satisfied.
13. Regarding feedback of its customer services representative 37% people think they answer
call quickly rest 20% thinks there communication skill is good.
14. Regarding itsproduct, services and customer relationship,37% people rated SBI as
excellent in its offering, 23% people rated it as good and are happy with its overall services.
15. 90% of respondent opine that they will definitely recommend SBI BANK to their families
& friends, maximum number of respondent opine positive.

5.2 CONCLUSIONS – FUTURE GROWTH

59
The project aims to study the retail banking operations of SBI BANK. The study was very
fruitful, it yielded the desired results, helped me understand the retail banking. The study also
helps in what are the customer opinions towards operations of bank & its various product and
services.Any serious discussion of the future of the retail banking industry eventually raises a
basic question: will future customers still need retail banks? The answer, it turns out, depends
on banks themselves. With technology and nonblank businesses providing new options for
safeguarding and managing their finances, customers will continue to depend on banks only
as long as banks can provide service and value that cannot be found anywhere else.

The need to become highly customer focused has forced the slow-moving public sector banks
to adopt a fast track approach. The unleashing of products and services through the net has
galvanized players at all levels of the banking and financial institutions market grid to look a
new at their existing portfolio offering. Conservative banking practices allowed.

Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now
quoting at higher valuation when compared to banks in other Asian countries (viz. Hong
Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing
Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in approach and
armed with efficient branch networks focus primarily on the ‘high revenue’ niche retail
segments.The Indian banking has finally worked up to the competitive dynamics of the ‘new’
Indian market and is addressing the relevant issues to take on the multifarious challenges of
globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive
players capable of meeting the multifarious requirements of the large customer’s base.
SBI BANK has a great opportunity to increase their market potential in the present market
situation.

5.3 RECOMMMENDATIONS
STRATEGIES FOR ENSURING HIGH CUSTOMER SATISFACTION

60
 Set service expectations and standards of behaviour- this means that managers must
set clear service expectations and standards of behaviour, beginning with defining
"excellent service."

 Identify and eliminate barriers and obstacles. Policies that do not make sense;
procedures that get in the way; and rules, norms that make satisfying customers
difficult all need to be eliminated to successfully improve service

 Learn and develop skills. Clearly, personnel at all levels should learn new skills
related to service excellence and serve the customer.

 Listen to your customers. Measurement of customer satisfaction can be a powerful

way to improve service if the feedback is not focused on punishment. Managers need
to help staff hear, first hand, how they are doing. For this feedback to be effective,
however, it must be tied to specific targets and goals and needs to be frontline driven

 Reinforce and support continuous improvement. The real challenge is keeping the
energy, learning, and improving alive and going.

61
ANNEXURE

62
63
 BIBLIOGRAPHY

BOOKS:

 Kothari, C.R., Research Methodology, Prince India practice Pvt.Ltd.

 Bajaj Chetan, Tuli Rajnish and SrivastavaVarma Nidhi, Retail Management, Oxford
Publications, 2007.
 Prakash Neetu, “Retail Banking in India”, ICFAI University press, Hyderabad
Publications, 2006.
 Alagiri DhandaPani, “Retail Banking challenges”, ICFAI university press, Hyderabad
Publications, 2006.
 Joshi Kumar Manoj, “Customer Services in retail banking in India”, ICFAI University
Press, Hyderabad Publications, 2007.
 Kumar Sunil, “Retail Banking in India”, Hindustan Institute of Management and
Computer Studies, Mathura, 2008.
 Divanna, J.A., “The future retail banking, Palgrave Macmillan, New York,2009.
 Mittal, V. & Carly, F., Customer Satisfaction: A Strategic Review and Guidelines for
Managers. Cambridge, MA: MSI Fast Forward Series, Marketing Science Institute, 2010.

WEBSITES:

 http://www.sbi.co.in/
 bank.sbi
 http://www.retailbanking-academy.org
 www.investopedia.com/articles/general/retail-banking-vs-commercial-banking.asp
 www.iibf.org.in/documents/RulesSyllabus/2017
 http://www.asiatradehub.com/india/banking/finance.html
 http://www.banknetindia.com/banking/index_1.html

64
 QUESTIONNAIRE

Dear Valued Customer,

I am NIKITA KOCHHAR a student pursuing BBA from MAHARAJA SURAJAMAL

INSTITUTE, NEW DELHI. I am doing a project on “CUSTOMER BEHAVIOUR AND
SATISFACTION LEVEL IN INDIAN RETAIL BANKING WITH SPECIAL REFERENCE
TO STATE BANK OF INDIA”. I request you to cooperate in my research study, by kindly
filling up the following questionnaire.Your candid feedback on the service standards of SBI
is very important for me to understand the customer behavior, preference and satisfaction
level of customers dealing with SBI and awareness among the customers towards the retail
services provided by the bank.

We would like to know a little more about you:-

NAME: ____________________________________________________

GENDER: MALE FEMALE

AGE: 18-25 25-40 40-60 60 ABOVE
OCCUPATION: Salaried Professional Others
Businessman Housewife
INCOME: < 100000 100000-250000

250000-400000 400000-Above

1. What was the single most important reason that you choose SBI bank?
a) I have traditional bank account with same bank

65
 b) The brand name of the bank
c) The excellent service provided by the bank
d) ATM service
e) Net banking facility
f) Location advantage
g) Any other

2. Which type of services you are taking from the SBI Bank?
a) Saving account b) Current Account c) NRI Account d) Any other

 OPINION ON BRANCH EXPERIENCE

3. The Branch Ambience and layout is very friendly.
a) Very Good b) Good c) Satisfactory d) Could be better

4. The Branch was clean and well maintained.

a) Very Good b) Good c) Satisfactory d) Could be better

5. Which service satisfy you most?

a) ATMb)Loanc)Early cheque clearanced)Net Bankinge) Mobile Banking
f)Interest Package g) Any Other

6. What is the main reason that you typically visit your Branch?
a) To make deposits
b) To get advice for investment option
c) To enquire about balance
d) To withdraw cash
e) Any other please specify _________________________________________________.

7. If you are provided with better service by optional bank. Would you like to move to other
bank?
a) YES b) NO
WHY??

8. Are you satisfied with your financial transactions with the bank?
a) Very satisfied b) Satisfied c) Somewhat satisfied d) Dissatisfied
9. When you think of your bank what comes first in your mind?

66
 a) Personalized service b) Wide branch network c) Customer service
d) Computerized banking e) Core banking
10. Are you able to use banking services online?
a) YES b) NO

11. What is the major purpose for which you use the online banking?
a) Online ticket booking b) Online bill payments c) Balance check
d) Request for a cheque book e) Others

12. Are you satisfied with Online Banking?

a) YES b) NO c) CANNOT SAY

13.What is your feedback regarding the Bank’s Customer Representative?

a) Answers calls quickly b) Knowledge about banking product
c) Knowledge about banking services d) Banking issues handled quickly
e) Good communication

14.What do you feel about the overall service quality of the bank?
a) Excellent b) Very good c) Good d) Average e) Below average

15. Would you recommend the bank to your friends, relatives and associates?
a) YES b) NO

WHY??

SUGGESTIONS IF ANY ___________________________________________________

Thank you very much for your valuable time and cooperation

67