INTRODUCTION

Banking system occupies an important place in any nation’s economy. Development of any country mainly
depends upon the Banking system. In India also the Banking Sector is playing pivotal role in the economic
development of the country. Banking in India is mainly governed by the Banking Regulation Act1949 &
Reserve Bank of India Act 1934.To meet the emerging needs of the consumers, government also allowed
entry for Private Banks further Foreign Banks with some restrictions in the banking sector that has created
Banking Industry more competitive.

The wind of liberalization sweeping through India has affected all sectors of the economy & the Centre of all
these activities is the Indian Banking Industry. In such a fast changing environment to meet emerging needs
Bank Computerization has taken place. This has improved customer service &decision making capability of
many Banks. Consumers today are becoming more discerning & demanding. There is price on their time. To
save the time of consumers, the Bank’s have introduced various other channels for performing Banking
Operations such as ATM Cards, Credit Cards, Internet Banking, Mobile Banking, RTGS(Real Time Gross
Settlement) ,NEFT (National Electronic Fund Transfer),E-RAIL,E-PAY, DEMAT, Locker Services, Forex
etc.

Instead of all these developments, Rural India is still untapped by the Banking Industry. There is still
psychological blocking among the people. Efforts should be done at the grass root level to create awareness of
the banking products among the people. also the continuous deregulation & fluctuations in the global economy
are also the causes of concern. Therefore study of this sector has gained so much importance.

Banking business has a history of over 200 years. From the times of the Bank of Bengal (1806) the sector has
been witnessing qualitative and quantitative changes. Main players during the pre-independence period were
Credit Lyonnais, Allahabad Bank, Punjab National Bank and Bank of India. With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with controlling powers over the
commercial banks.

The drastic development taken place during the first 25 years since independence was Nationalization of many
private banks. With this, the central government became major policy maker for these nationalized banks.

Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend
money. Banks are important players of the market and offer services as loans and funds.

 Banking was originated in 18th century

 First bank were General Bank of India and Bank of Hindustan ,now defunct
 Punjab National Bank and Bank of India was the only private bank in 1906.
 Allahabad bank first fully India owned bank in 1865.
 Rationale: Importance and Significance of the Study

Banks play very important role in the economic life of the nation. The health of the economy is closely related
to the soundness of its banking system. Although banks create no new wealth but their borrowing, lending and
related activities facilitate the process of production, distribution, exchange and consumption of wealth.

In this way they become very effective partners in the process of economic development. Today, modern banks
are very useful for the utilization of the resources of the country. The banks are mobilizing the savings of the
people for the investment purposes. The savings are encouraged and saving rate increases. If there would be no
banks then a great portion of a capital of the country would remain idle.

Banking is now an essential part of our economic system. Modern trade and commerce would almost be
impossible without the availability of suitable banking services. First of all, banking promotes savings. All
manner of people, from the ordinary labour and workers to the rich land owners and businessmen, can keep
their money safely in banks and saving centers.

Secondly, banking promotes investments. Banks easily invest the money they get in industry, agriculture and
trade. They either invest it directly or advance loans to other investors.

Thirdly ,it is most through banks that foreign trade is carried on. Whether we export or import, it is through
banks that money is transferred from one country to another. For example, bills of exchange and letters of credit
are the regular ways banks use to transfer money.

Banks provide almost all payment services, and a bank account is considered indispensable by most businesses,
individuals and governments. Non-banks that provide payment services such as remittance companies are not
normally considered an adequate substitute for having a bank account.

Banks borrow most funds from households and non-financial businesses, and lend most funds to households
and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute
for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in
many cases provide an adequate substitute to banks for lending savings too.

SCOPE
Banking business has a history of over 200 years. From the times of the Bank of Bengal (1806) the sector has
been witnessing qualitative and quantitative changes. Main players during the pre-independence period were
Credit Lyonnais ,Allahabad Bank, Punjab National Bank and Bank of India. With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with controlling powers over the
commercial banks.

Today most of the Indian cities have networked banking facility as well as Internet banking facility. A
customer is empowered to operate his account from any part of the country. SBI, ICICI, HDFC Bank, Punjab
National Bank, Central Bank of India are the main winners of the race.

OBJECTIVES OF THE STUDY

 Explore the recent developments in the Banking in India

 To study broad outline of management of credit, market and operational risks associated with banking
sector.
 To understand the importance of banking sector.
 To study the Indian bank scenario and its problem.
 To study the role of bank in Indian Market.
 Different types of services provided by the banks.
 Though the Indian Banking System is very wide and elaborated, still the project covers whole subject in
concise manner.
 The study aims at learning the techniques involved to manage the various types of Banks, various
methodologies undertaken.
 To understand the Laws & Regulations related to Banking Industry.

HYPOTHESIS
1. Banking System is a Backbone of an economy
The Reserve Bank is the primary regulator of banks .RBI has power to regulate the business of banks.
RBI is also called as banker’s bank. RBI is the sole authority for issuing currency in country. The
central bank with the help of the government approves the license of other banks. The government has
also the power to issue directions to the Reserve Bank whenever considered necessary in public interest
after consultation with the Governer.
It has achieved enormous appreciation for its strength particularly in the wake of the worldwide
economic disasters, which pressed its worldwide counterparts to the edge of fall down. if we compare
the business of top three banks in total assets and in terms of return on assets, the Indian banking
system is among the healthier performers in the world.
That is why Indian banking industry survived instead of debacles of various financial institutions in
America & all over the world in the year 2008 due to sub-prime crisis, for example The Five largest
U.S. investment bank, Lehman Brothers, Merrill Lynch, Morgan Stanley, Goldman sachs went
Bankrupt.

2. Today Banking Industry has developed a lot

The wind of liberalization sweeping through India has affected all sectors of the economy & the Centre
of all these activities is the Indian Banking Industry. In such a fast changing environment, to meet
emerging needs ,the operations in banks need immediate automation to provide services comparable to
best international standards and to match technological changes taking place in other countries. The
concept of Bank Computerization practically started after 1980-81 & more precisely gained pace in the
year 1983-84 after setting up a committee in the year 1983under the chairmanship of the then Deputy
Governor of RBI.
With the introduction & implementation of the recent technology in banking electronic devices are
making the job of cash payment as well as non-cash payments easy & efficient. The introduction of the
automatic teller machines (ATMs) and the plastic cards has given the banking customers the facility of
round the clock(24 hours) banking. Similarly the introduction of internet banking & mobile banking has
changed the face of the industry. with the help of the internet banking customer can transfer money
online, they can pay their electricity bill, telephone bill through online. consumer can make e-stdr/tdr,
they can get their account statement using online banking. with the help of mobile banking customers
can do balance enquiry of their account. Mobile top-up can be done with the help of mobile banking
keeping in mind the above developments the government has done deregularzation of interest rate on
saving bank account. The RBI has also introduced the concept of Account Number Portability.
3. Banking Industry is becoming more service oriented than product oriented
Today the consumer requires service with the product hence every bank in India has a product for all
age group. various bank’s are having products according to their consumer needs. for example ,
Insurance products are available for everyone. various tie-ups of insurance company helps banking
company to provide different types of services to their consumers. Banking company can use their sme
loan scheme to finance small & medium enterprises. for corporate customers, corporate banking is
available ,corporate loan facility is also there. for salaried employee, salary packages are available. The
people who are working in the Defence , DSP(Defece Salary Package ) is available. Education Loan is
available to the students who wants to go to the abroad for further studies with less interest rate. This
way every banking company is catering the need of each segment of the people.
 RESEARCH INSTRUMENT

Questionnaire: A questionnaire will be prepared while keeping in mind the objective of the study. The option of
filling a questionnaire is the most convenient way to interact with people while filling the questionnaire and
moreover the data will be less biased as the details will be collected directly from the company. The questionnaire
will be designed in an objective mode so that it would become easy for people to fill because it consumes less time.

Survey: Survey will be done with a view to studying the training method and tools and areas of improvement.
Historical data collection: The data of the company will be collected on a historical basis. With a view to
studying the terms and conditions or policies opted by the company, historical data will be studied so that the new
policies can be studies properly.

Sampling: Sampling is the process of selecting units (e.g., people, organizations) from a population of interest so
that by studying the sample we may fairly generalize our results back to the population from which they were
chosen. It is that part of statistical practice concerned with the selection of a subset of individual observations within
a population of individuals intended to yield some knowledge about the population of concern, especially for the
purposes of making predictions based on statistical inference. Sampling is an important aspect of data collection.

Sampling is a commonly used term to describe the process of obtaining information about an entire population by
examining only a part of it. The result obtained by sampling is objective and defensible. It is not subject to questions
of bias.

Statistical sampling can be more accurate than an examination of every item in a large population. It may save time
and money. Data may be combined and evaluated, even though obtained by different users.
 RESEARCH METHODOLOGY

The first stage included the introduction of Indian Banks and how they work in India. I choose five criteria
Growth, Credit quality, Strength, Profitability, Efficiency /Profitability. The next stage involved determining the
objectives of the study, drafting Aquestionnaire will be designed keeping in mind the target audience and
objectives of the study. It will non-disguised in nature and will include a few open-ended questions.

DATA COLLECTIONS

The data from such organization has also been collected

Primary Data

The primary data will be collected through the questionnaire designed. In the process of data collection we went
to the respective bank to get the questionnaire filled. The preparation of the project report required me to visit
the various other companies like Punjab National Bank, ICICI bank , State Bank of India, Central Bank, IDBI
bank etc.in order to collect data.

Secondary Data

 The Preparation of the project report also required data from various journals, newspapers ( like The
Economic Times, Times of India etc.) books ( like Working Capital Management written by Sarbesh
Mishra and Financial Service written by M Y Khan etc.)
 Newspaper
 Websites

Limitations

 Questionnaires will be filled on the basis of public’s knowledge &remembrance at time of interviewing.
 Banking as a subject topic is very vast and the topic selected is covered under its roof.
 Limitation of period : Last 5 years data is considered for research
 Sample Selection and Sample Size: data is collected from 25respondents selected randomly.
 EXPECTED CONTRIBUTION OF STUDY

1. This project work will help me to understand many unknown facts regarding banking industry. I have
very well understood the current trends in the banking industry. This study also enhances my knowledge
levels. as working with state Bank of India , this study is going to help me in my future career. I can
provide good customer service to my customer & definitely it is going to help my organization where I
am working.

2. The rural population in India suffers from a great deal of indebtedness and is subject to exploitation in
the credit market due to high interest rates and the lack of convenient access to credit. Rural households
need credit for investing in agriculture and smoothening out seasonal fluctuations in earnings. This study
is definitely going to help banking company to tapped the potential rural market. It is also going to help
in financing of self help groups & small & medium enterprises.

3. Accepting Deposits & Lending money to the public is the main function of banking .Today people are
earning money to meet their day-to-day expenses on food, clothing, education of children, housing, etc.
They also need money to meet future expenses on marriage, higher education of children, house building
and other social functions. These are heavy expenses, which can be met if some money is saved out of
the present income. Saving of money is also necessary for old age and ill health when it may not be
possible for people to work and earn their living. hence this study will inculcate habit of saving among all
the sections of society.

LIMITATIONS OF THE STUDY

Every work has its own limitation. Limitations are extent to which the process should not exceed. Limitations of
this project are

 The major limitation of this study shall be data availability as the data is proprietary and not readily
shared for dissemination
 Due to the ongoing process of globalization and increasing competition, no one model or method will
suffice over a long period of time and constant up gradation will be required. As such the project can be
considered as an overview of the various banks prevailing in Punjab National Bank and in the Banking
Industry.
 Each bank, in conforming to the RBI guidelines, may develop its own methods for measuring and
managing risk.
 The project study is restricted to banking sector used in India only.
 The conclusion made is based on a sample study and does not apply to all the Individuals.
 In India the banks are being segregated in different groups. Each group has their own benefits and
limitations in operating in India.

BIBLIOGRAPHY
 Suresh, P&Paul,J(2012).Management of Banking and Financial Services; New
Delhi, India .Pearson

 Gordon, E & Natrajan,K (2015) Banking: Theory Law and Practice,

Mumbai. Himalaya Publishing House.

 Nigam.L (1985) Banking Law and Practice ,New Delhi, Vani Educational Books .

 WWW.GOOGLE.COM

Tentative Scheme of Chapter

 INTRODUCTION

 RATIONALE: IMPORTANCE AND SIGNIFICANCE OF THE STUDY.

 RESEARCH METHODOLOGY

 HYPOTHESIS

 RESEARCH INSTRUMENT

 BIBLIOGRAPHY