10 - Vol-1 - Issue-7 - Nagendra Article Banking

ZENITH
International Journal of Multidisciplinary Research

Vol.1 Issue 7, November 2011, ISSN 2231 5780
A COMPREHENSIVE STUDY ON TARGETING THE CORPORATE

SALARY ACCOUNT HOLDERS IN MANGALORE
DR. NAGENDRA*; JATIN NAIR**
*Faculty, Department of MBA, Mangalore Institute of Technology and Engineering,
Badaga Mijar, Moodabidri, D.K. Mangalore.
**MBA Student, ICFAI Business School,
Mangalore.
INTRODUCTION
Corporation Bank, a premier Government of India enterprise is a 102 years old institution. Bank
was nationalized in 1980. Corporation Bank has an important role to play in the present context
given their greater resource-use efficiency, capacity for employment generation, wider networks,
government support, technological innovation, developing entrepreneurial skills etc. This
research paper drawn from the project carried out to find where the Corp Payroll service of
Corporation Bank stands, factors influencing banking decision of corporates, what is the level of
satisfaction of existing corporate customer, what are the advantages and services given by
Corporation Bank and why the corporates are planning to shift their payroll account to
Corporation Bank. This research paper is also to made comparison of various banks on their
services, facilities, and requirements regarding the Salary Account. And what are the reasons
Corporation Bank is preferred by the corporates. What are the challenges Corporation Bank faces
due to competition in the market.
OBJECTIVES OF THE STUDY
1) To know effective mode of the payments of the salary by corporate companies.
2) To determine the factors which are considered before availing the facility of Payroll.
3) To know the satisfaction levels of the employees holding salary accounts.
6) To determine reasons behind opting this account.

SCOPE OF THE STUDY
Each and every project study along with its certain objectives also has scope for future. And this
scope in future gives to new researches a new need to research a new project with a new scope.
Scope of the study not only consist one or two future business plan but sometime it also gives
idea about a new business which becomes much more profitable
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5) To determine the benefits of the employees holding salary accounts.
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4) Are the corporate companies easily accepting the change in the mode of payments of the
salaries?
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for the researches then the older one. Scope of the study could give the projected scenario for a
new successful strategy with a proper implementation plan. Whatever scope is observed in the
project are not exactly having all the features of the scope which we described above but also not
lacking all the features.
Research study could give an idea of network expansion for capturing more market and
customer with better services and lower cost, without compromising with quality. In future
customer requirements could be added with the product and services for getting an edge over
competitors. Consumer behavior could also be used for the purpose of launching a new product
with extra benefits which are required by customers for their account (saving or current) and/or
for their investments. Factors which are responsible for the performance for bank can also be
used for the modification of the strategy and product for being more profitable.
Factors which we observed in the study are following- Competitors Customer Behavior
Advertisement/promotional activities Attitude of manpower and Economic conditions
There is a stiff competition in banking industry due liberalization and increasing number of
players. At this point of economic recession customer retention and attracting the new customers
is the biggest challenge and success mantra for banks This project will help to find out the
critical factors affecting the customers (potential or existing) preference toward the PayRoll
(salary) account. At the same time this project will highlight the satisfaction level of PayRoll
(salary) account customers of the Corporation Bank, which will help the bank to serve its
customers in a better way. The study will differentiate its product from the other service
providers (Banks) for the same product.
These all could also be interchanged with each other for each other in banks strategies for
making a final business plan to affect the market with a positive way without disturbing a lot to
market, customers and competitors with disturbance in market shares.
RESEARCH METHODOLOGY
SECONDARY DATA
Company manuals, company brochure, annual reports, balance sheets of Corporation Ltd.
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By conducting and analyzing the results obtained from the survey, regarding to the products and
services offered by corporation bank Ltd. By conducting interviews and discussions with the
bank employees and some customers of Corporation Bank. Primary data will be acquired with
the help of questionnaire. The questionnaire would be given to employees of the company and
the satisfaction level would be determined. The sample size for the study is 200. This sample size
includes the different types of firms in the industry. 100 questionnaires are administered to the
respondents for determining the factors influencing the Corp PayRoll and another 100
questionnaires are administered for determining the satisfaction level of the existing customers.
PRIMARY DATA
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SAMPLING PLAN
SAMPLING UNITS: Contacting Corporates for opening the salary account for their
employees in Corporation Bank in Mangalore city
SAMPLE TECHNIQUE: Random sampling
RESEARCH INSTRUMENT: Structured questionnaire
CONTACT METHOD: Personal interview with different enterprises.
LIMITATIONS
1. The study was only confined to region of Mangalore, Karnataka. 2. The responses of
customers may be exaggerated. This will forfeit the authenticity of the research. 3. The time
frame of completing the study was limited. 4. The sample size was limited to 200 for the total
survey and out of that 100 questionnaires were framed to understand the factors affective the
organization for the Corp PayRoll and remaining 100 were framed to understand the satisfaction
level of the existing Corp PayRoll customers.
DATA ANALYSIS
QUESTIONNAIRE ANALYSIS OF FACTORS RESPONSIBLE FOR CORP PAYROLL:
FACTOR ANALYSIS USING SPSS
INTERPRETATION
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TOTAL VARIANCE EXPLAINED
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These Eigen values mainly represent the total variance explained by each factor. Here the
maximum amount of the variance is been clearly explained using 5 factors as shown in the above
table. This total variance showing the Eigen values which represent the extent of coverage of the
Critical factors included in the factor analysis. The first factor has the highest significance.
KAISER- MEYER-OLKIN (KMO) AND BARTLETTS TEST
The KMO test measures the adequacy of the sample. This KMO is an index used to examine the
appropriateness of the Factor Analysis. From the above table, the sampling adequacy is .763,
which indicates factor analysis is appropriate. Communalities:
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The table of communalities gives the extent to which the variance in the variables has been
accounted for by the extracted factors. From the below table, for Eg: 82% of the variance in
utility services of the bank has been taken into consideration.
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SCREE PLOT
The Scree plot helps us to decide the number of factors that should be retained. From the above
curve, it is clear that the curve begins to even out after the extraction of the 5th factor. Only 5
factors are kept.
COMPONENT MATRIX
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ROTATED COMPONENT MATRIXa
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Component Factor Matrix is obtained through the Factor Analysis. From this Component
Factor Matrix, the factor loadings of all the variables on all the factors are extracted. All these
variables are mainly divided into 5 factors by using the method Principal Component Analysis.
In this factor analysis, the 5 factors will explain the main 18 attributes for analyzing the
Customers view regarding Corp PayRoll.
The component matrix shows the loadings of the variables on the 5 extracted factors. The
loading value tells about the extent to which the factor contributes to the variables. From the
results of the factor analysis: The results obtained from this analysis clearly tell that the attributes
are mainly depending upon certain factors. After factor analysis and removing the redundancy,
out of the 18 attributes we can derive them into 5 factors which are:
1. Traditional services, 2. Financial services,3. Value Added Services,4. Visibility
5. Convenience Banking
The Traditional factor includes following:
Fair service charges, Interest rates on salary account, Interest rates on loans,Error free
transactions, Locker facility
The financial services factor includes the following:
DMAT services, Mutual funds, Utility services, Financial services,
The Value Added Services factor includes following:
E- Banking, Bank by Phone, SMS Banking,
The Visibility factors includes following:
Personal relation with the bank, Brand image, Ad promotion of the bank, The Convenience
Banking factor includes following:
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In factor 1, there are 5 attributes, out of these 5 variables, 1st variable i.e. fair service charges has
the highest factor loading. So the company should concentrate more on improving this attribute.
In factor 2, there are 4 attributes, out of these 4 variables, 3rd variable i.e. utility services has the
highest factor loading. So the company should concentrate more on improving this attribute. In
factor 3, there are 3 attributes, out of these 3 variables, 3rd variable i.e. SMS banking has the
factor 4, there are 3 attributes, out of these 3 variables, 3rd variable i.e. Ad promotion has the
factor 5, there are 3 attributes, out of these 3 variables, 3rd variable i.e. ATM machine has the
highest factor loading. So the company should concentrate more on improving this attribute. The
above 5 factors will explain the factors affecting the customers before availing the Corp PayRoll
Location of the Bank, Banking hours, ATM Locations
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services. From this analysis we can conclude that customers evaluate the banks using the above
major 5 factors. We can conclude that consumers evaluate the services of the banks using the
five basic factors of Convenience, Value Added Services, traditional services, visibility, and
financial services, and Corporation must excel on these factors to project a good image.
SATISFACTION LEVEL OF THE EXISTING PAYROLL CUSTOMERS: FACTOR
ANALYSIS BY USING SPSS
KAISER- MEYER-OLKIN (KMO) AND BARTLETTS TEST

KMO AND BARTLETT'S TEST
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The total variance of each value is explained by each factor. The maximum amount of the
variance is been clearly explained using 8 factors as shown in the above table. These are the 8
factors which were determined by the analysis made in SPSS. The Eigen value shown in the total
variance represents the extent of coverage of the Critical factors included in the factor analysis.
The first factor has the highest significance in the satisfaction level of the customers.
TOTAL VARIANCE EXPLAINED
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The KMO test is conducted to verify whether the sample size taken for the study is adequate or
not. This KMO is an index used to examine the appropriateness of the Factor Analysis. From the
above table KMO measure of sampling adequacy is .529. If the result of the KMO is more than
.50, then the sample size is adequate. Here in this case, the Factor analysis is appropriate
Communalities: The table of communalities gives the extent to which the variance in the
variables has been accounted for by the extracted factors. From the below table, for Eg: 81% of
the variance in Maintenance of records is made without errors attribute for finding out the
satisfaction level of customers from bank have been taken into consideration.
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The Scree plot helps us to decide the number of factors that should be retained. From the above
curve, it is clear that the graph has a very odd curve till 8th component and then the curve begins
to even out after the extraction of the 8th factor. Only 8 factors are kept.
SCREE PLOT
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COMPONENT MATRIX
Component Factor Matrix is obtained through the Factor Analysis. From this Component Factor
Matrix, the factor loadings of all the variables on all the factors are extracted. All these variables
are mainly divided into 8 factors by using the method Principal Component Analysis. In this
factor analysis, the 8 factors will explain the main 19 attributes for analyzing the Customers
satisfaction level in Corp PayRoll.
Lending policies Service Banking knowledge Accuracy Visibility Overall satisfaction

Accessibility Competitive service
The lending policies factor includes the following: Speedy clearance of cheques Rate of interest
on salary account Easily availability of overdraft facility Overdraft charges are nominal Quick
process of loan against salary account Information of new product The service factor includes the
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From the results of the factor analysis: The results obtained from this analysis clearly tell that the
attributes for the satisfaction level are mainly depending upon certain factors. After factor
analysis and removing the redundancy, out of the 19 attributes we can derive them into 8 factors
which are:
The component matrix shows the loadings of the variables on the 8 extracted factors. The
loading value tells about the extent to which the factor contributes to the variables.
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following: Corp Banks RTGS facility Wide range of ATMs across different locations ATM
provides customers continuous and uninterrupted services
The Knowledge factor includes the following: Hidden charges on salary account Banking
knowledge Banking knowledge among employees The Accuracy factor includes the following:
Willingness and quick response to the queries Maintenance of records without errors The
Visibility factor includes the following:
The bank has all the new and latest equipments Facility like parking and easy access
The Overall satisfaction factor includes the following: Overall satisfaction of PayRoll customers
from the service
The Accessibility factor includes the following: Politeness and hospitability Easy access to the
Branch Manager
The Competitive Service factor includes the following: SMS service of the salary account.
In factor 1, there are 6 attributes, out of these 6 variables, 4th variable i.e. Overdraft charges are
nominal has the highest factor loading. So the company should concentrate more on improving
this attribute.
In factor 2, there are 3 attributes, out of these 3 variables, 1st variable i.e. Corp Banks RTGS
facility has the highest factor loading. So the company should concentrate more on improving
this attribute.
In factor 3, there are 2 attributes, out of these 2 variables, 1st variable i.e. Hidden charges on
salary account has the highest factor loading. So the company should concentrate more on
improving this attribute.
In factor 6, there is 1 attribute, and the variable i.e. overall satisfaction among PayRoll
customers has the highest factor loading. So the company should concentrate more on improving
this attribute.
In factor 7, there are 2 attributes, out of these 2 variables, 2nd variable i.e. easy access to the
branch manager has the highest factor loading. So the company should concentrate more on
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In factor 5, there are 2 attributes, out of these 2 variables, 2nd variable i.e. the bank has all new
and latest equipments has the highest factor loading. So the company should concentrate more on
In factor 4, there are 2 attributes, out of these 2 variables, 1st variable i.e. Willingness and quick
response to queries has the highest factor loading. So the company should concentrate more on
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In factor 8, there is 1 attribute, and the variable i.e. SMS service of the salary account has the
highest factor loading. So the company should concentrate more on improving this attribute.
The above 8 factors explains the satisfaction level of the customers of the PayRoll service. From
this analysis we can conclude that customers satisfaction level mainly depends upon satisfaction
of these 8 factors. We can make a conclusion that if the attributes which are having high factor
loading should be given more concentration from the bank in order to serve the PayRoll
customers in a better way.
DETAILED ANALYSIS
CUSTOMERS
OF
THE
SATISFACTION
LEVEL
OF
PAYROLL
1) WILLINGNESS AND QUICK RESPONSE TO QUERIES

Willingness and quick response to queries includes the interaction between the bank employees
and the customers of the bank. Various queries like the service charges, interest rates etc are
raised from the customers.
58% of the sample sizes are fully satisfied with the willingness of the bank employees to solve a
particular query and they are quick in responding the query rose.
2) SPEEDY CLEARANCE OF CHEQUES
Clearance of the cheques is the lengthy process. Generally it always asks the customer to get
back on the next day for the cleared cheque as this is the lengthy process. So many times
customers feel that they are not well served. 58% of the sample sizes are fully satisfied with the
speed of clearance of the cheques. Around 24% of the customers were satisfied with the speed of
the clearance of the cheques. Only 4% of the customers were not satisfied with speed of the
service from the bank.
4) RATE OF INTEREST OF THE SALARY ACCOUNT

33% of the sample sizes were fully satisfied and another 33% were unsatisfied with the interest
rate in the salary account.
5) MAINTENANCE OF RECORDS ARE DONE WITHOUT ERRORS
Maintenance of records is updated in every fixed period of time. As the salary is generally credit
every month, maintenance of records is important. More than 55% of the samples were satisfied
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Transfer of money from one account to another is one the important services provided by Bank,
which is known as RTGS. Only 20% of the sample sizes were satisfied with the RTGS facility of
the bank. Large portions of 41% are satisfied but they expect little more speedy service for the
transfer of money.
3) CORP BANKS RTGS FACILITY ENABLES FAST REMITTANCE OF FUNDS
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with the maintenance of the records by the banks and they agree that it is done without any
errors.
6) WIDE DISTRIBUTION OF ATMS ACROSS DIFFERENT LOCATIONS
56% of the total sample sizes were satisfied with the distribution network of ATMs in
Mangalore. Around 10% of the total sample sizes were not satisfied with ATMs.
7) ATMS PROVIDE YOU CONTINUOUS AND UNINTERRUPTED SERVICE
ATMs may have to face many technical problems due which it leads to interrupted service.
ATMs are the one of the important factor which is considered before selection the bank for
PayRoll. So satisfaction in this statement plays an important role.
47% of the total sample sizes were satisfied with the continuous and uninterrupted service of
ATMs of the Corporation Bank. Another 14% were fully satisfied with the service of ATMs.
Only 8% of the total sample sizes mentioned their grievance in the continuous service of the
ATMs of the banks.
8) POLITENESS AND HOSPITALITY
Politeness and hospitality shows how interesting are the bank employees shows to the customers.
46% of the total sample sizes are fully satisfied with the politeness and hospitability of the bank
employees towards them. 31% says that they dont have any problem regarding the politeness of
the employees. Only 2% mentioned that they are not satisfied with the statement
9) OVERALL SATISFACTION
There are many factors to fine out the satisfaction level. Few customers may not be satisfied with
the bank due to less satisfaction in the few products or services. But still overall satisfaction level
among the customers may vary. 70% of the total sample sizes are fully satisfied with the
products and other services of the Corporation Bank and another 15% are fully satisfied with
Bank.
TRADITIONAL SERVICES FINANCIAL SERVICES COMPETENCE VISIBILITY

CONVENIENCE BANKING
The analytical study reveals that large number of PayRoll customers are aware of the all the
facilities and services of the Bank. The existing PayRoll customers are also satisfied with the
current services of the Corporation bank. The analytical study reveals that the various factors
which contain different attributes taken to determine the satisfaction level are appropriate.
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From the analysis done in the Factor Analysis, there are 5 important factors which the
organization will consider before availing the Corp PayRoll service. The major 5 factors are as
follows:
5. FINDINGS AND SUGGESTIONS
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The various factors are as follows: Lending policies Service Banking knowledge Accuracy
Visibility Overall satisfaction Accessibility Competitive service
More than 51% of the total sample size admitted that they would prefer to do all their personal
transaction with Corporation Bank.
More than 80% preferred to take the service of PayRoll from the nationalized banks and almost
every organization is easily adapting the change in the mode of payments of salary to their
employees, if the factors affecting the corporates are met by the bank. A large sample size
mentioned that they trust the Corporation Bank because of the sincerity and social
responsibilities methods adopted by the banks. The presence of Head Office is another important
factor.
SUGGESTIONS
Retain existing customers/ organization and widen market share through cross selling of other
products as well as exploring new customers. Regular inspecting the workings of ATM
Machines. Feedback system from existing PayRoll Customers should be introduced covering
problem faced by him during particular period and their suggestions to improve services of the
bank. Corporation Bank should provide financial services at subsidized rate to the existing
PayRoll Customers to enhance their attitude towards the bank. Bank should concentrate more on
speedy processing and error free transactions. Public Sector Bank lags behind in the quality of
service delivered to the customers as compared to the Private Sector and Foreign Banks. The
bank requires drastic change in outlook and should show the functioning and steady performance
of the banks in this highly volatile and competitive environment. Bank holidays should be
reduced so that PayRoll customers can fully utilize the banks services. Help desks in every
branch with the young talented employees with improved communication skills.
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The development of banking sector is considered as the development of the whole economy.
Banking sector has been identified of having high potential for growth in the near future. Banks
has not yet covered the rural areas, which has a high potential to save the funds. The analytical
study made an attempt to analyze the factors affecting Corp PayRoll and the satisfaction level of
the existing PayRoll customers. The study shows that how the Corporation bank has completely
changed its working methods and styles in order to provide better banking services regarding to
the Corp PayRoll in tune with the changing global competitive scenario as compared to other
private and foreign banks. Corp PayRoll is an important medium to cover the large portion of the
market. This product has made possible to sell other products and ultimately the product user of
one product utilizes the benefits of other products. Corp PayRoll has made the customers to use
the products like Corp Classic, Recurring Deposit scheme etc. where the customers are
benefitted with additional features. The bank should increase its media visibility and publicize all
its offerings. Thus by revamping its marketing strategy and by providing world class service &
Value added services, Corporation Bank can differentiate itself from competitors.
6. CONCLUSION
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8. BIBLIOGRAPHY/REFERENCES
1) Banks in south India by Dr. N K Thingalaya.
2) Report on trend & Progress of Indian Banks, Issued by R.B.I.
3) Articles from Business line.
WEBSITES
1) www.corpbank.com
2) www.moneycontrol.com
3) www.rbi.org.in
4) www.ask.com
5) www.wikipedia.com
6. www.corpbank.com/uploadfiles/custom/11_46_300_8728449.pdf
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7. www.moneycontrol.com as on 31/03/2007.

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ZENITH

International Journal of Multidisciplinary Research

A COMPREHENSIVE STUDY ON TARGETING THE CORPORATE

6) To determine reasons behind opting this account.

5) To determine the benefits of the employees holding salary accounts.

TOTAL VARIANCE EXPLAINED

ROTATED COMPONENT MATRIXa

Location of the Bank, Banking hours, ATM Locations

KAISER- MEYER-OLKIN (KMO) AND BARTLETTS TEST

TOTAL VARIANCE EXPLAINED

Lending policies Service Banking knowledge Accuracy Visibility Overall satisfaction

1) WILLINGNESS AND QUICK RESPONSE TO QUERIES

4) RATE OF INTEREST OF THE SALARY ACCOUNT

3) CORP BANKS RTGS FACILITY ENABLES FAST REMITTANCE OF FUNDS

TRADITIONAL SERVICES FINANCIAL SERVICES COMPETENCE VISIBILITY

5. FINDINGS AND SUGGESTIONS

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