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Under the Guidance of Company Guide Mr.S.B.Kanth Internal Guide Prof. Tanmoy De
DECLARATION
I hereby declare that this project work entitled Impact of SBI Retail Banking on customer Satisfaction is my original work, carried out under the guidance of my faculty guide Prof. Tanmoy De and my company guide Mr. S.B.Kanth and has not been submitted to any other institute/ university or any organization apart from SBI, Darbhanga and IMIS Bhubaneswar (INSTITUTE OF MANAGEMENT AND INFORMATION SCIENCE BHUBANESWAR).
ACKNOWLEDGEMENT
To acknowledge all the persons who had helped for the fulfillment of the project is not possible for any researcher but in spite of all that, it becomes a foremost responsibility of the researcher and also the part of research ethics to acknowledge those who had played a great role for the completion of the project. So in the same sequence at very first, I would like to acknowledge my parents because of whom I got the existence in the world for the inception and the conception of this project. Later on I would like to confer the flower of acknowledgement to
Mr.
Executive Summary:
The undergone project is a part of the training period of eight week, which I had in STATE BANK OF INDIA , DARBHANGA . Mr. S.B Kanth (Regional Manager) was my organizational guide and Mr. Tanmoy dey was my internal guide . Banking Industry is basically my concern industry, to work for this was really a complex, and hectic task .I took the challenge and approach with the project IMPACT OF SBI RETAIL BANKING ON CUSTOMER SATISFACTION. Sample size: Data was collected from 100 customer of SBI, Darbhanga. The main objective of the project is 1) To find out what type of problem customer are facing related to service delivered by SBI. 2) To find out the level of customer satisfaction from the product marketing of SBI retail banking. At the end I concluded from the project that customer availing loan from SBI are satisfied from the Service and the Employee cooperation as well as the whole loan procedure was so supportive that they want to avail loan in future from SBI only.
CONTENTS
Certificate Declaration Acknowledgement List of Illustrations/Tables Abstract Chapter 1 1.1 Objectives, Scopes, and Limitations 1.2 Research Methodology Chapter 2 2.1 Introduction to Banking 2.2 Introduction to State Bank of India 2.3 State Bank Today 2.4 State Bank Group 2.5 Retail Banking 2.6 Vision, Mission and Values Chapter 3 3.1 Interpretation of PIE and BAR chart. Chapter 4 Conclusions 4.1 Conclusion/Findings 4.2 Recommendations
References
OBJECTIVE
The main objective of this project is to study the awareness of the satisfaction of customers regarding the SBI Retail Banking .During this summer internship program period I have to achieve some thing, which is helpful for my career, and some value addition to the Banking Company. It gives me good opportunity to expose and creating good impression of corporate mind. 1) To find out what type of problem customer are facing related to service delivered by SBI. 2) To find out the level of customer satisfaction from the product marketing of SBI retail banking.
SCOPE
Money is the centre of world economy and Bank works as a central point for money. Banking industry is a very growing industry and among all the banks, particularly SBI is doing very well. In this time of global recession where the other companies are laying off their staffs but SBI has recruited more than 20000 employees in the year 2008.So there is a huge potential for getting jobs in SBI.
LIMITATIONS
1) The survey was conducted in the Darbhanga. 2) Target customers and respondents were too busy persons, so it was difficult to get their time and view for specific questions.
3) Area covered for the project while doing job also was very large and it was very difficult to correlate two different customers / respondents views in a one. Every financial customer has his / her own need and according to the requirements of the customer product customization was not possible.
Research Methodology:
The Research and Methodology adopted for the present study has been systematic and was done in accordance to the objectives set which has been detailed as below. Research Definition Research is a process in which the researcher wishes to find out the end result for a given problem and thus the solution helps in future course of action. According to Redman & Mory, research is defined as a Systemized effort to gain new knowledge. Research Design: According to Claire Seltiz, a research design is the arrangement of condition and analysis of data in manner that aims to combine relevance to the research purpose with economy in procedure. Nature of Research: Research is basically of two types. 1. Descriptive research 2. Explorative research 1. Descriptive Research: . My research design is descriptive as descriptive research
Describe the characteristics of certain groups/ samples / populations. Estimate proportions in specified populations. Make specific predictions. Determining sources of Data: There are two main sources of data 1. Primary data 2. Secondary data Primary Data: It consists of original informations collected for specific Purpose. Primary data for this research, data are collected through a direct source like survey to obtain the first hand information is others resources are written below. Survey. Face to face interaction. Secondary Data: 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, Books. Website. Newspaper. Financial Magazine. ( weekly , business world etc) Questionnaire: Sample Size: Total sample size is 100 Questionnaire Development: Questionnaire is the most common instrument in collecting primary data. In order to gather primary data from viewers. The present questionnaire consists closed ended type of questions. .
SamplingSampling 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. In my survey, I have taken convenience sampling. My sampling is probability sampling as probability sampling that has been selected using simple random selection each unit in the population has a known chance of being selected. Moreover, my sampling technique is simple random technique as in simple Random sampling; each unit of the population has an equal probability of inclusion in the sample. In my survey, each respondent have equal opportunity to be selected and the data, which I collected, was from customers of SBI who had taken loan.
Introduction to Banking
Customers are broadly classified into two: Personal Customers: Individuals having accounts singly or jointly (including minors) Non Personal Customers: Non individual customers like Proprietary concerns, Partnerships, Companies, Trusts, Associations, Clubs, Societies, Institutions, Govt. Departments, NGOs, SHG etc. Accounts are broadly classified into two: Customer accounts (external accounts) : Deposit accounts (Savings Bank, Current Account etc), Loan Accounts (Demand Loan, Term Loan etc) and Contingent accounts (Bank Guarantee etc) Office accounts. (Internal accounts): Cash Balance accounts, fixed assets account, Drafts account, Sundry Deposit account, Interest account etc. Basic Deposits Account:
Savings Bank : Running account for saving with restriction in
number of withdrawal Current Account: Running account without restriction on number of withdrawals Term Deposit : Deposit of an amount for a fixed period where interest is paid monthly/Quarterly Special Term Deposit : Deposit of an amount for a fixed period where interest is compounded
(Capitalized) and paid on maturity. Recurring Deposit: Regular (Monthly) deposit of a fixed amount for a fixed period.
Types of Loan Account: Overdraft Demand Loan Term Loan Cash Credit
Overdraft: A Current account when permitted to overdraw (allowing withdrawal more than deposited or without deposits ) becomes an overdraft account Can be operated by cheque, ATM, INB A type of advance of temporary nature/ to valued clients sometimes against Term Deposit, NSC etc. A running account where further withdrawals (debits) can be permitted as and when deposits (credits) come. Demand Loan: Basically an advance payable on demand. Payment in installments also generally allowed. Given against Bank deposits, NSCs, Insurance policies Gold loans and Pension Loans are given as Demand loans Only one Debit allowed for disbursement. Cannot be operated by cheque & ATM. Term Loan: Loan payable as per pre-determined installments over a fixed term. Extended for acquisition of assets like house, car, land, building, Plant & Machinery etc. Installments are to be paid out of the income of the person in case of Personal Segment loans
Installments are to be paid out of the income of the activity financed in case of non-personal segment loans. Cash Credit: An advance facility for financing the working capital needs of commercial activities. A running account on the lines of Overdraft. An account where all the receipts and payments of the activity on account of day-to-day operations are expected to be reflected. Extended against the stocks and receivables of the unit. (Stocks: raw materials, semi finished goods, finished goods etc, Receivable means money to be received towards sales). Security and Margin: The physical or financial asset for / against which the advance is made is referred as security. A car is a security for which a car loan is given. Assets acquired out of bank finance is called primary security. Any additional security offered by the borrower is called collateral. However, in CBS parlance all securities are referred as collaterals. The amount contributed by the borrower to the project cost / the percentage value of the assets owned by him is referred as margin.
Charge: An asset offered to the creditor (who lends the money) becomes a security only if a legally enforceable interest is created in his favour. This process is called the creation of Charge. Lien, Pledge, Hypothecation and Mortgage are different types of charges applicable to different types of securities. Transaction: There are three types of transactions:
Cash: Where receipt payment of physical cash is involved Transfer: Where funds are transferred from one account to another
account without
1921. An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and the rural sector of the country, in particular. Until the Plan, the commercial banks of the country, including the Imperial Bank of India, confined their services to the urban sector. Moreover, they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in particular, the All India Rural Credit Survey Committee recommended the formation of a state-partnered and statesponsored bank. The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of India to make the eight former Stateassociated banks as its subsidiaries. The State Bank of India emerged as a pacesetter, with its operations carried out by the 480 offices comprising branches, sub offices and three Local Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties, the State Bank of India catered to the needs of the customers, by banking purposefully. The bank served the heterogeneous financial needs of the planned economic development.
(In percentage terms) BALANCE SHEET AS AT 31ST MARCH 2009 Yield on Advances (Domestic) 9.90 Cost of Deposits (Domestic) 5.59 Net Interest Margin 3.07 Gross NPA Ratio 3.04 Net NPA Ratio 1.78 Capital Adequacy Ratio 13.47 Return on Average Assets 1.01
AS AT 31ST MARCH 2009 No. of Branches No. of Foreign Offices No. of Branches on CBS No. of employees No. of ATMs
The Bank handles almost the entire gamut of financial services. It is a financial supermarket. The Bank extends banking services to:
Corporate Sector SMEs Rural sector, especially Agriculture and allied activities Retail sector, i.e., Personal Segment The Bank has designed both Deposits as well as Advances products for specific segments as per their requirements. The loans range from Rs.100/- to say, Rs. 10,000 crores.
ASSOCIATE BANKS State Bank of India has the following 6 Associate Banks (ABs) with controlling interest ranging from 75% to 100%: State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of Indore (SBIn) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Travancore (SBT) The six ABs have a combined network of 4596 branches in India, which are fully computerized and on CBS. The ABs has 1070 ATMs, which are networked with SBI ATMs, providing value added services to clientele.
FOREIGN BANKING SUBSIDIARIES State Bank of India has the following Foreign Banking Subsidiaries: State Bank of India (Canada) SBI International (Mauritius) Ltd. State Bank of India (California) Indian Ocean International Bank Ltd. Commercial Bank of India LLC, Moscow PT Bank Indo Monex
NON-BANKING SUBSIDIARIES / JOINT VENTURES State Bank of India has Subsidiaries / Joint Ventures: the following Non-Banking
SBICAP Securities Ltd. (SSL) SBICAPS Ventures Ltd. (SVL) SBICAP (UK) Ltd. SBI Funds Management Pvt. Ltd. (SBIFMPL) SBI Factors & Commercial Services Pvt. Ltd. (SBIFACTORS) SBI DFHI Ltd. SBI Cards & Payment Services Pvt. Ltd. (SBICSPL) SBI Life Insurance Company Ltd. (SBILIFE) Global Trade Finance Ltd. (GTFL) SBI Mutual Funds Trustee Company Pvt. Ltd.
OTHERS In addition to these, there are other Subsidiaries / Jointly Controlled Entities such as: SBI Commercial and International Bank Ltd. SBICAP (UK) Ltd. SBI Funds Management (International) Ltd. GE Capital Business Process Mgmt. Services Pvt. Ltd. C-Edge Technologies Ltd. All these together constitute this mammoth organization the STATE BANK.
RETAIL BANKING
Retail banking refers to banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and checking accounts,
mortgages, personal loans, debit cards, credit cards, and so forth or it is a typical mass-market banking where individual customers use local branches of larger commercial banks. Retail Banking has wider connotation and is not the same as that of retail lending. Retail Banking refers to the efforts of the bankers to reach up to the customers on both fronts of the balance sheet i.e., Liabilities side as well as Assets side. Under the liabilities side, we have deposits. Under the assets side, we have credit schemes of the various banks. The job of the banker has become very difficult in this segment too. Bankers today are offering various sops to attract the potential customers.
In carrying out the inquiry and, for instance, addressing comprehensive questionnaires to banks in the EFTA States, the Authority has not applied a rigid definition within these general parameters. This approach has allowed for individually flexible definitions, for example by accepting the banks own definition of SME business even where they may be narrower in scope.
Together with the retail banking products specified above, the sector inquiry also analyses payments systems, since they form the core of money transmission services in personal and SME banking, and are significant structures within the retail banking sector as a whole.
The Authority scrutinizes advantages provided to certain financial institutions by means of State aid control in order to ensure a level playing field for all market participants and to enhance undistorted competition. In particular, the Authority ensures that public and private institutions operate under similar conditions by removing unlimited state guarantees or fiscal advantages favoring particular banks and by applying the so-called Market Economy Investor Principle (MEIP).
Banks need to expand and diversify by focussing on non urban segment as well as varied income and demographic groups Rural areas offer tremendous potential too which needs to be exploited
Challenges:
Sustaining Customer loyalty NPA reduction & Fraud prevention Avoiding Debt Trap for customers Bringing Rural masses into mainstream banking
What is Vision?
The Vision acts as a source of constant inspiration, a guiding light for the future. The Vision statement presents a picture of the desirable future.
What is Mission? The mission puts the vision in action. It is what you do to actualize your vision: your plans, your strategies, your targets, your numbers, and your activities. It concentrates on the present; it gives us an insight into the effort and direction required to achieve the desired future. Why Mission Statement?
.Mission statement helps we Prioritize what is important to the organization. Provides an inspiring statement of our ideals. a shared and compelling picture of the future that everyone can believe in and work towards achieving as a team.
What are Values? Values are the basis on which you shape your actions so that your vision can be reached.
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.
ANALYSIS OF THE DATA COLLECTED THROUGH THE QUESTIONNAIRE I have analyzed the data collected through the questionnaire and have classified the data into tables. TABLE-I The given below BAR graph shows the response of 100 customer. SERVICES EXPECTED FROM SBI QUICK RESPONSE GOOD CUSTOMER RELATION EXTRA FACILITY FOR EXISTING CUSTOMER 38 37 25
INTERPRETATION Out of 100 customers, 38 of them said that they expect QUICK RESPONSE from the SBI bank, 37 said they expect GOOD CUSTOMER RELATION and 25 customers said that they expect EXTRA FACILITY FOR EXISTING CUSTOMER.
TABLE-II The given below Bar chart shows the SATISFACTION LEVEL OF CUSTOMER AFTER AVAILING LOAN SATISFACTION AVAILING LOAN SATISFIED NORMAL DISSATISFIED AFTER 4 2 3 4 2 4
INTERPRETATION Out of 100 customers 42 were found SATISFIED after taking loan from SBI , 34 Customer were NORMALY satisfied from SBI and 24 were
TABLE-III The given below Bar chart shows the CUSTOMER WANTS TO TAKE ANOTHER LOAN FROM SBI CUSTOMER WANTS TO TAKE ANOTHER LOAN FROM SBI YES NO 68% 32%
70 60 50 40 30 20 10 0 1 2 YES NO
Interpretation:
Out of 100 customers, 68 would like to take another loan from SBI but 32 would not like to take another loan from SBI.
TABLE-IV The given Bar graph shows THE INFLUENCING FACTOR FOR TAKING LOAN FROM SBI
INFLUENCING FACTOR FOR LOAN FROM SBI ADVERTISEMENT FRIENDS EASY AVAILABILITY OF LOAN TRUST 26 20 22 32
Interpretation: Out of 100 customers, 32 said trust, 26 said advertisement,22 said easy availability and rest 20 said friends and relatives about the influence factor to taking loan from SBI.
TABLE-V The given Pie chart shows the processing procedure while availing loan:
28%
30%
42%
Interpretation:
Out of 100 customers 42 peoples said good, 30 people said excellent and rest 28 people said average about the processing procedure while availing the loan.
TABLE-VI
The given Pie chart shows the co-operation of the bank employees in processing and helping in documentation:
24%
21%
55%
Interpretation:
Out of 100 customers 55 peoples said good, 21 said excellent and 24 peoples said average about co-operation of employees in processing and documentation.
TABLE-VII
The given Pie chart shows the interest rate charged upon the loan available:
15%
Interpretation:
Out of 100 peoples 49 said averages, 36 said good and 15 said excellent about the interest rate charged upon the loan available.
CONCLUSION
SBI is providing good services to the clients during sanctioning the loan. They cooperate with the clients to given maximum benefits. Different banks offer same product but services only aspect, which differentiate banks products. Services through corporate banking, personal banking SBI reaches among the maximum number of customers across the country and More than average number of customers were found satisfied by the offered services of SBI.
FINDINGS
1) Customers were satisfied from the quick response and good customer relationship. 2) Customer found employees of SBI very helpful and cooperative. 3) Customer are more influenced for taking loan from SBI because of trust, customers have on SBI. 4) Customer found the procedure of availing loan simple and hassle free.
RECOMMENDATION
Their should be a separate section to deal with the customer queries and other responses. When a customer comes to know about the product one should say more about its value and benefits.
QUESTIONNAIRE
Dear Sir/ Madam, As part of my MBA curriculum, I, Vivek Kumar, am conducting a market research regarding the marketing of retail banking for which I need your personal views regarding banking products & services in shape of a questionnaire designed by me. The data being collected are solely for academic purpose. I request you to kindly extend your co-operation. 1) Name: 3) Age group :( plz tick) A)18-30 yrs. B)31-40 yrs. C)41-50 yrs. D)51-60 yrs. 4) Annual Income (in Rs.):A) 60000-200000 Above 1000000 b) 200000-400000 c) 400000-1000000 d) 2) Profession:
5) What kind of service or services do you expect from SBI? A) Quick Response B) Good Customer Relation C) Extra Facility for Existing Customer
6) What influence you at taking loan from SBI? A) Advertisement C) Easy availability loan B) Friend/Relative D) Trust
7) How do you find the processing procedure while availing the loan? A) Excellent B) Good C) Average
8) How do you find the cooperation of the bank employees in processing and helping you with documentation? A) Excellent B) Good C) Average
9) How do you find the interest rate charged upon the loan available? A) Excellent B) Good C) Average
10) Would you like to take another loan from SBI in future? A) Yes B) No
11) Your overall level of satisfaction with SBl: A) Satisfied B) Normal C) Dissatisfied
References:
www.sbi.co.in Banking Law and Practices (S.N.Maheswari) The Economic Times