COMPARATIVE STUDY OF CUSTOMER’S SATISFACTION TOWARDS HDFC BANK AND STATE BANK OF INDIA
1
DECLARATION
Hereby Hereby we declar declaree that that the projec projectt report report entitl entitled ed “COMPAR “COMPARATI ATIVE VE ST!" ST!" O# CSTOMER$S SATIS#ACTIO% TO&AR!S H!#C 'A%( A%! STATE 'A%( O# I%!IA) *+b,itted -or the de.ree o- Ma*ter o- '+*ine** Ad,ini*tration/ o+r ori.inal wor0 and the project report ha* not -or,ed the ba*i* -or the award o- any diplo,a/ de.ree/ a**ociate *hip/ -ellow*hip or *i,ilar other title* It ha* not been *+b,itted to any other +ni2er*ity or in*tit+tion -or the award o- any de.ree or diplo,a
3
ABSTRACT
The pre*ent *t+dy wa* wa* +ndert +nderta0 a0en en to 0now 0now the the pre-er pre-eren ence ce o- the the c+*to c+*to,e ,er* r* toward toward** H!#C H! #C 'an 'an0 0 and and State State 'an 'an0 0 o- Ind India ia 4S'I 4S'I51 51 The The ,ain ,ain prob proble le, , o- the the c+* c+*to to,e ,er* r* i* they they are are not not well well awar aware e oo- the the *er2i *er2ice* ce* pro2 pro2ide ided d by by their their ban0*1 ban0*1 Th The e *t+dy *t+dy al*o -orce -orce on the the c+*to c+*to,e ,err percep perceptio tion n that that how how the the ban0i ban0in. n. *er2 *er2ic ice e can be be i,pro i,pro2e 2ed1 d1 In o+r o+r *t+d *t+dy y we ha2e ha2e +*ed +*ed both both pri, pri,ar ary y *o+rc *o+rce* e* o- data data a* well well a* *econ *econda dary ry *o+r *o+rce ce** odata1 !+rin. project we ca,e to 0now that both the ban0* are hi.hly pre-erred by the
c+*to,er* b+t their pre-erence i* di--erent +p to *o,e e6tent toward* the *er2ice o- the*e ban0*
7
ACKNOWLEDGEMENT
%o *erio+* and la*tin. achie2e,ent or *+cce** one e2er achie2e* witho+t the -riendly .+idance and cooperation o- *o ,any people in2ol2ed in wor0 #ore,o*t o- all/ I e6pre** ,y .ratit+de to the Al,i.hty -or hi* ble**in.* and -or 2e*tin. wi*do, in all ,y wi*he* A -eel -eelin in. . o- elat elatio ion n in*i in*i*t *t** +* on e6pre e6pre** **in in. . o+r hear hearti tie* e*tt .rat .ratit it+de +de to MrA MrA,i ,itt Mahendroo/ who allowed doin. o+r project +nder hi* *+per2i*ion I place o+r than0* to all tho*e who *pared their ti,e and ,ade it con2enient -or +* to co,plete the re*earch &e deeply ac0nowled.e their concern -or o+r re*earch 8a*t b+t not the lea*t/ we al*o wi*h to red cord o+r .ratit+de -or any per*on/ o+r ,e,ory ha* -ailed to recall/ who rendered hi*9her9their h i*9her9their *+pport and *er2ice*
:
TABLE OF CONTENTS
Banking Industry Chapter 1
1.1 Introduction to banking Industry
7-10
1.2 Banking system in India
10-12
1.3 Private Sector Bank
12-17
1.4 Public Sector Bank
17-1
!om"any Pro#ile Chapter 2
Chapter 3
2.1 $vervie% $vervie% on State Bank $# India
&-24
2.2 Services "rovided by State Bank $# India
24-2'
2.3 S($) S($) analysi analysis s o# SBI
2'-2* 2'-2*
2.4 $vervie% $vervie% on +,! Bank
2*-34
2.' Services "rovided by +,! Bank
34-3*
2.* S($) analysis o# +,! Bank
3*-37
3.1 $be $becti ctive ves s
3
3.2 3.2
3
Sco" Sco"e e
3.3 literatu literature re revie% revie%
3-41 3-41
3.4
41-42 41-42
/esearc /esearc etodo etodology logy
3.' imitati imitations ons o# te study study ,ata nalysis and indings
42
4.1 State Bank $# India bank analysis
43-'*
4.2 +,! Bank analysis
'7-71
4.3 !om"arative analysis
72-3
Chapter 5
'.1
4
Appendix
'.2 '.2 ssum" ssum"tio tions ns *.1 uest estion ionnair aire
4 '- '-
*.2
Chapter 4
'.1Suggestions '.1Suggestions and recommendations recommendations
Bibliogra"y
;
Chapter 1 BANKING INDUSTRY
11I!tr"#$%t&"! t" I!#&a! Ba!'&!( S)*te+ H&*t"r) ", Ba!'&!( &! I!#&a &itho+t a *o+nd and e--ecti2e ban0in. *y*te, in India it cannot ha2e a healthy econo,y The ban0in. *y*te, o- India *ho+ld not only be ha**le -ree b+t b+ t it *ho+ld be able to ,eet new challen.e* po*ed by the technolo.y and any other e6ternal and internal -actor* #or the pa*t three decade* India<* ban0in. *y*te, ha* *e2eral o+t*tandin. achie2e,ent* to it* credit The ,o*t *tri0in. i* it* e6ten*i2e reach It i* no lon.er con-ined to only ,etropolitan* or co*,opolitan* in India In -act/ Indian ban0in. ban 0in. *y*te, ha* reached e2en to the re,ote corner* o- the co+ntry co+ ntry Thi* i* one o- the ,ain rea*on* o- India<* .rowth proce** The .o2ern,ent<* re.+lar policy -or Indian ban0 *ince 1=>= ha* paid rich di2idend* with the nationali?ation o- 1: ,ajor pri2ate ban0* o- India %ot lon. a.o/ an acco+nt holder had to wait -or ho+r* at the ban0 co+nter* -or .ettin. a dra-t or -or withdrawin. hi* own ,oney Today/ he ha* a choice @one are day* when the ,o*t e--icient ban0 tran*-erred ,oney -ro, one branch to other in two day* %ow it i* *i,ple a* in*tant ,e**a.in. or dial* a pi??a Money ha* beco,e the order o- the day The -ir*t ban0 in India/ tho+.h con*er2ati2e/ wa* e*tabli*hed in 1B> #ro, 1B> till today/ the jo+rney o- Indian 'an0in. Sy*te, can be *e.re.ated into three di*tinct pha*e* They are a* ,entioned below •
•
Early pha*e -ro, 1B> to 1=>= o- Indian 'an0* %ationali?ation o- Indian 'an0* and +p to 1==1 prior to Indian ban0in. *ector Re-or,*
•
%ew pha*e o- Indian 'an0in. Sy*te, with the ad2ent o- Indian #inancial D 'an0in. Sector Re-or,* a-ter 1==1
>
To ,a0e thi* write+p ,ore e6planatory/ I pre-i6 the *cenario a* Pha*e I/ Pha*e II and Pha*e III
Pha*e I The @eneral 'an0 o- India wa* *et +p in the year 1B> %e6t ca,e 'an0 o- Hind+*tan and 'en.al 'an0 The Ea*t India Co,pany e*tabli*hed 'an0 o- 'en.al 41BF=5/ 'an0 o'o,bay 41B:F5 and 'an0 o- Madra* 41B:75 a* independent +nit* and called it Pre*idency 'an0* The*e three ban0* were a,al.a,ated in 1=3F and I,perial 'an0 o- India wa* e*tabli*hed which *tarted a* pri2ate *hareholder* ban0*/ ,o*tly E+ropean* *hareholder* In 1B>; Allahabad 'an0 wa* e*tabli*hed and -ir*t ti,e e6cl+*i2ely by Indian*/ P+njab %ational 'an0 8td wa* *et +p in 1B=: with headG+arter* at 8ahore 'etween 1=F> and 1=17/ 'an0 o- India/ Central 'an0 o- India/ 'an0 o- 'aroda/ Canara 'an0/ Indian 'an0/ and 'an0 o- My*ore were *et +p Re*er2e 'an0 o- India ca,e in 1=7; !+rin. the -ir*t pha*e the .rowth wa* 2ery *low and ban0* al*o e6perienced periodic -ail+re* between 1=17 and 1=:B There were appro6i,ately 11FF ban0*/ ,o*tly *,all To *trea,line the -+nctionin. and acti2itie* o- co,,ercial ban0*/ the @o2ern,ent o- India ca,e +p with The 'an0in. Co,panie* Act/ 1=:= which wa* later chan.ed to 'an0in. Re.+lation Act 1=:= a* per a,endin. Act o- 1=>; 4Act %o 37 o- 1=>;5 Re*er2e 'an0 oIndia wa* 2e*ted with e6ten*i2e power* -or the *+per2i*ion o- ban0in. in India a* the Central 'an0in. A+thority !+rin. tho*e day$* p+blic ha* le**er con-idence in the ban0* A* an a-ter,ath depo*it ,obili?ation wa* *low Abrea*t o- it the *a2in.* ban0 -acility pro2ided by the Po*tal depart,ent wa* co,parati2ely *a-er Moreo2er/ -+nd* were lar.ely .i2en to trader*
Pha*e II
@o2ern,ent too0 ,ajor *tep* in thi* Indian 'an0in. Sector Re-or, a-ter independence In 1=;;/ it nationali?ed I,perial 'an0 o- India with e6ten*i2e ban0in. -acilitie* on a lar.e *cale e*pecially in r+ral and *e,i+rban area* It -or,ed State 'an0 o- India to act a* the principal a.ent o- R'I and to handle ban0in. tran*action* o- the nion and State @o2ern,ent* all o2er the co+ntry Se2en ban0* -or,in. *+b*idiary o- State 'an0 o- India wa* nationali?ed in 1=>F on 1=th
+ly/ 1=>=/ ,ajor proce** o- nationali?ation wa* carried o+t It wa* the e--ort o- the then Pri,e Mini*ter o- India/ Mr* Indira @andhi 1: ,ajor co,,ercial ban0* in the co+ntry were nationali?ed Second pha*e o- nationali?ation Indian 'an0in. Sector Re-or, wa* carried o+t in 1=BF with *e2en ,ore ban0* Thi* *tep bro+.ht BF o- the ban0in. *e.,ent in India +nder @o2ern,ent owner*hip The -ollowin. are the *tep* ta0en by the @o2ern,ent o- India to Re.+late 'an0in. In*tit+tion* in the Co+ntry •
1=:= Enact,ent o- 'an0in. Re.+lation Act
•
1=;; %ationali?ation o- State 'an0 o- India
•
1=;= %ationali?ation o- S'I *+b*idiarie*
•
1=>1 In*+rance co2er e6tended to depo*it*
•
1=>= %ationali?ation o- 1: ,ajor ban0*
•
1=1 Creation o- credit .+arantee corporation
•
1=; Creation o- re.ional r+ral ban0*
•
1=BF %ationali?ation o- *e2en ban0* with depo*it* o2er 3FF crore*
A-ter the nationali?ation o- ban0*/ the branche* o- the p+blic *ector ban0 India ro*e to appro6i,ately BFF in depo*it* and ad2ance* too0 a h+.e j+,p by 11/FFF 'an0in. in the *+n*hine o- @o2ern,ent owner*hip .a2e the p+blic i,plicit -aith and i,,en*e con-idence abo+t the *+*tainability o- the*e in*tit+tion*
Pha*e III
Thi* pha*e ha* introd+ced ,any ,ore prod+ct* and -acilitie* in the ban0in. *ector in it* re-or,* ,ea*+re In 1==1/ +nder the chair,an*hip o- M %ara*i,ha,/ a co,,ittee wa* *et +p by hi* na,e which w hich wor0ed -or the liberali?ation* o- ban0in. practice* The co+ntry i* -looded with -orei.n ban0* b an0* and their ATM *tation* E--ort* are bein. p+t to .i2e a *ati*-actory *er2ice to c+*to,er* Phone ban0in. and net ban0in. i* introd+ced The entire *y*te, beca,e ,ore con2enient con2 enient and *wi-t Ti,e i* .i2en ,ore i,portance than ,oney The -inancial *y*te, o- India ha* *hown a .reat deal o- re*ilience It i* *heltered -ro, any cri*i* tri..ered by any e6ternal ,acroecono,ic* *hoc0 a* other Ea*t A*ian Co+ntrie* B
*+--ered Thi* i* all d+e to a -le6ible e6chan.e rate re.i,e/ the -orei.n re*er2e* are hi.h/ the capital acco+nt i* not yet -+lly con2ertible/ and ban0* and their c+*to,er* ha2e li,ited -orei.n e6chan.e e6po*+re
1- Ba!'&!( *)*te+ &! I!#&a The Indian ban0in. can be broadly cate.ori?ed into nationali?ed 4.o2ern,ent owned5/ pri2ate ban0* and *peciali?ed ban0in. in*tit+tion* The Re*er2e 'an0 o- India act* a centrali?ed body ,onitorin. any di*crepancie* and *hortco,in. in the *y*te, Since the nationali?ation o- ban0* in 1=>=/ the p+blic *ector ban0* or the nationali?ed ban0* ha2e acG+ired a place o- pro,inence and ha* *ince then *een tre,endo+* pro.re** The need to beco,e hi.hly c+*to,er -oc+*ed ha* -orced the *low,o2in. p+blic *ector ban0* to adopt a -a*t trac0 approach The +nlea*hin. o- prod+ct* and *er2ice* thro+.h the net ha* .al2ani?ed player* at all le2el* o- the ban0in. and -inancial in*tit+tion* ,ar0et .rid to loo0 anew at their e6i*tin. port-olio o--erin. Con*er2ati2e ban0in. practice* allowed Indian ban0* to be in*+lated partially -ro, the A*ian c+rrency cri*i*Indian ban0* are now G+otin. al hi.her 2al+ation when co,pared to ban0* in other A*ian co+ntrie* 42i? Hon. (on./ (on./ Sin. Sin.apo apore re// Phil Philip ippi pine ne** etc etc55 that that ha2e ha2e ,ajo ,ajorr probl proble, e,** lin0e lin0ed d to h+. h+.ee %on Per-or,in. A**et* 4%PA*5 and pay,ent de-a+lt* Cooperati2e ban0* are ni,ble -ooted in approach and ar,ed with e--icient branch networ0* -oc+* pri,arily on the Jhi.h re2en+e$ niche retail *e.,ent* The Indian ban0in. ha* -inally wor0ed +p to the co,petiti2e dyna,ic* o- the Jnew$ Indian ,ar0et and i* addre**in. the rele2ant i**+e* to ta0e on the ,+lti-ario+* challen.e* o- .lobali?ation 'an0* that e,ploy IT *ol+tion* are percei2ed to be J-+t+ri*tic$ and proacti2e player* capable o- ,eetin. the ,+lti-ario+* reG+ire,ent* o- the lar.e c+*to,er* ba*e Pri2ate ban0* ha2e been -a*t on the +pta0e and are reorientin. their *trate.ie* +*in. the internet a* a ,edi+, The Internet ha* e,er.ed a* the new and challen.in. -rontier o,ar0etin. with the con2entional phy*ical world tenet* bein. j+*t a* applicable li0e in any other ,ar0etin. ,edi+, The Indian ban0in. ha* co,e -ro, a lon. way -ro, bein. a *leepy b+*ine** in*tit+tion to a hi.hly proacti2e proacti2e and dyna,ic entity entity Thi* tran*-or tran*-or,atio ,ation n ha* been lar.ely bro+.ht bro+.ht =
abo+t by the lar.e do*e o- liberali?ation and econo,ic re-or,* that allowed ban0* to e6plore new b+*ine** opport+nitie* rather than .eneratin. re2en+e* -ro, con2entional *trea,* 4ie borrowin. borrowin. and lendin.5 The ban0in. in India i* hi.hly -ra.,ented -ra.,ented with 7F ban0in. +nit* contrib+tin. to al,o*t ;F o- depo*it* and >F o- ad2ance* Indian nationali?ed ban0* 4ban0* owned by the .o2ern,ent5 contin+e to be the ,ajor lender* in the econo,y d+e to their *heer *i?e and penetrati2e networ0* which a**+re* the, hi.h depo*it depo*it ,obili?ation ,obili?ation The Indian ban0in. can be broadly cate.ori?ed cate.ori?ed into nationali?e nationali?ed/ d/ pri2ate ban0* and *peciali?ed ban0in. in*tit+tion* The Re*er2e 'an0 o- India act a* a centrali?ed body ,onitorin. any di*crepancie* and *hortco,in *hortco,in. . in the *y*te, *y*te, It i* the -ore,o*t ,onitori ,onitorin. n. body in the Indian -inancial -inancial *ector The nationali?ed ban0* 4ie .o2ern,entowned ban0*5 contin+e to to do,inate the Indian Indian ban0in. arena arena Ind+*try Ind+*try e*ti,ate* e*ti,ate* indicate indicate that that o+t o- 3: co,,ercial co,,ercial ban0* operatin. in India/ 337 ban0* are in the p+blic *ector and ;1 are in the pri2ate *ector The pri2ate *ector ban0 .rid al*o incl+de* 3: 3 : -orei.n ban0* that ha2e ha 2e *tarted their operation* here here
nde nderr the the a,bi a,bitt o- the the nati nation onal ali? i?ed ed ban0 ban0** co,e co,e the the *peci *pecial ali? i?ed ed ban0i ban0in. n.
in*tit in*tit+ti +tion* on*
The*e The*e cooper cooperati ati2e* 2e*// r+ral r+ral ban0* ban0* -oc+* -oc+* on area* area* o- a.ric+ a.ric+lt+ lt+re/ re/ r+ral r+ral
de2elop,ent etc/ +nli0e co,,ercial ban0* the*e cooperati2e ban0* do not lend on the ba*i* o- a pri,e lendin. rate They al*o ha2e 2ario+* ta6 *op* beca+*e o- their holdin. pattern and lendin. *tr+ct+re and hence ha2e lower o2erhead* Thi* enable* the, to .i2e a ,ar.inally ,ar.inally hi.her percenta.e percenta.e on *a2in.* depo*it* depo*it* Many o- the*e cooperati2e cooperati2e ban0* di2er*i-ied into *peciali?ed area* 4caterin. to the 2a*t retail a+dience5 li0e car -inance/ ho+*in. ho+* in. loan*/ loan*/ tr+c0 tr+c0 -inance -inance etc etc in order to 0eep pace with their their p+blic *ector *ector and pri2ate co+nterpart*/ the cooperati2e ban0* too ha2e in2e*ted hea2ily in in-or,ation technolo.y to o--er hi.hend co,p+teri?ed ban0in. *er2ice* to it* client*
TYPES OF BANKS Ce!tra. Ba!'
The Re*er2e 'an0 o- India i* the central 'an0 that i* -+lly owned by the @o2ern,ent It i* .o2erned by a central board 4headed by a @o2ernor5 appointed by the Central @o2ern,ent It i**+e* .+ideline* -or the -+nctionin. o- all ban0* ban 0* operatin. within the co+ntry
1F
C"/"perat&0e Se%t"r
The cooperati2e *ector i* 2ery ,+ch +*e-+l -or r+ral people The cooperati2e ban0in. *ector i* di2ided into the -ollowin. cate.orie* a Stat Statee coo cooper perat ati2 i2ee 'an0 'an0** b Central cooperati2e ban0* c Pri,ar Pri,ary y A.ric+ A.ric+lt+ lt+re re Credi Creditt Societ Societie* ie* De0e."p+e!t Ba!'*F&!a!%&a. I!*t&t$t&"!* •
IFCI
•
IDBI
•
ICICI
•
IIBI
•
SCICI Lt#
•
NABARD
•
E2p"rt/I+p"rt Ba!' ", I!#&a
•
Nat&"!a. H"$*&!( Ba!'
•
S+a.. I!#$*tr&e* De0e."p+e!t Ba!' ", I!#&a
•
N"rth Ea*ter! De0e."p+e!t F&!a!%e C"rp"rat&"!
13 PRIVATE SECTOR BANKS
a Old .eneration pri2ate ban0* b %ew .eneration pri2ate ban0* c #orei.n ban0* operatin. in India d Sched+led cooperati2e ban0* e %on*ched+led ban0* 11
Pr&0ate Se%t"r Ba!'*
1 H!#C 'an0 3 ICICI 'a 'an0 7
#ed #ederal 'a 'an0
:
I%@ I%@ Vy* Vy*ya ya 'an0 'an0
;
A6i* A6i* 'an0 'an0 4-or,e 4-or,erly rly TI 'an05 'an05
>
"e* 'an0
'an0 'an0 o- Raja Raja*t *tha han n
B 'har 'harat at O2e O2er* r*ea ea** 'an0 'an0 =
Cath Cathol olic ic Syr Syria ian n 'an0 'an0
1F Cent+rion Cent+rion 'an0 oo- P+njab P+njab 11 City City nion 'an0 'an0 13 !e2elop,ent !e2elop,ent Credit Credit 'an0 'an0 17 !hanala0*h,i !hanala0*h,i 'an0 1: @ane*h 'an0 'an0 o- (+r+ndw (+r+ndwad ad 1; Ind+*I Ind+*Ind nd 'an0 'an0 1> a,,+ D (a*h,ir (a*h,ir 'an0 'an0 1 (arnata0a (arnata0a 'an0 8i,ite 8i,ited d 1B (ar+r Vy*ya 'an0 1= (ota0 Mahindr Mahindraa 'an0 3F 8a0*h,i 8a0*h,i Vila* 'an0 31 %ainit %ainital al 'an0 'an0 33 Ratna0a Ratna0arr 'an0 37 S'I Co,,ercial Co,,ercial and Internationa Internationall 'an0
13
3: So+th Indian 'an0 3; A,a?in. A,a?in. Mercantil Mercantilee 'an0 3> P+njab %ational %ational 'an0 'an0 3 R+pee R+pee 'an0 3B Sara*w Sara*wat at 'an0 3= Ta,ilnad Ta,ilnad Mercantile Mercantile 'an0 'an0 7F Thane anata anata Saha0ari Saha0ari 'an0 'an0 71 'a**ein 'a**ein Catholic Catholic 'an0 'an0
A-ter nationali?ation o- 1: co,,ercial ban0* in 1=>=/ no new pri2ate ban0* were licen*ed by R'I in the co+ntry/ tho+.h there wa* no le.al ban0 on entry o- pri2ate *ector ban0* The %ar*i,ha co,,ittee report o- 1==1/ ha* en2i*a.ed a lar.er role -or pri2ate *ector ban0* In reco.nition o- need to introd+ce .reater co,petition with a 2iew to achi achie2 e2in in. . hi.h hi.her er prod prod+c +cti ti2i 2ity ty and e--i e--ici cien ency cy o- ban0i ban0in. n. *y*t *y*te, e, R'I R'I i**+ i**+ed ed -ew -ew .+ideline* in an 1==7 -or entry en try o- pri2ate *ector ban0* It pre*cribed o- ,ini,+, paid +p capital o- R*1FF crore* -or new ban0 and *hare* to be li*ted at *toc0 e6chan.e* new ban0 a-ter bein. .ranted licen*e +nder 'an0in. Re.+lation Act/ *hall be re.i*tered a* P+blic ltd Co,pany +nder co,panie* Act 1=;> S+b*eG+ently nine new co,,ercial ban0* ha2e been .ranted licen*e to *tart ban0in. operation* The new pri2ate *ector ban0* ha2e been 2ery a..re**i2e in b+*ine** e6pan*ion and are al*o reportin. hi.her pro-it le2el* ta0in. ad2anta.e o- technical and *0illed ,anpower In certain area*/ the*e ban0* ha2e been o+t cro**ed the other .ro+p o- ban0* incl+din. -orei.n ban0* GUIDELINES FOR PRIVATE SECTOR BANKS
The R'I i**+ed .+ideline* re.ardin. the -or,ation and -+nctionin. o- pri2ate *ector ban0* in an+ary 1==7 The*e .+ideline* are a* -ollow*
The ban0* *hall be .o2erned by the pro2i*ion* o- The Re*er2e 'an0 o- India Act/ 1=7: The 'an0in. Re.+lation* Act/ 1=:= other rele2ant *tat+arie*
17
Pri2ate *ector ban0* are reG+ired to be re.i*tered a* p+blic li,ited co,panie* in India
The a+thority to .rant a licen*e lie* with the R'I
The *hare* o- ban0* are reG+ired to be li*ted on *toc0 e6chan.e*
Pre-erence will be .i2en to tho*e ban0* who*e headG+arter* are propo*ed to be located in a center that doe* not ha2e headG+arter* o- any other ban0
Ma6i,+, 2otin. ri.ht* o- an indi2id+al *hareholder wo+ld be li,ited to 1 ototal 2otin. ri.ht*
The new ban0 wo+ld not be allowed to ha2e a* it* director any per*on who i* already a director in a ban0in. co,pany
The ban0 will be *+bject to pr+dential nor,* in re*pect o- ban0in. operation*/ acco+ntin. policie* and other policie*/ a* laid down by R'I The ban0 will be reG+ired reG+ired to adhere to the -ollowin. -ollowin. Mini,+, Mini,+, paid +p *hare capital capital o- R* 1 bln Pro,oter*< contrib+tion a* deter,ined by the R'I Capital adeG+acy o- B o- the ri*0 wei.hted a**et* Sin.le borrower and .ro+p borrower e6po*+re li,it* in -orce Priority *ector lendin. E6port credit 8oan policy within o2erall policy .+ideline* laid down by the R'I
The ban0* will be -ree to open branche* anywhere once they *ati*-y the capital adeG+acy and pr+dential acco+ntin. nor,*
The ban0* wo+ld not be allowed to ha2e in2e*t,ent* in *+b*idiarie*/ ,+t+al -+nd* and port-olio in2e*t,ent* in other co,panie* in e6ce** o- 3F o- the ban0*< own paid +p capital and re*er2e*
The ban0* wo+ld be reG+ired to +*e ,odern in-ra*tr+ct+ral -acilitie* in o--ice eG+ip,ent/ co,p+ter/ teleco,,+nication* etc
MA4OR PLAYERS IN PRIVATE SECTOR BANKS ICICI Ba!'5 ICICI 'an0in. i* co,,ercial 'an0in. ar, o- ICICI .ro+p It recei2ed it*
ban0in. licen*e -ro, R'I on ,ay 1 ,ay 1==: and it* branch wa* *tarted in Madra* in +ne 1==: ICICI 'an0 ha* a networ0 o- abo+t ;>F branche* and e6ten*ion co+nter* and o2er 1/=FF ATM* ICICI 'an0 o--er* a wide ran.e o- ban0in. prod+ct* and -inancial *er2ice* to corporate and retail c+*to,er* thro+.h wide 2ariety o- deli2ery channel* and 1:
thro+.h it* *peciali?ed *peciali?ed *+b*idiarie* and a--iliate* a--iliate* in the area* area* o- in2e*t,ent ban0in./li-e ban0in./li-e and nonli-e in*+rance/ 2ent+re capital and a**et ,ana.e,ent ICICI 'an0 *et +p it* international ban0in. .ro+p in -i*cal 3FF3 to cater to cro** border need* o- client* and le2era.e on it* do,e*tic ban0in. *tren.th* to o--er prod+ct internationally ICICI 'an0$* eG+ity eG+ity *hare* *hare* are li*ted li*ted in India on the Stoc0 E6chan.e/ E6chan.e/ M+,bai and the %ational Stoc0 E6chan.e o- India 8i,ited and it* A,erican !epo*itary Receipt* are li*ted on %ew "or0 Stoc0 E6chan.e It i* the -ir*t ban0 to *tart Internet ban0in. *er2ice in India In 1===/ ICICI beco,e the -ir*t Indian Co,pany and the -ir*t ban0 or -inancial in*tit+tion -ro, nonapan A*ia to be li*ted on %"SE IDBI Ba!'5 I!'I 8td/ the tenth lar.e*t de2elop,ent ban0 in the world ha* pro,oted
world cla** in*tit+tion* in India I!'I pro,oted I!'I ban0 to ,ar0 the -or,al -oray othe I!'I .ro+p into co,,ercial 'an0in. I!'I be.+n with an eG+ity capital ba*e oR*1FFF ,illion/ co,,enced it* -ir*t branch at Indore in %o2e,ber 1==; The birth oI!'I too0 place a-ter R'I i**+ed .+ideline* -or entry o- new pri2ate *ector ban0* in an+ary =7 I!'I ban0 deployed #inacle/ the ea.e ban0in. *ol+tion -ro, In-o*y* tio con*olidate it* po*ition/ ,eet challen.e* and G+ic0ly *ei?e new b+*ine** opport+nitie* I!'I ban0 beco,e the -ir*t to o--er ,obile re-ill9rechar.e +*in. *,*/ la+nch o- “ATM ne6t)/ which pro2ide online in-or,ation abo+t %ew*/ cric0et *core*/ e,er.ency n+,ber*/ ban0$* prod+ct* on ATM* UTI Ba!'5 TI 'an0 wa* the -ir*t o- the new pri2ate ban0* to ha2e br.+n operation* in
1==:/ a-ter the .o2ern,ent o- India allowed new pri2ate ban0* to be e*tabli*hed The 'an0 wa* pro,oted jointly by the Ad,ini*trator o- the *peci-ied +nderta0in. o- the nited Tr+*t o- India4TII5/ 8i-e In*+rance Corporation o- India48IC5 and @eneral In*+rance Corporation 8td and it* a**ociate* 2i?%ational In*+rance Co,pany 8td/The %ew India A**+rance Corporation/ The Oriental In*+rance Corporation and nited In*+rance In*+rance Co,pany 8td The ban0 today i* capitali?ed capitali?ed to the e6tent e6tent o- R*3B13 crore* crore* with p+blic holdin. at ;>1B The ban0$* re.i*tered o--ice i* at Ah,edabad and it* central o--ice i* at M+,bai The ban0 ha* wide networ0 o- ,ore than 7;F branch o--ice* and E6ten*ion Co+nter* The 'an0 ha* networ0 o- o2er 1>; ATM* pro2idin. 3:hr* a day ban0in. con2enience to it* c+*to,er* The ban0 wa* *et+p with capital o- R*11; crore/ with TI contrib+tin. R*1FF crore/ 8ICR*; crore and it* -o+r *+b*idiarie* 1;
contrib+tin. R* 1; crore each HDFC Ba!'5 H!#C 'an0 i* headG+artered in M+,bai The 'an0 at pre*ent ha* an
en2iable networ0 o- o2er :=; branche* *pread o2er 31B citie* acro** India All branche* are lin0ed on an online realti,e ba*i* C+*to,er* in o2er 13F location* are al*o *er2iced thro+.h Telephone 'an0in. The 'an0$* e6pan*ion plan* ta0e into acco+nt the need to ha2e a pre*en pre*ence ce in all ,ajor ,ajor ind+*t ind+*tria riall and co,,er co,,ercia ciall centre* centre* where it* it* corpor corporate ate c+*to,er* are located a* well a* the need to b+ild a *tron. retail c+*to,er ba*e -or both depo*it* and loan prod+ct* 'ein. a clearin.9*ettle,ent ban0 to 2ario+* leadin. *toc0 e6chan.e*/ the 'an0 ha* branche* in the centre* where the %SE9'SE ha2e a *tron. and acti2e ,e,ber ba*e The a+thori?ed capital o- H!#C 'an0 i* R*:;F crore 4R*:; billion5 The paid+p capital ca pital i* R*7F== crore 4R*7F= billion5 The H!#C @ro+p hold* 333 o- the ban0$* eG+ity and abo+t 1=; o- the eG+ity i* held by the A!S !epo*itory The 'an0 ha* ,ade *+b*tantial *+b*tantial e--ort* e--ort* and in2e*t,ent* in2e*t,ent* in acG+irin. the be*t technolo.y technolo.y a2ailable internationally/ to b+ild the in-ra*tr+ct+re -or a world cla** ban0
16 P$7.&% Se%t"r Ba!'* a State 'an0 'an0 o- India India and it* a**ocia a**ociate te ban0* called called the State State 'an0 @ro+p @ro+p b 3F nationali?ed ban0* c Re.ional Re.ional r+ral r+ral ban0* ban0* ,ainly ,ainly *pon*ored *pon*ored by by p+blic p+blic *ector *ector ban0* P$7.&% Se%t"r Ba!'* 8Nat&"!a.&9e# 7a!'*:5
1 State 'an0 o- India 4S'I5 3 State 'an0 o- 'i0aner D aip+r 7 State 'an0 o- Hyderabad : State 'an0 o- Indore ; State 'an0 o- My*ore > State 'an0 o- Patiala State 'an0 o- Sa+ra*htra B State 'an0 o- Tra2ancore = 'an0 o- India 1>
1F Canara 'an0 11 Central 'an0 o- India 13 Corporation ban0 17 Indian 'an0 1: Indian o2er*ea* ban0 1; Syndicate 'an0 1> CO 'an0 1 Allahabad 'an0 1B Andhra 'an0 1= 'an0 o- 'aroda 3F 'an0 o- Mahara*htra 31 !ena 'an0 33 Oriental 'an0 o- Co,,erce 37 P+njab D Sind 'an0 3: nion 'an0 o- India 3; nited 'an0 o- India 3> Vijaya 'an0 3 I!'I 'an0
1
Chapter -5 C"+pa!) Pr",&.e -1 O0er0&e; ", SBI EVOLUTION OF SBI
The ori.in ori.in o- the State State 'an0 o- India .oe* bac0 to the -ir*t -ir*t decade o- the nineteent nineteenth h cent+ry with the e*tabli*h,ent o- the 'an0 o- Calc+tta in Calc+tta on 3 +ne 1BF> Three year* later the ban0 recei2ed it* charter and wa* rede*i.ned a* the 'an0 o- 'en.al 43 an+ary 1BF=5 A +niG+e in*tit+tion/ it wa* the -ir*t joint*toc0 ban0 o- 'riti*h India *pon*ored by the @o2ern,ent o- 'en.al The 'an0 o- 'o,bay 41; April 1B:F5 and the 'an0 o- Madra* 41 +ly 1B:75 -ollowed the 'an0 o- 'en.al The*e three ban0* re,ained at the ape6 o- ,odern ban0in. in India till their a,al.a,ation a* the I,perial 'an0 oIndia on 3 an+ary 1=31 Pri,arily Pri,arily An.loIndian An.loIndian creation*/ the three pre*idency pre*idency ban0* ca,e into e6i*tence either a* a re*+lt re*+lt o- the co,p+l*ion* co,p+l*ion* o- i,perial i,perial -inance or by the -elt need* o- local E+ropean E+ropean co,,erce and were not i,po*ed -ro, o+t*ide in an arbitrary ,anner to ,oderni*e India<* econo,y Their e2ol+tion wa*/ howe2er/ *haped by idea* c+lled -ro, *i,ilar de2elop,ent* in E+rope and En.land/ and wa* in-l+enced by chan.e* occ+rrin. in the *tr+ct+re o- both the local tradin. en2iron,ent and tho*e in the relation* o- the Indian econo,y to the econo,y o- E+rope and the .lobal econo,ic -ra,ewor0
E*ta7.&*h+e!t
The e*tabli*h,ent o- the 'an0 o- 'en.al ,ar0ed the ad2ent o- li,ited liability/ joint *toc0 ban0in. in India So wa* the a**ociated a**ociated inno2ation inno2ation in ban0in./ ban0in./ 2i? the deci*ion to allow the 'an0 o- 'en.al to i**+e note*/ which wo+ld be accepted -or pay,ent o- p+blic re2en+e* within a re*tricted .eo.raphical area Thi* ri.ht o- note i**+e wa* 2ery 2al+able not only -or the 'an0 o- 'en.al b+t al*o it* two *iblin.*/ the 'an0* o- 'o,bay and Madr Madra* a* It ,eant ,eant an accr accret etio ion n to the the capi capita tall o- the the ban0 ban0*/ */ a capi capita tall on whic which h the the proprietor* did not ha2e to pay any intere*t The concept co ncept oo - depo*it ban0in. wa* al*o an inno2ation inno2ation beca+*e the practice practice o- acceptin. acceptin. ,oney -or *a-e0eepin. *a-e0eepin. 4and in *o,e ca*e*/
1B
e2en in2e*t,ent on behal- o- the client*5 by the indi.eno+* ban0er* had not *pread a* a .eneral habit in ,o*t part* o- India '+t/ -or a lon. ti,e/ and e*pecially +pto the ti,e that the three pre*idency ban0* had a ri.ht o- note i**+e/ ban0 note* and .o2ern,ent balance* ,ade +p the b+l0 o- the in2e*tible re*o+rce* o- the ban0*
The three ban0* were .o2erned by royal charter*/ which were re2i*ed -ro, ti,e to ti,e Each charter pro2ided -or a *hare capital/ -o+r-i-th o- which were pri2ately *+b*cribed and the re*t owned by the pro2incial .o2ern,ent The ,e,ber* o- the board o- director*/ which ,ana.ed the a--air* a--air* o- each ban0/ were ,o*tly proprietary proprietary director* director* repre*enti repre*entin. n. the the lar. lar.ee E+ E+ro rope pean an ,ana ,ana.i .in. n. a.en a.ency cy ho+ ho+*e *e** in Indi India a Th Thee re*t re*t were were .o2e .o2ern rn,e ,ent nt no,inee*/ in2ariably ci2il *er2ant*/ one o- who, wa* elected a* the pre*ident o- the board
B$*&!e**
The b+*ine** o- the ban0* wa* initially con-ined to di*co+ntin. o- bill* o- e6chan.e or other ne.otiable pri2ate *ec+ritie*/ 0eepin. ca*h acco+nt* and recei2in. depo*it* and i**+in. and circ+latin. ca*h note* 8oan* were re*tricted to R*one la0h and the period oacco,,odation con-ined to three ,onth* only The *ec+rity -or *+ch loan* wa* p+blic *ec+ritie* *ec+ritie*// co,,only co,,only called called Co,pany<* Co,pany<* Paper/ b+llion/ trea*+re/ trea*+re/ plate/ plate/ jewel*/ jewel*/ or .ood*
the three ban0*/ a* -ar a* the .o2ern,ent wa* concerned/ wa* to help the latter rai*e loan* -ro, ti,e to ti,e and al*o pro2ide a de.ree o- *tability to the price* o- .o2ern,ent *ec+ritie*
Ma<"r %ha!(e &! the %"!#&t&"!*
A ,ajor chan.e in the condition* o- operation o- the 'an0* o- 'en.al/ 'o,bay and Madra* occ+rred a-ter 1B>F &ith the pa**in. o- the Paper C+rrency Act o- 1B>1/ the ri.ht o- note i**+e o- the pre*idency ban0* wa* aboli*hed and the @o2ern,ent o- India a**+,ed -ro, 1 March 1B>3 the *ole power o- i**+in. paper c+rrency within 'riti*h India India The ta*0 o- ,ana.e,ent ,ana.e,ent and circ+latio circ+lation n o- the new c+rrency note* wa* con-erred on the pre*idency ban0* and the @o2ern,ent +ndertoo0 to tran*-er the Trea*+ry balance* to the ban0* at place* where the ban0* wo+ld open branche* %one o- the three ban0* had till then any branche* 4e6cept the *ole atte,pt and that too a *hortli2ed one by the 'an0 o- 'en.al at Mir?apore in 1B7=5 altho+.h the charter* had .i2en the, *+ch a+thority '+t a* *oon a* the three pre*idency band* were a**+red o- the -ree +*e o- .o2ern,ent Trea*+ry balance* at place* where they wo+ld open branche*/ they e,bar0ed on branch e6pan*ion at a rapid pace 'y 1B>/ the branche*/ a.encie* and *+b a.encie* o- the three pre*idency ban0* co2ered ,o*t o- the ,ajor part* and ,any o- the inland trade centre* in India &hile the 'an0 o- 'en.al had ei.hteen branche* incl+din. it* head o--ice/ *ea*onal branche* and *+b a.encie*/ the 'an0* o- 'o,bay and Madra* had -i-teen each The e&(ht 7a!'&!( *$7*&#&ar&e* are5
1State 'an0 o- 'i0aner and aip+r 4S''5 3State 'an0 o- Hyderabad 4S'H5 7State 'an0 o- India 4S'I5 :State 'an0 o- Indore 4S'IR5 ;State 'an0 o- My*ore 4S'M5 >State 'an0 o- Patiala 4S'P5 State 'an0 o- Sa+ra*htra 4S'S5 BState 'an0 o- Tra2ancore 4S'T5
3F
