A Report on Market Structure of Bank Ofindia

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A REPORT ON MARKET

STRUCTURE OF BANK

OFINDIA

A REPORT ON

MARKET STRUCTURE OF


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BANK OF INDIA

SUBMITTED TO:

PROF. SNIGDHA TRIPARTY

PREPARED BY:

Salani sah 12202151

Reetika Nanda-12202150

Pallabi Naha-12202141

Rashmi Singh-12202148

Stitapragya Rout-12202165

Piyush Jain-12202142

Prabhudatta Behera-12202143

SEC-CKIIT SCHOOL OF MANAGEMENT,BHUBNESHWAR

SUBMITTED ON -15.11.2012


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DECLARATION

We hereby declare that the project report titled "A Report on market structure of Bank of India" is our own work and has been carried out under the guidance of Prof.Snigdha Tripathy, KIIT School of Management , Bhubaneswar .

All necessary steps has been taken to keep this report flawless and we sincerely regretany unintended discrepancies in this report .

Thank You,

Members of Group- ,

Roll no- 12202151, 12202150, 12202148, 12202143,12202143,12202141

Date : 15.11.2012

Place : Bhubaneswar

ACKNOWLEDGEMENT


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EXECUTIVE SUMMARY

This report proposes to study the market structure of banking institution.

The findings of our report is solely based on the primary data collection method i.e.Direct personal interview, in which we have interviewed Mr Manoranjan Das, ZonalMarketing manager of Bank of India.

The scope of our survey was limited to the Zonal branch of Bank of India located in

Nayapalli , and several other banks such as Axis bank ,IDBI,HDFC, SBI, Syndicate bank ,Bhubneswar.

The data was collected through personal interaction with Mr Manoranjan Das, ZonalMarketing Manager of Bank of India, who gladly responded to all the question asked

by us. His responses were thoroughly analysed and the main findings of the study isthat, the market structure of banking institution is that of a Monopolistic market .

We conclude from our study that Banking institution are considered to be

Monopolistic .


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INTRODUCTION

1.1. HISTORY

Banking in India originated in the last decades first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1770; both arenow defunct. The oldest bank in existence in India is the State Bank of India, whichoriginated in the Bank of Calcutta in June 1806, which almost immediately becamethe Bank of Bengal. This was one of the three presidency banks, the other two beingthe Bank of Bombay and the Bank of Madras, all three of which were establishedunder charters from the British East India Company. For many years the Presidency

banks acted as quasi-central banks, as did their successors. The three banks merged in

1921 to form the Imperial Bank of India, which, upon India's independence, becamethe State Bank of India in 1955 .

Bank of India was founded on September 7, 1906 by a group of eminent businessmenfrom Mumbai. In July 1969 Bank of India was nationalized along with 13 other banks.

Beginning with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has madea rapid growth over the years. It has evolved into a mighty institution with a strongnational presence and sizable international operations. In business volume, Bank of

India occupies a premier position among the nationalized banks.Merchants in Calcutta established the Union Bank in 1839, but it failed in 1840 as aconsequence of the economic crisis of 1848-49. The Allahabad Bank, established in1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that issues stock and requires shareholders to be held liable for thecompany's debt) It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed,with some of its assets and liabilities being transferred to the Alliance Bank of Simla.

1.3. PURPOSE

This report attempts to laid down appropriate reasons for which the market structure of banking institution is said to be a monopolistic market-structure.

1.4. SCOPE

The primary data collection method used, in which we have interviewedMr Manoranjan Das, marketing Manager of Bank of India, Nayapalli (Zonal Office) to
http://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1http://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Calcuttahttp://en.wikipedia.org/wiki/Allahabad_Bankhttp://en.wikipedia.org/wiki/Alliance_Bank_of_Simlahttp://en.wikipedia.org/wiki/Alliance_Bank_of_Simlahttp://en.wikipedia.org/wiki/Allahabad_Bankhttp://en.wikipedia.org/wiki/Calcuttahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1


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collect relevant data. We also collected the data of several other banks such as Axis bank, IDBI,SBI,HDFC, Syndicate bank ,etc. The data collected were analysed tostudy the market-structure of banking institution.

1.5. LIMITATION

Time constraint. The study was confined to Bhubaneswar area.

1.6 REPORT ORGANIZATION

The introduction includes background of the company, purpose of the study, source of the survey and limitations of the study. Further, the report convey about the aim andscope of the study. To fulfil the aim of the study, data was collected through Direct

personal interview method(primary Method). Then, the data has been analyzedthoroughly to arrive at a conclusion. Methods of analysis include data both primaryand secondary data analysis and conclusion is based on data analysis. The report thenmentions about the findings, conclusion and recommendations.

OBJECTIVE AND SCOPE OF STUDY

The objective of our study are as follows : To know the Market structure of banking institution. To analyse the characteristics of the market prevailing in relation to the banking

institution

Scope of studyThe area of our survey is limited to the Zonal head office of Bank Of India Nayapalli,Bhubaneswar , Odisha .We interviewed Mr Manoranjan Das , Zonal MarketingManager of Bank Of India, to get relevant data about the market structure of a bankinginstitution.


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REVIEW OF LITERATURE

In economics, the different ways to categorize the Market structure are:

1. numbers and size of buyers and sellers2. product differentation3. conditions to entry and exit

The market can be of different types:

1. Monopoly market

2. Perfect competitive market3. Monopolistic market4. Oligopoly market

MONOPOLY MARKET-

The characteristics of a monopoly market areas follows:

i. sole supplier of a productii. strong entry barrier

iii. seller is the price-maker iv. information symmetry does not exist

PERFECT COMPETETION-

The features of a perfectly competitive market are:

i. large numbers of buyers and sellersii. no entry barriers

iii. homogeneous productiv. price is determined by demand and supplyv. existence of information symmetry

MONOPOLISTIC MARKET-


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A market is said to be a monopolistic market, if there are:

i. relatively large number of buyers and sellersii. selling cost

iii. Heterogeneous productiv. free entry and exitv. independent decision about price and output

OLIGOPOLY MARKET-

The distinct feature of this market are as follows:

i. few sellersii. product can be homogeneous(pure oligopoly) or heterogeneous

product(differentiated oligopoly)iii. independent decision in relation to price and outputiv. barriers to entry


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METHODOLOGY AND RESEARCH DESIGN

Primary data sources were used to gather information about the Market Structure of banking institution. In our study the research instrument which was used was theDirect Personal Interview method. The survey area was confined to the zonal office of Bank Of India, Bhubaneswar .We interviewed Mr Manoranjan Das to collect relevantdata about the market structure of Bank Of India. We also collected the data of severalother banks such as Axis bank, IDBI,SBI,HDFC, Syndicate bank ,etc. Samplingmethod was used to conduct the study. The data collected were analysed Data socollected was then analysed using various statistical tools such as pie-chart , bar-graphs ,etc. The findings of our study is that , the banking institutions possess the

characteristics of a monopolistic market as there are:

relatively large numbers of buyers and sellers heterogeneous product selling cost and complete dissemination of market free entry and exit

Sampling plan :a. Sampling method: Stratified Random Sampling

b. Sample size: 5c. Sample unit: Banks in Bhubaneswar

Sources of data :a. Primary data : Direct personal interview

b. Secondary data: Internet , articles, journals


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DATA ANALYSIS AND INTERPRETATION

1. Percentage share of bank branches in Bhubaneswar

Interpretation:

24%

16%

14%

16%

30%

SHARE OF BRANCHES

BANK OF INDIA

AXIS BANK

IDBI

HDFC

SBI


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SBI has the highest percentage share at Bhubaneswar in terms of total number of branches with IDBI being the lowest.

2. Barrier to Entry in the market

Interpretation:

Overall barrier to entry in the market is high in case of Banking Sector. It is higher incase of PSUs in comparison with Private Sector Banks.

0% 5% 10% 15% 20% 25% 30% 35% 40%

HIGH

MEDIUM

LOW

25%

40%

35%

ENTRY BARRIER

ENTRY BARRIER


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3. Total advertisement expenses of different Banks

Interpretation:

The highest amount spent on advertisement is by SBI Bank followed by HDFC Bank,Axis Bank and Bank of India respectively.

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

18000000

20000000

BANK OFINDIA

SBI HDFC AXIS BANK

3000000

20000000

80000007000000

ADVERTISEMENT EXPENSES (Rs)

ADVERTISEMENT EXPENSES (Rs)


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CONCLUSION

RECOMMENDATIONS

BIBLIOGRAPHY

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A Report on Market Structure of Bank Ofindia