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8/14/2019 Interim MT II
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Interim report
On
Management Thesis II
“ A Study on customer satisfaction towards retail Banking services of
IDBI bank in – Hubli city ”
Submitted by
Santosh K
Enrollment No - 8NBHU050
University ID No- 080251673
ICFAI NATIONAL COLLEGE
HUBLI
Under taken at
Hubli
Under the guidance of
Prof. Praveen Joshi
(Faculty Supervisor)
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A cknowledgement
“Experience is the best Teacher”. But experience is fulfilled only when there is
hard work and also good support and cooperation offered by various people that I have
been able to compile in this report. It is always wise to appreciate such people who have
helped me to complete this report successfully.
I express my deep sense of gratitude and indebtedness to My
Institute ICFAI National College which have provided me an opportunity to fulfill my
objectives.
I extend my sincere thanks to faculty guide Mr. Praveen Joshi for enabling me to facethe challenges ahead.
Thanking You
Santosh K
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Contents
Introduction
Industry Profile
Objectives
Limitations
Progress report
Literature Review
Methodology
Reference
Appendices
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Introduction of the Study
A bank is a financial institution licensed by a government. Its primary
activities include borrowing and lending money. Many other financial activities were allowed over
time. For example banks are important players in financial markets and offer financial services such
as investment funds.
Typical mass-market banking in which individual customers use local
branches of larger commercial banks. Services offered include savings and checking accounts,
mortgages, personal loans, debit/credit cards and certificates of deposit (CDs).
Retail banking aims to be the one-stop shop for as many financial services as
possible on behalf of retail clients. Some retail banks have even made a push into investment
services such as wealth management, brokerage accounts, private banking and retirement
planning. While some of these ancillary services are outsourced to third parties (often for regulatory
reasons), they often intertwine with core retail banking accounts like checking and savings to allow
for easier transfers and maintenance.
Banks in India can be categorized into non-scheduled banks and scheduled banks.
Scheduled banks constitute of commercial banks and co-operative banks. There are about 67,000
branches of Scheduled banks spread across India. During the first phase of financial reforms, there
was a nationalization of 14 major banks in 1969. This crucial step led to a shift from Class banking
to Mass banking. Since then the growth of the banking industry in India has been a continuous
process.
As far as the present scenario is concerned the banking industry is in a
transition phase. The Public Sector Banks (PSBs), which are the foundation of the Indian Banking
system account for more than 78 per cent of total banking industry assets. Unfortunately they are
burdened with excessive Non Performing assets (NPAs), massive manpower and lack of modern
technology.
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On the other hand the Private Sector Banks in India is witnessing immense progress. They are
leaders in Internet banking, mobile banking, phone banking, ATMs. On the other hand the Public
Sector Banks are still facing the problem of unhappy employees. There has been a decrease of 20
percent in the employee strength of the private sector in the wake of the Voluntary Retirement
Schemes (VRS). As far as foreign banks are concerned they are likely to succeed in India.
RETAILING: It has been a decade – and –a half since India embarked on an ambitious economic
liberalization programmed. Over the last five years, many of its benefits have manifested themselves
and one of the areas where growth is clearly reflected is retailing. The promotional strategies
adopted by retailer include different forms of communication to attract customers to the retail outlet.
This may be through Advertising, Sales promotion, Public relations, or Personal selling.
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Industry Profile
The Industrial Development Bank of India Limited commonly known by its
acronym IDBI is one of India's leading public sector banks and 4th largest Bank in overall ratings.
RBI categorised IDBI as an "other public sector bank". It was established in 1964 by an Act of
Parliament to provide credit and other facilities for the development of the fledgling Indian industry.
It is currently the tenth largest development bank in the world in terms of reach with 1162 ATMs,
702 branches and 468 centers.[1] Some of the institutions built by IDBI are the National Stock
Exchange of India (NSE), the National Securities Depository Services Ltd (NSDL), the Stock
Holding Corporation of India (SHCIL), and IDBI BANK, which today is owned by the Indian
Government, though for a brief period it was a private scheduled bank
Recent developments :
To meet emerging challenges and to keep up with reforms in financial sector, IDBI has taken steps
to reshape its role from a development finance institution to a commercial institution. With the
Industrial Development Bank (Transfer of Undertaking and Repeal) Act , 2003, IDBI attained the
status of a limited company viz. "Industrial Development Bank of India Limited" (IDBIL).
Subsequently, the Reserve Bank of India (RBI) issued the requisite notification on September 30,
2004 incorporating IDBI as a 'scheduled bank' under the RBI Act , 1934. Consequently, IDBI,
formally entered the portals of banking business as IDBIL from October 1, 2004.
The commercial banking arm, IDBI BANK, was merged into IDBI. Although IDBI Bank is owned
by the Government of India, there is a popular misconception that IDBI bank is a private entity.
In March 2008, IDBI Bank entered into a joint venture with Federal Bank and Fortis Insurance
International to form IDBI Fortis Life Insurance, of which IDBI Bank owns 48 percent. The
company ended the year with over 300 Cr in premiums as on 31st March 2009.
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Industrial Development Bank of India (IDBI)
The Industrial Development Bank of India (IDBI) was established on July 1,
1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 16
February 1976, the ownership of IDBI was transferred to the Government of India and it was made
the principal financial institution for coordinating the activities of institutions engaged in financing,
promoting and developing industry in the country. Although Government shareholding in the Bank
came down below 100% following IDBI’s public issue in July 1995, the former continues to be the
major shareholder (current shareholding: 52.3%). During the four decades of its existence, IDBI has
been instrumental not only in establishing a well-developed, diversified and efficient industrial and
institutional structure but also adding a qualitative dimension to the process of industrial
development in the country. IDBI has played a pioneering role in fulfilling its mission of promoting
industrial growth through financing of medium and long-term projects, in consonance with national
plans and priorities. Over the years,
IDBI has enlarged its basket of products and services, covering almost the
entire spectrum of industrial activities, including manufacturing and services. IDBI provides
financial assistance, both in rupee and foreign currencies, for green-field projects as also for
expansion, modernisation and diversification purposes. In the wake of financial sector reforms
unveiled by the government since 1992, IDBI evolved an array of fund and fee-based services with a
view to providing an integrated solution to meet the entire demand of financial and corporate
advisory requirements of its clients. IDBI also provides indirect financial assistance by way of
refinancing of loans extended by State-level financial institutions and banks and by way of
rediscounting of bills of exchange arising out of sale of indigenous machinery on deferred payment
terms.
IDBI has played a pioneering role, particularly in the pre-reform era (1964-91),in catalyzing broad
based industrial development in the country in keeping with its Government-ordained ‘development
banking’ charter. In pursuance of this mandate, IDBI’s activities transcended the confines of pure
long-term lending to industry and encompassed, among others, balanced industrial growth through
development of backward areas, modernisation of specific industries, employment generation,
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entrepreneurship development along with support services for creating a deep and vibrant domestic
capital market, including development of apposite institutional framework.
Narasimam committee recommends that IDBI should give up its direct financing functions and
concentrate only in promotional and refinancing role. But this recommendation was rejected by the
government. Latter RBI constituted a committee under the chairmanship of S.H.Khan to examine
the concept of development financing in the changed global challenges. This committee is the first
to recommend the concept of universal banking. The committee wanted to the development financial
institution to diversify its activity. It recommended to harmonise the role of development financing
and banking activities by getting away from the conventional distinction between commercial
banking and developmental banking.
In September 2003, IDBI diversified its business domain further by acquiring the entire
shareholding of Tata Finance Limited in Tata Home finance Ltd., signaling IDBI’s foray into the
retail finance sector. The fully-owned housing finance subsidiary has since been renamed ‘IDBI
Home finance Limited’. In view of the signal changes in the operating environment, following
initiation of reforms since the early nineties,
Government of India has decided to transform IDBI into a commercial bank without eschewing its
secular development finance obligations. The migration to the new business model of commercial banking, with its gateway to low-cost current, savings bank deposits, would help overcome most of
the limitations of the current business model of development finance while simultaneously enabling
it to diversify its client/ asset base. Towards this end, the IDB (Transfer of Undertaking and Repeal)
Act 2003 was passed by Parliament in December 2003. The Act provides for repeal of IDBI Act,
corporatisation of IDBI (with majority Government holding; current share: 58.47%) and
transformation into a commercial bank.
The provisions of the Act have come into force from July 2, 2004 in terms of a Government
Notification to this effect. The Notification facilitated formation, incorporation and registration of
Industrial Development Bank of India Ltd. as a company under the Companies Act , 1956 and a
deemed Banking Company under the Banking Regulation Act 1949 and helped in obtaining requisite
regulatory and statutory clearances, including those from RBI. IDBI would commence banking
business in accordance with the provisions of the new Act in addition to the business being
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transacted under IDBI Act , 1964 from October 1, 2004, the ‘Appointed Date’ notified by the Central
Government. IDBI has firmed up the infrastructure, technology platform and reorientation of its
human capital to achieve a smooth transition.
IDBI Bank, with which the parent IDBI was merged, was a vibrant new generation Bank. The Pvt
Bank was the fastest growing banking company in India. The bank was pioneer in adapting to policy
of first mover in tier 2 cities. The Bank also had the least NPA and the highest productivity per
employee in the banking industry.
On July 29, 2004, the Board of Directors of IDBI and IDBI Bank accorded in principle approval to
the merger of IDBI Bank with the Industrial Development Bank of India Ltd. to be formed
incorporated under the Companies Act , 1956 pursuant to the IDB (Transfer of Undertaking and
Repeal) Act , 2003 (53 of 2003), subject to the approval of shareholders and other regulatory and
statutory approvals. A mutually gainful proposition with positive implications for all stakeholders
and clients, the merger process is expected to be completed during the current financial year ending
March 31, 2005.
The immediate fall out of the merger of IDBI and idbi bank was the exit of employees of idbi bank.
The cultures in the two organizations have taken its toll. The IDBI BANK now is in a growing fold.
With its retail banking arm expanding further after the merger of United western Bank.
IDBI would continue to provide the extant products and services as part of its development finance
role even after its conversion into a banking company. In addition, the new entity would also
provide an array of wholesale and retail banking products, designed to suit the specific needs cash
flow requirements of corporates and individuals. In particular, IDBI would leverage the strong
corporate relationships built up over the years to offer customised and total financial solutions for all
corporate business needs, single-window appraisal for term loans and working capital finance,
strategic advisory and “hand-holding” support at the implementation phase of projects, among
others.
IDBI’s transformation into a commercial bank would provide a gateway to low-cost deposits like
Current and Savings Bank Deposits. This would have a positive impact on the Bank’s overall cost of
funds and facilitate lending at more competitive rates to its clients. The new entity would offer
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various retail products, leveraging upon its existing relationship with retail investors under its
existing Suvidha Flexi-bond schemes. In the emerging scenario, the new IDBI hopes to realize its
mission of positioning itself as a one stop super-shop and most preferred brand for providing total
financial and banking solutions to corporates and individuals, capitalising on its intimate knowledge
of the Indian industry and client requirements and large retail base on the liability side.
IDBI upholds the highest standards of corporate governance in its operations. The responsibility for
maintaining these high standards of governance lies with its Board of Directors. Two Committees of
the Board viz. the Executive Committee and the Audit Committee are adequately empowered to
monitor implementation of good corporate governance practices and making necessary disclosures
within the framework of legal provisions and banking conventions.
Objectives of the studies
• To study on the Customer Satisfaction level on retail banking
• To know the technical advancement benefits for customers.
• To understand the operations and modalities of Retail banking
• To study on the Impact of the Banking Crisis and the Flight to Quality
• To study and analyze the concept of Customer Relationship Management of banks
in general.
• To predict the future position of Retail banking in India
RETAIL BANKING-NEED:
Poor industrial production due to lack of demand has resulted in poor credit off take. Banks cannot
rely on big corporate. As there is regular rise in deposits, banks are flushed with funds. Banks do not
want to take risk by financing second rung manufacturers in recession. With narrowing investment
opportunities and poor credit off take, banks turn towards retail banking, which presents attractive
opportunity with lesser risk and reasonable return. Growing consumerism in India also encourages
retail banking.
The domain of retail banking market has tremendous growth potential for banks and finance
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companies, as at present it is largely untapped. The penetration level is 2.5 to 3%. And this is in a
scenario when the requirements of the consumers are growing. In the past, people never believed in
buying consumer goods on credit. But today the attitude is changing. The demand for consumer
products has increased. Today, about 70% of consumer goods purchased are through finance
schemes/loans as against 40% about five to six years ago.
In retailing of deposits also banks have better scope now. The stock markets and real estate market
are not performing to the expectations of the investors. To tap this market, banks should come out
with a variety of new deposit products.
Due to recession and industrial slowdown, many of the corporate have either shelved or postponed
their development plans. A number of corporate borrowers are sidetracking banks and raising money
through commercial paper and the debt market. These are not only cheaper than bank credit but at
times they succeed in raising money at rates below bank rate. To overcome these problems banks
have formulated strategies to go for retail banking as a major thrust area.
NATURE OF THE STUDY
“Retail banking is typical mass-market banking where individual customers use local
branches of larger commercial banks. Services offered include: savings and checking accounts,
mortgages, personal loans, debit cards, credit cards, and so”
The Retail Banking environment today is changing fast .The changing customer
demographics demands to create a differentiated application based on scalable technology, improved
service and banking convenience. Higher penetration of technology and increase in global literacy
levels has set up the expectations of the customer higher than never before. Increasing use of modern
technology has further enhanced reach and accessibility.
The market today gives us a challenge to provide multiple and innovative contemporary
services to the customer through a consolidated window as so to ensure that the bank’s customer
gets “Uniformity and Consistency” of service delivery across time and at every touch point across
all channels. The pace of innovation is accelerating and security threat has become prime of all
electronic transactions. High cost structure rendering mass-market servicing is prohibitively
expensive.
Present day tech-savvy bankers are now more looking at reduction in their operating costs
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by adopting scalable and secure technology thereby reducing the response time to their customers so
as to improve their client base and economies of scale.
The solution lies to market demands and challenges lies in innovation of new offering with
minimum dependence on branches ' a multi-channel bank and to eliminate the disadvantage of an
inadequate branch network. Generation of leads to cross sell and creating additional revenues with
outmost customer satisfaction has become focal point worldwide for the success of a Bank.
RESEARCH OBJECTIVE
Top of mind awareness of consumers for banks offering various retail
products.
Factors influencing their purchase decision.
To study the comparative influence of various mediums of advertisements in
creating awareness amongst the consumers.
To find the immediate competitors in the minds of consumer for every retail
product.
Key Players Analyzed
This section covers the key facts about the major players (including Public, Private, and Foreign
sector) in the Indian Banking Industry, including
• Bank of Baroda,
• State Bank of India,
• Canara Bank,
• Punjab National Bank,
• HDFC Bank,
• ICICI Bank,
• Kotak Mahindra Bank,
• Citibank,
• Standard Chartered Bank,
• HSBC Bank,
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• ABN AMRO Bank, and
EXPECTED OUTCOMES FOR THE PROPOSED STUDY:This study would enrich my knowledge to look into the modalities of operations of
Key products analyzed in this report include:
Indian retail credit scenario
Housing finance
Auto finance
Consumer Durable loan
educational Loan
Other personal loans
Credit Cards &
Banc assurance.
THE STUDY WOULD FURTHER ENABLE ME TO LEARN:
On line service provided by banks
The level of awareness about various products of banks
The satisfactory levels of existing customers
The location advantages to customer
These are the some of the expected outcomes out of these over-all research programs i will
come to that.
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Problems faced in Retail Banking:
• Retail Banking has all it’s attendant risks. It is highly sensitive .Banks got to move cautiously. It is
easy to enter, but difficult to get out. A systematic and a calculated approach is the pre-requisite for
success in the long run.
• Retail Banking is being introduced with the concept of serving customer with better and innovative
products with the latest technology and easy availability. It becomes so popular and widely
acceptable that more and more customers had started to use it. Now it becomes a mass product.
Customer database have tremendously increased and it becomes difficult to manage them.
• To match the customer inflows and current customer requirements as well as service standards,
banks have to set up more branches, distribution channels and new trained staff as well as
improvement in back office operations also in very near future. This itself a time bounded problem
and banks have to do it as early as possible.
• Today’s competitive market customer has more than one options for his retail banking needs.
Every bank is providing more or less similar kind of products. So an unsatisfied customer can easily
switch over to another competitor’s bank. So banks need to be very careful in handling the
customers. They have to continually improve their service standards.
• Retail Banking is so wide accepted by the customer as well as very aggressively promoted by the
bankers that if the bankers do not take adequate care in distributing and recovering advances, there
are chances of increasing in NPAs in coming feature. And that would be an alarming situation.
PROGRESS REPORT:
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Indian retail banking sector which mainly depends upon transactions directly with
consumers savings and lending, registered a decline in share of 5.02 per cent during the first quarter
of FY ’10 as compared to the corresponding period last year as per analyses of thirty public or
private Indian banks by the Assocham Financial Pulse.
The Retail Banking in India covers segments like current account, saving account, housing
loan, auto loan, personal loan, education loan, consumer durable loan, credit card and debit card etc.
The share of retail banking in total income stood at 41.06 per cent during Q1 FY ’10 and was lower
than the share of 46.08 per cent in the corresponding period last year. The total income of banking
sector increased about 24.3 per cent during Q1 FY ’10, whereas the income from retail banking
registered a growth of 6.03 per cent during the period.
Due to the global meltdown, Indian government took major steps in monitory policy and cut
the banking interest rate for lending like housing and auto loans which impacted the revenue of
Indian retail banking segment. Other reason behind the decline in retail revenue may be due to
higher collateral charged by the banks for retail loans.The analyses of fifteen private and fifteen
public banks show that the private banks are performing better than the public banks in terms of
their revenue from retail segment. The private and public banks have registered about 54.27 per cent
and 35.47 per cent share in retail banking during Q1 FY ’10 respectively.
In the context of banking sector, the public sector banks registered a growth of 28.96 per
cent in total income and 9.92 per cent in retail banking during the first quarter of FY ’10. While theshare of retail banking in public banks declined 6.14 per cent during the period from 41.61 per cent
in Q1 FY ’09 to 35.47 per cent in Q1 FY ’10. However the private banks registered only 13.52 per
cent growth in total income during the period and show a minimal decline of 0.16 per cent in retail
banking. The share of retail banking in private banks declined by 7.44 percentage points during the
period from 61.71 per cent in Q1 FY ’09 to 54.27 per cent in Q1 FY ’10.
Public Bank :
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• The analyses of fifteen public banks shows that State Bank of Hyderabad recorded a major
share in retail banking segment from its total income about 81.84 per cent followed by
Andhra Bank with 42.14 per cent, State Bank of India with 39.81 per cent and Indian Bank
with 38.01 per cent.
• State Bank of Hyderabad registered a major share in retail banking from its total income
during Q1 FY ‘10. The total income of the bank stood at Rs. 1724.41 crore during the
period, out of which Rs. 1448.94 crore came from the retail banking. The bank has
involved about 81.84 per cent in retail banking segment during Q1 FY ’10 registered a
minimal decline in share of 2.03 per cent from the last year same period.
• Andhra Bank registered about 42.14 per cent share in retail banking from its total income
during the Q1 FY ’10. The total income of the bank during the period stood at Rs. 1742.70
crore and the revenue from retail banking was Rs. 734.44 crore, the bank registered 1.17 per
cent decline in share of retail banking as compared to the last year same period.
• The major wholesale and retail banking operator, State Bank of India (SBI) shows 39.81 per
cent share in the retail banking segment from its total income during Q1 FY ’10. The bank
registered a major decline in share of retail segment about 6.23 per cent as compared to the
same period last year. The total income of the bank during the period stood at Rs. 21041.51
crore and the revenue from retail banking was about Rs. 8377.09 crore.
• Indian Bank had a 38.01 per cent share in retail banking from its total income during Q1 FY
’10. The total income of the bank during the period stood at Rs. 2230.39 crore and revenue
from retail banking was Rs. 847.84 crore. The bank registered a minimal decline of 0.98 per
cent in share as compared to the last year same period.
• Other banks which present major share in retail banking segment from their total income
were UCO Bank (37.42 per cent), Central Bank of India (34.45 per cent), Canara Bank
(33.42 per cent) and Union bank of India (31.36 per cent).
•
The banks which registered decline in share of retail banking during Q1 FY ’10 as comparedto the same period last year were Oriental Bank of commerce (33.96 per cent), Allahabad
Bank (10.54 per cent), Corporation Bank (7.81 per cent), Bank of India (7.71 per cent),
Indian Overseas Bank (6.64 per cent) and Bank of Baroda (5.88 per cent).
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Private Bank :
• In the context of fifteen private banks, Ing Vysya Bank Limited shows a major share (80.20
per cent) of retail banking in its total income, followed by Kotak Mahindra Bank Limited
(75.36 per cent), HDFC Bank of India (74.82 per cent) and ICICI Bank Limited (53.52 per
cent).
• Ing Vysya Bank Limited recorded a major share in retail banking from its total income
during Q1 FY ‘10. The total income of the bank stood at Rs. 742.55 crore during the
period, out of which Rs. 595.73 crore came from the retail banking. The bank earned
about 80.2 per cent revenue from retail banking segment during Q1 FY ’10 however
registered a minimal decline in share of 2.22 per cent from the last year same period.
• Kotak Mahindra Bank Limited had a share of 75.36 per cent of retail banking in its total
income during the Q1 FY ’10. The total income of the bank during the period stood atRs.894.23 crore and the revenue from retail banking was Rs. 673.91 crore, the bank
Registered 3.52 per cent decline in share of retail banking as compared to the same
period last year.
• HDFC bank recorded about 74.82 per cent share in retail banking from its total income
during the Q1 FY ’10. The total income of the bank during the period stood at Rs.
5126.75 crore and the revenue from retail banking was Rs. 3843.34 crore, the bank
registered 2.83 per cent decline in share of retail banking as compared to the same period
last year.The major private bank which involved in wholesale and retail banking
operations, State
• ICICI Bank Limited shows 53.52 per cent share in the retail banking segment from its total
income during Q1 FY ’10. The bank registered a major decline in share of retail segment
about 10.936 per cent as compared to the last year same period. The total income of thebank
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during the period stood at Rs. 9223.32 crore and the revenue comes from retail banking was
about Rs. 4936.18 crore. Development Credit Bank Limited recorded 52.26 per cent share in
retail banking from its total income during Q1 FY ’10. The total income of the bank during
the period stood at Rs. 147.08 crore and revenue from retail banking was Rs. 76.85 crore,
registering a 7.52 per cent growth in share as compared to the same period last year.
• Other banks which recorded major share in retail banking segment from their total income
were Axis Bank (47.16 per cent), South Indian Bank (46.92 per cent), J&K Bank (45.90 per
cent), IDBI Bank (43.45 per cent) and The Bank of Rajasthan Limited (22.91 per cent). The
banks which registered decline in share of retail banking during Q1 FY ’10 as compared to
the same period last year were The Federal Bank Limited (20.07 per cent), IndusInd Bank
(16.22 per cent), Dhanalakshmi Bank (15.89 per cent) and Karnataka Bank ( 13.29 per cent),
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LITERATURE REVIEW
Background:
Our perception is an approximation of reality. Our brain attempts to make sense out of the
stimuli to which we are exposed. This works well when we are about to perceive familiar facts.
However, our perception is sometimes “off” when we are not clear about concepts. Perception is a
process by which an individual select, organize & Interpret stimuli in a meaningful picture of the
world Also, we can describe as “how we see the world around us” Perception is the process of selecting, organizing, & Interpreting or attaching meaning to events happening in environment
The Concept of Perception
Perception is one of the objects studied by the science of consumer behaviour. Analyzing the
works of scientists studying consumer behaviour, it is possible to make a conclusion that perception
is presented as one of personal factors, determining consumer behaviour. Personal factors mean the
closest environment of a human, including everything what is inside the person, his head and soul,
characterizing him as a personality. Using his sensory receptors and being influenced by externalfactors, the person receives information, accepts and adapts it, forms his personal attitude, opinion,
and motive, which can be defined as factors that will influence his further activity and behaviour.
Perception within this context is considered as one of the principal personal factors, conditioning the
nature and direction of remaining variables.
Customer Perception
Customer perception is an important component of our relationship with our customers.
Customer satisfaction is a mental state which results from the customer’s comparison of expectations prior to a purchase with performance perceptions after a purchase. A customer may
make such comparisons for each part of an offer called ‘‘domain-specific satisfaction’’ or for the
offer in total called ‘‘global satisfaction’’.
Moreover, this mental state, which we view as a cognitive judgment, is conceived of as
falling somewhere on a bipolar continuum bounded at the lower end by a low level of satisfaction
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where expectations exceed performance perceptions and at the higher end by a high level of
satisfaction where performance perceptions exceed expectations.
Customer Perception on Service:
These characteristics of service also make service unique and different from goods as
Described below
1. Intangibility. Unlike manufactured goods that are tangible, a service is intangible. The
Products from service are purely a performance. The consumer cannot see, taste, smell, hear, feel or
touch the product before it purchased
2. Heterogeneity. A service is difficult to produce consistently and exactly over time. Service
performance varies from producer to producer, from customer to customer, and from time to time.
This characteristic of service makes it difficult to standardize the quality of the service
Inseparability. In service industries, usually the producer performs the service at the time the
consumption of the service takes place. Therefore, it is difficult for the producer to hide mistakes or
quality shortfalls of the service. In comparison the goods producers, have a buffer between
production and customers’ consumption
4. Perishability. Unlike manufactured goods, services cannot be stored for later consumption. This
makes it impossible to have a quality check before the producers send it to the customers. The
service providers then only have one path, to provide service right the first time and every time.
5. Non-returnable. A service is not returnable, unlike products. On the other hand, in many
services, customers maybe fully refunded if the service is not satisfactory.
6. Needs-match uncertainty. Service attributes are more uncertain than the product. This
Yield to higher variance of making a match between perceived needs and service is greater than
perceived need and product match.
7. Interpersonal. Service tends to be more interpersonal than products. For example, compare
buying a vacuum cleaner to contracting for the cleaning of a carpet. While customers will judge the
quality of the vacuum cleaner by how clean the carpet is, customers will tend to judge the quality of the carpet cleaning service on both the appearance of the carpet and the attitude of the technician.
8. Personal. Customers often view services to be more personal than products. For example, a
customer may perceive the service of her car (balancing the tires) as more personal than purchasing
new tires. If the same customer has problems later with the tires, the defect in the tires would be less
personal than if the tires were never balanced.
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9. Psychic. Even though the food at a restaurant might not be as delicious as other famous
restaurants., the customers will recognize the restaurant and tend to be satisfactions if the service of
the restaurant is excellent. Another example is when a flight is delayed, and people tend to be upset
with this poor service . However, if the gate agent is very helpful and friendly, people tend to still be
pleased with the service (Groth, & Dye,1999). Like other industries, banking and financial services
companies have reached the conclusion that the relationship with the customer should not
(metaphorically and literally) end at the bank door. Customer access after the transaction adds value
to the transaction.
Features of Banking:
1. Dealing in Money:
The banks accept deposits from the public and advancing them as loans to the needy people. The
deposits may be of different types- Current, Fixed, Savings, etc. accounts. The deposits are accepted
on various terms and conditions.
2. Deposits must be withdrawable:
The deposits (other than fixed deposits) made by the public can be withdrawable by cheques, draft
or otherwise, i.e., the bank issue and pay cheque. The deposits are usually withdrawable on demand.
3. Dealing with Credit:
The banks are the institutions that can create Credit i.e., creation of additional money for lending.
Thus, ‘Creation of Credit’ is the unique feature of banking.
4. Commercial in Nature:
Since all the banking functions are carried on with the aim of making profit, it is regarded as a
commercial institution.
5. Nature of Agent:
Besides the basic functions of accepting deposit and lending money as loans, banks possess the
character of an agent because of its various agency services.
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Methodology
RESEARCH METHODOLOGY
An exploratory research was conducted in order the study the consumer perception about
various banks offering retail products and the banks they opt for.
Sample Size
A random sample of 100 were administered with the questionnaire and responses collected.
Research Area
The research was carried out at Hyderabad.
Respondents’ profile
Data was collected from respondents across all age and income groups. Data relating to age was
collected. This segmentation helped us to gain insights into the perception and preferences across
all age groups. Based on the nature of retail banking products age groups were identified and
classified as follows:
Majority of the respondents
belonged to the age group of 25 – 40years.
The reason associated with it is
that this group is the highest user of
retail offerings.
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Age Profile
15%
45%
23%
17%18-25 yrs
25-40 yrs
40-55 yrs
55 yrs & above
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Respondents earning Rs. 8000-
15000 constitute the major chunk of
the respondents using retail product.
This income group qualifies
almost all eligibility criteria of retail
offerings.
Retail products being also
designed for students and retired
people, they were considered for the
survey.
Salaried and businessmen being
the major users of retail users of retail
products.
Data Collection Tools
23
Proffessional Profil
7
29
15
9
Students
Salaried
Businessmen
Retired
Income Profile
15%
15%
27%
30%
13%Non- earning
<5000
5000-8000
8000-15000
>15000
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Data was collected using Questionnaires. The Questionnaire consisted of suitable
combination of Rating Scale, Ranking Scale and open ended Questions in the level of
importance.
An in depth interview was also conducted while administering the questionnaire.
Sources of Data
Questionnaires were administered to people with experience of any retail offering,
currently using or used in the past.
Secondary Sources: Data was collected from the various websites from the internet as
well as Journals of Marketing.
Market research:-
Market research covers the field of problem, technique and other aspects of marketing
and related decision making and implementation.
Market Analysis:-
Market Analysis is very useful in plotting questionnaire to test comprehension
positioning charts the memory factors etc. It is useful for finding out real market position in order to
change the existing strategies whenever necessary. The information gathered from different source is
processed and analyzed with of computers to draw conclusion to be used by managers .
Area of Study:-
The study is conducted within the limit of Hubli city.
Type of research design:-
The research design adopted in this study is exploratory research design, exploratory
research design includes survey and facts finding enquiries of different kinds research design is used
to describe the state of affairs as it exists at present.
Research Instrument used:-
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A structured design Questionnaire is used for surveying the consumers both open
ended and closed ended questions, Binary questions and checklist questions are included.
Open and close ended questionnaires:-
A questionnaire is set of questions to be asked from respondent in an interview,
with appropriate instructions indicating which questions are to be asked and in what order
questionnaire are used in various fields of research and experimental design. A questionnaire serves
many functions-enables data collection from respondent, lend a structure to interview, provide a
standard means for writing down answer and help in processing collected data.
In questionnaire I used response format, it is required by questions depends on the
nature of the research. The format deals with issue relating to the degree of freedom that should be
given to respondent while answering a question. There are two types in this format
1) Open ended questions
2) Closed ended questions
Open ended questions:- It is a type of questions that requires participants to respond in his/her
pre-defined response choice.
Closed ended questions: - It refers to those questions which restricts the interviewee’s answer
to pre-defined response options. In closed ended question I used binary and checklist questions.
Binary questions: - This also knows dichotomous question as they permit only two possible
answers. The respondent has to choose one of the two permissible answers.
Sampling Size - Sampling size is 100.
Sampling Unit - Hubli
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Reference
Marketing Books.
Bank Brochures.
Information Websites.
www.reportlinker.com
www.idbi.com
http://www.icmrindia.org
www.researchandmarkets.com
www.google.com
www.marketresarch.com
Appendices
MBA - Master of Business Administration
MCA – Master of Computer Application
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M Sc. – Master of Science