Study Of Services Provided By Public And Private Sector Banks Finance Essay

INTRODUCTION

Banking in India originated in the last decades of the 18th century. The oldest bank in India is the State Bank of India, a government-owned largest commercial bank in the country. In 1991 banking sector made a remarkable progression. New private sector banks have brought the necessary competition into the industry and acquire the changes towards higher utilization of technology, improved customer service and innovative products. India has 88 scheduled commercial banks (SCBs) – 27 public sector banks (stake holding by the Government of India ), 29 private banks ( no government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

Customers are now becoming more conscious of their rights and are demanding more than ever before. The recent trends show that most banks are shifting from a “product-centric model” to a “customer-centric model” as customer satisfaction has become one of the major determinants of business growth. Keeping these in mind, an attempt has been made in this study to analyze the factors that are essential in influencing the investment decision of the customers of the public as well as private banks. For this purpose, Factor Analysis, which is the most appropriate multivariate technique, has been used to identify the groups of determinants. This study also suggests some measures to formulate marketing strategies to lure customers towards banks.

PROJECT BACKGROUND

STATE BANK OF INDIA

State Bank of India (SBI) is India’s largest commercial bank. SBI has a vast domestic network of over 9000 branches (~14% of all bank branches) and commands one-fifth of deposits and loans of all scheduled commercial banks in India.

The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries offering merchant banking services, fund management, factoring services, primary dealership in government securities, credit cards and insurance.

ICICI

ICICI Bank is India’s second-largest bank with total assets of Rs. 3,849.70 billion (US$ 82 billion) at September 30, 2008 and profit after tax Rs. 17.42 billion for the half year ended September 30, 2008. The Bank has a network of about 1,400 branches and 4,530 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.

ICICI Bank’s equity shares are listed in India on Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

PROJECT AIMS AND OBJECTIVES

To study whether the customers are satisfied with the services provided by ICICI bank and SBI bank

To know about the customer preferences among ICICI and SBI bank

To compare over all commitment, pattern of affective, normative and continuous commitment in public and private sector

To know about the various promotional tools of Private and Public sectors banks in India

To make a comparative analysis of customers’ perception for promotional strategies of private and public sector banks in India

To find out the key promotional tools for banking services on the basis of customers’ responses

The above objectives lead to the following Hypothesis:

H1: There is no significant relationship between the educational qualification of the

respondents and the reason to choose the service.

H2: There is no significant relationship between the occupation of the respondents and the

type of service they prefer the most.

RESEARCH PROGRAMME

THE MARKETING RESEARCH PROCESS:

RESEARCH PROBLEM

Assessment of consumer perception and behavior in relation with SBI and ICICI bank in Panipat, Haryana.

RESEARCH DESIGN AND PLAN

The study is both descriptive and exploratory in nature. By descriptive research the extent of difference in the needs perception attitudes and characteristics of customers would be gathered. Diagnostic analysis will be used when customers will be asked questions such as” why do you feel that way”? Exploratory studies will provide information to use in analyzing a situation. Descriptive research will be used to uncover conclusive evidences to determine a particular course of action.

The research design and plan was based on various factors like Method of data collection:

RESEARCH METHOD

The proposal is basically research oriented and it depends mainly on primary sources of data. It would be acquired through close-ended structured questionnaire in various ICICI and SBI banks covered under the project. The information validity depends upon the ability of the people’s understanding of the questions that is being asked by the researcher.

Survey Method: This method would be used to get more detailed information of responders through Questionnaire. Further this is the only method to get the desired information.

DATA SOURCES

Primary Data: The research would be done with the help of primary data as it requires firsthand information on individual interviews.

RESEARCH INSTRUMENT:

Research instrument would be a questionnaire as the data is primary. The questionnaire would be designed on the following basis:

To know about the customer needs and preferences

To find ways to provide them more satisfaction

To understand the factors that influence their decision while choose among the different banks

SAMPLING:

The sample consists of all those persons who either have a bank account in ICICI and SBI or are planning to open it in next few months. For this research we use non-probability sampling. Zikmund (1997) stated that in non-probability sampling, the probability of any particular member of the population being chosen is unknown. The element in the population does not have any probability attached to their being chosen as sample subjects.

Snow ball sampling will be applied in this research. Snow ball sampling refers to the procedure that involves the selection of additional respondents based on referrals of initial respondents.

Elements: Students, businessmen, Traders, Farmers, Workers, Salesman etc.

Extent: Panipat

Survey Time: 6 Weeks

Sample size: 200 customers are to be questioned. The target population in this research refers to the bank customers who are having an account in SBI bank and ICICI bank due to the convenience in collecting the data. The respondents can be any gender, any income level, any occupation and any education level.

Approach: 260 people would be approached

SAMPLING PLAN

Data would be collected from both public as well as private sources from all department.Accompanying each questionnaire is a letter explaining the general purpose of the study. Participants in the study are entirely voluntary.

The researcher is going to collect the data from the ATMS and also by visiting the bank. It would be directly obtained from the customers.

DATA ANALYSIS

Appropriate statistical analysis will be adopted. The data will be tabulated and analyzed.

DELIVERABLES

To get the clear view as to which bank is more efficient in focusing on serving their customer by building long term relationships through performance excellence and delivering customer satisfaction. To know about the reliability of the response and provide major requirements by getting feedback on questionnaire.

What are the reasons to choose a public bank like SBI? To examine in depth about their loan, ATM and other facilities that attract customers

To know why some people choose SBI while other prefer ICICI

Both the banks are competing equally with each other. But SBI bank is a bit below the line in customer complaints handling when compared to ICICI bank. The researcher would aim to know where they should focus to attain more and more customers while retaining the older ones at the same time.

REVIEW OF LITERATURE

Making Government the Best Place to Work: Building Commitment (Belcourt, Professor of Human Resource Management at York University, 2000; and Simon Taggar.

Resources

Library, internet, journels, magazines.