Pro on crm santosh

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A STUDY ON
CUSTOMER RELATION MANAGEMENT
With Reference to
SBI BANK
A Project Report submitted to Andhra University, Visakhapatnam
In Partial fulfillment for the Award of the Degree of
BACHELOR OF COMMERCE
Submitted by
NAME: DANDU SANTOSH KUMAR
(Hall Ticket No:- 115128803050)
Under the Esteemed guidance of
MRS B VARIJA
Lecturer, Department of Commerce
Department of Commerce and Management Studies
Dr. LANKAPALLI BULLAYYA COLLEGE
Andhra University
Visakhapatnam-530013
(2015 - 2018)

ACKNOWLEDGEMENT
.I would like to thank my Project Guide, MRS.B.VARIJA of Guide, Lecturer,
Department of Commerce and Management Studies, for her/his valuable
guidance, keen interest and support which was helpful in the completion of my
project work.
I would also like to express my deep gratitude to all the teachers in the Department
of Commerce and Management Studies, Dr. Lankapalli Bullayya College, who
have helped me in various stages of the project work.
Lastly, I would like to thank my family and friends for their constant help and support
which helped me a lot in finalizing this project within the limited time frame.
NAME:-DANDU SANTOSH KUMAR
Hall Ticket No: 115128803050

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DECLARATION
I hereby declare that the project work entitled “CUSTOMER RELATION
MANAGEMENT” with reference to “SBI BANK”, is a bonafide work done by me
for the award of the degree of “Bachelor of Commerce”, from Andhra University
has been done under the guidance of Mrs. B VARIJA Lecturer, Department of
Commerce and Management Studies, during the academic years 2015 – 2018, and
my work has not been submitted to any other University or Institution for the award
of any Degree or Diploma.
NAME:-DANDUSANTOSHKUMAR
Hall Ticket No: (115128803050)

CERTIFICATE
This is to certify that the project report entitled “CUSTOMER RELATION
MANAGEMENT” with reference to “SBI BANK” is a bonafide work done by
DANDU SANTOSH KUMAR, student of B.com, of Department of Commerce and
Management Studies, Dr. Lankapalli Bullayya College, Visakhapatnam, for the
award of the degree of “Bachelor of Commerce”, from Andhra University, done
under my guidance, during the academic years 2015 – 2018.
Signature of Students
NAME:-DANDU SANTOSH KUMAR
Hall Ticket No :-115128803050
DATE:
PLACE:VISAKHAPATNAM
Mrs,VARIJA
Lecturer
Dept. of Commerce and Management Studies
Dr.Lankapalli Bullayya College

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INDEX
CONTENT PAGE NO.
CHAPTER-1
1. INTRODUCTION 6-11
2. OBJECTIVES 12-13
NEED FOR THE STUDY
3. RESEARCH & METHODOLOGY 14- 15
4. SCOPE FOR THE STUDY OF TOPIC 16
5. LIMITATION 17-18
CHAPTER-2
1. INDUSTRY PROFILE 19-29
2. COMPANY PROFILE 30-39
CHAPTER-3
1. THEROTICAL FRAMEWORK 40-42
CHAPTER-4
1. DATA ANALYIS & INTERPRETATION 43-46
CHAPTER-5
1. FINDINGS & SUGGESTIONS 47-52
2. CONCLUSION 53-55
3. BIBILOGRAPHY 56-57

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INTRODUCTION
Customer Relation Management (CRM) originated in early 1970s when the business
units had a manifestation that it would be advisable to become ‗customer emphatic‘
rather that product emphatic‘. Birth of CRM was because of this heedful
perceptiveness. The famous writer and management consultant Peter F Drucker
wrote; The true business of every company is to make and keep customers‘.
Traditionally every transaction was on paper and dependent on goodwill which
created hindrance in clutching customers. People used to work hard in entertaining
customers by presenting new products with astonishing services; they were ready to
work overtime for grasping more and more customers for increasing business. This
too resulted in customer satisfaction and loyalty up to some extent, but at the end of
the day there was no such bonding or relation between the two to carry on with future
business smoothly.
Previously business was quite easy as it was mere a one-to-one dealing without any
specific process. But with time, due to incoming complexities in communication, it
found itself in troubled waters. Emerging of new strategies and technologies in global
marketplace and a mammoth degree of competition in business, the approach needed
to be changed to proactive rather than reactive. Origination of CRM turned out to be a
piece of cake for all suppliers and customers due to its advantages. Customer
relationship management came as a process that dealt with relationships with
customers surpassing the whole business.
Originally customer relationship management was based on three major principles;
shielding the current customers, fostering new customers and enhancing asset value of
all the customers. With the advent of CRM which was integrated with high end
software and technology, business perspectives were totally changed. A CRM system
eventually emerged as consisting of company-full of information which is depicted
sophistically to increase business profit and meliorate customer satisfaction and
loyalty, on the same hand reduces business cost and investment.
Customer Relationship Management (CRM) is one of those magnificent concepts that
swept the business world in the 1990‘s with the promise of forever changing the way

businesses small and large interacted with their customer bases. In the short term,
however, it proved to be an unwieldy process that was better in theory than in practice
for a variety of reasons. First among these was that it was simply so difficult and
expensive to track and keep the high volume of records needed accurately and
constantly update them. In the last several years, however, newer software systems
and advanced tracking features have vastly improved CRM capabilities and the real
promise of CRM is becoming a reality.
As the price of newer, more customizable Internet solutions have hit the marketplace;
competition has driven the prices down so that even relatively small businesses are
reaping the benefits of some custom CRM programs. Software is to India what oil
was to Gulf. It is therefore no surprise that the Indian companies are jumping into the
CRM bandwagon to seize a chunk of the global market, both products as well as
services. With its vast talent pool; India is fast becoming an important development
base of major CRM companies. This trend is likely to increase in the future. Call
Centers, catering primarily to the American and European markets are coming up in
and around the metros. With the easing of infrastructure constraints, India is likely to
emerge as a significant player in this segment. Companies in India are realizing the
need for CRM and some of the forward-thinking ones have been strategically
investing in CRM initiatives and relate activities.
Even though, some industries like steel, aluminium and cement could get by without
any active customer management, they realize that is now all history and that they
have to do something to create and build relationships. So the awareness of CRM
needed there. The first steps have been taken by many. The question is whether you
want to compare CRM programs of Indian companies with the standards and best
practices of players like Ikea and Marriott who have been torchbearers in this field.
India has a long way to go. Indian companies would do well to realize that CRM
cannot be delegated to the marketing department. It has to be whole revolution within
the entire organization. The entire organization from the chairman to the doorman has
to be galvanized to become a customer-oriented organization. It‘s about training,
learning, reskilling and the ability to adapt that will distinguish the laggards from the
winners. It needs a CEO who walks the talk, in other words CRM is an absolute
necessity now for the smallest kirana store to a large player like Ambuja Cement. One

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has 200 customers and the other 2000 customers. But both can‘t afford to lose even a
single of their customers, because the cost of creating a new customer is 5 to 10 times
more than the cost of retaining an old, good customer.
CRM is now an integral part of organizational strategy and overall business
objectives. Has CRM in India been reduced to an empty buzzword that‘s tossed
around so that a company appears to be keeping up with the industry? Not entirely,
because organisations like Standard Chartered Bank, ICICI Lombard, BPL Telecom
and Air-India have successfully used these tools and benefited. The difference lies in
the way CRM has been deployed at these organisations. It is a combination of
technology and process change that has worked. Adoption of CRM by Indian
companies is at an infancy stage.
CRM has been of great importance in India. Organizations now understand the
importance of being customer-centric, i.e. aligning all the processes, planning and
methods with the customer requirements. Today, the market is driven by the buyers.
The biggest challenge in front of the companies is to keep the customer happy 24x7
who is becoming more elusive, more demanding and more diverse than ever.
Therefore, it‘s very important to have a solution which is targeted towards building
long term cordial and profitable relations with the customers.
Customer Relationship Management (CRM) tools are created to achieve this objective
only. It helps an organization to perform in a way that it not only serve its customers
well but also exceed their expectations. In today's competitive business environment,
a successful CRM strategy cannot be implemented by only installing and integrating a
software package designed to support CRM processes. A holistic approach to CRM is
vital for an effective and efficient CRM policy.
This approach includes training of employees, a modification of business processes
based on customers' needs and an adoption of relevant IT-systems (including soft- and
maybe hardware) and/or usage of IT-Services that enable the organization or
company to follow its CRM strategy CRM-Services can even redundantize the
acquisition of additional hardware or CRM software-licenses. The term CRM is used
to describe either the software or the whole business strategy oriented on customer
needs.

The second one is the description which is correct. The main misconception of CRM
is that it is only software, instead of whole business strategy. Major areas of CRM
focus on service automated processes, personal information gathering and processing,
and self-service. It attempts to integrate and automate the various customer serving
processes within a company.
Customer Relationship Management has emerged as a popular business strategy in
today’s competitive environment. It is a discipline which enables the companies to
identify and target their most profitable customers.
Customer Relationship Management has been in India for over two decades but its
penetration into the industry in general and financial service sector in particular has
not been very impressive. With the entry of many foreign banks and setting up of
many private sector banks, there is an increased competition in the banking sector to
attain a competitive advantage. Banks have slowly but surely realized the importance
of building and maintaining customer relationships. CRM is a holistic strategy which
can help the banks to become customer oriented and implement customer- focused
strategies, which in turn will help them build long lasting relationships with the
customers and hence increase their profits.
Customer relationship management is based on customer because survive was made
in the global market and focused on the customer and the customer is becoming a key
factor for the small and big companies. The companies know that its cost is more to
acquire a new customers than to get an existing customer for a making a purchase.
Another aspect of survival of CRM is that knowing the customer better and also
his/her preferences will allow the companies to acquire new customers more easily
and facilitates targets crossselling.
CRM is based on the basic marketing belief that an organization that knows its
customer like an individual. The organization’s components include the database
warehouse that store all the company information of the customer. For the collection
of the customer database, they are using the customer service system, call centre, e-
commerce, web marketing, operation system than get the complete information of the
customer and the sales system. In the portable sales communication, the CRM is
appointment making of the service. In the practice, the CRM system is the range from
automated customer contacts system to the company wide pooling for the customer

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information. CRM is a system for capital investment that integrates the strategy,
marketing and the IT system. It is also is a strategic know how to handle the customer
relations from a company point of view. The strategy is based how to develop,
establish and increase the relation with the customer for profitability perspective. It is
based on the knowledge of the individual customer’s need and potential, the company
makes a strategic to find out the different of the customer with other customer to gain
the customer for a long period of time.
The cut across traditional the organization structure is to force the customer in the
integration of the company activities. By the implementation of CRM is not a small
task of any organization. There is no doubt that the CRM can be major factor that give
the competitive advantage for the maximum market and customer. CRM integrates
sales, marketing, service, enterprise resource planning and the supply chain
management through the business process by using technology solution, information
resource and automation to maximize the customer contact.
Customer Relationship Management (CRM) provides interactive, personalized and
relevant communication with customers to develop and maintain relationships. CRM
is a holistic strategy which can help the banks to build a relationship with their
customers that can last a lifetime, enables to develop philosophy that is oriented
towards the customers.

OBJECTIVE OF STUDY
The main objectives of the study are as follows.
 To study and present the perception of SBI customers about CRM.
 To analyze the perceived service quality of the customers towards their bankers
 To study the CRM practices adopted by the bank to promote the customer
relationship.
 To study the type of clientele visiting the organized retail outlets and in Banking
Sector.
 To study the relationship between the customer satisfaction & the customer loyalty in
organized retail & in private banks.
 To examine the effectiveness of CRM in banks with respect to CRM elements.
 To identify the effectiveness of CRM and to determine the lacunae in the process of
CRM by establishing an empirically tested CRM model.
 To review the Customer Relationship Management of SBI.
 To examine the opinion of customers as regards CRM Mallappally.
 To examine the CRM measure of SBI
 To evaluate the customer satisfaction of SBI
 To find out why customer have an account in more than one bank
 To gain an appreciation of the ways in which CRM execution being carried to
improve the effectiveness of banking sector.

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NEED FOR THE STUDY
The present study concentrates on the various issues of CRM practices of the Public
Sector, Private Sector, and Foreign Banks. The banks are confronting numerous
problems in attracting new customers and in maintain the existing customer base. The
technology advancement has led to knowledgeable customers and as a consequence,
the customers’ loyalty is facing a down trend.
Two strategies are identified for increasing a bank’s market penetration; one is to
concentrate on acquiring new customers and the other is to maintain the existing
customers. Inspite of applying the above strategies, not all the customers are retained
and as a result, the organization’s need to identify those customers at risk of leaving in
order to reduce defections becomes vital. Implementation of CRM poses a greater
challenge to the banks after acquiring the customers. The various ways and means
through which CRM is implemented by the banks determine the success or failure of
the entire concept.
The forces of deregulation, globalization and advancing technology have greatly
increased the competitive pressures in all the industries, especially in the banking
industry. Indian banks are functioning increasingly under competitive pressures
emanating from within the banking system, from non banking institutions as well as
from domestic and international capital markets.
Thus in this era of increased competition, in order to prosper, it will be imperative for
the banks to develop long term relationships with the customers by offering quality
services. Developing long term relations with the customer depends basically on three
dimensions – product quality, service quality and relationship quality for any kind of
industry.
This fact is also applicable for banking industry. Since the perceived service quality
acts as a foundation for developing long-term customer relationships, the present
study is mainly undertaken to present the SBI customers perception on CRM and to
study the perceived service quality provided by the bank.

RESEARCH & METHODOLOGY
In order to achieve the objectives of the study and to analyze the different factors
considered, an appropriate methodology has been adopted. The present study is
exploratory as well as descriptive. The survey was conducted in the month of
June,2012. The present study is based on primary data. The primary data has been
collected from a sample of 200 customers of SBI branches of Andhra Pradesh.
The perception of SBI customers on CRM was judged on the following 12 variables:
visual appeal of physical facilities; guidance signs at service counters; timely services
by bank employees; problem solving interest of bank employees; security measures
taken; service performing information; prompt services by employees; safety of
transactions; convenient of operating hours; parking facilities at bank; sending of
transaction information through sms, and installation of new ATMs.
Apart from the questionnaire being used for data collection, personal discussions were
also conducted with the respondent customers to get further information. The data so
collected has been analyzed with one way or two way tables. The statistical
techniques like percentages, averages and charts were also used.
In any study of research a proper reason of analysis is essential for reaching the goal
or an effective solution to the problem. This reasoning can be done in a research study
with the help of Research Methodology. Research Methodology is a way to
systematically solving the problem. It may be understood as a science of studying
how research is done scientifically.
The present study is on Customer relationship management. The research will be done
to find out whether the company is managing the customers of the organization.
Primary Data Sources:
 Observation method,
 Experiment
 Questionnaires

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Secondary Source:
 Internet
 Newspaper
 Magazines
 Books

SCOPE FOR THE STUDY
The scope of CRM includes customer satisfaction, service quality, relationship
quality, market orientation, trust, loyalty, commitment, customer retention etc.
To survive, banks have to redesign their strategy in delivering quality services to
attract and maintain customers and employ resource munificence to attract and retain
customers.
The only strategy that is perceived to make sense in this emerging marketing
environment requires marketers to learn and practice CRM.
This current study aims to identify the areas of research in CRM practices with special
reference to banking sector, customers’ level of satisfaction and offer practical
suggestions on how banks can create a superior CRM capability.
Scope of this study is to find out outcomes relating to a few points in customer
relationship management; some of them can be stated in few points as follows.
 Maintain current/existing customer
 Achieve new potential customers
 Retain all the customers
 Profitability increment
 Reputation and credibility increment
 A comparative study of public and private sector banks in CRM practices
 A study on Customer Relationship Management Practices in foreign banks.
 A comparative study on CRM practices in selected banks in India.
.

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LIMITATIONS
The study involves field study of customers of SBI to find out about the
satisfaction from the services of above bank and the reason for dissatisfaction. For this
purpose the questionnaire was administered to the customers of SBI Bank. A more
extended geographical sample may show greater differences among perception.
An ideal effort would have been study of nationwide survey converging the customers
of SBI. But since this was individual attempt to study the satisfaction level among the
customers of SBI.
It was not viable to carry out nationwide survey of customers because of time, cost
and other resources constraints. Consequently it had to be limited to sample account
holders and bank branches of SBI. It is noticed that the banks under study are more
active in urban and metropolitan markets.
Efforts have been made to collect significant data and 198 information from all
possible way and sources, there had been some dithering on the part of the official of
the recognized organization and institutions in giving out their experiences and
providing required data.
Similar restrictions were observed on the part of the officials of the recognized
organization and institutions in giving out their experiences and providing required
data.
Similar restrictions were observed on the part of the customers while giving
information relating to satisfaction, cost, income, and aspects. Their personal
inhibition and short memory were observed to be the shortcomings, as they could not
give or information.
Another limitation of this study comes from the fact that the Indian financial market
could not be termed as a mature market in terms of acceptance of electronic banking

as compared with other western countries. There is chance for easy generalization
because of this fact.
The research tool applied for comparing satisfaction could improve by adding more
variable capturing non financial banking services and the profile of customers.
1. There is not much research carried out on customer relationship management and
the customer relationship management policies adopted by banks
2. This study is very much limited to customers of three selected commercial banks.
3. The researcher faces some difficulty due to the lack of cooperation from some
respondents and the bias of respondents cannot be completely ruled out.
4. The study has been conducted only in the sample area.
5. The study is based on the perceptions of customers and the view

INDUSTRY PROFILE
Indian banking is the lifeline of the nation and its people. Banking has helped in
developing the vital sectors of the economy and usher in a new dawn of progress on
the Indian horizon. The sector has translated the hopes and aspirations of millions of
people into reality. But to do so, it has had to control miles and miles of difficult
terrain, suffer the indignities of foreign rule and the pangs of partition. Today, Indian
banks can confidently compete with modern banks of the world. Before the 20th
century, usury, or lending money at a high rate of interest, was widely prevalent in
rural India. Entry of Joint stock banks and development of Cooperative movement
have taken over a good deal of business from the hands of the Indian money lender,
who although still exist, have lost his menacing teeth.
In the Indian Banking System, Cooperative banks exist side by side with
commercial banks and play a supplementary role in providing need-based finance,
especially for agricultural and agriculture-based operations including farming, cattle,
milk, hatchery, personal finance etc. along with some small industries and self-
employment driven activities. Generally, co-operative banks are governed by the
respective co-operative acts of state governments. But, since banks began to be
regulated by the RBI after 1 st March 1966, these banks are also regulated by the RBI
after amendment to the Banking Regulation Act 1949. The Reserve Bank is
responsible for licensing of banks and branches, and it also regulates credit limits to
state co-operative banks on behalf of primary co-operative banks for financing SSI
units.
Banking in India originated in the first decade of 18th century with The General
Bank of India coming into existence in 1786. This was followed by Bank of
Hindustan. Both these banks are now defunct. After this, the Indian government
established three presidency banks in India. The first of three was the Bank of Bengal,
which obtains charter in 1809, the other two presidency bank, viz., the Bank of

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Bombay and the Bank of Madras, were established in 1840 and 1843, respectively.
The three presidency banks were subsequently amalgamated into the Imperial Bank of
India (IBI) under the Imperial Bank of India Act, 1920 – which is now known as the
State Bank of India.
By the 1900s, the market expanded with the establishment of banks such as
Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai –
both of which were founded under private ownership. The Reserve Bank of India
formally took on the responsibility of regulating the Indian banking sector from 1935.
After India‟s independence in 1947, the Reserve Bank was nationalized and given
broader powers.
As the banking institutions expand and become increasingly complex under the
impact of deregulation, innovation and technological upgradation, it is crucial to
maintain balance between efficiency and stability. During the last 30 years since
nationalization tremendous changes have taken place in the financial markets as well
as in the banking industry due to financial sector reforms. The banks have shed their
traditional functions and have been innovating, improving and coming out with new
types of services to cater emerging needs of their 5 customers.
Banks have been given greater freedom to frame their own policies. Rapid
advancement of technology has contributed to significant reduction in transaction
costs, facilitated greater diversification of portfolio and improvements in credit
delivery of banks. Prudential norms, in line with international standards, have been
put in place for promoting and enhancing the efficiency of banks. The process of
institution building has been strengthened with several measures in the areas of debt
recovery, asset reconstruction and securitization, consolidation, convergence, mass
banking etc.
Despite this commendable progress, serious problem have emerged reflecting in
a decline in productivity and efficiency, and erosion of the profitability of the banking
sector. There has been deterioration in the quality of loan portfolio which, in turn, has
come in the way of bank‟s income generation and enchancement of their capital
funds. Inadequacy of capital has been accompanied by inadequacy of loan loss
provisions resulting into the adverse impact on the depositors‟ and investors‟

confidence. The Government, therefore, set up Narasimham Committee to look into
the problems and recommend measures to improve the health of the financial system.
The acceptance of the Narasimham Committee recommendations by the
Government has resulted in transformation of hitherto highly regimented and over
bureaucratized banking system into market driven and extremely competitive one.
The massive and speedy expansion and diversification of banking has not been
without its strains. The banking industry is entering a new phase in which it will be
facing increasing competition from non-banks not only in the domestic market but in
the international markets also. The operational structure of banking in India is
expected to undergo a profound change during the next decade. With the emergence
of new private banks, the private bank sector has become enriched and diversified
with focus spread to the wholesale as well as retail banking. The existing banks have
wide branch network and geographic spread, whereas the new private banks have the
clout of massive capital, lean personnel component, the expertise in developing
sophisticated financial products and use of state-of-the-art technology.
The growth in the Indian Banking Industry has been more qualitative than
quantitative and it is expected to remain the same in the coming years. Based on the
projections made in the "India Vision 2020" prepared by the Planning Commission
and the Draft 10th Plan, the report forecasts that the pace of expansion in the balance-
sheets of banks is likely to decelerate. The total assets of all scheduled commercial
banks by end-March 2010 is estimated at Rs 40,90,000 crores. That will comprise
about 65 per cent of GDP at current market prices as compared to 67 per cent in 2002-
03. Bank assets are expected to grow at an annual composite rate of 13.4 per cent
during the rest of the decade as against the growth rate of 16.7 per cent that existed
between 1994-95 and 2002-03. It is expected that there will be large additions to the
capital base and reserves on the liability side branches through computers.
It also suggested modalities for implementing on-line banking. The committee
The Indian Banking industry, which is governed by the Banking Regulation Act of
India, 1949 can be broadly classified into two major categories, nonscheduled banks
and scheduled banks. Scheduled banks comprise commercial banks and the co-
operative banks. In terms of ownership, commercial banks can be further grouped into
nationalized banks, the State Bank of India and its group banks, regional rural banks

23
and private sector banks (the old/ new domestic and foreign). These banks have over
67,000 branches spread across the country
In the Indian Banking Industry some of the Private Sector Banks operating are
IDBI Bank, ING Vyasa Bank, SBI Commercial and International Bank Ltd, Bank of
Rajasthan Ltd. and banks from the Public Sector include Punjab National bank,
Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank among others. ANZ
Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank are some
of the foreign banks operating in the Indian Banking Industry.
As far as the present scenario is concerned the Banking Industry in India is going
through a transitional phase. The first phase of financial reforms resulted in the
nationalization of 14 major banks in 1969 and resulted in a shift from Class banking
to Mass banking. This in turn resulted in a significant growth in the geographical
coverage of banks. Every bank had to earmark a minimum percentage of their loan
portfolio to sectors identified as “priority sectors”. The manufacturing sector also
grew during the 1970s in protected environs and the banking sector was a critical
source. The next wave of reforms saw the nationalization of 6 more commercial banks
in 1980. Since then the number of scheduled commercial banks increased four-fold
and the number of bank branches increased eight-fold.
After the second phase of financial sector reforms and liberalization of the sector
in the early nineties, the Public Sector Banks (PSB) s found it extremely difficult to
compete with the new private sector banks and the foreign banks. The new private
sector banks first made their appearance after the guidelines permitting them were
issued in January 1993. Eight new private sector banks are presently in operation.
These banks due to their late start have access to state-of-the-art technology, which in
turn helps them to save on manpower costs and provide better services.
After the first phase and second phase of financial reforms, in the 1980s
commercial banks began to function in a highly regulated environment, with
administered interest rate structure, quantitative restrictions on credit flows, high
reserve requirements and reservation of a significant proportion of lendable resources
for the priority and the government sectors. The restrictive regulatory norms led to the
credit rationing for the private sector and the interest rate controls led to the
unproductive use of credit and low levels of investment and growth. The resultant

„financial repression‟ led to decline in productivity and efficiency and erosion of
profitability of the banking sector in general.
The Indian banking sector is broadly classified into scheduled banks and non-
scheduled banks..All banks included in the Second Schedule to the Reserve Bank of
India Act, 1934 are Scheduled Banks. These banks comprise Scheduled Commercial
Banks and Scheduled Co-operative Banks. Scheduled Co-operative Banks consist of
Scheduled State Co-operative Banks and Scheduled Urban Cooperative Bank
.Scheduled Commercial Banks in India are categorised into five different groups
according to their ownership and/or nature of operation:
1. State Bank of India and its Associates
2. Nationalised Banks
3. Private Sector Banks
4. Foreign Banks
5. Regional Rural Banks.
The IT revolution has had a great impact on the Indian banking system. The use of
computers has led to the introduction of online banking in India. The use of
computers in the banking sector in India has increased many fold after the economic
liberalization, of 1991 as the country's banking sector has been exposed to the world's
market. Indian banks were finding it difficult to compete with the international banks
in terms of customer service, without the use of information technology.
The RBI set up a number of committees to define and co-ordinate banking
technology. These have included:
1. In 1984 was formed the Committee on Mechanisation in the Banking Industry
(1984) whose chairman was Dr. C Rangarajan, Deputy Governor, Reserve Bank of
India. The major recommendations of this committee were
introducing MICR technology in all the banks in the metropolises in India.[34] This
provided for the use of standardised cheque forms and encoders.
In 1988, the RBI set up the Committee on Computerisation in Banks (1988)[35] headed
by Dr. C Rangarajan. It emphasised that settlement operation must be computerised in

25
the clearing houses ofin Bhubaneshwar, Guwahati, Jaipur
Patna and Thiruvananthapuram. It further stated that there should be National
Clearing of inter-city cheques at Kolkata, Mumbai, Delhi, Chennai and MICR should
be made operational. It also focused on computerisation of branches and increasing
connectivity among submitted its reports in 1989 and computerisation began from
1993 with the settlement between IBA and bank employees' associations.[36]
2. In 1995, the Committee for proposing Legislation on Electronic Funds Transfer and
other Electronic Payments (1995) again emphasised EFT system.
3. In July 2016, Deputy Governor Rama Gandhi of the Central Bank of India "urged
banks to work to develop applications for digital currencies and distributed ledgers.
4. In 1994, the Committee on Technology Issues relating to Payment systems, Cheque
Clearing and Securities Settlement in the Banking Industry (1994)[37] was set up under
Chairman W S Saraf. It emphasised ELECRONIC (EFT) system, with the
BANKNET communications network as its carrier. It also said that MICR clearing
should be set up in all branches of all those banks with more than 100 branches.
The industry is currently in a transition phase. On the one hand, the PSBs, which
are the mainstay of the Indian Banking system are in the process of shedding their
flab in terms of excessive manpower, excessive non Performing Assets (NPAs) and
excessive governmental equity, while on the other hand the private sector banks are
consolidating themselves through mergers and acquisitions. The private players
however cannot match the PSB‟s great reach great size and access to low cost
deposits. Therefore one of the means for them to combat the PSBs has been through
the merger and acquisition (M& A) route. Over the last two years, the industry has
witnessed several such instances. For instance, HDFC Bank‟s merger with Times
Bank ICICI Bank’s acquisition of ITC Classic, Anagram Finance and Bank of
Madura. Centurion Bank, Induslnd bank, Bank of Punjab, Vysya Bank are said to be
on the lookout. The UTI bank- Global Trust Bank merger however opened a
pandora‟s box and brought about the realization that all was not well in the
functioning of many of the private sector banks.
The allowing of PSBs to shed manpower and dilution of equity are moves that will
lend greater autonomy to the industry. In order to lend more depth to the capital
markets the RBI had in November 2000 also changed the capital market exposure

norms from 5 percent of bank‟s incremental deposits of the previous year to 5 percent
of the bank‟s total domestic credit in the previous year. But this move did not have
the desired effect, as in, while most banks kept away almost completely from the
capital markets, a few private sector banks went overboard and exceeded limits and
indulged in dubious stock market deals. The chances of seeing banks making a
comeback to the stock markets are therefore quite unlikely in the near future.
The Indian banking sector has emerged as one of the strongest drivers of India’s
economic growth. The Indian banking industry (US$ 1.22 trillion) has made
outstanding advancement in last few years, even during the times when the rest of the
world was struggling with financial meltdown. India's economic development and
financial sector liberalization have led to a transformation of the Indian banking sector
over the past two decades. Today Indian Banking is at the crossroads of an invisible
revolution. The sector has undergone significant developments and investments in the
recent past. Most of banks provide various services such as Mobile banking, SMS
Banking, Net banking and ATMs to their clients.
The banking industry has moved gradually from a regulated environment to a
deregulated market economy. The market developments kindled by liberalization and
globalization have resulted in changes in the intermediation role of banks. The pace of
transformation has been more significant in recent times with technology acting as a
catalyst. While the banking system has done fairly well in adjusting to the new market
dynamics, greater challenges lie ahead.
All these services attracted more and more customers to their banks. Indian
banking industry has undergone qualitative changes due to banking sector reforms.
Indian banking sector, which is dominated by state-controlled banks, has been facing
formidable challenges. Due to this new emerging competition, Indian banks,
especially PSBs, are trying their best to improve their performance and preparing to
compete in the emerging global market. New private sector banks and foreign banks
have more customer-centric policies, high quality services, new attractive schemes
and computerized branches. In this context, there is a need to examine the efficiency
of public sector banks operating in India. Mainly, competition can intensify and banks
will become more efficient. The transaction cost of customers could come down and a
bank which is efficient, nimble and customer focused would always be able to do

27
better than others. As a result of globalization, many new banks have entered the
Indian banking industry, further intensifying the competition
A bank is a financial institution and a financial intermediary that accepts deposits
and channels those deposits into lending activities, either directly or through capital
markets. A bank connects customers that have capital deficits to customers with
capital surpluses. Due to their critical status within the financial system and the
economy generally, banks are highly regulated in most countries. They are generally
subject to minimum capital requirements which are based on an international set of
capital standards, known as the Basel Accords.
Banking in India originated in the last decades of the 18th century. The first banks
were The General Bank of India, which started in 1786, and Bank of Hindustan,
which started in 1790; both are now defunct. The oldest bank in existence in India is
the State Bank of India, which originated in the Bank of Calcutta in June 1806, which
almost immediately became the Bank of Bengal. This was one of the three presidency
banks, the other two being the Bank of Bombay and the Bank of Madras, all three of
which were established under 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, became the State Bank of India in 1955.
Besides the Nationalized banks (majority equity holding is with the
Government), the State Bank of India (SBI) (majority equity holding being with the
Reserve Bank of India) and the associate banks of SBI (majority holding being with
State Bank of India), the commercial banks comprise foreign and Indian private
banks. While the State bank of India and its associates, nationalized banks and
Regional Rural Banks are constituted under respective enactments of the Parliament,
the private sector banks are banking companies as defined in the Banking Regulation
Act. These banks, along with regional rural banks, constitute the public sector (state
owned) banking system in India. The Public Sector Banks in India are back bone of
the Indian financial system. The cooperative credit institutions are broadly classified
into urban credit cooperatives and rural credit cooperatives.
Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and
Scheduled Urban Co-operative Banks. Regional Rural Banks (RRB’s) are state

sponsored, regionally based and rural oriented commercial banks. The Government of
India promulgated the Regional Rural Banks Ordinance on 26th September 1975,
which was later replaced by the Regional Rural Bank Act 1976. The preamble to the
Act states the objective to develop rural economy by providing credit and facilities for
the development of agriculture, trade, commerce, industry and other productive
activities in the rural areas, particularly to small and marginal farmers, agricultural
labourers, artisans and small entrepreneurs.
The Government of India issued an ordinance and nationalised the 14 largest
commercial banks with effect from the midnight of July 19, 1969. Within two weeks
of the issue of the ordinance, the Parliament passed the Banking Companies
(Acquisition and Transfer of Undertaking) Bill, and it received the presidential
approval on 9 August 1969. The need for the nationalisation was felt mainly because
private commercial banks were not fulfilling the social and developmental goals of
banking which are so essential for any industrialising country. Despite the enactment
of the Banking Regulation Act in 1949 and the nationalisation of the largest bank, the
State Bank of India, in 1955, the expansion of commercial banking had largely
excluded rural areas and small-scale borrowers.
An interesting feature of the Reserve Bank of India was that at its very inception,
the Bank was seen as playing a special role in the context of development, especially
Agriculture. When India commenced its plan endeavours, the development role of the
Bank came into focus, especially in the sixties when the Reserve Bank, in many ways,
pioneered the concept and practise of using finance to catalyse development. The
Bank was also instrumental in institutional development and helped set up insitutions
like the Deposit Insurance and Credit Guarantee Corporation of India, the Unit Trust
of India, the Industrial Development Bank of India, the National Bank of Agriculture
and Rural Development, the Discount and Finance House of India etc. to build the
financial infrastructure of the country. With liberalisation, the Bank's focus shifted
back to core central banking functions like Monetary Policy, Bank Supervision and
Regulation, and Overseeing the Payments System and onto developing the financial
markets.
The Reserve Bank of India has been empowered under the Banking Regulation
Act, 1949 to regulate and supervise banks' activities in India and their branches

29
abroad. While the regulatory provisions of this Act prescribe the policy framework to
be followed by banks, the supervisory framework provides the mechanism to ensure
banks' compliance with the policy prescription. While the Department of Banking
Operations and Development exercises regulatory powers in respect of commercial
banks and Local Area Banks (LABs), Regional Rural Banks/District and State Co-
operative Banks and Urban Cooperative Banks are regulated by Rural Planning and
Credit Department and Urban Banks Department, respectively.
The general banking scenario of India has become very dynamic now-a-days.
Before preliberalisation era, the picture of Indian Banking was completely different as
the government of India initiated measures to play an active role in the economic life
of nation, and the Industrial Policy Resolution adopted by the government in 1948
envisaged a mixed economy. This resulted into greater involvement of the state in
different segments of the economy including banking and finance. As per the RBI
report, The Indian economy continued to record strong growth during 2007-08, albett
with some moderation.
With adverse effect of global recessions on Indian industry and service sector,
theRealGDP growth rate of India, has declinedfrom9.6%in 2006-07 to9% in 2007- 08.
But the overall growth of real GDP rate of the India economy during 2007-08was note
worthy in the global context.
By the 1960s, the Indian Banking Industry had become an important tool to
facilitate the speed of development of the Indian economy. During the first phase of
financial reforms, there was a nationalization of14majorbanks in July 19, 1969. A
second dose of nationalization of 6 more commercial banks followed in 1980. The
stated reason for the nationalization was to give the International Journal of Business
Management Available at 10 government more control of credit delivery. With the
second dose of nationalization the government controlled around 91% of the banking
business in India. In early 1990s, the then Narasimham Rao government embarked on
a policy of liberalization, licensing a small number of private banks.

COMPANY PROFILE
ORIGIN OF STATE BANK OF INDIA
The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2nd June
1806186. Three years later the bank received its charter and was redesigned as the
Bank of Bengal on 2nd January 1809. The Bank of Bombay on the 15th April 1840
and the Bank of Madras on 1st July 1843 followed the Bank of Bengal. These three
banks were governed by Royal Charter, which were revised from time to time187.
These three banks received the exclusive right to issue paper currency in 1861 with
the Paper Currency Act, a right they retained until the formation of the Reserve Bank
of India. The business of the banks was initially confined to discounting of bills,
keeping cash accounts, receiving deposits and issuing and circulating cash notes.
Loans were restricted to Rs.1 lakh and the period of accommodation confined to three
months only. With the passing of the Paper Currency Act of 1861, the right of note
issue of the presidency banks was abolished and the Government of India assumed the
sole power of issuing paper currency from 1 March 1862. None of the three banks had
till then any branches although the charters had given them such authority.
By 1876, the Bank of Bengal had eighteen branches including its head office;
seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen
each188.
The Presidency Banks Act, which came into operation on 1st May 1876, brought the
three presidency banks under a common statute and the banksinvolved themselves in
the financing of practically every trading, manufacturing and mining activity in the
sub-continent. But the three banks were rigorously excluded from any business
involving foreign exchange, as it was feared that these banks enjoying government
patronage would offer unfair competition to the exchange banks, which had by then
arrived in India.

31
This exclusion continued till the creation of the Reserve Bank of India in 1935189.
The Presidency Banks of Bengal, Bombay and Madras with their 70 branches were
merged on 27th January 1921 to form the Imperial Bank of India190. They took on
the triple role of a commercial bank, a banker’s bank and a banker to the government.
The establishment of the Reserve Bank of India as the central bank of the country in
1935 ended the quasi-central banking role of the Imperial Bank.
The business of the banks was initially confined to discounting of bills of exchange or
other negotiable private securities, keeping cash accounts and receiving deposits and
issuing and circulating cash notes. Loans were restricted to Rs.One lakh and the
period of accommodation confined to three months only.
The earlier restrictions on its business were removed and the bank was permitted to
undertake foreign exchange business and executor and trustee business for the first
time. The Imperial Bank during the three and a half decades of its existence recorded
an impressive growth in terms of offices, reserves, deposits, investments and
advances, the increase in some cases amounting to more than six-fold.
The lofty traditions of banking which the Imperial Bank consistently maintained and
the high standard of integrity it observed in its operations inspired confidence in its
depositors that no other bank in India could perhaps then equal.
When India attained freedom, the Imperial Bank had a capital base (including
reserves) of Rs.11.85 crore, deposits and advances of Rs.275.14 croreand Rs.72,94
crore respectively and a network of 172 branches and more than 200 sub offices
extending all over the country
SBI has acquired local banks in rescues. For instance, in 1985, it acquired Bank of
Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, State
Bank of Travancore, already had an extensive network in Kerala.
The State Bank of India was thus born with a new sense of social purpose aided by
the 480 offices comprising branches, sub offices and three Local Head Offices
inherited from the Imperial Bank. The concept of banking as mere repositories of the
community's savings and lenders to creditworthy parties was soon to give way to the
concept of purposeful banking sub serving the growing and diversified financial needs
of planned economic development.

The State Bank of India was destined to act as the pacesetter in this respect and lead
the Indian banking system into the exciting field of national development.
In the early 1960s, the State Bank's network already contained nearly 500 branches
and sub-offices, as well as the three original head offices inherited from the
presidency bank era. Yet the State Bank now began an era of expansion, acting as a
motor for India's industrial and agricultural development that was to transform it into
one of the world's largest financial networks. Indeed, by the early 1990s, the State
Bank counted nearly 15,000 branches and offices throughout India, giving it the
world's single largest branch network.
SBI played an extremely important role in developing India's rural regions, providing
the financing needed to modernize the country's agricultural industry and develop new
irrigation methods and cattle breeding techniques, and backing the creation of dairy
farming, as well as pork and poultry industries. The bank also provided backing for
the development of the country's infrastructure, particularly on a local level, where it
provided credit coverage and development assistance to villages.
The nationalization of the banking sector 89 itself, an event that occurred in 1969
under the government led by Indira Gandhi, gave SBI new prominence as the
country's leading bank. Even as it played a primary role in the Indian government's
industrial and agricultural development policies, SBI continued to develop its
commercial banking operations.
In 1972, for example, the bank began offering merchant banking services. By the mid-
1980s, the bank's merchant banking operations had grown sufficiently to support the
creation of a dedicated subsidiary, SBI Capital Markets, in 1986. The following year,
the company launched another subsidiary.
SBI Home Finance, in collaboration with the Housing Development Finance
Corporation. Then in the early 1990s, SBI added subsidiaries SBI Factors and
Commercial Services, and then launched institutional investor servicesSBI has five
associate banks that with SBI constitute the State Bank Group. All use the same logo
of a blue keyhole and all the associates use the "State Bank of" name followed by the
regional headquarters' name.

33
Originally, the then seven banks that became the associate banks belonged to princely
states until the government nationalized them between October, 1959 and May, 1960.
In tune with the first Five Year Plan, emphasizing the development of rural India, the
government integrated these banks into State Bank of India to expand its rural
outreach.
There has been a proposal to merge all the associate banks into SBI to create a "mega
bank" and streamline operations. The first step towards unification occurred on 13
August 2008 when State Bank of Saurashtra merged with State Bank of India,
reducing the number of state banks from seven to six.
Then on 19 June 2009 the SBI board approved the merger of its subsidiary, State
Bank of Indore, with itself. SBI holds 98.3% in the bank, and the balance 1.77% is
owned by individuals, who held the shares prior to its takeover by the government.
The acquisition of State Bank of Indore added 470 branches to SBI's existing network
of 12,448 and over 21,000 ATMs. Also, following the acquisition, SBI's total assets
will inch very close to the Rs 10-lakh crore mark. Total assets of SBI and the State
Bank of Indore stood at Rs 998,119 crore as on March 2009. The process of merging
of State Bank of Indore was completed by April 2010.
ORGANISATION STRUCTURE AND MANAGEMENT
The management of the State Bank1 vests in a Central Board of Directors which
consists of:
• A Chairman and a Vice-Chairman appointed by the Central Government in
consultation with the Reserve Bank of India.
• Two Managing Directors appointed by the Central Board of Directors with the
approval of the Central Government.
• Six directors to be elected in the prescribed manner by the shareholders other than
the Reserve Bank.
• Eight directors to be nominated by the Central Government in consultation with the
Reserve Bank of India to represent territorial and economic interests in such a manner
that not less than two of them have special knowledge of the working of the

cooperative institutions and of rural economy and the others have experience in
commerce, industry, banking and finance;
• One director to be nominated by the Central Government; One director to be
nominated by the Reserve Bank; and
• Two directors to be appointed to represent the officers and the staff of the bank.
The Chairman, the Vice-Chairman and the Managing Director shall hold office for
such terms not exceeding five years as the Central Government may fix when
appointing them and shall be eligible for re-appointment. The directors elected by the
shareholders and nominated by the Central Government will hold office for fours
years and are eligible for re-election or re-nomination.
The other nominated directors shall hold office as per recommendations of the
authority appointing them. Besides the Central Board, there are Local Boards of
Management established at Calcutta, New Delhi, Kanpur, Ahmedabad, Bhopal and
Patna. Each local board consists of the members of the Central Board residing in the
area and directors not exceeding four elected shareholders whose names appear in the
branch register.
To keep the management free from politics, the Act stipulates that no member of the
Central or State Legislatures shall be appointed as directors of the State Bank of India.
Structural changes have been introduced by the bank in order to re-orient the business
according to changing conditions in the market. One such step, for the first time, was
initiated in 1971.
In the year 1979, for the second time the structural changes were implemented. The
major organizational change in structure took place in 1995, by the appointment of
Mckinsey Consultants. Through changes were introduced in strategies, structures,
systems etc., in the organizational set up of SBI, as per recommendations of the
consultant committee.
The Chairman is the Head of the Central Management Committee who is appointed
by the Government of India in consultation with RBI. The Central Management
Committee consisting of two Managing Directors – one belonging to Corporate
Banking and the other to National Banking – andseven Deputy Managing Directors

35
representing the areas such as Banks, International Banking, Corporate Development,
Finance, Credit, Information Technology, and Information and Management Audit.
Along with the Committee the Chief Vigilance Officer at CGM cadre, will also work
under the Chairman. The Managing Director and Group Executive of the Corporate
Banking are responsible for the banking operations relating to big size companies and
corporations.
The Corporate Account Group (CAG) under the leadership of the Managing Director
and Group Executive caters to a majority of top 100 companies/Corporations in
Indian ranked in the order of turnover and market capitalization. The credit sanction
of Rs.100 crore and above per company will fall under the jurisdiction of the
managing director.
The National Banking Group is headed by a Managing Director and Group
Executive. This group consists of two distinct net works namely Development
Banking and Personal Banking Network and Commercial Banking Network. About
90 per cent of the domestic deposits and 84 per cent of the domestic advances account
for National Banking.
The State Bank of India has seven Associate Banks and 7 subsidiaries one of them is
Banking Subsidiary and the other six are Non-Banking subsidiaries. One Deputy
Managing Director will monitor the activities of all Associate Banks and Subsidiaries
at the national level.
Another Deputy Managing Director will coordinate and promote International
Banking through a net work of 83 overseas offices spread over in 33 countries
covering all time zones. He is responsible for handling the country’s foreign trade and
related business and providing foreign currency resources to the Indian companies.
The Deputy Managing Director (Corporate Development) is concerned with the
development and growth activities of the bank. He is responsible for developing new
products and schemes from time to time. The Accounting and Finance wing is headed
by a Deputy Managing Director. He is also called Chief Financial Officer. The
compilation of financial data, preparation of financial statement as per the regulations
from time to time and monitoring the performance of the bank on the 99 financial

front are his responsibilities. One Deputy Managing Director will take care of Audit
activities.
The Deputy Managing Director, Information Technology is responsible for IT
operations in the Bank. Considering the importance of IT to promote efficiency in
banking, this new position is created in the organization system at the top
management level. There is one Chief Vigilance Officer reporting to the Chairman.
The officer will look after the activities including fraud detection and prevention of
frauds. The disciplinary action against errant officials up to the level of DGM will be
taken by this office. The Chief Vigilance Officer will maintain direct relations with
Ministry of Finance, Government of India and Vigilance Committee of Reserve Bank
of India.
The State Bank of India has 14 Local Head Offices, which are also called ‘Offices at
the Circles’ located at state head quarters. The heads of all LHOs are directly
responsible to the Chairman of the bank. A model organization chart of a circle is
shown in Exhibit No.3.2. The Circle Office has the jurisdiction of all Modules of the
bank attached to it.
The sanctions of above Rs.25 lakh and below Rs.100 crore are processed at the Circle
Office. The Chief General Manager will be assisted by four Circle Officers at the
DGM cadre in the areas of bank development, credit, finance and vigilance. The
General Manager Personal and Development Banking is assisted by four Assistant
General Managers (AGMs) in the areas of administration, personal, development and
expansion. The General Manager Commercial and International Banking is assisted
by four AGMs in the areas of premises, computers, accounts and policy and decision
making.
Information Technology The Bank has adopted and is pursuing effectively its IT
policy with the aim of achieving efficiency in operations, meeting customer and
market expectations and staying ahead in competition. Thus, the technology initiatives
would result in a) improved productivity, b) greatly reduced time-to-management in
MIS, c) better risk management, d) efficient tracking of NPAs, e) better regulatory
compliance, f) swifter reaction to market changes and customer needs, and g)
reduction in transaction costs etc., to make the better functioning of SBI.

37
Vision of State Bank of India
• MY SBI.
• MY CUSTOMER FIRST.
• MY SBI: FIRST IN CUSTOMER SATISFACTION.
Strengths of State Bank of India
• Largest commercial bank in the country with presence in all time zones of the
world.
• Macro economic proxy for the Indian Economy.
• Has emerged as a Financial Services Supermarket
• Group holds more than 25 per cent market share in deposits and advances
• Large base of skilled manpower
• SBI Group has more than 115 million customers – Every tenth Indian is a customer.
Values of SBI
The values of State Bank of India are:
• 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 early way out.
• We will do everything we can to contribute to the community we work in.
• We will nurture pride in India.
The subsidiaries of SBI are:
 State Bank of Indore
 State Bank of Bikaner & Jaipur
 State Bank of Hyderabad
 State Bank of Mysore
 State Bank of Patiala
 State Bank of Travancore

Non-Banking Subsidiaries of SBI
1. SBI Capital Markets Ltd. (SBI CAP)
2. SBI Funds Management Pvt. Ltd (SBI FUNDS)
3. SBI Factors and Commercial Services Pvt. Ltd.
4. SBI DFHI (Discount & Finance House of India) Ltd.
5. SBI GILTS Ltd.
6. SBI Commercial and International Bank Ltd.
7. SBI Mutual Fund (A Trust)
Foreign Subsidiaries :
1. SBI International Mauritius Ltd, Offshore Bank
2. SBI Canada
3. SBI Lagos
4. SBI California
Other Associates of SBI
1. Clearing Corporation of India Ltd.
2. Nepal SBI Bank Ltd.
3. Bank of Bhutan
4. UTI Asset Management Company Pvt. Ltd.
The total number of branches and ATMs of State Bank of India and its associates as
on March 2011 is The total number of branches for rural, semi-urban, urban, and
metropolitan for State Bank of India and its associates is discussed below.
The total number of branches of State Bank group for all the four areas is 17,913. The
total branches of State Bank of India are 13,284 of which 4,972 are in rural areas,
3,865 are in the semi-urban areas, 2,382 are in urban areas, and 2,065 branches are
located in the metropolitan areas.
The total ATMs of the State bank group are 24,651 of which 14,104 are onsite ATMs
and 10,547 are off-site ATMs. Further, the total number of ATMs of the State Bank of
India is 20,084, while on-site ATMs are 10,826 the off-site ATMs are 9,258.

39
The per cent of Off-site to total ATMs is 42.8 for the state bank group as a whole and
the per cent of Off-site to total ATMs for State Bank of India is 46.1. The per cent of
ATMs to branches for the total state bank group is 137.6 and for only the State Bank
of India is 151.2 per cent.
Staff strength
The Bank has total permanent staff strength of 2, 15,481 as on 31st March, 2012. Of
this, 80,404 (37.32 per cent) are officers, 95,715 (44.42 per cent) clerical staff and the
remaining 39,362 (18.26 per cent) are sub-staff. It has been further decided to recruit
9500 new clerical staff during the FY 2012-13 to meet the growing business needs of
the Bank.

41
THEORITICAL FRAMEWORK
In an attempt to summarize the most important concepts of CRM demonstrated that
there are five points of view for defining CRM. The points of view are the process,
the strategy, the philosophy, the ability and the technology . It also demonstrates that
since there are various points of view related to CRM concept, writers have not
reached an agreement on that concept. In the light of the above, then, the researcher
has tried to put a definition that suits the goal of the present study. This definition is:
"CRM is the activity which is interested in the main customers of the organization, in
the efficiency of organization and in the customer knowledge management, with the
aim of enhancing the effectiveness of the organization decisions related to customers,
leading, therefore, to the improvement of the marketing performance in particular and
the organizational performance in general."
On the other hand, (Payne & Frow, 2005) demonstrated that there are various points
of view related to the concept of CRM. Whereas, some points of view were in favor
of regarding CRM as correspondence in direct mail, a diagram for customer loyalty
programs or databases, other points of view regarded it as an assistant office work or a
call center. Still, some considered it data storage or taking care of data search and
processing. Finally, some considered it gaining the systems that make it able to
perform ecommerce . (Payne & Frow, 2005) mentioned that the obvious lack of
accepted and appropriate definition of CRM may lead to the failure of the project of
CRM, particularly if organizations adopt the limited point of view, which is related to
specific technology . Therefore, the two researchers tried to put a more
comprehensive definition which pays attention to the strategic point of view. So they
defined CRM as a strategic method related to creating a distinguished value for the
contributors through improving good relationships with the main customers and other
customer categories, as it (CRM) seeks to unify the strategies of marketing using
relationships and information technology to create profitable, long-term relationships
with customers and other parties. This value is created through providing good

chances to use data and information to understand customers and provide them with
value. Consequently, this requires the integration of customers, individuals and
marketing abilities, which happens through information, technology and applications.
It can be noticed that this definition regards CRM as mere communication on the part
of the organization to understand the customer's behavior. (Stone & Findlay, 2001)
defined CRM as the organization carrying out a lot of information about the customer
from various resources and keeping it in order to divide the territories, analyze and
reuse. This definition regards CRM as only collecting and recording information
about the customer. (Fross & Stone, 2001) defined CRM as the company use of its
abilities in the field of research methodology, technology and e-commerce in order to
manage customer relationships.
This definition for CRM regards it as the ability to use technology in the domain of
dealing with customers.(Parvatiyar & Sheth , 2002) mentioned that CRM is a
comprehensive strategy that includes the process of acquiring certain customers,
keeping them and cooperating with them to create a distinguished value for both the
company and the customer. This strategy requires integrating the functions of
marketing, sales, customer service and exposition chain so as to achieve the highest
competence and efficiency in delivering value to the customer. As it shows, this
definition regards CRM as a strategy with a main goal of delivering a distinguished
value to the customer through improving the marketing productivity.

DATA ANALYSIS & INTERPRETATION

FINDINGS
 In Mallappally there are number of banks despite of the tough competition, the
number of the new customers of SBI banks are increasing every year
 100 percent of people using at least any one service of the bank
 From this study it is clear that most of the customers(80%) using the service of
bank for the last 3 years or more
 The users of the ATM is highest(64%) followed by the use of net banking and
phone banking service, while the knowledge about the bill pay is very less
among the customers
 Most of the customers(100%) are satisfied with their banking service, they are
satisfied with fast processing of transaction and they get valuable information
at time
 50 percent ofcustomer‘s visit their bank branch once in a month
 Out of 50 Customers 40% prefer to invest their savings as fixed deposit and
30% savings account
 64% customers believe that private banks provide superior services than
government banks
 66 % of customers says that ,the bank measure customer satisfaction
 Banks rewarded the key (frequent and profitable) customers, out of 50
customers 96% of customers are rewarded by bank. They get reward in the
form of discount and gifts.
 70% bank employees are empowered to take decision that may positively
affect customer satisfaction, in the absence of his superior.
 Most of customers (94%) recommend their bank to friends, relatives and
associates.
 Customers are satisfied with over all service quality of SBI
 SBI also one of the successful private sector banks in India. It is the bank that
has pioneered many services first time in India.
 SBI was the first to offer a product called one view by which customers are
able to view their accounts in six banks on one page on their website.

49
 SBI Bank also the pioneer, in introducing a product called Net safe, which
makes online shopping on net using debit card, making it safer.
 The selected banking industries are strongly accepted the technology in
CRM basically depends upon the introduction of cost, usage of modern
technology and advanced technology and understanding the customer’s
behaviour.
 The executives of banking industries strongly agreed that initiation in CRM
primarily depend upon identifying the potential customers and that loyalty
rates towards organization.
 The selected banking industry strongly believed that the maintenances
procedures in CRM aimed to concentrate current customers, gathering the
customer’s grievances, periodic evaluation, employees training, employees are
rewarded and different customers are given different treatment.
 Maximum numbers of executives are accepted to the frequent visit of the
customers and fulfill their customer’s satisfaction.
 Maximum numbers of executives hope and trust the CRM increased the
number of 236 customers.
 A CRM strategy indicates that, least number of executives possess the
sufficient knowledge about CRM in these industry and present in their
complaint cell in their organization.

SUGGESTIONS
I would hereby to share some view points of mine with the organization which
according to me, if brought into action can prove beneficial.
 By encouraging people to use our service from the branch is very important
but habit needs to be changed and the branch is the first place from where it
should starts. By putting up corporate drop boxes at the branch, lot of
convenience can be provided to the customers as well as for the employees
working in the organization.
 Generally due to heavy traffic at the branch customers have to wait, executives
should take advantage of this time to explain and enroll customers for the
latest services and products.
 Banners do catch the eyes of existing customers for sure; banners must be put
up at the ATMs as people do tend to read things at the ATMs.
 The bank must consider positioning and mapping themselves on the minds of
people that they are customer oriented and always explore ways to make
banking easier for them.
 Television ads will definitely make a difference in the attitude of the people;
however financial part needs to be considered.
 News paper ads will allow us to reach out and educate maximum customers
about our bank and thus create a scene of awareness among the masses.
 We can give out information regarding our bank at various popular e-mail
sites or even auction sites.
 After any transaction from the ATM customers generally do take the slips to
check balance. The back side of the slip can be used to provide information to
the customers about the advantages of banking with them with respect to other
banks-just a medium for promotion.
 While staffs are dealing with a single customer, as other customers are also
waiting and staff should ensure that we should not waste other customers‘
valuable time.
 Bank should also have to improve its infrastructure as cusomers feel
inconvenience in sitting and standing.

51
 The customers of banking industries preferred and except transparency with
the executives. So, customer interaction programmes must be essential to
study the characteristic features of the customers.
 The customers are advised to the about mutual benefit. This enables the
industries to improve the quality of services. The qualitative approach and
proportionate should be taken care for their customers.

CONCLUSION
This chapter is completely dedicated to summaries the entire research work and to
present the important findings obtain through this innovative research work. The need
to find new sources of revenue is a fundamental requirement for business growth.
Developing close, co-operative relationship with customers is more important in the
current era of intense competition and demanding customers than it has ever been
before. In the past, many organizations depended on personalized services to develop
and maintain the loyalty of their customers.
As the customer relationship with their supplier has become more electronic, the
traditional source as customer loyalty personal service has been impacted. The one to
one contact with an organization now occurs most often by telephone or on the
internet. In effect, it is a combination of good business practices with common sense
and courtesy.
It is a well known fact that it cost a company dramatically less to retain and grow
existing customers than it does to court new ones and this proposition under pins the
argument that CRM is one of the most effective and valuable business tools available.
The real customer relationships, those that result in the customer feeling a genuine
sense of loyalty to the firm are predicated on a sense of satisfying experiences with
the company
Banking can be mysterious for consumers and how they interact with their finances
can be a complex matter. The challenges faced by banks and their customers are many
but the trick lies in de-mystifying complex financial relationships.
Technical solutions deployed by banks today are flexible, user-friendly and meant to
facilitate specific workflow and requirements in implementation processes. In order to
simplify lives, banks have begun to implement end-to-end technologies through all
departments with the intention of removing human error from processes.
Previously existing manual environments could not have been adequate for future
visions, growth plans and strategies. In this day and age, customers enjoy complete
luxury in terms of customized technical solutions and banks use the same to cement
long-term, mutually-beneficial relationships.

53
For a bank to succeed in adopting a CRM philosophy of doing business, bank
management must first understand CRM as a holistic concept that involves multiple,
interlocking disciplines, including market knowledge, strategic planning, business
process improvement, product design and pricing analysis, technology
implementation, human resources management, customer retention, and sales
management and training. Turning the business strategy into actionable items is a
difficult undertaking. For which Customer Relationship Management works a magic
wand.
This current study reinforces the importance of CRM practices and creates
information for banks on customer interactions and behaviours likely to generate
desired business results. The study shows that the combination of three strategic
capabilities comprising of technologic human, and business architecture capabilities
are required to create a superior CRM capability.
Customer relationship management is based on customer because survive was made
in the global market and focused on the customer and the customer is becoming a key
factor for the small and big companies. The companies know that its cost is more to
acquire a new customers than to get an existing customer for a making a purchase.
Another aspect of survival of CRM is that knowing the customer better and also
his/her preferences will allow the companies to acquire new customers more easily
and facilitates targets crossselling. CRM is based on the basic marketing belief that an
organization that knows its customer like an individual.
The organization’s components include the database warehouse that store all the
company information of the customer. For the collection of the customer database,
they are using the customer service system, call centre, e-commerce, web marketing,
operation system than get the complete information of the customer and the sales
system. In the portable sales communication, the CRM is appointment making of the
service.
In the practice, the CRM system is the range from automated customercontacts
system to the company wide pooling for the customer information. CRM is a system
for capital investment that integrates the strategy, marketing and the IT system. It is
also is a strategic know how to handle the customer relations from a company point of

view. The strategy is based how to develop, establish and increase the relation with
the customer for profitability perspective. It is based on the knowledge of the
individual customer’s need and potential, the company makes a strategic to find out
the different of the customer with other customer to gain the customer for a long
period of time.
The cut across traditional the organization structure is to force the customer in the
integration of the company activities. By the implementation of CRM is not a small
task of any organization. There is no doubt that the CRM can be major factor that give
the competitive advantage for the maximum market and customer. If any company
implement the inappropriate CRM than quality demand by the customer is going to be
161 declined.
Their results the customers leave that company and never return to the organization
because of the bad experience with the organization. CRM integrates sales, marketing,
service, enterprise resource planning and the supply chain management through the
business process by using technology solution, information resource and automation
to maximize the customer contact.
The banking industry in India has undergone radical changes due to the liberalization
and globalization measures undertaken since 1991.Today, Indian banking industry is
one of the largest in the world. Banks are looking to create pool of satisfied and
delighted customer who is vital non-financial asset through efficient services in the
emerging IT era. Customer Relationship Management (CRM) provides interactive,
personalized and relevant communication with customers to develop and maintain
relationships.
CRM is a holistic strategy which can help the banks to build a relationship with their
customers that can last a lifetime, enables to develop philosophy that is oriented
towards the customers. Our study has focused on Customer satisfaction, Loyalty,
Trust, Retention & Customer Buying Behaviour is the measure of how the needs and
responses are collaborated and delivered to excel customer expectation. In today’s
competitive business marketplace, customer satisfaction is an important performance
exponent and basic differentiator of business strategies. Hence, the more is customer
satisfaction; more is the business and more is the bonding with customer.

55
Customer satisfaction depends on quality of service, price, promotion, packaging,
location etc provided to him by the supplier. If the quality and trend of service go
beyond customer’s expectation, the organization is supposed to have a good business
with customers.
The finding has depicted that the dependent variable shows a positive relationship
with the other variable. CRM is influenced by, service quality, price, promotion,
internal satisfaction and customer loyalty value. The customer satisfactio0n is the
main point which is the important thing in every industry.
By apply the CRM in the industry, the customer will be satisfied with the service of
the company and will be a customer loyal 164 for the company. And the company
cost will reduce because they will not focus on the advertisement but they will focus
to give the customer better service and satisfaction.
Although there is a moderated relationship between these variable are positive and
independent variables (dimensions of CRM) has a position relationship with the
dependent variable customer satisfaction.
Acquiring new customers is the company acquires customers by promoting product
and service leadership. To enhance the maximum profitability of existing customers
the company should enhances the relationship by encouraging excellence in cross
selling and up selling of the product and the relationship will be useful for the
company because the customer become loyal to the company and will use the same
service or product again.
Therefore, by the deepening and broadening of the relationship with the customer and
to retain the profitable customers for life time, the customer retention is focuses on
service adaptability, delivering the service or product on the right time but not what
the market wants but do as the customers want.

BIBILOGRAPHY
1. Divya Prabha D and Dr. Krishnaveni R (2008), “A study on Corporate Customer
Relationship Management in Banking Industry”, PSG Journal of Management
Research.
2. Saurbhi Chaturvedi and Dr. Rishu Roy (2008), “Impact of CRM on Organizational
Effectiveness: An Exploratory Study of Services Sector”, Management Trends.
3. Sanjit Kumar Roy (2008), “CRM Implementation in Banks”, the Icfaian Journal of
Management Research.
4. Han-Yuh Lies (2007), “Development of a Frame work for Customer Relationship
Management in the Banking Industry”, International Journal of Management.
5. Day GS, Van den Bulte C (2002) Superiority in Customer Relationship
Management: Consequences for Competitive Advantage and Performance, Marketing
Science Institute, Cambridge, MA.
6. Campbell, A. (2003), "Creating customer knowledge: managing customer
relationship management programs strategically", Industrial Marketing Management.
7. Choy, K.L., Fan, K.K. and Lo, V. (2003), "Development of an intelligent
customer-supplier relationship management system.
8. Camponovo G., Pigneur Y., Rangone, A., & Renga, F. (2005). Mobile Customer
Relationship Management: An Explorative Investigation of the Italian Consumer
Market. Proceedings of The Fourth International Conference on Mobile Business
(ICMB 2005), Sydney, 11-13 July 2005.
9. Chalmeta, R. (2006). Methodology for customer relationship management. The
Journal of Systems and Software, 79, 1015-1024.
10. Goel, L., & Mousavidin, E. (2007). vCRM: Virtual Customer Relationship
Management. Database for Advances in Information Systems.

57
Web sites
1. www.rbi.org.in
2. www.sbigeneral.in
3. www.sbilife.co.in
4. www.google.com
5. www.yahoo.com

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