A STUDY ON CUSTOMER BEHAVIOUR TOWARDS BANKING SERVICES WITH SPECIAL REFERENCE TO PUBLIC SECTOR BANKS IN KADI

KADI SARVA VISHWAVIDYALAYA UNIVERSITY, GANDHINAGAR
N.P. COLLEGE OF COMPUTER STUDIES AND MANAGEMENT, KADI 1
The concept of Banking in India dates back to the first half of 18th century. The first bank that
was established in the country was The General Bank of India founded in 1786. After that came
the State Bank of India in Kolkata in 1806 which was then known as The Bank of Bengal.
The operations of all the banks in India are controlled by the Reserve Bank of India. All the
Indian banks are governed by the RBI or Reserve Bank of India. This governing body took
over the reasonability of formally regulating the Indian banks in 1935. The Reserve Bank of
India was announced as the official Central Banking Authority for the smooth supervision of
the banking industry in India. Banks in India are classified into 2 broad categories namely,
Public sector 0banks and Private sector banks. The banking scenario in India has already gained
momentum, with the domestic and international banks gathering pace.
All the banks in India are following the 'cost', determined by revenue minus profit model.
This means that all the resources should be used efficiently to improve the productivity and
ensure a win-win situation. To survive in the long run, it is essential to focus on cost saving.
Previously, banks focused on the 'revenue' model which is equal to cost plus profit.
Public Sector Banks In India:
Banks such as State Bank of India, Bank of Baroda, Syndicate Bank and Canara Bank are
known as Public sector banks. Public sector banks are controlled and managed by the
Government of India. Public sector banks have been serving the nation for over centuries and
are well known for their affordable and quality services. The banking sector in India is mostly
dominated by the Public sector banks. The Public sector banks in India alone account for about
75 percent of the total advances in the Indian banking industry. Public sector banks have shown
remarkable growth over the last five four decades. Allahabad Bank was the first fully owned
Indian bank. It was founded in the year 1865.
As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and
well-regulated. The financial and economic conditions in the country are far superior to any
other country in the world. Credit, market and liquidity risk studies suggest that Indian banks
are generally resilient and have withstood the global downturn well.Indian banking industry is
expected to witness better growth prospects in 2015 as a sense of optimism stems from the
Government’s measures towards revitalizing the industrial growth in the country. In addition,
RBI’s new measures may go a long way in helping the restructuring of the domestic banking
industry.
Market Size:
The Indian banking system consists of 26 public sector banks, 25 private sector banks, 43
foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural
cooperative banks, in addition to cooperative credit institutions. Public-sector banks control
nearly 80 percent of the market, thereby leaving comparatively much smaller shares for its
private peers. As of November 11, 2015, 192.1 million accounts had been opened under
Pradhan Mantri Jan Dhan Yojna (PMJDY) and 165.1 million Ru Pay debit cards were issued.
These new accounts have mustered deposits worth Rs 26,819 crore (US$ 4 billion).Standard &
1.1 INTRODUCTION

Poor’s estimates that credit growth in India’s banking sector would improve to 12-13 per cent
in FY16 from less than 10 per cent in the second half of CY14.
Investments/developments:
In the past few months, there have been many investments and developments in the Indian
banking sector
 Global rating agency Moody's has upgraded its outlook for the Indian banking system
to stable from negative based on its assessment of five drivers including improvement
in operating environment and stable asset risk and capital scenario.
 Lok Capital, a private equity investor backed by US-based non-profit organisation
Rockefeller Foundation, plans to invest up to US$ 15 million in two proposed small
finance banks in India over the next one year.
 The Reserve Bank of India (RBI) has granted in-principle licences to 10 applicants to
open small finance banks, which will help expanding access to financial services in
rural and semi-urban areas.
 IDFC Bank has become the latest new bank to start operations with 23 branches,
including 15 branches in rural areas of Madhya Pradesh.
 The RBI has given in-principle approval to 11 applicants to establish payment banks.
These banks can accept deposits and remittances, but are not allowed to extend any
loans.
 The Bank of Tokyo-Mitsubishi (BTMU), a Japanese financial services group, aims to
double its branch count in India to 10 over the next three years and also target a 10 per
cent credit growth during FY16.
 State Bank of India has tied up with e-commerce portal Snapdeal and payment gateway
Paypal to finance MSME businesses.
 The United Economic Forum (UEF), an organisation that works to improve socio-
economic status of the minority community in India, has signed a memorandum of
understanding (MoU) with Indian Overseas Bank (IOB) for financing entrepreneurs
from backward communities to set up businesses in Tamil Nadu
 The RBI has allowed third-party white label automated teller machines (ATM) to
accept international cards, including international prepaid cards, and said white label
ATMs can now tie up with any commercial bank for cash supply.
 The RBI has allowed Indian alternative investment funds (AIFs), to invest abroad, in
order to increase the investment opportunities for these funds.
 In order to boost the infrastructure sector and the banks financing long gestation
projects, the RBI has extended its flexible refinancing and repayment option for long-
term infrastructure projects to existing ones where the total exposure of lenders is more
than Rs 500 crore (US$ 75.1 million).
 RBI governor Mr Raghuram Rajan and European Central Bank President Mr Mario
Draghi have signed an MoU on cooperation in central banking. “The memorandum of
understanding provides a framework for regular exchange of information, policy
dialogue and technical cooperation between the two institutions. Technical cooperation
may take the form of joint seminars and workshops in areas of mutual interest in the
field of central banking,” RBI said on its website.

 RBL Bank informed that it would be the anchor investor in Trifecta Capital’s Venture
Debt Fund, the first alternative investment fund (AIF) in India with a commitment of
Rs 50 crore (US$ 7.51 million). This move provides RBL Bank the opportunity to
support the emerging venture debt market in India.
Bandhan Financial Services raised Rs 1,600 crore (US$ 240.2 million) from two international
institutional investors to help convert its microfinance business into a full service bank.
Bandhan, one of the two entities to get a banking licence along with IDFC, launched its banking
operations in August 2015.
Banks play an important role in the economic development of a country. A bank connects
customers which have capital deficits to those customers with capital surpluses.The banking
industry in India is facing certain challenges i.e. challenges of quality service, customer
satisfaction, customer retention, customer loyalty. Quality service plays a major role in
achieving customer satisfaction and creating brand loyalty in banking sector.
Nationalization of these banks without which it would not have been possible to transform the
class banking into mass banking and align bank credit to serve the planned priorities and social
needs. Branch expansion programs formulated by the Reserve Bank of India aimed at making
available necessary banking facilities in all parts of the country specially the unbanked rural
and semi urban areas.
Banking system occupies an important place in a nation’s economy. A banking institution is
indispensable in a modern society. It plays a pivotal role in the economic development of a
country. Thus, economic development of a country depends upon the success of its banking
industry and this success is determined to a large extent by understanding the needs and
satisfaction of its customers. In the earlier societies functions of a bank were done by the
corresponding institution dealing with loans and advances.
Britishers brought into India the modern concept of banking by the start of Bank of England in
1694. In 1708, the Bank of England was given the monopoly for the issue of currency notes by
an Act. In nineteenth century various banks started operations, which primarily were receiving
money on deposits, lending money, transferring money from one place to another and bill
discounting. India has a well-developed banking system.
Most of the banks in India were founded by Indian entrepreneurs and visionaries in the pre-
independence era to provide financial assistance to traders, agriculturists and budding Indian
industrialists. The origin of banking in India can be traced back to the last decades of the 18th
century. The General Bank of India and the Bank of Hindustan, which started in 1786 were the
first banks in India. Both the banks are now defunct. The oldest bank in existence in India at
the moment is the State Bank of India (SBI). The State Bank of India came into existence in
1806. At that time it was known as the Bank of Calcutta. SBI is presently the largest
commercial bank in the country.
Banking has come to occupy a crucial position in a nation’s economy. According to the modern
concept, banking is a business which not only deals with borrowing, lending and remittance of
funds, but also an important instrument for fostering economic growth. Service is an invisible
thing which is indispensable from the person who extends it. An efficient service is one which

is extended appropriately by identifying and understanding the needs of the individual
customer from time to time.
The customers at the present juncture are well exposed to unstoppable innovations in
communication technology. He/she is aware of the kind of service level available around the
world and thus expects the best from his/her bank. Customer service is not only a critical
function but plays a vital role for the business. It is next most important business strategy. The
improved customer services will definitely increase profitability. A bank can be said as
customer oriented if its various organizational activities like organizational restructuring,
staffing and coordination are geared up to full fill the needs of the customers.
The Rangarajan Committee Report (1989) was the first path breaking step in this direction,
which highlighted that “computerization must be looked upon as a means to improve customer
service and efficiency” and that “the banks workforce should realize that mechanization would
lead to growth and employment expansion” (Bide 1997). Subsequently Narasimhan Committee
(1992), while highlighting the problems faced by Indian public sector banks and as antidote to
the identified lacunae, also stressed the need for greater measure of computerization in banks.
The committee observed that modern banking involves a great deal of processing of mass
information and commitment to technology is the only solution that ensures timeliness,
accuracy and resultant in customer service (Bide 1997).
List of Public Sector Banks in India:
1.Bank of Baroda
 2. Allahabad Bank
 3.State Bank of Saurashtra
 4.Central Bank of India
 5.State Bank of Patiala
 6.Andhra Bank
 7.Canara Bank
 8.State Bank of Hyderabad
 9.Oriental Bank of Commerce
 10.Dena Bank
 11.State Bank of Mysore
 12.State Bank of Indore
 13.UCO Bank
 14.Vijaya Bank
 15.Syndicate Bank
 16.State Bank of India
 17.Bank of India
 18.Corporation Bank
 19.Indian Bank
 20.Union Bank of India
 21.Punjab National Bank-
 22.State Bank of Bikaner and Jaipur
 23.State Bank of Travancore

The origin of western type commercial Banking in India dates back to the 18th century. The
story of banking starts from Bank of Hindustan established in 1770 and it was first bank at
Calcutta under European management. It was liquidated in 1830-32. From Bank of Hindustan
in 1770, the evolution of banking in India can be divided into three different periods as
follows: Phase I: Early phase of primitive Indian banks to Nationalization of Banks in 1969
Phase II: From Nationalization of India banks in 1969 up to advent of liberalization and
banking reforms in 1991 Phase III: From Indian Financial and Banking Sector Reforms 1991
onward In 1786 General Bank of India was set up. Since Calcutta was the most active trading
port in India, mainly due to the trade of the British Empire, it became a banking center. Three
Presidency banks were set up under charters from the British East India Company- Bank of
Calcutta, Bank of Bombay and the Bank of Madras.
These worked as quasi central banks in India for many years. The Bank of Calcutta established
in 1806 immediately became Bank of Bengal. In 1921 these 3 banks merged with each other
and Imperial Bank of India got birth. Imperial Bank of India was later renamed in 1955 as the
State Bank of India. Thus, State bank of India is the oldest Bank of India. In 1839, there was a
fruitless effort by Indian merchants to establish a Bank called Union Bank. It failed within a
decade. Next came Allahabad Bank which was established in 1865 and working even today.
The oldest Public Sector Bank in India having branches all over India and serving the customers
for the last 145 years is Allahabad Bank. Allahabad bank is also known as one of India’s Oldest
Joint Stock Bank. However, the Oldest Joint Stock bank of India was Bank of Upper India
established in 1863 and failed in 1913. The first Bank of India with Limited Liability to be
managed by Indian Board was Oudh Commercial Bank. It was established in 1881 at Faizabad.
This bank failed in 1958. The first bank purely managed by Indians was Punjab National Bank,
established in Lahore in 1895. The Punjab national Bank has not only survived till date but also
is one of the largest banks in India. However, the first Indian commercial bank which was
wholly owned and managed by Indians was Central Bank of India which was established in
1911. So, Central Bank of India is called India’s First Truly Swadeshi bank.
Public sector banks are the ones in which the government has a major holding. They are divided
into two groups i.e. Nationalized Banks and State Bank of India and its associates. Among
them, there are 19 nationalized banks and 8 State Bank of India associates. Public Sector Banks
dominate 75% of deposits and 71% of advances in the banking industry.
Public Sector Banks dominate commercial banking India. The first bank of limited liability
managed by Indians was Oudh Commercial Bank founded in 1881. Subsequently, Punjab
National Bank was established in 1894. Swadeshi movement, which began in 1906, encouraged
the formation of a number of commercial banks. Banking crisis during 1913-1917 and failure
of 588 banks in various parts of the country during the decade ended 1949 underlined the need
for regulating and controlling commercial banks. The Banking Companies Act was passed in
February 1949, which was subsequently amended to read as Banking Regulation Act, 1949.
1.2 HISTORY

This Act provided the legal framework for regulation of the banking systemin India. The largest
bank -
Imperial Bank of India - was nationalised in 1955 and renamed as State Bank of India, followed
by formation of its 7 Associate Banks in 1959. With a view to bringing commercial banks into
the mainstream of economic development with definite social obligations and objectives, the
Government of India issued an ordinance on 19 July 1969 acquiring ownership and control of
major banks in the country. Six more commercial banks were nationalised from April 1980.
As certain rigidities and weaknesses were found to have developed in the banking system
during the late eighties, the Government of India felt that these had to be addressed to enable
the financial system to play its role in ushering in a more efficient and competitive economy
Accordingly, a high-level Committee on the Financial System (CFS) was set up on 14 August
1991 to examine all aspects relating to the structure, organization, functions and procedures of
the financial systems. Based on the recommendations of the Committee (Chairman: Shri
M.Narasimham), a comprehensive reform of the banking system was introduced in 1992-93.
To review the record of implementation of financial system reforms recommended in 1991 by
the Committee on Financial System and chart the path of reforms in the years ahead, a high-
level Committee on Banking Sector Reforms, under the Chairmanship of Shri M.Narasimham
was constituted by the Government of India in December 1997. The Committee submitted its
report in April 1998. Some of the recommendations of the Committee, on prudential norms,
Capital Adequacy Ratio, classification of Government guaranteed advances, provisioning
requirements on standard advances and more disclosures in the Balance Sheets of banks were
accepted and implemented. Recent major initiatives undertaken for strengthening the financial
sector in pursuance to the recommendations of the above Committee relate to guidelines to
banks on Asset-Liability Management and integrated risk management systems, compliance
with Accounting Standards, consolidated accounting and supervision, fine-tuning of prudential
norms for income recognition, asset classification and provisioning for NPAs, etc.
The guidelines on setting-up of Off-shore Banking Units in Special Economic Zones, Fair
Practices Code for Lenders, Corporate Governance, Anti-Money Laundering measures, Know
Your Customer (KYC) norms, Corporate Debt Restructuring (CDR) derivatives, guidance
notes on Credit Risk, Market Risk, Operational Risk, etc., are other important developments
introduced in the banking sector in recent years. RBI has also issued revised guidelines on
migration to Basel II Framework on Capital Adequency. The Securitization and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002 has facilitated NPA
management by banks more effectively.
In 1993, in recognition of the need to introduce greater competition, new private sector banks
were allowed to be set up. Licenses were issued to 10 banks which had satisfied the necessary
regulatory requirements. Subsequently in 2001, fresh guidelines for setting up new private

sector were issued and two banks were issued license under those guidelines. A draft
comprehensive policy framework for ownership and governance in private sector banks was
put in the public domain on 2 July 2004 for discussion and feedback. After taking into
consideration the feedback received from all concerned and in consultation with Government
of India, RBI issued detailed Guidelines on ownership and governance in private sector banks
on 28 February 2005. The underlying principles of the guidelines inter alia are to ensure that
the all banks in the private sector have a networth of 300 crore, ultimate ownership and control
of private sector banks is well diversified, important shareholders (i.e., shareholding of 5 per
cent and above) conform to the 'fit and proper' criteria. The directors and the CEO who manage
the affairs of the bank should also satisfy the 'fit and proper' criteria. The guidelines also provide
for restrictions on cross holding above 5 per cent by one bank/Financial Institution (FI) in
another bank/FI and observance of sound corporate governance principles.
On a review of corporate governance practices in Banks in 2007, RBI advised banks in private
sector to ensure that their Memorandum and Articles of Association conform to the above
mentioned stipulations. Banks in private sector were also advised to split the posts of
Chairman/MD/CEO and have a part time Chairman of the Board of Directors and a separate
Chief Executive Officer /Managing Director who would be responsible for day-to-day
management/activities of the bank.
Reserve Bank of India issued guidelines on May 11, 2005 for merger/ amalgamation of private
sector banks for consolidation in the banking sector. The guidelines are applicable where the
merger takes place between two banking companies or between a banking company and a non-
banking financial company.

Evolution History of Banks in India In Chronological Order
Origination of banking system in India took place in 18th century. And since the inception of
first bank in India, banks have seen vast changes in every aspect. Listed below is the established
year of bank’s in India:
 1786 – General Bank of India. This was the first bank established in India.
 1790 – Bank Of Hindustan which lasted until. 1832.
 1839 – Union Bank
Establishment of Three Presidency Banks
1) 02 June 1806 – Bank of Calcutta
2) 15th April 1840 – Bank of Bombay
3) 01st July 1843 – Bank of Madras
Year of Formation of Other Public & Private Sector Banks
1863 – Bank of Upper India
1865 – Allahabad Bank
1881 – Oudh Commercial Bank
19th May 1894 – Punjab National Bank
1895 – Punjab National Bank In Lahore
1904 – City Union Bank
1906 – Bank of India
12 March 1906 – Corporation Bank
15th August 1907 – Indian Bank
1.3 EVOLUTION OF BANKS

1908 – Bank of Baroda
01st July 1906 – Canara Hindu Permanent Fund (Rechristened to Canara Bank in 1910)
21st December 1911 – Central Bank of India
1916 – Karur Vysya Bank
11 November 1919 – Union Bank of India
26th November 1920 – Catholic Syrian Bank
1921 – Imperial Bank of India. Three presidency banks were merged in 1921 and evolution of
this bank took place
11th May 1921 – Tamilnad Mercantile Bank Limited
1923 – Andhra Bank
1924 – Karnataka Bank Limited
1925 – Syndicate Bank
1926 – Lakshmi Vilas Bank Limited
1927 – Dhanlaxmi Bank Ltd
1929 – South Indian Bank Limited
23rd October, 1931 – Vijaya Bank
1934 – Reserve Bank of India
16th Sept 1935 – Bank of Maharashtra
1937 – Indian Overseas Bank
1938 – Jammu & Kashmir Bank
26th May 1938 – Dena Bank
19th February 1943 – Oriental Bank of Commerce
1943 – UCO Bank
1943 – United Bank of India

1945 – Federal Bank Limited
1954 – Nainital Bank Limited
1955 – State Bank of India (Post independence, Imperial Bank became State Bank of India)
1985 – Kotak Mahindra Bank
1994 – UTI Bank (Now Axis Bank)
August 1994 – HDFC Bank
1996 – ICICI Bank
2003 – Yes Bank

GLOBAL SCENARIO
In 2014, the global economy entered a period of adjustment, leading to differentiated bank
performance results. The banking industry in the US and the UK saw an upturn, while that in
Japan and Euro Zone remained sluggish and facing challenges. Against the backdrop of the
“New Normal” economic pattern in China, the assets and liabilities and net profit growth of
China’s banking industry slowed down, and credit risk pressure increased but was controllable
on the whole.
In 2015, the global banking industry will face large and challenging operating pressure, and
difficulties and differentiated performances will become the key words. BOC Institute of
International Finance Global Banking Industry Research Team.
CURRENT SCENARIO
The Indian banking system consists of 26 public sector banks, 20 private sector banks, 43
foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural
cooperative banks, in addition to cooperative credit institutions. The Indian banking sector’s
assets reached US$ 1.8 trillion in FY14 from US$ 1.3 trillion in FY10, with 70 per cent of it
being accounted by the public sector.
Deposit growth has been steady
 Total money supply increased at a CAGR of 11.14 per cent during FY06–16*
 Between FY06–16*, narrow money supply (M1) rose at a CAGR of 7.69 per cent to US$ 392.8
billion, broad money supply (M2) increased at a CAGR of 6.49 per cent to US$ 395.3 billion
and money supply (M3) grew at a CAGR of 11.14 per cent to US$ 1.8 trillion by the end of
October’15
 Time deposits with banks have shown highest average growth of 12.9 per cent during FY06–
16*, and stood at US$ 1.44 trillion by the end of October’15
1.4 CURRENT AND GLOBAL SCENARIO

Total lending and deposits increased at a compound annual growth rate (CAGR) of 20.7 per
cent and 19.7 per cent, respectively, during FY07-14 and are further poised for growth, backed
by demand for housing and personal finance. Total asset size of banking sector assets is
expected to increase to US$ 28.5 trillion by FY25. Deposits have grown at a CAGR of 13.6
per cent during FY05–15 to an estimated US$ 1.48 trillion in FY15. Deposit growth has been
mainly driven by strong growth in savings amid rising disposable income levels.
Indian banks are increasingly focusing on adopting integrated approach to risk management.
Banks have already embraced the international banking supervision accord of Basel II.
According to RBI, majority of the banks already meet capital requirements of Basel III, which
has a deadline of March 31, 2019. Most of the banks have put in place the framework for asset-
liability match, credit and derivatives risk management.
Rising incomes are expected to enhance the need for banking services in rural areas and
therefore drive the growth of the sector; programmes like MNREGA have helped in increasing
rural income aided by the recent Jan Dhan Yojana. The Reserve Bank of India (RBI) has
relaxed its branch licensing policy, thereby allowing banks (which meet certain financial
parameters) to set-up new branches in tier-2 to tier-6 centers, without prior approval from RBI.
It has emphasised the need to focus on spreading the reach of banking services to the un-banked
population of India.
With the potential to become the fifth largest banking industry in the world by 2020 and third
largest by 2025 according to KPMG-CII report, India’s banking and financial sector is
expanding rapidly. The Indian Banking industry is currently worth Rs. 81 trillion (US $ 1.31
trillion) and banks are now utilizing the latest technologies like internet and mobile devices to
carry out transactions and communicate with the masses.
The Indian banking sector consists of 26 public sector banks, 20 private sector banks and 43
foreign banks along with 61 regional rural banks (RRBs) and more than 90,000 credit
cooperatives.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.
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 and private sector banks (the old/ new
domestic and foreign). These banks have over 67,000 branches spread across the country. The
Public Sector Banks(PSBs), which are the base of the Banking sector in India account for more
than 78 per cent of the total banking industry assets. Unfortunately they are burdened with
excessive Non Performing assets (NPAs), massive manpower and lack of modern technology.
On the other hand the Private Sector Banks are making tremendous progress. They are leaders
in Internet banking, mobile banking, phone banking, ATMs. As far as foreign banks are
concerned they are likely to succeed in the Indian Banking Industry.
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.

During the year 2000, the State Bank Of India (SBI) and its 7 associates accounted for a 25
percent share in deposits and 28.1 percent share in credit. The 20 nationalized banks accounted
for 53.2 percent of the deposits and 47.5 percent of credit during the same period. The share of
foreign banks (numbering 42), regional rural banks and other scheduled commercial banks
accounted for 5.7 percent, 3.9 percent and 12.2 percent respectively in deposits and 8.41
percent, 3.14 percent and 12.85 percent respectively in credit during the year 2000.
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.
PSBs, which currently account for more than 78 percent of total banking industry assets are
saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from traditional
sources, lack of modern technology and a massive workforce while the new private sector
banks are forging ahead and rewriting the traditional banking business model by way of their
sheer innovation and service. The PSBs are of course currently working out challenging
strategies even as 20 percent of their massive employee strength has dwindled in the wake of
the successful Voluntary Retirement Schemes (VRS) schemes.
Banks play an important role in the economic development of a country. It is a financial
institution that accepts deposits and channels those deposits into lending activities either
directly or through capital markets. A bank connects customers which have capital deficits to
those customers with capital surpluses.
The banking industry in India is facing certain challenges i.e. challenges of quality service,
customer satisfaction, customer retention, customer loyalty. Quality service plays a major role
in achieving customer satisfaction and creating brand loyalty in banking sector. One of the
most momentous of such initiatives was the substitution of private ownership by public
ownership, through the medium of an ordinance of the largest commercial banks in the private
sector on 19 July 1969.
Nationalization of these banks without which it would not have been possible to transform the
class banking into mass banking and align bank credit to serve the planned priorities and social
needs. Branch expansion programs formulated by the Reserve Bank of India aimed at making

available necessary banking facilities in all parts of the country specially the unbanked rural
and semi urban areas.
Banking system occupies an important place in a nation’s economy. A banking institution is
indispensable in a modern society. It plays a pivotal role in the economic development of a
country. Thus, economic development of a country depends upon the success of its banking
industry and this success is determined to a large extent by understanding the needs and
satisfaction of its customers. In the earlier societies functions of a bank were done by the
corresponding institution dealing with loans and advances.
Britishers brought into India the modern concept of banking by the start of Bank of England in
1694. In 1708, the Bank of England was given the monopoly for the issue of currency notes by
an Act. In nineteenth century various banks started operations, which primarily were receiving
money on deposits, lending money, transferring money from one place to another and bill
discounting. India has a well-developed banking system.
Most of the banks in India were founded by Indian entrepreneurs and visionaries in the pre-
independence era to provide financial assistance to traders, agriculturists and budding Indian
industrialists. The origin of banking in India can be traced back to the last decades of the 18th
century. The General Bank of India and the Bank of Hindustan, which started in 1786 were the
first banks in India. Both the banks are now defunct. The oldest bank in existence in India at
the moment is the State Bank of India (SBI). The State Bank of India came into existence in
1806. At that time it was known as the Bank of Calcutta. SBI is presently the largest
commercial bank in the country.
Banking has come to occupy a crucial position in a nation’s economy. According to the modern
concept, banking is a business which not only deals with borrowing, lending and remittance of
funds, but also an important instrument for fostering economic growth. Service is an invisible
thing which is indispensable from the person who extends it. An efficient service is one which
is extended appropriately by identifying and understanding the needs of the individual
customer from time to time.
The customers at the present juncture are well exposed to unstoppable innovations in
communication technology. He/she is aware of the kind of service level available around the

world and thus expects the best from his/her bank. Customer service is not only a critical
function but plays a vital role for the business. It is next most important business strategy. The
improved customer services will definitely increase profitability. A bank can be said as
customer oriented if its various organizational activities like organizational restructuring,
staffing and coordination are geared up to fulfill the needs of the customers.
The Rangarajan Committee Report (1989) was the first path breaking step in this direction,
which highlighted that “computerization must be looked upon as a means to improve customer
service and efficiency” and that “the banks workforce should realize that mechanization would
lead to growth and employment expansion” (Bide 1997). Subsequently Narasimhan Committee
(1992), while highlighting the problems faced by Indian public sector banks and as antidote to
the identified lacunae, also stressed the need for greater measure of computerization in banks.
The committee observed that modern banking involves a great deal of processing of mass
information and commitment to technology is the only solution that ensures timeliness,
accuracy and resultant in customer service (Bide 1997).

Title of project :
“A study on customer behaviour toward services with special reference to Public sector
Banks in Kadi”
Objective of study :
1. To study a customer behavior of services with special reference to Public sector Banks in
Kadi”
2. To study role of service quality in providing the excellent customer behavior in banking
industry. 3.
To identity the most important factor in customer service in public sector banks.
Research design:
The research design is descriptive in nature. The research design is a blueprint for fulfilling the
objective & answering the question. Selecting the research design is complicated due to
availability of large variety of method, techniques, procedures, protocols and sampling plans.
It guides the selection of sources and types of information. As far as our project is concern, we
have done research study by evaluating the various aspects of “A study on customer
behaviour toward services with special reference to Public sector Banks in Kadi”
Sampling Element:
Male or female head of household those who are using the banking services.
Sampling technique:
We have used non-probability sampling technique, in that convenience sampling is used in
project study.
Convenience Sampling:
In the convenience sampling the selection of the sample is left to the research who is
select the sample. The researcher normally interviews persons in group at some retail out let,
households, super market and interview the persons who happen to be there, the research
contact face to face to the respondents. The data collection and sample cost is minimum in this
case. This type of sampling also helps to get the new Ideas.
Research Instrument :
Research instrument means how the researchers get the information from the market.
TheResearch made a questionnaire to get the information from the market by fill up the
questionnaire.
2.1 RESEARCH METHODOLOGY

We used close ended questions for making the quesitionnaire.There are various of questions
which included in it as follows:
DICHOTOMOUS:
In the dichotomous the questions is common types like yes or no. These questions are easy to
ask an answer. These types of question are used only for to quality the respondents for the
research and it is give more information.
RANKING QUESTIONS:
The respondents rank coparatively the listed in this way several alternative can be compared
against each other at same time.
SCALEQUESTIONS: The
researcher asks this types of questions to the respondents to express their opinion for different
categories.
Sampling frame:
 A STUDY ON CUSTOMER BEHAVIOR TOWARDS BANKING SERVICES WITH
SPECIAL REFERENCE TO PUBLIC SECTOR BANKS IN SIVAGANGAI DIST.
 The Study of Customer Perception towards Banking Services of Banks in Indore
Region
Samplesize:
As the customer of Kadi city are only interviewed, we have kept our sample size limited to
150.
Analysis tools:
 Sufficiency table
 Statistical analysis
 Percentage
 Hypothesis testing
Data sources:
Primary data:
Primary data consists of collecting the information directly from respondents. primary data is
most reliable source in any research.

In our research we have directly asked questions to the customers, for that matter. We have
prepared a structured questionnaire to explore consumer’s view, interviews of some popular
banks are also taken for better understanding of the topic.
Secondary data:
Secondary data consists of published, or any other reference material which can be useful in
the particular subject. The sources of secondary data are many such as, magazines, newspaper,
journals, and internet. In our survey we have collected information from journals and websited.
Data-preparation:
The primary data that we have collected has been used for various hypothesis testing & other
statistical analysis. From that we have determined different suggestion/recommendations &
conclusion which will be useful not only for academic purpose but also to other players
operating in this field. The secondary data provided many insights into the topic, & was helpful
for better understanding of the project.
 The customer may not follow what they have stated in their responses in the
questionnaire.
 The study is limited to Kadi city only.
 The period allotted to do this project was not sufficient to cover each & every aspect in
depth.
 Data was not sufficient.
2.2 LIMITATION OF THE STUDY

Today world has become a global hub for business. To sustain and grow in the global market
industries require a strong banking system, which can satisfy the increasing needs of customer.
Indian banking system is now ready for the global market because of the Automation. The core
issues faced by banks today are on the fronts of customer’s service expectations, cutting
operational costs, and managing competition.
Safeena et al (2010) determines the customer’s perception on internet banking adoption .The
study shows that perceived usefulness, perceived ease of use, consumer awareness & perceives
risk are the important determinants of online banking adoption and have strong and positive
effect on customer to accept online banking system.
Santhiyavalli,G .(2011) determined the customer’s perception of service quality of the
selected branches of SBI and study the major factors responsible for their satisfaction.
Surbhi Singh and Renu Arora (2011) presented a paper on a comparative study of banking
services and customer satisfaction in public, private and foreign banks of Delhi and this study
shows that the customers of nationalized banks were not satisfied with the employee behaviour
and infrastructure, while respondents of private and foreign banks were not satisfied with high
charges, accessibility and communication.
MS Linda Mary Simon (2012) A study on customer perception towards services provided by
Public sector bank and Private sector bank in Coimbatore region reveals that private bank is
providing better services to its customers than the public sector bank. It is evident that public
sector banks have a strong presence in the market, but in recent times they are facing stiff
competition from private sector banks in the range and quality of services offered.
M.E. Doddaraju (2013) presented a study on customer satisfaction towards public and private
sector banking services with special reference to the Anantpur District of Andhra Pradesh
concluded that satisfaction level with regard to public sector units courtesy shown by bank staff
at the counter is very low. Therefore, the banks should pay special attention to “Human
Resource Development” by giving timely training to the employees to conduct themselves
better.
Dinabandhu Bag (2012) 82 observes that the personal credit has increased many times in India
since 1996. But this increase is not significant when compared to the increase in per capita
income and per household income in India. The demand for retail credit has increased as a
result of the increased employment generation in the organised sector. He further views that a
large portion of households remain unserved with retail credit and that the gap between retail
credit and income is increasing. Through better credit management tools the banks can improve
the credit eligibility and build a culture of credit.
Paritosh and Kavita (2012) 83 in their research paper on “The impact of customer satisfaction
on retail banking” conclude that the ATM, internet and branch office are the popular channels
used by retail banking customers. The financial crisis has not affected the trust and relationship
of customers with their retail banks.
3.1 LITERATURE REVIEW

Raghuwanshi (2012) 84 in his article states that the Indian retail banking has wide
opportunities and challenges. The retail portfolio of banks is subject to frequent change. Banks
should constantly innovate in retail banking through product diversification, technology up-
gradation, cross selling etc.
Revathy (2012) 85 in her article views that retail banking has greater scope of generating profit
than the traditional banking. Banks have identified this and are adopting a different approach
in designing the retail banking products and services to hold the market share.
Ashok Kumar (2013) 86 in his study “Opportunities and challenges in the Indian retail
banking industry” concludes that for the development of retail banking in India, a paradigm
shift is required in bank financing through innovative products and mechanisms involving
constant up-gradation of the banks internal systems and processes. Banks require product
development and differentiation, innovation and business process reengineering, micro-
planning, marketing, prudent pricing, customisation, technology up-gradation, electronic or
mobile banking, cost reduction and cross-selling for their development through retail lending.
He says that retail banking has more scope for generating profit than any other traditional
methods.
Madhvi (2013) 87 is of the opinion that retail banking is the most tremendous area to be looked
after by the banks. The rising population of higher income earning middle class, who are ready
to take risk, has increased the scope of retail banking. So banks should concentrate on this elite
group of customers through product innovation and offer them quality service in time.
Mittal and Pachauri (2013) 88 in their study on promotional tools and techniques adopted for
retail banking compared the public sector banks and private sector banks. Their finding is that
the perception of customers with regard to the type of promotional tools and the techniques
adopted significantly vary between public sector and private sector banks.
Phanindra and Parashuramulu (2013) 89 in their article view that the Indian banks have
wide scope for operations but the important obstacle before them is the hard regulations made
by the apex body. The LPG measures have affected the banking sector. Thus the participants
in retail banking in India have to adopt a different approach in designing products and services
in order to retain the market share.
Sujatha S. And Arumugam N. (2013) 90 in their study “Customer satisfaction in Indian
banking sector” view that before introducing various services to customers, banks should take
care of their needs. To serve customers with different occupations and educational backgrounds
banks should adopt strategies. There is a correlation between the satisfaction of the customer

and the performance of the banks. So it is important for banks to consider satisfaction of the
customer as a relationship- marketing strategy.
Gokilamani, and Natarajan (2014) 91 in their study opine that customers of Indian
commercial banks are positively responding to retail banking. It is important for banks to focus
on service quality for strengthening their competitive edge and to allocate the limited resources
to serve the personal banking division. They further views that the success of a retail bank will
depend on product innovation, technological developments and strategies to retain the retail
customers.
Sujatha S. And Arumugam N. (2013) 90 in their study “Customer satisfaction in Indian
banking sector” view that before introducing various services to customers, banks should take
care of their needs. To serve customers with different occupations and educational backgrounds
banks should adopt strategies. There is a correlation between the satisfaction of the customer
and the performance of the banks. So it is important for banks to consider satisfaction of the
customer as a relationship- marketing strategy.
Gokilamani, and Natarajan (2014) 91 in their study opine that customers of Indian
commercial banks are positively responding to retail banking. It is important for banks to focus
on service quality for strengthening their competitive edge and to allocate the limited resources
to serve the personal banking division. They further views that the success of a retail bank will
depend on product innovation, technological developments and strategies to retain the retail
customers.
Molina, A., Martin-Consuegra and D., Esteban, A. (2007) Relational Benefits and Customer
Satisfaction in Retail Banking. International Journal of Bank Marketing, 25 (4), 253-271.
Praveeth, K. (2007). Perceptions of Customers on Retail Banking: A Comparative Study
between Public Sector Banks and Private Sector Banks.
The foregoing analysis of the available literature of the researches carried out by various
scholars clearly shows that there is a research gap for the present study. The earlier studies
differed one another in the selection of variables, selection of reference period, selection of
banks and the use of tools and techniques. None of the studies had made an effort to understand
and “A study on customer behaviour toward services with special reference to Public sector
Banks in Kadi”.
3.2 RESEARCH GAP

1. Do you have a bank account?
Interpretation
This graph represents to 100% people used by public sector bank services and 0% people do
not use banking services in our survey research. There are 150 respondents have an account.
They are gives answer properly & next answers are gives sufficient. The details about the
customers having accounts in specific banks and the number of years of having transactions
with one banks. It is highlighted that 150(100%) of the respondents have their account in bank.
Particular No of respondent No of percentage
Yes 150 100%
No 0 0%
Total 150 100%
0
50
100
150
YES NO
150
0
Chart Title
Series1

2. In Which bank you have account?
INTERPRETATION:
In this chart represent a generally people which bank you have account? SBI bank’s respondent
is very high. PNB’s respondent is very low. In this chart concluded SBI, BOB, Dena bank,
Corporation, Other bank, like 42, 34, 20, 38, 4 respectively respondents. There are SBI bank’s
in mostly respondent have an account. The details about the customers having accounts in
specific banks and the number of years of having transactions with one banks. It is highlighted
that 42(28) % of the respondents have their account in State Bank of India (SBI), 34(23)% of
the respondents in Bank of Baroda(BOB),20(13%) of the respondents in Dena bank,38(25%)
of the respondents in Corporation,12(8%) of the respondents in Panjab National Bank(PNB),
another inferred that 4(3%) of the respondents have an experience with the oher bank.
SBI 42 28%
BOB 34 23%
DENA BANK 20 13%
CORPORATION
BANK
38 25%
PNB 12 8%
OTHER 4 3%
TOTAL 150 100%
42
34
20
38
12
4

3. Which of the following services are you using?
Interpretation:
In this chart represent a generally people which services are using a customer in bank. ATM is
respondents mostly using. Gold investment respondents are very low using the respondent. ATM, net
banking, telephone banking, credit card, debit card & gold investment are 76,22,14,17,12, & 9
respectively respondents gives the answer. Shows the customer preferences and their behaviour
with respect to bank ATM availability. It is measured through customers’ opinion about ATM,
Net banking, Telephone banking, credit card, debit card, gold investment, for preferring
particular banks services and overall behaviour. Out of 150 respondents, (76)51% of the
respondents were having uses the ATM, followed by (22)15% having net banking. A meagre
number of respondents had availed telephone banking (14) 9%, followed by credit & debit card
(17)11% & (12)8% respectively, and (9)6% of the respondents were having using the service.
particular No of respondent No of percentage
ATM 76 51%
NET BANKING 22 15%
TELEPHONE
BANKING
14 9%
CREDIT CARD 17 11%
DEBIT CARD 12 8%
GOLD
INVESTMENT
9 6%
TOTAL 150 100%
ATM Net banking Telephone
banking
Credit card Debit card Gold
investmet
facility
76
22
14 17
12 9

4. Which attribute of the bank do you value the most?
Interpretation:
In this chart represent a generally people which attribute of the bank do you value the most.
Respondents are trust most attribute of the bank do value. Quality of services, technology used,
trust, location, & other, 35, 41, 50,24,0 respectively respondents gives the answer.
Quality of service 35 24%
Technology used 41 27%
Trust 50 33%
Location 24 16%
Other 0 0%
Total 150 100
Quality of
services
Technology
used
Trust Location Other
35
41
50
24
0

5. Which factor promotes you to use the new services in banking?
Interpretation:
In this chart represent a generally people which factor promotes you to use the new services in
banking. Respondents are reduced time of transaction, cost effectiveness, ease of use,
technology survey & other, 62,23,45,20, & 0 respectively respondents gives the answer.
Reduction time of
transaction
62 42%
Cost effectiveness 23 15%
Ease of use 45 30%
Technology savvy 20 13%
Other 0 0%
Total 150 100%
Reduced time
of transactions
Cost
effectiveness
Ease of use Technology
savvy
Other
62
23
45
20
0

6. Which are the services you using the most?
Interpretation:
In this chart represent a generally people which services are using a customers in bank mostly.
De-mat account is respondents mostly using. Loan respondents are very low using the
respondent. De-mat account ATM, Credit card, debit card & loan are 1, 2,3,4,5, & 6
respectively respondents gives the answer in rank. Shows the customer preferences and their
behaviour with respect to bank ATM availability. It is measured through customers’ opinion
about ATM, Net banking, credit card, debit card, De-mat account, & loan, for preferring
particular banks services and overall behaviour. Out of 150 respondents.
Particular 1 2 3 4 5 6 Weightage
Score
Overall
Rank
De-mat account 52 53 12 8 4 21 678 1
ATM services 44 16 64 9 16 2 661 2
Debit card
services
18 34 44 32 9 11 579 3
Credit card
services
9 16 12 63 33 17 454 4
Net banking 14 9 8 23 58 38 384 5
Loan 13 22 9 15 30 61 390 6
Total 150 150 149 150 150 150
0
1
2
3
4
5
6
1 2 3 4 5 6
Series1

7. How frequently do you use the following banking services per month?
Services
Never 1to3
time
3to8
time
8to12
time
Over 12
time
avg Sd
Branch
banking
58 60 16 10 6 1.97 1.06
ATM 22 57 40 13 18 2.65 1.19
Internet
banking
31 61 39 11 8 2.36 1.06
Tele
phone
banking
50 45 40 10 5 2.17 1.07
Mobile
banking
30 61 32 17 10 2.44 1.13
Interpretation:
In this chart represent a generally people How frequently do you use the following banking
services per month? In this chart included branch banking, ATM, internet banking, telephone
banking, mobile banking etc. There are branch banking use the never in month 58 respondents,
1 to 3time use in month 60 respondents, 3 to 8 time ues in month 16respondents,8 to 12 time
use in month 10 respondents, over 12 time use in the month 6 respondents. ATM in the month
40 respondents use 3 to 8 time. Internet banking is 61 respondents use the in month 1 to 3 time.
0
10
20
30
40
50
60
70
Branch
banking
ATM Internet
banking
Tele
phone
banking
Mobile
banking
Never
1to3 time
3to8 time
8to12 time
Over 12 time

8. Satisfaction on services usage
Interpretation:
In this chart represent a generally people usage services gives satisfaction. In this chart included
promptness of card delivery, no. of transaction, conveniently located, e- payment, account to account
enquiry, clear instructions, provide additional options, transaction status, expensive etc. There are no.
of transaction 81 respondents extremely satisfied.
services Average
1.Promptness of card delivery 1.85
2.Number of transaction 2.08
3. Conveniently located 2.13
4. E-payment 2.06
5. Account to account Enquiry 2.29
Clear instructions 2.06
Provide additional options 2.45
Transaction status 2.16
Expensive 2.5
0
10
20
30
40
50
60
70
80
90
Extremely Satisfied
Satisfied
Neutral
Dissatisfied
Extremely Dissatisfied

9. Are you satisfied with internet services provided by your bank?
Particular No. of Respondent No. of percentage
Yes 144 96%
No 6 4%
Total 150 100%
Interpretation:
In this chart represent a generally people which factor promotes you to use the new services in
banking. The answer is gives Yes 144 respondents. There are only 6 respondents gives No
answer. There are respondents gives positive answer & few respondents are gives negative
answer.
Yes No
144
6

10. Which of the following facilities is given more important in your bank?
Particular No. of Respondent No. of percentage
Loan Facilities 48 32%
O/D facilities 20 13%
ATM facilities 61 41%
Customer care facility 13 9%
On line shopping
facility 8
5%
Total 150 100%
Interpretation:
In this chart represent a generally people which facilities is given more important in your bank?
The are included loan facilities, o/d facilities, ATM facilities, customer care facility, & on line
shopping facility.ATM facilities is more important in bank. On line facility is less important in
bank. There are loan facilities, o/d facilities, ATM facilities, customer care facility, & on line
shopping facility, 48, 20, 61, 13, & 8 respondents gives the question’s answer.
Loan
Facilities
O/D facilities ATM
facilities
Customer
care facility
On line
shopping
facility
48
20
61
13 8

11. Do use your bank have core banking facility for the customer?
Interpretation:
In this chart represent a generally people Do use your bank have core banking facility for the
customer.The answer is gives Yes 134 respondents. There are only 16 respondents gives No
answer. There are respondents gives positive answer & few respondents are gives negative
answer.
Particular No. of Respondent
%
Yes
134
89
No
16
11
total
150
100
0
20
40
60
80
100
120
140
Yes No
134
16

Gender:
Particular No. of
Respondent
No. of percentage
Male 113 75%
Female 37 25%
Total 150 100%
Interpretation:
In this chart represent a generally the respondent are which gender. There are
included male & female. There are 113 respondents male’s & 37 respondents
female’s. The positive answer’s gives the respondents. It is very important to
categorize the respondent’s demographic profile because it gives a broad
picture and helps bankers to analyze the demographic factors which influence
and are associated with the behaviour levels. In the gender response rate of the
survey, as it is indicated 113 (75%) responses from males and only 37 (25%)
from females.
Male Female
113
37

Education
Particular No. of
Respondent
No. of
percentage
Under-
Graduate
45 30%
Graduate 78 52%
Post-Graduate 21 14%
Professional 6 4%
Total 150 100%
Interpretation:
In this chart represent a generally the respondent are which education completed
and pursuing. There are included under-graduate, graduate, post-graduate,
professional etc. There are graduate respondents more & professional
respondents less. There are 45, 78, 21, & 6 respondents in respectively.
Education is a predominant factor that reveals the customer social class, life
style and willingness to buy and ability to buy because education provides the
income which influences the purchases and services. Among the 150
respondents, 45(30%) of respondents currently pursuing as an under-graduate,
followed by 78(52%) of the respondents doing graduate, 21(14%) of the
respondents were post graduate, and remaining 6(4)% of the them were
professional. We know that education are interrelated.
45
78
21
6

 Male respondents are higher than the female respondents, 75% of the
respondents were and majority of the respondents (52%) graduate was
below one 1-3 per annum. hence; it is good to concentrate on female
segment by offering different benefits.
 It is found from the study that 34.67% of the customers had at-least 1-3
time of experience while customers with experience were only 60%.
 It is found from the study that, among 150 respondents’ business loan
26% and vehicle loan 14% were the most preferred loans. Out of 150
customers were very quick satisfied with the loan processing 65.33%
and remaining 34.67% of the customers were slow processing of loan.
Hence the banker should treat these customer issues in a solvable
manner, and then only they can retain customers.
 Out of 150 respondents, only 32% respondents had opened fixed
deposits account, 6.67% of the respondents who invested in tax saver
deposits. It is found from the study that interest rates offered by banks
34.67%, safety 25.33% and services of the banks 20.67% are major
customer preference factors for choosing particular deposit schemes.
Overall satisfaction on bank deposit schemes resulted positively and
respondents satisfaction is higher than the dissatisfied customers and
this point was well supported by low 59.33% and moderate 35.33%
opinion about interest rates on deposit schemes but the number of non
investors in deposits is high due to low interest rates which made them
move to other investment avenues like securities, chit funds and other
financial institutions giving more returns against investment.
 Current financial investment scenarios face serious challenges like
global meltdown fear of share market, more risk and insecurities in
financial sector. These fear factors alert each and every person to go for
safer, secured, less risky investments. At this moment, if banks do
customer drives and awareness advertisements, promotional schemes
about its deposit schemes, it can result in 20-30% increase in deposit
schemes.
 In value added services ATM was given rank first and last rank was
given to Net banking. Married customer’s expectation is higher than
single respondents.
 After a detailed analysis of the study researcher could arrive at the
following findings. These findings will help the researcher to give
proper suggestions to the bank for better functioning.
 From the Survey the customers are well educated in Kadi city majority
of the people well educated.
FINDINGS

 The major occupation of the customer plays a very important role most
of the customer belongs to profession and business people.
 Income is very important factor to determine the status of every person
without income no cannot survive their life nearly half of respondents
earning 5000-10000.
 Among the 150 respondents 40 percent of them to conduct the branch
to conforming their funds.
 It is clearly indicate that other services like problem of ATM, Service
charge, Service charge and Improper behavior of employees is not
giving more difficulties to the customer.
 It is important to note that among the 100 respondents 60 of them were
said not providing quick services. It shows the bank inabilities to satisfy
the customer expectation.
 It is clear that from the above table the majority of the respondents were
told the banking services are excellent.

• Programme at least 6 month once to educate the bank up dating.
• Customers are accepted the bank prospect in order to know the bank procedure.
• Customers ombudsman should opened main city of the district.
• The bank should provide good environment in order to face huge
number of customer like head branch all sub branch need same
facility.
• The bank charge deposit rate and discount rate the bank should
inform to the customers mobiles.
• Effective use of communication network by the bank • If the
bank introduced new bank scheme the notice board should
display in front of the bank.
• Customer queries should be opened in order to avoid mistake. •
The separate counters should be allotted for providing passbook
and collection of cheque.
SUGGESTIONS

The banking sector has under gone many changes the new economic
policy based on privatization, globalization and liberalizations adopted
by government of India. Customer is the king in the present day
banking. Since the banks are providing tailor made services to the
changing needs of the ultra modern customer behavior to face their stiff
competition from the public banks.
Today the customer services preference keep on changing at a rapid
speed and their demands. For the banking sector challenging and tough
job for the bankers in retaining the existing customer base and winning
new customer. The aim of the bankers is to make the customers
comfortably and happy to achieve their targets. To achieve the highly
challenging task of customers behavior bankers turning to technology
for help. Bankers are not only satisfying the customer but should also
trigger to attitude of the customers towards the bank.
Each bank follow different procedure it is very difficult to follow the
customers. Even though the customer is well educated some time high
technology banking services hesitate the customer for the transaction.
For the effective banking transaction the banks should have good
communication, soft skill must need. At every level of delaying with
the bank the customer the bank management need to educate the
employees for the banking activities and process. Universal banking
procedure can help the customer for the better transaction.
CONCLUSION

REPORTS:
1. Ministry of Finance (1991), Report of the Committee on the
Financial System (Narasimham Committee), New Delhi,
Government of India.
2. A Profile of Banks 2010-2011, Reserve Bank of India,
Webside:
www.rbi.org.in
www.acedamicfoundation.com
www.banker'sindia.com
www.bankreport.rbi.org.in
www.financeindia.com
www.icfaipress.org
www.indian-bank.com
www.indianbankassociation.com
www.moneycontrol.com
www.rbi.org.in
www.report.rbi.org.in
http://www.gktoday.in/blog/brief-history-of-banking-in-india/
http://www.onlinegk.com/business-and-economics/history-of-indian-
banking/#sthash.Na3tYNlN.dpuf
http://business.mapsofindia.com/banks-in-india/#sthash.lPUmawEk.dpuf
BIBLIOGRAPHY

A STUDY ON CUSTOMER BEHAVIOUR TOWARDS BANKING SERVICES WITH SPECIAL REFERENCE TO PUBLIC SECTOR BANKS IN KADI

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A STUDY ON CUSTOMER BEHAVIOUR TOWARDS BANKING SERVICES WITH SPECIAL REFERENCE TO PUBLIC SECTOR BANKS IN KADI