A project treport on customer response towards the andhra bank

“CUSTOMER RESPONSE TOWARDS THE ANDHRA BANK”

Executive Summary

Introduction:
Women are one of the greatest assets in a society. They are equal 2 men in all
aspects...women are moreover perfectionists in all spheres...all that they need in Today's
world is a bit of empowerment and it is the duty of every society to provide this.... In the
vedic times, women were given an equal status like men in the society. They were allowed to
voice their own opinions, exhibit their talents and the list goes on. If you actually observe the
period after the vedic times you can really see the contrasting status and freedom levels of a
woman in society. Yes, after the vedic times women were treated like mans play thing. They
were considered as suitable only for household activities and the women being men
considered a part of bread making in the house shameful and thus began their ill treatment.
Women empowerments have started their very first struggle.

Most men view themselves as being the superior life-form in society. They justify this belief
by saying that they are stronger and more capable; thus, making them more qualify for the
more important roles in society. They place themselves on pedestals and force women to
believe in their own inferiority to men and their incapability to excel educationally,
politically, economically, and domestically. But the truth is that women will eventually
advance in all these areas and come to realize that they do not need men to survive.

Introduction to the topic

Andhra Bank, as a special gesture to encourage and empower Indian women, is offering a

Vehicle loan scheme “AB VANITHA VAHAN” with low rate of interest. AB VANITHA

VAHAN is a Four/Two wheeler vehicle loan scheme exclusively women for purchase of

vehicle including purchase of four wheeler on second sales. To know the response of the

customers the study has been taken.

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Title of the project:

“Customer response towards the Andhra Bank Vanitha Vahan scheme in Hubli.”

Objective:

To know the customer response towards Andhra Bank Vanitha Vahan scheme in Hubli.

Sub objectives:

1) To know the awareness level of AB Vanitha Vahan scheme.

2) To know the potential market for AB Vanitha Vahan scheme.

3) To identify the reasons for performance & avenues for popularizing the scheme.

Need for the study

As Andhra Bank offered the AB Vanitha Vahan scheme from last three years & till now in

Hubli, no women has taken loan from Andhra bank for their vehicles. It was felt to ascertain

the customer response towards AB Vanitha Vahan scheme. This study is undertaken to

explore the reasons for scheme not accepted by customers.

Research methodology:

1) Data collection methods used:
Primary and secondary data collected to carry out the research work.
Primary data:
Primary data collected through questionnaire using face-to-face interview method.

Secondary data-
In this study Secondary data is collected from Web-sites, Books and Employees of Andhra
Bank.

2) Measurement tool:


¬ Questionnaire

Sampling Method: The sample is selected based on non- probability sampling method
(convenience sampling method).

Sample size is 100 customers.

Sampling unit: Women account holders of Andhra Bank

Sample frame: Hubli city

3) Possible outcomes & Benefits:

1. The research will identify the reasons for customers not accepting the scheme.

2. The study will indicate the need for modification or scheme to make it attractive

3. The study will focus on need for creating awareness & increasing sales.

Findings

¬ 32% women are aware of AB Vanitha vahan scheme, 68% women are unaware of
AB Vanitha vahan scheme. Awareness level of AB Vanitha vahan scheme is low
in women comparing with the other schemes of Andhra Bank.

¬ Out of 100 women, 40% women feel that Andhra Bank has to use Hoardings-
Banners as promotional tool, 16% women feel that Catalogues- pamphlets as.30%
women feel that Local TV advertisement, 14% women feel that to popularize the
scheme Andhra Bank has to use promotional tools like News papers, Magazines
etc. Andhra Bank has to give more stress on promotional tools like Hoardings-
Banners, Local TV advertisement to popularize the scheme as well as to create
awareness also within the customers.



¬ Out of 100 women, 35% women are going to own a vehicle in future. So these
35% women may be potential customers for the Andhra Bank
¬ Out of 35% women, who are going to own a vehicle in future, 14% potential
customers for AB Vanitha vahan scheme. Andhra Bank has give more stress on
remaining 21% women as to make them potential customers for the scheme
through communicating them.



CHAPTER-1
INDUSTRY PROFILE



History of Banking in India:

Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans
or cosmopolitans in India. In fact, Indian banking system has reached even to the remote
corners of the country. This is one of the main reasons of India's growth process.

The Government's regular policy for Indian banks since 1969 has paid rich dividends with the
nationalization of 14 major private banks of India.

The first bank in India, though conservative, was established in 1786. From 1786 till today,
the journey of Indian Banking System can be segregated into three distinct phases. They are
as mentioned below :-

1. Early phase from 1786 to 1969 of Indian Banks
2. Nationalization of Indian Banks and up to 1991 prior to Indian banking sector
Reforms.
3. New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.

Phase I:



The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913,
Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank
of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline
the functioning and activities of commercial banks, the Government of India came up with
The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949
as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with
extensive powers for the supervision of banking in India as the Central Banking Authority.

During those days public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.

Phase II:


Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas. It formed State Bank of India to act as the principal
agent of RBI and to handle banking transactions of the Union and State Governments all over
the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th
July, 1969, major process of nationalization was carried out. It was the effort of the then
Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were
nationalized.

Second phase of nationalization of Indian Banking Sector Reform was carried out in 1980
with seven more banks. This step brought 80% of the banking segment in India under
Government ownership.

The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:

1949 : Enactment of Banking Regulation Act.
1955 : Nationalization of State Bank of India.
1959 : Nationalization of SBI subsidiaries.
1961 : Insurance cover extended to deposits.
1969 : Nationalization of 14 major banks.
1971 : Creation of credit guarantee corporation.
1975 : Creation of Regional Rural Banks.
1980 : Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector banks of India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and immense


confidence about the sustainability of these institutions.

Phase III :-

This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of Mr.M Narasimham, a committee was
set up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to
give a satisfactory service to customers. Phone banking and net banking is introduced. The
entire system became more convenient and swift. Time is given more importance than
money.

The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the
capital account is not yet fully convertible, and banks and their customers have limited
foreign exchange exposure.

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. The oldest bank in existence in India is the State Bank of India being
established as "The Bank of Calcutta" in Calcutta in June 1806.

Couple of decades later, foreign banks like HSBC and Credit Lyonnais started their Calcutta
operations in the 1850s. At that point of time, Calcutta was the most active trading port,
mainly due to the trade of the British Empire, and due to which banking activity took roots
there and prospered. The first fully Indian owned bank was the Allahabad Bank set up in
1865.

By the 1900s, the market expanded with the establishment of banks like Punjab National


Bank, in 1895 in Lahore; Bank of India, in 1906, in Mumbai - both of which were founded
under private ownership. Indian banking sector was formally regulated by Reserve Bank of
India from 1935. After India's independence in 1947, the Reserve Bank was nationalized and
given broader powers.

SBI Group:

The Bank of Bengal, which later became the State Bank of India. State Bank of India; with
its seven associate banks command the largest banking resources in India.

Nationalization :

The next significant milestone in Indian Banking happened in the late 1960s when the then
Indira Gandhi government nationalized, on 19th July, 1969, 14 major commercial Indian
banks, followed by nationalization of 6 more commercial Indian banks in 1980. The stated
reason for the nationalization was more control of credit delivery. After this, until the 1990s,
the nationalized banks grew at a leisurely pace of around 4% - also called as the Hindu
growth of the Indian economy.

After the amalgamation of New Bank of India with Punjab National Bank, currently there are
19 nationalized banks in India.

Liberalization :

In the early 1990s the then Narasimha Rao Government embarked on a policy of
liberalization and gave licenses to a small number of private banks, which came to be known


as New Generation tech-savvy banks, which included banks like ICICI Bank and HDFC
Bank. This move along with the rapid growth in the economy of India, kick started the
banking sector in India, which has seen rapid growth with strong contribution from all the
three sectors of banks, namely, government banks, private banks and foreign banks. However
there had been a few hiccups for these new banks with many either being taken over like
Global Trust Bank while others like Centurion Bank have found the going tough.

The next stage for the Indian banking has been set up with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be given
voting rights which could exceed the present cap of 10%.

Current scenario :

Currently (2006), overall banking in India is considered as fairly mature in terms of supply,
product range and reach - even though reach in rural India still remains a challenge for the
private sector and foreign banks. Even in terms of quality of assets and capital adequacy,
Indian banks are considered to have clean, strong and transparent balance sheets - as
compared to other banks in comparable economies in its region. The Reserve Bank of India is
an autonomous body, with minimal pressure from the Government. The stated policy of the
Bank on the Indian Rupee is to manage volatility -without any stated exchange rate - and this
has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time - especially
in its services sector, the demand for banking services - especially retail banking, mortgages
and investment services are expected to be strong. M & As., takeovers, asset sales and much
more action (as it is unraveling in China) will happen on this front in India.

Recently (March 2006), the Reserve Bank of India allowed Wartburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an
investor has been allowed to hold more than 5% in a private sector bank since the RBI
announced norms in 2005 that any stake exceeding 5% in the private sector banks would need


to be vetted by them.

One of the classical economic functions of the banking industry that has remained virtually
unchanged over the centuries is lending. However there have been considerable changes in
the institutional structure and the economic environment brought about by heightened
competition and technological changes. On the one hand, competition has had considerable
adverse impact on the margins, which lenders have enjoyed, but on the other hand technology
has to some extent reduced the cost of delivery of various products and services.

In the Indian scenario the first few decades of independent India witnessed regulated banking
environment with administered interest rate structure, which was inevitable in a resources
scarce scenario. However with the situation radically changing for the better in the second
half of the past decade most of the regulatory prescriptions have either been withdrawn or
considerably diluted. With further liberalization on the horizon, as the country moves towards
greater integration with the global economy the competitive environment that banks and
financial intermediaries are functioning can be expected to become more severe. The days
ahead can be expected to bring further innovations in the area of financial intermediation.

Bank is a financial institution that borrows money from the public and lends money to the
public for productive purposes. The Indian Banking Regulation Act of 1949 defines the term
Banking Company as "Any company which transacts banking business in India" and the term
Banking as "Accepting for the purpose of lending all investment of deposits, of money from
the public, repayable on demand or otherwise and withdrawal by cheque, draft or otherwise".
Banks play important role in economic development of a country, like

 Banks mobilise the small savings of the people and make them available for
productive purposes.
 Promotes the habit of savings among the people thereby offering attractive rates of
interests on their deposits.
 Provides safety and security to the surplus money of the depositors and as well
provides a convenient and economical method of payment.


 Banks provide convenient means of transfer of fund from one place to another.
 Helps the movement of capital from regions where it is not very useful to regions
where it can be more useful.
 Banks advances exposure in trade and commerce, industry and agriculture by
knowing their financial requirements and prospects.
 Bank acts as an intermediary between the depositors and the investors. Bank also
acts as mediator between exporter and importer who does foreign trades.

The Indian banking has come from a long way from being a sleepy business institution to a
highly pro-active and dynamic entity. This transformation has been largely brought about by
the large dose of liberalization and economic reforms that allowed banks to explore new
business opportunities rather than generating revenues from conventional streams (i.e.
borrowing and lending). The banking in India is highly fragmented with 30 banking units
contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks
(banks owned by the Government) continue to be the major lenders in the economy due to
their sheer size and penetrative networks which assures them high deposit mobilization. The
Indian banking can be broadly categorized interest nationalized, private banks and specialized
banking institutions.

The growing complexity of banking and the emergence of new loan products have changed
the risk profile of banks and as a result regulatory authorities have stepped in to maintain the
confidence level of the public in the financial system by calling for greater transparency and
also by imposition of capital adequacy norms and provisioning requirements. In the days

when lending was a simple operation, undertaken by well experienced bankers and that too in
a stable, predictable and familiar environment to a small community of known

Clientele the lack of a well documented credit policy was not considered a handicap.

Moreover there was a feeling that if such a document were to be put in place then it could
bring about some inflexibility in taking lending decisions. However, when operation through


a large network of branches and people it is necessary to have commonality of thinking and
approach and a credit policy document provides the basis for this. The consequences of the
excesses of the era of unbridled credit expansion were there for all to see. Some well known
banking institutions disappeared under a mountain of ill-advised credit exposure and some
very well known names considered stalwarts in global banking came close to disappearing.

A well-documented credit policy has therefore been now recognized as an important
requirement for any lending institution in building a loan book of acceptable risk profile,
which will provide liable revenue stream.

The Structure of Indian Banking.

The Indian banking industry has Reserve Bank of India as its Regulatory Authority. This is a
mix of the Public sector, Private sector, Co-operative banks and foreign banks. The private
sector banks are again split interest old banks and new banks.

Reserve Bank of India
[Central Bank]



Scheduled Banks

Scheduled Scheduled Co-operative Banks
Commercial Banks

Public Sector Private SectorRegional
Foreign
Banks Banks Banks Rural

Scheduled Urban Scheduled State
Nationalized SBI & its Co-Operative Co-Operative Banks
Banks Associates Banks

Old Private
Sector Banks New Private
Sector Banks
RESERVE BANK OF INDIA (RBI)

The central bank of the country is the Reserve Bank of India (RBI). It was established in
April 1935 with a share capital of Rs. 5 crores on the basis of the recommendations of the
Hilton Young Commission. The share capital was divided into shares of Rs. 100 each fully
paid which was entirely owned by private shareholders in the beginning. The Government
held shares of nominal value of Rs. 2, 20,000.


Reserve Bank of India was nationalized in the year 1949. The general superintendence and
direction of the Bank is entrusted to Central Board of Directors of 20 members, the Governor
and four Deputy Governors, one Government official from the Ministry of Finance, ten
nominated Directors by the Government to give representation to important elements in the
economic life of the country, and four nominated Directors by the Central Government to
represent the four local Boards with the headquarters at Mumbai, Kolkata, Chennai and New
Delhi. Local Boards consist of five members each Central Government appointed for a term
of four years to represent territorial and economic interests and the interests of co-operative
and indigenous banks.

The Reserve Bank of India Act, 1934 was commenced on April 1, 1935. The Act, 1934 (II of
1934) provides the statutory basis of the functioning of the Bank.

The Bank was constituted for the need of following:
• To regulate the issue of banknotes

• To maintain reserves with a view to securing monetary stability and

• To operate the credit and currency system of the country to its advantage.

Functions of Reserve Bank of India

The Reserve Bank of India Act of 1934 entrust all the important functions of a central bank
the Reserve Bank of India.

Bank of Issue

Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank
notes of all denominations. The distribution of one rupee notes and coins and small coins all


over the country is undertaken by the Reserve Bank as agent of the Government. The Reserve
Bank has a separate Issue Department which is entrusted with the issue of currency notes.
The assets and liabilities of the Issue Department are kept separate from those of the Banking
Department. Originally, the assets of the Issue Department were to consist of not less than
two-fifths of gold coin, gold bullion or sterling securities provided the amount of gold was
not less than Rs. 40 crores in value. The remaining three-fifths of the assets might be held in
rupee coins, Government of India rupee securities, eligible bills of exchange and promissory
notes payable in India. Due to the exigencies of the Second World War and the post-was
period, these provisions were considerably modified. Since 1957, the Reserve Bank of India
is required to maintain gold and foreign exchange reserves of Ra. 200 crores, of which at least
Rs. 115 crores should be in gold. The system as it exists today is known as the minimum
reserve system.

Banker to Government

The second important function of the Reserve Bank of India is to act as Government banker,
agent and adviser. The Reserve Bank is agent of Central Government and of all State
Governments in India excepting that of Jammu and Kashmir. The Reserve Bank has the
obligation to transact Government business, via. to keep the cash balances as deposits free of
interest, to receive and to make payments on behalf of the Government and to carry out their
exchange remittances and other banking operations. The Reserve Bank of India helps the
Government - both the Union and the States to float new loans and to manage public debt.
The Bank makes ways and means advances to the Governments for 90 days. It makes loans
and advances to the States and local authorities. It acts as adviser to the Government on all
monetary and banking matters.

Bankers’ Bank and Lender of the Last Resort

The Reserve Bank of India acts as the bankers' bank. According to the provisions of the
Banking Companies Act of 1949, every scheduled bank was required to maintain with the
Reserve Bank a cash balance equivalent to 5% of its demand liabilities and 2 per cent of its
time liabilities in India. By an amendment of 1962, the distinction between demand and time


liabilities was abolished and banks have been asked to keep cash reserves equal to 3 per cent
of their aggregate deposit liabilities. The minimum cash requirements can be changed by the
Reserve Bank of India.

The scheduled banks can borrow from the Reserve Bank of India on the basis of eligible
securities or get financial accommodation in times of need or stringency by rediscounting
bills of exchange. Since commercial banks can always expect the Reserve Bank of India to
come to their help in times of banking crisis the Reserve Bank becomes not only the banker's
bank but also the lender of the last resort.

Controller of Credit

The Reserve Bank of India is the controller of credit i.e. it has the power to influence the
volume of credit created by banks in India. It can do so through changing the Bank rate or
through open market operations. According to the Banking Regulation Act of 1949, the
Reserve Bank of India can ask any particular bank or the whole banking system not to lend to
particular groups or persons on the basis of certain types of securities. Since 1956, selective
controls of credit are increasingly being used by the Reserve Bank.

The Reserve Bank of India is armed with many more powers to control the Indian money
market. Every bank has to get a license from the Reserve Bank of India to do banking
business within India, the license can be cancelled by the Reserve Bank of certain stipulated
conditions are not fulfilled. Every bank will have to get the permission of the Reserve Bank
before it can open a new branch. Each scheduled bank must send a weekly return to the
Reserve Bank showing, in detail, its assets and liabilities. This power of the Bank to call for
information is also intended to give it effective control of the credit system. The Reserve
Bank has also the power to inspect the accounts of any commercial bank.

As supreme banking authority in the country, the Reserve Bank of India, therefore, has the
following powers:

(a) It holds the cash reserves of all the scheduled banks.

(b) It controls the credit operations of banks through quantitative and qualitative controls.


(c) It controls the banking system through the system of licensing, inspection and calling for
information

(d) It acts as the lender of the last resort by providing rediscount facilities to scheduled banks.

(e) Custodian of Foreign Reserves

The Reserve Bank of India has the responsibility to maintain the official rate of exchange.
According to the Reserve Bank of India Act of 1934, the Bank was required to buy and sell at
fixed rates any amount of sterling in lots of not less than Rs. 10,000. Since 1935 the Bank
was able to maintain the exchange rate fixed at lsh.6d. Though there were periods of extreme
pressure in favour of or against the rupee. After India became a member of the International
Monetary Fund in 1946, the Reserve Bank has the responsibility of maintaining fixed
exchange rates with all other member countries of the I.M.F.

Besides maintaining the rate of exchange of the rupee, the Reserve Bank has to act as the
custodian of India's reserve of international currencies. The vast sterling balances were
acquired and managed by the Bank. Further, the RBI has the responsibility of administering
the exchange controls of the country.

Supervisory Functions

In addition to its traditional central banking functions, the Reserve bank has certain non-
monetary functions of the nature of supervision of banks and promotion of sound banking in
India. The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949 have given the
RBI wide powers of supervision and control over commercial and co-operative banks,
relating to licensing and establishments, branch expansion, liquidity of their assets,
management and methods of working, amalgamation, reconstruction, and liquidation. The
RBI is authorized to carry out periodical inspections of the banks and to call for returns and
necessary information from them. The nationalization of 14 major Indian scheduled banks in


July 1969 has imposed new responsibilities on the RBI for directing the growth of banking
and credit policies towards more rapid development of the economy and realization of certain
desired social objectives. The supervisory functions of the RBI have helped a great deal in
improving the standard of banking in India to develop on sound lines and to improve the
methods of their operation.

Promotional functions

With economic growth assuming a new urgency since Independence, the range of the Reserve
Bank's functions has steadily widened. The Bank now performs a variety of developmental
and promotional functions, which, at one time, were regarded as outside the normal scope of
central banking. The Reserve Bank was asked to promote banking habit, extend banking
facilities to rural and semi-urban areas, and establish and promote new specialized financing
agencies. Accordingly, the Reserve Bank has helped in the setting up of the IFCI and the
SFC; it set up the Deposit Insurance Corporation in 1962, the Unit Trust of India in 1964, the
Industrial Development Bank of India also in 1964, the Agricultural Refinance Corporation
of India in 1963 and the Industrial Reconstruction Corporation of India in 1972. These
institutions were set up directly or indirectly by the Reserve Bank to promote saving habit
and to mobilize savings, and to provide industrial finance as well as agricultural finance. As
far back as 1935, the Reserve Bank of India set up the Agricultural Credit Department to
provide agricultural credit. But only since 1951 the Bank's role in this field has become
extremely important.

The Bank has developed the co-operative credit movement to encourage saving, to eliminate
moneylenders from the villages and to route its short term credit to agriculture. The RBI has
set up the Agricultural Refinance and Development Corporation to provide long-term finance
to farmers.

Classification of RBI’s Functions

The monetary functions also known as the central banking functions of the RBI are related to
control and regulation of money and credit, i.e., issue of currency, control of bank credit,
control of foreign exchange operations, banker to the Government and to the money market.


Monetary functions of the RBI are significant as they control and regulate the volume of
money and credit in the country.

Equally important, however, are the non-monetary functions of the RBI in the context of
India's economic backwardness. The supervisory function of the RBI may be regarded as a
non-monetary function (though many consider this a monetary function). The promotion of
sound banking in India is an important goal of the RBI, the RBI has been given wide and
drastic powers, under the Banking Regulation Act of 1949 - these powers relate to licensing
of banks, branch expansion, liquidity of their assets, management and methods of working,
inspection, amalgamation, reconstruction and liquidation. Under the RBI's supervision and
inspection, the working of banks has greatly improved. Commercial banks have developed
into financially and operationally sound and viable units. The RBI's powers of supervision
have now been extended to non-banking financial intermediaries. Since independence,
particularly after its nationalization 1949, the RBI has followed the promotional functions
vigorously and has been responsible for strong financial support to industrial and agricultural
development in the country.

Nationalization of Banks in India
The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime
minister. It nationalized 14 banks then. These banks were mostly owned by businessmen and
even managed by them.
1. Central Bank of India
2. Bank of Maharashtra
3. Dena Bank
4. Punjab National Bank
5. Syndicate Bank


6. Canara Bank

7. Indian Bank
8. Indian Overseas Bank
9. Bank of Baroda
10. Union Bank

11. Allahabad Bank

12. United Bank of India

13. UCO Bank

14. Bank of India

Before the steps of nationalization of Indian banks, only State Bank of India (SBI) was
nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of Seven
State Banks of India (formed subsidiary) took place on 19th July, 1960.

The State Bank of India is India's largest commercial bank and is ranked one of the top five
banks worldwide. It serves 90 million customers through a network of 9,000 branches and it
offers-either directly or through subsidiaries-a wide range of banking services.

The second phase of nationalization of Indian banks took place in the year 1980. Seven more
banks were nationalized with deposits over 200 crores. Till this year, approximately 80% of
the banking segment in India was under Government ownership.

After the nationalization of banks in India, the branches of the public sector banks rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.

• 1955: Nationalization of State Bank of India.
• 1959: Nationalization of SBI subsidiaries.
• 1969: Nationalization of 14 major banks.
• 1980: Nationalization of seven banks with deposits over 200 crores.

Scheduled Commercial Banks in India

The commercial banking structure in India consists of:


• Scheduled Commercial Banks in India

• Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been included in the Second
Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in
this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act.

As on 30th June, 1999, there were 300 scheduled banks in India having a total network of
64,918 branches. The scheduled commercial banks in India comprise of State bank of India
and its associates (8), nationalized banks (19), foreign banks (45), private sector banks (32),
co-operative banks and regional rural banks.

Non-scheduled Commercial Banks in India
"Non-scheduled bank in India" means a banking company as defined in clause (c) of section
5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".

Banks in India

In India the banks are being segregated in different groups. Each group has their own benefits
and limitations in operating in India. Each has their own dedicated target market. Few of
them only work in rural sector while others in both rural as well as urban. Many even are only
catering in cities. Some are of Indian origin and some are foreign players.

One more section has been taken note of is the upcoming foreign banks in India. The RBI has
shown certain interest to involve more of foreign banks than the existing one recently. This
step has paved a way for few more foreign banks to start business in India.


Private Sector Banks
Private banking in India was practiced since the beginning of banking system in India. The
first private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It
is one of the fastest growing Banks of Private Sector Banks in India. IDBI ranks the tenth
largest development bank in the world as Private Banks in India and has promoted world
class institutions in India.

The first Private Bank in India to receive an in principle approval from the Reserve Bank of
India was Housing Development Finance Corporation Limited, to set up a bank in the private
sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was
incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and
commenced operations as Scheduled Commercial Bank in January 1995.

Co-Operative Banks In India
The Co operative banks in India started functioning almost 100 years ago. The
Cooperative bank is an important constituent of the Indian Financial System, judging by the
role assigned to co operative, the expectations the co operative is supposed to fulfill, their
number, and the number of offices the cooperative bank operate. Though the co operative
movement originated in the West, but the importance of such banks have assumed in India is
rarely paralleled anywhere else in the world. The cooperative banks in India play an
important role even today in rural financing. The business of cooperative bank in the urban
areas also has increased phenomenally in recent years due to the sharp increase in the number
of primary co-operative banks.

Co operative Banks in India are registered under the Co-operative Societies Act. The


cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations
Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Co-operative banks in India finance rural areas under:
• Farming

• Cattle

• Milk

• Hatchery

• Personal finance

Cooperative banks in India finance urban areas under:
• Self-employment

• Industries

• Small scale units

• Home finance

• Consumer finance

• Personal finance

Regional Rural Banks In India

Rural banking in India started since the establishment of banking sector in India. Rural Banks
in those days mainly focused upon the agro sector. Regional rural banks in India penetrated
every corner of the country and extended a helping hand in the growth process of the country.

SBI has 30 Regional Rural Banks in India known as RRBs. The rural banks of SBI are spread
in 13 states extending from Kashmir to Karnataka and Himachal Pradesh to North East. The
total number of SBIs Regional Rural Banks in India branches is 2349 (16%). Till date in rural
banking in India, there are 14,475 rural banks in the country of which 2126 (91%) are located
in remote rural areas.

Apart from SBI, there are other few banks which functions for the development of the rural


areas in India. Few of them are as follows.

♣ Haryana State Cooperative Apex Bank Limited

♣ NABARD

♣ Sindhanur Urban Souharda Co-operative Bank

♣ United Bank of India

♣ Syndicate Bank

Foreign Banks
Foreign Banks in India always brought an explanation about the prompt services to
customers. After the set up foreign banks in India, the banking sector in India also become
competitive and accurate.

New rules announced by the Reserve Bank of India for the foreign banks in India in this
budget have put up great hopes among foreign banks which allow them to grow unfettered.
Now foreign banks in India are permitted to set up local subsidiaries. The policy conveys that
foreign banks in India may not acquire Indian ones (except for weak banks identified by the
RBI, on its terms) and their Indian subsidiaries will not be able to open branches freely.
Please see the list of foreign banks in India till date.

By the year 2009, the list of foreign banks in India is going to become more quantitative as


number of foreign banks is still waiting with baggage to start business in India.

Upcoming Foreign Banks In India

By 2009 few more names is going to be added in the list of foreign banks in India. This is as
an aftermath of the sudden interest shown by Reserve Bank of India paving roadmap for
foreign banks in India greater freedom in India. Among them is the world's best private bank
by Euro Money magazine, Switzerland's UBS.

India's GDP is seen growing at a robust pace of around 7% over the next few years, throwing
up opportunities for the banking sector to profit from. The credit of banks has risen by over
25% in 2004-05 and the growth momentum is expected to continue over the next four to five
years. Participation in the growth curve of the Indian economy in the next four years will
provide foreign banks a launch pad for greater business expansion when they get more
freedom after April 2009.

Banking Services In India
With years, banks are also adding services to their customers. The Indian banking industry is
passing through a phase of customers market. The customers have more choices in choosing
their banks. A competition has been established within the banks operating in India.
With stiff competition and advancement of technology, the services provided by banks have
become more easy and convenient. The past days are witness to an hour wait before
withdrawing cash from accounts or a cheque from north of the country being cleared in one
month in the south.

Bank Account
Open bank account - the most common and first service of the banking sector. There are
different types of bank account in Indian banking sector. The bank accounts are as follows:


♣ Bank Savings Account

♣ Bank Current Account
♣ Bank Term Deposits Account
♣ Bank Account Online

Plastic Money

Credit Card

Credit cards in India are gaining ground. A number of banks in India are encouraging
people to use credit card. The concept of credit card was used in 1950 with the launch of
charge cards in USA by Diners Club and American Express. Credit card however became
more popular with use of magnetic strip in 1970.Credit card in India became popular with the
introduction of foreign banks in the country.

Credit cards are financial instruments, which can be used more than once to borrow money or
buy products and services on credit. Basically banks, retail stores and other businesses issue
these.

Global player in credit card market

MasterCard
VISA Card
American Express
Diners Club International
JCB Cards

Debit Card


Debit cards, also known as check cards look like credit cards or ATM cards (automated teller
machine card). It operates like cash or a personal check. Debit cards are different from credit
cards. Credit card is a way to "pay later," whereas debit card is a way to "pay now." When we
use a debit card, our money is quickly deducted from the bank account.

Debit cards are accepted at many locations, including grocery stores, retail stores, gasoline
stations, and restaurants. Its an alternative to carrying a checkbook or cash. With debit card,
we use our own money and not the issuer's money. In India almost all the banks issue debit
card to its account holders.

Loans
Banks in India with the way of development have become easy to apply in loan market. The
following loans are given by almost all the banks in the country:
• Personal Loan
• Car Loan or Auto Loan
• Loan against Shares
• Home Loan
• Education Loan or Student Loan

Visa Money Transfer

Visa has recently introduced the 'Visa Money Transfer' option for its savings and current
account holder of any bank with a visa debit card. This facility helps its customer to transfer
funds from his bank account to any visa card, either debit or credit within India.


A Visa Money Transfer is of similar kind, in many respects, to the third-party fund transfer
option given by some banks to its account holders through e-cheque, but this is restricted to
only visa cardholders.

Banking System – Easy Banking

A decade before, it was tough to belief that banking sector will be at a finger tip. Now its
possible. A mobile hand set with a connection is the only instrument needed to make a
gateway to your banking transaction, the latest innovation of technology.
Apart from the Mobile Banking, including of SMS Banking, Net Banking and ATMs are the
major steps taken by the banks in India towards modernization. With all these devises and
systems, there is a complete freedom to experience.

Check your account, transfer your fund, make payments and what more, do anything of
everything what has been followed in physical banking since ages. But this time, no standing
for hours in front of cash counter and no time bounds in withdrawing your own money.

¬ Automated Teller Machine (ATM)
¬ Mobile Banking
¬ SMS Banking


¬ Internet Banking



CHAPTER- 2
COMPANY PROFILE

Brief History

"Andhra Bank" was founded by the eminent freedom fighter and a multifaceted
genius, Dr.Bhogaraju Pattabhi Sitaramayya. The Bank was registered on 20th November 1923
and commenced business on 28th November 1923 with a paid up capital of Rs 1.00 lakh and
an authorised capital of Rs 10.00 lakhs. The Bank crossed many milestones and the Bank's
Total Business as on 31.12.2007 stood at Rs.75,225 Crores with a Clientele base over 1.65
Crores. The Bank is rendering services through 2046 Business Delivery Channels consisting
of 1343 branches, 73 Extension Counters, 592 ATMs and 38 Satellite Offices spread over 21
States and 2 Union Territories as at the end of December, 2007. All Branches are 100%


computerized, 1186 units viz., 1101 Branches, 70 Extension Counters, 15 Service Centres
networked under Cluster Banking Solution and providing "Any Branch Banking(ABB)". Real
Time Gross Settlement (RTGS) Facility and National Electronic Fund Transfer (NEFT)
facility has been introduced in 680 Branches. To provide value-added services to Customers,
the Bank has set up its own 592 ATMs as on 31.12.2007. Of which 03 Mobile ATMs and
two with Biometric access.Besides, ATM sharing arrangements with several Banks including
SBI group, IDBI Bank, UTI Bank, HDFC Bank, Indian Bank and others under National
Financial Network Switch covering 24856 ATMs.

Andhra Bank is a pioneer in introducing Credit Cards in the country in 1981 and the business
turnover under Credit Cards related business increased by 19.16% to Rs.986 Crore.
The Bank opened its Representative Office in Dubai in May, 2006 and has received
permission from Reserve Bank of India for opening Representative Offices at New Jersey (U
S A).

Our Bank introduced Internet Banking Facility (AB INFI-net) to all customers of cluster
linked branches. Rail Ticket Booking Facility is made available to all debit card holders
through IRCTC Website through a separate gateway. Our Bank's Corporate Website is
available in English, Hindi and Telugu Languages communicating our Bank's image and
information. Our Bank has been given 'BEST BANK AWARD' a banking technology
award by IDRBT, Hyderabad for extensive use of IT in Semi Urban and Rural Areas on
02.09.2006. IBA Jointly with TFCI has conferred the Joint Runner-up Award to the Bank in
the Bet Payments initiative in recognition of outstanding achievement of the Bank in
promoting ATM Channel. Bank successfully conducted " Bancon 2006", a two day event at
Hyderabad, deliberating on Inclusive Growth - A New Challenge.

Bank in partnership with Kingfisher Airliens has launched a special facility "Quik Ticket" to
book Kingfisher Airliens tickets through any of Andhra Bank ATMs by using Andhra Bank
Debit/ATM Card or any VISA Card.

Kiddy Bank Scheme, with insurance benefits, was relaunched to inculcate savings habit


among the children.

Bank has also launched "Smart Card" under Financial Inclusion at Geesukonda Mandal of
Warangal District (A.P.) and proposes to extend the same to other areas.
As a part of Financial Inclusion, Bank adopted two districts i.e., Srikakulam in Andhra
Pradesh and Ganjam in Orissa State and achieved 100% coverage. Bank also established the
first "Financial Literacy-cum-Credit Counseling Centre" in Srikakulam Distrcit in Andhra
Pradesh.

Andhra Bank, along with A P State Government, NABARD, Canara Bank, Indian Bank, IOB
and SBH sponsored the Andhra Pradesh Banker's Institute of Entrepreneurship Development,
which will offer training to unemployed youth for improving their skills in Andhra Pradesh.
Our Bank has finalized an MoU with Hewlett-Packard India Ltd., for implementing a
comprehensive Core Banking Solution through Finacle. This initiative will enable the Bank to
achieve signifcant cost advantagers and better business outcome in the dynamic banking arena
in the country. This will also benefit the customers, who will have access to banking and
financial services anytime, any where through multiple delivery channels.
Bank is celebrated "AB Bima Utsav" from 15.10.2007 to 31.12.2007 - a special campaign
for marketing of LIC Policies and other insurance linked schemes of the Bank like AB
Arogyadan, AB Jeevan Abhaya, AB Abhaya Gold.

Our Bank adopted Gundugolanu village, West Godavari District, Andhra Pradesh - birth place
of Dr.Bhogaraju Pattabhi Sitaramayya for all-round development. A comprehensive budget
with an outlay of Rs.5.50 Crore is finalized for improving health, sanitation, education and
social service facilities in the village.

Bank issued 27.26 lacs of ATM/Debit Cards.

Bank extended financial assistance to 120926 Self Help Groups to the tune of Rs.744 Crore.
Bank introduced low cost comprehensive health insurance scheme for all credit linked Self
Help Groups under the name "Swashya Bima Yojana"


.
Bank has launched two new Agri products -"AB Kisan Rakshak" - a debt swapping scheme
for farmers and "AB Mahila Soubhagya" - a debt swapping scheme for SHGs on 15.12.2007
for the benefit of Self Help Groups. These schemes are intended to reduce the interest burden
of the less privileged sectors of the society.

Bank ranked First in LIC of India - Bancassurance business, in the Country on the basis of
First Premium Income. Bank has mobilized 137642 LIC Policies in this Financial Year.
Andhra Bank will open its Representative Office in New Jersey City in United States
shortly. Bank feels United States would be an ideal location as Andhra Bank has been a
household name among many NRIs there. A foothold in New Jersey is strategic for the 84
year old bank as it has a large number of non resident Indians from Andhra Pradesh.
Thus our Bank accords utmost concern to customer satisfaction by offering innovative and
need based financial products and services using state-of -the art technology.

Founder

Dr Bhogaraju Pattabhi Sitaramayya was born on 24th November 1880 in Gundugolanu
village, West Godavari District in Andhra Pradesh. He was a renowned Freedom Fighter and


a very illustrious personality.

Corporate Identity

('Togetherness ') is the theme of the logo of Andhra Bank where the world of banking services
meets the realm of ever changing customer needs and establishes a link that is like a chain,
inseparable.

The logo also denotes a bank that's prepared to do anything, to go to any lengths, for the
customer. The blue pointer on the top represents the philosophy of a bank that's always
looking for growth and newer, and challenging, more promising directions .The keyhole
indicates safety and security. The colours red and blue represent fusion of dynamism and
solidity. At a time when the performance of the bank, the prospects of the bank, and even the
perceptions of the bank are vibrantly different, and poised as we are at the threshold of a new
millennium, this modernized logo is a tribute to the Andhra Bankers who are the true creators
of the image of the bank.

Dr. K. Ramakrishnan - Chairman & Managing Director

Shri K Ramakrishnan took charge as Chairman and Managing Director of Andhra Bank in
June,2005. Brief profile of our Chairman and Managing Director is :



Shri K Ramakrishnan, B.Com(Spl), MBA(Gold Medalist)(First Class First) has been
conferred "Doctorate of Letters" by Acharya Nagarjuna University for contribution in the
field of Banking. Dr.K. Ramakrishnan joined Bank of India in 1970. He was appointed
Executive Director of Bank of Baroda in 2004 before taking chargeat Andhra Bank as
Chairman & Managing Director. During his appointment in Bank of Baroda, he was
Chairman, Bank of Baroda(Kenya) Ltd., and Chairman, BOB Housing Fianance Ltd.,

A widely travelled man with academic bent of mind, Mr Ramakrishnan attended programmes
at National Institute of Bank Management, Pune and Institute for Development Policy and
Management, University of Manchester, UK.

Dr. K Ramakrishnan is also Chairman, State Level Bankers' Committee, Andhra Pradesh and
a visiting faculty at Central University, Hyderabad.

Dr. Ramakrishnan will be the Chairman and Managing Director of Andhra Bank until 31st
July, 2008.

Sri Kalyan Mukherjee - Executive Director



Shri Kalyan Mukherjee B.A.(Hons), MBA joined the Andhra Bank board as Executive
Director on 25.03.2006. Before assuming charge as Executive Director, he was General
Manager with UCO Bank. In his career with UCO Bank spanning 37 years, held various
important assignments which included 10 years experience in Overseas Branches of UCO
Bank, namely Singapore & Hongkong.

Sri Mukerjee has wide experience in the area of HR. He was a member of Personnel
Committee, Indian Banks' Association for around 3 years.

Vision & Mission of Andhra Bank:-



Board Of Directors
• Dr K Ramakrishnan Chairman & Managing Director


• Sri Kalyan Mukherjee Executive Director

• Sri Madhusudan Prasad Govt. of India Nominee Director

• Shri B Maheshwaran RBI Nominee Director

• Dr K Anjanappa Director

• Sri V H Ramakrishnan Director

• Sri Prem Prakash Pareek Director

• Prof Sunil Kumar Maheshwari Director

• Sri K Ramakoteswara Rao Director

• Sri Anup Prakash Garg Director

• Sri Rama Chandra Khuntia Director

• Sri T Ravindranath Director

ATM Sharing Arrangements

Sl No:Name of the Bank
1 Allahabad Bank
2 Andhra Bank
3 Bank of Baroda


4 Canara Bank
5 CUB
6 CORP
7 COS
8 CSB
9 Dena Bank
10 Development Credit Bank
11 Dhanalakshmi Bank
12 HDFC Bank
13 ICICI Bank
14 IDBI Bank
15 Indian Bank
16 Indian Overseas Bank
17 IndusInd Bank
18 Jammu & Kashmir Bank
19 Karnataka Bank
20 Karur Vysya Bank
21 Oriental Bank of Commerce
22 Punjab National Bank
23 South Indian Bank
24 Tamilnad Mercantile Bank
25 Vijaya bank
26 Yes Bank

Besides the above, Andhra Bank has bilateral arrangements with

1. HDFC BANK
2. INDIAN BANK
3. UTI BANK
4. STATE BANK OF INDIA

The ATMs of other banks which are not listed above are shared through VISA network.



AWARDS
AND
ACHIEVEMENTS

Awards and Rewards

AWARDS RECEIVED , SO FAR IN THE PRESENT YEAR - 2006-07

SAFA award

* Received Best Presented Accounts Award 2005 from SAFA's (South Asian Federation of
Accountants)Centrein Colombo,
Sri Lanka on 16.01.2007.

"BEST BANK AWARD" by IDRBT, Hyderabad



* Andhra Bank has bagged the "Best Bank Award" in the category of "Use of IT for
Customer Service in Semi Urban and Rural areas" for 2005-06. Our Chairman & Managing
Director, Sri K Ramakrishnan has received the award from Sri Y V Reddy, Governor, RBI at
Institute for Development and Research in Banking Technology (IDRBT) Hyderabad on
2.9.2006.

MILESTONES ACHIEVED AND AWARDS RECEIVED DURING 2005-
06

FINTECH Asia 2006 Award For "Any Branch Banking (ABB)"

Andhra Bank has bagged the FINTECH Asia 2006 Award for its initiatives under "Any
Branch Banking (ABB)" service across the Country. Andhra Bank is the only Bank in the
Country to receive one of the six Awards announced by the Financial Insights (USA), an IDC
Company, which is a Subsidiary of IDG, the World's leading IT Media, Research and
Exposition Company.

Ranked 683rd among Top 1000 Banks in the World

ϖ The prestigious 'The Banker' - a Financial Times Business Publication, July 2005 Issue
published from London has ranked Andhra Bank as the '683rd Largest Bank Globally', out of
the Top 1000 World Banks' Annual Rankings.

2nd Highest Mover in the World having climbed 277 places over previous year

ϖ Andhra Bank also happened to be the 'Second highest mover in the World and highest
mover compared to any other Bank in Asia' having climbed 277 places in the Top 1000
Banks' Rankings based on Tier-I Capital.



Ranked as the Top Number 1 Bank in Asia under the "Return on Capital"

ϖ 'The Banker' Magazine went on to Rank 'Andhra Bank as the Top Number 1 Bank in Asia'
under the "Return on Capital" among all the Asian Banks - Rankings being based on Tier-I
Capital Business Parameter.

Adjudged Best Bank by Analyst Magazine - An ICFAI Publication

ϖ Our Bank has been adjudged as the "Best Bank under Large Banks Category" by "The
Analyst" Magazine - An ICFAI Publication, in its Performance Analysis of Select Indian
Banks for 2004-05.

The Best Bank as per the Business Standard Annual Banking Survey, 2004-
05

ϖ The "Best Bank" Status was conferred on our Bank by the Business Standard in its Annual
Banking Survey for 2004-05 in terms of Productivity, Profitability, Growth, Safety and
Efficiency.

Best Bank Rating from Business Today Magazine

ϖ The Business Today Survey of the Best Banks in India has Ranked Andhra Bank at 5th
Place under Largest Banks Category compared to last year where the Bank was Ranked at


15th Place in terms of Size and Strength, Operations, Productivity and Efficiency, Quality of
Earnings, Capital Adequacy and Asset Quality. The Bank has also been Ranked No.5 under
Slowest NPA Growth Category and Ranked No.2 under Return on Capital Employed
Category.

ICRA Rating for Corporate Governance

ϖ Our demonstrated commitment to vigilant Corporate Governance has been rewarded by
ICRA, which assigned us a Corporate Governance Rating of "CGR-2". This denotes high
level of assurance on the quality of Corporate Governance.

Award of Institute of Chartered Accountants of India for excellence in
Financial Reporting

ϖ The Institute of Chartered Accountants of India (ICAI) has recently awarded our Bank the
"Silver Shield" under the category of Banking, Insurance and Financial Institutions, given for
excellence in financial reporting in published accounts for the year, 2004-05. Our Bank is the
only Public Sector Bank to receive an Award from ICAI.

IBA Technology Award

ϖ Andhra Bank has been conferred the "Runner-Up" Award under "Best Payment Initiative"
at the Indian Banks' Association (IBA) Banking Technology Awards, 2005 for having wide
ATM Network and highest number of hits per day.

Awards for SLBC, as Convenor Bank in the State of AP

ϖ State Level Bankers' Committee (SLBC) of A.P. (Convenor Bank : Andhra Bank) has been
awarded for ensuring excellent performance by all Banks for Kharif 2005.


ϖ Andhra Bank as the Convenor Bank for the State Level Bankers' Committee (SLBC) of AP
has been presented an Award for its excellent coordinating efforts in implementation of Rajiv
Yuvashakti Scheme.

Awards for Best Performance under Kharif Loans

ϖ Andhra Bank was awarded by the Government of Andhra Pradesh for Best Performance in
exceeding Targets under disbursement of Kharif during 2005.

Best Bank in lending to Agriculture

ϖ Government of Andhra Pradesh has instituted for the first time Awards for Best Farmers
and Best Bankers at the State Level and District Level. Andhra Bank has bagged the Best
Banker Award at the State Level for its overall performance.

Best Banker in lending to Unemployed Youth under Rajiv Yuva Sakthi

ϖ Andhra Bank has been given the Best Banker Award for its performance during the
Year, 2005-06 for achieving Targets under the Rajiv Yuva Sakthi Scheme.



PRODUCT


PROFILE

Deposit Schemes:-

• AB Savings accounts
• AB Current accounts
• AB Term deposits
• AB Other schemes

1. AB Savings Accounts

• AB Kiddy Bank
• AB Abhaya Plus
• AB Easy Savings
• AB Abhaya SB AC
• AB Abhaya Gold SB AC
• AB Jeevan Abhaya Scheme



2. AB Current Accounts

• AB Insurance linked Current AC

3. AB Term Deposits

• AB Money Time
• AB Tax Saver
• AB Fixed Deposits
• AB Kalpataravu Deposits
• AB Recurring Deposits

4. AB Other Schemes

• AB Arogyadaan Scheme
• AB Bancassurance Life
• AB Bancassurance Non-Life

Retail Loans

• AB Doctor Plus
• AB Nightingale
• AB Housing Loans
• AB Dr. Pattabhi Vidya Jyothi
• AB Vanitha Vahan
• AB Personal Loan
• AB Vehicle Loan


• AB Clean Loans
• AB Mortgage Loans

Agriculture Loans

• AB Mahila Soubhagya
• AB Kisan Rakshak
• AB Kisan Vikas Card
• AB Pattabhi Agri Card
• AB Kisan Chakra
• AB Rural Godowns
• AB Agri Clinics/ Agro Service Centers
• AB Kisan Sampathi
• AB Kisan Bandhu-Tractor Financing
• AB Self Help groups- Bank Linkage Programme
• AB Andhra Bank Kisan Green Card
• AB Surya Sakthi
• AB Solar Cookers
• AB Finance purchase of land for agri purpose
• AB for financing to Dairy agents

Introduction:
Women are one of the greatest assets in a society. They are equal 2 men in all aspects. women
are more over perfectionists in all spheres...all that they need in Today's world is a bit of
empowerment and it is the duty of every society to provide this.... In the vedic times, women
were given an equal status like men in the society. They were allowed to voice their own
opinions, exhibit their talents and the list goes on. If you actually observe the period after the
vedic times you can really see the contrasting status and freedom levels of a woman in
society. Yes, after the vedic times women were treated like mans play thing. They were
considered as suitable only for household activities and the women being men considered a


part of bread making in the house shameful and thus began their ill-treatment. Women
empowerments have started their very first struggle.

Most men view themselves as being the superior life-form in society. They justify this belief
by saying that they are stronger and more capable; thus, making them more qualify for the
more important roles in society. They place themselves on pedestals and force women to
believe in their own inferiority to men and their incapability to excel educationally,
politically, economically, and domestically. But the truth is that women will eventually
advance in all these areas and come to realize that they do not need men to survive.



CHAPTER-3
METHODOLOGY



Andhra Bank, as a special gesture to encourage and empower Indian women, is offering a

Vehicle loan scheme “AB VANITHA VAHAN” with low rate of interest. AB VANITHA

VAHAN is a Four/Two wheeler vehicle loan scheme exclusively women for purchase of

vehicle including purchase of four wheeler on second sales. To know the response of the

customers the study has been taken.

Title of the project:

“Customer response towards the Andhra Bank Vanitha Vahan scheme in Hubli.”

Objective:

To know the customer response towards Andhra Bank Vanitha Vahan scheme in Hubli.

Sub objectives:

1) To know the awareness level of AB Vanitha Vahan scheme.

2) To know the potential market for AB Vanitha Vahan scheme.

3) To identify the reasons for performance & avenues for popularizing the scheme.

Need for the study

As Andhra Bank offered the AB Vanitha Vahan scheme from last three years & till now in

Hubli, no women has taken loan from Andhra bank for their vehicles. It was felt to ascertain

the customer response towards AB Vanitha Vahan scheme. This study is undertaken to

explore the reasons for scheme not accepted by customers.


Introduction to the Topic

Andhra Bank, as a special gesture to encourage & empower Indian women, is offering a
vehicle loan scheme “AB VANITHA VAHAN” with low rate of interest. AB VANITHA
VAHAN is a Four/Two wheeler vehicle loan scheme exclusively women for the purchase of
vehicle including purchase of four wheeler on second sales.

AB VANITHA VAHAN

EMPOWERING WOMEN

Nature of the Scheme:- A four wheeler/ two wheeler vehicle loan scheme exclusively for
women including for purchase of four wheelers on second sale.
Eligibility:- Salaried women (permanently employed)/ professional and self-employed
having income proof.
Income Criteria:- For 4 wheelers income should be more than Rs. 1,00,000 /- p.a
For 2 wheelers income should be more than Rs. 60,000 /- p.a

50% of the husband's salary will be taken for computing eligibility provided he is a co-
obligant.
Margin amount 10% on road price

Quantum of Finance:

New Vehicle: 90% on road price which includes invoice price, Life tax, Registration charges,
Insurance and accessories, if any, worth Rs. 5,000 /- or 3 years gross salary whichever is
lower.

Second Sale: Four wheelers (not more than three years old): 60% of garage value or 3 years
gross income whichever is lower.



Repayment:

For 4 wheelers - minimum 12 months and maximum 72 months (EMI).

For 2 wheelers - minimum 12 months and maximum 60 months (EMI)

Interest rate:- As applicable on the date of loan with 0.50% concession in rate of interest for
prompt payment.

Co-obligation:-Husband/ father or any third party acceptable to the bank.
Security :-Hypothecation of vehicle purchased, Valid driving license

Documents:-

Proof of Income - Salary Slip/ IT Returns/ Assessment Order, Proforma Invoice.
Valuation certificate from reputed garage for second sale.

Charges:- No processing charges and administrative charges applicable

A vehicle loan only for ladies, this kind of loan is provided by Andhra bank only.

Research methodology:

1) Data collection methods used:
Primary and secondary data collected to carry out the research work.
Primary data:
Primary data collected through questionnaire using face-to-face interview method.

Secondary data-
In this study Secondary data is collected from Web-sites, Books and Employees of Andhra
Bank.



2) Measurement tool:
¬ Questionnaire

Sampling Method: The sample is selected based on non- probability sampling method
(convenience sampling method).

Sample size : 100 customers.

Sampling unit: Women account holders of Andhra Bank

Sample frame: Hubli city



CHAPTER-4
ANALYSIS AND
INTERPRETATION



1) Occupation of the respondent

Occupation of the respodent

Cumulative
Frequency Percent Valid Percent Percent
Valid Profession 32 32.0 32.0 32.0
Service 28 28.0 28.0 60.0
Bussiness 26 26.0 26.0 86.0
Others 14 14.0 14.0 100.0
Total 100 100.0 100.0

40

30 32
28
26

20

14
Frequency

10

0
Profession Service Bussiness Others


Interpretation:-

It was found that out of 100 women respondents,

♣ 32% women respondents belongs to profession category

♣ 28% women respondents belongs to service category

♣ 26% women respondents belongs to business category

♣ Only 14% women respondents belongs to other category



The maximum women respondent belongs to profession and service category.

2) Annual Income

Annual income

Cumulative
Valid 60000-100000 30 30.0 30.0 30.0
100001-150000 54 54.0 54.0 84.0
150001-200000 15 15.0 15.0 99.0
>200000 1 1.0 1.0 100.0
Total 100 100.0 100.0

Annual income
60

50 54

40

30
30
20
Frequency

15
10

0
60000-100000 150001-200000
100001-150000 >200000

Annual income

Interpretation:-


♣ 30% women have their annual income between 60000-100000




♣ 1% woman has her annual income above 200000

The maximum women have their annual income between 100000-150000 and
60000-100000

3) How long are you with the Andhra bank?

How long are you with AB

Cumulative
Valid 1 to 5 yrs 40 40.0 40.0 40.0
6 to 10 yrs 42 42.0 42.0 82.0
11 to 15 yrs 15 15.0 15.0 97.0
> 15 yrs 3 3.0 3.0 100.0
Total 100 100.0 100.0

50

40 42
40

30

20
Frequency

15
10

0 3
1 to 5 yrs 6 to 10 yrs 11 to 15 yrs > 15 yrs


Interpretation:-


♣ 40% of women respondents are with the Andhra bank between 1-5 years



♣ 42% of women respondents are with the Andhra Bank between 6-10 years

♣ 15% of women respondents are with the Andhra Bank between 11-15 years

♣ Only 3% women respondents are with the Andhra Bank >15 years

4) Are you aware of Andhra Bank schemes?

Are you aware of AB schemes?

Cumulative
Valid Yes 69 69.0 69.0 69.0
No 31 31.0 31.0 100.0
Total 100 100.0 100.0

80

69
60

40

31
Frequency

20

0
Yes No


Interpretation:-




♣ 69% women are aware of Andhra bank schemes

♣ 31% women unaware of Andhra bank schemes

Awareness of Andhra bank schemes in women is good. To create awareness in the
remaining 31% women, Andhra bank has to communicate them. Then it is good for
Andhra bank as thet may get good number of accounts for the schemes.

5) Are you aware of “AB Vanitha Vahan” scheme?

Are you aware of AB Vanitha vahan scheme?

Cumulative
Valid Yes 32 32.0 32.0 32.0
No 68 68.0 68.0 100.0
Total 100 100.0 100.0



80

70
68
60

50

40

30 32
Frequency

20

10
0
Yes No


Interpretation:-

It was found that among 100 women,

♣ 32% women are aware of AB Vanitha vahan scheme

♣ 68% women are unaware of AB Vanitha vahan scheme.

Awareness level of AB Vanitha vahan scheme is low in women comparing with the other
schemes of Andhra Bank. So Andhra bank has create the awareness about scheme in
remaining women respondents as there is a possibility to get good number of customers
for AB vanitha vahan scheme.

6) How you came to know about this “AB Vanitha Vahan” scheme?



How you came to know about this AB vanita vahan scheme?

Cumulative
Valid relatives and friends 15 15.0 46.9 46.9
Advertisement 5 5.0 15.6 62.5
Employees of bank 12 12.0 37.5 100.0
Total 32 32.0 100.0
Missing System 68 68.0
Total 100 100.0

How you came to know about this AB vanita vahan schem
16

14 15

12
12
10

8

6
Frequency

4 5

2
0
relatives and friend Employees of bank
Advertisement

How you came to know about this AB vanita vahan scheme?

Interpretation:-

Out of 32% women who were aware of AB Vanitha vahan scheme

♣ 15% women came to know about the scheme by relatives and friends

♣ 12% women came to know about the scheme by Employees of the Bank



♣ Only 5% women came to know about the scheme through advertisement

So Andhra Bank has to give more stress on advertisement to promote the scheme as it can
create the awareness about the scheme also. Andhra bank has to do wide publicity about
scheme using different promotional tools to promote the sheme.

7) Through which media you came to know about the “AB Vanitha Vahn” scheme?

Through which media you camr to know about the AB vanita vahan scheme?

Cumulative
Valid Others 5 5.0 100.0 100.0
Total 100 100.0

Through which media you camr to know about the AB vanit
6

5
5

4

3

2
Frequency

1

0
Others

Through which media you camr to know about the AB vanita vahan scheme?


Interpretation: -

The 5% women who came know about the AB Vanitha vahan scheme through
advertisements they all are know about the scheme through the media of catalogues and
pamphlets only. So Andhra bank has to use the other media like TV, Magazines, News
papers, Radio with catalogues and pamphlets to promote and create awareness about the
scheme.

8) Do you know the features in detail of “AB Vanitha Vahan” scheme?

Do you know the fatures in detail of AB vanita vahan scheme?

Cumulative
Valid Yes 14 14.0 43.8 43.8
No 18 18.0 56.3 100.0
Total 32 32.0 100.0
Total 100 100.0



Do you know the fatures in detail of AB vanita vahan schem
20

18

14

10
Frequency

0
Yes No

Do you know the fatures in detail of AB vanita vahan scheme?

Interpretation:-

Out of 32% women who are aware of AB Vanitha vahan scheme

♣ 14% women know the features in detail of AB Vanitha vahan scheme

♣ 18% women don’t know the features in detail of AB Vanitha vahan scheme

So Andhra Bank has to give detail information about the scheme to those 18% women
then there may be possibility to get them as a potential customers for AB vanitha Vahan
scheme.

9) According to you which promotional tools Andhra Bank have to conduct for
popularizing the scheme?



According to you which promotional tools AB have to conduct for popularising the
scheme?

Cumulative
Valid Holdings and banners 40 40.0 40.0 40.0
Catalogues and
16 16.0 16.0 56.0
pamphlutes
Local t.v advertisements 30 30.0 30.0 86.0
Others 14 14.0 14.0 100.0
Total 100 100.0 100.0

According to you which promotional tools AB have to cond
50

40
40

30
30

20
Frequency

16
14
10

0
Holdings and banners Local t.v advertisem
Catalogues and pamph Others

According to you which promotional tools AB have to conduct for populari

Interpretation:-

Out of 100 women

♣ 40% women feel that Andhra Bank has to use Hoardings- Banners as promotional
tool to popularize the scheme

♣ 16% women feel that Andhra Bank has to use Catalouges- pamphlets as promotional


tool to popularize the scheme.

♣ 30% women feel that Andhra Bank has to use Local TV advertisement as promotional
tool to popularize the scheme

♣ 14% women feel that to popularize the scheme Andhra Bank has to use promotional
tools like News papers, Magazines etc.

Andhra Bank has to give more stress on promotional tools like Hoardings- Banners, Local
TV advertisement to popularize the scheme as well as to create awareness also within the
customers.

10) Would you like to own a vehicle in future?

Would you like to own a vehical in future?

Cumulative
Valid Yes 35 35.0 35.0 35.0
No 65 65.0 65.0 100.0
Total 100 100.0 100.0



70

65
60

50

40

35
30

20
Frequency

10

0
Yes No


Interpretation:-

Out of 100 women respondents,

♣ 65 % women are not going to own vehicle in future
♣ 35% women are going to own vehicle in future

35% women are going to own a vehicle in future. So these 35% women may be potential
customers for the Andhra Bank


11) If yes, would you go for “AB Vanitha Vahan” scheme?

If yes, would you go for AB vanita vahan scheme?

Cumulative
Valid Yes 14 14.0 40.0 40.0
No 21 21.0 60.0 100.0
Total 35 35.0 100.0
Total 100 100.0

30

20 21

14
10
Frequency

0
Yes No


Interpretation:-

Out of 35% women, who are going to own a vehicle in future

♣ 14% women would like to go for AB Vanitha Vahan scheme


♣ 21% women do not want to go for AB vanitha vahan scheme

This shows that there are 14% potential customers for AB Vanitha vahan scheme.Andhra
Bank has give more stress on remaining 21% women as to make them potential customers
for the scheme through communicating them.

Cross-tab 1

Occupation of the respondent with would you like to own a vehicle in future?

Occupation of the respodent * Would you like to own a vehical in
future? Crosstabulation

Count
Would you like to own
a vehical in future?
Yes No Total
Occupation of Profession 14 18 32
the respodent Service 11 17 28
Bussiness 7 19 26
Others 3 11 14
Total 35 65 100

20
19
18
17

14

10 11 11

7 Would you like to ow

Yes
Count

3
0 No
Profession Bussiness
Service Others




Interpretation:-

14% professional women and 11% service women would like to own a vehicle in future.
So Andhra has to give more stress on them.

Cross-tab 2

Occupation of respondent with According to you which promotional tools Andhra Bank
have to conduct for popularizing the scheme?
Occupation of the respodent * According to you which promotional tools AB have to conduct for
popularising the scheme? Crosstabulation

Count
According to you which promotional tools AB have to
conduct for popularising the scheme?
Catalogues Local t.v
Holdings and advertise
and banners pamphlutes ments Others Total
Occupation of Profession 16 5 11 32
the respodent Service 7 8 9 4 28
Bussiness 8 2 9 7 26
Others 9 1 1 3 14
Total 40 16 30 14 100



20

16 According to you whi

Holdings and banners

10 11 Catalogues and pamph
9 9 9 lutes
8 8
7 7
Local t.v advertisem
5
4 ents
Count

3
2
0 11 Others
Profession Bussiness
Service Others


Interpretation:-

Out of 32% professional women 16% feel that Hoardings-Banners, 5% feel catalogues-
pamphlets, 11% feel that Local TV advertisement used as promotional tool that
AndhraBank have to conduct for popularizing the scheme.

Out of 285 service women 7% feel that Hoardings-Banners, 8% feel catalogues-
pamphlets, 9% feel that local TV advertisement and 4% feel that News papers, magazines
used as promotional tool that Andhra Bank have to conduct for popularizing the scheme.



CHAPTER-5
FINDINGS,
RECOMMENDATIONS,
SUGGESTION, CONCLUSIONS,
AND LIMITATIONS


A project treport on customer response towards the andhra bank

A project treport on customer response towards the andhra bank

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