Chapter I. Introduction and. ix Design of the Study

Transcription

1 Chapter I Introduction and ix Design of the Study

2 CHAPTER - I INTRODUCTION AND DESIGN OF THE STUDY 1.1 INTRODUCTION The banking industry is the blood vascular system of our economy. It has a positive role to play in the economic development of the country as repositories of people s savings and purveyors of credit, especially as the success of economic development depends on the mobilization of resources and their investment in an appropriate manner. The banking sector is the backbone of any financial system of the economy. Commercial banks play an important role in the development of developing economies by mobilization of resources and their better allocation 1. The rapid growth of banks, especially since nationalization of major commercial banks in 1969, brought in both quantitative and qualitative changes in their functioning and also approach towards socio-economic development of the country. In the light of liberalization, privatization and globalization a lot of challenges were faced by the commercial banks. In the post-nationalization period, the proportions of rural areas in total number of bank branches as well as in credit deployment and deposit mobilization have been declined. On the other hand, the metropolitan areas registered a high increase in their percentage share in total expansion, credit deployment and deposit mobilization. Therefore, in the post- nationalization era, the performance of the banking system with respect to branch expansion in the rural and till then unbanked areas, mobilization of deposits, deployment of credit, population coverage and so on has indeed been creditable and perhaps has no parallel in the annals of banking elsewhere. 1 A.R.Sudhaman and Dr.N.Kalyanaraman, Literature Review on Customer Perception on Service Quality in Banking Sector, Indian Journal of applied Research, Volume -3, Issue - 7, July 2013, pp

3 The banking sector reflects the financial and economic health of the country. Development of any country, mainly depends upon the banking system. The Banking system remains the major focal point in the financial setup of any developing country. Banking plays vital role in the economy of the country. The face of the banking is changing rapidly. Public sector banks have a larger customer group. To deal with the customer, a member of innovative products and services are evolve in this age of LPG 2 (Liberalization, Privatization and Globalization). At the present juncture, banking in India is largely dependent on technology. Now, banks are using various other channels like, Automatic Teller Machine (ATM), Internet banking, Mobile banking, Tele - banking to provide banking services. Banking in India is changing from traditional branch banking to technology based banking. Currently, it is evident that there are two distinct customer groups - one is who like to have face-to-face interaction and another who does banking using technology 3. The primary challenge is to give consistent service to customers irrespective of the kind of channel they choose to use. Information technology poses both opportunities and challenges. Even with ATM machines and Internet Banking, many consumers still prefer the personal touch of their neighborhood branch bank. Technology has made it possible to deliver services throughout the branch bank network, providing instant updates to checking accounts and rapid movement of money for stock transfers. 2 Nirangan Pani & Sarbervar Mohapatra, Customer Relations Management (Banking perspective) Mahamaya publishing house, New Delhi, pp The FICCI Pinkerton Indian risk survey 2012 the journal of the Indian Institute of Banking and finance, Volume 84, no-1, January to March 2013, pp8. 2

4 The banking industry in India has also achieved a new height with the changing times. The marvelous kinds of innovation in technology and hard line blend of it with information technology made a paradigm shift in the banking industry. The use of technology has brought a revolution in the working style of the banks. Today, technology not only facilitates automation of processing and data processing, but also provides more value added to the entire banking business. Further, it s directly and visibly linked to value to customer. Banking today has transformed into a technology intensive and a customer friendly model with a focus of convenience. Information Technologies also facilitate the introduction of new delivery channels in the form of Automated Teller Machine, Net Banking, Mobile Banking, Card Mechanism and the like. All though Information Technologies enhances the banks in achieving higher customer satisfaction by extending value added services 4. Public sector banks provide various value added services to the customers. The awareness level of customers is increasing day by day and their expectations are also increasing for choice of choosing the product and services. The Public sector banks offering Value Added Services like bill payments, transfer of money, enquiring account balances, buying and selling of financial instruments such as securities, credit cards, mutual funds, ATM cum debit card, insurance policy, demat accounts and so on. Creation of all those facilities involves a very huge investment. So it s more important to increase the usage of Value Added Services among the customers to improve the operational efficiency and get maximum benefit from the investment made in these facilities. 4 R.Seranmadevi & M.G.Saravanaraj, Indian Banking Sector, European Journal of Social Sciences, Volume- 29, No- 4, 2012, pp

5 If the economy grows 8%, 9% or 6.5%, the banking sector will grow at least two-and-a-half times the rate of India s GDP growth. The sector could grow 16%-to-24% per annum year-on-year for the next decade. That means by 2020, we as a sector can be five times what we are today. So the growth opportunity is huge. Recently, the banking industry in different countries has shown their interest transition in improving service quality from traditional branches to electronic channels. Accordingly, many of them have tended to close or relocate their branches to be sited close to customers places for customers conveniences, and they have relied more on electronic banking services with significant growth in electronic facilities such as Internet, computer, ATMs, telephone and mobile phones 5. The banking industry of India is now running in a dynamic challenge concerning both customer base and performance. Today, banks are wooing existing customers, prospective customers by offering new facilities products and services in order to retail/increase their base in the market. The way the banking has changed, so has the customer changed. The customer of today is not what he was yesterday. Today the customer is more knowledgeable, demanding, analytical and aware of his rights. Today, many banks are rushing to become more customer focused. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. The customer has a choice. Gone are the days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging, Money has become the order of the day. 5 The Asian Banker, Special reports on retail distribution, June July 2000, pp

6 1.2 MEANING AND DEFINITION CUSTOMER SERVICE Customer Service is the commitment to providing Value Adde d Services to external and internal customer, including attitude, knowledge, technical support and quality of service in a timely manner. Customer Service is the provision of service to customers before, during and after a purchase. Customer service in banking is one of the most important ways to keep customers coming back. It includes responding to customers questions and complaints in a thorough and timely manner and interacting with customers through face-to-face meetings, telephone, mail, fax and CUSTOMER A customer is a person who is utilizing one or more of the services provided by the bank. It is not necessary that he must be an account holder or a direct user of banks services CUSTOMER PERCEPTION Customer perception of the quality of a service and their overall satisfaction has some observable indicators. Customers are not homogeneous in their behavioral pattern, attitude, needs and expectations. The customer perception is changing day by day. Customer perception is defined as the way that customers usually view or feel about certain services and products. It can also be related to customer satisfaction which is the expectation of the customer towards the products. 5

7 1.3 STATEMENT OF THE PROBLEM The present world is very fast and everyone is always busy and expects to complete all his engagements from a single window. In the availability of modern technology the customers want banking services at their door steps. Once upon a time, people have to spend three to four hours to go and do bank transaction. Some time cost of transactions was more than that of the money deposited or withdrawn. Now a day s banking is not in its traditional way, with new advance ment of technology its focus on more comfort of customer providing services here the focus of the problem is to study diverse value added services and its feature to satisfy and retain customer loyalty. Now a day s many bank like nationalized and private, offer different value added services to the customer, but the problem is to know that whether customers are satisfied with these services or not. Another problem is to study customers perceived value, quality, and expectation towards the value added services provided by nationalized banks so as to satisfy them. Here the focus of study is to certain the role of value added services to satisfy and retain customer loyal. The following some of these value added services are: 1. Automated Teller Machines (ATM) 2. Credit card 3. Debit card 4. Internet banking 5. Tele banking 6. Mobile banking 7. Electronic clearing service 8. Demat Account 6

8 Many value added services are introduced by the banks, but some customer s have lack of knowledge they would not use such services. The present study is considered important to identify the problem, whether the customer have awareness on the value added services provided by the public sector banks and carried out to examine the problem and offer solutions. 1.4 SCOPE OF THE STUDY Banking services are regarded as one of the important services. Banks provide financial services to the customers. Banks need to create and develop the services which can satisfy the consumer needs. Therefore, the present research work has been carried out to analyze the customer perception towards customer services with value added services of Public sector banks in Namakkal town. It is limited only to customers of Selected Public sector banks in Namakkal town. The data are collected from 700 respondents from June 2012 Dec The present study mainly highlights the customer perception towards value added services are utilized by the customers provided by the public sector banks. 1.5 SIGNIFICANCE OF THE STUDY In the present world, the customer is a customer of the bank and not of the branch. Consequently, transforming customer demands and explosion of new technologies, such as CBS (Core Banking Solution), Business process Reengineering (BPR), ATMs, Real Time Gross settlement (RTGS), makes it necessary for banks to move from transaction banking to customer-centric solutions 6. 6 R.K.Dubey, Customer Service in Banks, The Journal of Indian Institute of Banking & finance, April June 2013, pp5 9. 7

9 In order to increase the number of customers using these Value Added Services, it is imperative to understand the customer s awareness and preference for use of Value Added Services, the factors that influence the adoption of these facilities, problems encountered in using Value Added Services and customers expectations. Information on the above aspects would be useful to formulate programme to motivate more and more customers to utilize the value added facilities. Most of the value added features have been worked out, based on today s technology empowerments and changes in the life style of the users. Now billions of customers are being handled with care and caution by services without scarifying the concepts of privacy and reasonable care. In future, people have to transact using remote banking and virtual banking facilities. Banks are increasingly launching Self-service banking in the front lobby of branches enables customers to use alternative banking channels-atms, Phone Banking, Check Deposit Machine and Pass Book printer without entering the branch, any time of the day, irrespective of whether the branch open or closed. The per transaction cost incurred on one customer in the physical branch is Rs.50 on an average, while using Value added service cost will about minimum of Rs.10 for similar transactions 7. This study would help establish the framework for value added services are utilized by the customers. 7 Bank News, Self Service banking gaining currency, Banking Finance, October , pp7 8

10 1.6 OBJECTIVE OF THE STUDY The overall objective of the study is to analyze Customer perception towards customer service with Value Added Services offered by the Public Sector Banks in Namakkal town. The specific objectives of the study are: To suggest measures for improving the usage of Value Added Services. To examine the expectations and the level of satisfaction of the customers towards the Value Added services rendered by Public sector banks. To identify the various services enjoyed by the customers. To express the suggestions given by customers to improve the customer services in Public sector banks. To study the problems faced by bank customers while using Value added Services. 1.7 RESEARCH METHODOLOGY AND RESEARCH DESIGN SOURCES OF DATA The current study is descriptive in nature. The study focuses on customer perception towards customer services with value added services of public sector banks in Namakkal town. In this study two types of data have been used. There are primary data and secondary data. Primary data is a type of information that is obtained directly from first-hand sources by means of surveys, observation or experimentation. It is data that has not been previously published and is derived from a new or original research study and collected at the source. 9

11 The study mainly based on primary data. There are several methods of collecting primary data like an interview, observation, case studies and so on. The primary data was collected by the respondents from selected public sector banks in Namakkal town through a well designed questionnaire. The data have been collected secondary sources such as reports, books, journals, documents, magazines, periodicals, newspapers and website and other reference material available from various sources. The researcher approach various institutions like, RBI staff training college, Chennai, Institute for financial management and research (IFMR), Chennai, University of Madras Library, Chennai, Bharathiyar University Library, Coimbatore, Bharathidasan University Library, Thiruchirapalli, Periyar University Library, Salem, The Lead Bank, Namakkal SAMPLE SELECTED FOR THE STUDY The study is to determine the customer perception towards customer services with value added services of Public sector banks in Namakkal town. The sample Public sector banks have been selected on the basis of size and services provided by the bank, which are utilized by the customers. The primary data collected from the customers of selected Public sector banks, for this purpose to list the operating banks in Namakkal Town records were obtained from Indian Bank, The Lead Bank of Namakkal. 10

12 There are totally 15 Public sector banks in Namakkal town. Out of 15 banks only 10 banks have been selected for this study. The selected Public sector banks in Namakkal Town as shown in Table 1.1 Table 1.1Selected Public sector Banks in Namakkal Town S. No Name of the Banks 1 Bank of Baroda 2 Bank of India 3 Canara Bank 4 Central Bank of India 5 Indian Bank 6 Indian overseas Bank 7 Punjab National Bank 8 State Bank of India 9 Syndicate Bank 10 Union Bank of India From the 10 Public sector banks 700 respondents were selected for the study by adopting the method of convenient random sampling method. 11

13 1.7.3 SAMPLING TECHNIQUE The Namakkal Town was chosen for the purpose of the study on the basis of convenient sampling. Respondents were chosen at random from the selected public sector banks. In order to study customer perception towards customer services with value added services of public sector banks in Namakkal town. A Non random sampling technique of convenient sampling procedure is applied to collect various respondents from selected Public Sector Banks in Namakkal town. Out of 750 respondents only 700 respondents were selected. Hence, due to unfilled questionnaire, 50 respondents have been rejected and 700 respondents have been finally accepted for analysis and interpretation STATISTICAL TOOLS The primary data collected from the respondents were analyzed and presented in the form of tables, Bar charts and Pie diagrams are used. The entire statistical test in this study was carried out at 5% and 1% level of significance. In this present study the following statistical tools are used. Descriptive Analysis Chi square test Analysis of Variance Factor analysis T-test Weighted average score analysis Kruskal wallis test Friedman rank test Garrett Ranking Techniques 12

14 1.7.5 PERIOD OF STUDY The period of study was three years from 2011 to The data were collected from 700 respondents by10 selected Public sector banks in Namakkal town. The primary data was collected from the respondents from June 2012 Dec PROFILE OF THE SAMPLE PUBLIC SECTOR BANKS SELECTED FOR THE STUDY BANK OF BARODA Bank of Baroda (BoB) is an Indian state-owned banking and financial services company headquartered in Vadodara (earlier known as Baroda) in Gujarat, India. It is the second-largest bank in India, after State Bank of India, and offers a range of banking products and financial services to corporate and retail customers through its branches and through its specialized subsidiaries and affiliates. It has a corporate headquarters is in Mumbai. The bank was founded by Maharaja Sayajirao Gaekwad III (also known as Shrimant Gopalrao Gaekwad), the then Maharaja of Baroda on 20 th of July 1908 with a paid capital of Rs. 10 Lakhs. From its introduction in a small building of Baroda, the bank has come a long way to achieve its current position as one of the most important banks in India. On the 19 th of July 1969, Bank of Baroda was nationalized by the Government of India along with 13 other commercial banks. Based on 2012 data, a network of 4283 branches (out of which 4172 branches are in India) and offices, and over 2000 ATMs. 13

15 Along with a huge network of its branches spread across India, Bank of Baroda has its overseas branches located in 14 other countries, which include Bahamas, Bahrain, Belgium, China, Fiji Islands, Hong Kong, Mauritius, Republic of South Africa, Seychelles, Singapore, Sultanate of Oman, United Arab Emirates, United Kingdom and United States of America. Apart from it, the bank has established its subsidiaries in seven countries viz. Botswana, Ghana, Guyana, Kenya, Tanzania, Trinidad & Tobago and Uganda, and its representative offices in three countries which are Australia, Malaysia and Thailand. The bank offers a wide array of customized and specialized services to meet the diverse needs of its customers, and these services have been categorized into Personal Banking, Business Banking, Corporate Banking, International Banking, Treasury Banking and Rural Banking services BANK OF INDIA Bank of India was founded on 7 th September, 1906 by a group of eminent businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalized along with 13 other banks. Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakhs and 50 employees, the Bank has made a rapid growth over the years and blossomed into a mighty institution with a strong national presence and sizable international operations. In business volume, the Bank occupies a premier position among the nationalized banks. The Bank has 4545 branches in India spread over all states/ union territories, including specialized branches as on 31 st December These branches are controlled through 50 Zonal Offices. Presently the Bank has an overseas presence in 20 foreign countries spread over five continents with 53 offices, including four Subsidiaries, four Representative Offices and one Joint Venture, at key banking and financial centers viz., Tokyo, Singapore, Hong Kong, London, Jersey, Paris and New York. 14

16 The bank has been in the forefront of introducing various innovative services and systems. Business has been conducted with the successful blend of traditional values and ethics and the most modern infrastructure. The bank has been the first among the nationalized banks to establish a fully computerized branch and ATM facility at the Mahalaxmi Branch at Mumbai way back in CANARA BANK Canara Bank is one of the most prominent commercial banks of India headquartered in Bangalore, Karnataka (State). The bank was established in the year 1906 at Mangalore. Initially, it was founded with the name Canara Bank Hindu Permanent Fund, but later on the name was changed to the Canara Bank Limited. The bank was nationalized in Canara Bank offers a host of banking and value added services to its customers, which include Personal Banking Services, Corporate Banking Services, NRI Banking Services and Priority & SME Credit Services. Apart from setting other benchmarks in the field of providing comprehensive banking services to the consumers, Canara Bank has a number of achievements to its credit, which include being the first bank in India to have launched Inter-City ATM network, being the first bank to have been awarded ISO Certification for one of its branches, providing credit card for farmers for the first time in India along with offering Agricultural Consultancy Services. As of February 2014, the bank had a network of 4600 branches and more than 5500 ATMs spread across India. The bank also has offices abroad in London, Hong Kong, Moscow, Shanghai, Doha, and Dubai. Widely known for customer centricity.several IT initiatives have been undertaken during the year, which include Funds Transfer through Interbank Mobile Payment Services (IMPS) in ATMs, ASBA facility to net banking users, E-filing of tax returns and facility for viewing details of tax deducted at source, Terminal at select branches for customer 15

17 to use net banking, SMS/ alerts for all transactions done through ATM, net banking, POS, mobile banking, online payments irrespective of amounts, online loan applications and tracking facility, generation of automatic pass sheets through and automatic renewal of term deposits CENTRAL BANK OF INDIA Central Bank of India is one of the oldest commercial banks of India, Established in 1911, Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians without any foreign help. Sir Sorabji Pockhanawala was the founder of the bank. In the year 1969 the bank was nationalized by the Government of India. Central Bank of India claims to be the first bank to be conferred with the National Award for Excellence in Micro and Small Enterprises (MSE) Lending for the year The bank entered a partnership with Kotak Mahindra Assets Management Company in December 2008, under which all the Kotak Mutual Fund products will be made available through Central Bank of India branches. A number of innovative and unique banking activities have been launched by Central Bank of India. Central Bank of India offers a host of banking services to its customers, including Regular Banking Services such as Deposits and Loans, International Banking Services, and other services including Central card Electronic Cards, Debit Cards, No-Frills Savings Deposit Account under the name Cent Bachat Khata, and Finance options for domestic and international tours under the name Cent Safar. Among the Public Sector Banks, Central Bank of India can be truly described as an All India Bank, due to distribution of its large network in 27 out of 29 States as also in 3 out of 7 Union Territories in India. Central Bank of India holds a very prominent place among the Public Sector Banks on account of its 16

18 network of 4336 Branches, Asset Recovery Branches (ARB) 9, Retail Asset Branches (RAB) 15 and 26 extension counters along with satellite branches at various centers throughout the length and breadth of the country. The headquarters of the bank is located in Mumbai, the financial capital of India, along with 16 other zonal offices established in different cities of the nation, including Agra, Ahmedabad, Bhopal, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Lucknow, Mumbai Metro Zonal Office, Muzaffarpur, Nagpur, New Delhi, Patna, Pune and Raipur INDIAN BANK Indian Bank is one of the indigenous banks of India that emerged as a result of the Swadeshi Movement during the British Raj. The bank was established on 15 th of August, The bank soon spread its wings outside India too, and opened its branch in Colombo, Sri Lanka in the year 1932 and Rangoon, Burma in The bank was further nationalized by the Government of India in the year 1969, headquartered in Chennai. The modest beginning made by the Indian Bank has come a long way since then, with 1642 branches located nationwide within India and Overseas branches in Singapore and Colombo. The bank also has 40 Overseas Correspondent banks in 70 countries, giving a strong presence internationally. A 22,000 strong workforce of dedicated employees takes pride in serving the Indian Bank. Indian Bank offers a wide variety of Banking Products and Services to its customers, including various Deposit Schemes, Loan Options, Financial Services, Stock Investment Services and a number of specialized services such as Remittance, Collection, Seven Day Banking Branches, Cash Management and Electronic Funds Transfer. 17

19 Apart from it Regular Banking Services, the Indian Bank has also offered various other services through its three subsidiary companies, which are Indbank Merchant Banking Services Ltd., IndBank Housing Ltd. and IndFund Management Ltd. Indian Bank has been a leader in bringing new initiatives for development of rural banking and extending help to the farmers of India. The bank has received awards from the Honorable Union Minister of Finance for Excellence in Agricultural Lending. Apart from it, the bank also received the Best Performer Award for Micro-Finance activities in Tamil Nadu and Union Territory of Puducherry from National Bank for Agriculture and Rural Development (NABARD) INDIAN OVERSEAS BANK Indian Overseas Bank (IOB) is a leading bank based in Chennai, India established in IOB had the distinction of simultaneously commencing operations in three branches at Karaikudi, Chennai, and Yangon (Myanmar). Since IOB aimed to encourage overseas banking and foreign exchange operations, it soon opened its branches in Penang and Singapore. Today, Indian Overseas Bank boasts of a vast domain in the banking sector with over 3300 domestic branches, three extension counters and six branches overseas as of IOB was the first bank to venture into consumer credit, as it introduced the popular Personal Loan scheme. In 1964, the Bank started computerization in the areas of inter-branch reconciliation and provident fund accounts. Indian Overseas Bank was one of the 14 major banks, which were nationalized in After nationalization, the Bank emphasized on opening its branches in rural parts of India. In 1979, IOB opened a Foreign Currency, Banking Unit in the free trade zone in Colombo. The Bank's IT department has developed software, which is used by its 1200 branches to provide online banking to customers. Indian Overseas Bank also has a 18

20 network of about 500 ATMs throughout India. Its International VISA Debit Card is accepted at all ATMs belonging to the Cash Tree and NFS networks. IOB also offers Internet Banking; it's one of the banks that the Government of India has approved for online payment of taxes. Indian Overseas Bank offers investment options like Mutual Funds and Shares. It provides a wide range of consumer and commercial banking services, including Savings Account, Current Account, Depositary Services, VISA Cards, Credit Cards, Debit Cards, Online Banking, Any Branch Banking, Home Loans, NRI Account, Agricultural Loans, Payment of Bills / Taxes, Provident Fund Scheme, Forex Collection Services, Retail Loans PUNJAB NATIONAL BANK Punjab National Bank (PNB) is the second largest government-owned commercial bank in India. Punjab National Bank has one of the largest branch networks in India, headquarters is in New Delhi. The bank was established in 1895 at Lahore. PNB's founders included several leaders of the Swadeshi movement like Dyal Singh Majithia, Lala HarKishen Lal, Lala Lalchand, Kali Prosanna Roy, EC Jessawala, Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively associated with the bank management in its early years. It holds the distinction of being the first Indian bank to have been started solely with Indian capital. In 1969, it was nationalized by the Government of India along with 13 other banks. With more than 119 years of strong existence and 6081 total branches including five foreign branches, 6698 ATMs as on Dec

21 Punjab National Bank is serving more than 87 million esteemed customers. PNB, being one of the largest nationalized banks, has continued to provide prudent and trustworthy banking services to its customers. The Bank enjoys strong fundamentals, large franchise value and good brand image. To meet the growing aspirations of the people and compete in these tough conditions, the Bank offers a wide range of products and services. The Bank has the vast network of branches, including specialized branches which are offering multiple products and services to its customers. The bank also has a large network of ATMs which provides facilities like Fund Transfer, Bill Payments mobile registration for the generation of SMS alerts, Direct Tax Payment request for stop payment of cheques. The Bank is offering Internet Banking Services to its customers, which includes online bills payment of utility services; online Railways/air ticket booking, e payment towards services like Excise Duty and service tax. It is also providing on line trading activity to its customers and demat accounts are also getting available to the customers. Bank has come out with SMS Alert and Mobile Banking Options to the customers, which has led to tendering of Anytime Anywhere banking facility to the customers and keeping the customers updated about all their financial transactions. All the branches of the Bank are Real Time Gross Settlement (RTGS) /National Electronic Fund Transfer (NEFT) enabled wherein customers can transfer funds at the click of the mouse. PNB has a banking subsidiary in the United Kingdom, as well as branches in Hong Kong and Kabul. It has representative offices in Almaty, Shanghai, and Dubai. 20

22 1.8.8 STATE BANK OF INDIA State Bank of India is the largest bank in India. It is a multinational banking and financial services company based in India. It is a government owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2013, it had assets of US$388 billion and 17,000 branches, including 190 foreign offices, making it the largest banking and financial services company in India by assets. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidencies banks - Bank of Calcutta and Bank of Bombay to form the Imperial Bank of India, which in turn became the State Bank of India. Government of India owned the Imperial Bank of India in 1955, with Reserve Bank of India. The roots of the State Bank of India lie in the first decade of the 19 th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 nd June The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on 15 th April 1840) and the Bank of Madras (incorporated on 1 st July 1843). All three Presidency banks were incorporated as joint stock companies and were the result of royal charters. These three banks received the exclusive right to issue paper currency till 1861 when, with the Paper Currency Act, the right was taken over by the Government of India. The Presidency banks amalgamated on 27 th January 1921, and the re-organized banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company, but without Government participation. 21

23 The State Bank of India Act of 1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On 1 st July 1955, the Imperial Bank of India became the State Bank of India. SBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout India. As of 28 th June 2013, the bank had 180 overseas offices spread over 34 countries. It has branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which made eight state bank associates of SBI. SBI has five associate banks; all use the "State Bank of" name, followed by the regional headquarters' name: State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore As on 30 th September 2013, the five ABs has a combined network of 5685 branches in India which is on the core banking and 5809 ATMs networked with SBI ATMs, providing value added services to clientele. 22

24 Earlier SBI had seven associate banks, all of which had belonged to princely states until the government nationalized them between October 1959 and May In tune with the first Five Year Plan, which prioritized the development of rural India, the government integrated these banks into State Bank of India system to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline the group's operations. SBI is one of the largest employers in the country having 228,296 employees as on 31 st March 2013, out of which there were 46,833 female employees (21%) and 2,402 disabled employees (1%) SYNDICATE BANK Syndicate Bank is one of the oldest and major commercial banks of India. The bank was established in 1925 in Udupi, It was founded by T M A Pai, Upendra Pai andvaman Kudva. At the time of its establishment, the bank was known as Canara Industrial and Banking Syndicate Limited. The bank, along with 13 major commercial banks of India, was nationalized on 19 th July 1969, by the Government of India. The business started with a capital of 8000 rupees. The first branch of the bank started its operations in 1928 at Udupi, in Dakshin Kannada district in Karnataka state. Initially, the bank collected as low as two annas from the doorsteps of the depositors daily through its agents. This type of system wherein the agents of the bank came doorsteps to collect deposit is still prevailing in India and is referred to as the Pigmy Deposit Scheme. The name of the bank was changed to Syndicate Bank Limited in 1964 and the head office of the bank was shifted to Manipal. The bank expanded its operations not only on the domestic front but also overseas. It has a branch in 23

25 London and the bank manages National Exchange Co. in Doha and Musandam Exchange Co. in Muscat. By 1978, it opened its 1000th branch at Hauz Khas, Delhi. Currently it has over 3300 branches and all branches are offering core banking, E-banking services under anywhere-anytime-anyhow banking. Syndicate Bank has one branch in London, United Kingdom. The Bank's perception had a vision of future India. It has been propagating innovations in Banking and also has been receptive to new ideas without, however getting uprooted from its distinctive socio-economic and cultural ethos. The Bank is well equipped to meet the challenges of the 21 st century in the areas of information technology, knowledge and competition. A comprehensive IT plan is being put in place and the skills and knowledge of the Bank's personnel are being upgraded through a variety of training programmes to promote customer delight in every sphere of its activity. The Bank has launched an ambitious technology plan called Centralized Banking Solution (CBS) whereby 500 of our strategic branches with their ATMs are being networked nationwide over a four year period. The Bank is a pioneer among Public Sector Banks in launching CBS. Our bank has already achieved CBS implementation among all its branches. Thus, the bank is 100% CBS enabled. In 2004, Syndicate Bank also started utility bill payment services through Internet banking introduced. In 2005, the bank commenced the online reservation of railway tickets through Indian Railway Catering & Tourism Corporation Ltd for its customers. 24

26 UNION BANK Union Bank of India (UBI) is one of the largest public sector banks of India (the government owns 55.43% of its share capital). It has representative offices in Abu Dhabi, United Arab Emirates, Beijing, Peoples Republic of China, London, Shanghai, and Sydney, and a branch in Hong Kong. Union Bank of India (UBI) was registered on 11 th November 1919 as a limited company in Mumbai and was inaugurated by Mahatma Gandhi. At the time of India's Independence in 1947, UBI only had four branches - three in Mumbai and one in Saurashtra, all concentrated in the key trade centres. After Independence UBI accelerated its growth and by the time the government nationalized it in 1969, it had grown to 240 branches in 28 states. Shortly after nationalization, UBI merged in Belgaum Bank, a private sector bank established in 1930 that had it merged in a bank in 1964, the Shri Jadeya Shankarling Bank. Then in 1985 UBI merged in Miraj State Bank, which had been established in In 1999 the Reserve Bank of India requested that UBI acquire Sikkim Bank in a rescue after extensive irregularities had been discovered at the nonscheduled bank. Sikkim Bank had eight branches located in the North-east, which was attractive to UBI. With the age of global banking, Union Bank of India also changed its style, boasting of urbanized and computerized core banking systems. A front runner among public sector banks in modern-day banking, it has all the facilities that a modern bank should have - internet banking and centrally computerized branches. UBI was one of the pioneer public sector banks, which launched Core Banking Solution in

27 On the technology front the Bank has taken early initiatives and 100% of its branches are computerized. The Bank has also introduced Core Banking Solution with connectivity between branches. 100% of the business of the Bank is under Core Banking Solution making it a leader among its peers in infusion of technology. Many innovative products are developed using the technology platform to offer an array of choices to customers, adding speed and convenience to transactions. Technology will also enable the Bank to derive substantial cost reduction while creating the requisite capacity to handle the ever increasing volume of business in a competitive environment that offers immense opportunities. 1.9 LIMITATION OF THE STUDY 1) The research study is limited to Namakkal town. 2) Totally 700 samples were taken under convenient sampling method. 3) The results of the study were based upon the information provided by the sample respondents. 4) The study is confined to respondents were selected only from ten public sector banks in Namakkal town. 5) The study is not indicated, all value added services provided by the Public sector banks, it takes only a few services familiar by the respondents. 26

28 1.10 CHAPTERIZATION The study has been organized in six chapters. A brief outline of the various chapters is as follows: First chapter consists of Introduction and Design of the study, Meaning and Definition, Statement of the Problem, Scope of the study, Significance of the study, Objectives of the study, Sources of data, Sample selected for the study, Sampling Technique, Statistical tools, Period of study, Profile of the sample Public Sector Banks selected for the study, Limitations of the study and Chapterization. Second chapter, Review of Literature deals with the earlier studies regarding the concepts of customer perception and customer services towards value added services in public sector banks in detailed manner. Third chapter elaborates the growth and development of banks in India, Overview of Customer service in banks, and Profile of the Namakkal Town which is selected for the study. Fourth chapter deals with the Analysis and Interpretation - I Fifth chapter indicates the Analysis and Interpretation - II Sixth chapter is a concluding one, which highlights the major findings of the study and offers a few suggestions. 27