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Home , Alliance Bank of Simla

Chapter 1

Rationale of study

Banking in in the modern sense originated in the last decades of the 18th century. The first banks were The General , which started in 1786, and Bank of Hindustan, which started in 1770; both are now defunct. The oldest bank still in existence in India is the , which originated in the in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the and the , all three of which were established under charters from the British East India Company. For many years the presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the , which, upon India's independence, became the State Bank of India in 1955.

Colonial era

During the colonial era merchants in Calcutta established in 1839, but it failed in 1840 as a consequence of the economic crisis of 1848–49. The Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India, it was not the first though. That honors belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The Comptoir d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French possession, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center.

The first entirely Indian joint stock bank was the , established in 1881 in . It failed in 1958. The next was the , established in in 1895, which has survived to the present and is now one of the largest banks in India.

Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities.

The presidency banks dominated but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally undercapitalized and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." The period between 1906 and 1911, saw the establishment of banks inspired by the Swedesi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, , , , and of India.

The fervor of Swedesi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalised banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking".

During the First World War (1914–1918) through the end of the Second World War (1939–1945), and two years thereafter until the independence of India were challenging for Indian banking. The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war- related economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following table:

Number of banks Authorized capital Paid-up Capital Years that failed (Rs. Lakhs) (Rs. Lakhs)

1913 12 274 35

1914 42 710 109

1915 11 56 5 1916 13 231 4

1917 9 76 25

1918 7 209 1

Post-Independence

The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:

 The , India's central banking authority, was established in April 1935, but was nationalized on 1 January 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).

 In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India".

 The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors.

Nationalization in the 1960s

Banks Nationalization in India: Newspaper Clipping, Times of India, 20 July 1969

Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The meeting received the paper with enthusiasm.

Thereafter, her move was swift and sudden. The Government of India issued an ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969')) and nationalized the 14 largest commercial banks with effect from the midnight of 19 July 1969. These banks contained 85 percent of bank deposits in the country. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

Liberalization in the 1990s

In the early 1990s, the then Narasimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed ), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized 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.

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% at present it has gone up to 74% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4–6–4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more

Chapter 2

Objectives of Study

2.1 Title of the Project

CORPORATION BANK

Every institution has its start in modest initiatives but what makes it great is the passion of the people behind it. Carrying the legacy forward with an undaunted commitment to its vision, the journey of Corporation Bank truly epitomizes this

2.2 Objectives of the study

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 The information system is paramount concern to the banks in today‟s business environment. This exponential growth of Commercial Banks in India is attributed mainly to their much better local reach, personal interaction with customers, and their ability to catch the nerve of the local clientele With the help of this initial information the followings are some of the objective of the study  To understand the analytical framework of project financing and  to analyze the existing project appraisal mechanism at bank  To study the project financing of Corporation Bank  To familiarize with the interrelationship among various aspects of project finance.  To understand the importance of project appraisal in sharpening the ability of the bank to identify investment opportunities of the project undertaken.  To study the assessment of the various aspects of investment proposition to arrive at a financing decision.

Statement of the problem

Progressive deregulation and liberalization of the Indian financial sector have offered banks tremendous business opportunities and brought in competition. As there is growth in the economy many industry sectors like, Manufacturing and Infrastructure etc are growing up. This provides a good business opportunity of financing them. The long term or short term loan providing to the project is known as Project Financing. The banks should see the various risk related to the project before sanctioning the loan for the project. The bank should see uncertainty involved in the project. These risk and uncertainty may have an adverse impact on the Bank‟s capital and earnings. The project financing involves detailed and in-depth analysis of the results of the project. In this process the technical, the marketing, the organizational, the financial, the economic and the social aspects of the Projects are examined to ensure technical feasibility, market necessity, financial viability, economic strength and social desirability. The project financing is to identify measures, monitor and control various risk arising for its lending. When fierce competition is the rule, the banking sector is no exception. Banks compete with each other to attract quality borrowers. In this scenario, a hasty or adequate project appraisal will result in growth of NPA. Therefore the banks should have proper appraisal methods

2.3Scope of study

The scope of the study is limited to Project Finance Department of Corporation Bank Head Office, to the area of project financing. It will give an in-depth theoretical and practical knowledge about the project financing. This study also covers ratio analysis, cash flow from proposed project, risk involved in the project, analysis of the financial statement and the data found in the appraisal statement.

Limitations of study

 The study is limited to the Project appraisal department of Corporation Bank. The investigator could not cover all the banks, who are providing similar services.  The data recorded was presumed to be authentic  This study curtails comparison, as it is within the purview of only one organization.  The study is conducted on the data that are made available to the bank by the concern

Chapter 3 Profile of the company

Corporation Bank is a banking company. The Company operates in four segments: Treasury, Wholesale Banking, Retail Banking and Other Banking Business. Its services include core banking solution, automated teller machines (ATMs), point of sale terminals (PoS), Internet banking, short message service (SMS) banking, mobile payment solutions, government business, real time gross settlement (RTGS) and national electronic funds transfer (NEFT). As of March 31, 2012, it had 6,164 service outlets, which consisted of 1,500branches, 1,274 ATMs and 3,390 branchless banking units. During the fiscal year ended March 31, 2012,139 branches, 24 ATMs and 890 branchless banking units were operationalised, In fiscal 2012, it installed 14,197 PoS terminals at different merchant establishments. Corp Bank Securities Limited is its wholly owned subsidiary.

Started about 107 years ago in 1906, with an initial capital of just Rs.5000/-, Corporation Bank has recorded Rs. 2,36,611 Crore mark in business and even far more, with over 6164 service outlets across the nation, served by committed and dedicated 13,000 Corp Bankers. Proof of which is seen in its enviable track record in financial performance. We have many reasons to cheer; predominant of them is, being able to participate in nation building by empowering the rural and urban population alike. Today, we are proud that we are significant contributors to the growth of the country's economy.

Nationalized in 1980, Corporation Bank was the forerunner when it came to evolving and adapting to the financial sector reforms. In 1997, it became the Second Corporation Bank in the country to enter capital market, the IPO of which was over- subscribed by 13 times. the Bank has many " firsts " to its credit - Cash Management Services, Gold Banking, m-Commerce, " Online " approvals for Educational loans, 100% CBS Compliance and more recently, its pioneering efforts to take the technology to the rural masses in remotest villages through low-cost branchless banking - Business Correspondent model. All of which symbolize Bank's answered commitment to its customers to provide convenience banking.

At Corporation Bank, what motivates us is the passion to excel in banking by maintaining highest standards of service to our customers, backed by innovative products and services which makes us one of the leading Corporation Bank in the country, catering to a wide range of customers - from individuals to corporate clients.

Corporation Bank came into being as Canara Banking Corporation (Udipi) Limited, on 12th March, 1906, in the temple town of Udupi, by the pioneering efforts of a group of visionaries. The Bank started functioning with just Rs.5000/- as its capital and at the end of the first day, the resources stood at 38 Rupees-13 Annas-2 Pies.

The Founder President Khan Bahadur Haji Abdullah Haji Kasim Sahib Bahadur, committed to fulfill the long felt banking needs of the people and also to inculcate the habit of savings, provided the much-needed impetus to founding a financial institution that would bring about prosperity to the society.

The content of the first Appeal to the public dated 19th February, 1906 speaks volume about the lofty ideals and ethos behind the foundation. The Founder President Haji Abdullah declared that:

"The Primary object in forming „Corporation‟ is not only to cultivate habits of thrift amongst all classes of people, without distinction of caste or creed, but also habits of co-operation amongst all classes”.

“This is „Swadeshism‟ pure and simple and every lover of the country is expected to come forward and co-operate in achieving this end in view ”

The days that followed :

The initial growth was consciously cautious and need based. The first branch of the Bank was opened at Kundapur in 1923, followed by the second in Mangalore in 1926. The Bank stepped into the then Coorg State in 1934 by opening its seventh branch at Madikeri. In 1937 the Bank was included in the second schedule of Reserve Bank of India Act, 1934.

Prosperity to All:

In 1939, the Bank‟s name changed from Canara Banking Corporation (Udipi) Ltd., to “Canara Banking Corporation Ltd.,” and strongly put forth its vision with the motto-“ Sarve Janah Sukhino Bhavantu” which means“Prosperity to All ”

The second change in the name of the Bank occurred in 1972, from „Canara Banking Corporation Ltd.‟ to „Corporation Bank Limited.‟ and finally „Corporation Bank‟ following its nationalization on 15th April, 1980.

Shouldering National objectives:

The Bank took on the priorities of nationalization in full stride and emerged successful in fulfilling the national objectives, while sustaining its performance oriented culture and profit augmenting record. Amidst all this, the Bank crossed Rs.1000 crore-deposit mark in the year 1985 and launched into the 1990s with focus on high quality growth by embracing newer technology.

The end of first phase of Banking sector reforms in India had seen the Bank emerging as the most innovative and dynamic bank in the corporation, outshining other banks in terms of asset quality, capital adequacy, operational efficiency, well diversified income base, profitability, productivity, and strong balance sheet.

The tremendous amount of confidence and loyalty reposed by the public in general and customers in particular, manifested itself in the overwhelming response to the IPO of the Bank in the year 1997.

A Big Leap to the Big League:

As on 30th September, 2012, the Total Business of the Bank was Rs.2, 41,899 crore. The Total Deposit stood at Rs.1, 43,738 crore and the Total Advances were at Rs.98, 161 crore. The Net worth rose to Rs.8, 646 crore.

Growing Bigger. Getting Closer.

The Bank has Representative Offices at Dubai and at Hong Kong. Presently, the Bank has a network of 1601 fully automated CBS branches, 1281 ATMs and 3545 Branchless Banking Units across the country.

The Bank has extended Branchless Banking units to 3545 villages and has issued Smart Cards to all account holders in these villages for enabling them to operate their accounts at their doorsteps through the Business Correspondents appointed by the Bank.

From 38 Rupees-13 Annas-2 Pies to a business level of Rs.2,41,899 crore and from a Networth of Rs.5,000/- to Rs.8,646 crore, the evolution of the Bank from a Nidhi to graduate as a Premier Corporation Bank and from the early days of Swadeshism to post-Liberalization days has been a corporate success story.

Weathering two world wars, economic depressions, imbibing the latest in technology, responding to financial reforms and the unique record of uninterrupted posting of profits right from its inception in 1906, only further strengthened its its commitment to the people.

Date of Establishment 1906 Revenue 0 ( USD in Millions ) Market Cap 59059.1335698 ( Rs. in Millions ) Corporate Address Mangala devi Temple Road, Post Box No 88,Pandeshwar Mangalore-575001, Karnataka www.corpbank.in Management Details Chairperson - Ajai Kumar MD - Ajai Kumar Directors - Ajai Kumar, Ajay Garg, Ajay Kumar, Amar Lal Daultani, Ashwani Kumar, Asit Pal, BK Srivastav, C G Pinto, C Ramakrishna Kamath, D N Prakash, Grace Koshie, Hiren Mehta, J M Garg, Kaushik Kumar Ghosh, Kawaljit Singh Oberoi, L K Meena, Lalit Kumar, M A Srinivasan, Mukul Singhal, Narendra Singh, P M Sirajuddin, Raj Kumar Agrawal, Ramnath Pradeep, S K Dash, S Ravi, S Shabbeer Pasha, Satish Goel, Sushobhan Sarker, Suvarna Sanyal, T Ramachandra Bhatt, Thomas Mathew T, U Balakrishna Bhatt, US Paliwal, V Raghuraman, Venkatrao Y Ghorpade, Vincent DSouza Business Operation Bank – Public Background Corporation Bank incorporated in the year 1906 with a seed capital of Rs.5000. The Bank has Representative Offices at Dubai and at Hong Kong. Presently, the Bank has a network of 1361 fully automated CBS branches, 1250 ATMs and 2500 Branchless Banking Units across the country.

The Bank has many „firsts‟ to its credit - Cash Management Services, Gold Banking, m-Commerce, Financials Total Income - Rs. 145104.036 Million ( year ending Mar 2012) Net Profit - Rs. Million ( year ending Mar 2012) Company Secretary S K Dash Bankers

Auditors Kishore & Kishore, Padmanabhan Ramani & Ramanujam, Rao & Swami, Jain Chopra & Co, Padmanabhan Prakash & Co,

Devendra Kumar & Associates

Head office Mangaladevi Temple Road Mangalore, Karnataka - 575001 Tel: 0824-2426416, 2426417, 2426418 Fax: 0824-2421581 Email: [email protected] Website: www.corpbank.in

Corporation Bank incorporated in the year 1906 with a seed capital of Rs.5000. The Bank has Representative Offices at Dubai and at Hong Kong. Presently, the Bank has a network of 1361 fully automated CBS branches, 1250 ATMs and 2500 Branchless Banking Units across the country.

The Bank has many „firsts‟ to its credit - Cash Management Services, Gold Banking, m-Commerce, Online approvals for Educational loans, 100% CBS Compliance. On August 2010, Corporation Bank has inked a memorandum of understanding (MoU) with Unique Identification Authority of India (UIDAI), following which it will act as registrar for unique identification project 'Aadhar'.

Corporation Bank in September 2010 has signed a memorandum of understanding (MoU) with United India Insurance (UII), public sector non-life insurance major for distributing micro insurance and other rural insurance products through its business correspondents.

The Bank has one Subsidiary viz. CorpBank Securities formed as a Primary Dealer to deal in Government Securities. The Subsidiary has recorded impressive performance over the years. The Bank also has a namely CHIKO Bank covering Kodagu and Chikmagalur districts in Karnataka.

Milestone Corporation Bank was nationalized in the year 1980.In 1997, it was the second public sector bank in the India to enter capital market; It IPO was oversubscribed by 13 times. Corporation Bank‟s Lower Tier II bonds aggregating to Rs 500 crore were assigned 'CARE AAA' rating and its Upper Tier II/Perpetual Bonds issue of Rs 1,000 crore was also assigned 'CARE AAA' rating by Credit Analysis and Research.

Award

Banking Technology Awards 2009 for its efforts in implementing innovative technologies in its business initiatives under the auspices of the Indian Banks Association [IBA], Finical and the Trade Fairs & Conference International [TFCI].Best PSU Bank of the Year by Bloomberg UTV „Financial Leadership Awards 2011‟

Ranked No.1 in India‟s Most Customer Friendly Bank, a first ever Survey jointly conducted by Outlook Money and TNS.

Corporation Bank received the First Prize Under „National Award for Excellence in Lending to Micro Enterprises‟ for the year 2010-11 from Ministry of Micro, Small and Medium Enterprises, Govt. of India.

Corporation Bank has bagged the Best Manpower Efficiency Award in Public Sector Bank Category, instituted by Federation of Indian Chambers of Commerce and Industry (FICCI) and Indian Banks‟ Association (IBA) at FIBAC Banking Awards 2011.

Corporate Vision “To evolve into a strong, sound and globally competitive financial system, providing integrated services to customers from all segments, leveraging on technology and human resources, adopting the best accounting and ethical practices and fulfilling corporate and social responsibilities towards all stake holders.”

Corporate Mission  To become a provider of World-Class financial services.  To meet customer expectations trough innovation and technological initiatives.  To emerge as a role model with distinct culture identity, ethical values and good corporate governance.  To enhance share holder‟s wealth by sustained, profitable and financially sound growth with prudent risk management systems.  To fulfill national and social obligation as responsible corporate citizen.  To create environment, intellectually satisfying and professionally rewarding to the employees

PRODUCTS/SERVICES OFFERED BY BANK

Some of common available banking products are explained below: 1) Credit Card: credit Card is post paid´ or pay later´ card that draws from credit line money made available by the card issuer (bank) and gives one a grace period to pay. If the amount is not paid full by the end of the period, one is charged interest. These bills are assembled in the bank and the amount is paid to the bank by the card holder totally or by installments. The card holder need not have to carry money/cash with him when he travels or goes for purchasing. Credit cards have found wide spread acceptance in metros and big cities. Credit cards are joining popularity for online payments. The major players in the Credit Card market are the foreign banks and some big public sector banks like SBI and Bank of Baroda. India at present has about 3 million credit cards in circulation.

2) Debit Cards: Debit Card is a prepaid´ or pay now´ card with some stored value. Debit Cards quickly debit or subtract money from one‟s savings account, or if one were taking outcash.When A CUSTOMER makes a purchase, he enters this number on the shops PIN pad. When the card is swiped through the electronic terminal, it dials the acquiring bank system ± either Master Card or Visa that validates the PIN and finds out from the issuing bank whether to accept or decline the transaction. The customer never overspread because the amount spent is debited immediately from the customer‟s account. So, for the debit card towork, one must already have the money in the account to cover the transaction. There is no grace period for a debit card purchase. The major limitation of Debit Card is that currently only some 3000-4000 shops country wide accepts it.

3) Automatic Teller Machine: The introduction of ATMs has given the customers the facility of round the clock banking. ATM card is a device that allows customer who has an ATM card to perform routine banking transaction at any time without interacting with human teller. This can be done by inserting the card in the ATM and entering the Personal Identification Number and secret Password ATMs are currently becoming popular in India that enables the customer to withdraw their money 24 hours a day and 365 days. It provides the customers with the ability to withdraw or deposit funds, check account balances, transfer funds and check statement information.

4) E-Cheques: The e-cheques consists five primary facts. They are the consumers, the merchant, consumers bank the merchants bank and the e- mint and the clearing process. This chequring system uses the network services to issue and process payment that emulates real world chequing. The payer issues digital cheques to the payee ant the entire transactions are done through internet. Electronic version of cheques are issued, received and processed the e-chequing is a great boon to big corporate as well as small retailers. Most major banks accept e-cheques. Thus this system offers secure means of collecting payments, transferring value and managing cash flows.

Electronic Funds Transfer (EFT): Many modern banks have computerized their cheque handling process with computer networks and other electronic equipments. These banks are dispensing with the use of paper cheques. The system called electronic fund transfer (EFT) automatically transfers money from one account to another. This system facilitates speedier transfer of funds electronically from any branch to any other branch. In this system the sender and the receiver of funds may be located in different cities and may even bank with different banks. Funds transfer within the same city is also permitted. The scheme has been in operation since February 7, 1996, in India.

6) Telebanking: Telebanking refers to banking on phone services. a customer can access information about his/her account through a telephone call and by giving the coded Personal Identification Number (PIN) to the bank. Telebanking is extensively user friendly and effective in nature.

5)Mobile Banking: A new revolution in the realm of e-banking is the emergence of mobile banking. On-line banking is now moving to the mobile world, giving everybody with mobile phone access to real-time banking services, regardless of their location. The potential of mobile banking is limitless and is expected to be a big success. According to this system, customer can access account details on mobile using the Short Messaging System (SMS) technology where select data is pushed to the mobile device. The wireless application protocol (WAP) technology, which will allow user to surf the net on their mobiles to access anything and everything. This is a very flexible way of transacting banking business. Already ICICI and HDFC banks have tied up cellular service provides such as Airtel, Vodafone Sky Cell, etc. in and to offer these mobile banking services to their customers.

6) Internet Banking: Internet banking involves use of internet for delivery of banking products and services. With internet banking is now no longer confirmed to the branches where one has to approach the branch in person, to withdraw cashier deposits a cheque or request a statement of accounts. In internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. Corporation bank was the first one to offer Internet Banking in India Financial Transaction on the Internet:

Electronic Cash: Companies are developing electronic replicas of all existing payment system: cash, cheque, credit cards and coins. Automatic Payments: Utility companies, loans payments, and other businesses use on automatic payment system with bills paid through direct withdrawal from a bank account.

Direct Deposits: Earnings (or Government payments) automatically deposited into bank accounts, saving time, effort and money.

Stored Value Cards: Prepaid cards for telephone service, transit fares, highway tolls, laundry service, library fees and school lunches.

Point of Sale transactions: Acceptance of ATM/Cheque at retail stores and restaurants for payment of goods and services. This system has made functioning of the stock Market very smooth and efficient.

7) Cyber Banking: It refers to banking through online services. Banks with web site Cyber´ branches allowed customers to check balances, pay bills, transfer funds, and apply for loan son the Internet . 8) Demat: Demat is short for de-materialization of shares. In short, Demat is a process whereat the customer‟s request the physical stock is converted into electronic entries in the depository system

KEY FEATURES

1 Ajai Kumar Chairman

2 Ajai Kumar CEO 3 Ajai Kumar Managing Director

4 US Paliwal Director

6 Amar Lal Daultani Executive Director

5 BK Srivastav Executive Director

7 L K Meena Non Executive Director

8 Kaushik Kumar Ghosh Non Executive Director

9 Vincent DSouza Non Executive Director

10 Sushobhan Sarker Independent Director

11 Kawaljit Singh Oberoi Independent Director

12 S Shabbeer Pasha Independent Director Chapter 4 Review of literature

The banking sector in India has made remarkable progress since the economic reforms in1991. New private sector banks have brought the necessary competition into the industry and spearheaded the changes towards higher utilization of technology, improved customer service and innovative products. Customers are now becoming increasingly conscious of their right sand are demanding more than ever before The recent trends show that most banks are shifting from a product-centric model´ to a Customer-centric model´ as customer satisfaction has become one of the major determinants of business growth. In this context, prioritization of preferences and close monitoring of customer satisfaction have become essential for banks. Keeping these in mind, an attempt has been made in this study to analyze the factors that are essential in influencing the investment decision of the customers of the public sector banks Secondly; this study also suggests some measures to formulate marketing strategies to lure customers towards bank Internationally, there is a substantial literature that analyses various aspects of currency demand from the point of view of currency management. Many of these studies focus on modeling aggregate currency demand taking into account macroeconomic factors, payment mechanisms, local behavioral factors and (especially in the case of the US and Euro area) foreign demand for domestic currency. Studies devoted to estimating demand at denominational levels are, by contrast, relatively few. In India, however, there is surprisingly a paucity of studies on modelling currency demand. This chapter presents a survey of literature along with a broad overview from a cross-country perspective of the various issues that have a bearing on currency demand.

It is relevant to refer briefly to the previous studies and research in the related areas of the subject to find out and to fill up the research gaps, if any. Literature on financial services can generally be found; a number of books are available on banking related aspects as merchant banking, loan syndication, secure privatization, profitability and productivity etc. but, few studies are undertaken on the role of technology in the banking services.

Kailas M (2012)

The paper compares public and private sector banks in Vijayawada city using SERVQUAL model. The findings revealed that private sector banks have good services to customers and they retained customers by providing better facilities. The study finds out importance of new products and services for banks for retaining customers

H.Emari et al(2011)- The main objective of this research was to determine the dimensions of service quality in the banking industry of Iran. For this the study empirically examined the European perspective (i.e., Gronroos‟s model) suggesting that service quality consists of three dimensions, technical, functional and image. The results from a banking service sample revealed that the overall service quality is identified more by consumer‟s perception of technical quality than functional quality

Kumbhar, Vijay (2011)-It examined the relationship between the demographics and customers‟ satisfaction in internet banking,. It also found out relationship between service quality and customers‟ satisfaction as well as satisfaction in internet banking service provided by the public sector bank and private sector banks. The study found out that overall satisfaction of employees, businessmen and professionals are higher in internet banking service. Also it was found that there is significant difference in The customers‟ perception in internet banking services provided by the public and privates sector banks

Uppal R.K. (2010) studies the extent of mobile banking in Indian banking industry during 2000-2007. The study concludes that among all e- channels, ATM is the most effective while mobile banking does not hold a strong position in public and old private sector but in new Private sector banks and foreign banks m-banking is good enough with nearly 50 pc average branches providing m-banking services. M-banking customers are also the highest in e-banks which have positive impact on net profits and business per employee of these banks. Among all, foreign banks are on the top position followed by new private sector banks in providing m-banking services and their efficiency is also much higher as compared to other groups. The study also suggests some strategies to improve m-banking services.

Abdullah D.N.M.A. and Rosario F. (2009) study the influence of service and product quality towards customer satisfaction. 149 respondents from one of the well known hotel in Kuala Lumpur, Malaysia are selected as a sample. Psychometric testing is conducted to determine the reliability and validity of the questionnaire. The study finds positive significance relationship between place/ambience and service quality with customer satisfaction. Although, relationship between food quality and customer satisfaction is significant, it is in the negative direction. Future researchers can concentrate on determining attributes that influence customer satisfaction when cost/price is not a factor and reasons for place/ambience is currently becoming the leading factor in determining customer satisfaction.

P K Gupta (2008) Objective of this study was to find out the behavior of customers with respect to internet banking visa conventional banking. The study found out that internet banking was found to be easier and speedier than conventional banking and trust, accuracy and confidentiality were the most Important factors here.

Dr.Vannirajan&B.Anbazagan (2007)- The study tries to make an assessment of SERVPERF scale in the Indian Retail banking sector by doing a survey in banks at Madhurai. The study found that in public sector Banks tangibles and assurance are most important and in private sector banks reliability, responsiveness and tangibles are most important.

Sharma and Sharma (2006)- The study analyzed customer delight in urban consumer banking. The study found out that customers were satisfied with loan facilities, bank environment, routine work procedures, location, interest rates etc and were dissatisfied with loan formalities and promotion through media

Mohammad et al (2005)- The study tries to develop a comprehensive model of banking automated service quality taking into consideration unique attributes of each delivery channel and other dimensions which influence service quality Raul and Ahmed (2005) the study investigated customer service in public sector banks in 3 districts in Assam and it was found that Customers were dissatisfied with the management, technology and interactive factors along with high service charges. Communication gap was the root cause of poor service and service was different in rural and urban sectors

Chapter 5 Research and methodology

Research Methodology decides the territory of proposed study and gives information to the readers about adopted process of analysis for the respective study. This includes aims for which the study is undertaken. This also clarifies time, scope, data sources etc. of proposed study. Another significant aspect is tools and techniques which are used For the study. In brief this chapter helps to the researcher to decide his path of research work In the light of the above, the research study has been undertaken to study the selected banks to know, what policies, structural and procedural changes taken place in these selected banks and how these changes made impact on these banks. The other individual benefit of undertaking this research to the researcher is to grab an opportunity to meet and discuss with Academic Professional, Govt. Officials, regulatory Bodies of Government, Practical Bankers, Business and Industry, Executives, State Government Officials, Researchers and Policy Makers on various issues related to the banking sector reforms and their impacts in India The research will help the academic research scholars, policy makers, students and Government Officials to gain an insight into the future challenges before Indian Banking System. To conduct the research on the subject titled “Critical Analysis of Financial Reforms in Banking Sector in Post Liberalization Period (With respect to public and private sector banks)” the following thought provoking objectives were framed

5.1 Research design

It is the conceptual structure within which the research is conducted. It constitutes the blue print for the collection, measurement and analysis of data. The design includes an outline of what the researcher will do from writing the hypothesis and its operational implication to the final analysis of data. It constitutes the steps taken beginning with the collection of data, classifying, analyzing and interpretation, processing and finally putting in textual form. This is one important chapter of project and can be considered as skeletal of project

The type of a research is Descriptive Research:

Descriptive research is undertaken when the researcher desires to know the characteristics of certain groups such as age, sex, occupation, income or education. The objective of descriptive research is to answer the “who, what, when, where and how” of the subject under study/investigation.

Descriptive studies are normally factual and simple. However, such studies can be complex, demanding scientific skill on the part of researcher.

Descriptive studies are well structured. It tends to be rigid and its approach cannot be changed often and again. In descriptive studies, the researcher has to give adequate thought to framing research questions and deciding the data to be collected and the procedure to be used for this purpose. Data collected may prove to be inadequate if the researcher is not careful in the initial stages of data collection.

Descriptive research designs are used for some definite purpose. Descriptive research cannot identify cause and effect relationship.

Descriptive research is designed to describe the present situation or the features of a group or users of a product. In marketing, such research is undertaken to know the characteristics of certain groups or users of a product such as age, sex education, income etc. Such research studies are based on secondary data or survey research.

The major objective of descriptive research is to describe something – usually market characteristics or functions

A major difference between exploratory and descriptive research is that descriptive research is characterized by the prior formulation of the hypotheses. Thus, the information needed is clearly defined. As a result, descriptive research is preplanned and structured. It is typically based on large representative samples A formal research design specifies the methods for selecting these sources of information and for collecting data from those sources.

Date collections Methods / Sources

Data was collected by using main two methods i.e primary data and secondary data as regarded to methodology, normally both quantitative and qualitative approaches are adopted. In order to collect the data, this study brings a live analysis based on the live data collected from secondary type of data. The techniques of ratio analysis have been made use for the analysis of the financial statement of the bank.  Interacting with executives, functional in charge of various areas and departments discussing informally.  Referring to the secondary that is, various project reports prepared by the bank and desk guides available with the bank.  Visiting official website of the bank and other related websites.  Referring to news papers and various business magazines

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