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Contents Chapter - I Introduction Chapter - II Research Methodology Chapter - III Company Profile Chapter - IV Data Analysis & Interpretation Chapter - V Conclusion, Suggestions & Bibliography Chapter – I Introduction INTRODUCTION TO BANKING A bank is an institution, which deals with money and credit. It accepts deposits from the public, makes the funds available to those who need them and help in the remittance of money from one place to another. In fact, Modern Bank performs such a variety of functions that it is difficult to give precise and general definition of it. It is because of this reason that different economics give different definitions of the Bank. According to Crowther, “ A bank collects money from those who have it to spare or who are saving it out their incomes, and it lends this money to those who require it.” In the words of kinley, “ A bank is an establishment which makes to individuals such advances of money as may be required and safely made and to which individuals entrust money when not required by them use.” According to john Paget, Nobody can be a banker who does not. i) Take deposit accounts. ii) Take current accounts. iii) Issue and pay cheques-crossed and uncrossed for its customers” Prof. Sayers define the term bank banking distinctly. He defines banks as “institution whose debts (Bank deposits) are widely accepted in of other people debts to each other.” Again, according to sayers, banking business consists of changing cash for bank deposits and for cash. transferring the bank deposits from one person or corporation to another, giving bank deposits in exchange, government bonds, the secured promises of business to repay and so forth. According to Indian Companies Act 1949, banking means “ Accepting for the purpose of lending or investment of deposits, of money from the public, repayable on demand or otherwise, and with-drawable by cheque, draft or otherwise. In short, the term bank, in the modern times, refers to an institution having the following features. i) It deal with money, accepts deposits and advances loans. ii) It also deals with credit, has the ability to create credit, i.e. the ability to expand its liabilities as a multiple of its reserves. iii) It is commercial institution; it aims at earning profits. iv) It is unique financial institution that creates demand deposits, which serve as medium of exchange and as a result, the banks manage the payment system of the country. EVOLUTION OF BANKING IN INDIA Roots of Banking Systems in ancient India can be traced 2010 years back. Manusmrati and Arthshastra of Kautliya bear testimony to the existence and working of banking system in India in ancient times. Ancient banking in our country continued with much or less difference from early vedic period till Modern banking through Moghals and British period . The unification of currency under the East India Company and the substitution of single sovereign power in place of petty principles took away the business from the hands of indigenous bankers and shroffs. Western type of banking started 19th century. First joint stock Bank “ Bank of Hindustan “ came into being in 1770 at Calcutta, followed by few other banks which could exist for shorter duration’s only . In the first half of the 19th century three presidency banks. Bank of Bengal (1860), Bank of Bombay (1840) and bank of Madras (1843) were established. First Indian Bank, “Oudh Commercial Bank” evolved in 1818, which was followed by Punjab National Bank (1894) etc. These banks were started with small capital, which perhaps the major cause of failure off 87 banks during 1913-17 post. First World War period witnessed a large failure of commercial banks. In 1935 Reserve Bank of India was established which was nationalized in 1949. However, effective control on banks could be imposed only after banking Regulation Act 1949. CLASSIFICATION OF BANKS IN INDIA In India the banking sector is classified under the following heads:- RBI-CENTRAL APEX BANK SBI AND SUBSIDIARIES PUBLIC SECTOR BANKS PRIVATE SECTOR BANKS FOREIGN BANKS CO-OPERATIVE BANKS DEVELOPMENT BANKS OR INSTITUTIONAL BANKS NON-BANKING FINANCIAL COMPANIES (NBFC) 1. RBI-CENTRAL APEX BANK: The Central bank is the apex institution, which controls, regulates and supervises the monetary and credit system of the country. The Reserve Bank was established on April, 1935 under the RBI Act 1934. But it was nationalized on January, 1949. Important functions of central bank are: a) It has monopoly of note issue. b) It acts as the banker, agent and financial advisor to the government. c) It has the custodian of member banks reserve. d) It serves as the lender of last resort. e) It is the custodian of nations reserve of international currency. f) It functions as the bank of central clearance, settlement and transfer and it acts as the controller of the credit. Beside these functions, Indian Central Bank that is the Reserve Bank of India also performs many development functions to promote economic development in the country. II. SBI AND SUBSIDIARIES: The State Bank of India is the biggest commercial bank and holds. A special position in the modern commercial banking system in India. It came into existence on june,1 1965, after nationalization of the Imperial Bank of India. In 1955, on the recommendation of Rural Survey Committee, the Imperial Bank of India was nationalised and renamed as the State Bank of India through the SBI Act of 1955 . Apart from central banking functions, SBI also perform ordinary banking functions such as a) Receiving deposits from and advancing loans to the public against eligible securities. b) Investing its surplus funds in various securities and treasury bills. c) Buying and selling Gold and Silver d) Acting as an agent of co-operative bank e) Under-writing issues of stock, shares, debentures and other securities in which it is authorize to invest funds. f) Drawing bills of exchange and granting letters of credits payable out of India Example : State Bank of Mysore, State Bank of Hyderabad etc. III. PUBLIC SECTOR BANKS: These banks are owned and controlled by the government. In India, nationalized banks and regional rural banks come under this category. Examples: Union Bank of India, Canara Bank etc. IV PRIVATE SECTOR BANKS: These banks are owned by private individuals of corporations and not by the government and co-operative societies. Example: Vysya Bank, ICICI Bank, HDFC Bank etc. V. FOREIGN BANKS: These banks are foreign in origin and have their head offices in the country of its origin. Example: Citi Bank, A & Z Grinlays, Standard Charted etc., VI. CO-OPERATIVE BANKS: Co-operative banks are the institutions established on co-operative basis and they deal in ordinary banking business. Like other banks, the co-operative banks also collect funds through shares, accepts deposits and grant loans. In India, co-operative credit institutions are organized under co-operative societies and play an important role in meeting needs in rural areas. Example: State Co-operative Banks, Vasavi Bank etc., VII. DEVELOPMENT BANKS OR INSTITUTIONAL BANKS: These banks mainly meet medium-term and long-term financial needs of the industries. Such long-term needs cannot be met by commercial banks, which generally deal with short-term lending. Its main functions are as follows: a) It accepts long-term deposits b) They grant long-term loans to the industrialists to enable them to purchase land, construction factory building, purchase heavy machinery etc. c) They help in selling or even underwrite the debentures and shares of the industrial firms. d) They can also provide information regarding general economic position of the economy. Examples: NABARD, EXIM Bank, IFCI etc. RETAIL BANKING Retail banking is a combination of product development and selling strategies, essentially focused on personal banking segment. In the banks corporate objectives for business growth it is identified as thrust area. It is also the need of the hour to mobilise a good portfolio of retail banking business, as it provides a major source for sustaining growth in the industry and thus ensure the banks position in market place. Some distinguishing features between retail banking and commercial banking are as under: KEY DIFFERENCES BETWEEN RETAIL BANKING AND COMMERCIAL BANKING RETAIL BANKING COMMERCIAL BANKING CUSTOMER It focuses on individual customers It focuses on business, Institute, Corporate It has similarity within the PRODUCT products packaged differently to It has wide product suit the purpose-housing loan, differences, vehicle loan, personal loans, customised loans, consumer durable loan, gold loan with features to etc suit the particular borrower or It is published and applied to all transaction PRICING customers uniformly There is a point of sale promotion. It is selective and negotiable. PROMOTION Grass root involvement for extensive marketing, media/ It is canvassed through advertisement campaign support individual or institutional is given. contacts and supported through corporate efforts in It appeals to customer’s emotion customization & pricing. and relationship. APPEAL It appeals to economic logic. It may be appreciated that retail banking is a very Personalized service sold through individual efforts with extensive involvement of each and everyone. From the above said points of distinguishing features, it is now necessary to analyze the management of retail banking business in more detail. WHY RETAIL BANKING The following are the reasons for targeting retail banking: GROWTH MARKET: The growing income and standard of living ensures that the market for personal loans is on the increase all the time. The culture of spending tomorrow’s earnings today has sustained the retail banking growth in all the developed market place and it is expanding in India too. ASSURED MARKET: The repeat order one can expect from retail banking sector is very high. A customer satisfied with the first experience will prefer the same bank for further needs.

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