A

COMPREHENSIVE PROJECT REPORT

ON Study on Alternative Banking Channels In Ahmedabad

Submitted to L.J. Institute of Management Studies

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ASMINISTRATION

In Gujarat Technological University UNDER THE GUIDANCE OF Faculty Guide Prof. Dr. Priyanka Pathak Submitted by: Nauratmal Rao (Enrollment No: 127290592129) Sanket Shah (Enrollment No: 127290592149) [Batch No.: 2012-2014] MBA SEMESTER IV

L.J. Institute of Management Studies MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad March,2014

Students Declaration

We, Nauratmal Rao (Enrolment. No. 127290592129) & Sanket Shah (Enrolment No. 127290592149), hereby declare that the report for Comprehensive Project entitled Study on Alternative Banking Channels In Ahmedabad is a result of our own work and our indebtedness to other work publications, references, if any, have been duly acknowledged.

Place: Ahmedabad

Signature

Date: (Nauratmal Rao)

(Sanket Shah)

Institutes Certificate
Certified that this comprehensive project report titled Study on Alternative Banking Channels In Ahmedabad is the bonafied work of Nauratmal Rao (Enrolment. No. 127290592129) & Sanket Shah (Enrolment No. 127290592149) who carried out the research under my supervision. I also certify further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or a work was conferred on an earlier occasion on this or any other candidate.

Signature of the Faculty Guide

Prof. Dr. Priyanka Pathak

PREFACE
The GUJARAT TECHNOLOGICAL UNIVERSITY maintains a reputation for up-to-date curricula, quality teaching, empirical research, consulting and publications. It brings together talented youth and highly qualified and experienced teachers. It provides relevant knowledge, skill and motivation to succeed. The program of the L.J. INSTITUTE OF MANAGEMENT is highly regarded by employers both in India and overseas, as its programs bland modern theory with current practice. The Master of Business Administration (MBA) program is broad-based management program providing in-depth understanding to student in technical, human and conceptual skill. For the same, it imparts a unique, Comprehensive project report to its students, which help them to get in the corporate culture and to step towards a brightening career. Comprehensive project report is helpful in having practical knowledge, the project report is helpful to every students.

ACKNOWLEDGE
We are extremely thankful to our Director, Dean And Faculty guide Prof. Dr. Priyanka Pathak for their valuable guidance and the helpline they have provide us throughout our completion of the project we have undertaken as our CP. They were always there to lend a helping hand & directed us towards proper attitude to develop the project. They have always welcomed our queries and doubts regarding the project work and also in the subjects they have taken with a great interest to teach us. Without their help and right guidance the completion of the project would have been very difficult.

The level of knowledge they possess has covered entire aspects of the management expertise in different fields particularly in our project related Finance. We are also thankful to our college L.J. INSTITUTE OF MANAGEMENT for offering us such a great subject that binds all the knowledge we have gained through this SIP.

And last but not the least we would like to thank all our friends who have provided their thoughts about our project during development and for the further enhancement.

Thanking you.

TABLE OF CONTENTS

Definition Of Bank:
Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits of money from the public, repayable on demand or otherwise and withdraw by cheque, draft or otherwise." -Banking Companies (Regulation) Act, 1949

ORIGIN OF THE WORD BANK:The origin of the word bank is shrouded in mystery. According to one view point the Italian business house carrying on crude from of banking were called banchi bancheri" According to another viewpoint banking is derived from German word "Branck" which mean heap or mound. In England, the issue of paper money by the government was referred to as a raising a bank.

ORIGIN OF BANKING :
Its origin in the simplest form can be traced to the origin of authentic history. After recognizing the benefit of money as a medium of exchange, the importance of banking was developed as it provides the safer place to store the money. This safe place ultimately evolved in to financial institutions that accepts deposits and make loans i.e., modern commercial banks.

Banking system in India

Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process.

HISTORY OF BANKING IN INDIA

Banking in India has its origin as early or Vedic period. It is believed that the transitions from many lending to banking must have occurred even before Manu, the great Hindu furriest, who has devoted a section of his work to deposit and advances and laid down rules relating to the rate of interest. During the mogul period, the indigenous banker played a very important role in lending money and financing foreign trade and commerce. During the days of the East India Company it was the turn of agency house to carry on the banking business. The General Bank of India was the first joint stock bank to be established in the year 1786. The other which followed was the Bank of Hindustan and Bengal Bank. The Bank of Hindustan is reported to have continued till 1906. While other two failed in the meantime. In the first half of the 19th century the East India Company established there banks, The bank of Bengal in 1809, the Bank of Bombay in 1840 and the Bank of Bombay in1843. These three banks also known as the Presidency banks were the

independent units and functioned well. These three banks were amalgamated in 1920 and new bank, the Imperial Bank of India was established on 27th January, 1921.

With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial Bank of India was taken over by the newly constituted SBI. The Reserve Bank of India (RBI) which is the Central bank was established in April, 1935 by passing Reserve bank of India act 1935. The Central office of RBI is in Mumbai and it controls all the other banks in the country.

In the wake of Swadeshi Movement, number of banks with the Indian management were established in the country namely, Punjab National Bank Ltd., Bank of India Ltd., Bank of Baroda Ltd., Canara Bank. Ltd. on 19th July 1969, 14 major banks of the country were nationalized and on 15th April 1980, 6 more commercial private sector banks were taken over by the government.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. The areas mentioned below: Early phase from 1786 to 1969 of Indian Banks.

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.

New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.

Phase I
The General Bank of India was set up in the year 1786.Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders.

Phase II
Government took major steps in this Indian Banking Sector Reform after independence. In1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: 1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crore. After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

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

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

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

BANKS IN INDIA

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

All these details and many more are discussed over here. The banks and its relation with the customers, their mode of operation, the names of banks under different groups and other such useful informations are talked about.

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

STRUCTURE OF BANKING
Pu bli c Se ct
RESERVE BANK OF INDIA

or Ba

COMMERC-IAL BANKS

CO-OPERATIVE BANKS

nk s:

PUBLIC BANK

SCHEDULE BANKS

STATE CO-OPERATIVE BANK

STATE LAND DEVE CO-OP. BANK DEVLOPMENT

Pu bli c

SCHEDULE BANKS

NON SCHEDULE BANKS

CENTRAL CO-OPERATIVE

CENTRAL LAND COOPERATIVE

sec tor ba

NON SCHEDULE BANKS

PRIMARY AGRICULTURE CREDIT SOCIETY

nk s are

FARMER SERVICES SOCIETY

tho se

PRIMARY URBAN CO-OPERATIVE

ba nk s wh ich

are owned by the Government. The Govt. runs these Banks. In India 14 banks were nationalized in 1969 & in 1980 another 6 banks were also nationalized. Therefore in 1980 the numbers of nationalized bank were 20. At present there are total 26 Public Sector Banks in India (As on 26-09-2009). Of these 19 are nationalized banks, 6(STATE BANK OF INDORE ALSO MERGED RECENTLY) belong to SBI & associates group and 1 bank (IDBI Bank) is classified as other public sector bank. Welfare is their primary objective.
Nationalized banks Allahabad Bank Andhra Bank Bank Of Baroda Bank Of India Bank Of Maharashtra Canara Bank Central Bank Of India Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank UCO Bank Union Bank Of India United Bank Of India Vijaya Bank (State Bank of Saurastra merged with SBI in the year 2008 and State Bank of Indore In 2010) Bank Of State Bank of Bikaner And Jaipur State Bank of Travancore IDBI (Industrial Development Bank India)Ltd. State Bank of Patiala Of State Bank of Mysore State Bank of Hyderabad Other Public SBI & its Associates Sector Banks State Bank of India

Old Private Sector Banks

New Private Sector Banks

Catholic Syrian Bank. City Union Bank Ltd. Dhanalakshmi Bank Ltd. Federal Bank Ltd. ING Vysya Bank Ltd. Jammu and Kashmir Bank Ltd. Karnataka Bank Ltd. Karur Vysya Bank Ltd. Lakshmi Vilas Bank Ltd. Nainital Bank Ltd. Ratnakar Bank Ltd. SBI Commercial and

HDFC Bank Ltd. ICICI Bank Ltd. IndusInd Bank Ltd. Kotak Mahindra Bank Ltd. Axis Bank (earlier UTI Bank)

Yes Bank Ltd.

International Bank Ltd. South Indian Bank Ltd. Tamilnad Mercantile Bank Ltd. United Western Bank Ltd.

Private Sector Banks:

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

The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited, to set up a bank in the private sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995. ING Vysya, yet another Private Bank of India was incorporated in the year 1930. Private sector banks have been subdivided into following 2 categories:-

Co-operative banks in India:

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

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

Rural banks in India

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

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

Fact Files of Banks in India

The first Bank in India to be given an ISO certification.

Canara Bank

The first Bank in Northern India to get ISO 9002 certification for their Punjab and Sind selected branches. Bank

The first Indian Bank to have been started solely with Indian capital.

Punjab Bank

National

The first among the Private Sector Banks in Kerala to become South Scheduled Bank in 1946 under the RBI act. Bank

Indian

Indias oldest,largest and the most successful commercial bank State offering the widest possible rang of domestic,international and NRI India products and services,through its vast network in India and overseas.

Bank

of

Indias second largest Private Sector Bank and is now the largest The Federal Bank

scheduled commercial bank in India.

Limited

Bank which started as Private Shareholders Banks,mostly European Imperial Bank of shareholders. India

The first Indian Bank to open a branch outside India in London in 1946 Bank of India, and the first to open a branch in continental Europe at Paris in 1974 founded in 1906 in Mumbai.

The oldest Public Sector Bank in India having branches all over India Allahabad Bank and serving the customers for the last 132 years.

The first Indian Commercial Bank which was wholly owned and Central Bank of managed by Indians. India

ABOUT MAJOR COMPANIES IN THE INDUSTRY

With most of the major banks providing Internet Banking or online banking, it is possible to do most of your banking from the comfort of your home or office. All you need is a computer with internet access. More than 22% of the internet users in India use online banking.

Internet banking or e- banking is changing the face of Indian Banking and it has made available the accessibility to the banking products & services from the comfort of customers home.

Web is going to be extremely important for retail financial services as compared to other industries. Internet banking is rapidly changing the banking industry and it has led to major effects on banking relationships.

There are many companies working in India and providing the facilities of internet banking. Most of the banks are providing same facilities which are provided by other banks. So the competition is prevailing in the industry. The major banks which provide the internet banking facilities are as follows: Public Sector Banks 1) State Bank Of India 2) Punjab National Bank 3) Bank Of Baroda 4) Bank Of India 5) Central Bank Of India etc.

Private Sector Banks 1) ICICI Bank 2) HDFC Bank 3) KOTAK MAHINDRA Bank 4) AXIS Bank 5) CITI Bank 6) Standard Charter Bank etc

INTRODUCTION

The banking industry is undergoing through the significant technological changes; it has several impacts on customer satisfaction and loyalty. It has revolutionised every industry including banking in the world by rendering faster and cost effective delivery of products and services to the customers.

Core banking solution enables banks to extend the full benefits of ATM, tele-banking, mobile banking, internet banking, card banking and other multiple delivery channels to all customers allowing banks to offer a multitude of customer-centric services on a 24x7 basis from a single location, supporting retail as well as corporate banking activities.

Now, Indian banks are investing heavily in the technologies such as branch automation and computerization, core banking, tele-banking, mobile banking (M-banking), Internet banking, automated teller machine (ATMs), data warehousing etc. Today public sector and private sector banks are offering online banking services. Various alternative channels to provide easy and any where banking are properly thought of. The process of bank computerization was started since 1985 in public sector banks in India. However, some private sector banks have started computerization prior to the public sector banks in India.

 ALTERNATIVE BANKING

Customers are now looking for multiple delivery channels and flexible as well as convenient working hours neither the clock nor the geographical locations are constraints. Therefore, almost all Indian commercial banks are providing services through the various alternative e-channels, it is called as Alternative Banking. There are various means of alternative banking i.e. Core banking Solution (CBS), ATM, POS Terminals, Mobile Banking, Internet Banking, Credit Cards, Debit Cards, EFT, RTGS, MICR clearing etc.

IMPORTANCE OF THE STUDY

Measuring customer satisfaction has a great potential to provide the managers of retail banks with information about their actual performance of the bank and the expectations of their customers (Al-Eisa and Alhemoud, 2009). For a service provider customer satisfaction is important issue. There may not be an ultimate goal in itself rather; it is a means for yielding greater profits; even satisfied customer is also as another type of profit. Therefore, assessment of customer satisfaction and factors influencing satisfaction should be examined in the banking sector. With is in view the present research attempts to measure the overall customer satisfaction with alternative banking services in Ahmedabad City. The present study offers meaningful insights for policy implications to be proved better for customers satisfaction through improved alternative banking facilities. The main concern of the study is to provide information that would help the management of the public and privates sector banks to re-design their alternative banking services in order to retain its existing customers and to attract new ones in todays competitive environment. This research has practical significance because findings of the research understand the factors affecting customer satisfaction from the alternative banking channels, and comparative level of the customer satisfaction in public and private banks. Findings and suggestions of this research can help to design and improve their alternative channels, service and marketing strategies to cope with the challenges of keeping profitable customers in the virtual market place. Question behind this research is whether evaluating impact of alternative banking on customer satisfaction and relationships between service quality of alternative banking service and customer satisfaction. Several studies have found that firms spend substantial resources to attract new customers as they do keeping existing customer (Raman Nair, 2003). Several firms have been exerting all their efforts toward achieving customer satisfaction under the basic assumption that satisfaction will lead to loyalty (Buracom, 2003). However, in the recent era almost banks are trying to attract new customers by providing modern looking services and convenient e-service. We have investigated this attitude and concluded some findings. For academia, the findings of this research will provide empirical evidence and may add to a new knowledge to the existing literature of business economics and banking for understanding the impact of complex relationship between customer satisfaction and alternative banking service.

LITERATURE REVIEW
Customer satisfaction is buzzword today, once here everyone using this customers satisfaction is affected by the importance placed by the customers on each of the attitudes of the product/ service. Customer satisfaction measurement allows an organization to understand the key drivers that create satisfaction or dissatisfaction; and what is really driving their satisfaction during a service experience. Customer satisfaction is the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service (Kevin Cacioppo, 1995 and Kumbhar, 2010). It is also feeling or attitude of a customer towards a product or service after it has been used. According to Oliver (1980) satisfaction appears to mediate changes between pre-exposure and post-exposure attitudinal components. It is a major outcome of marketing activity whereby it serves as a link between the various stages of consumer buying behavior (Jamal & Nasser, 2002). When customers pay money to buy a service he has some minimum expectations from the transaction. These expectations from the purchase have to be met substantially, if not entirely for the customer to become a loyal customer of the service (Akbar and Parvez, 2009). These expectations are fulfilled of a promises- quality, fair price, availability, after sale services, complaints handling process, information, and variety etc. the customers are demanding high quality of services and low prices or charges. Better quality for the same cost is the motto of the customers. Sometimes they are prepared to overlook inconveniences also to avail better services at a low cost. Various empirical researches show that there is significant and positive relationship in service quality and customer satisfaction. Berry (1990) mentioned that there are ten 'Quality Values' which influence satisfaction behaviour i.e. Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behavior, Commitment to the Customer and Innovation. Rueangthanakiet Pairot, (2008) defined Customers satisfaction as the company's ability to fulfill the business, emotional, and psychological needs of its customers. However, customers have different levels of satisfaction as they have different attitudes and experiences as perceived from the company.

Increase in service quality of the banks can satisfy and develop attitudinal loyalty which ultimately retains valued customers (Kumbhar, 2010). There is very strong relationship between quality of service and customer satisfaction (Parasuraman et al, 1985). The higher level of perceived service quality results in increased customer satisfaction. When perceived service

quality is less than expected service quality customer will be dissatisfied (Jain and Gupta, 2004 and Kumbhar 2011). Parasuraman, Zeithaml and Berry (1988) posited that if there is expected quality of service and actual perceived performance is equal or near about equal there is customers can be satisfy, while a negative discrepancy between perceptions and expectations a performance-gap as they call it causes dissatisfaction, a positive discrepancy leads to consumer delight. The relationship between expectation, perceived service quality and customers satisfaction have been investigated in a number of researches (Zeithaml, et al, 1996). An expectation is minimum requirement of service quality by service providers to the meet customers wants and needs. According to Parasuraman et al (1985, 1988) perceived service quality is viewed as the degree and direction of discrepancy between customers' perceptions and desires. The branding is considered as the procedure of creating a brand image which keeps consumers. It is what separates identical products from each other, or its competitors. Marketing literature including NCSI and ACSI literature examined positive of the link between the satisfaction and the brand image, the brand reputation (Wafa et al 2009) and indicates that, the nature and amount of a consumer's experience with an evoked set of brands. Brand reputation has significant impacts on customer satisfaction (Woodruff et al 1983). A consumer's beliefs about these brands are derived from personal use experience, word-of-mouth

endorsements/criticisms, and/or the marketing efforts of companies. Perceived brand performance which is above or below the norm, but within the indifference zone, leads to confirmation. Positive or negative disconfirmation results when perceived brand performance affects customer satisfaction (Woodruff et al 1983). Some of the marketing research shows that the brand loyalty achieved through the satisfaction with brand performance. Brands that are high in brand equity are organization powerful assets. They can lead to customer satisfaction and customer loyalty. Wafa MSallem et al (2009) and Sondoh et al,(2007) Some of the empirical researches shows that there are two brand image benefits, i.e. appearance enhances and functional have significant impacts on satisfaction and loyalty intention. Perceived value also one of the important factors which influencing customers satisfaction in service setting. Perceived value is compression between price or charges paid for the services by the customer as sacrifice of the money and utility derived by service perception. In this study we have assessed overall satisfaction also it can be say cumulative satisfaction. It is overall perception and concluded remark of the customer regarding alternative banking channel used by customers. The overall remark of the customer is based on his/her expectations about various aspects of service quality and actual service he/she perceived by the particular bank.

PROBLEM STATEMENT

With the advancement of science and technology, the modern market has gone a buyers market; it also called as customer oriented market. Banking institutions are one of the most important service industries, which have special importance in the economy. Advancement in the technology and concomitant developments in communication channels has resulted in innovation of alternative delivery channels. These have changed the way in to interface the customers. In the traditional banking customer has to visit the branches to carryout banking transaction, but now they have the choice of alternative delivery channels i.e. ATMs, Credit cards, Debit cards, internet banking, mobile banking, core banking etc. Implementation of ICT in banking industry improves quality of service and improved service quality in the banking business. It is expected to influence the customer satisfaction. The customers are going to use a variety of service dimensions or attributes that are salient to the customer to infer in the service quality and perceived value (Toelle, 2006). These service quality dimensions play an important role in the customer satisfaction. There are various service quality dimensions which influence customer satisfaction and loyalty. Parasuraman et al (1985; 1988; 2000; 2005), Zeithaml et al (2000; 2002) and Cronin and Taylor (1992; 1994) mentioned that there is a relationship between perceived service quality and satisfaction in traditional service and general e-service. However, technology based alternative banking services differ from the common service and traditional banking services. Therefore, this research attempts to examine the effect of alternative banking service quality on customer satisfaction.

It is based on the basic research questions mentioned below:

1. Which service quality dimensions influences the customer satisfaction in alternative banking?

2. To what extent of distinction and difference in service quality of alternative banking services on the customer satisfaction received in public and private sector banks?

3. What are the major factors influence customers satisfactions ? And what are the problems, loopholes and disadvantages of alternative banking services which adversely affect the customers satisfaction?

4. If customer satisfaction level is low what are the possibilities of improvement in alternative banking services to increases customers satisfaction?

OBJECTIVES OF THE STUDY

Theoretically, alternative banking channels will enhance good performance of banking services and increases the level of customer satisfaction by providing anytime, anywhere and multi way banking services including varieties of services, convenience, speed, efficiency, security and cost effectiveness. However, various annual reports of the Bank Ombudsman Scheme of the RBI indicate that the use of ICT specifically after 2003 has created various problems relating to the banking services. Therefore, this study is carried out to fulfill the following adjectives:

1) To understand the history and present status of alternative banking services.

2) To identify the factors affecting on the customers satisfaction by alternative banking and develop a specialized instrument to assess service quality and customer satisfaction in alternative banking.

3) To assess relationship between service quality and overall customer satisfaction in alternative banking.

4) To make comparative analysis of customer satisfaction in public and private banks.

5) To find out the problems of alternative banking services and to recommend suggestions for betterment of customers satisfaction in alternative banking services.

REASEARCH METHODOLOGY

Research methodology is a very organized and systematic way through which a particular case or problem can be solved efficiently. It is a step-by-step logical process, which involves:

endations

Research inculcates scientific and inductive thinking and it promotes the development of logical habits of thinking and organization.

5.1 Research Design

Research design encompasses the methodology and procedures employed to conduct scientific research. We will conduct research under Descriptive Research Design and Exploratory Research Design.

1. Descriptive research design: It helps to answer the questions of who, what, when, where and how associated with a particular research problem, a descriptive study cant conclusively ascertain answers to why. 2. Exploratory research design: It is conducted when there is a research problem, when there are few or no earlier studies to refer to. The focus is going on insights and familiarity for clatter investigation or undertaken when problems are in a preliminary stage of investigation.

The research methodology will adopt both primary and secondary data.

5.2 Sources of data

There are two main data source available which is:

1. Primary data The primary data will be collected on the basis of the customer who are using the banking services whether through online or offline. With the help of the questionnaire containing open ended or close ended questions.

2. Secondary data Various sources of information will be collected for attaining clarity on the prospects of various factors that influence the people for the adoption of the online banking. It will be collected through various journals, articles and through website

5.3 Data Collection Method

It is an important aspect of any type of research study. Inaccurate data collection can impact the results of a study and ultimately lead to invalid results. We have chosen the Quantitative Data Collection Method for our research because it is based on random sampling and structured data collection instrument. Through which the results can be easily summarised.

5.4 Population

Our target population will be people living in the Ahmadabad. Between the age group of 15 to 60 years.

5.5 Sampling method

There are 2 main method of sampling: 1. Probability Sampling 2. Non- Probability Sampling

But we will use convenience sampling method under Non- Probability sampling method.

5.6 Sampling Size

We have taken 384 people as our sample size on the basis of following formula.

n= Z *p*q e Z = confidence level at 95% (1.96) p = probability of success (0.5) q = probability of failure (0.5) e = standard error (0.05)

5.7 Data Collection Instrument

Marketing researchers have a choice of three main research instruments in collecting primary data: i. Questionnaires ii. Qualitative Measures iii. Mechanical Devices - We will use questionnaire for the research instrument.

[ 1.]

AGE

60 50 40 30 20 10 0 15 - 30 31 - 45 AGE ABOVE 45

51.04 37.5

11.46

INETRPRETATION From the above study we have found that 51.04% respondent having age between 15 years to 30 years, 37.5% respondent having age between 31 years to 45 years and 11.46% respondent having age more than 45 years.

[ 2.]

GENDER

54 53 52 51 50 49 48 47 46 45 44 43

53.13

46.87
MALE FEMALE GENDER

INETRPRETATION From the above study we have found that 53.13% of total respondent are Male while 46.87% of total respondent are Female.

[ 3.]

EDUCATION

40 35 30 25 20 15 10 5 0 BELOW MATRIC 12TH PASS GRADUATE POST GRADUATE EDUCATION

39.58

23.96 16.67

19.79

INETRPRETATION From the above study we have found that 16.67% of total respondent are Below Matric, 23.96% of total respondent are 12th Pass, 39.58% of total respondent are Graduates and 19.79% of total respondent are Post Graduate.

[ 4.]

DO YOU HAVE ANY BANK ACCOUNT?

70 60 50 40 30 20 10 0 YES BANK A/C NO

67.71 32.29

INETRPRETATION From the above study we have found that 67.71% of total respondent have Bank Account while 32.29% of total respondent do not have Bank Account.

IF YES, [ 5.] IN WHICH BANK DO YOU HAVE YOUR ACCOUNT ?

11.96 28.26 10.87 8.7 10.87 13.04 16.3

STATE BANK OF INDIA

BANK OF BARODA DENA BANK ICICI BANK HDFC BANK AXIS BANK OTHER BANKS

INETRPRETATION From the above study we have found that 28.26% respondent have their account in State Bank Of India, 16.3% respondent have their account in Bank Of Baroda, 13.04% respondent have their account in Dena Bank, 10.87% respondent have their account in ICICI Bank, 8.7% respondent have their account in HDFC Bank, 10.87% respondent have their account in AXIS Bank and 11.96% respondent have their account in other banks like Canara Bank, Indian Overseas Bank ,Bank Of India, IDBI Bank, Central Bank Of India etc...

IF NO, [ 6.] GIVE REASON FOR IT.

16.67 HOUSE WIFE STUDENT OTHERS 40

43.33

INETRPRETATION From the above study we have found that 43.33% are Housewives, 40% are Students and 16.67% Are Illiterate / Having Less Income / Lack Of Knowledge. So they do not have bank account.

[ 7.]

WHICH TYPE OF ACCOUNT DO YOU HAVE ?

10.96

SAVINGS A/C CURRENT A/C 89.04

INETRPRETATION From the above study we have found that 89.04% of total respondents have Savings Account in their bank while 10.96% of total respondents have Current Account in their bank.

[ 8.]

DO YOU USE ANY OF THE OTHER SERVICES PROVIDED BY THE BANKS ?

20.31

YES NO

79.69

INETRPRETATION From the above study we have found that 79.69% of total respondents are using other services provided by the banks while 20.31% of total respondents are not using other services provided by the banks.

IF YES, [ 9.] WHICH OF THE FOLLOWING SERVICES YOU ARE USING ?(MULTIPLE TICKS )

6.41 17.31 31.41

ATM CREDIT CARD

DEBIT CARD
INTERNET BANKING 32.05 12.82 MOBILE BANKING

INETRPRETATION From the above study we have found that 31.41% of total respondents are using ATMs, 12.82% of total respondents are using Credit Cards, 32.05% of total respondents are using Debit Cards, 17.31% of total respondents are using Internet Banking and 6.41% of total respondents are using Mobile Banking.

IF NO, [ 10.] THEN GIVE REASON. (MULTIPLE TICKS)

OTHERS

35.3
11.76 11.76 11.76 29.42
0 5 10 15 20 25 30 35 40

LACK OF KNOWLEDGE REASONS

HIGH CHARGES

COMPLEX PROCEDURE

NOT RELIABLE

INETRPRETATION From the above study we have found that 29.42% respondent feels that the services are Not Reliable, 11.76% respondent feels that the services have Complex Procedure, 11.76% respondent feels that the services have High Charges, 11.76% respondent have Lack Of Knowledge and 35.3% respondent have other reasons like they do not need these type of services.

[ 11.] TICKMARK FOR THE SERVICES WHICH ARE PROVIDED BY YOUR BANK .

ATM
70 60 50 40 30 20 10 0 EXCELLENT VERY GOOD GOOD ATM

59.26

25.93 11.11 3.7

AVERAGE

0
POOR

INETRPRETATION From the above study we have found that 59.26% of total respondents feels that the ATM services are Excellent, 25.93% of total respondents feels that the ATM services are Very Good, 11.11% of total respondents feels that the ATM services are Good and 3.7% of total respondents feels that the ATM services are Average.

 CREDIT CARD
70 60 50 40 30 20 10

60.52

10.53
0 EXCELLENT

13.16
VERY GOOD GOOD CREDIT CARD

13.16 2.63
AVERAGE POOR

INETRPRETATION From the above study we have found that 10.53% of total respondents feels that the Credit Card services are Excellent, 13.16% of total respondents feels that the Credit Card services are Very Good, 60.52% of total respondents feels that the Credit Card services are Good 13.16% of total respondents feels that the Credit Card services are Average and 2.63% of total respondents feels that the Credit Card services are Poor.

 DEBIT CARD

50 45 40 35 30 25 20 15 10 5 0 EXCELLENT VERY GOOD GOOD DEBIT CARD

46.3 29.63

18.52
5.55
AVERAGE

0
POOR

INETRPRETATION From the above study we have found that 29.63% of total respondents feel that the Debit Card services are Excellent, 46.30% of total respondents feels that the Debit Card services are Very Good, 18.52% of total respondents feels that the Debit Card services are Good and 5.55% of total respondents feels that the Debit Card services are Average.

 INTERNET BANKING

60 50 40 30

51.85
20

27.78
10 0

5.56
EXCELLENT

12.96 1.85
VERY GOOD GOOD INTERNET BANKING AVERAGE POOR

INETRPRETATION From the above study we have found that 5.56% of total respondents feels that the Internet Banking services are Excellent, 12.96% of total respondents feels that the Internet Banking services are Very Good, 51.85% of total respondents feels that the Internet Banking services are Good 27.78% of total respondents feels that the Internet Banking services are Average and 1.85% of total respondents feels that the Internet Banking services are Poor.

 MOBILE BANKING

40 35 30 25 20 15 10 5 0

35.19 29.63 22.22 12.96 0

EXCELLENT VERY GOOD GOOD MOBILE BANKING AVERAGE POOR

INETRPRETATION From the above study we have found that 22.22% of total respondents feels that the Mobile Banking services are Excellent, 29.63% of total respondents feels that the Mobile Banking services are Very Good, 35.19% of total respondents feels that the Mobile Banking services are Good and 12.96% of total respondents feels that the Mobile Banking services are Average.

[ 12.] ARE YOU SATISFIDE WITH THE SERVICES PROVIDED BY YOUR BANK?

100 90 80 70 60 50 40 30 20 10 0

90.74

9.26

YES SATISFACTION

NO

INETRPRETATION From the above study we have found that 90.74% of total respondents are satisfied with the services provided by their banks while only 9.26% of total respondents are not satisfied with the services provided by their banks.

[ 13.] DO YOU WANT TO CHANGE YOUR BANK ?

100 90 80 70 60 50 40 30 20 10 0 YES

90.74 9.26

NO CHANGING BANK

INETRPRETATION From the above study we have found that only 9.26% of total respondents want to change their banks while 90.74% of total respondents do not want to change their banks.

FINDINGS

Majority of the respondents are having internet connection at home. Because of the need of the internet they have installed it in their home itself. The main purpose of using internet said by the respondent is to send or receive mail or to stay connected with their relatives, peers and friends. As per the survey we come to know that majority of the respondents havent use d the online banking as they dont feel safe for using it. Majority of the respondents say if bank offers them security than they will adopt it. The main source of learning online banking is leaflet and advertisement given by bank. Majority of the respondents prefer SBI for using the online banking as it is safe and public sector bank on which people can trust. The most answered purpose of using online banking is for making payments. Most of the respondents use online banking once in a week.

SUGGESSTIONS Banks should increase the safety for using the online banking so that the people become friendlier to it. They should also provide the training sessions for their customers so that they can learn how to manage their fund online.

The bank should give extra benefits to the customer so that they get motivated for using online banking. The private sector bank should increase the benefits to keep a track with the public sector bank.

LIMITATION OF STUDY

Our project has several limitations The sample size is very small which does not show the actual scenario of Customer. The Other limitation is lack of time. Research analysis always does not give accurate information about current trend.

BIBLIOGRAPHY

www.imf.org www.finance.indiamart.com www.scribd.com www.e-finance.com www.woweconomist.blogspot.com

ANNEXURE

QUESTIONNAIRE
I AM STUDENT OF L J INSTITUTE OF MANAGEMENT STUDIES PURSUING MY MBA. I AM COLLECTING THIS DATA FOR MY GRAND PROJECT A STUDY ON ALTERNATE BANKING CHANNELS IN AHMEDABAD. THE DATA IS PURELY FOR ACADEMIC PURPOSE.

[ 1.]

AGE : 15-30 31-45 Above 45

[ 2.]

GENDER

Male Female

[ 3.]

EDUCATION : Below metric 12th pass Graduate Post Graduate

[ 4.]

DO YOU HAVE ANY BANK ACCOUNT? Yes No

IF YES,

[ 5.]

IN WHICH BANK DO YOU HAVE YOUR ACCOUNT ? SBI BOB DENA BANK ICICI AXIS HDFC OTHER

IF NO,

[ 6.]

GIVE REASON FOR IT. Student House Wife Others _______________________

[ 7.]

WHICH TYPE OF ACCOUNT DO YOU HAVE ? Savings A/c Current A/c

[ 8.]

DO YOU USE ANY OF THE OTHER SERVICES PROVIDED BY THE BANKS ? Yes No

IF YES,

[ 9.]

WHICH OF THE FOLLOWING SERVICES YOU ARE USING ?(MULTIPLE TICKS ) ATM Credit Cards Debit Cards Internet Banking Mobile Banking Others ___________________________

IF NO,

[ 10.] THEN GIVE REASON. (MULTIPLE TICKS) Not Reliable Complex Procedure High Charges Lack of Knowledge Others _________________________

[ 11.] TICKMARK FOR THE SERVICES WHICH ARE PROVIDED BY YOUR BANK . ATM Excellent Very Good Good Average Poor CREDIT CARDS Excellent Very Good Good Average Poor DEBIT CARDS Excellent Very Good Good Average Poor MOBILE BANKING Excellent Very Good Good Average Poor

 INTERNET BANKING Excellent Very Good Good Average Poor

[ 12.] ARE YOU SATISFIDE WITH THE SERVICES PROVIDED BY YOUR BANK? Yes No

IF NO,

[ 13.] GIVE REASON FOR IT. _____________________________________________________________________________________ _____________________________________________________________________________________ ________________________________________________________________

[ 14.] DO YOU WANT TO CHANGE YOUR BANK ? Yes No

IF YES,

[ 15.] GIVE REASON FOR IT. _____________________________________________________________________________________ _____________________________________________________________________________________ ________________________________________________________________

[ 16.] ANY SUGGESTION _____________________________________________________________________________________ _____________________________________________________________________________________ ________________________________________________________________

THANK YOU FOR YOUR TIME AND VALUABLE INPUT.