TABLE OF CONTENTS

LIST OF ABBREVIATIONS USED

LIST OF FIGURES, TABLES, GRAPHS
EXECUTIVE SUMMARY
CHAPTER
NAME
I
INTRODUCTION TO BANKING SECTOR
II
COOPERATIVE BANKING
111
STATE BANK OF PATIALA
1V
PROJECT OVERVIEW, RATIONALE,
V
V1
V11

Page No.
6
7
8
9-12
13-40
41-46
47-48

OBJECTIVES
RESEARCH METHODOLOGY
DATA ANALYSIS AND INTERPRETATION
FINDINGS, RECOMMENDATIONS,

49-50
51-64
65-69

LIMITATIONS AND CONCLUSION

BIBLIOGRAPHY
ANNEXURE

70
71-73

LIST OF ABBREVATION USED

SCB:

State Cooperative Banks

SLDB:

State Land Development Banks

UCB:

Urban Cooperative Banks

CCB:

Central Cooperative Banks

CLDB:

Central Land Development Banks

PACS:

Primary Agricultural Credit Societies

PLDB:

Primary Land Development Banks

RRB:

Regional Rural Banks

Cop:

Cooperative

PSADB:

Punjab State Agricultural Development Bank

PSCB:

Punjab State Cooperative Bank

PADB:

Primary Cooperative Agricultural Development Bank

A/c:

Account

PAN:

Permanent Account Number

HUF:

Joint Hindu Family

FDR:

Fixed Deposit Receipt

SB:

Savings

RCC:

Revolving Cash Credit

NFS:

Non Farming Sector

CASS:

Cooperative Agricultural Savings Societies

SBOP:

State Bank of Patiala

A. LIST OF FIGURES
Page No.
STRUCTURE OF INDIAN BANKING
STRUCTURE OF COOPERATIVE BANKING

13
17

B. LIST OF TABLES

Page No.
DISTRICT CENTRAL COOPERATIVE BANKS
BRANCHES OF PATIALA CENTRAL COOPERATIVE BANK
DEPOSIT AND INTEREST SCHEMES INTEREST RATES
DIFFERENT LOAN SCHEMES OF COOPERATIVE BANKS
TYPES OF LOANS BY SBOP
DEPOSIT AND LOAN RATE OF INTEREST SBOP
LEVEL OF PREFERENCE

22
25
26-27
33-39
44
45-46

C. LIST OF GRAPHS
Page No.
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10
6.11

DEMOGRAPHIC ANALYSIS BASED ON OCCUPATION

TYPE OF ACCOUNT
CUSTOMERS WHO HAVE TAKEN LOAN FROM THE BANK
INFORMATION SOURCE OF SCHEMES AND SERVICES OF BANK
RATE OF INTEREST PREFERRED
APPRECIATION FOR BEING A GOOD CUSTOMER
FUTURE PREFERABLE BANK (A) (B)
MOTIVATIONAL FACTORS
INFLUENCE OF IMAGE OR BRAND OF THE BANK
ESSENTIALITY OF COMPUTERIZED BANKING
CUSTOMER DIFFER IN PERCEPTION FOR A GOVT. & PRIVATE BANK

55
56
57
58
58
59
60
61
62
63
64

EXECUTIVE SUMMARY
The report contains introduction to Banks, which includes past, present and future of banks and
challenges for banking industry in future. Banks plays the most important role in providing various
banking services. Earlier the banks were engaged in accepting and lending money. But in the recent
past the scope of services provided by the banks has increased. The growing competition requires
prompt and efficient services to the customers at reasonable cost. These days bank aim to provide
maximum satisfaction to their customers. Next Part contains bank profile, Bank profile shows the Bank
status, Mission and Vision of PUNJAB STATE CO-OPERATIVE BANK AND THE PATIALA
CENTRAL CO-OPERATIVE BANK LTD. The main purpose of this Bank was to cater the rapidly
developing financial services sector. The Bank mainly deals in Deposits and Loans. This part also

contains the Bank profile of STATE BANK OF PATIALA, because the project is about the
comparison of the customer perception of the Cooperative Bank and State Bank of Patiala. Next
Chapter is about the Research Methodology, which includes justification about the topic selected, the
objective of the study, Scope of the study and sources of information (primary as well as secondary). It
also includes various limitations during the course of the project. Next part of this report is about the
data interpretations and its findings. Next are the Recommendations, the various proposals that the
Cooperative bank could apply for maintaining its position in the region and to face future challenges
and the suggestions for the improvement. Then there are the limitations and the conclusion of the
study.

INTRODUCTION
BANKING

CHAPTER I
INTRODUCTION TO BANKING SECTOR
A Bank is a financial institution licensed by a government. Its primary activities include
borrowing and lending money. Many other financial activities were allowed over time. For example
banks are important players in financial markets and offer financial services such as investment funds.
The level of government regulation of the banking industry varies widely, with countries

TYPES OF BANKS
5

Banks' activities can be divided into:Retail banking, dealing directly with individuals and small businesses;
Business banking, providing services to mid-market business; corporate banking, directed at large
business entities;
Private banking, providing wealth management services to high net worth individuals and families;
Investment banking, is relating to activities on the financial markets. Most banks are profit-making,
private enterprises. However, some are owned by government, or are non-profit organizations.
Central banks are normally government-owned and charged with quasi-regulatory responsibilities,
such as supervising commercial banks, or controlling the cash interest rate. They generally provide
liquidity to the banking system and act as the lender of last resort in event of a crisis.

IMPORTANCE OF A BANK

SAFETY OF MONEY:
The money with the bank remains in safe custody there is always risk in keeping cash with ones
own self. It may be lost or stolen. Businessman likes to keep money with a bank to avoid risks of
money the customer need not keep large some of money.
IT CULTIVATES HABIT OF SAVING:

Banks cultivates the habit of saving in the Bank on the one hand are safe and on the other earned
interest for the depositor who prompted to safe and deposit money in their banks accounts.
FINANCIAL HELP TO CUSTOMER:
Banks allows overdraft facilities to their customer so whenever a customer needs money he can
even withdraw more money then the balance in his account. Bank also grants loans and credit
facilities to their customers.
SAFE CUSTODY OF VALUABLE ARTICLES :
Valuable articles deals security etc. can also be deposited in the bank for safe custody. Safe deposit
vaults are provided by bank storing for these valuables.
OTHER INFORMATION:
By opening an account with a bank, the customers may also take advantages of various other
services providing by the banks, such a purchase and sale of securities, travelers cheque etc.

BANKING IN INDIA

Without having sound and effective banking system India cannot have 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. Banking in India originated in the
last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a
government-owned bank that traces its origins back to June 1806 and that is the largest commercial

bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935
formally took over these responsibilities from the then Imperial Bank of India, relegating it to
commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized
and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the
government nationalized the six next largest in 1980.
Currently, India has 293 scheduled commercial banks (SCBs) - 27 public sector banks (that is
with the Government of India holding a stake), 30 private banks (these do not have government stake;
they may be publicly listed and traded on stock exchanges) and 40 foreign banks.
The oldest bank in existence in India is the State Bank of India, which originated in the Bank
of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the
three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, 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 1925
to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India

STRUCTURE OF INDIAN BANKING

RESERVE BANK OF INDIA

(RBI)

SCHEDULED BANKS IN INDIA

COMMERCIAL BANKS

COOPERATIVE BANKS

URBAN
COOPERATIVES (52)

REGIONAL
RURAL
BANKS (196)

PRIVATE
SECTOR
BANKS (30)

PUBLIC
SECTOR
BANKS (27)

FOREIGN
BANKS
(40)

NATONALIZED
BANKS (19)
OLD
(22)

STATE
COOPERATIVES (16)

SBI AND ASSOCIATE

BANKS (8)

NEW
(8)

INTRODUCTION
COOPERATIVE
BANKING

10

CHAPTER II
COOPERATIVE BANKING INTRODUCTION
Cooperative banking is retail and commercial banking organized on a cooperative basis.
Cooperative banking institutions take deposits and lend money in most parts of the world. The
Cooperative banks have a history of almost 100 years. The Cooperative banks are an important
constituent of the Indian Financial System, judged by the role assigned to them, the expectations they
are supposed to fulfill, their number, and the number of offices they operate. The cooperative
movement originated in the West, but the importance that such banks have assumed in India is rarely
paralleled anywhere else in the world. Their role in rural financing continues to be important even
today, and their business in the urban areas also has increased phenomenally in recent years mainly due
to the sharp increase in the number of primary cooperative banks. While the cooperative banks in rural
areas mainly finance agricultural based activities including farming, cattle, milk, hatchery, personal
finance etc. along with some small scale industries and self-employment driven activities, the cooperative banks in urban areas mainly finance various categories of people for self-employment,
industries, small scale units, home finance, consumer finance, personal finance, etc.

DEFINITION
A cooperative bank is a financial entity which belongs to its members, who are at the same time the
owners and the customers of their bank.

11

ORIGIN OF COOPERATIVE BANKS IN INDIA

The origins of the cooperative banking movement in India can be traced to the close of
nineteenth century when, inspired by the success of the experiments related to the cooperative
movement in Britain and the cooperative credit movement in Germany, such societies were set up in
India. They are the primary financiers of agricultural activities, some small-scale industries and selfemployed workers. The Anyonya Cooperative Bank in India is considered to have been the first
cooperative bank in Asia.
Cooperative movement is quite well established in India. The first legislation on cooperation
was passed in 1904. In 1914 the Maclagen committee envisaged a three tier structure for cooperative
banking viz. Primary Agricultural Credit Societies (PACs) at the grass root level, Central Cooperative
Banks (CCBs) at the district level and State Cooperative Banks (SCBs) at state level or Apex Level.
The first urban cooperative bank in India was formed nearly 100 years back in Baroda.
In the beginning of 20th century, availability of credit in India, more particularly in rural areas,
was almost absent. Agricultural and related activities were starved of organized, institutional credit. The
rural folk had to depend entirely on the money lenders, who lent often at usurious rates of interest.
The cooperative banks arrived in India in the beginning of 20th Century as an official effort to
create a new type of institution based on the principles of cooperative organization and management,
suitable for problems peculiar to Indian conditions. These banks were conceived as substitutes for
money lenders, to provide timely and adequate short-term and long-term institutional credit at
reasonable rates of interest. In the formative stage Cooperative Banks were Urban Cooperative
Societies run on community basis and their lending activities were restricted to meeting the credit
requirements of their members. The concept of Urban Co-operative Bank was first spelt out by Mehta
Bhansali Committee in 1939 which defined on Urban Cooperative Bank. Provisions of Section 5 (CCV)

12

of Banking Regulation Act, 1949 (as applicable to Co-operative Societies) defined an Urban
Cooperative Bank as a Primary Co-operative Bank other than a Primary Cooperative Society was made
applicable in 1966.

FEATURES OF COOPERATIVE BANKS

Cooperative Banks are organised and managed on the principal of co-operation, self-help, and
mutual help. They function with the rule of "one member, one vote". Function on "no profit, no
loss" basis.

Cooperative banks, as a principle, do not pursue the goal of profit maximization.

Cooperative bank performs all the main banking functions of deposit mobilization, supply of
credit and provision of remittance facilities. Cooperative Banks provide limited banking
products and are functionally specialists in agriculture related products. However, cooperative
banks now provide housing loans also.

Cooperative bank do banking business mainly in the agriculture and rural sector.

Cooperative banks are perhaps the first government sponsored, government-supported, and
government-subsidized financial agency in India. They get financial and other help from the
Reserve Bank of India NABARD, central government and state governments.

Cooperative Banks belong to the money market as well as to the capital market.

Primary agricultural credit societies provide short term and medium term loans.

Cooperative banks are financial intermediaries only partially. The sources of their funds
(resources) are:
(a) Central and state government,
(b) The Reserve Bank of India and NABARD,

13

(c) Other co-operative institutions,

(d) Ownership funds and,
(e) Deposits or debenture issues.

It is interesting to note that intra-sectoral flows of funds are much greater in cooperative banking
than in commercial banking. Inter-bank deposits, borrowings, and credit from a significant part
of assets and liabilities of cooperative banks. This means that intra-sectoral competition is
absent and intra-sectoral integration is high for cooperative bank.

Cooperative Banks are subject to CRR and liquidity requirements as other scheduled and nonscheduled banks are. However, their requirements are less than commercial banks.

Since 1966 the lending and deposit rate of commercial banks have been directly regulated by the
Reserve Bank of India.

STRUCTURE OF COOPERATIVE BANKING

RBI

NABARD

SCBs

SLDBs

CCBs

CLDBs

UCBs

PACS
PLDBs

BRANCHES OF SLDBs

14

SCBs:

State Cooperative Banks

SLDBs: State Land Development Banks

UCBs:

Urban Cooperative Banks

CCBs:

Central Cooperative Banks

CLDBs: Central Land Development Banks

PACS:

Primary Agricultural Credit Societies

PLDBs: Primary Land Development Banks

TYPES OF COOPERATIVE BANKS

1) STATE COOPERATIVE BANKS (SCBs)
State cooperative banks are a federation of central cooperative banks and act as a watchdog of
the cooperative banking structure in the state. Its funds are obtained from share capital, deposits, loans
and overdrafts from the Reserve Bank of India. State cooperative banks lend money to central
cooperative banks and primary societies and not directly to farmers.

2) CENTRAL COOPERATIVE BANKS (CCBs)

Central cooperative banks are the federations of primary credit societies in a district and are of
two types those having a membership of primary societies only and those having a membership of
societies as well as individuals. The funds of the bank consist of share capital, deposits, loans and
overdrafts from state cooperative banks and joint stocks. These banks finance member societies within
the limits of the borrowing capacity of societies.

3) PRIMARY AGRICULTURAL CREDIT SOCIETIES (PACS)

15

Cooperatives have played a major role in the supply of finance to agricultural sector for the
development of land, irrigation system and for its mechanization. The agricultural cooperative credit in
Punjab is divided into two sectors mainly, one dealing with short and medium-term credit and the other
with the long-term credit. The long term credit is awarded from the Punjab State Cooperative Land
Mortgage Banks at the apex and the Primary Cooperative Land Mortgage Banks at district/tehsil level.

4) PRIMARY COOPERATIVE BANKS (PCBs)

They are non-agricultural societies. These are of two types: Urban cooperative banks and Salary
earners societies. Development of PCBs is looked after by the RBI. The RBI and IDBI offer them
concessional refinance facility on a selected basis. They operate in urban and semi-urban areas. They
provide housing finance and loans and advances for various purposes such as petty trade and industry.

DIFFICULTIES FACED BY COOPERATIVE

BANKS IN RURAL AREAS
1) Slow progress: The progress of co-operative banks is not up to the expectation and is slow when
comparing other type of banks because of many restrictions on their operations.
2) Limited scope of investment: The main objective of co-operative banks is to provide credit
facilities to the poor people i.e., to small and marginal farmers and other weaker sections. They were
originally having limited scope to invest their surplus funds freely.
3) Delay in decision making: The co-operative banks directly or indirectly by various agencies i.e.,
NABARD, RBI. Thus it takes long time to take decision on some important issues. This, in turn affects
the progress of co-operative banks.
4) Lack of training facilities: Generally the staff of co-operative banks is urban oriented and they may
not know the problems and conditions of rural areas. Lack of training facility concerning these areas
also affects the growth of co-operative banks.
16

5) Poor recovery rate: The recovery performance of the co-operative banks is not up to the mark. the
reason for poor recovery of loans and mounting overdue are; inadequate supervision and follow up
action to assess the end use of credit by co-operative banks due to inadequate staff in banks, poor
Identification of beneficiaries, inadequate generation of output and income by the beneficiaries, poor
marketing facilities.
6) Lack of local participation: Rural co-operative banks have not received sufficient local
participation. The cooperative banks have been thrust upon the rural people from above without
involving local people in its operation and management. In this connection, it is suggested that
knowledgeable persons in the rural areas need be associated with the management of co-operative
banks.
7) Lack of co-ordination: There is lack of proper co-ordination between co-operative banks and other
institutional financing agencies like commercial banks and RRBs. Also, there is inadequate coordination between co-operative banks and other developmental agencies operating in rural areas. This
has hampered the progress of co-operative banks.
8) Poor development of rural areas: In spite of several efforts made during the course o development
plans to promote the development of rural areas, it has not taken place in a significant way. The areas,
at present lack economic infra- structures like; facilities of marketing storage and distribution of inputs.
Besides, social infrastructure like; schools, medical facilities. As a result, co-operative banks find it
extremely difficult to operate in such areas.

17

THE PUNJAB STATE COOPERATIVE BANK LTD., Chandigarh

The Punjab State Cooperative Bank was established at Shimla in the year 1949 at Apex of three
tier short term Cooperative Credit structure as a principle financing institution of the cooperative
movement in Punjab. In 1951 its Head Office was shifted to Jalandhar from where it moved in 1963 to
its present building at Chandigarh. In the cooperative Banking structure, the position of the Punjab State
Cooperative Bank is extremely important as the whole credit system revolves around it. It has 3
Divisional Offices at Amritsar, Bhatinda and Jalandhar. It has 19 branches and 3 extensions counters
operating in the city of Chandigarh. Besides this, there are 20 District Central Cooperative Banks
having 805 branches and 23 extension counters in the State of Punjab affiliated with it. The bank was
established to help to provide timely and adequate flow of credit to the farmers for agriculture and
allied activities through PACS.

OBJECTS :
The objects for which the Bank is established are as under :1. To serve as a balancing center for cooperative societies (herein called the society/societies) in the
State of Punjab registered under the Act for the time being in force.
2. To promote the economic interest of the members of the Bank and Cooperative Societies in the State
in accordance with cooperative principles and to facilitate the development and funding of any
Cooperative Society registered under the said Act.

18

3. To establish and support or aid in the establishment of and support to association, institutions, funds,
trusts and convenience designed to benefit the employees or ex-employees of the Bank or the
dependents or connections of such persons to grant pensions and allowances and make payment
toward insurance.
4. To provide long term loan for the maximum period of 15 years to the individuals, Coop. House
Building Societies and members of Group Housing Societies for purchase of house or construction
thereof by enrolling members/nominal members.
5. To adopt such measures as are conducive to the spread of cooperative education and training.
6. To promote and develop Cooperative Societies in the State.

ORGANISATIONAL STRUCTURE
The bank operates in the city of Chandigarh having 19 branches and 3 extension counters. It has 3
Divisional Offices in Punjab at Amritsar, Jalandhar & Bathinda. The organizational structure is as
under:Divisional Offices: 1. Amritsar 2. Jalandhar 3. Bathinda
1. District Central Cooperative Banks
1. Amritsar
2. Tarntarn
3. Gurdaspur
4. Ferozpur
5. Moga
6. Patiala
7. Ropar
8. Fathegrah Sahib

1. Jalhadhar
2. Hoshiarpur
3. Kapurthala
4. Ludhiana
5. Nawan Shahar
6. Sangrur

1. Bathinda
2. Fazilka
3. Faridkot
4. Mansa
5. Muktsar

19

COOPERATIVE CREDIT POLICY 2001-2012

The Cooperative Credit Institutions are distinctively structured to provide for short-term and long-term
credit needs of the farmers in the State. The Punjab State Cooperative Bank (PSCB) and its constituent
20 Central Cooperative Banks (CCBs) and 4000 Primary Agricultural Cooperative Service Societies
(PACS) direct and deliver short-term production credit to the farmers. The Punjab State Cooperative
Agricultural Development Bank (PSADB) and its constituent 84 Primary Cooperative Agricultural
Development Banks (PADBs) cater to long term credit needs of the farmer. These institutions are
committed to promote and sustain economic interests of their members and customers in keeping with
the principals of self-help, self-responsibility and self-administration. They facilitate development of
their members by providing easy, timely, cost-effective and quality services.

20

THE MUKTSAR CENTRAL CO-OPERATIVE BANK LTD., MUKTSAR

The Muktsar Central Cooperative bank Ltd. was registered in 1949,The bank started function with
only its two branches number of its branches was 50 in 1993 but in the same year,Mansa a new
district was created and 17 branches were attached to C.B.Mansa. After this 8 new branches were
opened by this bank and now total number of branches iosn 39.It is a licenced bank from R.B .I.186
multi purpose agri,cooperative socities are attached to this bank,that are providing loan to abou
85000farmers in shape of net payment and fertiliigers.Adding to it, 718 other industrial societies
have 41754 nominal membes.The bank had given agricultural and non -agricultural loans worth 700
crores during 2010-11.In the same year,400crores were deposited as socities. Very shortly all the
branches of the bank will be computerised.
For the last 15 years,this bank in counted as "A" grade bank.The bank has given
insurance worth one lakh to its depositers.Along with it,depositers of savings are giv en facility of one
lakh insurance in case of an accident under this scheme about 28 thousand accounts have b een
opened.As arough estimate,85 thousand farmers credit cards have been issued to farmers and an
insurance up to 50 thousand is also provide to them.
The present staff members are thankful to the ex-board of directors who during their
tenure approved and constructed a new building costing 3.50 crores in place of the sixty years old
delapidated building.The covered area of the bank building is29000 square foot.
The Muktsar Central Coop. Bank was registered on 02.06.1949. It was bifurcated in two banks due
to creation of new district Mansa in 1993. At time of Bifurcation this bank had 33 branches in the
Bathinda District. This Bank is providing valuable services to farmers, traders, Govt. employees,
Businessman, and students etc.
Registration: Bank was registered on 02.06.1949 vide no. 759
Membership of affiliated societies as on date 31.03.2008: 880
Status of Board Of Managment : Elected Board.
List of Key Personnel:
(a) Chairman

Sh.Gurnam Singh Sema

(b) Managing Director

Sh. Gurpreet Singh Maluka

(c) District Manager

Sh. Jagdish Singh Sidhu

0164-5002304
0164-5002305
0164-5002308

21

Number of Branches: 20
Other Achievement If any: A Class Bank

RESOURCES
The bank resources is collection of share capital, strengthening of its owned funds, by
topping deposits from the public and borrowings from NABARD, Punjab State Cooperative Bank
Ltd., Chandigarh.
The Patiala Central Cooperative Bank is having 43 branches under it at different places related
with it. The whole process of the branches is under the control of it.
The names of the branches and year of their establishment are given in the following table.

22

DEPOSIT SCHEMES INTEREST RATES

Interest Rates on Deposits with effect from 16th Nov, 2011

Interest Rates on Deposits with effect from 6%
Period
Below Rs.1.00 Cr.
Rs.1.00 Cr. & above
7 Days to 14 Days
2.50%
2.50%
15 days to 45 days
3.00%
2.75%
46 Days to 90 Days
4.00%
3.00%
91 Days to 179 Days
5.00%
3.75%
180 to <1 year
5.50%
5.00%
1 year to < 2 years
6.5%
6%
2 year to < 5 years
7%
6%
5 years and above
7.25%
6%
*Interest Rate @ 0.50% over and above these rates to the Senior Citizens will be
admissible on single Fixed Deposit Receipt of Rs.5000/- and above for one year and
above.
LOAN SCHEMES INTEREST RATES
Interest Rates on Loans with effect from 16th Nov, 2011
Interest Rates on Loans with effect from 6%
Loan Scheme
Personal Loan Scheme
Non Farm Sector Loan Scheme (NFS)
Consumer Durable Loan
Vehicle Loan Scheme
Second hand Vehicle Loan Scheme
Urban Housing Scheme
Cash Credit Facility to Traders
Revolving Cash Credit to Farmers (RCC)
Two Wheeler Loan to Farmers
Rural Housing Scheme
Mini Dairy Scheme
Commercial Dairy Development Scheme
Cooperative Education Loan Scheme
children of poor farmers, Dalits, BC, etc.
Loan against Rental Income Scheme

Rate of interest
13%
Up to Rs.0.50 Lac 11.50% Above Rs.0.50 Lac 12%
13%
11%
12%
10%
13%
11%
11%
10%
10.50%
10%
7.25%
13%
23

Dairy Loan Scheme to purchase a Cow

Loan against Property
Loan scheme for Earnest Money
Mai Bhago Istri Shakti Scheme
Bhai Lalo Sehkari Kirt Shakti Scheme

10%
14%
As fixed by the bank.
PACS to members 10.75% CCB to PACS 9.25%
PACS to members 11.50% CCB to PACS 9.50%

Different Deposit and Loan Schemes Offered by the bank

The Bank is offering various schemes of deposit and loans .These can be studied under the two different
headings separately as following.

I. Different types of Deposit Accounts

1. Saving Bank A/c

A Saving Bank A/c can be opened with an initial deposit of Rs.500/- without Cheque Book facility and
Rs.1000/-with Cheque Book facility.
Eligible categories to open SB A/c:
1. Any individuals
24

2. Joint A/c with others in the form of 'either or Survivor', 'Former or Survivor', and 'joint' etc.
3. Joint Hindu family (HUF)
4. Coop Societies, Clubs, Societies, Associations etc.
The intending customer should visit the bank to fill in A/c opening forms with complete particulars
such as parentage, occupation, address, latest two passport size photographs, residence such as copies of
Voter card, Passport, Telephone/Electricity bill etc. and PAN or form No.60. The accounts are required
to be introduced properly by the existing account holder of the bank or any person known to the bank.
Only 30 withdrawals are allowed per half year for a saving Bank A/c exceeding which service charges
are levied by the bank.
A minimum balance of Rs.500/- (without Cheque Book) and Rs.1000/- (with Cheque Book) has to
be maintained in the account, otherwise services charges are levied on monthly Basis.
At the time of opening the account, pass book is issued to the customer, which needs to be
accompanied every time when payment is drawn through a withdrawals form. Maximum limit of
withdrawal form is Rs.2000/- with passbook. Nomination facility is also in these accounts. A depositor
or depositors can nominate one Person only.

2. Current A/c
A Current A/c can be opened with the initial deposit of Rs.5000/-. It can be opened in the name of
individual, a Sole Proprietary Concern partnership firm, club, Religious Institution, Association Govt. /
Semi Govt. Dept., Local Bodies. As usual, all prospective applicants need to fill in the Account opening
forms wherein following documents are required to be attached:
1. Sole Proprietary Concern - Declaration of Sole Proprietorship
2. Partnership firm - Partnership Deed duly attested

25

3. Clubs, Schools, Societies, Association.

4. 1. Certificate of Registration
2. Copy of Bye Laws.
3. Memorandum of Association, if any.
4. Resolution of Board of Directors.
5. Limited Companies, Pvt. Ltd. Companies
6. Trusts
1. Instrument or Document of Trust
2. Resolution
3. Certification of registration.
All Current A/c need to be introduced properly from another current account A/c holder only.
Staff members are not allowed to introduce a Current A/c.
A minimum balance of Rs.5000/- has to be maintained.
Recent Passport size photographs of the operator/s need to be affixed on the AOF. All payment is
made by Cheques only. There is no restriction on the number of withdrawals unlike that in SB A/c Pass
Book is issued at the time of opening of account. Statement of account can also be got issued.

3. Recurring Deposit A/c

A Recurring Deposit A/c can be opened with a certain initial deposit wherein a Depositor needs to
deposit money by way of monthly installments over stipulated period. The period may be 2, 24, 36, 48,
60 month etc. On the expiry of the period, the accumulated amount along with interest is paid in lump
sum. All individuals, jointly with others minors, blind/illiterate person etc. can open the A/c. Rate of
interest on Recurring Deposits for various periods will be the rate applicable on term deposit for that
period.

26

Minimum monthly installment of the A/c is Rs.100/Maximum period is 10 years.

The intending customer should fill in A/c opening form with complete particulars such as parentage,
occupation, address etc. Two passport size photographs are required to be affixed along with furnishing
of residence proof such as copies of ration card, Voter card, Passport, Telephone/Electricity bill etc. and
PAN or Form No.60. The account is required to be introduce properly by the existing A/c holder of the
bank of any person know to the bank. On the expiry of the stipulated period, accumulated amount is
paid to the customer.

4. Term Deposit A/c

Term Deposit is a deposit received by the bank for a specific fixed period which is withdraw able after
expiry of said period.
Eligible categories to open Term Deposit A/c

Individual

Joint A/c with other in the form of Either or Survivor , Former or Survivor, any one or survivor
jointly etc.

Minors

Illiterate persons

Blind person

Joint Hindu Family (HUF)

Coop. Dept, Clubs, Societies, Associations etc.

The intending customer should fill A/c opening form with complete particulars such as parentage,
occupation, address etc. Two passport size photographs are required to be affixed along with furnishing
of residence proof such as copies of Voter Card, Passport, Telephone/ Electricity bill etc and PAN or
27

Form No.60. The account is required to be introduced properly by the existing A/c holder of the bank or
any person known to the bank. A minimum of Rs.1000/- can be placed in a term deposit. Minimum &
maximum period for which the amount is place in a term deposit are fixed by the bank from time to
time.
In a fixed deposit A/c, it usually ranges from 7 days to 120 months whereas in Long Term Deposit,
The minimum period is 12 months. Rate of interest is fixed by the bank from time to time, keeping in
view the market trends. Interest on Fixed Deposit can be fixed quarterly, half yearly or yearly etc. But
in Long term deposit it is cumulative with quarterly rests with the result that is paid only on maturity.
After opening the account in Computer, FDR is issued to the customer.
A TDS is to be deducted at source as per Income Tax Act. The mode of operation should be clearly
mentioned while opening the A/c. Term deposit A/c can also be opened with Cheques drawn on the
same branch or other banks. After getting proper discharge on the back side of the FDR from the
depositor payment can be made on due date. For payment before due date, The FDR has to be
discharged on the back side by all the operators. FDRs can be renewed on due date by mentioning the
period for which they are to be renewed on the back side. TDS is deducted if interest is Rs.10000/- and
more in a financial year prohibition for payment in cash The payment of FDR is prohibited to be
made in each if the amount of the FDR along with interest exceeds Rs.20,000/- . So usually the
payment of FDR should be made either by way of Bank Draft/ Pay order or through an a/c.

5. Saving Bank-No frill A/c

The No Frill A/c can be opened by any person without furnishing any resident proof or any proper
introduction. The A/c Can be opened with a minimum amount of Rs.10 /- only. In such accounts, the
Balance should not exceed Rs.50000/- otherwise, it will become an ordinary SB A/c. No cheque book is

28

allowed to be issued to the customer. The condition of maintaining any minimum balance in this A/c is
waived off.

6. Lockers A/c
Lockers of four different sizes viz. small, medium, large and extra large are available in the bank
which can be hired by any prospective customer for safe custody of their articles. A prospective
customers who wants to hire a locker, has to fill in embossing form and specimen signature card. For
getting a locker, the locker hire must open a SB A/c with the bank so that annual lock rent can be
charged by debiting that A/c. He has to keep a lien or minimum balance in that account depending upon
the size of the locker hired. The annual rates of Locker rent and the lien are as follows.
Term Deposit for Locker
A minimum of Rs.10000/- has to be placed in Term Deposit by a locker hirer as per RBI guidelines.
Nomination must for Individual Locker Holders
A Single locker holder must nominate someone in his locker A/c to receive the articles lying in his
locker after his death.

Loans Schemes of Cooperative Bank for Punjab

1. Revolving Cash Credit to Farmers (RCC)
Beneficiary
Purpose
Loan Limit
Margin
Rate of Int.
Repayment Period
Collateral Security

Any individual farmer holding the agricultural land.

Credit facility for meeting out socio-economic needs.
Maximum amount Rs.6.00 Lac. Subject to Rs.1.00 Lac / acre
No margin money required
11%
Renewable on annual basis
Agriculture Land valuing at 150% of the loan amount.

29

2. Non Farm Sector Loan Scheme (NFS)

Beneficiary
Purpose
Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security
Installment

Individual, Sole Prop., Firm, Coop. Societies or a Company.

For the establishment of cottage, tiny and SSI unit.
Maximum amount up-to Rs.25.00 Lac at CCB Level.
Up to Rs.0.50 Lac 11.50% Above Rs.0.50 Lac 12.00%
Minimum 10%
Maximum 5 to 7 Years.
Immovable Properties for the value of 150% of the amount.
Rs.2225.00 for 5 years.

3. Personal Loan Scheme

Beneficiary
Purpose
Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security
Installment

Employees of Punjab Govt., PSU, Boards, Corporations etc.

Credit Facility for meeting out socio-economic needs.
12 times of gross monthly salary or Rs.2.00, whichever is less.
13%
No Margin required.
Maximum 5 years.
Two Good Sureties as per satisfaction of the bank.
Rs.2276.00 for 5 years.

4. Consumer Durable Loan

Beneficiary
Purpose
Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security
Installment

Individual salary earners and non salary earners.

For the purchase of consumer durables.
Maximum amount up-to Rs.1.00 Lac.
13%
25%
Maximum 5 years.
Two Good Sureties as per satisfaction of the bank.
Rs.2276.00 for 5 years.

5. Two Wheeler Loan to Farmers

Beneficiary
Purpose
Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security
Installment

An agriculturist having land in his own name/family member.

For the purchase of new two wheelers.
Maximum amount up-to Rs.0.50 Lac.
11.00%
15%
Maximum 5 years.
Two Good Sureties as per satisfaction of the bank.
Rs.1087.00 for 5 years.

30

6. Cash Credit Facility to Traders

Beneficiary
Purpose
Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security

Individual, Sole Prop., Firm, Coop. Societies or a Company.

For meeting working capital requirement of business.
Maximum amount up-to Rs.25.00 Lac.
13%
25%
Renewable on annual basis.
Immovable Properties for the value of 150% of the amount.

7. Vehicle Loan Scheme

Beneficiary
Purpose
Loan Limit

Individual, Firm, HUF, Trust, Coop. Societies or a Company.

For the purchase of new vehicle for business and personal use.
Maximum amount up-to Rs.10.00 Lac or 80% of cost of

Rate of Int.
Margin
Repayment Period
Collateral Security

vehicle.
11%
20%
Maximum 5 years.
Two Good Sureties as per satisfaction of the bank besides the

Installment

hypothecation of the vehicle.

Rs.2174.00 for 5 years

8. Second hand Vehicle Loan Scheme

Beneficiary
Purpose

Individual, Sole Prop., Professionals and Partnership Firm.

For the purchase of second hand vehicle should be not more

Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security

than 3 years.
Maximum amount up-to Rs.5 Lac or 75% of cost of Vehicle.
12%
25%
Maximum 5 years.
Two Good Sureties as per satisfaction of the bank besides the

Installment

Hypothecation of the vehicle.

Rs.2225.00 for 5 years.

9. Rural Housing Scheme

Beneficiary
Purpose

Individual and Members of Coop. Housing Societies.

Purchase of built up house, construction of new house,

31

repairs / Renovation and addition of existing house in rural

Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security

areas.
Maximum amount up-to Rs.15.00 Lac.
10%
15%
Maximum 15 years.
Agricultural land for the value of 100% of the loan amount

Installment

besides the Mort - gage of house to be financed by the bank.

Rs.1074.00 for 15 years.

10. Urban Housing Scheme

Beneficiary
Purpose

Individual and Members of Coop. Housing Societies.

Purchase of built up house or flat, construction of new house,
repairs/Renovation and addition of existing house in urban

Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security
Installment

areas.
Maximum amount up-to Rs.25.00 Lac.
10%
25%
Maximum 15 years.
First mortgage of House Property to be financed by the bank.
Rs.1074.00 for 5 years.

11. Mini Dairy Scheme

Beneficiary
Purpose
Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security

Members of Coop. Milk Producers Society/ PACS.

Purchase of up to 25 milk cattle.
Maximum amount up-to Rs.5.00 Lac.
10.50%
15%
Maximum 5 years.
Mortgage of landed property value of 150% of the loan

Installment

amount.
Rs.2150.00 for 5 years.

12. Commercial Dairy Development Scheme

Beneficiary

Any Individual, Partnership Firm, corporate body and any

other Co - operative organization.

32

Purpose

To increase the income of milk producers by helping them to

Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security

purchase High yielding milk cattle equipments.

Maximum amount up-to Rs.25.00 Lac.
10%
15%
Maximum 5 years.
Mortgage of landed property value of 150% of the loan

Installment

amount.
Rs.2125 for 5 years.

13. Education Loan Scheme

Beneficiary

Salaried employees of Coop. banks, Punjab Govt. /

Purpose

Chandigarh Administration and its boards & Corporation

To provide financial assistance to deserving and meritorious

Loan Limit
Rate of Int.
Margin
Repayment Period

student for Pursuing higher studies in India or abroad.

Maximum amount up-to Rs.10.00 Lac.
9%
No Margin required.
The installment will start after completion of course.

Collateral Security

Maximum 5 years.
Mortgage of landed property value of 150% of the loan
amount. For the loan up to Rs.5.00 Lac, no Immovable
security is required. If the loaner is the employee of Punjab

Installment

Govt. or Coop. Dept.

Rs.2076.00 for 5 years.

14. Cooperative Education Loan Scheme Children of Poor farmers, Dalits, BC, etc.
Beneficiary
Purpose

Children of poor farmers, Dalits, BC, and other poor sections.

To provide financial assistance to deserving and meritorious students

Loan Limit
Rate of Int.
Margin
Repayment

for Pursuing higher studies in India or abroad.

Maximum amount up-to Rs.10.00 Lac.
7.25%
No Margin required.
The installment will start after completion of course. Maximum 5

Period
Collateral

years.
Mortgage of landed property value of 100% of the loan amount.

33

Security
Installment

Rs.1992 for 5 years.

16. Dairy Loan Scheme to purchase a Cow

Beneficiary
Purpose
Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security
Installment

Members of Coop. Milk Producers Society.

Purchase of a cow.
Maximum amount up-to Rs.0.50 Lac.
10.5%
10%
Maximum 5 years.
Two Good Sureties as per satisfaction of the bank.
Rs.1075.00 for 5 years.

17. Loan against Property

Beneficiary
Purpose

Any Individual.
To offer instant solutions relating to socio-economic needs and
business needs such as childrens higher education, Travel,

Loan Limit
Rate of Int.
Margin
Repayment Period
Collateral Security
Installment

daughters marriage Medical emergencies etc.

Maximum amount up-to Rs.25.00 Lac.
14%
No Margin required.
Maximum 6 years.
Mortgage landed property value of 200% of the loan mount.
Rs.2061 for 6 years.

19. Mai Bhago Istri Shakti Scheme

Beneficiary
Purpose
Loan Limit
Rate of Int.

Any women beneficiaries member of the PACS.

To establish the micro or small business in rural areas.
Rs.25000 through PACS.
PACS to members
10.75%

Repayment Period
Collateral Security
Installment

CCB to PACS
9.25%
Maximum 5 years.
One good Surety having landed property.
Rs.541.00 for 5 years.

34

20. Bhai Lalo Sehkari Kirt Shakti Scheme

Beneficiary
Purpose
Loan Limit
Rate of Int.

Any men/women beneficiaries member of the PACS.

To establish the micro or small business in rural areas.
Rs.25000 through PACS.
PACS to members
11.50%

Repayment Period
Collateral Security
Installment

CCB to PACS
9.50%
Maximum 5 years.
One good Surety having landed property.
Rs.550.00 for 5 years.

BRANCH:

CHAPTER III
INTRODUCTION TO STATE BANK OF PATIALA
An Associate Bank of the State Bank of India, State Bank of Patiala (SBP) was established in 1917 by
Late His Highness Bhupinder Singh, the Maharaja of erstwhile Patiala state. SBP started its operations
from one branch called 'Chowk Fort', in Patiala. During the time of the establishment, the state owned
Bank was known as Patiala State Bank. It was set up for the purpose of promoting the growth of
agriculture, trade and industry.
Patiala State Bank was renamed State Bank of Patiala on 1 April 1960, when it became a wholly
owned undertaking of the Government of Punjab. On that day, SBP became a subsidiary of the State
Bank of India (SBI). Since it was renamed, SBP has grown significantly in terms of its size and the
volume of business. It is now one of the prominent Banks of India. Another milestone in the history of
SBP was the computerization of all its branches on 24 January 2003. With this development, the Bank
became India's first fully computerized Public Sector Bank. The bank is principally engaged in the

35

provision of commercial and retail banking services to the individuals and business customers. The
bank offers a range of services to the including personal banking, agriculture and rural banking.

Branches and ATM Services

The business of State Bank of Patiala has grown manifold since its establishment. Recent
records say that State Bank of Patiala is networked by its 830 service outlets. There are as many as 750
branches of SBP, spread across the major cities of India, out of which, the majority of branches are
located in its home State, Haryana, Himachal Pradesh, Rajasthan, Jammu & Kashmir, Delhi and
Chandigarh. The Bank provides easy access to money to its customers through its ATMs spread over 16
states of India.

STATE BANK SERVICES:

State Bank of Patiala offers various types of services to its clients. SBP shares its ATM network
with other State Bank group members, so this means that the bank's customers have access to the more
than 7000 State Bank Group ATMs across the country. Some of the services offered by the bank consist
of:

NRI Services

Govt. Business

Personal Banking

Internet Banking

SME & Corporate Banking

Agriculture & Rural Banking

State bank Patiala loans

36

State Bank of Patiala is a prominent subsidiary of State Bank of India. Headquartered in Patiala,
Punjab, SBP offers a range of innovative products and services for the individual clients, agricultural
businesses, non resident Indians, corporate clients and small and medium enterprises. State Bank of
Patiala loans are obviously one of the best credit products that are available in Indian market.
State Bank of Patiala loans are recognized for attractive interest rates and flexible repayment terms.
The convenient terms and conditions associated with these loans truly make them admired credit
options among borrowers. State Bank of Patiala loans can be categorized into the following:
1) State Bank of Patiala loans Personal Banking
2) State Bank of Patiala Loans Agricultural and Rural Banking
3) State Bank of Patiala loans SME and Corporate Banking
4) State Bank of Patiala loans NRI Banking

PERSONAL BANKING:
Under the Personal Banking services offered by State Bank of Punjab, various types of loans are given
to customers, so that they can take care of all their monetary needs without any hassles.
TYPES OF LOANS

37

Personal Loan

8.

Loan Against LIC/ SBI-Life Products

.
2

Rent

9.

Loan For Rural Housings

.
3

Loan to Pensioners

10

Loan Against Term Deposits

.
4

Realty

11

Home Loan Scheme

.
5

.
Loan Against RBI Relief Bonds 12

.
6

Two Wheeler Loan

.
13

Loan For Earnest Money

Loan Against Gold Ornaments

.
14

Career Loan

.
7
.

Car Loan

DEPOSIT ACCOUNTS RATE OF INTEREST

38

NATURE

RATE OF INTEREST

MINIMUM BALANCE

NORMAL

SENIOR CITIZEN

Rural

Semi
Urban

Urban

a. with cheque book

facility

3.50

3.50

500

1000

1000

b. without cheque book

facility

3.50

3.50

250

500

500

c. No Frills Account

3.50

3.50

a. NRO

3.50

3.50

Same as domestic deposits

b. NRE

3.50

3.50

ACCOUNT
1. Savings Bank A/c
A. Domestic

B. Non-Resident

2. Term Deposit
A. Domestic

Rate of Interest (w.e.f. 01.01.2010)

Term Deposits (All maturities)

Below Rs.1 Corer

7 to 14 days

2.50#

15 to 45 days

2.75

46 to 90 days

4.00

91 days to 180 days

5.00

181 days to < 1 year

5.75

1 year to 2 years

6.75

> 2 years to < 3 years

6.75

3 years to < 5 years

7.00

5 years to < 8 years

7.25

8 years to 10 years

7.50

39

RATES OF INTEREST OF LOANS

RATE OF INTEREST (w.e.f. 06.07.2011 )

PROCESSING
CHARGES

LOANS
1. Housing Loan

Upto Rs
30 Lac

More than
Rs.30 Lac

Above Rs.
Lakhs Upto
Rs. Lac

Above Rs.
Lac

Floating Category
Upto 5 years

8.75%

9.75%

More than 5 yrs. &

upto 15 years

9.00%

10.00%

More than 15-25

yrs

9.25%

10.25%

Upto 5 years

12.75%

12.75%

More than 5 yrs. &

upto 10 years

12.75%

12.75%

More than 10yrs

N.A.

N.A.

N.A

2. Personal Loan
scheme

14.50%

1.10%

a) Two Wheeler
Loans

14.00%

1.10%

b) Three Wheel
Loans

N.A.

0.50% Max.
10,000/-

Fixed Category
0.50% Max.
10,000/-

3. Vehicle Loan

c) Car Loan
For New Cars
For Old Cars
4. Educational
Loans

Upto 3 yrs >3 to 5 yrs.

11.00%
14.25%

11.25

11.50%

0.50%

14.50%

14.50%

0.50%

Upto Rs. 4.00 lakhs

11.25%

> 5 to 7 yrs

Rs.4.00 lakhs upto 20 lakhs

13.00%

40

Agriculture and Rural Banking

1. Finance against warehouse receipt issued by National Bulk Handling Corporation Ltd. (NBHC)
2. Loans granted under tie-up arrangement with Milkfed Punjab & Haryana Dairy Development
Corporation Ltd., Haryana.
3. Establishment of dairy unit of 02 milch animals under schedule caste sub plan in the state of Punjab.
4. Finance to Farmers under KIisan Card and Golden Card Schemes.
5. Financing Commercial Dairy units
6. Indirect loans given through Primary Agricultural Cooperative Society (PACS)/ Farmer Service
Society (FSS)/ Large sized Adivasi/Agricultural Multipurpose Society (LAMPS)
7. Loans to self help Groups
8. Tractor Loans

Introduction to State Bank of Patiala, Branch

It was established in 1992 and situated in the village Daun Kalan, Patiala by the side of village
Gurudwara Sahib and in front of the Cooperative Bank.
Organizational Structure of the Branch includes:
Branch Manager: Mr. Rajesh Kant
Head Cashier: 1
Cashier cum Clerk: 3
Subordinate Staff: 3

41

CHAPTER IV

Project
Comparative Study of the Customer Perception of the
Cooperative Bank and SBOP
Project Overview
In today competitive environment where corporate are constantly searching for ways to keep a
float and sustain the market share, they have to find newer and better ways to satisfy the customer
needs. To run any organization successfully the management needs to think always for the betterment
of their service and product, every time there is a chance of improvement in the functioning of every
organization specially when we talk about the banking sector in past there is very less or no competition
in the market and the banks has no pressure to provide better facilities to the peoples but in recent years
the competition is increased due to the entry of the private banks and other money lending units.
Considering this the state cooperative banks need to be more careful and needs to take such steps which
favors hem to stay ahead in the market. This has always been the motto of Cooperative Banks and in
order to achieve this, I was entrusted in the dual task of doing a comparison of customer perception
analysis of the Cooperative bank branch and the SBOP branch in the village Daun Kalan, Patiala.

42

RATIONALE OF THE STUDY

Banking operations are becoming increasingly customer dictated. The ability of banks to offer
clients access to several markets for different classes of financial instruments has become a valuable
competitive edge. By going with the topic they can identify their own strengths and weaknesses, where
they stand in comparison to their competitors, chart out path future progress and improvement. This
comparison helps to promote an increased focus on customer outcomes and stimulate improvements in
the work practices and processes used within the bank and outside . With better understanding of
customers' perceptions, banks can determine the actions required to meet the customers' needs.

OBJECTIVES OF THE STUDY

To assess and compare the overall service performance with other banks

To know in which service quality the bank is performing well and in which dimension it needs
improvement..

To compare the different factors of the banks which influence the customer perception.

To study and understand the factors which motivate the customers while going for Banking
Services

43

CHAPTER V
RESEARCH METHODOLOGY

Research Problem
Comparison of the customer perception of the Cooperative Bank and State Bank of Patiala.

Research Design
Research Design is exploratory and descriptive which helps me to explore the factors
influencing the perception of the customers and to describe the gap between the banks at various levels.

Sampling Design
The study aimed to survey 100 samples from the village Faridkot and near by villages, who are
the customers, visiting in the banks. 50 respondents are of the customers of the Cooperative Bank and
the other 50 are the customers of the SBOP. Sampling Design was such to have a comparison of the
Customer Perception of the both banks. The respondents were selected on the basis of convenience
sampling.

Data Collection:
Both primary and secondary data have been collected for meeting the objectives of the current
study.
For the purpose of the collection of the primary data, personal interview of the respondents
was conducted. An unbiased, undisguised structured questionnaire was prepared which was

44

administered to the respondent for the purpose of getting the information. With the reference of certain
previously carried studies, certain statements for getting out the customer perception were formulated
and these were clubbed together to formulate the questionnaire having two parts: First part was having
10 general questions in addition to the demographic details and the second part dealt with the 10
elements of the bank showing the customer level of preference.
For the purpose of secondary data, secondary sources of information like magazines, newspapers,
journals; studies conducted in past etc. have been referred. The main sources of secondary data in the
study
1. Banks Detail Books
2. Websites
3. Books

Analysis Techniques
The questionnaire is having the alternative choices. Questions having alternative choices have
been analyzed by taking percentages and by the use of Likert scaling.

Scope of the study

The scope of the study is limited to the customers visiting to the Faridkot branch of the Patiala
Central Cooperative bank and the customer visiting to the village branch of State Bank of Patiala.
Present study has been restricted to time period from June 2010 to July 2010.

45

CHAPTER IX
DATA ANALYSIS AND INTERPRETATION
6.1 Demographic Analysis of the Customers based on occupation

60%
50%
40%
30%
20%
10%
0%

Cooperative
SBOP

Farmer

Businessman

Salaried
Employee

Other

Analysis and Interpretation - Out of the respondent customers of Cooperative Bank and SBOP
Majority is of farmers. Cooperative bank has more farmer customers in comparison with SBOP because
it is mainly a rural bank. It doesnt mean that it has less percentage of customers of the businessman and
salaried employees. Businessman and the salaried employees are more among the respondents of the
SBOP. Other customers are students or housewives.

46

Questions:
6.2 Type of account

Analysis and Interpretation The comparison of the type of accounts which the respondents are
having in their respective banks, have little difference. The respondent customers of Cooperative Bank
are having Savings, Fixed Deposit Accounts. Comparatively Savings percentage is more and FD
percentage is less in SBO. Perhaps the rate of interest offered can be the reason of this minor difference.

47

6.3 No of Respondents who have ever taken any loan from the bank

70%
60%
50%
40%
30%
20%
10%
0%

Cooperative
SBOP

Yes

No

Analysis and Interpretation Majority of the respondents of the Cooperative Bank have taken loan
from the bank. On the other side of there is approx equal number of customers of the SBOP have taken
loan and who have not. They only are having deposit account in the bank. The reason may be the
Cooperative Bank as a main rural lending bank.

48

6.4 Information source of the schemes and services of the bank

60%
50%
40%
Cooperative

30%

SBOP

20%
10%
0%
Personal Visit

Advertisement Word of Mouth

Other

Analysis and Interpretation - Data shows that Majority of the respondents from the Cooperative Bank
and SBOP respectively, come to know about the schemes and services of the bank by visiting
personally. Cooperative Bank is lacking in its advertisement in comparison to SBOP. Word of Mouth
is also an information source. Reason may be interpreted that branches of the bank do not pay much
heed to advertisement and also the customers prefer to visit the bank personally for the detail of
banking services offered.

49

6.5 Type of rate of interest preferred

70%
60%
50%
40%
30%
20%
10%
0%

Cooperative
SBOP

Yearly

Half Yearly

Monthly

Analysis and Interpretation Most of the customers of Cooperative Bank are from agricultural
background so that half yearly rate of interest is preferred, because of their crop cycle. Salaried
employee and businessmen prefer to pay monthly Rate of interest. Yearly rate of interest is not
offered by SBOP.

50

6.6 Appreciation for being a good Customer

80%
60%
Cooperative

40%

SBOP

20%
0%
Yes

No

Analysis and Interpretation Less number of the respondents from the Cooperative Bank says that
they have a received positive appreciation from the bank for being a good customer, while the majority
denies it. Looking at the data of SBOP respondents the percentage is however opposite, Majority is
favoring. There is set procedure in the bank that if you are a good customer as you timely pay your
installments and interest, you will get some rebate in the percentage of the interest but there is no such
procedure in Cooperative Bank.

51

6.7 (A) Future Preferable bank

50%
40%
30%

Cooperative

20%
10%
0%
SBOP

Stick to Same

Some other

6.7 (B) Future Preferable bank

60%
50%
40%
SBOP

30%
20%
10%
0%
Cooperative

Stick to Same

Some Other

Analysis and Interpretation - By the experience near about half of the respondents of the Cooperative
bank say that they will also stick to the same bank for same requirement in future, while other majority
wants to shift to SBOP and some other bank. The data analysis of SBOP shows that most of
respondents want to remain with SBOP. While other want to go for Cooperative Bank and to shift for

52

some other bank. The reason may be the requirement of the customer, schemes offered, rate of interest
offered and also the personal attachment.

6.8 Motivational Factors

50%
40%
30%

Cooperative

20%

SBOP

10%
0%
Interest

Schemes

Popularity

All

Other

Analysis and Interpretation - From the survey it was found that motivational factor, for opting for the
banking service, of the most of the respondents of Cooperative bank is Schemes offered by the bank
while other factors are like rate of interest, popularity etc. Data interpretation of the SBOP shows that
maximum percentage is with rate of interest, while other factors are schemes and popularity. Almost
equal number considers these all factors in both of the banks.

53

6.9 Influence of image or brand of the bank on the customers

80%
60%
Cooperative

40%

SBOP

20%
0%
Agree

Disagree

Analysis and Interpretation Majority of the respondents from SBOP and Cooperative bank agree
that image or name of the bank has its influence on customers. Customers consider the brand of the
bank while going for the banking. It can be interpreted that it might influence the decision of the
customers and prospects.

54

6.10 Essentiality of computerized Banking

50%
40%
30%
20%

Cooperative

10%

SBOP

0%
Strongly Somewhat
Disagree Disagree

Neutral

Somewhat
Agree

Strongly
Agree

Analysis and Interpretation Major part of the respondents from the cooperative bank agree and
strongly agree to the need of computerized system in the bank. By the response of SBOP customers,
majority of response agree and strongly agree to that computerized system is essential for modern
banking. Cooperative Bank is still using the manual books for accounts instead of computerized
banking as it is in SBOP.

55

6.11 Customer differs in his perception for a Government Bank & private bank

50%
40%
30%
Cooperative

20%

SBOP

10%
0%
Strongly
Disagree

Somewhat
Disagree

Neutral

Somewhat
Agree

Strongly
Agree

Analysis and Interpretation More than half of the respondents from the cooperative bank agree that
customer differ in his perception for a govt. bank and private bank. From the response of SBOP
customers, it may be interpreted majority also agree to it. The reason may be interpreted as the
customer feel that there is a genuine difference between a Govt. oriented bank and a private bank
regarding the services, rate of interest, infrastructure and other factors.

56

Level of Preference

Range
10 Statements and 50 respondents of each bank
Score
Max. Score = 5*50 = 250 (strongly agree)
Avg. Score = 3*50 = 150 (neutral)
Min. Score = 1*50 = 50 (strongly disagree)

Sr. No

Basis of Comparison

Scores
Cooperative

SBOP

Schemes Offered

193

186

Rate of Interest

177

186

Loan Passing & Repayment

182

179

Flexibility of Schemes

158

170

Transparency

154

170

Number of Staff

118

194

Customer Dealing

149

179

Bank Environment

123

202

Advertisement

119

194

10

Bank Image

153

182

57

Analysis and Interpretation

1. Schemes Offered: There is favorable response for the schemes offered by both of the banks.
However it is more in case of Cooperative Bank because it is established for mainly the rural
and agriculture services. So the village customer is more satisfied with the schemes offered by
this bank.
2. Rate of Interest: Rate of Interest is also generating favorable response in both of the banks.
However it is less favorable in case of Cooperative Bank. May be the customer feels that the
rate of interest is less charged or the structure of rate of interest is more convenient in the SBOP.
3. Loan Passing and repayment: Survey shows that the loan passing and the repayment process
is generating almost equal response in both of the banks. This process is favorable in both of the
banks. May be the banks are adopting such a procedure where customer feels minimum
harassment.
4. Flexibility of Schemes: Data analysis shows that SBOP customers are more favorable to the
flexibility of schemes which they avail than in case of Cooperative bank.
5. Transparency: Research shows that both banks are having more than average response
regarding the statement. But there is gap in the customer preference in both of the banks. SBOP
is having more favorable response than Cooperative bank.
6. Number of Staff: Data analysis shows that the scoring of the Cooperative Bank respondents is
much low than the average response but it is much higher in SBOP. Reason is that the

58

Cooperative Bank is only having 3 staff members including branch manager for the service of
customers. On the other side the number is seven in case of SBOP.
7. Customer Dealing: Cooperative Bank is also lacking in the customer dealing in comparison to
SBOP, as scored by the respondents. The reason may be interpreted as the staff of the
cooperative bank is less trained in comparison with the SBOP. Moreover the manual working,
due to lack of computerized system, also affects the customer dealing.
8. Bank Environment: Survey analysis shows Customer is negatively scoring the banking
environment in the cooperative bank because of less infrastructure facilities, the shortage of
staff, the non-availability of computerized system, the staff behavior. SBOP is having positive
score in this respect because of all the above stated factors and a fully air conditioned branch.
9. Advertisement: Survey analysis shows that majority of the respondents from the cooperative
bank disagree with the advertisement campaign of the bank because most of the customers come
to know about the schemes by the bank through their personal visit. The score given is the clear
evidence of it. The respondents of the SBOP are favorable to the advertisement by the bank.
10. Bank Image: Cooperative has been given average score regarding its bank image while it is
favorable in case of SBOP. The reason may be concluded the scam did by the previous branch
manager of Cooperative Bank. The last branch manager has been accused of manipulating
certain amount of loan. This had its influence on the bank image.

59

CHAPTER VII
FINDINGS OF THE STUDY
1. Majority of the customers of the cooperative bank and ICICI belong to agricultural background.
1. The percentage of different accounts having the customers of the two banks is relatively same.
2. The percentage of respondents who have taken loan from Cooperative is more in comparison
withICICI.
3. This is shown by the research that personal visit of customers is the main source of information
for knowing the bank schemes.
4. Most of the customers of the Cooperative Bank prefer to pay half yearly interest rate, while the
salaried employees prefer to pay the interest monthly, this is also same in the case of ICICI.
5. Majority of the respondents do not respondents in Cooperative Bank do not receive any
appreciation for being a good customer. But things are opposite in case of ICICI.
6. About the Future Bank Service, Majority of the respondents of the customers of ICICI want to
stick with ICICI as in comparison with the Cooperative Bank.
7. Analysis shows that Schemes offered by the banks is the main motivational factor for the
respondents of Cooperative Bank and the interest rate is the main motivational factor in case of
ICICI.
8. Majority of the both respondents from the both admits that image or name or brand of the bank
do influence the customer.
60

9. Essentiality of computerized banking is agreed by the respondents of the both banks.

10. Majority of respondents from both the banks agree that whether it is a Government Bank or
Private Bank, customer perception is differing about the both type of banks.
11. The comparison between the schemes offered by the both banks reveals that Schemes offered by
Cooperative Bank, being a rural lending bank, are little bit more preferred than ICICI.
12. The customers perception about the vehicle loan passing and its repayment process is almost
same in the both of the banks.
13. Flexibility of schemes offered and transparency of the customer related processes is more
satisfactory in the ICICI in comparison with Cooperative Bank.
14. The branch of the Cooperative Bank is lacking in its staff number. While the branch of ICICI is
having sufficient number of staff members according to perception of its customers.
15. Customer service and dealing is also far behind the point in the Cooperative bank as it is
satisfactory in ICICI.
16. Customers do not agree with the Cooperative bank environment. Comparatively, ICICI branch
has a fully satisfied environment according to the perception of the customer.
17. Mainly Cooperative Bank is lacking in advertisement at local level. On the other side ICICI
advertisement campaign makes agree its customers.
18. The bank image of Cooperative Bank is little bit lacking in comparison with ICICI, as going
with the response of the customers.

61

RECOMMENDATION AND SUGGESTIONS

1. More mass awareness campaigns should be organized in order to enhance market share of bank.
So Bank should concentrate on its advertisement itself.
2. Bank should refocus on its interest rate as responded by people. Periodic review of the interest
rate should be done.
3. Training of the employees should be there to meet the needs of the time.
4. Proper posting of the staff should be done.
5. Customers satisfaction must be the top priority of the bank.
6. Maximum practical exposure should be provided to the job trainees so that they may handle the
various enquiries of customer effectively.
7. Communication gap within the bank and with the head-office should be reduced.
8. Infrastructure facilities should be provided to the branch of Cooperative Bank, as it is catering to
the 5-6 near by villages.
9. Banks is also advised to have proper internal control measures for monitoring its functions and
transactions.

62

LIMITATIONS OF THE STUDY

Some respondents were hesitant in providing complete information.

The findings of this study are based on the expressed opinion of the respondents.

Difficulty was faced in getting the responses to various questions because the customers could
not devote enough time to us and the communication problem was there.

This study only relates to one organization, so conclusions drawn may not be finding its utility
in all the other banks.

Even the employees of the bank hesitated to give the complete & accurate data.

63

CONCLUSION
The project was undertaken to analyze and compare the customer perception of the two banks
one is Cooperative Bank and other is State Bank of Patiala. The study concludes that Cooperative Bank,
which was established for mainly for the service of rural sector, still is not on the line to its goal. It is
lacking at various elements, particularly at the branch levels, which reveals the edge of other public and
private sector banks over the Cooperative bank, the lines at which the bank is lacking behind.
Indiscipline and lack of commitment in these banks make peoples trust in the cooperative sector a
casualty.
Some of the co-operative banks are quite forward looking and have developed sufficient core
competencies to challenge state and private sector banks. But there is shortage of staff in some of the
cooperative banks and the traditional manual banking which is affecting the business and customer
services. People are still unaware of the services provided by the Cooperative Banks due to lack of
advertisement.
There is a need to analyze and pick up early warning signals. A change is needed today in the
cooperative banks which is built on confidence in human capital - the most important of all resources in commitment, creativity and innovation brought about by proactive management, membership and
employees. The ability to capture knowledge and wisdom gives cooperative banks their competitive
advantage. A prerequisite is that participants from all parts of a cooperative organization know and
understand its purpose, core values and visions.
In this way, by keeping in mind the certain shortcomings, appropriate measures to overcome
them should be adopted. So that the real purpose of the Cooperative bank must be realized with a

64

competitive advantage and the gap between the customer perception of the Cooperative Bank and the
other private and public sector bank, i.e. SBOP can be reduced.

BIBLIOGRAPY

65

BIBLIOGRAPHY
a. Books:

i. Kainth Gursharan Singh(1996), Dynamics of Cooperatives in Punjab; Indian Cooperative

Review, Vol. XXXVII, No.1,pp. 38-52
ii.

Kothari C.R.(2007), Research Methodology; revised second edition; pages 71-76, 8485, 100-102

b. Web Pages:
i. http://pbcooperatives.gov.in/PSCB.htm
ii. http://www.pscb.in/index.php?mod=interest_rate&opt=Deposit
iii. http://www.pscb.in/index.php?mod=interest_rate&opt=Loans
iv. http://pbcooperatives.gov.in/pscb_achievements.htm
v. http://www.pscb.in/index.php
vi. http://www.nabard.org/citizen.asp

66

ANNEXURE

67

Questionnaire
Dear respondent,
I would be extremely thankful if you spare some time to answer the following questions. All the
facts disclosed by you will be used for academic purpose only.

Personal details:
a. Name: ______________________________
b. Age:

_____

c. Gender:

Male

Female

d. Occupation: Farmer

Businessman

Salaried Employee

Other

___________________________________________________________________________________
_
1. Which type of account do you have? Please tick.

SB

FD

Both

Other
2. Have you taken ever any loan from this bank?

Yes

No
3. How do you come to know about the schemes and services of the bank?
Personal Visit

Advertisement

4. Which type of rate of interest do you prefer, offered?

Word of Mouth
Yearly

Other

Half yearly

Monthly
5. Do you avail any appreciation from bank for being a good customer?

Yes

No
68

6. In future service of which bank will you prefer?

SBOP

Cooperative

Stick to same

some other

7. What factors motivate you while going for a particular banking service?
Interest rate

Schemes & terms

Popularity of bank

All

Other

8. Do you agree that image or brand of the bank has its influence on the customers?
Agree

Disagree

9. Do you think that computerized Banking is the essential of modern banks?

Strongly Disagree

Somewhat Disagree

Somewhat Agree

Strongly Agree

Neutral

10. Do you think that customer differ in his perception for a Government Bank & private bank?
Strongly Disagree

Somewhat Disagree

Somewhat Agree

Strongly Agree

Neutral

11. Indicate your level of preference for the following statements regarding the bank.

Schemes Offered

Strongly Disagree Somewhat Disagree

Somewhat Agree

Strongly Agree

Neutral

Somewhat Agree

Strongly Agree

Neutral

Somewhat Agree

Strongly Agree

Interest Rate Offered

Strongly Disagree Somewhat Disagree

Neutral

Loan Passing & Repayment Process

Strongly Disagree Somewhat Disagree

69

Flexibility of Schemes

Strongly Disagree Somewhat Disagree

Strongly Agree

Neutral

Somewhat Agree

Strongly Agree

Neutral

Somewhat Agree

Strongly Agree

Neutral

Somewhat Agree

Strongly Agree

Neutral

Somewhat Agree

Strongly Agree

Neutral

Somewhat Agree

Strongly Agree

Advertisement

Strongly Disagree Somewhat Disagree

Somewhat Agree

Bank environment

Strongly Disagree Somewhat Disagree

Neutral

Customer Dealing

Strongly Disagree Somewhat Disagree

Strongly Agree

Number of Staff Members

Strongly Disagree Somewhat Disagree

Somewhat Agree

Transparency of the process

Strongly Disagree Somewhat Disagree

Neutral

Bank Image

Strongly Disagree Somewhat Disagree

Thanks for Your Cooperation

70

71