Report on Marketing at Central Bank of India

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SUMMER INTERNSHIP PROJECT

ON

Marketing of Retail Product

At

In Partial Fulfilment of

PGDM IMG 6

FORE SCHOOL OF MANAGEMENT

Submitted To

Prof. Sanghamitra Buddhapriya

Faculty, FORE School of Management

Submitted By

Nitin Shivnani

IMG 6, Roll No. 063033

FORE SCHOOL OF MANAGEMENT

June 2013

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CERTIFICATE

This is to certify that Mr. Nitin Shivnani Roll No. 063033 has completed his summer

internship at Central Bank of India, Agra and has submitted this project report

entitled Marketing of Retail Products towards part fulfilment of the requirement for

the award of the Post Graduate Diploma in Management (IMG-6) 2012-2014.

This report is the result of his own work and to the best of my knowledge, no part of it

has earlier comprised in any other report, monograph, dissertation or book. This

project was carried out under my overall supervision.

Date:

Place:

Mr. R.K. Jain

Regional Manager

Central Bank of India

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CERTIFICATE

This is to certify that Mr. Nitin Shivnani Roll No. 063033 has completed his summer

internship at Central Bank of India, Agra and has submitted this project report

entitled Marketing of Retail Products towards part fulfilment of the requirement for

the award of the Post Graduate Diploma in Management (IMG-6) 2012-2014.

This report is the result of his own work and to the best of my knowledge, no part of it

has earlier comprised in any other report, monograph, dissertation or book. This

project was carried out under my overall supervision.

Date:

Place:

Prof. Sanghamitra Buddhapriya

Internal Faculty Guide

FORE School of Management

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ACKNOWLEDGEMENT

I, Nitin Shivnani, have taken efforts to work on a project Marketing of Retail

Product of Central Bank of India. However, it would not have been possible

without the kind support and help of many individuals. I would like to extend my

sincere thanks to all of them who helped me directly and indirectly in completion of

this project successfully.

First of all I would like to extend my utmost regard to Central Bank of India who

provided me such a great opportunity and gave me a chance to work in such world

class organizations. I am highly indebted to my project guide, Mr. R.K. Jain,

Regional Manager, Central Bank of India, without whom guidance I would not

have been able to complete this project successfully. I would like to thank him and

Mr. A.K. Agarwal, Zonal Manager, Central Bank of India for allotting me this

project and their continuous support and guidance.

I would also like to thank Mr. S.K. Singh, Assistant Manager, HRD and Mr.

Saurabh Singh Sawant, Risk Manager and all other company personnel, who

extended their kind support and guidance whenever I needed.

I would like to take this opportunity to express my gratitude to my faculty mentor,

Prof. Sanghamitra Buddhapriya, FORE School of Management, for her

continued guidance and support. Her encouraging words motivated me towards

achievements of objectives and work harder to complete the project successfully.

My thanks and appreciations also go to all the people who have willingly helped

me out with their abilities.

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EXECUTIVE SUMMARY

Central Bank of India, a government-owned bank, is one of the oldest and largest

commercial banks in India. The bank has 4294 branches and 270 extension

counters across 27 Indian states and three Union Territories. The project aims at

developing strategies for Retail Products of Central Bank of India so as to make it

more popular within the city Agra.

In this we have taken products of Central Bank and compared it with the products of

5 other renowned bank in the city i.e. HDFC Bank, ICICI Bank, Punjab National

Bank, State Bank of India and YES Bank. I have also done consumer behaviour

analysis so as to know what general public thinks, is best for them. On this

comparative study of products through secondary sources, recommending ways of

how to improve your products and through consumer behaviour analysis through

primary source, telling what general public expect from bank. Through consumer

behaviour analysis we got to know which all banks are performing well in Agra.

For Consumer behaviour analysis, I made a questionnaire which was filled by the

people using these retail products of different banks. Then on this result, I applied

SPSS Software through which we got to know the lagging points of Central Bank of

India. On that basis giving recommendation, so as to improve bank position in mind

of general public and increasing the banks profitability.

Once these lagging points are overcome then Central Bank of India would also be

among the leading banks, having maximum business in city Agra.

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TABLE OF CONTENTS

CERTIFICATE...................................................................................................... i

CERTIFICATE...................................................................................................... ii

ACKNOWLEDGEMENT....................................................................................... iii

EXECUTIVE SUMMARY..................................................................................... iv

TABLE OF CONTENTS....................................................................................... v

LIST OF TABLES................................................................................................ vii

INTRODUCTION................................................................................................... 1

Background...................................................................................................... 1

Major Highlights................................................................................................ 3

Achievements................................................................................................... 4

Objective........................................................................................................... 5

Assumptions (Banks)........................................................................................ 5

ICICI Bank....................................................................................................... 6

State Bank of India.......................................................................................... 6

HDFC Bank..................................................................................................... 7

YES Bank........................................................................................................ 7

Punjab National Bank...................................................................................... 8

Retail Product.................................................................................................... 9

METHODOLOGY.................................................................................................. 10

Research Design Procedure............................................................................. 10

Analysis....................................................................................................... ...... 12

Primary Data.................................................................................................... 12

Secondary Data................................................................................................ 14

Retail Products............................................................................................... 14

Deposits...................................................................................................... 14

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Saving Account...................................................................................... 14

Recurring Deposits................................................................................ 15

Current Account..................................................................................... 16

Recommendations................................................................................. 16

Loans.......................................................................................................... 16

Mortgage Loan....................................................................................... 16

Vehicle Loan........................................................................................... 18

Home Loan............................................................................................. 21

Education Loan....................................................................................... 23

Gold Loan............................................................................................... 25

Recommendations.................................................................................. 26

Ancillary Services......................................................................................... 27

Corporate Internet Banking..................................................................... 27

Recommendations.................................................................................. 28

Third Party Services..................................................................................... 29

Bankassurance........................................................................................ 29

Mutual Funds........................................................................................... 30

Recommendations................................................................................... 31

RESULTS............................................................................................................... 32

CONCLUSIONS...................................................................................................... 34

RECOMMENDATION............................................................................................. 35

REFERENCE.......................................................................................................... 38

ANNEXURE............................................................................................................ 39

Questionnaire................................................................................................. 39

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LIST OF TABLES

Description Page No.Segmentation of Branches 1

Major highlights about the Bank 4Factors that are being checked through questionnaire 11

Case Processing Summary 12Reliability Statistics 12

Reliability Test for each Banks 13Reliability Test for each Dimension 14

Recurring Deposits interest rates in different banks 15Interest rates for Mortgage loans of State Bank of India 18

Interest rates for Mortgage loans of Punjab National Bank 18Interest rates for Vehicle loans of Central Bank of India 19Repayment for Vehicle loans of Central Bank of India 19

Interest rates for Vehicle loans of ICICI Bank (New Car) 20Interest rates for Vehicle loans of ICICI Bank (Old Car) 20Interest rates for Vehicle loans of State Bank of India 20

Interest rates for 2- Wheeler loans of State Bank of India 20Interest rates for Vehicle loans of State Bank of India (Used Cars) 21

Interest rates for Vehicle loans of Punjab National Bank 21Interest rates for Home loans of Central Bank of India 21

Interest rates for Home loans of ICICI Bank 22Interest rates for Home loans of State Bank of India 22

Interest rates for Home loans of Punjab National Bank 22Interest rates for Education loans of Central Bank of India 23Interest rates for Education loans of Punjab National Bank 24

Interest rates for Education loans of State Bank of India 24Interest rates for loans against Gold of ICICI Bank 26

Interest rates for loans against Gold of State Bank of India 26Result of the survey by SPSS 28

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INTRODUCTION

Background

Indias banking sector has seen large growth, and is regarded as one of the best in

the developing world. That is because we had adopted a policy measure quite some

time ago unlike many other developing countries to follow the best international

standards, both for public sector and private sector banks. That is very important in

terms of capital adequacy, provisioning of bank loans, etc.

Today, Indias commercial banking sector is a sound, rule-abiding system that meets

all the criteria of a good banking system. Non-performing assets, or NPAs, are better

in comparison with several countries. Even in terms of interest rate spread the cost

of banking is how much you charge above the minimum interest rate we compare

quite favourably with the rest of the world. We did not adopt the kind of subsidiaries,

collaterals and investment banking systems that some parts of the world such as the

US adopted. This is why in the 2008 crisis, we did not go haywire, though it did affect

the profits of our banks. Now, other countries, too, are considering a conservative,

straightforward banking system.

Central Bank of India, a government-owned bank, is one of the oldest and largest

commercial banks in India.

Table 1: Segmentation of Branches

Total Branches* 4294

Rural 1559

Semi Urban 1169

Urban 830

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Metropolitan 736

ATMs 2523

USBs 3612

Figure 1: Branch Segmentation

Source: Central Bank of India

Last year i.e. 2012-13, CBI has opened 283 branches in the country.

*A Real PAN India bank with presence in 568 districts out of 642 districts of the

country.

The bank has 4294 branches and 270 extension counters across 27 Indian states

and three Union Territories.

In India there is total 92485 branches of different banks.

Rural36%

Semi Urban27%

Urban20%

Metropolitan17%

Branch Segmentation

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At present, Central Bank of India has one overseas office, which is a joint venture

with Bank of India, Bank of Baroda, and the Zambian government. The Zambian

government holds 40 per cent stake and each of the banks has 20 per cent.

Bank has designed various products to cater the different needs of their variety of

customers, which includes commercial loans, retail loans, credit cards, prepaid

cards, yatra cards, insurance tie ups, mutual funds tie ups, gold and silver coins etc

to meet all their business and personal financial requirements.

Central Bank provide its customers with 4 type of products like

Deposits

Loans

Third Party Services

Ancillary Services

These days banking products are specially designed keeping customers segment

and relation in mind. Retail banks provides e-banking facilities for their high net worth

and techno-savvy customers which will enables to do the banking transactions from

anywhere in the world without physically going down to the branch.

Major Highlights FY 13

Increase/ decrease

over 2012

Net Profit Rs 1015 crore 90.43% Inc

Net NPA Rs 4988 crore 2.90% Dec

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Gross NPA Rs 8456 crore 4.80% Dec

Total Business Rs 402272 crore 15.96% Inc

Total Deposits Rs 226038 crore 15.22% Inc

Aggregate Core

Deposits

Rs 170953 crore 27.84% Inc

Advances Rs 176234 crore 16.92% Inc

Table 2: Major highlights about the Bank

Achievements

During the year Bank has added 847 ATMs to reach 2,529 ATMS

concentrating in Tier II and Tier III towns.

Share of Electronic transaction increased from 13.37% to 30% of total

transactions during the year.

Debit Card base doubled from 21 lacs to 42 lacs during the year.

During the year Internet banking customer base increased from 1.81 lacs to

6.02 lacs registering an impressive growth of 233%.

Direct Benefits Transfer successfully implemented in 6 districts.

Bank stood 2nd in mobilizing insurance premium amongst all Bancassurance

partners of LIC with Y-o-Y growth of 32%. Bank has canvassed 1,49,668

policies with premium of Rs. 238 crores.

Under general insurance business, Bank has mobilized 1,89,956 policies with

premium collection of Rs.83crore with Y-o-Y growth of 38%.

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Bank has launched new cards viz. World Credit Card, IDA Co Branded

Credit Card and Big Cinema Credit Card.

Objective

The objective of this research is Marketing of the retail products of Central Bank of

India. As these retail products are a major source of income for any bank so through

this study, suggest ways how Central Bank should market their products so as to

attract more customers and what all they must include to improve their products

performance in comparison to other banks product.

I would be covering 3 aspects in this report:

Developing market strategies of Retail Products for Central Bank of India.

Comparative study of products for 6 different banks and recommending ways

if there is room for improvement.

Comparative analysis of consumer expectation in terms of 4 dimensions i.e.

customer orientedness, convenience, tangibles and competence.

Assumptions

Banks

My study would be limited to six banks including Central Bank of India. I would be

comparing the products of these six banks. In this, i have taken three private sector

banks i.e. HDFC Bank, ICICI Bank and YES Bank and two public sector banks i.e.

Punjab National Bank, State bank of India other then Central Bank of India.

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These all banks are the leading banks and are preferred by most of the people now

days. And most of our questionnaires are filled by the customer of these banks.

About ICICI Bank

ICICI Bank is India's largest private sector bank with total assets of Rs. 5,367.95

billion (US$ 99 billion) at March 31, 2013 and profit after tax Rs. 83.25 billion (US$

1,533 million) for the year ended March 31, 2013. The Bank has a network of 3,130

branches and 10,486 ATMs in India, and has a presence in 19 countries, including

India.

ICICI Bank offers a wide range of banking products and financial services to

corporate and retail customers through a variety of delivery channels and through its

specialised subsidiaries in the areas of investment banking, life and non-life

insurance, venture capital and asset management.

About State Bank of India

State Bank of India is India's largest bank with a network of over 15000 branches

and 5 associate banks located even in the remotest parts of India.

State Bank offers you the convenience of over 27500 ATMs in India, already the

largest network in the country and continuing to expand fast!

This means that you can transact free of cost at the ATMs of State Bank Group (This

includes the ATMs of State Bank of India as well as the Associate Banks namely,

State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore,

State Bank of Patiala, and State Bank of Travancore), using the State Bank Cash

Plus card.

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SBI has 27,000+ ATMs (25,000th ATM was inaugurated by the then Chairman of

State Bank Shri O.P. Bhatt on 31 March 2011, the day of his retirement); and SBI

group (including associate banks) has about 45,000 ATMs. SBI has become the first

bank to install an ATM at Drass in the Jammu & Kashmir Kargil region. This was the

Bank's 27,032nd ATM on 27 July 2012.

About HDFC Bank

HDFC Bank Limited is an Indian financial services company based in Mumbai,

Maharashtra that was incorporated in August 1994. HDFC Bank is the fifth or sixth

largest bank in India by assets and the first largest bank by market capitalization as

of November 1, 2012. The bank was promoted by the Housing Development Finance

Corporation, a premier housing finance company (set up in 1977) of India. As on

May 2013, HDFC Bank has 3,062 branches and 10,743 ATMs, in 1,568 cities in

India, and all branches of the bank are linked on an online real-time basis. The

Banks total balance sheet size increased by 18.5% to ` 400,332 crores as of March

31, 2013 from ` 337,909 crores as of March 31, 2012.

About YES Bank

YES BANK, India's fourth largest private sector Bank, is an outcome of the

professional entrepreneurship of its Founder, Rana Kapoor and his highly competent

top management team, to establish a high quality, customer centric, service driven,

private Indian Bank catering to the Future Businesses of India. YES BANK is the

only Greenfield license awarded by the RBI in the last 17 years, associated with the

finest pedigree investors.

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Today, YES BANK has a widespread branch network of over 425 branches across

275 cities, with 950+ ATMs and 2 National Operating Centers in Mumbai and

Gurgaon.

YES BANK has been recognized amongst the Top and Fastest Growing Banks in

various Indian Banking League Tables by prestigious media houses and Global

Advisory Firms, and has received several national and international honours for our

various Businesses including Corporate Finance, Investment Banking, Treasury,

Transaction Banking, and Sustainable practices through Responsible Banking. The

Bank has received numerous recognitions for its world-class IT infrastructure, and

payments solutions, as well as excellence in Human Capital.

About Punjab National Bank

With over 72 million satisfied customers and 5937 domestic branches, PNB has

continued to retain its leadership position amongst the nationalized banks. The Bank

enjoys strong fundamentals, large franchise value and good brand image.

PNB is the largest nationalised Bank in the country in terms of Branch

Network, Total Business, Advances, Operating Profit and Low Cost CASA

Deposits. Total business crosses Rs. 7.00 lac crore in FY 2012-13. The CASA

deposits share to the Total Deposits of the Bank was at 40% as on April 2013.

Towards developing a cost effective alternative channels of delivery, the Bank with

more than 6050 ATMs has the largest ATM network amongst Nationalized Banks.

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Products

In any commercial bank there are basically four type of retail products i.e. deposits,

loans, third party services, and ancillary services.

Deposits Saving Deposit , Recurring Deposit, Term Deposit, NRI Deposit

Loans Housing loan, Vehicle loan, Personal loan, Mortgage loan, education

loan, Gold loan, reverse mortgage loan.

Third party services Life insurance, Mutual funds, Demat Services.

Ancillary Services - Internet banking, credit cards, debit cards, drafts.

On all these products, comparison would be done among these six banks and then

required measures would be suggested.

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METHODOLOGY

Research Design Procedure

The research would include comparison of retail products catered by Central Bank of

India from that of different leading banks and through this, telling the actual position

of Central Bank and ways to how they can improve their product and make it more

attractive. For this research the procedure we are going to take are:

Preparing a questionnaire to know the consumer behaviour towards different

banks product and services they offer. By this we would be able to say which

factor plays a major role in attracting consumer and on what should Central Bank

of India work.

Factors on which consumer behaviour would be checked are good and fast

services, rate of interest on investment, ambience of bank, consistent in its

operations, advance technology, connectivity, fast disposal of proposals,

customer friendly and easiness/simplicity in conducting banking operation.

Questionnaire comprised of 15 general questions about bank which can be

categorized into four dimensions:

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Factor 1:

Customer

Orientedness

Factor 2:

Competence

Factor 3:

Tangibles

Factor 4:

Convenience

Prompt Service Responsiveness Physical Facilities Branch Locations

Courteousness Right Service Materials ATM Network

Knowledge Dependability

Operating hours Service Timing

Personal attention Safety

Ability to

understand

Table 3: Factors that are being checked through questionnaire

Our target segment were people who use retail products of different banks

and by getting the questionnaire filled by them, we got their view point of what

they prefer the most. Questionnaire is attached at last.

For getting my questionnaire filled, I have gone to different banks branches

and got the questionnaire filled by the general public and also by my

neighbours and friends.

This data was entered into excel sheet and SPSS software was applied for

checking the reliability.

Also I have taken some products of Central Bank and compared with other

banks product and this data was mostly collected from secondary sources

such as internet by assessing particular bank site and pamphlets of that

banks product. Some data was also collected by going to that banks branch

and asking the concerned person dealing with that retail product.

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After comparing the products, giving suggestions on how they could improve

their product and make more out of it.

Analysis

Primary Data

The sample size is of 149 i.e. the questionnaire was filled by 149 people. Our target

segment were the general public using these retail products.

Table 4: Case Processing Summary

N %

Cases

Valid 149 100.0

Excludeda 0 .0

Total 149 100.0

Table 5: Reliability Statistics

Cronbach's

Alpha

N of Items

.893 15

In statistics, Cronbach's (alpha) is a coefficient of internal consistency. It is

commonly used as an estimate of the reliability of a psychometric test for a sample

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of examinees Cronbach's alpha is widely believed to indirectly indicate the degree to

which a set of items measures a single unidimensional latent construct.

As value of Cronbachs Alpha is 0.893 i.e. greater then 0.7, this mean our

questionnaire is reliable for fetching the right data.

Reliability (Cronbach's alpha) for the modified SERVQUAL scale was tested for each

of the six banks and for the entire sample.

Bank Cronbachs Alpha

Central Bank of India 0.707

HDFC Bank 0.717

ICICI Bank 0.851

Punjab National Bank 0.897

State Bank of India 0.914

YES Bank 0.655

Total Pilot Study 0.893

Table 6: Reliability Test for each Banks

It can thus be seen that the reliability figures are high, all above the recommended

lower limit of 0.70 except that of YES Bank. This is due to small sample size of each

bank and YES bank is considered good in mid sized bank while other 5 are large

sized banks.

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Dimensions Cronbachs Alpha

Customer Orientedness 0.854

Competence 0.776

Tangibles 0.717

Convenience 0.771

Table 7: Reliability Test for each Dimension

These all dimensions are also fulfilling the reliability test. By this we can say that

through this questionnaire, we can extract the right result.

Analysis of Secondary Data

Retail Products

Deposits:

Saving account

Central Bank of India -

Comprises of premium saving account, Cent Bal Bhavishya and Cent bachat khata.

Savings Deposit Interest rate 4.00% p.a.

Minimum Deposits

In Rural & Semi Urban Branches: Rs.500

In Urban & Metro Branches Rs.1000

Other Banks

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ICICI Bank 4.00% p.a.

Punjab National Bank 4.00% p.a.

HDFC Bank 4.00% p.a.

State Bank of India 4.00% p.a.

YES Bank is the first bank to offer differentiated rates on savings account following

RBIs deregulation of savings account rates in October 2011. Bank offers a 7%

interest rate on savings account of balances above 100,000 and 6% for balances

below ` 100,000.

Recurring Deposits

Time CBI HDFC ICICI SBI PNB YES

6

months-

364 days

7.75 7.50-8.00 7.00-7.25 6.50 7.50 8.25-8.75

1-2 years 9.00-

9.15

9.00-8.75 7.50-9.00 8.75 8.75 8.75

2-3 years 8.75 8.75 8.75 8.75 8.75 8.75

3-5 years 8.50 8.75 8.75 8.75 8.75 8.75

Above 5

years

8.50 8.25 8.50 8.75 9.00 8.75

Table 8: Recurring Deposits interest rates in different banks

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Current Account

All banks provide almost same facilities and features for Current Account.

Recommendation:

CASA is one of the major source of income for Banks so almost every bank is

working on it. It is the major source of profitability. So Central Bank should focus

on it and try to have as many customers.

This can be done by arranging camps and awareness programmes, where bank

representatives should try to convince people and tell them what benefits they

would be having if they open their account in our bank.

It can be seen through an article that HDFC Bank's retail services have become

by and large the best in India and since the contribution to CASA i.e. total

number of current and savings account of more than 50%, making HDFC BANK

India's No.1 Private Sector Bank.

Easing the process of Know your Customer so that a person interested in

opening an account dont get irritated by the tedious formalities.

LOANS

Mortgage Loans


Cent Mortgage

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Purpose - Loan against mortgage of immovable property located in

metro/urban/semi urban/rural centres. Personal or business expenses but not for

speculative purpose.

Eligibility Businessmen, Traders, professionals & self employed persons,

proprietary firms, partnership firms (excluding traders or partnership firms where

HUF is a partner), companies (excluding NBFCs)

Facility Term loan & Overdraft.

Amount of Loan Minimum of Rs 1 lakh & Maximum of Rs 1000 lakh.

Security EM of non encumbered property having market value of at least 200%

of the loan amount.

Rate of Interest Base rate + 4.50% irrespective of TL/OD/Tenor.

Repayment 120 EMIs from next month

For State Bank of India

Loan against Mortgage of Immovable Property

Size of Credit Limit

(Term Loan)

Rate of Interest

Upto Rs. 1,00,00,000/- 5.25% above Base Rate Floating,

currently 14.95% p.a.

Above Rs. 1,00,00,000/- 5.50% above Base Rate Floating,

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currently 15.20% p.a

Table 9: Interest rates for Mortgage loans of State Bank of India

For Punjab National Bank

Less then 3 years More then 3 years

BR+ 4.75% BR + 4.75% + TP

Table 10: Interest rates for Mortgage loans of Punjab National Bank

Public Sector Bank loans are more beneficial then private sector because of no extra

payment and hidden cost.

In ICICI, HDFC and YES Bank, interest rate and fees depend on the amount of loan

and processing fees are also associates with it that too also depending on the total

amount.

Vehicle Loans


Cent Vehicle

Purpose Loan against purchase of 2 wheeler or 4 wheelers solely for the purpose

of personal use.

Eligibility Finance is extended individually or jointly with spouse. Companies/

Proprietorship , partnership firms/ Societies etc.

Maximum Loan Amount

Indian Made Vehicles Rs 20.00 lakhs

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Imported Vehicles Rs 40.00 lakhs

Old Vehicles Rs 10.00 lakhs

Margin

New Vehicle: Upto 20.00lakh 15%

More than 20.00 lakh 25%

Old Vehicle 40% (not more than 3 years old)

Interest Rate

Repayable New Vehicle Second hand Vehicle

Two Wheeler BR + 1.0%

Four Wheeler BR + 0.50% BR + 1.50%

Table 11: Interest rates for Vehicle loans of Central Bank of India

Present Base Rate 10.25% p.a.

Repayment

4 Wheeler Maximum 84 months

2 Wheeler Maximum 48 months

Table 12: Repayment for Vehicle loans of Central Bank of India

For ICICI Bank

Tenure of

credit facility

Up to 23

months

24-35

months

36-60

months

Type of credit Rate of interest

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facility

New Car

Loans

15.75% to

16.50%

13.75% to

15.50%

11.50% to

14.25%

Table 13: Interest rates for Vehicle loans of ICICI Bank (New Car)

Type of credit facility Rate of interest

Used Car Loans 16.50% to 18.00%

Table 14: Interest rates for Vehicle loans of ICICI Bank (Old Car)


Tenure Rate of Interest

For all tenures For Term Loan and Overdraft:

0.75% above Base Rate, i.e. 10.45% p.a.

Table 15: Interest rates for Vehicle loans of State Bank of India

Two - Wheeler Loan


Up to 3 years 8.25% above Base Rate i.e. 17.95% p.a.

Table 16: Interest rates for 2- Wheeler loans of State Bank of India

Used Vehicles


Up to 3 years 7.25% above Base Rate i.e. 16.95% p.a.

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Above 3 yrs 7.50% above Base Rate i.e. 17.20% p.a.

Table 17: Interest rates for Vehicle loans of State Bank of India (Used Cars)


Less then 3 years More then 3 years

BR + 1.00% BR + 1.50%

Table 18: Interest rates for Vehicle loans of Punjab National Bank

Home Loan


Purpose Loan against construction/ acquiring of new or existing house/ flat not

older than 30 years.

Extension in the existing flat.

For repairs/ renovation/ alteration in the existing flats

Purchase of plot for construction of house with composite plan.

Quantum Maximum limit is Rs 50 crore.

Rate of Interest

Table 19: Interest rates for Home loans of Central Bank of India

Upto Rs 30 lakh Rs 30 lakh to Rs

75 lakh

Above Rs 75 lakh

BR BR BR + 0.25%

Base Rate 10.25% p.a.

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Repayment Maximum of 25 years

For ICICI Bank

Initial Tenor HL Rs. 3.0 million

2 Year 10.25% 10.50%

3 Year 10.50% 10.75%

5 Year 10.75% 11.00%

Table 20: Interest rates for Home loans of ICICI Bank


Loan Amount Linkage with Base Rate

over the tenor of the

loan

Effective Rate

Upto Rs. 30.00 lacs 0.25% above Base Rate 9.95% p.a.

Above Rs. 30.00 lacs 0.40% above Base Rate 10.10% p.a.

Base Rate= 9.70% p.a.

Table 21: Interest rates for Home loans of State Bank of India


Upto 75 lakhs Above 75 lakhs

Interest Rate BR BR + 0.25%

Base rate 10.25% p.a.

Table 22: Interest rates for Home loans of Punjab National Bank

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Education Loan


Cent Vidyarthi

Purpose Loan for pursuing higher studies in India & abroad.

Eligibility Student should be an Indian National having secured admission to

Professional/ Technical courses through entrance test / selection process. Teachers

trainings, Nursing course, B Ed course are also eligible.

Maximum Loan Amount Rs 10 lakhs for studies in India.

Rs 20 lakhs for studies Abroad.

Security

Up to Rs 4 lakhs No security

Above Rs 4 lakhs and up to Rs 7.5 lakhs collaterals in the form of a satisfactory

third party guarantee.

Above Rs 7.5 lakhs Collateral security of suitable value or Co obligation of

parents/ guardians/ third party along with the assignment of future income of the

student for payment of instalments.

Rate of Interest:-

Type of Borrower Rate of Interest Special concession for

IIM Student

Male Student BR + 2.0% BR + 0.5%

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Female Student, SC/ST

& Minority Community

BR+ 1.5% BR

Table 23: Interest rates for Education loans of Central Bank of India

Repayment Repayment to commence 12 months after completion of studies or 6

month after securing jobs whichever is earlier. Maximum period 5 to 7 years.

Repayment on EMI basis.


Repayable in less then

03 yrs

Repayable in 03 yrs &

above

Vidyalakshapurti

Loan upto Rs 4 lacs BR + 3.00% BR + 2.50% + TP

Loan over Rs 4 lac to upto

7.50 lacs

BR + 4.00% BR + 3.50% + TP

Loan over Rs 7.50 lac BR + 3.50% BR + 3.00% + TP

Table 24: Interest rates for Education loans of Punjab National Bank


Table 25: Interest rates for Education loans of State Bank of India

Loan Amount Loan Amount

For loans upto Rs.4 lacs 3.50% above Base Rate, currently

13.20% p.a.

Above Rs.4 lacs and upto Rs.7.50 lacs 3.75% above Base Rate, currently

13.45% p.a.

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Above Rs.7.50 lacs 1.75% above Base Rate, currently

11.45% p.a.

*(0.50% concession in interest for girl student)

* (1% concession for full tenure of the loan, if interest is serviced promptly as and

when applied during the moratorium period, including course duration)

Gold Loan


Cent Personal Gold Loan Scheme

Purpose Loan taken for meeting urgent personal expense like marriage/ medical/

educational needs etc.

Security Pledge of gold ornaments of 22 carat purity or Gold coins sold by our

Banks.

Facility Overdraft/ Term Loan

Quantum Minimum: Rs 10,000

Maximum: Rs 20,00,000

Rate of Interest For overdraft: BR+ 2.00%

For Term Loan: BR + 1.00%

Repayment

In case of Term Loan : 12 to 36 months

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In case of Overdraft: To be reviewed annually

For ICICI

Type of credit facility Rate of interest

Personal Loans 14.00% to 19.00%

Table 26: Interest rates for loans against Gold of ICICI Bank


Size of Credit Limit Rate of Interest

Upto Rs. 1,00,000/- 4.25% above Base Rate Floating,


Above Rs. 1,00,000/- 4.75% above Base Rate Floating,


Base Rate 9.70% p.a.

Table 27: Interest rates for loans against Gold of State Bank of India

For HDFC Bank

Rate of Interest varies from 14.50 to 22.25%

Recommendations:

The interest rates of every bank are almost same, maximum variation is of 0.5%

p.a. in that particular segment. Public Sector banks have low interest rates as

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compared to private sector banks. This difference is because of the services

provided by private sector are more customer oriented.

Central Bank should majorly focus on NPA as this is affecting both the

profitability and provisioning of the bank. We need to keep provisioning money

separate for NPA which cant be used for other purposes.

Bank should arrange recovery camps at regular intervals so as to reduce Non

Performing Assets.

Bank should also give weightage to retail portfolio as there probability of

occurrence of NPA is less and Central bank has highly invested in commercial

sector which are not or less performing these days.

ANCILLARY SERVICES

Corporate Internet Banking

For Central Bank of India

Features

View Transactions

Download Statements

Enquire status of Cheques

Transfer Funds through RTGS/ NEFT/ ECS

Stop Payment of Cheques

Online Payment of Taxes (CBDT/ CBEC/ LOCAL Taxes)

For Corporate in addition to these, we also offer Bulk Upload Facility.

28 | P a g e

Different Business Card like

Visa Platinum Cards

Visa Gold Cards

Master Card Gift Card

Central Card

Debit Cards

Recommendations:

These facilities are same for almost every bank. The major factor which makes

the difference is the service provided by the bank employees to the customer.

Good service encourages people to use these ancillary services like internet

banking, ATMs, etc.

Bank should encourage and promote their customers to use these services as it

saves lot of time and money. People dont have to wait for long time in lines for

depositing and withdrawing money and cost of bank also get reduced. According

to survey, dealing with the customer in a bank branch cost around Rs 200 and if

the person go to ATM for these little services such as mini statement, withdrawal

and deposits then the total cost incurred to the bank is not more then Rs 20.

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THIRD PARTY SERVICES

Bankassurance

With a view to provide one stop banking to the valued customers, Central Bank of

India has undertaken selling and distribution of Life Insurance Products and General

Insurance products of most trusted insurers through its branches. The Bank has tied-

up with Life Insurance Corporation of India to undertake life insurance business and

Chola MS General Insurance Co.Ltd. to undertake non-life insurance as corporate

agent of both the insurance companies on fee basis without any risk participation.

Bank has trained a good number of its officers who have been authorized by IRDA to

act as specified persons for selling insurance products.

LIC has a policy for every age, a scheme for every family, a plan for every need.Be it

risk cover, provision for child's education, marriage, health care or pension, LIC has

40 plans to suit every need.

Some of the most popular plans/products are as under:

Unit linked plan

Whole life plan

Children's plan

Money back plan

Endowment

Pension

Health Insurance

Group Insurance plan

Jeevan Plus

30 | P a g e

Bima bachat.

Chola MS General Insurance Co.Ltd.(General Insurance) products

Some of the products are as under:

Fire Insurance

Burglary Insurance

Engineering Insurance

Motor Insurance

Rural Insurance

Overseas Mediclaim Insurance

Package Insurance

Travel Insurance plan

Liability Insurance

Group personal Insurance

Group Insurance

Individual Mediclaim

These products are sold through all our branches throughout the country besides

other products of LIC of India and Chola MS General Insurance Co.Ltd

Customers may bank on us for their insurance needs too.

Mutual Funds

At Central Bank, our AMFI (Association of Mutual Funds of India) certified advisors

would help you to select the most suitable Mutual Fund schemes for your portfolio

through asset allocation strategies.

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Through the selected branches of Central Bank of India you can invest in various

schemes of UTI Mutual Fund , TATA Mutual Fund , Franklin Templeton Mutual

Fund, Reliance Mutual Fund, Sundaram Mutual Fund, Kotak Mahindra Mutual Fund,

ICICI Prudential Mutual Fund, DSP Blackrock Mutual Fund, IDFC Mutual Fund, L&T

Mutual Fund and Principal Pnb Mutual Fund . All these fund houses have decent

performance record.

Recommendations:

Central Bank should market their third party policies well so that people get to

about different schemes. Private sector banks through third party services earn a

good sum on a commission basis and provide their customers with an

investment option at one point store. Central Bank has a tie up with LIC and

Chola MS Insurance. They should try to make best use out of it.

There should be proper officials hired for marketing purpose who can represent

Central Bank. At each branch, some people should be hired specifically for the

purpose of guiding the public about different products and telling what would be

best for them.

Doing advertisement of their major products through banners at crowded places

and through television advertisements so that people get to know about it.

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RESULTS

When we compared our 6 banks on these four dimensions then the result came out

to be:

CBI HDFC ICICI PNB SBI YES

Customer

Orientedness

0.722 0.855 0.701 0.908 0.858 0.757

Competence 0.331 0.807 0.796 0.738 0.863 0.710

Tangibles 0.496 0.724 0.787 0.842 0.735 0.796

Convenience 0.796 0.764 0.846 0.726 0.898 0.631

Table 28: Result of the survey by SPSS

By this result we can see that Central Bank of India is lacking in Competence and

tangibles. Competence covers response of the bank employee towards customers

problem and whether services are being delivered on time or not. Tangibles cover

the physical facilities available at branch premises.

In competence, performance of Central Bank is not that satisfactory as compared to

other banks. According to the survey, people are dissatisfied due to unusual delay in

services and response of bank employees, which is not that welcoming to general

public which in turn is creating a feeling of bitterness among them.

In tangibles, the branch premises are not that attractive as they are not properly

maintained. There should be pamphlets available in branches so that people get to

know about banks different product.

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But the good point is Central Bank retail products are customer oriented. If they are

well marketed then the bank can touch heights in Agra. The bank needs to work on

two things:

Firstly improving their service by having a regular training and development program

for employees so that they learn the skill of convincing the public and

Secondly installing banners at crowded place and even in banks so that public get to

know about the products.

In YES Bank, convenience factor is lagging, as it is a bank opened 20 years back. It

is considered as the best mid sized bank but till date it has less number of branches

and ATMs. This makes its score low at that dimension.

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CONCLUSION

In this report, Marketing of Retail Products of Central Bank of India particularly in

Agra, various studies have been done. The study comprise of comparative study of

products for different banks with that of Central Bank of India. The factors in which

Central Bank was lacking are highlighted and recommendations are given.

The comparative study showing consumer behaviour was also done through a

survey. The SPSS software was applied on this excel data and through it, we got the

result of what people think about these banks. The shortcomings of Central Bank

have been shown through the result and the way of improving it also has been

recommended.

35 | P a g e

RECOMMENDATION

Deposits

CASA is one of the major source of income for Banks so almost every bank is

working on it. It is the major source of profitability. So Central Bank should focus

on it and try to have as many customers by arranging camps and awareness

programmes, where bank representatives should try to convince people and tell

them what benefits they would be having if they open their account in our bank.

Easing the process of Know your Customer so that a person interested in

opening an account dont get irritated by the tedious formalities.

Loans

The interest rates of every bank are almost same, maximum variation is of 0.5%

p.a. in that particular segment. Public Sector banks have low interest rates as

compared to private sector banks. This difference is because of the services

provided by private sector are more customer oriented.

Central Bank of India should majorly focus on NPA as this is affecting both the

profitability and provisioning of the bank. We need to keep provisioning money

separate for NPA which cant be used for other purposes.

Bank should arrange recovery camps at regular intervals so as to reduce Non

Performing Assets.

Bank should also give weightage to retail portfolio as there probability of

occurrence of NPA is less and Central bank has highly invested in commercial

sector which are not or less performing these days.

36 | P a g e

Ancillary Services

These facilities are same for almost every bank. The major factor which makes

the difference is the service provided by the bank employees to the customer.

Good service encourages people to use these ancillary services like internet

banking, ATMs, etc.

Bank should encourage and promote their customers to use these services

as it saves lot of time and money. People dont have to wait for long time in lines

for depositing and withdrawing money and cost of bank also get reduced.

According to survey, dealing with the customer in a bank branch cost around Rs

200 and if the person go to ATM for these little services such as mini statement,

withdrawal and deposits then the total cost incurred to the bank is not more then

Rs 20.

Third Party Services

Central Bank should market their third party policies well so that people get to

about different schemes. Private sector banks through third party services earn a

good sum on a commission basis and provide their customers with an

investment option at one point store. Central Bank has a tie up with LIC and

Chola MS Insurance. They should try to make best use out of it.

There should be proper officials hired for marketing purpose who can represent

Central Bank. At each branch, some people should be hired specifically for the

purpose of guiding the public about different products and telling what would be

best for them.

Doing advertisement of their major products through banners at crowded places

and through television advertisements so that people get to know about it.

37 | P a g e

According to survey

Firstly, improving their service by having a regular training and development

program for employees so that they learn the skill of convincing the public and

Secondly, installing banners at crowded place and even in banks so that

public get to know about the products.

38 | P a g e

REFERENCE

Manabendra N. Pal (2008), Exploring The Dimensionality Of Service Quality: An

Application Of Topsis In The Indian Banking Industry Asia-Pacific Journal of

Operational Research

https://www.centralbankofindia.co.in/site/indexcbi.aspx accessed on April 15, 2013.

https://www.pnbindia.in/En/ui/Home.aspx accessed on April 22, 2013.

http://www.hdfcbank.com/ accessed on April 24, 2013.

http://www.icicibank.com/index.html accessed on May 10, 2013.

http://www.sbi.co.in/ accessed on May 15, 2013.

http://www.yesbank.in/ accessed on May 20, 2013.

http://www.rbi.org.in/home.aspx accessed on May 25, 2013

http://businesstoday.intoday.in/story/best-banks-2012-indian-banking-

challenges/1/189858.html accessed on April 21, 2013

39 | P a g e

ANNEXURE

Questionnaire

Name *

Age

Bank in which you have an account *

Occupation *

Business

Service

Student

OthersYOUR BANK'S physical facilities are visually appealing. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeMaterials associated with the service, such as pamphlets and statements, are visually appealing atYOUR BANK. *

Strongly Agree

Agree

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Moderate

Disagree

Strongly DisagreeYOUR BANK has convenient branch locations. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeYOUR BANK has a large ATM network. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeWhen you have a. problem, YOUR BANK shows a sincere interest in solving it. *

Strongly Agree

Agree

Moderate

Disagree

Strongly Disagree

41 | P a g e

YOUR BANK performs the service right the first time. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeEmployees of YOUR BANK tell you exactly when services will be performed. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeEmployees of YOUR BANK give you prompt service. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeYou feel safe in your transactions with YOUR BANK. *

Strongly Agree

Agree

Moderate

42 | P a g e

Disagree

Strongly DisagreeEmployees of YOUR BANK are consistently courteous with you. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeEmployees of YOUR BANK have the knowledge to answer your questions. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeYOUR BANK has operating hours convenient to all its customers. *

Strongly Agree

Agree

Moderate

Disagree

Strongly DisagreeYOUR BANK has employees who give you personal attention. *

Strongly Agree

43 | P a g e

Agree

Moderate

Disagree

Strongly DisagreeEmployees of YOUR BANK understand your specific needs. *

Strongly Agree

Agree

Moderate

Disagree

Strongly Disagree

Documents

Report on Marketing at Central Bank of India