1

A

SUMMER INTERNSHIP PROJECT

ON

“MEASURING EFFECTIVENESS OF TRAINING IN THE SURAT PEOPLE’S

CO-OPERATIVE BANK LTD”

Submitted to

S.R. LUTHRA INSTITUTE OF MANAGEMENT

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

In

Gujarat Technological University

UNDER THE GUIDANCE OF

Faculty Guide: Company Guide:

Ms. Parinaz Todiwala Mr. Mukesh Patel

Assistant Professor Chief Manager

(Surat People‘s Co-op Bank)

Submitted by

Mr. CHITRAK M SAWADIYAWALA [Batch No. 2013-15, Enrollment

No. 138050592091]

MBA SEMESTER III

S.R. LUTHRA INSTITUTE OF MANAGEMENT – 805

MBA PROGRAMME

Affiliated to Gujarat Technological University

Ahmedabad

July, 2014

2

Company Certificate

This is certified that Mr. Chitrak Sawadiyawala from S.R. LUTHRA

INSTITUTE OF MANAGEMENT, have carried out the research on the subject

titled “Measuring Effectiveness of Training in The Surat People’s Co-

operative Bank Ltd.” at The Surat People‘s Co-operative Bank under the

supervision of Mr. Mukesh Patel, from June 2014 to August, 2014. I also

certify that, the above mentioned student has carried the research work

satisfactorily.

Place: - Surat

Date: - 22th July 2014

________________

(Name & Designation)

3

Students’ Declaration

I, Mr. Chitrak Sawadiyawala, hereby declare that the report for Summer

Internship Project entitled “Measuring Effectiveness Of Training in The

Surat People’s Co-Operative Bank Ltd” is a result of my own work and my

indebtedness to other work publications, references, if any, have been duly

acknowledged.

Place: Surat

Date: _____________

__________________

(Chitrak Sawadiyawala)

4

Institute’s Certificate

Certified that this Summer Internship Project Report Titled “Measuring

Effectiveness Of Training In The Surat People’s Co-operative Bank Ltd.”

is the bonafide work of Mr. Chitrak Sawadiyawala (Enrollment No.

138050592091), who has carried out the research under my supervision. I

also certify further, that to the best of my knowledge the work reported herein

does not form part of any other project report or dissertation on the basis of

which a degree or award was conferred on an earlier occasion on this or any

other candidate.

Place: Surat

Date: ________________

___________________

(Parinaz Todiwala)

Assistant Professor

___________________

(J. M. Kapadia)

I/C Director

5

PREFACE

In the era of rapid industrialization and technological innovation which has

made Gujarat emerge as industrial state with newer avenues and

opportunities.

As per university, it is must for the student of M.B.A., to prepare report on

practical study by visiting a particular industry to acquire practical as well as

theoretical knowledge pertaining to that industry in different aspects about its

internal environment.

My main focus and study was on “Measuring Effectiveness of Training in

The Surat People’s Co-Operative Bank Ltd.”

I have put up my best efforts and enumerated each possible information after

observing the activities carried over there, to make this report a satisfactory

report.

It was a great opportunity and memorable experience interacting with people

working there, collecting information regarding their job and acquiring

knowledge.

Lastly, I have tried my level best to prepare the best informative report.

6

ACKNOWLEDGEMENT

“With knowledge you

Know the words,

But with experience

You know the world.”

In this, one and a half months of ―ONCE IN A LIFETIME EXPERIENCE‖ I

have learnt a world of things and would really like to thank a few people who

made a difference during this exciting project tenure.

I would like to extend special thanks to Mr. Mukesh Patel (Chief Manager),

Ms. Rajeshree Parikh(Senior Officer) & Ms. Dipti Kapadia (Officer) Surat

People‘s Co-op. Bank, Surat for their support and important guidance.

I would like to thank Gujarat technological university who give me this

opportunity to work on the Summer Internship Program as a part of

Curriculum.

I would also like to my special thanks to Dr. Jimmy Kapadia, I/C Director, who

guide me about my project report.

Furthermore, I would like to thank my Faculty Guide Ms. Parinaz Todiwala for

his excellent guidance throughout the project without whom would not have

been able to complete this project successfully and who was behind me

throughout my project tenure.

Lastly but heartily I am very appreciate that all the respondents are give me

responses and spare their valuable time to fill up my questionnaire.

7

EXECUTIVE SUMMARY

As the management student of GUJARAT TECHNOLOGICAL UNIVERSITY,

AHMEDABAD, there is subject of partial training followed by project report

and also as per the requirement of the MBA study and to do develop our

personal knowledge, for that I have chosen the project report on “Measuring

Effectiveness of Training in The Surat People’s Co-operative Bank Ltd.”

The Surat People‘s Co-operative bank is the ―First Registered Urban Co-

operative Bank‖ of India and among the first 13 Co-operative Banks to get

―Scheduled Bank‖ Status.

The main objective of the study is to analyze and measure the effectiveness

of training in SPB. For this report 100 respondents are been covered from

bank‘s central office, Main branch and udhna branch employee and the

questionnaire is filled up by each employees to know the motivation level and

their performance. Through this research the bank will come to know whether

employees are satisfied or not with the training program.

In order to achieve this aim, both primary and secondary sources of data were

used. This primary data were collected through the administrating

questionnaire. Convenient sampling procedure was used to obtain 100

responses from employees and managers on the training effectiveness in

Surat People‘s Co-Operative bank. All important points such as motivation

level of employees & their communication skills are covered.

In data analysis, the simple mathematical tool such as percentage and charts

were used with the help of MSEXCEL 2007.

The Surat People‘s Bank is performing its role up to the mark and trainees

enjoy the training imparted and it meets the major objectives such as

performance of employees, their skills and knowledge and also helps to

motivate employees and helps in avoiding mistakes.

8

Report

D i g i t a l s i g n e d

Author: Owner

Processing date: Mon, 4.8.2014 19:41:42 CEST

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http://www.christuniversity.in/uploadimages/Chaanakya 4_17.pdf

http://www.sustainable-scotland.net/documents/8621_SSN Newsletter93-

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1 fragment found in a text with the title: "Eternal University", located on:

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TABLE OF CONTENTS

Sr. No.

Particulars Page No.

1. Introduction 1

2. Industry Profile 4

a. Global

b. National

c. State

d. PESTEL

e. Current trends

f. Major Players

g. Major Offerings

6

11

19

20

25

29

32

3. Company Profile 40

a. Company Profile

b. Organogram

c. Divisions/ Departments

d. SWOT

e. Market Position

40

50

51

52

55

34

4. Review of Literature 59

5. Research Methodology 63

a. Problem Statement

b. Research Objective

c. Research Design

i. Type of Design

ii. Sampling

iii. Data Collection

iv. Tools for Analysis

v. Limitations of the Study

63

63

63

6. Data Analysis & Interpretation 66

7. Findings 91

8. Conclusion & Recommendation 94

9. Recommendation 95

Bibliography 96

12

LIST OF TABLES

SR NO.

PARTICULAR TABLE NO.

PAGE NO.

1. Products comes under the category of Retail Banking 2.2 32

2. Products comes under the category of Wholesale Banking 2.3 33

3. Products comes under the category of Treasury Banking 2.4 34

4. SPCBL Profile 3.1 40

5. Board of Director & General Manager 3.2 41

6. Bank Charges on DD 3.3 45

7. Bank Charges on NEFT Services 3.4 46

8. Bank Charges on RTGS Service for Outward Transaction 3.5 47

9. Market Position 3.6 55

10. Gender Respondents 6.1 66

11. Designation of Respondents 6.2 67

12. Department of Respondents 6.3 68

13. Marital Status of Respondents 6.4 70

14. Experience of Respondents 6.5 71

15. Basis of Employed 6.6 72

16. Type of Training 6.7 73

17. Method of Training 6.8 74

18. Training Topics 6.9 76

19. Training Approaches 6.10 78

20. Training Program 6.11 79

21. Quality of Training 6.12 80

22. Helpfulness of Training 6.13 81

23. Motivation Level 6.14 82

24. Training Infrastructure 6.15 83

25. Training Time Duration 6.16 84

26. Training Complaints 6.17 86

27. Trainers Knowledge 6.18 88

13

28. Trainers Preparations 6.19 90

14

LIST OF FIGURES

SR NO.

PARTICULAR FIGURE NO.

PAGE NO.

1. Structure of Indian Banking Industry 2.1 19

2. Organogram 3 50

3. Gender Respondents 6.1 66

4. Designation of Respondents 6.2 67

5. Department of Respondents 6.3 68

6. Marital Status of Respondents 6.4 70

7. Experience of Respondents 6.5 71

8. Basis of Employed 6.6 72

9. Type of Training 6.7 73

10. Method of Training 6.8 74

11. Training Topics 6.9 76

12. Training Approaches 6.10 78

13. Training Program 6.11 79

14. Quality of Training 6.12 80

15. Helpfulness of Training 6.13 81

16. Motivation Level 6.14 82

17. Training Infrastructure 6.15 83

18. Training Time Duration 6.16 84

19. Training Complaints 6.17 86

20. Trainers Knowledge 6.18 88

21. Trainers Preparations 6.19 90

15

CHAPTER 1

INTRODUCTION

16

Introduction

Any organization that wants to succeed, and to continue to succeed, has to

maintain workforce consisting of people who are willing to learn and develop

continuously. Training and developing human capital is tremendously

important in the effective management and maintenance of a skilled

workforce. Training is one of the ways of improving organization‘s

effectiveness. In order to implement right training methods, organization

should be aware of the training methods and their effectiveness. Study

provides conceptual framework of determining which methods to use when

developing training program. The various training methods- both off-the-job

and on-the-job- are described along with their strengths and limitations. Paper

also explores the measurement methods of training evaluation which is very

crucial for the training effectiveness. This study tries to give general overview

of training methods and measurement models.

Training is a part of the human resource development, along with the other

human resources activities, such as recruitment, selection and compensation.

The role of human re-source department is to improve the organization‘s

effectiveness by providing employees with knowledge, skills and attitudes that

will improve their current or future job performance. In order to implement the

right training methods, the training specialist should be aware of the pros and

cons and effectiveness of each training method. Besides, for evaluating

training effectiveness, measurement should be done according to the models.

TRAINING

The verb ―to train‖ is derived from the old French word trainer, meaning ―to

drag‖. Hence such English definitions may be found as; to draw along; to

allure; to cause; to grow in the desired manner; to prepare for performance by

instruction, practice exercise, etc. Training can be described as ―providing the

conditions in which people can learn effectively‖. To learn is ―to gain

knowledge, skill, and ability‖

17

To understand the function of training in a company, it is needed to ask the

question of what training is state for the company. Training is an ―opportunity‖

for learning and it is accomplished by providing employees with opportunities

to learn how to perform more effectively and by preparing them for any

changes in their job. Training focuses on the acquisition of knowledge, skills

and attitudes needed to perform more effectively on one‘s current job. Role of

training may be seen as ―ensuring that the organization has the people with

the correct mix of attributes, through providing appropriate learning

opportunities and motivating people to learn, and thus enabling them to

perform to the highest levels of quality and service‖

TRAINING METHODS Many training techniques are created almost every year by the rapid

development in technology. Deciding among methods usually depends on the

type of training intended, the trainees selected, the objectives of the training

program and the training method. Training is a situational process that is why

no single method is right for every situation. While some objectives could be

easily achieved through one method, other objectives could necessitate other

methods. Many training programs have learning objective in more than one

area. When they do, they need to combine several training methods into an

integrated whole. Training methods could be classified as cognitive and

behavioral approaches. Cognitive methods provide verbal or written

information, demonstrate relationships among concepts, or provide the rules

for how to do something. These types of methods can also be called as off

the-job training methods. On the other hand, behavioral methods allow trainee

to practice behavior in real or simulated fashion. They stimulate learning

through behavior which is best for skill development and attitude change.

These methods can be called as on-the-job training methods. Thus; either

behavioral or cognitive learning methods can effectively be used to change

attitudes, though they do so through different means. Cognitive methods are

best for knowledge development and behavioral methods for skills. The

decision about what approach to take to training depends on several factors

that include the amount of funding available for training, specificity and

18

complexity of the knowledge and skills needed, timeliness of training needed,

and the capacity and motivation of the learner.

To be effective, training method should; motivate the trainee to improve his or

her performance, clearly demonstrate desired skills, provide an opportunity for

active participation by the trainee, provide an opportunity to practice, provide

timely feedback on the trainee‘s performance, provide some means for

reinforcement while the trainee learns, be structured from simple to complex

tasks, be adaptable to specific problems, encourage positive transfer from

training to the job.

19

CHAPTER 2

BANKING INDUSTRY

PROFILE

20

Banking industry Introduction

The bulk of all money transactions today involve the transfer of bank

deposits. Depository institutions, which we normally call banks, are at the

very center of our monetary system.

Banking is the business of a bank or other financial institution. Banking

includes such activities as holding money in saving and checking accounts, as

well as issuing loans and credit. A bank is a financial intermediary.

There are several different types of banks which engage in different types of

banking. Some of these types include: central bank, advising bank,

commercial bank, credit union and investment bank.

It is not uncommon for some banks to offer many different types of services.

For example a bank may offer personal and commercial banking services to

clients.

The banking industry is highly regulated by the government. In 2008, the

banking industry suffered from a crisis caused by risky lending, particularly in

the mortgage loan sector also known as the subprime mortgage crisis.

Though this may be viewed as a setback by some, the banking industry is

continually evolving and offering innovative services to meet client‘s needs.

An example of this is the somewhat recent addition of online banking which is

growing in popularity.

Routine banking activities include paying on checks written by clients,

collecting deposits and issuing loans. Issuing loans and charging interest is

the main source of revenue in the banking industry.

There are many banking channels which clients can use to access accounts

and conduct their business. Some of these include: bank teller at a branch or

retail location, call center or telephone banking, online or mobile banking,

video banking and ATM machines. The oldest bank still operating is located in

Italy. Monte dei Paschi di Siena has been banking since 1472.

21

Definition

Bank is a financial institution which receives deposits from the public and

lends them for investment purpose i.e., deposits of money and advances of

the Main function of banks, but in the era of globalization banks indulges

themselves in many activities like Insurance, Mutual Fund Business and

Investment in Stock Exchanges. These activities of banking are considered as

Para Banking Activities.

Features of banking

1. Money Dealing

2. Acceptance of deposit

3. Grant of loan and advances

4. Payment and withdrawal of deposits

5. Transfer of funds

6. Portfolio management

7. Foreign Exchange dealing

History of Banking

The History of Banking begins with the first prototype banks of merchants in

the ancient world, which made grain loans to farmers and traders who carried

goods between cities. This began around 2000 BC in Assyria and Babylonia.

Later, in ancient Greece and during the Roman Empire, lenders based in

temples made loans and added two important innovations: they

accepted deposits and changed money. Archaeology from this period

in ancient China and India also shows evidence of money lending activity.

Banking, in the modern sense of the word, can be traced to medieval and

early Renaissance Italy, to the rich cities in the north such

as Florence, Venice and Genoa. The Bardi and Peruzzi families dominated

banking in 14th century Florence, establishing branches in many other parts

of Europe. Perhaps the most famous Italian bank was the Medici bank,

established by Giovanni Medici in 1397. The position of the Medici‘s was

eventually taken over by the Fugger sand the Welders. The oldest bank still in

existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which

22

has been operating continuously since 1472. It is followed by Berenberg

Bank of Hamburg (1590).

The development of banking spread from northern Italy through Europe and a

number of important innovations took place in Amsterdam during the Dutch

Republic in the 16th century and in London in the 17th century. During the

20th century, developments in telecommunications and computing caused

major changes to banks' operations and let banks dramatically increase in

size and geographic spread. The financial crisis of 2007–2008 caused many

bank failures, including some of the world's largest banks, and provoked much

debate about bank regulation.

A. Banking Industry at Global level

Both international banks and central banks of the world play an important role

in global banking and global money market operations.

Global banking can be characterized by the types of services international

banks provide that distinguish them from domestic or region banks

1. Facilitate the imports and exports of their clients by arranging trade

financing.

2. Serve their clients by arranging for foreign exchange necessary to conduct

cross-border transactions and make foreign investments.

Assist their clients in hedging exchange rate risk in foreign currency

receivable and payable through forward and options contracts.

Generally also trade foreign exchange products for their own account.

The global banking industry shows its prominence in line with the growth of

world‘s economy. It is not only ―taking deposits from investors at lower interest

rate and loaning out to borrowers at a higher rate‖ that simple, the modern

banking system also have become global industrial powerhouses with a lot of

financial services for both private and commercial perspectives. Although the

international banking market was affected by the financial crises in late 2007,

and IMF estimates that more than $1.3 trillion in bad loans was written off

between 2007 and first half of 2009, the size of global banking industry shows

23

an overall expanding trend over the last few years. The assets of the world‘s

largest 1000 banks increased by 6.8% in 2009 financial year to reach $96.4

trillion yet profits declined by 85% to $115 billion. According to the report from

IFSL, EU banks held the largest share of the total, 56% in 2009, down from

61% in the previous year. Asian banks' share increased from 12% to 14%

during the year, while the share of US banks increased from 11% to 13%. Fee

revenue generated by global investment banking totaled $66.3 billion in 2009,

up 12% on the previous year.

Central banks around the world have taken unprecedented support measures

in an effort to boost liquidity. More than $200 billion in new capital was

injected into the top 20 banks alone. With regulators requiring banks to

increase their capital base, there has also been a great deal of issuance

activity on capital markets. Globally, banks raised nearly $1 trillion in new

capital between the start of the credit crisis and first half of 2009. US banks

raised nearly a half of this total, Europe followed with nearly $400 billion.

Global banking development

Introduction

The global banking system in 2011 and 2012, so far, witnessed severe

setbacks as it continued to be affected by tepid recovery in global growth;

the re-emergence of the euro area sovereign debt crisis; and funding and

deleveraging risks for global banks. Uncertainties emanating from the

ongoing euro area sovereign debt crisis, the downgrade in the outlook of

several advanced economies (AEs), and stability issues of euro area

banks amidst bank recapitalization concerns, among other factors, kept

international financial markets and the banking system volatile during most

of 2011-12.

Global credit growth demonstrated a mixed picture: in emerging market

economies it was sustained, in the US it showed some revival; but in

Europe it decelerated. The return on assets (RoA) improved for banks in

24

the US and some EMEs, but declined in European countries. The banking

trends in select regions and countries show that the US banking system

has made substantial progress in repairing balance sheets and enhancing

capital. In the euro zone banking system, the risks remain at an elevated

level on account of the vicious circle between banks and sovereigns. The

crisis in the euro area has affected the UK financial system also and the

funding costs for banks have risen sharply, leading to higher interest rates

and lower credit availability for household and corporate borrowers in the

UK.

An analysis of the performance of the top 100 global banks shows that the

share of emerging economies in global banking continued to increase.

Among emerging and developing countries, Chinese banks have

registered substantial gains in the top 100 bank ratings. On the global

policy reforms front, there has been some progress in rule framework for

the Basel Rule, systemically important financial institutions (SIFIs),

shadow banking, resolution regimes and bail-in mechanisms.

The global economy suffered a major setback in late 2011 as concerns

about financial stability in the euro area came to the fore. Market stress

spread throughout the euro area and bond yields soared in peripheral

economies as investors were increasingly concerned about the risk of a

sovereign default. These developments dramatically highlighted the risk of

adverse, self-fulfilling shifts in market sentiment that could rapidly push

fragile sovereigns into a bad equilibrium of rising yields, a funding squeeze

for domestic banks, and a worsening economy [IMF‘s Global Financial

Stability Report (GFSR) – April 2012

Global growth moderated to 3.8 per cent in 2011 compared with 5.1 per

cent achieved in 2010 (Chart II.1). The slow growth was mainly driven by

weakening growth in the advance economies. On the other hand,

emerging market economies continued to grow at a higher rate. For the

year 2012, various forecasts have suggested the continuation of sluggish

global growth. The IMF‘s World Economic Outlook (WEO) – October 2012

has projected global growth to moderate to 3.3 per cent in 2012 with

significant downward risks.

25

Against this global macroeconomic setting, Section 2 reviews the

performance of the global banking system using major indicators of

banking activity and soundness for select advanced and emerging

economies. Section 3 looks into the detailed individual performance of the

banking systems in few advanced and emerging economies/ economy

groups. Section 4 analyses the performance of the top-100 banks having

major global presence. Section 5 highlights the major regulatory and

supervisory policy initiatives with regard to the global banking system

during the year. Section 6 presents the overall assessment and outlook for

the global banking sector for 2013.

Analysis of the Performance of Top 100 Global Banks

1. Share of EMEs in global banking continued to increase.

The analysis of the top 100 global banks by the Banker Database shows

that the trend of moderate shift in the global banking business from

advanced economies to EMEs continued in the year 2011, as evident from

both the composition of number and assets of the top 100 global banks.

This shift reflects the continued credit growth in the EMEs, as well as the

decline in credit growth in the advanced economies. The decline in the

asset share of advanced economies between 2010 and 2011 was

concentrated in US and European banks. Among EMEs, Chinese banks

have exhibited a significant improvement in the top 100 banks ratings, as

four banks are listed among the top 10 banks based on Tier 1 capital for

the first time.

2. Profitability of global banks remains subdued.

The profits of the top 100 banks, which had staged a recovery after the

financial crisis received a setback during 2011. The aggregate profits of

these banks recorded a moderate fall to US$ 702 billion in 2011 from US$

709 billion in 2010. Moreover, the percentage of loss making banks

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[reporting negative return on assets (RoA)] also recorded an increase from

5 per cent in 2010 to 10 per cent in 2011.

3. Global banks strengthen their capital adequacy position

The capital adequacy position of the top 100 banks reveals that the

number of banks in the higher bracket of capital adequacy ratio, i.e., 13 to

17 per cent, showed an increase, reflecting global initiatives to strengthen

the capital position of banks. However, the number of banks with a CRAR

range of more than 17 per cent declined. All the top 100 banks (barring

one for which data are not available) show that they are maintaining a

higher capital adequacy level than the BCBS norm of 8 per cent CRAR

stipulated under the Basel II framework.

4. Some progress is evident in the deleveraging of global banks.

With the pressure on global banks to deleverage, especially after the

global financial crisis, the banks have made some progress in reducing

their leverage. At the end of 2011, the number of banks that are highly

leveraged with a capital to assets ratio – a measure of financial leverage –

of less than 4 per cent and between 4 - 6 per cent came down, while the

number of banks in the range of 6 - 8 per cent showed an increase.

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B. Banking Industry at National level

Banking in India originated in the last decades of the 18th century. The first

banks were Bank of Hindustan (1770-1829) and The General Bank of India,

established 1786 and since defunct.

The largest bank, and the oldest still in existence, 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 Bombay and the Bank of Madras,

all three of which were established under charters from the British East India

Company. The three banks merged in 1921 to form the Imperial Bank of India,

which, upon India's independence, became the State Bank of India in 1955.

For many years the presidency banks acted as quasi-central banks, as did

their successors, until the Reserve Bank of India was established in 1935.

In 1969 the Indian government nationalized all the major banks that it did not

already own and these have remained under government ownership. They

are run under a structure known as 'profit-making public sector undertaking'

(PSU) and are allowed to compete and operate as commercial banks. The

Indian banking sector is made up of four types of banks, as well as the PSUs

and the state banks; they have been joined since 1990s by new private

commercial banks and a number of foreign banks.

Banking in India was generally fairly mature in terms of supply, product range

and reach-even though reach in rural India and to the poor still remains a

challenge. The government has developed initiatives to address this through

the State bank of India expanding its branch network and through the

NABARD (National Bank for Agriculture and Rural Development) with things

like microfinance.

Banks act as payment agents by conducting checking or current accounts for

customers, paying Cheques drawn by customers on the bank, and collecting

Cheques deposited to customers' current accounts. Banks also enable

customer payments via other payment methods such as Automated Clearing

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House , Wire transfers or telegraphic transfer, EFTPOS, and automated teller

machine

The Indian banking sector has emerged as one of the strongest drivers of

India‘s economic growth. The Indian banking industry has made outstanding

advancement in last few years, even during the times when the rest of the

world was struggling with financial meltdown. India's economic development

and financial sector liberalization have led to a transformation of the Indian

banking sector over the past two decades.

Today Indian Banking is at the crossroads of an invisible revolution. The

sector has undergone significant developments and investments in the recent

past. Most of banks provide various services such as Mobile banking, SMS

Banking, Net banking and ATMs to their clients.

Indian banks, the dominant financial intermediaries in India, have made high-

quality progress over the last five years, as is evident from several factors,

including annual credit growth, profitability, and trend in gross non-performing

assets (NPAs). While annual rate of credit growth clocked 23% during the last

five years, profitability (average Return on Net Worth) was maintained at

around 15% during the same period, while gross NPAs fell from 3.3% as on

March 31, 2006 to2.3% as on March 31, 2011.

The Indian banking sector is a mixture of public, private and foreign

ownerships. The below table highlights top 10 banks which contributed 58%

share of the total credit as on March 31, 2011. The State bank of India has

recorded highest market share. The Net Interest Margin of HDFC Banks is

4.2% which is highest among others.

Broad Classification of Banks in India:

1. The RBI: The RBI is the supreme monetary and banking authority in the

country and has the responsibility to control the banking system in the

country. It keeps the reserves of all scheduled banks and hence is known

as the ―Reserve Bank‖

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2. Publ ic Sec tor Banks:

State Bank of India and its Associates (7)

Nationalized Banks (22)

Regional Rural Banks Sponsored by Public Sector Banks (46)

3. Private Sector Banks:

Private Banks (17)

Foreign banks operating in India(32)

4. Co-operative Sector Banks:

State Co-operative Banks

Central Co-operative Banks

Primary Agricultural Credit Societies

Land Development Banks

State Land Development Bank

5. Development Banks: Development Banks mostly provide long term finance

for setting up industries. They also provide short-term finance (for export

and import activities)

Industrial Finance Co-operation of India (IFCI)

Industrial Development of India (IDBI)

Industrial Investment Bank of India (IIBI)

Small Industries Development Bank of India (SIDBI)

National Bank for Agriculture and Rural Development (NABARD)

Export-Import Bank of India

Co-operative Bank

The Co-operative bank has a history of almost 100 years. The Co-operative

banks are an important constituent of the Indian Financial System, judging by

the role assigned to them, the expectations they are supposed to fulfill, their

number, and the number of offices they operate. The co-operative 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

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urban areas also has increased phenomenally in recent years mainly due to

the sharp increase in the number of co-operative banks.

While the co-operative 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

co-operative banks in urban areas mainly finance various categories of people

for self-employment, industries, small scale units, home finance, consumer

finance, personal finance, etc. Some of the co-operative banks are quite

forward looking and have developed sufficient core competencies to

challenge state and private sector banks.

According to NAFCUB the total deposits & lending‘s of Co-operative Banks is

much more than Old Private Sector Banks & also the New Private Sector

Banks. This exponential growth of Co-operative Banks is attributed mainly to

their much better local reach, personal interaction with customers, and their

ability to catch the nerve of the local clientele. Though registered under the

Co-operative Societies Act of the Respective States (where formed originally)

the banking related activities of the co-operative banks are also regulated by

the Reserve Bank of India. They are governed by the Banking Regulations

Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

There are two main categories of the co-operative banks.

(a) Short term lending oriented co-operative Banks

Within this category there are three subcategories of banks viz. state co-

operative banks, District co-operative banks and Primary Agricultural co-

operative societies.

(b) Long term lending oriented co-operative Banks

Within the second category there are land development banks at three

levels state level, district level and village level.

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Features of Cooperative Banks

Co-operative Banks are organized and managed on the principal of co-

operation, self-help, and mutual help. They function with the rule of ―one

member, one vote‖. Functions on ―no profit no loss‖ basis. Co-operative

banks, as a principle, do not pursue the goal of profit maximization‘s co-

operative bank performs all the main banking functions of deposit

mobilization, supply of credit and provision of remittance facilities. Co-

operative Banks provide limited banking products and are functionally

specialists in agriculture related products. However, co-operative banks now

provide housing loans also.

The State Co-operative Banks (SCBs), Central Co-operative Banks (CCBs)

and Urban Co-operative Banks (UCBs) can normally extend housing loans up

to Rs 1 lakh to an individual. The scheduled UCBs, however, can lend up to

Rs 3 lakh for housing purposes.

The UCBs can provide advances against shares and debentures also. Co-

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

However, UCBs, SCBs, and CCBs operate in semi urban, urban, and

metropolitan areas also.

The urban and non-agricultural business of these banks has grown over the

years. The co-operative banks demonstrate a shift from rural to urban, while

the commercial banks, from urban to rural. Co-operative 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. They constitute the ―most favored‖ banking sector with risk of

nationalization. For commercial banks, the Reserve Bank of India is lender of

last resort, but co-operative banks it is the lender of first resort which provides

financial resources in the form of contribution to the initial capital (through

state government), working capital, refinance.

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Co-operative Banks belong to the money market as well as to the capital

market. Primary agricultural credit societies provide short term and medium

term loans. Land Development Banks (LDBs) provide long-term loans. SCBs

and CCBs also provide both short-term and term loans. Co-operative 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, (c) other co-operative institutions, (d) ownership funds

and, (e) deposits or debenture issues. It is interesting to note that intra-

sectorial flows of funds are much greater in co-operative banking than in

commercial banking. Inter-bank deposits, borrowings, and credit from a

significant part of assets and liabilities of co-operative banks. This means that

intra-sectorial competition is absent and intra-sectorial integration is high for

co-operative bank.

Some co-operative banks are scheduled banks, while others are non-

scheduled banks. For instance, SCBs and some UCBs are scheduled banks

but other co-operative banks are non-scheduled banks. At present, 28 SCBs

and 11 UCBs with Demand and Time Liabilities over Rs 50 crore each

included in the Second Schedule of the Reserve Bank of India Act .Co-

operative Banks are subject to CRR and liquidity requirements as other

scheduled and non-scheduled banks are. However, their requirements are

less than commercial banks. Since 1966the lending and deposit rate of

commercial banks have been directly regulated by the Reserve Bank of India.

Although the Reserve Bank of India had power to regulate the rate co-

operative bank but this have been exercised only after 1979 in respect of non-

agricultural advances they were free to charge any rates at their discretion.

Although the main aim of the co-operative bank is to provide cheaper credit to

their members and not to maximize profits, they may access the money

market to improve their income so as to remain viable.

The Indian banking industry is shortly explained through the following point.

The Indian banking industry has its foundations in the 18th century, and

has had a bumpy evolutionary growth path since then. The industry in

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recent times has recognized the importance of private and foreign players

in a competitive scenario and has moved towards greater liberalization

Indian banks have mobilized around 80% of funding from deposits, thus

their ability to win market share profitably is key to stock returns

In today‘s scenario, Current and saving accounts (CASA) is the bank‘s

lifeline for profitable growth, but during FY2012 high interest rate choked

them of such deposits, slowing expansion to a five-year low of 7%.

Credit growth of the Scheduled Commercial Banks (SCBs) slowed down to

18.10%on FY2012, which was 22.90%1 in FY2011 on account of the

slowdown of the general economy. It is expected that the credit growth in

FY2013 will be in the range of 16 18% as there is increasing demand for

working capital loans and refinancing of forex loans by Indian corporates.

The growth of total deposits of the (SCBs) stood at 14.92%1 on FY2012,

Vs.18.31% in FY2011. The deposit growth is expected to moderate to 14-

17%2 over FY 2013-15 with stable Net Interest Margins (NIM). NIM of

SCBs in FY2012 was 2.90%1 on average.

In the present competitive scenario, Private Banks are targeting the faster

growing retail loans and also improving the growth rate in fee income by

increasing transaction fees, whereas Public Sector Banks are targeting to

push for higher recoveries and upgrades in Non-Performing Loans (NPL)

and also improving their deposits mix by reducing the share of bulk

deposits.

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Important Milestone of Indian Banking industry.

Prior to 1950 / Evolutionary Phase

Enactment of the RBI Act, 1935

High levels of deprivation in economy

Foundation Phase / 1948-1968

Government adopted the system of planned economic development

Complex Interest rates

Establishment of Banking Regulation Act, 1949

1968-1984/Expansion Phase

14 banks in 1969 and 6 banks in 1980 were nationalized termed as ―First

Banking Revolution‟

Rapid branch expansion

Retail lending to risk prone areas at concessional interest rates

1985-1990/ Consolidation

Lack of professionalism and transparency in the functioning of public

sector

Series of policy initiatives taken with the objectives of consolidation of

banks

1991 Onwards/Reformatory phase

The Economic liberalization of 1990 was initiated to ensure an efficient,

competitive and mature financial market

RBI gave licenses to new private sector banks as a part of its liberalization

process

Various guidelines (e.g. Basel rules, FEMA, FERA,LAF) were introduced

Banking Laws( Amendment) Bill, 2011 passed

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Figure name: Structure of Indian Banking Industry

Figure no.:2.1

http://www.icacec.com/images/content/indianbankindustry.gif

C. Banking at State level

During the year 2011-2012, total number of bank branches increased by 342

(Metro-82, Urban-118, Semi-Urban-54 and Rural-88 ) taking the total network

of branches from 6091 as of March, 2010 to 6433 as of March, 2011 in the

state.

The aggregate deposits of the banks in Gujarat increased by Rs. 46,777

crores in absolute terms from Rs. 2,25,299 crores as of March,2010 to Rs.

2,72,076 crores as of March, 2011 registering a growth of 20.76 percent

during the year ended March 2011, as compared to 17.42% recorded during

the previous year.

36

During the year 2010-11, the aggregate credit increased by Rs. 32,228 crores

in absolute terms from Rs. 1,55,575 crores as of March, 2010 to Rs. 1,87,803

crores as of March, 2011 registering a growth of 20.72 percent during the

year ended March 2011, as against 18.00 percent recorded during the

previous year.

The Credit-Deposit ratio stood at 69.03 % as of March 2011, which has

slightly declined by 0.02 %, over the ratio of 69.05 percent as of March 2010.

D. PESTEL Analysis of Banking Industry

What is PESTEL Analysis?

PESTLE analysis, which is sometimes referred as PEST analysis is a concept

in marketing principles. Moreover, this concept is used as a tool by companies

the world over to track the environment they‘re operating in or are planning to

launch a new project/product/service etc.

PESTLE is a mnemonic which in its expanded form denotes P for Political, E

for Economic, S for Social, T for Technological, L for Legal and E for

Environmental. It gives a bird‘s eye view of the whole environment from many

different angles that one wants to check and keep a track of while

contemplating on a certain idea/plan.

Political factor affecting banking industry

Indian banking sector is least affected as compared to other developed

countries- thanks to robust policy framework of RBI.

Government affects the performance of banking sector most by legislature

and framing policy government through its budget affects the banking

activities securitization act has given more power to banking sector against

defaulting borrowers.

A stricter prudential regulation with respect to capital and liquidity gives

India an advantage in terms of credibility over other countries.

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To support capitalization, the government has infused Rs 23,200 crore

(US$ 5.2 billion) into state-owned banks during the last three fiscals.

The Indian banking Industry is mostly dependent on the monetary policy

decided by the RBI

Stricter regulations with respect to capital and liquidity directly affects the

business of banks

Banks need to adjust their interest rates accordingly, which may or may

not favor them

Banks are forced to lend as per the guidelines of RBI, that includes credit

growth in all sectors

Budgetary Measures announced by the government at the beginning of

every financial year also lay down guidelines to banks to lend or accept

deposits

The government can also increase credit in particular sectors such as

increase in farm credit, increase in infrastructure credit etc.(priority

lending)

Sometimes the government gives debt waivers to certain sections of the

society that need to be adhered to by banks as well

Economic factors affecting banking industry

Economic factors in the country also effect the Banking Industry both

favorably or unfavorably

When the economy is in good shape in terms of high per capita income,

good agriculture harvest and normal inflation, banks have an edge as

people are left with more money to deposit them with banks

This helps in more capital formation as more deposits can be realized

Also In the times of economic boom, more and more FDI is brought into

India through banking channels, that actually improves business for banks

and the economy in general

Economic prosperity encourages lending business for the banks but in

times of recession banks face tough times to recover their money, issue

fresh credit and NIMs are lower too.

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Social factors affecting banking industry

The Indian banking system has been progressing rapidly. There are still

several untapped rural markets, despite the large number of banks in India

Many farmers still take loans from moneylenders at a very high interest

rate and small-scale industries continue to remain important for banks

However changes could be expected in the near future for the

unorganized sector

The growing population of India is a great opportunity for Indian banks as

a lot of people in the country want to open a bank account and develop

good savings habits

Changing lifestyle of the Indian urban population who wants easy ways of

financing to their desires

Technological factors affecting banking industry

Indian banking has been consistently working towards the development of

technological changes and its usage in its operations.

With the application of new and improved technologies banks are

expected to reduce costs, time and provide higher customer satisfaction.

Internet banking or banking via the phone can be considered a remarkable

development in the banking industry.

Mobile banking enables customers to check their account balance,

transfer funds 24x7, bill payments, booking of bus/flight tickets, recharge

prepaid mobile and do a lot more effortlessly and securely.

Banking through cell phone benefits the banks too. It cuts down on the

cost of in-person banking and helps reduce headcount at branches.

Technological developments facilitate the flow of information and data

faster leading to faster appraisal and decision-making as well.

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Environmental factors affecting banking industry

Indian economy has registered a high growth for last three years and is

expected to maintain robust growth rate as compare to other developed

and developing countries Banking Industry is directly related to the growth

of the economy

The growth rate of different industries were: Agriculture : 18.5%Industry :

26.3%Services : 55.2%

It is great news that today the service sector is contributing more than half

of the Indian GDP. It takes India one step closer to the developed

economies of the world. Earlier it was agriculture which mainly contributed

to the Indian GDP.

This increases the avenues of investment by the industrial sector. This

would further increase the borrowings by the industry‘s leading to the

banking Industry

In regards with the service sector , as the income of the people will

increase, lending and savings will increase leading to increased business

for the banks

Legal factors affecting banking industry

There are two major factors determining the legal aspects of the Banking

Industry

1. Banking regulation act

In 1949, the Banking Regulation Act was enacted which empowered the

Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in

India. The Banking Regulation Act also provided that no new bank or

branch of an existing bank could be opened without a license from the

RBI, and no two banks could have common directors

2. Intervention by RBI

The Reserve Bank of India (RBI) will intervene to smooth sharp

movements in the rupee and prevent a downward spiral in its value, but

40

will balance this with the need to retain reserves in the event of prolonged

turbulence.

41

E. Current Trends in Banking Industry

Global Banking Trends

The recent financial crisis brought to the fore the weaknesses in the global

banking industry, which, in turn, was manifested in dwindling public

confidence in the banking industry. The recent financial crisis has led to a

realization of the inadequacies in the banking sector. Banks had failed to

secure stable and diversified sources of income and to contain costs, which

resulted in liquidity stress for the institutions. Secondly, opaque balance

sheets significantly impaired analysis of risk, thus preventing timely

awareness of the weakness of banks‘ capital buffers (BIS Annual Report –

2011-12).

Banking Trends in Select Regions and Countries

US Banking System

The US banking system has made considerable progress towards repairing

balance sheets and building capital since the recent financial crisis. Large US

banks have reduced their reliance on short-term wholesale funding. The

banks have reduced impaired assets through charge-offs, write-downs and

asset disposals and increased the Tier-1 capital. Concurrently, the banks‘

equity capital and equity assets ratio has seen an improvement

The Stress Tests for US banks show improved resilience

The stress tests conducted under the Comprehensive Capital Analysis and

Review (CCAR) in March 2012 show that most of the 19 banking firms would

have sufficient capital to withstand a period of intense economic and financial

stress and still be able to sustain their lending capacity.

Improvement in the credit quality of US banks

There has been significant growth in credit to the industrial sector, but credit

to real estate and individual loans remains muted. The overall delinquency

rates on loan portfolios have fallen, but given the wide difference across

sectors in terms of asset quality, concerns remain Euro area banking system

42

The current euro area debt crisis has highlighted the existence of a vicious

circle between banks and sovereigns. Their increasing inter-linkage has

led to a prolonged collapse of market confidence in the European Union

(EU) banking sector, affecting adversely the cost and availability of funds.

Risk aversion during euro area crisis led to freezing of inter-bank market

The EU banks are more reliant on wholesale funds than customer

deposits. The ratio of residential deposits to total liabilities for these banks

is placed at around 51 per cent.

In order to ease the funding pressures on EU banks, the ECB undertook

Long-Term Refinancing Operations (LTRO) on December 21,2011 and

February 29, 2012 amounting to more than € 1 trillion. This has

temporarily alleviated the funding pressures on EU banks and reduced the

financial stress. The EU banks, however, have not used the LTRO funds

to extend private credit, but sought to protect their balance sheets. The

predominant share of LTRO funds has been re-deposited with the ECB.

As the crisis continued to escalate, the markets were increasingly

concerned about asset quality, the size of capital buffers and their ability to

cope with future credit losses. In order to alleviate these concerns, the

European Banking Authority (EBA) undertook an EU-wide stress test as

well as conducted a capital exercise of 71 banks in November 2011 to

assess their capital needs and advised the banks to build a temporary

capital buffer to reach a 9 per cent core Tier 1 ratio by June 30, 2012. The

EBA found that 27 banks across Europe needed to raise capital

totaling€76 billion to meet the 9 per cent core Tier 1 ratio. The final report

by the EBA on October 3, 2012showed that 27 banks have strengthened

their capital position by € 116 billion as of June 2012.Though the results

are positive, concerns remain as several of the banks surveyed require

bailouts, particularly, banks in Greece and Spain.

UK banking system

The crisis in the euro area has affected the UK financial system and has led to

a marked deterioration in the outlook for the UK economy. Even though UK

banks have built up considerable buffers of loss-absorbing capital, they were

affected by the general increase in the market uncertainty and widespread

43

risk aversion associated with problems in the euro area. This, in turn has

caused funding costs for banks to rise sharply, leading to higher interest rates

and lower credit availability for household and corporate borrowers in the UK

(Bank of England). In spite of the policy actions of the authorities, the flow of

credit through the banking system – which households and many businesses

necessarily rely on – has remained impaired. Recent data show that the stock

of lending to UK businesses has contracted.

Chinese banking system

The Chinese banking system continued to grow in 2011, with higher capital to

assets ratio and low level of non-performing loans (NPLs) at just about 1 per

cent. However, concerns remain, as the rapid growth of the Chinese banking

industry may be hard to sustain due to the slowdown in the national economy

and large exposure to Chinese property markets.

Trends in Indian Banking Industry

Credit take off of the corporate sector slowed down particularly because of

down-sized capital expenditure programs.

Banks have been focusing on secured lending products (such as

mortgage and auto loans) for retail customers to drive credit off take.

Policy uncertainty over the micro finance institutions and recent changes

to banks credit off take to non-banking.

Pressure to meet targets under Financial Inclusion also increased the cost

of lending and decreased returns on advances for banks.

CASA growth slowed because of High Interest rates and pressure on

corporate cash flows which affect all banks.

Due to Deregulation of Interest rates on saving deposits large amount of

competition is seen in Saving Deposits.

According to the Reserve Bank of India (RBI)'s 'Quarterly Statistics on

Deposits and Credit of Scheduled Commercial Banks', March 2012,

Nationalized Banks accounted for 53.0 per cent of the aggregate deposits,

while the State Bank of India (SBI) and its Associates accounted for 21.8

per cent. The share of New Private Sector Banks, Old Private Sector

44

Banks, Foreign Banks, and Regional Rural Banks in aggregate deposits

was 13.0 per cent, 4.8 per cent, 4.4 per cent and 3.0 per cent,

respectively. Nationalized Banks accounted for the highest share of 52.0

per cent in gross bank credit followed by State Bank of India and its

Associates (22.5 per cent) and New Private Sector Banks (13.5 per cent).

Foreign Banks, Old Private Sector Banks and Regional Rural Banks had

shares of around 4.8 per cent, 4.8 per cent and 2.4 per cent, respectively.

Another statement issued by the RBI revealed that foreign exchange

reserves increased by US$ 1.05 billion and stood at US$ 293.37 billion for

the week ended March 22, 2013. Foreign currency assets (FCAs), a major

component of the forex reserves, stood at US$ 260.41 billion while the

gold reserves amounted to US$ 26.292 billion.

Furthermore, India's economic expansion has made Indian banks more

global in their approach. Ten banks have opened 100 branches in foreign

jurisdictions as of February, 2013.

Increasing mobile penetration, coupled with higher smart phone adoption

has led an uptrend in mobile banking. Number of transactions through

mobile banking witnessed a jump of 64 per cent in the April-December

2012 period, according to data from the RBI.

Banks in India are highly alert in grabbing opportunities to increase

transaction volumes in their automated teller machines (ATMs) through

religious gatherings in the country. Private sector banks have introduced

mobile ATMs that migrate from one religious fair to another throughout the

year. For instance, HDFC Bank, the second largest private lender in the

country, had sent its mobile ATM to the MahaKumbh Mela-2013 in

Allahabad. Over 100 million people are estimated to have attended this fair

and the bank has noticed that the transaction volumes were phenomenal.

Similarly, Kerala-based Federal Bank stationed a couple of portable ATMs

near Sabarimala temple during the last festival season when thousands of

devotees visited the place.

France-based multinational bank Society Generate has recently opened its

third corporate banking branch at Sanand, near Ahmedabad in Gujarat. It

already has branches in Mumbai and Delhi. Believing that Gujarat is one

of the robust places in India and will provide good opportunities for bank to

45

expand its base in the country, the Bank will provide all-types of financing,

both short-term working capital lines and medium-long term equipment or

project finance, in Indian as well as foreign currencies. It will also provide

other specialized advisory and financing activities like M&A, project

finance, equipment and commodities financing to its clients. The Bank will

expand in Bangalore, Chennai, Hyderabad and Pune by 2016.

The ministry of Finance is believed to have infused Rs 12, 517 crore (US$

2.28 billion) into 13 public sector banks before March 2013, in order to

keep them adequately capitalized. In 2013-14, it proposes to provide

additional capital of Rs 14, 000 crore (US$ 2.55 billion) to ensure that

public sector banks always meet the Basel III regulations as they come

into force in a phased manner.

The Government is also working with the RBI and NABARD to bring all

banks, including some co-operative banks on core banking solution (CBS)

and on the electronic payment systems (like NEFT and RTGS) by the end

of 2013. All scheduled commercial banks and all regional rural banks

(RRBs) are already on CBS.

Apart from this, the ministry is also contemplating to come up with India's

first Women's Bank as a public sector bank and shall provide Rs 1,000

crore (US$ 182.45 million) as initial capital. Necessary approvals and

banking license are expected to be obtained by October 2013.

The Government intends to provide Rs 6,000 crore (US$ 1.09 billion) to

the Rural Housing Fund in 2013-14 while it may start a fund for urban

housing to mitigate the huge shortage of houses in urban areas. It would

provide Rs 2,000 crore (US$ 364.89 million) to the Fund in 2013-14.

F. Major players in banking industry

Oriental bank of commerce, Federal Allahabad are the small banks in

terms of market capitalization.

UBI bank, Yes bank, Canara, Induslnd, Bank of India is the mid-sized

bank.

Axis Bank, Bank of Baroda, Punjab National Bank, Kotak Mahindra Bank

are the growing banks.

SBI, ICICI, HDFC are the premium old generation banks.

46

At present, along with the above bank there are five major foreign banks

including Standard Chartered, HSBC, Citibank, RBS and Deutsche,

account for over 70 percent of the total asset size of overseas lenders in

the country.

Current Players in Banking Industry

Indian banks consist mostly of Scheduled commercial bank (SCBs), which

includes both Public Sector Banks and the Private Sector Banks. In Public

Sector Banks, the government must retain a 51% stake.

Old Private sector banks are those banks which were not nationalized at

the time of bank nationalization that took place during 1969 and 1980.

Most of the old private-sector banks are closely held by certain

communities and their operations are mostly restricted to the areas in and

around their place of origin. e.g. Federal Bank, Dhanalaxmi Bank, ING

Vysya Bank.

New private sector banks include those that were established in the past

twenty years such as Yes Bank, Axis bank and existing institutions that

were converted into commercial banks, such as the former development

institution ICICI and specialized lenders such as HDFC.

Cooperative banks are small-sized units registered under the Co-operative

Societies Act. That essentially lend to small borrowers and businesses.

E.g. Punjab & Maharashtra Co-op. Bank Ltd., New India Co-op. Bank Ltd.

Regional Rural Banks are mainly focused on the agro sector. These banks

are in every corner of the country and extend a helping hand in the growth

of the country. E.g. National Bank for Agriculture and Rural Development

(NABARD), Haryana State Cooperative Apex Bank Limited.

Also, under the recently passed The Banking Laws (Amendment) Bill

2011, the government is likely to give the new banking licenses in the next

year or so.

47

The information related to some of the major players is as follows

State Bank of India

The State bank of India (SBI) is the largest state-owned banking and financial

services company in India. It is the 29th most reputed company in the world

according to Forbes and it is the only bank to get featured in the coveted "top

10 brands of India" list in an annual survey conducted by Brand Finance and

The Economic Times in 2010. SBI posted a net profit of INR91.6 billion for

2009-10, registering a moderate growth of 0.49% as compared to 2008-09.

ICICI

ICICI bank has a network of 2,016 branches (as on 31 March 2010) and about

5,219 ATMs in India and presence in 18 countries. ICICI Bank– the largest

issuer of credit cards in India– offers a wide range of banking products and

financial services to corporate and retail customers. The net profit of the bank

for the financial year ending 2010 was INR40.25 billion, 7.1% higher than

2009.

HDFC Bank

In 2010, HDFC Bank had over 1,725 branches and 4,232 ATMs, in 779 cities

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

HDFC bank registered a net profit of INR29.4 billion as of March 31 2010, an

increase of 31% over 2009.

Axis Bank

Axis Bank is a financial services firm that began operations in 1994, after the

Government of India allowed new private banks to be established. At the end

of September 2010, the bank had a very wide network of more than 1,095

branches and over 4,846 ATMs. In the year 2009–2010, Axis bank posted a

net profit of INR25.1 billion, an increase of 38.5% over 2009.

48

G. Major Offerings

The major offering of banking industry is divided into 3 categories.

1. Retail Banking

2. Wholesale Banking

3. Treasury Banking.

1. Retail Banking

Retail banking is a buzzword in India that focuses strictly on the consumer

market.

Most banks have retail portfolios as part of their total lending portfolio

(18.4%1 on average). This sector has been growing at a high rate of 30 to

35%per annum.

As per a survey conducted by CLSA, Consumer credit penetration is only

8% of the GDP in India, which is expected to rise further quickly.

The growth is mainly led by growth in credit card receivables and other

personal loans.

Housing loans continued to constitute almost half of the total retail Portfolio

of banks.

Table name: Products comes under the category of Retail Banking

Table no. 2.2

Loan Products Deposit Products Other Products /

Services

Auto Loan Deposits NRI services

Gold Loan Saving Accounts POS Terminals

House Loan Current Accounts Private Banking

Credit cards Fixed / Recurring Demat Services

Education Loan Corporate Salary A/C Mutual Fund Sales

Loan against

Securities

Foreign Exchange

Retail Banking

Business

49

2. Wholesale Banking

Wholesale banking provides services to large corporate bodies, mid-sized

companies, international trade, other banks and financial Institutions.

This service contributes 30%1 to India's total banking revenues, with ROE

in the range of 15% to 30%.

From $16 billion in FY 2010, wholesale banking revenues are expected to

rise to a whopping $35 billion to $40 billion by FY 2015.

Besides large corporates, a growing number of SMEs, this contributed

more than 40% of exports & 17% of GDP in 2011, offer huge opportunity

for banks.

Investments in infrastructure totaling $240 billion between 2007 and 2010

have already been made under India‘s 11th Five-Year Plan. To sustain

India‘s economic growth, the Planning Commission therefore envisages

that $1 trillion (about 10% of GDP) will be spent on infrastructure during

the 12th plan from 2012 to 2017.

Infrastructure development, simplified FDI and globalization in Indian

Companies are key drivers of wholesale banking.

Table name: Products comes under the category of Wholesale Banking

Table no.2.3

Commercial

Banking

Transaction Banking Key Segment

Term Loan Cash Management Large Corporates

Guarantees Custodian Services Emerging Corporates

Bill Collection Clearing Bank Services Financial Institutions

Letter of Credit Tax Collections Government/PSUs

Working Capital Banker to Public Issues

Commodities(Inc. Hedging)

Agriculture

Commodities

Forex & Derivatives

Wholesale Deposits

50

3. Treasury Banking

The core function of a treasury is the measuring, monitoring, and

controlling of interest rate risk (IRR). Typically the department would

employ a variety of standard and proprietary models to measure this risk.

Traditionally, the treasury function in banks was limited to funds

management i.e., maintaining adequate cash balances to meet the day-to-

day requirements and deploying surplus funds from operations.

The scope of treasury has now expanded beyond liquidity management

and it has now evolved as a profit center with its own trading and

investment activity.

Treasury activity in a bank depends on its size, complexity of operations,

and risk profile.

Table name: Products comes under the category of Treasury Banking

Table no. 2.4

Product Segment Other Financing

Equities Cash Management

Derivatives Statutory Reserve

Capital Market Financial Decisions

Debt Securities Asset Liability Management

Foreign Exchange

51

CHAPTER 3

INTRODUCTION OF

THE SURAT PEOPLE’S

CO-OP BANK LTD

52

The Surat Peoples Co-operative Bank ltd

About the bank:-

Nine decades of Trust, Excellence & Services.

The Surat People‘s Co-op Bank has been a pillar of support for the thriving

Industry and Trade in the city.

The bank is the ―First Registered Urban Co-operative Bank‖ of India and

among the first 13 Co-operative Banks to get ―Scheduled Bank‖ Status. It

is the first Bank to provide the ―Depository participant Services‖ in South

Gujarat.

The Surat Peoples Co-Operative Bank Ltd. is serving since last 90 years

to the people of Surat having network of 23 computerized branches out of

them 21 in Surat and 1 in Vapi and 1 in Navsari.

Vision:-

Our vision is to be India‘s most respected and admired urban Co-

Operative bank by influencing people‘s lives through personalized banking

services and partnering them in realizing their dreams.

Mission:-

Our mission is to be a preferred financial service provider with a special

focus on innovative quality products, technical expertise & efficient

services for customer achieve their objectives and goals.

53

Values:-

We have accepted cardinal principle of corporate social responsibility and

accordingly we have tried to fulfill our social obligations to be recognized as

Surat people‘s bank in real sense.

History of Surat People’s Co-operative Bank

With the advent of the 20th century co-operative Movement Started in India.

Late Shri Raosaheb Vrundavandas Jadav- a visionary dreamt of establishing

Co-operative Bank. This Dream turned into reality in the name of The Surat

People‘s Co-operative Bank Ltd.

The Surat People’s Co-operative Bank Ltd was established in 1922 at

Surat. Bank was registered on 10th March, 1922 and started functioning from

21st April, 1922.The Bank was first registered Urban Co-Operative Bank in

India and became Scheduled Bank on 1st September, 1988.

The Bank is serving since last 91 years to the people of Surat and also to the

people of south Gujarat. The bank is having network of 23 branches, 21 in

Surat and 1 branch at Vapi and 1 branch at Navsari.

One of the glorious name amongst Surat’s uncountable Bank means

―Surat People‘s bank‖ to whom the peoples of the Surat to say as one of the

part of unanimous ―Our Bank‖ & the take the pride of it‘s as a service,

sharable & base for the Facilities & the immediate field of customer service

has supposed many endeavours & even today in the field of development to

passes the new endeavours go ahead ―My‖ Bank‘s development services to

look at a glance I am proud of it & filling the happiness.

From today approximately 80 to 90 years before in the area of British emperor

of salivary to reform of the small farmers to save from the economic

exploitation from the money lenders & businessman etc. to fulfill the needs of

their social & economic fore that the British emperor have passed the law of

54

money landing for the co-operative society. Afterwards these societies divided

in to two parts as rural & civics co-operatives.

One of this arrangement in the rural areas for the small farmers & in the urban

areas residing the middle & lower house persons to provide them the finance

at the reasonable rate of interest from the co-operative basis.

Incremental growth in the business industries import-export, increase in the

money & for the changing of the economic conditions to meet of these various

needs of economic & as a western countries in India the number of joint stock

banks increased gradually. But no one has thought over this that for to do the

work in the co-operation sector.

Small Industries the middle & the lower persons to get form them the deposits

in small & they have o interest to satisfy their small & big need of banking.

Due to this the small cities neglected. So the non-development of its

industries-business & due to lack of banking arrangement their development

is at stake. To change this atmosphere in the year 1920 & nearby from the

British emperor to start the civic banks in the small towns & at the tehsil level,

to emphasis on this & too issued the circulars from the register Shri

authorothfield.

By this way the starting the story of our own Surat People‟ s Co-operative

Bank & salute to Shri Vrundavandas Jadav who has established the Surat

peoples Co-operative Bank on the day of 10th March in the year 1922 which

will a remarkable day for us.

Having the vast knowledge in the field of banking & in economics in the

pioneer of switch bank, banking in the guidance of Shri Chunilal Sarvaiya, shri

Vrundavandas Jadav Saheb inhabitant & Surat, enthusiastic, intellectual &

having the development mind has taken the banking training & have decided

to established the Surat Peoples Bank. He has prepared the draft of the

bank‘s bye-laws from get the materials from the civic co-operative society‘s

bye laws & from the unnamed bankers & from the without naming banks who

55

doing the business of banking more or less by reforming & amending in its.

Such type of bank is not there in the Mumbai District or any other district at

that time with its own bye laws.

After that the local business & industries & engaged in the money landing and

having the remarkable personalities persons among them discuss details,

how to get the preliminary capital fund & from whom to get for inquiry in this

directions & after effects the organization of ―Surat People‘s Co-op Bank‖ as

per the Mumbai Co-operative laws to prepare the necessary documents &

legally on 10th March 1922 it was registered & succeeds. From this the

development of the Surat Peoples Bank started up till now.

On the First Year from the 134 members received Rs. 9815 & with the capital

total deposits of Rs. 42184 started the bank. The authorized capital of the

bank was Rs. 100000.

Bank has passed approximately 25 years on his own. In the golden era of

independence in 1947 the bank has celebrated its silver jubilee with the chair

of Shri Vaikunthbhai Mehta who was the Finance Minister & the eminent

economist of Mumbai District.

Up to 1995 Shri Vrundavandas Jadav has handled the various designations &

guided the bank.

In the year 1965 bank have got its own ownership glorious building in the

Parsi Sheri & its name ceremony known as Vasudhara was done by the

eminent personality & the Gujarat language literate Shri Vishnu Prasad

Trivedi.

The banks have celebrated its ―golden jubilee‖ in the year 1972 with the

hands of Shri Ghanshyambhai Oza who was the Chief Minister of Gujarat at

that time. On that year the total deposits of the bank was Rs. 5.02 crores &

the advances were of Rs. 2.77 crores & the working capital of Rs. 5.94 crore.

56

The platinum jubilee year has been celebrated on 21/4/97 under the chairman

sheep of Shri Madhu Dandvate who was the Vice Chairman of the Planning

Commission on that year. In this year the total deposit was of Rs. 278.70

crore, advances of Rs. 119.95 crores & the working capital of Rs. 386.46

crores of the banks.

57

A. SPCBL Profile

Table no. 3.1

Type Co-operative Bank (Scheduled Bank)

Industry Banking, Financial services

Founded 10 May 1922

Head Office Vasudhara Bhavan, Timaliawad, Nanpura, Surat - 395001

Area Served Surat City

Products Deposit Products , Debit Card & Remittance Products

Revenue

Revenue 252.33 Crore

Profit 28.24 Crore

Total Assets 2688.98 Crore

Total Equity 49.73 Crore

Contact Details (1) Central Office &

Registered office

Address : 'Vasudhara

Bhavan', Timliawad,

Nanpura, Surat

395001

Phone No : (0261)

2464621-22-23-24-25-

26-27-28-29

Fax : (0261)2464592

(2) Main Office : -

Address :Parsi Sheri,

Bhagal,

Surat - 395003.

Phone No : (0261)

2451677,

2451665

Fax : (0261) 2451669

SMS Banking.: 099988-

44949

Demat

Dept.:

(0261)2451671,2451866

E-mail Add. info@spcbl.in

Website www.spcbl.in

58

Table name: Board of Directors and General Manager

Table no.: 3.2

Sr.No Name Designation

1 Mr.Mukeshchandra N.Gajjar President

2 Mr. Pravinchandra P. Jariwala Vice-President

3 Mr. Jayvadanbhai T. Jariwala Director

4 Mr. Ashit V. Gandhi Director

5 Mr. Mukesh C. Dalal Director

6 Mr. Sunil K. Modi Director

7 Mr. Sanjiv N. Tamakuwala Director

8 Mr. Amit Gajjar Director

9 Mr. Ashok Dalal General Manager

10 Mr. Mayank Baxi Asst. General Manager

Services Provided by Surat People’s Co-operative Bank Ltd:-

1. Safe deposit Locker

A locker is a small, usually narrow storage compartment. They are

commonly found in dedicated cabinets, very often in large numbers in

various public places such as locker rooms, work places, schools,

transport centers, and the like. They vary in size, purpose, construction,

and security.

The locker service of Surat People‘s Co-operative Bank includes the following

rules:

The agreement for locker service is done on the 100 Rs stamp paper.

The fix deposits of Rs3000 must be deposit by customer for getting locker

service

When customer fail to pay rent in cash than the rent amount is credited by

bank from customers saving account.

Anything can be putted by customer in lockers except illegal things.

Minimum Charges of rent is Rs 337 per year including tax on small size

lockers while it goes on increasing as the sizes of lockers increase till Rs

4495 per year.

59

2. ATM (Automated Teller Machine)

Automated Teller Machine is a Machine at a bank branch or other location

which enables a customer to perform basic banking activities (checking

once balance, withdrawing or transferring) even when the bank is closed.

The charges on ATM service are 100 Rs a year. This is same as that

taken by other banks.

3. VAT (View Account Terminal)

You can easily have information on the screen about your account details

like balance and latest transaction. VAT machines are placed at all Surat

People‘s Co-operative Bank branches.

Following are the features of VAT machine.

In idle state VAT displays details of various loans and deposits afford by

the bank.

On touching the screen by finger (do not use any SHARP object) VAT will

start.

4. DEMAT

In India, refers to a Dematerialized account for individual Indian citizens to

trade in listed stocks or debentures, required for investors by The

Securities Exchange Board of India (SEBI).In a DEMAT Account, shares

and securities are held electronically instead of the investors taking

physical possession of Certificates. A DEMAT Account is opened by the

investors while registering with an investment broker (or sub-broker). The

DEMAT account number is quoted for all transaction to enable electronic

settlement of trades to take place.

DEMAT Account through Surat People‘s Co-operative Bank:

Physical Security holding are converted into Electronic holding so no fear

about loss of paper form securities, theft, fire or mutilation.

No worry about bad delivery.

Speedy sale-purchase and transfer.

No botheration for storing and preservation nor loss of securities.

Sale-purchase, credit-debit by return mandate only.

60

Freedom from inconvenience due to wrong signature and other objection

in stock exchange.

Security transfer without share transfer forms.

Freedom from botheration to inform change of address to all the

company‘s.

Dematerialization facility available.

Easy to pledge as security and to get loan.

Direct credit of corporate benefits like Bonus, Market Shares, Right share

in your account.

Direct credit of shares, securities purchased from market.

Nominal Service Charges

No stamp duty expense on transfer of securities.

Saving of postal expenses and time etc.

Very small amount of brokerage for sale / purchase of shares and

securities.

Competitive interest will be charged on loans/advances against DEMAT

shares & securities.

5. E-PAYMENT

E-PAYMENT is a comprehensive bill payment service as well as direct

payment of Income tax, Service Tax, TDS (Tax Deducted at Source) etc

from the customer accounts.

E-Payment Customer benefits:

Reputed and well established service.

Provide trusted, friendly and helpful customer service.

E-Payment is the fast, smart and secure way to pay your bills.

6. E-banking services

E-banking services also consider as online banking i.e. Internet banking

and Mobile banking.

61

1. Internet Banking

Surat People‘s Co-operative Bank NET Banking is the Bank‘s Internet

Service, offering the various facilities to the Users such as Accounts

enquiry, Statement of account, Funds Transfer, Utility Bills Payment, Stop

payment, request for issuance of cheque book, request for issuance of

DD, other requests, etc., alerts, financial modeling and other facilities as

the bank may decide upon to provide from time to time.

User refers to any individual or corporate user availing Internet banking

facility of the Bank and such user is identified as a User.

Account refers to the User‘s Savings and / or Current Account and / or

Time Deposit and / or Cash Credit, Overdraft, Loan Account and / or

any other type of account as available in the Bank to be covered under

the Surat People‘s Co-operative Bank NET Banking facility.

2. Mobile Banking(SMS Banking)

Through Mobile Banking the customer of Surat People‘s Co-operative

Bank can get all the information of their accounting transactions. The

information such as Current balance of Accounts Back dated balance of

accounts, Cheques details, Return clearing information & cheque returned

on debit clearing, other bank information and also ask for Help.

7. ECS (Electronic Clearing Services)

ECS is a mode of electronic funds transfer from one bank account to

another bank account using the services of a Clearing House. This is

normally bulk transfers from one account to many accounts or vice-versa.

This can be used both for making payments like distribution of dividend,

interest, salary, pension, etc. by institutions or for collection of amounts for

purposes such as payments to utility companies like telephone, electricity,

or charges such as house tax, water tax, etc. or for loan installments of

financial institutions/banks or regular investments of persons.

8. ASBA (APPLICATION SUPPORTED BY BLOCKED AMOUNT)

ASBA means ―Application Supported by Blocked Amount‖. ASBA is an

application containing an authorization to block the application money in

the bank account, for subscribing to an issue. If an investor is applying

62

through ASBA, his application money shall be debited from the bank

account only if his/her application is selected for allotment after the basis

of allotment is finalized, or the issue is withdrawn/failed.

9. Demand draft and pay order

Demand draft: Demand Draft is way for remitters to transfer money. A

demand draft is more secure than a normal cheque as it can only be

credited to a specific payee's account, and a customer can only be

reimbursed under indemnity if the draft is lost or stolen. People's bank

draft is a low-cost, convenient method of payments.

Bank charges as below:

Table name: Bank charges on DD.

Table no. 3.3

DD Amount DD Charges

Up to 10000 20/-

Rs. 10001 to 60000 30/-

Rs. 60001 to 100000 Rs. 0.50 per Rs. 1000/- Maximum Rs. 560/-

Rs. 100001/- & Above Rs. 0.50 per Rs1000/- Maximum Rs.560/-

Pay order

Pay order is secure way to make payment. Pay order can be made of

your party's name. And it is best proof of payment of this amount and on

date. So, instead of giving cheque you can make pay order from bank and

bank will make a payment from your account.

10. RTGS\NEFT.

The acronym 'RTGS' stands for Real Time Gross Settlement, which can

be defined as the continuous (real-time) settlement of funds transfers

individually on an order by order basis (without netting).'Real Time' means

the processing of instructions at the time they are received rather than at

some later time. ‗Gross Settlement' means the settlement of funds transfer

instructions occurs individually (on an instruction by instruction basis).

63

Considering that the funds settlement takes place in the books of the

Reserve Bank of India, the payments are final and irrevocable.

NEFT is an electronic fund transfer system that operates on a Deferred

Net Settlement (DNS) basis which settles transactions in batches. In DNS,

the settlement takes place with all transactions received till the particular

cut-off time. For example, currently, NEFT operates in hourly batches -

there are eleven settlements from 9 am to 7 pm on week days and five

settlements from 9 am to 1 pm on Saturdays. Any transaction initiated

after a designated settlement time would have to wait till the next

designated settlement time. Contrary to this, in the RTGS transactions are

processed continuously throughout the RTGS business hours.

Charges taken by bank on RTGS/NEFT

In NEFT less than or up to 200000 Rs is to transfer.

Table name: Charges of NEFT service

Table no.: 3.4

Particulars Charges

Up to 10000 3 Rs.

10001 to 100000 6 Rs.

100001 to 200000 17 Rs.

The RTGS system is primarily meant for large value transactions. The

minimum amount to be remitted through RTGS is 2 lakh. There is no upper

ceiling for RTGS transactions.

With a view to rationalize the service charges levied by banks for offering

various electronic products, a broad framework has been mandated as under:

Inward transactions – Free, no charge to be levied

64

Table name: Charges of RTGS service for outward transaction

Table no.: 3.5

Particulars Charges

2 lakh To 5 lakh 25 Rs.

Above 5 lakh 50 Rs.

11. Bill discounting

Bill discounting is a major activity with a lot of banks especially in

geographies involving a lot of exports and import activities. Purchasing

and discounting of bills of exchange is another short term method of

profitable instrument of banks funds. In Bill discounting, Financial

Institutions takes the bill drawn by borrower on his (borrower's) customer

and pay him immediately deducting some amount as

discount/commission. The Financial Institution then presents the Bill to the

borrower's customer on the due date of the Bill and collects the total

amount. If the bill is delayed, the borrower or his customer pays the Bank

a pre-determined interest depending upon the terms of transaction.

12. Loans and advances

The Surat People‘s cooperative banks provide loans and advances to its

customers. In finance, a loan is a debt evidenced by a note which specifies

that, among other things, the principal amount, interest rate, and date of

repayment. A loan entails the reallocation of the subject asset(s) for a

period of time, between the lender and the borrower. In a loan, the

borrower initially receives or borrows an amount of money, called the

principal, from the lender, and is obligated to pay back or repay an equal

amount of money to the lender at a later time. Typically, the money is paid

back in regular installments, or partial repayments; in an annuity, each

installment is the same amount. The loan is generally provided at a cost,

referred to as interest on the debt, which provides an incentive for the

lender to engage in the loan.

65

The Surat people‘s co-operative bank provides many loans such as

Personal Loan, Home loan, Education loan, Vehicle loan, Housing loan,

Business or industrial loan, travel loan etc.

13. E-Cheques

The e-Cheques consists five primary facts. They are the consumers, the

merchant, consumer‘s bank the merchant‘s bank and the e-mint and the

clearing process. This cheaquing system uses the network services to

issue and process payment that emulates real world cheaquing. The payer

issues digital Cheques to the payee ant the entire transactions are done

through internet. Electronic version of Cheques are issued, received and

processed. Atypical electronic cheque transaction takes place in the

following manner:

The customer accesses the merchant server and the merchant server

presents its goods to the customer.

The consumer selects the goods and purchases them by sending an e-

cheque to the merchant.

The merchant validates the e-cheque with its bank for payment

authorization.

The merchant electronically forwards the e-cheque to its bank.

The merchant‘s bank forwards the e-cheque to the clearing house for

cashing.

The clearing house jointly works with the consumer‘s bank clears the

cheque and transfers the money to the merchant‘s banks.

The merchant‘s bank updates the merchant‘s account.

The consumer‘s bank updates the consumer‘s account with the withdrawal

information.

The e-chequing is a great boon to big corporate as well as small retailers.

Most major banks accept e-Cheques. Thus this system offers secure means

of collecting payments, transferring value and managing cash flows.

66

14. General Insurance

First co-operative bank, in Gujarat to obtain a Corporate Agency in

General Insurance sector. Reserve Bank of India granted and Insurance

Regulatory and Development Authority (IRDA) license holder.

Following are the kind of Insurance provided by Surat People‘s co-operative

bank

Mediclaim

House-hold Insurance

Fire and Burglary

Personal Accident

Shop Keepers

Machinery Breakdown

Overseas Mediclaim for Foreign Exchange

15. PAN Card

Surat People‘s Co-operative banks also provide PAN Card service where any

person can apply for a PAN Card though he is not a customer of Surat

People‘s Co-operative Bank. The charge of this service is only 96 Rupees in

which 7 Rupees is taken as bank commission.

67

B. ORGANOGRAM-Organizational chart

Chart name: Organizational Chart

Chart no.: 3

Swipper

Puen

Junior Clerke

Senior Clerke

Specialist Officer

Officer's

Manager

Senior Manager

Chief Manager

Assistant General Manager

Department General Manager (Vacant)

General Manager

Directors

President

68

C. Divisions/Departments

Following are the departments of Surat People‘s Co-operative bank.

1. Loan Application Department.

2. Loan Disbursement Department.

3. Loan Recovery Department.

4. Personal Estate.

5. Share Department.

6. RBI Investment Department.

7. EDP Department.

1. Loan Application Department.

In loan application department mainly processing of loan application is

done. In this department all the required documents along with the

application are been collected and then sanctioning is done for further

procedure.

2. Loan Disbursement Department.

When the documents are been submitted by the customer for taking loan

than investigation on such documents is done by this department to find

out whether the documents are true or not and once the bank is satisfied

with the investigation than the loan amount is been paid to the customers.

3. Loan Recovery Department.

The customers who fail to pay the loan amount than for recovery of the

amount of the loan from the customers is done in Loan Recovery

Department. All the legal action are been taken to recover the loan.

4. Personal Estate

The work related to human resource is done in this department i.e. salary

of the staff, recruitment, selection, training etc. is done by the Personal

Estate department.

69

5. Share Department.

As the Surat People‘s co-operative bank has its own share a separate

department is developed to do all the works related to shares like share

issue, payment of dividend, share allotment, etc.

6. RBI investment department.

This department is also known as Marketing Intelligence system

department. In this department the implementation of RBI policy is done.

Along with this the Audit work is also been done for RBI in this department.

All the instruction and RBI schemes and regulation are thoroughly studied

and implemented.

7. EDP Department.

The Electronic Data Processing (EDP) Department is developing for data

processing and computer hardware and software implementation. Any

development of software for data entry of banking transaction is done in

this department all the E-Banking services like internet banking, ATM,

Mobile banking etc. are been handled in EDP Department.

D. SWOT analysis

SWOT means Strengths, Weakness, Opportunity and Threats so sorting out

of the qualities according to the given category is SWOT analysis.

Strength

The Bank is the "First Registered Urban Co-operative Bank" of India.

All Branches Connected in CBS.

Among the first 13 Co-operative Banks in September 1988 to get the

"Scheduled Bank" Status.

The bank commenced "Total Branch Automation" in 1992-93.

70

The Bank introduced "SMS Banking Facility" and "View Account

Terminal" {VAT} facility at all branches for better customer service.

Bank started its own "Training Centre" for providing training to its

employees.

The first Bank to provide the "Depository Participant Services" in South

Gujarat.

Only coop bank of South Gujarat to have direct connectivity to RBI

server for RTGS /NEFT facility.

Only bank to have direct connectivity with RBI server to have NECS

facility.

Only Bank to give RTGS /NEFT facility on STP basis - straight through

processing

There is constant increase in the annual profit of Surat People‘s Co-

operative bank.

Weakness

The services such as ATM Card and Internet banking is inappropriate

It fails to Provide Credit card facility

The ATM card of SPCB cannot be accessed in any other banks ATM

centers.

Foreign exchange service is not properly developed and there is no

facility of Making NRI account.

It fails to attract new customer for opening their account in SPCB.

The ATM centers are very less of Surat People‘s Co-operative bank.

Opportunities

By developing ATM card and Internet banking it can achieve more

customer satisfaction and also can get new customers.

The credit card facility is not yet available hence many customers use

other bank accounts like HDFC,ICICI,SBI etc. to get the credit card

facility hence if bank provide credit card facility than the customer may

not access other banks accounts.

71

It can develop its more branches in other Metro cities and states and

expand its business at a National and Global level.

The profit of Surat people‘s co-operative bank is very high and hence it

can do more and more promotional activities and can attract new

customers.

It can be India‘s most respected and admired urban Co-Operative bank

by influencing people‘s lives through personalized banking services

and partnering them in realizing their dreams.

The SPCB can be a preferred financial service provider by focusing on

innovative quality products, technical expertise &efficient services for

customer to achieve their objectives and goals.

Threats

Many multinational banks are going to establish in Surat city and hence

this may reduce the customers of SPCB as many people prefer

multinational companies because of its quality service.

Recently RBI has given the license to 26 non-banking multinational

companies such as Reliance Capital, IDFC, Edelweiss Financial ,

Muthoot Finance , Reliance Capital, J M Financials, Religare

Enterprises, Aditya Birla Nuvo, L & T Finance Holdings, TATA Sons,

Bajaj Finserv etc. hence there will be more competition.

As the SPCB fails to provide better ATM card, internet banking

services there may be chances that the customer may jump to other

bank which provide better services of ATM card, Internet banking etc.

SPCB also not providing Credit card facility and hence this will also

demotivate its customers.

72

E. Market Position

3.6 Market Position

Financial Result As At 31/03/2014

[Amount in Crore]

Total Deposits 2094.62

Total Advances 1448.51

Total Business 3543.13

Cost of Deposits 8.04%

Cost of Funds 6.63%

Gross Profit 46.88

Gross NPA 8.98

Gross NPA % 0.62%

Net NPA 0.00

Net NPA % 0.00%

(Source-From the Bank‘ Annual Report 2014)

73

Award and Recognition:-

―Champion of Champions- 2012-2013 Award‖ organized by The South

Gujarat Co-op Banks Association Ltd 20th Sep‘2013.

Top performer in New A/c opened (Bank Category) in NSDL star

performer Award-2013 organized by NSDL.

Participation Award in ―Vyapar 2013‖ organized by ―South Gujarat

Chamber of commerce & Industry‖.

74

Award for ―Customer choice Award for Banking Services 2009‖

organized by Gujarat Mitra & Grahak Parishad, Surat.

―Jury special recognition award‖ from banking frontiers-A Leading

Banking Magazine.

First Award in the category of decoration of Traffic I land for Swami

Vivekanand traffic I Land in competition 2010 organized by Surat

Municipal Corporation.

75

Other Awards:

Participation Award in ‗Udyog 2013‘ organized by The SGCCI

Runner up trophy in Tennis Cricket Tournament ‗VASUDHARA-2012‘

organized by The Surat People‘s Co Op Bank Ltd

First prize in ―SCOBA Topper‘s Award 2008-09‖ for Category III Scheduled

UCBs organized by The South Gujarat Co Op Banks Association Ltd at

Khanvel

‗Champion of Champions-2007-08 Award for Best Performance‘ organized by

The South Gujarat Co Op Banks Association Ltd at Lonawala on 15th Nov

2008

‗Best NPA Reduction Project Award –Large UCBs‘ from Banking Frontiers-A

Leading Banking Magazine

76

CHAPTER 4

REVIEW OF

LITERATURE

77

Literature Review

Introduction

Training is one of the most important strategies for organizations to help

employees gain proper knowledge and skills needed to meet the challenges

in an organizational environment (Rosow and Zager, 1988; and Goldstein and

Gilliam, 1990).The training unit, in a successful program, understands the

organization‘s strategic direction and designs and implements a creative way

of moving people in that direction. When the people grow to a point where

they are ready for responsibilities beyond their initial assignment, training and

development becomes imperative. Training and development is not only

concerned with helping individuals to adequately fill their positions, but it is

also concerned with helping the whole organization and sub-departments to

grow and develop. Training and development, though primarily concerned

with people, is also concerned with technology, the precise way an

organization does business.

Measuring Training Effectiveness

Bramley and Kitson (1994) discussed four levels of training evaluation. The

first is the trainee‘s reaction to the program. It focuses on assessing what the

trainees thought of the training program, usually in the form of a

questionnaire. The second level is trainees‘ learning. It focuses on measuring

their gained skills that were specified as training objectives. The third level is

the behavioral outcome. It focuses on measuring aspects of job performance,

which are related to the training objectives. The fourth level is the

organizational results. It focuses on the results of the training program to

organizational objectives and other criteria of effectiveness.

The authors indicated that evaluation at the third and fourth levels are not well

understood because of measurement problems. Defining the criteria by which

improvements can be measured will help applying the evaluation levels. Cost

benefit analysis, impact analysis, and analysis of organization processes

could produce criteria for measuring improvements.

78

Hughey and Mussnug (1997) elaborated on some training success factors.

The authors indicated that soft skills such as listening, communication,

teamwork and leadership are the least preferred in terms of tangible training

gains. Training should only involve tangible, hands-on skills and observable

behaviors. Thus, training objectives should focus on skills and competencies.

The authors also indicated that for training to be successful, it is imperative

that the goals of training be in line with the company‘s strategic plan. The

strategic training plan should identify and detail problems that are currently

impeding the company‘s potential for maximum profitability and should also

serve as a reference point for determining success or failure of the training

program. The time devoted to a given training program should be determined

by how long it takes employees to master the skills that the company deems

as important.

Khandelwal (2005) states that the challenge before the banks is not only to

produce employees with multi-skills and applications, but also to develop

these skills on a continuous basis.

Ramu (2006) states that designing and implementing effective training and

development systems is a particular challenge because all the costs are

borne in the present, while all the benefits will be accrued in the future.

Nagar (2009) empirically examines training program in staff training centers of

State Bank of Bikaner and Jaipur (Udaipur) and The Bank of Rajasthan Ltd.

(Jaipur). The author highlights that a systematically designed training program

helps in motivating the trainees towards effective learning.

Karthikeyan et al. (2010) empirically examine the training methods and their

effectiveness in selected public and private sector banks, namely, State Bank

of India(SBI), Indian Overseas Bank (IOB), Indian Bank, Industrial Credit and

Investment Corporation of India (ICICI) Bank, Housing Development Finance

Corporation (HDFC) Bank, and City Union Bank and conclude that the overall

effectiveness of training is quite high and that training contributes to the

growth and better performance of the banks.

Training evaluation ensures whether the candidates are able to

implement their learning in their respective workplaces or regular work

routines. Measuring the effectiveness of training programs consumes valuable

79

time and resources. Yet, being able to measure the results helps the firms

adapt to such changing circumstances.

A large number of organizations are setting up their own training

facilities. They are also inviting outside faculty to conduct in-company courses

for executives at all levels. This trend will continue because new orientation in

managerial and technical areas is necessary for effectively responding to the

changing environment of business.

Training is expensive if it does not serve the purpose for which it is

given. The training should be able to improve the capabilities of individuals

and, collectively that of the organization. If the program of training does not

contribute to the building of organizational capabilities, and, reflect, over a

period of time, in improved performance, the loss to the organization is far

greater than the money spent on training. The organization could lose its

competitive edge and its market position. Hence training has to serve

identified purposes for the organization based on a systematic analysis of its

own capabilities and the demands upon it that the future scenario may make.

The organization has to identify what skills, attitudes, behavior, knowledge,

conceptual and operating capabilities are needed and which of these can be

developed through training and which of these require reorientation in policy

and management practices. In our experience very few organizations spend

enough time to analyze the situation with care before launching on training

program. We have seen that even some of the best managed companies set

out vague goals such as training for leadership. Or .team building., etc.

without seriously questioning what they expect from leaders. or .team effort..

In many organizations some management practices have to be changed in

order that leader or team-building exercises in training can give the desired

results. Without clarity of purpose training effectiveness is difficult to measure.

Another critical area for deriving expected benefits from training is the

measurement of training effectiveness. How well the training inputs are

serving the intended purpose. This aspect is often neglected by organizations,

saying that measurement is difficult. We believe that the techniques in social

sciences have developed sufficiently to measure most important aspects of

training that contribute to its effectiveness. Here we will discuss the

techniques that we have used in our work, and found satisfactory to improve

80

upon training inputs. There are three kinds of training outputs that

organizations need to measure.

They are:

- Relating to course planning, relevance, comprehension and whatever goes

on in the teaching program and the environment.

- The utilization of what is learnt on the job, i.e. transferring the classroom

learning to the job in terms of skills, competencies, decision making, problem-

solving abilities and relationships and the like.

- The changes in the mind set such as work related attitudes, values,

interpersonal competencies and personal attributes.

The Kirkpatrick Model for Evaluating the Effectiveness of Training programs

is a widely used method for training evaluation. When originally developed by

Dr Donald Kirkpatrick in 1959 the model consisted of four levels.

The Kirkpatrick model allows organizations to evaluate their training function

on a number of levels, with the most important levels, from Level 3 upward,

providing an assessment of whether the training has had a lasting effect on

the trainees and the organization as a whole. The four levels of the Kirkpatrick

Model are:

Level 1: Reaction — evaluating how training participants react to the

program

Level 2: Learning — evaluating to what extent training participants improved

their skills, knowledge or changed their attitudes as a result of the training.

Level 3: Behavior — evaluating to what extent training participants changed

their behavior in the workplace as a result of the training

Level 4: Results — evaluating organizational benefits that resulted from the

training.

81

CHAPTER 5

RESEARCH

METHODOLOGY

82

A. Problem Statement

Training plays a vital role in any given organization in the modern day. It is

aimed at preparing employees for future or current jobs. The efficiency of the

firm can be increased considerably with right training methods. This is the

reason why HR department gives training such a huge importance.

The motive behind this study is to understand effectiveness of training

programs on the employees and employers of SURAT PEOPLE‘S CO-

OPERATIVE BANK LTD., SURAT.

The training cannot be measured directly but the change in attitude and

behavior that occurs as a result of training. By studying and analyzing the

response of employees regarding training.

The intention of this research is the measuring and analyzing

effectiveness of training in SURAT PEOPLE’S CO-OPERATIVE BANK

LTD., SURAT.

B. Research Objective

Primary Objective

To Measuring Effectiveness of Training in SURAT PEOPLE‘S CO-

OPERATIVE BANK.

Secondary Objective

To study the effectiveness of methods used in training of the employees.

To analyze whether the employees are satisfied with their current training

methods.

To collect and analyze the view of participants and superior on the

training.

To evaluate the Satisfaction level of employees and managers through the

Training.

83

C. Research Design

There are mainly 3 types of research design.

1. Exploratory Research

2. Descriptive Research

3. Causal Research

i. In this study descriptive research design is selected to continue

further.

ii. Sampling

Total 1000-1500 people are work in SPB along with its all branches including

vapi and navsari branch. From which 530 people were trained under the

training by RBI and SCOBA or their on- the job training.

Sample size: Sample size consists of 100 respondents from bank‘s central

office; main branch and udhna branch who are attend training sessions.

Method of sampling: The method used for sampling is non probability

Convenient Sampling.

Data Collection Methods

1) Survey Method

2) Observation Method

3) Experimentation method

4) Other methods

iii. In this research I have selected survey method for collection of

primary data.

84

Data Collection Tool

The structured questionnaire was used to collect primary data from the

employees and managers of Surat People‘s Co-operative

iv. Tools for Data Analysis

Primary data collected from employees and managers, are analyzed by

simple mathematical operation like percentage, charts, etc…with the use of

MSEXCEL.

Sources of Data

The primary data is collected from the employees and managers of Surat

people‘s co-operative bank.

The secondary data related to the topic has been obtained through various

sources like web content, journals, and books.

v. Limitations of the study

It is said, ―Nothing is perfect‖ and if the quite is true, I am sure that there

would be few shortcoming in this project also. Sincere efforts have been made

to eliminate discrepancies as far as possible but few would have reminded

due to limitations of the study. There are:

The convenient sampling technique has its own limitations.

Many times responses in questionnaire were incomplete and biased, it

may not represent accuracy in study.

Some of the respondents of the survey were unwilling to share personal

information.

85

CHAPTER 6

DATA ANALISIS &

INTERPRETATION

86

Gender:-

Table Name: Gender of Respondents

Table No. 6.1

Gender Number of

Responses

Male 71

Female 29

Figure Name: Gender of Respondents

Figure No. 6.1

Interpretation:-

From the chart 29% Female and 71% are the Male Respondent.

71%

29%

Responses(in %)

Male Female

87

Designation:-

Table Name: Designation of Respondents

Table No. 6.2

Designation Number Of

Respondent

Senior Manager 7

Manager 25

Clerk 22

Officer 30

Cashier 4

Apprentice 12

Figure Name: Designation of Respondents

Figure No. 6.2

Interpretation:-

32% responses are from top management, 52% from middle level and 16%

from lower level.

7

25

22

30

4

12

0

5

10

15

20

25

30

35

SeniorManager

Manager Clerk Officer Cashier Apprentice

percentage

88

Department:-

Table Name: Departments of Respondents

Table No. 6.3

Department Number of

responses

Saving & Current 7

Loan & OD 30

EDP 8

Personal Estate 3

Share 25

RBI Investment 8

Cash Receipt & Payment 5

Fixed Deposit 5

Clearing 9

Figure Name: Departments Of Respondents

Figure No. 6.3

0

5

10

15

20

25

30

7

30

8

3

25

8 5 5

9

Number of responses

89

Interpretation:-

From the Column Chart, 7% responses from Saving & current dept., 30%

from Loan & OD dept., From EDP dept. 8%, From Personal estate and Share

dept. 28% Respondents, and 27& from rest of the dept. like, RBI Investment,

Cash Receipt & Payment, F.D & Clearing.

90

Marital Status:-

Table Name: Marital Status of Respondents

Table no. 6.4

No. of Responses

Married 84

Unmarried 16

Figure Name: Marital Status of Respondents

Figure No. 6.4

Interpretation:-

84% are married and 16% are unmarried Respondent.

84%

16%

Responses (in %)

Married Unmarried

91

Experience:-

Table Name: Experience of Respondents

Table no. 6.5

Years No. of Responses

1 to10 24

11 to 20 49

21 to 30 27

Figure Name: Experience Of Respondents

Figure No. 6.5

Interpretation:-

From the comparison, 49% have an experience b/w 11-20yrs., 24% have 1-

10yrs. and 27% have 21-30yrs. of experience.

24%

49%

27%

Responses (in%)

1 to 10 11 to 20 21 to 30

92

Basis you are employed:-

Table Name: Basis of Employed

Table No. 6.6

Basis No. of Responses

Full 99

Part 1

Figure Name: Basis of Employed

Figure No. 6.6

Interpretation:-

It is said that, full employed employees are 99% and only 1% are part time

employed.

99%

1%

Responses (in%)

Full Part

93

1. What type of training program is undergone here?

Off-the job training

On-the job training

Both

Table Name: Type of Training

Table no. 6.7

Types of Training No. of Responses

Off-the job 13

On-the job 26

Both 61

Figure Name: Type of Training

Figure No. 6.7

Interpretation:-

The pie-chart shows that, 26% are saying that the bank conducted on-the

job training, 13% are saying that bank conducted off-the job training, And

61% people said that bank conduct on-the job and off-the job both training.

13%

26%

61%

Responses(in%)

Off-the job On-the job Both

94

2. Which Method of Training do you feel would be most effective?

Table Name: Method of Training

Table No. 6.8

Interactive case

study

Group

discussion

Classroom

coaching

Management

games

very

effective

68 28 68 77 29

Somewhat

effective

28 65 30 18 62

Not

effective

4 7 2 5 9

Figure Name: Method of Training

Figure No. 6.8

Interpretation:-

Interactive session- 68% are saying that it is very important, 28% says that it

is somewhat important and only 4% are says that it is not important.

Case study- 65% are says that this method is somewhat important because

sometimes it takes a long time, 28% are says it is very effective and

remaining are says it is not effective.

Interactive case study Groupdiscussion

Classroomcoaching

Managementgames

68

28

68

77

29 28

65

30

18

62

4 7 2 5

9

methods of training(in%)

very effective Somewhat effective Not effective

95

Group discussion- Out of 100, 68 people says that this method is more

effective, while 30 are say that it is somewhere effective and only 2% are says

that it is not effective because sometimes it consumes more time.

Classroom type coaching: 77% respondent are says that this method of

training is very effective because if any doubt they can ask the trainer while

18% are saying that it affect sometimes and only 5% people are say that it is

not effective.

Management Games: More people say that this method of training is

somewhat effective because mostly it is based upon training topics while 29%

are saying that it very effective and remaining 9% people are said that it is not

effective.

96

3. How important are the following Training Topics?

Table name: Training Topics

Table No. 6.9

Recruitment

& Retention

Customer

service

Branch

Mang.

Credit

Mang.

Leadership

effectiveness

NPA &

Recovery

Very

important

21 87 78 58 32 62

Somewhat

imp.

13 8 14 24 27 27

Not Sure 28 4 1 14 39 8

Not Now 36 1 6 3 2 3

Not important 2 0 1 1 0 0

Figure name: Training Topics

Figure No. 6.9

Interpretation:-

Recruitment & Retention:

In this chart, Recruitment & Retention is represent as an A. 21% people are

says that this topic is more important while 13% are says it is somewhat

important. 28% are not sure about this topic and 36% respondents are not

0

10

20

30

40

50

60

70

80

90

A B C D E F

Sign

ific

ance

Training Topics

Responses(in%)

97

want to say anything and rest of people say it is not important to all. This topic

is more important for whom which are related with HR department.

Customer Service:

In this chart, Customer Service is represents as a B. This topic is very

important according to 87% respondents because customer is a most is

important to achieve an organizational goal where 8% says that this topic is

somewhat important. 4% are not sure about this topic while 1% is not wants to

say anything about that.

Branch Management:

This topic is represents as a C in this chart. Most of officers and managers are

said that Branch Management is most important topic while 14% respondents

are saying that it is somewhat important. Only 1% is not sure about that and

6% people are not wants to say anything who are related with lower

management. Remaining 1% is saying this topic is not important.

Credit Management:

In Graph this topic is represent as a D. 58% are saying that this topic is very

important, 24% are with somewhat important while13% are not sure about

that. 3% are not wants to say anything about this topic while 1% is with not

important.

Leadership Effectiveness:

Graph represents this topic as an E. 32% respondents are says that this topic

is very important in which more people are from top level management while

27% are saying that this topic is somewhat important, 39% people are not

sure about this topic while rest of 2% are not want to say anything about that.

NPA & Recovery management:

Lastly, NPA & Recovery represent as a F in above graph. From the view point

of managers, officers and senior clerks NPA & Recovery management is very

important because it is more important for an organization. 27% are says that

it is somewhat important while 8% are not sure about this topic. Remaining

3% are not say anything about this topic.

98

4. Training approaches should match the Organizational Culture?

Strongly Agree

Agree

Moderate

Disagree

Strongly Disagree

Table Name: Training Approaches

Table No. 6.10

No. of

Responses

Strongly Agree 72

Agree 18

Moderate 10

Disagree 0

Strongly Disagree 0

Table Name: Training Approaches

Table No. 6.10

Interpretation:-

From the Graph, 72% are strongly agree, 18% are agree and 10% are

moderate about training approach should match the Organizational Culture.

72

18 10

0 0

Strongly Agree Agree Moderate Disagree StronglyDisagree

Responses(in%)

No. of Responses

99

5. What do you accept from training program?

Theories

Practical Knowledge

Vocational Knowledge

Table Name: Training Program

Table No. 6.11

No. of Responses

Theories 13

Practical Knowledge 22

Vocational

Knowledge

65

Figure Name: Training Program

Figure No. 6.11

Interpretation:-

From the above pie chart, 65% are says that they are accept vocational

knowledge while 13% & 22% are accept theories and practical knowledge

respectively.

13%

22%

65%

Responses(in%)

Theories Practical Knowledge Vocational Knowledge

100

6. Rate the quality of training that you received from training sessions.

very beneficial

beneficial

not beneficial

unimportance

Table Name: Quality of Training

Table No. 6.12

No. of Responses

very beneficial 57

beneficial 41

not beneficial 2

unimportance 0

Figure Name: Quality of Training

Figure No. 6.12

Interpretation:-

57% are said that training sessions are very beneficial, 41% saying that

Sessions are beneficial and rest of 2% respondent says that it is not

beneficial.

very beneficial beneficial not beneficial unimportance

57

41

2 0

Responses(in%)

No. of Responses

101

7. How is training helpful for communication?

Good Relationship Between Employee and Employer

Increase an Interaction

Attention the Organizational Goal

Table Name: Helpfulness of Training

Table No. 6.13

No. of

Responses

Good Relationship Between

Employee and Employer

67

Increase an Interaction 18

Attention the Organizational Goal 15

Figure Name: Helpfulness of Training

Figure No. 6.13

Interpretation:-

67% respondent says that training helps to keep good relationship b/w

employee and employer while 18% saying that it is helpful for increase an

interaction and rest of people says that it helps in attention the organization

goal.

67%

18%

15%

Responses(in%)

Good Relationship Between Employee and Employer

Increase an Interaction

Attention the Organizational Goal

102

8. Does Training helps to increase the Motivation Level of Employee?

Always

Sometimes

Never

Table Name: Motivation Level

Table No. 6.14

No. of Responses

Always 60

Sometimes 32

Never 8

Figure Name: Motivation Level

Figure No. 6.14

Interpretation:-

60% people says that training always increase the motivation level of

employees while 32% says that it increase sometimes and remaining 8%

people say that By training never increase the motivation level.

60%

32%

8%

Responses(in%)

Always Sometimes Never

103

9. Rate the Training Infrastructure.

Excellent

Good

Average

Bad

Table Name: Training Infrastructure

Table No. 6.15

No. of Responses

Excellent 27

Good 56

Average 17

Bad 0

Figure Name: Training Infrastructure

Figure No. 6.15

Interpretation:-

56% says that infrastructure of training center is good, while 27% people said

that infrastructure is excellence and rest of 17% says that it is average.

27%

56%

17%

0%

Responses(in%)

Excellent Good Average Bad

104

10. The Time duration given for the Training Period is?

Sufficient

To Be Extended

To Be Shortened

Manageable

Table Name: Training Time Duration

Table No. 6.16

No. of Responses

Sufficient 42

To Be Extended 10

To Be Shortened 22

Manageable 26

Figure Name: Training Time Duration

Figure No. 6.16

-

42%

10%

22%

26%

Responses(in%)

Sufficient To Be Extended To Be Shortened Manageable

105

Interpretation:-

From the above chart, it is said that 42% are agree with time duration of

training sessions, 10% are says that the training time to be extended. 22%

says that time period of training to be shortened, while rest of them are says

that the time period is manageable.

106

11. What are the General Complaints about the training sessions?

Take Away Precious Time Of Employees

Too Many Gaps Between Sessions

Training Sessions Are Unplanned

Boring & Not Useful

No Complaints

Table Name: Training Complaints

Table No. 6.17

-No. of

Responses

Take Away Precious Time of

Employees

22

To many gaps b/w sessions 15

Training Sessions are unplanned 18

Boring & Not useful 3

No Complaints 42

Figure Name: Training Complaints

Figure No. 6.17

22%

15%

18%

3%

42%

Responses(in%)

Take Away Precious Time of Employees

To many gaps b/w sessions

Training Sessions are unplanned

Boring & Not useful

No Complaints

107

Interpretation:-

42% have no complaints about the training sessions, 22% says that take

away a more time of employees, 33% are saying that sessions are unplanned

and many gaps b/w them and only 3% respondent say that it is a boring & not

useful.

108

12. Trainers are Knowledgeable about training topics.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Table Name: Trainers Knowledge

Table No. 6.18

No. of Responses

Strongly Agree 27

Agree 46

Neutral 27

Disagree 0

Strongly Disagree 0

Figure Name: Trainers Knowledge

Figure No. 6.18

StronglyAgree

Agree Neutral Disagree StronglyDisagree

27

46

27

0 0

Responses(in%)

No. of Responses

109

Interpretation:-

46% are agree that trainers are knowledgeable about training topics, 27%

people are strongly agree about trainer knowledge, while remaining are

neutral about that.

110

13. The Trainer was Well Prepared.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Table Name: Trainers Preparation

Table No. 6.19

No. of Responses

Strongly Agree 33

Agree 49

Neutral 18

Disagree 0

Strongly Disagree 0

Figure Name: Trainers Preparation

Figure No. 6.19

Interpretation:-

33% strongly says that trainer was well prepared, 49% are agree about trainer

are well prepared and remaining are neutral about the trainer.

StronglyAgree

Agree Neutral Disagree StronglyDisagree

33

49

18

0 0

Responses(in%)

No. of Responses

111

CHAPTER:-7

FINDINGS

112

Findings:

In Surat People‘s Co-Operative Bank, 26% are saying that the bank

conducted on-the job training, 13% are saying that bank conducted off-

the job training, and 61% people said that bank conduct on-the job and

off-the job both training.

For Interactive session method, 68% are saying that it is very important

while 28% says that it is somewhat important and only 4% are says

that it is not important because of this interaction between trainer and

trainee would be increase.

In Case study method, 65% are says that this method is somewhat

important because sometimes it takes a long time, 28% are says it is

very effective because of this method different cases would be discuss

in detail and remaining are says it is not effective. Sometime cases are

different than the topic.

Out of 100, 68 people says Group/work discussion method is more

effective, while 30 are say that it is somewhere effective and only 2%

are says that it is not effective because sometimes it consumes more

time.

In Classroom type coaching Method, 77% respondent are says that

this method of training is very effective because if any doubt they can

ask the trainer directly while 18% are saying that it affect sometimes

and only 5% people are say that it is not effective. This method have

pitfall like trainee are not interested because of trainers language and

behavior.

Most of people say that Management Games are somewhat effective

because it is based upon training topics while 29% are saying that it

very effective because it can help in increase the analytical skills of

trainee and 9% are says that it is not effective or it is a time

consumable.

Recruitment & Retention:

21% people are who are related with HR Department says that

Recruitment & Retention topic is more important while 13% are says it

is somewhat important. 28% are not sure about this topic and 36%

113

respondents are not want to say anything and rest of people say it is

not important to all.

Customer Service:

This topic is very important according to 87% respondents because

customer is a most valuable to achieve an organizational goal where

8% says that this topic is somewhat important who are not related to

customer service and 4% are not sure about this topic while 1% is not

wants to say anything about that.

Branch Management:

Most of officers and managers are said that Branch Management is

most important topic while 14% respondents are saying that it is

somewhat important. Only 1% is not sure about that and 6% people

are not wants to say anything who are related with lower management.

Remaining 1% is saying this topic is not important.

Credit Management:

58% are saying that this topic is very important, 24% are with

somewhat important while13% are not sure about that in which lower

level respondents are included. 3% are not wants to say anything

about this topic while 1% is with not importance of this topic to all.

Leadership Effectiveness:

32% respondents are says that this topic is very important in which

more people are from top level management while 27% are saying that

this topic is somewhat important, 39% people are not sure about this

topic while rest of 2% are not want to say anything about that.

NPA & Recovery management:

From the view point of managers, officers and senior clerks NPA &

Recovery management is very important because it is more important

for an organization. In SPB Net NPA is 0.00% only. 27% are says that

it is somewhat important while 8% are not sure about this topic.

Remaining 3% are not wants to say anything about this topic.

72% are strongly agree because due to training behavior of trainee

should be change. 18% are agree and 10% are moderate about

training approach should match the Organizational Culture.

114

65% are says that they are accept vocational knowledge while 13% &

22% are accept theories and practical knowledge respectively through

the training.

57% are said that quality of training which they is very beneficial while

41% saying that quality are beneficial and rest of 2% respondent says

that it is not beneficial.

67% respondent says that training helpful for communication because

of it can keep good relationship b/w employee and employer while 18%

saying that it is helpful for increase an interaction and rest of people

says that it helps in attention the organization goal.

60% people says that training always increase the motivation level of

employees while 32% says that it increase sometimes and remaining

8% people say that By training never increase the motivation level.

56% says that infrastructure of training center is good, while 27%

people said that infrastructure is excellence and rest of 17% says that it

is average. No one say that the infrastructure of training center is bad.

42% are says that the time duration of training sessions is sufficient,

10% are says which are connected to management level that the

training time to be extended. 22% says that time period of training to be

shortened, while rest of them are says that the time period is

manageable.

42% have no complaints about the training sessions, 22% says that it

take away a more time of employees because sometimes training

conducted at outside the Surat, 33% are saying that sessions are

unplanned and many gaps b/w them and only 3% respondent say that

it is a boring & not useful because they get a valuable knowledge from

the training.

46% are agree that trainers are knowledgeable about training topics,

27% people are strongly agree about trainers knowledge, while

remaining are neutral about that.

33% strongly says that trainer was well prepared, 49% are agree about

trainer are well prepared and remaining are neutral about the trainer

because sometimes they are not able to answer the questions asking

by the trainee.

115

CHAPTER 8

CONCLUSION &

RECOMMENDATION

116

CONCLUSION

Analysis of all facts & figures, the observation and experience during the

training period gives a very positive conclusion regarding training imparted by

the Surat People‘s Co-Operative Bank Ltd. The Surat People‘s Bank is

performing its role up to the mark and trainees enjoy the training imparted.

The training imparted meets objectives like:

Effectiveness of training and as its resultant in the performance of employees.

Assists the employees to acquire skills, knowledge and attitude and also

enhance the same.

Helps to motivate employees and helps in avoiding mistakes.

It becomes quite clear that there is no other alternative and shortcut to

development of Human Resources. Training when used in a planned and

purposeful manner can be an extremely effective management tool as they

increase the knowledge and skills of workers and thereby increase the wealth

of an organization.

117

RECOMMENDATIONS

Individual Attention may be provided to the trainees in order to encourage

their participation and make them perform better at their job.

Employee‘s feedback should be regularly obtained in order to understand the

effectiveness of training.

In Surat People‘s Bank, trainees are not satisfy about the training sessions

because sometimes sessions are unplanned and too many gaps between

sessions. So they should reduce the gaps between sessions.

Sometimes trainers are not prepared very well and they are not able to

answer the question of trainees. Thus the selection of trainer should be based

on their experience and skills.

118

BIBLIOGRAPHY

119

Bibliography

BOOKS

Cooper, Donald R. Business Research Methods. New Delhi: McGraw Hill Education (India)

Limited, 2013.

K.Ashwathappa. Human Resource and Personnel Management. New Delhi: McGraw Hills

Companies, 2007.

Websites

Encyclopedia. 2014. <http://en.wikipedia.org>.

Surat people's co-operative Bank. 1922. <www.spcbl.in>.

Article Journal

"General Overview Of Training and Measurement Models." Journal of Commerce & Tourism

Education Faculty 1 (2005): 13.

Ibrahim, Mohamed E. "Measuring Effectiveness of Training." The Journal of Management

Research 4 ( 2004).

"Measuring Training Effectiveness." Indian Journal of Industrial Relations 36 (2001).

120

APPENDIX

121

Questionnaire

Respected sir/madam,

This survey is a part of academic course being carried out by Chitrak

Sawadiyawala of MBA, S.R.LUTHRA INSTITUTE OF MANAGEMENT. This

survey is to understand ―Effectiveness of Training in Surat People‘s

Co.operative Bank Ltd‖. This survey is for my academic purpose only and

information gathered here will not be used for any other purposes. Answer for

personal details will be kept confidential.

Please spare your valuable time to answer the following questions. I will be

thankful for your valuable response.

Particular of respondent

Name:-

Age Group:-

Gender:-

Male

Female

Designation:-

Marital Status:-

Total Experience with this Bank:-

Working Department:-

Basis You are employed:-

Full time

Part time

122

1) What type of training program is undergone here?

Off-the job training

On-the job training

Both

2) Which Method of Training do you feel would be most effective?

Very effective Somewhat

effective

Not effective

Interactive sessions

case study method

Group/work

discussion

Classroom type

coaching

Management games

3) How important are the following Training Topics?

Very

important

Somewhat

important

Not sure Not now Not

important

Recruitment &

Retention

Customer Service

Branch Management

Credit Management

Leadership

Effectiveness

NPA & Recovery

management

4) Training approaches should match the Organizational Culture?

Strongly Agree

Agree

Moderate

Disagree

Strongly Disagree

123

5) What do you accept from training program?

Theories

Practical Knowledge

Vocational Knowledge

6) Rate the quality of training that you received from training sessions.

very beneficial

beneficial

not beneficial

unimportance

7) How is training helpful for communication?

Keep Good Relationship Between Employee and Employer

Increase an Interaction

Attention the Organizational Goal

8) Does Training helps to increase the Motivation Level of Employee?

Always

Sometimes

Never

9) Rate the Training Infrastructure.

Excellent

Good

Average

Bad

10) The Time duration given for the Training Period is?

Sufficient

To Be Extended

To Be Shortened

Manageable

11) What are the General Complaints about the training sessions?

Take Away Precious Time Of Employees

Too Many Gaps Between Sessions

Training Sessions Are Unplanned

Boring & Not Useful

No Complaints

124

12) Trainer are Knowledgeable about training topics.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

13) The Trainer was Well Prepared.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

125

Practical learning which I have learnt from the surat people’s co-

operative bank about training by RESERVE BANK OF INDIA (PUNE) and

SOUTH GUJARAT CO-OPERATIVE BANKS ACCOCIATION (SCOBA).

Following are the some information related to training given by the RBI and

SCOBA.

Training by RBI (Pune)

A.

Subject:- Program On Customer Service & Branch Management for the

Officers.

Place:- College Of Agriculture Banking (CAB), RBI, Pune.

Duration:- 19 August to 22 August, 2014

Timings:- 9:30 a.m. to 5:30 p.m.

Language:- English

Target Group:- Senior & Middle Level Officers/ Branch Managers

Methodology:- Interactive Lecture Sessions & Case Study

Course Fees:-

3) UCBs With deposit base of RS.100 crore & more = RS.9300/-

4) UCBs With deposit base of less than RS.100 crore = RS.5700/-

Training Directors:- 1. M.Ramakumari

2. Shri T.RajaGopal

B.

Subject:- Special Program on Credit Management For Officers

Place:- College of Agriculture Banking (CAB), RBI, Pune.

Duration:- 1st July to 4th July, 2014

Timings:- 9:30 a.m. to 5:30 p.m.

126

Language:- English

Target Group:- Officers Working In Loan & Advance Department, Internal

Audit Department & Branch Managers Handling Loan accounts

Methodology:- Interactive Lecture Sessions & Exercise

Course Fees:-

a. UCBs With deposit base of RS.100 crore & more = RS.9300/-

b. UCBs With deposit base of less than RS.100 crore = RS.5300/-

Training Directors:- 1. M.Ramakumari

2. Shri T.RajaGopal

C.

Subject:- Management Development Program on Leadership Effectiveness

Place:- College of Agriculture Banking (CAB), RBI, Pune.

Duration:- 21st July to 25th July, 2014

Timings:- 9:30 a.m. to 5:30 p.m.

Language:- English & Hindi

Target Group:- Middle/Senior Management Grade Officers from Bank

Methodology:- Classroom Sessions, Group Discussion and Management

Games

Course Fees:-

a. UCBs With deposit base of RS.100 crore & more = RS.11200/-

b. UCBs With deposit base of less than RS.100 crore = RS.6800/-

Lead Faculty:- 1. H.N. Panda [GM at CAB, Pune]

2. S. Mugunthan [DGM at CAB, Pune]

127

3. Mukesh Kumar [AGM at CAB, Pune]

D.

Subject:- Program On NPAs & Recovery Management For Officers

Place:- College Of Agriculture Banking (CAB), RBI, Pune.

Duration:- 10th April to 11th April, 2014

Timings:- 9:30 a.m. to 5:30 p.m.

Language:- English

Target Group:- Officers in Junior & Middle Levels/Recovery Officers

Methodology:- Case Study & Lecture Sessions

Course Fees:-

a. UCBs With deposit base of RS.100 crore & more = RS.5900/-

b. UCBs With deposit base of less than RS.100 crore = RS.3800/-

Training Directors:- 1. M.Ramakumari

2. Shri Ajit Kumar

128

Training by SCOBA (Surat)

A.

Training Session By Dr. Jatin Naik

On 12th June 2014. Timing:- 9:30 a.m. to 5:00 p.m.

Subject:- 1. Retail Banking

2. Customer Service & Customer Code and Standard to

Improve it.

Target Group:- Senior Clerk, Officers, Assistant Managers & Managers

Language:- Gujarati & English

Methodology:- Classroom Type Coaching, Group Discussion

Fees:- RS.750/-plus Service Tax @ 12.36%

B.

Subject:- Operational Banking

On 5th February, 2014

Timing:- 9:30 a.m. to 5.00 p.m.

Target Group:- Junior Clerk & Clerk

Trainer:- Dr. Jatin Naik

Language:- English & Gujarati

Venue:- SPB Bhavan, Prime Banking Center, Surat.

Fees:- RS.750/- plus Service Tax @ 12.36%

C.

129

Subject:- EDP on Total Credit Management

On 25th October to 26th October, 2013

Timing:- 9:30 a.m. to 5:30 p.m.

Target Group:- Loan Senior Clerk/Officers

Language:- Gujarati & English

Course Fees:- RS.1500/- plus Service Tax @ 12.36%

D.

Subject:- Training Session on New KYC Policy & Anti Money Laundering

On 31st July, 2013

Timing:- 9:30 a.m. to 5:00 p.m.

Target Group:- Junior Officers/Clerk

Language:- English & Hindi

Venue:- SPB Bhavan, Prime Banking Center, Surat.

Fees:- RS.750/- plus Service Tax @ 12.36%

130

College of Agricultural Banking

RBI

University Road

Pune 411 016

NOMINATION FORM

Name of Program:- ____________________________________________

Duration:- From__________________ To ___________________

Name of Nominee:-

Shri/Smt./Kum. _____________________________________

Designation ____________________________________

Nominating institution‘s:-

1. Name & Address:-

________________________________________________________

________________________________________________________

______________________ City:-_____________ Pin: -____________

State:-_______________

2. STD Code:- __________ Ph.no._______________________________

Fax no.:- ______________________

3. Email Address:- _______________________________________

Details of DD Favoring RBI & Payable at Mumbai

DD No./UTR No. (For NEFT) ___________________________

Date:- _______________________

Amt.:- RS.______________________

___________________

Signature With Stamp