Customer Satisfaction Canara Bank

A Project Report On “Customer Perception

about services provided by

Canara Bank, Panchkula” Submitted To The Business School Kashmir University In Partial fulfillment Of the requirement of The Degree of “Integrated MBA”

Under the guidance of Prof. Ayoub

The Business School, Kashmir University

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Declaration

I am Asrar Ahmad declare that this dissertation submitted in partial fulfillment require of IMBA to TBS, KU is my origin of work and has not been submitted for award of any other degree for title or prizes. As required by the university rules, I state that the work presented in this is original in nature and to the best my knowledge, has not been submitted so far to any other university. Whenever references have been made to the work of others, it is clearly indicated in the sources of information in references.

Asrar Ahmad

Place: - Thane Date:-


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Acknowledgement

I express my profound thanks to Mr. Ayoub my teacher and guide, who has been magnanimous in guiding, encouraging and supporting me during this project and he/she guided me to choose this immensely productive topic and it was because of his/her confidence in me that I have been able to carry out such a study report. I also wish to thank all the people at Canara Bank who helped me and facilitated my research project. I also wish to thank all those respondents who were patient enough in giving answer to my questionnaire. I would like to extend my gratitude to my parents, friends for their consistent encouragement, suggestions and moral support.

Asrar Ahmad TBS, KU


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1.

Introduction.......................................................................................................................6 1.1 Bank...................................................................................................................6 1.2 History of Banking in India....................................................................................7 1.2.1 Phase I.........................................................................................................8 1.2.2 Phase II........................................................................................................9 1.2.3 Phase III.....................................................................................................10 1.3 Indian Banking Industry.......................................................................................10 2. Scope of study....................................................................................................................11 2.1 Banks in India.......................................................................................................11 2.1.1 Major Banks in India.................................................................................12 2.1.2 Punch lines of Some Banks.......................................................................13 2.1.3 Fact Files of Banks in India.......................................................................14 2.1.4 Public Sector Banks..................................................................................15 2.1.5 Private Sector Banks.................................................................................17 2.2 Canara Bank.........................................................................................................18 2.2.1 Profile Of Canara Bank.............................................................................18 2.2.2 History of Canara Bank.............................................................................20 2.2.3 Significant Milestones...............................................................................23 2.2.4 Awards/Accolades.....................................................................................25 2.3. Competition Information.....................................................................................27 2.4 Canara bank Products / Services..........................................................................29 2.5 Subsidiaries of Canara Bank................................................................................30 2.6 Financial Statement of Canara Bank....................................................................36 2.6.1 Profit and Loss account:............................................................................37 2.7 Introduction to the Topic......................................................................................39 2.8 Introduction to customer satisfaction...................................................................56 2.8.1 Measure Customer Satisfaction.................................................................57 2.8.2 Information search.....................................................................................57 2.8.3 The selective consumer behavior process.................................................58 2.8.4 Information evaluation..............................................................................58 2.9 Literature Review.................................................................................................59 2.10 Objectives of the Study......................................................................................63 3. Research Methodology.......................................................................................................64 3.1 Research Objectives.............................................................................................64 3.2 Sample Size..........................................................................................................64 3.3 Research Area.......................................................................................................64 3.4 Descriptive Research............................................................................................65 3.5 Sampling Procedure.............................................................................................65 3.6 Formation of questionnaire..................................................................................65 3.7 Data Collection Tools...........................................................................................66 3.8 Sources of Data....................................................................................................66 3.9 Respondent’s Profile:...........................................................................................66 3.10 Organizing the Data...........................................................................................66 3.11 Presentation of Data...........................................................................................66 The Business School, Kashmir University

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3.12 Analysis of Data.................................................................................................66 3.13 Interpretation of Data.........................................................................................67 3.14 Classification of Data.........................................................................................67


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Chapter 1

Introduction 1.1 Bank Finance is the life blood of trade, commerce and industry. Now-a-days, bank money acts as the backbone of modern business. Development of any country mainly depends upon the banking system. The term bank is derived from the French word ‘Banco’ which means a Bench or Money exchange table. A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it. Oxford Dictionary defines a bank as "an establishment for custody of money, which it pays out on customer's order." Features of a Bank:

1. Dealing in Money Bank is a financial institution which deals with other people's money i.e. money given by depositors. 2. Individual / Firm / Company A bank may be a person, firm or a company. A banking company means a company which is in the business of banking. 3. Acceptance of Deposit A bank accepts money from the people in the form of deposits which are usually repayable on demand or after the expiry of a fixed period. It gives safety to the deposits of its customers. It also acts as a custodian of funds of its customers. The Business School, Kashmir University

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4. Giving Advances A bank lends out money in the form of loans to those who require it for different purposes. 5. Payment and Withdrawal: A bank provides easy payment and withdrawal facility to its customers in the form of cheques and drafts, It also brings bank money in circulation. This money is in the form of cheques, drafts, etc. 6. Agency and Utility Services A bank provides various banking facilities to its customers. They include general utility services and agency services. 7. Profit and Service Orientation A bank is a profit seeking institution having service oriented approach. 8. Connecting Link A bank acts as a connecting link between borrowers and lenders of money. Banks collect money from those who have surplus money and give the same to those who are in need of money. 9. Banking Business A bank's main activity should be to do business of banking which should not be subsidiary to any other business. 10. Name Identity

A bank should always add the word "bank" to its name to enable people to know that it is a bank and that it is dealing in money.


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1.2 History of Banking in India Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as Instant messaging or dial a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They areas mentioned below: Phase I: Early phase from 1786 to 1969 of Indian Banks.  Phase II: Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.  Phase III: New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.


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1.2.1 Phase I

The General Bank of India was set up in the year 1786. Next came the Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders In 1865 Allahabad Bank was established and first time exclusively by Indians. Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those day’s public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. 1.2.2 Phase II

Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with The Business School, Kashmir University

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seven more banks. This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: 1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India.  1959: Nationalization of SBI subsidiaries.  1961: Insurance cover extended to deposits.  1969: Nationalization of 14 major banks.  1971: Creation of credit guarantee corporation.  1975: Creation of regional rural banks.  1980: Nationalization of seven banks with deposits over 200 crore. After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%. Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

1.2.3 Phase III

This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M. Narasimham, a committee was set up by his name which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.


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1.3 Indian Banking Industry The Indian banking market is growing at an astonishing rate, with Aggregate deposits reaching US$1 trillion by 2013. An expanding economy, middle class, and technological Innovations are all contributing to this growth. The country’s middle class accounts for over 320 million People. In correlation with the growth of the economy, rising income levels, increased standard of living, and affordability of banking products are promising factors for continued expansion.

The Indian banking Industry is in the middle of an IT revolution, Focusing on the expansion of retail and rural banking. Players are becoming increasingly customer - centric in their approach, which has resulted in innovative methods of offering new banking products and services. Banks are now realizing the importance of being a big player and are beginning to focus their attention on mergers and acquisitions to take advantage of economies of scale and/or comply with Basel II regulation. “Indian banking industry assets are expected to reach US$1 trillion by 2010 and are poised to receive a greater infusion of foreign capital,” says Prathima Rajan, analyst in Celent's banking group and author of the report. “The banking industry should focus on having a small number of large players that can compete globally rather than having a large number of fragmented players."


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Chapter 2

Scope of study 2.1 Banks in India In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. Each has their own dedicated target market. Few of them only work in rural sector while others in both rural as well as urban. Many even are only catering in cities. Some are of Indian origin and some are foreign players. All these details and many more is discussed over here. The banks and its relation with the customers, their mode of operation, the names of banks under different groups and other such useful information’s are talked about. One more section has been taken note of is the upcoming foreign banks in India. The RBI has shown certain interest to involve more of foreign banks than the existing one recently. This step has paved a way for few more foreign banks to start business in India. The banking section will navigate through all the aspects of the Banking System in India. It will discuss upon the matters with the birth of the banking concept in the country to new players adding their names in the industry in coming few years. The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association (IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined under three separate heads with one page dedicated to each bank.


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2.1.1 Major Banks in India

ABN-AMRO Bank Abu Dhabi Commercial Bank American Express Bank Andhra Bank Allahabad Bank Bank of Baroda Bank of India Bank of Maharashtra Bank of Punjab Bank of Rajasthan Bank of Ceylon BNP Paribas Bank Canara Bank Catholic Syrian Bank Central Bank of India Centurion Bank China Trust Commercial Bank Citi Bank City Union Bank Corporation Bank Dena Bank Deutsche Bank Development Credit Bank Dhanalakshmi Bank Federal Bank HDFC Bank HSBC ICICI Bank IDBI Bank Indian Bank

Indian Overseas Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank JPMorgan Chase Bank Karnataka Bank Karur Vysya Bank Laxmi Vilas Bank Oriental Bank of Commerce Punjab National Bank Punjab & Sind Bank Scotia Bank South Indian Bank Standard Chartered Bank State Bank of India (SBI) State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurastra State Bank of Travancore Syndicate Bank Taib Bank UCO Bank Union Bank of India United Bank of India United Bank Of India United Western Bank UTI Bank


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2.1.2 Punch lines of Some Banks

BANKS

PUNCHLINES

CANARA BANK

“Service to grow, grow to service”

INDIAN BANK SBI BANK HDFC BANK HSBC BANK INDIAN OVERSEAS BANK DENA BANK CANARABANK VIJAYA BANK FEDERAL BANK IDBI ORIENTAL BANK OF COMMERCE DHFL

“Poised for higher growth” “With you- all the way” “We understand your world” “The world’s local bank” “Good people to grow with” “The trusted family bank” “May I help you” “A friend you can bank with” “Your perfect banking partner” “Plan ahead. Get ahead” “Where every individual is committed”


“The friendly housing loan people”

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2.1.3 Fact Files of Banks in India

.

The first bank in India to be given an ISO Certification.

Canara Bank

The first bank in Northern India to get ISO 9002 certification for their selected branches.

Punjab and Sind Bank

The first Indian bank to have been started solely with Indian Capital.

Punjab National Bank

The first among the private sector banks in Kerala to become a Scheduled bank in 1946 under the RBI Act.

South Indian Bank

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

State Bank of India

India's second largest private sector bank and is now the Largest scheduled commercial bank in India.

The Federal Bank Limited

Bank which started as private shareholders banks, mostly Europeans shareholders

Imperial Bank of

The first Indian bank to open a branch outside India in Bank of India, London in 1946 and the first to open a branch in continental founded in 1906 in Europe at Paris in 1974. Mumbai The oldest Public Sector Bank in India having branches all over India and serving the customers for the last 132 years. Allahabad Bank The first Indian commercial bank which was wholly owned and managed by Indians


Central Bank of India

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2.1.4 Public Sector Banks

Among the Public Sector Banks in India, United Bank of India is one of the 14 major banks, which were nationalized on July 19, 1969. Its predecessor, in the Public Sector Banks, the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz. Camilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Camilla Union Bank Ltd. (1922) and Hooghly Bank Ltd. (1932). Oriental Bank of Commerce (OBC), Government of India Undertaking offers Domestic, NRI and Commercial banking services. OBC is implementing a GRAMEEN PROJECT in Dehradun District (UP) and Hanumangarh District (Rajasthan) disbursing small loans. This Public Sector Bank India has implemented 14 point action plan for strengthening of credit delivery to women and has designated 5 branches as specialized branches for women entrepreneurs. The following are the list of Public Sector Banks in India                 

Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank UCO Bank Union Bank of India


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 United Bank of India  Vijaya Bank

List of State Bank of India and its subsidiary, a Public Sector Banks       

State Bank of India. State Bank of Bikaner & Jaipur. State Bank of Hyderabad. State Bank of Indore. State Bank of Mysore. State Bank of Saurastra. State Bank of Travancore.

2.1.5 Private Sector Banks

Private banking in India was practiced since the beginning of banking system in India. The first private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. IDBI ranks the tenth largest development bank in the world as Private Banks in India and has promoted world class institutions in India. The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited, to set up a bank in the private sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995. ING Vysya, yet another Private Bank of India was incorporated in the year 1930. Bangalore has a pride of place for having the first branch inception in the The Business School, Kashmir University

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year 1934. With successive years of patronage and constantly setting new standards in banking, ING Vysya Bank has many credits to its account List of Private Banks in India                   

Bank of Punjab Bank of Rajasthan Catholic Syrian Bank Centurion Bank City Union Bank Dhanalakshmi Bank Development Credit Bank Federal Bank HDFC Bank ICICI Bank IDBI Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank Karnataka Bank Karur Vysya Bank Laxmi Vilas Bank South Indian Bank United Western Bank


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2.2 Canara Bank 2.2.1 Profile Of Canara Bank

Type

Public (BSE: 532483, NSE: CANBK)

Industry

Banking Financial services

Founded

Canara Bank Hindu Permanent Fund (1906) Canara Bank Ltd (1910) Canara Bank (1969)

Headquarters

Bangalore, India

Key people

A. C. Mahajan, (Chairman & MD) Jagdish Pai K L , (Executive Director)

Products

Investment Banking Consumer Banking Commercial Banking Retail Banking Private Banking Asset Management Pensions Mortgage Credit Cards

Employees Website

47,389 (2004–05) www.canarabank.com


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"A good bank is not only the financial heart of the community, but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people" - A. Subba Rao Pai. A. Subba Rao Pai.

Vision To emerge as a ‘Best Practices Bank’ by pursuing global benchmarks in profitability, operational efficiency, asset quality, risk management and expanding the global reach. Mission To provide quality banking services with enhanced customer orientation, higher value creation for stakeholders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking. Founding Principles To remove Superstition and ignorance. To spread education among all to sub-serve the first principle. To inculcate the habit of thrift and savings. To transform the financial institution not only as the financial heart of the community but the social heart as well.  To assist the needy.  To work with sense of service and dedication.  To develop a concern for fellow human being and sensitivity to the    


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surroundings Sound founding principles, enlightened leadership, unique work culture and remarkable adaptability to changing banking environment have enabled Canara Bank to be a frontline banking institution of global standards. 2.2.2 History of Canara Bank

Canara Bank is a major financial service. It was established in India in 1906, which makes it among the older Indian banks. As on 2009 November, the bank had a network of 2861 branches, spread across India and other countries. Its head office is located in Bangalore, India. The bank also has international presence in several centers, including London, Hong Kong, Moscow, Shanghai, Doha, and Dubai . In terms of business it is one of the largest nationalized commercial banks in India, with a total business of about Rs.2 trillion. The late Sri. Ammembal Subba Rao Pai, a philanthropist, established the Canara Bank Hindu Permanent Fund in Mangalore, India, on 1 July 1906. The bank changed its name to Canara Bank Limited in 1910 when it incorporated. In 1958, the Reserve Bank of India ordered Canara Bank to acquire G. Raghumathmul Bank, in Hyderabad. This bank had been established in 1870, and had converted to a limited company in 1925. At the time of the acquisition the bank had five branches. The Government of India nationalized Canara Bank, along with 13 other major commercial banks of India, on 19 July 1969.In 1976, Canara Bank inaugurated its 1000th branch. In 1983, Canara Bank opened its first overseas office, a branch in London. In 1985, Canara Bank acquired Lakshmi Commercial Bank in a rescue. In 1984, Canara Bank acquired the Laksmi Commercial Bank. In 1985, Canara Bank established a subsidiary in Hong Kong, Indo Hong Kong International Finance Ltd. In 2008-09, Canara Bank opened its third foreign branch, this one in Shanghai. Widely known for customer centricity, Canara Bank was founded by Shri Ammembal Subba Rao Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a small port in Karnataka. The Bank has gone through the various phases of its growth trajectory over hundred years of its The Business School, Kashmir University

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existence. Growth of Canara Bank was phenomenal, especially after nationalization in the year 1969, attaining the status of a national level player in terms of geographical reach and clientele segments. Eighties was characterized by business diversification for the Bank. In June 2006, the Bank completed a century of operation in the Indian banking industry. The eventful journey of the Bank has been characterized by several memorable milestones. Today, Canara Bank occupies a premier position in the comity of Indian banks. With an unbroken record of profits since its inception, Canara Bank has several firsts to its credit. These include:  Launching of Inter-City ATM Network  Obtaining ISO Certification for a Branch  Articulation of ‘Good Banking’ – Bank’s Citizen Charter  Commissioning of Exclusive Mahila Banking Branch  Launching of Exclusive Subsidiary for IT Consultancy  Issuing credit card for farmers  Providing Agricultural Consultancy Services Over the years, the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad. As at March 2009, the Bank has further expanded its domestic presence, with 2729 branches spread across all geographical segments. Keeping customer convenience at the forefront, the Bank provides a wide array of alternative delivery channels that include over 2000 ATMs- one of the highest among nationalized banks- covering 705 centers, 1362 branches providing Internet and Mobile Banking (IMB) services and 2062 branches offering 'Anywhere Banking' services. Under advanced payment and settlement system, all branches of the Bank have been enabled to offer Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) facilities. Not just in commercial banking, the Bank has also carved a distinctive mark, in various corporate social responsibilities, namely, serving national priorities, promoting rural development, enhancing rural self-employment through The Business School, Kashmir University

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several training institutes and spearheading financial inclusion objective. Promoting an inclusive growth strategy, which has been formed as the basic plank of national policy agenda today, is in fact deeply rooted in the Bank's founding principles. "A good bank is not only the financial heart of the community, but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people". These insightful words of our founder continue to resonate even today in serving the society with a purpose. The growth story of Canara Bank in its first century was due, among others, to the continued patronage of its valued customers, stakeholders, committed staff and uncanny leadership ability demonstrated by its leaders at the helm of affairs. We strongly believe that the next century is going to be equally rewarding and eventful not only in service of the nation but also in helping the Bank emerge as a "Global Bank with Best Practices". This justifiable belief is founded on strong fundamentals, customer centricity, enlightened leadership and a family like work culture.


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2.2.3 Significant Milestones

1st July 1906 1910 1969 1976 1983 1984 1985 1987 1989 1989-90

Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000 shares of Rs.50/- each, with 4 employees. Canara Hindu Permanent Fund renamed as Canara Bank Limited 14 major banks in the country, including Canara Bank, nationalized on July 19 1000th branch inaugurated Overseas branch at London inaugurated Cancard (the Bank’s credit card) launched Merger with the Laksmi Commercial Bank Limited Commissioning of Indo Hong Kong International Finance Limited Canbank Mutual Fund & Canfin Homes launched Canbank Venture Capital Fund started Canbank Factors Limited, the factoring subsidiary launched

Became the first Bank to articulate and adopt the directive principles 1992-93 of “Good Banking”. Became the first Bank to be conferred with ISO 9002 certification for 1995-96 one of its branches in Bangalore The Business School, Kashmir University

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Opened a 'Mahila Banking Branch', first of its kind at Bangalore, for 2001-02 catering exclusively to the financial requirements of women clientele. 2002-03 2003-04

Maiden IPO of the Bank Launched Internet & Mobile Banking Services

2004-05

100% Branch computerization Entered 100th Year in Banking Service Launched Core Banking Solution in select branches 2005-06 Number One Position in Aggregate Business among Nationalized Banks Retained Number One Position in Aggregate Business among Nationalized Banks. 2006-07 Signed MoUs for Commissioning Two JVs in Insurance and Asset Management with international majors viz., HSBC, (Asia Pacific) Holding and Robeco Groep N.V respectively Launching of New Brand Identity Incorporation of Insurance and Asset Management JVs 2007-08 Launching of 'Online Trading' portal Launching of a ‘Call Centre’ Switchover to Basel II New Capital Adequacy Framework 2008-09 2009-10

The Bank crossed the coveted Rs. 3 lakh crore in aggregate business. The Bank’s 3rd foreign branch at Shanghai commissioned The Bank’s aggregate business crossed 4 lakh crores mark. Net profit of the Bank crossed 3000 crores. The Bank’s branch network crossed the 3000 mark

The Bank’s aggregate business crossed 5 lakh crores mark. Net profit of the Bank crossed 4000 crores. 100% coverage under Core Banking Solution. The Bank’s 4th foreign branch at Leicester and a 2010-11 Representative office at Sharjah, UAE, opened. The Bank raised 1993 crores under QIP. Govt. holding reduced to 67.72% post QIP. As at December 2011, the total business of the Bank stood at 534710 crores. The Business School, Kashmir University

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2.2.4 Awards/Accolades.

Awards/Accolades Received during 2014-15  "MSME Banking Excellence Awards-2014" organized by Chamber of Indian Micro, Small and Medium Enterprises (CIMSME)  Awarded ‘Niryat Bandhu’ instituted by Federation of Indian Export Organization (FIEO)  “SKOCH Renaissance Award 2014” under India's Best Projects 2014 Category for Rural Self Employment Training Institute.  Best Performer in Account Growth Rate by NSDL Star Performer Awards 2014.  Awarded First Prize under “Indira Gandhi Rajbhasha Shield” in Region C for effective implementation of Official Language for the year 201314.  Conferred with Reserve Bank Rajbhasha Shield for effective implementation of Official Language in Region 'B' & 'C'.  Ranked 1st among Public Sector Banks in an article on India's Best Companies for CSR published in the "Corporate Dossier" of Economic Times.  Awarded ‘Best Inspiring Place to Work (Public Sector)’ by Banking Frontiers partnering with M/s. Deloitte in an effort to recognize the HR efforts of the BFSI sector.  Golden Peacock Award for Corporate Governance by the Institutes of Directors, India.  CEO with HR Orientation at the Asia Pacific HRM Congress 2014 instituted by World HRD Congress.  Conferred with “Asia HRD Award” under the category “Contribution to Organization” of the Asia HRD Congress Awards – 2014.


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Awards and Achievements during 2013-14 In recognition of the varied initiatives, the Bank was conferred with the following awards –  Global CSR Excellence and Leadership Awards 2014 from CSR World Congress.  Best Home Loan Provider Award from Outlook Money for 2013.  “Finger Print based Biometric Authorization for CBS” declared as winner for secure IT 2014 award.  The Bank’s Desktop Management System project awarded amongst India’s Best -2013 in 33rd SKOCH Summit.  NFS Operational Excellence Award 2013 - Special Jury Award 2013 by NPCI  ‘Corporate Collateral Awards’ under various categories by Public Relations Council of India.  Golden Peacock Award for excellence in Corporate Social Responsibility for the year 2013.  Greentech Award for excellence in Corporate Social Responsibility for the year 2013.  Skoch Renaissance Award 2013, with a Medal and Citation for being India's Best-2013.  ‘Jury Award for New Initiatives under MSME’ instituted by Chamber of Indian MSME under Banking Excellence Awards 2013.  ‘Top Performer in New De-mat Accounts Opened’ in banking sector by National Securities Depository Ltd., (NSDL) for the year 2013.  ‘Golden Peacock Global Award for Corporate Social Responsibility’ for the year 2013  Golden Peacock Award for Excellence in Corporate Governance 2013. 2.3. Competition Information Canara Bank’s main competitors are as follows:-

1) Axis Bank Ltd. Axis Bank Limited, formerly UTI Bank, is a financial services firm that had begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank's Registered Office is at The Business School, Kashmir University

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Ahmadabad and its Central Office is located at Mumbai. Axis Bank one of the largest private sector financer in India for Agriculture loans.

2) ICICI Bank Ltd. ICICI Bank Limited also known as Industrial Credit and Investment Corporation of India Bank is the second largest financial service company headquartered at Mumbai, India. The Bank has a network of 2,533 branches and 6,601 ATMs in India, and has a presence in 19 countries, including India. ICICI Bank was established in 1994 by ICICI Limited, an Indian financial institution, as a wholly owned subsidiary.

3) Kotak Mahindra. The Kotak Mahindra group is a financial organization established in 1985 in India. It was previously known as the Kotak Mahindra Finance Limited, a non-banking financial company. In February 2003, Kotak Mahindra Finance Ltd was given the license to carry on banking business by the Reserve Bank of India (RBI). Kotak Mahindra Finance Ltd. is the first company in the Indian banking history to convert to a bank. Today it has more than 20,000 employees and Rs. 10,000 crore in revenue.

4) State Bank of India State Bank of India (SBI) (is the largest Indian banking and financial services company (by turnover and total assets) with its headquarters in Mumbai, India. It is state-owned. SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. SBI has 14 Local Head Offices and 57 Zonal Offices that are located at important cities throughout the country. It also has around 130 branches overseas.

5) Yes Bank Ltd. YES Bank Limited is an Indian Bank, engaged in providing a range of banking and financial services. The Bank’s business segments include Treasury, Corporate/Wholesale Banking, and Retail Banking, Corporate Finance, Transaction Banking and a host of other Banking services. It was founded by Rana The Business School, Kashmir University

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Kapoor and his partner (Late) Ashok Kapur, with the duo holding a collective financial stake of 27.16%.

6) IndusInd Bank IndusInd Bank, which commenced operations in 1994, caters to the needs of both consumer and corporate customers. Its technology platform supports multi-channel delivery capabilities. As on June 30, 2013, IndusInd Bank had 530 branches, and 1003 ATMs spread across 380 geographical locations of the country. The Bank also has representative offices in London and Dubai. The Bank believes in driving its business through technology. It enjoys clearing bank status for both major stock exchanges BSE and NSE - and major commodity exchanges in the country, including MCX, NCDEX, and NMCE. IndusInd Bank on April 1, 2013 was included in the NIFTY 50 benchmark index. IndusInd Bank also offers DP facilities for stock and commodity segments.

7) ING Vysya ING Vysya Bank Ltd is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services. More than 84,000 ING employees server over 61 million private, corporate and institutional customers in over 40 countries in Europe, North America, Latin America, Asia and Australia. We draw on our experience and expertise, our commitment to excellent service and our global scale to meet the needs of a broad customer base, comprising individuals, families, small, businesses, large corporations, institutions and governments.

2.4 Canara bank Products / Services Core Services

Payment Services

Facilitating Services Cash Foreign Currency Requirement Traveler Charges DD / Bankers Charges IT EFT


Supporting Services Making Payments At Door Step Internet Banking Telephone Banking

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Current Saving Account

Account

ATM Card Standing Instructions From & Customers From Making Payments Inter-Branch / Inter-Bank Transfer Funds Safety Vaults

Loan products: Consumer loans, personal loans, housing loans, educational loans

Current account Savings account Time deposit account

Current account Insurance products: Life Savings account insurance, pension Time deposits schemes Safety vaults

Credit Cards Debit Cards Service To Senior Citizens Telephone Banking Internet Banking Conversion Of Excess Balance To Time Deposits Delivery of loan at promised Time period Interest rate option: Fixed/floating Flexibility in pre-payment of Loan Counseling on Real-estate Markets Legal services for Documentation ECS for payment of loan Installments Additional insurance facility for family members Counseling on post retirement savings

2.5 Subsidiaries of Canara Bank CAN FIN HOMES Ltd.: Can-Fin Homes Limited was established on 29.10.1987 as a Sponsored Entity of the Bangle some of the premier financial institutions such as HDFC, UTI and NHB are the co-promoters of the Company. Canara Bank holds 29.30% of equity in the Company. Sri K Venkataramayya, General Manager of the Bank IS Managing Director of the Company. Apart from the Managing Director, the Board of Directors is compiled of top Executives of the Bank, institutional The Business School, Kashmir University

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nominees of HDFC, UTI and NHB and also professionals in the field of accounts/finance/Banking. The Registered Office of the Company is at No. 29, Sir M N Krishna Rao Park Road, Basavanagudi, Bangalore 560 004. The Company has 41 branches and 5 Representative Office spread across the country. Activities:  The prime objective and activity of the Company is to provide Ion g term finance to individuals for construction or purchase of residential houses/flats and to Companies or Corporations or Societies or Associations for the purpose of construction or purchase of residential houses flats  Over the years, the company has added new products to their range and value addition is done to the existing products to keep updated with the changing market scenario and the competition, which is getting tougher with each passing day. Personal loans to the existing borrowers, loans for purchase of sites, insurance cover for loaners, etc., are some examples of innovation/value addition.  Bank's goodwill, the innate strength of the Company approach and an unflinching business acumen have always kept the business on an envious platform making good profits and paying rich dividends and their pragmatic ever since inspection.  The Company also took a major step in diversification by launching three Non-housing Finance Products namely Premises Loan for practicing professionals (Venture), Mortgages Loans (Net worth) and Loan against rent receivables (Noncash)

CANARA BANK FACTORS LIMITED: Post Sale funds crunch is proving a handicap for many industries and business in the smooth cycling of capital. Canara Bank Factors Limited (CFL) was established in 10.05.1991 to mitigate this problem of the industry and business and ensure a smooth flow of capital in the entire cycle. This Company is promoted by our Bank along with Andhra Bank and SIDBI. The Registered office is at No. 17, Seshadri Road, Bangalore 56 0 009. The Business School, Kashmir University

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The Company is now being headed by Sri G R Seshadri as Managing Director a senior executive in the cadre of Deputy General Manager deputed from the Bank. The Board of the Company consists of Chairman & Managing Director, Executive Director and a General Manager of the Bank, apart from the Managing Director. SIDBI and Andhra Bank have appointed their nominees. There are 3 non-official Directors from the profession of audit/accounts/ Banking/Finance. It has a network of 8 branches in southern and we stem part of the courtly and proposes to add some more during the next financial year. Activity: Factoring Services: To cater to the needs of the clientele, Company has always on the lookout for innovative and competitive products. Introduction {)f variants of fact ling such as International Factoring/Export Factoring and Sub -variants such as Invoice Discounting backed by LCs/Hundisffripartite Agreements are examples of their consistent Endeavour to design/redesign their products. CRISIL has given the following RATING to the Company:  "PH" - indicating highest safety for short term debt program allover Commercial Papers.  "FAA+" - indicating higher safety for Public Deposits.  "AA" - indicating higher safety for non-convertible debentures.  The Company is accredited with an ISO Certificate -"DIN EN ISO 9001:2000" by TUV CERT Certification body of Germany . CANBANK VENTURE CAPITAL FUND LIMITED: In our economic environment, assistance for establishment of new ventures in the field of industry is not easily forthcoming. To assist the new ventures, our Bank had formed a Venture Capital Fund in the year 1989. The Fund is managed by Canara bank Venture Capital Fund Ltd, a wholly owned Subsidiary of Canara Bank. This is the only Company of its kind sponsored by a Public Sector Bank The Business School, Kashmir University

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in the country. Sri B Sudhakar Shetty, Asst General Manager of the Bank is heading the Company as Managing Director. Apart from the Managing Director, the Company's Board of Directors consists of our Chairman & Managing Director, Executive Director and a General Manager of the Bangle There are two non-official Directors, each drawn from the field of industry and Finance. The Registered Office is at No. 14, Naveen Complex, 4th Floor, M G Road, Bangalore 560001. Activity: Trustee and Manager of Canara bank Venture Capital Fund CANBANK COMPUTER SERVICES LIMITED: With fast increasing impetus ~n information technology and extensive use of computers in more and more spheres, the Bank found good opportunity for establishment of a Company which can develop software’s and provide consultancy services to computer users. This thought of the Bank culminated in the establishment of CCSL on 13.08 .1994. The Company is co-promoted by 2 other Public Sector Banks and 3 Private Sector Banks. Canara Bank is holding 62.97% of the equity of the Company. The Registered Office is situated at No. 14, Naveen Complex, 7 the Floor, M G Road, Bangalore 560 001. B. Sivaraman, Deputy General Manager of the Bank is heading the Company as Managing Director of the Company.

Apart from the Managing Director, the Board of Directors consists of our Chairman & Managing Director and Executive Director. There is one Director each from Bank of Baroda, Lakshmi Vilas Bank, ING Vysya Bank Limited and Vijay Bank on the Board Activities: CCSL designs and develops software for banks, financial institutions The Business School, Kashmir University

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and Government Departments, with its extensive in-house infra-structure and proven technical expertise. All its products and Projects are well documented and user -friendly, with on-line help, data encryption and audit features. CCSL offers services in the following areas: 1. Software development 2. Business Process Outsourcing 3. Training 4. Data warehousing Solution 5. Web based solution 6. Information Systems Audit 7. Consultancy Service

GILT SUCURITIES TRADING CORPORATION LIMITED This is the latest of the Subsidiaries of Canara Bank so far. Established on06.06.1996 and co-promoted by Corporation Bank and Bank of Baroda, is a Primary Dealer Subsidiary accredited by RBI. Company is a wholly Owned Subsidiary of Canara Bank since September 2004.  The Registered Office is at 1-1, Kalahari heritage, Manikin Wada The Business School, Kashmir University

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Building, 127, M G Road, Foi T, Mumbai 400 023.  Presently, the Company is under the stewardship of Sri D G Kamath as Managing Director who is a Deputy General Manager of the Bank on second mint to the Company.  The Board of the Company consists of our Chairman& Man aging Director, Executive Director, 2 General Managers of the Bank and 2 Chartered Accountants and a former Banker. Activity:  Primary Dealer accredited by RBI for dealing III Government of India Dated Securities and Treasury Bills.  Strengthening Infrastructure in the Government Securities (G Sec) Market so as to make it vibrant, liquid and broad based.  Development of Underwriting and Market Making capabilities.  Improving Secondary Market Trading System. With the mentioned objectives, GSTCL participates actively both III Security and Money Market.  Reserve Bank of India, being the Regulator of Primary Dealers, sets certain goals in tons of Bidding Commitments and Success Ratio in the Primary auction of G Sec and T Bills, to be accomplished by them which form the basis for renewal of PD's license. GSTCL has the distinction of achieving these benchmarks consistently since inception. Underwriting of G Sec in the auction is yet another obligation cast on PDs.  Bond yields being the function of interest rate, the Company's asset portfolio is subject to market vagaries caused by factors like inflation, liquidity, government borrowing programmed, coupon, maturities of papers issued and also event base risks. In order to manage and mitigate these risks the Company has well defined and board approved investment policy so also Risk Management Policy.  As typical of a trader, the Company is encasing price volatility to earn profits. Day-to-day operations are largely supported by Call and Repo Borrow wings. Thus efficient funds management holds key to improving profitability.  The Company is also into retailing G Sec to individual investors PF The Business School, Kashmir University

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staffs/ Charitable Institutions through 24 designated branches of the parent, Canara Bank. And also has put in place arrangements for retailing through Stock Exchanges. CANBANK INVESTMENT MANAGEMENT SERVICES LIMITED Bank had established its Mutual Fund arm "Canara bank Mutual Fund" on 19.12.1987 for foraying into the Capital Market. CMF is an independent Trust governed by a Board of Trustees, When the RBI issued directives to form Asset Management Companies to manage the assets of Mutual Funds and such other Trusts, Canara bank Investment Management Services Limited was established by the Bank on 02.03.1993 as a Wholly Owned Subsidiary of the Bank, Sri N R Rarnanujam, Deputy General Manager of the Bank is at the helm of the Company as Managing Director. Two General Managers of the Bank is also on the Board. There are four non-official Directors on the Board drawn from various fields connected to finance, CANBANK FINANCIAL SERVICES LIMITED: This is the first Subsidiary emerging from the stable of Canara Bank. Established on 01.06.1987 as a Wholly Owned Subsidiary of the Bank, cantina was very quick to carve a niche for itself in the Merchant Banking arena as a premier institution providing a host of financial services under one roof. Registered Office of the Company is housed at No. 14, Naveen Complex, 6 th Floor, M G Road, Bangalore 560 001. Sri M. S. Prabhu, Divisional Manager of the Bank is heading the Company Executive Director. Apart from the Executive Director, the Board of Director consists of two General Managers of the Bank and a Chartered Accountant who is non -official Nominee as Chairman. 2.6 Financial Statement of Canara Bank Financial statements and reports are the tools which provide information of the firm’s financial affairs. This information is required for financial analysis & decision making. It assesses the financial status of organization which is prepared with help of accounting principle. Financial statement has mainly as follow: The Business School, Kashmir University

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 Balance sheet  Profit & loss account Basic conventions under which financial statements prepared are:  Consistency  Conservativeness  Disclosure Analyzing of financial statements helps to know the financial health of the borrower, which provides the detail of the liabilities and the assets of the applicant. It also helps to study the trends in the financial matters of the company. It helps to evaluate the assets of the applicant company. It assists in decision making process relating to the future activities.

2.6.1 Profit and Loss account:

Profit and loss account is one of the essential documents which show the summary of revenues, expenses and net income of the firm during the particular financial period. Functions of the Profit and Loss account: It gives a concise summary of the firm’s revenue and expenses during the particular period. It measures the firm’s profitability. It represents the activity of the firm. Profit and Loss account of Canara Bank (in Rs. Cr.) Mar '14 Mar '13 Mar '12

Income Interest Earned

Mar '11

Mar '10

12 mths 12 mths

12 mths

12 mths

12 mths

39,547.6134,077.94

30,850.62

23,064.01

18,751.96


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Other Income Total Income Expenditure Interest expended Employee Cost Selling, Admin & Misc Expenses Depreciation Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses

3,932.76 3,153.01 43,480.3737,230.95

2,949.75 33,800.37

2,826.98 25,890.99

3,000.82 21,752.78

30,603.1726,198.94 3,672.38 3,253.56 6,538.16 4,716.65 228.47 189.69 0.00 0.00 6,081.01 5,141.99 4,358.00 3,017.91 41,042.1834,358.84 Mar '14 Mar '13

23,161.31 2,973.09 4,226.38 156.89 0.00 5,967.81 1,388.55 30,517.67 Mar '12

15,240.74 2,954.84 3,518.16 151.36 0.00 5,420.49 1,203.87 21,865.10 Mar '11

13,071.43 2,193.70 3,311.09 155.13 0.00 4,903.79 756.13 18,731.35 Mar '10

12 mths 12 mths

12 mths

12 mths

12 mths

2,872.10 0.00 0.00 2,872.10 0.00 576.00 98.00

3,282.71 0.00 0.00 3,282.71 0.00 487.30 80.00

4,025.89 0.00 0.00 4,025.89 0.00 487.30 80.00

3,021.43 0.00 0.00 3,021.43 0.00 410.00 70.00

64.83 130.00 561.58

74.10 110.00 465.57

90.88 110.00 405.00

73.69 100.00 305.83

2,198.10 0.00

1,530.15 1,185.26

1,765.29 1,693.30

1,676.35 865.08

674.00

567.30

567.30

480.00

0.00 2,872.10

0.00 3,282.71

0.00 4,025.89

0.00 3,021.43

Net Profit for the Year 2,438.19 Extraordinary Items 0.00 Profit brought forward 0.00 Total 2,438.19 Preference Dividend 0.00 Equity Dividend 507.38 Corporate Dividend Tax 86.23 Per share data (annualized) Earnings Per Share (Rs) 52.86 Equity Dividend (%) 110.00 Book Value (Rs) 642.16 Appropriations Transfer to Statutory Reserves 1,844.58 Transfer to Other Reserves 0.00 Proposed Dividend/Transfer to 593.61 Govt Balance c/f to Balance Sheet 0.00 Total 2,438.19

Balance Sheet Mar '14

Mar '13


Mar '12

Mar '11

Mar '10 Page 38

Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities

Assets Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Revaluation Reserves Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs)

12 mths

12 mths

12 mths

12 mths

12 mths

461.26 461.26

443.00 443.00

443.00 443.00

443.00 443.00

410.00 410.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

29,158.85 24,434.79 29,620.11 24,877.79 420,722.82355,855.99 27,230.64 20,283.37 447,953.46376,139.36

20,181.82 20,624.82 327,053.73 15,525.39 342,579.12

17,498.46 17,941.46 293,972.65 14,261.65 308,234.30

12,129.11 12,539.11 234,651.44 8,440.56 243,092.00

14,348.29 11,325.45

8,891.12

7,804.64

6,977.30

491,921.86412,342.60 Mar '14 Mar '13

372,095.06 Mar '12

333,980.40 Mar '11

262,608.41 Mar '10

12 mths

12 mths

12 mths

12 mths

22,153.78 15,405.93

17,795.14

22,014.79

15,719.46

22,674.93 19,308.77

10,384.27

8,693.32

3,933.75

301,067.48242,176.62 126,828.26121,132.83 6,641.56 2,862.72 0.00 0.00

232,489.82 102,057.43 4,858.37 2,065.14

212,467.17 83,699.92 4,686.15 2,098.36

169,334.63 69,676.95 4,480.37 2,132.68

0.00

0.00

2,000.84

1,841.74

1,620.99

6,641.56

2,862.72

792.39

746.05

726.70

0.00

0.00

0.00

0.00

0.00

12,555.85 11,455.73 491,921.86412,342.60

8,576.01 372,095.06

6,359.15 333,980.40

3,216.92 262,608.41

239,320.37263,705.34 0.00 0.00 642.16 561.58

166,419.96 36,132.91 465.57

111,805.73 29,041.74 405.00

110,627.02 21,206.47 305.83

12 mths


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2.7 Introduction to the Topic

2.8 Introduction to customer satisfaction Customer satisfaction is essential for the survival of any business. The best way to find out whether customers are satisfied or not is to ask them their opinions about your products and services, what's most important to them, and then make improvements to those areas that have the biggest impact on their satisfaction. Customer satisfaction, however, is when the customer is satisfied with a product/service that meets the customer’s needs, wants, and expectations. According to Philip Kotler “satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a products perceived performance in relation to his or her expectation”. As this definition makes clear, satisfaction is a function of perceived performance and expectations. If the performance falls short of expectations, the customer is dissatisfied; if the performance matches the expectations, the customer is satisfied. If the performance exceeds the customer is highly satisfied or delighted. Highly satisfied customers:  Stays loyal longer.  Buys more as the company launches its new products and upgrades existing products.  Talks favorably about the company and its products. The Business School, Kashmir University

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 Pays less attention to competing brand and advertisement and is less sensitive to price.  Offer product/service ideas to the company.  Costs less to serve than new customer because transactions are reutilized. Consumers form their expectations on the basis of message received from seller’s side and other sources of information, which lead to dissatisfaction. The large gap between expectation and performance, the greater the consumer dissatisfaction. Some consumers magnify the gap when the product is not perfect and they are highly dissatisfied. Other consumers minimize the gap and are less satisfied. The level of satisfaction is determined not only by the quality and type of customer experience but also by the customer’s expectations. A customer may be defined as someone who  Has a direct relationship with, or is directly affected by your agency and  Receives or relies on one or more of your agency’s services or products. The ultimate aim of measuring customer satisfaction must be to act on the information gathered, close the “gaps” between the customer’s perception of service and the actual service provided. An organization with a strong customer service culture places the customer at the center of service design, planning and service delivery. Customer centric organizations will:  Determine the customer’s expectations when they plan listen to the customer as they design.  Focus on the delivery of customer service activities value customer feedback when they measure performance. 2.8.1 Measure Customer Satisfaction.

In today’s competitive environment, every organization is trying to attract the customers by assuring highest degree of satisfaction. Satisfied customers are the main determinants of success or failure of the business of an organization. The Business School, Kashmir University

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Customer satisfaction measurement helps the organization to know:  How well are the products and services able to meet customer needs and expectations?  How well is the business process working?  Where to make the changes to improve the performance of product or process?  What is the effect of the changes made for improvements? 2.8.2 Information search

Once the consumer has recognized a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search. Sources of information include:  Personal sources  Commercial sources  Public sources  Personal experiences The relevant internal psychological process that is associated with information search is perception. Perception is defined as the process by which an individual receives, selects, organizes, and interprets information to create a meaningful picture of the world. 2.8.3 The selective consumer behavior process

Stage Description  Selective exposure consumers select which promotional messages they will expose themselves to.  Selective attention consumers select which promotional messages they will pay attention to  Selective comprehension consumer interpret messages in line with their beliefs, attitudes, motives and experiences  Selective retention consumers remember messages that are more meaningful or important to them  The implication of the process helps develop an effective promotional strategy, and select which sources of information are more effective for the brand. The Business School, Kashmir University

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2.8.4 Information evaluation

At this time the consumer compares the brand and products that are in their evoked set. How can the marketing organization increase the likelihood that their brand is part of the consumer’s evoked set? Consumers evaluate alternatives I terms of the functional and psychological benefits that they offer. The marketing organization needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision. Purchase decision: Once the alternatives have been evaluated, the consumer is ready to make a purchase decision.. The marketing organization must facilitate the consumer to act on their purchase intention. The organization can use variety of technique to achieve this. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration. Once the integration achieved, the organization can influence the purchase decisions much more easily. Post purchase evaluation: It is common for the customers to experience concerns after making a purchase decision. This arises from a concept that is known as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time. To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision. It is not affected by advertisement. Internal influences: Consumer behavior is influenced by demographics, psychographics, personality, motivation, knowledge, attitudes, beliefs and feelings. Consumer behavior concern with consumer need consumer actions in the direction of satisfying needs leads to his behaviour of every individual depend on thinking. External influences: Consumer behavior is influenced by: culture, subculture, locality, royalty, ethnicity, family, social class, reference groups, lifestyle, sex and all.


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2.9 Literature Review Both the technical and the functional dimensions of service management were shown to correlate with customer satisfaction. Thus, SMEs seem to evaluate their banking relationship not only on the basis of the effectiveness and quality of banks' service outcomes but also on the care and manner in which the bankers deliver services. (Lundahl, Vegholm and Silver 2009) The purpose of this paper is to explore the relationship between corporate social responsibility (CSR) and customer outcomes. This paper reviews the literature on CSR effects and satisfaction, noting gaps in the literature. A series of propositions is put forward to guide future research endeavors. By understanding the likely impact on customer satisfaction of CSR initiatives visà-vis customer-centric initiatives, the academic research community can assist managers to understand how to best allocate company resources in situations of low customer satisfaction. Such endeavors are managerially relevant and topical. Researchers seeking to test the propositions put forward in this paper would be able to gain links with, and possibly attract funding from, banks to conduct their research. Such endeavors may assist researchers to redefine the stakeholder view by placing customers at the center of a network of stakeholders. An understanding of how to best allocate company resources to increase the proportion of satisfied customers will allow bank marketers to reduce customer churn and hence increase market share and profits. (McDonald and Rundle-Thiele 2008) Ethics have always played a crucial role in the realm of business and commerce. This paper aims to extract the principle factors of ethical practices The Business School, Kashmir University

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to develop a model for competitive advantage in banking and to show the relation between ethical practice and customer satisfaction and the linked reason for satisfaction as a tool for competitive advantage. Based on the literature review, ethical issues in banking have been identified as a foundation work. Then an empirical study using survey research has been completed. The survey questionnaire has been designed using the literature and pilot survey input. Factor analysis has been conducted to derive ethical factors for competitive advantage from the survey data, which included 186 responses. ? 2 tests were also carried out to show the linked .From the analysis; two principle factors have been extracted: the cost leveraging factor; and the value leveraging factor which lead to competitive advantage. Moreover, it also revealed that high ethical practice results in high customer satisfaction and performance. (Tesfom and J. 2011) This research investigated the relationship between three elements – core service quality, relational service quality- and perceived value – and customer satisfaction and future intentions across four services. The results revealed that core service quality (the promise) and perceived value were the most important drivers of customer satisfaction with relational service quality (the delivery) a significant but less important driver. A direct link between customer satisfaction and future intentions was established. The relative importance of the three drivers of satisfaction varied among services. Specifically, the importance of core service quality and perceived value was reversed depending on the service. A major conclusion was that both perceived value and service quality dimensions should be incorporated into customer satisfaction models to provide a more complete picture of the drivers of satisfaction. . (Gordon H.G. McDougall, Birch Journal of Services Marketing Volume: 25 Issue: 5 2011) Results from independent two-sample t-tests and logistic regression support all five hypotheses, confirming that young and older bank customers differ significantly in their perception of switching barriers: relational benefits, switching costs, availability and attractiveness of alternatives, service recovery and the duration of time they intend to end their relationship with their banks. This study was conducted among employees of two higher education institutions. Thus, further research needs to test the research results in a diverse population. Since younger customers are more likely to change their banks easily, if retail banks want to retain younger customers they need to offer more meaningful incentives to younger customers than they offer to older customers. The Business School, Kashmir University

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In terms of practice the findings in this research highlight the need for managers to design different switching barrier packages for each customer age group. (Goitom Tesfom, Nancy J. Birch Journal of Services Marketing Volume: 25 Issue: 5 2011) This research investigated the relationship between three elements – core service quality, relational service quality- and perceived value – and customer satisfaction and future intentions across four services. The results revealed that core service quality (the promise) and perceived value were the most important drivers of customer satisfaction with relational service quality (the delivery) a significant but less important driver. A direct link between customer satisfaction and future intentions was established. The relative importance of the three drivers of satisfaction varied among services. Specifically, the importance of core service quality and perceived value was reversed depending on the service. A major conclusion was that both perceived value and service quality dimensions should be incorporated into customer satisfaction models to provide a more complete picture of the drivers of satisfaction. (Gordon H.G. McDougall, (Professor of Marketing, School of Business and Economics, Wilfred Laurier University, Waterloo, Ontario, Canada), Terrence Levesque, (Professor of Economics, School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario, Canada)


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2.10 Objectives of the Study  To collect information of other Banks.  To identify the major attributes of customer satisfaction.  To study customer perception about Canara BANK Current Account services  To draw the comparative analysis of Canara BANK. .  To identify and study the various ways of ensuring customer Satisfaction adopted by Canara BANK Vs other Banks.


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CHAPTER 3

Research Methodology Research is common refers to search for knowledge. It is the pursuit of truth with the help of study, observation, composition and experiment. Research methodology is a systematic way to solve the research problems. It helps in studying the various steps that are adopted by the researcher to study the research problems along with the logic behind the It describe mail what must be done, how will be done. What data will be needed and how the data will be analyzed. 3.1 Research Objectives  Top mind awareness of consumers for banks offering various retail products.  Factors influencing their purchase decision.  To study the comparative influence of various mediums of advertisements in creating Awareness amongst the consumers.  To find the immediate competitors in the minds of consumer for every retail product.


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3.3 Population The population consisted of people having a current account in Canara Bank 3.2 Sample Size A random sample of 50 were administered with the questionnaire and responses collected. 3.3 Research Area The research was carried out at Sector 4, Panchkula, Haryana.

3.4 Descriptive Research Descriptive research includes surveys and fact-finding enquires of different kinds. The major purpose of descriptive research of the state of affairs as it exists at present. In social science and business research, we quite often use the term Ex post facto research for descriptive research studies. Descriptive research was conducted in order the study the consumer perception about various banks offering retail products and the banks they option for. 3.5 Sampling Procedure This refers to the procedure by which the respondents should be chosen. In order to obtain a representative sample, a probability sample of the population was drawn. Probability sampling can be of the following types: Simple random sample  Stratified random sample.  Cluster (area) sample. In this case, simple random sampling was done The Business School, Kashmir University

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3.6 Formation of questionnaire Quite often the questionnaire is considered as the heart of a survey operation. Hence it should be carefully constructed. In the words of good and Hatt, "In general, the word questionnaire refers to a device for securing answers to questions by using a form which the respondent fills in himself." All the questions in a questionnaire are framed with a specific objective in mind and are placed in logical, sequential order. The questionnaire framed for the purpose of the study consists of a limited number of questions placed in a logical order. The questions were framed keeping in mind the educational and social background of the companies dealers. The questions were both open and closed ended as well as multiple choices.

3.7 Data Collection Tools Data was collected using Questionnaires. The Questionnaire consisted of suitable combination of Rating Scale, Ranking Scale and open ended Questions in the level of importance. 3.8 Sources of Data Primary source: Questionnaires were administered to people with experience of any retail offering, currently using or used in the past. Secondary Sources: Data was collected from the various websites from the internet as well as magazines and books. 3.9 Respondent’s Profile: Data was collected from respondents across all age and income groups. Data relating to age was collected. This segmentation helped us to gain insights into the perception and preferences across all age groups. 3.10 Organizing the Data The data collected during data collection process are organized and presented in a comprehensible sequence to make them more meaningful. 3.11 Presentation of Data After the data has been properly organized, it is ready for presentation. There The Business School, Kashmir University

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are different modes of presentation like tables, charts etc. The main objectives of presentation are to put collected data into an easy readable form. 3.12 Analysis of Data After organizing and presenting the data, the researchers then have to proceed towards conclusion by logical inferences. The raw data is then analyzed:  By bringing raw data to measured data.  Summarizing the data. 3.13 Interpretation of Data Interpretation means to bring out meaning of data or to convert more data into information. From the analysis of data the various conclusions are find out on the basis of logical inferences. 3.14 Classification of Data It refers to the process of arranging data into homogenous classes. Subsequent to the collection of data, the results were sorted out and arranged in different categories like Graph, Table etc.


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Chapter – 4 Data Analysis and Interpretation Q. 1 CUSTOMER PROFILE OF SURVEYED RESPONDENTS Table 4.1 Customer Profiles of Surveyed Respondents. Source: questionnaire survey


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Customer Satisfaction Canara Bank

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