CUSTOMER PERCEPTION TOWARDS J&K BANK

Description
CUSTOMER PERCEPTION TOWARDS J&K BANK

A SUMMER TRANING PROJECT REPORT ON “Customer perception towards J&K Bank” AT

MARKETING DIVISION SANGARMAAL

In the partial fulfillment of the requirement for the award of “Master of Business Administration” Lovely professional university.

Submitted To:Mr.Mushtaq Ahmad Khan Incharge marketing Division Zonal office,central, Kashmir Submitted By:S Surjeet singh Contact9915296427,9797946264, Email:[email protected]

ACKNOWLEDGEMENT

(In the name of GOD, the most Beneficent and the most Merciful)We offer our prime salutations to ?GOD? for he has always answered our prayers and provided us good health to complete this phase of our life. Every effort is motivated by an ambition and all ambitions have an inspiration behind. We owe this pride place to our revered parents,whose encouragement, positive reception and trust upon us has always inspired us to move further. We deem it to be our profound privilege to express our deep sense of gratitude and profound personal regards to esteemed,Mr.MUSHTAQ AHMED KHAN, Incharge Marketing Division, Zonal Office, Kashmir Central, J&K Bank whose impeccable guidance, critical analysis, constructive criticism, constant encouragement and unparalleled execution of the essential requisites during the entire course of study are beyond reach of our formal words. We extend our sincere thanks and regards towards our esteemed mentor, Mr.Zaffar Iqbal for his advice, constant help and suggestions during the course of investigations. I also extend my thanks to Mr.sandeep singh for his timely help & support.

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TABLE OF CONTENTS S. No. 1 2 3 4 5 6 7 8 9 10 11 Title A brief History of banking Reserve bank of India History and company profile Product details of J&k bank Marketing,service marketing and perception Research Methodology Objectives And limitation of study Data analysis and interpretation Finding,Suggestion And recomendation Biblography Annexure Page No. 4-14 15-19 20-27 28-50 51-62 63-65 66-67 68-83 84-86 87-88 89-93

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CHAPTER 1 BREIF HISTORY OF BANKING

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A Brief 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, tothe 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 oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472.It is followed by Bahrenberg 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. In the recent era, the story of "the Banks" commences with the development of the modern banking system in Middle Ages Europe. At that time, disposable wealth was usually held in the form of gold or silver bullion. For safety, such assets were kept in the custody of the local goldsmith, he usually being the only individual who had a vault on his premises. The goldsmith would issue a receipt for the deposit and, to undertake financial transactions, the buyer would withdraw his gold and give it to
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the seller, who would then deposit it again, frequently with the same goldsmith. As this was a timeconsuming process, it became common practice for people to simply exchange smiths' receipts when conducting financial transactions. As time passed, the goldsmiths began to issue receipts for specific values of gold, making buying and selling easier still. The smiths' receipts thus became the first banknotes. The goldsmiths, now fledgling bankers, noticed that at any one time only a small proportion of the gold held with them was being withdrawn. So they hit upon the idea of issuing more of the receipt notes themselves, notes that did not refer to any actual deposited wealth. By giving these receipts to people seeking capital, in the form of loans, the goldsmiths could use the money deposited with them by others to make money for themselves. It was found that, for every unit of gold held by the goldsmith, ten times the sum could be safely issued as notes without anyone usually becoming any the wiser. If a goldsmith held, say, 100 pounds of other people's gold in his vaults, he could issue banknotes to the value of 1000 pounds. As long as no more than 10 percent of the holders of those notes wanted their gold at any one time, no one would realize the fraud being perpetrated. This practice, known as "fractional reserve lending," continues to this day and is actually the backbone of the modern banking industry. INTRODUCTION ABOUT THE BANK In modern age, Banking constitutes the fundamental basis of economic growth. The term bank is being used since long time but there is no clear conception regarding its beginning. According to one viewpoint, in good old days, Italian moneylenders were known as Bane chi or Banacheri, because these people kept special type of table to transact their business, called Ban chi. Origin of the word, Bank belongs to the word Banchi or to the Greek word Banque. Both these words refer to some kind of banking. According to another viewpoint, bank originated from the German word (Italy) Banque meaning Joint Fund.Casa De SanGiorgio was the first bank to be established in 1148.The First Public bank of Venice. It was established in 1157. As per Banking Regulation Act. 1949, ?Banking? means: “Accepting for the purpose of lending or investment of deposit of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise?In simple words, bank refers to an institution that deals in money. This institution accepts deposits from the people and gives loans to those who are in need. Besides dealing in money, banks these days perform various other functions such as credit creation, agency job and general service.Bank, therefore, is
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such an institution, which undertakes agency

accepts deposits from the people, gives loans, creates credit and

A brief history of Banking in India In the modern sense 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 Bank of 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 know 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 National Bank for Agriculture and Rural Development with things like microfinance Post-Independence The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the
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government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included.The Reserve Bank of India, India's central banking authority, was established in April 1935, but was nationalized on 1 January 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).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. Nationalizations in the 1960s Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, the then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation?. The meeting received the paper with enthusiasm.Thereafter, her move was swift and sudden. The Government of India issued an ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969')) and nationalised the 14 largest commercial banks with effect from the midnight of 19 July 1969. These banks contained 85 percent of bank deposits in the country. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969.A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated reason for the nationalisation was to give the government more control of credit delivery. With the second dose of nationalisation, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalised banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. Liberalization in the 1990s
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In the early 1990s, the then Narasimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalised the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions.The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4– 6–4 method (Borrow at 4%; Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. Current period By 2010, banking in India was generally fairly mature in terms of supply, product range and reacheven though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true.With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales.In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them.In recent years critics have charged that the non-government owned banks are too aggressive in
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their loan recovery efforts in connection with housing, vehicle and personal loans. There are press reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide.

COMPOSITION OF THE BANKING SYSTEM IN INDIA AS AT THE BEGINNING OF NEW MILLENIUM At present, the number of nationalized banks is 20. Several Foreign banks were allowed to operate as per the guidelines of RBI. At present the banking system can be classified in following categories:

PUBLIC SECTOR BANKS ? Reserve Bank of India. ? State Bank of India and its 7 associate Banks. ? Nationalized Banks (20 in number) ? Regional Rural Banks sponsored by Public sector Banks PRIVATE SECTOR BANKS ? Old Generation Private Banks. ? New Generation Private Banks. ? Foreign Banks in India. ? Local Area Banks. ? Non Scheduled Banks CO-OPERATIVE SECTOR BANKS ? State Co-operative Banks. ? Central Co-operative Banks ? Primary Agriculture Credit Societies ? Land Development Banks
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? Urban Co-operative Banks ? State Land Development Banks ? Scheduled Co-operative Banks DEVELOPMENT BANKS ? Industrial Finance Corporation of India (IFCI) ? Industrial Development Bank of India (IDBI) ? Industrial Credit & Investment Corporation of India (ICICI) ? Industrial Investment Bank of India (IIBI) ? Small Industries Development Bank of India (SIDBI) ? National Bank for Agriculture & Rural Development (NABARD) ? Export-Import Bank of India BANK A bank is a commercial or state institution that provides financial services, including issuing money in form of coins, banknotes or debit cards, receiving deposits of money, lending money and processing transactions. A commercial bank accepts deposits from customers and in turn makes loans based on those deposits. Some banks (called Banks of issue) issue banknotes as legal tender. Many banks offer ancillary financial services to make additional profit; for most banks also rent safe deposit boxes in their branches. Despite common assumptions, banks do not create money; banks merely change debt from one form (loans) to another (banknotes).Currently in most jurisdictions commercial banks are regulated and require permission to operate. Operational authority is granted by bank regulatory authorities who provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. A commercial bank is usually defined as an institution that accepts both deposits and makes loans; there are also financial institutions that provide selected banking services without meeting the legal definition of a bank. Banks have influenced economies and politics for centuries. The primary purpose of a bank was to provide loans to trading companies. Banks provide funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Commercial lending today is a very intense activity, with banks carefully analyzing
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the financial condition of its business clients to determine the level of risk in each loan transaction. Banking services have expanded to include services directed at individuals and risks in these much smaller transactions are pooled.

Banks in India In India the banks are being segregated in different groups. Each group has its own benefits and limitations in operating in India. Each has its 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. 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 Indian Overseas Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank JPMorgan Chase Bank Karnataka Bank KarurVysya Bank Laxmi Vilas Bank Oriental Bank of Commerce Punjab National Bank

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Bank of Ceylon BNP Paribas Bank Canara Bank Catholic Syrian Bank Central Bank of India Citi Bank Corporation Bank Dena Bank Deutsche Bank HDFC Bank HSBC ICICI Bank IDBI Bank Indian Bank Foreign Banks in India:

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 StateBank of Saurashtra State Bank of Travancore Syndicate Bank Taib Bank UCO Bank

Foreign banks have brought latest technology and latest banking practices in India. They have helped in making Indian Banking system more competitive and efficient. Government has come up with a road map for expansion of foreign banks in IndiaThe road map has two phases. During the first phase between March 2005 and March 2009, foreign banks may establish a presence by way of setting up a Wholly Owned Subsidiary (WOS) or conversion of existing branches into a WOS. The second phase commenced in April 2009 after a review of the experience gained after due consultation with all the stake holders in the banking sector. The review would examine issues concerning extension of national treatment to WOS, dilution of stake and permitting
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mergers/acquisitions

of

any

private

sector

banks

in

India

by

a

foreign

bank.

Major foreign banks in India are: ? ? ? ? ? ? ? ? ? ABN-AMRO Bank Abu Dhabi Commercial Bank Ltd American Express Bank Ltd BNP Paribas Citibank DBS Bank Ltd Deutsche Bank HSBC Ltd Standard Chartered Bank

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CHAPTER 2 RESERVE BANK OF INDIA

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RESERVE BANK OF INDIA The Reserve Bank of India (RBI) is India's central banking institution, which controls the monetary policy of the Indian rupee. It was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934.The share capital was divided into shares of ?100 each fully paid, which was entirely owned by private shareholders in the beginning. Following India's independence in 1947, the RBI was nationalised in the year 1949.RBI assumes an important part in the development strategy of the Government of India, and as a leading member of the Alliance for Financial Inclusion (AFI), is notably active in promoting financial inclusion policy. RBI is also a member of the Asian Clearing Union. The general superintendence and direction of the RBI is entrusted with the 21-member-strong Central Board of Directors—the Governor (currently Duvvuri Subbarao), four Deputy Governors, two Finance Ministry representative, ten governmentnominated directors to represent important elements from India's economy, and four directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these local boards consists of five members who represent regional interests, as well as the interests of cooperative and indigenous bank Main Functions: Monetary Authority: Formulates implements and monitors the monetary policy. Objective: ? Maintaining price stability and ensuring adequate flow of credit to productive sectors.
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? Regulator and supervisor of the financial system: ? Prescribes broad parameters of banking operations within which the country's banking and financial system functions. ? Maintain public confidence in the system, protect depositors' interest and provide costeffective banking services to the public. Manager of Exchange Control: .Issuer of currency: Issues and exchanges or destroys currency and coins not fit for circulation. Objective: To give the public adequate quantity of supplies of currency notes and coins of good quality
TYPES OF BANKS

ACCORDING TO OWNERSHIP

ACCORDING TO LAW

ACCORDING FUNCTION

TO

PUBLIC SECTOR BANKS

PRIVATE SECTOR BANKS SCHEDULED BANKS NON-SCHEDULED BANKS

CO-OPERATIVE BANKS

COMMERCIAL BANK

INDUSTRIAL 17 BANK

SAVING BANK

Scheduled Banks in India (Public Sector): Scheduled Banks are those banks, which are included in the second schedule of the Reserve Bank Act, 1934. In terms of Section 42(5) of the Reserve Bank of India Act, a bank should fulfill the following conditions: ? It must have a paid up capital & reserve of an aggregate value of not less than Rs. 5 lacks. ? It must satisfy RBI that its affairs are not conducted in a manner detrimental to the depositors. ? It must be a state co-operative bank of a company under companies Act, 1956 or an institution notified by Central Government in this behalf or a corporation or a company incorporated under law in force in a place in or outside India. The scheduled banks enjoy certain privileges like approaching RBI for financial assistance; refinance etc. and correspondingly, they have certain obligations like maintaining certain cash reserves as prescribed by the RBI, submission of returns etc. The scheduled

commercials Banks in India comprises of state bank of India and its eight association, the other nineteen nationalized foreign banks, private sector banks co-operative banks and regional rural banks. As at the end of 30th June, 1999, there were 300 scheduled banks in India having a total networking of 64,918 branches among them. Non scheduled banks are those joint stock banks, which are not included in the second schedule of RBI Act on account of the failure to comply with the minimum requirements for being scheduled. As on 30th Jun, 1997, there are only, 3 non scheduled commercial banks operating in the country with a total of 9 branches: ? State Bank of Indore
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? State Bank of Mysore ? State Bank of Patiala ? State Bank of Saurashtra ? State Bank of Travancore ? Andhra Bank ? Punjab and Sind Bank ? Central Bank of India ? Corporation Bank ? Dena Bank ? Indian Overseas Bank ? Punjab National Bank ? Syndicate Bank ? Bank of Baroda ? Indian Bank ? Allahabad Bank ? Bank of Maharashtra ? Canara Bank ? State Bank of India ? State Bank of Bikaner and Jaipur ? State Bank of Hyderabad ? Oriental Bank of Commerce

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CHAPTER 3
History and company Profile

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HISTORICAL BACK GROUND OF THE J&K BANK LTD. The Jammu and Kashmir Bank was founded on October 1, 1938 under letters patent issued by the Maharaja of Jammu and Kashmir, Hari Singh. The Maharaja invited eminent Kashmiri investors to become founding directors and shareholders of the bank, the most notable of which were Abdul Aziz Mantoo, Pesten Gee and the Bhaghat Family, all of whom acquired major shareholdings.The Bank commenced business on July 4, 1939 and was considered the first of its nature and composition as a State owned bank in the country. The Bank was established as a semi-State Bank with participation in capital by State and the public under the control of State Government. In 1971, the Bank acquired the status of a scheduled bank and was declared as an A-Class bank by the Reserve Bank of India in 1976.The bank had to face serious problems at the time of independence when out of its total of ten branches two branches of Muzaffarabad, Rawalakot and Mirpur fell to the other side of the line of control (now Pakistan-administered Kashmir) along with cash and other assets. Following the extension of Central laws to the state of Jammu & Kashmir, the bank was defined as a government company as per the provisions of Indian companies act 1956. Mushtaq Ahmed is the new Chairman & CEO of Jammu & Kashmir Bank. However the State Govt. came to its rescue with the assistance of Rs6.00 Lacks to meet the claims thereafter, the bank overcame its difficulties and kept growing. Following the extension of Central laws to the state of Jammu & Kashmir, the bank was defined as a govt. company as per the provisions of Indian Companies Act 1956. The bank had its first full time chairman in 1971, following social Central measures in banks .The year 1971 was a turning point for the bank on conferment of scheduled bank status and witnessed remarkable progress in all the vital fields of operations. The bank was declared as "A" Class Bank by Reserve Bank of India in 1976. In recognition of dominant role and exalted performance, Reserve bank of India appointed the bank as its agent for performing the general banking business of the Central Govt. especially in maintaining currency chests and collection of taxes.

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Unique Characteristics & Services J&K Bank carries out banking business of the Central Government.Inspite of a government equity holding of 53 per cent, Jammu & Kashmir Bank (J&K Bank) is regarded as a private sector bank .J&K Bank is the one and only banker and lender of last resort to the Government of J&K. Plan and non-plan funds, taxes and non-tax revenues are routed through the J&K Bank J&K Bank claims the distinction of being the only private sector bank that has been designated as agent of RBI for banking The services of J&K Bank are utilized for the purposes of disbursing the salaries of Government officials. J&K Bank collects taxes pertaining to Central Board of Direct Taxes, in Jammu & Kashmir COMPANY PROFILE INTRODUCTION ABOUT THE J&K BANK Ltd. The Jammu & Kashmir Bank is today one of the fastest growing banks in India with a network of more than 691 branches/offices spread across the country offering world class banking products/services to its customers. Today, the Bank has a status of value driven organization and is always working towards building trust with Shareholders, Employees, Customers, Borrowers, Regulators and other diverse Stakeholders, for which it has adopted a strategy directed to developing a sound foundation of relationship and trust aimed at achieving excellence, which of course, comes from the womb of good Corporate Governance. Good Governance is a source of competitive advantage and a critical input for achieving excellence in all pursuits. J&K Bank considers good Corporate Governance as the sine qua non of a good banking system and has adopted a policy based on all the four pillars of good governance – Transparency, Disclosure, Accountability and Value, enabling it to practice Trusteeship, Transparency, Fairness and Control, leading to stakeholders delight, enhanced shareholder value and ethical corporate citizenship. It also ensures that bank is managed by an independent and highly qualified Board following best globally accepted practices,
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transparent disclosures and empowerment of shareholders, besides ensuring to meet shareholders‘ aspirations and societal expectations following the principles of management's executive freedom to drive the bank forward without undue restraints but within the framework of effective accountability.During FY 2012-13, 70 new branches were established and 12 Extension Counters were upgraded into full-fledged Branches, thereby taking the number of branches to 685, as on 31st March, 2013, spread over 20 states and one union territory. The area-wise breakup of the branch network (excluding extension counters/mobile branches and Service branches), as at the end of FY 2012-13 is as under: Area Metro Urban Semi-Urban Rural TOTAL Branches 39 178 136 332 685

VISION OF THE BANK The Bank's vision is “To catalyze economic transformation and capitalize on growth”. The bank aspires to make Jammu and Kashmir the most prosperous state in the country, by helping create a new financial architecture for the J&K economy, at the center of which will be the J&K Bank. The Bank is committed to achieve healthy growth in profitability and simultaneously to remain consistent with the Bank's risk appetite and at the same time ensuring the highest levels of ethical standards, professional integrity and regulatory compliance.

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MISSION OF THE BANK The company‘s mission is two-fold: To provide the people of J&K international quality financial services and solutions and to be a super-specialist bank in the rest of the country. The two together will make it the most profitable bank in the country. RECOGNITION AND AWARDS The Bank won the prestigious Asian Banking Award – 2005 for its ?Development Project Financing Programme, contributing significantly to the development of tourism industry of the J&K State. The award was presented by the Under Secretary Finance, Philippines, at a glittering Gala Dinner award function held at Manila, Philippines on June 17, 2005. The annual Asian banking awards recognize and honor Asian banks for outstanding, innovative and world-class products and programmes implemented during the previous year. It is the most respected and premier banking awards program in Asia Pacific region.It is worth mentioning that the Bank has won the Asian Banking Award consecutively for the two years. Before this, the Bank had won the award for Customer Convenience Programmes and was also given runners up certificate for its project „Motivating Employees for Better Performance' under ?Operational Efficiency Programme' category. The Bank was ranked fifth among the top ten Asian banks and 762nd among top 1000 World banks. A renowned business
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journal "Business Today” ranked JK Bank among 25 top investor friendly companies in India, the only bank in the whole Indian Banking industry, which has been ranked in the magazine among first 10 Investor Friendly Companies. The Bank for the second consecutive year was ranked Best Private Sector Bank in Financial Express/ Ernest and Young combined Survey for the year 2002-03 released recently. Bank was awarded ?Shiromani Award' for outstanding achievements in the field of banking and commitment to national progress and human welfare during the year under report. The Bank has figured among 24 Indian companies in Forbes Global - 100 best ?under a billion Asia's Rising Companies', listed by Forbes magazine in its issue dated November 01 2006. The publication has commended J&K Bank for representing economic dynamism in the region, sustained growth in all spheres and an excellent track record of rewarding its shareholders.

BANKS NEW IDENTITY

The new identity of the J&K Bank is a visual representation of the Bank‘s philosophy and business strategy. The three colored squares represent the three regions of the state viz, Jammu,
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Kashmir and Ladakh. The counter-form created by the interaction of the squares is a falcon with outstretched wings – a symbol of power, speed and empowerment. The synergy between the three regions propels the bank towards new horizons. Green signifies growth and renewal, blue conveys stability and unity, and red represents energy and power. All these attributes are integrated and assimilated in the white counter-form. CSR Aspect of the Bank: The Corporate Social Responsibility (CSR) of the J&K Bank seeks to recognize obligations towards society and aims to integrate the CSR ideals into its mission for optimizing both business and social performance. It stresses on promoting work life balance, give attention to social and environmental concerns and host of factors that facilitate business pursuits and accomplishment of economic goals. The CSR is not just recognized as promulgating the Bank's own values and principles of philanthropy but also the values and principles of all those who have a stake in it or are affected by its operations. By supporting social cause aligned to the mission the CSR strategy differentiates the Bank's brand and enhances its reputation. The Bank manages social issues in the same manner as any other strategic business issues. In order to enable socially and economically weaker classes to live a healthy life the bank shall endeavor to give financial support to the needy and poor patients, afflicted with dreaded diseases like Cancer, cardiac failure, Kidney failure etc. for their treatment surgery. Heritage preservation is an important responsibility of every conscious individual, institution or agency. The thrust areas to assist in this respect for the Bank will be preservation of historical/religious monuments, development of tourist sites, national properties, museums, libraries, protection of environment/ecology etc. and sponsoring seminars and awareness camps, art and literary works, 3rd cultural activities, social service camps, college or university students clubs etc. Apart from above activities the Bank has been constructing/developing the public utility service like public parks, bus stands, drinking water posts, lavatories, conveniences, rain shelters. In addition to this, the bank organizes relief camps, service camps, night shelters, health resorts, health clinics, disaster & calamity management centers, rehabilitation centers etc.With the objective of promoting the philanthropic activities, other social and environmental issues, the bank has a CSR policy in place embodying the broader principles for providing donations. The donations are made within the prescribed limit of 1% of the published profit for the previous year. It focuses on economic, social, cultural and geographical backwardness of the area. With a view to help Kargil war sufferers of Drass
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area in Ladakh region in their 4rehabilitation, the Bank organized a relief camp. Blankets and eatables were distributed among the people covering about 1500 families settled in 17 villages in and around Drass, who had migrated to Sankoo, Saliskote and other far flung areas of Kargil. Stationery items were distributed among the school going children. FINANCIALS OF THE BANK The aggregate business of the Bank crossed yet another milestone mark and stood at ` 1,03,421.03 Crores at the end of FY 2012-13. The total business of the Bank increased by ` 16,996.71 Crores from the previous year‘s figure of ` 86,424.32 Crores, registering a growth of 19.67%. The total deposits of the Bank have grown by ` 10,873.72 Crores from ` 53,346.90 Crores, as on 31st March, 2012, to ` 46,220.62 Crores, as on 31st March, 2013, registering a growth of 20.38%. CASA deposits of the Bank at ` 25,191 Crores constituted 39.23% of total deposits of the Bank. Cost of deposits for current FY stood at 6.87%. The Bank continued its prudent approach in expanding quality credit assets in line with its policy on Credit Risk Management. The net advances of the Bank increased by ` 6,122.99 Crores from ` 33,077.42 Crores, as on 31st March, 2012, to ` 39,200.41 Crores, as on 31st March, 2013, a growth of 18.51%.Yield on advances for the current FY improved to 12.59%, compared to 12.12% for FY 2011-12 . Priority sector advances (Gross) stood at ` 11,591.58 Crores, as on 31st March, 2013. The Bank‘s performance in the recovery of NPAs during the year cont inued to be good. The Bank effected cumulative cash recovery; upgradation of NPAs and technical writeoff of ` 327.83 Crores, compared to ` 316.91 Crores in the previous year. Investment portfolio of the bank increased by ` 4,116.74 Crores from ` 21,624.32 Crores, as on 31st March, 2012, to ` 25,741.06 Crores, as on 31st March, 2013. Income Analysis Interest income of the Bank recorded a growth of ` 1,301.22 Crores and increased from ` 4,835.58 Crores in FY 2011-12 to ` 6,136.80 Crores in FY 2012-13. Interest expenses increased from ` 2,997.22 Crores to ` 3,820.76 Crores during the year. The Net Interest Income increased from ` 1,838.36 Crores to ` 2,316.04 Crores on YoY basis. The Net Income from operations Interest Spread plus Non-interest Income] has increased to ` 2,799.77 Crores in FY 2012-13 from ` 2,172.48 Cr in FY 2011-12, growing by 28.87%. The Operating Expenses exhibited an increase of ` 186.86 Crores during FY 2012-13 and stood at ` 989.01 Crores, as compared to ` 802.15 Crores in FY 2011-12. The
27

Cost to Income ratio (Operating Expenses to Net Operating Income) has come down from 36.92% in FY 2011-12 to 35.33% in FY 2012-13. Gross Profit The Gross Profit for FY 2012-13 stood at ` 1,810.76 Crores, as compared to ` 1,370.33 Crores in FY 2011-12, registering a growth of 32.14%

CHAPTER 4
PRODUCT DETAILS OF J&K BANK

28

The J and K bank has always inclination to launch new products deposit scheme and loans depending upon the market conditions and requirements of customers. The products are tailored to suit everybody‘s requirements. The products are: ? Loans or Advances. ? Deposit Schemes ? Global Access Card

LOANS OR ADVANCES:

Housing Loan Scheme Quantum of loan

29

For Construction /Purchase 60 months net salary or 75.00 Lacs whichever is lower.For repairs/renovation 20 months net salary, subject to a maximum of 10.00 Lacs. For purchase of land: 20 months net salary/income subject to maximum of 5 Lacs within J&K and 10.00 Lacs outside J&K.Also as an incentive for small borrowers, the loans upto 1.5 Lacs granted for repairs/renovations of existing houses would now be secured by third party guarantee of two persons or such other security as is deemed appropriate by the Bank

Education Loan Scheme Scale of Finance• 10.00 Lacs for studies in India . 20.00 Lacs for studies abroad .

Courses Financed (India) Graduate / Courses in: BA, B.Com. B.Sc., etc.Medicine, Surgery, Engineering, Hotel

Management, Design, Architecture, Bio-chemistry, Agriculture, Veterinary etc.P.G Courses in: Business Management, Chartered or Cost Accounting, Company Secretary ship, Masters & PhD. Professional Courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc. •Computer Certificate Courses: of reputed institutes accredited to Dept. of Electronics or institutes affiliated to university. •Courses like ICWA, CA, CFA etc. Courses Conducted by IIM, IIT, IISc, XLRI. NIFT etc.•Regular Degree/Diploma courses like Aeronautical, pilot training,

shipping etc., approved by Director General of Civil Aviation/Shipping, if the course is pursued in India. In case the course is pursued abroad, the Institute should be recognized by the competent local aviation/shipping authority. Courses offered in India by reputed foreign universities. Evening courses of approved institutes. Other courses leading to diploma/ degree etc. conducted by colleges/ universities approved by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc. Courses offered by National Institutes and other reputed private institutions.Courses under Distance Education/ learning leading to professional/ technical certificates/ degree/ diploma courses etc offered/ conducted by reputed colleges/ universities/ institutions recognized/ approved by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc. Teacher Training Courses/ Nursing Courses/ B.Ed. conducted by institutions that are approved by Central Government/ State Government provided the said courses lead to degree or diploma and not
30

to certification course. Courses Financed (Abroad)•Graduation: For job oriented professional/ technical courses offered by reputed universities. P.G Courses: MCA, MBA, MS, etc. Courses conducted by CIMA- London, CPA in USA etc.

Loans against Mortgage of Immovable Property Eligibility Criteria: The Scheme would provide finance to individuals/Business Enterprises having minimum net annual income of 1.00 lacs per annum against mortgage of immovable property situated in Metros/Urban/Semi-Urban areas. Fair Price Shop Scheme Introduction :The scheme is launched to provide hassle free cash credit facility to Fair Price Shops.

The facility under this scheme can be availed to meet working capital requirements for procuring the supplies –food grains and sugar from Assistant Director (Stores). Travel & Tourist Taxi Operators Introduction :To upgrade the tourist transport services and to generate more employment in The

Jammu & Kashmir State a scheme has been formulated to provide the financial assistance to the Travel and Tourist Taxi Operators identified by the Directorate of Tourism (J&K State) for purchase of fresh vehicles

Help Tourism (For Kashmir valley only) Purpose•Exclusive scheme providing hassle free credit for the conversion of residential properties into tourist guest houses (renovation/refurbishment only) All Purpose Agri Term Loan Nature of Facility Objective• Purpose• Purchase of assets (farm equipments, bullocks, etc) Creation ofasset(Orchard Development, DairyDevelopment, Poultry development Animal etc)andany Husbandry, other activity Fisheries under etc.An •Agricultural Term Loan farmers

To provide adequate and timely credit for comprehensive requirements of

with flexible and simple features

Agriculture,Horticulture.Sericulture,

Plantation,

indicative list of activities is presented herein below.
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Fruit Advances Scheme (Apple) Salient Features:Finance to Growers ? Assessed on entire fruit bearing orchard owned by the grower farmer or any of his family member. ? Upto an individual credit limit of 1.00 lac no revenue record of land holding is required. ? The credit limit of Growers is to be assessed and sanctioned for a period of 3 years. The limit will get automatically renewed annually subject to satisfactory conduct of the account. ? Option for the grower to enter the scheme to avail the financial assistance at any of the following stages: ? Pre-harvest stage for production cost. ? Harvesting stage for picking/ packing/ grading. ? Post harvesting stage for marketing. ? For entire production & marketing cycle. ? The grower is not required to submit any financial statement/ balance sheet for sanction of credit facility excepting personal statement and land holding record wherever required in addition to papers under KYC norms. ? Option for additional financial assistance for carriage and cold storage of the produce as per stipulated rates. ? No collateral Security upto the loan limit of 1.00 lakh.

b) Finance to the Traders/Arthias/Commission & Forwarding Agents ? The scale of finance to be assessed on the basis of number of fruit boxes marketed/ forwarded during the previous year with a reasonable increase based on average growth during the last three years. ? The average per box market price will be aligned to the actual market rates. ? Hassle free renewal of the credit limit from January onwards subject to satisfactory conduct of the account. ? Option for additional financial assistance for cold storage of the produce as per stipulated rates. Zafran Finance Objective:-To provide adequate and need based financial assistance for cultivation of saffron. The

32

term loan shall cover the entire plantation & production costs including plant material, agricultural machinery, labour, etc. Roshni Financing Scheme Objective:-To provide finance to occupants desirous of acquiring freehold rights of the land under their occupation, as per the SRO-64 dated 5th March 2007, issued by Govt of Jammu & Kashmir. Giri Finance Scheme Nature of Facility: -Cash Credit /SOD facility Objective: -To provide adequate and hassle-free working capital finance to Walnut kernel Traders for taking care of the expenses involved in procuring and sales of kernels. Laptop/PC Finance Nature of Facility: -Term Loan Purpose: To provide finance for purchase of Laptop/ PC‘s to regular students of recognized

schools, colleges & universities in India, i.e. 1.Regular students of recognized schools & colleges from LKG to 12th Class. 2.Graduation courses: BA, B.Com, B. Sc, BVSc etc. 3.Post graduation courses: Masters, M.Phil. and PhD. 4.Professional degree courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc. Finance under this product shall also be provided to regular teachers of recognized private schools.

Contractor Finance Nature of Facility :-Facility to be extended by way of: i) Running Account in the form of Secured Overdraft / Cash Credit Facility ii) Cheque Purchase Facility iii) Bank Guarantee Facility. Purpose :To facilitate the contractors for meeting working capital requirements for executing

contracts/works allotted by Government Departments / Undertakings, Autonomous Bodies, Defence Departments, etc. JK Bank Commercial Floriculture Finance Nature of Facility: -Composite Term loan
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Objective:-To provide adequate and need based financial assistance for commercial cultivation of Flowers. Seed Capital Fund Scheme under “Sher-e –Kashmir Employment and Welfare Programme for the Youth (SKEWPY)” of Government of Jammu & Kashmir. Objective: -To provide finance to eligible candidates sponsored by JKEDI under the Seed Capital Fund Scheme of Government of Jammu & Kashmir. Purpose: Finance under this product shall be available to trained and registered first generation

entrepreneurs sponsored by the JKEDI under the Seed Capital Scheme to start environment-friendly ventures relating to certain core areas of the state economy which inter-alia shall include: i) Horticulture, floriculture, cultivation of medicinal and aromatic plants; ii) food-processing at the household/village level; iii) Establishment of facilities for storage of food products/horticulture products: particularly cold chains; iv) handloom, handicrafts and other artisanal products: particularly design improvement, technologytransfer and marketing; v) ventures in poultry, sheep-breeding and production, collection, storage and marketing of milk: aimed at import substitution;

JKBankScooty Finance for Girls/ Ladies. Purpose:For purchase of new Scooties, etc. (Any make or model). The product shall be

primarily targeted at girl students and working ladies JK Bank Craftsmen Livelihood Finance Name of the Product: JK Bank Craftsmen Livelihood Finance

Nature of Facility: -Cash Credit facility Objective: - To provide adequate and timely credit for comprehensive requirements of Artisans & Craftsmen, etc. The facility, however, shall be provided to those Craftsmen only who are part of the trilateral agreement between the Bank, Exporters/Traders/Manufacturers and the Craftsmen. JK Bank Construction Equipment Finance
34

Purposerovide hassle free and timely finance for purchase of construction equipments including Backhoe loaders, Excavators, wheel loaders, Compactors, Cranes , Skid Steers , Telehandlersetc Deposit Schemes INTRODUCTION The deposit schemes‘ booklet is a tailor-made product for ready reference of the staff, particularly for those who are on the operational front. The term deposit plans have been categorized into five distinct categories to facilitate the easy marketing of the products to the customers according to their requirements. DEPOSIT PLANS Categories of Term Deposits: 1.Cumulative or Growth Plans Lump sum deposits with benefits of reinvestment (compounding) of interest on quarterly basis resulting in higher annualized yield. ? Cash Certificate ? Open -Ended Deposit Plan ? Flexi-Deposit Plan ? Mehendi Deposit Plan ? Super Re-investment Deposit Plan ? Tax Saver Deposit Plan III

Non-Cumulative Plans Lump sum deposits with an option to withdraw interest on quarterly basis. ? Fixed Deposit ? Super Earner Deposit Plan ? Tax Saver Deposit Plan Installment Deposit Plans Small installment deposits grow with reinvestment of interest to substantial proportions. ? Recurring Deposit Plan ? Recurring Plus Deposit Plan ? Daily Deposit Plan Monthly Income Plans
35

Lump sum deposits conferring regular monthly interest payments on the depositors while the principal remains intact. ? Monthly Yield Deposit Plan ? Tax Saver Deposit Plan II Hybrid Plans Plans combining the features of simple deposit plans to cater to the special requirement of the target customer. ? Child-care Deposit Plan ? Depositor‘s Pension Plan. ? Smart Saver Plan CURRENT ACCOUNT: Platinum Current Account ? ? ? ? ? Gold Current Account Premium Plus Current Account Premium Current Account Basic Current Account Grameen Current Account

SAVINGS ACCOUNT: ? ? ? ? Deluxe Savings Account General Savings Account Deluxe Salary Account General Salary Account

Bank also offers a basic no frills savings account ?SB UJALA? for inclusion of economically disadvantaged sections of society. Cumulative (Growth) Plans Cash Certificate Ideal for All types of investors-short, medium and long term. Minimum deposit: Rs. 1000/- and above. Tenure :6 months to 10 years. Interest rate :Fixed. Interest calculation :Quarterly compounding basis Interest payouts: On maturity.
36

Add-ons :Loan facility upto 90% of amount deposited plus interest accrued. Premature withdrawal Allowed with penalty of: ? ? Before completion of 6 months: 1% less than the rate of interest applicable for the period the deposit remains with the bank. After completion of 6 months: 0.50% less than the rate of interest applicable for the period the deposit remains with the bank.

Open-Ended Deposit Plan Ideal for Retail investors seeking returns as well as liquidity (partial withdrawal allowed). Minimum deposit Rs. 1000/- and above in multiples of Rs. 500/-. Tenure 6 months to 10 years. Interest rate Fixed. Interest calculation Quarterly compounding basis. Interest payouts On maturity. Add-ons ? ? ? The deposit is kept in units of Rs.500/-. Any number of units can be withdrawn anytime provided the total deposit balance does not fall below Rs.1000/-. Loan facility upto 90% of amount deposited plus interest accrued. However, withdrawal of units shall not be allowed till adjustment of the loan. Premature withdrawal: Allowed without penalty.

Flexi -Deposit Plan Ideal for : Retail investors seeking easy access to loan (against deposit). Minimum deposit Rs.1000/- and above. Tenure 6 months to 10 years. Interest rate Fixed. Interest calculation Quarterly compounding basis. Interest payouts On maturity. Add-ons ? Flexible Credit facility (with facility of multiple credits/withdrawals) upto 90% of amount deposited plus interest accrued.
37

?

No separate loan requisition, no execution of loan documents and no surrendering of the original Flexi Deposit Receipt. Premature withdrawal Allowed with penalty of: ? Before completion of 6 months:1% less than the rate of interest applicable for the period the deposit remains with the bank. ? After completion of 6 months: 0.50% less than the rate of interest applicable for the period the deposit remains with the bank.

Mehendi Deposit Plan Ideal for Parents/Guardians of Girl Child. Minimum deposit Depends upon the tenure and maturity amount desired. Tenure:-5, 7, 10, 12 or 15 years. Maturity amount (options):- Rs 25,000, Rs 50,000 or Rs 1, 00,000. Interest rate Fixed. Interest calculation Quarterly compounding basis. Interest payouts On maturity. Add-ons:- Accidental Insurance Cover (linked to maturity amount) for parent/guardian. Premature withdrawal As in the case of other term deposits. Super Re-investment Deposit Plan Ideal for Retail MIG medium and long-term investors having positive interest rate outlook. Minimum deposit Rs. 1000/- and above. Tenure1 year to 10 years. Interest rate Floating. Interest calculation Quarterly compounded Interest. Interest payouts On maturity. Add-ons Loan facility upto 90% of amount deposited plus interest accrued. Premature withdrawal Allowed with penalty of: ? ? Before completion of 6 months: 1% less than the rate of interest applicable for the period the deposit remains with the bank. After completion of 6 months: 0.50% less than the rate of interest applicable for the period the deposit remains with the bank.

Tax-Saver Deposit Plan Ideal for:-Customers desiring to place long term deposits to avail tax benefits under section 80C of Income Tax Act, 1961 and also to earn higher rate of interest.
38

For Joint Accounts, tax benefit will be available to the first holder. Minimum deposit Rs. 1000 and multiples thereof. Maximum deposit Rs. 1,00,000/- per year. Tenure:-Minimum: 5 years. Maximum: 10 years. Interest payouts:-The interest on the deposit shall be paid along with the principal at the time of maturity. The term deposit shall carry compound rate of interest. Benefit:-Income Tax benefit under section 80C of Income Tax Act 1961 subject to maximum deposit of Rs. 1 lac per year under all the options of Tax Saver Deposit Plan. Add-on a. Automatic credit card limit equal to amount deposited. b. A discount of 1.00% on interest rates for first year to eligible customers on our housing, educational or consumer loan products provided the minimum investment in TSTDS is Rs. 50,000. The incentives shall be available to a customer for a period of 3 months from the date of opening of the TSTDS. Loan facility : - No loan facility available against the deposit.

Premature withdrawal:-Not allowed before expiry of 5 years from the date of account opening.

Non-Cumulative (Growth) Plans Fixed -Deposit Plan Ideal for All types of investors. Minimum deposit:-Rs. 100/- and above. Tenure:-7 days to 10 years. Interest rate:-Fixed. Interest calculation Simple Interest. Interest payouts Quarterly/On maturity (as per option of depositor).
39

Add-ons Loan facility up to 90% of amount deposited plus interest accrued. Premature withdrawal Allowed with penalty of ? ? Before completion of 6 months: 1% less than the rate of interest applicable for the period the deposit remains with the bank. After completion of 6 months: 0.50% less than the rate of interest applicable for the period the deposit remains with the bank.

Installment Deposit Plan Recurring Deposit Plan Ideal for Retail LIG investors desiring regular monthly investments for accumulation of a substantial lump sum maturity amount. Minimum monthly installmentRs. 50/- and above in multiples of Rs. 5/-. Tenure: - 6 months to 10 years. Interest rate:-Fixed. Interest calculation:-Quarterly compounded interest. Interest payouts:-On maturity. Add-ons:-Loan facility up to 90% of amount deposited plus interest accrued. Delayed payment of installments In case of installments not deposited on due dates, a penalty @ 2% per annum above the applicable deposit rate shall be imposed for the period the installment remains in arrears.The period of installments to be considered shall be the actual month from the date of opening of account and not the calendar month. However, no penalty shall be imposed if an installment is deposited within 15 days of the due date. Premature withdrawal Before completion of 6 months: 1% less than the rate of interest applicable for the period the deposit remains with the bank. After completion of 6 months: 0.50% less than the rate of interest applicable for the period the deposit remains with the bank. Recurring- Plus Deposit Plan Ideal for Retail depositors with irregular investible income.
40

Minimum basic monthly installmentRs.100/- and multiples thereof. Monthly installment:-Variable installments allowed in multiples of Rs.100/-. Maximum number of installments per month:-10. Maximum monthly deposit:-10 times of basic installment subject to a cap Rs 50,000/-. Tenure:-6 months to 5 years. However, existing accounts with higher tenures shall continue till maturity. Interest rate:-Fixed. Interest calculation:- Quarterly compounded interest. Interest payouts:-On maturity. Loan facility ? ? Recurring plus credit facility in the nature of revolving SOD facility. Facility allowed after a minimum of 6 months from the date of opening of RD plus account and the minimum outstanding balance in the account (principal+interest) is not less than Rs. 5000.

Premature withdrawal ? Allowed with penalty of

Before completion of 6 months: 1% less than the rate of interest applicable for the period the deposit remains with the bank. ? After completion of 6 months: 0.50% less than the rate of interest applicable for the period the deposit remains with the bank.

Daily Deposit Plan Ideal for:-Businessmen/professionals who would like to save a part of their sale proceeds/income receipts on daily /weekly basis. Eligibility:-Individuals, joint account holders, proprietors, individual partners. Tenure:-1 to 5 years. Operation of the scheme The account shall operate with active participation of employees at branch level. One employee in workmen cadre in each branch shall be designated on a voluntary basis. The employee, so designated, shall make collection by personally visiting the business premises/household units of the depositor
41

between 2 p.m to 4.45 p.m and make on spot entry in the passbook of the depositor after receipt of cash. The collections made from the account holders shall be deposited on the same day in the vault at the branch. On the next day the designated employee will get the amount credited in the respective accounts by submitting the summary sheet containing columns for collection date, name of the depositor, account number of the depositor and the date of deposit in the account. Amount of daily installment deposit:-Rs. 100/- and above in multiples of Rs. 50/-. Interest calculation:-3.50% p.a as in the case of savings account. The interest is calculated on daily product basis with quarterly application frequency. ? ? ? Incentive for employees0.50% on the amount mobilized per month. Conveyance allowance of Rs. 300/- per month. Rs. 10/- for every new account opened by him.

Cheque book facility:-Nocheque book facility shall be allowed under this scheme. Premature withdrawal:-Allowed. However, if the deposit is withdrawn before the period of six months, the account shall attract penalty of Rs. 75/- per occasion. Monthly Income Plans Monthly Yield Deposit Plan Ideal for:- Retail medium and long term investors seeking regular monthly returns. Minimum deposit:-Rs.1000/- and its multiples. Tenure:-1 year to 10 years. Interest rate:-Fixed. Interest calculation:-Simple Interest (discounted). Interest payouts:-Monthly. Add-ons:-Loan facility up to 90% of amount deposited. Premature withdrawal:-Before completion of 6 months: 1% less than the rate of interest applicable for the period the deposit remains with the bank. After completion of 6 months: 0.50% less than the rate of interest applicable for the period the deposit remains with the bank. Hybrid Plans Childcare Deposit Plan
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Ideal for:- Parents/guardians desirous of investing over a long term with regular monthly savings for their children. Plan combination:-Recurring deposit plan (Phase -I) and Cash certificate (Phase-II). Minimum deposit:-Rs 100/- and multiples thereof. Tenure:-7, 9 and 10 years as recurring (Phase-I) and 5 , 7 and 10 years respectively as term deposit (Phase-II). Interest rate:-Fixed. Interest rates will be applied as per the rate structure prevalent at the time of beginning of the respective phases. Interest calculation:-Quarterly compounded interest. Interest payouts:On maturity.

Add-ons:-Accidental Insurance Cover for the Parent / Guardian (linked to the size of monthly deposit amount). Delayed payment of installments:-In case of installments not deposited on due dates, a penalty @ 2% per annum above the applicable deposit rate shall be imposed for the period the installment remains in arrears.The period of installments to be considered shall be the actual month from the date of opening of account and not the calendar month. However no penalty shall be imposed if an installment is deposited within 15 days of the due date. Premature withdrawal:-As in the case of other term deposits. Depositor’s Pension Plan Ideal Forersons who do not enjoy pension benefits either from their present employers or their parent business or who want to enhance their pensions with regular monthly returns. Plan combination:- Recurring Deposit Plan (Phase I) and Monthly Yield Deposit Plan (Phase II) Minimum Monthly Installment:-Rs 25/- and multiples of Rs 25/-, Rs 50/- or Rs 100/-. Tenurehase I: 84, 105 or 111 months. Phase-II: As per the option of depositor. Interest rate:-Fixed. Interest Calculation:- Quarterly Compounding basis for Phase I. ? Simple interest for phase-II.

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Payment Pattern:-Monthly payouts shall commence from 86th,107thand 113thmonths respective to the maturity tenors of Phase I. Add-ons:- Loan facility upto 90% of amount deposited plus interest accrued. Premature Withdrawal Allowed with penalty of: Before completion of 6 months: 1% less than the rate of interest applicable for the period the deposit remains with the bank.After completion of 6 months: 0.50% less than the rate of interest applicable for the period the deposit remains with the bank. Penalty shall be applicable to both phases. Smart Saver Deposit Plan The product consists of a core deposit(Term Deposit), which entitles the operative account(CD or SB) of the customer for sweep facility , where balance above a floor level is auto-swept to form short term Smart Saver Term deposits(linked deposits) in multiples of Rs 10,000/-. The sweep facility remains in force till termination of the core deposit. Current Account Variant Basic Current Account For Metros & Urban Areas) Minimum average quarterly balance (AQB) Rs 3000/-. Charges for non maintenance of AQB Rs 300/- per quarter. Facilities Demand draft charges ? ? ? ? Issuance Duplicate drafts Cancellation Revalidation Normal charges. Normal charges. Normal charges. Normal charges.

Collection of bills:-Normal charges. Payment orders:-Normal charges. Inter-Branch funds transfer:-Normal charges. ? ? Collection of cheques Local Normal charges.
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? ?

Outstation through own bank Outstation through other banks

Normal charges. Normal charges.

Debit card:-Normal charges. Grameen Current Account (For Rural & Semi-Urban Areas) Minimum average quarterly balance (AQB):- Rs 1000. Charges for non-maintenance of AQB:-Rs 100/-per quarter. Facilities: - Demand draft charges ? ? ? ? ? ? ? Collection of cheques ? ? ? Local Outstation through own bank Outstation through other banks Normal charges. Normal charges. Normal charges.

Issuance Normal charges. Duplicate drafts Normal charges. Cancellation Normal charges. Revalidation Normal charges. Collection of bills Normal charges. Payment orders Normal charges. Inter-branch funds transfer Normal charges.

Debit card Normal charges. Premium Current Account Minimum average quarterly balance (AQB):-Rs 50,000. Charges for non-maintenance of AQB:-Rs 700/-per quarter. Facilities:-Demand Draft ChargesIssuance ? ? ? Duplicate drafts Cancellation Revalidation Free upto 15 lacs/month. Normal charges. Normal charges. Normal charges.

Payment orders:-Free upto 15 instruments per month. Inter-branch funds transfer:-Free upto Rs 20 lacs per month. ? Collection of cheques
45

? ? ? ?

Local Outstation through own bank Outstation through other banks Debit Card

Free. Normal charges. Normal charges. Free.

Cash handling charges:-Cash deposit upto 50 lacs per month – Free. Anywhere cheque book:-50 leaves free per year.

Premium Plus Current Account Minimum average quarterly balance (AQB):-Rs 1,00,000. Charges for non-maintenance of AQB:For AQB of RS 50,000 to Rs 1,00,000 For AQB less than Rs 50,000 Facilities :-Demand Draft Charges ? ? ? ? Issuance Duplicate drafts Cancellation Revalidation Free upto 30 lacs/month. 50% of Normal charges. Normal charges. Normal charges. Rs 1,000/-per quarter.

Rs 2,000/- per quarter.

Collection of bills:-Free upto Rs 2 lacs per month. Payment orders:-Free upto 25 instruments per month. Inter-branch funds transfer:-Free upto Rs 50 lacs per month. ? ? ? ? Collection of cheques:Local Outstation through own bank Outstation through other banks Free. Free. 50% of Normal charges. Normal charges.

Debit Card

Cash handling charges:-Cash deposit upto 50 lacs per month – Free. Anywhere cheque book:75 leaves free per year.

Gold Current Account Minimum average quarterly balance (AQB):-Rs. 2, 50,000. Charges for non-maintenance of AQB:46

For AQB of RS 1,00,000 to Rs 2,50,000 For AQB less than Rs 1,00,000 Facilities:? ? ? ?

Rs 2,000/-per quarter. Rs 4,000/- per quarter.

Demand Draft ChargesIssuance Duplicate drafts Free. Cancellation Normal charges. Revalidation Normal charges.

Free upto 50 lacs per month.

Collection of bills:-Free upto Rs 5 lacs per month. Payment orders:-Free upto 30 instruments per month. Inter-branch funds transfer:-Free upto Rs 1.00 Crore per month.50% of normal charges thereafter. Collection of cheques ? ? ? Debit Card Cash handling charges:Multicity cheque book :Local Outstation through own bank Outstation through other banks Free. Free. 100 leaves free per year. Free. Free. 50% of Normal charges. Normal charges.

ATM Charges at non-J&K Bank ATMslatinum Current Account Minimum average quarterly balance (AQB):Rs. 5,00,000. Charges for non-maintenance of AQB:For AQB of RS 2,50,000 to Rs 5,00,000 For AQB less than Rs 2,50,000 Facilities ? ? ? ? Issuance Duplicate drafts Cancellation Revalidation

Rs 4,000/-per quarter. Rs 8,000/- per quarter.

Free. Free. Normal charges. Normal charges.

Collection of bills:-Free upto Rs 10 lacs per month.
47

Payment orders:-Free upto 50 instruments per month. Inter-branch funds transfer:-Free. Collection of cheques ? ? ? Debit Card Local Outstation through own bank Outstation through other banks Free. Free. Free. Normal charges.

Cash handling charges:-Free. Multicity cheque book:-125 leaves free per year. ATM charges at non-J&K Bank ATM:- Free. Savings Account Variants Deluxe Savings Account Minimum average quarterly balance (AQB):-Rs. 5000/-. Charges for non-maintenance of AQB:-Rs.200/- per quarter. Facilities Free cash withdrawals at branch (per month). Maximum 15. (Additional Withdrawals to be charged @ Rs. 20/- per withdrawal). Cash withdrawal limits using withdrawal form:-No limit. Debit card issued:-Gold Debit Card. Debit card transaction limits (per day) ATM (cash withdrawal) POS : : Rs. 50,000.

Rs. 1,00,000. Free. Rs. 150/- per half year..

Debit card issuance feeebit card usage fee:General Savings Account

Minimum average quarterly balance (AQB) With cheque book : Rs. 500/-. Rs. 300/-.

Without cheque book :

Charges for non-maintenance of AQB:-Rs.100/- per quarter. Facilities
48

Free cash withdrawals at branch (per month). Maximum 5.(Additional withdrawals to be charged @ Rs. 20/- per withdrawal). Cash withdrawal limits using withdrawal form:-Rs. 20,000/-. Debit card issued:-General Debit Card. Debit card transaction limits (per day) ATM (cash withdrawal) POS : : Rs. 20,000.

Rs. 50,000.

Debit card issuance fee:-Rs. 50/-. Debit card usage fee:-Rs. 50/- per half year.

Deluxe Salary Account Minimum average quarterly balance (AQB):-Rs. 5000/-. Charges for non-maintenance of AQB:-Rs.200/- per quarter. Facilities:-Free cash withdrawals at branch (per month). Maximum 15.(Additional withdrawals to be charged @ Rs. 20/- per withdrawal). Cash withdrawal limits using withdrawal form:-No limit. Debit card issued:-Gold Debit Card. Debit card transaction limits (per day)ATM (cash withdrawal) : POS: Rs. 1,00,000. Debit card issuance fee:-Free. Debit card usage fee:-Rs. 150/- per half year. TOD facility:-50% of net salary drawn.(Maximum Rs. 20,000). Rs. 50,000.

General Salary Account Minimum average quarterly balance (AQB):-No minimum limit. Charges for non-maintenance of AQB:-Not applicable. Facilities:-Free cash withdrawals at branch (per month). Maximum 5.(Additional withdrawals to be charged @ Rs. 20/- per withdrawal). Cash withdrawal limits using withdrawal formRs. 20,000/-. Debit card issued:-General Debit Card. Debit card transaction limits (per day)
49

ATM (cash withdrawal) POS :

:

Rs. 20,000.

Rs. 50,000. Rs. 50/-. Rs50/- per half year.

Debit card issuance feeebit card usage fee:-

TOD facility:-50% of net salary drawn.(Maximum Rs. 10,000).

SB Ujala:- No Frills Saving Account Ideal for:- Underprivileged & financially excluded sections of society.

Purpose:-Greater financial inclusion. Eligibility:-Individuals including minors who have completed 10 years of age and pensioners. Joint accounts are allowed. Minimum initial deposit:-Rs. 50/-. However, customers shall also be allowed to open the account with a banking instrument, like Bankers Cheque, etc. Minimum balance:-Rs. 50/-. Maximum balance:Balance in the account should not exceed Rs. 50,000/- at any point of time and total credit in the account should not exceed Rs. 1,00,000/- in a year. Permissible withdrawals:-Maximum 4 in a month. Cheque book facility:No cheque book facility shall ordinarily be provided. However, cheque book may be issued to the account holder/s in case the average quarterly balance for past 6 months is maintained at Rs. 1000/and above. Debit card:-Not issuable on this account.

50

CHAPTER 5
MARKETING, SERVICE MARKETING AND PERCEPTION

51

Marketing Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling the product or service. It is a critical business function for attracting customers.From a societal point of view, marketing is the link between a society‘s material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. It is the process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that also benefit the organisation and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behaviour and providing superior customer value.

52

There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The four components of holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. The set of engagements necessary for successful marketing management includes, capturing marketing insights, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, creating long-term growth, and developing marketing strategies and plans. Services marketing Services‘ marketing is a sub field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and services marketing. Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services, and includes marketing of services like telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services. The range of approaches and expressions of a marketing idea developed with the hope that it be effective in conveying the ideas to the diverse population of people who receive it.Services are economic activities offered by one party to another. Often time-based, performances bring about desired results to recipients, objects, or other assets for which purchasers have responsibility. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved. Marketing of services is a relatively new phenomenon in the domain of marketing, having gained in importance as a discipline only towards the end of the 20th century. Services marketing first came to the fore in the 1980s when the debate started on whether marketing of services was significantly different from that of products so as to be classified as a separate discipline. Prior to this, services were considered just an aid to the production and marketing of goods and hence were not deemed as having separate relevance of their own.

7ps of marketing

53

The first four elements in marketing mix are the same as those in the traditional marketing mix. However, given the unique nature of services, the implications of these are slightly different in case of services. 1. Product: In case of services, the ?product‘ is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Hence particular care has to be taken in designing the service offering.

2. Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark up for an adequate profit margin. 3. Place: Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought to where the service would be provided. Thus, a fine dine restaurant is better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away from the rush and noise of a city.

4. Promotion: Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer. Thus, service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings. We now look at the 3 new elements of the services marketing mix - people, process and physical evidence - which are unique to the marketing of services.

5. People: People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service
54

provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today.

6. Process: The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff.

7. Physical Evidence: Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests.

Perception Perception is the ability to pick out something through the different senses. It can be through seeing, hearing, smelling or touching. The sensory stimulus of the body system consciously registers an activity or event in the human memory. Perception depends on complex functions of the nervous system, but subjectively seems mostly effortless because this processing happens outside conscious awareness.

Factors affecting perception (a) The Perceiver: When an individual looks at the target and attempts to interprete what he / she sees. Such interpretation is heavily influenced by personal characteristics of the individual perceiver.
55

The characteristics of perceiver include person‘s needs. Past experience, habits, personality, values, attitudes etc For example: – a negative attitude person interprets negative results and further makes negative perception. (b) The Perceived (object): Characteristics of the target, which has been, observed also affects the individual‘s perception The physical attributes, appearance and behavior of other persons in the situation also influences the perception. Physical attributes of the person means age, height, weight, gender etc. Loud people are easily noticeable in a group in comparison to the quite ones. Motion sound, size and other attributes of a target also affect the perception of an individual. Object which is perceived is not observed in isolation, the relationship of a target with its background also influences perception. Person, objects or events that are similar to each other also tend to be grouped together. Greater the similarity, the greater is the probability that we will tend to perceive them as a common group. (c) The Situation: The physical, social and organizational setting of the situation also influences individual‘s perception. The situation in which we see objects or events is important. The elements in the surrounding environment influences our perception. For example: - hearing a subordinate calling his / her boss by his / her name may be perceived quite differently when observed in an office as opposed to an evening social reception.

Bank Marketing The origin of bank marketing dates back to the succeeding years of the succeeding years of world war ii when it was associated with public relations , advertisings and promotional efforts, particularly known as business development. It was only towards the second half of the 20thcentaury that the concept of the marketing began to catch up in the banks in England and the USA. The compulsion to understand the needs and the preferences of the customers and the impact of various markets led to the growth of market research and other sophisticated and disciplined marketing effort. Bank managements were forced to rethink their strategies and device new business models to operate competitively in high tech, multichannel banking market. After the introduction of stringent norms,
56

banks in India witnessed their profits sliding down, sometimes by alarming margins. But with the recovery symptoms in the sector bank managements are integrating carefully selected technology to improve customer service, empower their work forces and increasing core operating efficiencies. This prudent use of technology is designed to increase revenue and control costs, producing sustained growth and profitability.One of the key challenges for the banks today is to create a single view of the enterprise and of customers across multiple channels. For competitive advantage, banks today need the ability to quickly translate business strategies in to actions that can be measured and monitored throughout the organization. This is achievable by careful and planned marketing strategy. Marketing solutions enable banks to implement effective business strategies, maximize the profits, retain and grow customer accounts and execute marketing campaigns. Banks world are seeking to increase the efficiency and effectiveness of their marketing campaigns. This enables the banks to execute highly targeted marketing campaigns that yield higher response rates. The solution offers rules for retention, loyality, customer acquisition, development, activation and reactivation. The concept of bank

marketing is the combination or compendium of two different words, Bank and marketing. In true sense, it is application of marketing principles in the banking services or conceptualization of marketing in the decision making process of banking organizations. The match of marketing with banking services is formulation of overall marketing strategy which suits the saving and investment preferences, needs and requirements, likes and dislikes of customers.One definition of bank marketing, as referred to by the national institute of Bank Management, pune (2000), is: ?Bank Marketing is the aggregate of functions, directed at providing services to satisfy customers financial(and other related) needs and wants, more effectively and efficiently than competitors keeping in view the organizational objectives of the bank?. ? There are five stages in the development of marketing in Banks ? Marketing is advertising, sales promotion and publicity ? Marketing is smiling and friendly atmosphere ? Marketing is segmentation and innovation ? Marketing is positioning ? Marketing is marketing analysis, planning, implementation and control Elements of Bank marketing services
57

In the formation of overall marketing strategies of banking service industry, the following decisions are considered significant in the liberalization business environment. Product Planning The banking or financial companies should aim at creating new generic products as per customer needs. Creation of attractive schemes has to be coupled with efficient delivery to optimize customer satisfaction. It is always better to bring modification in the existing products by adding some new feature and elimination of outdated products. For designing and developing a new product, banks should take the help of market research to assess the needs of the customers, availability of existing product and future growth in demand Selection of suitable place This involves searching of suitable places for offering the services. That is, locating the branch at a sensitive point, this is accessible to the actual and potential customers for activating the bank business. Pricing Policy The potential customer‘s generally frame their investment strategies in the background of pricing decision. The price takes different dimension depending upon the type of financial services and the price of financial services are linked with return. Only competitive price and the promised return catch the sentiments of the customers Branding Brand name or scheme name very often signifies the market segments inherent benefits and investment objectives and customers loyality

58

Customer Service Market orientation of product of product and customer orientation of services are the key factors in the competitive world bank services. Prompt and timely services as per the customers need would make a distinct difference. The quality of the services offered in turn helps to develop loyality among the customers. Market Segmentation The segmentation of market is based on the changing needs of customers. Market segmentation is identified on the basis of nature of the product, direct and indirect benefits of the product, behavior or attitude of the customer, and product usage rate. Distributional policy The determination of proper channel to be used for selling product or service is also a key issue in the marketing of banking product or services. Before launching of a product or a service, there should be clear cut idea about of distribution of the product to make it accessible to the ultimate customer.

Promotional policy: In order to promote the business in highly competitive world, a creative promotional tool helps potential customers to buy products and services. Emerging functions in Marketing of Banking Services The following are emerging functions in marketing of banking or financial services industries and having greater significance in this competitive market. ? Product development
59

? ?

To assess the potential for retail asset business based on market feed back and to enhance existing products or develop new products. To monitor and deliver profitability for each product line

Channel Management ? ? To identify third party agencies such as direct sales agents, collection agents verification agencies and finalize terms and conditions, responsibility pricing with each agency To monitor the performance of these agencies on an ongoing basis and ensuring a high quality channel operation over time Appraisal Management ? ? To scrutinize and recommend approval or rejection of retail loan proposal received from branches by way of credit scoring system and sound judgment. Territory sales management

To build the retail asset business in liaison with direct selling agents and branch heads in order to achieve the business target for the region. To identify and recommend suitable third party agencies for marketing, collection and verification in their area of operations as well as to ensure quality of the credit portfolio and to follow up delinquent cases. Branch Management To achieve the business target of the branch with a predominately retail business focus Brand Management To develop strong brand name for the product/ service and corporate image for the company through various innovative devices. Bank Environment
60

Bank marketing systems operates within the framework of forces that constitute the systems environment. These forces are either external or internal to the bank. The bank cannot control external forces. But it has to adapt itself to the environmental forces and work according to the conditions and situations of the external environment factors. These elements can be divided into macro and micro. T macro environment are social, cultural, economic conditions, legislations etc. The micro environment includes suppliers, marketing middlemen and customers. These external environmental factors are closely related to the banks and are included as a part of the banks total marketing system. External macro environmental factors include demography, economic conditions, political and legal forces and technology. Demography is important to the bank marketing executives because people who have money and are willing to deposit in the banks and people who need and are willing to take loans from banks, and people who need bank services constitute the bank market.Economic conditions which affects bank marketing includes national income, per capital income, trends in distribution of income and wealth, money supply, interest rates offered by the various financial institutions prices, inflation, deflation, services, etc. political and legal forces include the ideologies and activities of political parties, which influence bank activities, particularly granting loans and advances to priority sector.

Dynamics of Bank Marketing: Banks are important financial intermediaries, which accept deposits from public for the purpose of lending and investment. Through this function (Bank Marketing), they get related businesses or ancillary services like remittance, demand draft issues, mail transfers, telegraphic transfers, collection of bills, sale and purchase of foreign exchange, safe custody and safe deposit vault, guarantee facilities, sale of travelers‘ cheques, trustee and executor services, etc. Apart from these traditional services, others such as merchant banking, port folio management, leasing, hire-purchase, etc. are services that have been added in recent years. These services are being rendered by the banks mainly
61

with a view to attracting and retaining deposits and advances, customers and thus develop their business further.Bank marketing principles if practiced in a right fashion besr the efficacy of generation enriching and tapping the business potentials, satisfying the customers and sub-serving the social interests. The time-honored innovation in perception becomes essential to conceptualize the modern marketing principles in the banking services.With the help of different marketing research, the bankers get an opportunity to understand the expectations of customers/prospectus. A good number of foreign banks and few of the Indian commercial banks, of course working in the private sector appear serious to the problem and therefore they succeed in capitalizing on opportunities optically. The credibility for this goes to application of modern marketing principles.After understanding the needs and wants of the customer, the marketer interested in designing creative or time honored policies, the success rate reaches at its peak. If the marketing processes are understood by the marketer, the task of satisfying customers becomes easy. The formulation and innovation processes of the marketing mixes move in a right and desired order. The customers get the services in tune with their expectations which help banks in mobilizing saving and deposits by transforming the prospects into actual customers and the actual customers into habitual customers.The Indian banks are facing a lot of competition from foreign leading banks and to some extent even from the Indian commercial and private banks. This by using technology and marketing can solve the problem the competition for banks and can help in improving the quality of services.The quality of mix plays a decisive role in getting the business and increasing the market share. So banks need to use the mixes for better services.It is not only sufficient offer customer quality service, or promote bank in right fashion or use meaningful strategies. Bank promote arrange as overriding priority to the magnitude of social costs. In short, the marketing concept points to the following essentials, which contribute towards banks success. Banks cannot exist without the customers.The purpose of the bank is to create, win and help customer. The customer is and should be the central focus of everything the bank does It is also a way of organizing the bank. The starting point for organizational design should be the customer and the bank should ensure that the services are performed and delivered in most effective way. Ultimate aim of the bank is to delivery total satisfaction to the customer. Customer satisfaction is affected by the performance of all the personnel of the bank

62

63

CHAPTER 6
RESEARCH METHODOLOGY

RESEARCH METHODOLOGY Introduction and Meaning: Research Methodology is a way to systematically solve the research problem. The Research Methodology includes the various methods and techniques for conducting a Research. ?D. Slesinger and M.Stephenson in the encyclopedia of Social Sciences define Research as ?the manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art?. Research is a careful investigation or inquiry especially through search for new facts in branch of knowledge: market research specifies the information. Required to address these issues: designs the
64

method for collecting information: manage and implements the data collection process analyses the results and communicates the finding and their implications.Research problem is the one which requires a researcher to find out the best solution for the given problem that is to find out the course of action, the action the objectives can be obtained optimally in the context of a given environment. Techniques: The problem definition can be said to be the quite essential part of the research process; as it determine precisely, what the managerial problem is and the type of information that the research can generate to help the problem before conducting the fieldwork. It is better to decide upon the method/technique of data collection. Generally, there are two technique of data collection are:

1. Census Technique 2. Sample Technique or Convenient sampling A census is a complete enumeration of each and every unit of population where as in a sample only a part of the universe is studied and conclusion about the entire universe is drawn about that basis. The census method is costlier and more time consuming as compared to sampling method but the result are near representatives than sample method.The availability of resources, time factor degree of accuracy desire and scope of the problem enable us to apply sample technique. Data Collection: The objectives of the project are such that both primary and secondary data is required to achieve them. So both primary and secondary data was used for the project. The mode of collecting primary data is questionnaire mode and sources of secondary data are various magazines, books, newspapers, & websites etc. Primary Data: The primary data was collected to measure the customer satisfaction regarding J&K Bank. The primary data was collected by means of direct personal interview method through structured questionnaire and analysis was done on the basis of response received from the customers. The source for the primary data was a questionnaire. The questionnaire is the most popular and useful method for the collecting survey data and helps in analyzing the information from the framed questions to get the real picture of the subject. The questionnaire has been designed in such a manner that the customer‘s satisfaction level can be measured and consumer can enter his/her responses easily.The questionnaire that was used for the collection of the research data contained 10 questions.
65

Out of which, 9 questions were closed question based on options and 1 open end question. The questions were based on variables like markets segmentation. The questions used in the questionnaire contained information and details about the bank like Details of the person interacted about product being utilized Customer‘s current level of knowledge regarding bank product Customer‘s preferences about the product which they would rate higher than other product and Customer‘s media preference or the way in which they would like the product to be advertised or promoted The questionnaire was distributed to 63 customers in rural, semi urban and urban areas in Jammu And Kashmir State. The customers were: ? ? ? ? Students. Customers of different bank branches. Govt employees. Pensioner.

SECONDARY DATA: The secondary data used in the research was collected from The Jammu and Kashmir bank‘s magazines. Articles from newspapers. Websites. Dairies.

66

CHAPTER 7
OBJECTIVES AND LIMITATIONS OF STUDY

Objectives of the study Every company has a particular goal. A study without objectives cannot reach the destination. My project work was also directed to some particular targets and the main objectives of the study are as bellow:

? To study the customer perception towards various products and services of J&K Bank. ? To study the major factors responsible for their satisfaction.
67

? To study the brand image of the bank. ? To make bank employees aware about the customer problems and give suggestions to solve them so that the Bank can retain and maintain the loyal customers.

LIMITATION OF THE RESEARCH Every research is limited by its imagination is true,but we definitely have some limitations on this research.The limitations are as follows: ? The study was restricted to J&K bank customers only. ? Considering the size of population that we have, the sample size that I have taken was very small. ? Some customers were reluctant to give detailed information. ? Time factor was one of big limiting factor. ? Data given by the respondents are limited to their own attitude, perception, knowledge, feeling and awareness.

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CHAPTER 8
DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS AND INTERPRETATION Qno.1 Occupation ? ? ? Salaried Pensioner Business
69

? ?

Housewife Student NO. OF RESPONDENTS 36 3 17 3 4 PERCENTAGE 57.14 4.76 26.98 4.76 6.34

REPONSE SALARIED PENSIONER BUSINESS HOUSE WIFE STUDENT

4.76%

6.34% Salaried

26.98%

pensioner business house wife 57.14% student

14.76%

Interpretation: From the above graph it has been observed that, the majority of customers i.e 57.14% are salaried.

Qno.2 How did you come to know about the J&K Bank? ? ? ? ? Television Word of mouth Newspaper Billboard REPONSE NO. OF RESPONDENTS
70

PERCENTAGE

Television Word of mouth Newspaper Billboard

34 14 6 9

53.96 22.22 9.52 14.28

14.28% 9.52%

Awareness
53.96% television word of mouth newspaper billboard

22.22%

Interpretation: From the above pie-chart, it has been observed that among the sample size of 63 customers, majority of customer‘s i.e, 53.96% rated television who created awareness about the J&K Bank among the customers. This implies that among all the five options television play important role in creating awareness among customers about the J&K Bank

QNo3. In J&K Bank, what type of account do you have? ? ? ? Saving account Current account Term deposit account REPONSE Saving account NO. OF RESPONDENTS 58
71

PERCENTAGE 92.06

Current account Term deposit account

04 01

6.34 1.58

Type of account
6.34% 1.58% saving account current account term deposit 92.06%

Interpretation:From survey it has been observed that majority of customers i.e 92% are a having saving account with the J&K Bank.

Qno4. Are you aware about all the services provided by J&K Bank? ? ? Yes No

REPONSE

NO. OF RESPONDENTS

PERCENTAGE

72

YES NO

47 16

74.60 25.39

Awareness
25.39% YES NO 74.60%

Interpretation: From the survey it has been observed that majority of customers i.e 74.60% said yes and 25.39% customers said no .This implies that about 25% of the customers don‘t have enough knowledge about all the products and services provided by J&K Bank. There is a big opportunity for the bank to attract these customers towards other services. And the bank staff should get involved in providing knowledge and awareness to customers about the various products and services offered by J&K Bank.

Qno.5 Are you using free SMS service provided by J&K bank? ? ? Yes No

REPONSE

NO. OF RESPONDENTS
73

PERCENTAGE

YES NO

38 25

61 39

25.39%

Free SMS
60.31% YES NO

Interpretation: From the above survey it is clear that majority of customers i.e 60.31% of J&K Bank use free SMS service and rest of 25.39% customers don‘t use free SMS service.

Qno6. How do you feel about the work culture and ambience of J&K Bank? ? ? ? ? ? Excellent Very good Good Average Poor
74

REPONSE Excellent

NO. OF RESPONDENTS 40

PERCENTAGE 63.31

Very good

09

14.28

Good

12

19.04

Average poor

02 0

3.17 0

19.04%

Work culture
3.17% 0 excellent very good Good Average

14.28%

63%

poor

Interpretation: From the above pie-chart it has been observed that majority customers feel that the work culture and ambience of J&K Bank are excellent. This implies that J&K Bank is known for excellent customer service among all the banks in Srinagar.

Qno7. Do you think, the branch and ATM network of J&K Bank is good enough to cater all the customers ? ? ? ? ? Strongly agree Agree Neutral Disagree
75

REPONSE Strongly agree

NO. OF RESPONDENTS 38

PERCENTAGE 61

Agree

16

25

Neutral

06

10

Disagree

03

5

9.82% 25.39%

4.76%

Branch ATM
60.31% stongly agree agree neutral disagree

Interpretation: From this pie-chart it has been observed that, majority of customers 60.31% feel strongly agree and 4.76% feel strongly disagree about the branch and ATM network of J&K Bank. This depicts that half of the customers are dissatisfied about the branch and ATM network

Qno.8 How do you rate the J&K Bank? (a).With regard to rate of interest being offered? ? ? ? Excellent Very good Good.
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?

Average RESPONSE Excellent Very good Good Average Nf RESPONDENTS 30 11 13 09 PERCENTAGE 47.61 17.46 20.63 14.28

14.28%

Rate of interest
47.61%

20.63%

Excellent very good good Average 17.46%

Interpretation: From the survey it is clear that majority of customer i.e 48% have rated J&K bank excellent.

(b).With regard to net banking? ? ? ? ? Excellent Very good Good Poor
77

RESPONSE Excellent Very good Good Poor

Nf RESPONDENTS 38 09 11 05

PERCENTAGE 60.31 14.28 17.46 7.93

Net banking
7.93% 17.46% 60.30% 14.28% Excellent very good good poor

Interpretation: From above study it is clear that majority of customers i.e 60.30% have rated J&K bank excellent with regard to net banking.

(c).With regard to how well knowledgeable bank staff is in solving your problem? ? ? ? ? Excellent Very good Good poor
78

RESPONSE Excellent Very good Good poor

Nf RESPONDENTS 29 24 07 03

PERCENTAGE 46.61 38.09 11.11 4.76

Bank staff knowledge
11.11% 4.76% 46.61% Excellent very good good 38.09% poor

Interpretation: From above survey it is clear that majority of customers i.e 46.03% has rated J&K Bank excellent.

(d).With regard to terms and conditions? ? ? ? Excellent Very good Good
79

?

Poor

RESPONSE Excellent Very good Good

Nf RESPONDENTS 24 27 10

PERCENTAGE 38.09 42.85 15.87

Terms and condition
15.87% 3.17% 38.09% excellent very good good 42.85% poor

Interpretation: From survey it is clear that majority of customers have rated J&K bank very good.

Q9. When you think of J&K Bank, what comes first in your mind? ? ? ? Quality service Wide branch network Easy accessibility
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?

Speedily transaction

RESPONDENTS Quality service Wide branch network Easy accessibility Speedily transaction

NO. of RESPONDENTS 30 13 14 06

PERCENTAGE 47.61 20.63 22.22 9.52

9.52% 22.22%

Brand image
47.61% Quality service wide branch network easyaccesibilty speedly tranction

20.63%

Interpretation: From the survey it is clear that majority of customers i.e 47.61% think that the quality service is the key reason for customer satisfaction provided by bank. This implies that J&k Bank is known for quality service.

.QNO10 Would you recommend this bank to your friends, relatives and associates? ? ? Yes No

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RESPONSE YES NO

NO. of RESPONDENTS 62 01

PERCENTAGE 98.41 1.58

Recommend
9.52%

YES 98.40% NO

Interpretation: This study implies that when talking about the recommendation , all the customers are ready and feel great to recommend the bank to their friends and relatives. This shows the positive word of mouth publicity of the bank and the bank is attracting and maintaining the customers to generate a high profit for the bank

QNO11 Do you think J&K bank is working for well being of society? ? ? Yes No
82

RESPONSE YES NO

NO. of respondents 57 06

PERCENTAGE 90.47 9.52

well being of society
9.50%

YES NO 90.47%

Interpretation: From above graph it is clear that 90% of customers feel that J&K bank is working for well being of society,10% of customers feel that J&K bank is not socially responsible.

QNO.12 Do you find any drawbacks in the services of J&K bank? ? YES
83

?

NO RESPONSE YES NO NO. of RESPONDENTS 18 45 PERCENTAGE 28.57 71.42

Drawback
28.57%

YES NO

71.42%

Interpretation: This chart explains that about 28.57% feel that there are few drawbacks in the services of J&K Bank and 72.42% are those customers who feel that there are no drawbacks in the services provided by J&K Bank. These customers give suggestions and remedies to make improvements in the service level so that the J&K Bank should maintain loyal customer base and cam maintain a good brand image among the customers.

84

CHAPTER 9
FINDING,SUGGESTION AND RECOMMENDATION

FINDINGS: ? From this project, it has been observed that J&K Bank is holding the No. 1 market share
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among all the private sector banks in Srinagar. ? It has been observed that television is the most attractive and profitable marketing channels of J&K Bank for creating awareness among customers. ? A large number of J&K Bank customers are holding savings account among other products and services provided by J&K Bank like current a/c, fixed deposits, recurring deposits etc. ? It has been observed that 25.39% of the customers are not aware about all the products and services provided by J&K Bank. ? It has been observed that about half of the customers (39.68%) don‘t use free SMS facility of the Bank. ? All of the customers are satisfied with the work culture and ambience of J&K Bank. ? 4.76% of the customers feel that the branch and ATM network of J&K Bank is not good enough to cater all the customers. ? It has been observed that of 47.61% customers think that the quality service is the key reason for customer satisfaction provided by bank. ? It has been observed that 98.4% customers are willing to recommend it to others. ? It has been observed that 9.5% of customers think that J&K bank is not working for well being of society. ? It has been observed that 28.7% of customers fell that there are drawbacks in services provided by j&k bank. ? It has been observed that 47.61% of customers feel that rate of interest provided by J&K bank is excellent. ? It has been observed that 46.03% of customers feel that bank staff is well knowledgeable in solving customer problems. ? It has been observed that 38.09% of cutomers feel that terms and conditions set by J&K bank are excellent.

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SUGGESTIONS AND RECOMMENDATIONS

? About 25.39% of the customers are not aware about all the products and services provided by the bank, therefore the J&K Bank employees should get involved in providing information about the other services offered by the bank rather than pitching accounts to them. ? About (39.68%) of the customers don‘t use free SMS facility of the bank, the Bank staff should make the customers aware about the benefits of using free SMS service. ? The J&K Bank should decrease the time period for the activation of credit cards so that the customers feel satisfied with the bank. ? Only 4.76% of the customers feel that the branch and ATM network is not good enough to cater all the customers, therefore the ATM and branch network should be increased so that 4.76% of customers also feel that bank can cater their needs.

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CHAPTER 10
BIBLOGRAPHY

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BIBLIOGRAPHY: Websites: www.jkbank.net ? http:/papers.ssrn.com/sol3/papers.cfm-abstract ? http:/ www.researchandmarkets.com ? http:/google.com ? http:/ www.economicwatch.com/banking ?http://en.wikipedia.org/wiki/bank

Text book: ? Marketing research by Naresh K Malhotra. ? Marketing Management by Philip Kotler

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CHAPTER 11
ANNEXURE

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ANNEXURE

QUESTIONAIRE I will be thankful to the respondents, if you will spare 4-5 minutes from your valuable time to answer this questionnaire, which will help, the J&K Bank to reach up to your expectations in serving you and also finish my project towards the partial fulfillment of MBA Degree. Gender__________ Occupation ? ? ? ? Q.NO1. ? ? ? ? Q.NO2. ? ? ? Salaried Pensioner Business Housewife How do you come to know about j&k bank? Television Word of mouth Newspaper Billboard In J&K bank, which type of account do you have? Saving account Current account Term deposit account Name________________ Contact No._______________

Q.NO3. What motivated you to open an account with J&K bank? ? ? ? ? Interest rate offered Security demanded Efficient customer service Easy accessibility
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Q.NO4. Are you aware about all services provided by J&K bank? ? ? Yes No

QNO5. Are you using the free SMS service provided by J&K bank? ? ? Yes No

QNO6. How do you feel about work culture and ambience of J&K bank? ? ? ? ? Excellent Very good Good Average

QNO7. Do you think the branch and ATM network of J&K bank is good enough to Cater all customers? ? ? ? ? Strongly agree Agree Neutral Disagree

QNO8. How do you rate J&K bank? (A).With regard to rate of interest being offered? ? ? ? ? Excellent Very good Good. Average

(B).With regard to net banking? ? ? ? ? Excellent Very good Good Poor
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(c).With regard to how well knowledgeable bank staff is in solving your problem? ? ? ? ? Excellent Very good Good Poor

(D).With regard to terms and conditions? ? ? ? ? Excellent Very good Good Poor

QNO9.When you think of j&k bank, what comes first in your mind? ? ? ? ? Quality service Wide branch network Easy accessibility Speedily transaction

QNO.1O.Would you recommend this bank to your friends? ? ? Yes No

QNO.11.Do you think J&K bank are working for the well being of the society? ? ? Yes No

QNO.12.Do you find any drawback in services offered by J&K bank, if yes specify? ? ? ? Yes No please give some suggestions to serve you better__________________

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