“STUDY ON A COMPARITIVE ANALYSIS OF CUSTOMER SERVICE OF

HPSCB”

“A CASE STUDY OF BRANCH OFFICE SANJAULI”

PROJECT REPORT

Submitted to the UNIVERESITY SCHOOL OF BUSINESS MANAGEMENT

In the partial fulfilment of the requirement for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

SUBMITTED BY ARPIT VERMA

15BBA1057

HP.ACSTI/SML/184/57

Under the guidance of Mr Gunjan Munjal

UNIVERSITY SCHOOL OF BUSINESS MANAGEMENT

CHANDIGARH UNIVERSITY
 DECLARATION

I hereby declare that this project report title ‘‘STUDY ON A COMPARITIVE ANALYSIS OF
CUSTOMER SERVICE OF HPSCB”“A CASE STUDY OF BRANCH OFFICE
SANJAULI’’ submitted by me to the Department of University School of Business is a work
undertaken by me and it is not submitted to any other University or institution for award of any
degree diploma / certificate or published any time before.

Arpit Verma

15BBA1057

2
 GUIDE CERTIFICATE

Certified that Project report titled ‘‘STUDY ON A COMPARITIVE ANALYSIS OF CUSTOMER

SERVICE OF HPSCB’’ submitted by Arpit Verma UID 15BBA1057 for the partial fulfillment of BBA
degree offered by CHANDIGARH UNIVERSITY, GHARUAN during academic year 2017-2018 is an
original work carried out by the student under guidance of Mr. Gunjan Munjal. This report has not been
submitted to any other university or institution for the award of any degree/diploma/certificate.

Project Guide:

3
 ACKNOWLEDGEMENT

It is a matter of great pleasure for me in submitting the project report on COMPARITIVE

ANALYSIS for the fulfilment of the requirement of my course from UCBS.

I am thankful to and owe a deep dept. gratitude to all those who have helped in preparing the
project.

I would also like to thank Mr Nishchay Dhanaik (SR.Manager Sanjauli Co-operative Bank) who
gave me an opportunity to learn recurring knowledge of what is working in our lives that can
help us not only to survive but surmount our difficulties.

I express my sincere thanks to whole Co-operative Bank for giving me all the facilities during
my project and helping and guiding me during whole internship period.

I want to thank all who have supported and gave me their timely guidance. Last but not the least
I am very greatful to all those who helped me in one-way or the other way at every stage of my
work.

-Arpit Verma

4
 Preface

Summer training is a very important part of a BBA curriculum. It provides an optimistic

iconography for future existence through which students are able to see the real environment
which gives an opportunity to relate the theory with practice. I undertook forty five days training
program at HPSEB, BO Sanjauli and worked on the subject Project Customer Analysis. This
project report is the knowledge acquired by me during this period of training.

Customer Analysis is very important topic for bank as it makes any branch of bank to realize
what are its present conditions as compared to earlier performances. So as a finance student I
have got this topic to study and make my report. I have tried my best to make this report.

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 Contents

1. Introduction 7-24

2. Objectives and 25-27

Need of Study

3. Review of Literature 28-29

4. Research Methodology 30-31

5. Analysis and Interpretation 32-40

Conclusion

Bibliography

6
 CHAPTER 1
INTRODUCTION

7
 INTRODUCTION

Bank plays an important role Indian economy. After liberalization, the banking underwent major
changes. The economic reforms totally have changed the banking sector. RBI permitted new
banks to be stated or industry was in the private sector as per the recommendations of
Narasimham committee. . The Indian banking industry was dominated by public sector bank.
But now the situation has changed. New generation bank with advance technology and
professional management has gained a reasonable position in the banking industry.

HISTORY

Banking in its modern sense evolved in the 14th century in the prosperous cities of Renaissance
Italy but in many ways was a continuation of ideas and concepts of credit and lending that had
their roots in the ancient world. In the history of banking, a number of banking dynasties —
notably, the Medicis, the Fuggers, the Welsers, the Berenbergs and the Rothschilds — have
played a central role over many centuries. The oldest existing retail bank is Banca Monte
deiPaschi di Siena, while the oldest existing merchant bank is Berenberg Bank.

In most common law jurisdictions there is a Bills of Exchange Act that codifies the law in
relation to negotiable instruments, including cheques, and this Act contains a statutory definition
of the term banker: banker includes a body of persons, whether incorporated or not, who carry on
the business of banking' (Section 2, Interpretation). Although this definition seems circular, it is
actually functional, because it ensures that the legal basis for bank transactions such as cheques
does not depend on how the bank is structured or regulated.

The business of banking is in many English common law countries not defined by statute but by
common law, the definition above. In other English common law jurisdictions there are statutory
definitions of the business of banking or banking business. When looking at these definitions it is
important to keep in mind that they are defining the business of banking for the purposes of the
legislation, and not necessarily in general. In particular, most of the definitions are from
legislation that has the purpose of regulating and supervising banks rather than regulating the
actual business of banking. However, in many cases the statutory definition closely mirrors the
common law on.

Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct
debit and internet banking, the cheque has lost its primacy in most banking systems as a payment
instrument. This has led legal theorists to suggest that the cheque based definition should be
broadened to include financial institutions that conduct current accounts for customers and
enable customers to pay and be paid by third parties, even if they do not pay and collect cheques.

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 MEANING OF BANK

A bank is a financial institution that accepts deposits from the public and creates credit.
Lending activities can be performed either directly or indirectly through capital markets. Due to
their importance in the financial stability of a country, banks are highly regulated in most
countries. Most nations have institutionalized a system known as fractional reserve banking
under which banks hold liquid assets equal to only a portion of their current liabilities. In
addition to other regulations intended to ensure liquidity, banks are generally subject to
minimum capital requirements based on an international set of capital standards, known as the
Basel Accords. Banking is one of the key drivers of the U.S. economy. Why? It provides
the liquidity needed for families and businesses to invest for the future.

How It Works

Banks are a safe place to deposit excess cash. That's because the Federal Deposit Insurance
Corporation insures them. Banks also pay a small percent, the interest rate, on the deposit.

Banks can turn every one of those saved dollars into ten. They are only required to keep 10
percent of each deposit on hand. That regulation is called the reserve requirement. Banks lend
the other 90 percent out. They make money by charging higher interest rates on their loans than
they pay for deposits.

Role of Bank

A proper financial sector is of special importance for the economic growth of developing and
underdeveloped countries. The commercial banking sector which forms one of the backbones the
financial sector should be well organised and efficient for the growth dynamics of a growing
economy .no underdeveloped country can progress without first setting up a sound system of a
commercial banking .the importance of a sound system of a commercial banking for a
developing country may be depicted as follows:

CAPITAL FORMATION:

It is a specific statistical concept used in national accounts statistics, econometrics and

macroeconomics. In that sense, it refers to a measure of the net additions to the (physical) capital
stock of a country (or an economic sector) in an accounting interval, or, a measure of the amount
by which the total physical capital stock increased during an accounting period. To arrive at this
measure, standard valuation principles are used.

MONETIZATION:

It is the process of converting or establishing something into legal tender. While it usually refers
to the coining of currency or the printing of banknotes by central banks, it may also take the form
of a promissory currency.

9
The term "monetization" may also be used informally to refer to exchanging possessions for cash
or cash equivalents, including selling a security interest, charging fees for something that used to
be free, or attempting to make money on goods or services that were previously unprofitable or
had been considered to have the potential to earn profits. And data monetization refers to a
spectrum of ways information assets can be converted into economic value.

INNOVATION:

It is an essential prerequisite for economic progress. These innovations are mostly financed by
bank credit in the developed countries but the entrepreneurs in the under developed countries
cannot bring about these innovations for lack of bank credit in an adequate major. The banks
should pay special attention to the financing of business innovations by providing adequate and
cheap credits to entrepreneurs.

FINANCE FOR PRIORITY SECTORS:

The commercial banks in underdeveloped countries generally hesitateinextending financial

accommodations to such sectors as agriculture and small scale industries on account of the risks
involved there in. They mostly extend is far less . But for the development of these countries it is
essential that the banks take risks in extending credit facilities to the prority sectors such as
agriculture and small scale industries.

PROVISION FOR MEDIUM AND LONG TERM FINANCE:

The commercial banks in underdeveloped countries invariably give loans and advances for a
short term of span. They generally hesitate to extend medium and long term loans to
businessmen. As well known, the business need medium and long term loans for their proper
establishment. The commercial banks should therefore change their policies in favour of granting
medium and long term accommodations to business and industry.

CHEAP MONEY POLICY:

The commercial banks in an underdeveloped economy should follow cheap money policy to
stimulate economic activity or to meet the threat of business recession. In fact , cheap money
policy is the policy which one can help promote the economic growth of an underdeveloped
country. It is heartening to note that recently the commercial banks have reduced their lending
interest rates considerably.

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SWOT Analysis

Then,for each trend or development, management needs to identify the associated marketing
opportunities and threats. A marketing opportunity is an area of buyer need in which
acompany can perform profitably. Opportunities can be classified according to their attractivene
ss and their success probability.

The company’s success probability depends on whether its business strengths not only match
the key success requirements for operating in
the target market, but also exceed those of its competitors. Mere competence does not constitute
a competitive advantage. The best-performing company will be the one that can generate the
greatest customer value and sustain it over time. An environmental threatis a challenge posed by
an unfavorable external trend or development that would lead, in theabsence of defensive
marketing action, to deterioration in sales or profit. Threats should be
classified according to seriousness and probability of occurrence.
Minor threats can be ignored; somewhat more serious threats must be carefully monitored; and
major threats require the development of contingency plans that spell out changes the company
can make if necessary.
Internal Environment Analysis
It is one thing to discern attractive opportunities and another to have the competencies tosucceed
in these opportunities. Thus, each business needs to periodically evaluate its
internalstrengths and weaknesses in marketing, financial, manufacturing, and organizationalcom
petencies. Clearly, the business does not have to correct all of its weaknesses, nor shouldit gloat
about all of its strengths. The big question is whether the business should limit
itself to those opportunities in which it possesses the required strengths or consider better opport
unities to acquire or develop certain strengths. Sometimes a business does poorly because its
departments do not work
together well as a team. It is therefore criticallyimportant to assess interdepartmental working rel
ationships as part of the internalenvironmental audit.

STRENGTH: -
The strengths of the H.P. State Cooperative Bank depending on itsexternal and internal
environment are
1.The bank is spread into only 6 districts due to its limited area it is easy to monitor minor
requirements of the customers which may else ignored by other banks.
2. The bank provides the easiest way to open a new account into any of its branch as the
customers has to fill minimum requirements which are asked by other banks.
3. The bank has the branches in the remote areas where the branches of other banks are not yet
opened which give the bank edge over the other banks.
4. As the bank is a cooperative bank thus bank gets the advantage of getting priority by the
different cooperative societies for transactions and loans.
5. Due to the cooperative in nature peoples has faith in the bank.
6. Cooperative staff is the main strength of all the organization as in case of the bank its
cooperative staff is the main strength of the bank.

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7. Adherence to coop values and principles.

8. The H.P. State Cooperative Bank has well-knit organizational structure.

9. The H.P. State Cooperative Bank has deep roots in the community.
10. The H.P. State Cooperative Bank deals the user as not only the customers but also the
member of the bank.
11. It has great amount cooperation with other district cooperative banks( Kangra central
cooperative bank, Jogindra central cooperative bank ).
12. The H.P. State Cooperative Bank focus on the person of limited means & the poorer section
13. The main priority of The H.P. State Cooperative Bank is member services rather than profit.
14. The H.P. State Cooperative Bank has the capacity to thrive in crisis.
15. The main emphasis of The H.P. State Cooperative Bank is on GLOCALISATION.

WEAKNESSES:-
1.The H.P. State Cooperative Bank has less resources’ as compared to the other nationalized and
public banks
.2.The H.P. State Cooperative Bank staff lacks the professionalism.
3. Political pressures on the employees of the bank as compared to the other banks.
4. There is some sort of government control over the working of The H.P. StateCooperative
Bank.
5. In the H.P. State Cooperative Bank dependence syndrome is there. Each person think his work
may be done by the other.
6. No internet banking and mobile banking.
7. ATM network is not well spread like other nationalized and public banks.
8. Most of the branches are not online however they are computerized.
9. Less advertisement is other weakness of The H.P. State Cooperative Bank.
10. Lack of time management.
11. Lack of knowledge about the many aspects of banking to the employees.
12. Due to the restricted area the total capital of The H.P. State Cooperative Bank islimited.

OPPORTUNITIES:-
1 .Being the cooperative bank it has the opportunity to finance the government projects.
2. Providing ATM facilities may take bank a long way.
3. With the growth of axis bank in the term of customers and market share the growth of bank is
also promote.
4. As it is a state cooperative bank this bank is bank in demand.5.Being cooperative bank this
bank gets priority over the other banks for cooperativesocieties.6. Existence of bank in remote
areas.7.Bank may take the advantage of being cooperative bank by promoting itself.

THREATS:-
1. The main threat to The H.P. State Cooperative Bank is increasing steps/roots of the public
banks.
2. Easy policies of the public banks.
3. Less documentation of the public banks for different types of loans.
4. Instant /one minute service provided by some banks.
5. Online banking and mobile banking facilities of other nationalized and public banks

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6. Facilities like ZERO BALANCE ACCOUNT by some of public sector banks.
7. Increasing market share of the other bank threaten the H.P. State Cooperative Bank tolose its
position in the market.

More significant brand image in public acceptance of product and services of publicand
nationalized banks as compared to cooperative banks.

FUNCTION OF BANK

Primary Functions of Banks

The primary functions of a bank are also known as banking functions. They are the main
functions of a bank.

These primary functions of banks are explained below.

1. Accepting Deposits

The bank collects deposits from the public. These deposits can be of different types, such as

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1 .SAVING DEPOSITS

2. FIXED DEPOSITS

3. CURRENT DEPOSITS

4. RECURRING DEPOSITS

(A). Saving Deposits

This type of deposits encourages saving habit among the public. The rate of interest is low. At
present it is about 4% p.a. Withdrawals of deposits are allowed subject to certain restrictions.
This account is suitable to salary and wage earners. This account can be opened in single name
or in joint names.

(B). Fixed Deposits

Lump sum amount is deposited at one time for a specific period. Higher rate of interest is paid,
which varies with the period of deposit. Withdrawals are not allowed before the expiry of the
period. Those who have surplus funds go for fixed deposit.

(C). Current Deposits

This type of account is operated by businessmen. Withdrawals are freely allowed. No interest is
paid. In fact, there are service charges. The account holders can get the benefit of overdraft
facility.

(D). Recurring Deposits

This type of account is operated by salaried persons and petty traders. A certain sum of money is
periodically deposited into the bank. Withdrawals are permitted only after the expiry of certain
period. A higher rate of interest is paid.

2. Granting of Loans and Advances

The bank advances loans to the business community and other members of the public. The rate
charged is higher than what it pays on deposits. The difference in the interest rates (lending rate
and the deposit rate) is its profit.

The types of bank loans and advances are :-

1. OVERDRAFT

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2. CASH CREDITS

3. LOANS

4. DISCOUNTING OF BILLS AND EXCHANGE

(A). Overdraft

This type of advances is given to current account holders. No separate account is maintained. All
entries are made in the current account. A certain amount is sanctioned as overdrafts which can
be withdrawn within a certain period of time say three months or so. Interest is charged on actual
amount withdrawn. An overdraft facility is granted against a collateral security. It is sanctioned
to businessman and firms.

(B). Cash Credits

The client is allowed cash credit upto a specific limit fixed in advance. It can be given to current
account holders as well as to others who do not have an account with bank. Separate cash credit
account is maintained. Interest is charged on the amount withdrawn in excess of limit. The cash
credit is given against the security of tangible assets and / or guarantees. The advance is given for
a longer period and a larger amount of loan is sanctioned than that of overdraft.

(C). Loans

It is normally for short term say a period of one year or medium term say a period of five years.
Now-a-days, banks do lend money for long term. Repayment of money can be in the form of
installments spread over a period of time or in a lumpsum amount. Interest is charged on the
actual amount sanctioned, whether withdrawn or not. The rate of interest may be slightly lower
than what is charged on overdrafts and cash credits. Loans are normally secured against tangible
assets of the company.

(D). Discounting of Bill of Exchange

The bank can advance money by discounting or by purchasing bills of exchange both domestic
and foreign bills. The bank pays the bill amount to the drawer or the beneficiary of the bill by
deducting usual discount charges. On maturity, the bill is presented to the drawee or acceptor of
the bill and the amount is collected.

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Secondary Functions of Banks

The bank performs a number of secondary functions, also called as non-banking functions. These
important secondary functions of banks are explained below.

1. Agency Functions

The bank acts as an agent of its customers. The bank performs a number of agency functions
which includes:-

1. Transfer of Funds
2. Collection of Cheques
3. Periodic Payments
4. Portfolio Management
5. Periodic Collections
6. Other Agency Functions

(A). Transfer of Funds

The bank transfer funds from one branch to another or from one place to another.

(B). Collection of Cheques

The bank collects the money of the cheques through clearing section of its customers. The bank
also collects money of the bills of exchange.

(C). Periodic Payments

On standing instructions of the client, the bank makes periodic payments in respect of electricity
bills, rent, etc.

(D). Portfolio Management

The banks also undertake to purchase and sell the shares and debentures on behalf of the clients
and accordingly debits or credits the account. This facility is called portfolio management.’

(E). Periodic Collections

The bank collects salary, pension, dividend and such other periodic collections on behalf of the
client.

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(F). Other Agency Functions

They act as trustees, executors, advisers and administrators on behalf of its clients. They act as
representatives of clients to deal with other banks and institutions.

2. General Utility Functions

The bank also performs general utility functions, such as :-

1. Issue of Drafts, Letter of Credits, etc.

2. Locker Facility
3. Underwriting of Shares
4. Dealing in Foreign Exchange
5. Project Reports
6. Social Welfare Programmes
7. Other Utility Functions

(A). Issue of Drafts and Letter of Credits

Banks issue drafts for transferring money from one place to another. It also issues letter of credit,
especially in case of, import trade. It also issues travellers' cheques.

(B). Locker Facility

The bank provides a locker facility for the safe custody of valuable documents, gold ornaments
and other valuables.

(C). Underwriting of Shares

The bank underwrites shares and debentures through its merchant banking division.

(D). Dealing in Foreign Exchange

The commercial banks are allowed by RBI to deal in foreign exchange.

(E). Project Reports

The bank may also undertake to prepare project reports on behalf of its clients.

(F). Social Welfare Programmes

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It undertakes social welfare programmes, such as adult literacy programmes, public welfare
campaigns, etc.

TYPES OF BANK

1. Saving Banks

Saving banks are established to create saving habit among the people. These banks are helpful
for salaried people and low income groups. The deposits collected from customers are invested
in bonds, securities, etc. At present most of the commercial banks carry the functions of savings
banks. Postal department also performs the functions of saving bank.

2. Commercial Banks

Commercial banks are established with an objective to help businessmen. These banks collect
money from general public and give short-term loans to businessmen by way of cash credits,
overdrafts, etc. Commercial banks provide various services like collecting cheques, bill of
exchange, and remittance money from one place to another place.

In India, commercial banks are established under Companies Act, 1956. In 1969, 14 commercial
banks were nationalized by Government of India. The policies regarding deposits, loans, rate of
interest, etc. of these banks are controlled by the Central Bank.

3. Industrial Banks / Development Banks

Industrial / Development banks collect cash by issuing shares debentures and providing long-
term loans to industries. The main objective of these banks is to provide long-term loans for
expansion and modernization of industries.

In India such banks are established on a large scale after independence. They are Industrial
Finance Corporation of India (IFCI), Industrial Credit and Investment Corporation of India
(ICICI) and Industrial Development Bank of India (IDBI).

4. Land Mortgage / Land Development Banks

Land Mortgage or Land Development banks are also known as Agricultural Banks because these
are formed to finance agricultural sector. They also help in land development.

18
 In India, Government has come forward to assist these banks. The Government has guaranteed
the debentures issued by such banks. There is a great risk involved in the financing of agriculture
and generally commercial banks do not take much interest in financing agricultural sector.

5. Indigenous Banks

Indigenous banks mean Money Lenders and Sahukars. They collect deposits from general public
and grant loans to the needy persons out of their own funds as well as from deposits. These
indigenous banks are popular in villages and small towns. They perform combined functions of
trading and banking activities. Certain well-known Indian communities like Marwaries and
Multani even today run specialized indigenous banks.

6. Central / Federal / National Bank

Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A, Federal
Reserve and in U.K, Bank of England. These central banks are the bankers of the other banks.
They provide specialised functions i.e. issue of paper currency, working as bankers of
government, supervising and controlling foreign exchange. A central bank is a non-profit making
institution. It does not deal with the public but it deals with other banks. The principal
responsibility of Central Bank is thorough control on currency of a country.

7. Co-operative Banks

In India, Co-operative banks are registered under the Co-operative Societies Act, 1912. They
generally give credit facilities to small farmers, salaried employees, small-scale industries, etc.
Co-operative Banks are available in rural as well as in urban areas. The functions of these banks
are just similar to commercial banks.

8. Exchange Banks

Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign Banks working
in India. These banks are mainly concerned with financing foreign trade.

Following are the various functions of Exchange Banks :-

1. Remitting money from one country to another country,

2. Discounting of foreign bills,
3. Buying and Selling Gold and Silver, and
4. Helping Import and Export Trade.

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9. Consumers Banks

Consumers bank is a new addition to the existing type of banks. Such banks are usually found
only in advanced countries like U.S.A. and Germany. The main objective of this bank is to give
loans to consumers for purchase of the durables like Motor car, television set, washing machine,
furniture, etc. The consumers have to repay the loans in easy installments.

AN OVERVIEW

Cooperative movement in Himachal Pradesh

The Department of Cooperation was established in 1948 immediately after the formation of the
state of Himachal Pradesh. The main objective of the Department has been to eliminate
exploitation of common man by middlemen and money lenders by ensuring credit facilities to
farmers at low rate of interest through Cooperative institutions. The focus is on amelioration of
the socio-economic conditions of the people. It also envisages enabling empowerment for people
to come together for constituting organizations for mutual benefit, build up synergies and drive
economic benefits.

The first H.P Cooperative Societies Act, enacted in 1956 and prior to this Cooperative Societies
were registered under the Cooperative Societies Registration Act, 1912. With the reorganization
of Punjab State in 1966, four more hilly districts namely, Kangra, Kullu, LahualSpiti and Shimla
were formed. Simultaneously on 1st September, 1972 two more districts vizHamirpur and Una
were created out of Kangra District and Solan also named as a district dropping Mahasu District.
Reorganization of the State paved the way to enact H.P. Cooperative Societies Act 1968, because
most of the Societies in the new merged area were of unlimited liabilities as such H.P.
Cooperative Societies Rules, 1971 were also framed by the Government for strengthening the
Cooperative movement in the State.
The statutory duties of, registration of Cooperative Societies, Arbitration, execution,
Liquidation, Inspection and Audit under section 3 of the H.P Cooperative Societies Act 1968 are
entrusted to the Registrar, Cooperative Societies H.P. or the person authorized by him.
At present following subjects are being dealt by Cooperative Department as per
Business of the Government of Himachal Pradesh (Allocation) Rules 1971:-

o All work relating to Cooperative Societies of all types and at all levels, registered
under the Cooperative Societies Act, except administration of section 35, 94, and
100 of the Himachal Pradesh Cooperative Societies Act, 1968 in relation to
Himachal Pradesh State Cooperative Milk Producers Federation Ltd; Himachal
Pradesh State Cooperative Wool Federation and their constituent Cooperative
institutions.
o Urban Cooperative Bank.
o Land Mortgage Bank.
o Grant of loans and subsidies to Societies.

20
 o Investment in share capital of the Societies.
o Crop Loan Schemes.
o Marketing of Agricultural Produce.
o Distribution of fertilizers, seeds and other Agricultural inputs through the
Cooperatives.
o Cooperative processing and ware-house activities.
o Cooperative Law, Act and Rules.
o Audit of Cooperative Institutions.
o Consumer Cooperative Stores.
o Liquidation, Arbitration and Execution of awards.
o Special schemes of medium and long term credits.
o Registration of Societies under Societies Registration Act, 1860
o Establishment budget and accounts matters .

Banking in India

Banking in India, in the modern sense, originated in the last decades of the 18th century. Among
the first banks were the bank of India, which was established in 1770 and liquidated in 1829–32;
and the General Bank of India, established in 1786 but failed in 1791.

The largest bank, and the oldest still in existence, is the state bank of India (S.B.I). It originated
as the Bank of Calcutta in June 1806. In 1809, it was renamed as the bank of Bengal. This was
one of the three banks funded by a presidency resident, the other two were the Bank of Bombay
in 1840 and the Bank o Madras in 1843. The three banks were 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 had acted as quasi-central banks, as did their
successors, until the Reserve Bank of India was established in 1935, under the Reserve Bank Of
India Act, 1934

In 1960, the State Banks of India was given control of eight state-associated banks under the
State Bank of India (Subsidiary Banks) Act, 1959. These are now called its associate banks. In
1969 the Indian government nationalized 14 major private banks, one of the big bank was Bank
of India. In 1980, 6 more private banks were nationalized. These nationalized banks are the
majority of lenders in the Indian economy. They dominate the banking sector because of their
large size and widespread networks.

The Indian banking sector is broadly classified into scheduled banks and non-scheduled banks.
The scheduled banks are those included under the 2nd Schedule of the Reserve Bank of India
Act, 1934. The scheduled banks are further classified into: nationalized banks; State Bank of
India and its associates; Regional Rural Banks (RRBs); foreign banks; and other Indian private
sector banks. The term commercial banks refers to both scheduled and non-scheduled
commercial banks regulated under the Banking Regulation Act, 1949.

21
Generally banking in India is 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 (NABARD)
with facilities like microfinance.

HISTORY OF COOPERATIVE BANK

The commercial banks were operating for the years , but it was being felt that these banks were
not paying necessary head to the credit requirement of common masses. Further the commercial
banks were mainly concentrating their business in the urban area and the banking facilities to
rural people were not available consequently, the cooperative banks came into picture after 1904.
Himachal Pradesh has the distinction of having first coop. society registered in India.
Cooperative were primarily visualized as specialized agency for financing the credit requirement
of rural people in the country particularly agriculture.

The cooperative movement has been conceived as the movement of masses for the masses and
by the masses. Today cooperative are looked upon as agencies of economic growth ,creating
wealth and employment especially in the rural areas. The benefits of cooperative in the present
set up can be viewed from different angels such as economic social and educational.

The beginning of Indian cooperative movement was placed at 1904 The cooperative credit
societies Act was passed on 25th March 1904. The Indian Cooperative Movement continued to be
a predominately credit movement till the eve of independence. After independence cooperation
was accorded an important place in the planned economic development cooperative credit
institutions as an integral part of rural credit institutions as an integral part of rural credit system
in India has completed 104yr , the commercial banks and regional rural banks have been for
almost 37 and 31 yrs respectively. In fact , this structure has been very unique as compared to
any other country in the world. It serves around 120 million rural house holds residing in about
seven lakh villages through through 92000 primary agricultural credit societies , 1146 branches
of short term cooperative , 2213 branches of long term cooperatives , 33948 branches of
commercial banks and 11426 branches of long term cooperatives , 32948 branches of
commercial banks and 11426 of regional rural bank.

In Himachal Pradesh at the time of attaining independence of India, Mahasu Central Co-
operative Bank, The Mandi Central Co-operative Bank Ltd. and The Chamba Central Co-
operative Bank Ltd. were functioning to cater to the needs of farmer. In 1953 Himachal Pradesh
State Co-operative Bank was established after amalgamating these three Central Co-operative
Banks into it.

The Registration of Himachal Pradesh State Co-operative Bank was done in August, 1953, under
the Co-operative Society Act, 1912 the bank started functioning on 15th March 1954.At that

22
time, the State of Himachal Pradesh used to be the Union Territory and there were only 6
districts in the State. The bank started functioning as an Apex bank as well as Central financing
agency under 2-tier system in 6 districts of the State.

In the year 1955 one Joint Stock Bank i.e., Bank of Sirmour was also merged in it. At present the
H.P.S.C.B. is performing dual function viz. that of Apex Co-operative Bank in Himachal
Pradesh to play lead role in development in Co-operative in the State and that of a Co-operative
Bank in 6 districts viz. BILASPUR, CHAMBA, KINNAUR, MANDI, SHIMLA and
SIRMOUR.

The Bank is extending banking facilities in 5 districts viz. KANGRA, KULLU, HAMIRPUR,
LAHAUL & SPITI and UNA through our affiliated District Central Co-operative Banks, i.e. The
Kangra Central Co-operative Bank and in district SOLAN through another affiliated District
Central Co-operative Bank, The Jogindra Central Co-operative Bank as a District Central Co-
operative Bank.

The Himachal Pradesh Co-operative Bank is serving the people of the State through a network of
190 branches and Extension Counter of which about 94% is in the rural areas of the State and
one branch at New SubziMandi, Azadpur,New Delhi for the benefit horticulturists of the State.

HISTORY AND FUNCTIONING OF KASUMPTI BRANCH

The HPSCB is serving the people of the state through a network of 209 branches and extention
counters of which about 94% is in the rural areas of the state and one branch at New
SubziAzadpur New Delhi for the benefit of horticulturists of the state.

The HPSCB inaugurated its branch at Kasumpti in 1994 for the welfare of people within that
area. The branch a Sr.Manager managing the branch with accordance with 2 managers and a
asst. Manager . There are 3 employees working in the branch to help their customers in a better
way with 3 subordinates.

In the 1st year of working branch was able to open 184 accounts at the end of financial year.
According to the data of last financial year the branch has now 7875customers. The branch has
assets of 1191.50lakh of assest in the form of loans and advancements to 623 of its customers.

Objective of project
 To collect and analyse financial statements of branch
 To know organizational structure working culture and business segments of the bank.
 To know the business environment in which the bank is working.
 To understand the meaning and objective of financial statement analysis
 To know various tools for financial statement objectives of financial statement analysis

23
  Data interpretions with the help of soft tools
 Determine the performance of banks.

Scope of the project

the scope of this project covers a brief financial performance analysis of The HPSCB kasumpti
branch from 2015 to 2017 using annual report of the bank. It also includes study of accounting
standards with its history and other information regarding the past of banking.

The scope of study includes:

 Significance and objectives

 History of banking
 Performance structure of the branch

Soft tools knowledge of interpretation of data.

24
 Chapter 2

Review of Literature

25
Various studies conducted and numerous suggestions were sought to bring effectiveness in the
working and operations of financial institutions. Narsimham Committee (1991) emphasized on
capital adequacy and liquidity, Padamanabhan Committee (1995) suggested CAMEL rating (in
the form of ratios) to evaluate financial and operational efficiency, Tarapore Committee (1997)
talked about Non-performing assets and asset quality, Kannan Committee (1998) opined about
working capital and lending methods, Basel committee (1998 and revised in 2001) recommended
capital adequacy norms and risk. management measures.

Kapoor Committee (1998) recommended for credit delivery system and credit guarantee and
Verma Committee (1999) recommended seven parameters (ratios) to judge financial
performance and several other committees constituted by Reserve Bank of India to bring reforms
in the banking sector by emphasizing on the improvement in the financial health of the banks.
Experts suggested various tools and techniques for effective analysis and interpretation of the
financial and operational aspects of the financial institutions specifically banks. These have focus
on the analysis of financial viability and credit worthiness of money lending institutions with a
view to predict corporate failures and incipient incidence of bankruptcy among these institutions.

Bhaskaran and Josh (2000) concluded that the recovery performance of co-operative credit
institutions continues to unsatisfactory which contributes to the growth of NPA even after the
introduction of prudential regulations. They suggested legislative and policy prescriptions to
make co-operative credit institutions more efficient, productive and profitable organization in
tune with competitive commercial banking.

Jain (2001) has done a comparative performance analysis of District Central Co-operative Banks
(DCCBs) of Western India, namely Maharashtra, Gujarat and Rajasthan and found that DCCBs
of Rajasthan have performed better in profitability and liquidity as compared to Gujarat and
Maharashtra.

Singh and Singh (2006) studied the funds management in the District Central Co-operative
Banks (DCCBs) of Punjab with specific reference to the analysis of financial margin. It noted
that a higher proportion of own funds and the recovery concerns have resulted in the increased
margin of the Central Co-operative Banks and thus had a larger provision for non-performing
assets.

Mavaluri, Boppana and Nagarjuna (2006) suggested that performance of banking in terms of
profitability, productivity, asset quality and financial management has become important to
stable the economy. They found that public sector banks have been more efficient than other
banks operating in India.

26
 Pal and Malik (2007) investigated the differences in the financial characteristics of 74 (public,
private and foreign) banks in India based on factors, such as profitability, liquidity, risk and
efficiency. It is suggested that foreign banks were better performers, as compared to other two
categories of banks, in general and in terms of utilization of resources in particular.

Campbell (2007) focused on the relationship between nonperforming loans (NPLs) and bank
failure and argued for an effective bank insolvency law for the prevention and control of NPLs
for developing and transitional economies as these have been suffering severe problems due to
NPLs.

Singla(2008) emphasized on financial management and examined the financial position of

sixteen banks by considering profitability, capital adequacy, debt-equity and NPA.

Dutta and Basak (2008) suggested that Co-operative banks should improve their recovery
performance, adopt new system of computerized monitoring of loans, implement proper
prudential norms and organize regular workshops to sustain in the competitive banking
environment.

Chander and Chandel (2010) analyzed the financial efficiency and viability of HARCO Bank
and found poor performance of the bank on capital adequacy, liquidity, earning quality and the

management efficiency parameters.

27
 Chapter 3
Objectives of study

28
The objective of the study is to analyse the customer service of
HPSTC.

OBJECTIVES OF THE STUDY

To know the lending practices of cooperative banks in India.
To measure and compare the efficiency of Cooperative Banks
of India.
To study the impact of „size‟ on the efficiency of the
Cooperative Banks.
To suggest the appropriate measures to improve the efficiency
of the Cooperative banks.
To know different type of loans preferred by different sets of
customers.
To know the satisfaction level of the customers from Bank‟s
lending policies.

29
 Chapter 4
Research Methodology

30
 Type of Research –
Descriptive research is used in this study in order to identify the lending practices of bank and
determining customer’s level of satisfaction. The method used was questionnaire and interview
of the experienced loan officers.

Collection of data:

1 Primary Data
a. Observation Method
b. Interview Method
c. Structured Questionnaire

2 Secondary Data
a. Annual reports of the bank
b. Manual of instructions on loans and advances
c. Books
d. Articles and Research Papers
e. Internet

Research Design

1. Research Methodology: Descriptive research was used as a method of study.

2. Universe: Different departments of HP STATE CO-OPERATIVE BANK Life Insurance
3. Sampling Technique: Simple Random Sampling was used for sample selection.
4. Sample Size: 75 respondents were used as overall sample for study.
5. Sampling Unit: Employees of HP STATE CO-OPERATIVE BANK Life Insurance from various
departments.
6. Data Interpretation: Pie-charts were used as a method of representation of responses.
7. Data Collection: Primary and secondary data was used in the project.
8. Primary Sources: Questionnaire formed the basis of getting responses.
9. Secondary Sources: Internet, Company records, Management Journals and Literature.

31
 Chapter 5
Analysis and Interpretation

32
Source:-Primary data collected through questionnaire

33
Interpretation:- From the above graph, it is inference that 67% employees were satisfied with
their current job and this is good for the organization. Whereas 23% of respondents remained
unsure regarding their response and only 10% of the respondents appeared unsatisfied with their
job.

Interpretation : Present Study reveals that 8 % people prefer loan less than 20,000, 20 %
respondents prefer 20,000 to 50,000,12 % prefer more than 1 lac and 60% of the respondents
prefer more than 1 lac.

34
Interpretation: Study shows that 64 % respondents take loan for more than 3 years, 20 % take
loan for 1 to 3 years and 12% take loan for the period of less than 1 year.

35
Interpretation: Study reveals that 38 % take loan because banks provide easy payment,34%
take loans because of less formalities and other respondents take loan because of reasonable rate
of interest, more schemes .

36
Interpretation: Study shows that 52% of the respondents says that customer service of the bank
is good,24% says that it is excellent and another 24 % says its average and only 2 % says its
poor.

37
6: Are you satisfied with the services provided by the organization
(Like air-condition, canteen etc.)?

Particular No. of respondents % age of

respondents
Yes 43 57
No 21 28
Can’t say 11 15
Total 75 100

%age of respondents

15

yes
no

28 57 can't say

Interpretation:- From the above graph, it is inference that organization provides services like
canteen and air conditioning etc. to the employees and 57% employees were satisfied with these
services. But 28% were not satisfied and 15% remained unsure.

38
7- How is working environment?

Particular No. of respondents % age of respondents

Participative 56 75
Autonomy 15 20
None of above 4 5
Total 75 100

%age of respondent

5
20
participative
autonomy
none of above
75

Interpretation:-From the above graph it is inference that, Environment of the organization is a

very important factor to make the employees feel satisfied with 75% of the employees believed
that there is participative environment in the organization. But 20% felt that here is autonomy
environment.

39
8- Are you satisfied with the services provided by the organization (Like air-condition, canteen etc.)?

Particular No. of respondents % age of respondents

Yes 43 57
No 21 28
Can’t say 11 15
Total 75 100

%age of respondents

15

yes
no

28 57 can't say

Interpretation:- From the above graph, it is inference that organization provides services like canteen
and air conditioning etc. to the employees and 57% employees were satisfied with these services. But
28% were not satisfied and 15% remained unsure.

40
 Conclusion

41
 CONCLUSION

From the above study, it is visible that maximum employees were satisfied with their current job and this
is good for the organization. And that believe that organization cares for them and think that their
association with the organization has been favourable and that their job is important for the organization.
Hence showing a large number of satisfied employees, maximum number of respondents agreed that their
efforts are recognized aptly by the organization that they feel motivated when their efforts are recognized
with monetary benefits appearing to be the most necessary for a happy job.

Also organization provides services like canteen and air conditioning etc. To the employees and the
employees were satisfied with these services and stated they were given regular counselling sessions. Thus
confirming that organization cares about the employee and that employees are well aware of these efforts
and are satisfied with the same underlining high level of job satisfaction amongst the employees.

FINDINGS

1. Majority (32% as per the study) of the respondent were having housing loan from this bank.
2. Most (64% as per the study) of the people prefer to take long term loan which is more than 3
years.
3. There is a very simple procedure followed by bank for loan.
4. Easy repayment and fewer formalities are the main factors determining customer’s selection of
loans.
5. Quality of services provided by the staff is satisfactory because bank is catering to a small
segment only and the customers are properly dealt with.
6. Customers are satisfied with the mode of repayment or installation

 71% of employees thought that their association with the organization has been favourable and 84% of the
employees agreed that their job is important for the organization

 Maximum number of respondents agreed that their efforts are recognized aptly by the Organization and
motivates its employees by various methods as 82% of the employees replied that they feel motivated
when their efforts are recognized.

42
 46% of the respondents believed that monetary benefits are necessary for a happy job followed by 34% of
those who believed that better growth is a precursor to a happy job and 20 % believed in good
interpersonal relations been the essential requirement of the same.

 Except that 56% employees thought that better salary offerings can make them search for a new job
elsewhere but 27% employees believed that better growth prospects are more important factor and 17%
wanted a better work environment.

 63% employees believed that organization cares for them and 71% employees thought that their
association with the organization has been favourable. Also organization provides services like canteen
and air conditioning etc. to the employees and 57% employees were satisfied with these services also they
were given regular counselling sessions.

LIMITATIONS

1) The study conducted is limited to a one organization only.

2) The study conducted with the precincts of one department of organization only.
3) Time and money was major limitation, which may have affected the study.
4) Some of the respondents were reluctant to share information.

SUGGESTIONS
.
1. The banks should adopt the modern methods of banking like internet banking, credit cards,
ATM, etc.
2. The banks should plan to introduce new schemes for attracting new customers and satisfying
the present ones.
3. The banks should plan for expansion of branches.
4. The banks should improve the customer services of the bank to a better extent.

43
 ANNEXURE (Questionnaire for Customer satisfaction)

Kindly fill the following details about yourself

Name (optional):

Department:

Q1. Are you satisfied with your SERVICE?

[ ] Yes [ ] No

[ ] Can’t say

Q2.Do you feel that the organization cares for you and your growth?

[ ] Yes [ ] No

[ ] Can’t say

Q3. Do you feel that your association with the organization has been fruitful?

[ ] Yes, very much [ ] Not at all

[ ] Average

Q5. Are your efforts recognized by your organization?

[ ] Yes [ ] No

[ ] Can’t say

Q6. Do you feel motivated when your efforts are recognized by the organization?

[ ] Yes [ ] No

[ ] Can’t say

Q7.How is working environment?

[ ] Participative [ ] Autonomy

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[ ] None of above

Q8.Are you satisfied with the services provided by the organization (Like air-condition, canteen etc.)?

[ ] Yes [ ] No

[ ] Can’t say

Q9. Does your organization organize any counseling programs for the employees?

[ ] Yes, always [ ] No, never

[ ] Sometimes

Thank you for your co-operation

45
 Bibliography

http://www.inc.com/guides/201105/7-ways-to-improve-employee-satisfaction.html#/guides/201105/7-
ways-to-improve-employee-satisfaction.html

http://www.smallenterpriseindia.com/index.php?view=article&catid=61:hr&id=457%25..

http://www.slideshare.net/hemanthcrpatna/a-study-on-employee-job-satisfaction-h-r-final-project

http://www.slideshare.net/hemanthcrpatna/a-study-on-level-of-employee-job-satisfaction-conducted-at-
bharathi-associates-ltd

http://humanresources.about.com/od/employeesurvey1/g/employee_satisfy.htm

http://wiki.answers.com/Q/What_is_the_definition_of_customer_satisfaction

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