1.
Retail Banking/ Madhusudan Narayan P a g e | 1
A Project Report
On
“RETAIL BANKING”
For
By
Madhusudan Narayan
Under the guidance of
Mr. Sanjay Kumar Mr. Ramakant Behra
Senior Marketing Manager Marketing Manager
Rapid Retail Centre, Patna Patna Regional Office
Indian Overseas Bank, Patna Indian Overseas Bank, Patna
“In partial fulfilment of the requirements for the award of the
degree of
Master of Business Administration (MBA)”
Submitted to
Department of Management Studies
National Institute of Technology
Durgapur

2.
Retail Banking/ Madhusudan Narayan P a g e | 2
DECLARATION
I hereby declare that the project report titled “RETAIL BANKING”
WITH REFERENCE TO “INDIAN OVERSEAS BANK” d o n e b y m e
u n d e r g u i d a n c e o f M r . S a n j a y K u m a r , ( S e n i o r M a r k e t i n g
M a n a g e r , R . R . C . , I O B P a t n a ) a n d M r . R a m a k a n t
B e h r a , ( M a r k e t i n g M a n a g e r , R . O . , P a t n a ) is my original work
and has not been published or submitted for any degree, diploma or other
similar titles elsewhere. This has been undertaken for the purpose of partial
fulfilment of the award of Master of Business Administration (MBA) at
National Institute of Technology, Durgapur (West Bengal).
Date: 16/ 07/2014 MADHUSUDAN NARAYAN
Place: Patna, BIHAR Roll No.: 13/MBA/75
Session: 2013-15

3.
Retail Banking/ Madhusudan Narayan P a g e | 3
PREFACE
Retail banking refers to banking in which banking institution execute
transactions directly with customers, rather than corporations or other banks.
Services offered include: savings accounts, mortgages, personal loans, debit
cards, credit cards and so forth or it is a typical mass-market banking where
individual customers use local branches of larger commercial banks.
This project report attempts to bring under one cover the entire hard
work and dedication put in by me in the completion of the Summer Internship
Project on Retail Banking with reference to Indian Overseas Bank. I have
expressed my experiences in my own simple way. I hope who goes through it
will find it interesting and worth reading. All constructive feedback is cordially
invited.
I am personally Grateful to Chief Regional Manager, Regional Office,
Patna and, Chief Manager, RRC, Patna who gave me an opportunity to undertake
my project in IOB Rapid Retail Centre, Patna. I would also like to express thanks
towards all managers, staff, and to all those who directly or indirectly helped me
in successfully execution of my work. It is impossible to list all the people who
have helped me during my project. I would like to thank my Project guide
Mr. Sanjay Kumar (Senior Marketing Manager, Rapid Retail Centre, Patna, IOB),
Mr. Ramakant Behra (Marketing Manager, Patna Regional Office, IOB) and
Mr. Abhishek Tiwari (Marketing Manager, IOB, Amritsar) without their help it
wouldn’t be possible for me to complete the project at the stipulated period of
time for abundant guidance, support, and encouragement throughout my
internship Study.
Last but not the least I would like to articulate my deep sense of
respect to my Father Prof.(Dr.) S.B. Verma, Professor of Commerce,
and my mother Late Dr. Hema Verma, Deputy Collector, B.A.S.
(Bihar Administrative Service) she is not alive today but her invisible soul
had always inspired me, and Uncle Er. Sudhir Kumar Verma, for abundant
guidance, support, and encouragement throughout my internship Study.
Madhusudan Narayan
Roll no.: 13/MBA/75
Session: 2013-15

4.
Retail Banking/ Madhusudan Narayan P a g e | 4
Table of Contents
EXECUTIVE SUMMARY.....................................................................5
LITERRATURE REVIEW...................................................................10
INTRODUCTION TO THE CONCEPT: .........................................................12
INDUSTRY PROFILE.....................................................................14
COMPANY PROFILE......................................................................17
VISION CORE VALUES MISSION .............................................19
PRODUCT AND SERVICES ...............................................................20
PERSONAL BANKING ...................................................................20
DEPOSIT PRODUCTS ...................................................................20
RETAIL CREDIT SCHEMES ..............................................................27
VARIOUS RETAIL LENDING SCHEMES .....................................................31
WORK FLOW MODEL......................................................................32
MCKINSEY’S SEVEN S MODEL .............................................................34
STRUCTURE..........................................................................36
SKILLS.............................................................................37
STYLE /CULTURE .....................................................................37
STRATEGY...........................................................................38
SYSTEM.............................................................................39
STAFF..............................................................................39
SHARED VALUE .......................................................................39
SWOT ANALYSIS........................................................................40
RESEARCH METHODOLOGY.................................................................42
TITLE OF THE PROJECT ...............................................................42
STATEMENT OF THE PROBLEM ...........................................................42
OBJECTIVES OF STUDY ................................................................42
OPERATIONAL DEFINITION .............................................................42
DATA COLLECTION ....................................................................42
SAMPLING TECHNIQUE .................................................................43
PLAN OF ANALYSIS ...................................................................44
LIMITATIONS ........................................................................45
DATA ANALYSIS AND INTERPRETATION .....................................................45
S.P.S.S............................................................................54
FACTOR ANALYSIS ....................................................................54
SUMMARY OF FINDINGS..................................................................64
SUGGESTIONS & RECOMMENDATIONS: .......................................................65
CONCLUSIONS – FUTURE GROWTH ..........................................................67
LEARNING EXPERIENCE..................................................................68
ANNEXURE.............................................................................69
BALANCE SHEET ......................................................................69
QUESTIONNAIRE ......................................................................70
BIBLIOGRAPHY .......................................................................71

5.
Retail Banking/ Madhusudan Narayan P a g e | 5
EXECUTIVE SUMMARY
In recent years, the financial services industry has been
characterised by increased global competition, the transition from paper-based
to electronic products, and a raft of regulatory changes. The relentless march
of technology has allowed banks to extend the scope of their activities and
increase their operational efficiency, automating critical functions such as credit
checking and loan approvals. At the same time, the rapid growth of electronic
payments has exposed the weaknesses of complex legacy batch-processing
systems and prompted the adoption of new technologies that store and transfer
critical information in real time. This digital revolution is also presenting new
challenges in terms of ensuring data security and protecting customers from
fraud across multiple service-delivery channels. Against the backdrop of rapid
technological progress, the changing behaviour of customers and target
customers has become a critical consideration for banks. As the cost of PCs,
processing power and memory continue to fall, customers are increasingly
interacting with banks in a virtual world, as well as through more traditional
channels such as branch visits and contact centre calls. As a result, banks that
fail to innovate and compete effectively across all channels may risk losing
market share to a new generation of tech-savvy competitors. In this
environment, technological innovation is recognised as a key differentiator
among banks today. Institutions in the west increasingly use technology, such
as customer segmentation and accessibility Software, to tailor services to the
needs of specific customer groups, including older people, young people, or
people with disabilities. At the same time, banks in emerging markets are
exploring the potential of online and telephone Channels to deliver services to

6.
Retail Banking/ Madhusudan Narayan P a g e | 6
rural, geographically-distributed populations in the most cost-effective way
possible.
The Retail Banking environment today is changing fast. The changing
customer demographics demands to create a differentiated application based
on scalable technology, improved service and banking convenience. Higher
penetration of technology and increase in global literacy levels has set
up the expectations of the customer higher than never before. Increasing
use of modern technology has further enhanced reach and accessibility. The
market today gives us a challenge to provide multiple and innovative
contemporary services to the customer through a consolidated window
as so to ensure that the bank's customer gets "Uniformity and
Consistency" of service delivery across time and at every touch point
across all channels. The pace of innovation is accelerating and security
threat has become prime of all electronic transactions. High cost structure
rendering mass market servicing is prohibitively expensive.
Present day tech-savvy bankers are now more looking at reduction
in their operating costs by adopting scalable and secure technology thereby
reducing the response time to their customers so as to improve their client
base and Economies of scale. The solution lies to market demands and
challenges lies in innovation of new offering with minimum dependence on
branches:- A multi-channel bank and to eliminate the disadvantage of an
inadequate branch network. Generation of leads to cross sell and creating
additional revenues with utmost Customer satisfaction has become focal point
worldwide for the success of a Bank.

7.
Retail Banking/ Madhusudan Narayan P a g e | 7
TITLE OF PROJECT
“A Study on Retail Banking with special reference to
INDIAN OVERSEAS BANK”
STATEMENT OF THE PROBLEM
As there are immense opportunities of the retail banking in
India. This dissertation is on the issues and challenges in the retail banking
because of the competition of the various banks and the customer satisfaction
of the services which the banks are providing and at the same time to solve
the complaints of the customer and maintaining the sound relationship for the
future and by this way to estimate the future growth of the retail banking.
OBJECTIVES
 To study the issues and challenges in retail banking.
 To study the recent trends in retail banking.
 To ensure high satisfaction level and reduce percentage of complaints
of customers in retail banking.
 To estimate the future growth of Indian retail banking.
 To understand Optimization of retail banking channels.
 To suggest strategies for improvement in Customer Service.

8.
Retail Banking/ Madhusudan Narayan P a g e | 8
DATA COLLECTION
Data was collected from two sources-primary and secondary sources.
1. Primary data collection- The primary data was collected by means
of survey. It was collected from different customers through
questionnaire.
2. Secondary data collection-This data was collected from
Internet, Company’s websites, Books & Magazines.
SAMPLE SIZE
Sample size was restricted to 50 respondents, since it was not possible to cover
the whole universe in the available time period.
SAMPLING METHOD
For this research Non- Probability Convenience Sampling has been used
because time limit for the completion of the work is limited and also managers
and employees were not available all the time.
Area of Study – Patna, Bihar
Duration - 2 months (13th
May 2014 – 16th
July 2014)

9.
Retail Banking/ Madhusudan Narayan P a g e | 9
SUMMARY OF FINDINGS
 44% of the Respondent are availing IOB service on Friends/ Relative
Recommendations. It shows IOB Customers are its Brand Ambassadors.
 94% of Customers are Happy with Brach timing and they believe it is very
good.
 98% of Respondents like the Brach ambience & Layout and find it friendly.
 There is Tremendous change in Bank Segmentation, as per Bank officials
IOB is having around 30%-40% of its customers above the age of 60. But
in Survey 94% of the Respondent were below 45 Years.
 94% of respondents responded that Branch personnel had been very
helpful and courteous
 86% of the Customers are Happy with the Minimal time at Teller Counter.
 94% of the Customers are Happy with Smooth and Error Free
Transactions.
 98% of the Respondent are in favour that IOB taken necessary action on
their Feedback.
 42% of the Customers are Unhappy with the IOB’s E-Product.
 88% of the Respondent are Happy with good customer relation and quick
services
 96% of the Respondent are happy processing procedure while availing
different services provided by IOB.
 98 % of the Respondent feels satisfied cooperation of the bank employees
in processing and helping them in documentation, services and problem
faced by them in banking issue.
 84% of Respondent are happy with Turn around Time (TAT).
 36% and 50% of the Respondent were over satisfied and Satisfied
Respectively with Overall level of Satisfaction.
SUGGESTIONS
 42% of the Respondent are unhappy with E-Products so bank personnel
should improve this issue because customer is a source through which
business can be increase and satisfy customers is a source to create more
customers.
 Bank should introduce/ Open new ATMs Especially in Bihar because there is
much Scarcity of IOB-ATMs.
 24% of the Respondent were not fully satisfied with Branch Personnel
cooperation in sorting out problems faced in banking issue, IOB should
work on this because CRM is the major aspect of any Business.

10.
Retail Banking/ Madhusudan Narayan P a g e | 10
LITERRATURE REVIEW
Indian Banking industry is one of the most technologically advanced industries
with vast networks of branches empowered by strong banking systems, their wide
range of product and effective distribution channel capabilities. However,
regulatory, structural and technological factors are significantly changing the
banking environment throughout the world. One of the most important factors
that is motivating the growth of the Indian banking institutions is the liberalization.
The financial sector reforms in India were designed to infuse greater competitive
vitality in the banking system. To achieve this objective, the “Narsimhan
Committee” was formed. The Narsimhan Committee report suggested wide
ranging reforms for the Indian banking sector in 1992, including the important
one to introduce internationally accepted banking practices so as to enable Indian
banks to achieve service excellence. The Committee recommended a liberal policy
towards the entry norms of private sector banks and foreign banks into the Indian
banking sector.
The Interest rate structure has been deregulated to a great extent and banks
have been given a great degree of freedom in determining their rate structure for
deposits and advances, as well as their other product range. Banking has also
become more competitive in respect of branch network. The end result is that
market power is getting shifted from banks to their customers. Financial
liberalization has led to intense competitive pressures, and retail banks are
consequently directing their strategies towards increasing customer satisfaction
and loyalty through improved service quality. With such a high potential in the
Indian banking industry, all leading banks are looking ahead to establish
themselves as the most preferred bank by the customers and this can only happen
when they are able to differentiate themselves on the basis of service quality being
offered by their competitors. Retail Banking has immense opportunities in a
growing economy like India. As the growth story further unfolds in India, retail
banking is going to emerge a major driver of economic growth. A.T. Kearney, a
global management consulting firm, recently identified India as the second most
attractive retail distribution center of 30 emergent markets.
Dhandapani Alagiri (2007) in his article entitled as, “Retail Banking:
Challenges” has focused on the Retail banking with increased consumer spending
and increased challenges in the form of competition and technological upgradation
that comes along. Product innovation and competitive packaging services are the
most important issues for the new generation customers. It has increased the
uses of the mobile and e-banking facilities, security and confidentiality have
become very difficult to maintain and that has become a major challenge for the
banks. The study emphasized that credit delivery mechanism improved
considerably with the advent of technological advances and more methodical

11.
Retail Banking/ Madhusudan Narayan P a g e | 11
credit evaluation and credit scoring models. The study also dwells on the
implications of Basel II for retail banking
S.Venkata Seshaiah & Vunyale Narender (2007) in their study entitled as,
“Factors Affecting Customer’s Choice of Retail Banking”, have identified various
factors affecting customer’s choice and study consumer behavior with respect to
the people’s choice of retail banks. In this study efforts have been made to go
deep into the psychology of the customer’s loyalty. Through a survey is different
factors have been identified (1) Safety of deposits (2) size and strength (3)
Accuracy (4) General Survey Quality (5) Speed of delivery (6) proximity (7)
Security of Environment (8) Cordiality of staff (9) Price & services charges (10)
Product packaging (11) General Public Impression (12) Peer Group Impression
(13) Face lift (Structural) (14) Friendship with staff (15) advertising & Publicity.
The findings showed that retail banking must reorganize their activities to achieve
their corporate mission through customer orientation.
Sudhir (2005) in his study entitled as, “Growth Pattern of Retail Banking”
emphasizes that existing potential of Retail Banking was untapped in rural and
semi-rural areas and that untapped clientele provided a good and vast opportunity
for growth in this segment
Tapan K. Panda & Bivraj Bhushan Parida (2006) in their study entitled as
“Customer Relationship Management in Retail Banking in India” talk about the
implementation of CRM principles in Retail banking sector, analyze the need for
drivers of CRM implementation and the challenges associated with illustration of
HDFC Bank and PNB. The article discusses the retail banking challenges like
customer retention and finding new customers and the need for implementing
CRM in this sector. The study revolved around the perception that the CRM has
opened a new path to the world of customer intelligence. In today’s environment
business decision & strategies are made looking at the proximity to customers.
The market research report by RNCOS (2006), entitled as “Booming Indian
Retail Banking Sector” provides extensive research and rational analysis of the
opportunities, challenges and drivers critical to the growth of the retail banking
Industry in India. The future overview of the industry in terms of asset size,
number of financial cardholders and various other important features. The future
forecast discussed the prospects of different arms of banking Industry, including
rural banking by bank assurance, financial cards, mobile banking, role of
technology in retail banking, pension fund and future course of action or strategies
for Retail Banking.

12.
Retail Banking/ Madhusudan Narayan P a g e | 12
INTRODUCTION TO THE CONCEPT:
RETAIL BANKING AN INTRODUCTION
“Retail banking is typical mass-market banking where individual
customers use local branches of larger commercial banks”.
Retail banking refers to banking in which banking institution execute
transactions directly with consumers, rather than corporations or other banks.
Services offered include: savings accounts, mortgages, personal loans, debit
cards, credit cards and so forth or it is a typical mass-market banking where
individual customers use local branches of larger commercial banks.
Drivers of Retail Growth:
 Growing disposable incomes
 Increasing literacy levels
 Higher adaptability to technology
 Growing consumerism
 Changing mindsets-willingness to borrow/lend
Retail banking has become a very important component in the
business mix of banks. Retail banking offers multiple comfort factors for banks to
do business. Large and divergent customer base across income segment offers
huge scope for banks to develop and offer multiple products and services. In
addition to traditional products and services offered by banks over the years, the
retail model has undergone rapid innovation in the past decade with regard to
products, processes, people and technology.
Technology has become the driver for retail banking explosion, and
technology products like ATM, Internet Banking, Mobile Banking, Card products
like Debit Cards and Credit Cards and remittance products like RTGS and NEFT
are making their presence felt in retail space. Banks are embracing different
strategies, redesigning their conventional business silos, reengineering their
channels, product and services to increase the share of customer wallet.
A bank functions can be divided into various divisions like:
Retail/Personal Banking: This division provides a range of financial services to
individual customers and small companies. It operates mainly through branch
networks. Retail banking includes routine transactions like deposits and

13.
Retail Banking/ Madhusudan Narayan P a g e | 13
withdrawals of money; money transfer; foreign currency exchange and traveller's
cheque encashment. They also deal with personal and small loans, credit and
mortgages; insurance policies; investment schemes; pension funds; and advice
to customers on various financial matters. Apart from offering home loans, car
loans, educational loans, consumer loans, etc. they also develop various deposit
schemes and help people fill their offers.
Corporate Banking: They deal with medium to large-scale companies and
government agencies. It could start at the local branch manager level, though
more complex dealings are routed through corporate divisions of clearing banks
and their merchant banking subsidiaries. Corporate banking deals with credit and
advances, trade finance, foreign exchange management, asset management,
lease financing of heavy equipment, infrastructure, machinery, credit risk
assessment, etc. They also advise clients on matters such as corporate mergers
and acquisition, raising capital and business strategy regarding competitors and
outside factors.
Merchant Banking: Investment management is the primary activity of this
group. It could be on behalf of corporate clients, or institutional investors-like
pension funds, investment trusts, or those in the securities business. This groups
also handles public issue and marketing of shares, debentures and other such
papers. It may also include other stock market functions like dematerialization
services, investment advisory services, etc. Merchant banking executives research
into capital market, advice and manage funds of various corporate and individual
customers.
Treasury group: This group takes care of the total funds of a bank including
foreign exchange reserves. Responsibilities include bank portfolio management,
dealing in foreign currency, etc. There are Forex (foreign exchange) dealers in this
group who exclusively deal with the foreign market. They buy and sell foreign
exchange at the minimum exchange cost thereby earning maximum profit from
the transactions.
Rural Banking: This group deals with the banking and credit needs of people in
the rural sector. Not all banks have this group and some banks have separate
subsidiary companies for rural banking.
Product Management: This group conceptualizes various banking services and

14.
Retail Banking/ Madhusudan Narayan P a g e | 14
then develops; implements and manages them. They have the responsibility for a
banking product (meaning services like personal loans, home loans, credit cards,
loans against shares, educational loans, etc.).
Apart from these main functional groups, there is an appraisal group
to analyse economic feasibility of industrial projects, the bank's exposure to
financial risk and long term returns. There are internal auditors who audit the
bank's internal books of accounts.
There are various groups of professionals like lawyers, engineers,
agricultural scientists, chartered accountant, company secretary, cost accountant
and economists who work in various departments in advisory capacities. They help
make decisions on issues that are legal, technical or economic in nature. For
example, the economist advises various functional groups on the implications of
the Union budget on the business of the banks, consumer buying pattern, etc.
INDUSTRY PROFILE
INDIAN BANKING SECTOR
The Indian Banking Sector is quite different from the banking system
in the rest of Asia, because of the distinctive geographic, social and economic
characteristics of the country. India is the second most populated nation in the
world; it has marked economic disparities and high levels of illiteracy.
The country followed a socialist approach for well over 4 decades after
independence till the government initiated the economic reforms through the
policy of liberalization. The banking structure in India is therefore a reflection of
the countries socialistic set up. It had to meet the goals set by the five year plans,
especially with regard to equitable distribution of wealth, balanced regional
economic growth and removing private sector monopolies in trade and industry.
The government nationalized the banks in 2 different phases (1969
and 1980). On July 19, 1969, 14 major banks of the country were nationalized
and on 15th April 1980, six more commercial private sector banks were taken
over by the government. As a consequence the banking system in India
concentrated on the domestic sector; very few banks in India had a presence
internationally. The nationalized banks had a social obligation of taking the
banking sector to the people by expanding the branches and by getting more
people to open an account.

15.
Retail Banking/ Madhusudan Narayan P a g e | 15
SCOPE FOR RETAIL BANKING IN INDIA
It is reported that Indian retail market has the potential to be second only
to the USA. National Readership Survey 5puts Indian households with monthly of
over Rs. 5000 at 4.5 million. According to the survey, the category of households
with annual income of Rs. 2 lakhs and above is growing at the rate of 30 per cent
per annum. No wonder, banks with vision and insight are trying to woo this market
through a series of innovative additions to their products, services, technology
and marketing methods. Fixed and unfixed Deposits, (cluster deposits which can
be broken into smaller units to help meet depositors’ overdraft without breaking
up entirely), centralised database for ‘any branch banking’ (whereby the customer
can access his account in any of the branches irrespective of where the account is
maintained), room services (whereby the customers are visited at their residences
offices to enable them to open their accounts), automatic teller machines, tele
banking network, extended banking time, courier pickup for cheques and
documents, etc. are some of the privileges extended to the customers by the
banks in are eagerness to cultivate the retail market. In short, in the bold new
world of retail banking the customer is crowned as king.
RETAIL BANKING-A COOL OASIS
Retail banking is much more than as opportunity to addressing dwindling
margins. It is an imperative to preserve profits and market positions. Customers
now have many more personal financial options, a growing credit culture, a
willingness to switch between financial services providers, and a demand for lower
interest rates. As they witness these trends, banks realize that they cannot remain
passive. The new private sector banks are making inroads in the markets they
serve, while competition from non-banks is growing. In respect, older institutions
need to revamp their distribution capabilities, customer management capabilities,
operating culture, compensation system and operations processing.
The bankers struggling through the shifting sands of corporate credit,
retail banking looks like a cool oasis. Corporate Credit, retail banking looks like
a cool oasis. Corporate customers rely less on commercial banks every day as
other fund raising avenues present themselves. As this disintermediation takes
place and competition shrinks margins, retail banking has gained an irresistible
allure for banks because of its apparently higher margins and potential for growth.
With their large branch networks, banks have secured sizeable deposits 23%
(Percent) of GDP. On the assets side, however, retail advances account for a
mere seven per cent of total lending. The penetration of products like car loans

16.
Retail Banking/ Madhusudan Narayan P a g e | 16
or credit cards is very low. With very few focused multi-line banks, non-banks
are often significant players in retail lending, as HDFC is in house loans. Yet,
many non-banks lack the minimum size to make the necessary investments and
address the challenges of retail banking.
A large number of banks have launched or relaunched retail products and
are attempting to grow their share of the personal financial services market. Even
the term lending institutions have decided that they need to go retail to raise
funds. Many organization like ICICI are betting that a large part of their future
growth will come from retail customers. All round increase in economic activity.
Increase in the purchasing power. The rural areas have the large purchasing
power at their disposal and this is an opportunity to market Retail Banking. India
has around 200 million households and 400 million middleclass population more
than 90% of the savings come from the house hold sector. Falling interest rates
have resulted in a shift. "Now People Want To Save Less And Spend More."
Nuclear family concept is gaining much importance which may lead
to large savings, large number of banking services to be provided are day-
by-day increasing. Tax benefits are available for example in case of housing
loans the borrower can avail tax benefits for the loan repayment and the
interest charged for the loan.
POTENTIAL FOR RETAIL IN INDIA: IS SKY THE LIMIT
The Indian players are bullish on the Retail business and this is not
totally unfounded. There are two main reasons behind this. First, it is now
undeniable that the face of the Indian consumer is changing. This is reflected in a
change in the urban household income pattern. The direct fallout of such a change
will be the consumption patterns and hence the banking habits of Indians, which
will now be skewed towards Retail products. At the same time, India compares
pretty poorly with the other economies of the world that are now becoming
comparable in terms of spending patterns with the opening up of our economy.
For instance, while the total outstanding Retail loans in Taiwan is around 41% of
GDP, the figure in India stands at less than 5%. The comparison with the West is
even more staggering. Another comparison that is natural when comparing Retail
sectors is the use of credit cards. Here also, the potential lies in the fact that of
all the consumer expenditure in India in 2001, less than 1% was through plastic,
the corresponding US figure standing at 18%.
It also had to play a supportive role to other sectors of the economy
like agriculture, small scale industries and exports.

17.
Retail Banking/ Madhusudan Narayan P a g e | 17
COMPANY PROFILE
Type Public Sector Bank
Traded as BSE: 532388
NSE: IOB
Industry Banking, Financial services
Founded 10th Feb 1937
Headquarters Chennai, India
Number of locations 3,388 branches (2014) and 2,795 ATMs (2014)
Key people  M.Narendra (Chairman & MD)
 A.D.M Chavali (Executive Director)
 Atul Aggrawal (Excutive Director)
Product  Term Deposit, Retail ,MSME, Agriculture Loan
Services  Finance and insurance
 Consumer Banking, Corporate Banking
Total income 6,47,593 (March 2014) In Lakhs
Operating Profit 1,19,909 (March 2014) In Lakhs
Net Profit 26,833 (March 2014) In Lakhs
Website www.iob.in

18.
Retail Banking/ Madhusudan Narayan P a g e | 18
INDIAN OVERSEAS BANK : INTRODUCTION
INDIAN OVERSEAS BANK (IOB) was founded on 10th
February 1937
by Shri. M.Ct.M. Chidambram Chettyara pioneer in industry, banking and
insurance. He founded IOB to cater the banking needs of Indian traders in
south Asia. At the time of India’s independence, the Bank had 38 branches
in India and 7 branches abroad. Deposits amounted to Rs.6.64 crores and
Advances Rs.3.23 crores. During the 1960s Indian Banking witnessed
strong wave of mergers of weak private sector banks with stronger
institutions. IOB itself took five banks into its fold, which helped the Bank
widen its reach. The Bank has been attending to the needs of small industry
and agriculture since long. Personal loans were given by the Bank right in
the early 1950s when the concept was new to the banking industry.
Customer service was given top priority by the Bank ever since inception.
The Bank also gave importance to mechanization for improving customer
service as early as in the 1960s.
IOB was youngest the one of 14 major banks which were nationalised
in 1969. Indian Overseas Bank (IOB) is a major bank based in Chennai
(Madras), having branches in India and abroad with more than 3,388
domestic branches (as on 31.03.2014) and 13 Branches in Foreign
Countries.
Indian Overseas Bank has an ISO certified in-house Information
Technology department, which has developed the software that 3,388
branches use to provide online banking to customers; the bank has achieved
100% networking status as well as 100% CBS status for its branches. IOB
also has a network of 2,795 ATMs all over India (as on 31.03.2014) and
IOB's International VISA Debit Card is accepted at all ATMs belonging to the
Cash Tree and NFS networks.
IOB offers internet Banking & Mobile Banking and is one of the bank
that the Govt. of India has approved for online payment of taxes. The bank
business more than doubled in the last four years.

19.
Retail Banking/ Madhusudan Narayan P a g e | 19
VISION CORE VALUES MISSION
VISION
To be among the top five nationalised bank in terms of business volume and
sustained profitability with global recognition guided by high standards of
governance and ethics; and emerge as a “Most preferred Banking partner” to
unlock the value of its stakeholders”
CORE VALUES
Customer centricity
 Good people to grow with
 Touching heart and spreading smiles
 Honesty, Integrity, Fairness & Transparency
 Build leaders for industry
 Team of skilled and dedicated employees
 Innovation and Risk Appetite
 Green Banking
MISSION
 Deliver best of competitive products in terms of quality, range, utility and
cost effectiveness.
 Optimize HR resources through training, exposure, mentoring and incentive,
relying on the “soft touch” instead of “big stick”.
 Develop quality bankers who would rise to be future leaders of the industry.
 Contribute to country’s economic growth through dedicated efforts and
customer focus.
 Streamline the process of service delivery from time to time to meet
emerging requirements.
 Nurture a climate of creative problem solving to resolve customer grievances
with ability ensuring that the bank regarded as customer centric.
 Emphasize a policy oriented and rule- driven culture of compliance to meet
evolving requirements.
 Engineer CRM (customer relationship management) and insights gain for
further enhancement of product and service quality.
 Expand IT infrastructure to deliver all banking services from “one tap”
irrespective of customer location.
 Adopt a multi-disciplinary approach to facilitate future growth through the
evolution of “Banks with in the Bank”

20.
Retail Banking/ Madhusudan Narayan P a g e | 20
PRODUCT AND SERVICES
PERSONAL BANKING
Personal banking of Indian Overseas Bank is further divided into these main
categories:
i) Saving Bank
ii) Current Account
iii) Term Deposit
iv) Retail Loans
v) Home Loans and Mortgages
vi) Depository Services
vii) ABSA (Application Supported by Block Amount)
viii) International VISA Cards
ix) Insurance and Mutual Funds
x) Real Time Gross Settlement (RTGS)
xi) Pension Payment Scheme
xii) Saving Scheme
DEPOSIT PRODUCTS
 Saving Bank Account
 SB Regular
 SB Basic/Small
 SB Little Star
 SB Silver
 SB Gold
 SB Platinum
 SB Student
 SB Corporate Salary Account
 Term Deposit
 RD Gold
 Recurring Deposit
 Reinvestment Deposit
 Special Fixed Deposit
 Easy Deposit
 Wedding Deposit
 Education Deposit
 Vardha (for Senior Citizen)
 Tax Saver Deposit

21.
Retail Banking/ Madhusudan Narayan P a g e | 21
 NRI Accounts
 Foreign Currency (Non Residence)
 Non Residence External
 Non Residence Ordinary
 Resident Foreign Currency
 IOB NRI Plus
 IT Products
 IOB VISA International Debit Card
 Internet Banking
 Mobile Banking
 IOB VISA International Credit Card
 IOB-AMEX Gold Charge Card
 Insurance Products
 IOB Jeevan
 IOB Health Care Plus
 Vidya Jyothi With Suraksha
 Liability Insurance
 Gold Coin
 Gold Coin
 Third Party Products
 Life Policies LIC
 Non Life Polices – USGICO
 Mutual Funds
 Current Deposit
 CD Regular
 CD Classic
 CD Super
 CD Supreme
 Tax Saver Products
 Tax Saver Deposit
 IOB Health Care Plus
 IOB Jeevan
 Housing Loan – Subha Gruha
 LIC Tax Saver Plans
 ELSS Mutual Funds
 Retail Credit Schemes
 Home Improvement Scheme
 Home Décor
 Home Loan for NRIs
 Housing Loan – Subh Gruha
 Vehicle Loan – Pushpaka
 Clean Loan
 Pensioner’s Loan
 Sahayika
 Sanjeevani
 IOB Akshay
 Easy Trade Finance
 Education Loan –Vidya jyothi

22.
Retail Banking/ Madhusudan Narayan P a g e | 22
Deposit Products
Documents Required for Opening a Saving A/c
PROFF OF IDENTITY
 1. Voter ID
 2. Driving License
 3. Passport
 4. PAN Card
 4. Any other ID card (subject to Bank
5. Satisfaction)
 6. Letter from recognized public
 authority or Public servant verifying
 the photograph to bank’s satisfaction
RESIDENCE PROFF
 1. Ration Card
 2. Current Telephone Bill
 3. Latest Electricity Bill
 4. Bank a/c passbook / statement
 5. Registered Lease deed
 6. Letter from any recognized public authority
 7. Property tax book / Receipt
 8. Letter from employer to Bank’s satisfaction
 Any one or more document(s) which provide
customer information to Bank’s satisfaction
SB – Regular
• Minimum Balance: Rs 500/- (with Out Cheque Book) & Rs 1000/- (With Cheque Book).
• Interest rate at 4.00 % on Daily Product Basis.
• Free International VISA Debit Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Anywhere Banking & ASBA Facility Available
• Online Tax payment facility.
• Utility Bill payment facility
• Life & Health Insurance cover available at affordable premium.
SB – Silver
• Account can be opened with '0' balance.
• Minimum Average daily balance - Rs.5,000.
• Free International VISA Debit Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Anywhere Banking
• Online Tax payment facility.
Deposit Products

23.
Retail Banking/ Madhusudan Narayan P a g e | 23
• Free Personal Accident Insurance cover for Rs. 1 lakh
• Utility Bill payment facility
• Overdraft facility up to one-month salary in case of salary earners.
SB – GOLD
• Minimum average quarterly daily balance is Rs.50000.
• Free International VISA Debit Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Any where Banking
• Sweep in – Sweep Out Facility
• Online Tax payment facility.
• Free Personal Accident Insurance cover for Rs. 5 lakh
• Utility Bill payment facility
• Personalized cheque books free of cost.
• Preferential rate for gold coins ( Concession of Rs 15/- per Gm).
SB – Platinum
• Minimum Balance : Rs 750/-
• Free 75 Cheque Leaves per annum
• Free International VISA Debit Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Free Personal Accident Insurance cover for Rs 75,000/-
• Transfer of funds through RTGS/NEFT (75% concession on charges).
• Any where Banking
• Online Tax payment facility.
• Utility Bill payment facility
• Life & Health Insurance Cover available at affordable premium.
SB – Student
• For the students from the age of 16 Years
• Minimum Balance : Rs 500/-
• Free 60 Cheque Leaves per annum
• Free Multipurpose Usage Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Free Personal Accident Insurance cover of Rs.1 Lac
• Transfer of funds through RTGS/NEFT
• Any where Banking
• Online Tax payment facility.
• Utility Bill payment facility

24.
Retail Banking/ Madhusudan Narayan P a g e | 24
• Life & Health Insurance Cover available at affordable premium.
SB – Corporate Salary Account
• Zero Balance Salary Account for Employees of reputed organization.
• Free 60 Cheque Leaves per annum
• Free IOB International VISA Debit Card
• SMS Alerts for all transactions.
• Withdrawal up to Rs 50,000 per Day in ATMs
• Free Internet Banking Facility
• Free Mobile Banking Facility
• Free RTGS/NEFT Facilities
• Free Personal Accident Cover for Rs 1 Lac
• Over Draft Facility* & much more
• Life & Health Insurance cover available at affordable premium.
Current Account
CD - Regular
• Minimum Balance Rs 2000/- for Metro & Urban Branches & For others Rs 1000/- only.
• Internet Banking Facility
• Any where Banking
• NEFT & RTGS Facilities
• Cheque Book facility
• Online Tax payment facility.
• Utility Bill payment facility
• Multicity Cheques facility
• ASBA facility available.
CD - Classic
• Minimum Balance > 1 Lac daily Balance over 3 Months
• Free Internet Banking Facility & Any where Banking
• Free NEFT,25% concession on RTGS
• Free Personal Accident Cover for Rs 1 Lac
• Free name- Printed Cheque Books
• Online Tax payment facility.
• Utility Bill payment facility
• 50% concession on Multicity Cheques, Folio Charges & DD Charges
• ASBA facility available.
CD - Super
• Minimum Balance > 5 Lac daily Balance over 3 Months
• Free Internet Banking Facility & Any where Banking
• Free NEFT,50% concession on RTGS

25.
Retail Banking/ Madhusudan Narayan P a g e | 25
• Free Personal Accident Cover for Rs 5 Lac
• Free name- Printed Cheque Books
• Online Tax payment facility.
• Utility Bill payment facility
• Free Multicity Cheques
• Free Folio Charges
• 50% concession on Outstation cheque collection charges & DD Charges
• ASBA facility available.
CD - Supreme
• Minimum Balance Rs.7500/-
• Free Debit Card
• Free Cheque Leaves
• Free Internet Banking
• 75% concession on NEFT/RTGS.
• Free Cash withdrawal up to RS. 50,000/- under CBS transactions from any Branch
• Concession on Gold Coin purchase ( Rs 7.50/- per Gram on minimum purchase of 76
gms in a day)
• ASBA facility available.
Recurring Deposits
• Deposits received for 6 months to a maximum of 10 years as monthly fixed
installments.
• The amounts saved and interest compounded at quarterly intervals paid at the time
of maturity.
• Ideal for depositors who save in installments for future big occasions.
RD - Gold
• This scheme combines the features of RD and Easy deposit schemes and on maturity,
Gold coins are given equivalent to the maturity value of the deposits.
• Minimum deposit will be Rs.250/- and thereafter in multiples of Rs.50/-.
• The minimum and the maximum period of deposit will be 12 months and 24 months
respectively.
• Concession of Rs 25/- per gram is applicable
Reinvestment Deposit
• Earn Interest on the interest.
• Deposits accepted for 6 months to 10 years.
• Interest compounded quarterly and paid at the time of maturity.
• Avail loans up to 85% on the principal
• Minimum deposit - Rs. 1,000/-.
Special Fixed Deposit
• Deposits accepted for 6 months to 10 years.
• Interest payable every quarterly or monthly.
• Monthly interest is payable at discounted rate.

26.
Retail Banking/ Madhusudan Narayan P a g e | 26
• Ideal for depositors who want regular monthly or quarterly interest income.
Easy Deposit
• The minimum monthly savings amount between Rs.100 to Rs.1000 is to be decided by
the depositor.
• This will be the core amount and depositor is free to deposit up to 10 times the core
amount every month.
• Interest at term deposit rates is payable and calculated on the minimum balance
between the 10th and the last day of the month.
• Deposit amount and accrued interest is repayable after a specified period, which ranges
from 6 months to 10 years.
Wedding Deposit
• This is a variation of RD. The deposit can be made for 63, 84,120 months.
• The monthly deposit amount increases every year by the amount of initial deposit.
E.g. if the monthly deposit in the first year is Rs.100 it will be Rs.200 in the second
year and Rs.300 in the third year and so on.
• The deposit can be made in such a way that maturity proceeds are used for marriage
expenses of their children.
Education Deposit
• This is also another variation of RD.
• The deposit is accepted for 63 months and 84 months.
• The monthly deposit from the second year decreases by 1/5 in the case of 63 month
deposit and 1/7 in the case of 84 month deposit. For E.g. if the installment in the first
year is Rs.250 the second year it will be Rs.200 and third year Rs.150 and so on.
Minimum deposit is Rs.250 for 63 months and Rs.350 for 84 months.
• Monthly installments can be planned in such a way that the maturity proceeds are
utilized for meeting the education expenses.
Vardhan Deposit
• Deposit scheme for senior citizens.
• Deposits accepted for a maximum period of 10 years.
• Minimum deposit amount is Rs.5000.
• Depositor is eligible for additional interest of 0.75%.
• Cap of Rs 25 Lac applicable to special deposits only.
Tax Saver Deposit
• Amount from Rs. 10,000 to 1,00,000
• Amount deposited is eligible for tax benefit under Sec 80 ( C) of IT Act.
• Period of deposit - 5 years to 10 years.
• Premature closure is not permitted till 5 yrs, Interest Rate – 9.00 %.

27.
Retail Banking/ Madhusudan Narayan P a g e | 27
RETAIL CREDIT SCHEMES
Home Loan Scheme- Subha Gruha
• Housing Finance scheme for resident individuals up to Rs.500 Lakhs.
• Margin - 20%. Repayable in 20 years for purchase / construction of new / old houses /
flats.
• Holiday period – up to 18 months for construction and 3 months for purchase.
• Interest rate depends on the size of the loan and repayment period.
• Security - Mortgage of house.
Home Improvement Scheme
• Loan scheme for repair / renovation / up gradation of existing houses to individuals in
service, profession, trade. Loan amount - up to Rs.10 Lakhs
• Repayable in 120 EMI with a holiday period of 3 months.
• Security: Mortgage of property being repaired or any other unencumbered property
with market value twice that of the loan amount.
Vehicle Loan Scheme- Pushpaka
• Car finance scheme for purchase of new as well as used car and 2-wheeler.
• 90% of cost of new car and two-wheeler and 75% of market value of used car financed
against hypothecation of vehicle.
• Higher amount of loan for used car considered on case to case basis.
• Repayment - 60 EMI for new cars and 36 EMIs for used cars..
Clean Loan
• Loan for salaried employees to meet personal and domestic expenses
• Quantum of loan – 10 times monthly salary / 10 lac whichever is lower
• For LIC agents up to Rs 5 Lacs
• Repayment – 60 EMI for 10 times salary and 36 EMI for others
• Undertaking letter from the employer to deduct from the salary ,loan installments
every month and remit to bank to be produced.
Pensioner’s Loan
• All pensioners excluding Malaysian Government pensioners receiving pension through
our bank branch are eligible.
• The loan amount is restricted to 10 months pension with a ceiling of Rs.2.00 lakhs for
those not over 65 years of age and Rs.1 lakh for those who are over 65 years of age.
• Repayable out of pension amount in 48 EMI for those not more than 65 years and 36
EMI for those over 65 years.

28.
Retail Banking/ Madhusudan Narayan P a g e | 28
Home Loan for NRIs
• Loan scheme for Non-resident Indians / Persons of Indian Origin with monthly income
not less than Rs.10, 000/, to buy / construct house / flat in India.
• Maximum loan - Rs. 500 Lakhs or 80% of the cost.
• Repayable in 15 years.
• Security - Mortgage of property.
Sahayika Loan
• Loan to meet expenditure on social financial commitments
• Applicant should be an individual in employment or business / professional or
Self-employed with regular income.
• Maximum loan amount - Rs.5 Lakhs.
• Security and margin: NSC, LIC, ULIP etc. = 25%, Life policies = 10%,
• Immovable property = 50%.
• Repayment - 48 equated monthly installments. No holiday period.
Sanjeevini Loan
• Loan Scheme for registered medical practitioners for construction of nursing home,
hospitals, purchase of equipment, vehicle, ambulance etc.
• Maximum loan - Rs.2 crore in Metro/urban area, Rs.50 Lakhs in semi-urban area and
Rs.10 Lakhs in rural area.
• Margin - 15-25% for purchase of equipment, 25-30% for construction of nursing home.
Repayment – 5 - 7 years.
Educational Loan – Vidya Jyothi
• Loan scheme to students for education in India and abroad.
• Maximum Loan amount - Rs.10.00 Lakhs for study in India and Rs.20.00 Lakhs for
foreign study.
• Repayable in 5- 7 years, after completion of studies.
• No collateral security for loans up to Rs.4 lac.
IOB Akshay
• Loan against life policies of LIC and other private insurance companies approved by
IRDA.
• Maximum loan amount - 90% of surrender value in the form of CC/DL/TOD.
• Repayment - 36 EMI.
Easy Trade Finance
• Hassle free advance to retail traders, who can be individuals, proprietary, partnership
or company.
• Insurance of stock, submission of stock statement etc. are not insisted.
• Maximum advance - Rs.300 lakhs.
• Margin - ranges from 10% to 50%.
• Security: Collateral security of immovable property. Liquid security in the form of NSC,
Life policies etc may also be considered.

29.
Retail Banking/ Madhusudan Narayan P a g e | 29
CORPORATE BANKING
It comprises of following :
 Micro small and Medium Enterprise (MSME)
 IT and Ites BPO
 SWIFT Centres
 Authorised Dealers
 BG Verification
 IOB Expo Gold Card
RURAL BANKING
It comprises of following:
 IOB’s Commitment for Social Causes
 Rural Products
 Agricultural Short Terms Loans
 Financial Inclusion
 Agri-Business Consultancy
 PM 15 Point Program
 Agriculture Term Loans
 IOB Special Credit Schemes
 PMRY Subsidy
 Agriculture loan forms
NRI ACCOUNTS
It comprises of following:
 NRI Newsletter
 NRI Queries
 Non-Resident Ordinary (NRO)
 Resident Foreign Currency Account (RFC)
 Foreign Currency Non-Resident Accounts (Banks)
 IOB NRI Plus Deposit
 NRI Homeloan Scheme
 NRI Remittances
INTERNATIONAL BANKING
Indian Overseas Bank has 13 International Branches.

30.
Retail Banking/ Madhusudan Narayan P a g e | 30
OTHER SERVICES
Other important services of Indian Overseas Bank are:
i) Government Business
 E Payment of Direct Taxes
 E Payment of Indirect Taxes
 Sales Tax Collection
ii) E – Products
iii) Debit Cards/Credit Cards
iv) National Eligibility Fund Transfer (NEFT)

31.
Retail Banking/ Madhusudan Narayan P a g e | 31
VARIOUS RETAIL LENDING SCHEMES
Rate of Interest under Retail Credit Products. (as on 31st
May 2014)
S No Name of Scheme Interest Rate %
p.a (Floating)1 Pushpaka-loan 10.75 %
2 Sahayika-loan to meet social financial commitments 14.00%
3 Sanjeevini - loan to medical practitioners for setting up nursing
homes/hospitals and for purchase of equipments
 For Loans up to Rs. 1.00 Crore.
 Above Rs.1 Crore to 5.00 Crores
12.00%
12.50%
4 Pensioners' loan Scheme - loan to pensioners for meeting immediate emergency
needs
14.25%
5 Home Décor - loan for furnishing your home. 13.00%
6 Liquirent - loan against future rent receivables
 Tenor up to 36 months
 Tenor more than 36 months
13.00%
13.50%
7 Akshay - loan against life policies of LIC and private insurers approved
by IRDA
14.00%
8 Vidya Jyothi - loan for pursuing higher education
 Up to Rs. 4 Lacs
 Above Rs. 4 lacs to Rs.7.50 lacs
 Above Rs.7.50 lacs
 Ward of Staff
 Vocational Courses
12.25%
13.50%
13.25%
12.00%
12.25%
9 Clean Loan - loan to employees of reputed organizations to meet personal
expenditure
15.25%
10 Easy Trade Finance - Hassle free working capital finance and term loan to
retail traders: Working Capital: Term Loan:
Term Loan:
13.25%
13.75%
11 IOB Career Dream
 Loan Secured by NSC,LIC,KVP etc
 Loan without security/against immovable property
14.00%
14.25%
12 IOB Scholar
 Up to Rs. 4 Lacs
 Above Rs. 4 lacs
 Ward of Staff
12.75%
13.50%
12.00%
13 Jewel Loans
 Up to Rs. 3 Lacs
 Above Rs. 3 lacs
11.75%
12.75%
14 Home Improvement 10.25%
15 IOB Personal Loan
*1.00% interest concession if 100% collateral security is provided
0.50% interest concession for women borrowers
12.00%
16 Reverse Mortgage 11.25%
17 IOB Surya
 Scheme A -- For Individuals
 Scheme B -- For Institutions
11.75%
12.50%
18 IOB Royal
 Repayment Less than 4 years
 Repayment Above 4 years
14.50%
15.25%

32.
Retail Banking/ Madhusudan Narayan P a g e | 32
WORK FLOW MODEL
DEPOSITS
Customer Approaching the
Bank/Enquiry
Introduction
Documentation
Saving, Fixed, Current
and Recurring Account
A/C holder facility
Deposits Withdrawal
Cashier Cashier
Cash supervision Cash supervision
Account for the customer

33.
Retail Banking/ Madhusudan Narayan P a g e | 33
ACCOUNT OPENING
Choose an Institution
Go to the Bank or Website
Pick the Product You Want
Provide Your Information
Agree to Terms
Print, Sign, and Mail (If Applicable)
Congratulate Yourself!

34.
Retail Banking/ Madhusudan Narayan P a g e | 34
MCKINSEY’S SEVEN S MODEL
MCKINSEY’S SEVEN S MODEL AS APPLICABLE TO
INDIAN OVERSEAS BANK
The Seven-S is a framework for analysing organizations and their
effectiveness. It looks at the seven key elements that make the organizations
successful, or not: strategy; structure; systems; style; skills; staff; and shared
values.
Consultants at McKinsey & Company developed the 7S model in the late
1970s to help managers address the difficulties of organizational change. The
model shows that organizational immune systems and the many interconnected
variables involved make change complex, and that an effective change effort must
address many of these issues simultaneously.
7-S Model – A Systemic Approach to Improving Organizations
The 7-S model is a tool for managerial analysis and action that provides
a structure with which to consider a company as a whole, so that the
organization's problems may be diagnosed and a strategy may be developed and
implemented.
The 7-S diagram illustrates the multiplicity interconnectedness of
elements that define an organization's ability to change. The theory helped to

35.
Retail Banking/ Madhusudan Narayan P a g e | 35
change manager's thinking about how companies could be improved. It says that
it is not just a matter of devising a new strategy and following it through. Nor is
it a matter of setting up new systems and letting them generate improvements.
----Shared values” ―are commonly held beliefs, mindsets, and assumptions
that shape how an organization behaves – its corporate culture. Shared values
are what engender trust. They are an interconnecting centre of the 7S’s model.
Values are the identity by which a company is known throughout its business
areas, what the organization stands for and what it believes in, it central beliefs
and attitudes. These values must be explicitly stated as both corporate objectives
and individual values
― Strategy” is a plan of an organization formulates to reach identified goals, and
a set of decisions and actions aimed at gaining a sustainable advantage over the
competition. ―Systems” define the flow of activities involved in the daily
operation of business, including its core processes and its support systems. They
refer to the procedures, processes and routines that are used to manage the
organization and characterize how important work is to be done. ―Style” refers
to the cultural style of the organization, how key managers behave in achieving
the organization's goals, how managers collectively spend their time and
attention, and how they use symbolic behaviour. How management acts is more
important that what management says.
―Staff” refers to the number and types of personnel within the organization and
how companies develop employees and shape basic values.
―Skills” refer to the dominant distinctive capabilities and competencies of the
personnel or of the organization as a whole.
---Structure” is the organizational chart and associated information that shows
who reports to whom and how tasks are both divided up and integrated. In other
words, structures describe the hierarchy of authority and accountability in an
organization, the way the organization's units relate to each other: centralized,
functional divisions (top-down); decentralized (the trend in larger organizations);
matrix, network, holding, etc. These relationships are frequently diagrammed in
organizational charts. Most organizations use some mix of structures - pyramidal,
matrix or networked ones - to accomplish their goals.

36.
Retail Banking/ Madhusudan Narayan P a g e | 36
STRUCTURE
Board of Directors
CONSTITUTION:
The Constitution of the Board of the Bank is governed by "The
Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970,
formulated by the Central Government, after consultation with the Reserve Bank of
India, in exercise of the powers conferred by section 9 of "The Banking Companies
(Acquisition and Transfer of Undertakings) Act,1970".
COMPOSITION:
The Composition of the Board of Directors of a Bank is governed by "The
Nationalised Banks (Management and Miscellaneous Provisions) Scheme 1970" read
with "The Banking Companies (Acquisition and Transfer of Undertakings) and
Financial Institutions Laws (Amendment) Act 2006" and amendment to the vide
Extraordinary Gazette Notification dated 19.02.2007 of the Central Government.
CONTRIBUTION:
In terms of The Banking Companies (Acquisition and Transfer of Undertakings
Act 1970, the General Superintendence, Direction and Management of the affairs
and business of the Bank vests in the Board of Directors which is entitled to
exercise all such powers and do all such acts and things as the Bank is authorized
to exercise and do.
STRENGTH OF THE BOARD:
Presently, there are 13 Directors on the Board of the Bank. Brief Particulars
of each of the directors are placed below:
Desination Name
Date of
Appointment/ Charge
Chairman and
Managing Director
Shri. M.Narendra 1st November 2010
Executive Director Shri A.D.M.Chavali 28th December 2011
Executive Director Shri. Atul Agarwal 27th September 2013
Government Nominee
Director
Dr. Alok Pande
22 July 2011

37.
Retail Banking/ Madhusudan Narayan P a g e | 37
RBI Nominee Director
Shri.Nirmal Chand
13 March 2014
Officer Employee
Director
Shri. Jai Deo
Sharma 02 May 2013
Part-Time Non-Official
Director
(Nominated by GOI)
Shri Niranjan Kumar Agarwal 01 November 2011
Share holder Director Shri.Ajit Vasant Sardesai
08 December 2011
Share holder Director Shri.S.Sadagopan 08 December 2011
Part Time Non Official
director
(Nominated by RBI)
Shri.Chinnaiah 13 Novembe 2013
Part-Time Non-Official
Director
(Nominated by RBI)
Smt. S Sujatha 05 December 2013
Part –time Non-official
Director Shri A.B.D. Badushas 12 December 2013
Workmen Employee
Director Shri. R. Sampath Kumar 24 January 2014
Source: http://www.iob.in/aboutus.aspx
SKILLS
Highly skilled candidates are recruited at various levels across the organization.
Skills can be classified broadly into highly skilled and semi skilled routine work.
Various training program are organized regularly to impart training needs of the
employees.
STYLE /CULTURE
The culture of the organisation, consisting of two components:
Organisational culture: the dominant values and beliefs, and norms,
which develop over time and become relatively enduring features of
organisation life.
Management Style: More matter of what managers do than what they say
how do a company‘s managers spend their time? What are they focusing
attention on?
Symbolism – the creation and maintenance (or sometimes deconstruction) of
meaning is a fundamental responsibility of managers.
Building a high performance culture is another key prerogative of the HR function.
Indian Overseas Bank envisage a credible and transparent performance
management process that helps in aligning individual goals with corporate

38.
Retail Banking/ Madhusudan Narayan P a g e | 38
objectives, both quantitative and qualitative, and encourages cross sell and team
spirit. Indian Overseas Bank performance management process will be supported
by a robust rewards and recognition strategy for each business and a market
based compensation structure that is flexible, responsive and helps retention
through asset building and wealth creation for top performers.
STRATEGY
Being one of the leading banking institutions with rich culture of professionalism
the bank has various strategies to tackle with competitors in the market. The bank
has the strategy to make use of the growing potential of the rural sector as well
as the global academy, the business landscape will be changing magically and so
will the financial service need.
The bank has the strategy to enhance the reach of anytime and anywhere
banking. It has the ATM’s almost in all the cities and in good numbers but quite
less ATMs in Bihar. With the growing of the net banking the bank have several
new products and facilities with state-of-the-art facilities, enabling you to conduct
all your banking activities using your personal computer, from the comfort of your
home or office. Thus providing you with secure, 24 hour access to all your accounts
from anywhere in the world.
Unique Advantages:
Single Access Key: Our revolutionary technology allows you to access your
account with your Internet Banking. Just log on to our website (www.iob.in),
select Internet Banking services and key in your Login ID and Password. On
successful validation you will be allowed to access to your account.

39.
Retail Banking/ Madhusudan Narayan P a g e | 39
Secure Technology: For the first time in India, our Two Factor Authorization
allows for "One Time Passwords" for Internet Banking transaction
authentication to be delivered via SMS to your Mobile Phone. This password
enhances your Internet Banking security and allows you the freedom of banking
without remembering multiple passwords.
Instant Payment Solutions: Our Real Time Gross Settlement (RTGS)
Payment and Electronic Funds Transfer (NEFT) facilities allow you to transfer
funds to own or third party accounts instantly. You can also request for multiple
Demand Drafts at various locations and set up standing instructions for your
account to execute routine payments
SYSTEM
Formal and informal procedures that support the strategy and structure
(systems are more powerful than they are given credit).
The bank follows a systematic procedure at all the levels. The bank has very
good performance appraisal system, training and development system, resource
allocation system, distribution and recovery system. The instructions flow from
top management to lower levels of management.
The training needs are developed after TNI (Training Needs Identification)
and all the programs are put on the monthly/annual training calendar to be
implemented.
STAFF
The people/human resources management – processes used to develop
managers, socialization processes, ways of shaping basic values of management
cadre, ways of introducing young recruits to the company, ways of helping to
manage the careers of employees.
Indian Overseas Bank envisaged that for an individual to work with the
organization in perfect synergy, his/her goals had to be linked with the goals of
the organization. This process of aligning individual and organizational goals was
termed as the performance management process. The main objective of these
innovative performance management practices was to encourage the employees
to think innovatively.
SHARED VALUE
The bank aimed at building a culture to inculcate professional
entrepreneurship in them to make themselves and the shareholders prosperous.

40.
Retail Banking/ Madhusudan Narayan P a g e | 40
Indian Overseas Bank has planned to steadily increase its presence in retail
business. Earlier bank has purposely maintained a low-key presence in the retail
market, now is planning to increase exposure in this segment. There is
tremendous scope for IOB’s growth as it was trying to take care of the latent
needs of the customers with highly skilled and involved employees.
Organizational Chart of IOB Patna Region
SWOT ANALYSIS
STRENGHTS:
 IOB is one of the largest public sector banks operating in India. It has an
extensive distribution network comprising of 3376 branches in pan India and 7
branches in abroad.
 Best Customer Relationship Management.
 Customers of IOB are IOB Marketers.
 Quick Disbursement of Loans.
 The Bank has a strong retail depository base & has good number of
customer.

41.
Retail Banking/ Madhusudan Narayan P a g e | 41
 Bank boasts of strong brand equity.
 The bank has a near competitive edge in area of operations.
 It has a highly automated environment in terms of information technology &
communication system.
 Awards
 Best Public Sector Banker Award.
 Best Indian Banker Award.
 SME Award.
 Skoch Award for Financial Inclusion.
 Best in rural Outreach
 Best CSR Practise from IPE BFSI Award
 It has many innovative products like Little Star Account, NRI services, Vardhan
Deposit for Senior Citizens.
WEAKNESS:
 Sometimes account opening and delivery of cheque book take comparatively
more time.
 Technology need to be upgraded especially Softwares.
 Low Retention Rate
 Occasionally link failure.
 Lack of ATMs in Bihar.
OPPORTUNITY:
 Branch expansion.
 Door step services.
 A strong Corporate identity can be achieved through Branding (Public
Awareness)
 IOB should focus on to increase Tie up with Private Organisations, Colleges
and Universities.
 Infrastructure improvements & better systems for trading & settlement in
the government securities & foreign exchange markets.
 IOB should open more Branch in Rural areas to target more Rural Public.
THREATS:
 Potential Entrant (Upcoming Banks).
 Similar Products which are offered by other Banks.
 Slow Economy Growth Rate.

42.
Retail Banking/ Madhusudan Narayan P a g e | 42
RESEARCH METHODOLOGY
TITLE OF THE PROJECT
“A Study on Retail Banking with special reference to Indian Overseas Bank”
STATEMENT OF THE PROBLEM
As there are immense opportunities of the retail banking in India. This
project is on the issues and challenges in the retail banking because of the
competition of the various banks and the customer satisfaction of the services
which the banks are providing and at the same time to solve the complaints of the
customer and maintaining the sound relationship for the future and by this way to
estimate the future growth of the retail banking.
OBJECTIVES OF STUDY
 To study the issues and challenges in retail banking.
 To study the recent trends in retail banking.
 To ensure high satisfaction level and reduce percentage of complaints
of customer in retail banking.
 To estimate the future growth of Indian retail banking.
 To understand Optimization of retail banking channels.
 To suggest strategies for improvement in Customer Service.
OPERATIONAL DEFINITION
Retail banking refers to banking in which banking institutions execute
transactions directly with consumers, rather than corporations or other banks.
Services offered include: savings and checking accounts, mortgages, personal
loans, debit cards, credit cards, and so forth. And to know about the customer’s
perceptions about the different products of the bank like current account, savings
account, FD, Smart Saver, Smart Access and others.
DATA COLLECTION
There are several approaches of data collection. The primary sources of data
collection are done through: -
Observations and Questionnaire
Methodology

43.
Retail Banking/ Madhusudan Narayan P a g e | 43
QUESTIONNAIRE
Questionnaire is the method of data collection, which is very much popular,
particularly in big cities. Different modes of questions are put up on the paper and
the particular universe, on which the research is conducted, are asked to fill their
responses.
The Secondary source includes data collection through: Magazines,
Journals, Books, Newspapers etc. and Indian Overseas Bank’s Website.
SAMPLING TECHNIQUE
(a)Sampling Unit: -
Walk in customers and the company database of high ended customer.
(b)Sample Size:-
Sample size for this project was restricted to 50 respondents. Since it was
not possible to cover the whole universe in the available time period, it was
necessary for me to take a sample size of 50 respondents.
(c) Sampling Method:-
There are three methods of sampling:-
1. Probability Sampling
2. Non-Probability Sampling
3. Quota
For this research work Non- Probability Convenience Sampling has been
chosen because time limit for the completion of the work is limited.
Area of Study - Patna, Bihar
Duration - 2 months (13th
May 2014 – 16th
July 2014)
DATA COLLECTION METHOD
Data for the present study is collected from two sources:
1. Primary Data:
The data are collected directly from the universe by conducting
interviews, etc. these are the original sources from which the researcher
directly gathers data which are not previously referred. All the people from
different profession were personally visited and interviewed. They were the
main source of primary data. The method of collection of primary data was

44.
Retail Banking/ Madhusudan Narayan P a g e | 44
personal direct interview through a structured questionnaire.
The primary data was collected by means of survey. Questionnaires
were prepared and customers of Indian Overseas Bank were approached to
fill up these questionnaires. The filled up information was later analyzed to
obtain the required information.
2. Secondary Data:
The data are collected from the secondary sources such as magazines,
journals, etc. These sources consist of already variable data in the form of
statements, and reports, which may include sensory reports, financial
statements of the company, reports of governments departments, etc.
It was collected from internal sources. The secondary data was
collected on the basis of organizational file, official records, newspapers,
magazines, management books, preserved information in the company’s
database and the website of the company.
Both Primary and Secondary sources was used for data collection.
For primary source, Questionnaire was used. For secondary source
Internet, Books and Newspapers etc. were used.
RESEARCH DESIGN
Research design is simply the framework or plan for a study, used as a guide in
collecting and analysing data. There are three types of Research Design:-
1. Exploratory Research Design
2. Descriptive Research Design
3. Casual Research Design
For the study, Exploratory Research Design was undertaken to classify the
investors on their risk and return profile.
PLAN OF ANALYSIS
The data obtained from the structured questionnaire’s are
interpreted and recorded. The table, Pie Chart, and factor analysis, correlation
(SPSS) were constructed using data from the questionnaire. which was then
used for analyzing the acquired data.

45.
Retail Banking/ Madhusudan Narayan P a g e | 45
LIMITATIONS
 Designing own and new financial products is very costly and time consuming
for the bank.
 Customers now-a-days prefer net banking to branch banking. The banks that
are slow in introducing technology-based products, are finding it difficult to
retain the customers who wish to opt for net banking.
 Customers are attracted towards other financial products like mutual funds etc.
 The volume of amount borrowed by a single customer is very low as compared
to wholesale banking. This does not allow banks to exploit the advantage of
earning huge profits from single customer as in case of wholesale banking.
 Though banks are investing heavily in technology, they are not able to exploit
the same to the full extent.
DATA ANALYSIS AND INTERPRETATION
Profile of Respondents
Respondents were the customers of Indian Overseas Bank, Main branch, of
age group 21-65 years.
1. What is your Age Group?
Parameters In Numbers In Percentage
Below 25 11 22%
25-30 13 26%
30-35 11 22%
35-40 7 14%
40-45 5 10%
Above 45 3 6%
Table Number – 01
Interpretation: The purpose of this question is to know the age group of the
Respondent.
Inference: 94% of the Respondent are below the age of 45.
below 25 25-30 30-35 35-40 40-45 above 45
Series1 22% 26% 22% 14% 10% 6%
22%
26%
22%
14%
10%
6%
0%
5%
10%
15%
20%
25%
30%
Age Group

46.
Retail Banking/ Madhusudan Narayan P a g e | 46
2. Do you have any Bank Account? If Yes which type of Account?
Account Type In Numbers In Percentage
Savings Account 36 72%
Current Account 10 20%
Loan Account 4 8%
Table Number --- 02
Interpretation: The purpose of this question is to know Account type of the respondent.
Inference: 72% of the Respondent is having Savings Account.
3. What is Your Occupation?
Parameters In Numbers In Percentage
Self-Employed 13 26%
Service 17 34%
Student 9 18%
Business 11 22%
Table No -- 03
Interpretation: The purpose of this question is find the Occupation of the Respondent.
Inference: 34% of the Respondent are service holder and 22% and 26% are
Businessman and Self-Employed Respectively.
SB CA LL
SB CA LL 72% 20% 8%
72%
20%
8%
0%
20%
40%
60%
80%
Account Type
Service Self-Employed Student Business
Series1 34% 26% 18% 22%
34%
26%
18%
22%
0%
10%
20%
30%
40%
Occupation

47.
Retail Banking/ Madhusudan Narayan P a g e | 47
4. What kind of service or services do you expect from IOB?
Parameters In Numbers In Percentage
Quick Response 15 30%
Services Better than other Bank 12 24%
Extra Facility for Existing Customers 5 10%
Good Customer Relation 18 36%
Table No. --04
Interpretation: The purpose of this question is the Service Expectation of Respondent.
Inference: 36% of the respondent are happy with Bank’s Good Customer Relations and
30% are happy with Quick response of the bank. Since, both of them are related to
customers satisfaction which is good.
5. What influence you to come and avail services from IOB?
Parameters In Numbers In Percentage
Govt. of India Undertakings 19 38%
Friend/ Relative Recommendations 22 44%
Brand Value 6 12%
Advertisement 3 6%
Table No. -- 05
Interpretation: The purpose of this question is to know that what Influence respondent to
avail service from Indian Overseas Bank?
Inference: 44% of the Respondent are availing service after friends/ Relative
Recommendation it says that IOB Customers are IOB Marketers. 38% of the Respond are
availing service of IOB in favour of Govt. of India Undertakings.
Quick Response SBOB Extra Facility GCRM
Series1 30% 24% 10% 36%
30%
24%
10%
36%
0%
10%
20%
30%
40%
Service Expectation
GOI Undertaking
Friend
Recomendation
Recommendation
Brand Value Advertisement
Series1 38% 44% 12% 6%
38%
44%
12%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%

48.
Retail Banking/ Madhusudan Narayan P a g e | 48
6. The Branch timings (10:30 am to 4:30 pm from Monday to Friday and
10:30 am to 1:30 pm on Saturday) are convenient?
Parameters In Numbers In Percentage
Could Be Better 0 0%
Satisfactory 3 6%
Good 20 40%
Excellent 27 54%
Table No. ---06
Interpretation: The purpose of this question is to know satisfaction level on Brach timings
Inference: 94% of the Respondent are happy with branch timings.
7. Is the branch ambience & layout is very friendly?
Parameters In Numbers In Percentage
Could Be Better 0 0%
Satisfactory 3 6%
Good 22 44%
Excellent 25 50%
Table No. --- 07
Interpretation: The purpose of this question is to know about branch ambience & layout
Inference: 94% of the Respondent are satisfied with branch layout and ambience.
Could be Better Satisfactory Good Excellent
Branch Timing 0% 6% 40% 54%
0% 6%
40%
54%
0%
10%
20%
30%
40%
50%
60%
Branch Timing
Could be Better Satisfactory Good Excellent
Ambience_Layout 0% 6% 44% 50%
0%
6%
44%
50%
0%
10%
20%
30%
40%
50%
60%
Ambience_Layout

49.
Retail Banking/ Madhusudan Narayan P a g e | 49
8. Is the waiting time at the Teller Counter was minimal?
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 6 12%
Good 18 36%
Excellent 25 50%
Table No. ---08
Interpretation: The purpose of this question is to know about the waiting time at counter.
Inference: 86% of the Respondent are happy with waiting time at the teller counter.
9. Is the transactions done by us have been smooth & error free?
Parameters In Numbers In Percentage
Could Be Better 0 0%
Satisfactory 3 6%
Good 23 46%
Excellent 24 48%
Table No. --- 09
Interpretation: The purpose of this question is to know about Transactions Feedback.
Inference: 94% of the Respondent are satisfied with smooth and error free Trasactions.
Could be Better Satisfactory Good Excellent
Waiting_Time 2% 12% 36% 50%
2%
12%
36%
50%
0%
10%
20%
30%
40%
50%
60%
Waiting_Time
Could be Better Satisfactory Good Excellent
0 3 23 24
Error_free_transaction 0% 6% 46% 48%
0%
6%
46% 48%
0%
10%
20%
30%
40%
50%
60%
Error_free_transaction

50.
Retail Banking/ Madhusudan Narayan P a g e | 50
10.Is IOB looks into the feedback provided by you and takes necessary
action if required?
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 8 16%
Good 32 64%
Excellent 9 18%
Table No. ---10
Interpretation: The purpose is to know response on feedback provided by customers.
Inference: 98% of the Respondent are satisfied with their response on feedback.
11.How was your experience while using IOB E-Products?(like–ATM,
Internet/Mobile Banking, etc)
Parameters In Numbers In Percentage
Could Be Better 5 10%
Satisfactory 16 32%
Good 22 44%
Excellent 7 14%
Table No. --- 11
Interpretation: The purpose of this question is to know the satisfaction on E-Products.
Inference: 44% of the Respondent are not fully satisfied with E-Product, Especially ATM
they told there is Scarcity of IOB’s ATM in the State. So Bank should look in this regard.
Could be Better Satisfactory Good Excellent
1 8 32 9
Series1 2% 16% 64% 18%
2%
16%
64%
18%
0%
10%
20%
30%
40%
50%
60%
70%
Customer_feedback
Could be Better Satisfactory Good Excellent
E-Product 10% 32% 44% 14%
10%
32%
44%
14%
0%
10%
20%
30%
40%
50%
E-Product

51.
Retail Banking/ Madhusudan Narayan P a g e | 51
12.How do you find IOB employees provide you good customer relation and
quick services?
Parameters In Numbers In Percentage
Could Be Better 2 4%
Satisfactory 4 8%
Good 25 50%
Excellent 19 38%
Table No. ----12
Interpretation: The purpose of this question is to know the Satisfaction on CRM.
Inference: 88% of the Respondent are happy with CRM of the IOB.
13. How do you find the processing procedure while availing different services
provided by IOB?
Parameters In Numbers In Percentage
Could Be Better 2 4%
Satisfactory 8 16%
Good 24 48%
Excellent 16 32%
Table No. ----13
Interpretation: The purpose of this question is to know about Processing Procedure.
Inference: 96% of the Respondent are satisfied with the Processing Procedure.
Could be Better Satisfactory Good Excellent
CRM 4% 8% 50% 38%
4%
8%
50%
38%
0%
10%
20%
30%
40%
50%
60%
CRM
Could be Better Satisfactory Good Excellent
Processing_procedure 4% 16% 48% 32%
4%
16%
48%
32%
0%
10%
20%
30%
40%
50%
60%
Processing_procedure

52.
Retail Banking/ Madhusudan Narayan P a g e | 52
14.Is the branch personnel have been very helpful and courteous?
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 2 4%
Good 28 56%
Excellent 19 38%
Table No. ----14
Interpretation: The purpose of this question is to know about branch personnel nature.
Inference: 94% of the Respondent are happy with branch personnel helpfulness.
15. How do you find the cooperation of the bank employees in processing and
helping you with documentation, services and problem faced by you in
banking issue ?
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 11 22%
Good 27 54%
Excellent 11 22%
Table No. ---14
Interpretation: The purpose to know the Employee helping nature on banking Problems.
Inference: 98% of the Respondent are satisfied with employee co-operation.
Could be Better Satisfactory Good Excellent
Branch_helpfullness 2% 4% 56% 38%
2% 4%
56%
38%
0%
10%
20%
30%
40%
50%
60%
Branch_helpfullness
Could be
Better
Satisfactory Good Excellent
Employee_co-operation 2% 22% 54% 22%
2%
22%
54%
22%
0%
10%
20%
30%
40%
50%
60%
Employee_co-operation

53.
Retail Banking/ Madhusudan Narayan P a g e | 53
16. Are you happy with the TAT (Turn Around Time) post request ? ***
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 7 14%
Good 27 54%
Excellent 15 30%
Table No. ----15
Interpretation: The purpose of this question is to know about TAT feedback.
Inference: 98% of the Respondent are satisfied on TAT post request.
17.Your overall level of satisfaction with IOB?
Parameters In Numbers In Percentage
Over Satisfied 18 36%
Satisfactory 25 50%
Not Dis-satisfied 7 14%
Dis-satisfied 0 0%
Table No. ----16
Interpretation: The purpose of this question is to know the overall satisfaction with IOB
Inference: 36% of the Respondent are delighted with IOB service and rest 64% are
happy with IOB Service. Since more than one-third Respondents are delighted with Service
it is a very great sign for any Business Organisation for Rapid Progress.
Could be Better Satisfactory Good Excellent
TAT 2% 14% 54% 30%
2%
14%
54%
30%
0%
10%
20%
30%
40%
50%
60%
TAT
Dis-satisfied Not Dis-satisfied Satisfied Over Satisfied
OverAll_satisfaction 0% 14% 50% 36%
0%
14%
50%
36%
0%
10%
20%
30%
40%
50%
60%
OverAll_satisfaction

54.
Retail Banking/ Madhusudan Narayan P a g e | 54
S.P.S.S.
(STASTICAL PACAGE FOR SOCIAL SCIENCES)
OUTPUT, ANALYSIS AND INTERPRETATION
Analysis:
FACTOR ANALYSIS
Factor analysis is a statistical method used to describe variability among observed,
correlated variables in terms of a potentially lower number of unobserved variables called factors.
The main goal of factor analysis is data reduction. A typical use of factor analysis is in survey research,
where a researcher wishes to represent a number of questions with a smaller number of factors.
Factor analysis is only possible when some of its variables are correlated.
In other words, it is possible, for example, that variations in three or four observed
variables mainly reflect the variations in fewer unobserved variables. Factor analysis searches for
such joint variations in response to unobserved latent variables. The observed variables are
modelled as linear combinations of the potential factors, plus "error" terms. Factor analysis is
related to principal component analysis (PCA), but the two are not identical.

55.
Retail Banking/ Madhusudan Narayan P a g e | 55
 Kaiser-Meyer-Olkin Measure of Sampling Adequacy - This measure varies between 0 and
1, and values closer to 1 are better. A value of 0.6 is a suggested minimum. Here it is .803
which signifies that we can continue with factor analysis.
 Bartlett’s Test of Sphericity - This tests the null hypothesis that the correlation matrix is an
identity matrix. An identity matrix is matrix in which all of the diagonal elements are 1 and all off
diagonal elements are 0. here significance value is .00 <.05 so we reject this null hypothesis
and it shows that multicollinearity occurs. Here we accept Alternate hypothesis. (Null = no
correlation exists among variables, Alternate = Correlation Exist among variables)
The Bartlett’s Test of Sphericity relates to the significance of the study and thereby shows the validity
and suitability of the responses collected to the problem being addressed through the study. For
Factor Analysis to be recommended suitable, the Bartlett’s Test of Sphericity must be less than 0.05.
Once the extraction of factors has been completed, we examine the table of 'Communalities'
which tells us how much of the variance in each of the original variables is explained by the
extracted factors. Higher communalities are desirable. This is the proportion of each variable's
variance that can be explained by the factors. It can be defined as the sum of squared factor
loadings for the variables. This explains how much important variables are. Average of Extraction is
.905 which is more than .6, so factor analysis is possible. It provides both, Initial and Extraction,

56.
Retail Banking/ Madhusudan Narayan P a g e | 56
Initial means variables are fully involved (100% or 1.0). We can find the extraction value are more
than 0.40 so all the variables contributing to development of factor analysis.
Initial: This is the proportion of each variable’s variance that can be explained by the
factors. Extraction: The values in this column indicate the proportion of each variable’s variance that
can be explained by the retained factors. Variables with high values are well represented in the
common factor space, while variables with low values are not well represented. Factor: The initial
no. of factors is the same as the no. of variables used in the factor analysis. Initial eigen values-
Eigen values are the variances of the factors. Because we conducted our factor analysis on the
correlation matrix, the variables are standardized, which means that the each variable has a variance
of 1 and the total variance is equal to the no. of variance used in the analysis.
TOTAL VARIECE EXPLAINED :
The value which I got is 90.512 it is very very good. Here 3 factors are explaining 90%
of Variance. The table is below:
Scree Plot : It graphically represents eigen value against the factor values. From fig. we can note
how the curve drops sharply at fast and the level off at horizontal axis.

57.
Retail Banking/ Madhusudan Narayan P a g e | 57
With the help of component matrix, we can find the correlation between variables
and factors which we get from Principal Component Matrix (PCM). But for our analysis, we
apply rotated variables and factors which we get from PCM. This table contains the unrotated
factor loadings, which are the correlations between the variable and the factor. The possible
value range of this correlation lies between -1 to +1.

58.
Retail Banking/ Madhusudan Narayan P a g e | 58
Another important aspect that needs mention is the Rotated Component Matrix. While
deciding how many factors one would analyse is whether a variable might relate to more than
one factor.
Finally, the Rotated Component Matrix shows the factor loadings for each variable.
Rotation maximizes high item loadings and minimizes low item loadings, thereby producing a
more interpretable and simplified solution. This table contains the rotated factor loadings
(factor pattern matrix), which represents both how the variables are weighted for each factor
but also the correlation between the variables and the factor. The possible value range for
this correlation is between -1 to +1.
Componet Transform Matrix : Not using this table for anything. It has to do with SPSS
performing the orthogonal rotation that we asked for.
CONCLUSION
Now these 11 parameters can be grouped into 3 factors viz. 1, 2, 3. This varies
between 0 and 1, and values closer to 1 are better. A value of more than 0.7 (here I had
taken 0.85 and above) is a considered to be very good parameter which can be very useful
to figure out the factors important for customers satisfaction in Indian Overseas Bank, (Patna
Main Branch) Patna.
Customer Satisfaction (Factor 01):
Waiting_Time, Customer_feedback, CRM , Processing_procedure,
Branch_helpfullness, Employee_co-operation, TAT
Essential Service (Factor 2): Error_free_transaction, E-Product.
Branch Service (Factor 3): Branch_Timing, Ambience_Layout.
Based on the values got in our analysis we can further group the parameters as under
Most important: Brach_Timing, Customer_feedback, Employee_co-operation
Important to a certain extent: E-Product, Error_free_transaction,
Processing_procedure, Branch_helpfullness, TAT
The rest of the parameters can be stacked in the Not Important category and can be
neglected as they are less than 0.7 Value.

59.
Retail Banking/ Madhusudan Narayan P a g e | 59
OPPORTUNITIES AND CHALLENGES
Retail banking has immense opportunities in a growing economy like India.
As the growth story gets unfolded in India, retail banking is going to emerge a
major driver. How does the world view us? The BRIC report is viewing India as an
economic superpower. A.T. Kearney, a global management-consulting firm,
recently identified India as the ―second most attractive retail destination of 30
emergent markets.
The rise of Indian middle class is an important contributory factor in this
regard. The percentage of middle to high-income Indian households is expected
to continue rising. The younger population not only wields increasing purchasing
power, but as far as acquiring personal debt is concerned, they are perhaps more
comfortable than previous generations. Improving consumer purchasing power,
coupled with more liberal attitudes towards personal debt, is contributing to
India‘s retail banking segment.
The combination of above factors promises substantial growth in retail sector,
which at present is in the nascent stage. Due to bundling of services and delivery
channels, the areas of potential conflicts of interest tend to increase in universal
banks and financial conglomerates. Some of the key policy issues relevant to the
retail-banking sector are: financial inclusion, responsible lending, and access to
finance, long-term savings, financial capability, consumer protection, regulation
and financial crime prevention.
 Challenges for the Industry and its Stakeholders:
 First, retention of consumers is going to be a major challenge. According to
a research by Riechheld and Sasser in the Harvard Business review, 5
percent increase in customer retention can increase profitability by 35
percent in banking business, 50 percent in insurance and brokerage, and
125 percent in the consumer credit card market. Thus, banks need to
emphasis on retaining consumer and increasing the market share.
 Second, rising indebtedness could turn out to be a cause for concern in the
future. India’s position, of course, is not comparable to that of developed
world where household debt as a proportion of disposable income is much
higher. Such a scenario creates high uncertainty. Expressing concerns about
the high growth witnessed in consumer credit segments the reserve bank
has, as a temporary measure, put in place risk containment measures and

60.
Retail Banking/ Madhusudan Narayan P a g e | 60
increased the weight from 100 percent to 125 percent in the case of
consumer credit including personal loans and credit cards.
 Third, information technology poses both opportunities and challenges. Even
with ATM machines and Internet Banking, many of the customers still prefer
the personal touch of their neighbourhood branch bank. Technology has
made it possible to deliver services throughout branch network, providing
instant updates to checking accounts and rapid movement of money for
stock transfers. However, this dependency on the network has bought IT
department‘s additional responsibilities and challenges in managing,
maintaining and optimizing the performance of retail banking networks and
It is equally important that banks should maintain security to the advance
level to keep the faith of the customers.
 Fourth, KYC Issues and money laundering risks in retail banking is yet
another important issue. Retail lending is regarded as a low risk area for
money laundering because of the perception of the sums involved. However,
competition for clients may also lead to KYC procedures being waived in the
bid for new business. Banks must also consider seriously the type of
identification documents the will accept and other processes to be
completed. The Reserve Bank has issued details guidelines on application of
KYC norms in November 2004.
 Fifth, the issue of money laundering is very important in retail banking. This
compels all the banks to consider seriously all the documents which they
accept while approving the loans.
 Sixth, Banks are expected to take utmost care to retain the ongoing trust
of the Customers. Someone has rightly said, "It takes months to find a
good customer but only seconds to lose one." Thus, Customer service
should be t h e f i rs t a n d f i n al st ra t e g y at the end all in retail banking.
RETAIL BANKING : ADVANTAGES AND DISADVANTAGES
Retail banking has inherent advantages outweighing certain disadvantages.
Advantages are analysed from the resource angle and asset angle.

61.
Retail Banking/ Madhusudan Narayan P a g e | 61
RESOURCE SIDE
 Retail deposits are stable and constitute core deposits.
 They are interest insensitive and less bargaining for additional interest.
 They constitute low cost funds for the banks.
 Effective customer relationship management with the retail customers
built a strong customer base.
 Retail banking increases the subsidiary business of the banks.
ASSESTS SIDE:
 Retail banking results in better yield and improved bottom line for a
bank.
 Retail segment is a good avenue for funds deployment.
 Consumer loans are presumed to be of lower risk and NPA perception.
 Helps economic revival of the nation through increased production
activity.
 Improves lifestyle and fulfils aspirations of the people through affordable
credit.
 Innovative product development credit.
 Retail banking involves minimum marketing efforts in a demand -driven
economy.
 Diversified portfolio due to huge customer base enables bank to reduce
their dependence on few or single borrower.
 Banks can earn good profits by providing non fund based or fee based
services without deploying their funds.
DISADVANTAGES
 Designing own and new financial products is very costly and time
consuming for the bank.
 Customers now-a-days prefer net banking to branch banking. The banks
that are slow in introducing technology- based products, are finding it
difficult to retain the customers who wish to opt for net banking.
 Customers are attracted towards other financial products like mutual
funds etc.
 Though banks are investing heavily in technology, they are not able to
exploit the same to the full extent.
 A major disadvantage is monitoring and follow up of huge volume of loan
accounts inducing banks to spend heavily in human resource
department.

62.
Retail Banking/ Madhusudan Narayan P a g e | 62
 Long term loans like housing loan due to its long repayment term in the
absence of proper follow-up, can become NPAs.
 The volume of amount borrowed by a single customer is very low as
compared to wholesale banking. This does not allow banks to to exploit
the advantage of earning huge profits from single customer as in case of
wholesale banking.
Trends in Retail Banking
Growing a retail banking business is becoming increasingly
challenging. The yield curve is flattening, reducing bank’s net interest margin.
Competition is intensifying, as new, non-traditional players enter the retail
banking space. And consumer preferences for financial products, payment
methods and distribution channels continue to evolve, providing revenue
opportunities, but also introducing new operational challenges.
The changing dynamics of the retail banking business have significant
implications for financial institutions. In order to successfully compete in this
environment, banks must provide a distinctive customer experience and offer
innovative product solutions in order to differentiate their value proposition in the
marketplace.
Key trends in retail Banking are:
1. Bifurcation of the retail banking business:
 National- Consolidate- Credit Cards
 Home Equity Loans Mortgages
 Local- Fragmented- Deposits
 Instalment Loans & Small Business Loans
2. Lack of differentiation in retail financial services:
 Many financial institutions are struggling to differentiate their value
propositions in the retail banking market.
 Free checking is now offered by all or most financial institutions.
 Most institutions no longer charge for online banking or online bill
payment.