authorization

I, SHINAM ALIM, here by state that this project work entitled “consumer behaviour on
financial product & services” is an original piece of work done and submitted by me towards
complete fulfilment of the requirement of MBA Program of IBS Hyderabad.

The findings and conclusions expressed in this report are genuine and for academic purpose
and it has neither been submitted nor published anywhere before any resemblance to earlier
project or research work purely coincidental. This report is done as a part of Summer
Internship Program from 24th February 2024 to 24th May 2024 under the guidance of
“Dr. Birendra Kumar”.

(Chief Manager Officer) at BANK OF INDIA, BARASAT BRANCH.

SHINAM ALIM

(BATCH 2022-2024)

Acknowledgement
I would like to express my heart felt gratitude to all the people who have been a constant
source of guidance and support during the entire course of internship with Bank of India,
zonal office, Barasat branch, Kolkata.

I am deeply grateful to the entire management of “IBS-Hyderabad” for giving me an

opportunity to learn the practical aspect of life. I would like to thank, ‘BANK OF INDIA,
KOLKATA.’ for providing me the chance to undertake this internship study and allowing me
to explore the area of Consumer behaviour in Bank of India financial products.

At the onset, I would like to express my sincere gratitude to Prof. Sayan Chakraborty
(Faculty Guide) without his guidance, co-operation, and motivation this project would not
have been complete. He has always been guiding and motivating me to push myself beyond
limits and achieve greater results.

I would sincerely like to thank Dr. Birendra kumar (Chief Manager Office) who has acted as
a source of inspiration and motivated me to move besides my comfort boundaries. He has
always been my helping hand in any situation from start to end of internship and helped me
to enhance my targets and training me achieve them as well. Be any situation, he was always
standing beyond me in case of any problem or difficulties faced in handling any issues.

I would like to thank all my senior members of the organization for putting their trust in me
and assigning trustworthy tasks.

I extend my heartfelt thanks to my Parents & Friends for their unwavering support and
encouragement throughout the journey.

Lastly I would like to express gratitude to myself for the dedication, perseverance, and hard
work invested in this internship.

BANK OF INDIA
Bank of India (BOI) is an Indian public sector bank headquartered in Bandra Kurla
Complex, Mumbai. It was founded in 1906 by a group of eminent businessmen from
Mumbai. The bank remained under private ownership and control until July 1969, when it
was nationalized along with 13 other banks. Since then, it has been government-owned and
has played a significant role in India’s banking sector. BOI is a founding member
of SWIFT (Society for Worldwide Inter Bank Financial Telecommunications), which
facilitates provision of cost-effective financial processing and communication services.

Bank of India offers a wide range of products and services, including:

Personal Banking: This includes services like online internet banking, personal loans, and
insurance.

Business Banking: BOI provides various business-related services.

Investment and Insurance: Customers can explore mutual funds, insurance options, and
more.

NRI Services: Tailored solutions for non-resident Indians.

Agricultural Services: Specialized offerings for the agricultural sector.

For convenient digital banking, we can download the new BOI Mobile Omni Neo Bank
App. Remember, Bank of India has been a trusted institution for over a century, serving the
financial needs of individuals, businesses, and communities across the country.

Bank of India aim at providing superior, proactive banking service to niche market
globally, while providing cost effective and responsive services. The Bank has over
5100+ branches in India spread over all states/ union territories including specialized
branches. These branches are controlled through 69 Zonal Offices and 13 NBG Offices.
There are 45 branches/ offices abroad which includes 23 own branches, 1 representative
office and 4 Subsidiaries (20 branches) and 1 joint venture.

OUR MISSION

To provide superior, proactive banking service to niche markets globally, while providing
cost effective, responsive service to others in our role as a development bank, and in doing
so, meet the requirements of our stakeholders.

OUR VISION

To become the bank of choice for corporates, medium business and upmarket retail
customers and developmental banking for small business, mass market and rural markets.

History
The Bank came out with its maiden public issue in 1997 and follow on Qualified Institutions
Placement in February 2008.
While firmly adhering to a policy of prudence and caution, the Bank has been in the
forefront of introducing various innovative services and systems. Business has been
conducted with the successful blend of traditional values and ethics and the most modern
infrastructure. The Bank has been the first among the nationalised banks to establish a fully
computerised branch and ATM facility at the Mahalaxmi Branch at Mumbai way back in
1989. The Bank is also a Founder Member of SWIFT in India. It pioneered the introduction
of the Health Code System in 1982, for evaluating/ rating its credit portfolio.

Presently Bank has overseas presence in 15 foreign countries spread over 5 continents – with
47 branches/offices including 4 Subsidiaries, 1 Representative Office and 1 Joint Venture, at
key banking and financial centres viz., Tokyo, Singapore, Hong Kong, London, Paris, New
York, DIFC Dubai and International Banking Unit (IBU) at GIFT City Gandhinagar.

CHAPTER 1: BANKING INDUSTRY

INTRODUCTION
Banking means accepting for the purpose of lending or investment, of deposits of money
from the Public, repayable on demand or otherwise and withdraw able by cheques, draft,
order or otherwise.

Banking is a crucial economic function and forms an integral part of nation’s economy. A
healthy banking system is essential for any economy striving to achieve good growth and yet
remain stable in an increasingly global business environment. The Indian banking system,
with one of the largest banking networks in the world, has witnessed a series of reforms over
the past few years like the deregulation of interest rates, dilution of the government stake in
public sector banks (PSBs), and the increased participation of private sector banks. The
growth of the retail financial services sector has been a key development on the market front.
Indian banks (both public and private) have not only been keen to tap the domestic market
but also to compete in the global market place. New foreign banks have been equally keen to
gain a foothold in the Indian market.

Since Independence, the Indian banking sector has been experiencing phenomenal growth.
Though the commercial banks were largely confining their activities to urban affluent
customers and to industry, trade and commerce, the nationalization of several commercial
banks since 1969 have forced these banks to undertake aggressively various programs
including: branch expansion in the rural and semi-urban areas, reallocation of bank credit in
Favor of priority sectors like agriculture, small-scale industry, transportation, exports and
distribution of food and other agricultural products, and fixed interest rates for various types
of deposits, thus expanding their horizon of customer interface. The banking industry in India
has been a witness to several regulatory changes in the last few decades, which have not only
facilitated the entry of private and foreign banks, but also have enhanced the expectations of
the customers with regards to service delivery in banks. Global competition has further forced
the banks to explore the trade-off between winning new customers and retaining old ones,
thus focusing on customer relationship management.

Like other industries, banking and financial services companies have reached the conclusion
that the relationship with the customer should not (metaphorically and literally) end at the
bank door. Customer access after the transaction adds value to the transaction.

Figure: Distribution of the Indian banking industry

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and well-
regulated. The financial and economic conditions in the country are far superior to any other country
in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally resilient
and have withstood the global downturn well.

The Indian banking industry has recently witnessed the rollout of innovative banking models like
payments and small finance banks. In recent years India has also focused on increasing its banking
sector reach, through various schemes like the Pradhan Mantri Jan Dhan Yojana and Post payment
banks. Schemes like these coupled with major banking sector reforms like digital payments, neo-
banking, a rise of Indian NBFCs and fintech have significantly enhanced India’s financial inclusion
and helped fuel the credit cycle in the country.

Indian Fintech industry is estimated to be at US$ 150 billion by 2025. India has the 3rd largest
FinTech ecosystem globally. India is one of the fastest-growing Fintech markets in the world. There
are currently more than 2,000 DPIIT-recognized Financial Technology (FinTech) businesses in India,
and this number is rapidly increasing.

The digital payments system in India has evolved the most among 25 countries with India’s
Immediate Payment Service (IMPS) being the only system at level five in the Faster Payments
Innovation Index (FPII). India’s Unified Payments Interface (UPI) has also revolutionized real-time
payments and strived to increase its global reach in recent years.

CHAPTER 2: INDIAN BANKING SECTOR TODAY

The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46
foreign banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000 rural
cooperative banks in addition to cooperative credit institutions. As of October 2023, the total
number of micro-ATMs in India reached 15,30,287. Moreover, there are 1,25,969 on-site
ATMs and Cash Recycling Machines (CRMs) and 93,771 off-site ATMs and CRMs.

Banks added 2,796 ATMs in the first four months of FY23, against 1,486 in FY22 and 2,815
in FY21. 100% of new bank account openings in rural India are being done digitally. BCG
predicts that the proportion of digital payments will grow to 65% by 2026.

In 2023 (till December 1st, 2023), total assets in the public and private banking sectors were
US$ 1688.15 billion and US$ 1017.26 billion, respectively. In 2023 (till December 1st,
2023), assets of public sector banks accounted for 58.32% of the total banking assets
(including public, private sector and foreign banks).

Public sector banks accounted for over 57.48% of interest income in 2023 (till December 1st,
2023). The interest income of public banks reached US$ 102.51 billion in 2023 (till
December 1st, 2023). In 2023 (till December 1st, 2023), interest income in the private
banking sector reached US$ 70.07 billion.

India's digital lending market witnessed a growth of CAGR 39.5% over a span of 10 years.
The Indian digital consumer lending market is projected to surpass US$ 720 billion by 2030,
representing nearly 55% of the total US$ 1.3 trillion digital lending market opportunity in the
country.

According to RBI’s Scheduled Banks’ Statement, deposits of all scheduled banks collectively
surged by a whopping Rs.1.75 lakh crore (US$ 2,110.87 billion) as of December 1st, 2023.

According to the BCG Banking Sector Roundup Report of 9M FY23, credit growth is
expected to hit 18.1% in 2022-23 which will be a double-digit growth in eight years.

Non-food bank credit registered a growth of 17.6% in November 2022 as compared with
7.1% a year ago on the back of robust credit demand from the segments such as services,
industry, personal, and agriculture and allied activities, according to RBI’s statement on
Sectoral Deployment of Bank Credit.

CUSTOMER PERCEPTION AND CUSTOMER SATISFACTION

Customer perception is an important component of our relationship with our customers. Customer
satisfaction is a mental state which results from the customer’s comparison of expectations prior to a
purchase with performance perceptions after a purchase. A customer may make such comparisons for
each part of an offer called ‘‘domain-specific satisfaction’’ or for the offer in total called ‘‘global
satisfaction’’. Moreover, this mental state, which we view as a cognitive judgment, is conceived of as
falling somewhere on a bipolar continuum bounded at the lower end by a low level of satisfaction
where expectations exceed performance perceptions and at the higher end by a high level of
satisfaction where performance perceptions exceed expectations.

Customer Perception of Services

These characteristics of service also make service unique and different from goods as described below
a. Intangibility.
b. Heterogeneity.
c. Inseparability.
d. Perishability.
e. non-returnable.
f. Needs-match uncertainty.
g. Interpersonal.
h. Personal.

Measuring Customer Perception in the Banking Industry

The domestic Indian economy is an increasing pie which offers extensive economies of scale that only
large banks will be in a position to tap. With the phenomenal increase in the country's population and
the increased demand for banking services; speed, service quality and customer satisfaction are going
to be key differentiators for each bank's future success. Thus, it is imperative for banks to get useful
feedback on their actual response time and customer service quality aspects of retail banking, which
in turn will help them take positive steps to maintain a competitive edge. The working of the
customer's mind is a mystery which is difficult to solve. This exercise in the context of the banking
industry will give us an insight into the parameters of customer satisfaction and their measurement.
This vital information will help us to know how banks can build satisfaction amongst the customers
and customer loyalty in the long run which is an integral part of any business. We can recognize
where we need to make changes to create improvements and determine if these changes, after
implemented, have led to increased customer satisfaction.

1.1 SCOPE OF THE STUDY

The shortcomings of the research coupled with the growing evidence of the influence of service
quality on the financial viability of firms demonstrate the need for designing the present research.
The competition unleashed by the combination of three major segments of banking in India i.e.
 private, public, and foreign banks also necessitated the investigation into the profiling and
satisfaction of banking customers at Bank of India.

1.2 OBJECTIVES OF THE STUDY

An objective (or goal) is a projected state of affairs that a person or a system plan or intends to
achieve—a personal or organizational desired end-point in some sort of assumed development.
Many people endeavour to reach goals within a finite time by setting deadlines. No project is
done with certain goals and objectives in mind.

PRIMARY OBJECTIVES
 To understand core business strategies of a banking institution such as Bank of India.
 To conduct a customer satisfaction survey in Bank of India.
 Make recommendations and suggestions based on the analysis of the existing service quality in
different branches of the bank to enhance their service quality and expand their customer bases.

SECONDARY OBJECTIVES
 To find out how the relationship between the different demographic factors such as age, income,
occupation and the various service quality dimension
 To do effective analysis on vehicle loan service quality dimensions.

CHAPTER 3: METHODOLOGY

Methodology (also called manner) is defined as the analysis of the principles of methods,
rules, and postulates employed by a discipline. For instance, “Since customers were not
available to complete the survey about academic success, we changed our methodology and
gathered data from instructors instead”. In this instance, the methodology (gathering data via
surveys, and the assumption that this produces accurate results) did not change, but the
method (asking teachers instead of students) did.

2.1 UNIVERSE OF THE STUDY

The Universe is defined as everything that physically exists: the entirety of space and time,
all forms of matter, energy and momentum, and the physical laws and constants that govern
them. However, the term ‘universe’ may be used in slightly different contextual senses. Here,
the universe was the different branches as well as zonal office of Bank of India all over
Kolkata (North, South, East and West Zones).

2.3 TYPES OF RESEARCH

The research conducted was both exploratory and descriptive in nature. Exploratory
research was planned to be conducted by using secondary data set. This research helped not
only in resolving any ambiguity in the problem statement but also in understanding of the
dimensions of the problem in a better way. The exploratory research involved reading and
analyzing various publication and journals. In exploratory research the main objective was to
gain more insight into the various factors that affect consumer perception of services
provided by banks, the perception of service of the banks will depend on various attributes of
customer too (customer age group and occupation). Here we also found out that consumer
perception is dependent on RATER Model factors.
So, our research objective gets modified to finding out these five factors. This exploratory
research was followed by comprehensive descriptive research that was conducted on a
sample size of 120 customers from four different branches of Bank of India such that these
customers also avail the services of one or the other private banks. The research included
collection of the primary data through sample surveys and questionnaires from the target
customers. Questionnaire was designed to find out the various factors which impact customer
perception on banking service.

2.4 SELECTION OF SAMPLE

• Source of Data (Target customer with different age group and different occupation)
• Respondents =
• Sampling type: simple random sampling.
• Sample selection: Convenience sampling
• Unit of analysis: Individual

2.5 DATA COLLECTION

The primary source of data was a questionnaire consisting of 22 questions and the data was
collected in the questionnaire itself. The primary reason for designing the questionnaire was
to check the level of satisfaction of the consumer with Bank of India and any private bank
with which they deal. Also, the questionnaire proved useful in finding out the difference in
the patterns of performance of the different categories of banking services and products in
different branches. The data and findings enabled me to give recommendations and
suggestions regarding the scope of improvement of individual branch of the bank that was
considered for the study and also for the bank as a whole. The secondary sources of data were
the website of the bank, Journals, Reports, Internet (websites of different banks), and
Brochures/Pamphlets etc.

2.6 DATA ANALYSIS

Analysis (from Greek "a breaking up") is the process of breaking a complex topic or
substance into smaller parts to gain a better understanding of it. Analysis is done in various
fields including mathematics, economics, science, computers etc. The data collected has been
analyzed both qualitatively and quantitatively by formulation of requisite tables, graphs etc
with MS Excel.

2.7 FIELD EXPERIENCE

Despite the hardships faced during time consuming procedure, I had an enriching experience
as the learning involved was immense. Gathering information from customer of four different
branches) was challenging as I had to convince the customers to answer the questions without
being biased and also it was difficult to get the questionnaire filled completely. My
knowledge base and communication skills were strengthened to a great extent.

2.8 LIMITATIONS OF THE STUDY

The time spent for canvassing the bankers and customers to get the questionnaire filled was
considerable. Further, there was reluctance on the part of customers to respond to the
questionnaire. The cost and time factors are the other limitations. However adequate care was
taken to collect unbiased data.
2. 9 BRIEF OUTLINE OF THE PROJECT
The project is divided into three modules viz.
Module 1: - This module will deal with the Product portfolio and core business strategies of
Bank of India. It will elucidate an application of various marketing principles which I have
learnt so far. It will discuss the following topics: -
 Business Area of Bank of India.
 Understanding the Retail and Corporate Banking Market.
 Marketing Strategies and Operations at Bank of India.
 Product Portfolio of Bank of India
 Holistic marketing at Bank of India which includes Internal, Integrated, Relationship and
Performance Marketing.
 Competitors Analysis
 Market Potential which discusses further markets where Bank of India can enter into.

Module 2: - This is most important module of the project. It will consist of two parts. The
First part of this Module will comprise of a Customer Satisfaction & Consumer behaviour
Survey based on 22 Questions which can classified into 5 dimensions of RATER Model i.e.
Tangibility, Reliability, Responsiveness, Assurance, Empathy. The result of this
Questionnaire will be analysed using MS Excel. A comparison has been made between the
satisfaction level of customer of a PSU bank like Bank of India and a private bank. Also, an
analysis has been done in which we have tried to study the differences in the means of the
weightage assigned to the five dimensions caused by the various demographic factors like
age, income, occupation using One-way ANNOVA.

Module 3: - In the last module we have tried to analyze the performance of branches for the
different product categories and have tried to relate their performance to their dimensional
scores. Also, we have tried to suggest marketing strategies to the individual branches and also
for the Bank as a whole. We have also tried to focus on enhancing the sales of third-party
products such as SUD LIFE.