A PROJECT REPORT ON CUSTOMER SATISFACTION TOWARDS THE JAMMU CENTRAL CO-OPERATIVE BANK LIMITED WITH REFERENCE TO CAR LOANS

CONDUCTED FOR
THE JAMMU CENTRAL CO-OPERATIVE BANK LIMITED.

Submitted to BABA GHULAM SHAH BADSHAH UNIVERSITY RAJOURI in partial fulfillment of the requirement for the award of

MASTER OF BUSINESS ADMINISTRATION SUBMITTED BY:

Kashif Ul Anwar M.B.A 3rd sem Roll no: 24-MBA-2010

UNDER SUPERVISION OF:

DR. RADHA GUPTA ASSTT. PROFESSOR SCHOOL OF MGMT. STUDIES.

ACKNOWLEDGEMENT

I avail this opportunity to express my deep sense of gratitude to Mr. Sansar Chand the respected chief General Manager of The Jammu Central Co-Operative Bank for providing me an opportunity to work as a project report on the Jammu central co-operative Bank Ltd. I also take this opportunity to thank to my guide Mr. Latif Bangroo (Loan Manager, Main Branch, DODA) for providing me proper direction to my project, for sparing their valuable time and rendering all possible guidance whenever approached. Thus, from which I have gained many insights.

Place:

(KASHIF UL ANWAR)

DECLARATION BY THE STUDENT

I here by declare that this project tilted CUSTOMER SATISFACTION TOWARDS The Jammu Central Co-Operative Bank WITH REFERECE TO CAR LOANS is based on the original work carried out by me under the supervision of Mr. Sansar Chand and Mr. Lateef Bangroo, is an original and bonafide work carried out in partial fulfillment of the requirement of the award of the degree of Master of Business Administration of BABA GHULAM SHAH BADSHAH UNIVERSITY. This is my original work and not submitted for any other diploma, fellowship, award or prizes. This is my sole effort.

Place:

(Kashif Ul Anwar)

CONTENTS

S. No. I II III IV V VI VII VIII IX X

Title of the Chapter Executive Summery Industrial Background Company Profile Objectives of the Study Research Methodology Analysis & Interpretation Recommendations and Suggestions Limitations Conclusion Bibliography

Page No. 5 7 14 30 32 41 53 55 57 59

CHAPTER-I

EXECUTIVE SUMMARY

Executive Summary
5

Even though The Jammu Central Co-Operative Bank enjoys a large market share and customer loyalty but still it is not able to tap the potential customers because of the certain loopholes in the scheme. With the result customers are shifting to State Bank of India & J&K Bank particularly for car loans as their scheme is more attractive and their severe advertising has caused the results. The rate of interest, margin money of The Jammu Central Co-Operative Bank is quite high in comparison with competitors. The repayment period and minimum finance offered is also less with the result people wanting fewer amounts in installments and those who want to buy luxury sedans goes out of reach of bank. As evident the formalities required are less and the net annual income for availing loan is only Rs75000, which is healthy for the bank. The Jammu Central Co-Operative Bank should also start financing second hand cars in order to laurel more customers.

CHAPTER II

INDUSTRIAL BACKGROUND

Industrial background

Definition: The Indian Banking Companies Act, 1949 section 5(b), defines banking as accepting for the purpose of lending or investment of deposits from the public, repayable on demand or otherwise and withdrawal by cheque, drafts, and orders or otherwise.

ORIGIN OF BANKS: A bank is a financial institution that accepts deposits and channels those deposits into lending activities. Banks primarily provide financial services to customers while enriching investors. The invention of banking preceded that of coinage. Banking originated in Ancient Mesopotamia where the royal palaces and temples provided secure places for the safe-keeping of grain and other commodities. Receipts came to be used for transfers not only to the original depositors but also to third parties. Eventually private houses in Mesopotamia also got involved in these banking operations and laws regulating them were included in the code of Hammurabi. In Egypt too the centralization of harvests in state warehouses also led to the development of a system of banking. Written orders for the withdrawal of separate lots of grain by owners whose crops had been deposited there for safety and convenience, or which had been compulsorily deposited to the credit of the king, soon became used as a more general method of payment of debts to other persons including tax gatherers, priests and traders. Even after the introduction of coinage these Egyptian grain banks served to reduce the need for precious metals which tended to be reserved for foreign purchases, particularly in connection with military activities.

ORIGIN OF BANKING IN INDIA: India has a well developed banking system. Most of the banks in India were founded by Indian entrepreneurs and visionaries in the pre-independence era to provide financial assistance to traders, agriculturists and budding Indian industrialists. The origin of banking in India can be traced back to the last decades of the 18th century. The General Bank of India and the Bank of Hindustan, which started in 1786 were the
8

first banks in India. Both the banks are now defunct. The oldest bank in existence in India at the moment is the State Bank of India. The State Bank of India came into existence in 1806. At that time it was known as the Bank of Calcutta. SBI is presently the largest commercial bank in the country. Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking centre. The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India.

Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally undercapitalized and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:

In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.

10

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."

The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors.

However, despite these provisions, control and regulations, banks in India except the State Bank of India continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19 July 1969 By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity."Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969. The nationalized banks were credited by some; including Home minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 2007-2009. In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid

11

growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%, at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. Theoretical literature/ framework Financial statement is that statement which provides information on the firms position at a point in time and its operation over a period of time. Financial statement contains information about the wealth of the organization, which if well analyzed and interpreted can provide valuable insight into firms performance and its operations. Analysis of financial statement is of interest to lenders, investors, owners outsiders, shareholders and others. The traditional financial statement like Profit and loss account and Balance Sheet gives a summary of the firms resources, obligations and Profits or losses at a particular point in time. These statement exhibit the nature of financial events occurred only in a given period

12

of time. Moreover, they dont make any attempt to explain the changes in the assets, liabilities, profits or losses. Thus, these statements are viewed as static.

13

CHAPTER-III

COMPANY PROFILE

14

Profile of The Jammu Central Co-Operative Bank

Brief History of the Bank: The Jammu Central Co-operative Bank Limited was registered in the year 1914 as a District Central Co-operative Bank with its area of operation confined to Jammu District only. However, with the partition of the Country some of the other similar type of Central Co-operative Banks was merged with the Jammu Central Co-operative Bank Limited Jammu. These Banks were of Districts Rajouri, Poonch, Doda, Kathua, Udhampur and thus the area of operation of the bank got extended to whole of the Jammu region comprising of six districts Viz. Jammu, Kathua, Udhampur, Doda, Rajouri and Poonch. There are 63 Branches and 3 Extension Counters of the Bank. Formerly, the Bank was having a nominated Board but after 3rd September 2001 there is duly elected Board of Directors of the Bank.

Financial Indicators
(Amt. in Lakhs) Position as on 31st March Parameter 2006 Share Capital Of Which from Govt. Deposits Borrowings Loans Issued Short Term Medium Term Long Term Loans Outstanding 427.55 150.50 40378.83 650.49 4366.84 1841.06 2319.73 206.05 11708.26 2007 455.08 150.50 47114.06 409.61 4494.87 2148.61 2030.11 316.15 13176.80 2008 479.56 150.50 50704.68 229.33 4893.09 2097.23 2372.96 422.90 14625.65 2009 505.68 150.50 53595.69 111.52 5245.92 2248.79 2565.49 431.64 15804.89 2010 537.66 150.50 55401.25 39.73 6736.50 2583.03 3317.43 836.04 17730.69

15

Short Term Medium Term Long Term Investments Recovery Demand Collection Percentage of recovery. Non-Performing Assets Of Which from JAKFED C.D. Ratio Business Per Branch Business Per Employees Net Worth Net Loss

4434.39 6801.16 472.71 21768.06

4844.96 7652.99 678.85 25764.30

5111.56 8567.38 946.71 27691.91

5570.96 9092.79 1141.14 29066.59

5511.16 10604.41 1615.12 28440.59

5706.77 1671.98 29% 3543.03

5681.00 1480.55 26% 3945.78

6459.00 2081.00 32% 4098.82

6867.00 2308.00 34% 4516.73

7781.03 2833.52 36% 4626.13

2177.47 29% 801.34 77.74 -4802.99 1745.40

2177.47 28% 927.55 91.00 -5172.31 483.89

2177.47 29% 1037.00 100.00 -5335.67 228.14

2177.47 29% 1101.60 106.77 -5484.19 194.56

2177.47 32% 1160.82 113.03 (-) 5734.28 284.77

Kissan Credit Cards: Kissan Credit Cards Scheme was operationalized during 99/2000 in accordance with NABARD's guidelines which improved the quality of Institutional Credit Delivery for agricultural purposes. Bank has covered a significant proportion of borrowers under the Kissan Credit Card Scheme which proved an innovative attempt at further refining the crop absorption capacity of Primary Agricultural Societies. Bank have so far issued 17710 Cards with credit facility of Rs.1732.21 Lakhs, the year-wise break-up is as under:

16

Year 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

Target of KCC 0 650 11000 57500 25000 5000 5000

KCC Issued 152 304 7880 4696 2208 721 1749

Amount Sanctioned 30.58 41.45 728.11 431.25 212.90 119.52 168.40

Affiliated Societies: There are 1273 societies affiliated with the bank as on 31st March 2009, with district-wise break-up as under: S.No. District Primary 1 2 3 4 5 6 Jammu Kathua Udhampur Rajouri Poonch Doda Total :456 113 223 88 24 194 1098 Type of Societies Secondary 9 1 3 2 1 2 18 Others 112 16 7 6 6 10 157 Total 577 130 233 96 31 206 1273

Revival of PACS: Based on target to identify one society per block as a Model Society, 43 Societies are identified as per district-wise detail appended hereunder:

17

S.No.

District

No. of Societies identified as Modal Societies

1 2 3 4 5 6

Jammu Kathua Udhampur Doda Rajouri Poonch Total :-

11 8 11 4 6 3 43

District Managers have been directed to focus their attention particularly towards these societies for affecting recoveries and subsequently providing loans for seasonal agricultural operations and other allied activities. Against 43 identified societies, 29 societies have already been made eligible. Efforts are being made to revive other societies also. Directions stand issued to all the District Managers for early revival of these societies and also to enroll more and more families as a member of the society, to bring them under Cooperative fold. Based on guidelines received from Govt. of India, Bank has targeted to double the flow of agriculture credit by the end of March 2010. Development Action Plan (DAP) Strategies thereof: A. Bank attaches considerable importance to Development Action Plan in an attempt to improve the viability. The Development Action Plan is prepared, taking into account the strengths and weaknesses of the Bank. In the process, the efforts are made to deal with the problems and exploit the business potentials. The different phases in DAPs are:

Diagnosis of problem Problem definition

18

Potential analysis Action Planning Implementation Monitoring and Review Refinement of plan

Future Outlook and Strategies: Looking at the Financial indicators and the working of the Bank, a specific course of action is planned for:

Reduction in cost of funds Reduction in risk cost Reduction in transaction cost Increase in yield

Reduction in Cost of Funds: Aggregate deposits of the Jammu Central Coop. Bank Ltd are growing at all times though the rate of growth during certain periods in the past was more and during certain other periods it was less. But the concern of our bank is not growth rate perse but the changing composition of deposits portfolio. The volume of time deposits was growing at a faster rate then the demand deposits. One of the implications - the most significant one - is higher outgo in the form of interest on these deposits. This along with the decrease in the lending rates squeezes the margin available. To reduce the cost of funds, there is no other alternative but to alter the mix of deposits. The Bank has to mobilize more and more of savings and current account deposits. During the last two years Bank's Board has taken a policy decision not to encourage term deposits under reinvestment plan(under Money Multiple Deposit Scheme).Besides
1/2

extra interest incentive which the Bank was providing to its clients for the last many years stands withdrawn. Both these decisions checked the growth of Term Deposits. Whereas percentage of Term deposits (high cost deposits) was 66.85% as on 31st March 2005, it came down to 56.88% as on 31st March 2009.This changed composition of deposit portfolio decreased the interest cost of deposits as Rs.5.64 per hundred rupees during 2008-09 as against Rs.7.21 per hundred rupees during 2004-05.

19

Reduction in Transaction/Risk Cost: A major part of transaction cost is related to payments to be made to staff. It may not be possible to reduce these costs in absolute terms. Some of the costs like Stationery, Telephones, Travelling expenditure may be brought down in absolute terms. But then the reduction may not be very significant. Bank has to ensure that at least the increased business does not carry proportionate increase in transaction cost. In the Development Action Plan for the year 2005-06 & 2006-07, COM is projected at Rs.2.33 and Rs.2.03 respectively as against Rs.2.49 per hundred rupees ending 31st March 2005. Keeping in view the past experience and freezing of fresh appointments in the Bank, it would not be difficult to achieve the target. Increase in Yield:

In view of the stagnant credit absorption capacity of Primary Agricultural Cooperative Societies, the Bank has to diversify its loan portfolio and to search for high yield loans to increase the proportion of such assets in the total portfolio. Two possible courses of action are :o

To give larger loans by meeting the credit requirements of customers in full and

to build a loan portfolio which consists of both long term and short term loans.

Managerial talent in the JCCB is more synonymous with deposit mobilization capacity instead of "COMPLETE BANKERS" with ability of asset liability management skills. The emerging scenario shall be changed. The talent shall be nurtured and recognized more on the lines of raising resources for profitable deployment, Training infrastructure along with technology support shall be geared up.

Recovery of interest income is another factor that affects the yield. Bank shall pay greater attention towards monitoring of regular payment of interest by the borrowers. This would be achieved by reducing the NPAs of the Bank. Process of recovery of JAKFED's default is in the pipeline and likely to be finalized during the current financial year. This would not only reduce the accumulated losses of the bank but recycling of funds (Rs.62.04 Crores) would further generate interest

20

income for the Bank. In view of this, the Bank is likely to comply with the provision of Section 11(i) of the B.R. Act.1949 (AACS) by the end of March 2007.

Another area of concern is "judicious cash management and management of funds. Opportunities for earning income are lost by lack of proper MIS, insufficient cash handling procedures, ineffective remittance mechanism and irregular monitoring system. By focusing attention on improving the funds management system bank would be in a position to maximize the returns from investments with negligible incremental transaction cost.

Audit Classification/ NABARD Classification: Bank is continuously being classified under "D" Category by the Audit Team constituted by the Cooperative Department. Reasons are high level of overdue and accumulated losses (mainly due to JAKFED's default as not only the level of overdues increased but non recycling of these funds also affected the further increase in interest income of the Bank, resulting into increase in accumulated losses) Human Resource Development Programmes: Key inputs which would make Bank's planning as successful are those pertaining to human resources and these are being taken care of. Taking stock of the volume and quality of the human resources available, the future requirements of the Bank in accordance with the profile of business anticipated in the next few years shall be planned for. Training and equipping the staff with relevant expertise for future shall be an integral part of the plan. Computerization: Bank in 1997-98 had set up its first fully computerized branch in Jammu in its new Central Office Complex with a concept ofServing one to one basis". Uptill now 9 branches in Jammu City, besides all the District Offices stands already computerized. Bank intends to have all its District Head Quarter branches fully computerized. Ensuring continued Public confidence: Bank had been in the past taking steps to improve public confidence and in 2003-04, set up its first ATM at Parade Branch in collaboration with Bank of Punjab Ltd.Another ATM has been installed at Rail Head Branch during

21

2004-05.Clients of the Bank having ATM Card, can now operate through ATMs of Bank of Punjab Ltd, all over India. Bank intends to open more such ATMs in other City Branches. Vision 2005-2010: Any vision statement refers to a complete set of dispositions that evolve entire trend of futuristic view. Vision is a combination of vista (V) of any imaginary (I) situation based on impulses, synthesized and synergized (S) with intuition (I), optimism (O) and novel (N) ideas for FUTURE. The life of every individual is guided by the vision he has for the future and the mission for him is to achieve the same. It is more pertinent for an institution as well as any structure to have a clearly defined vision and determined mission to reach the goal. Vision The Jammu Central Co-operative Bank dedicates itself to all round of growth of PACS by providing required credit to them. It also swears to serve the general public by extending improved banking services and enhanced credit dispersal better than any other banking channel. Mission The Jammu Central Co-operative Bank shall have the visionary look and missionary zeal to achieve its awarded objectives. The Bank shall fine tune its functioning to challenge the competitive on slaught from the commercial Banks and Regional Rural Banks. For developing a mission, there shall be a two step process:Corporate Mission As a corporate process, the uniqueness and distinct culture of the Jammu Central Cooperative Bank is our experience specialization in the field of agricultural credit and vast clientele base. Therefore, as a corporate mission, our focus would be agricultural finance and needs of the rural people. In light of above, the corporate mission would be to double the flow of Agriculture Credit during the next three years.

22

Organization Mission The organizational mission would be to inculcate sense of belongingness by

bringing professionalization in true sense to introduce and upgrade technology based skill with human face and strengthen its resource base by broadening its customer base.

BOARD OF MANAGEMENT:
The Board is the Governing Body of the Bank to whom the management of the affairs of the Bank is entrusted. Formerly, the Bank was having a nominated Board but after 3 rd September 2001 there is duly elected Board of Directors of the bank .The strength of elected members of the Board does not exceed sixteen members. The Board is elected as follow: Members representing individual Share holder not exceeding one. Members representing the share holding Primary Agricultural Credit Societies not exceeding twelve, elected two from each district by his class of member societies from his District. Members representing share holding non agriculture credit societies not exceeding one. Members representing share holding Marketing Societies not exceeding one. Members representing other share holding societies not falling in any of the above category not exceeding one.

Of the above two seats are reserved for the members who belong to the Scheduled Castes and other backward classes & one for a women representative. If no such persons are elected the elected members may co-opt the required number of persons entitled to such representation with the approval of the registrar. Chief-Executive is the Ex-office Member Secretary of the Board. Besides Govt. nominees as may be nominated in accordance with Act and the seat shall be reserved for the nominees of J&K state Cooperative Bank and National Cooperative Development Corporation.

23

The term of office of all the elected members of the Board is three years from the date of election. Should the election be not conducted by the Competent Authority before the expiry of the term, the term of the Board shall be deemed to have been extended until such time within which the Competent Authority as prescribed under the Act and Rules get the elections conducted.

24

Organizational Structure of Head Office

CHAIRMAN AND BOARD OF DIRECTORS MANAGING DIRECTOR DY.GENERAL MANAGER (Banking) ASST.GENERAL MANAGER (Administration) DY.GENERAL MANAGER (INSPECTION)

Head Office: 1) Mr. Mohinder Singh, Chairman 2) Mr. Arun Bakshi, Managing Director 3)
Mr. C.M. Arora, Deputy General Manager (Banking)

4) Sh.Madan Lal Sharma, Deputy General Manager (Inspection) 5) Mr. Roshan Lal Chaudhary,
Asstt. General Manager.(Administration)

6) Mr. Ganesh Chander Sharma

Asstt. General Manager (Inspection & Vigilance) 7) Mr. Abdul Qyoom Asstt. General Manager (Loan)
25

Area Offices:
1) Sh. H. L. Bhagat. Distt. Manager Jammu (Head Office, Parade Branch) 2) Sh. Janak Raj Distt. Manager, Kathua 3) Sh. Ashwani Kumar Sharma Distt. Manager, Udhampur 4) Sh. Sansar Chand Distt Manager, Doda 5) Sh. Parmanand Distt. Manager, Rajouri 6) Sh. Nanak Chand Distt. Manager, Poonch

Head Office Premises: The Head Office of THE JAMMU CENTRAL CO-OPERATIVE BANK LIMITED is located at SEHAKRI BHAWAN, RAIL HEAD COMPLEX, JAMMU. It was inaugurated by Dr. Farooq Abdullah, Honble Chief Minister J&K, on 9th December, 1977.

26

BRANCH NETWORK:

Di District Jammu Udhampur Doda Rajouri Poonch Kathua

Branches 27 10 09 08 04 08

Sections of Head Office: 1) Banking 2) Administration (Admn +BP&D) 3) Inspection and loans

Functions of Banking: Compiling of Statutory and Non Statutory returns General Statistics of the bank Branch Accounting Branch Control Reconciliation Banks/Branches Investments/Borrowings Computer section To prepare review note To prepare budget To prepare/regular interest rates on advances/deposits Asset Management Commercial Banking, Retail Banking

27

 Diversification Business operations including Deposit Borrowings Regulation Authorities Forecasting Image Building

Functions of Administration +BP&D: Recruitment Training with officers Postings Disciplinary Action Stationary Printing/Stocking Record Keeping Asset Management Bank security Board matters Co-ordination /employees(Association) Meetings Arranging Tour Program/Diaries Insurance of Employee/Vehicle/Building.etc Vehicle Maintenance & Repairs Building Maintenance & Repairs Purchase of Safe Fixture & Furniture

Function of Inspection & Loans: Inspection of branches Audit Statutory/Non statutory by NABARD & compliance thereof etc. Customer complaints Society Inspection/Audit All type of loans Field Monitoring
28

 Loan supervision Returns pertaining to loans and advances Others matter relating to SLBC & DRDA meetings Women Dev.cell Monitoring of recoveries of loans over dues & NPAs

29

CHAPTER-IV

OBJECTIVE OF THE STUDY

30

Objectives of the Study

1. The primary objective of the study is to know about the satisfaction of customers with reference to car loans. 2. To study the impact of personal selling on sales of car loan product. 3. To study the problems encountered in selling this product. 4. To suggest remedial measures, if required. 5. To understand how they deal with the car loans in overall.

31

CHAPTER-V

RESEARCH METHODOLOGY

32

RESEARCH METHODOLOGY
Research approach and Methodology

It is a documentary process for management of projects that contains procedures, definitions and explanations of techniques used to collect, store, analyze and present the information as a part of research process. TYPE OF RESEARCH Descriptive method has been used in this research for the collection of data. As the research is related to the study of consumer behavior, which can more effectively be studied through direct question. Descriptive research includes surveys and fact-finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. In social sciences and business research we quite often use the term Ex post facto research for descriptive research studies. The main characteristic of this type of method is that the researcher has no control over the variables; he can only report what has happened or what is happening. Most ex post facto research projects are used for descriptive studies in which the researcher seeks to measure such items as, for example, frequency of shopping, preferences of people, or similar data. The methods of research utilized in descriptive research are survey methods of all kinds, including comparative and co- relational methods.

SOURCES OF INFORMATION

The report mainly consists of primary data gathered through the schedule of questions asked to the respondents directly. Information about the company, its

33

product/ services, features and market share were obtained from the bank and form other secondary sources such as magazines, journals, annual reports etc. The interviewer approached the respondents as if the was the marketing executive of the bank and questionnaire was formulated. The answers, queries and responses were noted down from each respondent and accordingly the results were formed. Geographical area of the study: The data collection for this project is restricted to the Doda city. Statistical Tools:

Tools are used for tabulation of data, percentages are drawn for generalizing the study and graphs are used for having better pictorial representation. Sampling Plan: Population of the Sample: The population of the interest was DODA. A random sample design was used. Judgment sample was also done to ensure maximum coverage of The Jammu Central Co-Operative Bank customers. Sample Size: A sample of 50 respondents was taken from different places like Govt offices, College, hospitals, local places and in some shopping centers of the area.

34

Comparative analysis of the various banks in Doda.

(1) Head on comparison and the features of The Jammu Central Co-Operative Bank with its competitors in the District.

S. No. 1.

Name of the Bank The Jammu Central Co-Operative Bank

Tenure Up to 3 Years Above 3 to 5 Years Up to 3 Years

Rate of Interest 11% 11.5%

2.

State Bank of India

9.25% Above 3 to 5 Years 11.25% floating 3. Punjab National Bank Up to 3 Years 11% fixed Above 3 to 5 Years 11% fixed 4. J & K Bank Up to 3 Years 12.75% Above 3 to 5 Years 13.25%

Analysis:- It is evident from above table that The Jammu Central Co-Operative Bank levy high rate of interest compared to its arch rival competitor state bank of India. If it is allowed for more time that the Bank will loose the hold of the potential customers. Therefore efforts must be raised by the bank management to reduce the rate of interest.

35

(2) Margin Money required for availing the scheme

30% 25% 20% 15% 10% 5% 0% JCC SBI J&K PNB

Series1

Analysis:- From the graph it is observed that the margin money required for the sanction of loan of various banks is as:

The Jammu Central Co-Operative Bank J&K Bank Punjab National Bank State Bank of India

=25% =20% =25% =25%

Inference:- It is evident that margin money required is high. In order to make more influence on potential customer the bank management should take steps in order to reduce the margin money.

36

(3)Repayment period of the schemes for different banks:

8 7 6 5 4 3 2 1 0 JCC J&K SBI PNB Series1

Analysis: - From the graph it is observed that the maximum repayment period of various banks is listed as: The Jammu Central Co-Operative Bank J&K Bank Punjab National Bank State Bank of India =5years =1yrs to 7yrs =5years =7years

Inference: - It is inferred that the Jammu Central Co-Operative Bank offers only 5 years to maximum repayment period while some of its competitors offer 7 years. This in order to make the scheme more competitive, the management should made efforts to increase the repayment period to 7 years form 5 years which is crucial and important step.

37

(4) Security required by the various banks

S.NO

SECURITY

BANKS

1.

Hypothecation

2.

Third Party guarantee

3.

In addition to above 2 Points. All banks obey these criterias.

One

can

keep

liquid

security

FDR/LIC/ Bank approved shares in demat form etc.

Analysis: - Under security, all the banks obey stated features.

38

(5) Eligibility required for availing loan from different banks

S.No 1.

ELIGIBILITY Employees of Government / semi Government undertaking

BANKS

2. 3. 4. 5. 6. 7. 8.

Autonomous bodies Public sector undertakings Individuals Proprietorship concerns Firms Limited Companies Recognized schools / Colleges. All banks obey these criterias for the sanction of loan.

9.

Having regular and known sources of income

Analysis: - It is evident that for eligibility all bank obey the above described criteria for the sanction of loan.

39

(6) Added information about the other banks.

(a) Jammu and Kashmir Bank.. 1. J&K Bank also provides finance to second hand cars under True Value Scheme of Maruti Udyog Limited. 2. It charges interest rate of PLR +2.5%. 3. The repayment period is 5 years. 4. Maximum finance for second hand cars under True Value Scheme is 6 Lacks. 5. Margin money required is 25%.

(b) In addition PNB and SBI also provided finance for second hand cars.

40

CHAPTER-VI

ANALYSIS & INTERPRETATION

41

(1):- Age group of the respondent?

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 20-30 30-40 40-50 above 50 Series1

Analysis:- It is evident from the graph that the age group of the respondents is as:

20-30 30-40 40-50 Above 50

= 20% = 40% = 24% = 16%

42

(2) Monthly income of the respondents who have availed the loan facility?

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 8000-10000 10000-15000 15000 & above Series1

Analysis: - It is evident from the graph that the monthly income of the respondents is as:

Rs8000---Rs 10000 =23% Rs10000---Rs 15000 =32% Rs15000 and above =45%

43

(3):- Do you own a car?

Yes No

= 70% =30%

80% 70% 60% 50% 40% 30% 20% 10% 0% Yes No Series1

Analysis: - Above graph shows 70% of the respondent had own the car whereas 30 % had not owned the car.

44

(4):- Do you know the JCC Bank car loan scheme?

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Aware Unaware Series1

Analysis: - Above graph shows 78% of the respondent are aware about the car loan scheme whereas 22 % doesnt have the clear idea about the scheme.

45

(5):- Through which media you came to know about the scheme?

70% 60% 50% 40% 30% 20% 10% 0% Print media Electronic media Bank branches Series1

Analysis: - From the graph the main source of knowledge about the awareness of scheme is:

Print Media Electronic Media Bank Branches

=34% =08% =58%

46

(6):- If you dont own a car, are you interested to buy one?

80% 70% 60% 50% 40% 30% 20% 10% 0% Yes No Series1

Analysis: - Above graph shows that 67% of the respondent are interested to buy the car whereas 33% are not

47

(7):- Will you go through finance?

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Yes No Series1

Analysis: - Above graph shows that 80% of the respondent are willing to go through finance whereas 20% are not

48

(8) Awareness about the car loan scheme of other bank?

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% aware unaware Series1

Analysis: - The above chart shows that 87% of people are aware about the car loan schemes of other banks while 13% are unaware about the same.

49

(9) Sources of knowledge about awareness of schemes of other bank?.

70% 60% 50% 40% 30% 20% 10% 0% Print media Electronic media Bank branches Series1

Analysis: - From the graph the main source of knowledge about the awareness of other banks is:

Print Media Electronic Media Bank Branches

=26% =09% =65%

50

(10) Rating of The Jammu Central Co-Operative Bank car scheme with other banks?

60% 50% 40% 30% 20% 10% 0% Good Satisfactory Can improve Extremely bad

Series1

Analysis: - From the graph the rating of Jammu central co-operative bank with other banks is as:

Good Satisfactory Can improve Extremely Bad

=23% =28% =49% =0.0%

51

(11) Reasons for not availing the car loan?

60% 50% 40% 30% 20% 10% 0% HRI MM SRP AO WBF

Series1

HRI MM SRP AO WBF

=High rate of interest =Margin Money =Short Repayment Period =Already Owns a car =Will buy in near future

Analysis: - From the graph it is clear that the reasons for not availing the car loan are as: High rate of interest Margin Money Short Repayment Period Already owns a car Will buy in near future =55% =12% =18% =9% =6%

52

CHAPTER-VII

RECOMMENDATIONS AND SUGGESTIONS

53

Recommendations and suggestions

From the fore going process, it is important for the bank to establish a system for the continuous creation of high customer satisfaction. The following measures are recommended to create growing customer base:1. First of all the bank should over haul the scheme to make it more competitive than the other banks. The bank has to definitely reduce the rate of interest, decrease the margin money and increase the time for the repayment period. 2. They should not put any ceiling on the maximum finance so that people can easily avail the loan for luxury sedans. 3. The bank should also provide the loan for the second hand cars in order to create strong customers base with hand in hand to Marutis Authorized Dealers under True Value Scheme 4. Print media adverting should be done effectively so as to move the customers to higher levels in the decision process for using the finance scheme. 5. The bank needs to go for aggressive marketing of its products and requires increasing the awareness level among the customers. 6. Definitely personal selling helps in increasing the sales and clears the confusion about the scheme among the customers. So bank should keep a separate force for telling the schemes and policies of the same. It will definitely help the bank. 7. Employees of the bank must be trained to treat the customers more courteously and to be more responsive towards their needs and expectations. As the satisfied customers will bring in more customers.

54

CHAPTER-VIII

LIMITATIONS

55

Limitations of the study:

After conducting the study and research, I found many limitations, some of them are as follows: Time factor was the major limitation. The findings of the report have been made in Doda. Care should be taken in generalizing the report for other places. The bias of the respondents may have introduced errors in the survey findings. Cost factor is the another constraint in my study. The data provided by the bank officials was not update hence cant be completely relied upon. The research study (may not) detect the true official position of the concern.

56

CHAPTER-IX

CONCLUSION

57

Conclusion
Even though The Jammu Central Co-Operative Bank enjoys a satisfactory market share and customer loyalty but still it is not able to tap the potential customers because of the certain loopholes in the scheme. With the result customers are shifting to State Bank of India particularly for car loans as their scheme is more attractive and their severe advertising has caused the results. The rate of interest, margin money of The Jammu Central Co-Operative Bank is high in comparison with competitors. The repayment period and maximum finance offered is also less with the result people wanting fewer amounts in installments and those who want to buy luxury sedans goes out of reach of bank. As evident the formalities required are less and the net annual income for availing loan is only Rs 75000, which is healthy for the bank. The Jammu Central Co-Operative Bank should also start financing second hand cars in order to laurel more customers. In addition it should find tools to counter Rs 2599 of State Bank of India which is taking the toll in the area and has kept the space of the mind of the potential customers busy.

58

CHAPTER-X

BIBLIOGRAPHY

59

Bibliography

1. Marketing Management by Philip Kotler. 2. Marketing Management by Rajan Saxena. 3. Marketing Research by G.C Beri. 4. Annual Reports of The Jammu Central Co-Operative Bank 5. Yearly Journals of The Jammu Central Co-Operative Bank 6. Websites of The Jammu Central Co-Operative Bank www.jcc.org.in Ltd. Ltd.

60

Questionnaire
1. Name_____________________________________________ 2. Age Group: (a) 20-30 years____________ (c) 40-50 years____________ 3. Income Bracket: (a) 8000-10000_________ (c) 15000-20000_________ 4. Do you own a car? (a) Yes___________ (b) No___________ (b) 10000-15000__________ (d) Above 20000__________ (b) 30-40 years____________ (d) Above 50 years__________

5. Did you know about the The Jammu Central Co-Operative Bank car loan scheme? (a) Yes___________ (b) No___________

6. Through which media, you came to know about the scheme: (a)Print Media___________ (b) Electronic Media ___________ (c) Bank Branches________ 7. If you do not own a car, are you interested to buy one? (a) Yes___________ 8. Will you go through finance? (a) Yes___________ (b) No___________ (b) No___________

9. Are you aware about the scheme of other banks?

61

(a) Yes___________

(b) No___________

10. Sources of knowledge about awareness of schemes of other bank. (a) Print media_____________ (c) Bank Branches______________ 11. Rating of The Jammu Central Co-Operative Bank (a) Good___________ car loan scheme with other banks: (b) Electronic media ___________

(b) Satisfactory___________

(c) Can improve___________ (d) Extremely bad___________ 12. Reasons for not availing the car loan: (a)High rate of interest________ (b) Margin money_________ (c)Short repayment period_______ (d) Already owns a car___________ (e) Will buy in future_____________

62