RESEARCH PROJECT

REPORT
ON
RETAIL BANKING

UNDER
SUBMITTED BY
OF

THE

SUPERVISION

DECLARATION

I, PRIYANKA, hereby declare that I have carried out project report

on Topic RETAIL BANKING OF ALLAHABAD BANK in
Rajpura. I further declare that project work is my original work and
no part of this report has been published or submitted to anybody
or university for award of any other degree or Diploma.

PRIYANKA BATRA
M.COM(SEM 2)

ACKNOWLEDGEMENT
The extensive endeavour, bliss and euphoria that accompany the successful
completion of the task that would not be complete without the expression of
gratitude to the people who made it possible .I take this opportunity to
acknowledge all those who guided ,encouraged and helped me in winding up
this project.
I am very thankful to Mrs. SARIKA(H.O.D,COMMERCE deptt.) ,who gave
me guidance throughout my Project work. I would also like to extend my
feelings of gratitude towards my faculty mentor Dr.MUNISH WAYYAR,for his
constant guidance, support and correcting where I was wrong. I thank them with
full zeal and enthusiasm that they gave this big opportunity to me.

PRIYANKA BATRA
DATEPLACE-

M.COM(SEM 2)

TABLE OF CONTENT
PAGE NO.

CHAPTER-1 Introduction

1-27

Introduction

1-1

About Allahabad bank

1-5

CHAPTER-2 Literature Review

28-39

CHAPTER-3 Research Design

40-42

3.1 Research methodology

40-40

3.2 Research design

41-41

3.3 Method of data collection

41-42

CHAPTER-4 Data Analysis and Interpretation

43-51

CHAPTER-5

52-54

5.1 Findings

52-52

5.3 Conclusion

53-

53
5.3 suggestion

54-54

CHAPTER-6

55-55

Bibliography

55-55

INTRODUCTION OF THE TOPIC

1.1 RETAIL BANKING:

Retail banking is, however, quite broad in nature - it refers to the dealing of
commercial banks with individual customers, both on liabilities and assets sides of the
balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages,
loans (e.g., personal, housing, auto, and educational) on the assets side, are the more
important of the products offered by banks. Related ancillary services include credit
cards, or depository services.
The issue of retail banking is extremely important and topical. Across the globe,
retail lending has been a spectacular innovation in the commercial banking sector in
recent years. The growth of retail lending, especially, in emerging economies, is
attributable to the rapid advances in information technology, the evolving
macroeconomic environment, financial market reform, and several micro-level demand
and supply side factors.
India too experienced a surge in retail banking. There are various pointers towards
this. Retail loan is estimated to have accounted for nearly one-fifth of all bank credit.
Housing sector is experiencing a boom in its credit. The retail loan market has decisively
got transformed from a sellers market to a buyers market. All these emphasize the
momentum that retail banking is experiencing in the Indian economy in recent years.
Retail banking refers to provision of banking services to individuals and small business
where the financial institutions are dealing with large number of low value transactions.
This is in contrast to wholesale banking where the customers are large, often
multinational companies, governments and government enterprise, and the financial

institution

deal

in

small

numbers

of

high

value

transactions.

The concept is not new to banks but is now viewed as an important and attractive
market segment that offers opportunities for growth and profits. Todays retail banking
sector is characterized by three basic characteristics:

Multiple products (deposits, credit cards, insurance, investments and securities)

Multiple channels of distribution (call center, branch, and internet)

Multiple customer groups (consumer, small business, and corporate).

SCOPE FOR RETAIL BANKING IN INDIA:

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 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.

Drivers of Retail Growth:

CHANGING CONSUMER DEMOGRAPHICS

Growing disposable incomes

Youngest population in the world

Increasing literacy levels

Higher adaptability to technology

Growing consumerism

Fiscal incentives for home loans

Changing mindsets-willingness to borrow/lend

Desire to improve lifestyles

Banks vying for higher market share

Future of Retail Banking:

The accelerated retail growth has been on a historically low base.

Penetration continues to be significantly low compared to global bench marks.

Share of retail credit expected to grow from 22% to 36%.

Retail credit expected to grow to Rs.575, 000crs by 2010 at an annual growth rate
of 25%.

Dramatic changes expected in the credit portfolio of Banks in the next 5 years.

Housing will continue to be the biggest growth segment, followed by Auto loans.

Banks need to expand and diversify by focussing on non urban segment as well as
varied income and demographic groups.

Rural areas offer tremendous potential too which needs to be exploited.

Challenges:

Sustaining Customer loyalty.

NPA reduction & Fraud prevention.

Avoiding Debt Trap for customers.

Bringing rural masses into mainstream banking.

Why customers choosing bank more than post office, mutual funds,
shares etc.?

Security

They dont have any risk

The rate of interest is higher than post office

Facilities are more

Available at any place

Satisfaction of customer is higher

PROCESSING CHANNELS
Banks offer many different channels to access their banking and other services:

A branch is a retail location.

ATM is a machine that dispenses cash and sometimes takes deposits without the
need for a human bank teller. Some ATMs provide additional services.

Mail: Most branches accept check deposits via mail and use mail to communicate
to their customers, eg: by sending out statements.

Telephone banking: It is a service which allows its customers to perform

transactions over the telephone without speaking to a human.

Call center: To help the customers about any sort of problems.

Online banking: It is a term used for performing transactions, payments etc. over
the internet.

Mobile banking: It is a method of using ones mobile phone to conduct banking

transactions.

Video banking: It is a term used for performing banking transactions or

professional banking consultations via a remote video and audio connection.
Video banking can be performed via purpose built banking transaction machines
(similar to ATM), or via a video conference enabled bank branch.

RISK INVOLVED IN RETAIL BANKING

There are of course, considerable risks in retail banking. They are:

Databases on credit history are large.

Collection mechanisms are poor.

Investments in technology are large.

Operating efficiency levels needs to be very high.

Unlike corporate banking, retail banking involves a large number of accounts.

Demands on processing capabilities are higher.

Retail segment is not something you can get into overnight.

The right systems and right architecture needs to be put in place first

1.2 About Allahabad bank

Allahabad Bank was founded by group of Europeans on April 24 1865. The Allahabad
Bank has a history of 3 centuries. The Allahabad Bank is the oldest joint stock Bank in
India. Due to business considerations the head office of Allahabad Bank was shifted to

Calcutta (now Kolkatta) in 1923. In March 2007 the business of Allahabad bank has
reached to a mark of 150000 crores.
The Allahabad bank has main branches in Kanpur, Lucknow, Nanital, Kolkatta, Jabalpur,
Meerut, Nagpur, Mumbai, and New Delhi. The Chairman and Managing Director of
Allahabad Bank is Sri K.R. Kamath. Sri K.K. Agarwal and Sri J.P. Dua are the executive
directors of Allahabad Bank.
The Allahabad bank offers its services to self-employed persons, Professionals, salaries
employees, businessman. The Allahabad bank offers three kinds of products Deposit
products, Retail Credit Products and Other Credit Products. The Flexi-fix Deposit, Rs.5
Banking, Tax Benefit Term Deposit are some of the famous Deposit Products of the
Allahabad Bank.
The Allahabad Bank also offers its services to NRI customers. It offers International
Banking facility for its NRI customers. The deposit schemes, tax benefits schemes,
remittance facility, forex services are offered by the Allahabad Bank. The NRI services
are available in 312 branches of the Allahabad Bank all over the country.

Philosophy of the Bank

The highest standards of ethical conduct and honest.

Accurate, Fair, Full, Sensible and timely disclosures in reports.

Compliance with laws, regulations and rules.

Nineteenth Century
The Oldest Joint Stock Bank of the Country, Allahabad Bank was founded on April 24,
1865 by a group of Europeans at Allahabad. At that juncture Organized Industry, Trade
and Banking started taking shape in India. Thus, the History of the Bank spread over
three Centuries - Nineteenth, Twentieth and Twenty-First.
April 24, 1865's

The Bank was founded at the confluence city of Allahabad by a

group of Europeans.

Twentieth Century

1920's

The Bank became a part of P & O Banking Corporation's group

1923

with a bid price of Rs.436 per share,

The Head Office of the Bank was shifted to Calcutta on Business

July 19, 1969

considerations.
Nationalized along with 13 other banks, Branches - 151 Deposits

October, 1989
1991

- Rs.119 crores, Advances - Rs.82 crores.

United Industrial Bank Ltd. merged with Allahabad Bank.
Instituted Allahabad Bank Finance Ltd., a wholly owned
subsidiary for Merchant Banking.

Twenty-First
October, 2002

Century
The Bank came out with Initial Public Offer (IPO), of 10 crores
share of face value Rs.10 each, reducing Government

April, 2005

shareholding to 71.16%.
Follow on Public Offer (FPO) of 10 crores equity shares of face
value Rs.10 each with a premium of Rs.72, reducing Government

June, 2006

shareholding to 55.23%.
The Bank Transcended beyond the National Boundary, opening

Oct, 2006
February, 2007

Representative Office at Shenzen, China.

Rolled out first Branch under CBS.
The Bank opened its first overseas branch at Hong Kong.

Vision
To put the Bank on a higher growth path by building a Strong Customer-base through
Talent Management, induction of State-of-the-art Technology and through Structural Reorganization.
Mission

To ensure anywhere and anytime banking for the customer with latest state-of-the-art
technology and by developing effective customer centric relationship and to emerge as a
world-class service provider through efficient utilization of Human Resources and
product innovation

RETAIL BANKING IN ALLAHABAD BANK

PERSONAL BANKING
1. DEPOSIT PRODUCTS
2. OTHER CREDIT
3. ACCOUNT PORTABILITY
4. DECEASED DEPOSITORS
5. RETAIL CREDIT

SOCIAL BANKING

1. FINANCIAL INCLUSIONS
2. CREDIT FACILITIES
3. PRIORITY SECTOR

MSME BANKING
1. FINANCE TO TRADERS
2. COMMERCIAL VEHICLE FINANCE
3. FINANCE TO DOCTORS
4. WEAVES CREDIT CARD(WCC)
5. LAGHU UDYOGOMI CREDIT(LUCC)
6. ARTISAN CREDIT CARD(ACC)
7. REVISED GCC SCHEME

RETAIL CREDIT PRODUCTS

1. HOUSING & FURNISHING LOAN
2. DREAM CAR LOAN
3. COMMERCIAL VEHICLE FINANCE SCHEME
4. TRADE LOAN
5. PROPERTY LOAN
6. RENT LOAN
7. HOME APPLIANCE FINANCE SCHEME
8. EDUCATION LOAN
9. GYAN DIPIKA SCHEME
10. SARAL LOAN

CORPORATE BANKING
1. CASH MANAGEMENT
2. GOLD CARD SCHEME

INTERNATIONAL BANKING

1.OVERVIEW

Allahabad Bank is oldest nationalized Bank with rich experience in

extending various banking solutions to our valued clients since 1865. Our
consistent track record of growth with profit provides the confidence of
meeting all your Banking requirements.
Allahabad Bank is well spread out in India and one overseas Branch at
Hong Kong, besides a Representative office at Shenzhen, China. Bank has
also arrangements with correspondents at various important overseas
locations, which will ensure extending to all our NRI customers rich
banking experience.

We understand your needs and value your patronage and would request you
to invest your surplus funds in the various products offered by our Bank.
2.NON RESIDENT
NOT AN NRI
DEPOSIT ACCOUNT
NRI DEPOSIT FAQ
ACCOUNT OPENING
REMITTANCE FACILITY
TAX BENEFITS
EXPORT FINANCE
OVERSEAS BANKING

OTHER SERVICES

1.INSURANCE

REPOSITORY

SERVICES

CENTRAL INSURANCE LIMITED(CIRL)

2. INSURANCE & MUTUAL FUND
3. GOVERNMENT BUSINESS
4. DEPOSITORY SERVICES
5. E-PRODUCTS
6. CARDS

IN

ASSOCIATION

WITH