1 History of Indian Banking Sector:As early as 2000 B.C., the Babylonians has developed a banking system.

There is evidence to show the temples of Babylon were used as banks. After a period of time, there was a spread of irreligion, which soon destroyed the public sense of security in depositing money and valuable in temples. The priests were longer acting as financial 45 agents. The Romans did minute regulations, as to conduct private banking and to create confidence in it. Loan banks were also common in Rome. From these the poor citizens received loans without paying interest, against security of land for 3 or 4 years. However, upon the revival of civilization, growing necessity forced the issued in the middle of the 12th century and banks were established at Venice and Genoa. The Bank of Venice established in 1157 is supposed to be the most ancient bank. Originally, it was not a bank in the modern sense, during simply an office for the transfer of the public debt. Again the origin of modern banking may be traced to the money dealers in Florence, who received money on deposit, and were lenders of money in the 14th century and also in 1349, the business of banking was carried on by drapers of Barcelona. In India, as early as the Vedic Period, banking in most crude from existed. The books of Manu contain references regarding deposits, pledges, policy of loans, and rate of interest. True, the banking in those days largely mint money lending and they did not know the complicated mechanism of modern banking. This is true not only in the case of India but also of other countries. Although, the business of banking is as old as authentic history, banking institutions have since than changed in character and content very much. They have developed from a few simple operations involving the satisfaction of a few individual wants to the complicated mechanism of modern banking, involving the satisfaction of capital slowly seeking employment and thus providing the very life blood of commerce.

The origin of word BANK:The word Bank itself derived from the word bancus or banque that is French. There were others of the opinion that the word Bank is originally derived from the German word back meaning joint for which was Italianized into banco.

1.2Banking System of India:Reserve Bank of India

Commercial Banks

Regional Rural Banks

State Co-operative Banks

Foreign Commercial Banks

Indian Commercial bank Banks

Central / District Co-operative Banks Co-operative Banks Banks

Public Sector Banks

Private Sector Banks (PSB)

State Bank Group

Nationalized Banks

New PSB

Old PSB

Subsidiary Banks

State Bank of India

Chart 1

Reserve Bank of India:The Hilton-young commission, appointed in 1926 has recommended the necessity of centrally empowered institution to have effective control over currency and financial transaction in the country. Accordingly, the Government had then passed Reserve Bank of India Act, 1934 and established the Reserve Bank of India with effect from 1st April 1935. The principal aim behind this was to organize proper control over the currency management in the interest of country benefits and to maintain financial stability. With this, the RBI mainly looks after the following important functions: To keep effective control over creation and currency supply To control the Banking transaction of Central and State Government To act as central administered Authority of all other banks in the country To organize control over Foreign Currency Transaction To assist for improvement in financial aspect of the country.

Nationalized Banks:Nationalization of bank means the taking over by the government the ownership and management of the commercial bank. The government of India nationalized 14 major commercial banks with effect from JULY 19, 1969. At this time these banks had deposits aggregating Rs 2626.2 cores, accounting for 56% of the total deposits of the banking system in the country and 4168 offices comprising about 50% of the bank offices. Six other commercial banks were nationalized on April 15, 1980. Ever since then there has been a rapid growth in the banking industry. Some people as a bold and timely step by the government describe the nationalization of top 20 commercial banks. Name of the Banks: BANK OF BARODA BANK OF INDIA STATE BANK OF INDIA STATE BANK OF SAURASHTRA

State Bank of India & Group:The State Bank of India was established under the State Bank of India Act, 1955, the subsidiary banks under the State Bank of India (subsidiary Banks) Act 1959. The Reserve Bank of India owns the State Bank of India, to a large extent, and rest of the part is some private ownership in the share capital of State Bank of India. The state Bank of India owns the subsidiary banks.

Name of the banks: STATE BANK OF INDIA STATE BANK OF SAURASHTRA STATE BANK OF BIKANER STATE BANK OF MYSORE STATE BANK OF INDORE STATE BANK OF HYDERABAD STATE BANK OF PATIYALA

1.3 Structure of Indian Banking Industry

The banking structure in India can be classified into: 1. Public Sector 2. Private Sector 3. Foreign Banks

Public Sector:
Public sector banks have the Government as a majority shareholder. This segment comprises of SBI and its subsidiaries, other nationalized banks and regional rural banks. The public sector banks comprise more than 70% of the total branches.

Private Sector (old):

These banks existed prior to the promulgation of banking nationalization act but were not nationalize due to their smaller size and regional focus, most of these bank continue to have a regional focus and are relatively smaller in size. Large numbers of these banks are basically from the south. Being small in size, these banks focus on service and technology and thus face competition from new private and foreign banks. These banks are registered under Company Act, 1956. Basic difference between co-operative banks and private banks is its aim. Co-operative banks work for its member and private banks work for earn profit.

Private Sector (new):

The banking regulation Act was amended in 1993 permitting the entry of new private sector banks. The Act also specified certain criteria for establishing new private sector banks. These criteria are as follows: The bank should have a minimum net worth of Rs.1 bn. The promoters holding should be minimum 25% of the paid up capital. The bank should offer shares to the public within three years of their operation.

The first new private sector banks started in 1995. The minimum net worth requirement of Rs 1 bn. At present there are nine new generation private banks in the country. Many of these banks have been promote by the financial institutions. These banks lead the market of Indian banking business in very short period. Because of its variety services and approaches to handle customer and also because of long working hours and speed of services. This is also registered under the Company Act.1956.

Foreign Banks:
Foreign banks carry on normal commercial banking activity like any other Indian owned bank. They have confined their operation to mostly metropolitan cities, as per RBI regulation. Along with the nationalization of sector of some Indian banks, the entry of new foreign banks into Indian as well as expansion of the existing branches was prohibited. These restrictions were lifted in 1980 but RBI was yet slow in granting approvals. Foreign banks did not suffer but used technology to their advantage by doing many times more business from one branch than that done by nationalization banks of late, RBI has granted them approvals for expansion as well as for entry of new foreign banks are looking at expansion and diversification with hopes that the operating environment and major restriction will be relaxed, keeping with the liberalization were and GATT norms.

Co-operative Banks:Cooperative banks are owned by their customers and follow the cooperative principle of one person, one vote. Unlike credit unions, however, cooperative banks are often regulated under both banking and cooperative legislation. They provide services such as savings and loans to non-members as well as to members and some participate in the wholesale markets for bonds, money and even equities

1) State Co-operative Banks State Co-operative Bank means the principal Co-operative society in the state. The primary objective of which is the financing other co-operative societies in the state. 2) Central / District Co-operative Banks Central / District co-operative Bank means the principal co-operative society in a district, the primary objective of which is the financing of other co-operative in that particular district. 3) Primary / Urban Co-operative Banks The primary objective of principal business of which the transaction is of banking business and paid up share capital and reserve of which are not less than rupees 100,000 and bye-laws of which do not permit admission of any other co-operative society as a member.

1.4 Legal Framework

Co operative Banks in India are registered under The Co-operative Societies Act 1904. The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Cooperative banks in India finance rural areas under:

Farming Cattle Milk Hatchery Personal finance

Cooperative banks in India finance urban areas under:

Self-employment Industries Small scale units Home finance Consumer finance Personal finance This exponential growth of Co operative Banks in India is attributed mainly to their

much better local reach, personal interaction with customers, and their ability to catch the nerve of the local clients. Indian economy is substantially supported by cooperative sector through 5,25,000 cooperatives, 230 million members, assets worth INR 1.5 billion and presence in every sector of economy. 20th century remained milestone for credit and banking cooperative in India

1.5 Development of Cooperative Bank in India

The Co operative banks in India started functioning almost 100 years ago. The Cooperative bank is an important constituent of the Indian Financial System. They are the primary financiers of agricultural activities, some small-scale industries and self-employed workers The real commence of the cooperative movement in India began after the enactment of Cooperative Societies Act-1904. The basic objective of the establishment of cooperative credit societies in India was to provide to the farmers and rural poor that were not covered by commercial banks or any other institutional financing agencies. The first known mutual aid society in India was probably the Anyonya Sahakari Mandali organised in the erstwhile princely State of Baroda in 1889 under the guidance of Vithal Laxman also known as Bhausaheb Kavthekar. Urban co-operative credit societies, in their formative phase came to be organized on a community basis to meet the consumption oriented credit needs of their members. The enactment of Cooperative Credit Societies Act, 1904, however, gave the real momentum to the movement. The first urban cooperative credit society was registered in Canjeevaram (Kanjivaram) in the erstwhile Madras province in October, 1904. Amongst the prominent credit societies were the Pioneer Urban in Bombay (November 11, 1905), the No.1 Military Accounts Mutual Help Co-operative Credit Society in Poona (January 9, 1906), Gokak Urban (February 15, 1906) and Belgaum Pioneer (February 23, 1906), the Kanakavli-Math Cooperative Credit Society and the Varavade Weavers Urban Credit Society (March 13, 1906) in the South Ratnagiri (now Sindhudurg) district. The most prominent amongst the early credit societies was the Bombay Urban Co-operative Credit Society, sponsored by Vithaldas Thackersey and Lallubhai Samaldas established on January 23, 1906..

1.6 Current Status of Cooperative Banks in India

The cooperative banks in India, plays an important role even today in rural financing. The businesses of cooperative bank in the urban areas have also increased phenomenally in recent years due to the sharp increase in the number of primary co-operative banks. Though commercial bank had branches in urban and semi-urban areas, it did not cater to the needs of urban middle and lower class public due to several reasons. This inability of commercial banks led to the emergence of urban cooperative banks (UCBs). After enactment of the Cooperative Societies Act, the first UCB was founded in a small town in South India called Conjivaram in 1904. Over the years, primary (urban) cooperative banks have registered a significant growth in number, size and volume of business handled. As on 31st March, 2003 there were 2,104 UCBs of which 56 were scheduled banks. About 79 percent of these are located in five states, - Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu. Recently the problems faced by a few large UCBs have highlighted some of the difficulties these banks face and policy endeavors are geared to consolidating and strengthening this sector and improving governance.

Some facts about Cooperative banks in India

Some cooperative banks in India are more forward than many of the state and private sector banks.

The total deposits & lending of Cooperative Banks in India is much more than Old Private Sector Banks & also the New Private Sector Banks.

Banking sector Reforms:

After Independence in 1947, the government took the view that loans extended by colonial banks were biased toward working capital for trade and large firms. Moreover, it was perceived that banks should be utilized to assist Indias planned development strategy by mobilizing financial resources to strategically important sectors. Reflecting these views, all large private banks were nationalized in two stages: in 1969 and then in 1980. Subsequently, quantitative loan targets were imposed on these banks to expand their networks in rural areas and they were directed to extend credit to priority sectors. These nationalized banks were then increasingly used to finance fiscal deficits. Although nonnationalized private banks and foreign banks were allowed to coexist with public-sector banks at that time, their activities were highly restricted through entry regulations and strict branch licensing policies. Thus, their activities remained negligible. 1) Against this background, the first wave of financial liberalization took place in the second half of the 1980s, mainly taking the form of interest rate deregulation. Based on the 1985 report of the Chakravarty Committee, coupon rates on government bonds were gradually increased to reflect demand and supply conditions. 2) 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. 3) Following the 1991 report of the Narasimham Committee I, more comprehensive reforms took place that same year. The reforms consisted of: A shift of banking sector supervision from intrusive micro-level intervention over credit decisions toward prudential regulations and supervision; A reduction of the CRR and SLR; Interest rate and entry deregulation; Adoption of prudential norms (convergence of developing financing institutions to with commercial banks or non-bank financial institutions and an adoption of the integrated system of regulation and supervision.) 4) Further, in 1992, the Reserve Bank of India issued guidelines for income recognition, asset classification and provisioning, and also adopted the Basle Accord capital adequacy standards. The government also established the Board of Financial Supervision in the

Reserve Bank of India and recapitalized public-sector banks in order to give banks sufficient financial strength and to enable them to gain access to capital markets. 5) In 1993, the Reserve Bank of India permitted private entry into the banking sector, provided that new banks were well capitalized and technologically advanced, and at the same time prohibited cross-holding practices with industrial groups. The Reserve Bank of India also imposed some restrictions on new banks with respect to opening branches, with a view to maintaining the franchise value of existing banks. 6) Narasimham committee II (1998): a) To suggest necessary legislative changes for implementation of electronic funds transfer, with, inter alia, emphasis on: Encryption of Public Switching Telephone Network (PSTN) lines ; Admission of electronic files as evidence Treating Electronic Funds Transfers on par with crossed cheques / drafts for purposes of Income Tax etc. ; Record keeping ;

b) To recommend approaches for development of Intra-bank/Intra-city communication network to facilitate connectivity with VSATs c) To suggest ways to bring about computerization of Government accounts in an expeditious and efficient manner d) To work out modalities necessary for development and optimal utilisation of a secure, robust Wide Area Network (WAN) based on satellite with the necessary security systems, by banks and other financial institutions, to ultimately develop a sound and efficient payments system e) To examine methods by which technological upgradation in banks and financial institutions could be effected and in the context study the feasibility of establishment of standards, designing payments system backbone and standards relating to security levels, messages and smart cards by IDRBT. f) To make recommendations for development of data warehousing and data mining, with a view to creating opportunities for development of efficient Management Information System (MIS) in near future

g) To recommend guidelines for outsourcing of programs development and implementation work, and h) To make recommendations on any other related issues like assigning of risk weight of 2.5 per cent to cover market risk in respect of investments in securities outside the SLR by March 31, 2001 in addition to a similar prescription for Government and other approved securities by March 31, 2000, And Lowering of the exposure ceiling in respect of an individual borrower from 25 percent of the bank's capital fund to 20 per cent, effective April 1, 2000. The aim of Narasimham committee I & II was to bring about operational flexibility and functional autonomy respectively so as to enhance efficiency, productivity and profitability.

History of BMC Bank:

Each and every organization has a small or big history. On the basis of history one can judge the ability and position of bank. The history of BMCB is like the development from the zero. BANASKANTHA MERCANTILE CO-OPERATIVE BANK was established on 11th May, 1973 with a capital of Rs.60000 and membership of 27 persons under the leadership of Mr. Prahaladbhai R Shah as a Chairman. Bank has completed its 39 years. Today the bank has capital of Rs.2, 87, 59,050 with membership of 5777 persons. . The Banaskantha Mercantile Co-operative bank has made rapid growth from the starting to today. On 30-6-1974 the bank has total 459 members with the share capital of Rs.299500. The bank has given 4% dividend to the shareholders at that time. On 31-3-2011 the bank has total 5777 members with the capital of Rs.28759050. The bank has given 12% dividend to the shareholder. The HDFC bank is the middle bank for the BMC bank. The bankers of the BMC bank are as follows: State Bank of India, Palanpur and Deesa Branch The Mahesana Urban Co-operative Bank Ltd, Palanpur The Gujarat State Co-operative Bank Ltd, Ahmedabad The HDFC bank Ltd, Ahmedabad The Kalupur Commercial Co-operative Bank Ltd, Ahmedabad The Ahmedabad District Co-operative Bank Ltd, Ahmedabad The Banaskantha District Co-operative Bank Ltd, Palanpur and Deesa.

The Banaskantha Mercantile Bank has five branches. They are as follows: Branches Rajgathi, Palanpur Sardargunj, Palanpur Dhundhiyawadi, Palanpur Newgunj Bazaar, Palanpur Iqbalgath Deesa Branch. Year of Establishment 1973 1979 1991 1995 1995 2009 Phone Numbers 262708 253849 254243 252141 291441 02744-224122

Company Profile [BMCB]

NAME ADDRESS Commencement: Head - Office : Category: R.B.I. License No. Date of License: Chairman: Managing Director: Auditor: Motto E-Mail: Fax No. Phone No.: Banaskantha Mercantile Co-operative Bank Ltd. Sardargunj Road, Gathaman gate, Palanpur-385001 1973 Sardargunj, Palanpur Non Schedule ACD/GJ/267P 2nd May 1981 Mr. Pushkarbhai N Patel Bechardas D Patel Paragbhai B Malvi Values For Services, For Years bmcbank@sancharnet.in 02742-253145 02742-260274

Logo:

Organizational Structure:

Chairman

Vice Chairman

Managing Director

Joint Managing Director

Board secretary

General Manager

Senior Officer

Junior Officer

Clerks

Board of Directors:Name Shree Pushkarbhai N Patel Shree Bechardas D Patel Shree Devchandbhai B Patel Shree Rajanikant K Patel Shree Vinodchandra B Patel Shree Ishvarbhai A Patel Shree Dineshchandra R Modi Shree Rajendrakumar B Somani Shree Hirabhai P Patel Shree Maheshkumar P Patel Shree Karsanbhai L Patel Shree Natubhai I Patel Shree Purshotambhai K Patel Status Chairman Vice-chairman Managing Director Jo.Managing Director Director Director Director Director Director Director Director C.A Banking Expert

Table 2: Board of Directors

Office Executives:Name Mr.Bhupendra G Trivedi Mr.M L Bheda Mr.R O Gupta Mr.M B Joshi Mr.C B Patel Mr.P D Prajapati Mr.P C Joshi Mr.N N Patel Mr.S M Gandhi Mr.V P Dave CEO Recovery Manager(Head Office) Branch Manager (Head Office) Loan Manager (Head Office) Status

Branch Manager (Rajgathi) Senior Officer (Administration)

Branch Manager (Dhundhiyawadi) Branch Manager (Newgunj) Branch Manager (Iqbalgath) Branch Manager (Deesa)

Introduction:
The study helps to know about the market position of the bank and the opinion of the customers about the bank as well as the service provided by the bank. The respondents were the customers as well as the non customers. Some of them were the employees of BMC Bank and other were the non-employees. This research is all about the customers satisfaction regarding services provided by BMC bank like, clearing, transfer, locker, loan, deposits, demate facility. Businesses monitor customer satisfaction in order to determine how to increase their customer base, customer loyalty, revenue, profits, market share and survival. Although greater profit is the primary driver, exemplary businesses focus on the customer and his/her experience with the organization. They work to make their customers happy and see customer satisfaction as the key to survival and profit. Customer satisfaction in turn hinges on the quality and effects of their experiences and the goods or services they receive. The definition of customer satisfaction has been widely debated as organizations increasingly attempt to measure it. Customer satisfaction can be experienced in a variety of situations and connected to both goods services. It is a highly personal assessment that is greatly affected by customer expectations. Satisfaction also is based on the customers experiences of both contacts with the organization and personal outcomes.

2. Literature Review:
A literature review is body of text that aims to review the critical points of current knowledge including substantive findings as well as theoretical and methodological contribution to a particular topic. Literature review are secondary source, and as such, do not report any new or original experimental work. Most often associated with academic oriented literature such as these, a literature review usually precedes a research proposal and results section. Its ultimate goal is to bring the reader up to date with current literature on a topic and forms the basis for another goal, such as future research that may be needed in the area. (Source: http://en.wikipedia.org/wiki/Literature_review) There are many researches made on customer satisfaction regarding banking services. Customer satisfaction occurs when performance is higher than expected, while dissatisfaction occurs when performance is lower than expected. Overall, to gain customer satisfaction, some argue that organizations need to exceed predictive expectations of customers, rather than just satisfy expectations. Past reports show that if the customers are satisfied it increases the reputation of the bank in the market. More and more customers are attracted towards bank which is beneficial for the bank. Past research report shows that some of the customers are satisfied with the services provided by the bank while some are little bit dissatisfied with the services. So, I do a summer project on customer satisfaction regarding services provided by the BMC bank to know the satisfaction level of the current customers in current scenario.

3.1 Title of research study:customer satisfaction towards Banaskantha Mercantile Co-operative Bank .

3.2 Research objective:The objective of our study is to find out customer satisfaction regarding the services provided by the Banaskantha Mercantile Co-operative Bank.

3.3 Nature of the research study:-

3.4 Research Design: Area the Research study :

Population of the Research study:

Population of the PALANPUR City

Sample of the Research study:

Sampling Method Research study:

Simple random sampling method

Number of the samples selected:

100

Methods of data collection:

Survey interview

Sampling technique:

Sources of the data collection:

Primary Data: In the context of this project report we have collected the data through questionnaire.

Secondary Data: Annual report Past records of the bank Banks document regarding rules and policies

Data collection Instrument:

Analytical tool:
Microsoft office Excel