A study on customer perception about implementation of core banking

SUMMER INTERNSHIP PROJECT [SIP] – 2014
A PROJECT REPORT
ON
„A STUDY ON CUSTOMER PERCEPTION ABOUT IMPLEMENTATION OF
CORE BANKING‟
FOR
RAJKOT NAGARIK SAHAKARI BANK LTD.
Submitted to
MARWADI EDUCATION FOUNDATION‟S GROUP OF INSTITUTIONS
In partial fulfilment of the requirement of the award for the degree of
Master of Business Administration
Under
Gujarat Technological University
Under the guidance of
Faculty guide: Company guide
Prof. Pratik joshi V.A. Ramani
Faculty of management guide Branch manager
Submitted by
POOJA LALITBHAI PARMAR
Enrolment no: 138270592096
MBA semester III
MARWADI EDUCATION FOUNDATION‟S GROUP OF INSTITUTIONS
MBA program
Affiliated to Gujarat Technological University
Ahmadabad
July 2014

I Pooja L. Parmar hereby declare that the report for summer training project
entitled “A STUDY ON CUSTOMER PERCEPTION ABOUT IMPLIMENTATION
OF CORE BANKING IN RNSB”, is a result of my own work and my indebtedness
to other work publications, reference, if any, have been duly acknowledged.
Place:- Rajkot - - - - - - - - - - - -
Date:- [ Pooja L. Parmar]
STUDENT DECLARATION

MBA Professional degrees run by Gujarat Technological University. Entail within
its preview a special on practical for two years of study.
It is rightly said by Swami Vivekananda “One once of the practice is growth of
the thousand I pound of theory."
With a view to fulfil this objective, a research based report is expected to be
prepared by the first year student.
I had undergone my training in RAJKOT NAGRIK SAHAKARI BANK LTD. for
practical training and also studied on the working of its different services. I felt
that this unit is being run superbly excellent management teams and employees
co-operation.
Such training promotes a student to boost own and the inner qualities, and
thereby students come to know about their reality that how the theoretical
knowledge works in actual sense in any unit. This has indeed proved to be very
useful to me.
PREFACE

I am heartily thankful to our chairman Mr.Ketan Marwadi and vice
chairman Mr. Jitendra.chandarana of “marwadi education foundation‟s group of
institution” for the extension of the college facilities which enable me to complete
this project.
I feel obliged to Dr.s.chinnam reddy the dean [faculty of management] of
our college for his support & encouragement.
I also thank Mr. Pratik joshi, faculty of management studies for his
valuable suggestion and assistance throughout the project.
I would also like to thank Mr.V.A.Ramani, branch manager of Rajkot
nagarik sahakari bank ltd. At paddhari branch for helping and guiding me
throughout the project.
I am heartily thankful to the all members of his bank for giving me such a
wonderful training at the bank.
I express my deep sense of gratitude to my family members and to my
dear friends for their support and encouragement during the entire course of
study.
ACKNOWLEDGEMENT

Sr. No. Particulars Page no.
Part 1 GENERAL INFORMATION
1 Industry overview 2
1.1 History of bank 4
1.2 Status wise bifurcation of bank 6
1.3 Types of banks 7
1.4 Market players in the industry 8
2 Co-operative banking 9
2.1 Introduction 9
2.2 Types of co-operative banks 10
3 Company overview 11
3.1 History 12
3.2 Board of directors 14
3.3 Mile stones 15
3.4 Strength of R.N.S.B. 19
3.5 progress at a glance 21
3.6 Services at R.N.S.B. 22
3.7 SWOT analysis 23
Part RESEARCH WORK 24
4 Introduction of study 36
4.1 Background of study 36
4.2Review of literature 37

4.3 Statement of problem 37
4.5 Objective of study 38
4.6Contribution and learning from project 39
5 Research methodology 39
5.1 Research design 39
5.2 Sampling method 39
5.3 Sampling size 39
5.4 Sources of data 39
5.5 Data collection method 39
5.6 Data collection instrument 39
5.7 Model specification 39
6 Analysis and interpretation of data 40
7 Results and findings 50
8 Suggestion and conclusion 51
9 Limitation of the study 52
10 Scope for further research 53
11 Bibliography 54
Annexure

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[1]
PART- 1
General
Information

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INDUSTRY
OVERVIEW

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THE ORIGIN OF WORD ‘BANK’
But whenever be the origin of the word bank as pro. Ramchandra rao says ―it
would trace the history of banking in Europe from the middle ages.‖
Bank is an institution, which deals in money or the credit.its main function is to
accept the deposits and giving loans. If an institution does not receive the
deposit but only lends money then it will only be money lending institution and
not a bank.
Meaning of banking:
The Banking Regulation Act, 1949, section (b)
―Banking means the accepting, for the purpose of leading or
investment, of deposits of money from the public, repayable on demand or
otherwise, and withdrawal by cheque, draft, order or other.‖
"A Bank is a financial intermediary, a dealer in loans and debt."
The word ‗bank‘ itself derived from the word ‗bancus‘ or ‗banque‘ that is
a 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‘.
―Bank is an establishment which makes, to individuals, such advances
of money as may be required and safely made and to which individuals
entrust money which it is not required by them for use. ‖
 Prof. Kenly

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 EARLY HISTORY OF BANKING
During the early periods, although private individuals mostly did the
banking business, many countries established public banks either for the
purpose of facilitating commerce or to serve the government.
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.
In india as early as the vedic period, banking in most crude from exised.
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 then changed in character and content very much.
They have developed from a few simple operations involving the
satisfaction of a few individuals 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.
HISTORY OF BANK

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The development of banking is an inevitable pre-condition for the healthy
repaid development of national economic structure. Banking institution has
contributed much in the development of developed countries of the world.
Today we cannot imagine the business world without banking institutions.
Banking is as important as blood in human body. Due to development
of banking advance have increased and business activities have also
developed, so it is rightly said, ―the development of banking is not only the
root but also result of development of business-world.‖
After independence the Indian government also has taken a series of
steps to develop banking sector. Due to considerable efforts of government
today we have number of banks such as reserve bank of India, state bank of
India, nationalized commercial banks, industrial banks and co-operative
banks. Indian banks contribute a lot in the development of agriculture, trade
and industrial sectors. Even today banking system of India possesses certain
limitations but one cannot doubt its important role in the development of
Indian economy.
INTRODUCTION

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1.2 STATUS WISE BIFURCATION OF BANKS
1. SCHEDULED BANKS.
2. NON-SCHEDULED BANKS.
1) SCHEDULED BANKS
In first schedule, government OF India notifies the primary
banks, which are licensed and whose demand and time liability are
not less than 50 cores in 1987. After that it was increased to 100 cores
can only qualify to be included in the second schedule since 1993.
From 24th, 2006 the limit has increased to 250 cores.
2) NON-SCHEDULED BANKS
The banks, which are not applicable as per the criteria of scheduled
banks, are called as a non-scheduled bank these are very small banks.
1.3 TYPES OF BANK
The Indian banking industry can be broadly classified into:
1. Public sector banks
2. Private sector banks (old & new)
3. foreign banks
4. co-operative banks
Public Sector Banks
the players here are state bank of India and its associates, bank of
Baroda, corporation bank, Punjab national bank, union bank of India, etc.
TYPES OF BANK

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Old Private banks
Some of the private sector-old pliers are bank of Madura ltd., tamilnadu
mercantile bank ltd., the jammu&kasmir bank ltd., the visa bank ltd., etc.
New private Banks
example some of the private sector-new players include, axis bank ltd,
HDFC bank, ICICI banking Corporation ltd., ibis bank ltd., etc.
Foreign Banks
Some of the foreign banks operating in india are ABN-AMRO bank
N.V.,ANZ grind lays bank ltd, N.A., deutsche bank AG, standard
chartered bank, ex. City bank, HSBC bank etc.
Co-operative bank
The main aim of the co-operative banks is to provide cheaper credit to
their members, and not to maximize their profits. There has been an
impressive growth in deposits, credit and working capital of these banks. The
annual rates of growth of co-operative banks have been quite highland are
comparable with those of commercial banks.

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NATIONALIZATION OF BANK IN INDIA
The nationalization of bank in India took place in 1956 Mrs. Indira
Gandhi then prime minister .it nationalise 14 banks. These bank were mostly
owned by businessman and even managed by them.
 Reserve bank of India  State bank of India
 Central bank of India  Bank of Maharashtra
 Dena bank  Punjab national bank
 Syndicate bank  Canada bank
 IDBI bank  Indian bank
 Indian overseas bank  Bank of Baroda
 Union bank  Allahabad bank
 ING visa bank  United bank of India
 UCO bank  Axis bank ltd.
 City union bank ltd.  HDFC BANK
 Bank of India  Federal bank
 ICICI bank  SBI commercial & international
bank ltd.
 H.S.B.C.  Bank financial institutions
 Schedule commercial banks  Co-operative and credit
institutions
 Regional rural banks  Urban co-operative banks
 Rural co-operative credit
institutions
 All India financial institutions
 State level institutions
MARKET PLAYERS IN INDIA

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INTRODUCTION
 Over the year the difference between co-operative banks & commercial
banks has blurred as they all have come under a common law. All
products & services are offered by co-operative banks are on the par with
commercial banks, with a few exceptions related to government business.
In 1904 the co-operative movement started in India with a view to provide
finance to the agriculturist at a low rate of interest.
 The co-operative society has to take the place of the money lenders &
provide cheap loan to the farmers for productive purposes. Even though
many types of co-operative societies have been started verities of services
with different technologies. Once the mahatma gandhiji has remarked that
―there is sweetness in co-operation; there is no one who weak or strong
among those who co-operate. Each is equal to other.‖
 So, after having such easy government policy, today many co-
operative banks have started in India. Now, they are in same market with
all the other banks. So, by this way the co-operative banks are in the key
position in the economy.
Co-operative banking

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There are mainly three types of co-operative banks in India.
 Stat co-operative banks
 Central co-operative banks
 Urban co-operative banks
STATE CO-OPERATIVE BANKS
These banks are also known as apex bank are registered under co-
operative societies act-1912. In fact these banks are established to function
as a leading co-operative financial institution of the state offer co-operative
societies should grow. The ―apex banks render financial help as &when the
co-operative societies are in need of their help.
CENTRAL CO-OPERATIVE BANKS
A district level of central co-operative banks is functioning as a
commercial bank that too as an independent unit. They are there in order
to strengthen the co-operative movement in the country. Their working
capital is usually provided by state government.
URBAN CO-OPERATIVE BANKS
Urban co-operative banks are organized & established in towns on the
pattern of joint-stock banks but are established under co-operative
societies act-1912. For funds these banks depend on their own sources.
However central co-operative banks are helping them in financially viable.
TYPES OF CO-OPERATIVE BANKS

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BANK PROFILE OF R.N.S.B
Type: co-operative bank
Founded: 5th October 1953
Industry: Banking, financial services
Headquarter: Rajkot
Website: www.rnsbindia.co.in.
Tagline/slogan: “PROUDLY CO-OPERATIVE”
Product: Different deposits, vehicle loan, education loan, gold
loan, land & building loan, loan on
FD , mortgage loan, locker ,demand draft,
R.T.G.S. & N.E.F.T. facility, ATM facility
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COMPANY OVERVIEW

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HISTORY OF
RAJKOT NAGARIK SAHAKARI BANK LTD
[MULTISTATE SCHEDULED BANK]
Rajkot nagarik sahakari bank ltd is a leading co-operative bank in
Gujarat state, India. Bank was established on 5th October 1953 with a small
capital of rs.4890 and membership of 59 persons under the leadership of late
keshavlal amrutlal parekh as a chairman, and late janmashan karantani as a
made bank has made tremendous & real progress, bank became pride of
saurashtra region & achieved new height in banking as well as co-operative
sector under the leadership of former chairman late shriarvindbhai maniar.
During past years bank has played vital & leading role for the
development of industries, business &economy of Rajkot city, development
and nursing of co-operative movement in the saurastra region of Gujarat state
of saurashtra. Bank was inaugurated by ―shahakarmaharshi― late
shrivaikunthbhai Mehta.
Bank has developed in manifolds with the time. Membership (share
holder) of bank is mounting towards 2,50,000 which is a record by itself
&provides an example of how a mass movement can be turned into the
instrument for social upliftment. Today bank has more than 7, 20,000+ deposit
accounts with a deposit base of 2132.73+ cores, And 40000+ establishment/
individuals enjoy the facility of Rs 1494.07+ cores of advanced.
Since inception bank was guided by the people with foresight & vision,
which includes the names like shrikeshubhai Patel, shri vajubhai vala, shri

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shashikant Mehta, shri vasantbhai khokhani, shri pravinbhai maniyar,
shrishivlalbhai vekaria etc.
Being in the service sector, with a vision of current & future trends,
bank started automation & modernization way back in 1987 and by 1995 all
the branches were computerized.
Bank is enjoying the SCHEDULE BANK status since 1989. In the year
2001 bank was registered UNDER MULTI-STAT CO-OPERATIVE SOCIETY
ACT. With this bank has opened a branch in Mumbai, economic capital of
India and become MULTI-STATE SCHEDULE CO-OPERATIVE BANK.

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3.2 BOARD OF DIRECTORS
Shri jyotindrabhai Mehta- chairman
Shri nalinbhai vasa – vice chairman
Vice chairman
Shri kalpakbhai maniar
Shri tapubhai limbasia
Shri dayabhai delawala
Shri arjunbhai shingala
Shri arjanbhai makavana
Shri girishbhai devaliya
Shri jivanbhai Patel
Shri haribhai dodiya
Shri jimmybhai daxini
Shri shaileshbhai thaker
Shri dhanrajbhai kela
Shri madhavjibhai thumar
Shri rameshbhai upadhyay
Shri harkishanbhai bhatt (G.M. & C.E.O.)

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05 OCT 1953 BANK was started as a first ever co-operative
institution in the erstwhile state of SAURASHTRA.
Inaugurated by SHAHKAR MAHARSHI late shri
VAIKUNTHRAI MEHTA.
30 jun 1955 Bank recorded maiden profit.
30 jun 1956 Bank declares maiden dividend 4.00%
01 feb 1960 A step towards expansion,UDYOG NAGAR branch
was commenced.
30 jun 1966 No of share holders(member) crosses 10,000 mark
30 jun 1973 Deposit base crosses Rs. 5 cores.
06 oct 1973 First outstation branch was opened at wakened.
25 oct 1974 With a future vision, a unique concept of mobile
branch was introduced. Bank reaches out to public.
1975-76 Bank achieves FIRST position among all 268 co-
operative banks of GUJARAT STATE.
05 OCT 1977 Bank celebrates SILVER JUBILEE YEAR. FIRST OF
its kind industrial fare was organized by the bank.
30 jun 1978 Deposit base crosses rs.10 cores. 12% dividend was
declared.
19 sep 1979 For the flood affected move city, branches was
opened, Rs 2 cores was lent to the people of move
within 3 months at the lower interest rate (3% less
than normal ).
05 oct 1981 Publication of in house journal ―SAMANVAY‖ was
started by hon‘blekeshubhai Patel (ex- chief minister
Gujarat state).
1985-86 Deposit base crosses Rs. 51 cores.
05 oct 1987 True vision, bank starts computerization, a UNIX
3.3 MILE STONES

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based computer system was installed & special
department was setup. Department was inaugurated
by dy. Governor of RESERVE BANK OF INDIA,Dr.
P.d. oza.
18 aug 1988 BANK IS DECLARED AS A SCHEDULED BANK BY
THE RESERVE BANK OF INDIA. (Ref. UBD.BR.
94/A 9/88/89)
1988-89 NET PROFIT CROSSES S. 1 CRORE
30 JUN 1990 First ever branch outside SAURASHTRA, was
opened at AHEMDABAD CITY.
30 JUN 1990 ADVANCES CROSES RS. 100 CRORES.
1989-90 Administration of SICK bank ― vijay commercial co-op
bank ― was undertaken by the bank on the
persuasion from RESERVE BANK OF INDIA & CO-
OP department of govt. Of Gujarat.
1991-92 No. Of share holder(member) crosses 1 lac
(1,00,000)
1991-92 Staff training centre was started.
05 oct 1992 2nd all indianite bank CARROM tournament was
organized by BANK (IBA & BANK SPORT BOARD).
1993-94 VCC BANK records profit under admonition of
BANK, became healthy from SICK.
1994-95 Bank set a unique example in co-op movement,
administration of VCC was handed over to elected
body of VCC.
1995-96 Banking operation at all the branches were
computerized. Software was developed in-house.
1996-97 RBI permits the bank to open NR-NR accounts.
1996-97 More to follow, administration of SICK bank ―
junagadh vibhagiya nagarik bank, junagadh‖ was
undertaken.

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1996-97 10th all indianite bank cricket tournament was
organised by bank.
1999-2000 Deposit base crosses Rs. 500 cores.
2000-2001 Recognition of talent, GM suresh motiani appointed
as a member of working group on asset liability
management committee of RESERVE BANK OF
INDIA.
17 jan 2001 BANK was REGISTERED UNDER MULTI–STATE
CO-OPERATIVE SOCIETY ACT. Area of operation
was extended outside the state of Gujarat.
12 mar 2001 RESERVE BANK OF INDIA gives license for
opening branches at MUMBAI.
05 oct 2001 BANK starts DP department, start offering depository
services (demit share & security trading). As
depository participant OF CENTRAL DEPOSITORY
SERVICES INDIA LIMITED (CDSIL).
Mar 2002 First ever BRANCH OUTSIDE THE STATE OF
GUJARAT WAS OPENED AT MUMBAI.
31 mar 2003 Net profit crosses Rs. 10 cores, 25% dividend was
declared.
05 oct 2003 Bank celebrates GOLDEN JUBILEE YEAR.
2005-06 Bank treasury department awarded ISO 9001-2000
certification by TUV a German organisation.
2005-2006 The dolls museum only the second of in kind in the
country has taken shape at our yank road branch
premises with the joint efforts of Rajkot nagarik
sahakari bank ltd, arvindbhai maniarjankalyan trust
and rotary midtown club
2006-2007 Bank has provided free coast BSNL mobile
connections to our members.

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2007-2008 Bank has started RTGS service.
2007-2008 Bank awarded for a scheme ―for total interest rebate
to regular borrowers with limits below Rs. 25000/-
2010-2011 Bank has started NEFT service
2013-2014 ATM services start

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Strength factors Figures dated : 31 mar 2012
Total share capital & reserve fund More than Rs. 334.39 cores
Total deposit base More than rs.2132.73 cores
Toil advances landed More than rs.1494.07 cores
No. of branches 29 branches (with 29 premises)
Total membership Stands at 2,48,284(31-mar-2011
Net profit (2010-2011) Rs.34.06 cores
Advances sanctioned to borrowers
belonging to lower-middle class
income group
83%
Scheduled status Since oct 1988
MULTI –STATE status Since Jan 2001
Business per employee Rs. 7.05 cores.
Fully computerized branches &
departments
All 29 branches since 1995.
Dividend to shareholders Record 20 % proposed 2011 -2012
Total investment in government
security (SLR)
Rs. 536.92 core
Depository participant facility
provided
AS DP OF CDSL SINCE OCT-2001
Management Experienced and foresighted board of
directors including IT fractioned, 2
C.A., industrialist, businessman
Staff members Committed ,dedicated and
professional staff of 500+ strength
Capital adequacy ratio C.R.A.R. 13.31 %
NET NPA <0.63%
Borrowings from any bank/
institution.(NHB)
0.46 CRORES.
ADVANCES to directors / relative Stands at 0.28 % of total advances
Advances against share Stands at 0.17 % of total advances
Deposits up to Rs. One laky Fully insured with DICGC
3.4 STRENGTH OF R.N.S.B.

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Social contribution:-
(1) Donation to educational institutions and hospitals.
(2) Fodder supply to cattle camps.
(3) Promotion of sports activities.
(4) Loans to educationally UN employed youth.
(5) Help to earthquake victims by providing soft loans.
(6) Rajkot nagarik sahakari bank permit VVP end. College.
(7) Indubhai parekh school of architecture was sponsored by BANK.

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RAJKOT NAGARIK SAHAKARI BANK LTD started with a small capital
of Rs. 4890/- and 59 members in 1953 at the inception the bank has gradually
crossed the milestone of 2,50,000 members a huge co-operative family.
There entering in to sixtieth year has become a celebrating land mark for the
bank.
In the starting of the bank the deposits was only 43000 but now
currently it becomes 2572 cores which indicates greter increament in the bank
with 61 cores profit which was only 3000 Rs in 1994 the bank has
implemented any branch banking .
however their aim has been complete technology up gradation, bank has
entered in to an agreement with ‗FINANCUS; for implanting their FINCORE
core banking solution at all branches during 2011-12 once this solution id
implemented further technology up gradation such as mobile banking as well
as CORE BANKING would also be started which shall make our bank techno
savvy in coming years. For further detail you can refer annexure no.3.
3.5 PROGRESS AT A GLANCE

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DEPOSITS ADVANCES OTHER FACILITIES
Saving deposit Personal surely
loan
Clearing
Special saving
Deposit
Vehicle loan Locker
Recurring deposit Education loan Demand draft
Current deposit Gold loan Transfer
Fixed deposit Land & building loan R.T.G.S. & N.E.F.T.
Facility
Stock in trade loan Bills collection
Loan on FD ECS facility
Mortgage loan Demit facility
Cash credit Sims facilities
A.T.M. facilities
Other facilities
3.6 SERVICES AT RNSB

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STRENGTHS:
 Growth in profitability
 Experienced board of directors and staff members
 Malty state status
 Credit rating of banks
 Commitment towards society
 Loan procedure
 Currently one of the best scheme provided by this bank that is ―FLOOD IT‖
which gives desktop, tablet on 0% interest
WEAKNESS:
 rate of interest
 shortage of new technology
 small branch network
 slow response
OPPORTUNITIES:
 expand horizons of services
 co-operative banks can reach easily to rural area, which is difficult for
private banks
 providing service, it can attract big client.
THREATS:
 Increasing competition in this co-operative banking industry
 Threat of private players
 Threat of more charges of foreign transaction.
 It is seen that co-operative sector is neglected by government
SWOT ANALYSIS

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New Information technology has taken important place in the
future development of financial services, especially banking sector transition
are affected more than any other financial provider groups. Increased use of
mobile services and use of internet as a new distribution channel for
banking transactions and international trading requires more attention
towards e-ban king security against fraudulent activities. The develop mint
and the increasing progress that is being experienced in the Information n
and Communication Technology have brought about a lot of changes in
almost all facets of life. In the Banking Industry, it has been in the form of
online banking, which is now replacing the traditional banking practice.
Online banking has a lot of benefits which add value to cu stompers‘
satisfaction in terms o f better quality of service offerings and at the
same time enable the banks gain more competitive advantage over
other competitors .
Mobile banking is an innovation that has progressively rendered itself
in pervasive ways cutting across several financial institutions and other
sectors of the economy. During the 21st century mobile banking advanced
from providing mere text messaging services to that of pseudo internet
banking where customers could not only view their balances and set up
multiple types of alerts but also transact activities such as fund transfers,
redeem loyalty coupons, deposit cheques via the mobile phone and instruct
payroll based transactions European Scientific Journal May 2013 edition
vol.9, No.13 ISSN: 1857 – 7881 (Print) e - ISSN 1857- 7431 147
(Vaidya 2011). The world has also become increasingly addicted to doing
HISTORY OF CORE BANKING

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business in the cyber space, across the internet and World Wide Web.
Internet commerce in its own respect has expanded in various innovative
forms of money, and based on digital data issued by private market actors,
has in one way or another substituted for state sanctioned bank notes and
checking accounts as customary means of payments (Cohen 2001).
Technology has greatly advanced playing a major role in improving the
standards of service delivery in the financial institution sector. Days are long
gone when customers would queue in the banking halls waiting to pay their
utility bills, school fees or any other financial transactions. They can now do
this at their convenience by using their ATM cards or over the internet from
the comfort of their homes. Additionally due to the tremendous growth of the
mobile phone industry most financial institutions have ventured into the
untapped opportunity and have partnered with mobile phone network
providers to offer banking services to their clients.
ATM banking is one of the earliest and widely adopted retail core
banking services in Kenya (Nyangosi et al. 2009). However according to an
annual report by Central Bank of Kenya its adoption and usage has been
surpassed by mobile banking in the last few years (CBK 2008). The
suggested reason for this is that many low income earners now have access
to mobile phones. A positive aspect of mobile phones is that mobile networks
are available in remote areas at a low cost. The poor often have greater
familiarity and trust in mobile phone companies than with normal financial
institutions

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The economy of most developing countries is cash driven; meaning that
monetary transactions are basically made through the exchange of bank notes
and coins for goods and services. However, this trend is now giving way to a
modern and sophisticated payment system where the currency and
notes are converted to d ate, which are in turn transmitted through the
telephone lines and satellite transponders.
This is as a result of rapid technological progress and development in
the financial market (Our et al. 2010; Johnson, 2005).There is faster delivery
of information from the customer and service provider, thus differentiating
Internet enabled electronic banking system from the traditional banking
operation (Signal and Padhmanabhan, 2008 ; Salawu et al. 2007). This
transfer process makes money to be carried in information storage medium
such as cheques, credit cards, and electronic means than its pure cash form.
core banking has thus become important channel to sell Products and
Services; leading to a paradigm shift in marketing practices, resulting in
high performance in the banking industry (Christopher et al. 2006; Boride et
al 2007; Signal and Padhmanabhan, 2008).
The banking industry has been undergoing changes since the mid
1990s, in the form of innovative use of information technology and
INTRODUCTION

.
.
[28]
development in electronic commerce (Kolkata and Whinstone, 1996).
This development made core banking pose as a threat to the traditional
branch operations, despite the fact that electronic commerce is still dev
eloping and is rapidly changing (Harris and Spence, 2002; Turban et al.
2002). According to Our et al. (2010) ―The importance of electronic
payment system in any country can never be over emphasized, due to
the dramatic transformation in technological advancements that is being
experienced by the global financial industry‖.

.
.
[30]
In simple words, CORE BANKING implies provision n of banking
products and services through electronic delivery channels. Electronic
banking has been around for quite some time in the form of automatic teller
machines (ATMs) and telephone transactions. In more recent times, it has
been transformed by the internet – a new delivery channel that has
facilitated banking transactions for both customers and banks. For
customers, the internet o fifers faster access, is more convenient and
available around the clock irrespective of the customer‘s location.
Internet banking (core banking)/core banking is the use of internet and
telecommunication networks to deliver a wide range of value added products
and services to bank customers (Steven, 2002) through the use of a system
that allows individuals to perform banking activities at home or from their
offices or over the internet.
What is CORE Banking?

.
.
[31]
The financial products and services have become available over the
Internet, which has thus become an important distribution channel for a
number of banks. Banks boost technology investment spending strongly to
address revenue, cost and competitiveness concerns. The purpose of present
study is to analyze such effects of IB in India, where no rigorous attempts
have been undertaken to understand this aspect of the banking business.
A study on the Internet users, conducted by Internet and Mobile
Association of India (IAMAI), found that about 23% of the online users prefer
IB as the banking channel in India, second to ATM which is preferred by 53%.
Out of the 6,365 Internet users sampled, 35% use online banking channels in
India. This shows that a significant number of online users do not use IB, and
hence there is a need to understand the reasons for not using it .Until the
advent of ATMs, people were unaware and/or not directly affected by the
technological revolutions happening in the banking sector.
ATMs became the major revelation for customers, since it offered the
facility to avoid long queues in front of the cashiers in banks. It also provided
them the flexibility of withdrawing money—anytime, anywhere. In the study by
IAMAI, it was found that the people are not doing financial transactions on the
banks‘ Internet sites in India because of reasons such as security concerns
(43%), preference for face-to-face transactions (39%), lack of knowledge
about transferring online (22%), lack of user friendliness (10%), or lack of the
facility in the current bank (2%)
CORE Banking in India

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[32]
There are not many inventions that have changed the business of
banking as quickly as the CORE BANKING revolution World over banks is
reorienting their business strategies towards new opportunities offered by
CORE BANKING. CORE BANKING has enabled banks to scale borders,
change strategic behaviour and thus bring about new possibilities. CORE
BANKING has moved real banking behavior closer to neoclassical economic
theories of market functioning. Due to the absolute transparency of the
market, clients (both business as well as retail) can compare the services o f
various banks more easily. For instance, on the internet, competitors are o nly
one click away. If clients are not happy with the products, prices or
services offered by a particular bank, they are able to change their
banking partner much more easily than in the physical or real bank –client
relationship.
From the banks‘ point of view, use of the internet has significantly
reduced the physical costs of banking operations. As discussed by Turner
(2001), progress in information technology has slashed the costs o f
processing information, while the internet has facilitated its transmission, thus
facilitating change in the very essence of the banking business. Around the
world, electronic banking services, whether delivered online or through
other mechanisms, have spread quickly in recent years.
.
Why CORE Banking?

.
.
[33]
General features
 Viewing account balances
 Viewing recent transactions
 Downloading bank statement, for example in pdf formate
 Viewing images of paid cheque
 Ordering cheque books
 Download periodic account statements
 Downloading application m-banking ,CORE BANKING etc.
 Bank customers can transact banking tasks through online banking
including
 Funds transfers between the customers linked accounts
 Paying third parties , including bill payment (see e.g., epay) and
telegraphic/wire transfer
 Investment purchase or sale Loan applications and transactions such
as repayments of enrolments
 Register utility billers and make bill payments
FEATURES OF CORE BANKING

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.
[34]
o Convenience : unlike your corner bank online banking sites never
close; they‘re available 24 hours a day , seven days a week and they‘re
online a mouse click away
o Ubiquity: if you‘re out of state or even out of country when a money
problem arises you can log on instantly to your online bank and take
care of business 24/7
o Transaction speed online banks sites generally execute and confirm
transactions at or quicker than ATM processing speed
o Efficiency you can access and manage all of your bank accounts
including IRS, CDS, even securities from one secure site
o Effectiveness many online banking sites now offer sophisticated tools
effectively
o Better cash management- CORE BANKING facilities speed up
cash cycle and increases efficiency of business
Benefits of CORE BANKING/ impotence

.
.
[35]
o Operational risk
o Security risk
o System architecture and design
o Reputational risk
o Legal risk
o Money laundering risk
o Cross border risks
o Strategic risk
o Other risk
o Liquidity risk
o Credit risk
o Risk of unfair competitions
TYPES OF RISK ASSOCIATED WITH CORE BANKING

.
.
[36]
INTRODUCTION OF STUDY
- Background of study
- Review of literature
- Statement of problem
- Objective of study
- Contribution and learning from the project
BACKGROUND OF THE STUDY
The study would try to throw some insight into the existing services
provided by the banks and the gap between the requirement of new
technical and modern system (CORE BANKING) whether the customer
expectant or not perceptions and the actual state of performance. The
result of the study would be able to recognize the lacunae in the system
and thus provide key areas where improvement is required for better
performance and introduce new system success ratio.
RESEARCH WORK

.
.
[37]
REVIEW OF LITERATURE
Jadhav Anil (2004)
described various channels of core banking services such as ATM,
Telephone banking (Telcore banking), Mobile banking, Internet banking and
its features.
The focus is also given on core banking opportunities, challenges and
security aspects while Performing the banking transactions on the internet.
Comparison of public, private, foreign and co-operative banks and barriers to
the growth of core banking in India are also discussed. Finally the paper
discusses an overview of the major private sector banks such as ICICI,
HDFC, IDBI, UTI & GTB banks which provides core banking services.
The study conducted by Gotlieb, and Denny [1993], is one of the studies
that deals with the impact of IT on banking productivity per se.
Computerisation is one of the factors which improves the efficiency of the
banking transactions. They concluded that higher performance levels have
been achieved without corresponding increase in the number of employees.
Also, it has been possible for Public Sector Banks and Old Private Banks to
improve their productivity and efficiency by using IT.

.
.
[38]
OBJECTIVE OF STUDY
o To find out the level of expectation and level of the customer perception
on requirement of CORE BANKING system in R.N.S.B.
o To know if R.N.S.B. provides CORE BANKING system how many ready
to use the service.
o To know which age people use most CORE BANKING services
o To know present & future perception on CORE BANKING for customer
o To know which type of security and transaction related perception
having customer
o To know which service quality dimension the bank is performing well
and which dimension it needs improvement
STATEMENT OF PROBLEM

.
.
[39]
- RESEARCH DESIGN
- SAMPLING METHOD
- SAMPLING SIZE
- SOURCES OF DATA
- DATA COLLECTION METHOD
- DATA COLLECTION INSTRUMENTS
Sampling method Convenience sampling
Sampling size 100
Sources of data Primary –Questionnaire
Secondary- internet, research book
Data collection method Questionnaires fill up by bank customer
Data collection instrument Questinnaire
RESEARCH METHODOLOGY
RESEARCH DESIGN

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.
[40]
1) WHAT do you know about CORE BANKING/net banking ?
INTERPRETATION
The above respondent in that 10 % are not aware of net banking ,
20% respondent know enough/little and 70% well informed much.
70%
20%
10%
well
informed
much
enough/
little
not at all
Particulars %
Well
informed
much
70
Enough/little 20
Not at all 10
ANALYSIS AND INTERPRETATION OF DATA

.
.
[41]
2) How important would online banking be in your daily banking
activities?
INTERPRETATION
In the above pie chart CORE BANKING /online banking is impotent 60 %
significant, 30% frequent and 10% not at all.
60 %
30 %
10 %
significant
frequent
not at all
Particulars %
significant 60
frequent 30
Not at all 10

.
.
[42]
3) if RNSB provide CORE BANKING facility will you interested?
INTERPRETATION
In above responded they are interested are 70% and not interested are 30%
70
30
respondand
yes
no
Particulars %
yes 70
no 30

.
.
[43]
4) Do you use any core banking services in other bank?
INTERPRETATION
In response they are using CORE BANKING facility in other bank 70% and
30% not using
30
70
respondant
no
yes
Particulars %
yes 70
No 30

.
.
[44]
5) do you thinks that internet banking is convenient?
INTERPRETATION
In above responded convenient for CORE BANKING 75% , 20 % not
convenient and other 5% can‘t say.
75
20
5
response
yes
no
can't say
Particulars %
yes 75
No 20
Can‘t say 5

.
.
[45]
6) If BANK starts CORE BANKING what type of banking would you do
over the internet?
INTERPRETATION
In above respondent if star CORE BANKING they are 35 % using for
personal banking and 20 % for business transactions and 45 % are using both
the purpose.
35
20
45
personal
banking
business
transaction
both
Particulars %
Personal
banking
35
Business
transaction
20
both 45

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.
[46]
7) Would you like to use your mobile phone to do your Banking
transaction like sms banking?
Interpretation:-
in above response 66% yes they are use sms banking, remaining 34%
are not.
66
34
yes
no
Particulars %
yes 66
No 34

.
.
[47]
8) If we provide best security and protection for your transaction will you
use CORE BANKING?
Interpretation
If CORE BANKING facility provides protection then 83% responded are using
and 17% are not using CORE BANKING.
Particulars %
yes 83
No 17
83
17
yes
no

.
.
[48]
9) any suggestion related to CORE BANKING?
INTERPRETATION
In above respondent 5% give suggestion for protection ,security , rapid facility
related and 10% not given any suggestions.
12
88
yes
no
Particulars %
yes 12
No 88
If yes..

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.
[49]
10) Are you aware of our ATM services?
INTERPRETATION
In above responded 80% they aware about ATM facility and remaining
20 % not aware.
65
35
awarness
yes
no
Particulars %
yes 80
No 20

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.
[50]
 I found that Most of responded service of bank are good
 From this study people are not aware of CORE BANKING now
they aware.
 Customer perception about CORE BANKING system related
now they aware.
 Customer are using our ATM facility very nicely.
 Customers are aware about core banking but, lack of
technology support in terms of security is a hurdle.
 the implementation of core banking, becomes difficult because
most of customers are not literate, and techno savvy.
Observation & findings

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.
[51]
After interpretation and analysis, I am giving certain suggestions to the
bank which I hope may be helpful for the bank.
 According to me the bank should have to more investment in
electronic system or modern technology so that the survive in
banking industries will become very good prestige as compare to
competitors.
 Bank should also provide maximum no of staff member.
 Bank‘s should provide maximum computerised and speed work
system .
 Bank should also provide credit card facility , net-banking system.
 This also required to increase working hours not like private bank
but more than the other co-operative banks because it creates very
good image in the mind of the people.
SUGGESTIONS & RECOMMENDATION

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.
[52]
There may be some limitations to this study which are as under :
 Sample size is limited which may not represent overall population
 Time duration of study is less so time is one of the constrain
 It may not accurate data or reliable some times
 Response are taken from granted as there is no tools to judge the
authentication of respondent
 Because of unwillingness to fill questionnaire for the research work
responded might give vague answer
SCOPE FOR FURTHER RESEARCH
 This research may useful to bank to take important decision.
 to know how much customer are willing to use CORE
BANKING facility
LIMITATION OF THE STUDY

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.
[53]
ACCORDING to me R.N.S.B. means.
R --- Responsibility to keep safe customer‘s money
N --- Never break trust of customers.
S ---satisfaction of all customers.
B --- best banking – small man‘s big bank
 according to me from litrature review shows that different
researchers and experts in the fields of bank.
 It has been observed that no more of the reviewed study
addresses the issues such as technological developments and
CORE BANKING(extent of computerisation) of cooperative
banks, different aspects affecting the development of co-
operative banks, problems and prospects of bank
computerisation, responses of the employees and customers on
bank computerisation, and different software solutions available
for bank computerisation.
 Therefore, this study is an attempt to address these issues.
Conclusion

.
.
[54]
BOOKS:
Donald R.cooper
Donald r. Cooper(2012) research methodology, Himalaya publication
WEBSITES:
www. rajkotnagariksahakari bank ltd.in.
www.rnsbindia.co.in.
CORE BANKING /core banking research report
LITRATURE review on core banking
BIBLIOGRAPHY

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.
[55]
A study on customer perception of CORE BANKING in CO-
OPERATIVE BANK (R.N.S.B.)
1) Your age group
15-18 19-23
24-29 30-35
36-41 42-47
2) Your gender
Male
Female
3) You are educated ?
Yes
No
4) WHAT do you know about CORE BANKING/net banking ?
Well informed much
Enough/ little
Nothing at all
5) What types of account (s) do you have with RNSB?
Saving a/c
Special saving a/c
Current a/c
Recurring
QUESTIONNAIRE

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.
[56]
6) How important would online banking be in your daily banking
activities?
Significant
Infrequent
Not at all
7) If RNSB provide CORE BANKING facility will you interested?
Yes
No
8) Do you use any e- banking services in other bank?
Yes
No
9) Detour thinks that internet banking is convenient?
Yes
No
Not sure
10)Would you like to use your mobile phone to do your important
transaction in minimum time limit?
Yes
No
11)If start CORE BANKING what type of banking would you do over
the internet?
Personal banking
Business transactions
Both
12)If we provide best security and protection for your transaction will
you use CORE BANKING?
Yes
No

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[57]
13)Any suggestion related to CORE BANKING?
Yes
No
If
Yes_________________________________________________
14)Are you aware of our ATM services?
Yes
No

A study on customer perception about implementation of core banking

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