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Geographical Coverage of Banking Services
77
GEOGRAPHICAL COVERAGE OF BANKING SERVICES
Along with the traditional banking services, the retail banking industry continues
to invest heavily in new information technology. As a result, new electronic means of
transacting with the bank continue to develop due to their relative cost advantage as
compared to paper based banking system. The increased competition along with the
explosive changes in information technology fuels the need for banks to innovate in
products, services and delivery channels. Banking services, either technology based or
diversified or innovative banking services, are selectively introduced by the banks, first in
metros, then to the cities and then small towns and finally to the villages. Therefore, there is
the gap between the time when the service is firstly introduced and its provision in different
geographical locations. The present chapter deals with the gaps in geographical coverage of
the services introduced by selected banks in the districts under study.
All commercial banks in India have directed their efforts to capture the rural
market. There is a race among banks to meet their targets for opening bank branches in
unbanked villages and to get competitive advantage. As on September 01, 2010, there
were 31,684 bank branches in rural areas of the country of which 18,941 were the
branches of SBI group and other nationalized banks, and 11,626 were the RRBs (RBI,
2010). Further, commercial banks in public sector are holding a big share in rural
banking. In Punjab too, the maximum number of bank branches located in rural areas are
from public sector. The public sector banks selected for the present study are holding first
five positions on the basis of maximum number of bank branches located in rural areas of
Punjab. All the five selected banks in the study are already extending their services to the
rural customers such as savings accounts, deposits, loans etc. These banks also intend to
provide services such as remittances, insurance products etc. in rural areas. Besides, the
banks are also focusing on extending their technology driven and innovative services to
the rural customers. ‘As reported by RBI, there are over six lakh villages in India and
50% of them do not have banking facilities. The RBI has set a target of providing
banking facilities to 73,113 unbanked villages by March 2012.’1 A brief discussion of the
selected banks in this regard is as follows:
1 http://www.asianage.com/business/banks-race-tap-unbanked-villages-959
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78
SBI (State Bank of India): The State Bank of India was set up under State Bank of India
Act, 1955 by taking over Imperial Bank of India in July, 1955. While enacting the State
Bank of India Act, the objective stated was to extend the banking facilities on a large
scale, more particularly in rural and semi-urban areas. SBI, therefore, became an
important instrument of extending rural credit to supplement the efforts of cooperative
institutions. As per RBI’s Profile of Banks (2009-10), SBI had 13,094 offices throughout
the country and the bank was working with 2,00,299 employees. The bank mobilised
deposits of 8,04,116 crore, and made loans and advances of 6,31,914 crore and
investments of 2,95,485 crore during the year. Per employee business of the bank was
636 lakh with profit per employee of 4.46 lakh. Branch Banking Statistics of RBI
for the same year exposed that SBI had the largest of number branches in rural areas of
the country i.e. 4,696 as against a total of 20,785 branches of all scheduled commercial
banks (excluding RRBs). Therefore, the bank is moving ahead to expand its rural banking
base. As on January 31, 2010, SBI had 20,000 ATMs catering 286 million customers (O.
P. Bhatt)2. Thus, through its largest banking network it provides services such as ATMs
and internet banking, debit cards, mobile banking etc. to its customers. To capture the
emerging rural market, the bank has planned to introduce biometric cards based on Smart
Card technology known as ‘SBI Tiny Cards’. Therefore, SBI is directing its efforts in
extending all the services whether these are primary, innovative, diversified or
technology based, to reach out to the last mile.
PNB (Punjab National Bank): Punjab National Bank is an Indian bank which originated
on May, 1894 in Lahore (then the city of British India but now in Pakistan). The bank
was owned, managed and operated by the Indians for the benefit of the Indians. The Lion
of Punjab, Lala Lajpat Rai was actively associated with the management of the bank in its
formative years. In June, 1947, the Punjab National Bank shifted its premises of
registered office from Lahore in Pakistan to Delhi in India. Along with 13 other banks,
Punjab National Bank was nationalized in July, 1969. As per RBI’s Profile of Banks
(2009-10), the bank has been working with 4,978 offices which include branches as well
as administrative offices of the bank. The bank mobilised the deposits of 2,49,330
crore, and made loans and advances and investments of 1,86,601 crore and 77,724
2 http://news.oneindia.in/2010/02/24/sbi-to-open-1000-atm-in-2010-op-bhatt.html
Geographical Coverage of Banking Services
79
crore respectively. PNB was working with 57,103 employees and per employee business
of the bank was 807.95 lakh whereas profit per employee of the bank stood at 7.31
lakh. Branch Banking Statistics of RBI for the year ending 31st March, 2010 reveal that
PNB had the largest number of branches in rural areas of the country amongst
nationalised banks i.e. 1,949 as against a total of 13,606 branches of all nationalised
banks. The bank claims to provide ‘Anytime Anywhere’ banking facility to all customers
including customers of more than 3,200 rural and semi urban branches3. The bank has
also been offering Internet banking services to its customers which also enables on line
booking of rail tickets, payment of utilities bills, purchase of airline tickets etc. Towards
developing cost effective alternative channels of delivery, the bank with 5,050 ATMs had
the largest ATM network amongst nationalized banks as on March, 2011. The bank is
continuously forced to find out new ways to offer banking products for its customers at
their doorstep. Doorstep banking services are offered by the bank to its individual /non
Individual/corporate customers who are interested to avail the said services, for pick up
of cash from and delivery of the same at the door step of customer. The bank claims to
have started several innovative initiatives for marginal groups like rickshaw pullers,
vegetable vendors, dairy farmers, construction workers etc. In nut shell, the bank is in the
race with the other banks to make available every kind of banking services to the
customer of last mile.
PSB (Punjab & Sind Bank): Punjab & Sind Bank was established in the year 1908 in
the holy city of Amritsar by luminaries like Bhai Vir Singh, Sir Sunder Singh Majitha
and Sardar Tarlochan Singh. The bank was nationalised in 1980 along with six other
banks by the Government of India. The Profile of Banks, RBI (2009-10) stated that PSB
had 932 offices (branches and administrative offices) in the country and it had 8259
employees. Per employee business and profit of the bank were 963 lakh and 6 lakh
respectively. PSB mobilised the deposits of 49,155 crore and made investments of
17,887 crore for the same year. Out of total 899 branches of PSB, 283 were located in
rural areas. The amount of loans and advances made by the bank during the year was
32,639 crore. The bank has entered into agreements for non life insurance business with
M/s Bajaj Allianz General Insurance Company and life insurance business arrangements
3 https://www.pnbindia.in/En/ui/Profile.aspx?LId=1andPId=2
Geographical Coverage of Banking Services
80
with M/s Aviva Life Insurance Company India Pvt. Ltd. Its customers can now avail
insurance related services under one roof. The bank claims to have introduced many other
innovated hi-tech services to its customers such as NRI Service, Gold Card Schemes,
Real Time Gross Settlement, National Electronic Funds Transfer, PSB e-funds Transfer,
Tax Payment, E-bill Payments etc. but the bank is still very slow in extending these
services to its rural customers.
OBC (Oriental Bank of Commerce): OBC is an Indian public sector bank. It originated
on 19th Feb, 1943 in Lahore (then the city of British India but now in Pakistan). Its
modest beginning is creditable to its founder Late Rai Bahadur Lala Sohan Lal, the first
Chairman of the OBC. Within four years of its coming into existence, the country
partitioned and the bank shifted its registered office from Lahore to Amritsar. The OBC
was nationalized on 15th April, 1980 and paved its way to count amongst the strongest
banks in India. Within a decade, the bank turned into one of the most efficient and best
performing banks of India. As per RBI’s Profile of Banks (2009-10), OBC had 1,579
offices which were comprised of branches and administrative offices. The bank mobilised
deposits of 1,20,258 crore, and made investments of 35,785 crore and loans and
advances of 83,489 crore. The bank was working with 57,103 employees and per
employee business of the bank was 1,331.17 lakh whereas profit per employee of the
bank stood at 7.39 lakh. Out of total 1,530 branches of OBC, 299 branches were
serving the financial needs of rural population of the country (Branch Banking Statistics,
RBI, March 31, 2010). OBC has established new wing viz., Rural Development, Retail &
Priority Sector for capturing rural market. On April 13, 1997 at the occasion of Baisakhi,
OBC launched another unique scheme ‘The Comprehensive Village Development
Programme’ in three villages of Punjab. This programme focuses on providing a
comprehensive and integrated package, which offers finance to the villagers. After the
success of this scheme in these villages, the bank extended the programme to more
villages. As on February, 2011, it covered 10 villages in Punjab, 4 in Haryana and 1 in
Rajasthan. Besides, the bank claims to extend its full range of banking services to the
rural areas of the country and serve the needs of the masses.
SBP (State Bank of Patiala): The State Bank of Patiala was found by Late His Highness
Bhupinder Singh (Maharaja of erstwhile Patiala state) with one branch in the name of
Geographical Coverage of Banking Services
81
'Chowk Fort, Patiala' in the year 1917. Then the bank was known as the 'Patiala State
Bank' and was primarily set up to foster the growth of agriculture, trade and industry in
the state. The constitution, scope and operations of the bank underwent a sea change with
the formation of the Patiala and East Punjab States Union (PEPSU) in the year 1948. The
bank was then reorganized and brought under the control of Reserve Bank of India. It
was known as the Bank of Patiala. Another milestone in the history of this bank was that
it became a subsidiary of SBI on 1st April, 1960 and it was named as State Bank of
Patiala. Since then, it has grown significantly both in size and volume of business.
Currently, the bank has been playing an important role in banking sphere. As per RBI’s
Profile of Banks (2009-10), SBP had 937 offices throughout the county and it was
working with 12,409 employees. The bank mobilised deposits of 64,552 crore, and
made loans and advances of 18,165 crore and investments of 46,347 crore during
the year. Per employee business of the bank was 895.21 lakh with profit per employee
of 4.45 lakh. Branch Banking Statistics of RBI for the same year exposed that out of
total 890 branches of SBP, 243 were located in rural areas.
From the above discussion, it can be said that all the selected banks are in the race
to open branches in every nook and corner of the country to make available the services
to the last mile customer. Merely opening of branches in rural and remote areas is not
sufficient to fulfill the expectations of the customers but there is a dire need on the part of
the banks that they should provide brick and mortar services to their customers. The
excluded segments of the population require products which are customized, taking into
consideration their varied needs but products and services offered at present do not
effectively meet these needs.4 In other words, rural customers also expect the same range
of the services which is offered in the urban areas by the banks. But as discussed earlier,
there is a gap between the time when the service is firstly introduced and its provision in
different geographical locations i.e. urban and rural areas. Therefore, one of the
objectives of the present research work is to analyse these gaps in the coverage of the
services provided by the selected banks at different geographical locations i.e. rural and
urban areas.
4 http://www.nabard.org/pdf/report_financial/summary_recommendations.pdf
Geographical Coverage of Banking Services
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4.1 Analysis of Geographical Coverage of Banking Services
For the purpose of analyzing geographical coverage of banking services, first of
all, a list of 80 personal banking services was prepared by visiting the websites,
published reports and brochures of the selected banks. The list of 80 banking services
was grouped into seven categories of personal banking services namely; Deposit
Services, Loan Services, Insurance and Mutual Funds, Agricultural Banking Services,
NRI Banking Services, E-banking Services, and Other Services and Schemes. This list
was presented to the bank officials (at the branch level) of the respective banks and
they were asked whether the service was available in rural and urban bank branches of
the districts under study. For this, two columns (first urban and second rural) for each
service were provided and the bank officer was asked to tick the column(s) if the
service was available/provided in those areas. After collecting the data for all the
selected banks, codes have been given for the provision/non provision of the service
i.e. if the service is provided in the respective area, then it is given code 1 and if not,
code 0 has been given to the service. The analysis of the data has been done by using
frequencies and percentages as presented in Tables 4.1 and 4.2.
Table 4.1 presents the detailed analysis of the geographical coverage of
banking services provided by the selected banks. The table shows that as far as the
Deposit Services are concerned, SBI is providing all the given services in urban
branches but it does not provide unit deposit, variable deposit and tax saver term
deposit schemes in the rural branches. Similarly, in case of all the other selected banks,
there exist gaps in the geographical coverage of the given Deposit Services except
PSB. Both OBC and SBP are providing 87.5% of Deposit Services in urban branches
followed by PNB (75%). In case of rural branches, SBI and OBC provide 62.5% of
Deposit Services followed by PNB, PSB and SBP which are providing 50% of Deposit
Services to their rural customers. PSB provides 50% of the given deposit services and
that too equally in urban and rural branches. Therefore, this bank needs to introduce
the diversified and new deposit schemes firstly in urban areas, and then extend the
same in the rural branches too. The researcher included 15 services under the Loan
Geographical Coverage of Banking Services
83
Services category and as per the bank officials’ responses, SBI, PNB and SBP have
been able to introduce 100% of services in urban branches followed by OBC (93.33%)
and PSB (66.67%). But in case of rural branches, PNB is on the top amongst the entire
selected banks. This bank provides 86.67% of Loan Services in its rural branches
followed by SBI and OBC, both of which are providing 66.67% of Loan Services in
rural branches. Again, PSB is holding the lowest position as far as the geographical
coverage of Loan Services in urban and rural branches is concerned. The selected
banks have started providing insurance and mutual funds to their customers. SBI and
SBP are in joint venture with SBI Life, SBI General Insurance and SBI Mutual Fund.
OBC has joint venture with Canara HSBC OBC Life Insurance Company for life
insurance. It performs agency function for Oriental Insurance Company for general
insurance and Birla Sun Life Mutual Fund for mutual funds. PNB and PSB banks are
acting as corporate agents for insurers to distribute insurance products. PNB has a tie
up with Life Insurance Corporation and MetLife Life Insurance Company for life,
Oriental Insurance Company for general insurance and Principal PNB Asset
Management Company Pvt. Ltd. for mutual funds. PSB has a tie up with Bajaj
Alliance for general insurance and with Aviva Life for life insurance etc. The table 4.1
shows that in case of Insurance and Mutual Funds, PNB, PSB and SBP have not yet
introduced these services in rural areas during the study period. But SBI and OBC both
have been able to extend 75% of these services in rural branches. But in case of urban
branches, SBI, PNB and SBP are providing 100% of these services whereas OBC and
PSB both have been able to provide 75% of these services in urban branches.
As far as Agricultural Banking Services are concerned, the study reveals that SBI,
PNB and SBP are the three selected banks which are providing all the given services in
rural branches though their provision in urban areas is below 50%. Agriculture is the
primary occupation in rural areas which is also confirmed by the sample profile of the
rural customers in the study. OBC and PSB are lagging behind by one and two services
respectively in rural branches.
Geographical Coverage of Banking Services
84
Table 4.1
Geographical Coverage of the Services Provided by Selected banks
S. No. Name of the Bank → SBI PNB PSB OBC SBP
Name and Nature of the Service ↓ Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
A Deposit Services
1 Savings Account 1 1 1 1 1 1 1 1 1 1
2 Recurring Deposit Account 1 1 1 1 1 1 1 1 1 1
3 Current Account 1 1 1 1 1 1 1 1 1 1
4 Term Deposit Account 1 1 1 1 1 1 1 1 1 1
5 Reinvestment Plans 1 1 0 0 0 0 1 0 0 0
6 Unit Deposit Schemes 1 0 0 0 0 0 0 0 1 0
7 Variable Deposit Schemes 1 0 1 0 0 0 1 1 1 0
8 Tax Saver Term Deposit Account 1 0 1 0 0 0 1 0 1 0
Score 8 5 6 4 4 4 7 5 7 4
Percentage 100 62.5 75 50 50 50 87.5 62.5 87.5 50
B Loan Services
1 Cash Credit Facility 1 1 1 1 1 1 1 1 1 1
2 Gold Loan 1 1 1 1 0 0 1 0 1 0
3 Loan against Shares and Securities 1 0 1 1 0 0 1 0 1 0
4 Home Loan 1 1 1 1 1 1 1 1 1 1
5 Home Décor Loan 1 0 1 0 0 0 1 0 1 0
Contd…
Geographical Coverage of Banking Services
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S. No. Name of the Bank → SBI PNB PSB OBC SBP
Name and Nature of the Service ↓ Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
6 Education Loan 1 0 1 1 1 1 1 1 1 0
7 Loan for Marriages/Medical Emergency/etc. 1 0 1 0 1 1 0 0 1 0
8 Loan for Pensioners 1 1 1 1 1 0 1 1 1 1
9 Computer Loan 1 0 1 1 0 0 1 0 1 0
10 Car Loan 1 1 1 1 1 0 1 1 1 1
11 Auto Loan (other than Car Loan) 1 1 1 1 1 0 1 1 1 1
12 Loan for Consumer Durables 1 1 1 1 1 0 1 1 1 0
13 Loan to Women for Business/Occupation 1 1 1 1 0 0 1 1 1 1
14 Loan against Mortgage of Immovable Property 1 1 1 1 1 1 1 1 1 1
15 Loan against Term Deposits 1 1 1 1 1 0 1 1 1 1
Score 15 10 15 13 10 5 14 10 15 8
Percentage 100 66.67 100 86.67 66.67 33.33 93.33 66.67 100 53.33
C Insurance and Mutual Funds
1 Insurance
i Life Insurance 1 1 1 0 1 0 1 1 1 0
ii Health Insurance 1 1 1 0 0 0 0 0 1 0
iii General Insurance 1 0 1 0 1 0 1 1 1 0
4 Mutual Funds 1 1 1 0 1 0 1 1 1 0
Score 4 3 4 0 3 0 3 3 4 0
Percentage 100 75 100 0 75 0 75 75 100 0
Contd…
Geographical Coverage of Banking Services
86
S. No. Name of the Bank → SBI PNB PSB OBC SBP
Name and Nature of the Service ↓ Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
D Agricultural Banking Services
1 Loan for Agriculture and Allied Activities 0 1 1 1 1 1 1 1 0 1
2 Loan for Purchase of Agriculture Land 0 1 1 1 1 1 0 1 1 1
3 Product marketing Loan 1 1 1 1 1 1 1 1 1 1
4 Issuing Kisan Credit Card/Kisan Gold Card 0 1 0 1 0 1 0 1 1 1
5 Finance under Kisan Credit Card/Kisan Gold Card 0 1 0 1 0 1 0 1 0 1
6 Micro Credit to Small Farmers/Women/Artisans/etc. 1 1 0 1 1 1 1 1 0 1
7 Agriculture Clinic and Agriculture Business Centers. 0 1 0 1 0 0 0 0 0 1
8 Overdraft Facility to Farmers 0 1 0 1 1 0 1 1 0 1
9 Loan against Warehouse Receipts 1 1 0 1 1 1 1 1 1 1
Total Score 3 9 3 9 6 7 5 8 4 9
Percentage 33.33 100 33.33 100 66.67 77.78 55.56 88.89 44.44 100
E NRI Banking Services
1 Remittances to India 1 0 1 0 0 0 1 1 1 0
2 Deposit Accounts
i Foreign Currency (Non Resident) Account 1 0 1 1 1 0 1 1 1 1
ii Non Resident External (Rupee) Accounts 1 0 1 1 1 0 1 0 1 0
iii Non-Resident Ordinary Rupee Accounts 1 1 1 1 1 0 1 0 1 1
3 Loan Schemes for NRIs
Contd…
Geographical Coverage of Banking Services
87
S. No. Name of the Bank → SBI PNB PSB OBC SBP
Name and Nature of the Service ↓ Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
i Car Loan 1 1 1 1 0 0 1 1 1 1
ii Home Loan 1 1 1 1 0 0 1 1 1 1
iii Loan against Bank Deposits 1 1 1 1 0 0 1 1 1 1
iv Loan against immovable properties 1 0 1 1 1 0 1 1 1 0
v Loan against securities of shares/convertible
debentures 1 0 1 1 1 0 1 0 1 0
4 NRI Investment Schemes in India
i On 100% Repatriable basis 1 0 1 0 0 0 1 1 1 0
ii On Non-Repatriable basis 1 0 1 0 0 0 1 1 1 0
iii Investment in Immovable Property 1 0 1 0 0 0 1 1 1 0
5 PIO (Person of Indian Origin) Card Scheme 1 0 0 0 0 0 1 1 1 0
6 Debit/Credit Cards 1 0 1 0 0 0 1 1 1 0
7 Insurance 0 0 1 0 0 0 0 0 1 0
8 Mutual Funds 0 0 1 0 0 0 0 0 1 0
Total Score 14 4 15 8 5 0 14 11 16 5
Percentages 87.5 25 93.75 50 31.25 0 87.5 68.75 100 31.3
F E-banking Services
1 ATMs/Debit Cards 1 1 1 1 1 0 1 1 1 1
2 Credit Cards 1 0 1 0 0 0 1 1 1 0
3 Phone/Tele Banking 1 1 1 1 1 0 1 1 1 1
4 Mobile Banking 1 0 1 0 0 0 1 0 1 0
Contd…
Geographical Coverage of Banking Services
88
S. No. Name of the Bank → SBI PNB PSB OBC SBP
Name and Nature of the Service ↓ Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
5 Internet Banking
i Utility Bill Payments 1 1 1 0 0 0 1 1 1 1
ii Online Ticket Booking for travel by Road, Rail and
Air 1 0 1 0 0 0 1 1 1 1
iii Insurance Premium Payments 1 1 1 0 1 0 1 1 1 0
iv Mutual Funds Investments 1 1 1 0 1 0 1 1 1 0
v Credit Card Dues Payments 1 0 1 0 0 0 1 0 1 0
vi Tax Payment – Income, Service, State Govt. 1 1 1 0 1 0 1 1 1 1
vii Online Share Trading 1 0 1 0 0 0 1 0 1 0
viii Funds Transfer between Own/Others Accounts 1 1 1 1 1 0 1 1 1 1
ix Third Party Transfers to Accounts Maintained at any
Branch 1 1 1 1 0 0 1 1 1 1
x Online instructions for Periodical Transfer 1 0 1 0 0 0 1 0 1 0
xi Credit PPF Accounts across Branches 1 1 1 0 0 0 1 0 1 0
xii Request for Issue of Demand Draft 1 0 1 0 1 0 1 0 1 0
xiii Request for Opening of New Accounts 1 0 1 0 1 0 1 0 1 0
xiv Stop Payment of Cheques 1 0 1 0 0 0 1 0 1 0
xv Request for Issue of Cheque Book 1 0 1 0 0 0 1 0 1 0
Total Score 19 9 19 4 8 0 19 10 19 7
Percentage 100 47.37 100 21.05 42.11 0 100 52.63 100 36.84
Contd…
Geographical Coverage of Banking Services
89
S. No. Name of the Bank → SBI PNB PSB OBC SBP
Name and Nature of the Service ↓ Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
G Other Services and Schemes
1 Locker Facility 1 1 1 1 1 1 1 1 1 1
2 Collection of Cheques 1 1 1 1 1 1 1 1 1 1
3 Issue /Collection of Drafts 1 1 1 1 1 1 1 1 1 1
4 Issuing Traveller’s Cheque 1 0 1 0 0 0 1 1 1 0
5 Home Banking/Door Step Banking 1 0 1 0 0 0 1 1 1 0
6 Foreign Money Change and Transfer 1 0 1 0 1 0 1 1 1 0
7 Sale and Purchase of Securities 1 1 1 1 1 0 1 1 1 1
8 Credit Information 1 1 1 1 1 1 1 1 1 1
9 Senior Citizens Saving Schemes 1 1 1 1 1 1 1 1 1 1
Score 9 6 9 6 7 5 9 9 9 6
Percentage 100 66.67 100 66.67 77.78 55.56 100 100 100 66.67
Note: code 0 = service is not provided, code 1 = service is provided
Geographical Coverage of Banking Services
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Table 4.2
Summary Analysis of Geographical Coverage of the Services Provided by Selected banks
Nature of the
Service
↓
N
Name of
the Bank → SBI PNB PSB OBC SBP
Area→ Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
Score ↓
Deposit Services 8 Score 8 5 6 4 4 4 7 5 7 4
Percentage 100 62.5 75 50 50 50 87.5 62.5 87.5 50
Loan Services 15 Score 15 10 15 13 10 5 14 10 15 8
Percentage 100 66.67 100 86.67 66.67 33.33 93.33 66.67 100 53.33
Insurance and Mutual
Funds 4
Score 4 3 4 0 3 0 3 3 4 0
Percentage 100 75 100 0 75 0 75 75 100 0
Agricultural
Banking Services 9
Score 3 9 3 9 6 7 5 8 4 9
Percentage 33.33 100 33.33 100 66.67 77.78 55.56 88.89 44.44 100
NRI Banking Services 16 Score 14 4 15 8 5 0 14 11 16 5
Percentages 87.5 25 93.75 50 31.25 0 87.5 68.75 100 31.3
E-banking Services 19 Score 19 9 19 4 8 0 19 10 19 7
Percentage 100 47.37 100 21.05 42.11 0 100 52.63 100 36.84
Other Services and
Schemes 9
Score 9 6 9 6 7 5 9 9 9 6
Percentage 100 66.67 100 66.67 77.78 55.56 100 100 100 66.67
Total Personal
Banking Services 80
Score 72 46 71 44 43 21 71 56 74 39
Percentage 90 57.5 88.75 55 53.75 26.25 88.75 70 92.5 48.75
RANK 2 2 3 3 4 5 3 1 1 4
Geographical Coverage of Banking Services
91
Punjab state is known for NRIs too. It is said that one person from every house of
Punjab (especially in Doaba region) is settled abroad. Therefore, NRI Banking is very
popular in Punjab. To attract NRIs, banks have been introducing new diversified, and
innovative services and schemes from time to time. Therefore, the researcher has also
attempted to check the geographical gaps in the introduction and provision of this
category of personal banking services. Sixteen different services under this category have
been included for the analysis. The Table 4.1 shows that SBP is the only selected bank
which is providing 100% of NRI Banking Services to its customers in urban branches
followed by PNB with 93.75% of the services. But in case of rural branches, the coverage
of OBC is the highest with 68.75% followed by PNB with 50%. PSB is providing 31.25%
in urban branches and no service in the rural branches.
For identifying the gaps in the geographical coverage of E-banking Services, the
researcher gave a list of 19 services to the bank officials. As shown in Table 4.1, it has
been found that all the selected banks provide ATMs/Debit Cards in the rural branches
except PSB. Only OBC has been able to extend its Credit Cards in rural branches of
Punjab. PSB still lags behind in introducing its Credit Cards, Telephone and Mobile
Banking services even in urban branches. Overall, SBI, PNB, OBC and SBP are
providing 100% of the given E-banking Services in the urban branches. In case of rural
branches, OBC is performing well by introducing 52.63% of E-banking Services
followed by SBI (47.37%). Here also, PSB holds the lowest position in both the areas
by providing 42.11% E-banking Services in urban branches and no such service in rural
branches. In case of Other Services and Schemes, out of total nine given services, SBI,
PNB, OBC and SBP have been able to provide 100% of the services in urban branches,
and only PSB is the bank which provides 77.78% of the services under this category to
the urban customers. But in case of rural branches, only one bank i.e. OBC provides
100% of services under this category whereas SBI, PNB and SBP provide 66.67% of
the services under this category to their rural branch customers. In this category of
personal banking services, PSB has been able to extend its services upto 55.56% in the
rural branches.
Geographical Coverage of Banking Services
92
Table 4.2 presents the summary analysis of the geographical coverage of the
services provided by the selected banks. Table shows that the geographical coverage of
SBP in urban branches is the highest amongst all the selected banks which provides 74
out of total 80 (92.50%) personal banking services. SBI is holding the second rank with
the provision of 90% of services in urban branches of Punjab. OBC and PNB are slightly
behind the SBI with the provision of 88.75% of services, and both are holding third
position as far as the coverage of personal banking services in urban branches is
concerned. PSB is at the bottom which has been able to introduce only 53.75% of services
in urban branches. As far as the coverage of personal banking services in rural areas is
concerned, it has been found that OBC is holding first rank by extending 70% of services
in rural branches. This bank also holds first position in extending Deposit Services,
Insurance and Mutual Funds, NRI Banking services, E-banking services, and Other
Services and Schemes in rural branches. Second and third ranks are held by SBI and PNB
respectively which have been able to extend 57.50% and 55% of the given personal
banking services respectively to the rural branches of Punjab. SBP which is holding first
rank in case of urban branches is providing 48.75% of services to the rural customers and
is holding fourth position. In case of rural branches too, PSB is at the bottom and
providing just 26.25% of given personal banking services.
Conclusion
It can be concluded from the above analysis that selected banks have not been able
to make available their full range of banking services to the rural customers. Even in
urban areas, the selected banks are unable to provide 100% of given personal banking
services to their customers. Some of the selected banks exist on the basis of traditional
services only. Thus, the selected banks are suggested to improve the coverage of their
services so that all the customers can get full range of personal banking services i.e.
traditional as well as modern.
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