GEOGRAPHICAL COVERAGE OF BANKING...

Geographical Coverage of Banking Services

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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

http://www.asianage.com/business/banks-race-tap-unbanked-villages-959


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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


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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


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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


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'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


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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


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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.


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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…


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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…


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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…


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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…


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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…


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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


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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


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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.


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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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