retail banking at hdfc

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A

PROJECT REPORT

ON

RETAIL BANKING

AT

(SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE DEGREE

OF

BACHELOR OF BUSINESS ADMINISTRATION

(SESSION 12-14)

SUBMITTED BY:-

UTKARSH JAISWALREG ID:-201224!



DECLARATION

I UTKARSH JAISWAL student of B.B.A. III year in I.B.(P.G.) College, Panipat hereby declare

that the project report entitled “RETAIL BANKING AT HDFC BANK sub!itted for the

degree of B.B.A. III year is !y original "or# and the project report has not for!ed the basis for

the a"ard of any diplo!a, degree, associate ship, fello"ship or si!ilar other titles. It has not

been sub!itted to any other uni$ersity or institution for the a"ard of any degree or diplo!a.

(PRINCIPAL SIGNATURE) UTKARSH JAISWAL

AC%&'*+G**&-



ur$ey is an e/cellent tool for learning and e/ploration. &o classroo! routine can substitute

"hich is possible "hile "or#ing in real situations. Application of theoretical #no"ledge to

practical situations is the bonan0as of this sur$ey.ithout a proper co!bination of inspection and perspiration, it1s not easy to achie$e

anything. -here is al"ays a sense of gratitude, "hich "e e/press to others for the help and

the needy ser$ices they render during the different phases of our li$es. I too "ould li#e to do

it as I really "ish to e/press !y gratitude to"ard all those "ho ha$e been helpful to !e

directly or indirectly during the de$elop!ent of this project.

I "ould li#e to than# !y professor I.&I2A G3P-A "ho "as al"ays there to help and

guide !e "hen I needed help. 2er percepti$e criticis! #ept !e "or#ing to !a#e this project

!ore full proof. I a! than#ful to her for his encouraging and $aluable support. or#ingunder her "as an e/tre!ely #no"ledgeable and enriching e/perience for !e. I a! $ery

than#ful to her for all the $alue addition and enhance!ent done to !e.

&o "ords can ade4uately e/press !y o$erriding debt of gratitude to !y parents "hose

support helps !e in all the "ay. Abo$e all I shall than# !y friends "ho constantly

encouraged and blessed !e so as to enable !e to do this "or# successfully.

3-%A52 6AIA

RETAIL BANKING



DEFINITION:

“5etail ban#ing is typical !ass7!ar#et ban#ing "here indi$idual custo!ers use local

branches of larger co!!ercial ban#s. er$ices offered include8 sa$ings and chec#ing accounts,

!ortgages, personal loans, debit cards, credit cards, and so

The 5etail Ban#ing en$iron!ent today is changing fast. -he changing custo!er

de!ographics de!ands to create a differentiated application based on scalable technology,

i!pro$ed ser$ice and ban#ing con$enience. 2igher penetration of technology and increase in

global literacy le$els has set up the e/pectations of the custo!er higher than ne$er before.

Increasing use of !odern technology has further enhanced reach and accessibility.

-he !ar#et today gi$es us a challenge to pro$ide !ultiple and inno$ati$e conte!porary

ser$ices to the custo!er through a consolidated "indo" as so to ensure that the ban#1s custo!er

gets “3nifor!ity and Consistency of ser$ice deli$ery across ti!e and at e$ery touch point

across all channels. -he pace of inno$ation is accelerating and security threat has beco!e pri!e

of all electronic transactions. 2igh cost structure rendering !ass7!ar#et ser$icing is

prohibiti$ely e/pensi$e.

Present day tech7sa$$y ban#ers are no" !ore loo#ing at reduction in their operating costs by

adopting scalable and secure technology thereby reducing the response ti!e to their custo!ers so

as to i!pro$e their client base and econo!ies of scale.

-he solution lies to !ar#et de!ands and challenges lies in inno$ation of ne" offering "ith

!ini!u! dependence on branches 9 a !ulti7channel ban# and to eli!inate the disad$antage of

an inade4uate branch net"or#. Generation of leads to cross sell and creating additional re$enues

"ith ut!ost custo!er satisfaction has beco!e focal point "orld"ide for the success of a Ban#.

RETAIL BANKING AN INTRODUCTION

R etail ban#ing is, ho"e$er, 4uite broad in nature 7 it refers to the dealing of co!!ercial

ban#s "ith indi$idual custo!ers, both on liabilities and assets sides of the balance sheet. :i/ed,

current ; sa$ings accounts on the liabilities side< and !ortgages, loans (e.g., personal, housing,

auto, and educational) on the assets side, are the !ore i!portant of the products offered by

ban#s. 5elated ancillary ser$ices include credit cards, or depository ser$ices. 5etail ban#ing

refers to pro$ision of ban#ing ser$ices to indi$iduals and s!all business "here the financial



institutions are dealing "ith large nu!ber of lo" $alue transactions. -his is in contrast to

"holesale ban#ing "here the custo!ers are large, often !ultinational co!panies, go$ern!ents

and go$ern!ent enterprise, and the financial institution deal in s!all nu!bers of high $alue

transactions.

-he concept is not ne" to ban#s but is no" $ie"ed as an i!portant and attracti$e !ar#et

seg!ent that offers opportunities for gro"th and profits. 5etail ban#ing and retail lending are

often used as synony!s but in fact, the later is just the part of retail ban#ing. In retail ban#ing all

the needs of indi$idual custo!ers are ta#en care of in a "ell7integrated !anner.

T"#$%&' *$+, $./+. '*" +' $$*+3# % * $'+ $$*+'*+':

o ultiple products (deposits, credit cards, insurance, in$est!ents and securities)

o ultiple channels of distribution (call center, branch, internet)

o ultiple custo!er groups (consu!er, s!all business, and corporate).

ORIGIN OF BANKING

Ban#s are a!ong the !ain participants of the financial syste! in India. Ban#ing offers

se$eral facilities and opportunities.

Ban#s in India "ere started on the British pattern in the beginning of the => th century. -he first

half of the =>th century, -he *ast India Co!pany established ? ban#s -he Ban# of Bengal, -he

Ban# of Bo!bay and -he Ban# of adras. -hese three ban#s "ere #no"n as Presidency Ban#s.

In =>@ these three ban#s "ere a!alga!ated and -he I!perial Ban# of India "as for!ed. In

those days, all the ban#s "ere joint stoc# ban#s and a large nu!ber of the! "ere s!all and

"ea#. At the ti!e of the @nd "orld "ar about = joint stoc# ban#s "ere operating in India out

of "hich = "ere non7 scheduled ban#s. Bad and dishonest !anage!ent !anaged 4uiet a

4uiet a fe" of the! and there "ere a nu!ber of ban# failures. 2ence the go$ern!ent had to step

in and the Ban#ing Co!pany1s Act (subse4uently na!ed as the Ban#ing 5egulation Act) "as

enacted "hich led to the eli!ination of the "ea# ban#s that "ere not in a position to fulfil the$arious re4uire!ents of the Act. In order to strengthen their "ea# units and re$ie" public



confidence in the ban#ing syste!, a ne" section "as enacted in the Ban#ing 5egulation Act

in the year =>D, e!po"ering the Go$ern!ent of India to co!pulsory a!alga!ate "ea# units

"ith the stronger ones on the reco!!endation of the 5BI. -oday ban#s are broadly classified

into @ groups na!elyE

($) S#,# $./'5() N".-S#,# $./'5

BENEFITS OF RETAIL BANKING

Traditional lending to the corporate are slo" !o$ing along "ith high &PA ris#, treasure

profits are no" loosing i!portance hence 5etail Ban#ing is no" an alternati$e a$ailable for the

ban#s for increasing their earnings. 5etail Ban#ing is an attracti$e !ar#et seg!ent ha$ing a

large nu!ber of $aried classes of custo!ers. 5etail Ban#ing focuses on indi$idual and s!all

units. Custo!i0e and "ide ranging products are a$ailable. -he ris# is spread and the reco$ery is

good. urplus deployable funds can be put into use by the ban#s. Products can be designed,de$eloped and !ar#eted as per indi$idual needs.

SCOPE FOR RETAIL BANKING IN INDIA

o All round increase in econo!ic acti$ity

o Increase in the purchasing po"er. -he rural areas ha$e the large purchasing po"er at their

disposal and this is an opportunity to !ar#et 5etail Ban#ing.

o India has @ !illion households and !illion !iddleclass population !ore than >F of

the sa$ings co!e fro! the house hold sector. :alling interest rates ha$e resulted in a shift.

“&o" People ant -o a$e ess And pend ore.

o &uclear fa!ily concept is gaining !uch i!portance "hich !ay lead to large sa$ings, large

nu!ber of ban#ing ser$ices to be pro$ided are day7by7day increasing.

o -a/ benefits are a$ailable for e/a!ple in case of housing loans the borro"er can a$ail ta/

benefits for the loan repay!ent and the interest charged for the loan.



AD6ANTAGES AND DISAD6ANTAGES OF RETAIL BANKING

AD6ANTAGES

5etail ban#ing has inherent ad$antages out"eighing certain disad$antages. Ad$antages are

analy0ed fro! the resource angle and asset angle.

RESOURCE SIDE

o 5etail deposits are stable and constitute core deposits.

o -hey are interest insensiti$e and less bargaining for additional interest.

o -hey constitute lo" cost funds for the ban#s.

o *ffecti$e custo!er relationship !anage!ent "ith the retail custo!ers built a strong

custo!er base.

o 5etail ban#ing increases the subsidiary business of the ban#s.

ASSETS SIDE

o 5etail ban#ing results in better yield and i!pro$ed botto! line for a ban#.o 5etail seg!ent is a good a$enue for funds deploy!ent.

o Consu!er loans are presu!ed to be of lo"er ris# and &PA perception.

o 2elps econo!ic re$i$al of the nation through increased production acti$ity.

o I!pro$es lifestyle and fulfils aspirations of the people through affordable credit.

o Inno$ati$e product de$elop!ent credit.

o 5etail ban#ing in$ol$es !ini!u! !ar#eting efforts in a de!and 9dri$en econo!y.

o+i$ersified portfolio due to huge custo!er base enables ban# to reduce their dependence

on fe" or single borro"er

o Ban#s can earn good profits by pro$iding non fund based or fee based ser$ices "ithout

deploying their funds.

DISAD6ANTAGES

o +esigning o"n and ne" financial products is $ery costly and ti!e consu!ing for the ban#.



o Custo!ers no"7a7days prefer net ban#ing to branch ban#ing. -he ban#s that are slo" in

introducing technology7based products, are finding it difficult to retain the custo!ers

"ho "ish to opt for net ban#ing.

o Custo!ers are attracted to"ards other financial products li#e !utual funds etc.

o -hough ban#s are in$esting hea$ily in technology, they are not able to e/ploit the sa!e to

the full e/tent.

o A !ajor disad$antage is !onitoring and follo" up of huge $olu!e of loan accounts

inducing ban#s to spend hea$ily in hu!an resource depart!ent.

o ong ter! loans li#e housing loan due to its long repay!ent ter! in the absence of

proper follo"7up, can beco!e &PAs.

o -he $olu!e of a!ount borro"ed by a single custo!er is $ery lo" as co!pared to

"holesale ban#ing. -his does not allo" ban#s to to e/ploit the ad$antage of earning huge

profits fro! single custo!er as in case of "holesale ban#ing.

OPPORTUNITIES

R etail ban#ing has i!!ense opportunities in a gro"ing econo!y li#e India. As the

gro"th story gets unfolded in India, retail ban#ing is going to e!erge a !ajor dri$er.

-he rise of Indian !iddle class is an i!portant contributory factor in this regard. -he percentage

of !iddle to high7inco!e Indian households is e/pected to continue rising. -he younger

population not only "ields increasing purchasing po"er, but as far as ac4uiring personal debt is

concerned, they are perhaps !ore co!fortable than pre$ious generations. I!pro$ing consu!er

purchasing po"er, coupled "ith !ore liberal attitudes to"ards personal debt, is contributing to

India1s retail ban#ing seg!ent.



-he co!bination of abo$e factors pro!ises substantial gro"th in retail sector, "hich at present is

in the nascent stage. +ue to bundling of ser$ices and deli$ery channels, the areas of potential

conflicts of interest tend to increase in uni$ersal ban#s and financial conglo!erates. o!e of the

#ey policy issues rele$ant to the retail7ban#ing sector are8 financial inclusion, responsible

lending, and access to finance, long7ter! sa$ings, financial capability, consu!er protection,

regulation and financial cri!e pre$ention.

CHALLENGES TO RETAIL BANKING IN INDIA

o -he issue of !oney laundering is $ery i!portant in retail ban#ing. -his co!pels all the

ban#s to consider seriously all the docu!ents "hich they accept "hile appro$ing the

loans.

o -he issue of outsourcing has beco!e $ery i!portant in recent past because $arious core

acti$ities such as hard"are and soft"are !aintenance, entire A- set up and operation

(including cash, refilling) etc., are being outsourced by Indian ban#s.

o Ban#s are e/pected to ta#e ut!ost care to retain the ongoing trust of the public.

o Custo!er ser$ice should be at the end all in retail ban#ing. o!eone has rightly said, “It

ta#es !onths to find a good custo!er but only seconds to lose one. -hus, strategy of

%no"ing our Custo!er (%C) is i!portant. o the ban#s are re4uired to adopt

inno$ati$e strategies to !eet custo!er1s needs and re4uire!ents in ter!s of

ser$ices;products etc.

o -he dependency on technology has brought I- depart!ents1 additional responsibilities

and challenges in !anaging, !aintaining and opti!i0ing the perfor!ance of retail



ban#ing net"or#s. It is e4ually i!portant that ban#s should !aintain security to the

ad$ance le$el to #eep the faith of the custo!er.

o -he efficiency of operations "ould pro$ide the co!petiti$e edge for the success in retail

ban#ing in co!ing years.

o -he custo!er retention is of para!ount i!portant for the profitability if retail ban#ing

business, so ban#s need to retain their custo!er in order to increase the !ar#et share.

o 'ne of the crucial i!pedi!ents for the gro"th of this sector is the acute shortage of

!anpo"er talent of this specific nature, a !odern ban#ing professional, for a !odern

ban#ing sector.

STRATEGIES FOR INCREASING RETAIL BANKING BUSINESS

o C".'*$.* 7"#* +.."8$*+". *" 9$* * +9.*' "; * '*"9 '9.*'

-he custo!er database a$ailable "ith the ban#s is the best source of their de!ographic and

financial infor!ation and can be used by the ban#s for targeting certain custo!er seg!ents

for ne" or !odified product. -he ban#s should co!e out "ith ne" products in the area of

securities, !utual funds and insurance.

o <$,+*% '8+ $.# +/.'' +. #,+8%

As !ost of the ban#s are offering retail products of si!ilar nature, the custo!ers can easily

s"itcho$er to the one, "hich offers better ser$ice at co!parati$ely lo"er costs. -he 4uality

of ser$ice that ban#s offer and the e/perience that clients ha$e, !atter the !ost. 2ence, to

retain the custo!ers, ban#s ha$e to co!e out "ith co!petiti$e products satisfying the desires

of the custo!ers at the clic# of a button.

o I.*"#*+". "; .= #,+8% $..,'

5etail custo!ers li#e to interface "ith their ban# through !ultiple channels. -herefore,

ban#s should try to gi$e high 4uality ser$ice across all ser$ice channels li#e branches,

Internet, A-s, etc.

o T$77+. "; .>7,"+*# 7"*.*+$, $.# +.$'+. * 8",9 "; '+.''

-his "ill co!pensate for the thin !argins. -he Indian retail ban#ing !ar#et still re!ains

largely untapped gi$ing a scope for gro"th to the ban#s and financial institutions. ith



changing psyche of Indian consu!ers, "ho are no" co!fortable "ith the idea of a$ailing

loans for their personal needs, ban#s ha$e tre!endous potential lying in this seg!ent.

ar#eting depart!ents of the ban#s be geared up and special training be i!parted to the! so

that ban#s are successful in grabbing !ore and !ore of retail business in the !ar#et.

o I.;$'** "*'"+.

-his "ill help in lo"ering the cost of ser$ice channels co!bined "ith 4uality and 4uic#ness.

o D*$+, 9$/* '$

Ban#s !ay go for detail !ar#et research, "hich "ill help the! in #no"ing "hat their

co!petitors are offering to their clients. -his "ill enable the! to ha$e an edge o$er their

co!petitors and increase their share in retail ban#ing pie by offering better products and

ser$ices.

o C"''-',,+. "; 7"#*'

PBs ha$e an added ad$antage of ha$ing a "ide net"or# of branches, "hich gi$es the! an

opportunity to sell third7party products through these branches.

o B'+.'' 7"'' "*'"+.

'utsourcing of re4uire!ents "ould not only sa$e cost and ti!e but "ould help the ban#s in

concentrating on the core business area. Ban#s can de$ote !ore ti!e for !ar#eting,

custo!er ser$ice and brand building. :or e/a!ple, anage!ent of A-s can be outsourced.

-his "ill sa$e the ban#s fro! dealing "ith the intricacies of technology.

o T+-7 $$.9.*'

PBs "ith regional concentration can reap the benefit of reaching custo!ers across the

country by entering into strategic alliance "ith other such ban#s "ith intensi$e presence in

other regions. In the present regi!e of falling interest and stiff co!petition, ban#s are a"are

that it is finally the retail ban#ing "hich "ill enable the! to hold the head abo$e "ater.

2ence, ban#s should !a#e all out efforts to boost the retail ban#ing by recogni0ing the needs

of the custo!ers. It is essential that ban#s "ould be i!aginati$e in predicting the custo!ersH

e/pectations in the e$er7changing tastes and en$iron!ents. It is the inno$ati$e and

co!petiti$e products coupled "ith high 4uality care for clients "ill only hold



SPECIAL FEATURES OF RETAIL CREDIT

One of the pro!inent features of 5etail Ban#ing products is that it is a $olu!e dri$en

business. :urther, 5etail Credit ensures that the business is "idely dispersed a!ong a large

custo!er base unli#e in the case of corporate lending, "here the ris# !ay be concentrated on a

selected fe" plans. Ability of a ban# to ad!inister a large portfolio of retail credit products

depends upon such factors 8

o S*". #+* $''''9.* $7$+,+*%

Because of large $olu!e good infrastructure is re4uired. If the credit assess!ent itself is

4ualitati$e, than the need for follo" up in the future reduces considerably.

o S".# #"9.*$*+".

A latest syste! for credit docu!entation is necessary pre7re4uisite for healthy gro"th of credit

portfolio, as in the case of credit assess!ent, this "ill also !ini!i0e the need to follo" up at

future point of ti!e.

o S*". 7"''''+. $7$+,+*%

ince large $olu!es of transactions are in$ol$ed, today transactions, !aintenance of bac#ups is

re4uired

o R,$ ".'*$.* ;",,"=- 7

Ideally, follo" up for loan repay!ents should be an ongoing process. It should start fro!

custo!er en4uiry and last till the loan is repaid fully.

o S/+,,# 9$. '"

-his is one of the !ost i!portant pre7re4uisite for the efficient !anage!ent of large and di$erse

retail credit portfolio. 'nly highly s#illed and e/perienced !an po"er can "ithstand the ri$er of

ad!inistrating a di$erse and co!ple/ retail credit portfolio.

o T.","+$, '77"*

-his is yet another $ital re4uire!ent. 5etail credit is highly technological intensi$e in nature,

because of large $olu!es of business, the need to pro$ide instantaneous ser$ice to the custo!er

large, faster processing, !aintaining database, etc.



EMERGING ISSUES IN HANDLING RETAIL BANKING

O KNOWING CUSTOMER

%no" your Custo!er1 is a concept "hich is easier said than practiced. Ban#s face

se$eral hurdles in achie$ing this. In order to that the product lines are targeted at the

right custo!ers7present and prospecti$e7it is i!perati$e that an integrated $ie" of

custo!ers is a$ailable to the ban#s. -he benefits flo"ing out of cross7selling and up7

selling "ill re!ain a far cry in the absence of this $ital input. In this regard the custo!er

databases a$ailable "ith !ost of the public sector ban#s, if not all, re!ain far fro! being

en$iable.

hat needs to be done is setting up of a robust data "arehouse "here fro!

!eaningful data on custo!ers, their preferences, there spending patterns, etc. can be

!ined. Cleansing of e/isting data is the first step in this direction. PBs ha$e a long

"ay to go in this regard.

O TECHNOLOGY ISSUES

5etail ban#ing calls for huge in$est!ents in technology. hether it is setting up of aCusto!er 5elationship anage!ent yste! or *stablishing oan Process Auto!ation or



pro$iding anyti!e, any"here con$enience to the $ast nu!ber of custo!ers or

establishing channel;product;custo!er profitability, technology plays a pi$otal role. And

it is a long haul. -he Issues in$ol$ed include adoption of the right technology at the right

ti!e and at the sa!e ti!e ensuring $olu!es and !argins to sustain the in$est!ents.

It is pertinent to re!e!ber that Citiban#, #no"n for its deploy!ent of technology,too# nearly a decade to !a#e profits in credit cards. It has also to be added in the sa!e

breath that "ithout ade4uate technology support, it "ould be "ell nigh possible to

ad!inister the gro"ing retail portfolio "ithout allo"ing its health to deteriorate. :urther,

the #ey to reduction in transaction costs si!ultaneously "ith increase in ability to handle

huge $olu!es of business lies only in technology adoption.

PBs are on their "ay to catch up "ith the technology !uch re4uired for the

success of retail ban#ing efforts. ac# of connecti$ity, stand alone !odels, concept of

branch custo!er as against ban# custo!er, lac# of con$ergence a!ongst a$ailable

channels, absence of custo!er profiling, lac# of proper decision support syste!s, etc., are

a fe" deficiencies that are being o$erco!e in a great "ay. 2o"e$er, the initiati$es in this

regard should include creating fle/ible co!puting architecture a!enable to changes and

ha$ing scalability, a futuristic approach, net"or#ing across channels, de$elop!ent of a

strong Custo!er Infor!ation yste!s (CI) and adopting Custo!er 5elationship

anage!ent (C5) !odels for getting a ?D degree $ie" of the custo!er.

O ORGANI?ATIONAL ALIGNMENT

It is of ut!ost i!portance that the culture and practices of an institution support its stated

goals. 2a$ing decided to ta#e a plunge into retail ban#ing, ban#s need to ha$e a "ell

defined business strategy based on the co!petiti$e of the ban# and its potential. Creation

of a proper organi0ation structure and business operating !odels "hich "ould facilitate

easy "or# flo" are the needs of the hour. -he need for building the organi0ational

capacity needed to achie$e the desired results cannot be o$erstated.-his "ould !ean a strong co!!it!ent at all le$els, intensi$e training of the ran#

and file, putting in place a proper incenti$e sche!e, etc. As a part of organi0ational

align!ent, there is also the need for setting up of an effecti$e Corporate ar#eting

+i$ision. ost of the public sector ban#s ha$e only publicity depart!ents and not

!ar#eting setup. A fully fledged !ar#eting depart!ent or di$ision "ould help in

e$ol$ing a brand strategy, address the issue of alienation fro! the up"ardly !obile, high

net "orth custo!er group and i!pro$e the recall $alue of the institution and its products

by arresting the trend of getting receded fro! public !e!ory. -he !uch needed tie7ups



"ith !anufacturers;distributors;builders "ill also facilitated s!oothly. It is ti!e to brea#

the !yth PBs are not custo!er friendly. -he attention is to be di$erted to $ast databases

of custo!ers lying "ith the PBs till une/ploited for !ar#eting.

O PRODUCT INNO6ATIONProduct inno$ation continues to be yet another !ajor challenge. *$en though ban# after

ban# is co!ing out "ith ne" products, not all are successful. hat is of crucial

i!portance is the need to understand the difference bet"een no$elty and inno$ationJ

Peter +ruc#er in his path brea#ing boo#8 “anage!ent Challenges for the @=st Century

has in fact sounded a "ord of caution8 “inno$ation that is not in tune "ith the strategic

realities "ill not "or#< confusing no$elty "ith inno$ation (should be a$oided), test of

inno$ation is that it creates $alue< no$elty creates only a!use!ent. -he days of selling

the products a$ailable in the shel$es are gone. Ban#s need to inno$ate products suiting

the needs and re4uire!ents of different types of custo!ers. 5e$isiting the features of the

e/isting products to continue to #eep the! on de!and should not also be lost sight of.

O PRICING OF PRODUCT

-he ne/t challenge is to ha$e appropriate policies in place. -he industry today is

"itnessing a price "ar, "ith each ban# "anting to ha$e a larger slice of the ca#e that is

the !ar#et, "ithout !uch of a scientific study into the cost of funds in$ol$ed, !argins,

etc. -he strategy of each player in the !ar#et see!s to be8 under cutting others and

"ooing the clients of others1. ost of the ban#s that use rating !odels for deter!ining

the health of the retail portfolio do not use the! for pricing the products. -he !uch

needed transparency in pricing is also !issing, "ith !any hidden charges. -here is a

tendency, at least on the part of fe" to ca!ouflage the price. -he situation cannot re!ain

his "ay for long. -his "ill be one issue that "ill be gaining i!portance in the near

future.

O PROCESS CHANGES

Business Process 5e7engineering is yet another #ey re4uire!ent for ban#s to handle the

gro"ing retail portfolio. i!plified processes and aligning the! around deli$ery of

custo!er ser$ice i!pinging on reducing custo!er touch7points are of essence. A

reali0ation has to dra"n that auto!ating the inefficiencies "ill not help anyone and

continuing the old processes "ith ne" technology "ould only !a#e the organi0ation anold e/pensi$e one. or# flo" and docu!ent !anage!ent "ill be integral part of process



changes. -he docu!entation issues ha$e to re!ain si!ple both in ter!s of docu!ents to

be sub!itted by the custo!er at the ti!e of loan application and those to be e/ecuted

upon sanction.

151 GENERAL INTRODUCTION ABOUT THE SECTOR

-he Indian econo!y is e!erging as one of the strongest econo!y of the "orld "ith the G+P

gro"th of !ore than KF e$ery year. -his has gi$en a great support for the de$elop!ent of

ban#ing industry in the country .+ue to recession it has co!e do"n to .LF. But !ar#et no"

stabili0ing.

+ue to globali0ation, co!petition a!ong the ban#s has drastically been increased .As India has a

substantial upper and !iddle class inco!e hence the ban#s ha$e i!!ense opportunities to

increase their !ar#et shares. -he consu!er being on the recei$ing end is in the co!fortable

position but the ban#s trying to increase their !ar#et share ha$e to continuously add $alue for

consu!ers in order to increase !ar#et share and sustain their gro"th.

BANKING SECTOR

-he ban#ing sector is the !ost do!inant sector of the financial syste! in India. ignificant

progress has been !ade "ith respect to the ban#ing sector in the post liberali0ation period. -he

financial health of the co!!ercial ban#s has i!pro$ed !anifolds "ith respect to capital

ade4uacy, profitability, and asset 4uality and ris# !anage!ent. :urther, deregulation has opened

ne" opportunities for ban#s to increase re$enue by di$ersifying into in$est!ent ban#ing,

insurance, credit cards, depository ser$ices, !ortgage, securiti0ation, etc. iberali0ation has

created a !ore co!petiti$e en$iron!ent in the ban#ing sector

152 INDUSTRY PROFILE

$) ORIGIN AND DE6ELOPMENT OF THE INDUSTRY

-he origin of ban#ing in India is traceable in ancient ti!e through the !odern ban#ing hardly

@ years old. -he !ain function of ban# is to accept deposits and grant loans. -here is e$idence



of these functions being perfor!ed by a section of the co!!unity in the Medic periods. -here

are !any references of debt in the Medic literature. +uring the 5a!ayana and ahabharata areas

ban#ing, "hich "as a side business during the Medic period, beco!e a full7ti!e business acti$ity

for the people. +uring the s!riti period, "hich follo"ed the Medic period and the *pic age,

ban#ers perfor!ed the function of the !odern ban#s. -he !e!bers of the Maish co!!unity

carried on the ban#ing business and anu spea#s of earning through interest as the business of

Maishays. 2e accepted deposits fro! the public, granted loans against pledges and personal

security, granted si!ple open loans, acted as bailee for his custo!ers, subscribed to public loans

by granting loans to #ings, acted as treasurer and ban#er to the state and !anaged the currency of

the country. Indigenous ban#ers used to !aintain a regular syste! of accounts and borro"ers

used to sign the loan deeds.

R*$+, $./+.

According to in$estopedia.co!, retail ban#ing is typical !ass7!ar#et ban#ing "here indi$idual

custo!ers use local branches of larger co!!ercial ban#s. er$ices offered include8 sa$ings and

chec#ing accounts, !ortgages, personal loans, debit cards, credit cards, and so forth.

Types of retail banks

P+8$* $./

Pri$ate Ban#s is a ban# that is not incorporated. *ither an indi$idual or a general partner(s) "ith

li!ited partner(s) o"ns a non7incorporated ban#. In any such case, the creditors can loo# to both

the Nentirety of Othe ban#Hs assetsN as "ell as the entirety of the sole7proprietorHs;general7

partnersH assets.



-hese ban#s ha$e a long tradition in "it0erland, dating bac# to at least the re$ocation of the

*dict of &antes (=DK).

C"99+$, $./+.

A co!!ercial ban# is a type of financial inter!ediary and a type of ban#. Co!!ercial ban# has

t"o possible !eanings8

Co!!ercial ban# is the ter! used for a nor!al ban# to distinguish it fro! an in$est!ent ban#.

-his is "hat people nor!ally call a Nban#N. -he ter! Nco!!ercialN "as used to distinguish it

fro! an in$est!ent ban#. ince the t"o types of ban#s no longer ha$e to be separate co!panies,

so!e ha$e used the ter! Nco!!ercial ban#N to refer to ban#s "hich focus !ainly on co!panies.

In so!e *nglish7spea#ing countries outside &orth A!erica, the ter! Ntrading ban#N "as and is

used to denote a co!!ercial ban#. It raises funds by collecting deposits fro! businesses and

consu!ers $ia chec#able deposits, sa$ings deposits, and ti!e (or ter!) deposits. It !a#es loans

to businesses and consu!ers. It also buys corporate bonds and go$ern!ent bonds. Its pri!ary

liabilities are deposits and pri!ary assets are loans and bonds. +etailed infor!ation on ban#s

sectoral e/posure of credit re$eals that o$er t"o7thirds of the credits flo" has been on account of

retail, housing and other priority sector loans. Ban#s credit flo" e/posure to large *nterprises

continues to re!ain buoyant "ith recent indications that credit to agriculture and icro credit

has also pic#ed up. -he In$est!ent Ban#ing and ar#ets di$ision brings together the ad$isory

and financing, e4uity securities, asset !anage!ent, treasury and capital !ar#ets, and pri$ate

e4uity acti$ities of the Group to co!plete the CIB structure and pro$ide a co!plete range of

financial products to our clients. Increasingly, *CA financing is being

) GROWTH AND PRESENT STATUS OF THE INDUSTRY



Co!!ercial ban#ing can also refer to a ban# or a di$ision of a ban# that !ostly deals "ith

deposits and loans fro! corporations or large businesses, as opposed to nor!al indi$idual

!e!bers of the public (retail ban#ing). as in the Indian ban#ing.. -he !ost pro!inent on our

!inds in the conte/t of ban#ing these days, perhaps, are the i!plications arising out of the Basel

II accord. Ban#s, as "e all #no", are subjected to !ore intense regulation as co!pared to the

non7financial fir!s. -his is probably because the ban#s possess certain HspecialH characteristics8

Ban#s are !uch !ore le$eraged than the other fir!s due to their capacity to garner public

deposits. -he asset 7 liability structure of the ban#s is also different fro! not only the non7

financial fir!s but also the financial fir!s. -o illustrate, the ris# in an insurance co!pany arises

!ainly fro! the liability side of the balance sheet in the for! of insurance clai!s "hereas for the

ban# the ris# !ainly co!es fro! the di!inution of asset $alues (for e/a!ple, illi4uid loans that

are not fully reco$erable). -he deposits "hich constitute a !ajor part of the liability of ban#s are

repayable on de!and, unsecured and their principal a!ount does not change in $alue "hereas

the loans of a ban# are illi4uid and there can be erosion in the $alue of loans or of other assets.

-he li4uidity transfor!ation by an insurance co!pany is in the re$erse direction as co!pared to

a ban#. -he balance7sheet structure of an insurance co!pany is the least li#ely to gi$e rise to

syste!ic ris#, "hereas ban#s due to their typical asset liability !is!atches i.e. long ter! assets

funded by short ter! liabilities, !ay be prone to run1 and pose a $ery high degree of potential

syste!ic ris#. -he resolution costs of syste!ic ban# insol$encies and significant proble!s can besubstantial. "eighted differently.

B$', I proposals forced the ban#s to loo# at credit ris# and regulatory capital !ore closely than

they had done earlier. As ban#s found "ays to arbitrage regulatory capital, so!e of the

pro$isions of Basel I beca!e less rele$ant. i!ultaneously, ban#s in the G7= countries

de$eloped ne"er approaches to !anage credit ris# by building portfolio !odels for pricing,

pro$isioning and allocating econo!ic capital for the credit portfolios. -hese de$elop!ents !ade

the "ea#nesses in the Basel I fra!e"or# !ore apparent and this set the stage for the creation of

HInternational Con$ergence of Capital easure!ent and Capital tandards8 A 5e$ised

:ra!e"or#H, popularly #no"n as Basel II.

T B$', Co!!ittee on Ban#ing uper$ision has obser$ed that the funda!ental objecti$e in

re$ising the =>KK Accord has been, and I 4uote, Hto de$elop a fra!e"or# that "ould further

strengthen the soundness and stability of the international ban#ing syste! "hile !aintaining

sufficient consistency that capital ade4uacy regulation "ill not be a significant source of co!petiti$e ine4uality a!ong internationally acti$e ban#s. -he (Basel) Co!!ittee belie$es that



the re$ised :ra!e"or# "ill pro!ote the adoption of stronger ris# !anage!ent practices by the

ban#ing industry, and $ie"s this as one of its !ajor benefitsH 3n4uote

) F* "; * +.#'*%

5eflecting on future prospects in ban#ing, i!!ediate focus has to be on the cleaning up of the

re!nants of undercapitali0ed ban#s, "hile concentrating on i!pro$e!ents in the rural co7

operati$e credit syste!. It is also necessary to ensure i!pro$e!ents in their go$ernance and

financial !anage!ent. In the ban#ing syste! as a "hole, a healthy credit culture enco!passing

appropriate pricing, 4uality of ser$ice, financial inclusion and contract7enforce!ent "ould be

$ital.

-he 5eser$e Ban# of India has, in the ser$ice of our country, a pro$en trac# record and

professionalis!, "hich ha$e lent it considerable credibility 7 both do!estically and globally.

-his credibility enables the 5BI to confidently carry the refor!s for"ard to credibly !aintain

price and financial stability, "hile enabling self7accelerating e4uitable gro"th at ele$ated le$els

-he Indian financial sector is ready for consolidation, said > per cent of the respondents. Gi$en

the increased co!petition, and the i!ple!entation of Basel II nor!s in the near future, the

ban#ing industry of the country "ould be better off "ith si/ to se$en ban#s as big as tate Ban#

of India, said the sur$ey. 2o"e$er, $oluntary !ergers are better than forced ones.

A !ajority of the public sector ban#s also de!anded !ore autono!y to fi/ salary le$els

proportionate to perfor!ance. In order to i!pro$e e!ployee producti$ity it is essential to offer

co!petiti$e co!pensation pac#ages at all le$els, the sur$ey said. About >@ per cent of the public

sector ban#s respondents $oiced that they do not ha$e sufficient autono!y to offer attracti$e

incenti$e pac#ages to e!ployees to ensure co!!it!ent le$els.

o!e ban#s also said that in one7yearHs ti!e, ban#s should be per!itted to issue preference

shares. According to the sur$ey, so!e of the strengths of the ban#ing industry are regulatory

syste!s, econo!ic gro"th, technological ad$ance!ent, ris# assess!ent syste!s and credit

4uality.

Areas that need i!pro$e!ent include di$ersification of !ar#ets beyond big cities, hu!an

resources syste!s, si0e of ban#s, high transaction costs, infrastructure and labour infle/ibilities.



As per the sur$ey so!e strategies that can help India achie$e a "orld class ban#ing syste! are

consolidation, strict corporate go$ernance nor!s, regional e/pansion "ithin the country and

outside, higher :+I li!its and :ree -rade Agree!ents "ith countries "here India has

co!parati$e ad$antage in ban#ing sector.

NA$ailability and reach of 4uality products is confined to just big cities. -hus it is essential no"

to e/pand the ga!ut of ban#ing ser$ices both "ithin India as "ell as outside,N the sur$ey said.

2o"e$er, ban#s in India are yet to effecti$ely le$erage technology. ICICI Ban# has been

ac#no"ledged to be a!ong the first to e/plore ne" !ediu!s li#e Internet.

India has a!ong the lo"est penetration of retail loans in Asia. -hough the sector has been

gro"ing at around = per cent, there is still a huge opportunity to tap into. iddle and 7high7

inco!e ho!es in India has increased fro! =.=D crore (==.D !illion) in =>> to @.L crore (@.L

!illion) in @@. Interest rates on retail loans ha$e been dropping rapidly too. :or instance

residential !ortgages slu!ped by L per cent o$er the last four years.

N-he entry of a nu!ber of ban#s in India in the last fe" years has helped pro$ide increased

co$erage and a nu!ber of ne" products in the !ar#et,N says %a!ath.

ban#ing sector today is esti!ated to be at 5s =L trillion and total deposits are esti!ated at 5s =?

trillion.

ector hare of G+P F Gro"th of Q= : @? Gro"th in Q@ : @?

er$ices D.= L. >.K

Industry @=.K .K D.?

Agriculture @@.= =.L L.

G+P .L K.



251 ORIGIN OF THE ORGANI?ATION

T H"'+. D8,"79.* F+.$. C"7"$*+". L+9+*# (2+:C) "as a!ongst the first to

recei$e an Hin principleH appro$al fro! the 5eser$e Ban# of India (5BI) to set up a ban# in the

pri$ate sector, as part of the 5BIHs liberali0ation of the Indian Ban#ing Industry in =>>. -he

ban# "as incorporated in August =>> in the na!e of H2+:C Ban# i!itedH, "ith its registered

office in u!bai, India. 2+:C Ban# co!!enced operations as a cheduled Co!!ercial Ban#

in 6anuary =>>.

2+:C is IndiaHs pre!ier housing finance co!pany and enjoys an i!peccable trac# record in

India as "ell as in international !ar#ets. ince its inception in =>LL, the Corporation has

!aintained a consistent and healthy gro"th in its operations to re!ain the !ar#et leader in

!ortgages. Its outstanding loan portfolio co$ers "ell o$er a !illion d"elling units. 2+:C hasde$eloped significant e/pertise in retail !ortgage loans to different !ar#et seg!ents and also

has a large corporate client base for its housing related credit facilities.

252 GROWTH AND DE6ELOPMENT OF THE ORGANI?ATION

2+:C Ban# is head 4uartered in u!bai. -he Ban# at present has an en$iable net"or# of o$er

DK branches spread o$er ?=D cities across India. All branches are lin#ed on an online real7ti!e

basis. Custo!ers in o$er =@ locations are also ser$iced through -elephone Ban#ing. -he Ban#Hs

e/pansion plans ta#e into account the need to ha$e a presence in all !ajor industrial and

co!!ercial centers "here its corporate custo!ers are located as "ell as the need to build a

strong retail custo!er base for both deposits and loan products. Being a clearing;settle!ent ban#

to $arious leading stoc# e/changes, the Ban# has branches in the centers "here the &*;B*

ha$e a strong and acti$e !e!ber base. -he Ban# also has a net"or# of about o$er

net"or#ed A-s across these cities. oreo$er, 2+:C Ban#Hs A- net"or# can be accessed by



all do!estic and international Misa;asterCard, Misa *lectron;aestro, Plus;Cirrus and

A!erican */press Credit;Charge cardholders.

In a !ilestone transaction in the Indian ban#ing industry, -i!es Ban# i!ited (another ne"

pri$ate sector ban# pro!oted by Bennett, Cole!an R Co.;-i!es Group) "as !erged "ith 2+:CBan# td., effecti$e :ebruary @D, @. As per the sche!e of a!alga!ation appro$ed by the

shareholders of both ban#s and the 5eser$e Ban# of India, shareholders of -i!es Ban# recei$ed

= share of 2+:C Ban# for e$ery .L shares of -i!es Ban#.

25@ PRESENT STATUS OF THE ORGANI?ATION

At present 2+:C Ban# is the leading !ost ban# in the housing and de$elop!ent sector and is

gro"ing $ery fast in the other ban#ing sectors such as life insurance R !utual fund.

-he authori0ed capital of 2+:C Ban# is 5s. crore (5s.. billion). -he paid7up capital is

5s.?==.> crore (5s.?.= billion). -he 2+:C Group holds @@.=F of the ban#Hs e4uity and about

=>.F of the e4uity is held by the A+ +epository (in respect of the ban#Hs A!erican +epository

hares (A+) Issue). 5oughly ?=.?F of the e4uity is held by :oreign Institutional In$estors

(:IIs) and the ban# has about =>, shareholders. -he shares are listed on -he toc#

*/change, u!bai and the &ational toc# */change. -he ban#Hs A!erican +epository hares

are listed on the &e" or# toc# */change (&*) under the sy!bol N2+B.

2+:C i!ited, Bennett, Cole!an R Co. td. and its group co!panies (the pro!oters of

erst"hile -i!es Ban# i!ited) and Chase :unds had entered into tripartite agree!ent dated

&o$e!ber @D, =>>> for effecting a!alga!ation of -i!es Ban# i!ited "ith the Ban#. 3nder

this Agree!ent, Bennett Cole!an Group has a right to no!inate one +irector on the Board of

the Ban# as long as its holding e/ceeds F of the share capital of the Ban#. Currently, as on

arch ?=, @L, the Bennett Cole!an Group holds .=F of the share capital of the Ban# and

r. Mineet 6ain represents the group on the Board of the Ban#.



254 FUNTIONAL DEPARTMENT OF THE ORGANI?ATION

Chairman

Managing

Executive Director

Regional Sales

Area sales Head

Area Sales

Deputy Sales

Team Leader

Contract Sales



25 ORGANI?ATION STRUCTURE AND ORGANI?ATION CHART

Chairman

Managing Director & C E

!oint Managing Director

"#nternational $usiness%

!oint Managing Director

"Domestic $anin %

Executive

Director

Executive

Director

Executive

Director

Executive

Director

Sr' (eneral Managers

(eneral Managers



25! PRODUCT AND SER6ICE PROFILE OF THE ORGANI?ATION

W",'$, B$./+. S8+'

-he Ban#Hs target !ar#et ranges fro! large, blue7chip !anufacturing co!panies in the Indian

corporate to s!all R !id7si0ed corporate and agri7based businesses. :or these custo!ers, the

Ban# pro$ides a "ide range of co!!ercial and auctional ban#ing ser$ices, including "or#ing

capital finance, trade ser$ices, transactional ser$ices, cash !anage!ent, etc. -he ban# is also a

leading pro$ider of structured solutions, "hich co!bine cash !anage!ent ser$ices "ith $endor

and distributor finance for facilitating superior supply chain !anage!ent for its corporate

custo!ers. Based on its superior product deli$ery ; ser$ice le$els and strong custo!er

orientation, the Ban# has !ade significant inroads into the ban#ing consortia of a nu!ber of

leading Indian corporates including !ultinationals, co!panies fro! the do!estic business

houses and pri!e public sector co!panies. It is recogni0ed as a leading pro$ider of cash

!anage!ent and transactional ban#ing solutions to corporate custo!ers, !utual funds, stoc#

e/change !e!bers and ban#s.

R*$+, B$./+. S8+'

-he objecti$e of the 5etail Ban# is to pro$ide its target !ar#et custo!ers a full range of financial

products and ban#ing ser$ices, gi$ing the custo!er a one7stop "indo" for all his;her ban#ing

re4uire!ents. -he Ban# also has a "ide array of retail loan products including Auto oans,

oans against !ar#etable securities, Personal oans and oans for -"o7"heelers. It is also a

leading pro$ider of +epository Participant (+P) ser$ices for retail custo!ers, pro$iding

custo!ers the facility to hold their in$est!ents in electronic for!. 2+:C Ban# "as the first

ban# in India to launch an International +ebit Card in association "ith MIA (MIA *lectron)

and issues the asterCard aestro debit card as "ell. -he Ban# launched its credit card business

in late @=. By epte!ber ?, @, the ban# had a total card base (debit and credit cards) of

.@ !illion cards. -he Ban# is also one of the leading players in the N!erchant ac4uiringN



business "ith o$er , Point7of7sale (P') ter!inals for debit ; credit cards acceptance at

!erchant establish!ents.

D7"'+*'

I5 S$8+.' A".*

-hese accounts are pri!arily !eant to inculcate a sense of sa$ing for the future, accu!ulating

funds o$er a period of ti!e. hate$er custo!er occupation, ban# is confident that custo!er "ill

find the perfect ban#ing solution.

• +ebit7cu!7A- card

• Auto In$est Account

• Internet Ban#ing

• Phone ban#ing

• Any"here Ban#ing

• tanding Instruction

• &o!ination facility

• +oorstep ser$ice

II5 S7+$, '$8+.' $".*

Co!prehensi$e ban#ing

olution "ith added features

upple!entary sa$ings

Ideal for ta/7e/e!pt entities

Internet ban#ing

Any"here ban#ing

+oorstep ser$ice

In"ard re!ittance

III5 S.+" C+*+3. S8+'

2igher interest rates

pecial de!and loans against deposit



:ree collection of outstation che4ues dra"n on our locations.

+ebit7cu!7A-7card

Auto In$est Account

Internet ban#ing

Phone ban#ing

Any"here ban#ing

tanding instructions

&o!ination facility

I65 F+># #7"'+*'

ide range of tenures

Choice of in$est!ent plans

Partial "ithdra"al per!itted

afe custody of fi/ed deposit receipts

Auto rene"al possible

oan facility a$ailable

65 D-M$* $".*'

:ree trading account

'nline buying and selling of shares

ess docu!entation

Can control loss of !oney

25 MARKET PROFILE OF THE ORGANISATION

2+:C Ban# has its deposit progra!!es rated by t"o rating agencies 7 Credit Analysis R

5esearch i!ited. (CA5*) and :itch 5atings India Pri$ate i!ited. -he Ban#Hs :i/ed +eposit

progra!!e has been rated HCA5* AAA (:+)H O-riple A by CA5*, "hich represents instru!ents

considered to be Nof the best 4uality, carrying negligible in$est!ent ris#N. CA5* has also rated

the Ban#Hs Certificate of +eposit (C+) progra!!e NP5 =SN "hich represents Nsuperior capacity

for repay!ent of short ter! pro!issory obligationsN. :itch 5atings India P$t. td. (=F

subsidiary of :itch Inc.) has assigned the NtAAA (ind)N rating to the Ban#Hs deposit progra!!e,

"ith the outloo# on the rating as NstableN. -his rating indicates Nhighest credit 4ualityN "here

Nprotection factors are $ery highN. 2+:C Ban# also has its long ter! unsecured, subordinated



(-ier II) Bonds of 5s. billion rated by CA5* and :itch 5atings India Pri$ate i!ited. CA5*

has assigned the rating of NCA5* AAAN for the -ier II Bonds "hile :itch 5atings India P$t. td.

has assigned the rating NAAA (Ind)N "ith the outloo# on the rating as NstableN. In each of the

cases referred to abo$e, the ratings a"arded "ere the highest assigned by the rating agency for

those instru!entsJ

ithin this business, the ban# has three !ain product areas 7 :oreign */change and +eri$ati$es,

ocal Currency oney ar#et R +ebt ecurities, and *4uities. ith the liberali0ation of the

financial !ar#ets in India, corporate need !ore sophisticated ris# !anage!ent infor!ation,

ad$ice and product structures. -o co!ply "ith statutory reser$e re4uire!ents, the ban# is

re4uired to hold @F of its deposits in go$ern!ent securities.



@51 STUDENTS WORK PROFILE (R", $.# R'7".'++,+*%)5

I a! "or#ing as contract sales e/ecuti$e in 2+:C ban#< !y role is to find out people "ho "ant

to open sa$ings A;c. I ha$e to con$ince the custo!ers to open sa$ings account in our ban#. After

con$incing, I use to fill up the for!s through custo!ers and collect their docu!ents to login the

for! for opening their accounts. -here are so!e targets in a !onth, "hich "e need to reach in

ban#. I ha$e done !any acti$ities li#e par# acti$ities, A- acti$ities, Apart!ents acti$ities etc to

generate !y leads. By doing these acti$ities "e get custo!ers for opening accounts. -he roles

and responsibilities handled by !e are8

=) Generating leads for opening accounts

@) Preparing daily sales report of daily acti$ities

?) Ans"ering to custo!er 4ueries.

) Merification of the docu!ents gi$en by the custo!ers.

After three !onth "or#ing e/perience I ca!e to #no" ho" to handle the people R tas# in the

organi0ation. &o" I feel !uch confident.

Being a sales e/ecuti$e I ha$e to ans"er to the custo!ers as "ell as tea! leader to the 4ueries. I

ha$e to fulfill !y indi$idual target.

@52 DESCRIPTION OF LI6E EPERIENCES5

-his training has helped !e a lot in understanding the realities of the outside "orld. I also ca!e

to #no" the real !eaning of the "ord marketing. -here are both negati$e and positi$e

e/periences of our training. o!e of these are8

• 5eal e/posure to the corporate "orld, "hich helped !e a lot in understanding the !ind,

set of e/ecuti$es to a certain e/tent.

• earned about custo!er re4uire!ents, custo!er !ind set ho" to con$ince others and

!any.

• It helped !e in i!pro$ing !y co!!unication s#ills, presentation s#ills and ho" to

beha$e in front of public.



• Apart fro! these positi$e e/periences I faced certain proble!s too "hich I "ould

li#e to discuss here8

• It "as 4uite difficult in the beginning to cope "ith both college studies and job.

• Initially it too# !e so!eti!e to understand the process of sales opening, closing,

ho"e$er "ith ti!e I understood the proble! and "or#ed on it sincerely. &o" I feel

!uch !ore confident in handling sales calls.

451 STATEMENT OF RESEARCH PROBLEM

-he co!pany !ust gain confidence of the custo!ers and pro$ide ser$ices par e/cellence.

-herefore, underta#ing the project helps in assessing the custo!er care le$el of 2+:C BA&%.

-he study is applied descripti$e as "ell as diagnostic in nature. It also tends to find the custo!er

$ie" about i!portant aspects of the ser$ices. At the sa!e ti!e it "as intended to find the

custo!er $ie" about the product and the 4uality of ser$ice i!pro$e!ent. In short this proble!

can be defined as8 A '*"9' '$*+';+# =+* * '8+' $* HDFC

In today1s era of cutthroat co!petition, it is of an utter!ost i!portance to gain a cutting edge

o$er the co!petition, and de$elop a large !ar#et share. -his is only possible if there is a large

custo!er base for the co!pany.



452 RESEARCH OBJECTI6ES:

=. -o e$aluate the perception le$el of the account holders to"ards 2+:C BA&%

@. -o study the i!portance of custo!er relationship.

?. -o study the i!pact of custo!er relationship !anage!ent on ban# custo!ers.

. -o analy0e the e/pectations of ban#ing custo!ers.

. -o suggest the ban#s under study to strengthen the custo!er relations.

D. -o analy0e the satisfaction le$el of custo!ers of 2+:C BA&% on the follo"ing heads8

=. or#ing en$iron!ent

@. Custo!er care

?. Personal care of the custo!ers

. Ban# ti!ings

. '$erall ser$ices

D. pecial sche!es pro$ided



45@ RESEARCH DESIGN AND METHODOLOGY5

THE METHOD USED OF DATA COLLECTION ARE:

P+9$% D$*$

S".#$% D$*$

PRIMARY DATA: Pri!ary data are data1s, "hich are original in nature, and are collected by

the researcher. -he !ethod used to collect the pri!ary data "as ur$ey ethod. -he sur$ey

!ethod included a structured 4uestionnaire that "as gi$en to the respondent.

SECONDARY DATA: econdary data are data, "hich has been collected and co!piled in

ad$ance for another needed purpose. econdary data is an i!portant !ethod to #no" the present

proble! faced by the account holders in the field of 2+:C BA&%. &e"spaper, Articles, Boo#s,

aga0ines etc. ha$e been used to prepare the 4uestionnaire.

PLAN OF ANALYSIS8

Calculations ha$e been done for interpretation such as percentages, a$erages.

-he data collected fro! respondents through 4uestionnaire are organi0ed, coded, processed and

tabulated in order to create graphs and charts to !a#e the project understandable. Chi 4uare

-est is perfor!ed on the inferred data to arri$e at a statistical conclusion.

TOOLS FOR DATA COLLECTION

-he tool used for data collection is Pri!arily “Questionnaire !ethod. -he 4uestions contained8

O7.- E.## <'*+".'

here the respondent "as gi$en a chance to reply or gi$e suggestions to the Co!pany. -his

included :ree 5esponses 4uestions "here the respondents "ere gi$en the freedo! to gi$e

suggestions.

C,"' - E.## <'*+".'

here the respondent "as gi$en a lesser chance to reply. -his includes !ultiple Choice

Questions "here the respondents "ere gi$en a nu!ber of alternati$es.



S$,'

5espondents "ere gi$en a scale "hose positions range fro! “2ighly atisfied to “2ighly

+issatisfied

A$ "; '8%-he area selected to find the satisfactory le$el "as in and around Bannerghatta 5oad.

S$97, U.+*

-he sa!ple "as considered to be the Custo!ers of 2+:C BA&%

SAMPLING:

5ando! sa!pling !ethod to select a sa!ple of = custo!ers a!ong the custo!ers of the

2+:C BA&%.

454 ANALYSIS OF DATA

As the co!petition le$el in the ban#ing sector is e$er increasing, it beco!es indispensable for

the co!pany (2+:C) to conduct the study on the perception and satisfaction le$el of its

custo!ers. -his study "ill help the co!pany in !a#ing its ne" strategies to satisfy its custo!er

in the "ays in "hich he or she "ants to be satisfied and to the co!pany its position in the

!ar#et.

-he study on custo!er satisfaction has the geographical co$erage li!ited to Bannerghatta 5oad

only. -his study "ill help the co!pany to #no" in detail about the custo!er perception and their

attitude to"ards the co!pany ser$ices and products. -he co!pany "ill gain the feedbac# fro!

the custo!er to i!pro$e its products and 4uality of ser$ice.

TABLE 1: SHOWING DISTRIBUTION OF AGE

AG* G5'3P &'. ': 5*P'&+*&- P*5C*&-AG*

@ 9 ? @@ @@F

? 9 ? ?F

A&+ AB'M* ? ?F

-'-A = =F



ANALYSIS

-he abo$e table sho"s that @@F of the respondents fall under the age group of @ 9 ?

years ,?F of the respondents fall under age group of ? 9 years and ?F of the

respondents belonging to age group of and abo$e years.

INFERENCE

2ence it clearly sho"s that the !ajority of the respondents fall under the age group of

? 9 years i.e. ?F.

(RA)H*+



TABLE 2: SHOWING DISTRIBUTION OF SE OR GENDER

G*&+*5 &'. ': 5*P'&+*&- P*5C*&-AG*

:*A* ? ?F

A* L LF

-'-A = =F

ANALYSIS

-he table sho"s that there are LF of !ale respondents and ?F of fe!ale respondents.

INFERENCE

-hus the table clearly sho"s that the !ajority of the respondents are !ale i.e. LF.

(RA)H*,



TABLE @: SHOWING THE DISTRIBUTION OF THE MONTHLY HOUSEHOLD

INCOME

'&-2 2'3*2'+

I&C'*

&'. ': 5*P'&+*&- P*5C*&-AG*

* -2A& 5 =, F

5 =, 9 5 @, @? @?F

'5* -2A& 5 @, LL LLF

-'-A = =F

ANALYSIS

-he abo$e table sho"s that there are no respondents "ho ha$e a !onthly household

inco!e of less than 5s =,, there are @?F of the respondents "ho fall under 5s

=, 9 5s @, household inco!e and LLF fall under the !ore than 5s @,

household inco!e category.

INFERENCE

-he table clearly sho"s that the !ajority of the respondents ha$e !ore than 5s @,

of !onthly household inco!e, that is LLF.



TABLE 4: SHOWING THE IMPORTANCE OF A SMILING EMPLOYEE ACCORDING

TO A CUSTOMER

IP'5-A&C* &'. ': 5*P'&+*&- P*5C*&-AG*

M*5 IP'5-A&- F

'*2A- IP'5-A&- @ @F

&'- ' IP'5-A&- @ @F

&'- A- A IP'5-A&- F

-'-A = =F

ANALYSIS

According to the table F of the respondents feel its e/tre!ely i!portant for a

e!ployee to "elco!e a custo!er "ith a s!ile,@F respondents thin# its so!e"hat

i!portant "hile @F feel its not so i!portant and F thin# its not at all i!portant.

INFERENCE

(RA)H*-



2ence "hen a custo!er enters the ban# , he loo#s for a s!iling e!ployee to "elco!e

hi!, its e/tre!ely i!portant to hi!(F of respondents thin# its $ery i!portant).

TABLE : SHOWING THE IMPORTANCE OF THE SI?E OF THE CHE<UE BOOK

ACCORDING TO THE CUSTOMERS

(RA)H*.



IP'5-A&C* &'. ': 5*P'&+*&- P*5C*&-AG*

M*5 IP'5-A&- @ @F

'*2A- IP'5-A&- F

&'- ' IP'5-A&- ? ?F

&'- A- A IP'5-A&- F

-'-A = =F

ANALYSIS

-he table sho"s that according to the @F of the respondents its $ery i!portant that the

che4ue boo# si0e is appropriate,?F of the respondents thin# its not so i!portant, F of the respondents thin# its not at all i!portant "hile F of the respondents thin# its

so!e"hat i!portant.

INFERENCE

2ence the table clearly sho"s that the !ajority of the respondents thin# its so!e"hat

i!portant for the che4ue boo# si0e to be appropriate.



TABLE !: SHOWING THE IMPORTANCE OF THE BANK TIMING ACCORDING TO

THE CUSTOMERS

IP'5-A&C* &'.': 5*P'&+*&- P*5C*&-AG*

M*5 IP'5-A&- D DF

(RA)H*/



'*2A- IP'5-A&- @ @F

&'- ' IP'5-A&- = =F

&'- A- A IP'5-A&- F

-'-A = =F

ANALYSIS

-he abo$e table relates that the DF of the respondents thin# its e/tre!ely i!portant for

the ban# ti!ing to be con$enient,@F of the respondents thin# its so!e"hat

i!portant,=F of the respondents thin# its not so i!portant "hile none of the! thin# its

not at all i!portant.

INFERENCE

-able nu!ber L clearly sho"s that !ajority of the custo!ers thin# that its $ery

i!portant that the ban# ti!ings are con$enient i.e. DF



TABLE : SHOWING THE IMPORTANCE OF THE ( ?ERO BALANCE SA6INGS

ACCOUNTS ) FACILITY ACCORDING TO THE CUSTOMERS

IP'5-A&C* &'. ':

5*P'&+*&-

P*5C*&-AG*

M*5 IP'5-A&- K KF

'*2A- IP'5-A&- @ @F

&'- ' IP'5-A&- F

&'- A- A IP'5-A&- F

-'-A = =F

ANALYSIS



According to the table abo$e none of the respondents thin# its not at all or not so

i!portant that the T*5' BA&A&C* C355*&- ACC'3&- 2'3+ be pro$ided, "hile

KF of the respondents thin# its $ery i!portant and @F of the respondents thin# its

so!e"hat i!portant.

INFERENCE

2ence the table clearly sho"s that the !ajority of the custo!ers thin# its $ery i!portant

that the T*5' BAA&C* AMI&G ACC'3&- facility should be pro$ided that is KF.

(RA)H*0



TABLE : SHOWING THE IMPORTANCE OF TRANSACTION TIMING IN HDFC

BANK ACCORDING TO CUSTOMRES

MA5AIB* 5*P'&+*&- P*5C*&-AG*

2IG2 A-I:I*+ = =F

A-I:I*+ D@ D@F

&*3-5A @? @?F

+IA-I:I*+ F

2IG2 +IA-I:I*+ F

= =F

ANALYSIS

:ro! the abo$e table , it can be analy0ed that out of = respondents =F only are

highly satisfied "ith the -ransaction ti!ing of the Ban# , D@F of the! are satisfied , @?F

of the! are on the neutral side . oreo$er F of the! are dissatisfied and none are

highly dissatisfied.



INFERENCE

-herefore, it can be inferred that al!ost F of the respondents are not happy "ith the

ti!e ta#en for transaction . -his indicates that the custo!ers are not satisfied "ith the

speed of the transaction .



TABLE : SHOWING THE IMPORTANCE OF CUSTOMER CARE IN HDFC BANK

ACCORDING TO CUSTOMRES

MA5AIB* 5*P'&+*&- P*5C*&-AG*

2IG2 A-I:I*+ =@ =@F

A-I:I*+ D? D?F

&*3-5A @= @=F

+IA-I:I*+ F

2IG2 +IA-I:I*+ F

-'-A = =F

ANALYSIS

(RA)H*1



-he abo$e table sho"s that out of = respondents =@F are highly satisfied "ith the

Custo!er Care of the 2+:C Ban#, D?F of the! are satisfied and @=F are neutral,

!oreo$er F of the! are dissatisfied and none of the! are highly dissatisfied.

INFERENCE

In today1s "orld custo!er care is one of the !ost i!portant criteria as it helps the

organi0ation to retain their or add !ar#et share . -herefore , 2+:C should "or# to"ards

the F dissatisfied custo!ers either by training the e!ployees or !a#ing the procedure

custo!er friendly



TABLE 10: SHOWING THE IMPORTANCE OF HDFC BANK SER6ICE ACCORDING

TO CUSTOMRES

MA5AIB* 5*P'&+*&- P*5C*&-AG*

*UC*P-I'&A A-I:I*+ F

A-I:I*+ F

&*3-5A D DF

ANALYSIS

(RA)H*2



-he abo$e table sho"s that out of = respondents F are e/ceptionaly satisfied "ith

the er$ice of the 2+:C Ban#, F of the! are satisfied and DF are neutral.

INFERENCE

In today1s "orld Ban# er$ice is one of the !ost i!portant criteria as it helps the

organi0ation to retain their or add !ar#et share . -herefore , 2+:C should "or# to"ards

the DF neutral custo!ers either by training the e!ployees or !a#ing the procedure

custo!er friendly



45 SUMMARY OF FINDINGS

ost of the custo!ers of the ban# are satisfied, but there is a !inority of custo!ers "ho

are still loo#ing for i!pro$e!ent in this aspect of ser$ice area as "ell in the field of

"or#ing en$iron!ent.

'ne area of strength of the ban# "hich it can really boast off as !ost of the custo!ers are

satisfied "hen it co!es to custo!er care.



'$erall the result of sur$ey has sho"n a positi$e sign for the o$erall ser$ices

fro! "here on they can increase their custo!er base "ith the e/ception of a fe"

dissatisfied custo!ers "hich needs to be loo#ed after.

-he ban# has caused a lot of incon$enience to the custo!ers regarding its

ban#ing hours as sho"n fro! the result of the sur$ey. :le/ible ban#ing hours

should be achie$ed to attain higher custo!er satisfaction again lot of the! are

e$en satisfied .

-here is a !i/ed response "hen it co!es to transaction ti!e. A certain section or

respondents see! to be satisfied but a substantial nu!ber of custo!ers are loo#ing for

faster transaction ti!e.

651 SUMMARY OF LEARNIG EPERIENCE5

I "ent through a good learning practice in !y 2+:C Ban# for the past eight !onths "hich has

de$eloped !e to heights of understanding the custo!ers !ind as "ell their taste and preferences

in the field of ser$ices sector.

-he uncertain "orld or !ar#et structure e/isting in India has $ery typical "ay of e/pectation

"hen it co!es to pri$ate ban# and the ban#s ha$e reali0ed their needs and desires and "or#ing

to"ards satisfying their re4uire!ents and !y ban# is also in its run for custo!er satisfaction

-he "or#ing en$iron!ent "as e/cellent "hich enabled !e to learn the products and ser$ices

features as "ell as the internal aspects of !anage!ent le$el in !y ban#.

-his project has opened up the ne" "indo" of learning, "hich enables !e into the clear

understanding of corporate "orld



-he proper understanding of custo!ers is !ust "hen it co!es to ser$ice industry and that

e/actly "hat I "ent through in this period of !anage!ent training period.

652 CONCLUSIONS AND RECOMMENDATIONS5

CONCLUSION

2ence, I conclude by understanding that !ar#eting concepts is essentially about the fe" things

"hich contribute to the ban#s success8

• -he ban# cannot e/ist "ithout custo!er.

• -he purpose of a ban# is to create, "in and #eep a custo!er. -he custo!er is and should

be the central focus of e$erything the ban# does.

•

3lti!ate ai! of a ban# is to deli$er satisfaction to the custo!ers.

• Custo!er satisfaction is affected by the perfor!ance of all the personnel of the ban#.



It is also a "ay of organi0ing the ban#. -he starting point for the organi0ational design should be

the custo!er and the ban# should ensure that the ser$ices are perfor!ed and deli$ered in the

!ost effecti$e "ay. er$ice facility should also be designed for custo!er con$enience.

RECOMMENDATIONS

-he en$iron!ent of the ban# can be !ade !ore custo!ers friendly and the "or#ing of the ban#

should be !ore organi0ed and efficient by training the e!ployees of the ban#.

@. I!pro$ing custo!er care facilities by pro$iding @ hours ban#ing facilities !ore effecti$e.

?. ore nu!ber of C355*&- ACC'3&- ith different features are loo#ed for"ard fro!

public.

. Proper and general insturuction about the !aintenance and "or#ing of current account and its

benefits should be !ade clearer.

. -he ban#ing hours should be !ore custo!ers friendly it should close little later in the e$ening.

D. -he ban#ing process needs to be !ore syste!atic so that the transaction ti!e can be reduced.



L. -here should be !ore branches especially in s!aller to"ns and cities .

K. pecial sche!es should be pro$ided for s!aller retail shops as "ell ne" pac#age of offers

and discounts should be pro$ided for high net"or# people and senior citi0ens .

BIBLIOGRAPHY

BOOKS AND MAGA?INES

=) -ull . +onald et al 2a"#ins I. +el 77ar#eting 5esearch Measurement & Methods Dth

edition

Published by Aso#e %. Ghosh , Prentice72all of India p$t. td.

@) Cooper 5. +onald et al chindler .Pa!ela 9Business 5esearch ethod logy @D edition

Published by -A-A cGra" 2I Publishing Co!pany li!ited

India -oday



Business "orld, *cono!ic -i!es, Business "orld , oney regulator and Business ine

NEWSPAPERS

-he -i!es of India

-he *cono!ic -i!es

Business tandard

INTERNET

""".hdfcban#.co!

""".google.co!

http://www.hdfcbank.com/

http://www.hdfcbank.com/

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