MEANING OF BANKING

Banking has come to occupy a pivotal position in a nation’s economy. According to the
modern concept, banking is a business which not only deals with borrowings, lending and
remittance of funds, but also an important instrument for fostering economic growth.

The Banking Regulation Act 1949, defines the term banking as “the accepting  for
the purpose of  lending or investment of deposits of money from the public or otherwise
and withdraw able by cheque, draft, order or otherwise.”  Thus, the essentials of banking
are:

(1)   There should be acceptance of deposited.

(2)   Deposits should be from the public.
(3)   Deposits should be repayable on demand or expiry of a term or after a
specified periods.
(4)   The purpose of deposits should be lending or investment.

“Bank” is an institution which deals in money and credit. It buys money from depositors and
sell to the borrowers. It is body of persons whether    incorporated or not who carry on the
business of banking. A bank may defined as a corporation or person which collects deposits
from the public, repayable on demand and which supplies and facilitates all kinds of
exchanges.

RETAIL BANKING

Retail banking means mobilizing deposit form individuals and providing loan
facilities to them in the form of home loans, auto loans, credit cards, etc, is becoming
popular. This used to be considered by the banks as a tough proposition because of the
volume of operations involved. But during the last couple of years or so, banks seem to
have realized that the only sustainable way to increase deposits is to look at small and
middle class consumer retail deposit and not the price sensitive corporate depositors.
With financial sector reforms gathering momentum, the banking system is facing
increasing companies from non-banks and the capital market. More and more companies
are tapping the capital market directly for finance. This is one of the main reasons for the
banks to focus vigourously on the much ignored retail deposits. Another reason is the
current liquidity the margins are 1 to 2 percent above the prime rate; in retail market they
are 3to4 percent.

            It is reported that Indian retail market has the potential to be second only to the
USA. National Readership Survey 5puts Indian households with monthly of over Rs.
5000 at 4.5 million. According to the survey, the category of households with annual
income of Rs. 2 lakhs and above is growing at the rate of 30 per cent per annum. No
winder, banks with vision and insight are trying to woo this market through a series of
innovative additions to their products, services, technology and marketing methods.
Fixed and unfixed Deposits, (cluster deposits which can be broken into smaller units to
help meet depositors’ overdraft without breaking up entirely), centralised database for
‘any branch banking’ (whereby the customer can access his account in any of the
branches irrespective of where the account is maintained), room services (whereby the
customers are visited at their residences offices to enable them to open their accounts),
automatic teller machines, tele banking network, extended banking time, courier pickup
for cheques and documents, etc are some of the privileges extended to the customers by
the banks in are eagerness to cultivate the retail market. In short, in the bold new world of
retail banking the customer is crowned as king.

RETAIL BANKING-A COOL OASIS

To bankers struggling through the shifting sands of corporate credit, retail banking looks
like a cool oasis. Corporate   Credit, retail banking looks like a cool oasis. Corporate
customers rely less on commercial banks every day as other fund raising avenues present
themselves. As this disintermediation takes place and competition shrinks margins, retail
banking has gained an irresistible allure for banks because of its apparently higher
margins and potential fir growth.

With their large branch networks, banks have secured sizeable deposits-23 percent of
GDP. On the assets side, however, retail advances account for a mere seven per cent of
total lending. The penetration of products like car loans or credit cards is very low. With
very few focused multi-line banks, non banks are often significant players in retail
lending, as HDFC is in house loans. Yet, many non-banks lack the minimum size to
make the necessary investments and address the challenges of retail banking.

A large number of banks and non-banks have launched or relaunched retail products and
are attempting to grow their share of the personal financial services market. Even the
term lending institutions have decided that they need to go retail to raise funds. Many
organization like ICICI are betting that a large part of their future growth will come from
retail customers.

Retail banking is much more than as opportunity to addressing dwindling margins. It is

an imperative to preserve profits and market positions. Customers now have many more
personal financial options, a growing credit culture, a willingness to switch between
financial services providers, and a demand for lower interest rates. As they witness these
trends, banks realize that they cannot remain passive. The new private sector banks are
making inroads in the markets they serve, while competition from non-banks is growing.
In respect, older institutions need to revamp their distribution capabilities, customer
management capabilities, operating culture, compensation system and operations
processing.

WEB IMPACT ON BANKS RETAIL REVENUES:

For all those gurus who’ve been predicting that the net will end the business of said
banks, here’s a shocker.

Even in the SILICON valley-driven USA, Internet is not expected to have a major impact
in banks’ retail revenues.

The reason: the absence of a convenient alternative at present to using cash.

According to a report by moody’s Investors service, at least in the intermediate term, the
internet is not expected to impact large US banks’ core profitability or competitive
position.

This is despite the despite business being the simple-most important profit source for
most American retail banks.

The core retail banking business of deposit taking will be sheltered form web-based
competitors and margin shrinkage on this business.

Need for convenient access to physical locations coupled with the advantages of multiple
delivery channels like branch, ATM, telephone and computers, consumers need to leave
money in transactional accounts; customer inertia and the relatively limited cost savings
available to consumers from net banking, are cited as the main factors supporting its
view.

The moody’s report, however, cautions that other consumer business such as residential
mortgages, auto loans and credit cards may be more vulnerable to web-based
competitors.

However, most US banks have thin margins or low market shares in these businesses
mitigating this impact, says the report made available to the Economic Times.
The rating agency is skeptical of banks ability to generate substantial incremental
revenues from cross-selling financial products to existing customers via the net.
Banks have to maintain a comprehensive and effective web based capability to maintain
their competitive position, cautions moody’s.

The need for customers to take frequent physical receipts, make convenient physical
receipts, make convenient physical delivery of cheques using ATMs, inhibition towards
paying ATM charges for using another bank’s ATM network by the consumer and time
consuming, difficult and disruptive nature of switching accounts also contribute to the
‘stickiness’ of retail deposits.

With low bank fees for individual transactions and relatively small bank deposits, the
opportunity cost in terms of interest income for customers is not material where the deposits
are not large.

Banks offer convenience and choice and the web-based channels of banks have reported
rapid growth in the number of customers by retaining current customers.

According to moody’s a survey indicated that 35 per cent of Internet banking customer
disconnect because they don’t find it convenient.

Customers prefer to use a variety of channels to conduct their banking which is why it
remains to be seen whether a business model based solely on internet banking will
generate adequate returns and sustain long term competition against conventional
banking systems.

The advent of the internet could, however have a powerful effect on banks acquisition
strategies by creating uncertainty about the value of purchasing large branch networks,
the study says. 

For some banks, however, the Internet could facilitate an increase in fee income by
generating fees from Internet service arrangements like bill presentment and clearing.

However, if smart cards or stored value cards or other electronic cash substitute gain
popularity, alternatives could become more attractive to customers.
On the other hand, banks might be able to reduce costs of servicing the retail customers
by moving them over into a paperless environment.

Banks could introduce various incentives to the persuade customers to forego paper
statements for the basic savings account and credit card, says moody’s. 

THE RULES HAVE CHANGED

As the 1900s come to their close and we look eagerly towards the new millennium, a
revolution that will change the rules and every thing we have understood of the retail
market, financial products and other services. Economic boundaries are disappearing, and
the global village is a reality – where the retail customer will have a choice in a manner
we may have never imagined.

Providers of retail products and services will battle for market and market share. It is
battle that will be fought at different levels and the real winner will be the customer, who
will benefit from increased competition through better products, distribution, technology,
pricing, and post transaction service.

The quality and range of products will expand exponentially –convenience of usage,
customization to individual needs, and a host of other user-friendly add-ons will create a
whole new frontier of applications. Companies will have to innovate and continuously
upgrade their products. Anticipation, listening and responding to your customers needs,
will be the buzz-words of this thrust.

Distribution will be the next key benchmark of success. The customer will demand (and
therefore the provider will have to respond) for greater convenience of access to the
product or service and all this at the best cost of delivery. Re-defined methods, the use of
technology – specifically the Internet-and realigned strategies will drive this important
criterion of success. Constraints of location, timing, accessibility etc will all be history.
No matter how brilliant the product you have, your distribution flexibility will be the
customers’ selection parameter.

Again, quality of the product and responsive strategies for distribution will also have a
link to price. Efficiencies on this front will be the next item on your report card. Through
innovation in production and delivery and cost reduction strategies, the price to the
customer will have to be at maximum benefit. The intelligent customer will be ruthless
with any price distortions, which as a consequence of inefficiencies or market
exploitation – his cost benefit analysis will not allow for these variables. 

Would you prefer a product, which (hopefully) is never expected to need post sale service
or one which offers the best after sale service if required ? Clearly, the relationship with
the customer starts with the transaction, does not and with it. Organisation we have to
give equal importance to cost sale needs of customers as the pitch made prior to the sale.

Technology will perhaps be the single largest driver of this detail thrust. The entire
strategy will evolve around the absolute ability of the organisation to be at the cutting as
edge of technology. We will have to invest in technology far ahead of immediate needs
and be able to anticipate the future direction at a pace we are perhaps not used to. Being
able to keep abreast, but more importantly, being able to recognize the immense potential
that technology provides at all stages in the retail chain will be of paramount importance.
To leverage, exploit and link technology to your business will be the greatest challenge of
the new millennium and I am convinced that the retail war will be won and lost on this
one aspect, purely because technology increasingly we influence on the entire chain in a
retail business cycle.

Above all these, I would list attitude towards customer as the single point basis on
determining the winner of the race. Attitude to the customer will influence all the areas
we have discussed and will ensure excellence in each one of them. It is an intangible, it is
not prescribed in a manual nor is it a quantifiable item in the balance sheet, but an
organizations attitude to the customer will be the basis determinant of success for any
retail operation.

There are interesting and challenging times ahead – the future promises a lot but will also
make extraordinary demands. The customer will be the most important aspect of your
business and ultimately the winner of the retail war.

RISK INVOLVED IN RETAIL BUSINESS

There are of course, considerable risks in retail banking. They are :

(a)      Databases on credit history are large.

 (b)      Collection mechanisms are poor.
(c)       Investments in technology are large.
(d)       Operating efficiency level needs to be very high.
(e)       Unlike corporate banking, retail banking involves a large number of
small accounts.
(f)       Demands on processing capabilities are higher.
(g)       Retail segment is not something you can get into overnight.
(h)     The right systems and the right – architecture needs to be put in place
first.

PRODUCT RANGE OF RETAIL BANKING

New Private sector banks have great resource mobilizing and asset expansion capabilities
which cannot be undermined by the fact these banks volume.  Which have taken decades of
option for the old private sector bank to build.  These bank are dominating the market with
new product, service3 and ideas.  Information technology has enabled many private banks are
emerging strong in banking and financial services with the marketing of new product and
service based on technological capabilities.

            In the present scenario HDFC bank Ltd. is a fast emerging bank.  It has 227branches throughout
the India in Rewari city HDFC has one branch also and one ATM’s.

            Apart from the HDFC bank, the other bank like PNB, SBI which is included in study.  These both
are the public sector bank.  SBI is the one bank in India.  These two are also providing the retail banking
service.

            Now the emergence of the retail concept of the banking customers are expecting more and
better services.  To day customer prefer private banks because they can have personal relationship with
the bank personnel, with lesser hierachy and It is possible for these banks to forget closer ties with
customers also.

HDFC Bank provide the following service :-

1.         Current A/C                                                                         2.         Loan

3.         Corporate Salary A/C                                                           4.         Online A/C

5.         Debit Card                                                                             6.         Phone Banking

7.         Intercity/ Inter Branch Banking                                             8.         Net Banking

9.         Bill Pay

SBI & PNB Provides following services :-

Deposit

                        -Demand Deposit

     Current Deposit

     Saving Deposit

                        -Time Deposit

     Fixed Deposit

     Akshaya Deposit

     Cumulative Deposit

     Pragati Deposit

Loan :-

                 Housing finance for individuals

                 Car finance

                  Finance for consumer disables

                 Finance for Scooter/Motorcycles

                 Finance against future lease Rentols

                 Personal loan to pensioness

                 Personal loan to serving Army officers, Govt. & other Employees

                 Education loan scheme

                 Advance against life policy

                 Advance against bank deposits

- ATM’s
 

HDFC’S  RANGE OF PRODUCT

Current A/C:- 

            Under this account a person can deposit and with draw money as many times in a day as he
wants . The regulars an average quarterly balance of the Rs. 10000 only .Besides the free ATM card and
easy accessibility. Your first 50 cheque leave are o

Offered free. This can be as:-   

                 Premium current account – From any branch 

                 HDFC  bank Trade - Small business 

                 HDFC bank plus.  

Loans :- To Suits every need.

            A loan is a specified amount sanctioned for a period of times. Loans are granted
generally against the security of assets or on the personal security of the borrower. The

borrowers may with draw the amount of the loan in lamp sum in instalment. Similarly it may be
repayable in lump sum or in instalment.

HDFC bank provides following loan under the retail banking segment :-

                 Car Loan (For new and used cars).

                 Personal loan.

                 Loans against securities and two wheelers .

                  Consumer loan.

Car Loan :-   Varity of finance schemes 

New Car loan :-

            Loan amount : upto 90% Of car value

Tenure : 12 to 48 month
 

Personal Loan :-  For anything you have in mind

                 Holiday abroad 

                 Wedding in the family

                 Higher education

                 No security or granter required

Loan amount:  Rs. 25000 to Rs 10 lack

Tenure  :12 to 48 months.

Eligibility : Salaried, individuals, self-employed doctors and CAS, CS, Engineers M.B.A.S

Two wheelers and Consumer loan :-

Whatever your dream, HDFC have a scheme

                 Two wheelers

                 Personal computer and AC

                 Durable like TV, Washing Machine, Refrigerator etc.

                                    For HDFC bank A/C holders only.

Loan amount : Rs. 7000 to 1 lakh (Max 85% of product value)

Tenure : 6 to 36 months

Eligibility : Salaried and self employed individuals

Loan against securities - An overdraft facility

Loan amount – Rs. 50000 to Rs. 20 lakh (upto 60%of market value of demand share)

Mutual Fund – Rs. 50000 to Rs. 10 lakh

LIC policy – Rs.100000 onwards.

Corporate salary A/c:-

            With HDFC bank’s corporate salary A/C, employees receive an array of rewards with then
monthly pay cheque. All at no extra coast to organisation. E-age banking service from any where, at any
time:-

                 Phone banking

                 Inter branch banking

                 Net banking

                 Bill payable

                 Free phone banking

                 Free mobile banking

                 Free demand draft

                 Free International debit card

                 Direct salary credit

                 Overdraft facility

                 Demote A/C

                 Joint A/C facility

                 Free Demand Draft

 
PHONE BANKING:  HDFC bank provides phonebanking facility to its customers. With the help of this
service customers can get their account detail, ask for a cheque book or a statement, open a fixed
deposit, transfer money within their own accounts, order a demand drafts, stop cheque payment etc. all
by phone

INTERCITY/ INTERBRANCH BANKING:   At HDFC you can access your account from any of their 131
branches in 26 cities. So you can withdraw cash form another branch, through a self-cheque. You can
deposit a local cheque in one branch and get it credited to your account in another city.

NETBANKING :   Internet banking is just like normal banking, with a one big exception that you don’t
have to go to the bank for transactions. Instead you can access your account any time form any part of
the world, and do so when you have the time ,and not when the bank is open. Through the  net banking
you can transfer funds within the same bank, open a fixed deposit, get a demand draft, make a TDS
enquiry request a stop payment of on a cheque, request for a new cheque book or even cheque your
account balance.

BILLPAY :  HDFC bank provides its customers to pay their mobile  bills in some selected cities over the
phone as well as through their ATMs. In Mumbai you can pay BPL Mobile bills, in Delhi you can pay Airtel
bills and in Chennai you can pay RPG and Sky cell  cellular bills through this facility. You can also pay
MTNL bills in Mumbai and Delhi and MSEB bills in Pune and Mumbai. It saves a lot of time , which you
spend in long queues or writing cheques.

Debit Cards

HDFC Bank’s International debit card provide seamless freedom and fiscal management to
spending, both locally and globally.

The Debit and ATM Card, when issued as visa compliant cards, will give you the freedom to
access your savings or current at merchant location and ATM’s.

Whenever you make payments, the amount will be instantly debited from your account. The
present ATM cards allow you to access your account 24 hours a day, all through the year.

How does it work?

 All you need to do is present your card to the merchant who will swipe it through the electronic
terminal and enter the amount of your purchase. You only need to sign the transaction slip.

Your account will be automatically debited for the amount of your purchase. Your debit card can
be used at any merchant location displaying the visa electronic logo or at any ATM displaying the circus
logo of course, you can always use it any HDFC Bank ATM as a normal ATM card.

What if your Debit Card is lost or stolen?

If your card is lost or stolen, you are protected from fraudulent charges from the moment you
report the loss to the bank.

Any  transaction limit for the Debit Card?

            For the safety of the card holders, the bank have a daily limit of Rs. 15000 at ATM, (at merchant
location there is no transaction limit,) and this is subject to the available balance in your account.

SBI & PNB PRODUCT RANGE

 Deposit

            Deposits accepted by bank may be categorised as demand deposit and time deposit.

Demand Deposit

Demand deposits are those deposits that can be withdrawn without notice. Bank undertake to
repay such deposits as demand. The following types of deposit accounts are classified under Demand
Deposits.

(a)               Current Account

(b)               Saving Account

 
Current Account :

Under this accounts, a person can deposit and with draw money as many times in a day as he wants. Money can be withdrawn by
issuing cheques. Current acount are remunerative type of deposit accounts as no interest its payable on the credit balances outstanding in
these accounts.

Saving Accounts :

            This account is opened for the purpose of savings. Any purpose of savings. Any person including a minor can open this account by
depositing a small sum of money. Saving Bank Account is subject to the restriction as to the number of withdrawal as also the amount of
withdraw as also the amount of withdrawal permitted by banks during any specified period. However there is no restriction on the number and
amount of deposits that can be made on any day. Balances in the Saving Bank Account cans interest at rates as determined by RBI from time to
time.

Time Deposit

            Any deposit, which is repayable after a period of notice rather than repayable after a fixed date or
period, is a time deposit or popularly called as term deposits. The following type of account in both
banks are classified under Retail Time Deposits.

      Fixed Deposit

      Apshaya Deposit

      Cumulative Deposit

      Pragati Deposit

Fixed Deposit :-

            Fixed Deposit where the depositor makes a lumpsum deposit where the depositors makes a
lumpsum deposit at one time for a fixed period and receive payment there of on Maturity with interest.

Apshaya Deposit :-

            Apshaya Deposit is a reinvestment deposit Scheme where the depositors makes a lumpsum
deposit at one time for a fixed period and receive payment there of on Maturity with interest
1. Meaning of Retail Banking
 Retail banking is generally refers to offering financial services, products related
to deposits and assets to individual customers for personal consumption. Banks concentrate on
various segments like professional, housewives, pensioner, children, salaried class etc. Different
types of product like recurring deposit, saving bank deposits, F.D, credit cards, housing & consumer
loans are offered by bands of the above mentioned market segments.
2. Needs & Advantages of Retail Banking
o Rate of interest can be higher
o Less risk
o Smooth ALM ( Asset Liability Management )
o Cheap funds
o Increasing income of middle class
o Disintermediation
3. Problems of Retail Banking
o “ Every problem brings opportunity with it.”
o Infrastructure
o Less spread
o Increasing volumes
4. Products Products Demat Cards Investments NRI Services Deposits Loans
5. Strategic Analysis of Retail Banking Industry
o Adapting a tech-based mindset.
o Catching on the first mover’s advantage.
o Recognizing the core competencies.
o Ability to deal multiplicity with simplicity.
o Senior management involment.
o Redesigning optimal channel portfolio.
o Acquiring new capabilities
6. Conclusion
o Retail banking offers opportunities to banks to cross sell various other retail products like
credit card, insurance, mutual fund product and demat facilities to the depositor. Before the reforms, most
of the products offered by banks were multiple, which the customer had no option except to accept or leave
them.
o Retail banking has become the buzzword in banking. It is the flavor of the year. A critical
assessment of the foregoing scenario indicates that retail banking is, at present, the only shortcoming left
with banks is to survive in this era of falling interest.
o Banking is undergoing rapid changes worldwide and India is no exception. The financial
sector reforms aimed at deregulation, liberalization and globalization of Indian banking has changed the
entire scenario of Indian banking. Satisfaction to customers in banking has given way to innovative.

PROJECT REPORT ON FUTURE PROSPECTS OF DEBIT & CREDIT

CARDS WITH SPECIAL REFERENCE TO H.D.F.C. BANK

 
Banking Sector in India

THE development of plastic money is one of the recent Phenomenon's in the

banking sector. Plastic money is a charge card. It is a direct charge against
the limit sectioned. IT is a debt instrument issued by some specialized
companies. It is one step forward towards cashless and chequeless society.
The operation is through electronic funds transfer {EFT} installations and inter-
bank network. Credit cards are key to the opening of bank accounts for daily
payments by the card holders. Credit card has been rightly called "PLASTIC
MONEY". The objective is to provide convenience and security. It eliminates
cash transactions, and protects from the danger of pick pocketing a lot of
cash. There is usually interest free credit for 30 to 45 days. These plastic
cards have the photo identity and holders signature embossed on the card. It
also has the issuing banks name and validity period of the card. The bank
issuing the credit card knows well the customer and his creditworthiness.
Basically, the use of credit cards helps the holder to take the advantage of the
two essential aspects of the financial services functions:

1.    Transmission of payments

2.    The granting of credit.

Carrying Credit cards are innovative ones in the line of financial

services offered by commercial banks. The idea of credit card was first
developed by a BAVARIAN FARMER, FRANZ NESBITUM MC NAMARA, an
American business man who found himself without cash at a weekend resort
founded Dinners card in 1950. Right from that time, the commercial banks and
non banking companies in USA developed the idea of credit card to develop
their business. BARCLAYS BANK was the first bank to introduce credit card in
1966 in Britain. The credit card business got momentum in 60’s and a number
of banks entered the field in a big way.

WHAT IS A CREDIT CARD?

A credit card is a card or mechanism which enables to purchase goods,

travel and dine in a hotel without making immediate payments. The
holders can use the cards to credit from banks unto 45 days. The credit
card relieves the consumer from the botheration cash and ensures
safety. It is a convenience of an extended credit without formality. Thus,
credit card is a passport to, SAFETY, CONVENIENCE, PRESTIGE AND
CREDIT.

WHO CAN BE A CREDIT CARD HOLDER

The general criterion applied is a person spending capacity and not merely his
income and his wealth. The other criterion is the worthiness of the client and
his average monthly balance. Most of the banks have clear out the norms for
giving the credit cards.

I.      A person who earns a salary of Rs. 60,000/_ per annum is eligible
for a card.

II.      A reference from a banker and the employers of the applicant is

insisted upon.

III.      He should have a savings current account in the bank.

IV.      His assets and liabilities on a particular date are reported to bank.

V.      A statement of annual or monthly income.

VI.      He is considered credit worthy upon to certain limit depending upon

his income, assets and expenditure. The eligible customer is
asked to fill in application form giving the details of account
number , name , address , income , wealth status and a proof of
his income/wealth etc.

PARTICULARS DISPLAYED ON THE CREDIT CARDS

Every credit card bears the following particulars:

1.    NAME OF THE CUSTOMER: Every card displays the name of

customer. It should be spelled correctly. In case, it does not, the
customer can contact the customer service cell/helpline and get
 the necessary correction done. This facility is provided free of
cost by the bank.

2.    16-DIGIT CARD NUMBER   :  A unique 16 digit number is allotted

to every customer/ cardholder.

3.    VALIDITY DATE     :   The card mentions the period through
which it is valid. The card is usually valid from the it is received by
the customer unto and including the last day of the month
indicated on the card. After the card has to be renewed.

4.    THE VISA HOLOGRAM AND THE VISA LOGO: The hologram
and the logo ensure that all the establishments through out the
world displaying the visa logo will accept the card.

5.    NAME OF THE ISSUING BANK: The card indicates on the top
the name of the issuing bank.

6.    SIGNATURE PANEL:  The back of the card contains the

signature panel. The customer must put his signature on the
signature panel to prevent misuse by any other person. This
identifies the card holder. Signature on the panel would imply that
card holder has given his consent to abide by the terms and
conditions governing the use of the credit card. The card is valid
is only if signed.

7.    MAGNETIC STRIP: The black magnetic strip contains important

information in encoded from and needs special handling. The
card should not be kept in an area where there is a continuous
magnetic field. It should not be left on the top the television. Set
or near any electronic appliance. The card should be kept away
from heat and direct sun light.
 8. PIN (PERSONAL IDENTIFICATION NUMBER): Each card holder
is issued a password or pin to enable use of the card for
accessing his/her card account on the ATM and internet and also
for availing any privilege, benefit or service that may be offered by
bank on the card. The pin is communicated to the cardholder
entirely at his/her risk who shall not disclose the pin to any person
and shall take all possible care to avoid its discovery by any
person. The card holder shall be liable for all transactions made
with the use of the pin whether with or without the knowledge of
the cardholder.

TABLE OF CONTENTS

 DECLARATION
 ACKNOWLEDGEMENT
 PREFACE
 INTRODUCTION
 LITERATURE REVIEW
 RESEARCH METHODOLOGY
 OBJECTIVE OF STUDY
 SCOPE OF STUDY
 METHODS OF DATA COLLECTION
 TOOLS AND TECHNIQUES OF ANALYSIS
 LIMITATIONS
 ANALYSES OF DATA  FINDINGS
 CONCLUSIONS
 SUGGESTIONS
 LIMITATIONS
  BIBLIOGRAPHIES

STUDY OF CONVERGENCE OF BANKING SECTOR TO HOUSING FINANCE

INTRODUCTION
Earlier it was very difficult to take a loan from the

financial institutions. Interest rates were high and

a lot of documentation was there. But today when

there are a large number of financial institutions in

India, who are providing credit facility, it has

become very easy to take a loan.

 Terms and conditions are liberal i.e. low interest

rates, less documentation etc. Interest rates are becoming
globally competitive and declining continuously. Now a
day just think of purchasing a car and car-financing
companies will start knowing at your door and ringing your
phone.

 Financial institutions have adopted liberal credit policies. They enquire less about end use of
funds. Various types of loans are there and easily available at cheap rates.

          When we take the case of home loans, it is a very safe area of loans from the point of view of
financial institutions. They are easier to increase their share in the home loan sector. So they are
coming with the attractive schemes. Customers can have the benefit of liberal terms and conditions
as well as tax benefits if they choose to take a home loan. So the use has gain attention. The
increasing number of home loans available today as strengthened the middle class individual to
venture forth and fulfill his dreams.

          Today, the demands of the current social status necessitate that varied means are tapped into
in order to achieve the ultimate goal-better living Home loan proposals are thus gaining popularity
due to their easy-installments schemes, low interest rates and high returns on the standards of
living. While a home loan generally includes financial for home extension, home improvement loans
are well as loans for property medication; the terms are more commonly applied to finance schemes
for purchasing houses.

Home Loan

Home loans are loans you have access to, depending on whether you want to buy or build a
house and can also be used to repair or extend an existing house.
Who can avail of these loans?

          According to lending institutions, any Indian resident who is over 21 years of age at the
beginning of the loan and below 65at its maturity can avail of the loan. Salaried Employees as well as
Self- Employed citizens can apply. NRI Salaried and RBI Self Employed, under RBI guidelines, can
approach only nationalized banks and other HDFC for loans.

Why should one option for a loan to buy a house?

          Taking a loan seems like a good option when the money at hand is insufficient to buy the house
of your dreams. Consider couples in their twenties and thirties. They enjoy a good income currently,
buy their accumulated capital isn’t enough to purchase a house. Whereas a home loan can give them
access to capital their current earnings.

          Also, if you take a 10 years old loan when you are thirty, you could repay it by the time you’re
forty. So you don’t have to be burdened with the interest and are free to plan your retirement
savings.

The Quantum of loan that one can avail of :

          Loan sanctioned depend on your repayment capacity – which is based on your current income
and your future repayment capacity. You would include your spouse’s name to enhance the loan
amount.

          The maximum loan can be sanctioned varies with each bank/institutions and ranges from Rs.10
lakhs to Rs. 1 crore.

Benefits of taking a home loan:

          A home loan is very different from a personal loan like a car loan for instance. You can utilize a
home loan for financing an asset that will hold its value and even appreciate over the period of the
loan. Though its price could fluctuate in the short terms, Total Estate will show capital appreciation
over the years.

          The value of your house generally while the loan remains constant. If you had opted to wait,
save up and buy a house, it would, in the long run cost you much more; home loans also come with
many tax benefits.

Tax benefits of taking a home loan:

          The income tax authorities look with favor upon those servicing a housing loan from specified
financial institutions. And, it is up to you to be wise enough to take advantage of this.

Section 24 of the Income Tax:

          Interest on loan till Rs.1.5 lakhs per annum is exempted form income tax (under section
23/24(1) of th Income tax act).
Section 88 of Income Tax Act:                                                             

          You get a 20% rebate on repayment of principle during a financial year. Once again, over the
years, the principle repayment eligible for rebate has been enhanced from Rs.10,000 to the current
limit of Rs.20,000 Stamp duty, registration fee or transfer of such house property to the assesses is
also considered under this amount.

Financial Institutions, which give, home loans:

    Leading Banks

    Housing finance companies

Financial implications of availing a loan, small or big.

          There are several expenses involved apart from repayment of the actual loan amount:

1.     Processing fees- A processing fee (PF) is charges at the time of submission of the application
form and covers expenses incurred for processing the application form. This fee has to be
paid upfront by the customer – in some cases, it is non-refundable.

2.      Administration fees- to meet operating expenses.

3.     Pre-EMI- A simple interest calculated on the disbursement amount in case of a plot under
construction.

4.     EMI- The EMI is an abbreviated form of the equated money installment and is simply
referred to as monthly installment in common parlance. And, being a self-explanatory term
that is exactly what it is. The amount you will have to pay you financier every month when
repaying your loan. Being a monthly payment, at the end of the year, you would have paid
12 EMIs.  

Types of loans available

          Broadly two types- fixed rate and variable rate loans; while the former deals with a fixed rate
of interest over the entire duration of the loan, the latter has the rate of interest changing according
to the fluctuations in the market.

Loan that one can avail

          Up to 85-90% of the total cost based primarily upon the individual’s payback capacity.

General conditions that govern a home loan:

          These are likely to vary with respect to the different types of housing loans:

      The maximum period of the loan is normally fixed by HFIs. However, HFIs do provide for
different tenors with different terms and conditions.
       The Installment that you pay is normally restricted to amount 45% of your monthly gross
income.

      You will be eligible for a loan amount, which is the lowest as per your eligibility. This is
calculated on the basis of your gross income and payback capabilities.

      Some HFIs insist on guarantees from other individuals for due repayment of your loan. In
such cases you have to arrange for the personal guarantee before the disbursement of your
loan tasks place.

      Most HFIs have a panel of lawyers who go through your property documents to ensure that
the documents are clear and are not misrepresented. This is an added benefit that you get
when you avail of a loan from an HFI.

     You repay the loan either through Deduction against Salary, Post dated cheques,
and standing instructions or by Cash/DD.

Contents
1. Introduction
2. Objectives
3. Research Methodology
4. Home Loan Scheme of Various Bank
SBI Home Loan    Scheme
PNB Home Loan    Scheme
BOB Home Loan    Scheme
HDFC Home Loan    Schemes
5. Analysis & Finding
6. Limitations
7. Recommendations and Conclusion
8. Annexure :-
    Questionnaire
    Bibliography

Introduction

      Indian Banking System

      Something about customer

      Concept of satisfaction

      Different types of Banker-Customer Relationships

2)               Review of Literature

 3)               Research Methodology

4)               Data Analysis & Interpretation

5)               Conclusions & Suggestions 

Questionnaire

Bibliography

Project Report "Banking System" in India

Introduction of Banking
Banking regulation Act, 1949, defines banking as accepting for the purpose of lending or
investment, of deposits of money from the public, repayable on demands or otherwise and
with draw able on demand by cheques, draft or order otherwise.

Functions of Commercial Banks :

1. To change cash for bank deposits and bank deposits for cash.

2. To transfer bank deposits between individuals and or companies.

3. To exchange deposits for bills of exchange, govt. bonds, the secured and unsecured
promises of trade and industrial units.

4. To underwrite capital issues. They are also allowed to invest 5% of their incremental
deposit liabilities in shares and debentures in the primary and secondary markets.

5. The lending or advancing of money either upon securities or without securities.

6. The borrowing, raising or taking of money.

7. The collecting and transmitting of money and securities.

8. The buying and selling of foreign exchange including foreign bank notes.

Banking scene in India

The banking sector in India is passing through a period of structural change under the
combined impact of financial sector reforms, internal competition, changes in
regulations, new technology, global competitive pressure and fast evolving strategic
objectives of banks and their existing and potential competitors. Until the last decade,
banks were regarded largely as institutions rather akin to public utilities. The market for
banking services were oligopolies and Centralized while the market place was regulated and
banks were expected to receive assured spreads over their cost of funds. This phenomenon,
which was caricatured as 3-6-3 banking in the united states, meaning that banks accepted
deposits at 3%, lent at 6%, and went home at 3 p.m. to play golf, was the result of the
sheltered markets and administrated prices for banking products. Existence of entry barriers
for new banks meant that competition was restricted to existing players, who often operated
as a cartel, even in areas where the freedom to price their products existed.

The market place began to change for banks in India as a result of reforms of the financial
sectors initiated in the current decade. On account of policy measures introduce to infuse
greater competitive vitality in the system, the banking has entered in to a competitive phase.
Competition has emerged not only from within the banking system but also from non-
banking institutions. Lowering of entry barriers, deregulation of interest rates and growing
sophistication of customers have made banking far less oligopolistic today. Introduction of
capital adequacy and other prudential norms, freedom granted to enter into new turf’s and
greater overlap of functions between banks and non-banks have forced banks to get out of
their cozy little world and think of the future of the banking.

Emerging Environment of Banking in India

Full convertibility of rupee leading to free mobility of capital, which will mean virtual
collapse of the national borders for trade and capital flows.

Greater coordination between monetary, fiscal and exchanged rate policies for achieving the
goals of faster and sustainable economic growth, macro-economic stability and export
promotion.

Close integration of various financial markets such as money market, capital market and
forex market.

Removal of lowering of existing barriers of competitiveness, which are present today in the
form of quantitative instructions on certain imports protective custom duties, reservation of
certain utilities for the public sector.

Growing privatization and commercialization infrastructure sector.

Today, Banks customers are better informed, more sophisticated and discerning. They
also have a wide choice to choose from various banks and non-bank intermediaries. Their
expectations are soaring. This is particularly true for banks corporate clientele but also
applies to customers from personal segment.

This is changing profile of customer’s call for a shift from product-based approach to
customers-based approach. A bank aiming at maximizing customer value must, of
necessity, plan for customized products. A combination of marketing skills and state-of-the-
art technology should enable to bank in maximizing its profits through customer satisfaction.

In the next millennium banks will have to be more and more cautions about customer
service, profitability, increased productivity, to keep face with changing banking scenario.
As banks in India prepare themselves for the millenium these are the shifts in the paradigm
they are likely to experience. The 21st century may see the dawn of “DARWINIAN
BANKING”. Only the banks could fulfill the demands of markets and changing items would
survive and prosper.

A word about SBI card

SBI Segment : Small business credit card (SBI credit card)

Preamble :

Small business units, retail traders, artisans, village industries, small-scale industrial units
and tiny units, professionals and self employed persons etc., contribute significantly to the
growth of our economy. The entrepreneur himself manages many of the units. Very often,
these entrepreneurs complain of procedural delay in sanctions and renewal of limits. They
also find it difficult to cope with the demands for audited balance sheet and other statements
sought by the bank from time to time for availing credit facilities. With a view to providing
hassle free financial supports to the above categories of entrepreneurs who have shown
commitment to run the unit successfully and who are dealing with the banks for last two
years satisfactorily, new and friendly credit product namely small business credit card
scheme is designed. Under the scheme, cumbersome procedural aspects relating to reviews
and renewals, submission of balance sheet, stock statements and other statements are done
with credit delivery made simple and easy.

Purpose :

To meet the credit requirements of small business units, industrial unit, retail trader, artisan,
Small Scale Industry (SSI) and tiny units.

Eligibility :

A. Customers of the following segments with a satisfactory track record for the last two years
enjoying credit facilities.

 Small industrial units (SSI and tiny units including artisans)

 Small retail traders (Under SBF)

 Professional and self employed persons

 Small business enterprise

B. Units who do not enjoy credit limit with us/other banks at present with excellent
performance and credential may be considered.

Quantum of loan :

Loan up to Rs. 5 Lakh can be sanctioned to eligible persons.

Assessment :
The small business credit card limit can be fixed as follows :

 For small business, retail trader etc. 20% of the annual turnover declared for tax
purpose or last twelve months turnover in the operative accounts, whichever is higher.

In respect of parties with good track record, where sales tax returns are not available, the
credit limits may be decided taking into consideration the actual turnover in the accounts
during the last two years.

 For professionals and self employed persons, 50% of their gross annual income as
per IT return shall be considered as the limit for issuing the SBI credit card.

 For small scale industrial units, tiny sector units the assessment norms in vogue as
per the Nayak Committee recommendations would continue.

Validity :

 Credit card limit will be valid for a period of three years, subject to satisfactory
conduct of the accounts.

 Annual review will be done based on conduct/operations of the A/cs. A major portion
of the sales turnover should have been routed through the accounts as revealed by the
credit summations.

Repayment :

 The working capital advance may be continued subject to that review every year
provided the credit summations in the account is not less than 50% of the projected
sales turnover. If the credit summations is less than 50% of projected sales turnover.
The outstanding as on the due date of review should be made repayable in suitable
monthly installments.

 The term loan is repayable in suitable installments with in a maximum period of five
years.

 In case of composite loans, only the term loan is repayable in installments up to a

maximum period of five years.

Interest rate :

As per extent instructions issued from time to time relating the market segment.

Refinance :

No refinance is to be claim from SIDBI

Security :

Primary : Hypothecation of the stock in trade receivables, machinery, office equipment.

Collateral :

Under SSI-No collateral security as per existing guidelines of RBI.

User SBF :

 Up to Rs. 25000/- No collateral security.

 Over Rs. 25000/- charge over movable/immovable property or third party granted.

However, in case of the excellent track record, sanctioning authority may waive collateral
requirement.

Margins :

Up to Rs. 25000/-   -  NIL

Rs. 25001/- to Rs. 5,00,000/-    -  20%

Documentation :

Documents as per extant instructions.

Credit Card - A Convenient Banking Product :

The credit card is a hassle free convenient banking product aimed at simplifying the
credit delivery mechanism. Cumbersome procedural aspects relating to reviews and
renewals, submission of stock statement, balance sheet and other statements are done away
with. The credit limit will be worked as detail above.

Small business credit card

 Card No.

 Name

 Account No.

 Tel. No.

 Limit Rs.

 Date of issue

 Valid upto

 ………….. (Branch Code)

Signature of the Brach Manager                     Card holder’s Photograph with signature

The borrower would be issued a photo card indicating sanctioned limit and validity of the
limit (sample card)

Insurance :

 Fixed assets/stock pledged/hypothecated to the bank be fully insured at least to the

extent of the bank interests.

 Bank may waive insurance of assets for equipment against the fire and other risk up to
Rs.25000/-

Cover under credit guarantee scheme :

All eligible loan accounts sanctioned for small scale industries (other than services)
would qualify for cover under CGTFSI scheme (presently the scheme has been introduce
in five circles on pilot basis viz. New Delhi, Chandigarh, Lucknow, Patna & Hydrabad).

Operation :

 Small business credit card accounts should be maintained in a separate ledger.

 Cheque book should be issued and marked as small business credit card account.

 Pass book should be issued for mall business credit card holders.

 Stock statement waived.

 Submission of audited balance sheet waived.

 Borrower would be issued a small business credit card with photograph thereon. Cost
of photograph to be borne by banks.

 IRAC norms would be applicable.

 Brief opinion report should be recorded. Marked inquiries should be made and
recorded in the opinion report and singed by the field officer/cash officer or officers
not below that rank.

 Units within a radius of 5 kilometers may be covered intensively for the issue of
credit card. This condition may be waived for such of those units already in the book
of the branch. 

Inspections :

 Half-yearly inspection/monitoring to ensure the end user funds.

Sanction :

 Required loan may be sanctioned with in a week after receipt of detailed information.
  Control return after sanction may be sent to next higher authority for approval .

Scoring Model :

 Loan would be sanctioned up to Rs. 5,00,000/- based on the simplified scoring model
as given in annexure- II. Those who are scoring less than 60% would not qualify for
the loan.

Rationale :

 New schemes for hassle free credit facilities to small borrower.

Automatic Teller Machine (ATM)

An ATM (Automatic Teller Machine) card is useful to a card holder as it helps him to
withdraw cash from banks even when they are closed. This can be done by inserting the
card in the ATM installed at various banks locations.

State Bank Cash Plus CARD

 Signature Panel.

 Magnetic Stripe

Features of State Bank Cash Plus Card

 State Bank Cash Plus Card having the 19 digit.

 Name of the card holders mention there on it.

 In case of State Bank Cash Plus Card, there is no expiry period but for the old card,
the date after which your card needs to be renewed is the last day of the month
indicated on your card.

 Signature panel on which you must sign as soon as you’re your card. It identifies the
card as your State Bank Card Plus Card.

 The magnetic stripe, which contains encoded information.

 ATM card possess pincode which having the 4 digit.

Use of State Bank Cash Plus Card

 We uses our State Bank Cash Plus Card for cash withdrawal from ATMs.

 We uses it for making the payments for purchase made at the merchant
establishments.
Significance of the Study

This study entitled “comparative study of various credit schemes of SBI V/s other
banks” will be helpful for bankers to maintain customers service policy, for customers
while deciding their financing needs and also helpful for other researchers for further
research in the future.

SBI card provides customers with an option, in addition to the existing banking credit
facilities available. With an SBI card customers can enjoy hassle-free credit facilities.

This study would help us to know about the problems that are faced by the consumers during
transactions. It would also reveal the problems that are being faced by the bank employees
while dealing with customers and would also highlight the future prospect of SBI card.

Review of Existing Literature :

It is very essential to know whether the study has already been conducted before. If so, how
and to what extent ? And because of this scholar has to go through all the existing literature
related to the study. SBI Card, very limited studies have been conducted on the subject. Due
to the time restrictions scholar could seek advice from only the limited literature, which is
available with the bank.

As the concept is completely under the control of various banks and RBI. So the
information is directly taken from these sources.

Conceptualization

As the concept includes two terms i.e. cash credit or working capital loans and terms loans.
Therefore both the terms are taken into consideration in the proposed study. Due to the
privatization of banking sector many big private players entered in this sector giving a tough
competition to the existing players. So, to face this stiff competition all the public sector
banks have to review their functioning. These aspects will be given importance in this project
report.

The concept of SBI card, question crops in mind what is a SBI card, What is its shape
and size, what is its function. A SBI card is nothing but a identity card containing card
holder’s photographs with signature, card no. Name, A/c No. limit, validity period, branch
code with signature of Branch Manager.

Table of contents

                                                                            Page No.

1. Introduction                                                     1-15

1.1 Significance of the Study

1.2 Review of Literature

1.3 Conceptualization

1.4 Focus of Study

1.5 Objectives of Study

1.6 Limitations of the Study

1.7 Chapterization

2. Research Methodology                                         16-20

2.1 Universe and Survey Population

2.2 Profile of PNB

2.3 Research Design

2.4 Sample Size and Techniques

2.5 Analysis Pattern

2.6 Applied Statistical Tools

3. Micro Analysis                                                     21-46

3.1 Analysis of Consumers Awareness about Credit Card

4. Macro Analysis (Inferences & Interpretation)     47-48

5. (A) Summary of Major Observations                 49-55

5.1 Marketing Practices Adopted by Banker about Credit Card.

5.2 Emerging Trends in Modern Banking Sector

5.3 Deficiences

(B) Suggestions and Recommendations                  56

6. Appendices                                                         57-62

6.1 Questionnaires

6.2 Bibliography
 6.3 Annexures

Axis - Document Transcript

1. A REPORT ON Axis Bank: Reinventing Banking Submitted to: Prof. Vinod Puri Atharva Institute of
Management Studies Submitted by: Nikunj Shah 24 Reshma Sonawane Jayesh Surve 43 Sanil Tharwal 45
Ankita Trivedi 48
2. Table of Contents: 1. Banking in India 2. About axis bank 3. Mission And Values 4. Why UTI To Axis
Bank 5. Financial Overview at Axis bank 6. HR Overview at Axis bank 7. Systems Overview at Axis bank 8.
Operations Overview at Axis bank 9. Marketing Overview at Axis bank 10. Conclusion
3. SYNOPSYS Axis Bank: Reinventing Banking Introduction: Today, Axis Bank ranks amongst the top 10
private banks in India. The erstwhile UTI Bank has changed its name to Axis Bank effective July 30, 2007. This is
the first time that a bank has gone in for a brand-change voluntarily; earlier names of banks have been changed
either due to a merger or an acquisition..Axis refers to a line of reference, stability and maturity. Scope of the
presentation To enumerate the growth story of Axis Bank from it being the first private bank in India known as
UTI and its Journey to being Axis bank one of the top 10 private banks in India Objectives of the presentation
The presentation aims to discuss Journey from UTI to Axis Beginning of UTI  Banking in India the following:
Financial and Human Resource Operations and Marketing Aspects of Axis Bank   Future of Axis Bank
Highlights of the Presentation Aspects of Axis Bank Beginning of UTI Bank Axis Bank was the first of the new
private banks to have begun operations in 1994, after the Government of India allowed new private banks to be
established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of
India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and
other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company
Ltd., The Oriental Insurance Company Ltd. and United Journey from UTI to AXIS UTI brand was given inIndia
Insurance Company Ltd . 1994 by its promoters and UTI Bank could use the brand only till January 2008 as per
Govt directives. On July 30, 2007, UTI Bank, the third largest private sector bank in India, officially changed its
name to Axis Bank. The Bank today is capitalized to the extent of Rs. 359.76 crores with the public holding (other
than promoters) at 57.79%.This is one of the largest ATM networks in the Human Resource in Axis The ultimate
aim of the Human Resourcescountry. function is to build and manage a motivated pool of professionals by
grooming internal resources and recruiting the right skills from the market, develop a high performance work-
ethic and create a culture of continuous learning and skill development.
4. Systems Overview in Axis The ultimate aim of the systems function at axis bank is to constantly keep
in terms with the upgrade of the technology. And provide the customers the best services with the help of this
Operations Overview in Axis Operations functionadvancement in technology. focuses on restructuring of the
banking operations to reflect a modern approach to banking. And for this an operational framework has been
established in order that all transactions are handled with precision. Operational parameters and control
functions were refined to ensure efficient functioning of branches. Future of Axis Bank Due to flattening of the
world, the organization competitive playing field is being levelled. New players are entering into the market. Axis
will have to face stiff completion with its existing as well as with new players in giving best services to its
customer base and function globally.
5. INDIAN BANKING SECTOR INTRODUCTION: History of Banking in India Without a sound and
effective banking system in India it cannot have a healthy economy. The banking system of India should not only
be hassle free but it should be able to meet new challenges posed by the technology and any other external and
internal factors. For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in
India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the
main reason of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich
dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait
for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice.
Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is
simple as instant messaging or dial a pizza. Money have become the order of the day. RECENT HISTORY OF
INDIAN BANKING Indian banking system, over the years has gone through various phases after establishment
of Reserve Bank of India in 1935 during the British rule, to function as Central Bank of the country. Earlier to
creation of RBI, the central bank functions were being looked after by the Imperial Bank of India. With the 5-year
plan having acquired an important place after the independence, the Govt. felt that the private banks may not
extend the kind of cooperation in providing credit support, the economy may need. In 1954 the All India Rural
Credit Survey Committee submitted its report recommending creation of a strong, integrated, State-sponsored,
State-partnered commercial banking institution with an effective machinery of branches spread all over the
country. The recommendations of this committee led to establishment of first Public Sector Bank in the name of
State Bank of India on July 01, 1955 by acquiring the substantial part of share capital by RBI, of the then Imperial
Bank of India. Similarly during 1956-59, as a result of re-organisation of princely States, the associate banks
came into fold of public sector banking.
6. Another evaluation of the banking in India was undertaken during 1966 as the private banks were still
not extending the required support in the form of credit disbursal, more particularly to the unorganised sector.
 Each leading industrial house in the country at that time was closely associated with the promotion and control of
one or more banking companies. The bulk of the deposits collected, were being deployed in organised sectors of
industry and trade, while the farmers, small entrepreneurs, transporters , professionals and self-employed had to
depend on money lenders who used to exploit them by charging higher interest rates. In February 1966, a
Scheme of Social Control was set-up whose main function was to periodically assess the demand for bank credit
from various sectors of the economy to determine the priorities for grant of loans and advances so as to ensure
optimum and efficient utilisation of resources. The scheme however, did not provide any remedy. Though a no. of
branches were opened in rural area but the lending activities of the private banks were not oriented towards
meeting the credit requirements of the priority/weaker sectors. On July 19, 1969, the Govt. promulgated Banking
Companies (Acquisition and Transfer of Undertakings) Ordinance 1969 to acquire 14 bigger commercial bank
with paid up capital of Rs.28.50 cr, deposits of Rs.2629 cr, loans of Rs.1813 cr and with 4134 branches
accounting for 80% of advances. Subsequently in 1980, 6 more banks were nationalised which brought 91% of
the deposits and 84% of the advances in Public Sector Banking. During December 1969, RBI introduced the
Lead Bank Scheme on the recommendations of FK Nariman Committee. Meanwhile, during 1962 Deposit
Insurance Corporation was established to provide insurance cover to the depositors. In the post-nationalisation
period, there was substantial increase in the no. of branches opened in rural/semi-urban centres bringing down
the population per bank branch to 12000 appx. During 1976, RRBs were established (on the recommendations of
M. Narasimham Committee report) under the sponsorship and support of public sector banks as the 3rd
component of multi- agency credit system for agriculture and rural development. The Service Area Approach was
introduced during 1989. While the 1970s and 1980s saw the high growth rate of branch banking net-work, the
consolidation phase started in late 80s and more particularly during early 90s, with the submission of report by
the Narasimham Committee on Reforms in Financial Services Sector during 1991. In these five decades since
independence, banking in India has evolved through four distinct phases:
7. Foundation phase can be considered to cover 1950s and 1960s till the nationalisation of banks in 1969.
The focus during this period was to lay the foundation for a sound banking system in the country. As a result the
phase witnessed the development of neces sary legislative framework for facilitating re-organisation and
consolidation of the banking system, for meeting the requirement of Indian economy. A major development was
transformation of Imperial Bank of India into State Bank of India in 1955 and nationalisation of 14 major private
banks during 1969. Expansion phase had begun in mid-60s but gained momentum after nationalisation of banks
and continued till 1984. A determined effort was made to make banking facilities available to the masses. Branch
network of the banks was widened at a very fast pace covering the rural and semi-urban population, which had
no access to banking hitherto. Most importantly, credit flows were guided towards the priority sectors. However
this weakened the lines of supervision and affected the quality of assets of banks and pressurized their
profitability and brought competitive efficiency of the system at a low ebb. Consolidation phase: The phase
started in 1985 when a series of policy initiatives were taken by RBI which saw marked slowdown in the branch
expansion. Attention was paid to improving house-keeping, customer service, credit management, staff
productivity and profitability of banks. Measures were also taken to reduce the structural constraints that
obstructed the growth of money market. Reforms phase The macro-economic crisis faced by the country in 1991
paved the way for extensive financial sector reforms which brought deregulation of interest rates, more
competition, technological changes, prudential guidelines on asset classification and income recognition, capital
adequacy, autonomy packages etc. Types of Banks Central Bank The Reserve Bank of India is the central Bank
that is fully owned by the Government. It is governed by a central board (headed by a Governor) appointed by
the Central Government. It issues guidelines for the functioning of all banks operating within the country.
8. Public Sector Banks a. State Bank of India and its associate banks called the State Bank Group b. 20
nationalized banks c. Regional rural banks mainly sponsored by public sector banks Private Sector Banks a. Old
generation private banks b. New generation private banks c. Foreign banks operating in India d. Scheduled co-
operative banks e. Non-scheduled banks Co-operative Sector The co-operative sector is very much useful for
rural people. The co-operative banking sector is divided into the following categories. a. State co-operative Banks
b. Central co-operative banks c. Primary  IFCI Agriculture Credit Societies Development Banks/Financial
Institutions  Export-Import Bank of India  NABARD  SCICI Ltd.  IIBI  ICICI IDBI North Small Industries
Development Bank of India National Housing Bank Eastern Development Finance Corporation
9. TOP 10 BANKS IN INDIA Ever since the emergence of banking in India in the last decades of the 18th
century, the sector witnessed a considerable growth irrespective of economic volatility and unstable political
premise. Banking sector of India still maintains its reputation as one of the most persistently lucrative sector that
runs on regular government intervention and well-conceived economic policies. Reserve Bank of India,
considered the supervisor of all the commercial banks in India, is the main regulator and these financial
institutions have to adhere to its governance. India has about 88 commercial banks including 31 private banks,
27 public sector banks and 38 foreign banks. The country has an aggregate of 53,000 bank branches and 17,000
ATMs. Public sector banks dominate the segment with 75%of the total assets of the industry held by them. List
Of Top 10 Banks Of India: State Bank of India: SBI is the oldest bank of India and also India‘s largest commercial
bank. This government owned bank was established in the year 1806.It is also the second largest bank in the
globe. The bank provides a wide array of banking products through their effective network not only on India but
also overseas. The bank has about 16,000 branches and is also accountable for one- fifth of the loans of India. It
has about 8500 ATMs across the nation. ICICI Bank: This is the second largest bank in India with about 1,419
branches and 4,644 ATMs spread countrywide. It is among the top commercial banks of India providing a wide
range of banking services through varied delivery channels. Besides offering high-end banking facilities like
Internet banking, Phone Banking and Mobile Banking, ICICI also plays a pivotal role in the domains of investment
 banking, venture capital and asset management and life and non-life insurance. It has its presence in 18
countries across the world including UK, Canada, Russia and others. AXIS Bank: One of the top private banks in
India, it was earlier known as the Unit Trust of India (UTI) since it was promoted by the same organization. It was
first among the new private banks to have started its operations in the year 1994. AXIS has its significant
presence in about 4509 districts of India with a wide network of over 729 branch offices and Extension Counters.
With around 3171 ATMs, the bank provides round the clock banking convenience. This Indina bank has amassed
a capital of more than Rs. 350 crores and enjoys equal sway over retail and corporate banking.
10. HDFC Bank: It is also among the top banks of India offering various banking services for the customers
like Personal Banking, NRI Services, Net Banking, Online Remittances and others. The year 2008 has been very
prosperous for HDFC as it won a host of awards for being the best retail bank and also the best among other
Indian banks to adopt Information Technology. With a total income of more than Rs. 5,400 crores, it demands a
significant position in Indian banking industry. The bank has about 1,500 branches and 2,890 ATMs in 530 Indian
cities. HSBC: The first ATM provider of India, HSBC Bank is one of India‘s top banks with its operational base
extending consitently. This commercial bank of India first started to function in 1853. It opens up ample banking
services for the customers apart from cash management, financial planning and business banking facility. It has
a provision of 150-in-branch and off-branch ATMs and phone banking for 24 hours. Reserve Bank of India:
Referred as the Central Bank of India, RBI is a premier bank of India having about 22 regional offices across the
nation and most of the offices are in the capitals of the Indian states. RBI is fully owned by Government of India
and it performs myriad range of services from supervising and regulating financial system to managing exchange
control. Established in 1935, RBI remains the most prestigious entity playing the guardian of all commercial
banks of India. Punjab Bank of India (PNB): Has been in operation since 1895, PNB is a trusted name in the
banking segment of India. It is among the few other public sector banks of India that runs special schemes for
senior citizens, army personnel, students and women. Despite the recessive tendency in Indian economy, PNB
has managed to eke out profit on a sustained manner. Central Bank of India: This is one of the largest and oldest
commercial banks in India. The bank has its office in about 27 states in India with 270 extension counters and
3,168 branches. Founded in the year 1911, this is India‘s first commercial bank that was completely managed
and owned by Indians. With an average business of around 2,000 crore, Central Bank of India has a significant
presence in India‘s financial orbit. Union Bank of India: This PSU unit has convinced the customers that they are
‗Good people to bank with‘. More than 50% of share capital of Union Bank of India is held by Indian government.
Around 27,000 employees work together to fulfill the bank‘s mission to reduce the gap between expectations and
deliverables.
11. Axis Bank Axis Bank: Company Profile Axis Bank was established in 1993 and was the first private
sector bank to start operations after the Government of India allowed entry of private banks. Previously called
UTI Bank, Axis Bank was promoted by Unit Trust of India (UTI-I), Life Insurance corporation of India (LIC),
General Insurance Corporation (GIC) and its four subsidiaries, New India Assurance Company, Oriental
Insurance Corporation, National Insurance Company and United Insurance Company. The name of the Bank
was changed in 2007 as there was brand confusion because many unrelated shareholder entities such as UTI
Securities, UTI Technological Service and UTI Investor Services were also sharing the UTI brand. Moreover, the
name was changed to connote stability and solidarity as well as was in line with the bank‘s expanding operations
across geographical boundaries. Staring with one branch in Ahmedabad in 1994, the bank now has 835
branches including extension networks (31st March 2009) across 30 States and 4 Union Territories. The bank
also has overseas offices in Singapore, China, Hongkong and Dubai. Shikha Sharma was named as the bank's
managing director and CEO on 20 April 2009.[3] As on the year ended March 31, 2009 the Bank had a total
income of Rs. 13,745.04 crores and a net profit of Rs 1,812.93 crores The banks business is divided into four
segments: retail, corporate, treasury and merchant banking. Apart from this the bank is also into insurance,
investment banking, mortgage financing, credit cards, and depository services amongst others. Shareholding
Pattern The shareholding pattern of the company as on 30th June 2009 is shown in the chart. In the promoter
group, UTI-I holds maximum share in the company with 27.02% stake, the rest is held by LIC (10.34%) and GIC
including its four subsidiaries (4.85%).
12. Key Milestones The key milestones achieved by the company are Opens its firstgiven in the table
below: Timeline Milestone / Event  Opens Representative Office in Shanghai international branch in Singapore
Opens a Full Licence Bank Branch in HongCrosses the 2,000 ATM mark in 2006 Launches Platinum Credit
Card, Re-brands itself as Axis Bank Kong 2006-2009 Private Crosses the 3,595 ATM mark in 2009 India's
first EMV chip based card Deposit crosses Rs.100bn markplacement of 26% stake to CDC Capital Partners
First commercial bank to open an ATM at ain 2001, advances crosses Rs.50bn Crosses the 100th branch
opens at Tuticorin,Tamilnadu post office 2001-2005 Gets listed on the London Stock Exchange, raises1,000
ATM mark in 2003 Successfully completes its IPO in 1998 and gets itself listed on NSE$239.3m Profit Cash
management services as well as credit card launched and BSE Launches Internet banking module,
iConnectcrosses Rs.500m in 2000 1998-2000 Financial advisory services and e-commerce introducedretail
loans introduced Incorporated as UTI Second largest ATM network in the country with 200 ATMs  First
Branch inaugurated at Ahmedabad 1993-1997Bank, headquartered in Mumbai Deposit crosses Rs.10bn
Completes first profitable year in operation in 1995  mark in 1996
13. Promoters Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the
country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 crore, LIC - Rs.
7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5 crore each. SUUTI - Shareholding 27.02%
Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act, 1963, with a view to encourage
 savings and investment. In December 2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of
India (Transfer of Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the bifurcation of UTI
into 2 entities, UTI-I and UTI-II with effect from 1st February 2003. In accordance with the Act, the Undertaking
specified as UTI I has been transferred and vested in the Administrator of the Specified Undertaking of the Unit
Trust of India (SUUTI), who manages assured return schemes along with 6.75% US-64 Bonds, 6.60% ARS
Bonds with a Unit Capital of over Rs. 14167.59 crores. The Government of India has currently appointed Shri K.
N. Prithviraj as the Administrator of the Specified undertaking of UTI, to look after and administer the schemes
under UTI - I, where Government has continuing obligations and commitments to the investors, which it will
uphold. Board of Directors The members of the Board are : Smt. Shikha Sharma Managing Director & CEO Shri
M. M. Agrawal Deputy Managing Director (Designate) Shri N.C. Singhal Director Shri J.R. Varma Director Dr.
R.H. Patil Director Smt. Rama Bijapurkar Director Shri R.B.L. Vaish Director Shri M.V. Subbiah Director Shri K.
N. Prithviraj Director
14. Customer ServiceMission and values of Axis Bank Mission and Product Innovation tuned to diverse
needs of individual and corporate  Continuous technology upgradation while maintaining human values.
clientele. EfficiencyProgressive globalization and achieving international standards. Customerand
effectiveness built on ethical practices. Core Values Satisfaction through o Providing quality service effectively
and efficiently o "Smile, it enhances your face value" is a service quality stressed on o Periodic Success
through Maximisation of Stakeholder value Customer Service Audits Teamwork, Integrity and People Branch
Network At the end of March 2009,the Bank has a very wide network of more than 726 branch offices and
Extension Counters. The Bank has loans now (as of June 2007) account for as much as 70 per cent of the
bank‘s total loan book of Rs 2,00,000 crore. For HDFC Bank, retail assets are around 57 per cent (Rs 28,000
crore) of the total loans as of March 2007. In the case of Axis Bank, retail loans have declined from 30 per cent of
the total loan book of Rs 25,800 crore in June 2006 to around 23 per cent of loan book of Rs.41,280 crore (as of
June 2007). Even over a longer period, while the overall asset growth for Axis Bank has been quite high and has
matched that of the other banks, retail exposures grew at a slower pace. If the sharp decline in the retail asset
book in the past year in the case of Axis Bank is part of a deliberate business strategy, this could have significant
implications (not necessarily negative) for the overall future profitability of the business. Despite the slower
growth of the retail book over a period of time and the outright decline seen in the past year, the bank‘s
fundamentals are quite resilient. With the high level of mid- corporate and wholesale corporate lending the bank
has been doing, one would have expected the net interest margins to have been under greater pressure. The
bank, though, appears to have insulated such pressures. Interest margins, while they have declined from the
3.15 per cent seen in 2003-04, are still hovering close to the 3 per cent mark. (The comparable margins for ICICI
Bank and HDFC Bank are around 2.60 per cent and 4 per cent respectively. The margins for ICICI Bank are
lower despite its much larger share of the higher margin retail business, since funding costs also are higher).
15. Risk and earnings perspective Such strong emphasis and focus on lending also does not appear to
have had any deleterious impact on the overall asset quality. The bank‘s non-performing loans are even now,
after five years of extremely rapid asset build-up, below 1 per cent of its total loans. From a medium-term
perspective, it appears that Axis Bank could be charting out a niche for itself in the private bank space. It appears
to be following a business strategy quite different from the high-volume and commodity-style approach of ICICI
Bank and HDFC Bank. That strategy also has its pluses in terms of the higher margins in some segments of the
retail business and the in-built credit risk diversification (and mitigation) achieved through a widely dispersed
retail credit portfolio. But, as indicated above, Axis Bank has been to able to maintain the quality of its loan
portfolio despite the concentrated nature of wholesale corporate lending. Change in Name: UTI Then, Axis Now
The Conflict Of Brand UTI: According to a deal between the government and the fund's four sponsors — State
Bank of India, Life Insurance Corporation, Bank of Baroda and Punjab National Bank — UTI's nine subsidiaries
could use the brand name for free till January 2008. After the period ended, UTI Bank, UTI Securities, UTI
Technology Services and UTI Investor Advisory Services had to pay royalty to the fund house. The year long
conflict ended when UTI Bank finally decided to change its name to Axis Bank. Chairman and CEO of UTI bank
Mr P J Nayak told thatthe decision to re-brand the Bank emanated from the need to move out of a scenario of
brand confusion that is created by several shareholder-unrelated entities using the UTI brand. The name Axis is
chosen as it is simple and it conveys a sense of solidity and a sense of maturity. It also has a universal appeal.
The bank is likely to spend around Rs50 crore in the re-branding exercise. Some reasons for change in name of
'UTI Bank to Axis Bank' - are : 1) The UTI brand is owned by UTI Asset Management Company. 2) UTI Bank to
shed its brandname after the split of the erstwhile UTI. Though UTI was a government instutition, its subsidiary
UTI Bank has been categorised as a private sector bank, according to RBI guidelines.
16. 3) UTI Bank was started as a part of the entire UTI (Unit Trust of India) Group. But, when there were
losses incurred by UTI ( due to failure of US 64 scheme probably ) because of other reasons, it was decided by
RBI that UTI Bank should be separated as private sector bank, as several unrelated entities were using the UTI
brand. 4) The change of name to Axis Bank has been cleared from shareholders and regulators. 5) The
government still has a 26% stake in UTI Bank. This stake is up for sale. Regarding the re-branding strategy,
Executive director (corporate strategy) of the bank R Ashok Kumar said the bank had hired advertising firm O&M
to help in creating awareness of the new brand across the country. The bank would change logo and colour of
logo, he had said, adding, the bank is likely to spend around Rs 50 crore (Rs 500 million) in the re-branding
exercise Axis Bank is born out of the pressure on UTI Bank to shed its brandname after the split of the erstwhile
UTI. Though UTI was a government instutition, its subsidiary UTI Bank has been categorised as a private sector
bank, according to RBI guidelines. The name change to Axis Bank means that UTI Bank will have to undergo a
rebranding exercise soon. After the split of UTI, entities like UTI Securities, UTI MF and UTI Bank were all
 allowed to retain the UTI brand name for a while. Now that it is time for UTI Bank to shed the brand name, it has
opted to go for the more modern-sounding Axis Bank. ·Axis Bank brand aims to portray the bank as modern and
innovative The Bank has decided to create a distinct brand identity for itself as for instance ICICI Infotech
rebranding itself as "3i Infotech".Rebranding provides an opportunity to communicate elements of personality,
values and vision, which are specific to the Bank. This rebranding became more important as the Bank takes its
initial steps in establishing a global footprint. NEW LOGO: The bank has retained the burgundy colour, but has
changed the logo. The logo uses the alphabet 'A' from the word Axis. The logo depicts a strong growth path for
the bank supported by a strong base, indicating that the bank is moving on from a position of strength. Earlier,
the bank's logo used the letters U, T and I. On July 30, 2007, UTI Bank20, the third largest private sector bank in
India, officially changed its name to Axis Bank. The decision to rebrand itself was taken by the bank as it was
allowed to use the 'UTI' brand21 name for free till January 31, 2008, beyond which it had to pay royalty for using
the name. Moreover, rebranding itself also gave it the opportunity to have a brand of its own, which would go a
long way in resolving the brand confusion that was created by several shareholder-unrelated entities using the
UTI brand name.
17. The bank acquired the services of Ogilvy & Mather (O&M) to design and implement the rebranding
campaign. It was reported that the bank expected to spend a whopping Rs. 500 million on the rebranding
exercise. Recent News in AXIS: The Financial Express newspaper presented its Tenth India's Best Bank Awards
2009 in 12 categories. These banks are selected on basis of growth, profitability, credit quality and strength over
the past fiscal year. New Private Sector Bank - Axis Bank and HDFC Bank (HDB). Last month, Dun & Bradstreet,
the world‘s leading provider of global business information announced the top banks in India in a publication titled
―India‘s Axis Bank Ltd is the third largest lender amongTop Banks 2009″. Highlights: - private banks in India.
Over the last decade, the Bank has gradually improved its assets quality, built a strong IT platform, controlled
costs, and expanded its network. The Bank has posted over 30% y-o-y growth in net Profit in 35 of the last 37
quarters and over 60% Net Profit growth in each of the last 7 Post its rebranding exercise in 2007 the bank has
continued to doquarters well and the change in name has not affected the bank‘s business. In fact in FY2008 it
saw its customer acquisition grow at a robust rate of 67% over the Net NPAs as a proportion oflast year to over
9.9 million customer accounts. "Executionnet customer assets stood at a mere 0.35% at the end of March
2009. of rebranding exercise was a logistical nightmare‖. Spread across 96 elements, including cheque books,
pay orders, welcome kits, 28 different types of cards, The Bank‘s consolidated Net Interestit's an arduous and
ongoing process. Income (NII) grew 42.4% during FY2009 to Rs. 36.80 billion. The Bank had total Deposits of
Rs.1,173.74 billion and Net Advances of Rs.815.57 billion as on The Net Interest Margin (NIM) of the Bank fell
by14bps to3.33%March 31, 2009. Asin FY2009 from 3.47% in FY2008 due to a rise in the cost of funds to
6.50%. on March 2009, the Bank had a Book Value of Rs. 284.50 per share. The Net Worth of the Bank
increased by 15% to Rs. 97.57 billion in FY2009 from Rs. 84.49 billion in FY2008. Axis Bank‘s Return on Equity
(ROE) increased from 16.09% in FY2008 to
18. 19.93% in FY2009. Return on Assets (ROA) increased to 1.44% In March 2008, Axis Bank launched
Platinumin FY2009 from 1.24% in FY2008 The Bank was ranked No.1 DebtCredit Card, India's first EMV chip
based card. Total AssetsArranger by Prime Database for the 9 months ended December‘08. have grown at a
CAGR of 40.65% during 2005-2009 due to continuous growth in its CASA and Term Deposits. Financial/Ratio
Analysis Total Savings Deposits Rs in crs 4,891 2004-2005 89.24% 2005-2006 8,066 64.9% 2006-2007
12            2006-2007 12      ,126 50.33% 2007-2008 19            2007-2008 19      ,982 64.78% 2008-2009
25            2008-2009 25      ,822 29.22% The Savings deposits of the banks are growing atInterpretations: -
considerable high rate. Only in 2008- 09 it could not achieve a robust growth in Compounded Annual Growth
Rate of 58%. TotalSB A/c compare to earlier years. Current A/c Deposits: - Rs in crs 7,155 2004-2005 32.65%
2005-2006 7,970 11.39% 2006-2007 11            2006-2007 11      ,304 41.8% 2007-2008 20            2007-2008
20      ,045 77.33% 2008-2009 24            2008-2009 24      ,822 23.83% The Current A/c growth too is showing
significant growth inInterpretations: - last five years. This is actually increasing the banks strength.
19. Both Saving Bank deposits and current bank deposits is increasing year by year which is a good sign
for the bank and it‘s shows the image of bank is becoming more good in the eyes of customers and public and
the customers have satisfied with the services of bank so the result they are keeping more faith on bank and
that‘s why they are depositing more money in the CAGR of 36% Total Advances: -bank. 2004-2005
15            2004-2005 15      ,602.92 66.63% 2005-2006 22            2005-2006 22      ,314.23 43.02% 2006-2007
36            2006-2007 36      ,876.48 65.25% 2007-2008 59            2007-2008 59      ,661.14 61.788% 2008-2009
81            2008-2009 81      ,556.77 36.7% We can see that total advances has also been increasing since
2004, and they are Advances are growing CAGR of 55% Net Interestshowing significant growth The net
interest margin has increased since 2005 because of increaseMargin: - in cost of funds. Yet it has maintained
to attract lot of savings A/c depositors every year.
20. Net Interest Income: - 2004-2005 731 26.7% 2005-2006 1,078 47.47% 2006-2007 1,468 36.18% 2007-
2008 2,585 76.08% 2008-2009 3,686 42.59% Net Interest Income of the bank is increasing in every
yearInterpretations: - and in the year 2007-08 is 2585; it has growth of 76.08 % from the year 2006-07 its
shows that bank deposits are increasing or bank is earning more income from Growing at a CAGR of 45% Net
NPAs: - 2004-2005the interest of that deposit. 1.07 2005-2006 0.75 2006-2007 0.61 2007-2008 0.36 2008-
2009 0.35 We can see since 2005 the net NPAs have significantlyInterpretations: - reduced. This is a good
sign for any bank, and it shows that the operations are taking place efficiently. Branches & ATMs: - Along with
3723 ATMs
21. This shows Axis believes in expanding the business through more ATMs and less branches. Working
Capital Turnover Ratio: - 2004-2005 (2.51) 2005-2006 7.92 2006-2007 (12.1) 2007-2008 (1.14) 2008-2009 (1.46)
The working capital turnover ratio is used to analyze theInterpretations: - relationship between the money used
to fund operations and the sales generated In a general sense, the higher the working capitalfrom these
operations. turnover, the better because it means that the company is generating a lot of In the case of
AXISsales compared to the money it uses to fund the sales. BANK working capital turnover ratio is negative in
most of the years, which is showing inefficiency in operations of the bank. Operating Margin: - 2004-2005 26.77
2005-2006 26.45 2006-2007 21.84 2007-2008 23.25 2008-2009 24            2008-2009 24      .3 In the year 2008-
09 Operating Margin was 24.3, in the yearInterpretations: - 2006-07 it was 21.84. This shows that Operating
profit margin is increasing which is good for the bank.
22. Net Profit Margin: - 2004-2005 14.33 2005-2006 13.47 Net profit2006-2007 12.01 2007-2008 12.22
2008-2009 13.31 Interpretations: - margin was 14.33% in 2005 but it showed a downward trend from 2006 till
2008 and then again it went high to 13.31% which shows that the Net profit margin of Axis Bank is little volatile.
Return on Assets: - 2004-2005 1.21% 2005-2006 1.18% Return on2006-2007 1.10% 2007-2008 1.24% 2008-
2009 1.44% Interpretations: - assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives an idea as to how efficient management is at using its We could see that the Return on
Assets has beenassets to generate earnings. volatile, which is not a good sign. Return on Net Worth: - 2004-
2005 13.54% 2005-2006 16.94% 2006-2007 19.45% 2007-2008 12.38% 2008-2009 17.85%
23. Since 2004-05 Return on Net Worth hasInterpretations: - been increasing significantly but then again
it took steep dip of 12. 38% in 07-08, and again it jumped to 17.85% in 2008-09 which shows a good sign. Capital
Adequacy Ratio: - 2004-2005 12.66% 2005-2006 11.08% 2006-2007 11.57% 2007-2008 We could see that Axis
has able to13.73% 2008-2009 13.69% Interpretations: - meet the capital adequacy ratio as prescribed by RBI
every year. They had never defaulted on Capital Adequacy Ratio. Earlier this ratio was low but after
implementations of BASEL II norms, it is mandatory for every bank in India to adopt the ratio prescribed by RBI.
Debt / Equity Ratio: - 2004-2005 13.17 2005-2006 13.97 2006-2007 17.32 2007-2008 9.99 2008-2009 11.49
Interpretations: The debt equity ratio is calculated to measure the extent to which debt- financing has been
used in business. It indicates what proportion of equity and debt the company is using to finance its assets. As a
general rule there should Webe a mix of owner fund as well as outside fund in proportional manner. could also
see that Axis has been highly leveraged since 2006-07 but later they came down to 9.99 in 2007-08 and again
went up to 11.49.
24. Total Advances against Deposits: - Year Total Deposits Total Advances Percentage 31,712 2004-2005
15,602.92 49.2% 2005-2006 40            2005-2006 40      ,113.53 22,314.23 55.63% 2006-2007 58            2006-
2007 58      ,785.60 36,876.48 62.73% 2007-2008 87            2007-2008 87      ,626.22 We could59,661.14
68.08% 2008-2009 117,374 81,556.77 69.5% Interpretations: - see earlier in 2004-05 the percentage of
advances against deposits were low as 49%, where as it has increased to 69.5% in 2008-09. Therefore we can
say that bank has become efficient in utilizing its resources apart from meeting its capital adequacy ratio and
meeting the CRR and SLR norms with RBI. Total Income/Capital Employed: - 2004-2005 7.54% 2005-2006
8.23% 2006-2007 8.92% 2007-2008 9.59% 2008-2009 10            2008-2009 10      .60% We could see that total
income against total CapitalInterpretations: - Employed has been significantly increasing year on year since
2004 – 05. This is a good sign for the Bank. Other Income/Total Income: - 2004-2005 1.48% 2005-2006 0.18%
2006-2007 0.39% 2007-2008 0.16% 2008-2009 0.60%
25. In the year 2004-05 other income hasInterpretations: - been high compared to subsequent years, but
again in 2008-09 other income ratio against total income has improved. Interest expended against Net Income
Earned: - Year Interest earned Interest Expended Percentage 2004-2005 1,924.16 1,192.98 62% 2005-2006
2,888.79 1,810.56 63% 2006-2007 4,560.40 2,993.32 66% 2007-2008 7,005.32 4,419.96 63% 2008-2009
10            2008-2009 10      ,835.49 7,149.27 We could see that the net interest expended has been in66%
Interpretations: - the range of 62% to 66% since 2004-05 to 2008-2009. Interest expended margin is close to
industry interest expended margin. Earnings per share: - 2004-2005 11.83 2005-2006 17.41 2006-2007 23.40
2007-2008 29.94 2008-2009 50.57 Earning per share is increasing year by year which is aInterpretations: -
good sign for an investors of axis bank it shows that an investor can invest in AXIS Bank to get good profits.
26. COMPARATIVE ANALYSIS: - Particulars Axis HDFC PNB HSBC Deposits 117,374.11 142,811.58
209,760.50 49,970.27 Advances 81,556.77 98,883.05 154,702.99 27,588.68 Share Capital 359.01 425.38
315.30 4,499.16 Net worth 10,214.80 15,052.73 14,653.63 11,214.3 Book Value 284.53 344.44 416.74 - Interest
earned 10,835.49 16,332.26 19,326.16 6,326.9 Interest expenditure 7,149.27 8,911.10 12,295.30 2,661 Net
profit 1,815.36 2,244.94 3,090.8 12,91.2 Net NPAs 0.35% 1.49% 0.17% 1.42% Total Assets 147,722.06
183,270.78 246,918.62 94,620.3 Return on Assets 1.44% 1.10% 1.15% 1.51% We have compared AXIS Bank’s
performance with leading banks in the particular field. Therefore we have taken one PSU Bank, one Private Bank
and one Foreign Bank for comparative analysis. INTERPRETATIONS: - Deposits: - If we analyse deposits of
Punjab National Bank is higher than any bank taken into consideration, this is because of its accentuated
presence in the country since 1895. Second comes HDFC bank which is also the close competitor of AXIS Bank,
and 3 rd comes AXIS bank in terms of deposits. HSBC is ranked last. Advances: - Again more the deposits more
the advances. PNB has been leading among all banks taken into consideration regarding loans and advances.
Again HDFC has 2 nd largest advances and third comes AXIS Bank. Share Capital: - HSBC has the highest
share capital amongst all the 4 banks taken into consideration. Second comes HDFC, 3rd is AXIS bank and last
comes PNB. Interest Earned: - Highest interest earned is by PNB as again it has high deposits as well as high
advances, HDFC ranks 2nd in interest earned, and AXIS 3rd. Net Profits: - Again PNB has highest profits among
 4 banks, HDFC ranks 2 nd and AXIS bank ranks 3rd, whereas HSBC ranks 4th. Net NPAs: - PNB has lowest
NPAs, whereas AXIS Bank has 2 nd lowest NPAs, HSBC has 3 rd lowest NPAs, HDFC ranks last in NPAs.
Return on Assets: - HSBC has high return on Assets, whereas AXIS has 2 nd highest return on assets. PNB
bank has 3rd highest return on assets and HDFC has lowest return on assets among 4 banks.
27. Banks Branches ATMs Cities Inception Overseas yr presence Axis 835 3595 515 1994 4 HDFC 1416
3382 550 1995 8 PNB 4668 2150 21,408 1895 3 We could see from the data givenHSBC 178 150 - 1959 83
Interpretations: - that PNB has highest number of branches, HDFC has 2nd highest number of branches in the
country whereas Axis had 3 rd largest network of branches and the lowest Axis has highest number of ATMs in
the country, HDFC ranks 2 nd inis HSBC. terms of ATMs presence, PNB ranks 3rd in ATM presence whereas
HSBC ranks last. PNB covers maximum area of the country in terms of banking, whereas HDFC and HSBC has
maximum presence across the world, 2ndAXIS has limited presence. ranks HDFC, Axis ranks 3rd in overseas
presence and PNB ranks last.
28. Revenue Segmentation
29. Key Financial Metrics: - Key Financial Metrics (in Billions INR) 2005 2006 2007 2008 2009 Net Interest
Income 7.31 10.78 14.68 25.85 36.8 Non - Interest Income 4.16 7.3 10.1 17.95 29.16 Net Revenue 11.47 18.08
24.78 43.8 65.96 Net Profit 3.35 4.85 6.59 10.71 18.13 Net NPA's 1.07% 0.75% 0.61% 0.36% 0.35% Return on
Assets 1.21% 1.18% 1.10% 1.24% 1.44% Total Assets 377.44 We497.32 732.57 1095.78 1477.22 Revenue by
segment: - Capital Structure: - can see that only 42.32% of the total equity capital is available for public and
major stake is among the investors belongs to Administer of specified undertaking of UTI, LIC and other QIPs.
30. Comparing the Market share: - Metrics/Company State Punjab Bank Bank Axis ICICI HDFC Allahabad
Canara (figures in Billions Bank of National of of Bank Bank Bank Bank Bank INR) India Bank India Baroda
Revenue Metrics Net Revenue (net 43.8 161.83 75.11 264.2 75.32 85.51 59.62 26.57 58.46 of interest exp.) Net
Interest 25.85 73.04 52.3 170.21 55.34 54.99 39.11 17.81 35.38 Income Revenue Growth 71.50% 45.18%
50.70% 12.43% 8.49% 70.92% 20.21% 24.50% 5.50% from 2007 NIM 3.47% 2.20% 4.40% 3.07% 3.58% 2.97%
2.90% 2.61% 2.42% Opearating Metrics Net Income 10.71 41.57 15.9 67.29 15.41 30.07 14.35 9.94 15.65 Net
Profit Margin 24.45% 25.69% 21.17% 25.47% 20.46% 35.17% 24.07% 37.41% 26.77% Total Operating 22.26
72.43 37.65 138.11 40.06 54.57 30.27 14.99 29.59 Income Other Key Industry Metrics Total Assets 1095.78
3997.95 1332.51 5665.65 1990.48 1788.3 1795.99 829.23 1805.29 capital Adequacy 13.73% 14.92% 13.60%
13.47% 12.96% 12.95% 12.91% 12.04% 13.25% Ratio Return on Assets 1.24% 1.10% 1.32% 1.01% 1.15%
1.25% 0.89% 1.33% 0.92% Net NPAs 0.36% 1.49% 0.47% 1.78% 0.64% 0.52% 0.47% 0.80% 0.84%
31. To initiateHR OVERVIEW AT AXIS BANK: AXIS HR Objectives & institutionalise globally competitive
HR practices in the Bank in our pursuit to become a Bank of international standards and to become an employer
of To put in place relevant HRD strategies and use modernpreferred choice. methodologies to undertake
organizational renewal; identify and nurture talent, bring about marked changes in the mindset of employees at
all levels so as to To create a performance-driven culture and an excitingenhance HR Quality. To create a
pool of entrepreneurial managers andworkplace for the employees. To inculcate a strong and effective sales
andbusiness leaders for future. service culture across levels in the organization in order to generate strong To
create a learning organization for employeesstakeholder affiliation. intellectual growth and creativity; and to re-
skill the workforce to operate in digitally enabled modern core banking environment. The ultimate aim of the
Human Resources function is to build and manage a motivated pool of professionals by grooming internal
resources and recruiting the right skills from the market, develop a high performance work-ethic and create a
culture of continuous learning and skill development. One of the major platforms on which the success of the
Bank's corporate strategy rests is bringing on board the requisite skills within the overall ceiling of the manpower
budget. Although the economic downturn in the latter half of the year brought in its wake a larger availability of
manpower in the market, the challenge that emerged was to ensure against any dilution in the quality of talent
while fulfilling the targeted numbers. There was a net staff increase of 5,885 over 2007-08 translating to a growth
of 40% compared to a 48% growth in the previous year. The overseas staff complement has grown almost
twofold from 44 to 90 in the same period in tune with the growth in businesses at our overseas centres. Besides
recruitment, attrition management learning and skill development and management of performance are the other
key areas of the Human Resources function. Employee engagement measures like a competitive compensation
structure, performance linked rewards and
32. incentives, a merit-based promotion process, ongoing interactions with staff at all levels and providing
staff with opportunities to seek aspirational roles through internal job postings, contribute to retention of staff at all
levels. There has been a significant reduction in the year-end attrition level compared to the previous year. The
Bank's Performance Management system, where recognition is directly related to performance, sends a clear
message of meritocracy. The ultimate aim of the training process is to create a knowledgeable pool of talent
delivering optimum value to customers, which we believe our training initiative has been able to achieve. One of
the major challenges in this regard is the requirement to scale up training bandwidth to keep pace with the
growing workforce. The training team has lived up to this challenge through focused programmes for newly
recruited employees as well as for the more experienced domain specialists. A combination of classroom
sessions, external programmes and e-learning initiatives are part of the training module. In the process, training
man-days have registered an increase of 71% in the year under review as against 62% in the earlier year. Axis
Bank continues to be a young Bank with an average age of 29 years and a talent pool comprising a mix of new
recruits and experienced officers. The Bank also continues to espouse the policy of affirmative action by being an
equal opportunity employer. Your Bank will continue to pursue the objective of accomplishing its corporate
 mission and core values through fulfillment of its Human Resources agenda for the eventual purpose of
delivering a high level of customer satisfaction.
33. HR Business Model:
34. The Strategic HR Business Model adopted by Axis incorporates its HR Mission and Philosophy and is
focused towards attainment of long-term organizational goals. A very strong Organizational Leadership at
different Strategic Leadership -levels forms the key link in the Model. These are; Business Leadership -
ZonalCorporate level & OperationalRegional level Leadership - Business unit level i.e. branch The two vital
Human Resource sub-systems i.e. HR Planning & Management Sub-System & Competency Based HRD Sub-
System shape the very crucial Performance Environment within the Bank which facilitates development of
enabling capabilities of the people. Through proper developmental inputs, Positive Attitude & Right Mindset is
created among people. Through proper Communication Medium and an Organizational Culture of sharing,
openness, collaboration & confrontation, autonomy etc., people in the organization are facilitated to give their
best output (performance). The Model is adequately supported by a suitable Learning Platform, which imparts
proper Knowledge and enhances Learning among people (functional, behavioural etc) so that their Competence
increases and their potential could be properly leveraged for greater Individual and Organizational Effectiveness.
These create proper Employee Motivation, which ultimately facilitates Goal Achievement. HR Blueprint for
Business Driven HR Reforms: Board level approved strategy paper outlining various organization wide HR
reforms interventions HR Steering Committee Board Level HR Committee for piloting HR initiatives and reforms.
The Committee comprises of Directors and leading professionals as Experts from outside the Bank. KHOJ
Organization wide Talent identification and Development Programme for Officers and Clerks (Through scientific
process of identification and selection, employees with high potential to be deployed in key business areas. Such
employees to be provided with suitable grooming and career growth opportunities).
35. SAMPARK SOS Employee HELP Line (Employees in distress can directly approach the CMD for
immediate relief) PARAMARSH Employees Counselling Centre (Counselling centres for providing psychological
assistance and guidance to overcome their stress, complexities and conflicts in order to lead a better life. This is
totally confidential between the employee and the counsellor. First such centre set up at Mumbai where services
of professional Clinical Psychologist are available. AXIS FINANCIAL REWARDS FOR BUSINESS LEADERS
Weighted Index based Model (with pre-defined weight ages for different business KRAs) for balanced
assessment of efforts of Business Leaders (Branch Heads, Regional Heads, Deputy Regional Heads and Zonal
Heads). Rewards in Cash for achievement of business KRAs. MEP-TIKSHNA Management Education
Programme for Executives (GM, DGM, AGM, Chief Managers) in association with top B-Schools like IIM-
Ahmadabad and Management Development Institute, Gurgaon. The specially designed programme is aimed at
development of strategic business leaders for the future. So far, 213 executives have undergone the programme.
HR POLICY FOR OVERSEAS SELECTION & DEPLOYMENT Scientific and process orientation in the new
revamped policy for selection and deployment of officers at the Bank‘s overseas territories. HR RESOURCING
POLICY New HR Resourcing Policy formulate to take care of various recruitment needs of the bank consequent
upon abolition of the erstwhile Banking Services Recruitment Board (BSRB). Performance Appraisal System for
Clerical and Sub-Staff With the objective of bringing an organization wide performance culture in the
organization, hitherto uncovered employees in the Clerical and Sub-Staff cadre brought in under a new
performance
36. appraisal system Massive Recruitment of Specialist officers and also graduates from B-Schools through
campus recruitment To take care of the Bank‘s requirement in different specialized areas like IT, Treasury, HR,
Marketing & Sales, Credit, International Business etc (Around 500 officers being recruited). A New Induction cum
Grooming Programme for Young Officers With the objective of developing future managers and leaders and for
deployment in key areas, a re- vamped Officers‘ Induction cum Grooming Programme is launched. Fast Track
Career Growth Opportunities for Executives and Officers In order to provide fast track growth opportunities to
aspiring Executives and Officers, promotional opportunities have been provided. Axis LEADERSHIP
DEVELOPMENT CENTRE Board has taken the decision to set-up a World-Class Leadership Development
Centre to be set up to prepare future leaders for the Bank. NEW GROUP HR STRUCTURE A new Group HR
Organization Structure is being put in place to take care of the strategic business – HR needs of the
Organization. The Structure would have balanced focus on HRM and HRD aspects and will put in place
competency based HR systems and practices. Recruitment Process at Axis Bank: The selection of external
recruits consists of the following steps: 1. CV Submission Potential candidates interested in joining the bank are
required to send their complete curriculum vitae. An acknowledgement of receipt is sent for all submitted
applications to the candidate's email. 2. Application Evaluation The Human Resources department evaluates all
incoming applications, against prerequisite abilities and skills set for all current openings. All applications are kept
based on strengths and specialization, for future reference. 3. Ability Tests
37. Potential candidates will be invited to participate in aptitude tests i.e. numerical, verbal, English and
psychometric, when deemed necessary. 4. Capability Based Interviews To ensure that our recruitment process is
fair and consistent, all candidates who are successful at the exams are invited for a capability based interview.
Interviews are based against capabilities, required for each position for which the candidate is interviewed for. A
capability or competency is an ability described in terms of skills & behaviours that are essential to effectively
perform within a job. 5. Reply Letters At all stages of the process candidates are kept informed of the status of
their application with an email reply letter. 6. Job Offer If a candidate successfully reaches the final stage, a
position offering is made in conjunction with a competitive reward package. SYSTEMS OVERVIEW AT AXIS
BANK: Axis Bank has implemented a new derivatives system -- Summit FT by global financial applications
provider -- Misys. The system will provide the bank with the ability to structure derivative products in real time,
 reduce time to market, and give a single view of the entire transaction to the customer. According to Prabhakar
Saxena, general manager (India) of Misys, "A lot of banks are providing derivative products on a back to back
basis. But these are plain vanilla products, which are uniform in nature. Summit FT will help Axis to structure its
derivative products differently and offer its customers products that are different from the run-of- the-mill
derivatives. Thus, it can charge a premium for its dynamic services." The bank hopes to leverage the ability to
rationalize its currently dispersed functions to provide a single view of every transaction to customers. Derivative
transactions can expose the bank to three broad categories of risks: counterparty credit risk, market risk, and
operational risk. With derivatives and structured products operations currently served by a range of third party
vendor solutions, spreadsheets, and customer built platforms, the bank is predicting that rationalizing systems
across front, middle, and back office operations will provide significant competitive advantage. "Apart from
helping the bank to create new derivative products without having to resort to developers each time, it also helps
from a regulatory compliance standpoint," said Saxena. The RBI favors transparent online systems that can track
every transaction and report it exactly as it is. Currently spreadsheets are being used to record information, which
leaves room for misreporting, errors etc. An automated system will remove this anomaly and improve compliance
to a great extent. The Summit FT product was evaluated against products by competitors Murex and Calypso
before it was finally adopted by Axis Bank.
38. Axis Bank: The Right Phone Banking CRM Software: A state-of-the-art call centre, with volumes of up to
40,000 calls a day, was set up by Axis Bank for centralised services and support of the organisation‘s products
and processes. The aim was to take away routine jobs from branches so that they could focus on sales and
services. These operations were to be shifted to the call centres, which would follow standard and focused
processes. Based on the success of the first call centre, the services were to be extended to pan-India branches
where enterprise-wide services and support were standardised. It was required to track trailing businesses from
point of origination to consumption/culmination. With growth of the organisation, there was also a need for a
complete automated human resources management system in place to cater to employee‘s requirements in an
automated manner. The main objectives of the project were to select a operating system that had to be scalable,
robust, secured, virus free and easily available. This was specially relevant from the point of the bank‘s credit
card business so as to cater to 24x7 authorisations. Also, certified versions from respective vendors was of prime
importance as this project was a large-scale enterprise-wide initiative. PROCESS-> The design and
implementation of the bank‘s phone banking CRM software was carried out on an open architecture using Linux
as the operating system. With RHEL cluster service, the database was clustered and achieved 99.9 per cent
uptime. The remaining balance, 0.01 per cent was down for scheduled maintenance only. The project was
implemented in a record time of three months. With a shared global file system, care was taken to ensure that
load balanced applications were on active clusters. IMPACT-> Based on the success of the initial implementation
in 2004 and the smooth running of the operating system — the services were up almost 99.9 per cent — the
bank decided to go in for the large-scale enterprise-wide project. The solution has helped achieve the highest
return on investment on the lowest total cost of ownership. The project served to enrich the banking experience
for customers, made available a payment gateway for secured transactions and enabled extension of customer
services across the country India. In the next phase, it seeks to automate HR management SCALABILITY-> The
hardware sizing is for three-five years and it has yet to reach total scalability. However, one more node can be
added in an hour to the system as the necessary clusters are already in place.
39. ORGANISATION COMPUTING RESOURCES: SOFTWARE RESOURCES Risk Management solutions
provider for derivatives market, Pyxis Systems, has announced that UTI Bank has selected its RisKompass as
the software solution for financial derivatives risk management. A software system for derivatives valuation and
risk management, RisKompass enables clients to manage derivative trades in a further controlled way from the
front to back office. Supporting the industry standard FpML (Financial Product Markup Language) protocol, it can
manage valuation and risk management of a broad range of derivatives instruments. The system will handle
derivatives such as interest rates and foreign exchange for UTI Bank. The implementation will provide the bank
with an automated system that reduces manual effort to streamline its operations. The benefit envisaged by the
bank is that everybody being on the same system, it can be accessed by anyone on the different locations of the
bank. The users at the bank would include marketing staff, traders, dealers and risk managers. The solution will
result in smoother deal processing, with verifying and online risk monitoring mechanism. It will streamline all
operations and the risk mechanism can be monitored centrally. UTI will be replacing their Crystal Xcelcius
system with this solution. Pyxis has developed utilities for data migration to this system. The solution is on a .Net
platform, and will operate on the Windows operating system. The database employed is Oracle 9i. Pyxis has
already conducted a training programme for the users at UTI, and their personnel will be present at their
premises, providing on-site support, for a further period of three months. According to R.V.S. Sridhar, VP -
Treasury, UTI Bank, The system is user friendly, and the software offers good portfolio management features
and pricing capabilities required to meet the increasingly complex requirements of customer business. The
process of implementation started in June 2006, and UTI will go live with the solution by mid-October, said Sunil
Nikhar co-founder, & President, Pyxis Systems. Pyxis will offer full implementation, customization and
maintenance support services for the solution. It is a very complex system, and it took Pyxis 18 months to
develop it, added Nikhar. UTI Bank is the first customer for Pune based Pyxis and the company is into talks with
some other large private banks for implementation of RisKompass. Axis Bank eShop NetBuy is developed by
Axis Bank and is used by 2 users of Software Informer. The most popular version of this product among our
users is 1.0. The product will soon be reviewed by our informers.
40. Axis bank testing new mobile payment method: Axis Bank is in advanced stages of beta testing a new
method of using mobile phones to make payments. The service is expected to be fully launched in just three
 months. A pilot study involving 500 customers of Axis Bank is currently being conducted at various locations. If
this mobile payment method is implemented, users can swipe their mobile phone and conduct various
transactions, which were earlier possible using the credit cards. Atom Technologies, a subsidiary of the BSE-
listed Financial Technologies (India) Ltd (FTIL), which runs the Multi Commodity Exchange of India has
innovated a technology, which will enable mobile payments. Atom card- a product developed by the company
and the accompanying software can embed a user's credit card data, over-the air like SMS into his mobile phone.
A 2-D bar code will store this credit card detail, which will be unreadable for the user and will keep the credit card
details safe even when the mobile phone is stolen or lost. Whenever, the mobile phone user has to make a
payment he will have to provide his PIN details. After embedding the credit card details into the mobile phone,
the instrument can be used in place of credit cards. Purchases can be made at a merchant establishment, which
has the requisite software to implement the transaction. The company has called this swiping model as 'optical
payment' and has received a patent in US for this payment mode. A simple webcam is required to read the 2-D
bar code and can be implemented at merchant establishments at a very low cost. The software required to
implement mobile transactions will be provided free of cost to merchants, banks and customers by Atom.
However, this technology will be available for JAVA enabled phones at present. Many other companies like
Bharti Airtel, Reliance Communications and C-Sam were also looking at offering mobile commerce solutions, but
the Reserve Bank of India (RBI) is yet to give its clearance for a mobile wallet service in Electronic Clearing
Service (ECS Credit) ECS Credit is an electronicIndia. clearing system that facilitates paperless transaction
through an offline system. Axis Bank facilitates ECS Credit at all ECS designated locations. We accept the
electronic file and arrange obtention of settlement date (date of credit to benefiary account) from RBI/SBI/Local
Clearing House as the case may be. The funds gets debited from a centralized account and credit is accorded to
the respective beneficiaries as per settlement cycle. A detailed MIS about the NEFT To establish an
Electronictransactions is provided to the customer. Funds Transfer System to facilitate an efficient, secure,
economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India.
The customer willing to avail the NEFT facility offered by us shall submit an "NEFT Application Form" authorising
the sending bank to debit the sender's account and transfer funds to the beneficiary specified in the NEFT
Application Form. The Beneficiary's account will be credited on the same day by crediting the
41. specified account of the beneficiary or otherwise placing Real Time Gross Settement (RTGS)funds at
the disposal of the beneficiary. RTGS System is a payment settlement system that minimises the credit risk in
the prevalent cheque clearing system. Under RTGS the funds are settled on a near real time basis across Banks
in different locations. Bank offers this immediate electronic fund transfer facility to RTGS enabled bank branches
across through the country its designated RTGS enabled locations. ORGANISATION TRANSACTION
PROCESSING SYSTEM: Team Inertia The way people do business has been changed significantly with the
advent of the Internet Revolution. Today customers have an option to choose from a plethora of options while
shopping for that favourite item. Web Commerce or Ecommerce has witnessed a significant increase in revenue
year on year. You can now integrate this option to your website in the various Secured Payment Gateway
Options we have to offer. Technologies are the authorized reseller for Axis Bank Payment Gateway Services in
the state. EBS (E-Billing Solutions) is the Merchant Account providing company partnered with Axis Bank that
visualizes you how to become more competitive and help you to make the changes to your online payment
processing for risk free business. EBS "Payment Gateway" is specifically designed to accommodate the
increasing demand by e-commerce companies for sophisticated payment solutions to tap the enormous
opportunities for global Internet transactions. The system also includes several exciting new technologies that
enable e-commerce businesses to make the things more customized and backend more user friendly with
advanced features and technical know-how.
42. How It Works: Step 1: Customer select and adds item in the shopping cart And places the order on your
(merchant) website. Step 2: Customer selects to pay via credit card . Step 3: Customer is redirected through EBS
Payment Gateway to Transaction Processing Bank. Step 4: Customer enters credit card details on Secured
Payment page. Step 5: Credit card information is transmitted securely to the corresponding bank for approval.
Step 6: Corresponding bank sends appropriate information to the transaction Processing bank . Step 7: The
result is forwarded to EBS (via the Transaction Processing Bank). Step 8: Customer receives a confirmation and
is redirected to your (merchant) website.
43. EBS has taken tremendous steps to secure your transactions Anfrom fraud, data piracy and hacking.
Some of the steps taken are as follows automated risk management system which triggers for all transactions
and flags High Risk Transactions are manuallythe transaction for risk involved. investigated by our intelligence
team and Risk control unit at your customers Verisign 128 bit SSL RMS parameters. and their issuing banks
working hours. Robust secured PCI Audited servers.  Hacker safe certification. encrypted. highly strategic
data servers and network design for sustaining heavy traffic Extensive Network Axis Bank has its own branches
intransaction and data load. various locations. Above this our arrangement with reputed correspondent banks
covering more than 900 locations ensures that most of your cheques are covered under our network and the
realisation status can be known at the earliest. Lower Interest Costs & Improved Liquidity A dedicated HUB
ensures that you receive funds in your designated account within transit time thereby reducing Centralized
Service Deskinterest costs and improving your liquidity position. A dedicated service desk has been started at
our Centralised Collection and Payment HUB (CCPH) to ensure that your queries are resolved quickly and
efficiently. The Customers can contact CCPH regarding any query about the MIS or Web CMS Web CMS
provides you with all the information at athe process flow. click. Detailed MIS like location wise collection and
return, product-wise pooling, pooling in pipeline (due credit report) etc. can be viewed and Comprehensive MIS
 We providedownloaded from web interface through internet. comprehensive MIS reports like daily report,
transaction report future credits reports and cheque returned unpaid report. On the payments side we provide
daily paid - unpaid status for the demand drafts, cheques or warrants issued by your Organisation.
44. Operations Overview At Axis Bank Now with a name having universal appeal, the banks is now working
towards becoming a multinational bank and diversify into other financial services like AMC, insurance and
restructure operations to reflect a modern approach to banking. AXIS bank has differentiated itself very well on
the basis of high level service and product quality. They have successfully implemented the change and due to
this their market share has increased only despite of tough competition prevails. Regarding the re-branding
strategy, Executive director (corporate strategy) of Axis bank R Ashok Kumar said the bank had hired advertising
firm O&M to help in creating awareness of the new brand across the country. The bank would change logo and
colour of logo, he had said, adding, the bank is likely to spend around Rs 50 crore (Rs 500 million) in the re-
branding exercise .This rebranding becomes more important as the Bank takes its initial steps in establishing a
global footprint. Restructuring The bank has appointed Mckinsey and Company to suggest the restructuring and
it will also prepare Vision Document 2015 for Group Axis. Roadmaps for new businesses are likely to be part of
the vision document and the new businesses will include insurance, brokerage and I- banking. This is not the first
time Mckinsey is suggesting a revamp to Axis Bank. In the past, the consultants have worked with Axis's
corporate lending and capital markets team. But now the focus will be a lot broader and the entire group will be
covered in insurance. For example, the question is should Axis remain a distributor of Metlife's products or should
they start their own products. The financial year 2008 was a roller-coaster year for the banking industry. Axis
Bank churned out an impressive earnings growth on the back of an aggressive business growth and capital
infusion. The retail banking operations of Axis Bank contribute about 20% to the bank's total income and only 8%
to its bottom line, making it the least profitable segment. Wholesale banking is most lucrative business for the
bank owing to its strong position in the loan syndication business. However, significant focus on strengthening
the current account and savings account (CASA) should drive Axis Bank's profitability going forward. The
restructuring of the corporate banking business has helped the segment achieve a strong growth (a 68.3%
growth in corporate advances). A leadership position in the loan syndication business provides further
momentum to the corporate banking business.
45. Information Technology: Technology is the key to deliver customised financial solutions. The Bank aims
to maintain a scalable computing infrastructure backed by a robust network architecture that delivers service
across multiple channels for customer convenience and cost reduction through operational efficiency. In order to
retain a competitive edge, the Bank's technology infrastructure is continuously upgraded. In tune with business
priorities, the IT strategy has been focused on capacity enhancement to be able to maintain an efficient servicing
capability in a multi-channel delivery environment. During the year, many pioneering efforts have been taken
towards use of technology in the Bank such as being the first among Indian banks in submitting centralised R-
Return for foreign exchange transactions by the 'B' category branches to RBI, being the first bank in the country
to market EMV chip embedded Debit Platinum, Travel Currency and Credit Platinum cards, development of a
product for Business Banking for printing cheques at the customer locations after due validations of issuing a
cheque series. This facility allows integration with the corporate ERP systems to print dividend warrants and
issue payments directly from customers' premises. The Bank has taken various initiatives in the area of
increasing use of technology in its day-to-day operations. The most notable achievement this year was in the
area of financial inclusion, where the Bank was successful in deploying a separate dedicated core banking
solution, which has the capability of maintaining liability accounts as well as agricultural lending accounts for
microfinance. The current volumes handled in the software are 6.21 lacs accounts. This has allowed the Bank to
substantially reduce transaction costs while complying with regulatory standards. The unique capability of the
solution is the bulk account-opening and transaction-handling potential without manual intervention. The Bank
was in the forefront in the use of advanced imaging technologies to improve workflow processing and reduce the
cost of centralized operations of CPU and TFC (Trade Finance Centre). The imaging technologies like Optical
Character Recognition (OCR), Optical Mark Recognition (MCR) have been deployed to capture images of
account opening forms of liability and trade finance documents. This facility was extended to the Hong Kong
branch operations and helped in improving processing efficiencies. The Bank has also extended this technology
to its Cheque Truncation System (CTS) implemented in the NCR region. The Bank's New Delhi Service Branch
caters to more than 50,000 clearing instruments per day for the branches within its jurisdiction. The Bank was
awarded the ISO 27001:2005 certification for process management in delivery channels (ATM and Internet
Banking) in February 2009. The ISMS certification was given for conforming to quality standards in respect of
protecting client related information from different kinds of security threats, and for maintaining integrity as the
supplier of services to external and internal customers. The Bank's IT proficiency was recognized in the Indian
Banking Technology awards conducted by IBA (Indian Banks Association) in January 2009 and the Bank
received awards in the categories of (a) Best use of Business Intelligence, and (b) Rural Initiatives for Financial
Inclusion, from among the 10 categories of awards.
46. Operations And Complience: Operational procedures for delivery of products and services were
constantly refined during the year under review from the perspective of implementation of best practices, risk
identification and containment. An operational framework has been established in order that all transactions are
handled with precision. Operational parameters and control functions were refined to ensure efficient functioning
of branches. The Bank continued to vigorously pursue its commitment in adhering to the highest standards of
compliance and management of compliance risks in the current global meltdown. The existing products and
processes were subjected to vetting from the compliance standards during the year in accordance with the
Bank's compliance policy, which is based upon the rules, laws and standards of regulatory as well as non-
 regulatory bodies, both domestic and overseas. During the year, the mechanism for monitoring and identification
of suspicious transactions in accordance with the regulatory requirements was further reinforced. The
technological initiatives undertaken for dissemination of regulatory/internal guidelines and inculcation of
compliance culture at the grass roots level were well received. The skill sets of staff on implementation of
regulatory guidelines on 'Know Your Customer' norms and fraud prevention were strengthened during the year.
Focused efforts were made at all levels to ensure prompt redressal of customer grievances. The code of
commitment of micro and small enterprises was adopted during the year to support the development of this
segment. Suitable steps are being undertaken to meet the emerging challenges in the identification of unusual
transactions through customer profiling and inculcation of a compliance culture at the grass-root level.
Introduction of a compliance self-testing template for business functions and branches is expected to aid the
achievement of compliance objectives of the Bank. No instance of compliance failure was registered during the
year against the Bank by any of the regulators. Corporate Banking Operations: Corporate Banking Operations
(CBO) within the Bank involves monitoring the accounts of large/mid-corporates and SME customers while
ensuring compliance with the regulatory guidelines and systems and procedures of the Bank in the conduct of
credit operations. CBO Division is created at branches where advances exceed Rs. 50 crores, in order to ensure
that the operational risks in monitoring the advances and other related issues are well mitigated. In case of other
branches, trained and experienced manpower is posted when the number of borrowal units and the advances
level exceed a minimum threshold level. As part of business process re-engineering, 8 city specific centralised
CBO Hubs called Credit Management Centres (CMCs) have been opened during the year for standardizing the
skill pool for efficient monitoring and control of advances. Facilitation Centres have been set up at select
branches of these 8 centres for providing prompt customer service in co-ordination with CIVIC. Other branches
located at these cities have been mapped to the closest facilitation centres for all their credit, domestic trade
finance and related operations. CBO Divisions and CMCs handled 86% of the Bank'stotal domestic non-retail
credit portfolio, ensuring that trained and experienced personnel are monitoring a substantial percentage of
advances.
47. Internal Audit: The Bank's Internal Audit function performs an independent and objective evaluation of
the adequacy and effectiveness of internal controls. This ensures that the operating and business units adhere to
systems and procedures as also regulatory and legal requirements. The effort is to continuously benchmark
against international best practices and procedures in the area of internal control systems. It is also pro-active in
recommending quality enhancement measures in operational processes based on audit findings. Internal Audit
department has conformed to 'Quality Management System' (QMS) and its internal processes have been
certified to be ISO 9001:2000 compliant by International certifying agency M/s Det Norske Veritas AS,
Netherlands. The Bank's Internal Audit function undertakes a comprehensive risk based audit of all branches,
retail asset centres and service branches. An annual audit plan is drawn up on the basis of a risk profiling of
auditee units. The scope of risk-based internal audit encompasses the examination of adequacy and
effectiveness of internal control systems, as well as external compliance and evaluating the risk residing at the
auditee units. Central Office departments of the Bank are also subjected to inspection and audit. Around 60% of
the Bank's total business and 75% of total advances are subjected to concurrent audit. Information System audits
are also conducted at all the branches, the Banks' Data Centre, Business Continuity Centre as also all the
relevant departments at Central Office. Internal Audit has also developed an effective off-site surveillance
system. During the year, the operations of the Internal Audit function have been decentralized by opening Zonal
Internal Audit offices at four metros namely Delhi, Chennai, Kolkata and Mumbai for better operational efficiency
and quicker turnaround time. To ensure independence, the Internal Audit Function has a reporting line to the
Audit Committee of the Board, which oversees its performance and reviews the effectiveness of controls laid
down by the Bank and compliance with regulatory guidelines. International Banking: The international operations
of the Bank are at the core of the strategy to expand the horizon of the product offerings and delivery channels to
various geographies and across client segments, covering the spectrum of retail and corporate banking solutions.
The international presence of the Bank now comprises branches in Singapore, Hong Kong and DIFC- Dubai, and
representative offices in Shanghai and Dubai, besides alliances with banks and exchange houses in the Gulf
Cooperation Council (GCC) countries. While the foreign branches primarily offer corporate banking, trade
finance, treasury and risk management solutions, the Bank's retail initiatives in the GCC caters to the large Indian
diaspora and promotes the Bank's NRI products. In a year marked by an unprecedented upheaval of the financial
markets that has changed the contours of the global financial system, the international operations of the Bank
displayed resilience and recorded impressive growth in assets and deposits, and maintained profitability. The
total assets of the foreign branches now constitute 7.90% of the total assets of the Bank and grew by 38.55% to
touch USD2.30 billion from USD 1.66 billion a year ago. Despite the prevailing recessionary trends in the
developed world economies, the asset quality at foreign offices continues to be satisfactory with zero level of
non-performing assets. The Bank continually evaluates the prospect of a wider product offering as well as deeper
reach, and has been working towards offering private banking services out of its foreign branches, which has
now commenced.
48. Strategic Tie-ups:- Tie- up with Banque Privee Edmond de Rothschild Europe: Axis Bank and Banque
Privee Edmond de Rothschild Europe have signed an agreement on September 19, 2007 in Luxembourg. This
Agreement enabled both organisations to work together and provide Wealth Management solutions to overseas
Indians. Mr. P.J. Nayak, Chairman & CEO, Axis Bank after signing the agreement said ―As we have embarked
on creating an international franchise for the Bank, a key aspect of our international strategy is to focus on
financial advisory services and wealth management solutions for overseas Indians. Our association with
Rothschild, who are known for their expertise in Wealth Management, marks a significant step in this direction
 which will enable us to bring world class wealth management solutions to our customers.‖ The tie-up will also
enable Axis Bank to offer investment opportunities in global financial products for overseas Indians and will offer
the joint products through its branches in Hong Kong, Singapore and Dubai. Axis bank has set up three branches
in Singapore, Hong Kong and Dubai—and one representative office in Shanghai, which will be converted into a
bank. ―Within a year of its operations, our Singapore branch has already created $750 million (Rs3,038 crore) in
assets and is profitable. Three years from today, I see foreign operations accounting for 15% of our bank‘s total
assets. We have metamorphosed into an Asian bank and at the next stage will become a global bank,‖ Nayak
said Tie-ups with various Govt. Departments: The Bank has entered into tie-ups with various Govt. Departments
for providing various G2B and G2C online payment facility to the citizens and businesses thus providing
convenience to them.Few of the important online payment tie-ups entered into by Axis Bank with various Govt.
Departments is as under: Govt. Departments IRCTC - Online Railway Reservation DGFT ePayments Sampark -
Utility Bill ePayments MCD - Municipal Tax or Fees ePayments Bangalore One Project - Utility Bill MCD -
eTendering Project DGFT ePayments The Bank has tied-up with Directorate General ofePayments Foreign
Trade (DGFT), under Ministry of Commerce, for the facility of online payment of import or export application fees
through Internet by the importers or exporters with valid Importer Exporter Code (IEC) and having their account
MCD - Municipalwith Axis Bank through DGFT website http://www.dgft.gov.in/ Tax or Fees ePayments
49. The Bank has tied-up with Municipal Corporation of Delhi (MCD) wherein citizens maintaining Accounts
with Axis Bank can make online MCD -payment of Municipal Taxes and Fees at the website
www.mcdonline.gov.in eTendering Project The Bank has tied-up with MCD for e-tendering project wherein
citizens, contractors, suppliers maintaining Accounts with Axis Bank can make online payment of Tender
Document Fees, EMD, etc. directly through their Axis IRCTC - Online RailwayBank Account at the website
http://mcdetenders.com/ Reservation The Bank has tied-up with Indian Railway Catering and (IRCTC) for its
online Railway Reservation or Ticket Booking System wherein citizens maintaining Accounts with Axis Bank can
make online payment of Ticket charges Sampark - Utilityfor confirmed booking at the website
http://www.irctc.co.in/ Bill ePayments The Bank has tied-up with Chandigarh Administration for its "Sampark
Project" wherein citizens maintaining Accounts with Axis Bank can make online payment of various Utility Bills
(namely Electricity Bills, Water Bills, Municipal Taxes, etc.), pertaining to the Departments and Utility Service
Providers participating in the "Sampark Project", directly through their Axis Bank Account at the website
www.sampark.chd.nic.in Additionally, citizens can also make payment through Credit or Debit Cards on Axis
Bank's Internet Payment Bangalore One Project - Utility Bill ePayments The Bank has tied-upGateway. with
Govt. of Karnataka for its "Bangalore One Project" wherein citizens maintaining Accounts with Axis Bank can
make online payment of various Utility Bills (namely Electricity Bills, Water Bills, Municipal Taxes, etc.), pertaining
to the Departments and Utility Service Providers participating in the "Bangalore One Project", directly through
their Axis Bank Account at the website www.bangaloreone.gov.in. Additionally, citizens can also make payment
through Credit or Debit Cards on Axis Bank's Internet Payment Gateway. Other Tie-ups: Axis bank has also tied
up with Western Railways (Mumbai), Central Railways (Mumbai), Pantaloons, HPCL, and BPCL for setting up
ATMs at their locations. Almost all costs related to setting up and maintenance of an ATM network are fixed.
Thus, the challenge for the Bank has been to migrate customers to this channel and develop new streams of
revenues from this channel, in order to make the channel viable. The Bank has achieved tremendous success in
this regard. We have been able to migrate about 90% of all cash disbursement transactions to our ATMs.
50. To generate direct revenue from the ATM Channel, the bank has adopted 2 strategies: - ATM Sharing
with other banks - New functionalities such as mobile airtime refill, bill payment & mutual fund sales through
which our bank earns a commission The bank has also set up ATM galleries at 3 locations. Each of the Gallery
has 2 ATMs for the convenience of the customers, information kiosk, a card operated touch-screen internet
kiosk, though which the customers can access their i-Connect accounts with bank and perform their banking
transactions such as funds transfer, bill payment, balance inquiry etc. A bill payment kiosk has also been set up
at this gallery. The ATM Channel for the bank has been a major customer acquisition tool. Increasingly the
channel is being seen as a customer-servicing tool and all the new value –added services are part of that
initiative. New Initiatives:- a) Remittance Card: The AXIS Bank Remittance Card. Launched in association with
Remit2India.com, is a unique product that has changed the way money is sent across borders. Remitters from 23
different countries including the USA, UK, Gulf Countries can send money to India through the Remittance Card.
The product is available as a delivery mode (other delivery modes being Demand Drafts/Direct credits to Bank
accounts) for remittances made through the Web Portal www.Remit2India.com. Based on the remitter‘s request,
we prepare a personalised Remittance Card for the beneficiary, which is preloaded with the funds remitted to him
in INR. The card is sent in a Welcome Kit to the beneficiary, who has to take it to the nearest AXIS Bank branch
to complete some basic formalities in order to activate his/her card. Once the card is activated, it works just like a
normal ATM-cum-Debit Card, usable at all VISA ATMs for withdrawing funds and at all VISA enabled POS
outlets to pay for purchases. Subsequent remittances are directly loaded onto the card and provide the
beneficiary with almost instant access to the funds remitted to him.Thus, the product is primarily aimed at
providing a hassle-free and convenient solution to beneficiaries who receive remittances on a regular basis.
Other features provided to Remittance Card customers are as follows: ➢ Multi-city At Par chequebook (on
request) ➢ No minimum average balance requirement ➢ Encash facility ➢ Quarterly interest payment ➢ Daily
Cash Withdrawal Limit of Rs. 40,000/- ➢ Free Insurance cover comprising of: ➢ Purchase protection ➢ Zero
lost card liability ➢ Internet and Telebanking facility
51. b) VISA Money Transfer Service: The VISA Money Transfer Service has now made it possible to send
money from an AXIS Bank account to any of the 28 million VISA Cards issued in India. Beneficiary of Funds: The
beneficiary of the funds should have a VISA Card (debit or credit, issued in India). In case the beneficiary VISA
 Card is linked to more than one bank account, funds will be transferred to the primary account linked of the card.
Availability: The service has been enabled through all our ATMs and i-ConnectTM. Usage: The VISA money
Transfer service can be used for the following purposes: ➢ To send money to any of the 23 million VISA Cards
anywhere in India. ➢ To pay VISA credit card bills by giving the card number and making a direct payment. Time
Taken for Funds Transfer: Although the sender‘s account would be debited instantaneously or on the scheduled
date with the transferred amount, the funds will reach the beneficiary‘s VISA Card within one or two working day,
depending on the time of transaction. c) EMV standard based Platinum Credit Card: Axis Bank today launched
India‘s first ‗Visa Platinum Credit Card‘ based on the EMV (Europay, MasterCard, Visa) Standard. The Card has
an embedded chip, which stores cardholder‘s information in an encrypted format, thereby providing the highest
level of security to the cardholder against possible misuse. The Platinum Chip offers clear authentication of debit
and credit payments combined with easy fraud detection. The chip cannot be duplicated, ruling out counterfeiting
and skimming. This makes your card safer and secure than any other card in India. EMV based chip card also
ensures secure exchange of information between the Card and Bank‘s Authorization system (because of
presence of cryptogram in the online requests/responses). Higher data storage enables card to perform multiple
functions. e.g. Efficient Rewards Management by offering chip based loyalty solutions, instant reward
redemption, multiple The merchant insertsprograms on single card etc. How does it work:- Step 1: the chip
card into his EDC terminal in the chip reader slot. The card need not The card remains inserted in the terminal
throughout thebe swiped. transaction .
52.  The purchase amount is entered in the terminal. Step 2: TheOnce the purchase is approved a
receipt will be printed. Step 3: Cardholder signs the receipt and removes his/her card from the terminal.
Transaction processing does not require PIN entry by the Cardholder. Alternate Channels: Axis bank has
following Alternate channels: - ATM Channel - Internet Banking Channel - Tele-banking Channel - Mobile
Banking Channel
53. ATM Channel: As of now Axis bank has more than 3500 ATMs. This includes all its onsite and off-site
ATMs. All its ATMs are connected to Base24 ATM switch, which in turn interacts with their centralized core
banking software for transaction processing. The Bank through its ATMs offers the following services: Banking
Services: - Cash Withdrawal, with real time debit to customer's account - Cash & Cheque Deposit - Balance
enquiry - PIN Change Other Services: - Mobile Airtime Refill for Hutch, Airtel Idea, BPL, RIM, TataTele - Facility
for Non UTI bank VISA card holders to refill their Prepaid phones. - Life Insurance Corporation Premium
Payment - Bill Payment e.g.: BSNL, MTNL - Funds Transfer (within own accounts) -Online Donations to Trusts &
NGOs. - Purchase and redemption of UTI Mutual Fund Schemes through the ATM. Shared Resource: Axis bank
has been a pioneer in developing shared networks in the country. Apart from acquiring ATM Transactions
through VISA/MasterCard; we have ATM Sharing Arrangements (Bilateral and Multilateral) with the following
partners: Bilateral ATM sharing arrangement 1. State Bank of India 2. ABN Amro Bank 3. Bank of Rajasthan 4.
Karur Vysya Bank 5. Andhra Bank Multilateral: 1. Cashnet (A shared network run by Euronet India Pvt. Ltd.) 2.
BANCS (Formerly known as Swadhan. Now run by E Funds Ltd.)
54. Internet Banking Channel: Since April 2000, the Internet Banking channel has grown fast to complement
the branch and ATM network. As of March 2006, there are around 20 lac users of Internet Banking, which
amounts to more than 50% of our retail banking savings account customers. Apart from routine functional like
balance and transactions lookup, axis bank also provide a number of value-added services on the Internet
banking platform. A brief description of each product is given below: Funds Transfers: Currently, we offer three
types of funds transfers: -To the customers own Axis Bank account (linked to same customer id). -To any Axis
bank account -To any account in any other bank in India. Power Transfer: This service is available for transfers to
any branch of any bank provided the branch is in the 15 RBI centres in the country. All the above services are
free to our savings bank customers. Porwer Transfer, however, is charged at Rs.17 per transaction for customers
other than savings account customers. Bill Payment: The bill payment services on the Internet can be classified
into 3 categories:- Presentment or EBPP (Electronic Bill Presentment and Payment): Under this type of bill
payment, the customer needs to register for each bill. Once registered, the biller will send an electronic version of
the bill for acceptance and payment. Direct Payment: Under this type of bill payment, no bill presentment
happens. The customer is free to select the biller and pay accordingly to his convenience. Payee: This is a
variation of direct payment method with the customer creating his own biller. E.g. payment of rent to landlord.
The landlord‘s account details would typically be entered and payment made on a recurring basis. Shopping: A
customer with Internet banking access can buy from merchants registered with us and pay through the direct
debit facility on our website. Other Services: Apart from the above, the customer can give requests for stop
payments and cheque books.
55. Mobile Banking Channel: Mobile banking was launched by the Bank in October 2004. Within the one
and a half year, Axis bank‘s customer base has grown to over five lac subscribers as of April 2006. It offers the
following two type services in mobile banking: Automatic Alerts: A subscriber is alerted through SMS on the
activities in his account with automatic alerts for every debit or credit in his account of more than Rs. 5,000. Also,
if the customer is registered for bill payments, he receives an alert as soon as a bill is presented by the biller for
payment. Benefits: - Safety: Be alerted on any transaction above Rs.5,000 in your account so that action can be
initiated promptly in case of any misuse of the account. - Convenience: Know the status of the account from
wherever you are. Charges: The service is chargeable at Rs.100 plus taxes (total Rs.112.24) for all customers
other than Senior Privilege accountholders, Priority accountholders and staff. Update Mobile Number: The
customer can update his mobile number through the following channels: ➢ Branch (through a written request or
form) ➢ iConnect ➢ ATM De-register: The customer can de-register through the following channels: ➢ Branch
(through a written request or form) ➢ iConnect ➢ SMS (by sending SUSPSMS to the mobile banking number)
56. Marketing objectives Banks wants to achieve following To get the market capitalizationmarketing
objectives by the end of year 2011: To get 125 Crore CorporateTo get the 200 Crore retail investment. 500
Crore. At present Axis bank isTo get the 175 Crore Capital investments. investments. ranked at the 6th
position (overall) by its market share and capitalization and 3 rd in the private banks category. It wants to get the
3 rd position in overall Indian banking market. EVOLUTION OF THE MARKETING CONCEPT The Role of
marketing in the banking industry continues to change. For many years the primary focus of bank marketing was
public relations. Then the focus shifted to advertising and sales promotion. That was followed by focus on the
development of a sales culture. Although all the elements of the marketing concept – customer satisfaction, profit
integrated framework, and social responsibility – will remain important, customer satisfaction must receive the
greatest emphasis in the years ahead. The chief concerns of most bank executives still focus on legal and
regulatory issues, according to most surveys. Community banks are particularly concerned with eliminating
barriers that give unfair advantages to financial services competitors, such as credit unions. However, another
concern pertains to technology: keeping nonblank competitors out of the payment system. Bankers Identify Near-
Team and Long Term Concerns 1991 2015 Maintaining profitability Service quality Credit Portfolio Management
Maintaining profitability Service Quality Market / customer focus Regional Economy
Operations/systems/technology Cost Management / Expense reduction Credit portfolio management Declining
Earnings/ more failures Productivity improvement Market / customer focus Investment to stay competitive Capital
adequacy Stock market value Stock market value Asset/liability management Industry Overcapacity Electronic
Banking
57. When this gateway system was first proposed, access to the Internet was very new and few banks had
the resources and knowledge to set up their own direct-access lines for customers. Customers have shown a
growing interest in online banking services, and banks have responded by quickly putting in place proprietary
sites on the World Wide Web and offering PC banking. Within the next five years, 93 percent of community bank
executives surveyed say they plan to offer telephone banking, and 79 percent plan to offer PC banking. When
asked which technology holds the most potential for the future, bank executives identified call centers first. As
customers continue the transition the transition into a high-tech world in which they want information and answers
more quickly and accurately than ever before, call centers offer the ideal bridge. With 24-hour access to either
automated information or live operators, customers do everything from check their accounts to apply for a loan.
Bank executives also identified PC banking as having the most promise for the future, followed by Interest
access and broad function kiosks. MARKETING AND COMPETITION In view of the declining profitability and
productivity of the banking sector and extremely low rate of profit percentage, the determination of the financial
health of the system requires drastic remedial measures not only to build up investor confidence but also to
combat competition from all over. It is time that the pros and cons of the oncoming banking era are properly
understood and advantage taken of various opportunities. This will require an efficient marketing approach to
bank management in which target markets will be tackled successfully along with effective satisfaction levels and
in which the usual basic elements – product, pricing, promotion and distribution will be taken care of in a proper
format of an efficiently working marketing organization. The nationalised banks must face competition from
private banks, non-banking financial institutions, foreign banks and others. The competition is in the fields of
deposits and credits, foreign trade, consumer credit and miscellaneous banking activities. The competition will
benefit customers and force the banking system to raise its productivity, minimize expenses, and remain
sensitive to evolving issues. Narasimham Committee Reports while recommending internal autonomy long with
compliance with prudential norms suggested rule-based credit policies, fiscal balance and a gradual movement
towards liberatlisation. To deal with the competition from foreign banks, the Indian banks should go in for
diversification and extension of services as well as expansion of products and business. Economic freedom and
innovative
58. spirit have contributed greatly to the success of the market-oriented financial sector in the Western
countries. Directed credit and investment has done just the opposite. Interventionism is not necessarily bad
provided it is associated with a committed leadership. Indian financial sector had for more than four decades,
neither full economic freedom nor a well disciplined interventionism so that it cost operational flexibility as well as
functional autonomy both of which were concerned with profitability performance and related factors.
MARKETING CONCEPTS Its application to Banking, When we apply marketing to the banking industry, the bank
marketing strategy can be said to include the following – i) A very clear definition of target customers. ii) The
development of a marketing mix to satisfy customers at a profit for the bank. iii) Planning for each of the ‗source‘
markets & each of the ‗use‘ markets (A Bank needs to be doubly market – oriented – it has to attract funds as
well as were of funds & services. iv) Organization & Administration. BANK MARKETING We define bank
marketing as follows: ―Bank marketing is the aggregate of functions, directed at providing services to satisfy
customers‘ financial (and other related) needs and wants, more effectively and efficiently that the competitors
keeping in view the organizational objectives of the bank‖. Bank marketing activity. This aggregate of functions is
the sum total of all individual activities consisting of an integrated effort to discover, create, arouse and satisfy
customer needs. This means, without exception, that each individual working in the bank is a marketing person
who contributes to the total satisfaction to customers and the bank should ultimately develop customer
orientation among all the personnel of the bank. Different banks offer different benefits by offering various
schemes which can take care of the wants of the customers. Marketing helps in achieving the organizational
objectives of the bank. Indian banks have duel organizational objective – commercial objective to make profit and
social objective which is a developmental role, particularly in the rural area. Marketing concept is essentially
about the following few thing which contribute towards banks‘ success: 1) The bank cannot exist without the
 customers. 2) The purpose of the bank is to create, win, and keep a customer. 3) The customer is and should be
the central focus of everything the banks does.
59. 4) It is also a way of organizing the bank. The starting point for organizational design should be he
customer and the bank should ensure that the services are performed and delivered in the most effective way.
Service facilities also should be designed for customers‘ convenience. 5) Ultimate aim of a bank is to deliver total
satisfaction to the customer. 6) Customer satisfaction is affected by the performance of all the personal of the
bank. All the techniques and strategies of marketing are used so that ultimately they induce the people to do
business with a particular bank. Marketing is an organizational philosophy. This philosophy demands the
satisfaction of customers needs as the pre-requisite for the existence and survival of the bank. The first and most
important step in applying the marketing concept is to have a whole hearted commitment to customer orientation
by all the employees. Marketing is an attitude of mind. This means that the central focus of all the activities of a
bank is customer. Marketing is not a separate function for banks. The marketing function in Indian Bank is
required to be integrated with operation. Marketing is much more than just advertising and promotion; it is a basic
part of total business operation. What is required for the bank is the market orientation and customer
consciousness among all the personal of the bank. For developing marketing philosophy and marketing culture, a
bank may require a marketing coordinator or integrator at the head office reporting directly to the Chief Executive
for effective coordination of different functions, such as marketed research, training, public relations, advertising,
and business development, to ensure customer satisfaction. The Executive Director is the most suitable person
to do this coordination work effectively in the Indian public sector banks, though ultimately the Chief Executive is
responsible for the total marketing function. Hence, the total marketing function involves the following: a) Market
research i.e. identification of customer‘s financial needs and wants and forecasting and researching future
financial market needs and competitors‘ activities. b) Product Development i.e. appropriate products to meet
consumers‘ financial needs. c) Pricing of the service i.e., promotional activities and distribution system in
accordance with the guidelines and rules of the Reserve Bank of India and at the same time looking for
opportunities to satisfy the customers better.
60. d) Developing market i.e., marketing culture – among all the customer-consciousness ‗Personnel‘ of the
bank through training. Thus, it is important to recognize the fundamentally different functions that bank marketing
has to perform. Since the banks have to attract deposits and attract users of funds and other services, marketing
problems are more complex in banks than in other commercial concerns. INCREASING IMPORTANCE OF
MARKETING IN BANKING INDUSTRY The various other factors which have led to the increasing importance of
marketing in the banking industry are categorized as follows: Government Initiatives The Indian economy
embarked on the process of economic reform and various policy measures initiated by the government resulted
in the increasing competition in the banking industry, thereby highlighting the importance of effective marketing.
The Narasimhan Committee Report evidence of the Government‘s desire to ‗re-regulate‘ the banking industry so
as to encourage efficiency through competition. The Government initiatives include: Deregulation of Interest
Rates The bank may reduce their Minimum Lending Rates so as to attract customers (individual and corporate).
Such reduction in lending rates reduce the spread between the deposit rates and lending rates, i.e. the banks
margins would decline and they would have to increase their volumes or provide attractive services so as to
maintain profits. This calls for bank marketing. Increasing Emphasis on Bank Profitability: With the Narasimhan
Committee Report, banks have been directed to improve their efficiency, productivity and profitability. Banks are
required to be self-sufficient. In fact, the report has adopted the BIS standards of capital adequacy (though in a
phased manner). Foreign Banks Foreign banks offer stiff competition to the Indian Banks and with their superior
services and technology offer them a competitive advantage. Thus Indian Banks have to effectively apply
marketing concepts to attract customers.
61. Entry of New Private Banks In the early ‗90s new competition emerged in the form of new Private
Banks, who brought along with them a high technology-based banking matching with International Standards and
have made a significant dent in the banking business by capturing substantial share in the profits of the banking
industry. Reduction of Statutory Liquidity Ratio: With the Government‘s aim of reducing the SLR to 25 percent,
the banks will have surplus funds for which they will have to attract users. Social Environment Increasing
Urbanization, Education and Awareness: The higher literacy level, migration to urban areas and higher
awareness due to the boom in the mass media have important implications for the retail banker. He needs to be
conscious of the fact the increasing proportion of people are aware of financial service and are, therefore
demanding and expecting higher quality services. Increasing Urbanization, Education and Awareness: The
higher literacy level, migration to urban areas and higher awareness due to the boom in the mass media have
important implications for the retail banker. He needs to be conscious of the fact the increasing proportion of
people are aware of financial service and are, therefore demanding and expecting higher quality services.
Decline in Traditional Indian Values (Borrowing as Taboo), Rising Consumerism, Rise in the Percentage of
Working Women. Technology Development Modernization of Technology has facilitated the introduction of new
banking services as to attract new customers. An example of this is the ‗Automated Teller Machines‘ or the
facility of ‗Any Time Money‘. Also in foreign countries, banks are experimenting with money transmission at Point
of sale, e.g., petrol station linked with banking network. Credit is Easier to Obtain Growing Importance of Non-
Banking Financial Institutions: Fixed Deposits being offered by the NBFC‘s are very attractive for the public,
because of the wide gap of interest rates offered by banks on term deposits and that offered by the NBCS‘s.
further, they offer a variety of specialized services to their customers so as to attract and retain them.
Disintermediation: The increasing role of capital markets in mobilizing funds is reducing the importance of banks
as intermediaries. Companies are directly approaching the savers through the capital markets. Mutual funds help
 in attracting the small investors who do not want to take much risk. STRATEGIES FOR EFFECTIVE BANK
MARKETING IN INDIA
62. Introduction: Since the inception of globalization in India, banking sector has undergone various
changes. Introduction of asset classification and prudential accounting norms, deregulation of interest rate and
opening up of the financial sector made Indian banking sector competitive. Encouragement to foreign banks and
private sector banks increased competition for all operators in banking sector. The protective regime by the
authority is over. Indian banks are exposed to global competition. Even competition within the country has
increased manifold. The almost monopoly position enjoyed by the public sector banks of India is no more
existence. Under this development Indian banks needs to reinvent the marketing strategy for growth. The spread
of the bank in Indian rural and semi urban areas are highly different from state to state and region to region.
Many states have fewer networks of bank branches in the rural areas. Under such scenario different marketing
approach for different areas is required. If the bank follows the same marketing strategy for all areas the success
would be difficult. Marketing approach for urban area: The urban areas of India are developed taking into account
all parameters of development. The level of income of the people, the literacy rate and level of education as well
as awareness of the people about rights of the customer are higher than that of the rural and even semi urban
areas. Thus here for effective bank marketing different approach is necessary than that of rural areas. The
marketing strategy should be based on customer service and the use of modern technology in banking. Under
competitive environment for the success of the business, better customers and retaining existing customers is
possible only with customer service. Use of modern technology in urban areas will also go long way for marketing
of banking services. Technology based service like credit card, debit card, ATM, anywhere banking, internet
banking, and mobile banking are necessary for urban areas. This is because it enables customers to perform
banking transactions at their convenience. Business hours of a bank are also an important factor for urban
banking. India many private sector banks, especially co-operative banks and now even some of the public sector
banks have also started this practice and they find it successful. To attract business and wholesale customers,
banks need to adopt technology based product and service which is suitable to such class of customer. For
instance RTGS, collection of out station cheques, issuing the cheques at par at any branch in the country, cash
management facility, DD boutiques etc. are necessary. Another strategy for effective marketing is bank need to
change the focus from the traditional banking to universal banking. In urban areas the extend and variety of
economic activities demands that one institution should meet all financial need of a customer. Under such an
expectation of people universal banking would prove successful approach for bank marketing. The term
‗universal banking‘ in general
63. refers to the combination of commercial banking and investment banking, i.e., issuing, underwriting,
investing and trading in securities. A universal bank is a supermarket for financial products. Under one roof,
corporate can get loans and avail of other handy services, while individuals can bank and borrow. For increasing
customer base and retention of the existing cliental universal banking approach is effective strategy. Universal
banking offers number of benefits to customers as well s the banks. For instance, economies of scale arise in
multi-product firms because costs of offering various activities by different units are greater than the costs when
they are offered together. Universal banking approach is beneficial to bank also. For banks economies of scale
relate to cost- savings through sharing of overheads and improving technology by jointly providing generically
similar groups of services. Since universal banking basically provides financial services the inputs like manpower,
infrastructure is more or less same. Necessary changes in the inputs can be made easily. For instance training
can be given to staff for providing different financial services to customers. Moreover the most important benefit
for the bank is that it is useful to increase the fee based income of the bank. Financial sector passing from lower
interest rate regime at present and added to this the process of disintermediation is affecting the main and the
traditional source of income for the banks i.e. interest income. All banks are striving hard to increase their fee
based income to improve their bottom line. Universal banking can help the banks here positively. Marketing
approach for rural areas: Prior to nationalization of banks in 1969, the rural areas were virtually without banking
facility. At that time unorganized sector was dominating in the rural finance. After nationalization of banks in 1969
branches of the banks were started gradually in the rural areas also. Today more than 50 percent branches of
the banks are found in the rural areas. However, the distribution of banks in the rural areas is highly uneven.
Here banks have to face competition with the unorganized sector. Moreover the rural banking is highly
regularized activity by the Government in India. Lending as well as interest rate is regularized. Thus under such
environment different marketing approach is required. For effective rural marketing product development,
promotion and communication is important. All these parameters banks have to balance with socio-economic
factors prevailing in the rural areas. Bank need to innovate product that could attract the depositors. Various loan
schemes that are suitable for them for getting funds at right time and also they find convenient to repay. For
instance traditional saving bank account may be given fixed deposit concept that once a particular limit of
balance is reached the funds from saving account is automatically coveted into fixed deposit attracting higher
interest rate. Banks need t develop some scheme which would attract them to bank with. For loans and advances
products which are suitable to farmers, small traders, small scale agro based rural industries are already
64. in existence. Banks need to see the how value addition can be mad to these existing schemes. Banks
also needs to tie up with Non Government Organizations and various Self Help Group for different types of loans,
micro financing etc. This will help the bank for building good image and reputation in the rural areas over and
above the business. Another potential area which can be explored by the banks in the rural area is retail banking.
With the steady increase in the income of the rural people there is ample scope for retail loan products like
housing loans and loan for consumer durables. Marketing through customer services in rural areas is different
from that of urban areas. Here personalized banking is the success mantra for banks. Because of high level of
 illiteracy people prefer to undertake banking transaction themselves. They hesitate to depend upon technology
based service. For effective marketing in rural areas bank should have staff with right soft skill like concern for
customers‘ problem, positive attitude, good communication and negotiation skill. At every level of dealing with the
customer bank need to educate them for banking activates and process. To attract the customers from the
unorganized sector most important factor is to provide. The borrower the required finance of right amount at right
time. Rebranding In July 2007, UTI Bank was renamed Axis Bank. The Bank decided to shed the name of its
original promoter and build a new brand, after UTI AMC protested to the government about the bank s plan to
float an asset management firm for private equity. UTI AMC was granted exclusive rights to the UTI brand name
after January 2008 according to an agreement signed in 2003 between the government and the four sponsors.
Post its rebranding exercise in 2007 the bank has continued to do well and the change in name has not affected
the bank s business. In fact in FY2008 it saw its customer acquisition grow at a robust rate of 67% over the last
year to over 9.9 million customer accounts. The bank has retained the burgundy colour, but has changed the
logo. The logo uses the alphabet 'A' from the word Axis. The logo depicts a strong growth path for the bank
supported by a strong base, indicating that the bank is moving on from a position of strength. Earlier, the bank's
logo used the letters U, T and I. The bank is likely to spend around Rs50 Crore in the re-branding exercise.
Regarding the re-branding strategy, Executive director (corporate strategy) of the bank R Ashok Kumar said the
bank had hired advertising firm O&M to help in creating awareness of the new brand across the country. The
bank would change logo and colour of logo, he had said, adding, the bank is likely to spend around Rs 50 Crore
(Rs 500 million) in the re-branding exercise
65. The bank has chalked out a strong communication campaign over the year. On August 1, the bank will
launch a nationwide advertisement campaign with a catchline, ''Twins both equal''. The entire branding exercise
is expected to cost the bank around Rs50 crore The bank has already redesigned 96 elements, including cheque
books, welcome kits, payorders, among others, suggesting the name change. ADVERTISING: Axis Bank used a
short yet intensive burst of advertising to announce its rebranding. Everybody loves twins,” says Sumanto
Chattopadhyay, group creative director, Ogilvy & Mather, which holds the Axis Bank advertising account. The
decision to use several sets of identical twins as the abiding visual imagery for the rebranding of UTI Bank to Axis
Bank was the master stroke of the campaign. Never mind that he had to hard-sell the idea to the top brass of UTI
Bank. “There was a worry that something as serious as financial services was being reduced to such simplicity,”
says Chattopadhyay. Still, he won his case. It‟s anything but orthodox for a brand to go in for a name change
when a study conducted by a global brand valuation firm has only just ranked it among India‟s 50 most valuable
brands. But then again, UTI Bank — the fifth largest Indian bank by market capitalisation - didn‟t have much of a
choice. It was required to surrender the UTI brand name to its parent, Unit Trust of India by January 2008,
following an impasse over a non-compete clause. To start the rebranding on the right footing was a brand health
check which determined that while the new name should retain the perception of professional and friendly service
associated with the legacy brand, it could afford to lose the bureaucratic image. Starting August 2007, the
marketing machinery for communicating the change swung into motion. “Everything is the same except the
name”, read ubiquitous billboards with striking images of identical twins. “Our first concern was to reassure 6.5
million existing customers that besides our name and logo, nothing from our network, our technology platform or
our management had changed,” said Hemant Kaul, president, retail banking, Axis Bank. So what‟s in a name,
you ask? Certainly more than what Shakespeare implied. The brief to advertising agency O&M was to create a
new brand name that was short and easy to remember. Also, given the bank‟s growing interests in other Asian
markets including Dubai, Singapore and Hong Kong, a “global-sounding” name was imperative. „Axis‟ was
gleaned from a list of over 50 possibilities that were all checked for semantics, pronunciation and cultural
references.
66. “It was one of those „aha‟ names,” says Chattopadhyay. But it was more than a catchy moniker. As P J
Nayak, chairman and managing director, Axis Bank, pointed out, the name Axis “denotes stability and security
just as axis in geometry is a line of reference around which all else is measured”. While the name changed, the
proposition did not exactly change. In fact, when the new logo was derived from the alphabet “A”, a decision was
made to retain the house colour Burgundy to strengthen the message that while the new brand was building a
strong new imagery to denounce the PSU connotation, it was retaining its service proposition. But branding
specialists expressed some concern. Some say that an opportunity was lost to build a strong new identity around
Axis as a bank that would arrive with a difference. UTI , on its part, was taking one step at a time. The first part of
the rebranding campaign entail the communication of a single message in one short but intensive burst across
mass media. A prominent feature of this campaign was the heavy use of internal media. They started
communicating the impending change in name through customer account statements and 2,500 Axis Bank ATMs
carried the message through posters and ATM screens. “The campaign was undeniable in its wide visibility and
360-degree integrated approach,” says Sarvajeet Chandra, founder, Master Sun Consulting. But the instruction
from Axis to O&M was clear — once the campaign served its purpose, there would be no more mention of the
legacy brand. What would then follow was a new television campaign that focussed on each of the bank‟s key
products, minus the twins. That campaign has since been rolled out. The rebranding exercise doesn‟t come
cheap. Axis Bank is reported to have spent over Rs 50 crore on its rebranding. “A successful brand creates and
fosters loyalty amongst the company‟s key stake-holders. So if the company manages to attract new stake-
holders that it wants to target and retains those that it wishes to keep, it is successful branding,” says Samit
Sinha, managing partner, Alchemist Brand Consulting. Kaul is sure it will net new retail banking customers, to the
tune of 7-8 per cent, month-on-month. Like Sinha says, what will be key for Axis now is to remember that “re-
branding helps the entity to start with a clean slate and build up its own new set of desired associations”.
 Translated, the cute twin association will go a long way, but customers, old and new, will be waiting to see how
the bank‟s revitalised services will match up.
67. Swot Analysis of Axis Bank SWOT analysis is done for a company, to find out its overall Strengths,
Weaknesses, Threats and opportunities leading to gauging the competitive potential of the company. The SWOT
Analysis enables a company to recognize its market standing and adopt strategies accordingly. Here SWOT
analysis of AXIS bank is made to understand the positioning of the bank better: STRENGTHS 1. BRAND NAME:
AXIS Bank has earned a reputation in the market for extending quality services to the market vis-Ã -vis its
competitors. It has earned a strong Brand name in banking sector. 2. MARKET SHARE: AXIS Bank has the
largest market share of 34% in the IT & ITES industry in India according to our survey. 3. DIVERSIFIED
PORTFOLIO: AXIS Bank has all the products under its belt, which help it to extend the relationship with existing
customer. AXIS Bank has umbrella of products to offer their customers, if once customer has relationship with
the bank. Some Products, which AXIS Bank is offering are: 4. TREASURY DEPARTMENT: So customers can
get the best rates for foreign exchange. 5. AGGRESSIVE MARKETING: AXIS Bank is known for its aggressive
marketing of its products. This gives AXIS an edge over other banks.
68. 6. TECHNOLOGY: From its inception, AXIS Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology. AXIS bank technology platform has been
acknowledged globally as one of the best in terms of robustness, flexibility and cost efficiency. AXIS Bank is in a
position to leverage this platform to further build cost and service advantage. WEAKNESS 1. TRANSACTION
COST: AXIS Bank charges high cost for its transactions. Through our data analysis we have find out that most of
the small companies prefer nationalized banks only because of this cost factor. Also the group has found out that
there are companies which are going for multi bank system.i.e. They are using only those facilities of AXIS Bank
which are provided at cheaper rates (read Salary Account) and for other services they are going to nationalize
banks and MNCs (read Forex). So there exists a huge potential for AXIS Bank if they are ready to make their
transaction cost flexible. 2. DEFENSIVE APPROACH IN LENDING: AXIS Bank has a defensive approach in
lending. Mainly to IT & ITES companies Bank do not provide loan as these companies are not having collaterals
so bank hesitate in giving loans to them. Because of this policy companies prefer nationalized banks and AXIS
bank in turn sometimes loose potential customers. 3. LITTLE PRESENCE OUTSIDE INDIA: AXIS Bank is having
little presence Outside India, because of which companies prefer MNC Bank, mainly Citibank. So if AXIS Bank
tries to emerge outside India then it has a huge potential of customers.
69. 4. POOR CUSTOMER CARE/SERVICE: With its aggressive marketing AXIS Bank is rapidly increasing
its customer base. They are not however, increasing the number of employees accordingly. This is leading to
deterioration of the standard of customer service. OPPORTUNITIES 1. NEW IT & ITES COMPANIES: IT & ITES
sector is on a boom in the Indian market context, with new companies mushrooming in the market; it opens the
door for AXIS bank to capture the huge untapped market. 2. Dissatisfied Customers of Other Banks: The group
from its survey and analysis of IT companies have found out that there are many companies which are not
satisfied with its current bank, so AXIS with its superior service quality and long working hours can capture those
customers. 3. Remittances: From the analysis group has also found out that AXIS bank has very little presence
as far as the EEFC account (Exchange Earner's Foreign Currency) is concerned. Companies prefer to bank with
MNCs (which have greater presence in the foreign countries) and nationalized banks (which according to the
companies provide lower transaction rates) to get their inward remittances in spite of AXIS being providing one of
the most competitive rates. So the bank can promote its EEFC account better and get the key to the door of huge
potential market. 4. Business advising for smaller Players: The concept of business advising though very popular
with the higher end players is virtually nonexistent in the lower end of the market. AXIS should take this
opportunity to provide business advising to the smaller companies at competitive rates and try to take the first
mover advantage. THREATS 1) Advent of MNC banks: Large numbers of MNC banks are mushrooming in the
Indian market due to the friendly policies adopted by the government. This can increase the level of competition
and prove a potential threat for the market share of AXIS bank. 2) Dissatisfied Customers: Most of the companies
are satisfied with the products offered by AXIS bank but the poor customer support/ service is creating a lot of
dissatisfaction among the customers, this can prove to be a serious problem as far as the market reputation of
the bank is concerned and can be a major threat in future in future business acquisition.
70. 3) Ever improving nationalized banks: With PSU banks like SBI going all out to compete with the private
banks and government giving them a free hand to do so; it can prove to be serious threat for banks like AXIS.
71. Competitive Strategy: 1. Competitive Strategy of Axis Bank Axis bank has differentiated against these
banksFor the private sector banks on the base of the maximum area coverage. In this group some banks have
no reach to the some part of the country. So Axis bank has got the advantage of reach in terms of this segment.
The level of service is same in almost all banks but Axis bank has also got the advantage of the product
innovation which not all the banks are doing in this group. 2. Competitive Strategy of Axis Bank For the Axis
bank has differentiated itself from this group ongovernment sector banks the base of the high level of service
quality and through product innovation. In terms of the reach Axis bank is not anyway near to these but it has
created a different set of segment of the people who believe in the higher set of Forservices. 3. Competitive
Strategy of Axis Bank For the International Banks these types of banks Axis bank differentiated itself on the base
of the reach and coverage to the people. The service level is somewhat same or these are providing good
services than Axis bank is providing. In the future these banks may create a problem for Axis bank as at present
they are new in the market so their branch are not fully established in the maximum number of cities.
72. MARKETING MIX IN BANKING INDUSTRIES 1. PROMOTION: Promotion mix includes advertising,
publicity, and sales promotion, word– of – mouth promotion, personal selling and telemarketing. 2. PRICE: The
price must be high enough to cover costs and make a profit but low enough to attract customers. There are a
 number of possible pricing strategies. 3. PRODUCT: The business has to produce a product that people want to
buy. They have to decide which ‗market segment‘ they are aiming at – age, income, geographical location etc. 4.
PLACE: Banks need to take into consideration the place factor as it decides the volume of business for them. 5.
PEOPLE: Sophisticated technologies no doubt, inject life and strength to a bank‘s efficiency but the moment
there is a lack of productive human resources even the new generation of information technologies would hardly
produce the desired results. Other than these there are: 6. PROCESS: All the major activities of banks follow RBI
guidelines. There has to be adherence to certain rules and principles in the banking operations. 7. PHYSICAL
EVIDENCE: The physical evidences include the logo, the layout of the branch, the passbooks, cheque books, the
furniture, the reports, punch lines, other tangibles, employee‘s dress code etc. 8. PENETRATION PRICING:
Charging a low price, possibly not quite covering costs to attain a position in the market. This is quite popular with
new businesses trying to get a to the hold.
73. 7 P’s OF MARKETING OF AXIS BANK: Marketing of services by AXIS bank 1. PRODUCT MIX A)
DEPOSITS: Savings Account: AXIS Bank offers a them packed Savings Account with a host of convenient
features and banking channels to transact through, without the stress of waiting in queues. Senior Citizen
Services: AXIS understands that a Savings Account needs to do more after one reaches the age of seniority.
They have an ideal Savings Bank Service for those who are 60 years and above. Fixed Deposits: Safety,
Flexibility, Liquidity and Returns. A combination of unbeatable features of the Fixed Deposit from AXIS Bank.
Recurring Deposits: Through AXIS Bank Recurring Deposit one can invest small amounts of money every month
that ends up with a large saving on maturity. So one can enjoy twin advantages- affordability and higher
earnings. B) InvestmentGovernment of India Bonds AXIS Bank Tax Saving Bonds INVESTMENTS:
Investment in "Pure Gold" Initial Public Offers by Corporate in Mutual Funds Senior Citizens Savings
Scheme.Foreign Exchange Services 
74. C) ANYWHERE BANKING: AXIS Bank is the second largest bank in the country. It services a customer
base of more than 5 million customer accounts through a multi-channel access network. This includes Call
Centre and Internet Banking. Thus, one can access the various services AXIS Bank has to offer at anytime,
anywhere and from anyplace. D) LOANS: AXIS Bank offers wide variety of Loans Products to suit the customer
requirements. Coupled with convenience of networked branches/ ATMs and facility of E-channels like Internet
and Mobile Banking, AXIS Bank brings banking at their doorstep. Home Loans Some HomeGuidance
throughout the process of the key benefits for HOME LOAN are: SimplifiedHome Loan tenure up to 20 years
loan amounts suited to their needs Sanction approval without having selected aDoorstep Service
Documentation Insurance options for their homeFree Personal Accident Insurance property. loan at
attractive premium. Personal Loans Key Benefits of AXIS Bank Personal security/guarantor required NoLoan
up to 15 lacks Loan: Faster Processing 12-60Months repayment optionsAttractive Interest Rates Minimum
Documentation 
75. Car Loans AXIS offer loans up to 100% of `on-road' cost on select models, and up to 95% of the ex-
showroom price on others. The process for getting a loan involves only a few simple steps and they will tailor-
make the loan to suit their needs. 1. Loan on Phone for Customers: If you are an AXIS Bank customer, go for a
pre-approved car loan. Call Customer Care numbers or sms "car loan. 2. Loan on the Strength of their Income:
Submit income proofs as required and avail of finance up to 100% of the `on-road' cost of the car! 3. Loan in the
absence of Income Proof: AXIS offer car loan for customers without income proof on producing the bank
statement, loan repayment track record, etc. 4. Car Loans with Fixed and Floating Interest Rates: AXIS Bank
now offers new car loans with both fixed and floating interest rate options. The customer can opt for fixed interest
rate or floating interest rate for taking a car loan from AXIS Bank according to his/her discretion. Farm Equipment
Loans Preferred financier for almost all leading tractor manufacturers in the country. Financing farm equipments
in over 381 locations spread across the country. Fast processing of files with easy documentation. Flexible
repayment options in tandem with the farmer's seasonal liquidity. Monthly, Quarterly and Half-yearly repayment
patterns to choose from. Comfortable repayment tenures from 1 year to 6 years. Loan against Property Loan
against Property is the perfect way to unlock the hidden value of their property. With this loan, you can fully
benefit from life's little surprises you may have earlier passed over due to lack of funds. Live their dreams with a
multi-purpose loan put funds at their disposal to use as you wish. This loan is available at a reasonable rate and
can be repaid comfortably over as many as 15 years. The AXIS Bank's Loan against Property can be used for
any purpose.
76. Expand their business - No longer do you have to stifle their creative ideas. With funds at their disposal,
you can now expand their business without hesitation. AXIS helps you to meet all their expenses with ease--
when you take an AXIS Bank Loan against Property. Send their child for higher studies - Education is the
cornerstone of their family s progress. With a Loan against Property, you can employ their son or daughter to
grow into an outstanding achiever. Farmer Finance Providing finance to the farmer for his various needs of inputs
and consumption in the form of crop loans, dairy loans and loans for allied activities to agriculture like irrigation
etc. for input needs and auto loans (two, three and their wheeler) and personal loans for consumption needs. The
customer can also avail of working capital term loan for setting up a poultry project. Flexible repayment pattern
and tenure to align to the cash flow of the customers. Rural Education Loan AXIS Bank Rural Educational
Institution Finance (REI) caters to the need of privately runs Educational Institution based out of Rural, Semi
Urban and outside city limit locations. The product is designed to cater to the specific needs of the education
institutions. New products and features in the existing product are introduced based on regular customer
feedback. E) CARDS: AXIS Bank offers a variety of cards to suit different transactional needs of customers. This
includes Credit Cards, Debit Cards and Prepaid cards. These cards offer convenience during financial
 transactions like cash withdrawal, shopping and travel. These cards are widely accepted both in India and
abroad.
77. Credit cards – AXIS Bank Credit Cards offer a smart way to shop, along with flexibility and convenience
in managing their finances. Choose from a wide range of credit cards designed to cater to their specific lifestyle
requirements. Commercial cards AXIS Bank Commercial Cards have been designed as payment solutions for
large & mid-sized organizations. A widely accepted concept internationally, Commercial Cards help to better
streamline payment processes & thus increase efficiencies. Business Card The AXIS Bank Business Card is
aimed at SMEs as an enabler for their business. The Business card is a smart alternative to cheques, cash, and
personal credit cards. With its purchasing convenience, cost savings, available credit, and detailed reporting
facilities, the AXIS Bank Business Credit Card offers what their business needs to stay on top. Travel Card
Presenting AXIS Bank Travel Card. The hassle free way to Travel the world. Travelling with US Dollar, Euro,
Pound Sterling or Swiss Francs; looking for security and convenience; take AXIS Bank Travel Card. Issued in
duplicate. Offers the Pin based security. Has the convenience of usage of Credit or Debit card. Debit Cards The
AXIS Bank Debit Card is a revolutionary form of cash that allows customers to access their bank account around
the clock, around the world. The AXIS Bank Debit Card can be used for shopping at more than 3.5 Lakh
merchants in India and 24 million merchants worldwide.
78. FEATURES Anywhere Banking Our Current Account allows you to bank from all our branches and
extension counters. You can deposit cash, withdraw cash, deposit cheques, and issue 'at-par' cheques at any of
our branches. So bank at your own convenience! Instant Fund Transfer You can transfer funds instantly between
any of our branches. Funds transfers can be effected online, right from your desktop, through our internet
banking services. Internet Banking Axis Bank presents Corporate iConnect - a unique NetBanking platform for its
current account customers. Available with multiple user IDs, depending on your needs. Access your account at
any time form anywhere. You can transfer funds to your own accounts or to third party accounts within Axis Bank
& Inter Bank covering over 25,000 branches of various banks. Corporate iConnect also permits transaction
initiation by one user and approval by another. You can also execute bulk payments like salary and commission
across Axis Bank network, right from your desktop. At-Par (Multicity) Chequebook Enjoy the benefits of multicity
chequebook with Axis Bank's current accounts. You can issue cheques payable at par at all our branches across
the country. Your cheques will be treated as local cheques at more than 375 locations as on January 31, 2008.
ATM or Debit Card With every Current Account (for proprietary and partnership concerns), you can avail upto 2
ATM cum Debit cards, which allow you round the clock access to your account from any of all our ATMs all over
the country. You can withdraw upto Rs 40,000 a day. Free Monthly Account Statement By courier and daily on
email. Mobile Banking Mobile Banking will enable you to bank with us through your mobile phone irrespective of
where you are. Phone Banking Phone banking or Tele-banking service can help you access your account from
your telephone anytime you want.
79. F) DEMAT SERVICES: AXIS Bank Demat Services boasts of an ever-growing customer base of over 7
lacs account holders. In their continuous endeavour to offer best of the class services to customers they offer the
following features: E-Instructions: Transfer securities 24/7 days through Internet & Digitally Signed
Statement:Interactive Voice Response (IVR). Mobile Alerts: G) MOBILEMobile Request: Corporate Benefit
Tracking:  BANKING: With AXIS Bank, banking is no longer what it used to be. AXIS Bank offers Mobile
Banking facility to all its Bank, Credit Card and Demat customers. AXIS Bank Mobile banking enables you to
bank while being on the move. AXIS Bank Mobile Banking can be divided into two categories of facilities: Alert
facility: The AXIS Bank Mobile Banking Alert facility informs you promptly of the significant transactions in their
accounts. It keeps you updated wherever you go. H) NRI SERVICES: ONLINE MONEY TRANSFER facility
available to NRIs worldwide FREE Moneythrough www.money2India.com at the click of a button! Benefits:
Demand Drafts issued andtransfers into accounts with over 30 banks in India ONLINE Tracking of the status
of theirpayable at over 1250 locations in India OFFLINE MONEY TRANSFERfacility is alsoSUPERIOR
Exchange rates funds available across geographies
80. 2. PRICING MIX The pricing decisions or the decisions related to interest and fee or commission
charged by banks are found instrumental in motivating or influencing the target market. The RBI and the IBA are
concerned with regulations. The rate of interest is regulated by the RBI and other charges are controlled by IBA.
The pricing policy of a bank is considered important for raising the number of customers vis-à-vis the accretion of
deposits. Also the quality of service provided has direct relationship with the fees charged. Thus while deciding
the price mix customer services rank the top position. The banking organizations are required to frame two- fold
strategies. First, the strategy is concerned with interest and fee charged and the second strategy is related to the
interest paid. Since both the strategies throw a vice- versa impact, it is important that banks attempt to establish a
correlation between two. It is essential that both the buyers as theyll as the sellers have feeling of winning. 3.
PLACE MIX This component of marketing mix is related to the offering of services. The services are sold through
the branches. The 2 Making available the promised services toimportant decision making areas are: Selecting
a suitable place for bank branches. Major Privatethe ultimate users Sector lender Axis Bank has announced
that it plans to set up 210 more branches across the country in this fiscal. Of the total proposed branches, 52
would come up in the southern states. At present, the bank (Axis Bank) has 699 branches in the country,
including 171 in the southern states. The Kerala branches account for a business of Rs 25 billion and it is
expected to touch Rs 50 billion after new branches are opened. Axis bank has a network of 20 extension
counters and 2871 ATMs across the country.
81. 4. PROMOTION MIX The different components of promotion help bank professionals in promotion the
banking business. Advertising: Television, radio, movies, theatres. AXIS uses this component of the promotion
 mix with the motto of informing, sensing and persuading the customers. The advertising professionals bear the
responsibility of making the appeals, slogans, messages more creative. Print media: Hoardings, newspaper,
magazines. There are a number of devices to advertise, such as broadcast media, telecast media and the print
media. Publicity: road shows, campus visits, sandwich man, Sponsorship. Sales promotion: Gifts, discount and
commission, incentives, etc. The banking organizations make provisions for incentives. Personal selling: Cross-
sale (selling at competitors place), personalized Service. The personal selling is found instrumental in promoting
the banking business. It is just a process of communication in which an individual exercise his/her personal
potentials, tact, skill and ability to influence the impulse buying of the customers. Since AXIS gets immediate
feedback, the personal selling activities energies the process of communication very effectively. Telemarketing:
AXIS one sterile Call centre.
82. 5. PROCESS MIX Flow of activities: All the major activities of AXIS banks follow RBI Guidelines. There
has to be adherence to certain rules and principles in the banking operations. The activities have been
segregated into various departments accordingly. Standardization: AXIS bank has got standardized procedures
got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some
standardization in them. This is because of the rules they are subject to. Besides this, each of the banks has its
standard forms. Customization: There are specialty counters at each branch to deal with customers of a
particular scheme. Besides this the customers can select their deposit period among the available alternatives.
Number of steps: Numbers of steps are usually specified and a specific pattern is followed to minimize time
taken. Simplicity: In AXIS banks various functions are segregated. Separate counters exist with clear indication.
Thus a customer wanting to deposit money goes to deposits counter and does not mingle elsewhere. This makes
procedures not only simple but consume less time. Besides instruction boards in national boards in national and
regional language help the customers further. Customer involvement: ATM does not involve any bank
employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other
place because of the money matters and signature requires. 182
83. 6. PHYSICAL EVIDENCE: Physical evidence is the material part of a service. Strictly speaking there are
no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of
BusinessFurnishings Brochures Paperwork Internet physical evidence: The building itself (such as
prestigious offices or scenic headquarters)cards The physical evidences also include signage, reports, punch
lines, other tangibles,employee s dress code etc. Signage: Each and every bank has its logo by which a person
can identify the company. Thus such signage is significant for creating visualization and corporate identity.
Financial reports: The Company s financial reports are issued to the customers to emphasis or credibility.
Tangibles: Bank gives pens, writing pads to the internal customers. Even the passbooks, chequebooks, etc
reduce the inherent intangibility of services. Punch lines: Punch lines or the corporate statement depict the
philosophy and attitude of the bank. Banks have influential punch lines to attract the customers. Employee’s
dress code: AXIS bank follows a dress code for their internal customers. This helps the customers to feel the
ease and comfort. Strategic Management
84. 7. PEOPLE All people directly or indirectly involved in the consumption of banking services are an
important part of the extended marketing mix. Knowledge Workers, Employees, Management and other
Consumers often add significant value to the total product or service offering. It is the employees of a bank which
represent the organization to its customers. In a bank organization, employees are essentially the contact
personnel with customer. Therefore, an employee plays an important role in the marketing operations of a
service organisation. To realize its potential in bank marketing, AXIS is conscious in its potential in internal
marketing - the attraction, development, motivation and retention of qualified employee-customers through need
meeting job- products. Internal marketing paves way for external marketing of services. In internal marketing a
variety of activities are used internally in an active, marketing like manner and in a coordinated way. The starting
point in internal marketing is that the employees are the first internal market for the organization. The basic
objective of internal marketing is to develop motivated and customer conscious employees. A service company
can be only as good as its people. A service is a performance and it is usually difficult to separate the
performance from the people. If the people don t meet customers' expectations, then neither does the service.
Therefore, investing in people quality in service business means investing in product quality. AXIS understands
the needs of customers and therefore it is leveraging technology to service customers quickly and conveniently.
AXIS aims at providing and enabling favorable environment to foster growth and learning for their employees.
Strategic Management
85. SEGMENTATION STRATEGY DEMOGRAPHICS VARIABLES -LOCATION-METROS and divisional
cities, occupation-business persons, salaried class (both govt and private), working women, age-senior
citizens,minor PSYCHOGRAPHIC VARIABLES -LIFESTYLE-the people who believes in modern banking with
higher set of services.i.e. internet banking (icontact,mobile refill,travel currency card,etc) Targeting strategy
Corporate banking market: These markets target the industries and fulfill their financial needs Capital market: this
segment targeted on the long term needs of the individual as well as of industries Retail banking market: This
segment is for the retail investor and provides them short term financial credit for their personal, household
needs. Selective specialization strategy Here the bank selected a number of segments, each objectively
attractive and appropriate. There may be little or low synergy among the segment but each segment proves to be
worth full for it. If we take the example of cards then axis bank have separate set of credit cards, each targeted at
different set of people. i.e. segment and each one has its own importance for the bank. POSITIONING
STRATEGY: Axis bank has positioned itself as a bank which gives higher standard of services through product
innovation for the diverse need of individual and corporate clients. so they want to highlight following points in
their positioning statement. -customer centric -service oriented -product innovation Strategic Management
86. PRIORITY BANKING • AXIS Eligibility Criteria • (AQB) of Rs. 1 Lakh in your savings account (75,000 if
in case you have a salary account with Axis Bank) • Rs. 5 lacs in combination of your savings and term deposits
(Minimum AQB of Rs. 50,000 in the savings account) • Minimum Average quarterly relationship of Rs. 10 lacs
across members of the same family - subject to a minimum (AQB) of Rs. 80,000 being maintained in the savings
account of each member and the remaining amount in Term Deposits. Strategic Management
87. CONCLUSION Over the last five years, the CAGR for loan growth for the banking industry has been 25-
26 per cent; for Axis Bank it has been above 40 per cent. Nonetheless, the bank is still expected to grow its loan
portfolio at 1.5-1.7x the industry average. In FY09 its advances grew at the rate of 37.5 per cent. In FY10 they
are expected to grow at the rate of 27-28 per cent and in FY11 at 25 per cent. For the banking industry as a
whole, the loan book is expected to grow at 18 per cent in FY10 and 16 per cent in FY11. Thus, Axis Bank‘s fast
pace of growth is expected to sustain over the next couple of years. AXIS bank has differentiated itself very well
on the basis of high level service and product quality. They have successfully implemented the change and due
to this their market share has increased only despite of tough competition prevails. Strategic Management

Uti bank to axis bank” a study in customer awareness - Document Transcript

1. SUMMER TRAINING PROJECT REPORT ON AXIS BANK Pvt.Ltd SUBMITTED IN PARTIAL

FULFILLMENT OF THE REQUIREMENT OF POST ) GRADUATE PROGRAM IN MANAGEMENT (PGPM +
MBA SESSION 2008-2010 JAGANNATH INSTITUTE OF HIGHER EDUCATION SEC. 3, ROHINI AN
EMPIRICAL STUDY OF CUSTOMER PERCEPTION: NAME CHANGE OF UTI BANK TO AXIS BANK
Supervisor Submitted By Dr. Samina Bano Dharmendra Kumar Asst. Professor JIHE 017/PGPB/JIHE/2008 i
2. Acknowledgement It is my privilege to show my gratitude to my supervisor who spend t h is precious
time providing continuous encouragement and his expert guidance in my project work. It was his direction and
encouragement that motivated me to go through the research work confidently and successfully. At last, but not
the least, I wish to record my deep feeling of love, affection and graduate to my parent without whose blessings it
would not have been possible for me to complete this dissertation. Dharmendra Kumar ii
3. Certificate of Originality I …………………………………………..Roll No. …… Batch …….., a student of
second year of PGPB+MBA program of the Jagannath institute of higher education hereby certify that this project
work carried out by me and the report submitted today in partial fulfillment of the requirements of the program is
an original work of mine and is not based, derived or reproduced from any existing work of any other purpose
and has not been submitted anywhere else at any time. Date………………………. Signature………………………
Certificate by the Project Guide I certify that Mr.…………………………………….has pursued this project work
under my consistent guidance and supervision. I further certify that the work is original and is not based, derived
or reproduced from any existing work of anyone or on any of the student’s earlier work undertaken at any other
time or for any other purpose and has not been submitted anywhere else at any time. Signature of Faculty
Guide……………………………………..Date……………………. Name of the Faculty Guide Prof. /Dr………….
………………………………………….. Contents Page No. iii
4. Chapter I Introduction and Outline i) About organizatoion 1 ii) Current Profit 8 iii) Milestones 15 iv)
Limitation of the study 2 Chapter II Literature Review 3 Chapter III Research Design and Methodology 15
Chapter IV Collection of Primary Data and Analysis 17 Chapter V Findings and Conclusions 36 Chapter VI
Application and significance of the study 38 Annexure i) Questionnaire ii) Sample of Coding Sheet iv
5. Chapter I: Introduction and Outline About Axis Bank Axis Bank was the first of the new private banks to
have begun operations in 1994, after the Government of India allowed new private banks to be established. The
Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I),
Life Insurance Corporation of India (LIC) and General Insurance Corporation Ltd. and other four PSU companies,
i.e. National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation
and United Insurance Company Ltd. The Bank today is capitalized to the extent of Rs. 356.51 crore with the
public holding (other than promoters) at 56.72%. The Bank's Registered Office is at Ahmedabad and its Central
Office is located at Mumbai. Presently, the Bank has a very wide network of more than 596 branch offices and
Extension Counters. The Bank has a network of over 2502 ATMs providing 24 hrs a day banking convenience to
its customers. This is one of the largest ATM networks in the country. UTI Bank is the first of the new private
banks to have begun operations in 1994, after the Government of India allowed new private banks to be
established. The Bank has 5
6. strengths in both retail and corporate banking and is committed to adopting the best industry practices
internationally in order to achieve excellence. It has the second largest customer database especially in Delhi
and NCR region. The Bank recently changed its name from UTI Bank Ltd to Axis Bank Ltd. The name change
affects a lot in consumer’s perception of this brand. As an employee of this company I want to measure the level
of awareness which has been created among the customers after the name changed. Current Scenario The
industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of the Indian
Banking system, are in the process of shedding their flab in terms of excessive manpower, excessive non
Performing Assets (NPAs) and excessive governmental equity, while on the other hand the private sector banks
are consolidating themselves through mergers and acquisitions. Public Sector Banks, which currently account for
more than 78 percent of total banking industry assets are saddled with Non Performing Assets (a mind-boggling
Rs 830 billion in 2000), falling revenues from traditional sources, lack of modern technology and a massive
workforce while the new private sector banks are forging ahead and rewriting the traditional banking business
 model by way of their sheer innovation and service. The Public Sector Banks are of course currently working out
challenging strategies even as 20 6
7. percent of their massive employee strength has dwindled in the wake of the successful Voluntary
Retirement Schemes (VRS) schemes. The private players however cannot match the Public Sector Bank’s great
reach, great size and access to low cost deposits. Therefore one of the means for them to combat the PSBs has
been through the merger and acquisition route. Over the last two years, the industry has witnessed several such
instances. Private sector Banks have pioneered internet banking, phone banking, anywhere banking, mobile
banking, debit cards, Automatic Teller Machines (ATMs) and combined various other services and integrated
them into the mainstream banking arena, while the Public Sector Banks are still grappling with disgruntled
employees in the aftermath of successful VRS schemes. Also, following India’s commitment to the WTO
agreement in respect of the services sector, foreign banks, including both new and the existing ones, have been
permitted to open up to 12 branches a year with effect from 1998-99 as against the earlier stipulation of 8
branches. Government diluting their equity from 51 percent to 33 percent in November 2000 has also opened up
a new opportunity for the takeover of even the Public Sector Banks. The FDI rules being more rationalized in
Q1FY02 may also pave the way for foreign banks taking the Merger & Acquisition route to acquire willing Indian
partners. 7
8. The economic and corporate sector slowdown has led to an increasing number of banks focusing on the
retail segment. Many of them are also entering the new vistas of Insurance. Banks with their phenomenal reach
and a regular interface with the retail investor are the best placed to enter into the insurance sector. Banks in
India have been allowed to provide fee-based insurance services without risk participation, invest in an insurance
company for providing infrastructure and services support and set up of a separate joint-venture insurance
company with risk participation. AXIS BANK ANNOUNCES Q1FY10 NET PROFIT OF Rs.562.04 CRORES, UP
70.24 % YOY Axis Bank has announced its unaudited results for the first quarter of FY 2009-10, following the
approval of its Board of Directors in a meeting held in Mumbai on 13th July 2009. The Net Profit of the Bank for
the first quarter was Rs. 562.04 crores, growing by 70.24% over the Net Profit of Rs. 330.14 crores during the
first quarter of the previous year. The Bank’s balance sheet has grown by 24.18% yoy to Rs. 1,41,142 crores as
at the end of June 2009 from Rs. 1,13,660 crores as at end June 2008. Demand deposits have grown 24.62%
yoy and constituted 40% of the total deposits, with Savings Bank deposits growing 32% yoy and Current Account
deposits growing 16% yoy. On a daily average basis, demand deposits grew by 24.75% yoy and constituted 37%
of the total deposits during Q1 FY10, as against 35% in Q4 FY09 and 8
9. Results at a Glance 1 2 3• Net Profit rose to Rs. 562.04 crores during Q1FY10 from Rs. 330.14 crores in
Q1FY09, registeringa growth of 70.24% yoy. 4• Balance Sheet Size increased 24.18% yoy from Rs. 1,13,660
crores 5 6at the end of Q1FY09 to Rs.1,41,142 crores at the end of Q1FY10. 7 8 9• Demand Deposits rose
24.62% yoy from Rs. 35,449 crores at the 10end of Q1FY09 to Rs. 44,176crores at the end of Q1FY10. On a
daily 11average basis, demand deposits grew by 24.75% toRs 39,739 crores 12in Q1 FY10 from Rs 31,854
crores in Q1 FY09. 13 14 15• The Bank is well capitalised with a Capital Adequacy Ratio of 16 1715.28% at the
end of Q1 FY10compared to 13.25% at the end of 18Q1FY09 and 13.69% at the end of FY2009. The Tier -
Icapital was 19.39% at the end of the quarter against 9.93% at the end of June 202008 and 9.26%at the end of
FY2009. 38% in Q1 FY09. The Bank’s Capital Adequacy Ratio was 15.28% as at end June 2009 as compared to
13.25% as at end June 2008 and a Tier-I ratio of 9.39% as compared to 9.93% as at end June 2008. The diluted
quarterly EPS at Rs. 15.50 was 71.65% higher than the EPS of Rs. 9.03 in the first quarter of the previous year.
9
10. FINANCIAL HIGHLIGHTS: 1 2 3 4• Net Interest Income (NII) and Net Interest Margins (NIM) The Bank
continued to build a wide presence through its 861 Branches & Extension Counters and 3,723 ATMs across 534
cities and towns. During the quarter the Bank added 26 Branches & Extension Counters and 128 ATMs. The
daily average balances of Savings Bank deposits during the quarter grew 33% yoy and those of Current
Accounts grew 15% yoy. ] Demand deposits constituted 37% of the total daily average deposits during Q1 FY10
at nearly the same level (38%) as in Q1 FY09 and higher than the level of 35% in Q4FY20. As a result, the Bank
posted a Net Interest Margin of 3.34%, marginally lower than the NIM of 3.37% in Q4FY09 and 3.35% for
Q1FY09. The Bank’s advances grew by 28% from Rs. 61,160 crores as at end June 2008 to Rs. 78,105 crores
as at end June 2009, while investments rose to Rs. 46,328 crores from Rs. 35,718 crores, a growth of 30% yoy.
The Net Interest Income rose to Rs. 1,046 crores in Q1FY10 from Rs. 810 crores in Q1FY09, a growth of 29%
yoy. 1 2 3• Fee income Fee Income registered a growth of 17% yoy, rising to Rs. 626.63 crores in Q1FY10
compared to Rs. 537.27 crores in Q1FY09, with contributions from all major businesses in the Bank. Fee income
from Treasury grew at 55% yoy, followed by that from Retail Banking (21% yoy), Business Banking (19% yoy),
Large & Mid Corporate Credit (15% yoy) and SME & Agri lending businesses (8% yoy). 1 2 10
11. 3• Trading Profits The Bank generated Rs. 326.07 crores of Trading Profits in Q1FY10, as compared to
Rs. 57.31 crores in Q1FY09, a growth of 468.96% yoy. The share of Trading Profits to the Operating Revenue
increased from 3.99% in Q1FY09 to 16.27% in Q1FY10. 1 2 3• NPAs and restructured loans Net NPAs, as a
proportion of Net Customer Assets, increased to 0.41% as at the end of June 2009 compared to 0.35% as at end
March 2009 and was below the level of 0.47% as at end June 2008. Gross NPAs as a proportion of Gross
Customer Assets were at 1.01% at end June 2009, compared to 0.96% as at end March 2009 and 0.92% as at
end June 2008. The Bank had a provision coverage of 85.88% at the end of June 2009 (as a proportion of Gross
NPAs together with accumulated write-offs). If the accumulated write-offs are excluded, provisions held as a
proportion of Gross NPAs would constitute 59.89% as at end June 2009. The Bank has restructured loans
aggregating Rs. 995.95 crores during the quarter, of which Rs. 182.86 crores were restructured under the CDR
mechanism. Of the total loans restructured during the quarter, loans aggregating Rs. 101.71 crores were
 restructured for a second time in terms of the Reserve Bank of India dispensation. The cumulative value of
assets restructured upto 30th June 2009 was Rs. 2,520.10 crores, constituting 2.77% of gross customer assets.
The diminution in fair value against the restructured loans during the quarter was Rs. 34 crores and has been
provided for. The segment-wise break-up of the restructured loans for loans restructured in the quarter is as
follows: 11
12. Large/Mid- 71% Corporate SME 19% Capital Market 4% Agriculture 6% The sector-wise breakup of
loans restructured during the quarter is as follows: Oil & Gas 48% Textiles 17% Real Estate 6% Steel 5% Others
24% 1• Investment Portfolio The book value of the Bank’s investment portfolio as at end June 2009 was Rs.
46,328 crores, of which Rs. 26,859 crores was in government securities while Rs. 19,469 crores was in other
investments including corporate bonds, equities, preference shares, mutual funds etc. 91% of the government
securities have been classified in the HTM category while 99% of the corporate bond portfolio has been classified
in the HFT and AFS categories. The distribution of the investment portfolio in the three categories as well as the
modified duration in each category was as follows. Category Percentage Duration HFT 0.64% 5.7 years AFS
41.86% 3.5 years HTM 57.50% 5.6 years 12
13. BUSINESS OVERVIEW: 1• Cash Management Services Under Cash Management Services, the Bank
handled a cash remittance throughput of Rs. 2,55,759 crores in Q1FY10 as compared to a throughput of Rs.
3,60,318 crores in Q4FY09 and higher than the throughput of Rs 2,40,102 crores during Q1FY09. The number of
CMS clients has grown to 5,089 as at end June 2009. 1 2 3• Placement / Syndication and Project Advisory The
Bank maintained its No.1 rank as Debt Arranger as assessed by Prime Database for the year ended March 2009.
Further, in the Bloomberg league table for ‘India Domestic Bonds’, the Bank has been ranked No.1 for the
quarter ended June 2009. The Bank was the arranger of debt aggregating Rs 14,630 crores during Q1FY10 as
compared to Rs. 27,206 crores during Q4FY09 and substantially higher than Rs. 7,649 crores in Q1FY09, a
growth of 91% yoy. The Bank continues to strengthen its focus on project advisory services. 1 2 3• Retail
Business The number of Savings Bank accounts grew from 65.23 lakhs as at end June 2008 to 75.41 lakhs as at
end June 2009. 1 2 Retail Asset Products: Retail advances grew from Rs. 14,638 crores as at end33 4 5June
2008 to Rs. 16,780 crores as at end June 2009, a growth of 15% yoy. Retail 6Advances accounted for 21% of
the total Advances of the Bank as at the end of June 72009. The Bank has set up 64 Retail Asset Centres
(RACs) for focussed retail 13
14. Card products: The Bank's International Debit8lending. 9 101 Card issuance has risen to 124 11lakh
debit cards as at end June 2009 as compared to 95 lakh cards as at end June 122008. The Bank had over
5,43,000 Credit Cards in force as at end June 2009. The 13Bank has an installed base of over 1,23,000
Electronic Data Capture (EDC) machines 14as at end June 2009. 15 Wealth Advisory Services and Third Party
Products: The Bank offers Wealth161 17Advisory Services and Mohur - Gold Coins and bars - through its select
branches, and 18Personal Investment Products including Mutual Funds, Life Insurance products in 19association
with Metlife India, General Insurance products in association with Bajaj 20Allianz Insurance and Online trading
accounts in association with Geojit Securities. 21 22 • International Business The Bank has five international
offices – branches at Singapore, Hong Kong and Dubai (at the DIFC) and Representative Offices in Shanghai
and Dubai - with focus on corporate lending, trade finance, syndication, investment banking, risk management
and liability businesses. The total assets under 14
15. overseas operations amounted to US$ 2.18 billion as at end June 2009 as compared to US$ 1.80 billion
as at end June 2008, a growth of 21% yoy. 1 • Capital & Net Worth: The Net Worth of the Bank was Rs. 10,282
crores as at end June 2009 as compared to Rs. 8,742 crores as at end June 2008, a growth of 18% yoy. The
Capital Adequacy Ratio for the Bank was 15.28%, as at end June 2009, as compared to 13.25% as at end June
2008. The Tier - I capital amounted to 9.39% as at end June 2009 as against 9.93% as at end June 2008. .
Milestones Mar-08 Axis Bank launches Platinum Credit Card, India's first EMV chip based card Dec-07 Axis Bank
gets AAA National Long-Term Rating from Fitch Ratings Sept-07 Axis Bank ties up with Banque Privée Edmond
de Rothschild Europe for Wealth Manageme July-07 UTI Bank re-brands itself as Axis Bank July-07 UTI Bank
successfully raises USD 1050 million- July-07 UTI Bank ties up with Tata Motors Ltd. for Car Loans June-07 UTI
Bank's expansion into Asia supported by FRS May-07 UTI Bank launches 'Spice Rewards' on the bankcards -
India's first-ever merchant-supported program April-07 UTI Bank opens a Financial Services Category I Branch in
the DIFC in Dubai Mar-07 UTI Bank ties up with Hyundai Motor India Ltd. for Car Loans Mar-07 UTI Bank ties up
with IIFCL to provide finance for infrastructural projects in the country Mar-07 UTI Bank launches Car Loans in
association with Maruti Udyog Ltd Mar-07 UTI Bank opens a Full Licence Bank Branch in Hong Kong
16. Feb-07 Finance Minister Shri P. Chidambaram Launches Shriram - UTI Bank Co - Branded Credit C
Exclusively For Small Road Transport Operators (SRTOS) Feb-07 UTI Bank announces the launch of its Meal
Card Feb-07 UTI Bank announces the launch of its Gift Card Feb-07 LIC Premium payment now through UTI
Bank Branches Jan-07 UTI bank opens Priority Banking branch in Mumbai and Kolkata Nov-06 UTI Bank opens
Priority Banking Lounge in Pune Sep-06 UTI Bank launches operations of UBL Sales, its Sales Subsidiary -
Inaugurates its first office Bangalore Aug-06 UTI Bank announces the launch of its Credit Card Business Aug-06
UTI Bank becomes the first Indian Bank to successfully issue Foreign Currency Hybrid Cap the International
Market Aug-06 UTI Bank Business Gold Debit Card MasterCard Launched - Designed for business related s by
SMEs and self employed professionals Aug-06 UTI Bank announces the scheme of issuance of "Senior Citizen
ID Card" in association with Foundation Aug-06 UTI Bank rolls out its 2000th ATM July-06 UTI Bank opens
Representative Office in Shanghai May-06 UTI Bank and LIC join hands to launch an Annuity Card for group
pensioners of LIC May-06 UTI Bank ties up with Geojit Financial Services to offer Online Trading service to its
custom Apr-06 UTI Bank opens its first international branch in Singapore Jan-06 UTI Bank and UTI Mutual Fund
to launch a new service for sale and redemption of mutual f schemes through the Bank's ATMs across the
 country Dec-05 UTI Bank wins International Financing Review (IFR) Asia 'India Bond House' award for the 2005
Oct-05 UTI Bank extends banking services to the rural milk producers in Anand and Kheda districts Gujarat July-
05 UTI Bank and Visa International launch Mobile Refill facility - Anytime, Anywhere Pre-Pai Refill for all Visa
Cardholders in India May-05 UTI Bank and Bajaj Allianz join hands to distribute general insurance products Apr-
05 UTI Bank launches Smart Privilege - a special bank account designed for women
17. Mar-05 MTNL ties up with UTI Bank for payment of telephone bills through the Bank's ATM netwo Mar-
05 UTI Bank gets listed on the London Stock Exchange, raises US$ 239.30 million through Glo Mar-05
Depositary Receipts (GDRs) Feb-05 UTI Bank appointed by Government of Karnataka as the sole banker for the
Bangalore One project Feb-05 UTI Bank launches a powerful version of Kisan Credit Card Jan-05 UTI Bank ties
up with Remit2India to launch the Remittance Card Mar-04 UTI Bank enables premium payment of LIC policies
through its ATMs. Feb-04 Bilateral arrangement between State Bank of India (and its 7 associate member banks)
and U Bank. comes into force with the commencement of operations (as on 3rd February '04) of the combined
network of over 4000 ATMs Feb-04 UTI Bank (by pursuing a proactive strategy of forging bilateral agreements
and being a prog player in the multi-lateral consortiums for shared ATM network) offers its customers access
7000 ATMs across the country - the largest to be offered by any bank in India so far. Dec-03 Bank inaugurated
its ATM at Thegu near the Nathula Pass in Sikkim. This ATM is at the hig altitude in India. Sep-03 The Bank's
ATMs across the country crosses the thousand mark Sep-03 Bank launches the Travel Currency Card. Aug-03
The Bank's Debit Card crosses the one million mark. Aug-03 Total Advances cross Rs 7,000 Crore. May-03 Bank
declares a net profit of Rs 192.18 crores for FY03, a growth of 43% over the previous Mar-03 Bank signs
Agreement with Employees Provident Fund Organization (EPFO) for disburseme Pension Mar-03 Bank crosses
the 800 ATM mark Mar-03 The Bank issues 3,83,62,834 fully paid up equity shares totaling to Rs. 164.00 crores,
throug Mar-03 Preferential offer to Life Insurance Corporation of India (now constituting 13.54% of Mar-03 the
Bank's expanded equity), Citicorp Banking Corporation, Bahrain (holding 3.84%), Chrys I, Mar-03 LLC, Mauritius
(holding 3.84%) and Karur Vysya Bank Ltd.(constituting 1.00%) The Bank Mar-03 Increases the authorised share
capital of the Bank from Rs. 230 crores to Rs. 300 crores.
18. Feb-03 Bank, in a pioneering move, launches the AT PAR Cheque facility, free of cost, for all its Sa
Bank customers. Feb-03 Bank wins mandate to set up 14 ATMs at the Western Railway stations along the
Mumbai di Oct-02 Bank launches Corporate iConnect? - the Internet Banking facility for Corporates Aug-02 Bank
signs MoU with BSNL regarding bill collection services across the country through bo and offline channels. Apr-
02 Bank opens its 500th ATM Mar-02 Deposits Cross Rs.12, 000 Crore Jan-02 The Bank's 100th branch opens
at Tuticorin,Tamilnadu Jan-02 The Bank opens an ATM at the Gol Dak-Khana, i.e. the New Delhi GPO, making it
the first of a commercial bank setting up an ATM at any post-office in the country. Dec-01 Total Advances cross
Rs 5,000 Crore Nov-01 The deposit base for the Bank crosses Rs. 10,000 Crore Sep-01 Private placement of
26% stake in the Bank to CDC Capital Partners. UTI holding reduces to Aug-01 Bank signs MoU with India Post
for introducing value added financial products and services customers of both organizations, including setting up
of UTI Bank ATMs in post offices. July-01 Bank ties up with Govt of Andhra Pradesh for collection of commercial
tax Dec-00 Bank opens its 200th ATM. It becomes the 2nd largest ATM network in the country, a positi even
today. Oct-00 Bank becomes fully networked July-00 E-commerce initiatives announced July-00 Financial
Advisory Services offered beginning with marketing of US 64 Apr-00 UTI Bank calls off its proposed merger with
Global Trust Bank and surges ahead on its own Apr-00 Bank launches its Internet banking module, iConnect
Retail loans introduced for the first tim Bank Mar-00 Profits cross Rs 50 crore mark for the first time. Feb-00 Bank
adopts Finacle software from Infosys for core banking Jan-00 Dr.P.J Nayak takes over as Chairman and
Managing Director from Shri Supriya Gupta. Sep-99 Cash management services (CMS) launched, Co branded
credit card launched
19. Mar-99 Deposits cross Rs.3000 crores Sep-98 UTI Bank goes public with a Rs. 71 crore public issue;
Issue over-subscribed 1.2 times, over retail investors. UTI holding reduces to 60.85% Jun-96 Crosses Rs.1000
crore deposit mark Mar-95 Completes first profitable year in operation Apr-94 First branch of UTI Bank
inaugurated at Ahmedabad by Dr. Manmohan Singh, Hon'ble Fina Minister, Government of India. Dec-93 UTI
Bank comes into being Dec-93 Registered office at Ahmedabad; Head office at Mumbai Challenges Ahead (i)
Improving profitability: The most direct result of the banking reforms is increasing competition and narrowing of
spreads and its impact on the profitability of banks. The challenge for banks is how to manage with thinning
margins while at the same time working to improve productivity which remains low in relation to global standards.
This is particularly important because with dilution in banks’ equity, analysts and shareholders now closely track
their performance. Thus, with falling spreads, rising provision for NPAs and falling interest rates, greater attention
will need to be paid to reducing transaction costs. This will require tremendous efforts in the area of technology
and for banks to build capabilities to handle much bigger volumes. (ii) Reinforcing technology: Technology has
thus become a strategic and integral part of banking, driving banks to acquire and implement world class
systems that enable them to provide products and services in large volumes at a competitive cost with better risk
20. management practices. The pressure to undertake extensive computerization is very real as banks that
adopt the latest in technology have an edge over others. Customers have become very demanding and banks
have to deliver customized products through multiple channels, allowing customers access to the bank round the
clock. (iii) Risk management: The deregulated environment brings in its wake risks along with profitable
opportunities, and technology plays a crucial role in managing these risks. In addition to being exposed to credit
risk, market risk and operational risk, the business of banks would be susceptible to country risk, which will be
heightened as controls on the movement of capital are eased. In this context, banks are upgrading their credit
assessment and risk management skills and retraining staff, developing a cadre of specialists and introducing
technology driven management information systems. (iv) Sharpening skills: The far-reaching changes in the
 banking and financial sector entail a fundamental shift in the set of skills required in banking. To meet increased
competition and manage risks, the demand for specialized banking functions, using IT as a competitive tool is set
to go up. Special skills in retail banking, treasury, risk management, foreign exchange, development banking,
etc., will need to be carefully nurtured and built. Thus, the twin pillars of the banking sector i.e. human resources
and IT will have to be strengthened. (v) Greater customer orientation: In today’s competitive environment, banks
will have to strive to attract and retain customers by introducing innovative products, enhancing the
21. quality of customer service and marketing a variety of products through diverse channels targeted at
specific customer groups. (vi) Corporate governance: Besides using their strengths and strategic initiatives for
creating shareholder value, banks have to be conscious of their responsibilities towards corporate governance.
Financial liberalization, as the ownership of banks gets broad based, the importance of institutional and individual
shareholders will increase. In such a scenario, banks will need to put in place a code for corporate governance
for benefiting all stakeholders of a corporate entity. (vii) International standards: Introducing internationally
followed best practices and observing universally acceptable standards and codes is necessary for strengthening
the domestic financial architecture. This includes best practices in the area of corporate governance along with
full transparency in disclosures. In todays globalize world, focusing on the observance of standards will help
smooth integration with world financial
22. Chapter II Objective & Methodology . significance of the study This project work will help the employee
as well as managers of Axis Bank to make decisions regarding Customers after the name changed. They will
clearly understand about the mind set of the customers and their expectations about branding. The project work
will help the management level of Axis Bank for organizing their product, service and facilities. The employees
can cross sell through generating reference from customers. It will help the manager to knowing the needs in
terms of customer liking towards the Bank service. This project work will help me to find out the target customers,
all about target segments, their age, family income as well as generating references from the customers. As a
sales person of Axis Bank, it will help me a lot.
23. Research Objectives To find out the level of customer awareness about the name change in name from
UTI Bank to Axis Bank. To find out the source of customer awareness. To find out the perception before and after
change of nameUTI Bank to Axis Bank. To measuring the level of awareness of customers after the branding of
Axis Bank. To measure the Impact of Branding upon customers and their perception about the name changed.
Scope and Plan of the Study This project will help me to understand the consumer awareness level of customers
regarding the name change from UTI Bank to Axis Bank. This project work will also be helpful to understand the
relative variable which affects the company’s brand awareness among the customers. The growth in the Indian
Banking Industry has been more qualitative than quantitative and it is expected to remain the same in the coming
years. Based on the projections made in the "India Vision 2020" prepared by the Planning Commission and the
Draft 10th Plan,
24. the report forecasts that the pace of expansion in the balance-sheets of banks is likely to decelerate.
The total asset of all scheduled commercial banks by end-March 2010 is estimated at Rs 40,90,000 crores. That
will comprise about 65 per cent of GDP at current market prices as compared to 67 per cent in 2002-03. Bank
assets are expected to grow at an annual composite rate of 13.4 per cent during the rest of the decade as
against the growth rate of 16.7 per cent that existed between 1994-95 and 2002-03. It is expected that there will
be large additions to the capital base and reserves on the liability side. This project has future scope for me as I
am working with Axis Bank. This project helps me to understand the consumer awareness level of customers
regarding the name change from UTI Bank to Axis Bank. This project work is also helpful to understand the
relative variable which affects the company’s brand awareness among the customers. Methodology
25. Flowchart of the Project Work Start Setting the objectives Collection of Secondary Data & Literature
Review Sampling size & Data Collection Input & Coding responses Conclusion & Findings End Research Design
The research done by me is an exploratory research.
26. Data Collection Method The methods used for collected primary data are 1. Questionnaire 2. Interviews
Sampling The data collected at a random basis from respondents. All the respondents are customers of Axis
Bank Ltd. Sample size The sample size of respondents is 100. Contact Method The respondents are met by face
to face at branch location of Axis Bank. Some of the respondents are interviewed by me on telephone at their
convenience time.
27. Chapter III Literature Review Related Studies; 1. Colorado National Bank Celebrates Name Change to
U.S. Bank DENVER--(BUSINESS WIRE)--March 30, 1998--Today Colorado National Bank celebrated its name
change to U.S. Bank. The new name will unify the entire organization under a single identity and create better
customer recognition -- How does this change affect customers? For customers it will be business as usual. They
can continue to use existing checks, credit cards and other items with the First Bank/Colorado National Bank
name. As these items are replaced or reordered they will reflect the U.S. Bank name. In addition to being a
seamless transition, customers will also reap many benefits from the changes. With one
28. unified name and logo, customers will be able to more easily recognize us in all of the 17 states we now
serve. They will also have access to more than 1,000 branches and nearly 3,000 ATMs. In addition, U.S. Bank
offers benefits such as 24-hour banking through PC Banking and telephone banking. (NAME CHANGE Q&A in
2000) www.findarticles.com 2. First Financial Bankshares Announces Name Change for Hereford State Bank
PowerRating -- First Financial Bankshares, Inc. (Nasdaq: FFIN | Quote | Chart | News | PowerRating) announced
in 1998 that its subsidiary bank, Hereford State Bank in Hereford, Texas, is changing its name to First Financial
Bank, to better benefit from the Company's growing brand identity. The name change is subject to final regulatory
approval in June SOURCE First Financial Bankshares, Inc. http://www.ffin.com result The Company is listed on
 The NASDAQ Global Select Market under the trading symbol FFIN. For more information about First Financial
Bankshares, please visit our Web site at http://www.ffin.com. (By Williams in 1999)
29. 3. Ohio Savings Bank to Change Name to Amtrust Bank Cleveland, OH (PRWeb) April 25, 2007 --
Effective April 23, Ohio Savings Bank will change its name to AmTrust Bank. The name change is not the result
of a sale, or the purchase of another bank, or a merger. No locations have changed, nor have people or practices
or values. The bank will simply change its name. How this change affect the customers? In terms of direct impact
to our Ohio customers, it will be business as usual. Account numbers, checks, ATM, debit and credit cards,
online banking access, loan payments, etc., all will remain the same," said Jeremy Goldberg, senior vice
president of retail banking. "Along with the name change, customers will notice a change in our branch interiors,
which are being updated to better convey our extensive product line -and superior customer service." (BY : David
Johns in 2008 ) http://www.amtrustdirect.com/ 4. Sanwa Bank Undergoing Name Change.(merger with Tokai
Bank will create United California Bank) July 2, 2001| DOUGHERTY, CONOR Though his title remains the same,
as of July 2, when Sanwa Bank California and Tokai Bank of California merge, Tamakoshi's new card will say
United California
30. Bank. Customers frown and bear bank's third name in a year. A year after going through one name
change, customers of the former Sanwa Bank California and Tokai Bank of California are about to endure
another re- branding. This week, Bank of the West will kick off a multimillion-dollar ad campaign that will put to
rest the year-old United California Bank name -- itself the spawn of last year's merger between Sanwa and Tokai.
"We're calling them one thing and then the next week they're called another, and they say 'Here are our new
business cards but they won't be good for long because we're . (BY Kavin in 2003) www.encyclopedia.com `5.
EON Bank name change on the cards The bank will re-look the name change issue in the second quarter of next
year in line with its aspiration to be a lender that offers innovative products and services
31. . The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949, can be
broadly classified into two major categories, non-scheduled banks and scheduled banks. Scheduled banks
comprise commercial banks and the co-operative banks. In terms of ownership, commercial banks can be further
grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private
sector banks. These banks have over 67,000 branches spread across the country. The first phase of financial
reforms resulted in the nationalization of 14 major banks in 1969 and resulted in a shift from Class banking to
Mass banking. This in turn resulted in a significant growth in the geographical coverage of banks. Every bank had
to earmark a minimum percentage of their loan portfolio to sectors identified as “priority sectors”. The next wave
of reforms saw the nationalization of 6 more commercial banks in 1980. After the second phase of financial
sector reforms and liberalization of the sector in the early nineties, the Public Sector Banks (PSB)s found it
extremely difficult to compete with the new private sector banks and the foreign banks. The new private sector
banks first made their appearance after the guidelines permitting them were issued in January 1993. Eight new
private sector banks are presently in operation. These banks due to their late start have access to state-of-the-art
technology, which in turn helps them to save on manpower costs and provide better services.
32. During the year 2000, the State Bank Of India (SBI) and its 7 associates accounted for a 25 percent
share in deposits and 28.1 percent share in credit. The 20 nationalized banks accounted for 53.2 percent of the
deposits and 47.5 percent of credit during the same period. The share of foreign banks (numbering 42), regional
rural banks and other scheduled commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percent
respectively in deposits and 8.41 percent, 3.14 percent and 12.85 percent respectively in credit during the year
2000. Financial sector reforms were initiated as part of overall economic reforms in the country and wide ranging
reforms covering industry, trade, taxation, external sector, banking and financial markets have been carried out
since 1991. A decade of economic and financial sector reforms has strengthened the fundamentals of the Indian
economy and transformed the operating environment for banks and financial institutions in the country. The
sustained and gradual pace of reforms has helped avoid any crisis and has actually fuelled growth. GDP growth
in the last 10 years after reforms i.e. 1992-93 to 2001-02 averaged 6.0% against 5.8% recorded during 1980-81
to 1989-90 in the pre-reform period∗. The most significant achievement of the financial sector reforms has been
the marked improvement in the financial health of commercial banks in terms of capital adequacy, profitability,
asset quality and also greater attention to risk management. Further, deregulation has opened up RBI Annual
Report 2001-02.new opportunities for banks to increase revenues by
33. diversifying into investment banking, insurance, credit cards, depository services, mortgage financing,
securitization, etc. At the same time, liberalization has brought greater competition among banks, both domestic
and foreign, as well as competition from mutual funds, NBFCs, post office, etc. Post-WTO, competition will only
get intensified. Increasing competition is squeezing profitability and forcing banks to work efficiently on shrinking
spreads. Positive fallout of competition is the greater choice available to consumers, and the increased level of
sophistication and technology in banks. As banks benchmark themselves against global standards, there has
been a marked increase in disclosures and transparency in bank balance sheets as also greater focus on
corporate governance. Major Reform Initiatives Some of the major reform initiatives in the last decade that have
changed the face of the Indian banking and financial sector are: • Interest rate deregulation. Interest rates on
deposits and lending have been deregulated with banks enjoying greater freedom to determine their rates. •
Adoption of prudential norms in terms of capital adequacy, asset classification, income recognition, provisioning,
exposure limits, investment fluctuation reserve, etc. • Reduction in pre-emption – lowering of reserve
requirements (SLR and CRR),
34. Government equity in banks has been reduced and strong banks have been allowed to access the
capital market for raising additional capital. • Banks now enjoy greater operational freedom in terms of opening
and swapping of branches, and banks with a good track record of profitability have greater flexibility in
 recruitment. • New private sector banks have been set up and foreign banks permitted to expand their operations
in India including through subsidiaries. Banks have also been allowed to set up Offshore Banking Units in Special
Economic Zones. • New areas have been opened up for bank financing, insurance, credit cards, infrastructure
financing, leasing, gold banking, besides of course investment banking, asset management, factoring, etc. • New
instruments have been introduced for greater flexibility and better risk management: e.g. interest rate swaps,
forward rate agreements, cross currency forward contracts, forward cover to hedge inflows under foreign direct
investment, liquidity adjustment facility for meeting day-to-day liquidity mismatch.
35. • Several new institutions have been set up including the National Securities Depositories Ltd., Central
Depositories Services Ltd., Clearing Corporation of India Ltd., Credit Information Bureau India Ltd. • Limits for
investment in overseas markets by banks, mutual funds and corporate have been liberalized. The overseas
investment limit for corporates has been raised to 100% of net worth and the ceiling of $100 million on
prepayment of external commercial borrowings has been removed. MFs and corporates can now undertake
FRAs with banks. Indians allowed maintaining resident foreign currency (domestic) accounts. Full convertibility
for deposit schemes of NRIs introduced. • Universal Banking has been introduced. Banks permitted to diversify
into long-term finance and DFIs into working capital, guidelines have been put in place for the evolution of
universal banks in an orderly fashion. • Technology infrastructure for the payments and settlement system in the
country has been strengthened with electronic funds transfer, Centralized Funds Management System,
Structured Financial Messaging Solution, Negotiated Dealing System and move towards Real Time Gross
Settlement. • Adoption of global standards. Prudential norms for capital adequacy, asset classification, income
recognition and provisioning are now close to global standards. RBI has introduced Risk Based Supervision of
banks (against the traditional transaction
36. based approach). Best international practices in accounting systems, corporate governance, payment
and settlement systems, etc. are being adopted. • Credit delivery mechanism has been reinforced to increase the
flow of credit to priority sectors through focus on micro credit and Self Help Groups. The definition of priority
sector has been widened to include food processing and cold storage, software up to Rs 1 crore, housing above
Rs 10 lakh, selected lending through NBFCs, etc. • RBI guidelines have been issued for putting in place risk
management systems in banks. Risk Management Committees in banks address credit risk, market risk and
operational risk. Banks have specialized committees to measure and monitor various risks and have been
upgrading their risk management skills and systems. • The limit for foreign direct investment in private banks has
been increased from 49% to 74% and the 10% cap on voting rights has been removed. In addition, the limit for
foreign institutional investment in private banks is 49%. The age distributions of respondents are major from male
which is 83%. And 17% respondents are female.
37. 90 80 70 60 50 40 83 30 20 10 17 0 Male Female Table 4: Age wise distribution of respondents The
below table shows that respondents which are chosen for this project are 67% married and 33% unmarried.
Means there is big opportunity for tapped for his or her family members. 80 70 60 50 40 67 30 20 33 10 0 Single
Married Table 5: Marital status wise distribution of respondents The major respondents are from private sector
employee which is 48%. The next major employment category is Businessman which is 24%. 9% of the
respondents are self-
38. employed and 8% are Govt. employee. Student group holds only 7% among respondents and 3%
respondents are retired. The lowest, 1% respondents are from housewife. 60 50 40 30 48 20 10 24 7 8 9 0 1 3 ee
d ee if e an d nt ye e oy w oy sm de tir lo e pl pl e p tu us es m R m m S o in .E E .E H us f- t vt ov el B P S G
Table 6: Employment status wise distribution of respondents 58% of the major are graduate respondents. 29%
respondent’s holds professional qualification and 13% respondents are under graduate. 70 60 50 40 30 58 20 29
10 13 0 Under Graduate Graduate Profesional Qualication Table 7: Qualification status wise distribution of
respondents The name change is communicating among respondents major from advertising. 65% respondents
are watching TV and they heard the name change from TV commercial. The
39. bank also initiate his own channel of communication and from which 17% respondents directly knows
about the name change from banks directly by bank letter and mails. 9% of the respondents are heard from the
bank employee about the name change of the bank. And another 9% respondents are heard from their friend and
others. 70 60 50 40 30 65 20 10 17 9 7 0 2 n ee tio g . ds rs in oy a he is n ic rie pl rt un ot e m F dv ny m E om A
A k an C B k an B Table 8: Channel of Communication wise distribution of respondents The major respondents
are maintaining their savings a/c with Axis bank. The percentage of saving a/c maintaining by respondents is
49%. Private sector employee is also maintaining their salary a/c with Axis Bank which is 22%. 10% of the
respondents are maintaining fixed deposits and saving a/c jointly with the bank. 17% of respondents are directly
in business maintaining their current a/c with the bank.
40. 60 50 40 30 49 20 10 22 17 10 0 2 Savings Fixed Current Salary Any others Deposits Table 9: Types of
A/c wise distribution of respondents The respondents maintain another bank a/c with ICICI Bank. The percentage
of ICICI Bank a/c holder is 31%.Among100 respondents, 21% respondents holding another bank a/c with SBI
and 11% with HDFC Bank. The respondents also maintain a/c with IDBI which is 10%. Another 22% respondents
maintains their a/c in PNB, ABN AMRO, SYNDICATE, CITI, KOTAK and HSBC Bank. 35 30 25 20 15 31 10 21 5
11 10 6 7 5 2 4 3 0 E O I K C C I I B IC T I IT B B R A F B N A ID S IC C M T D S IC P O H H A D K N N B Y A S
41. Table 10: Other Bank A/c wise distribution of respondents 53% of the respondents also having their
family member a/c with Axis bank that represent that it is recommended by other family members. 47%
respondents’ family members’ a/c don’t have any a/c with Axis Bank. 54 53 52 51 50 49 53 48 47 46 47 45 44
Yes No Table 11: Family member’s a/c in Axis Bank of the respondents Major 44% respondents think that name
change is good for the Bank as well as customers. The respondents are also thinks that name change is good for
Bank which is 29% but 27% respondents thinks it is good for customers.
42. 50 45 40 35 30 25 44 20 15 29 27 10 5 0 Bank Customers Both Table 12: Change is good for-
distribution of respondents The product offered by Axis bank was good before name change. 42% respondent
thinks that product of Axis bank was good and 6% thinks that it was excellent. 4% of the respondents choose it
was very poor before the name change. Other respondent thinks it was poor and average at their perception
regarding product offered of Axis bank before branding 25% and 20% respectively. After the name change of
Axis bank the respondent thinks it is as good as before they perceive. Axis Bank product is not very poor replied
by all respondents. But most of them think the product is improved with the name change and 32% of the
respondents think it is excellent. Before branding the response for Axis product was total 45% for average and
poor but after branding it reduces to 25%. This means the consumers thinks the overall product offered by Axis
bank after name change is good.
43. 45 42 40 37 35 30 28 25 25 Before name change 23 20 After name change 18 15 12 10 5 6 5 4 0
Excellent Good Average Poor Very Poor Table 13: Product offered wise responses before & after name
changed. The Service level perceived by respondents was good before the name change of Axis Bank. The
respondents think its service level as excellent is only 6% and as very poor are 7%. 39% respondents perceive
the service level before branding was good and perceived as average was 32%. But after the name change of
Axis Bank, the perception about bank service is increased and its responds as excellent is 30%. No one is
perceived its service as very poor after the name change. The overall impact of branding is good for Axis Bank
regarding the services they offered
44. 50 45 44 40 39 35 32 30 30 Before name change 25 After name change 20 20 15 16 10 6 6 7 5 0 0
Excellent Good Average Poor Very Poor Table 14: Service offered wise responses before & after name changed.
Helpfulness of employees increases at a higher rate with name change of Axis bank. Before branding the
percentage of respondents who thinks it as excellent was 20% but after the name changed its increases at 29%.
26% respondents think the helpfulness of employees is good but after branding it increase at a higher rate and
goes to 37%. In opposite side, the helpfulness of employees was average at 31% but after name change it
decrease at 19%. Perception regarding helpfulness of employees was poor with a percentage of 19 but after
name change it reduces at 14%. Among the respondents 4% was thought that helpfulness of employees is very
poor but after name changed it almost goes down at only 1%. The overall perception regarding helpfulness of
employees after name change is very good.
45. 40 37 35 30 31 29 25 26 Before name change 20 20 19 19 After name change 15 14 10 5 4 0 1
Excellent Good Average Poor Very Poor Table 15: Helpfulness of Employees wise responses before & after
name changed. The perception regarding cleanliness of facilities was 5% before branding but after the name
change it increase to 29%. Also the perception of cleanliness was 33% good and after name change it goes to
42%. Respondents rate the cleanliness of facilities on an average of 36% before name change but after branding
it reduces at a percentage of 22. On other hand, the perception regarding cleanliness of facilities is poor for only
7% respondents. Where as it was 17% before the name changed. And after the name change no one is thinking
about very poor cleanliness of facilities but before branding the percentage was 3. The overall cleanliness
facilities are increased with the change of the name from UTI to Axis Bank.
46. 45 42 40 39 35 36 30 29 25 Before name change 22 20 After name change 17 15 10 7 5 5 3 0 0
Excellent Good Average Poor Very Poor Table 16: Cleanliness of facilities wise responses before & after name
changed. From the below table we can easily understood that the charges of various services is now better after
name change from UTI to Axis Bank. When before the branding 7% respondents thinks it is excellent but after
name change it goes up to 23%. The perception is good regarding service charge was 24% before name
changed and after name change it goes to 39%. Where as the perception regarding charge of various services is
average for both situations only a difference of 1% decrease after branding. Only 7% respondents think that the
service charge of Axis Bank after name change is poor and very poor. But previously the percentage was 37%
who thinks that the service charge was poor and very poor.
47. 45 40 39 35 32 31 30 29 25 24 Before name change 23 20 After name change 15 10 7 8 5 4 3 0
Excellent Good Average Poor Very Poor Table 16: Charges of various services wise responses before & after
name changed. The bank location visibility was good perceived by respondents and it slide change with the
change of its name from UTI Bank to Axis Bank. 4% respondents thinks that the bank location visibility was
excellent but after branding the perception rate increase to 27%. The perception regarding bank location visibility
is good by 44% respondents before branding and 42% respondents after branding. Where as the bank location
perceived is average by 44% and 42% respondents respectively for before and after change in Bank names.
Before name change, the bank location perceived is poor by 21% but after that it completely changes to a
percentage of 5 only. Those 2% are thinking the bank location as very poor is still at the same percentage after
change in names of UTI Bank to Axis Bank.
48. 50 45 44 42 40 35 30 29 27 Before name change 25 25 21 After name change 20 15 10 5 4 5 2 1 0
Excellent Good Average Poor Very Poor Table 17: Bank location visibility wise responses before & after name
changed. After the name change of UTI Bank to Axis Bank, the branch ambience is totally changes and the
experiences by respondents are different from the before situation. When the Bank was UTI only 14%
respondent think the Branch ambience was excellent but after branding it totally changes and it grows to 36%
(increased more than 2.5 times). But the perception is good about bank location was 30% and after name
changes it is 32%. The respondents are respond 6% on poor ambience of branch after the name changed but
the same was respond 14% before the name change took place. Where as, there is nil response of very poor of
ambience of branch after name change and before name change the percentage for very poor response was 5.
49. 40 35 36 36 32 30 30 25 26 Before name change 20 After name change 15 14 14 10 5 6 5 0 0 Excellent
Good Average Poor Very Poor Table 18: Ambience of Branch wise responses before & after name changed. The
 following graph showed the response of Telephone Banking Facility of Axis Bank before its name change and
after its name change. It is clearly understood by graph that the telephone banking facility is improved a lot after
its name change from UTI Bank to Axis Bank. The rating for excellent was 5% before name change and now it
after the name change the percentage is 18.The response for good telephone banking services was only 38%
where as it also increased to 51%. When the response for telephone banking facilities is average at 29% before
the name change that goes down to 20%. And also, the responses for poor telephone banking facilities
decreases to 9% but the past response was 22 percent. The telephone banking
50. facilities was very poor, respond by 6% before the name change of Axis Bank but it goes to 2% after
name change. 60 50 51 40 38 Before name change 30 29 After name change 22 20 20 18 10 9 5 6 2 0 Excellent
Good Average Poor Very Poor Table 19: Telephone Banking Facility wise responses before & after name
changed. Like Telephone Banking Facility, the Internet Banking Facility is also improved for the overall time
period. The 12% responses for excellent Internet Banking Facility before the name change. But they respond
27% for excellent after the name changed of Axis Bank from UTI Bank. 37% responses for good Internet Banking
facility before the name change where as 49% respond after name change. The percentage of average Internet
Banking Facility by respondents before name change was 28 and after name change, it falls at 20%. The past
condition for Internet banking facility was poor and very poor respondents 23% jointly. But after name change no
one is respond the Internet Banking Facility as very poor services.
51. 60 50 49 40 37 Before name change 30 27 28 After name change 20 20 18 12 10 4 5 0 0 Excellent
Good Average Poor Very Poor Table 20: Internet Banking Facility wise responses before & after name changed.
With the change of the name of Bank, Grievance redressed system is also improved as well. Axis Banks
grievance redressed system response 4% very poor by the respondents before name change of Axis Bank. The
respondents also response it nil for grievance redressed system after the name change. 21% respondents are
agreeing that the grievance redressed system was poor but after name change the percentage goes to 3% only.
The response for average grievance redressed system after name change is 22% compare to 36% before the
name change. 47% response for good grievance as well as 28% response for excellent after name change but
the percentage was 32 and 28 respectively before the name changes.
52. 50 47 45 40 35 36 32 30 28 Before name change 25 22 21 After name change 20 15 10 7 5 4 3 0 0
Excellent Good Average Poor Very Poor Table 21: Grievance Redressed System wise responses before & after
name changed.
53. Chapter IV: Findings and Conclusions 1. The target customer of Axis Bank is mainly resided at south
Delhi and part of west & north Delhi. 2. The age group of target customer is 20yrs to 30 yrs and 31yrs –40 yrs. 3.
The income level of target customers are from 21k to 30k with in a month. The next groups of target customers
are from 20k to 30k per month. 4. Most of the customers are male and working in private sector. 5. The major
customers of Axis Bank are married. 6. Most of the customers are related with private sector jobs and next 27%
are from business. 7. The major customers of Axis Bank are Graduate. 8. The most reached medium is
advertisement though which 65% are aware about the name changed.
54. 9. Most of the customers holding their savings a/c with Axis Bank. The next category is salary a/c
maintained by private employees. 10. 53% of respondents having their family member’s a/c with this Bank. 11.
The respondents have a strong brand awareness about Axis Bank. They have correctly identified Axis Bank logo
in the questionnaire. Even they know when the name change took place. All the respondents are highly aware
about the name change of UTI Bank to Axis Bank. They are also know about the time when the name change
and also the new logo of Axis Bank. It shows the awareness level is very high regarding customer awareness of
Axis Bank. The overall featured of Axis Bank is positive towards branding except the product offered and Bank
location visibility. Customers are taken the positive way towards the name change from UTI Bank to Axis Bank.
55. Chapter VI: Application and significance of the study This project work will help the employee as well as
managers of Axis Bank to make decisions regarding Customers after the name changed. They will clearly
understand about the mind set of the customers and their expectations about branding. The project work will help
the management level of Axis Bank for organizing their product, service and facilities. The employees can cross
sell through generating reference from customers. It will help the manager to knowing the needs in terms of
customer liking towards the Bank service. This project work will help me to find out the target customers, all
about target segments, their age, family income as well as generating references from the customers. As a sales
person of Axis Bank, it will help me a lot.
56. References Internet: 1. www.google.com 2. www.financialexpress.com 3. www.axisbank.com
Newspaper: 1. Business Standard 2. The Hindu
57. Annexure Questionnaire used for survey Name:
………………………………………………...Mobile…………………………… Address:
…………………………………………E-Mail ID……………………………. You live in : a)North Delhi b)South Delhi
c)East Delhi d)West Delhi e)Ghaziabad f)NOIDA g)Faridabad h)Gurgaon i)Others………………. Your Age:
a)Below 20yrs b)20-30yrs c)31-40yrs d)41-50yrs e)51-60yrs f)Senior Citizen Income (pm): a)Below 10k b)10k-
20k c)21k-30k d)31k-40k e)Above 41k Gender: a)Male b)Female Martial Status: a)Single b)Married Employment:
a)Student b)Govt. Employee c)Pvt. Employee d)Self- Employed e)Housewife f)Retired g)Businessman Your
Education: a)Not Graduate b)Graduate or higher degree c)Professional qualification 1. Are you aware of the
change in name from UTI to Axis Bank? Yes /No 2. If yes, then through? a)Advertisement b)Bank
Communication c)Bank Employee d)Friends d)Any other………………….. 3. Do you have any account with UTI
Bank? Yes / No 4. If yes, what kind of a/c it is?
58. a)Savings b)Fixed Deposit c)Current d)Salary e)Any other…………………. 5. You have other A/c with a)
……………………b)………………....c)…..... …………... 6. Do your family members have a bank a/c with Axis
 Bank? Yes / No 7. You think the name change is good for the a)Bank b)Customers c)Both 8. Base on your past
& current perceptions as regards Axis Bank, Please rate your evaluation what you thought of its various aspects
before its name changed and what you think/perceive now. (Please circle your selected option as regard earlier
perception and current views) E-Excellent, G-Good, A-Average, P-Poor, VP-Very Poor Before Name Change
After Name Change a) Product offered E G A P VP E G A P VP b) Service Level E G A P VP E G A P VP c)
Helpfulness of Employee E G A P VP E G A P VP d) Cleanliness of facilities E G A P VP E G A P VP e) Charges
of various services E G A P VP E G A P VP f) Bank Location visibility E G A P VP E G A P VP g) Ambience of
Branch E G A P VP E G A P VP h) Telephone Banking Facility E G A P VP E G A P VP
59. i) Internet Banking Facility E G A P VP E G A P VP j) Grievance Redressed System E G A P VP E G A
P VP 9. When did you really realize that the UTI Bank had changed its name to Axis Bank? a)2006 b)2007
c)2008 10. What is the logo of Axis Bank? a) b) c) d)
60. Sample of Coding Sheet Live in 1=North Delhi 2=South Delhi 3=East Delhi Age 4=West Delhi
1=Below20yrs Income 5=Gzd 2=20-30yrs 1=Below 10k 6=Noida 3=31-40yrs 2=10k-20k Marital 7=faridabad
4=41-50yrs 3=21k-30k Gender Status Questionnaire 8=Gurgaon 5=51-60yrs 4=31k-40k 1=Male 1=Single No#
9=Others 6=senior citizen 5=Above 41k 2=Female 2=Married 1 6 2 3 1 1 2 5 2 2 1 1 3 2 2 2 1 2 4 8 2 3 2 1 5 4 4
4 1 2 6 9 4 4 1 2 7 1 2 1 1 1 8 1 3 4 1 2 9 4 3 3 1 2 10 7 6 3 1 2 11 4 6 5 1 2 12 9 3 3 1 2 13 5 3 3 2 2 14 4 4 3 1 2
15 2 2 1 1 1 16 2 3 3 1 1 17 2 1 1 2 1 18 8 3 3 1 2 19 2 1 1 2 1 20 1 2 1 2 1 21 2 2 2 1 1 22 2 2 3 1 1 23 5 2 3 1 2
24 2 2 2 2 2 25 4 2 2 1 1 26 5 2 3 1 1 27 3 3 2 1 2 28 2 4 3 1 2 29 3 2 3 1 2 30 4 4 4 1 2 31 3 2 2 2 2 32 2 3 2 2 2
33 1 2 2 1 2
61. Qno. 4 Employment Qno. 2 1=Savings 1=Student 1=Advertising 2=Fixed 2=Govt. emp Education
2=Bank Qno.3 Deposits 3=Pvt.emp 1=Not Communication Have any 3=Current 4=Self-emp Graduate 3=Bank
a/c in UTI A/c 5=Housewife 2=Graduate Qno.1 Aware of Employee bank? 4=Salary 6=Retired 3=Professional
Name change 4=Friends 1=Yes 5=Any 7=Businessman qualification 1=Yes 2=No 5=Any others. 2=No Others 3
3 1 4 1 4 3 2 1 1 1 4 3 2 1 3 1 1 3 3 1 1 1 1 7 1 1 2 1 1 4 3 1 1 1 3 3 1 1 5 1 4 4 3 1 2 1 3 3 2 1 1 1 4 6 2 1 2 1 1*2
7 3 1 1 1 1*3 3 2 1 3 1 4 4 3 1 1 1 1 4 3 1 1 1 1*2 1 2 1 1 1 1 3 3 1 2 1 4 1 1 1 1 1 1 3 2 1 1 1 1 1 1 1 4 1 1 1 2 1 1
1 1*2 1 3 1 2 1 1 3 3 1 1 1 4 3 2 1 2 1 3 3 2 1 1 1 1 3 3 1 1 1 1 3 2 1 1 1 4 3 1 1 3 1 1*2 3 2 1 1 1 3*4 7 2 1 1*3 1
3 7 2 1 2 1 3 7 2 1 2 1 3 2 2 1 1 1 1*2 7 1 1 1*4 1 1*3 3 2 1 2 1 4 3 2 1 1 1 1
62. Qno. 5 1=ICICI 2=SBI 3=HDFC 4=PNB 5=ABN 6=Syndicate Qno.6 Qno 8C1 7=Central Family Qno 8A1
Qno 8B1 1=Excellen Qno 8D1 8=citi members Qno. 7 1=Excellent 1=Excellent t 2=Good 1=Excellent 9=Kotak
a/c with 1=Bank 2=Good 2=Good 3=Average 2=Good 10=IDBI, 11- axis bank 2=Custom 3=Average 3=Average
4=Poor 3=Average HSBC, 12- 1=Yes ers 4=Poor 4=Poor 5=Very 4=Poor Dena 2=No 3=Both 5=Very Poor
5=Very Poor Poor 5=Very Poor 6 1 3 2 3 3 3 2 1 2 2 2 4 5 1 1 3 2 3 2 4 8*10 2 3 3 2 3 4 4 2 1 3 3 3 2 3 1 2 2 3 3
4 2 1 3 4 4 3 3 10 1 3 2 2 2 3 10 1 3 2 2 2 2 2 1 2 2 2 2 2 3*11 2 2 2 2 2 2 2 1 3 4 3 4 3 5 1 3 2 2 3 3 1 2 2 2 2 1 1
3 2 1 4 4 4 3 4 2 1 4 4 4 3 6 2 3 2 5 4 4 1 1 2 3 4 4 5 2 2 3 3 3 3 2 3 1 3 2 3 3 2 1*3*4 2 1 2 2 1 1 1*5*6 2 3 3 2 2
2 1*7 2 1 1 1 3 2 8 2 3 2 2 2 2 1 2 3 3 2 3 2 1*2*9 1 2 3 4 3 3 1*3 1 3 4 3 2 3 2*3 2 3 4 2 1 2 1*3 2 3 2 2 2 3 1 1 2
4 3 3 3 1*5 1 3 2 3 3 3 1 1 2 2 3 3 2 9 1 3 5 4 2 3 6 2 3 5 4 5 4 10 2 3 4 4 3 3 Qno 8E1 Qno 8F1 Qno 8G1 Qno
8H1 Qno 8I1 Qno 8J1 Qno 8A2 1=Excellent 1=Excellent 1=Excelle 1=Excellent 1=Excellent 1=Excellen
1=Excellent
63. 2=Good nt 2=Good t 2=Good 2=Good 3=Average 3=Average 2=Good 2=Good 3=Average 2=Good
3=Average 4=Poor 4=Poor 3=Average 3=Average 4=Poor 3=Average 4=Poor 5=Very 5=Very 4=Poor 4=Poor
5=Very 4=Poor 5=Very Poor Poor Poor 5=Very Poor 5=Very Poor Poor 5=Very Poor 4 4 3 3 2 3 1 5 3 2 3 2 2 2 5
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I D B I - Presentation Transcript

1. A PRESENTATION ON OPERATIONS OF A FINANCIAL INSTITUTE

2. INTRODUCTION
o Financial institutes deal with processing of money and other monetary transactions.
o Every financial institute goes through processes which are similar to the manufacturing
process.
3. A CASE STUDY :
4.
o IDBI stands for Industrial Development Bank Of India.
o Primarily set up to render monetary services to Indian industries.
o IDBI was found in the year 1964.
o It is an undertaking of the public sector.
5. THE WORKING OF IDBI INPUTS OUTPUT PROCESS
6. INPUTS
o Every financial institute requires inputs.
o The main input for a bank is money in any form.
o For different banks, the sources of funds are different.
 7.
o For IDBI, the main sources of income or inputs are :
o 1. FIXED DEPOSITS.
o 2. CURRENT DEPOSITS.
o 3. SAVINGS DEPOSITS.
8.
o Apart from these, the other sources are :
o 1. Interests on loans and
o borrowings.
o 2. Charges on services rendered.
o 3. Overdrafts.
9. THE TANGIBLE INPUTS
o The other inputs which are required in a financial institute are :
o 1. Manpower.
o 2. Office and appliances.
o 3. Machines and technology.
10. COMPARATIVE INPUT CLASSIFICATION
11. PROCESS
o The intermediate processes of a financial institute includes:
o 1. Check clearance.
o 2. Allocation of funds.
o 3. Confirmation of accounts.
o 4. Advertising.
o 5. Negotiating instruments, etc.
12. THE PROCESS PARAMETERS OF IDBI BANK
13. EFFECTS OF ADVERTISEMENTS
14. OUTPUTS
o The outputs of a financial institution are as follows :
o 1. Loans.
o 2. Financial services.
o 3. Security of savings.
o 4. Instruments of negotiation, etc.
15.  
16. CUSTOMER’S RESPONSE N=250
17. OUR FINDINGS
o The main source of money.
o It pays an interest of 3.5% towards savings deposits.
o The main profits of the bank are from these two accounts or deposits.
18.
o The profit margin is less on Fixed Deposits.
o But fixed deposits act as a long term asset for the bank.
o The Annual turnover = Rs. 70,000 Crores.
19. LIMITATIONS
o Low rate of interest.
o Low on marketing and advertising strategies.
o Competition from Private banks.
20.
o The ambience and technology are not as developed.
o Lack of efficient human resources.
o Governed by rules and regulations.
21. RECOMMENDATIONS
o Necessary to open more branches.
o More resources should be allocated in the Indian market.
o Short advertising campaign to gain long term benefits with more intensity.
22.
o The bank should alter the rates of interest.
o Pay more attention towards its FD’s.
o Make full use of technology.
o Improve its production downtime.
23. CONCLUSION
24. THANK YOU …
 Idbi, then and now - Presentation Transcript

1. GROUP NO. 1C Ankita Jain Akansha Misra Disha Mahajan Indranil Bhowmick Jyoti Jain
2. Industrial Development Bank of India (IDBI)
o Genesis
 1964 - Established as a wholly owned subsidiary of the Reserve Bank of India
(RBI)
 Established as a DFI with the following functions:
o Plays the role of coordinator at all India level.
o Providing financial assistance for the establishment of new projects as well as for
expansion, diversification, modernisation and technology upgradation of existing industrial enterprises.
o undertakes wide-ranging promotional activities including entrepreneurship development
programmes for new entrepreneurs, provision of consultancy services for small and medium enterprises,
upgradation of technology and programmes for economic upliftment of the underprivileged.
3.
o Assistance to backward areas by setting up of voluntary agencies, support to Science and
Technology Entrepreneurs’ Parks, Energy Conservation, Common Quality Testing Centres for small
industries, SIDBI etc..
o TCOs offer diversified services to small and medium enterprises in the selection, formulation
and appraisal of projects, their implementation and review.
o IDBI played a prime role in setting up of the Entrepreneurship Development Institute of India
for fostering entrepreneurship in the country.
o Pioneered capital market development
 By setting up National Stock Exchange – an electronic Stock Exchange, NSDL
– a Securities Depository, CARE – a Rating Agency, SHCIL – a Depository, etc.
4.
 Products and services
 Project finance, equipment finance, asset credit, equipment lease etc.
 Professional advice and services for issue management, project evaluation,
corporate restructuring, share valuation etc.
 Set up subsidiaries:
 IDBI Bank
 IDBI Capital Market Services Ltd.
 IDBI Investment Management Company Ltd.
 1976 - 100% ownership transferred to Government of India (GoI)
 1995 - Domestic IPO reduced GoI stake to 52.3%.
 2003 – Acquired Tata Finance Ltd. and entered into retail finance sector.
 2004 – converted into a banking company
5. PROBLEMS FACED BY IDBI AFTER LIBERALIZATION
6.
o Net profit dropped.
o Decline in sanction and disbursements.
o Lack of proper leadership.
o Break-up of deal between DPC(Dhabol power corporation) & Maharashtra govt.
o IDBI’s NPA increased rapidly.
o Improper business practices.
o ICRA downgraded IDBI’s rating in 2001.
o Failed to retain it’s top-rated customers.
o IDBI was not triple-A-rated entity.
o High cost of funds.
o Investors confidence in IDBI has come down drastically.
7. IDBI’s Financial Performance Over The Year (In Rs. Crore) Particulars 2002-2003 2001-2002 2000-
2001 1999-2000 1998-1999 Sanctions 2889 13505 23178 22060 18939 Disbursement 3924 11151 17747 17063
14473 Income 6371 7175 7834 7859 7464 PBT 455 414 734 1027 1300 PAT 401 424 691 947 1258 EPS(in Rs.
Crore) 6.15 6.49 10.2 14.07 18.7 Gross NPA 16006 14449 9849 8236 - Net NPA 7308 6500 7675 6488 - Net
NPA(in % ) 14.16 11.69 13.44 12.05 -
8.  
9. WAYS OF REVIVAL
o Reverse merger with its banking subsidiary ‘IDBI Bank’
o Splitting IDBI into a “good –asset IDBI” and an “NPA IDBI”
o Hive off its stake in IDBI bank of worth Rs 1,500 crore.
10. Better option is to go for merger with IDBI bank
11.  
12. Contribution of Merger
 o To meet out with emerging challenges and reforms in financial sector, it reshape its role
from a development finance institution to a commercial institution.
o This merger provides an array of customer-friendly services to its existing and prospective
clients.
o It create a firm foundation for IDBI Ltd. to compete with other banks, supported by strong
operational synergies.
o “ The government will hold 51.3% stake in the merged entity,”
13. Shareholding Pattern : Dec 31, 2008
14. IDBI Bank Business Chart
o .
15. Merger issue
o The swap ratio -100:142 (100 shares of IDBI for 142 shares of IDBI Bank).
o EGM - February 23 for seeking the approval passed by two-thirds of its shareholders.
o Merged entity which will have
o assets - Rs 78,000 crore
o manpower - over 4,000
o By adding IDBI Bank’s network to its own. it have
o 199 or 200 branches
o 300-odd ATM
o Rs 56,000 crore customer asset portfolio
16. No. of Branches   Metro  Urban  Semi Urban  Rural 178 173 99 53
17.
o IDBI Ltd is now virtually a universal bank.
o total business size of around Rs.1,34,189 crore,
o It uses information technology (IT) platform to structure and deliver personalized banking
services and customized financial solutions to its clients.
o Pole position in the technological arena
o -> Card-to-Card Money Transfer
o -> Online tax payment
o -> Visa Off-us mobile recharge facility
o -> Air Ticketing through ATM etc.

Benefit

18. Core income growth

19.
o Gateway to low-cost deposits.
o Positive impact on the Bank’s overall cost of funds and facilitate lending at more competitive
rates to its clients.
o Highest standards - corporate governance (operations)
o IDBI would continue
o -> Products and services as part of its development finance role.
o -> An array of wholesale and retail banking products, for specific cash flow requirements of
corporate and individuals.
20.
o The provision coverage to the tune of 97% of gross NPAs is by far the highest in the sector.
21. Strong Investment Portfolio
22. Subsidiaries
23.  
24.  
25. Network & delivery channels (Current Scenario)
o 504 branches, 496 counters
o 871 ATMs
o Presence in 316 important commercial centres in India
o Presence in 100 cities
o Internet banking
o Retail customer base: 5 million +
o Corporate customers: 3000 +
26. Achievements
o Awards Won during the year
 IT Team of the Year(2007) Award of IBA5
 Best IT Security Practices Award of NASSCOM
 Best CTO Award of Cyber Media
  Won two special awards, for “Best Payments Initiative” and “Outstanding
Achiever of the Year" (2007)
o Key Projects
 Airline ticketing through ATMs
 Setup of Data Center and Disaster Recovery Center
 Internet Banking Enabled Multi-Functional KIOSK
 Kolkata and Haldia Port Trust Internet Banking Payment and MIS Modules
 Online Payment of Central Excise & Service Tax
27. New Business Initiatives
o IDBI completed the reorganization of its business into separate verticals focused on SME,
Agri-business, Personal Banking, Mid Corporate, Large Corporate and Infrastructure.
o IDBI Fortis Life Insurance
o IDBI Gilts
o Bank will also open branches in Singapore, Dubai and Shanghai, with either the Dubai or
Singapore branch opening likely by the end of March
o Steps initiated for mortgage guarantee business
o Took another initiative in reaching out to the smaller clients by introducing facility of Online
application for educational loan.
o Bank introduced a new product for encashment/sale of Foreign Currency by NRI Clients
and encashment of Travelers Cheques by Bank’s existing NRI customers.
28. Business Strategy
o Optimize mix of corporate and retail banking
o Increase product offering by leveraging corporate relationships
o Rationalize and reorient human resources through on-going training
o Improve technology infrastructure
o Enhance & implement enterprise-wide risk management systems
o Focus on fee based income to boost profitability
o Strengthen brand equity
o Enhance market share
29.
o Pursue organic growth opportunities
o Leverage core competency in project financing while creating additional business
opportunities in retail & commercial banking
o Inorganic growth domestically through bank acquisitions/ mergers
o Entry into Insurance, Asset Management
o Business operated as separate Retail Banking and Corporate Financing SBU(strategic
business units)s
o A common Treasury, Risk Management, Audit, IT and other support operations
o Integrated and Rationalized branch network