1

SUMMER TRAINING REPORT SUBMITTED TOWARDS THE

PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN
INTERNATIONAL BUSINESS

InternationaI Banking Operations and CRM of




SUBMITTED BY:
KANIKA SINGLA
MBA-IB (2010-2012)
Roll No. : A1802010389




MR RA1IT SINGLA MS SHALINI GAUTAM
(BRANCH MANAGER) (FACULTY GUIDE)
AXIS BANK





AMITY INTERNATIONAL BUSINESS SCHOOL,
NOIDA
AMITY UNIVERSITY - UTTAR PRADESH







TO WHOM IT MAY CONCERN



This is to certiIy that KANIKA SINGLA, a student oI Amity International
Business School, Noida, undertook a project on 'International Banking
operations (FOREX) and analysis oI customer relationship management
(CRM) at AXIS BANK Irom 3-06-011 to 14-07-011.

Ms.KANIKA SINGLA has successIully completed the project under the
guidance oI Mr.RAJIT SINGLA. She is a sincere and hard-working student
with pleasant manners.

We wish all success in her Iuture endeavors.


Signature with date
(Name)
(Designation)
(Company Name)













3


CERTIFICATE OF ORIGIN


This is to certiIy that Ms.KANIKA SINGLA, a student oI Post Graduate Degree in
MBA, Amity International Business School, Noida has worked in the AXIS
BANK, under the able guidance and supervision oI Mr.RAJIT SINGLA, (Branch
manager) oI AXIS BANK.
The period Ior which he/ she was on training was Ior 6 weeks, starting Irom 3-0-
011 to 14-07-011. This Summer Internship report has the requisite standard Ior
the partial IulIillment the Post Graduate Degree in International Business. To the
best oI our knowledge no part oI this report has been reproduced Irom any other
report and the contents are based on original research.







MS SHALINI GAUTAM KANIKA SINGLA
(Faculty Guide) (Student)


4


ACKNOWLEDGEMENT


I express my sincere gratitude to my industry guide MR RAJIT
SINGLA, (Branch manager) oI AXIS BANK Ior his able guidance,
continuous support and cooperation throughout my project, without
which the present work would not have been possible.

I would also like to thank the entire team oI AXIS BANK, Ior the
constant support and help in the successIul completion oI my project.

Also, I am thankIul to my Iaculty guide Ms. SHALINI GAUTAM oI my
institute, Ior her continued guidance and invaluable encouragement.




KANIKA SINGLA





PREFACE
The research studies are oI a great help in enhancing the knowledge oI a
person. Practical knowledge is a suIIix to theoretical knowledge. Classroom
lecturers clariIy the Iundamental. But classroom lectures must be correlated
with the practical research situation. It is in this sense that the research
project is made compulsory Ior the curriculum and has a signiIicant role to
play in the Iield oI business management. Through this type oI project one
can understand the application oI theory into practical. In this project I have
put a lot oI eIIort to make it a success.

This PROJECT is based on International Banking Operations AND CRM OI
Axis Bank. The objective oI my study is to understand how banking activities
actually takes place and to gain an insight and in depth knowledge oI the
International banking operations viz., Export-Import Documentation, Letter
oI Credit, Inward-Outward Remittances, Export-Import Finance, NRI
Deposits and guidelines oI various authorities AND the how banks maintain
relationship with customers.

It was my Iortune to do this PROJECT. I learned a lot oI new things which
could never been learned Irom the theory classes. This dissertation report is a
presentation oI my work.

In the Iorthcoming pages an attempt has been made to present report covering
diIIerent aspects oI my project.

KANIKA SINGLA

6

Executive summary
Private banking is a concept which is Iast emerging in the world oI banking where changes
have become a necessity in order Ior banks to survive in this competitive environment via- a-
vis not only Irom the public and private sector bank but also Irom the Iollowing bank.

The report contains the brieI description oI the banking industry in INDIA. It gives an in-
depth analysis and understanding oI International Banking Operations and the survey
conducted on CRM to gather primary data to judge the importance oI various attributes that
inIluence the satisIaction oI customers in diIIerent manner and to diIIerent extent.

It gives an overview oI the conditions existing in the current global economy Ior
International Banking Transactions. International Banking Transaction is the extension oI
credit by a bank headquartered in a particular country to residents oI another country can
occur via: (I) cross-border lending; (ii) local lending by aIIiliates established in the Ioreign
country; or (iii) lending booked by an aIIiliate established in a third country (e.g. an
international Iinancial centre). In addition, the BIS international banking statistics on a
residency basis include the extension oI credit by a bank headquartered in a particular
country to residents oI the same country but in a Ioreign currency. The underlying Iinancial
instruments could be loans, deposits or securities as well as derivatives contracts and
contingent Iacilities.

Customer relationship management (CRM) is a companywide business strategy designed
to reduce cost and increase proIitability by solidiIying customer loyalty. It is a strategy used
to learn more about customers needs and behavior in order to develop stronger relationship
with them. AIter all, good customer relationship is the heart oI the business success. The
attributes which inIluence the satisIaction oI customer are initial experience, service delivery
experience, relationship experience, grievance handling etc.

The title oI the project is INTERNATIONAL BANKING OPERATIONS AND ANALYSIS
OF CRM in AXIS BANK. The approach Ior this project was to understand the basic
concepts oI the Ioreign exchange and the measures adopted by Axis Bank to promote Iair
relationship between bank and customer.

International banking has expanded markedly over the last 30 years. Its Iorm and
Geographical coverage reIlects two important aspects oI the role international banks play in
the global economy. The objective oI my study is t to gain an insight and in depth knowledge
oI the International banking operations viz., Export-Import Documentation, Letter oI Credit,
Inward-Outward Remittances, Export-Import Finance, NRI Deposits and guidelines oI
various authorities. The International Chamber oI Commerce (ICC) was Iounded in 1919,
with an aim to promote trade and investment, open market Ior goods and services and Iree
Ilow oI capital.
7

As the trade transactions can be broken down into movement oI goods, movement oI
documents and movement oI Iunds. But banks (AXIS BANK also) plays a role in the
movement oI documents and movement oI Iunds.
Payments made Ior the exchange oI goods and services across the countries in the
international trade comprises oI clean payments (payment in advance and open account) , bill
oI collection and documentary credit.
Various documents have to be exchanged between the exporter and importer in the
international trade which includes Airway bill, Bill oI lading, CertiIicate oI Origin, Bill oI
exchange, Insurance policy, Inspection CertiIicate etc.
Foreign Exchange Management Act (FEMA) has also come into account in order to Iacilitate
the external trade and payments and to promote the orderly development and maintenance oI
the Ioreign exchange market in India.
Foreign Exchange Dealers` Association oI India (FEDAI) is the apex Iorum oI banks
authorized to deal in Iorex issues and guidelines. It mainly deals in Export transactions
(Export bills purchased/ discounted/ negotiated, application oI interest) and in Import
transactions (application oI rates, merchant trade, clean instruments and guarantees).


An analysis of CRM is done by getting the questionnaire Iilled by the HNI customers oI the
Axis Bank. In order to promote Iair relationship between the bank and the customer, helping
the customer in understanding product and services, how to increase the value oI customer
and know their level oI satisIaction and ultimately increases the bank proIitability.

Research methodology adopted Ior this research includes the descriptive study in which the
overall needs and behavior oI the customers are taken care oI. My research is based on both
primary (questionnaire and personal observation) and secondary data (website, bank
manuals). The data is collected through the respondents oI Axis bank oI Panipat city,
comprising oI government employees, selI-employed and housewiIe etc. through random
sampling and the sample size consists oI 100 respondents.

The key findings were that 4 oI the customers are having account Ior 3- years and they
are satisIied with the way their account are managed.4 oI customers are satisIied with the
way their enquiries are handled through phones and letters. The staII oI the axis bank is Iully
eIIicient according to the customer`s responses and they quickly sought out their grievances
and mistakes. According to the customer`s Ieedback, the bank has improved its services and
also the overall the satisIaction oI the customers has also improved.








INDEX


Certificate
Acknowledgement
Preface
Executive summary
TABLE OF CONTENTS

PART 1 - INTERNATIONAL BANKING TRANSACTIONS
CHAPTER NO. Title Page no.
CHAPTER NO.1 INTRODUCTION
1.1 Introduction to industry
1.2 Company ProIile


1
CHAPTER NO. INTRODUCTION- INTERNATIONAL BANKING
OPERATIONS(FOREX)


47
CHAPTER NO.3 REVIEW OF LITERATURE &RESEARCH
METHODOLOGY

49
CHAPTER NO.4 ANALYSIS & INTERPRETATION



PART 2- CUSTOMER RELATIONSHIP MANAGEMENT

CHAPTER NO. TITLE PAGE NO.
CHAPTER NO INRODUCTION-CRM,
ECRM

CHAPTER NO 6 REVIEW OF LITERATURE
CHAPTER NO 7 OBJECTIVES AND SCOPE
CHAPTER NO RESEARCH METHODOLOGY
9

CHAPTER NO 9 ANALYSIS & INTERPRETATION



CHAPTER 10-FINDINGS AND CONCLUSION
CHAPTER 11-SUGESSTIONS AND RECOMMENDATIONS
CHAPTER1-SWOT ANALYSIS
CHAPTER14-BIBLIOGRAPHY
ANNEXURE
CASE STUDY
SYNOPSIS






















10


1.1Banking in India: Overview
Banking in India originated in the Iirst decade oI 1
th
century. The Iirst banks were The General
Bank oI India, which started in 176, and Bank oI Hindustan, both oI which are now deIunct.
The oldest Bank in existence in India is the State Bank oI India, which originated in the The
Bank oI Bengal` in Calcutta in June 106. This was one oI the three presidency banks, the other
two being the Bank oI Bombay and the Bank oI Madras. The presidency banks were established
under charters Irom British East India Company. They merged in 19 to Iorm the Imperial
Bank oI India, which, upon India`s independence, became the State Bank oI India. For many
years the presidency banks acted as quasi-central banks, as did their successors. The Reserve
Bank oI India Iormally took on the responsibility oI regulating the Indian banking sector Irom
193. AIter India`s independence in 1947, the Reserve Bank was nationalized and given broader
powers.


Reserve Bank of India










Urban Cooperatives




Other Nationalized Banks


1.2 Nationalized Banks in India

Banking system in India is dominated by nationalized banks. The Nationalization oI Banks in
India took place in 1969 by Mrs. Indira Gandhi the Prime Minister. The major objective behind
Non-
Scheduled
Scheduled
Commercial Banks

Cooperatives Bank
Foreign Banks
State Cooperatives
Private Sector
Public Sector
Regional Rural Banks
SBI & Associates
11

nationalization was to spread the banking inIrastructure in rural areas and make available cheap
Iinance to Indian Iramers. Fourteen banks were nationalized in 1969. BeIore 1969, State Bank oI
India (SBI) was the only public sector bank in India. SBI was nationalized in 19 under the SBI
Act oI 19. The second phase oI nationalization oI Indian Banks took place in the year 190.
Seven more banks were nationalized with deposits over 00 crores.

1.2.1List of Public Sector Banks in as follows:
O Allahabad Bank Andhra Bank
O Bank oI Baroda Bank oI India
O Bank oI Maharashtra Central Bank oI India
O Canara Bank Corporation Bank
O Dena Bank Indian Bank
O IDBI Bank Indian Overseas Bank
O Oriental Bank oI Commerce Punjab National Bank
O Punjab & Sind Bank UCO Bank
O Syndicate Bank United Bank oI India
O Union Bank oI India Vijaya Bank

1.2.3 List of State Bank of India and its subsidiary, a Public Sector
Banks
O State Bank of India
4 State Bank oI Bikaner & Jaipur
4 State Bank oI Hyderabad
4 State Bank oI Indore
4 State Bank oI Mysore
4 State Bank oI Saurastra
4 State Bank oI Travancore

1

1.2.4 Private Banks in India
All the banks in India were earlier private banks. They were Iounded in the pre-independence era
to cater to the banking needs oI the people. But aIter nationalization oI banks in 1969 public
sector came to occupy dominant role in the banking structure. Private banking sector in India
received a Iillip in 1994 when Reserve Bank oI India encouraged setting up oI private banks as a
part oI its policy oI liberalization oI the Indian Banking Industry. Housing Development Finance
Corporation Limited (HDFC) was amongst the Iirst to receive an in principle` approval Irom the
Reserve Bank oI India (RBI) to set up a bank in the private sector. Private Banks have played a
major role in the development oI Indian Banking Industry. They have made banking more
eIIicient and customer Iriendly. In this process they have jolted public sector banks out oI
complacency and Iorced them to become more competitive.

1.2.5 List of Private Banks in India
O Bank oI Punjab Dhanalakshmi Bank
O Bank oI Rajasthan Development Credit Bank
O Catholic Syrian Bank Federal Bank
O Centurion Bank ICICI Bank
O City Union Bank ING Vysya Bank
O HDFC Bank Jammu & Kashmir Bank
O IndusInd Bank Karur Vysya Bank
O Karnataka Bank Laxmi Vilas Bank
O South Indian Bank United Western Bank
O UTI Bank






13

1.3 Introduction of Axis Bank






Axis Bank, Iormally UTI Bank, is a Iinancial services Iirm that had begun operations in 1994,
aIter the Government oI India allowed new private banks to be established. The Bank was
promoted jointly by the Administrator oI the SpeciIied Undertaking oI the Unit Trust oI
India (UTI-I), LiIe Insurance Corporation oI India (LIC), General Insurance Corporation Ltd.,
National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance
Corporation and United India Insurance Company UTI-I holds a special position in the Indian
capital markets and has promoted many leading Iinancial institutions in the country. The bank
changed its name to Axis Bank in April 007 to avoid conIusion with other unrelated entities
with similar name. AIter the Retirement oI Mr. P. J. Nayak, Shikha Sharma was named as the
bank's managing director and CEO on 0 April 009.
The Bank today is capitalized to the extent oI Rs. 406.94 crores with the public holding (other
than promoters and GDRs) at 4..



14

1.4 PRODUCTS OF AXIS BANK:

1. Banking and Saving Banking and Accounts
3. Convenience banking 4 Credit cards
. NRI services 6 DEMAT
7. Deposit corporate and
Institutional corporate Iinance
. Investment banking 9 Treasury
10. LiIe Insurance 11 Mutual Funds
1. Gold 13 Share Trading
14. Loans and Borrowings 1 Car Finance
16. Commercial Loans 17 Home Loans
1. Personal Loans 19 Loans against Property
0. Agriculture Loan

1.4.1 Branch Network
The Bank's Registered OIIice is at Ahmadabad and its Central OIIice is located at Mumbai.
At the end oI September 010, The Bank has a very wide network oI more than 11
branches and Extension Counters (as on 31st December, 010). The Bank has a network oI
over 670 ATMs (as on 31st March, 011). The Bank has loans now (as oI June 007)
account Ior as much as 70 per cent oI the bank`s total loan book oI Rs ,00,000 crore.

1.4.2 Risk and Earning Perspective
From a medium-term perspective, it appears that Axis Bank could be charting out a niche Ior
itselI in the private bank space. It appears to be Iollowing a business strategy quite diIIerent Irom
the high-volume and commodity-style approach oI ICICI Bank and HDFC Bank. That strategy
also has its pluses in terms oI the higher margins in some segments oI the retail business and the
in-built credit risk diversiIication (and mitigation) achieved through a widely dispersed retail
credit portIolio.
The Bank has strengths in both retail and corporate banking and is committed to adopting the
best industry practices internationally in order to achieve excellence.



1

1.5 HISTORY OF AXIS BANK

1993: The bank was incorporated on 3
rd
December and CertiIication oI business on 14
th

December. The bank transacts banking business oI all description. The bank was the Iirst
private sector bank to get a license under the new guidelines issued by the RBI.
1997: The bank obtained license to act as Depository Participant with NSDL and
applied Ior registration with SEBI to act as Trustee to Debenture Holders`.
1998: The bank has branches in urban and semi urban areas as on 31
st
July. All the
branches are Iully computerized and networked through VSAT. ATMs services are
available in 7 branches.
1999: UTI Bank and CITI Bank have launched an International co-branded credit card.
2000: The bank has announced the launch oI Tele-Depository Services Ior its depository
clients.
2001: UTI bank launched a private placement oI non-convertible debentures to rise up to
Rs 7 crores. UTI has opened two oIIsite ATMs and one extension counter with an ATM
in Mangalore.
2002: UTI bank has inIormed that Shri J M Trivedi has been appointed as an alternate
director to Shri Donald Peck with eIIect Irom November , 00.
2003: UTI has opened a branch at Nellore.
2004: Comes out with Rs. 00 mn Unsecured Redeemable Non-Convertible Debenture
Issue and also opens new branch in Udupi-UTI bank and a website oIIering money
transIer services.
2005: UTI bank enters into a banc assurance partnership with Bajaj Allianz General Ior
selling general insurance products through its branch network.
2006: Sets up branch in Jaipur UTI bank unveils priority banking lounge.
2007: UTI has inIormed that consequent upon handing over charge as Administrator oI
the SpeciIied undertaking oI the UTI oI India,the nominee director oI SUUTI has
16

resigned as a Director oI bank. And company`s name has been changed from UTI
BANK TO AXIS BANK.
2008: Axis bank launches platinum credit card, India`s Iirst EMV CHIP based card and it
set up its branch at ILANJI at meenakshi nagar.
2009: SHIKHA SHARMA was appointed as CEO and has set up a new branch at
perumbavoor.The bank has a network oI 3 branches and 36 ATMs across the
country. It also entered into strategic alliance with Motilal Oswal, in order to Iacilitate the
online trading Ior bank customers.
2010: AXIS bank received Iinal clearance Irom the SEBI to begin its mutual Iund
operations and will launch debt and equity schemes. It also opened new branch at
IRINJALAKUDA while it has a network oI 9 branches and 3,06 ATMs across the
country.

1.6 BOARD OF DIRECTORS
During the year, some changes in the Board oI Directors have taken place. Dr. P. J. Nayak,
Iormer Chairman and CEO oI the Bank retired with eIIect Irom 0 April 009. Shri A. T. Pannir
Selvam, nominee Director oI the SpeciIied Undertaking oI the Unit Trust oI India (SUUTI)
passed away on 1 April 009. Shri Ramesh Ramanathan, Independent Director resigned with
eIIect Irom 14 July 009. Five new Directors have been inducted in the Board during the year.
Smt. Shikha Sharma was appointed as Managing Director and CEO oI the Bank with eIIect Irom
1 June 009. RBI gave its approval Ior the appointment oI Shri M. M. Agrawal, Iormer
Executive Director (Corporate Banking) oI the Bank as Deputy Managing Director with eIIect
Irom 10 February 010. Shri V. R. Kaundinya, Managing Director, Advanta India Ltd. was
appointed as an Additional Independent Director with eIIect Irom 1 October 009. Dr. Adarsh
Kishore, Iormer Finance Secretary, Government oI India and Iormer Executive Director,
International Monetary Fund and nominee oI the SpeciIied Undertaking oI the Unit Trust oI
India (SUUTI) was appointed as an Additional Director with eIIect Irom 1 January 010. RBI
gave its approval Ior the appointment oI Dr. Adarsh Kishore as a non-executive Chairman oI the
Bank with eIIect Irom March 010. Shri S. B. Mathur, Iormer Chairman oI LIC and the
National Stock Exchange oI India was appointed as an Additional Independent Director with
eIIect Irom 1 January 010.
17


1.7 VISION 2015 & CORE VALUES
Vision 2015:
'To be the preIerred Iinancial solutions provider excelling in customer delivery through
insight, empowered employees and smart use oI technology.
Core Values:
Customer centricity
Ethics
Transparency
Teamwork
Ownership
PRICE CHARGED BY AXIS BANK:

The pricing decisions or the decisions related to interest and Iee or commission charged by
banks are Iound instrumental in motivating or inIluencing the target market. The RBI and the
IBA are concerned with regulations. The rate oI interest is regulated by the RBI and other
charges are controlled by IBA.

PROCESS:

1-Standardization: Bank has got standardized procedures got typical transactions. In Iact
not only all the branches oI a single-bank, but all the banks have some standardization in
them. This is because oI the rules they are subject to. Besides this, each oI the banks has its
standard Iorms, documentations etc. Standardization saves a lot oI time behind individual
transaction.

2-Customization: There are specialty counters at each branch to deal with customers oI a
particular scheme. Besides this the customers can select their deposit period among the
available alternatives.

3-Number of steps: numbers oI steps are usually speciIied and a speciIic pattern is
Iollowed to minimize time taken.
1


4-Simplicity: Banks various Iunctions 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 Iurther.

5-Customer involvement: ATM does not involve any bank employees. Besides, during
usual bank transactions, there is deIinite customer involvement at some or the other place
because oI the money matters and signature requires


TECHNOLOGY:
AXIS Bank operates in a highly automated environment in terms oI inIormation technology and
communication systems. All the bank's branches have online connectivity, which enables the
bank to oIIer speedy Iunds transIer Iacilities to its customers. Multi-branch access is also
provided to retail customers through the branch network and Automated Teller Machines
(ATMs). The Bank has made substantial eIIorts and investments in acquiring the best technology
available internationally, to build the inIrastructure Ior a world class bank. The Bank's business
is supported by scalable and robust systems which ensure that our clients always get the Iinest
services we oIIer.
The Bank has prioritized its engagement in technology and the internet as one oI its key goals
and has already made signiIicant progress in web-enabling its core businesses. In each oI its
businesses, the Bank has succeeded in leveraging its market position, expertise and technology to
create a competitive advantage and build market share.







19

1.8 Business Overview



1 Placement / Syndication and Project Advisory
The Bank arranged debt aggregating `3,0 crores during FY11. The Bank was assessed by
Prime Database as the No.1 Debt Arranger Ior the period April 010 to December 010 and also
by Bloomberg Underwriter league table Ior the calendar year 010. The Bank was awarded the
'Best Domestic Bank in India and 'Best Domestic Bond House in India at the Asset Triple A
Country Awards 010. It was also awarded the 'Best Domestic Debt House in India 010 by
Asia Money and 'Best Bond House in India 010 by Finance Asia.


Retail Business
The number oI Savings Bank accounts grew Irom 1. lacs as on 31st March 010 to 93.94 lacs
as on 31st March 011. Retail advances grew Irom `0,1 crores as on 31st March 010 to
`7,79 crores as on 31st March 011, a growth oI 33 YOY. Retail advances accounted Ior
19.49 oI the total advances oI the Bank as on 31st March 011. The Bank's International Debit
Card base has risen to 10 million debit cards as on 31st March 011, compared to .6 million
debit cards as on 31st March 010. The Bank had over 6.3 lac credit cards in Iorce and an
installed base oI over 1. lac Electronic Data Capture (EDC) machines as on 31st March 011.
The Bank oIIers personal investment products including liIe insurance products, general
insurance products, online trading accounts and mutual Iunds oI leading manuIacturers as also
wealth advisory services and Mohur - gold coins and bars - through select branches.





0

3 International Business
The Bank has six international oIIices - branches at Singapore, Hong Kong and Dubai (at the
DIFC) and representative oIIices at Shanghai, Dubai and Abu Dhabi- with Iocus on corporate
lending, trade Iinance, syndication, investment banking, risk management and liability
businesses. The total assets under overseas operations amounted to USD 4.99 billion as on 31st
March 011 which represents a growth oI 61 over the previous year.
Axis UK Limited was incorporated as a subsidiary on 7th March 011.


4 Capital and Shareholders` Funds
The Shareholders` Fund oI the Bank was `1,999 crores as on 31st March 011, as compared to
`16,044 crores as on 31st March 010, a growth oI 1 YOY. The Capital Adequacy Ratio Ior
the Bank was 1.6, as on 31st March 011, as compared to 1.0 as on 31st March 010.
The Tier-I capital was 9.41 as on 31st March 011, as compared to 11.1 as on 31st March
010.

Dividend
The Board oI Directors have proposed a dividend oI `14 per share.


6 Update on Proposed Acquisition of Enam`s Demerged Businesses
The Board oI Directors oI the Bank and its wholly-owned subsidiary, Axis Securities & Sales
Limited (ASSL), in their meetings held on the 17th November 010, had approved a proposal to
acquire certain demerged businesses oI Enam Securities Private Limited. The proposed
acquisition is subject to requisite approvals. In a letter dated 1th April, 011, the Reserve Bank
oI India (RBI) has conveyed an in principle approval. The RBI has also required the IulIilment oI
certain conditions, including a revised scheme oI accounting and the eventual structure Ior the
business proposed to be acquired. Other terms oI RBI`s in-principle approval include the
stipulation that no shareholder oI Enam Securities
Private Limited acquiring shares oI Axis Bank under the Scheme oI Arrangement would be
eligible Ior being a Director on the Board oI the Bank. The Board had decided at its meeting on
17th January, 011 to explore ways oI working with Mr. Vallabh Bhanshali to access his
expertise as opposed to a Board position. The Bank is in the process oI examining the
implications oI the conditions laid down by RBI and is reviewing the Scheme oI Arrangement in
order to proceed with the completion oI the transaction.








1

1.9 Organizational Chart



Managing Director



























Sales Executive




Director
Executive Director
Top Level
Retail and Branch Banking Head
Regional Head National Head
Middle
Level Zonal Head Zonal Head
Cluster Head Area Sales Manager
Regional Sales Manager Branch Manager
Personal Banker Authorize Sales Manager
Lower
Level
Personal Banker
Team Leader


1.10 Growth Chart - past and projections for
future

The net interest income (NII) oI Axis Bank, over the last 10 years, has rocketed by 4. CAGR
Irom Rs. 9 Cr. in FY01 to Rs. Rs. 004 Cr. in FY10; and its total income has grown by
34.9CAGR. During the same period its book value and EPS have jumped by 37 and
resp.
The bank has maintained its net proIit to total Iund ratios between 1 and 1. during FY0 to
FY0, whereas in the last two Iinancial years, this ratio has been above 1.. This increasing
trend oI net proIit to total Iund ratio shows that it has continuously increased its eIIiciency oI
utilizing Iunds. The non-perIorming assets (NPA) to net advances ratio has also shown a
decreasing trend Irom 3.46 in FY0 to 0.4 in FY10 which shows the bank has continuously
increased its assets quality. It has also maintained a very good capital adequacy ratio (CAR) oI
1. at the end oI FY10, well above the RBI guide line oI 9, which indicates that it can easily
cover all the associated risks.
ence, the 10 YEAR X-RAY of Axis Bank is Green (Very Good).


Axis Bank`s target for FY11: -

Business growth (Advances Deposits) oI
Opening 00-0 new branches and 1000 new ATMs.


3

Axis Bank has reported a strong performance in December, 2010
quarter:

It has shown a 36 jump in the Net ProIit at Rs. 91.36 Cr. and a rise in the Net Interest
Income to Rs. 1733.1 Cr. on the back oI robust 46 credit growth.
The other income oI the Bank inched up by 16 to Rs. 1147.71 Cr. mainly on the back oI
1 jump in the Iee income at Rs. 96 Cr.
CAR has decreased to 1.46 in Q3 FY11, compared to 16. in the same quarter last year
Its Net Interest Margin (NIM) stood at 3.1 during Q3 FY11, compared to 4 during
QFY10 (much higher than the industry standard oI -.)
The net NPAs oI Axis Bank stood at 0.9 in Q3 FY11, which is amongst the lowest in the
banking industry; the provision coverage ratio stood at .69, much higher than the regulatory
requirement oI 70

Advances of the Bank have reported a strong growth of 46 on y-o-y basis and 12 on q-
o-q basis to Rs. 123547 Cr. in the December 2010 quarter. The growth in the advances was
driven by 69 jump in the corporate segments at Rs. 701 Cr. and 33 rise in the retail
segment at Rs. 04 Cr. Agri & microIinance loan book grew by 4 to Rs. 1077 Cr. and
SME by 9 to Rs. 1703 Cr. Exposure to the MicroIinance institutions is around 1 oI advance
book and that oI telecom (mainly G license advances) constitutes 6 oI total advance book.
For the nine months ended December 010, Axis Bank has reported 37 rise in the NII at Rs
461.99 Cr., 19 in Iee-based income at Rs. 9 Cr., and 6 in the other income at Rs 311.73
Cr. compared to that oI corresponding quarter last year respectively. In FY11, so Iar, it has
opened 14 branches and 1010 ATMs. Thus, the bank is on line to achieve its target Ior FY11.
4


Increasing cost of funds is a cause for concern:
The RBI has increased the Repo rate, Reverse repo rate, and CRR in the last one and a halI year
in several phases to control inIlation. This has lead to lower loanable Iund availability in the
bank and continuous increase in cost oI Iunds, which can be seen in the chart. As, the inIlation
rate is still on the higher side, tight monetary policy is expected to continue in the short-term. So,
we expect that the cost oI Iunds will also increase Iurther in the short-term, which will keep
margins under pressure.
RBI, recently, has increased provisioning percentage on housing, real estate, and many other
types oI loans. This will aIIect the proIitability oI the bank because, in the retail segment, it
Iinances almost 70 advances in housing.
Considering above factors, we expect that the short-term future prospects of Axis Bank wiII
be Orange ('somewhat good')

Strength of Axis Bank:
It is India`s third largest private bank, with 11 branches and 303 ATMs, and a
customer base oI over 10 Lakh as on 31st Dec, 010
It has the largest EDC network, the third largest ATM network, and the fourth largest
base of debit cards in India.
It already has branches in Singapore, Hong Kong and Dubai International Financial Centre.
About 14 oI the bank`s asset book is Irom international operations. It is Iurther going to set up
a subsidiary in London and upgrade its representative office in Shanghai to a branch.
100 core banking Iacilities with advanced technology
On-line trading Iacilities in alliance with Geojit BNP Paribas
In Jan 011, Axis Bank, , announced the launch of Axis Direct, an online trading platform a
product oI its wholly-owned subsidiary, Axis Securities and Sales Ltd. Axis Direct will oIIer
trading in cash, derivatives, IPO segments through NSE and BSE; and provide well-researched
inIormation about various corporate, access to independent third-party research, stock research
and analysis tools.




Axis Bank has maintained a very good Current Account Savings Account (CASA) ratio, above
40% in the Iast three years, which is higher than the industry standard of 35-40%. CASA pIays
a very significant roIe in keeping cost of funds Iow and margins high. OnIy four other banks -
SBI, PNB, C Bank, and ICICI Bank - have more that 40% CASA ratio.


Product strategy designed to benefit customers:
To beat the market, Axis Bank is adopting diIIerent product strategies. Recently, it has extended
the repayment period oI the standard home loan to the maximum tenure oI years. In the step
down product (a type oI home loan product), the customer has to pay a higher EMI when the
combined Iamily income is higher and a lower EMI when the Iamily income has reduced over a
period oI time. Apart Irom this, the Bank has given option to its customers to close the loan
beIore its maturity with no prepayment penalty.
Banking Sector - eading towards a high-performing sector:
The banking sector is poised to grow in line with the growth oI the economy. The Indian
economy is expected to have a high growth in the long-term and so is the Indian banking sector,
which is currently in consolidation stage. According to Mckinsey Report on India Banking 010,
The banking index has grown at a compounded annual rate oI over 1 since April 001 as
compared to a 7 growth in the market index Ior the same period (001 to 010)`. The report
says that the Indian banking sector is heading towards a high-perIorming sector. Axis Bank,
being the third largest private bank in India, is ready to take Iull advantage oI this growth
opportunity.
inanciaI IncIusion Program:
Under Financial Inclusion Program, RBI is taking initiative to provide banking services at
aIIordable costs to the weaker sections oI society or the unbanked segment, which does not have
any access to the Iormal banking system. As oI now, it is estimated that 60 oI the Indian
population does not have access to Iormal banking Iacility and RBI is keen on achieving 100
Iinancial inclusion Ior sustaining equitable growth.

6

Axis Bank is taking following initiatives under this Program:
4 %argets to cover 12,000 viIIages in the next 5 years: Axis Bank plans to cover ,00
villages Ior Iinancial inclusion by March 011 and scale it up to 1,000 villages in Iive years
time. It is looking at opening 1-lakh no-Irills accounts, Rs. 40 Cr. oI deposits, and Rs. 10 Cr. oI
advances. The 1-lakh account would include 1-lakh accounts that they have already opened Ior
government-sponsored scheme. The bank is looking at several low-cost delivery models such as
smart card, mobile banking and point oI transaction device.

4 %ie up with JanaIakshmi SociaI Services to tap urban poor: To tap unbanked population
in urban areas, Axis Bank has tied up with a Bangalore-based microIinance institution,
Janalakshmi Social Services. Janalakshmi will use its client base to provide banking services oI
Axis Bank and will work as business correspondent to sell other products oI the Bank. This
service would be spread Irom Bangalore to 0 other cities in the near Iuture.

4 MoU with Idea to test a BranchIess Banking ModeI:
Axis Bank has signed a Memorandum oI Understanding with Idea Cellular to test a Branchless
Banking` model through a mobile enabled remittance pilot. Idea will act as a Business
Correspondent` oI Axis Bank to provide an entire range oI Iinancial products and services
oIIered by the Bank, through the mobile operator`s retail outlets. Idea`s network will help Axis
Bank gain access to widespread distribution reach and a low-cost delivery channel Ior oIIering
Iinancial products and services, based on the mobile platIorm. On the other hand, Idea can oIIer
value-added services to its customers by oIIering Iinancial products and services.

There is still a question mark on the viability oI Financial Inclusion Program which primarily
targets the low-income group. This leaves little scope oI high margins under this program.
However, this initiative is expected to help in economic development, and hence is expected to
be IruitIul in the long-term.

iversified into non-banking financiaI services:
Axis Bank has started non-banking Iinancial services to carry out investment and lending
activities with a Iocus on inIrastructure and other activities. It has Iive wholly-owned
subsidiaries:
1. Axis Securities and Sales Ltd. To market credit cards , retail asset products and online
trading Iacilities
2. Axis Private EqUity Ltd. To manage equity investments & provide venture capital to
support businesses
3. Axis Trustee Services Ltd. To engage in trusteeship activities
4. Axis Asset Management Companies Ltd. To carry on the activities oI managing mutual
Iund business
5. Axis Mutual Fund Trustee Ltd. To act as the trustee Ior the mutual Iund business


7

Acquisition of Enam's investment banking business expected to fiII the gap in their portfoIio:

Axis Bank has acquired Enam`s investment banking and institutional broking businesses Ior R.s
,064 Cr. in a stock-swap deal. Pursuant to the scheme and in consideration Ior the proposed
demerger, Enam shareholders will receive .7 shares oI Axis Bank Ior every 1 share held in
Enam; translating into an approximately 3.37 shareholding in Axis Bank. While the acquisition
appears to be at a slight premium, it will help Axis Bank Iill a key gap in portIolio, increase Iee-
based income and bring signiIicant long-term beneIits. Also, as these businesses are proIit-
making and enjoy one oI the highest margins in the industry, they will contribute to Axis Bank`s
proIits and will be earnings accretive.
Low exposure in high-margin retail banking
New Bank License would hamper banks` profits: RBI is providing banking licenses to
selected NBFCs Irom 011. This would increase competition among banks which would
consequently hamper their proIits
RBI, in Bancon 2010 held in Mumbai, has indicated that Indian Banks should
operate at lower margin, in line with global standard. They should decrease lending rate
and increase savings rate to help in achieving double digit economic growth. RBI may also
increase Capital Adequacy Ratio benchmark Irom 013.
As the banks have mainly Iinancial assets, they have to manage several risks such as
credit risk, market risk, liquidity risk, country risk etc. So, banking business, as a whole, is
considered as risky business
Government regulation increases uncertainty in the banking sector: The Government
oI India Irequently changes monetary policies by changing CRR, repo rate, reverse repo rate
etc. to maintain stability in the economy. It increases uncertainty in the banking sector.

Considering the strong position that Axis Bank has estabIished for itseIf in the banking
industry and its recent acquisition of Enam, we can expect that the Iong-term future
prospects of Axis Bank wiII be Green (Very Good)


The economy is expected to grow roughly by -7 in the next years. The banking
sector is poised to grow in line with the growth oI the economy. Considering the bank`s
large size and its strengths, we can expect this economic growth to have a positive impact
on Axis Bank`s growth.







2. International Banking Operations of Axis Bank

International Banking is the extension oI credit by a bank headquartered in a particular
country to residents oI another country can occur via: (I) cross-border lending; (ii) local
lending by aIIiliates established in the Ioreign country; or (iii) lending booked by an aIIiliate
established in a third country (e.g. an international Iinancial centre). In addition, the BIS
international banking statistics on a residency basis include the extension oI credit by a bank
headquartered in a particular country to residents oI the same country but in a Ioreign
currency. The underlying Iinancial instruments could be loans, deposits or securities as well
as derivatives contracts and contingent Iacilities.


WHY IS IT NECCESARY?
International banking transactions is mainly taken Ior 3 reasons:
1. To make the payment Ior the imports oI goods and services to another
countries.
. To receive the payment Ior the export oI goods and services Irom
another countries
3. And Ior other remittances.

2.1 Introduction to Exports:

Export oI Goods and Services Irom India is allowed in terms oI clause (a) of sub-section (1) and
sub-section (3) of Section 7 of the Foreign Exchange Management Act 1999 (42 of 1999), As per
the Customs Act, 1962, Export means taking out oI India to a place outside India. The Foreign Trade
Policy regulates export oI goods. For the purpose oI exports, goods have been divided into Iollowing
categories. Prohibited Goods are not permitted to be exported. Restricted Goods can be permitted Ior
export under license or subject to compliance oI stipulated procedures .An exporter has to obtain an
Import Export Code (IEC) number Irom the oIIice oI DGFT prior to Iiling oI shipping bill Ior
clearance oI export goods.


Export Procedures and Documents

The export documentation involves the preparation oI the speciIied number oI copies oI the
prescribed documents pertaining to the diIIerent procedures.

Preliminaries:
9


Some preliminary steps have to be taken beIore an export transaction begins.

1. IEC Number: The IEC Number is normally allotted by the regional licensing authorities.
2. Membership-cum-Registration: Members oI EPC receive diIIerent kinds oI assistance and
services in respect oI the export business.
3. Inquiry and Offer: An inquiry is a request Irom a perspective importer to be inIormed oI the
terms and conditions oI sale. And the oIIer made by the exporter is usually in the Iorm oI a
proIorma invoice. This is an invoice sent in advance to the buyer beIore the shipment is made.
4. Confirmation of Order: Once the negotiations are completed and the terms and conditions
are acceptable to the buyer and seller, the buyer may place an order with the exporter. The
exporter should immediately conIirm the order by sending his acceptance.
5. Export License: The exports oI some goods are banned and oI some items controlled by
means oI licenses, though many items are permitted to be exported Ireely.
6. Finance: II the exporter requires pre-shipment Iinancial assistance, he should take the
necessary steps to obtain it.
7. Production: Once the order is conIirmed, the exporter should take necessary steps to ensure
the timely availability oI the goods oI the speciIications required and execute the export order
promptly.
8. Shipping Space: As soon as the export order is conIirmed, the exporter should contract the
shipping companies.
9. Packing and Marking: Once the goods are ready, they are packed and marked properly.
10. Quality Control: Goods should be exported only aIter ensuring that they are oI proper
quality.
11. Excise Clearance: As a matter oI policy, the government has granted excise duty exemption
Ior export products.
12. Customs Formalities: Goods may be shipped out oI India only aIter Customs clearance has
been obtained.
Exporters should present the Iollowing documents to the customs authorities:
- Shipping Bill
- Declaration regarding truth oI statement made in the shipping bill.
- Invoice
30

- GR Form
- Export License
- Quality Control Inspection CertiIicate
- Contract Registration CertiIicate
- Letter oI Credit ( wherever applicable)
- Packing List
- AR-4 Form
Any other documents
13. Exchange Control Formalities: An exporter, who has sent goods outside the country, has
the obligation to satisIy the Reserve Bank oI India that he has received payment Irom his
overseas buyer.
14. Insurance: The goods that are exported may be subject to certain maritime perils. The risks
oI such perils may be covered under certain marine insurance. For instance, under the CIF
terms, insurance is the responsibility oI the exporter.
15. Shipping the Goods: Goods may be exported to Ioreign markets by sea, air, post, land and
river.
16. Negotiation of Documents: AIter shipping the Goods, the exporter should arrange to obtain
payment Ior the exports by negotiation the relevant documents through the bank.
17. Export Incentives: II the exporter is entitled to any export incentives, he should take the
necessary steps to realize it.



Export Documents
It may include 16 commercial documents and 9 regulatory documents.
The commercial documents are those which, by customs oI trade, are required Ior aIIecting
physical transIer oI goods and their title Irom the exporter to the importer and the realization oI
export sale proceeds. It may be classiIied into principal documents and auxiliary documents.
Principal Export Documents

Commercial Invoice
31

Packing List
Bill oI Lading
Combined Transport Document
CertiIicate oI Inspection
Insurance CertiIicate
CertiIicate oI Origin
Bills oI Exchange and shipping advice


Auxiliary Documents

ProIorma Invoice
Intimation Ior Inspection
Shipping Instructions
Insurance Declaration
Shipping Order
Mate Receipt
Application Ior CertiIicate oI Origin
Negotiation oI Documents
The Regulatory Documents are those which have been prescribed by diIIerent Government
departments/bodies, such as:

- Gate Pass 1/ Gate Pass
- AR4/AR4A Form
- Shipping Bill
- Export Application
- Receipt Ior payment oI Port charges
- Vehicle Ticket
- Exchange Control Declaration
- Freight Payment CertiIicate
- Insurance Premium Payment CertiIicate

3

Important Documents:
Invoice: An invoice is the seller`s bill Ior merchandise and contains particulars oI goods,
such as the price per unit at a particular location, quantity, total value etc.
Packing list: The packing list is a consolidated statement oI the contents oI a number oI
packs.

Certificate of Origin: It is a certiIicate which speciIies the country oI the production oI the
goods.

Shipping Bill: It is the main document on the basis oI which the Customs` permission Ior
export is given.

Bill of Lading: It is also a document oI title to the goods and, as such, is Ireely transIerable
by endorsement and delivery.

Letter of Credit: It is a document containing the guarantee oI a bank to honour draIts drawn
on it by an exporter, under certain conditions and up to certain amounts, provided that the
beneIiciary IulIils the stipulated conditions.

Bill of Exchange: An instrument in writing containing an unconditional order, signed by the
maker, directing a certain person to pay a certain sum oI money only to a certain person.

Certificate of Inspection: It is a certiIicate issued by the Export Inspection Agency,
certiIying that the consignment has been inspected as required under the Export and satisIies
the conditions relating to quality control.




2.2 Schedule
(Refer to Regulation 3)

Form GR: To be completed in duplicate Ior export otherwise than by Post including export oI
soItware in physical Iorm i.e. magnetic tapes/discs and paper media.

Form SDF: To be completed in duplicate and appended to the shipping bill, Ior exports declared
to Customs OIIices notiIied by the Central Government which have introduced Electronic Data
Interchange (EDI) system Ior processing shipping bills notiIied by the Central Government.

Form PP: To be completed in duplicate Ior export by Post.

Form SOFTEX: To be completed in triplicate Ior declaration oI export oI soItware otherwise
than in physical Iorm, i.e. magnetic tapes/discs, and paper media.
33



2.3 Introduction to Imports

Import oI Goods and Services into India is being allowed in terms oI Section 5 of the Foreign
Exchange Management Act 1999 (42 of 1999), Import means commodities bought Irom
Ioreign countries, To bring or carry in Irom an outside source, especially to bring in (goods or
materials) Irom a Ioreign country Ior trade or sale.

Import trade is regulated by the Directorate General of Foreign Trade (DGFT) under the
Ministry of Commerce & Industry, Department of Commerce, and Government of India.
Authorized Dealer Category I (AD Category I) banks should ensure that the imports into
India are in conIormity with the Foreign Trade Policy in Iorce and Foreign Exchange
Management (Current Account Transactions) Rules.




2.3.1 General Guidelines for imports


1. General Guidelines
Rules and regulations to be Iollowed by the AD Category I banks Irom the Ioreign exchange
angle while undertaking import payment transactions on behalI oI their clients are set out in the
Iollowing paragraphs. Where speciIic regulations do not exist, AD Category I banks may be
governed by normal trade practices. AD Category I banks may particularly note to adhere to
"Know Your Customer" (KYC) guidelines issued by Reserve Bank (Department oI Banking
Operations & Development) in all their dealings.
2. Form A-1
Applications by persons, Iirms and companies Ior making payments, exceeding USD 00 or its
equivalent, towards imports into India must be made in Form A-1.
3. Import Licenses
34

Except Ior goods included in the negative list which require license under the Foreign Trade
Policy in Iorce, AD Category - I banks may Ireely open letters oI credit and allow remittances Ior
import. While opening letters oI credit, the For Exchange Control purposes` copy oI the license
should be called Ior and special conditions, iI any, attached to such licenses should be adhered
to. AIter eIIecting remittances under the license, AD Category - I banks may preserve the copies
oI utilized license /s till they are veriIied by the internal auditors or inspectors.

4. Obligation of Purchaser of Foreign Exchange
(i) In terms oI Section 10(6) oI the Foreign Exchange Management Act, 1999 (FEMA), any
person acquiring Ioreign exchange is permitted to use it either Ior the purpose mentioned in the
declaration made by him to an Authorized Dealer Category I bank under Section 10() oI the
Act or to use it Ior any other purpose Ior which acquisition oI Ioreign exchange is permissible
under the said Act or Rules or Regulations Iramed there under.

(ii) Where Ioreign exchange acquired has been utilised Ior import oI goods into India, the AD
Category I bank should ensure that the importer Iurnishes evidence oI import viz., Exchange
Control copy oI the Bill oI Entry.


2.3.2Evidence of Import

Physical Imports
In case oI all imports, where value oI Ioreign exchange remitted/ paid Ior import into
India exceeds USD 100,000 or its equivalent, it is obligatory on the part oI the AD
Category I bank through whom the relative remittance was made, to ensure that the
importer submits.
n respect of imports on D/A basis, AD Category bank should insist on
production of evidence of import at the time of effecting remittance of import bill
However, if importers fail to produce documentary evidence due to genuine
reasons such as non-arrival of consignment, delay in delivery/ customs clearance
of consignment, etc, AD bank may, if satisfied with the genuineness of request,
3

allow reasonable time, not exceeding three months from the date of remittance,
to the importer to submit the evidence of import
The Exchange Control copy of the Bill of Entry for home consumption
The Exchange Control copy of the Bill of Entry for warehousing, in case of 100%
Export Oriented Units, or
Customs Assessment Certificate or Postal Appraisal Form, as declared by the
importer to the Customs Authorities

Issue of acknowledgement
AD Category I bank should acknowledge receipt oI evidence oI import e.g. Exchange Control
copy oI the Bill oI Entry, Postal Appraisal Form or Customs Assessment CertiIicate, etc., Irom
importers by issuing acknowledgement slips containing all relevant particulars relating to the
import transactions.



2.3.3 Documentation for Import
Introduction
An essential Ieature oI all import sales transactions is import documentation. There are various
categories oI documents required in international trade transactions. This section lists the basic
documentation required Ior an import shipment. Not all the documents listed below are required
Ior every import transaction; many oI them are applicable to speciIic products or circumstances.
Enquiry Documents
Costing sheet: It may include address, date, commodity, unit, weight, exchange rate, special
labeling and packaging, packing, marking, shipping Iee, agent`s commission.
Quotation/offer to the importer
36

Pro-forma invoice: AIter receiving a quotation Irom the exporter, the importer may
request a pro-Iorma invoice. This is a preliminary invoice and is prepared prior to
shipment or even beIore a Iirm order has been received. The purpose is to enable the
importer to obtain an import license (iI required) or a letter oI credit prior to entering into
the contract oI sale.
Instruction Documents
Forwarder's instruction: Most Ireight Iorwarders have a printed Iorwarder's instruction Iorm,
but the required inIormation may also be printed on the exporter`s company letterhead.
InIormation required includes instructions Ior booking oI cargo, inIormation Ior completing
transport documents, description oI goods as per the letter oI credit etc.
Shipping instruction: Where a shipping company has a computerized bill oI lading system, it
provides pre-printed shipping instruction Iorms which must be completed by the exporter/Ireight
Iorwarder. The bill oI lading is drawn up Irom the inIormation provided on this Iorm.
Bank instruction: When the exporter is selling on the basis oI a letter oI credit, the instructions
stipulated in the letter oI credit must be Iollowed. However, iI selling on the basis oI sight or
usance draIt under documentary collection, bank instructions must be generated to secure
payment Ior the goods. InIormation supplied would include description oI cargo, name oI vessel,
date oI shipment etc; a detailed list oI all documents submitted; payment method etc.
Transport Documents
1. Bills of lading: The bill oI lading is a contract oI carriage and has three Iunctions:
It deIines in detail, the terms oI the contract between the shipper and the shipping line
Ior the carriage oI goods Irom one speciIied port to another.
ii) It is a Iormal, signed receipt Ior a speciIied number oI packs e.g. crates, drums etc.
which is given to the shipper by the shipping line when the shipping line receives the
consignment. (It should be noted that the shipping line denies all knowledge oI
quantity, quality, value or condition oI the contents oI the packs.)
37

iii) It is a document oI title (i.e. a certiIicate oI ownership) to the goods. As such, it must
be produced at the port oI Iinal destination by the consignee in order to claim the
goods.



Air waybill: This transport document serves as:
1. Documentary evidence oI the conclusion oI a contract oI carriage
. ProoI oI receipt oI the goods Ior shipment
3. An invoice Ior the Ireight
4. A certiIicate oI insurance
. Guide to airline staII Ior the handling, dispatch and delivery oI the consignment.
6. The document consists oI three originals and nine copies and is only issued in a
non-negotiable Iorm. The Iirst original is intended Ior the carrier and is signed by
the shipper; the second original, the consignee's copy, is signed by the shipper and
accompanies the goods; the third original is signed by the carrier and is handed to
the shipper as a receipt Ior the goods aIter they have been accepted Ior carriage.
The copies are dispatched by the airline authorities as required to on-carriers,
airport authorities, etc or they serve as delivery receipts, invoices etc.

. Rail waybills:
Spoornet Combined Consignment Note and Truck Label (c.c.t.): This is the oIIicial
transport document in respect oI carriage oI bulk cargo by rail
Spoornet Freight Transit Order (f.t.o.): This is the oIIicial transport document in
respect oI carriage oI containers by rail. The I.t.o. consists oI Iive identical tear-oII pages
comprising a pricing copy, a checking copy, a receiver's copy, a delivery note and a
sender's receipt.The c.c.t. and I.t.o. documents apply to transport within the borders oI
3

South AIrica and serve both as evidence oI the contract oI carriage and as a receipt oI
goods.
3. Road waybill
There is no standard transport document Ior road haulage. Road hauliers usually design
their own waybills which serve as evidence oI a contract oI carriage and as receipts Ior
consignment oI goods.
Insurance Documents
Marine insurance policy document
Certificate of insurance
Customs Documents
The Department oI Customs and Excise requires the Iollowing documents to clear imports:
Bill of Lading/Air Waybill/ Road Hauliers Certificate
Commercial Invoice
Customs Worksheet


2.4 Bill of Entry (DA500)
A certificate of origin (DA59) is required Ior imports oI certain strategic commodities or
imports oI goods involved in anti-dumping charges (e.g.: shoes Irom Hong Kong, T-shirts Irom
China)
Exchange Control Documents
Payment Documents
39

Transport documents
Marine insurance documents
Draft (bill of exchange)
Pro-forma invoice Inspection certificates
Commercial invoice (c/i): This should be virtually the same as the pro-Iorma invoice and should
contain all the Iinal and accurate details relating to a particular order. The import license number
and the l/c number should all be stated on the commercial invoice. Also the price and the
delivery term should be consistent with the sales contract.
Certificate of origin (c/o) iI it is a required document
Packing declaration: The packing list indicates the number oI packs involved the contents oI
each pack and the individual weights, dimensions. This list enables the customer to check that
the correct number oI units has been received. Customs authorities can also easily identiIy a
speciIic pack they wish to inspect.

Inspection certificate
Quality certificate
Dangerous Goods Documentary Requirements
There are a number oI special shipping instruction Iorms and transport documents that are
required in respect oI dangerous goods. Special documentation is usually required Ior all
shipments oI dangerous goods, regardless oI the mode oI transport used. There are 3 standard
ways of payment methods in the export import trade international trade market:
40

1. Clean Payments
In clean payment method, all shipping documents, including title documents are handled
directly between the trading partners. The role oI banks is limited to clearing amounts as
required. There are basically two types oI clean payments:
Advance Payment
In advance payment method the exporter is trusted to ship the goods aIter receiving
payment Irom the importer.
Open Account
In open account method the importer is trusted to pay the exporter aIter receipt oI goods.
The main drawback oI open account method is that exporter assumes all the risks while
the importer get the advantage over the delay use oI company's cash resources and is also
not responsible Ior the risk associated with goods.
. Payment Collection oI Bills in International Trade
The Payment Collection oI Bills also called 'UniIorm Rules Ior Collections is published
by International Chamber oI Commerce (ICC) under the document number
(URC) and is Iollowed by more than 90 oI the world's banks.
In this method oI payment in international trade the exporter entrusts the handling oI
commercial and oIten Iinancial documents to banks and gives the banks necessary
instructions concerning the release oI these documents to the Importer. It is considered to
be one oI the cost eIIective methods oI evidencing a transaction Ior buyers, where
documents are manipulated via the banking system.
There are two methods oI collections oI bill:
41

Documents Against Payment D/P
In this case documents are released to the importer only when the payment has been
done. D/P means payable at sight (on demand). The collecting bank hands over the
shipping documents including the document oI title (bill oI lading) only when the
importer has paid the bill.
Documents Against Acceptance D/A
In this case documents are released to the importer only against acceptance oI a draIt. The
Exporter allows credit to Importer, the period oI credit is reIerred to as Usance, The
importer/ drawee is required to accept the bill to make a signed promise to pay the bill at
a set date in the Iuture.
3. Letter of Credit L/c
Letter oI Credit also known as Documentary Credit is a written undertaking by the
importers bank known as the issuing bank on behalI oI its customer, the importer
(applicant), promising to eIIect payment in Iavor oI the exporter (beneIiciary) up to a
stated sum oI money, within a prescribed time limit and against stipulated documents. It
is published by the International Chamber oI Commerce under the provision oI UniIorm
Custom and Practices (UCP) brochure number 00. (Discussed below in detailed)


2.5 Letter of Credit

L/C provides complete Iinancial security to the seller oI the goods. A letter oI credit reinIorces
the buyer`s integrity by adding to it his banker`s undertaking. It is a signed instrument
embodying an undertaking by the banker oI a buyer to pay his seller a certain sum oI money on
presentation oI stipulated document. It is a document containing the guarantee oI a bank to
honour draIts drawn on it by an exporter, under certain conditions and up to certain amounts,
provided that the beneIiciary IulIils the stipulated conditions.

4

2.5.1 Parties to Letters of Credit
O Applicant (Opener): Applicant which is also reIerred to as account party is normally a
buyer or customer oI the goods, who has to make payment to beneIiciary. LC is initiated
and issued at his request and on the basis oI his instructions.
O Issuing Bank (Opening Bank): The issuing bank is the one which create a letter oI
credit and takes the responsibility to make the payments on receipt oI the documents Irom
the beneIiciary or through their banker. The payments have to be made to the beneIiciary
within seven working days Irom the date oI receipt oI documents at their end, provided
the documents are in accordance with the terms and conditions oI the letter oI credit. II
the documents are discrepant one, the rejection thereoI to be communicated within seven
working days Irom the date oI receipt oI documents at their end.
O Beneficiary: BeneIiciary is normally stands Ior a seller oI the goods, who has to receive
payment Irom the applicant. A credit is issued in his Iavour to enable him or his agent to
obtain payment on surrender oI stipulated document and comply with the term and
conditions oI the L/C. II L/C is a transIerable one and he transIers the credit to another
party, then he is reIerred to as the Iirst or original beneIiciary.
O Advising Bank: An Advising Bank provides advice to the beneIiciary and takes the
responsibility Ior sending the documents to the issuing bank and is normally located in
the country oI the beneIiciary.
O Confirming Bank: ConIirming bank adds its guarantee to the credit opened by another
bank, thereby undertaking the responsibility oI payment/negotiation acceptance under the
credit, in additional to that oI the issuing bank. ConIirming bank play an important role
where the exporter is not satisIied with the undertaking oI only the issuing bank.
O Negotiating Bank: The Negotiating Bank is the bank who negotiates the documents
submitted to them by the beneIiciary under the credit either advised through them or
restricted to them Ior negotiation. On negotiation oI the documents they will claim the
reimbursement under the credit and makes the payment to the beneIiciary provided the
43

documents submitted are in accordance with the terms and conditions oI the letters oI
credit.
O Reimbursing Bank: Reimbursing Bank is the bank authorized to honor the
reimbursement claim in settlement oI negotiation/acceptance/payment lodged with it by
the negotiating bank. It is normally the bank with which issuing bank has an account
Irom which payment has to be made.
O Second Beneficiary: Second BeneIiciary is the person who represents the Iirst or original
BeneIiciary oI credit in his absence. In this case, the credits belonging to the original
beneIiciary is transIerable. The rights oI the transIeree are subject to terms oI transIer.

2.5.2 Types of Letter of Credit

1. Revocable Letter of Credit L/C
A revocable letter oI credit may be revoked or modiIied Ior any reason, at any time by the
issuing bank without notiIication. It is rarely used in international trade and not considered
satisIactory Ior the exporters but has an advantage over that oI the importers and the issuing
bank.

There is no provision Ior conIirming revocable credits as per terms oI UCPDC, Hence they
cannot be conIirmed. It should be indicated in LC that the credit is revocable. iI there is no such
indication the credit will be deemed as irrevocable.
. Irrevocable Letter of Credit L/C
In this case it is not possible to revoke or amended a credit without the agreement oI the issuing
bank, the conIirming bank, and the beneIiciary. Form an exporters point oI view it is believed to
be more beneIicial. An irrevocable letter oI credit Irom the issuing bank insures the beneIiciary
44

that iI the required documents are presented and the terms and conditions are complied with,
payment will be made.
3. Confirmed Letter of Credit L/C
ConIirmed Letter oI Credit is a special type oI L/c in which another bank apart Irom the issuing
bank has added its guarantee. Although, the cost oI conIirming by two banks makes it costlier,
this type oI L/c is more beneIicial Ior the beneIiciary as it doubles the guarantee.
4. Sight Credit and Usance Credit L/C
Sight credit states that the payments would be made by the issuing bank at sight, on demand or
on presentation. In case oI usance credit, draIt are drawn on the issuing bank or the
correspondent bank at speciIied usance period. The credit will indicate whether the usance draIt
are to be drawn on the issuing bank or in the case oI conIirmed credit on the conIirming bank.
. Back to Back Letter of Credit L/C
Back to Back Letter oI Credit is also termed as Countervailing Credit. A credit is known as back
to back credit when a L/c is opened with security oI another L/c.
A back to back credit which can also be reIerred as credit and counter credit is actually a method
oI Iinancing both sides oI a transaction in which a middleman buys goods Irom one customer and
sells them to another. The parties to a Back to Back Letter oI Credit are:
1. The buyer and his bank as the issuer oI the original Letter.
. The manuIacturer's subcontractor and his bank.
The practical use oI this Credit is seen when L/c is opened by the ultimate buyer in Iavour oI a
particular beneIiciary, who may not be the actual supplier/ manuIacturer oIIering the main credit
with near identical terms in Iavour as security and will be able to obtain reimbursement by
presenting the documents received under back to back credit under the main L/c.The need Ior
such credits arise mainly when:
4

1. The ultimate buyer not ready Ior a transIerable credit
. The BeneIiciary does not want to disclose the source oI supply to the openers.
3. The manuIacturer demands on payment against documents Ior goods but the beneIiciary
oI credit is short oI the Iunds
6. Transferable Letter of Credit L/C
A transIerable documentary credit is a type oI credit under which the Iirst beneIiciary which is
usually a middleman may request the nominated bank to transIer credit in whole.
The L/c does state clearly mentions the margins oI the Iirst beneIiciary and unless it is speciIied
the L/c cannot be treated as transIerable. It can only be used when the company is selling the
product oI a third party and the proper care has to be taken about the exit policy Ior the money
transactions that take place. This type oI L/c is used in the companies that act as a middle man
during the transaction but don`t have large limit. In the transIerable L/c there is a right to
substitute the invoice and the whole value can be transIerred to a second beneIiciary.
The Iirst beneIiciary or middleman has rights to change the Iollowing terms and conditions oI the
letter oI credit:
1. Reduce the amount oI the credit.
. Reduce unit price iI it is stated
3. Make shorter the expiry date oI the letter oI credit.
4. Make shorter the last date Ior presentation oI documents.
. Make shorter the period Ior shipment oI goods.
6. Increase the amount oI the cover or percentage Ior which insurance cover must be
eIIected.
7. Substitute the name oI the applicant (the middleman) Ior that oI the Iirst beneIiciary (the
buyer).


46

.6 Other Remittances
Remittance facilities for Non Resident Indians/ Person of India Origin (NRIs) / PIO) and
Foreign Nationals: Remittance oI Iunds Irom the sale oI capital assets in India held by a person,
whether resident in or outside India, requires approval oI the Reserve Bank except to the extent
provided in FEMA or Rules or Regulations made there under.
NRI Ior this purpose is deIined as a person resident outside India who is citizen oI India. In
terms oI Regulation oI FEMA NotiIication No.13 dated May 3, 000, Non-Resident Indian
(NRI) means a person resident outside India who is a citizen oI India. Person of Indian Origin
(PIO) means a citizen oI any country other than Bangladesh or Pakistan who had (a) at any time
held Indian passport or (b) he or either oI his parents or any oI his grandparents was a citizen oI
India by virtue oI the Constitution oI India or the Citizenship Act, 19 or (c) the person is a
spouse oI an Indian citizen or a person reIerred to in (a) or (b).

Remittance of current income:
(1) Remittance outside India oI current income like rent, dividend, pension, interest, etc. in India
oI the account holder is a permissible debit to the NRO account. Authorized Dealer banks may
also allow repatriation oI current income like rent, dividend, pension, interest, etc. oI NRIs
who do not maintain an NRO account in India based on an appropriate certiIication by a
Chartered Accountant, certiIying that the amount proposed to be remitted is eligible Ior
remittance and that applicable taxes have been paid/provided Ior.
() NRIs/PIO have the option to credit the current income to their Non-Resident (External)
Rupee account, provided the Authorized Dealer bank is satisIied that the credit represents current
income oI the non-resident account holder and income tax thereon has been deducted / provided
Ior.


Remittance of assets by a foreign national of non-Indian origin:
(1) A Ioreign national oI non-Indian origin who has retired Irom an employment in India or
who has inherited assets Irom a person resident in India or who is a widow oI an Indian
47

citizen who was resident in India, may remit an amount not exceeding USD one million, per
Iinancial year (April-March), subject to the satisIaction oI the Authorized Dealer bank, on
production oI documentary evidence.
() These remittance Iacilities are not available to citizens oI Nepal and Bhutan.

Remittance of assets by NRI/PIO:
NRI/PIO may remit sale proceeds oI immovable property purchased by him out oI Rupee
Iunds.
The remittance Iacility in respect oI sale proceeds oI immovable property is not available to
citizens oI Pakistan, Bangladesh, Sri Lanka, China, AIghanistan, Iran, Nepal and Bhutan.
The Iacility oI remittance oI sale proceeds oI other Iinancial assets is not available to citizens
oI Pakistan, Bangladesh, Nepal and Bhutan.
Remittance of Salary:
A citizen oI a Ioreign state resident in India, being an employee oI a Ioreign company and on
deputation to the oIIice/ branch/ subsidiary/ joint venture in India oI such Ioreign company or
being an employee oI a company incorporated in India, may open, hold and maintain a
Ioreign currency account with a bank outside India and receive/ remit the whole salary
payable to him Ior the services rendered, by credit to such account, provided that income tax
chargeable under the Income Tax Act, 1961 is paid on the entire salary as accrued in
India.6..
(ii) A citizen oI India, employed by a Ioreign company outside India and on deputation to
the oIIice/ branch/ subsidiary/ joint venture in India oI such Ioreign company, may open,
hold and maintain a Ioreign currency account with a bank outside India and receive the
whole salary payable to him Ior the services rendered to the oIIice/ branch/ subsidiary/
joint venture in India oI such Ioreign company, by credit to such account, provided that
income tax chargeable under the Income Tax Act, 1961 is paid on the entire salary as
accrued in India.

4

- Facilities for students:
- Students going abroad Ior studies are treated as Non- Resident Indians (NRIs) and are
eligible Ior all the Iacilities available to NRIs under FEMA.
- As non-residents, they will be eligible to receive remittances Irom India (i) up to USD
100,000 Irom close relatives in India, on selI declaration, towards maintenance, which
could include remittances towards their studies also (ii) up to USD 1 million per Iinancial
year, out oI sale proceeds oI assets / balances in their NRO account maintained with an
Authorised Dealer bank in India and (iii) upto USD 00,000 per Iinancial year under the
Liberalized Remittance Scheme.
- All other Iacilities available to NRIs under FEMA are equally applicable to the students.
Miscellaneous Remittances from India
In order to provide adequate Ioreign exchange Iacilities and eIIicient customer service, the
Reserve Bank has decided to grant licenses to certain entities by authorizing them as Authorized
Dealer Category II to undertake a range oI non-trade current account transactions.
Accordingly, Authorized Dealer Category II are authorized to release / remit Ioreign exchange
Ior the Iollowing non-trade current account transactions:
(a) Private visits
(b) Remittance by tour operators / travel agents to overseas agents / principals / hotels
(c) Business travel
(d) Fee Ior participation in global conIerences and specialized training
(e) Remittance Ior participation in international events / competitions (towards
training, sponsorship and prize money)
(I) Film shooting
(g) Medical treatment abroad
(h) Disbursement oI crew wages
(i) Overseas education
(j) Remittance under educational tie up arrangements with universities abroad
49

(k) Remittance towards Iees Ior examinations held in India and abroad and additional score
sheets Ior GRE, TOEFL, etc.
(l) Employment and processing, assessment Iees Ior overseas job applications

2.7 NRI Deposits
DEFINITIONS
Non-Resident Indian (NRI)
An NRI is a person resident outside India, who is a citizen oI India or is a person oI Indian
origin.

Person of Indian Origin (PIO)
PIO Ior this purpose is deIined in Regulation oI FEMA NotiIication ibid as a citizen oI any
country other than Bangladesh or Pakistan, iI (a) he at any time held Indian passport; or (b) he or
either oI his parents or any oI his grandparents was a citizen oI India by virtue oI the Constitution
oI India or the Citizenship Act, 19 (7 oI 19); or (c) the person is a spouse oI an Indian
citizen or a person reIerred to in sub-clause (a) or (b).

ELIGIBILITY
(a) Any person resident outside India (as per Section oI FEMA), may open and maintain NRO
account with an Authorized Dealer or an Authorized bank Ior the purpose oI putting through
bonaIide transactions denominated in Indian Rupees, not involving any violation oI the
provisions oI FEMA, Rules and Regulations made there under.
(b) Opening oI accounts by individuals / entities oI Bangladesh / Pakistan nationality / ownership
require prior approval oI the Reserve Bank.
TYPES OF ACCOUNTS
NRO accounts may be opened / maintained in the Iorm oI current, savings, recurring or Iixed
deposit accounts. Rate oI interest applicable to these accounts and guidelines Ior opening,
0

operating and maintenance oI such accounts shall be in accordance with directives/instructions
issued by the Reserve Bank Irom time to time.
1OINT ACCOUNT WITH RESIDENT/ NON-RESIDENT
The accounts may be held jointly with residents and / or with non-residents.
ASSETS REQUIRED IN INDIA OUT OF RUPEE FUNDS

NRI/PIO may remit sale proceeds oI immovable property purchased by him as a resident or out
oI Rupee Iunds as NRI/PIO, without any lock-in-period, subject to the above limit oI USD 1
million, per Iinancial year.

FOREIGN NATIONALS OF NON-INDIAN ORIGIN ON A VISIT TO INDIA

NRO (current/savings) account can be opened by a Ioreign national oI non-Indian origin visiting
India, with Iunds remitted Irom outside India through banking channel or by sale oI Ioreign
exchange brought by him to India. The balance in the NRO account may be converted by the
Authorized Dealer bank into Ioreign currency Ior payment to the account holder at the time oI
his departure Irom India provided the account has been maintained Ior a period not exceeding six
months and the account has not been credited with any local Iunds, other than interest accrued
thereon. In case the account has been maintained Ior a period more than six months, applications
Ior repatriation oI balance will have to be made by the account holder concerned on plain paper
to the Regional OIIice concerned oI the Reserve Bank.

CHANGE OF RESIDENT STATUS OF ACCOUNT HOLDER
- From Resident to Non-resident- When a person resident in India leaves India Ior a
country (other than Nepal or Bhutan) Ior taking up employment or Ior carrying on
business or vocation outside India or Ior any other purpose indicating his intention to stay
outside India Ior an uncertain period, his existing account should be designated as a Non-
Resident (Ordinary) Account. When a person resident in India leaves Ior Nepal or Bhutan
1

Ior taking up employment or Ior carrying on business or vocation or Ior any other
purposes indicating his intention to stay in Nepal or Bhutan Ior an uncertain period, his
existing account will continue as a resident account. Such account should not be
designated as Non-Resident (Ordinary) Account (NRO).
- From Non- resident to Resident-NRO accounts may be re-designated as resident Rupee
accounts on return oI the account holder to India Ior taking up employment, or Ior
carrying on business or vocation or Ior any other purpose indicating his intention to stay
in India Ior an uncertain period. Where the account holder is only on a temporary visit to
India, the account should continue to be treated as non-resident during such visit.
OPERATIONS OF NRO ACCOUNT BY POWER OF ATTORNEY HOLDER
Powers have been delegated to the authorized dealers/banks to allow operations on an NRO
account by Power oI Attorney granted in Iavour oI a resident by the non-resident individual
account holder provided such operations are restricted to:
(i) All local payments in Rupees including payments Ior eligible investments subject to
compliance with relevant regulations made by the Reserve Bank; and
(ii) Remittance outside India oI current income in India oI the non-resident individual account
holder, net oI applicable taxes.
(iii) The resident Power of Attorney holder is not permitted to repatriate outside India
funds held in the account other than to the non-resident individual account holder nor to make
payment by way oI giIt to a resident on behalI oI the non- resident account holder or transIer
Iunds Irom the account to another NRO account.
2.8 Export Finance

- PRE-SHIPMENT FINANCE
- POST-SHIPMENT FINANCE







2.9 Pre-Shipment Finance

Introduction
Pre-Shipment Finance is issued by a Iinancial institution when the seller wants the payment oI
the goods beIore shipment. The main objectives behind pre-shipment Iinance or pre export
Iinance are to enable exporter to:
O Procure raw materials.
O Carry out manuIacturing process.
O Provide a secure warehouse Ior goods and raw materials.
O Process and pack the goods.
O Ship the goods to the buyers.
O Meet other Iinancial cost oI the business.
Types of Pre Shipment Finance
O Packing Credit
O Advance against Cheques/DraIt etc. representing Advance Payments.
Pre shipment Iinance is extended in the Iollowing Iorms :
O Packing Credit in Indian Rupee
O Packing Credit in Foreign Currency (PCFC)
W]a^WWZ` for Getting Packing Credit
This Iacility is provided to an exporter who satisIies the Iollowing criteria
O A ten digit importer-exporter code number allotted by DGFT.
O Exporter should not be in the caution list oI RBI.
O II the goods to be exported are not under OGL (Open General License), the exporter
should have the required license /quota permit to export the goods.
3

Packing credit Iacility can be provided to an exporter on production oI the Iollowing evidences
to the bank:
1. Formal application Ior release the packing credit with undertaking to the eIIect that the
exporter would be ship the goods within stipulated due date and submit the relevant
shipping documents to the banks within prescribed time limit.
. Firm order or irrevocable L/C or original cable / Iax / telex message exchange between
the exporter and the buyer.
3. License issued by DGFT iI the goods to be exported Iall under the restricted or canalized
category. II the item Ialls under quota system, proper quota allotment prooI needs to be
submitted.
The conIirmed order received Irom the overseas buyer should reveal the inIormation about the
Iull name and address oI the overseas buyer, description quantity and value oI goods (FOB or
CIF), destination port and the last date oI payment.
Eligibility
Pre shipment credit is only issued to that exporter who has the export order in his own name.
However, as an exception, Iinancial institution can also grant credit to a third party manuIacturer
or supplier oI goods who does not have export orders in their own name.
In this case some oI the responsibilities oI meeting the export requirements have been out
sourced to them by the main exporter. In other cases where the export order is divided between
two more than two exporters, pre shipment credit can be shared between them
Quantum of Finance
The Quantum oI Finance is granted to an exporter against the LC or an expected order. The only
guideline principle is the concept oI Need Based Finance. Banks determine the percentage oI
margin, depending on Iactors such as:
The nature oI Order.
O The nature oI the commodity
4

Different Stages of Pre Shipment Finance

Appraisal and Sanction of Limits
1. BeIore making any an allowance Ior Credit Iacilities banks need to check the diIIerent aspects
like product proIile, political and economic details about country. Apart Irom these things, the
bank also looks in to the status report oI the prospective buyer, with whom the exporter proposes
to do the business. To check all these inIormation, banks can seek the help oI institution like
ECGC or International consulting agencies like Dun and Brad street etc.
The Bank extended the packing credit Iacilities aIter ensuring the Iollowing"
a. The exporter is a regular customer, a bona Iide exporter and has a good standing in the
market.
b. Whether the exporter has the necessary license and quota permit (as mentioned
earlier) or not.
c. Whether the country with which the exporter wants to deal is under the list oI
Restricted Cover Countries (RCC) or not.
Disbursement of Packing Credit Advance
. Once the proper sanctioning oI the documents is done, bank ensures whether exporter has
executed the list oI documents mentioned earlier or not. Disbursement is normally allowed when
all the documents are properly executed.
Sometimes an exporter is not able to produce the export order at time oI availing packing credit.
So, in these cases, the bank provides a special packing credit Iacility and is known as Running
Account Packing.

BeIore disbursing the bank speciIically check Ior the Iollowing particulars in the submitted
documents
a. Name oI buyer


b. ,Commodity to be exported
c. Quantity
d. Value (either CIF or FOB)
e. Last date oI shipment / negotiation.
I. Any other terms to be complied with
The quantum oI Iinance is Iixed depending on the FOB value oI contract /LC or the domestic
values oI goods, whichever is Iound to be lower. Normally insurance and Ireight charged are
considered at a later stage, when the goods are ready to be shipped. The bank decides the
duration oI packing credit depending upon the time required by the exporter Ior processing oI
goods. The maximum duration oI packing credit period is 10 days; however bank may provide
a Iurther 90 days extension on its own discretion, without reIerring to RBI.
Follow up of Packing Credit Advance
3. Exporter needs to submit stock statement giving all the necessary inIormation about the
stocks. It is then used by the banks as a guarantee Ior securing the packing credit in advance.
Bank also decides the rate oI submission oI these stocks.
Apart Irom this, authorized dealers (banks) also physically inspect the stock at regular intervals.
Liquidation of Packing Credit Advance
4. Packing Credit Advance needs be liquidated out oI as the export proceeds oI the relevant
shipment, thereby converting preshipment credit into post shipment credit.
This liquidation can also be done by the payment receivable Irom the Government oI India and
includes the duty drawback, payment Irom the Market Development Fund (MDF) oI the Central
Government or Irom any other relevant source. In case iI the export does not take place then the
entire advance can also be recovered at a certain interest rate. RBI has allowed some Ilexibility
in to this regulation under which substitution oI commodity or buyer can be allowed by a bank
without any reIerence to RBI.
6

Overdue Packing
. Bank considers a packing credit as an overdue, iI the borrower Iails to liquidate the packing
credit on the due date. And, iI the condition persists then the bank takes the necessary step to
recover its dues as per normal recovery procedure.
Advance against Cheque/Drafts received as advance payment
6. Where exporters receive direct payments Irom abroad by means oI cheques/draIts etc. the
bank may grant export credit at concessional rate to the exporters oI goods track record, till the
time oI realization oI the proceeds oI the cheques or draIt etc. The Banks however, must satisIy
themselves that the proceeds are against an export order.
2.10 Post-shipment Finance
Introduction
Post Shipment Finance is a kind oI loan provided by a Iinancial institution to an exporter or
seller against a shipment that has already been made. This type oI export Iinance is granted Irom
the date oI extending the credit aIter shipment oI the goods to the realization date oI the exporter
proceeds. Exporters don`t wait Ior the importer to deposit the Iunds.
Basic Features
The Ieatures oI post-shipment Iinance are:
O Purpose of Finance Post-shipment Iinance is meant to Iinance export sales receivable
aIter the date oI shipment oI goods to the date oI realization oI exports proceeds. In cases
oI deemed exports, it is extended to Iinance receivable against supplies made to
designated agencies.
O Basis of Finance Post-shipment Iinances is provided against evidence oI shipment oI
goods or supplies made to the importer or seller or any other designated agency.

7

O Types of Finance Post-shipment Iinance can be secured or unsecured. Since the Iinance
is extended against evidence oI export shipment and bank obtains the documents oI title
oI goods, the Iinance is normally selI liquidating. Further, the Iinance is mostly a Iunded
advance. In Iew cases, such as Iinancing oI project exports, the issue oI guarantee
(retention money guarantees) is involved and the Iinancing is not Iunded in nature.
O Quantum of Finance As a quantum oI Iinance, post-shipment Iinance can be extended
up to 100 oI the invoice value oI goods. In special cases, where the domestic value oI
the goods increases the value oI the exporter order, Iinance Ior a price diIIerence can also
be extended and the price diIIerence is covered by the government. This type oI Iinance
is not extended in case oI pre-shipment stage. Banks can also Iinance undrawn balance.
In such cases banks are Iree to stipulate margin requirements as per their usual lending
norm.
O Period of Finance Post-shipment Iinance can be oII short terms or long term, depending
on the payment terms oIIered by the exporter to the overseas importer. In case oI cash
exports, the maximum period allowed Ior realization oI exports proceeds is six months
Irom the date oI shipment. Concessive rate oI interest is available Ior a highest period oI
10 days, opening Irom the date oI surrender oI documents. Usually, the documents need
to be submitted within 1days Irom the date oI shipment.
Financing For Various Types of Export Buyer's Credit
Post-shipment Iinance can be provided Ior three types oI export:
O Physical exports: Finance is provided to the actual exporter or to the exporter in whose
name the trade documents are transIerred.
O Deemed export: Finance is provided to the supplier oI the goods which are supplied to
the designated agencies.
O Capital goods and project exports: Finance is sometimes extended in the name oI
overseas buyer. The disbursal oI money is directly made to the domestic exporter.


Supplier's Credit
Buyer's Credit is a special type oI loan that a bank oIIers to the buyers Ior large scale purchasing
under a contract. Once the bank approved loans to the buyer, the seller shoulders all or part oI the
interests incurred.
Types of Post Shipment Finance
The post shipment Iinance can be classiIied as:
1. Export Bills Purchased/ Discounted (DP & DA Bills)
Export bills (Non L/C Bills) is used in terms oI sale contract/ order may be discounted or
purchased by the banks. It is used in indisputable international trade transactions and the proper
limit has to be sanctioned to the exporter Ior purchase oI export bill Iacility.
. Export Bills Negotiated (Bill under L/C)
The risk oI payment is less under the LC, as the issuing bank makes sure the payment. The risk is
Iurther reduced, iI a bank guarantees the payments by conIirming the LC. Because oI the inborn
security available in this method, banks oIten become ready to extend the Iinance against bills
under LC.
However, this arises two major risk Iactors Ior the banks:
1. The risk oI nonperIormance by the exporter, when he is unable to meet his terms and
conditions. In this case, the issuing banks do not honor the letter oI credit.
. The bank also Iaces the documentary risk where the issuing bank reIuses to honour its
commitment. So, it is important Ior the Ior the negotiating bank, and the lending bank to
properly check all the necessary documents beIore submission.
3. Advance against Export Bills Sent on Collection Basis
Bills can only be sent on collection basis, iI the bills drawn under LC have some discrepancies.
Sometimes exporter requests the bill to be sent on the collection basis currency.
Banks may allow advance against these collection bills to an exporter with a concessional rates
oI interest depending upon the transit period in case oI DP Bills and transit period.
The transit period is Irom the date oI acceptance oI the export documents at the bank`s branch
Ior collection and not Irom the date oI advance.
9

4. Advance against Export on Consignments Basis

Bank may choose to Iinance when the goods are exported on consignment basis at the risk oI the
exporter Ior sale and eventual payment oI sale proceeds to him by the consignee.
However, in this case bank instructs the overseas bank to deliver the document only against trust
receipt /undertaking to deliver the sale proceeds by speciIied date, which should be within the
prescribed date even iI according to the practice in certain trades a bill Ior part oI the estimated
value. In case oI export through approved Indian owned warehouses abroad the times limit Ior
realization is 1 months.
5. Advance against Undrawn Balance

It is a very common practice in export to leave small part undrawn Ior payment aIter adjustment
due to diIIerence in rates, weight, quality etc. Banks do Iinance against the undrawn balance, iI
undrawn balance is in conIormity with the normal level oI balance leIt undrawn in the particular
line oI export, subject to a maximum oI 10 percent oI the export value. An undertaking is also
obtained Irom the exporter that he will, within 6 months Irom due date oI payment or the date oI
shipment oI the goods, whichever is earlier surrender balance proceeds oI the shipment.
6. Advance against Claims of Duty Drawback

Duty Drawback is a type oI discount given to the exporter in his own country. This discount is
given only, iI the in house cost oI production is higher in relation to international price. This type
oI Iinancial support helps the exporter to Iight successIully in the international markets.

In such a situation, banks grants advances to exporters at lower rate oI interest Ior a maximum
period oI 90 days. These are granted only iI other types oI export Iinance are also extended to the
exporter by the same bank. AIter the shipment, the exporters lodge their claims, supported by the
relevant documents to the relevant government authorities. These claims are processed and
eligible amount is disbursed aIter making sure that the bank is authorized to receive the claim
amount directly Irom the concerned government authorities.



60

2.11 Forex Market

FOREX Market
Forex market is one oI the largest Iinancial markets in the world, where buyers and sellers
conduct Ioreign exchange transactions. Its important in the international trade can be estimated
with the Iact that average daily trade in the global Iorex markets is over US $ 3 trillion.
Spot Rate
Also known as "benchmark rates", "straightIorward rates" or "outright rates", spot rates is an
agreement to buy or sell currency at the current exchange rate. The globally accepted settlement
cycle Ior Ioreign exchange contracts is two days. Foreign exchange contracts are thereIore settled
on the second day aIter the day the deal is made.
Forward Price
Forward price is a Iixed price at which a particular amount oI a commodity, currency or security
is to be delivered on a Iixed date in the Iuture, possibly as Ior as a year ahead. Traders agree to
buy and sell currencies Ior settlement at least three days later, at predetermined exchange rates.
This type oI transaction oIten is used by business to reduce their exchange rate risk.
Forward Price vs. Spot Price
Theoretically it is possible Ior a Iorward price oI a currency to equal its spot price However,
interest rates must be considered. The interest rate can be earned by holding diIIerent currencies
usually varies, thereIore Iorward price can be higher or lower than (at premium or discount to)
the spot prices.
RBI Reference Rate
There reIerence rate given by RBI is based on 1 noon rates oI a Iew selected banks in Mumbai.
Inter Bank Rates
Interbank rates quote the bank Ior buying and selling Ioreign currency in the interbank market,
which works on waIer thin margins. For inter bank transactions the quotation is up to Iour
decimals with the last two digits in multiples of 25.
61

Telegraphic Transfer
Telegraphic transIer or in short TT is a quick method oI transIer money Irom one bank to another
bank. TT method oI money transIer has been introduced to solve the delay problems caused by
cheques or demand draIts. In this method, money does not move physically and order to pay is
wired to an institutions` casher to make payment to a company or individual. A cipher code is
appended to the text oI the message to ensure its integrity and authenticity during transit.
Currency Rate
The Currency rate is the rate at which the authorized dealer buys and sells the currency notes to
its customers. It depends on the TC rate and is more than the TC rate Ior the person who is
buying them.
Cross Rate
In interbank transactions all currencies are normally traded against the US dollar, which becomes
a Irame oI reIerence. So iI one is buying with rupees a currency X which is not normally traded,
one can arrive at a rupee exchange rate by relating the rupee $ rate to the $X rate . This is known
as a cross rate.
Long and Short
When you go long on a currency, its means you bought it and are holding it in the expectation
that it will appreciate in value. By contrast, going short means you reselling currency in the
expectation that what you are selling will depreciate in value.
Bid and Ask
Bids are the highest price that the seller is oIIering Ior the particular currency. On the other hand,
ask is the lowest priced acceptable to the buyer. Together, the two prices constitute a quotation
and the diIIerence between the price oIIered by a dealer willing to sell something and the price
he is willing to pay to buy it back.
Buying and Selling
In terms oI Ioreign exchange, buying means purchasing a certain amount oI the Ioreign currency
at the bid or buying price against the delivery /crediting oI a second currency which is also called
counter currency.
6

On the other hand, selling reIers to a Iix amount oI Ioreign currency at the oIIered or selling
price against the receipt / debiting oI another currency.
FOREX Rates vs. Interest Rates
Forex rates or exchange rate is the price oI a country's currency in terms oI another country's
currency. It speciIies how much one currency is worth in terms oI the other. For example a Iorex
rate oI 13 Japanese yen (JPY, ) to the United States dollar (USD, $) means that JPY 13 is
worth the same as USD 1.
Choice oI currency and its interest rate is a major concern in the international trade. Investors are
easily attracted by the higher interest rates which in turns also eIIects the economy oI a nation
and its currency value.
For an example, iI interest rate on INR were substantially higher than the interest rate on USD,
more USD would be converted into INR and pumped into the Indian economic system. This
would result in appreciation oI the INR, resulting in lower conversion rates oI USD against INR,
at the time oI reconversion into USD.


Guidelines of Various Authorities

UCPDC Guidelines
UniIorm Customs and Practice Ior Documentary Credit (UCPDC) is a set oI predeIined rules
established by the International Chamber oI Commerce (ICC) on Letters oI Credit. The UCPDC
is used by bankers and commercial parties in more than 00 countries including India to
Iacilitate trade and payment through LC.
UCPDC was Iirst published in 1933 and subsequently updating it throughout the years. In 1994,
UCPDC 00 was released with only 7 chapters containing in all 49 articles.

The latest revision was approved by the Banking Commission oI the ICC at its meeting in Paris
on October 006. This latest version, called the UCPDC600, Iormally commenced on 1 July
63

007. It contains a total oI about 39 articles covering the Iollowing areas, which can be classiIied
as sections according to their Iunctions and operational procedures.
ISBP 2002
The widely acclaimed International Standard Banking Practice (ISBP) Ior the Examination oI
Documents under Documentary Credits was selected in 007 by the ICCs Banking Commission.

First introduced in 00, the ISBP contains a list oI guidelines that an examiner needs to check
the documents presented under the Letter oI Credit. Its main objective is to reduce the number oI
documentary credits rejected by banks.
2.12 FEDAI Guidelines
Foreign Exchange Dealers Association oI India (FEDAI) was established in 19 under the
Section oI the Companies Act (196). It is an association oI banks that deals in Indian Ioreign
exchange and work in coordination with the Reserve Bank oI India, other organizations like
FIMMDA, the Forex Association oI India and various market participants. FEDAI has issued
rules Ior import LCs which is one oI the important area oI Ioreign currency exchanges.
As the issuance oI standby oI letter oI Credit including imports oI goods is susceptible to some
risk in the absence oI evidence oI shipment, thereIore the importer should be advised that
documentary credit under UCP 00/600 should be the preIerred route Ior importers oI goods.
Below mention are some oI the necessary precaution that should be taken by authorised dealers
While issuing a stands by letter oI credits:
1. The Iacility oI issuing Commercial Standby shall be extended on a selective basis and to
the Iollowing category oI importers
i. Where such standby are required by applicant who are independent power
producers/importers oI crude oil and petroleum products
ii. Special category oI importers namely export houses, trading houses, star trading
houses, super star trading houses or 100 Export Oriented Units.
. SatisIactory credit report on the overseas supplier should be obtained by the issuing
banks beIore issuing Stands by Letter oI Credit.
64

3. Invocation oI the Commercial standby by the beneIiciary is to be supported by proper
evidence. The beneIiciary oI the Credit should Iurnish a declaration to the eIIect that the
claim is made on account oI Iailure oI the importers to abide by his contractual obligation
along with the Iollowing documents.
i. A copy oI invoice.
ii. Nonnegotiable set oI documents including a copy oI non negotiable bill oI
lading/transport document.
iii. A copy oI Lloyds /SGS inspection certiIicate wherever provided Ior as per the
underlying contract.
4. Incorporation oI suitable clauses to the eIIect that in the event oI such invoice /shipping
documents has been paid by the authorized dealers earlier, Provisions to dishonor the
claim quoting the date / manner oI earlier payments oI such documents may be
considered.
. The applicant oI a commercial stand by letter oI credit shall undertake to provide
evidence oI imports in respect oI all payments made under standby. (Bill oI Entry)
R-RETURN (Reporting to RBI)

PURPOSES:

Reporting oI all inIlow and outIlows oI Ioreign exchange.

Reporting oI NOSTRO Account

Follow up oI over-due transaction.









6

3 . Literature reviews
International banking operations are widely used both by practitioners and researchers.
Historically one can observe several major themes in the Iinancial analysis literature.
An assessment oI banking operation strategies oI private banking institutions in the Philippines is
done by( Liu, 21) , II EDI is to succeed to a similar degree as paper-based systems then
international harmonization and standardization must be achieved across all Iunctional groups
(banking, transport, insurance, customs) and industry sectors on message standard and structures
( Mulligan,1999).An analysis oI domestic and Ioreign banks` internal perIormance by
investigating their Iinancial ratios shows that banks in Bahrain, Oman, the United Arab Emirates
(GCC countries) have improved their perIormance over the past several years. Commercial
banks in these GCC economies are well capitalized and have adopted modern banking services.
Most banks are Iound to be Iinancially sound by international standards, measured by all key
Iinancial ratios (Islam,(23). Many Thai banks are currently implementing Internet banking.
Banks that oIIer service via this channel claim that it reduces costs and makes them more
competitive. However, many corporate customers are not highly enthusiastic about Internet
banking (Rotchanakitumnuai, 23).The descriptive study was conducted to develop an
understanding oI consumers' attitudes and adoption oI Internet banking among sophisticated
consumers. Based on a random sample oI academicians, demographic, attitudinal, and behavioral
characteristics oI Internet banking (IB) users and non-users were examined. The analyses
revealed signiIicant diIIerences between the demographic proIiles and attitudes oI users and non-
users. IB users were Iurther investigated, and three sub-segments were deIined according to a set
oI bank selection criteria. Finally, based on the similarities between various Web-based bank
services, Iour homogeneous categories oI services were deIined (Akinci, 24). The purpose oI
this paper is both to determine Citibank's response to cultural diversity in the dynamic, highly
competitive global market Ior online banking Iacilities and services, and whether or not
international online bank web sites are constructed in a manner sensitive to the culture oI their
host country. The another purpose oI paper presented by (Acharya, 28) is to examine the
impact oI online banking intensity on the Iinancial perIormance oI community banks . The
current exploratory study is an attempt to discover the Iactors aIIecting a bank's decision to adopt
Internet banking in India. Particularly, it seeks to examine the relationship between the bank's
adoption decision and various banks and market characteristics (Malhotra, 27) .The another
66

paper deals with the paradigm oI Islamic banking and Iinance. It constitutes a general review that
bears special Ieatures, Iacts and Iigures over the recent developments oI Islamic banking and
Iinance across the globe. It takes stock oI the growing institutional and inIrastructure support Ior
the Islamic banking and Iinance system in Muslim countries and Western Iinancial markets
(han, 28) .The exploratory study is an attempt to present the present status oI Internet
banking in India and the extent oI Internet banking services oIIered by Internet banks. In
addition, it seeks to examine the Iactors aIIecting the extent oI Internet banking services (
Malhotra, 21). A questionnaire with Iour-point Likert scale is applied to 34 usable responses.
Ten attributes are tested, namely convenience oI usage, accessibility, Ieatures availability, bank
management and image, security, privacy, design, content, speed, and Iees and charges. Results
indicate that all elements Ior ten identiIied Iactors are signiIicant with respect to the users'
adoption oI e-banking services (Poon, 27). It presented a paper,the purpose oI which is to to
examine the relationships among three dimensions oI service quality that inIluence overall
internet banking service quality and its subsequent eIIect on customer satisIaction in a New
Zealand banking context (Rod, 29).














67

3.1 RESEARCH METHODOLOGY
Every project work is based on certain methodology, which is a way to systematically solve the
problem or attain its objectives. It is a very important guideline and lead to completion oI any
project work through observation, data collection and data analysis
According to CliIIord Woody, 'Research Methodology comprises oI deIining & redeIining
problems, collecting, organizing &evaluating data, making deductions &researching to
conclusions.

3.2 OB1ECTIVE OF THE STUDY:

The main objective oI undergoing training oI 6weeks is to:

Understand how banking activities actually takes place.
To gain an insight and in depth knowledge about International Banking Operations.
To know how services provided by bank to its customer.
To learn about corporate banking culture in India.


3.3 Meaning of Research:
Research is ScientiIic and systematic search Ior gaining inIormation and knowledge on a speciIic
topic or phenomena .The method adopted to carry out this report was based on both the primary
and secondary sources.
3.4 DATA COLLECTION
To determine the appropriate data Ior research mainly two kinds oI data was collected namely
primary & secondary data as explained below:
PRIMARY DATA
Primary data are those, which were collected aIresh & Ior the Iirst time and thus happen to be
original in character. However, there are many methods oI collecting the primary data; all have
not been used Ior the purpose oI this project. The ones that have been used are:
Questionnaire
6

InIormal Interviews
Observation
SECONDARY DATA
Secondary data is collected Irom previous researches and literature to Iill in the respective
project. The secondary data was collected through:
Text Books
Articles
Journals
Websites
Primary Sources:
Interaction with the Forex Manager

Secondary sources:

- Manuals oI the bank
- Websites
- Journals
- R B I Circulars
- Annual Report

3.5 Limitation of the Study
Although every eIIort has been in to collect the relevant inIormation through the sources
available, still some relevant inIormation could not be gathered.
1. Busy Schedule of Concerned Executives: The concerned executives were having very busy
schedule because oI which they were reluctant to give appointment.
. Time: The time duration could not provide ample opportunity to study every detail oI cash
and receivable management oI the company.
3. Unawareness: Executives were unaware oI many terms related to international banking
operations while asking to them.
4. Confidential Information: As the company on account oI conIidential report has not
disclosed some Iigures. Moreover, in some cases separate accounts oI division are not separately
maintained thereby, leading to restrictions in study.
69

4. Analysis and Interpretation


Treasury (54)


1.




Interpretation
The AXIS Bank has A net revenue segmentation which is divided into 3 parts i.e. RETAIL
BANKING comprising oI 3 , CORPORATE BANKING comprising 3 and TREASURY
comprising the highest 4 oI the part and this integrated Treasury, which covers both domestic
and Global markets andIundsthe balance sheet across locations.
70


INTERPRETATION:
Forex turnover Ior Axis Bank achieved a rise oI 14 in Q4FY011 to Rs. 1, CRORES
Irom Rs. 1, 1,6 CRORES in Q4FY010. And Forex turnover achieved a rise oI 6 in FY11
compared to FY10.





71

INTERPRETATION:
FOREX trading improved 3 Irom Rs. 3 CRORES in Q4FY011 to Rs. CRORES in
Q4FY010. . ProIit beIore Tax (PBT) Irom Treasury rose 13.7 to Rs. .09 billion in FY011
Irom Rs. 3.43 billion in FY011.


COMPE%I%ION
State Bank of India - State Bank oI India, a public sector bank, is the largest bank in
India. Besides personal and corporate banking, SBI is also involved in NRI (Non Resident
Indian) services through its network in India and overseas. Its 11,000 branches and ,600
automatic teller machines give it a reach throughout the length and breadth oI the country; its
work Iorce oI 00,000 dwarIs all other banks in India.

ICICI Bank ICICI Bank is India's largest private sector bank and second largest
overall in terms oI assets. Together with its subsidiaries, ICICI Bank oIIers a complete
spectrum oI Iinancial services and products ranging Irom commercial banking to investment
banking, mutual Iund to insurance. The bank, headquartered in Mumbai, has a network oI
about 1,400 branches and 4,30 ATMs in India and a presence in 1 countries. ICICI Bank is
also the largest issuer oI credit cards in India.

Punjab National bank - Punjab National Bank (PNB) is the second largest government-
owned commercial bank in India with about 4,00 branches across 764 cities. This Iinancial
institution oIIers services in personal and corporate banking, including industrial,
agricultural, and export Iinance, as well as international banking. It competes with Axis
mostly in retail lending and wholesale businesses.


7


HDFC Bank - Housing Development Finance Corporation Limited Bank Limited
or HDFC Bank is one of the largest private banks in ndia The company competes
with Axis in each segment, over a wide range of banking services
covering commercial and investment banking on the wholesale side and
transactional/branch banking on the retail side HDFC's Standard Life nsurance
Company competes with CC's insurance subsidiaries Their mutual fund and asset
management businesses are also in direct tussle



















73














Customer relationship management
(CRM)










74


5.CUSTOMER RELATIONSHIP MANAGEMENT
(CRM)



CRM is developing into a major element oI corporate strategy Ior many organizations .CRM
also known by other terms such as relationship marketing and customer management, is
concerned with creation, development and enhancement oI individualized customer
relationship with careIully targeted customers and customer groups resulting in maximizing
their customer liIe, time value.

Industry leaders are now addressing how to transIorm their approach to customer
management. A new Iorm oI cross Iunctional marketing, i.e. CRM is replacing narrow
Iunctionally based traditional marketing. The traditional approach marketing has been
continuously questioned in recent years.

This approaches emphasized on the management oI the key marketing mix elements such as
product, price, promotion ,and place within the Iunctional context oI marketing department.


The new CRM approach, while recognizing these key elements still need to be addressed
reIlect the need to create an integrated cross Iunction which Iocus on marketing- one which
emphasis keeping as well as wining customers. Thus the Iocus is shiIting Irom customer
acquisition to customer retention and ensuring the appropriate amount oI time, money and
managerial resources are directed towards these tasks.


The adoption oI CRM is being Iilled by recognition that long term relationship with
customers is one oI the most important assets oI the organization and that inIormation-
enabled system must be developed that will give them 'customer ownership.



SuccessIul ownership will create competitive advantage; will result in improved customer
retention and proIitability Ior the company.




7

5.1CRM AN OVERVIEW:


Businesses today are continuously looking Ior ways to achieve competitive advantage.
Margins are shrinking, competition is increasing and industries are consolidated. While
customer expectation intensiIy Ior quality , service and delivery, businesses are reducing
staII and the same time searching Ior ways to arm employees with inIormation to make better
decisions and innovate.

Customer is the most important asset Ior the businesses .Consequently applying some
management resources to improve the customers experience and maximize the proIit,
potential oI that asset is important. The concept oI CRM as a strategy reIlects the business
process and technology that can be combined to optimize revenue, proIitability and customer
loyalty.

The CRM market is evolving rapidly and is one the Iastest growing market segments in
application soItware.CRM has captured the mind share oI senior executives across the
variety oI industries. With rapid growth oI e- customer application and increasing need to
sell to and support customers through internet , CRM solutions must provide a Iocal point Ior
all the customers- Iacing activities across the channels.

What is CRM?

It is a comprehensive approach that provides seamless coordination between sales ,
customer service, marketing and Iield support and other customer touching
Iunction.CRM integrates people, process and technology to maximize relationship
with all customers e- customers, distribution channel and suppliers.
It is customer Iocus business strategy design to optimize the revenue., proIitability
and customer loyalty .By implementing a CRM strategy, an organization can improve
the business process and technology solution around selling and marketing and
servicing Iunctions approx. all customer touch-( Ior e.g.: web ,email ,phone ,Iax, in
person)


A primary objective oI CRM is to provide the entire organization with a complete, 360-
degree view oI the customer, no matter where the inIormation resides or where the customer
touch point occurred. Today, many businesses manage diIIerent CR with multiple
inIormation system, which weaken customer service and ultimate reduce total sales potential.
To realize the beneIits, it is important to have an integrated solution across all customers
inIormation systems, trying together the Iront and Iront oIIicer Ior a complete view oI the
customers in order to serve them better.


76


WHY IS IT NECESSARY?

Many companies are turning to customer relationship management system to better
understand customer needs and wants.
CRM applications oIten used in combination with data warehousing e-commerce application
and call centre, which allows companies to access inIormation about customer buying
history, preIerences , complains and other data so they can better anticipate what customer
will want . The goal is to instill greater customer loyalty.



Other beneIits includes
1- The ability to provide Iaster response to customer enquiries.
- Increase eIIiciency trough automation.
3- Having a deeper knowledge oI customer.
4- 4- getting more marketing oI cross selling opportunities
- IdentiIy the most proIitable customer
6- Receiving the customer Ieedback that leads to new and improved product and
services.
7- Doing one to one marketing.


WHY NOW?

What makes CRM appropriate for today`s environment?

While, there are many no oI environmental Iactors and business advancement that impact
and enable the real importance Ior CRM in today`s environment is competitive and
diIIerentiation. CRM promises to be competitive and diIIerentiation in today`s environment.

Organization today is Iinding it diIIicult to compete on the basis oI product technology
advancement has enabled the near immediate application oI product Ieatures and Iunctions. It
is just a matter oI weeks between a product launch and saturation oI the market.
1ust think about it, are their many products out there that are purely unique?




77

Price, which has traditionally been another basis oI competitive diIIerentiation, is no
longer a means Ior many to compete. Complex channel networks have caused parity
pricing.
Promotion strategies similarly lessened a means oI diIIerentiation .Clubs abound,
special oIIers are the norm, and sales and continual.
Place oI distribution has likewise become less inIluential in the successor and Iailure
oI business. The internet has created an avenue Ior even the smallest business to
compete.

While all this Iactors are still important, none oI them can alone support the success oI most
business. CRM the ability to provide a more meaningIul sales and service experience
promises to be means oI diIIerentiating, oI providing customer with a reason to Irequent your
business rather than that oI your competitors.

Ownership oI customer relationship provides exponentially greater rewards than diIIerences
in product, price, place, promotion on distribution could ever oIIer. All oI these Iactors can
even be mitigated, iI u can serve as the ones top provider that can identiIy, quantiIy and
service customers need.


5.3 IMPLEMENTING CRM

II CRM involves optimsing product, price, place oI distribution, promotion, sales and
service, why are so many companies struggling? Has NOT anyone really mastered the art
and science oI CRM, iI not, why is it so diIIicult?



CRM is difficult because it is an enterprise - wide initiative.

CRM is not a technology initiative. Many have conIused CRM as a technology
initiative. Technology is needed in order to implement CRM, particularly the
customization part but technology is not the driver oI CRM, or the solution to the
successIul CRM implementation.
CRM is not exclusively a marketing initiative. Many organizations have merely
equated CRM with customer- Iocused marketing, or data driven /data base marketing.
CRM requires marketing expertise. But CRM is not strictly a marketing initiative
CRM is not exclusively a service initiative. As with sales and marketing, customer
service is one Iunctional aspect oI successIul CRM implementation. But customer
service is not the sole driver oI the process.
CRM involves marketing, sales, service and technology, as well as the other inner
workings oI the organization.


7

Thus is it properly described as an enterprise wide initiative. It involves all the areas oI
organization and all the Iunctions oI organization and it requires all areas oI the organization
to be working together in harmony .CRM requires all areas oI the organization to not only
exist in harmony, but to be working toward the common goal oI stronger relationship.



5.3 IMPOTANCE OF CRM

VALUE OF CRM TO BUSINESS

A CRM strategy is designed to increase revenue and proIitability by attracting new
customers, growing customer business, increasing satisIaction loyalty enabling mere eIIicient
business processes and utilizing lower cost technologies.

The primary goal oI CRM is higher revenue, not cutting costs. CRM solutions improve sales
and marketing eIIorts and enable organizations to provide superior services to customers.
New customers are gained and existing are retained and by more in greater quantity and
customers beneIits are receiving superior customer services and getting the products and
services they want, when they want them.

An enterprise that does not have a CRM strategy or CRM applications is at a competitive
disadvantage.
BeIore engaging on a mission to implement a CRM strategy, it is critical to determine what
the speciIic objectives are and how to measure the return on investment.
There are sobering statistic that over one-halI oI CRM implementation 'Iails primarily due
to lack oI consensus on agreed upon and more importantly, measurable goals. While
objectives can address speciIic points oI poor perIormance, they also address supporting the
entire customer liIe cycle.



5.4 CRM in Banking

Banks become customer- centric. The post- liberalized banking sector in India has been
witnessing spectacular changes. The major reasons Ior the recent radical changes in banking
industry`s portIolio are competition, consolidation, inIormation technology and the need to
be customer- centric.



79

Banks should improve the proIitability by adopting strategies like market segmentation,
innovation, price bundling and relationship. Technology has a major role to play in retail
banking, but its role is complementary to customer service initiatives.


Due to increased Iinancial market products like commercial papers, and variety oI Iinancial
instruments, big corporate clientele oI several commercial banks have shiIted their loyalty,
and have been raising resources Irom the market directly and commercial banks have
become more retail customer- centric by oIIering wide range oI services. Banks have
identiIied new customers segments like students, working women and high rich net worth
individuals.

CUSTOMER RELATIONSHIP PROFITABILITY

Regulated era have given assured proIits to banks, but in the cost deregulation period as
margins are Ialling down substantially, as banks are concentrating on customer
relationship.

Banking services can be divided into three categories:
1. Core services,
. Facilitating services
3. Supporting services.

Core service is the reason Ior being in the market. Facilitating services are needed so that
the core service can be used and supporting service exactly discriminates the service
package Irom the services oI competitors.

CRM is the base on which the structure oI retail banking will evolve. The cost to develop
customer relationship is always higher than the revenue, but when the relationship rose,
new demands will appear and then the incremental revenue would be higher than the
incremental cost.

The cost associated with building up oI the relationship is huge. They are advertising
costs, price incentives, set up costs Ior accounts and service costs etc.
Customer service delivery is vital Ior the success oI banking operations. This is not
possible only through technology. Process consistency within and service channels is
paramount. Banks are increasingly making investment in a single type oI process rather
investing in assets oI processes that depend on human resource policies.





0

5.5 WHO ARE HNI CUSTOMERS?


They are HIGH NET WORTH INDIVIDUAL Customers.

They are the major targets Ior private banks.

Banks provide premium class Iacilities to these clients and try to cater their
special needs related to Iinancial and non- Iinancial in nature.

They are high proIile customers.

They have income oI above Rs. 10 laces p.a.

The customer who can at least a very amount in their accounts.

Bank tries to maintain long term relationship with these clients.

HNI customers have a relationship manager.




HOW TO APPROACH HNI CUSTOMERS?

Approaching to prospective is very important Ior any organization. II banks rightly
approach customers then a long term relationship can be expected.

Following are the steps how a bank approaches to HNI customers:

1. DATA COLLECTION:
Normally banks maintain their data bank which is collected Irom various sources
like credit cards holders, diIIerent account holder`s primary data, yellow pages,
directories.


1

2-TELE CALLING:

Once a data is collected then the tele-callers call upon to these contacts and make the
client aware about various Iacilities provided by the banks. II the clients show their
inclination then an appointment is Iixed with these clients and the relationship managers
visits the clients.

3-ROLE OF RELATIONSHIP MANAGER:

This appointment is LEAD. This lead is transIerred to other relationship manager and
client is approached personally. Relationship manager explains the Iacilities provided and
take note to the client`s additional needs which can also be IulIilled by their services. II
the client is convinced the lead converts in customer Iorm.

4-CORPORATE BANKING:

Relationship manager analyses the requirement oI a customer and provide the best suited
products. The relationship manager explains the various investment options available in
the market and gives the opportunity to select Irom the options which is suitable to him.



5-PORTFOLIO MANAGEMENT:

II the customer has invested then the role oI the manager is to design his portIolio
keeping in mind the risk and return Iactors. PortIolio manager provide these customers
the requisite inIormation about the investment opportunities available in the market
according to the proIile oI the customer.


6-HANDLING ENQUIRIES:
Frequent services and time to time updating oI the market circumstances are shared with
these customers. The relationship manager with the help oI other oIIicers clariIies the
doubts and enquiries are handled with a special care.







DIAGRAM






























HNI CUSTOMERS
GEMS & JEWELLARY
INDUSTRY
BUILDERS
LOCAL
BUSINESSMAN

SUSPECTS

PROSPECTS
FIRST TIME
CUSTOMERS
3

5.6 What is electronic customer relationship (ECRM?)

Superior customer service is a critical diIIerentiator in an increasingly competitively
marketplace. Companies that give customer what they want it will increase customer
satisIaction and ultimately gain greater market share, generating more revenue and
enjoying higher proIitability.

ECRM is a practice that encompasses all marketing activities directed toward
establishing, developing and maintaining successIul customer relationship. The Iocus oI
relationship marketing is on developing long-term relationships and improving corporate
perIormance through customer loyalty and customer retention.

With the advent oI the internet the dynamics oI business have changed Iorever.
Traditional business inIluences diIIerentiators such as location; convenience and
switching cost have become much less relevant. For businesses and organizations around
the world, Irom banks and mortgage companies to manuIactures, universities and service
companies the playing Iield has been quickly and radically leveled.

In the new business environment, one oI the only ways leIt to diIIerentiate your
organization Irom the competition is the quality oI your customer service. Superior
customer service gives customer real reasons Ior doing businesses with companies.
That`s why industry analyst agree that inter based customer service is one oI the biggest
and most crucial opportunities available on web today.
ECRM can be seen as a means oI gaining competitive advantage, especially through the
acquisition oI intangible assets, such as knowledge, commitment and trust.ThreIore, Irom
a relationship marketing standpoint, particular importance is placed on achieving the
goals oI generating and increasing intangible resources.

Communications, transaction activities, inIormation research are all parts oI traditional
marketing, but can marketers improve or streamline these traditional marketing
processes? II we look toward and apply some oI the ubiquitous electronic
communications Iacilities, such as e-mail, online discussion groups and the World Wide
Web readily at hand, and investigate some oI the more esoteric electronic marketing
resources, these processes can be improved or streamlined .With these tools you can
better research your products or services industry, better research environmental trends
,better target your markets, maintain better knowledge oI and communications with your
4

current and prospective customers, and receive almost instantaneous Ieedback on new
products and services.

Why employ ECRM?
Companies need to take Iirm initiatives on the ECRM Irontier to
Optimize the value oI interactive relationship
Enable the business to extend its personalized reach
Company-ordinate marketing activities across all customer channels.
Leverage customer inIormation Ior more eIIective e-marketing and e-business
Focus the business on improving customer relationship and earning a greater share oI each
customer`s business through consistent measurement, assessment and 'actionable customer
strategies.
The six 'E`s oI ECRM
1. Electronic channels
. Enterprise
3. Empowerment
4. Economics
. Evaluation
6. External InIormation

.7 BENEFITS OF E-CRM










1. Relationship with the customers 1. Customer interaction & satisIaction
Using e-mails Ior business communication . Convenience
3. Personalized services 3. Speed oI processing transaction through
4. Websites to market product/services e-response
. Transaction security 4. Service quality & trust
E-CRM
E-CRM BENEFITS TO BANKS
E-CRM BENEFITS TO CUSTOMERS



6. REVIEW OF LITERATURE:
Previous studies have identiIied the beneIits that customer satisIaction delivers to an
organization. The longer customer stays with an organization the more proIitability the
organization generates (Reichheld & Sasser, 1990).

In business where the underlined products have become commodity- like quality oI service
depends heavenly on the quality oI its personnel. This is well documented in the study by
LEEDS (199), WHO DOCUMENTED that approximately 40 oI customers switched
banks because oI what they considered to be poor service. LEEDS Iurther agreed that nearly
three- quarters oI the banking customers mentioned teller courtesy as a prime consideration
in choosing a bank. The study also showed that increased use oI service quality/ sales and
personal behavior (such as Iormal greetings) improve customer satisIaction and reduced
customer attrition.

REICHHELD (1996) suggests that satisIied customers may choose not to deIect, because
they don`t not expert to receive better service anywhere else. Additionally, unsatisIied
customers may look Ior other providers because they believe they might receive better
services elsewhere. However, keeping customers is also depending on number oI other
Iactors.

FORNELL(199),in his study oI Swedish customers , notes that although customer
satisIaction and quality appear to be important Ior all Iirms , satisIaction is more important
Ior loyalty in industries such as banks , insurance, mail- order and automobiles.

IOANNA (00) Iurther proposed that service quality is an important element impacting
customer satisIaction level in banking sector.

To compete successIully in today`s competitive market place, banks must Iocus on
understanding the needs, attitudes, and satisIaction and behavior patterns oI the market
(KAYNAK AND KCKEMIROGL, 199). Consumers evaluate a number oI criteria when
choosing a bank.


KCKEMIROGL, 199 study oI the Hong Kong banking market discovered that customer
choose their banks because oI the convenience, long association, recommendation oI Iriends
and relatives, and accessibility to credit.



6






SCOPE
AND
OB1ECTIVES










7

7. SCOPE OF THE PRO1ECT:

THE scope oI the project was quite wide because in this project an attempt was made to
analyze oI customer relationship management in AXIS BANK, thereIore CRM is the
heart oI every business success. With CRM, we will easily understand customer
requirement, needs eIIectively and predict market trends and conditions.


A CRM program will allow a business to make new customers, service the customers,
increase the value oI customers to the company, retain good customers, and determine
which customers can be retained to given a higher level oI service and turning them into
loyal customers and ultimately increasing the proIit Ior banks.


The customer satisIaction is also known why they preIerred AXIS BANK and Iactor
inIluencing their satisIaction level. As customer is very important Ior the banks and also
they contribute proIitability Ior them but it is not necessary that every customer generate
revenue Ior the banks; hence the scope oI the project is to identiIy the non- proIitable
customers and converting them proIitable customers.


ThereIore, customer satisIaction is very necessary as when the customer delighted he
switch to more product and services thus we can see that the scope oI this research is very
wide and comprehensive.





7.1 STATEMENT OF PROBLEM:

WHAT is the eIIectiveness oI CRM in development oI customer satisIaction?

The objective oI the study is to identiIy how a customer is proIitable to AXIS BANK and
to enhance the proIitability oI the HNI customers.







7.2 OB1ECTIVES OF THE STUDY

ASCERTAINING the behavior and perception oI the existing customers
towards product and services in banking.

Study the value oI existing customers and reduce cost associated with
servicing them and ways to increase the overall eIIiciency oI bank
perIormance.


IdentiIying the most proIitable and least proIitable customers Ior the bank.

To identiIy and study the various ways oI ensuring customer satisIaction
adopted by AXIS BANK.


Receiving customer Ieedback.






















9


RESEARCH
METHODOLOGY














90

8. Research methodology:

The research methodology used Ior the study is very rigorous. Questionnaire is made,
interviews with customers are held and various books and websites are consulted Ior
various types oI inIormation related to study. The methodology so applied is brieIly
discussed below step by step.

ThereIore, marketing research can be deIined as the systematic design, collection,
analysis, and reporting oI the data and Iinding relevant to a speciIic marketing situation
Iacing the bank.

8.1RESEARCH DESIGN

It is the basic plan which guides the researchers in the collection and analysis oI data
required Ior practicing the research product. In Iact the research is the conceptual
structure with which research is conducted. It consist the blue print Ior the collection,
measurement and analysis oI the data i.e. Iollowed completing the study to ensure that
study is relevant to the problem and will Iollow the pre-determine and set data.

8.2TYPE OF RESEARCH DESIGN

DESCRIPTIVE RESEARCH-
It provides data about the population or universe being studied. it is used when we are
interested in knowing the characteristics oI certain groups such as age, sex, educational
level, etc. but it can only describe the ' who, what , when , where and how oI a situation
, not what caused it. It is used when the objective is to provide a systematic description
i.e. as Iactual and accurate as possible.


TEST OF HYPOTHESIS:
The Iollowing hypothesis is made in the study:
The customer gives the equal importance to all the attributes related to initial
experience, service delivery experience, service experience, relationship
experience and grievance handling in determining satisIaction level.
The private sector banks are able to bring greater satisIaction to customer than
public sector banks.





91

DATA COLLECTION TECHNIQUES

PRIMARY SOURCE

The data required Ior this stage is regarding the customer relationship and behavior and
perception oI the existing customers towards the products/services provided by the bank
and also, to get their satisIaction level toward bank. The data could have been by
collected by just interviewing the customers but to get a reasonable conclusion and Iair
accuracy, questionnaire is prepared and customers are interviewed. Some customers were
very co-operative but some did not care to even listen. Overall the study is a success as
Iar as primary source is concerned.

SECONDARY SOURCE

The secondary data is collected with the help oI various books, bank journals, websites
and staII oI the bank. The data collected Irom the website and books are enough to be
included in the study to analysis and concluded but the data collected Irom the staII
members oI the bank accurate and reliable. The secondary doesn`t provide any personal
views oI the customers on the technological advancement but provides a great help in
completing the report and getting the details about the bank history, products and services
etc.


8.3SAMPLE DESCRIPTION

SAMPLE METHOD-
Random sampling was chosen as the sample selection procedure.

SAMPLE UNIVERSE-
My sample universe Ior research IS the HNI customer oI AXIS BANK oI PANIPAT
CITY.

SAMPLE UNIT-
The respondents who are asked to Iill out the questionnaire are the sampling unit. These
comprise oI govt. employees, selI employed, housewives etc.

SAMPLE FRAME
The sample Irame oI this project is existing customers oI AXIS BANK.


9

SAMPLE SIZE-
The sample size is taken to be oI 100 HNI customers and asked them to Iill the
questionnaire.

RANDOM SAMPLING-
It is the best sample procedure as individual customer in the bank is chosen and
requested to take out certain time Ior an interview and Iilling oI the questionnaire. A
sample size oI 100 HNI customers in taken randomly so that the conclusion is not biased
and great care is taken while getting the questionnaire Iilled, so that the customer doesn`t
misunderstand the question and check the option that is applicable

ON THE WHOLE, such methodology is adopted that will give accurate result and the
study be a success.


8.4LIMITATIONS OF THE STUDY:

During the project Iollowing limitations are known:-

The area was large and it is not possible to deal with each and every
customer.

Time was the major constraint as, I have only 6 weeks and the area is very
vast even though, I have put up the best oI my eIIorts to cover all the areas
given to me.


Many oI the customers were not co-operative.

As AXIS bank is a big brand, many times the answers oI the respondents
may be aIIected by his oI good and bad experience about some other
product.


Geographical area is one oI the constraints, as the study is limited only to the
AXIS bank oI Panipat branch.

SOME oI the customer shows biasness and give wrong inIormation.
93

9. DATA INTERPRETATION
AND ANALYSIS

1.



INTERPRETATION
As Axis Bank was established in 1994, customers are having accounts Ior more than 10
years with the bank and 4 oI customers are having A/c with the bank Ior 3 to years. The
customers having A/c Ior 6 to 10 years are 1 only and having less than Account Ior years
are only 3 only as table 1 shows. As customers are very important Ior each and every industry
so they are given important care oI. In Axis bank also due consideration is given to their clients
by the staII members regarding their management oI accounts. According to the responses oI the
customers, the staII oI the Axis Bank handles their A/c eIIiciently. 6 oI the customers are
thoroughly satisIied with way oI handling their accounts and 7 oI them are dissatisIied.
And 1 oI the customers have no experience; customers who are very satisIied are only
1.
When Axis Bank commits any mistakes, it apologizes also Ior that as 40 customers are
very satisIied Ior that. Customers having no experience are 4 and 37 customers are
satisIied with that the bank apologizes Ior their mistakes. Only 19 oI the customers are
dissatisIied with them.
The staII oI Axis Bank whether perIorm their task well i.e. explain the charges clearly. It has
been clearly Iind out with the help oI the responses oI the customers that 9 oI the
customers are satisIied with them ( are very satisIied and 40 are satisIied). Customers
who are dissatisIied with the Axis bank are only .


94

.


INTERPRETATION 2:
Whether enquiries are careIully and eIIiciently handled by the staII oI Axis Bank, in regard
to this customers respond that 76 oI customers are satisIied that appropriate time is given
to the customers while handling the enquiries and also the voice oI the staII member is also
clear and answers the call kindly. Customers are also agree that it is very easy to approach
the staII members and they also solve their queries quickly.3 oI the customers are
dissatisIied with handling enquiries Irom the staII oI the bank like less time is taken by staII
members to answer the phone calls, non-clearness oI the voice, not meeting oI the staII members
and delay in enquiry resolvance etc. .And 1 oI the customers have no experience with these
enquiries. AIter asking the respondents that when you call the Axis Bank, most oI the responses
are related to the last month i.e. regular phone calls is being done. In also Ior the letters enquiries,
76 oI customers are thoroughly satisIied and 13 oI the customers are dissatisIied and 1 has
no experience.
Banks whether commits mistakes or not, or whether the customers have made complaint about
the mistakes, aIter asking this Irom the customers the responses are like 37oI the customers
respond that mistake does not happen with their accounts and 63 oI customers respond that
9

they have complained about the mistakes i.e. mistake regarding account, instructions not carried
out, misspell oI the name or address on letters or unhelpIul staII etc.
AIter complaining about the mistakes, the mistakes were thoroughly handled by the experienced
staII oI Axis Bank. 7 oI the customers are Iully satisIied that their complaints are resolved
eIIiciently and proper time is taken by the staII to sort out the complaint and oI them are
dissatisIied.


3.


INTERPRETATION 3:
The staII members oI the Axis Bank are Iully eIIicient according to the Ieedback oI the
customers. 7 oI the customers are Iully satisIied with the services provided by the
staII members. i.e. they have Iull potential and ability to give good advice and provide
100 attention to the customers, also have a pleasing behaviour in assisting their clients
and these people are very smart and proIessionals. And 1 oI customers are dissatisIied
with the staII members oI the bank












96

4.

INTERPRETATION 4:

Regarding the satisIaction oI the customers with the Axis Bank branch, 3 oI them are
satisIied with the perIormance oI the branch in Panipat city (7 are satisIied and 6
are Iully satisIied) i.e. Iully privacy is given to their accounts, cleanliness oI the branch,
Iree Ilow oI inIormation are passed among the staII, eIIicient perIormance by the cashiers
in carrying transactions and also the ATM machine perIorm well, cleanliness is there and
provides readable printouts. 16 customers are dissatisIied (13 are dissatisIied and 3
are Iully dissatisIied) with the perIormance oI branch and 1 have no experience.


5.

INTERPRETATION 5:
AIter getting satisIaction Irom the Axis bank, 94 oI the existing customers also
recommend their Iriends or relatives to open the A/c in this bank or to buy the product/
service and 6 oI them does not recommend about this. oI the customers buy
97

another product Irom the bank like credit card, mutual Iunds etc. with the opening oI the
bank A/c. And 1 oI them don`t buy the product Irom the bank.


6.


INTERPRETATION 6:
With time to time the proIitability oI the bank rises as well the savings oI the customers.
AIter asking the respondents about the services oI Axis Bank regarding previous year, the
customers who experienced better services oI the bank are 77 and oI the customers
have worst experience. And 1 oI the customers have experienced the same services
i.e. no change in the bank services regarding previous years.











9

10.FINDINGS


FINDINGS:
ALL the private and public sector banks are recognizing the importance oI
relationship management in their growth and customer retention.
The oIIicials try to make best relation with the banks.
The staII member gives regular updates to the customers and provides
inIormation oI the product and the services.
The registers and Iiles are systematically maintained on a daily basis and in
an organized manner.
Most oI the respondents are having more than accounts and holds more
than products with AXIS BANK.
BANK has shown better utilization oI cash balance oI customer by cross
selling other products. 7-according to the Ieedback it is observed that bank is
in need to increase their branches in Panipat city as well as to pay concern to
increase their ATM networks.
With the help oI the research it has been Iound that most oI the customer
preIer brand name and service Iacilities and some oI them is inIluenced by
some existing customers.
Greater retention oI customer is being needed as they are oIIering various
products and services .This enables a great understanding oI what customer
may expect Irom the bank and what to oIIer to them. This leads to deIining
where each customer is in relationship with the bank so that cross selling can
be done.



4 oI the customers are having account Ior 3- years and they are satisIied
with the way their accounts are managed.4 oI customers is satisIied with
the way their enquiries are handled through phones and letters. The staII oI
the axis bank is Iully eIIicient according to the customer`s responses and
99

they quickly sought out their grievances and mistakes. According to the
customer`s Ieedback, the bank has improved its services and also the overall
the satisIaction oI the customers has also improved.
AXIS BANK is eIIiciently maintaining its international banking operations
as the FOREX turnover has increased by 6 in FY11 Irom FY10 .and
FOREX trading has also increased by 43 in FY11 Irom FY11.

















100

10.1CONCLUSION:


INTERPRETATION:
FROM above diagram we can interpret ,that over the years the cusomer are more
satisIied with the overall perIormance oI the AXIS bank , as according to the oI
respodents the services oI the bank has got more better than beIore .They are more
satisIied with the staII,branch,aIter-sale services,opening oI accounts,products and
services given by all department (INCLUDING FOREX) OF AXIS BANK to
customers.


According to the interpretations, AXIS BANK is working efficently in every
field whether it is maintaining FOREX DEPARTMENT or satisfying their HNI
customers.



So we can conclude:
AXIS bank has a strong brand name in the Panipat city. The people oI
Panipat city are good in investment part and most oI them go Ior FDS AND
LIs rather investing in mutual Iund products.
Thus there is need to convert the people in mutual Iunds and credit
cards Ior increasing the proIitability oI bank.
AXIS bank sought proIitable customer and generated proIits Irom them and
taken steps by converting the non- proIitable customer to proIitable
customers.
Customer can be pulled into proIitability area when the customer is satisIied
with the product and services which he or she is using.
101

Customer satisIaction plays an important role as customers are satisIied and
retained in the bank by which they will look Ior some other product also.
At this state, relationship manager is very important who will serve the
customers in best way and suggest the customers which products should they
use with reIerence to their needs.
Banks must maintain mutual relationship between the relationship manager
and customer.
ECRM, lead to better understanding oI all aspect oI customer behavior
regarding issues and beneIit oIIered by bank and helps to diIIerentiate it-selI
Irom others.



The project was Iull oI learning and experiments and provides me with a great knowledge
about banking sector. I came to know about the export and import Iormality that a
company has to perIorm when it export and import the goods. Through this I came to
know about the operations and activities perIormed by axis bank and the kind oI products
and services provided by Axis Bank. It was a great opportunity to learn about corporate
culture and etiquettes. I have interacted with a lot oI people personally during these 6
weeks .study oI company proIile was done beIore starting the project which helps me a
lot while interacting with people. During the course oI time, I tried to get all the
objectives oI the project to be IulIilled







10

11. Suggestions and
Recommendations

Continuous interaction with customer in necessary in order to
continue with relationship building activities Ior long term
perspective.
The bank should come up with more branches in other location in
Panipat city.
The banks should open ATM network.
To increase the no oI customers so AXIS bank should also oIIer some
products Ior small business like zero balance savings.
It is seen that some oI the customers are not aware oI product and
services oIIered by axis bank .so it should pay attention on
advertising.
More number oI training and educational programs should be
included in Banks schedule.
Developing a learning culture through continuous learning process.
Net proIit margin oI the bank is quite low so the bank has to take
necessary steps to improve it perIormance.









103

12. SWOT ANALYSIS


STRENGTH


1 Right strategy Ior the right products.
Extremely Competitive And ProIitable Banking Franchise.
3 Superior customer services vs. competitors
4 Banking Services Include Corporate Credit, Retail Banking, Business Banking,
Capital Markets, Treasury And International Banking.
Sound Technological PlatIorm With Centralized Database And Operations
6 Retail Savings Bank Deposits Grew.
7 Corporate Banking: Current Account deposits grew by 4
Support oI various Promoters.
9 Dedicated workIorce aiming at making a long-term career in the Iield.



2. WEAKNESS

1 Not having Image UTI (Iraud)
Higher cost
3 Customer service
4 Market Capitalization Very Low.



3. OPPORTUNITY
1 Large retail and corporate market
Wide scope in rural India
3 Other Activity (Non Banking Activity)
4 People are become more service oriented
New specialist applications


4. THREAT
1 Legislation could impact
Other better saving, investment option available (like Insurance, MutulIund, Real-
estate, Gold)
3 Government Rules And Regulation
104

4 Very high competition with Private sector (ICICI Bank, HDFC bank) or public sector
(BOB, PNB) Bank.
Capital Market slow-down
6 Rising Rates
7 Future Market Trends
Vulnerable to reactive attack by major competitors.














10

13. BIBLIOGRAPHY
1. Books:


1. Research Methodology` by; C. R. Kothari new age international publications

. Tulsain p.c(007), Iinancial statement, Iinancial accounting, Tata McGraw hill,
nd
ed.,
pp.9.1-9.1

3. ProIessor J. Jay Choi (006) Emerging European Financial Markets.
Independence and Integration Post-Enlargement (International Finance Review, Jolume 6),
Emerald Group Publishing Limited, pp.01-0

Franco Parisi, Carlos Maquieira, Antonino Parisi (00), BANKRUPTCY IN BANKS
FROM ECUADOR: SOLVENCY VERSUS PANIC THEORIES, in ProIessor J. Jay
Choi (ed.) atin American Financial Markets. Developments in Financial Innovations
(International Finance Review, Jolume 5), Emerald Group Publishing Limited, pp.31

2.Websites:

1. www.google.com
. www.wikipidia.com
3. www.money.rediII.com
4. www.investorwords.co
. www.axisbank.com
6. www.RBI.org.in


106


3.1ournals:


1. Ricardo Baba, Hanudin Amin, (2009) "OIIshore bankers' perception on Islamic
banking niche Ior Labuan: an analysis", International Journal oI Commerce and
Management, Vol. 19 Iss: 4, pp.93 30


. Chu-Mei Liu, (2001) "An assessment oI banking operation strategies oI private banking
institutions in the Philippines", Asia PaciIic Journal oI Marketing and Logistics, Vol. 13
Iss: 1, pp.7 71

3. Daniel Singer, Albert Avery, Babu Baradwaj, (2008) "Management innovation and
cultural adaptivity in international online banking", Management Research News, Vol. 31
Iss: 4, pp. 7

4. Pooja Malhotra, Balwinder Singh, (2010) "An analysis oI Internet banking oIIerings
and its determinants in India", Internet Research, Vol. 0 Iss: 1, pp.7 106

. Philip Gerrard, 1. Barton Cunningham, (2003) "The diIIusion oI Internet banking
among Singapore consumers", International Journal oI Bank Marketing, Vol. 1 Iss: 1,
pp.16 .


6. Wai-Ching Poon, (2007) "Users' adoption oI e-banking services: the Malaysian
perspective", Journal oI Business & Industrial Marketing, Vol. 3 Iss: 1, pp.9 69

7. M. Mansoor Khan, M. Ishaq Bhatti, (2008) "Development in Islamic banking: a
Iinancial risk-allocation approach", Journal oI Risk Finance, The, Vol. 9 Iss: 1, pp.40
1.
107


. Michel Rod, Nicholas 1. Ashill, 1inyi Shao, 1anet Carruthers, (2009) "An
examination oI the relationship between service quality dimensions, overall internet
banking service quality and customer satisIaction: A New Zealand study", Marketing
Intelligence & Planning, Vol. 7 Iss: 1, pp.103 16.

9. Pooja Malhotra, Balwinder Singh, (2007) "Determinants oI Internet banking adoption
by banks in India", Internet Research, Vol. 17 Iss: 3, pp.33 339




























10


14. ANNEXURE

CUSTOMER NAME ACCOUNTS NUMBER MOBLE NO:
PERMANENT ADDRESs:

"1-Please indicate how long you have had an account with this bank?
1-2years: 3-5years 6-10years 10+years
Managing your account

"2-How satisfied are you with the way we:

Very satisfied satisfied dissatisfied very dissatisfied no experience

Handle your account efficiently,
without
Mistakes?



Apologize for mistakes?



Explain charges clearly?



andIing enquiries


"3-How satisfied are you with:

Very satisfied satisfied dissatisfied very dissatisfied no experience
The time taken by members of staff to
answer the telephone?


How quickly your enquiry was
understood and responded to?



109




"4-How satisfied are you with:

Very satisfied satisfied dissatisfied very dissatisfied no experience

Time taken by us to respond to
your letters?



How clearly our letters answer your
enquiry?




"5-Have you experienced any of the following issues in the last 6 months?

NOT Happened Complained about

A mistake on your account?



nstructions not carried out?



Unhelpful staff



"-f you have complained, please tell us how satisfied you were with:

Very satisfied satisfied dissatisfied
very
dissatisfied
The way your complaint were
handled?
Time taken to sort out your
complaint?

Staff

"-How satisfied are you that we have staff who are:

Very satisfied
satisfie
d
dissatisfied very dissatisfied no experience

Knowledgeable, Smart and
professional?
Able to give good advice and 100%
ATTENTON?

110



About the branch

"-How satisfied are you with:

Very satisfied satisfied dissatisfied
very
dissatisfied
no experience

The level of privacy and cleanliness
we offer in the branch?



How often and for how long you
have to queue?
How quickly our cashiers carry out
your instructions?

"-How satisfied are you with the branch cash machines:

Very satisfied satisfied Dissatisfied very dissatisfied no experience

Being open, clean and tidy?



Providing readable printouts?




GeneraI

"10-How likely are you to:

very likely likely unlikely very unlikely

Recommend this bank to a friend or
Relative or customer of this bank?





Buy another product or service from
this bank?







"11-Overall, how satisfied are you with the service you receive?
Very satisfied Satisfied Dissatisfied Very dissatisfied
"12-Over the last year has our service: Got better stayed the same Got the worse

111

%ANKYOU OR %AKING %E %IME %O ILL IN %IS SURVEY



CASE STUDY:


Today, banks are Iacing an aggressive competition and they have to make eIIorts to survive
in a competitive and uncertain market place. Banks have realized that managing customer
relationships is a very important Iactor Ior their success. Customer relationship management
(CRM) is a strategy that can help them to build long-lasting relationships with their
customers and increase their profts through the right management system and the application
oI customer-Iocused strategies. CRM in the banking sector is oI strategic importance. In this
study, a single descriptive case study oI one major Greek bank that has implemented CRM is
presented. The aim of this study is to analyze the design and implementation of CRM in
the bank, identify the benets, the problems, as well as the success and failure factors of
the implementation and develop a better understanding of CRM impact on banking
competitiveness as well as provide a greater understanding of what constitutes good
CRM practices.



INTRODUCTION:
Banking has traditionally operated in a relatively stable environment Ior decades. However,
today, the industry is Iacing an aggressive competition and banks have lost a substantial
proportion oI their domestic business to essentially non-bank competition. Fighting
competition is vital Ior the proftability and ultimate survival oI banks. Customer relationship
management (CRM) has been adopted by many organizations in recent years because oI their
eIIort to become more customer Iocused to Iace the increasing competition. Many companies
highlighted that they have applied CRM methods and experienced success. CRM is a
growing trend in banks today and billions have already been spent on CRM systems.

According to RaIIaella Molignani, research analyst Ior the European IT Opportunity
Financial Services research program, CRM is still at the top oI banking priorities.
In this study, a single descriptive case study oI one major Greek bank that has implemented
CRM is presented. The aim oI this study is to analyze the design and implementation oI
CRM in the bank in real-liIe settings. It presents the benefts, the problems as well as the
success and Iailure Iactors oI the implementation and develops a better understanding oI
CRM impact on banking competitiveness and provides a greater understanding oI what
constitutes good CRM practices. The empirical data are used to identiIy similarities and
disparities with the existing literature to assess whether practitioners have a well-developed
comprehension oI CRM and whether they could be translated into a set oI good CRM
practices, beyond the specifc context oI fnancial services.


11




WHAT IS CRM?
CRM evolves Irom business processes such as relationship marketing and the increased
emphasis on improved customer retention through the eIIective management oI customer
relationships. One view oI CRM is the utilization oI customer-related inIormation or
knowledge to deliver relevant products or services to customers.

Another view oI CRM is that it is technologically orientated. Advances in database
technologies such as data warehousing and data mining are crucial to the Iunctionality and
eIIectiveness oI CRM systems.

A study conducted in a UK-based manuIacturing company demonstrates that in reality CRM
is a complex combination oI business and technological Iactors. In addition, CRM is
considered a holistic process oI acquiring, retaining and growing customers.
Thus, CRM is not simply some applications or soItware but the philosophy, the way a
company works so as to build long-lasting relationships with its customers.
CRM is a comprehensive strategy and the process oI acquiring, retaining and partnering with
selective customers to create superior value Ior the company and the customer.


BENEFITS OF CRM:

CRM permits businesses to leverage inIormation Irom their databases to achieve customer
retention and to cross-sell new products and services to existing customers. Companies that
implement CRM make better relationships with their customers, achieve loyal customers and
a substantial payback, increased revenue and reduced cost.

CRM when successIully deployed can have a dramatic eIIect on bottom-line perIormance.
For example, Lowe`s Home Improvement Warehouse, in a span oI 1 months, achieved a
6 per cent return on investment (ROI) on its $ 11m CRM investment.

According to a study conducted in the sector oI banking, convenience oI location, price,
recommendations Irom others and advertising are not important selection criteria Ior banks.
From customers` point oI view, important criteria are: account and transaction accuracy and
careIulness, eIIiciency in correcting mistakes and Iriendliness and helpIulness oI personnel.
Thus, CRM, high-quality attributes oI the product / service and diIIerentiation proved to be
the most important Iactors Ior customers.

Another study conducted in a European bank shows that with CRM, the bank was able to
Iocus on proftable clients through eIIicient segmentation according to individual behavior.
InIormation about who buys what and how much` enabled the bank to have a commercial
113

approach based on the client and not solely on the product. Thus, the bank was able to better
satisIy and retain its customers.


Success and failure factors of CRM implementation

CRM should be placed at the heart oI the organization and a holistic approach should be
adopted because CRM reaches into many parts oI the business. Thus, CRM should be
beyond a Iront-oIIice contact management system. Another issue is that oI sourcing, since
many organizations have Iew alternatives but to outsource a signifcant proportion oI their
CRM solution as they lack the resources to develop CRM soItware.

Managers have a basic understanding oI CRM and the IT department has little time to
research CRM or to develop soItware solutions. Thus, in many cases, external consultants
should be used to acquire knowledge oI CRM. In addition, best-practice examples, that is,
the practical guidelines on how to design and implement CRM successIully are Iew within an
industry.

In CRM implementation, a vision or strategic direction Ior the project is highly important
because else the project may Iail. Furthermore, CRM involves business process change to
align with the system. Another major problem is the selection oI the appropriate project
team. The integration oI CRM systems is also essential, as well as the selection oI a suitable
.CRM soItware package, which is able to integrate with many other enterprise applications.
Customers should not have to deal with the complexity oI the companies and CRM should
make things easier Ior them.

Other success Iactors oI CRM are: Process ft, that is, the CRM system must be designed
around an elaborate understanding oI a CRM process so as to leverage the marketing and
sales eIIort.Customer inIormation quality that is, making eIIective use oI customer
inIormation resources. System support, because only iI the system has been implemented
and adopted successIully, a frm is able to reap its benefts. Another important Iactor is
culture, because employees should accept the changes and be prepared Ior what the
implementation oI CRM will bring.



RESEARCH METHODOLOGY

Case-study approach Taking into consideration that CRM is recently introduced in
marketing, that there is yet little consensus as to what it constitutes and that there are so Iar
no accepted CRM constructs or guiding principles yet established, it is diIIicult to begin with
a theory or a set oI hypotheses. Thus, to gain an initial understanding oI CRM practices, it
was decided to Iocus on a single Greek bank. ThereIore, the case-study method is employed,
since its Iundamental characteristic is the Iocus on a particular setting or event`.
114





SAMPLING METHOD

PurposeIul sampling is the most appropriate Ior the case study approach, because
inIormation-rich` cases can be selected so as to learn much about the issues that are
important to the study.

Two types oI purposeIul sampling were used in combination:
snowballs sampling` and
Maximum variation sampling`.


Snowball sampling relies on people identiIying others to investigate. Thus, a gatekeeper`
was used to bring the researcher in contact with other participants in the bank. The
maximum variation sampling was needed because it allows picking cases purposeIully and
illustrating a wide range oI variation on dimensions oI interest. Thus, the interviewees came
Irom diIIerent departments in the bank. The director oI the phone banking department was
used as the gatekeeper` and he suggested seven more people in the bank to be interviewed
Irom diIIerent departments. In particular, eight in-depth interviews were conducted with the
directors oI the departments: phone banking, credit cards, customer relationships, strategic
analysis and CRM, inIormation technologies, marketing, human resources management and
direct banking.


DATA COLLECTION METHODS

Several authors have suggested that it might be useIul to gather data Irom multiple sources
when conducting qualitative research. This phenomenon is called triangulation` and is
essential when undertaking a case study.

In this study, three methods were employed to collect the appropriate data. In particular,
eight in-depth interviews were conducted with the bank`s executives and secondary data
concerning general inIormation about the bank`s operations and organizational structure
were gathered through press articles, the bank ` s leafets, newsletters and monthly reports
and the bank ` s Web page. In-depth interviews are considered to be the most valuable data
collection method, given that the aim was to investigate the underlying meaning oI complex
phenomena and processes.

The in-depth interviews were based on a questionnaire that was developed around a list oI
topics regarding CRM. However, despite the Iact that the Iocus was on issues central to the
research questions, the type oI questioning and discussion allowed Ior greater fexibility`.
11

The questions were broad, to allow respondents as much Ireedom in their answers as
possible and an eIIort was made to avoid leading questions and create an interpersonal and
communicative climate with all the respondents. The summation oI the responses was based
on the content analysis method.

Qualitative content analysis was applied and the material Irom the interviews was divided
into content analytical units. Thus, the results were careIully put into categories according to
the points oI interest oI this research (implementation, benefts, and success and Iailure
Iactors) and the strong points were presented.




CRM APPLICATION IN THE BANK

UNDER STUDY

GENERAL INFORMATION

The bank was established in July 1991 in Thessaloniki by a group oI Iamous Greek
entrepreneurs. The vision oI its Iounders was to create a modern and fexible bank, which
would satisIy all the needs oI its customers and would gain a signifcant share oI the Greek
banking market.

Today, the group has a network oI 64 branches, Iour bank centers and seven aIIiliates. The
bank having as competitive advantages its well-trained employees and its modern
technological inIrastructure oIIers a signifcant range oI innovative products and services and
satisfes even the most specialized customer needs. The bank is customer Iocused and by
applying modern management methods it has signifcantly developed its fnancial results, and
it has established its presence through the long-term relationship it develops with customers.
The revenues oI the bank arrived at S19m in 003 and its profts (PBT) at S9.6m. The
bank is considered as innovative`, using modern technology to create innovative products.
Its strategy is Iocused on the Iollowing: continue to develop and increase its fnancial results,
establish collaborations Ior its aIIiliates, upgrade its personnel, and oIIer better services to its
customers so that they Ieel the bank as their own, participate or establish real estate
companies and investments portIolio.




THE SITUATION BEFORE CRM IMPLEMENTATION


116

In 00, the bank had a small customer service department with only 1 employees not well
trained. The waiting time to contact the phone centre (call centre) oI the bank was long about
0 min, and the only inIormation the customer could get was an account balance. Thus, the
bank also Iaced the problem oI long queues in its branches and dissatisfed customers who
were obliged to come to the branches Ior their transactions. The percentage oI dissatisfed
customers was high and there were many resignations oI employees in the customer service
department. The cost oI service was high. The duration oI employee training was long (more
than months) and expensive.

The working hours oI customer service were Iew (9 a.m. to p.m. Irom Monday to Friday).
Thus, the bank recognized the need to improve the level oI its services by implementing
modern technology to diIIerentiate and become an innovative bank. The bank was also
suIIering Irom high operational costs that reduced its profts. To solve the problem, the bank
could hire more employees Ior the call centre, but this would increase its operational costs
and reduce its profts.

The implementation oI a modern and fexible call centre, with relatively low cost and the
possibility to integrate new applications, would improve and strengthen the relationship with
customers by oIIering them an alternative way oI service apart Irom the branches and would
increase the bank ` s productivity in all areas.

As the phone banking manager stated: BeIore CRM, the services oIIered by the call centre
concerned only the account balances, now we can serve our customers with various banking
stock exchange and transactions as well as loans ` .



THE IMPLEMENTATION OF CRM

For the new call centre, a CRM solution oIIering a unique platIorm` was preIerred so as to
have the possibility to integrate all the existing applications and databases.
The discussions between the bank, CRM vendor and a consultancy company experienced in
CRM implementation, started in May 004. In July 004, the consultancy company
conducted interviews with executives oI the bank and prepared a draIt study, which was sent
to the central oIIices oI the bank Ior review and a week later the fnal study was ready. The
CRM project began in January 004 and in October oI the same year it was completely
implemented.



THE BENFITS OF CRM

117

The bank had a lot oI benefts Irom the implementation oI CRM: it reduced costs (one
supplier with a long-term relationship), decreased complexity (a common platIorm Ior all the
bank decreased the need Ior integration, oIIered one contact point and decreased the need Ior
technical support) and improved operations (increased employees` capabilities, decreased the
problems oI maintenance and support because oI the unique platIorm).


The integration oI voice banking in CRM helped the bank to come closer to its customers
and oIIer phone banking services (stock exchange transactions, loans, etc.). In addition, the
bank did not have to hire additional personnel Ior its new call centre to satisIy the increasing
incoming calls. Many operations were transIerred Irom the branches to the call centre and the
bank`s operational costs decreased (the cost oI an employee in the call centre is halI the cost
oI an employee in the branches). The branches now have the opportunity to deal with
specialized products and with customer relationships. As a result oI this re-organization, the
bank increased its accounts per per cent and reassured the value oI the investment.


1. THE TECHNOLOGICAL BENEFITS OF THE BANK

The adoption oI the CRM solution resulted in: an integrated platIorm Ior all the applications
oI the bank; easier architecture as Iar as the maintenance and the supporting operations are
concerned (Iewer components, higher responsibility, limited data management); a platIorm
able to support Iuture new applications (personnel, portal, platIorm outbound, etc.) and a
platIorm costing less than those oI competitors.

The easier architecture is due to the decreased needs Ior integration and the low cost oI
maintenance and support Ior one platIorm. The cost is also reduced because the supplier
undertakes a high degree oI responsibility Ior the platIorm. There is also lower demand Ior
specialized issues; however, in the case oI multiple technologies, specialized personnel or
consultancy services would be required. With the unique platIorm, the bank can oIIer a
simple and integrated solution, which gathers together all the applications. The benefts oI
the platIorm are: a decreased need Ior data management, because data are taken Irom the
central system; up-to-date inIormation and phone calls appearing on the screen oI the
employee to improve perIormance and high degree oI coordination and services; all the
networks are synchronized (telephone centre, IVR, branch ATM); the employees oI the call
center are better equipped Ior servicing customers and receive inIormation to develop the
level oI service oIIered to customers; decrease training period, etc.

As the IT Manager stated: the unique and integrated platIorm consists oI the call center, G /
L, stock exchange services, risk management services etc. Competition is Iar behind in
many oI these.`


2. THE CORPORATE BENEFITS OF THE BANK
11


The banks ` investment in the new phone banking system reduced the cost oI services by
transIerring some oI the operations Irom the branches to the new call centre and transIerred
at least 70 employees Irom other activities to sales aiming at increasing the banks `
revenues.

As the direct banking manager stated: CRM solution gave us the possibility to transIer more
than 70 employees Irom other operations to sales, strengthening in this way the possibility
Ior a Iurther increase oI the bank ` s fnancial indices.` CRM solution gave the bank a higher
degree oI eIIectiveness and perIormance and increased the level oI service and response
time. Waiting time decreased Irom about 0 min to less than min, although the volume
oI telephone calls increased about 40 per cent. Despite the increase in the provision oI
services (banking, stock exchange transactions, loans, etc.), the conversation time decreased
per 0 per cent due to the new call centre.

With CRM, the bank is able to provide services 4h a day, 7 days a week with a success
percentage oI 9 per cent. More than 7 per cent oI phone calls are done through the agents
oI the call centre and the rest through IVR and the voice banking system. The bank is now
able to manage the increasing demand more eIIectively without hiring other seven employees
who would be needed with its old system. In addition, CRM raised the capital value oI the
bank by means oI: coordination between the departments oI Marketing and Operations; the
prospects Ior new marketing channels with Telesales; the possibility oI promoting the
increased service level as a diIIerentiation Irom competitors and the emphasis given to
customers instead oI sales.

As the Marketing Manager stated: Now with the various networks the emphasis is given to
customers, Iace to Iace, beIore CRM everything was based on mass marketing per product `
The marketing campaign oI the Bank changed aIter the implementation oI CRM it is
more Iocused and more powerIul.`



FUTURE OPPORTUNITIES

The successIul application oI CRM is expected to create revenues S10 m in fve years.
The areas that are expected to generate Iuture value Ior the bank are:

CUSTOMER SEGMENTATION: The detailed inIormation the bank has about its
customers (characteristics, needs, habits, etc.) allows the bank to Iocus on the increase
oI sales, cross-selling, etc.

DISTANCE SALES / OUTBOUND: The bank can change its call centre Irom a
customer service point into a point oI revenue creation. AIter rush hours, the bank can
change the call centre into a sales point, to increase its revenues.
119



DELAYS: The bank is planning to integrate delays operations in CRM system, to
take advantage oI technology and the availability oI the call centre agents.

HUMAN CAPITAL MANAGEMENT: There are plans to implement CRM in the
Human Resources Department to achieve more proftable human resources
management and increase productivity. The initial investment on CRM was about
S1.m. The bank achieved a breakeven oI CRM investment in nine months, and in the
fIth year, the ROI will arrive at 30 per cent and the Internal Rate oI Return at 9 per
cent.




SUCCESS AND FAILURE FACTORS OF CRM APPLICATION

Critical success Iactors Ior CRM applications are good project management, a realistic time
schedule, perIect programming and not exceeding the predefned budget. Good collaboration
with the consultants and between the project team is also important Iactors Ior the success oI
the project.

During the implementation oI CRM project, programming was very good, there was a
perIect collaboration between all the parts involved, there were no changes and delays and no
problems occurred with the suppliers.

However, as the interviewees argued, since it was the frst project in the feld oI banking and
very Iew CRM applications exist (mainly in USA), very little experience was available.Thus,
having access to best business practices` is an essential Iactor Ior the success oI CRM.
Integration oI the existing systems is a Iactor that may result in the Iailure oI the project. All
the existing systems in the bank should be integrated, but the diIIerent versions did not have
the same expiration date; thus, technical support was required.

However, the CRM vendor`s team in Greece did not have the necessary experience and
specialists Irom abroad should be invited. An important Iactor that may lead to Iailure is the
capabilities oI the consultant. During the project, the consultant should oIIer new ideas and
solutions concerning the use oI the technology.




DISCUSSION

10

The bank had a lot oI benefts Irom the implementation oI CRM. One important benefts was
the reduction oI costs. As seen in the literature, organizations by implementing CRM
applications reduce costs. Another benefts was reduced complexity since there was only one
platIorm and one contact point. The integration oI all the systems in one platIorm oIIered
easier architecture and decreased the time needed Ior the support oI various systems. The
need Ior integration was also emphasized in the literature review, and it was also mentioned
that customers should not deal with complexity.

Furthermore, operations improved by increasing employees` capabilities. Thus,
eIIectiveness and perIormance were improved and the level oI service and response time
increased. Waiting time decreased, although the volume oI telephone calls increased. CRM
helped the bank to come closer to its customers and emphasis was given to customers instead
oI sales. The bank could provide services 4h a day, seven days a week with a success
percentage oI 9 per cent. The implementation oI CRM resulted in a signifcant increase in
the banks` revenues.

As the interviewees stated, eIIective project management, realistic time scheduling, perIect
programming and not exceeding the budget are critical success Iactors Ior CRM
implementation. Another Iactor is good collaboration between the project team and with the
external consultants. The bank used an experienced consultancy frm Ior CRM
implementation. The need to employ experienced consultants was also emphasized as well as
the need Ior system support to achieve a successIul CRM implementation.In addition, having
access to best business practices` is crucial. The bank Iully recognizes the value oI CRM
system Ior its development and success in the market and has established a Strategic
Analysis and CRM department.




THE CONTRIBUTION OF THIS STUDY
This study contributes to the fnancial services literature as it is one oI the very Iew that have
examined CRM applications, a comparatively new technology, in the Greek banking sector,
where very limited research has taken place on the implementation oI CRM.
The results oI the study support the fndings oI other studies mentioned in the literature and
they can be oI defnite interest and potential value to managers responsible Ior implementing
CRM in banking as well as beyond the specifc context oI fnancial services.









11







SYNOPSIS





AXIS BANK





INTERNATIONAL BANKING
OPERATIONS $ ANALYSIS
OF CRM.


Student`s Name:KANIKA SINGLA
Industry Guide: MR.RAJIT SINGLA
Faculty Guide: MS SHALINI GAUTAM


OB1ECTIVE OF THE STUDY:
The objective oI my study is to understand how banking activities
actually takes place and to gain an insight and in depth knowledge oI
the International banking operations viz., Export-Import
Documentation, Letter oI Credit, Inward-Outward Remittances,
Export-Import Finance, NRI Deposits and guidelines oI various
authorities AND
The how banks maintain relationship with customers AND Study the
value oI existing customers and reduce cost associated with servicing
them and ways to increase the overall eIIiciency oI bank perIormance.

KEY FINDINGS:
ALL the private and public sector banks are recognizing the
importance oI relationship management in their growth and customer
retention. 4 oI the customers are having account Ior 3- years
1

and they are satisIied with the way their accounts are
managed.4 oI customers is satisIied with the way their enquiries
are handled through phones and letters. The staII oI the axis bank is
Iully eIIicient according to the customer`s responses and they quickly
sought out their grievances and mistakes. According to the customer`s
Ieedback, the bank has improved its services and also the overall the
satisIaction oI the customers has also improved.
AXIS BANK is eIIiciently maintaining its international banking
operations as the FOREX turnover has increased by 6 in FY11
Irom FY10 .and FOREX trading has also increased by 43 in FY11
Irom FY11.
CONCLUSIONS:
ACC to the interpretations, we can conclude AXIS BANK is
working eIIicently and eIIectively in every Iield whether it is
maintaining FOREX DEPARTMENT or satisIying their HNI
customers.
AXIS bank has a strong brand name in the Panipat city. The
people oI Panipat city are good in investment part and most oI
them go Ior FDS AND LIs.




PERCEPTION ABOUT INDUSTRY GUIDE:
MR RAJIT SINGLA is the branch manager oI AXIS BANK,
PANIPAT. He has the operational knowledge, and a IaithIul observance to
industrial standards, key processes indicators, quality assurance processes
and industrial benchmarking to ensure business continuity and operational
excellence. He is instrumental to ensure operational continuity and
excellence; motivate to employees to achieve corporate goals and get them
aligned with business strategy; he is helpIul to preserve a good climate in the
workplace and manages the knowledge, business practices and policies that
deIines culturally to any given organization. He is very good supervisor with
Excellent communication skills, A great listener and Able to grow their
associates in their job duties and to the next level iI so desired.


I express my sincere gratitude to my industry guide, Ior his able guidance,
continuous support and cooperation throughout my project, without which
the present work would not have been possible.


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