Business Development Strategies Hand Outs Strategy refers to a Plan of Action designed to achieve a particular Goal.

. The business strategy of a company provides the big picture that shows how all the individual activities are coordinated to achieve a desired end result. It is through the strategy process that the overall direction of the business is set. This is based on the opportunities and threats in the outside world and the internal strengths and weaknesses of the business. Need for Business Development Strategies 1. Increased competition . If you have a new, big competitor who has just entered your market or is preparing to enter the market and has the potential to be a serious threat, it is the right time to take a good, hard look at your business and the way it should compete in the future. Perhaps the new competitor has taken over one of the existing businesses (or even several in an attempt to consolidate your industry) and it's clear that they have a very different approach to business and different goals. . Perhaps the new competitor has a different business model and has significant advantages to the customer. . Perhaps the competitor has entered the market from overseas and brings with them a major cost advantage. 2. Changes in customer needs, wants and expectations. Customers can be very fickle and what they look for can suddenly change. . If the customer value criteria buyers use to make their buying decisions change either adding or taking away one element, or the weightings between elements change - it is essential that the company reviews its offerings quickly and makes the necessary changes. 3. Poor performance and fear of failure . If the business suddenly starts to perform badly, then you can expect external stakeholders like the bank or third party shareholders to put pressure on the managers to take a detailed review of their business and put together a plan of action to improve future performance. 4. There is a planning advocate . A new senior manager has been recruited who is a big believer in strategic planning. Alternatively one of the influential existing managers becomes aware of the benefits of strategic planning - from reading a book or from talking to other people who have seen the benefits of strategic planning. *********************************

CURRENT ACCOUNT SAVINGS ACCOUNT (CASA)

CASA are also referred as the banks Low Cost Deposits. CASA plays a very important role in banks business as there are wide opportunities for business expansion and revenue enhancement through CASA. CASA accounts are most prominent in middle and Southeast Asia, and are an attempt to combine savings and checking accounts to entice customers to keep their money in the banks. The current account portion pays no interest while the savings portion pays an above average return. They are offered free or for a fee depending on minimum or average balance requirements. Strategies to improve CASA Business References from existing customers. Aggressive marketing through various channels. Tie ups and alliances. Qualitative services. Outsourcing

********************************* TRADE FINANCE Trade Advances Trade finance is related to international trade. While a seller (the exporter) can require the purchaser (an importer) to prepay for goods shipped, the purchaser (importer) may wish to reduce risk by requiring the seller to document that the goods have been shipped. Banks may assist by providing various forms of support. For example, the importer's bank may provide a letter of credit to the exporter (or the exporter's bank) providing for payment upon presentation of certain documents, such as a bill of lading. The exporter's bank may make a loan (by advancing funds) to the exporter on the basis of the export contract. Other forms of trade finance can include trade credit insurance, export factoring, Forfaiting and others. In many countries, trade finance is often supported by quasi-government entities known as export credit agencies that work with commercial banks and other financial institutions. In short, trade finance means money lent to exporters or importers.

Various Services Offered

Import Financing Banks offer both Buyers Credit and Suppliers Credit. The financing is available in all major currencies. Export Financing In both local and foreign currencies. Pre-shipment Financing: This facility is offered to an exporter by way of packing credit to enable him to finance purchase or import of raw materials, processing and packing of the goods meant for exports. Post-shipment Financing: Post-shipment Credit is offered to an exporter to finance export sales receivables after the date of shipment of goods till the date of realization of export proceeds. Advances Against Collection Bills (AACB): This offering is in the form of a loan provided to the exporter to bridge the working capital gap that exists before the export proceeds are realized. The rate for this advance is the same as the post shipment rate for exports as prescribed from time to time by RBI. Once the export proceeds are realized the loan is liquidated. Letter of Credit Whether you are an exporter or an importer, Axis Bank offers a gamut of services to meet all your Letter of Credit requirement including Opening, Negotiating or Discounting, Advising, Confirming, Standby LC, Reimbursement and Foreign Exchange services. In addition to our overseas branches we also have an extensive correspondent bank network. We also structure complex Letters of credit to suit specific transaction requirements. Advising Export Letters of Credit: One of the key offerings of the Bank under exports is advising Export Letters of Credits. These LCs are advised to the beneficiary most expeditiously and within a committed time period. Confirmations of Letters of Credit: The bank also confirms letters of Credit for its customers. Once the bank has confirmed a letter of Credit, it steps into the shoes of the Issuing Bank. It therefore has no recourse to the exporter, once it provides post shipment credit and has recourse only to the issuing bank. Bank Guarantees Banks offer to issue various types of guarantees - performance, financial, bid bond etc. Guarantees are well accepted by government agencies Capital Market Agencies and all major corporates. Apart form the guarantees issued locally, overseas correspondent bank alliances also enable banks to issue guarantees overseas for participation in global tenders.

Collection Services Axis Bank offers flexible and efficient handling of commercial and financial documents for Imports, Exports as well as for local trade. We have in place an extensive local branch network and correspondent banking arrangements to facilitate the same.

Local Bills Collections: wide network of branches spread across the country enables to send and follow up on your LC-backed as well as clean bills sent for collection. International Bills Collections: Overseas branches coupled with a wide network of correspondent banks enable us to offer efficient and prompt collections as regards imports, exports, bills under LC and so on. Trade Advisory Services Advisory services to meet all your trade requirements. Business Development Strategies Tie Up with District Chamber of Commerce. Aggressive marketing of Credit Products (High Value). References. Database of the International Transactions. Survey Methods. ********************************* PERSONAL LOANS Whenever a person considers taking a loan the first question that comes to mind is about the type of loan that he/she can get. The personal loan can be used for any purpose, such as renovating your house, marriage expenses, medical expenses, holidays, purchasing consumer durables, higher education etc. No clarification is needed while applying for the personal loan. Neither do you require a guarantor or security. You can obtain a personal loan primarily on the basis of your income. The factors that decide how good an interest rate you can get for your personal loan include your income, your employer's profile, and your repayment track record for other existing loans. Many people, these days, take personal loans to repay their credit card dues, which carry a higher interest rates than personal loan.

Personal loan Features: Loans for salaried & self-employed individuals Special loans for doctors, chartered accountants, engineers, architects, company secretaries, and ICWAI graduates Loans are available from Rs. 20000 to Rs. 20 lakh for any purpose depending on your requirement Flexible repayment options, ranging from 12 to 60 months Hassle-free loans - No security/guarantor/collateral required Repay with easy EMIs Balance transfer facility to retire any higher cost debt Loans available against repayment track record of any existing auto, personal or home loan Loans available against proof of life insurance policy premium receipts Simple procedure, minimal documentation, & quick approval Strategies to reduce NPA in Personal Loan Regular tracking of accounts. Utilization of CIBIL effectively. Ensuring proper documentation (KYC) Clearly understanding the requirements. Auto debit facility from the savings account. Maintain good relationship.

********************************* CREDIT CARD Credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services.[1] The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. Benefits to customers The main benefit to each customer is convenience. Compared to debit cards and cheques, a credit card allows small short-term loans to be quickly made to a customer who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card. Credit cards also provide more fraud protection than debit cards. In the UK for example, the bank is jointly liable with the merchant for purchases of defective products over 10 Many credit cards offer rewards and benefits packages, such as offering enhanced product warranties at no cost, free loss/damage coverage on new purchases, and points which may be redeemed for cash, products, or airline tickets.

Strategies to improve Credit Card Business Effective cross selling to walk in customers. Aggressive marketing of products to existing customers. Outsourcing. Display of product posters in Shopping Centres etc. Free Credit Cards to the HINs. Attractive Bonus and Reward Points. Waive off card charges.

********************************* Current position of Banks retail loans in India Retail lending activity survived despite a number of restrictions imposed on it in the past. With financial sector reforms, the focus has shifted from "priority sector banking" and commercial lending has been reinstated to its rightful place. Today many banks focus on this activity for improving their bottom lines. Fresh and innovative products are being launched to facilitate the corporate customer who forms the core of this business. There is big competition among banks to secure bigger share of this business At present, commercial loans are available for practically any kind of activity and also for both long and short tenures. Based on customer profile, these loans are of two types:

Corporate Loans Retail Loans

India has emerges as one of the largest and fastest growing economies of the world during the last decade. The strengthening of the economy in India has been fuelled by the convergence of several key influences, like growth of the key economy sectors, liberalization policies of the government, well-educated work force and the emergence of a middle class population. India, having the second largest population in the world, is on its way to become the world's fourth largest economy in a span of 2 decades. Due to the restrictive regulatory environment and strict policies of the government of India until the early 1990's the public sector banks and other scheduled banks were the major lenders. Even with the entry of private banks, in the initial phase, there was limited competition between the public sector banks and private banks. Also, the thrust was not on developing the economy consistently through credit growth. Hence, banks did not feel the need to foray into the sectors that were under served. In the current scenario, banks have been thriving on retail lending. The focus of banks now, is to increase the probable profits while limiting possible losses. An increase in market penetration brought about a change in the business environment and in the way banks conducted their business. There was a change in terms of innovation in products as well as processes to cater to the demands of the new age customer on one hand and to protect the bank from multiple risks on the other.

Retail exposure of banks includes various types of retail credit, such as residential mortgages, consumer credit cards, automobile and personal loans, loans against securities, and small business loans. Retail Loans - Characteristics

These are small size loans These loans meet the needs of a large number of customers with well diversified portfolios The target customers are generally individuals or small organizations These loans offer standard products to customers. Very rarely a customer's requirement is customized The operations of retail credit are centralized in most of the banks Bankers can make quick credit related decisions because of decentralization These loans are designed to cover varied segments of risks High volume business High number of transactions

Salient features of retail loans

Types of facilities: Loans are the finance facility of a fixed amount extended to meet a onetime requirement of a customer, for a fixed tenure, to be repaid over a period in installments. To enable customers to meet their emergency requirements, bankers permit them an overdraft [OD]. This means that bankers allow the customer to withdraw more than the credit balance in the customer's current account or give a temporary loan in the current account itself.

Secured/Unsecured facilities: Secured loans are always secured by an underlying asset against which funding is extended. This lending is also known as asset based lending. A specific charge is created against such an asset. This gives the banker/lender the right to take possession of the asset and sell it to recover the loan in case of default. Unsecured loans do not have any underlying security and are purely extended based on the creditworthiness of the borrower. This is also known as non-asset based lending.

Interest: On a loan given at a fixed rate, interest is charged throughout the tenure of the loan at that rate which is fixed at the time of granting the loan. The customer has to pay interest at the contracted rate irrespective of whether the interest rate in the market goes up or down. In case of floating rate of interest, the rate at which the interest is charged on the loan varies from time to time according to the movement of interest rate in the market.

Tenure: The tenure for a loan depends upon the amount of the loan and repayment capacity of the customer. However, the maximum tenure permitted depends upon the period over which the asset financed could depreciate completely.

Loan to Value ratio: Loan to Value ration [LVR] refers to the maximum percentage of the value of the asset that is given as a loan. It varies according to the nature of the asset and also the rate at which the asset is expected to depreciate or reduce in value.

Rising income levels and a greater propensity to consume in India's tier-2 cities has created an attractive opportunity for retail finance players, a CRISIL study has said. The study, retail loan products: opportunities and risks beyond the metros and mini-metros, has detailed the current market opportunity, growth prospects, emerging competitive scenario and key operating parameters such as finance penetration, average ticket size, loan to value ratio and non-performing assets in these cities. The report has considered these parameters for five retail loan products including home loans, loan against property (LAP), car loans, two wheeler loans, and gold loans. The markets it has covered include Bhopal, Coimbatore, Indore, Jaipur, Kanpur, Kozhikode, Lucknow, Ludhianna, Madurai, Mysore, Nagpur, Nashhik, Rajkot, Thiruvananthapuram, and Vishakhapatnam. These markets are significant in terms of size and together account for about 15 per cent of the demand for retail loans in India, the report said. CRISIL Research believes that growth prospects in many of these markets are extremely strong. According to the report car loan disbursements in 10 of the 15 markets assessed are expected to clock a 20 per cent compounded annual growth rate (CAAGR) over the next 2 years as compared to 13 per cent CAGR in the larger cities. In 7 of these tier 2 cities, Loan Against Property (LAP) disbursements would grow faster than the rest of India, the report said. Gold loans are expected to grow at a much faster pace (more than 50 per cent annually) in five non--southern cities assessed. Stronger growth prospects, lesser competition, higher yields and profitability comparable to the larger cities make tier 2 markets an extremely attractive proposition for lenders. Rising competition has seen over leveraging of customers, which along with rising rates may cause a rise in delinquencies. Even though this market is nascent, its one of the fastestgrowing loan segments. Unlike in the US, there is no sub-prime market in India. The US sub-prime market consisted primarily of people with little or no credit worthiness, most of them charged to sub-prime borrowers being mortgage loans. In India, the lower end of the personal loan market may be considered as a segment carrying some of the risks attached to the sub-prime.

Most customers in India are first-time borrowers from the organized market, and hence, have no credit history. The AEP study found that the big personal loans with an average size of around Rs 90,000 are given to more established individuals at lower rates of 14-28% against the 30-55% level. Competition in the personal loans market has increased with the entry of multinationals, private banks and NBFCs. Citi Financial and GE Money are the oldest players in this market. However, in recent times, companies like ABN Amro, Centurion Bank of Punjab, HDFC Bank, HSBC, ICICI Bank, DBS Cholamandalam, Fullerton India and Religare have been increasingly focusing on the personal loan. In most cases, the sub-prime market for these players constitutes somewhere between 5-20 per cent of the monthly disbursements.

Though some players like Citi Financial and Fullerton go through a personal screening of customers, this is not a practice being followed by everyone. Therefore, even though, India is not exposed to sub-prime lending, the likely recession in the US market may affect entire world economy. Indian stock market is showing a downward trend in line with the global markets as the prices of Indian shares, corporate bonds and real estate are decreasing. Most of the commercial banks have focused on retail lending by registering an increase of about 32 per cent with a subsequent reduction of 13.75 per cent in their NPAs on a y-o-y basis during the financial year 2006-07. It further revealed that among the major commercial banks, Centurion Bank of Punjab (CBOP) topped the list in extending loans in the retail segment. CBOP saw a huge growth of 65 per cent in their retail business in FY 2006-07. Others in the pack doing well in this area of lucrative retail banking included ICICI Bank (38.5 per cent), Bank of India (35 per cent), Dena Bank (33 per cent), Allahabad Bank (29.3 per cent) and HDFC Bank (22.9 per cent) Hit by a liquidity squeeze, a battered stock market, and the recent travails of big institutions such as ICICI Bank Ltd, Indias banks are feeling the impact of the global financial meltdown. But there are also made-in-India problems brewing, caused by the recent surge in unsecured lending. Indian retail lenders see non-performing loans (NPLs) rising across all lending classes, especially in unsecured lending which includes credit cards. NPLs in credit cards are in the 10-15% range while the figure often crosses 20% in small unsecured loans. The magnitude of the risk is worrying. Indian-owned banks made around Rs5 trillion of unsecured loans by Marcha fivefold increase in five years. In just two years through March, banks total NPLs rose by nearly Rs60 billion. Though banks have pulled back on lending in the wake of the global financial crisis, they need to act more firmly and swiftly to prevent the NPL problem from growing to a point where it may undermine confidence in a banking system, already under strain due to a slowing Indian economy and deepening global recession.

The situation Indias lenders face today shares features uncomfortably similar to those that prevailed prior to the Asian financial crisis a decade ago. Lets examine the principal factors that underlie Indian banks bad-loan problems: Aggressive, undisciplined market growth: Lending has been increasing by some 35% a year for the past three years, with loans to new customers accounting for much of the growth. To boost growth, banks relied on direct selling agents and retail partners to offer loans.

*********************************

Know Your Customer (KYC)

KYC can hinder the deposit growth of the Bank The regulations require the Banks to adopt KYC procedures (KYC is an acronym for 'Know your Customer', a term commonly used for Client Identification Process). It assists the Banks to know / understand the customers and their financial dealings better to monitor their transactions for identification and prevention of suspicious transactions. The RBI guidelines require the Bank to establish the identity of the customer on the basis of documentary proof at the time entering into any business relationship. By submitting the required information, you help the Bank in discharging its statutory / regulatory obligation. In 2002 the RBI directed all banks and financial institutions to put in place a policy framework to know their customers before opening any account. In November 2004, the RBI again issued a comprehensive guideline reiterating the objective of KYC guidelines to prevent banks from being used for money laundering activities or for the financing of terrorism. KYC has become a focus function due to:

Increased regulatory pressure, with regulators requiring ever-tightening control; Lowered risk appetite, requiring better understanding of counterparties, their taxonomy and corresponding collateral exposure; Business needs requiring faster turnarounds with lower costs in an environment of tightening margins.

However, the documentation hassles involved in KYC implementation have had a negative impact on the growth of number of investors. It becomes frustrating for the customers as well as for the financial organizations to adhere to the complex KYC requirements. For this reason, banks and financial institutions are now looking at implementing a more strategic approach to KYC compliance. Documents needed: The mandatory details required under KYC norms are proof of residence and identity. A person's ration card, passport, utility bills or a letter from the employer or his housing society is accepted as residence proof. For proof of identity, passport, voter ID card,

Permanent Account Number (PAN) card or driving licence too could work. Nowadays, most institutions ask for the customer's PAN too We have seen adverse impact of KYC are duplication of effort; over-diligence due to lack of clarity over requirements; violation of rules due to poor training, poor enforcement, or simply indiscretions on part of front office staff; poor internal and external interfacing resulting from inconsistent standards and ineffective tooling of processes. Given that it is mandatory for banks to follow KYC norms to prevent money laundering and to keep a check on suspicious transactions; this dissuades the lower income group from availing banking services? Its not practically feasible for everyone, like a maid servant or the sweeper in, to provide proof of residence. With a large part of Indias population belonging to the lower income group, strict KYC norms may deprive them even from opening a savings account? Impact: Although the effort towards strengthening identification norms has helped in preventing money laundering and reducing fraud, it has had a negative impact in an unexpected quarter. The growth in investor numbers in various instruments is either stagnating or reducing. Apparently, the KYC norms are proving restrictive because of the hassles of documentation. The KYC requirement sometimes leads to unnecessary and repetitive work, delaying operations. Customers complain about the paperwork involved. Ultimately, it means customers have to run from pillar to post for complying with the KYC norms. Investors complain of being asked to provide details repeatedly or face a freeze on their accounts Impact for service providers: Companies and distributors say, KYC requirements have burdened them with substantial administrative obligations. The verification rules place a financial burden on banks, insurance companies and mutual funds due to the involved costs. Currently, every entity has to individually conduct this verification which results in duplication of effort for customers as well as the institutions. There is a need to simplify KYC requirements . The authorities could opt for centralisation of the KYC norms to make investing easy for those not well versed with paperwork. Mutual funds have done this at an industry level by giving the mandate to a single entity, CDSL Ventures. A uniformity in requirements for KYC prescribed by all authorities would help make the filing easier. One important document that will make life simpler is - 'Aadhar', the unique identification number to be provided to each citizen by Unique Identification Authority of India (UIDAI), a government initiative. But there is still some time before it will be implemented. By making KYC norms simpler, it will make investments simpler. It is especially required if investing is to become more inclusive. KYC, being a key regulatory requirement for all financial institutions across the globe, can be viewed as an opportunity to minimize business risks. Financial institutions need an appropriate solution to integrate the KYC process with their existing customer on-boarding process, to ensure faster customer on-boarding and minimize business risk by providing a 360

degree view of customer behaviour. An important offshoot of the KYC process is deeper customer understanding through customer analytics, further enabling effective cross-selling and up-selling.

KYC Need and Importance

It is critical for financial institutions, professionals working within the financial sector, bullion and gambling sectors as well as other regulated entities to know their customers very well. Financial institutions and other reporting entities should have a proper understanding of their customers to satisfy their respective KYC obligations. It is equally important that employees of these organisations are properly trained regarding the importance of KYC and the specific KYC policies or procedures of their organisation. KYC is important for a number of other reasons. For example, if a business knows its customers well, it may be able to prevent damage to its reputation and avoid fraud or excessive risk in financial transactions involving customers. The principal objectives of a KYC policy include: ensuring that only legitimate and bona fide customers are accepted ensuring that customers are properly identified and that they understand the risks they may pose verifying the identity of customers using reliable and independent documentation monitoring customer accounts and transactions to prevent or detect illegal activities implementing processes to effectively manage the risks posed by customers trying to misuse facilities. What risks are mitigated by KYC? Let's take a brief look at the risks that can be mitigated by an effective KYC policy. There are five types of risks that an effective KYC policy can help to mitigate: reputational operational legal financial concentration. Reputational risk: The reputation of a business is usually at the core of its success. The ability to attract good employees, customers, funding and business is dependant on reputation. Even if a business is otherwise doing all the right things, if customers are permitted to undertake illegal transactions through that business, its reputation could be irreparably damaged. A strong KYC policy helps to prevent a business from being used as a vehicle for illegal activities.

Operational risk: This is the risk of direct or indirect loss from faulty or failed internal processes, management and systems. In today's competitive environment, operational excellence is critical for competitive advantage. If a KYC policy is faulty or poorly implemented, then operational resources are wasted, there is an increased chance of being used by criminals for illegal purposes, time and money is then spent on legal and investigative actions and the business will be viewed as operationally unsound. Legal risk: If a business is used as a vehicle for illegal activity by customers, it faces the risk of fines, penalties, injunctions and even forced discontinuance of operations. Apart from regulatory risk, involvement in illegal activities could lead to third-party judgments and unenforceable contracts. In addition, professionals working within many financial and other professional sectors may also personally be subject to legal action or prosecution. Due to the nature of business, these risks can never entirely be eliminated. However, if a business does not have an effective KYC policy, it will be inviting legal risk. By strictly implementing and following a KYC policy, a business can mitigate legal risk to itself and its staff. Financial risk: If a business does not adequately identify and verify customers, it may run the risk of unwittingly allowing a customer to pose as someone they are not. The consequences of this may be far reaching. If a business does not know the true identity of its customers, it will also be difficult to retrieve any money that the customer owes. Concentration risk: This type of risk occurs on the assets side of a business if there is too much exposure to one customer or a group of related customers. It also occurs on the liabilities side if the business holds large concentrations of funds from one customer or group (in which case it faces liquidity risk if these funds are suddenly withdrawn). By implementing an effective KYC policy, a business can identify the entire scope of the asset and liability risk faced in relation to each customer and group of customers.

*********************************

LOW COST DEPOSITS

Faced with higher interest outgo on account of migration of deposits from savings bank to term deposits, public sector banks are looking at ways to improve the share of low-cost deposits. They are opening salary accounts, expanding branches, especially in untapped smaller cities, and waiving charges for add-on facilities. Margin protection A higher share of low cost current and savings account (CASA) deposits helps to reduce the interest expenses, thereby protecting margins. While the interest payable on savings bank is 4.5 per cent, the interest rate on one year and above fixed deposits is, on an average, above 8 per cent and going up to 10 per cent and above in case of longer-term deposits. Besides, savings bank deposits are more long term in nature as they are replenished. Therefore, they offer a more reliable source of funds for banks than term deposits, which are by their very nature available for a fixed time period. Bank of Baroda opened 45 branches in the first quarter and plans to add over 500 more this year. Of this, 269 will be in Tier-I and Tier-II cities and 253 in Tier-III to Tier VI cities. The bank added 18 lakh new customers in the first quarter and will focus on adding more, said Mr M. D. Mallya, Chairman and Managing Director. Share of the bank's CASA deposits fell to 33.92 per cent as on June 30, 2011, from 35.23 per cent last year. At 24 per cent, Corporation Bank's CASA deposits to total deposits ratio is one of the lowest in the industry. We are trying to replace high-cost deposits with CASA in order to protect our NIMs, said Mr Ramnath Pradeep, CMD. Corp Mahila Power', a savings bank-cum-loan account for working women and similar other schemes are expected to bring in more lowcost deposits. This year the bank is targeting a CASA share of 30 per cent. Indian Overseas Bank's CASA ratio came down to 27.56 per cent for the quarter ended June from 33.12 per cent in the previous year. We are looking to open 400 branches during this year which will contribute to savings accounts, said Mr M. Narendra, CMD. Our bank is on an account opening spree. We are targeting to open 75 lakh accounts to boost the CASA ratio to 30 per cent, added Nupur Mitra, Executive Director, IOB. Bank of India also plans to focus on customer acquisition for improving its CASA ratio, which as on end-June was at Misra, CMD, BoI.

*********************************

Online Utility Bill Payments

Top 3 reasons to pay Utility Bills Online 1. Convenient. 2. Saves Time. 3. Completely Secure. Features
1. 2. 3. 4. 5. 6.

Pay bills without stepping out of your home or office Link multiple bills to your account View and Pay bills anytime, anywhere Fast, convenience and hassle-free Access to all major utility billers Get updates for pending bills

Also needs to identify how the Online Utility Bill Payment option can be considered as USP for the bank? Axis Bank are put this forward to all new customers and also they are educating the existing customers about the various features. This feature also helps branches to earn revenue in the form of fee. Online Payment of Insurance Premium Life Insurance Products Pay your insurance premium through ATMs Now you can pay your insurance premium through Axis Bank's ATM. Features

Convenience No more writing cheques. Online payment. Reach You will be able to view your MetLife premium details & pay at any of our ATMs, irrespective of the place where you hold your policy or location from where you have registered with the Bank. You will be able to pay the premium not only for yourselves, but also for your spouse & dependent children. Instant Payments When you pay your premium through Axis Bank ATM's your account will be instantaneously debited.

Safety All transactions through the ATM are completely secure.

How to avail this service? To avail this service you need to fill in a registration form and submit it at the nearest branch. If you are the customer of the bank, You can also pay your premium amount using Net Banking facility of the bank. This facility is advantages to both banks and the customers. Banks can reduce the human effort involved in it, as the transactions are processed online. Lesser cost, Better service to the customers. Banks are now able to concentrate in getting new customers for Insurance business than concentrating on premium recovery which is very well taken care by the customer themselves. *********************************

Value Added Services

VAS helps the banks to differentiate themselves from the customers. Service is the Key to achieve your business targets specially in Banking Industry. This can be definitely considered as USP in acquiring new customers and also improving CASA Business. Advantages of VAS for Banks Customer Satisfaction. Acquisition of new customers. Improved CASA Business. Increased Revenue earning capacity. Banks should identify the customer needs and requirements and then fill the GAP by implementing better service. Also try to find out the problems your customer or new customers facing in other banks, so that better services can be introduced to retain the existing customers and to acquire the new ones.

Value Added services for Banks Need & Importance Value-added Services refers to advanced and/or additional services a content provider (network operator) offers to possibly increase their revenues, or make their offering more competitive, all services beyond standard voice calls and fax transmissions. However, it can be used in any service industry, for services available at little or no cost, to promote their primary business. Banks in India offers innovative services such as core banking solutions, net banking, phone banking and ATM services. Apart from traditional banking functions such as lending and borrowing, Indian commercial banks provide a number of value added services. Personal Banking, Investment consulting, insurance consulting, export credit, providing demat accounts are some of the value added services provided by commercial banks in India. Indian banking sectors is governed by Reserve Bank of India. RBI functions include issuance of banking licenses, devising guidelines and regulations, specifying lending rates, specifying reserve, liquidity and solvency ratios to commercial banks. A number of foreign banks started their operations in India during 90s. Sensing the competition and their own survival Indian public sector banks started getting their acts together. They improved their working standards and provide better customer service. Major Indian Banks State Bank of India is the largest public sector bank in the country having more than 4000 branches and a large customer base. ICICI Bank comes next as the largest private sector bank. HDFC Bank, Punjab National Bank, Canara Bank, Union Bank of India, Axis Bank, Bank of India, Indian Overseas Bank, and Oriental Bank of India are some of the leading commercial banks in India. As the Indian economy emerges one of the largest in the world banks in India has very important role in shaping it. Value-added services like mobile banking will drive the growth of India's booming telecom sector in the next phase, with the market for such offerings set to rise four-fold to Rs 482 billion ($9.64 billion) by 2015, says a new report. In developing markets like India, mobile banking, in particular, will see huge uptake as regulators evolve clearer guidelines to reach out to the large un-banked population base. The increase in income levels and large young population will also drive demand. Globally, too, telecom service providers are increasingly looking at broadening their value added services offerings as declining revenues from voice segment and rising costs put pressure on margins.

The report also says that the Indian telecom industry will continue to add subscribers at a healthy rate, even though the number of users has already crossed 900 million in a country with a population of around 1.2 billion. The reach and penetration of mobile phones can ensure the delivery of a large number of services in a cost effective, fast and seamless manner even without physical access, as is seen from such initiatives around the world. Basic value added services

Access to multiple users Account view / Statement Online Funds Transfer Third party funds transfer (RTGS/NEFT) Demand Draft request Utility Bill Payment Bulk transaction through file upload Direct and indirect tax payment SMS/Email alerts MIS reports Demat View facility *********************************

Government Transactions
During the last two years, the Reserve Bank of India, Government Departments and agency banks doing Government business have initiated several steps for computerisation of Government transactions. The RBI has upgraded the computer systems at its Central Accounts Section (CAS), Nagpur, and has started supplying data electronically to the circle offices of several Central Government Ministries. The Public Accounts Departments of the Reserve Bank are also at advanced stage of computerisation. The State Bank of India has also computerised its Government Accounts Division (GAD), Navi Mumbai and other banks have computerised their Link Cells at Nagpur, using `Stand alone Personal Computers (PCs). 5.1.2 There are as many as four committees at the Central Government level addressing the issue of computerisation of Government transactions :
o

The Working Group on expeditious transmission of tax payment/ challans. information from banks (Chaired by the Principal Chief Controller of Accounts, CBDT) The Committee for the improvement of tax collection system for quicker remittance of funds to Government Accounts

(Chaired by the Principal Chief Controller of Accounts, CBDT)

The Committee to review existing format of receipt and payment scrolls of RBI and public sector banks (Chaired by the Joint Controller General of Accounts) Joint working Group to study the delinking of Fund Settlement from the submission of scrolls/challans (Chaired by the Deputy Controller General of Accounts)

Electronic Reporting of transactions Central Government Transactions Day-1 : Branches capture the transactions on computer and send the details to the Focal Point Branch the same day evening. Day-2 : Focal Point Branches to consolidate and report the transactions to GAD/ Link Cell at Nagpur by 12.00 Noon and GAD/Link Cell, in turn, redirecting the transactions to CAS, Nagpur by 2.00 p.m. State Government Transactions Day-1 : Branches capture the transactions on computer and send the details to the State Government Link Cell the same evening. Day-2 : The State Government Link Cell consolidates and transmits the data to Local Public Accounts Department(PAD) by 1.00 p.m. by next day.

Recommendations 5.3.1 There is a need to computerise all branches of banks dealing with Government transactions. In the first phase computerisation of all focal point branches and State Government Link Cells should be completed by March 31, 2000 to be followed by the second phase of computerisation of all branches dealing with Government transactions on an expeditious basis. 5.3.2 Efforts should be made to forward scrolls and other data in respect of Government transactions to all PAOs, treasury offices, Drawing and Disbursing offices, and to Finance departments of State Governments and Accountant General on magnetic media in the initial phase and in an on-line manner subsequently. 5.3.3 The computerisation of Government departments should be synchronised with the computerisation of bank branches dealing with Government transactions. 5.3.4 The Public Accounts Departments of the RBI should be connected to CAS, Nagpur to enable same day reporting and booking of Government transactions.

5.3.5 All PAOs / Circle offices should be computerised not later than March 31, 2001 and DDOs / Treasury offices before March 31, 2002 in alignment with the computerisation of FPBs and dealing branches. 5.3.6 A Working Committee may be constituted for monitoring the progress of computerisation of branches of banks dealing in Government transactions. Such a Working Committee may prepare a blue print for computerisation and monitor the usage of standardised message formats, system and application software developed and progress of implementation. The Working Committee may be made into a Standing Committee over the medium term, if felt necessary. 5.3.7 Electronic reporting of transactions to GAD of SBI / Link Cell of banks should be resorted to, with an initial three day cycle to be compressed into two days after stabilisation. 5.3.8 There is a need to delink the submission of scrolls from the funds settlement by the payee branch. 5.3.9 Establishment of connectivity between the CAS, Nagpur and the Reserve Banks departments (DGBA, IDMC) and the Controller General of Accounts and the Finance departments of State Governments is necessary. The RBI should develop the necessary software package for information exchange using the INFINET. 5.3.10 The Government may examine the feasibility of introducing a variant of the EFT system to facilitate the collection of taxes which could start preferably with collection of direct taxes. 5.3.11 The need for affording interest credit in respect of Relief Bonds to the accounts of Bond Holders through ECS has to be made a workable reality. In the long run, collection of subscriptions to the Relief Bonds Scheme could also be routed through ECS mode and with the linking of banks / branches through the INFINET. 5.3.12 The migration to dematerialisation of Government securities requires upgradation of existing technology so as to facilitate maintenance of data pertaining to a dematerialised environment, to gain access to dematerialised data and exchange of DEMAT based information and to have settlement in a dematerialised environment, conversion from DEMAT to scrip form and vice-versa. Such upgradation should be suitably worked out with scalability as an essential feature. 5.3.13 All the above would also require a process re-engineering to be made on the entire process of Government accounting / funding. Also identify the need and importance of Govt transactions to banks. Its role in customer satisfaction and also the role in improving CASA Business. Government Transactions and CASA Business Banks must formulate strategies in getting accounts of government offices. Government accounts will be funded with huge balances required for them in implementation various projects.

Banks should also concentrate on identifying the possible debits so that they can convert them to be a new customer and ultimately the funds lies with the branch, thus improving the CASA business, specially the Current Account Business.

Axis Bank, Udupi is the best example to quote Having opened government account, it has been able to mobilize huge deposits.

********************************* CASH MANAGEMENT SERVICE In United States banking, cash management, or treasury management, is a marketing term for certain services offered primarily to larger business customers. It may be used to describe all bank accounts (such as checking accounts) provided to businesses of a certain size, but it is more often used to describe specific services such as cash concentration, zero balance accounting, and automated clearing house facilities. Sometimes, private banking customers are given cash management services. The following is a list of services generally offered by banks and utilized by larger businesses and corporations:

Account Reconcilement Services: Balancing a checkbook can be a difficult process for a very large business, since it issues so many checks it can take a lot of human monitoring to understand which checks have not cleared and therefore what the company's true balance is. To address this, banks have developed a system which allows companies to upload a list of all the checks that they issue on a daily basis, so that at the end of the month the bank statement will show not only which checks have cleared, but also which have not. More recently, banks have used this system to prevent checks from being fraudulently cashed if they are not on the list, a process known as positive pay. Advanced Web Services: Most banks have an Internet-based system which is more advanced than the one available to consumers. This enables managers to create and authorize special internal logon credentials, allowing employees to send wires and access other cash management features normally not found on the consumer web site. Armored Car Services: Large retailers who collect a great deal of cash may have the bank pick this cash up via an armored car company, instead of asking its employees to deposit the cash. Automated Clearing House: services are usually offered by the cash management division of a bank. The Automated Clearing House is an electronic system used to transfer funds between banks. Companies use this to pay others, especially employees (this is how direct deposit works). Certain companies also use it to collect funds from customers (this is generally how automatic payment plans work). This system is criticized by some consumer advocacy groups, because under this system

banks assume that the company initiating the debit is correct until proven otherwise.

Balance Reporting Services: Corporate clients who actively manage their cash balances usually subscribe to secure web-based reporting of their account and transaction information at their lead bank. These sophisticated compilations of banking activity may include balances in foreign currencies, as well as those at other banks. They include information on cash positions as well as 'float' (e.g., checks in the process of collection). Finally, they offer transaction-specific details on all forms of payment activity, including deposits, checks, wire transfers in and out, ACH (automated clearinghouse debits and credits), investments, etc. Cash Concentration Services: Large or national chain retailers often are in areas where their primary bank does not have branches. Therefore, they open bank accounts at various local banks in the area. To prevent funds in these accounts from being idle and not earning sufficient interest, many of these companies have an agreement set with their primary bank, whereby their primary bank uses the Automated Clearing House to electronically "pull" the money from these banks into a single interest-bearing bank account. Lockbox - Retail: services: Often companies (such as utilities) which receive a large number of payments via checks in the mail have the bank set up a post office box for them, open their mail, and deposit any checks found. This is referred to as a "lockbox" service. Lockbox - Wholesale: services: are for companies with small numbers of payments, sometimes with detailed requirements for processing. This might be a company like a dentist's office or small manufacturing company. Positive Pay: Positive pay is a service whereby the company electronically shares its check register of all written checks with the bank. The bank therefore will only pay checks listed in that register, with exactly the same specifications as listed in the register (amount, payee, serial number, etc.). This system dramatically reduces check fraud. Reverse Positive Pay: Reverse positive pay is similar to positive pay, but the process is reversed, with the company, not the bank, maintaining the list of checks issued. When checks are presented for payment and clear through the Federal Reserve System, the Federal Reserve prepares a file of the checks' account numbers, serial numbers, and dollar amounts and sends the file to the bank. In reverse positive pay, the bank sends that file to the company, where the company compares the information to its internal records. The company lets the bank know which checks match its internal information, and the bank pays those items. The bank then researches the checks that do not match, corrects any misreads or encoding errors, and determines if any items are fraudulent. The bank pays only "true" exceptions, that is, those that can be reconciled with the company's files. Sweep accounts: are typically offered by the cash management division of a bank. Under this system, excess funds from a company's bank accounts are automatically moved into a money market mutual fund overnight, and then moved back the next morning. This allows them to earn interest overnight. This is the primary use of

money market mutual funds.

Zero Balance Accounting: can be thought of as somewhat of a hack. Companies with large numbers of stores or locations can very often be confused if all those stores are depositing into a single bank account. Traditionally, it would be impossible to know which deposits were from which stores without seeking to view images of those deposits. To help correct this problem, banks developed a system where each store is given their own bank account, but all the money deposited into the individual store accounts are automatically moved or swept into the company's main bank account. This allows the company to look at individual statements for each store. U.S. banks are almost all converting their systems so that companies can tell which store made a particular deposit, even if these deposits are all deposited into a single account. Therefore, zero balance accounting is being used less frequently. Wire Transfer: A wire transfer is an electronic transfer of funds. Wire transfers can be done by a simple bank account transfer, or by a transfer of cash at a cash office. Bank wire transfers are often the most expedient method for transferring funds between bank accounts. A bank wire transfer is a message to the receiving bank requesting them to effect payment in accordance with the instructions given. The message also includes settlement instructions. The actual wire transfer itself is virtually instantaneous, requiring no longer for transmission than a telephone call. Controlled Disbursement: This is another product offered by banks under Cash Management Services. The bank provides a daily report, typically early in the day, that provides the amount of disbursements that will be charged to the customer's account. This early knowledge of daily funds requirement allows the customer to invest any surplus in intraday investment opportunities, typically money market investments. This is different from delayed disbursements, where payments are issued through a remote branch of a bank and customer is able to delay the payment due to increased float time. *********************************

Need and Requirement for Revenue products for the banks

Banks are now loosing focus on their home products like SB, Current, FD and RD. Their business development strategies and Performance analysis is now based on the Revenue that they generate on a monthly basis. Banks have now selling Mutual Funds, Insurance to their clients which fetch them good amount of revenue. Insurance revenue amounts to almost 40% of the premium amount collected. Banks are now having a full fledged Wealth Management Team to support the

revenue generating activities of the banks.

Please elaborate on the following points 1) To advise clients on their investments. 2) Customer Satisfaction. 3) Revenue Generation. 4) Good product to survive during recession. 5) To meet the financial needs of the customers. 6) All in one Roof for the clients. ******************************** Wealth Management Service Wealth management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services. High net worth individuals, small business owners and families who desire the assistance of a credentialed financial advisory specialist call upon wealth managers to coordinate retail banking, estate planning, legal resources, tax professionals and investment management

ICICI BANK & WEALTH MANAGEMENT : In India ICICI bank and Axis-Bank are very well known banks in the field of wealth management. ICICI Bank will float subsidiary for the purpose of WM activities in Canada & other market even as ICICI has rolled out ICICI Group Global Private Clients for those with net worth of $ 1 million or more. ICICI GCPC launched their business in Dubai very recently in the month of April-08 and caught 2500 clients. They are going to add another 1000 high network clients this year. ICICI Bank is using the services of global players like Merrill Lynch, City group, and UBS for catching the clients for Wealth Management business. ICICI Bank and its subsidiaries are engaged in the development of various attractive products (services) for the clients with net worth of $ 1 million.

The eyes of ICICI Group Global Pvt. Clients on the rising number of dollar millionaires at present they are 100,000 in number in few year the number will definitely increase. India's No.2 lender banker ICICI expects to sustain the 70% growth in its private wealth management business. ICICI has 150,000 customers with investible surplus of at least Rs. 10 lakhs equity, real estate and private equity is driving the private banking business in India. India has market of wealth management about $ 600 billion.

AXIS BANK & WEALTH MANAGEMENT One of India's leading private sector banker Axis bank also combined with Banque Privee Edmond de Rothschild Europe based wealth management expertise institution & is going to make new standard for the NRI's wealth management. The LCF Rothschild group has based its reputation in the area of wealth management on its big banking experience. Actually the institution is engaged in the task of providing financial advise to the Europe's leading families, Government and various corporations for the last '7' generations. The Axis Bank 5th largest bank by market capitalization in India provides payroll services to over 12000 corporates across 2.8 million salary accounts. The market capitalization of Axis Bank was 235 million in the last year 2007 is engaged in the business of wealth management, with its international presence in Dubai, Singapore Hong Kong, Shanghai and so on. *********************************

E Tax
Process

The Assessee/ Taxpayer will log on to the designated website of the bank wherein the taxpayer has to select Commercial Taxes Department. Thereafter, a Challan Form (eChallan) will be made available online which the taxpayer will fill by providing the requisite details like Head of Account, Period, Area, Registration Number, etc. In the Bank Branch dropdown menu, the taxpayer is required to select Axis Bank to make payment through our Bank. On confirmation of the Challan details, the taxpayer will be directed to the Internet Banking Module (iConnect) of Axis Bank and the taxpayer has to log in using the User Id & Password issued by the Bank wherein the payment screen is displayed. At the payment screen, the taxpayer will once again verify the Challan details submitted and the amount of tax being paid and will complete the transaction using the User Id & Transaction Password issued to him by the Bank. On successful completion of the transaction, a receipt in the form of a "Tax Payer Counterfoil" will be displayed which the taxpayer can print for records.

Availability of the Facility

To the Customer having a Current/ Savings Account with any Branch of the Bank in the country, paying Commercial (Sales) and Professional Tax in any of the Sales Tax Division/ Circle in Chhattisgarh. To the Customer registered for Net Banking Facility (iConnect) of the Bank with Funds Transfer Facility. In case of Corporate/ Non-Individual Customers who are registered for Corporate iConnect facility, they have to obtain separate 'e-Payment User Id & Password' from the Branch for such e-Payments. Advantages: Ease of operation and convenience - Online payment of taxes from Desktop Facility is available 24*7*365 basis One can pay on behalf of the firm, company and others from anywhere in the country No submission of physical Challan by the taxpayer - eChallan to be submitted/ delivered by the Bank's Nodal Branch directly to Treasury. Immediate acknowledgement of payment in form of Cyber Receipt - Taxpayer counterfoil generated online at the time of payment ********************************* Education Loans

Education loans have made the pursuit of academic courses easier, without burdening parent or guardians with liabilities, that we should be bearing. The education loan process may vary from bank to bank but there are some fundamental steps. Step 1: Fill in the loan application form Like in case of every loan, the applicant has to fill in an application form which may ask for details such as contact details, details relating to academics etc. it is important to fill in accurate information. Step 2: Personal Discussion Once the applicant, ie the student fills in the form, there is a round of personal discussion wherein he/she may be asked various question relating to the academic performance, the course one has selected, probably the institute etc. At this stage, it is very important to be lucid and clear about one's selection of course and its future potential of generating income. While some banks are known to hold the academic record important, some may give it a slightly lesser attention. This does not go to say that one needs an excellent academic record. But, make sure that there are answers to those mishaps that could have occurred during the academic life.

Step 3: Provide validated supporting documents Unlike other loans where the talk of documents relating to say property, might come in at a later stage and may cause delay-documents are a must. In case of education loans, documents relating to admissions are mandatory even before the bank considers the loan application. The bank will verify the enrollment of the student from the concerned institute. One may also require collateral security such as papers relating to property to be mortgaged if the loan amount is above Rs. 4 lakh. Step 4: Stage of loan approval or denial When one takes some other kind of loan, there is a co-guarantor, especially in case of personal and home loans. For an education loan, a guarantor is mandatory. The guarantor could be an applicant's parents or guardians. The bank will run a thorough check of the guarantor and his/her credit history before sanctioning the loan. After completion of the process, the loan may be sanctioned or denied. Step 5: Borrower's signature on a Promissory Note While the parents/guardians are guarantors, the student is the actual borrower of the loan. Once the loan is sanctioned, the student has to sign a promissory note to the bank.

Step 6: Disbursal of the loan Once the formalities are completed (additional documents and signed post-dated cheques may be required), the bank will disburse the loan. The bank may disburse the college/institute fee directly to the concerned institute. Online Applications In the current times, availing an education loan has been made even easier. Now, one can apply for an education loan online. The loan will be sanctioned only in principal and the applicant will have to contact the bank for actual approval and disbursement of the education loan. *********************************

Outsourcing and its Problems for banks

The Indian banking industry is witnessing robust growth under the influence of a changing regulatory environment, rapid technological advancements, heightened competition and consolidation. This changing landscape in the banking industry is driving banks to explore the outsourcing option to achieve efficiencies. Likely problems in Outsourcing (Kindly Elaborate) Wrong/ misleading in formation passed to the customers

Chances of Frauds Damage to the reputation of banks Increased Cost Increased customer complaints Risk of exposing confidential data. Lack of customer focus ********************************* Strategies of New Product sales at your bank Banks need to formulate strategies for any of the new product introduced by it, for improving the sales of the same Elaboration on following points can be done. 1) Contact the existing customer base and educate them about the new product. 2) Banners and Kiosk 3) Tie ups with any agencies. 4) Internal offers and competition among the employees. 5) Contact all the walk in customers and educate them about the new product. *********************************

Converting Customer satisfaction into loyalty is considered major objective to sustain for banks. Customer satisfaction influences how consumers will. Their satisfaction could influence their future behaviour to purchase online, offline, recommend website, return to website, commit to a brand, and general retail satisfaction. That is a very convincing statement to support why bank should focus on converting customers from new to return and make them loyal to the service and brand. Obviously, the customer has to be satisfied to be loyal. Nevertheless, higher customer satisfaction and loyalty can have a much broader impact on business by enabling to:

Achieve lower costs of selling Increase repeat sales to existing customers Improve brand equity or price premium Increase retention rates for supplies sales Enable faster roll out and ramp up of new products and services Leverage satisfaction rates in marketing messages to attract new customers Create a pool of referrals for capturing new accounts Improve employee productivity, satisfaction, and retention

In many cases customer satisfaction and loyalty are not simply based on how well the services perform. Customers tend to have a more holistic view of their experience and what satisfies them. In banking sector, the key components driving customer loyalty, include:

Identifying what the customer values Examining critical touch points with the customer Understanding the impact of business channel on customer satisfaction Examining the impact of billing and administrative issues on satisfaction Identifying specific sources and causes for low customer satisfaction Quantifying the business impact from improving customer satisfaction Benchmarking your customer satisfaction vs. competitors Assessing the differences in customer satisfaction by market segment Examining the relationship between business processes and customer satisfaction

The discipline of customer experience management (CEM) turns customer satisfaction into loyalty and advocacy for shared services. How do you get there? It comes down to managing every customer and consumer touch point. Consider these key principles for CEM:

Evaluate your customer engagement model. Are you taking advantage of all communication channels? Are you developing strategic messages about shared services? Stay in touch with customers to gather feedback and concerns keep in front of emerging business issues and manage your message. Consider your organizational structure. Part of staying relevant with the customer is assessing your leadership team and governance. Do you have the right skills? Are you focusing on areas such as communication and change management, customer engagement, risk and compliance? The right leadership skills are an important part of the customer experience. Design the right offers and experiences for the right customers. Look beyond transactional services to develop experiences that delight customers, provide strategic value and create brand advocates. Focus the entire shared services organization on delivering the experiences. Consider creating cross-functional teams to determine customers needs; then deliver on them by measuring experience-oriented objectives. Develop the capability to please customers again and again. Loyalty and advocacy come from consistently great service, not from satisfaction that spikes in one month and plummets in another. So provide effective training, establish direct accountability for the customer experience, and look for new ways to measure it while creating meaningful insights. Converge all services into a brand experience for customers. Simplify complexities for customers, develop effective communications and reporting materials, and consider appointing service delivery managers to serve as the primary point of accountability for customer satisfaction.

*********************************