“A STUDY ON CUSTOMER PERCEPTION ON RETAIL BANKING” Submitted By N.SUNILKUMAR (Enroll No: 8NBBP013) Under the esteemed guidance of Mr.




1. INTRODUCTION. • • • • Brief overview of research planned Nature of research Objectives Expected outcome/results 2. LITERATURE REVIEW • • • • • Complete survey of previous work How guided in the present research The reliance, reliability and validity to the present study Identify gaps in the existing literature Justify how the present work adds value to the field of knowledge and Research 3. PROGRESS REPORT • • • • • Research work done Accomplishment of objectives till date Evaluation of research objectives Deviations/Gaps Mid course correction 4. REFERENCE. • • • All references /Bibliography Should be in international standards Book references and web sites should be in Alphabetical order

ABOUT BANKING Origin of Banking
Banks are among the main participants of the financial system in India. Banking offers several facilities and opportunities. Banks in India were started on the British pattern in the beginning of the 19thcentury. The first half of the 19thcentury, The East India Company established 3 banks The Bank of Bengal, The Bank of Bombay and The Bank of Madras. These three banks were known as Presidency Banks. In 1920 these three banks were amalgamated and The Imperial Bank of India was formed. In those days, all the banks were joint stock banks and a large number of them were small and weak. At the time of the 2ndworld war about 1500 joint stock banks were operating in India out of which 1400 were nonscheduled banks. Bad and dishonest management managed quiet a quiet a few of them and there were a number of bank failures. Hence the government had to step in and the Banking Company’s Act (subsequently named as the Banking Regulation Act) was enacted which led to the elimination of the weak banks that were not in a position to fulfil the various requirements of the Act. In order to strengthen their weak units and review public confidence in the banking system, a new section 45 was enacted in the Banking Regulation Act in the year 1960, empowering the Government of India to compulsory amalgamate weak units with the stronger ones on the recommendation of the RBI. Today banks are broadly classified into 2 groups namely— (a) Scheduled banks. (b) Non-Scheduled banks.

Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services. The issue of retail banking is extremely important and topical. Across the globe, retail lending has been a spectacular innovation in the commercial banking sector in recent years. The growth of retail lending, especially, in emerging economies, is attributable to the rapid advances

in information technology, the evolving macroeconomic environment, financial market reform, and several micro-level demand and supply side factors. India too experienced a surge in retail banking. There are various pointers towards this. Retail loan is estimated to have accounted for nearly one-fifth of all bank credit. Housing sector is experiencing a boom in its credit. The retail loan market has decisively got transformed from a sellers’ market to a buyers’ market. All these emphasise the momentum that retail banking is experiencing in the Indian economy in recent years. Retail banking refers to provision of banking services to individuals and small business where the financial institutions are dealing with large number of low value transactions. This is in contrast to wholesale banking where the customers are large, often multinational companies, governments and government enterprise, and the financial institution deal in small numbers of high value transactions. The concept is not new to banks but is now viewed as an important and attractive market segment that offers opportunities for growth and profits. Today’s retail banking sector is characterized by three basic characteristics:  Multiple products (deposits, credit cards, insurance, investments and securities)  Multiple channels of distribution (call center, branch, and internet)  Multiple customer groups (consumer, small business, and corporate).

• • • • • To study on the Customer Satisfaction level on retail banking To know the technical advancement benefits for customers. To understand the operations and modalities of Retail banking To study on the Impact of the Banking Crisis and the Flight to Quality To study and analyze the concept of Customer Relationship Management of

banks in general. • To predict the future position of Retail banking in India

“Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so” The Retail Banking environment today is changing fast .The changing customer demographics demands to create a differentiated application based on scalable technology, improved service and banking convenience. Higher penetration of technology and increase in global literacy levels has set up the expectations of the customer higher than never before. Increasing use of modern technology has further enhanced reach and accessibility. The market today gives us a challenge to provide multiple and innovative contemporary services to the customer through a consolidated window as so to ensure that the bank’s customer gets “Uniformity and Consistency” of service delivery across time and at every touch point across all channels. The pace of innovation is accelerating and security threat has become prime of all electronic transactions. High cost structure rendering mass-market servicing is prohibitively expensive. Present day tech-savvy bankers are now more looking at reduction in their operating costs by adopting scalable and secure technology thereby reducing the response time to their customers so as to improve their client base and economies of scale. The solution lies to market demands and challenges lies in innovation of new offering with minimum dependence on branches ' a multi-channel bank and to eliminate the disadvantage of an inadequate branch network. Generation of leads to cross sell and creating additional revenues with outmost customer satisfaction has become focal point worldwide for the success of a Bank. RESEARCH OBJECTIVE  products.   Factors influencing their purchase decision. To study the comparative influence of various mediums of advertisements Top of mind awareness of consumers for banks offering various retail

in creating awareness amongst the consumers.

 retail product.

To find the immediate competitors in the minds of consumer for every

RESEARCH METHODOLOGY An exploratory research was conducted in order the study the consumer perception about various banks offering retail products and the banks they opt for.  collected.  Respondents’ profile Data was collected from respondents across all age and income groups. Data relating to age was collected. This segmentation helped us to gain insights into the perception and preferences across all age groups. Based on the nature of retail banking products age groups were identified and classified as follows:
Age Profile

Sample Size A random sample of 100 were administered with the questionnaire and responses Research Area The research was carried out at Hyderabad.

17% 15%
1 8-25 yrs 25-40 yrs

Majority of the respondents

belonged to the age group of 25 – 40 years.  The reason associated with it is that this group is the highest user of retail offerings.

23% 45%

40-55 yrs 55 yrs & above

Income Profile

Non- earning

Respondents earning Rs.


15% 15%

<5000 5000-8000 8000-1 5000 >1 5000

8000-15000 constitute the major chunk of the respondents using retail product.

30% 27%

This income group qualifies almost all eligibility criteria of retail offerings.
Proffessional Profile
9 7 Students Salaried Businessmen Retired 29

Retail products being also

designed for students and retired people, they were considered for the survey. Salaried and businessmen


being the major users of retail users of retail products.

Data Collection Tools  Data was collected using Questionnaires. The Questionnaire consisted of suitable combination of Rating Scale, Ranking Scale and open ended Questions in the level of importance.  An in depth interview was also conducted while administering the questionnaire. Questionnaires were administered to people with experience of any retail offering, Secondary Sources: Data was collected from the various websites from the internet Sources of Data  currently using or used in the past.  as well as Journals of Marketing.

Brief overview of research planned: Retail Banking In India 2008
Description: The annual growth in bank credit to the commercial sector is at 25.4% as on March 31, 2007 and was lower than 27.2% against previous year. Till 2010, retail banking is expected to grow at a CAGR of 28% to touch a figure of INR9,700 billion. This requires expansion and diversification of retail product portfolio, better penetration and faster service mechanism.

The report on Retail Banking Industry in India covers industry segments like housing loan, auto loan, personal loan, education loan, consumer durable loan, credit card and regulatory frame work for retail banks is also discussed. The report gives retail banking industry’s current performance and future outlook. Total 22 major retail banks in India are covered in terms of their performance, strategy and outlook.

Indian Retail Banking – 2006
Description: Indian Retail Banking continues to redefine the credit growth in the country. It grew by a whopping 44.4% in 2005-06 to touch Rs3,538 billion. This leap was despite the increase in risk weight by RBI for housing and real estate loans during August, 2005. Housing, which constitutes more than 52% of all retail loans, grew at a robust rate of 44.35% during 2005-06. In order to help banks in India to understand the market and competition and plan future strategies, we have just come out with an Industry Insight on Indian Retail banking – 2006 edition. This report analyses the retail banking market and its segments in India and presents the key trends, along with issues and challenges. The report also paints a future outlook for the market. Besides it profiles 21 major players in the retail banking space and their strategies. This report will be of immense use to all banks in India to review and formulate their strategies in the retail space. It primarily covers analysis of the present status, current trends, major issues & challenges in the growth of the retail banking sector.

Key Highlights Covered
• • • • During 2006-07, gross credit extended by Indian commercial banks grew by 34.83% to touch INR19, 495 billion. Retail credit constitutes about 25% of the total credit and has grown by 28.0% to INR4, 218.3 Billion The annual growth in bank credit to the commercial sector is at 25.4% as on March 31, 2007 and was lower than 27.2% against previous year. Till 2010, retail banking is expected to grow at a CAGR of 28% to touch a figure of INR9, 700 billion

Key Findings of the Report
• • • • • • • • Pension fund industry in India grew at a CAGR of 122.44% from 1999-00 to 2006-07. In terms of ownership, debit cards are more in number than credit cards but in terms of transactions, use of credit cards is more prevalent than debit cards. The ATM outlets in India increased at a rate of 28.09% from March 2006 to March 2007. Outstanding Education loan segment is expected to grow at 36.41% till March 2009 from March 2007 onwards to cross Rs. 27000 Crore Mark. Two-wheeler finance industry is projected to forge ahead at a CAGR of 14.21% till 200910 from 2005-06. Indian Mutual Fund industry witnessed a growth of 49.88% from May 2006 to May 2007, and a higher 215.61% growth was recorded in closed ended schemes. Increasing number of millionaires in India is increasing the scope of Wealth Management Services. Bankable households in India are estimated to move up at a CAGR of 28.10% during 2007-2011

Key Players Analyzed
This section covers the key facts about the major players (including Public, Private, and Foreign sector) in the Indian Banking Industry, including • • • • • • • • Bank of Baroda, State Bank of India, Canara Bank, Punjab National Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Citibank,

• • •

Standard Chartered Bank, HSBC Bank, ABN AMRO Bank, and

This study would enrich my knowledge to look into the modalities of operations of Key products analyzed in this report include:  Indian retail credit scenario  Housing finance  Auto finance  Consumer Durable loan  educational Loan  Other personal loans  Credit Cards &  Banc assurance.

 On line service provided by banks  The level of awareness about various products of banks  The satisfactory levels of existing customers  The location advantages to customer These are the some of the expected outcomes out of these over-all research programs i will come to that.

Our perception is an approximation of reality. Our brain attempts to make sense out of the stimuli to which we are exposed. This works well when we are about to perceive familiar facts. However, our perception is sometimes “off” when we are not clear about concepts. Perception is a process by which an individual select, organize & Interpret stimuli in a meaningful picture of the world Also, we can describe as “how we see the world around us” Perception is the process of selecting, organizing, & Interpreting or attaching meaning to events happening in environment The Concept of Perception Perception is one of the objects studied by the science of consumer behaviour. Analyzing the works of scientists studying consumer behaviour, it is possible to make a conclusion that perception is presented as one of personal factors, determining consumer behaviour. Personal factors mean the closest environment of a human, including everything what is inside the person, his head and soul, characterizing him as a personality. Using his sensory receptors and being influenced by external factors, the person receives information, accepts and adapts it, forms his personal attitude, opinion, and motive, which can be defined as factors that will influence his further activity and behaviour. Perception within this context is considered as one of the principal personal factors, conditioning the nature and direction of remaining variables. Customer Perception Customer perception is an important component of our relationship with our customers. Customer satisfaction is a mental state which results from the customer’s comparison of expectations prior to a purchase with performance perceptions after a purchase. A customer may

make such comparisons for each part of an offer called ‘‘domain-specific satisfaction’’ or for the offer in total called ‘‘global satisfaction’’. Moreover, this mental state, which we view as a cognitive judgment, is conceived of as falling somewhere on a bipolar continuum bounded at the lower end by a low level of satisfaction where expectations exceed performance perceptions and at the higher end by a high level of satisfaction where performance perceptions exceed expectations.

Customer Perception on Service:
These characteristics of service also make service unique and different from goods as Described below 1. Intangibility. Unlike manufactured goods that are tangible, a service is intangible. The Products from service are purely a performance. The consumer cannot see, taste, smell, hear, feel or touch the product before it purchased 2. Heterogeneity. A service is difficult to produce consistently and exactly over time. Service performance varies from producer to producer, from customer to customer, and from time to time. This characteristic of service makes it difficult to standardize the quality of the service Inseparability. In service industries, usually the producer performs the service at the time the consumption of the service takes place. Therefore, it is difficult for the producer to hide mistakes or quality shortfalls of the service. In comparison the goods producers, have a buffer between production and customers’ consumption 4. Perishability. Unlike manufactured goods, services cannot be stored for later consumption. This makes it impossible to have a quality check before the producers send it to the customers. The service providers then only have one path, to provide service right the first time and every time. 5. Non-returnable. A service is not returnable, unlike products. On the other hand, in many services, customers maybe fully refunded if the service is not satisfactory. 6. Needs-match uncertainty. Service attributes are more uncertain than the product. This Yield to higher variance of making a match between perceived needs and service is greater than perceived need and product match. 7. Interpersonal. Service tends to be more interpersonal than products. For example, compare buying a vacuum cleaner to contracting for the cleaning of a carpet. While customers will judge

the quality of the vacuum cleaner by how clean the carpet is, customers will tend to judge the quality of the carpet cleaning service on both the appearance of the carpet and the attitude of the technician. 8. Personal. Customers often view services to be more personal than products. For example, a customer may perceive the service of her car (balancing the tires) as more personal than purchasing new tires. If the same customer has problems later with the tires, the defect in the tires would be less personal than if the tires were never balanced. 9. Psychic. Even though the food at a restaurant might not be as delicious as other famous restaurants., the customers will recognize the restaurant and tend to be satisfactions if the service of the restaurant is excellent. Another example is when a flight is delayed, and people tend to be upset with this poor service . However, if the gate agent is very helpful and friendly, people tend to still be pleased with the service (Groth, & Dye,1999). Like other industries, banking and financial services companies have reached the conclusion that the relationship with the customer should not (metaphorically and literally) end at the bank door. Customer access after the transaction adds value to the transaction.

Features of Banking:
1. Dealing in Money: The banks accept deposits from the public and advancing them as loans to the needy people. The deposits may be of different types- Current, Fixed, Savings, etc. accounts. The deposits are accepted on various terms and conditions. 2. Deposits must be withdrawable: The deposits (other than fixed deposits) made by the public can be withdrawable by cheques, draft or otherwise, i.e., the bank issue and pay cheque. The deposits are usually withdrawable on demand. 3. Dealing with Credit: The banks are the institutions that can create Credit i.e., creation of additional money for lending. Thus, ‘Creation of Credit’ is the unique feature of banking. 4. Commercial in Nature: Since all the banking functions are carried on with the aim of making profit, it is regarded as a commercial institution.

5. Nature of Agent: Besides the basic functions of accepting deposit and lending money as loans, banks possess the character of an agent because of its various agency services.

Measuring Customer Perception in the Banking Industry:
Banking operations are becoming increasingly customer dictated. The demand for 'banking super malls' offering one-stop integrated financial services is well on the rise. The ability of banks to offer clients access to several markets for different classes of financial instruments has become a valuable competitive edge. Convergence in the industry to cater to the changing demographic expectations is now more than evident. Banc assurance and other forms of cross selling and strategic alliances will soon alter the business dynamics of banks and fuel the process of consolidation for increased scope of business and revenue. The thrust on farm sector, health sector and services offers several investment linkages. In short, the domestic economy is an increasing pie which offers extensive economies of scale that only large banks will be in a position to tap. With the phenomenal increase in the country's population and the increased demand for banking services; speed, service quality and customer satisfaction are going to be key differentiators for each bank's future success. Thus it is imperative for banks to get useful feedback on their actual response time and customer service quality aspects of retail banking, which in turn will help them take positive steps to maintain a competitive edge. The working of the customer's mind is a mystery which is difficult to solve and understanding the nuances of what perception the customer has to attain satisfaction is, a challenging task. This exercise in the context of the banking industry will give us an insight into the parameters of customer satisfaction and their measurement. This vital information will help us to build satisfaction amongst the customers and customer loyalty in the long run which is an integral part of any business. The customer's requirements must be translated and quantified into measurable targets. This provides an easy way to monitor improvements, and deciding upon the attributes that need to be concentrated on in order to improve customer satisfaction. We can

recognize where we need to make changes to create improvements and determine if these changes, after implemented, have led to increased customer satisfaction. The Need to Measure Customer Perception: Satisfied customers are central to optimal performance and financial returns. In many places in the world, business organizations have been elevating the role of the customer to that of a key stakeholder over the past twenty years. Customers are viewed as a group whose satisfaction with the enterprise must be incorporated in strategic planning efforts. Forward-looking companies are finding value in directly measuring and tracking customer satisfaction as an important strategic success indicator. Evidence is mounting that placing a high priority on customer satisfaction is critical to improved organizational performance in a global marketplace. With better understanding of customers' perceptions, companies can determine the actions required to meet the customers' needs. They can identify their own strengths and weaknesses, where they stand in comparison to their competitors, chart out path future progress and improvement. Customer satisfaction measurement helps to promote an increased focus on customer outcomes and stimulate improvements in the work practices and processes used within the company. When buyers are powerful, the health and strength of the company's relationship with its customers – its most critical economic asset – is its best predictor of the future. Assets on the balance sheet – basically assets of production – are good predictors only when buyers are weak. So it is no wonder that the relationship between those assets and future income is becoming more and more tenuous. As buyers become empowered, sellers have no choice but to adapt. Focusing on competition has its place, but with buyer power on the rise, it is more important to pay attention to the customer. Customer satisfaction is quite a complex issue and there is a lot of debate and confusion about what exactly is required and how to go about it. This article is an attempt to review the necessary requirements, and discuss the steps that need to be taken in order to measure and track customer satisfaction. Need and Importance of the Study One of the most important developments in banking sector has been the growth of the financial industry over the past two decades. The benefits of financial industry can be seen in the form of large scale industrial development, increased employment opportunities, higher turnover

as well as revenue generation to the government and also increase in export of goods and services. Banking industry in India has undergone a process of evolution with the package of time. To count or to depend on a bank merely by the function it is supposed to perform would be insufficient in the world that we live today. Investments play a vital role on the part of the customers. A real investor does not simply throw his or her money random investment; he or she performs through analysis and commits capital only when there is a reasonable expectation of profit. Hence they both are interdependent i.e., it all depends upon the customer. “Customer knows what to expect”. Today banks have a relationship management approach with their clients. Banks are offering more customized solutions to their clients. The need of the hour is not only to introduce more value added products for which the customers are willing to pay here but also to innovate & enter new segments like small business & periodical finance. Everything resolves around the customer and banks via with their innovative and quality products to suit their clients. Today the bottom line for any customer is convenience understanding and evaluating the customers perception on the service & products of a bank has without doubt become a need, which propels the body to structure itself for better performance and service. Thus delivering high quality service to clients is just as important as delivering performance that meets or exceeds their expectations. It is in this context that a study is necessary to know about awareness levels on the services provided by the public and private sector banks namely, Public Sector Banks : State Bank of India, Indian Bank and Indian Overseas Bank and Private Sector Banks : ICICI, HDFC and IndusInd Bank and the customer perception towards the banks. Objectives • • • • To evaluate the different factors considered by the investors while making investments. To study the services provided by Private Sector and Public Sector banks and the performance of it. To analyze the service facilities those are being effectively utilized by thecustomers. To ascertain suggestions from the investors for further improvement of the institutions.

Methodology The data required for this study has been collected from the primary sources. Initially a ‘Pilot Study’ will be conducted for testing the questionnaires. The pilot survey will help in making certain improvement in the final questionnaire. A structured questionnaire shall then be prepared for the respondents in order to collect primary data. The questionnaire is designed based on the objectives. Source of Data The researcher proposed to gather the required data through primary data and secondary data. Primary data are those which are collected afresh and for the first time, and thus happen to be original in character. It will be collected through questionnaires method. Secondary data is collected from the possible records like books, magazines, periodicals and websites. Universe The proposed study is to find out the services rendered by the Public and Private Sector Banks to their Customers. The population is uncountable and is considered as infinite. However, the proposed sample for the study from Private Sector Banks and Public Sector Banks are 300 respectively. Sampling Method The universe of the study is the account holders of Public and Private Sector banks and the sampling technique adopted will be convenient sampling method. Statistical Tools and Techniques The collected data have been analyzed with the help of tools like Gap Analysis and Factor Analysis

Findings from Factor Analysis:
• • • It is concluded that the respondents’ expectation are significantly more than they derive on the various aspects relating to facilities in SBI. It is concluded that the respondents’ expectation are significantly more than they derive on the various aspects of Indian Overseas bank. It is concluded that the respondents’ expectation are significantly more than they

derive on the various aspects of Indian bank. • • • It is concluded that the respondents’ expectation are significantly more than they derive on the various aspects relating to facilities in ICICI bank. It is concluded that the respondents’ expectation are significantly more than they derive on the various aspects relating to facilities in HDFC bank. It is concluded that the respondents’ expectation are significantly more than they derive on the various aspects relating to various facilities in Indusind bank. SUGGESTIONS, DISCUSSIONS AND CONCLUSIONS • The following suggestions are the outcome of the research and applications of these Every bank should take precautions to keep customers experience safe. It should take continued efforts to safeguard online banking transactions. • • • • • • • • All internet banks should provide close interaction between bank service and web based e-commerce and even service through direct electronic payments. The bank should provide more convenient international transactions which means internet along with general trends. Elimination of geographical boundaries will help free access of internet banking. The bank should provide more customer awareness and need of transparency in their dealings. All banks should provide digital certification procedure as it helps the customers data that they receive from the correct system. The banks should come up with innovative ways of service at their door steps this may be a costly affair but will surely give positive results in the long run. The banks should take the initiative of training the advisors about the new schemes from time to time which also makes the advisors connected to the bank. The banks should also emphasis on the monitoring of EMI which directly relates to the returns of a loan amount. The company should come up with proper fixed deposit plans at this point of time where the market is highly volatile and the investors become very cautious at this level.

The banks should use brand ambassadors for example the CEO’s of major Companies where the company allocate the funds. This will probably ensure proper results.

• •

The banks should focus on the advertising strategy and also the marketing of the bank product. The bank doesn’t have enough tax saving plans or appropriate plans for tax so which they should come up with.

PROGRESS REPORT: The reliance, reliability and validity to the present study: Indian retail banking sector which mainly depends upon transactions directly with consumers savings and lending, registered a decline in share of 5.02 per cent during the first quarter of FY ’10 as compared to the corresponding period last year as per analyses of thirty public or private Indian banks by the Assocham Financial Pulse. The Retail Banking in India covers segments like current account, saving account, housing loan, auto loan, personal loan, education loan, consumer durable loan, credit card and debit card etc. The share of retail banking in total income stood at 41.06 per cent during Q1 FY ’10 and was lower than the share of 46.08 per cent in the corresponding period last year. The total income of banking sector increased about 24.3 per cent during Q1 FY ’10, whereas the income from retail banking registered a growth of 6.03 per cent during the period. Due to the global meltdown, Indian government took major steps in monitory policy and cut the banking interest rate for lending like housing and auto loans which impacted the revenue of Indian retail banking segment. Other reason behind the decline in retail revenue may be due to higher collateral charged by the banks for retail loans.The analyses of fifteen private and fifteen public banks show that the private banks are performing better than the public banks in terms of their revenue from retail segment. The private and public banks have registered about 54.27 per cent and 35.47 per cent share in retail banking during Q1 FY ’10 respectively. In the context of banking sector, the public sector banks registered a growth of 28.96 per cent in total income and 9.92 per cent in retail banking during the first quarter of FY ’10. While the share of retail banking in public banks declined 6.14 per cent during the period from 41.61

per cent in Q1 FY ’09 to 35.47 per cent in Q1 FY ’10. However the private banks registered only 13.52 per cent growth in total income during the period and show a minimal decline of 0.16 per cent in retail banking. The share of retail banking in private banks declined by 7.44 percentage points during the period from 61.71 per cent in Q1 FY ’09 to 54.27 per cent in Q1 FY ’10.

Public Bank :
• The analyses of fifteen public banks shows that State Bank of Hyderabad recorded a major share in retail banking segment from its total income about 81.84 per cent followed by Andhra Bank with 42.14 per cent, State Bank of India with 39.81 per cent and Indian Bank with 38.01 per cent. • State Bank of Hyderabad registered a major share in retail banking from its total income during Q1 FY ‘10. The total income of the bank stood at Rs. 1724.41 crore during the period, out of which Rs. 1448.94 crore came from the retail banking. The bank has involved about 81.84 per cent in retail banking segment during Q1 FY ’10 registered a minimal decline in share of 2.03 per cent from the last year same period. • Andhra Bank registered about 42.14 per cent share in retail banking from its total income during the Q1 FY ’10. The total income of the bank during the period stood at Rs. 1742.70 crore and the revenue from retail banking was Rs. 734.44 crore, the bank registered 1.17 per cent decline in share of retail banking as compared to the last year same period. • The major wholesale and retail banking operator, State Bank of India (SBI) shows 39.81 per cent share in the retail banking segment from its total income during Q1 FY ’10. The bank registered a major decline in share of retail segment about 6.23 per cent as compared to the same period last year. The total income of the bank during the period stood at Rs. 21041.51 crore and the revenue from retail banking was about Rs. 8377.09 crore.

Indian Bank had a 38.01 per cent share in retail banking from its total income during Q1 FY ’10. The total income of the bank during the period stood at Rs. 2230.39 crore and revenue from retail banking was Rs. 847.84 crore. The bank registered a minimal decline of 0.98 per cent in share as compared to the last year same period.

Other banks which present major share in retail banking segment from their total income were UCO Bank (37.42 per cent), Central Bank of India (34.45 per cent), Canara Bank (33.42 per cent) and Union bank of India (31.36 per cent).

The banks which registered decline in share of retail banking during Q1 FY ’10 as compared to the same period last year were Oriental Bank of commerce (33.96 per cent), Allahabad Bank (10.54 per cent), Corporation Bank (7.81 per cent), Bank of India (7.71 per cent), Indian Overseas Bank (6.64 per cent) and Bank of Baroda (5.88 per cent).

Private Bank :
• In the context of fifteen private banks, Ing Vysya Bank Limited shows a major share (80.20 per cent) of retail banking in its total income, followed by Kotak Mahindra Bank Limited (75.36 per cent), HDFC Bank of India (74.82 per cent) and ICICI Bank Limited (53.52 per cent). • Ing Vysya Bank Limited recorded a major share in retail banking from its total income during Q1 FY ‘10. The total income of the bank stood at Rs. 742.55 crore during the period, out of which Rs. 595.73 crore came from the retail banking. The bank earned about 80.2 per cent revenue from retail banking segment during Q1 FY ’10 however registered a minimal decline in share of 2.22 per cent from the last year same period. • Kotak Mahindra Bank Limited had a share of 75.36 per cent of retail banking in its total income during the Q1 FY ’10. The total income of the bank during the period stood at Rs.894.23 crore and the revenue from retail banking was Rs. 673.91 crore, the bank Registered 3.52 per cent decline in share of retail banking as compared to the same

period last year. • HDFC bank recorded about 74.82 per cent share in retail banking from its total income during the Q1 FY ’10. The total income of the bank during the period stood at Rs. 5126.75 crore and the revenue from retail banking was Rs. 3843.34 crore, the bank registered 2.83 per cent decline in share of retail banking as compared to the same period last year.The major private bank which involved in wholesale and retail banking operations, State • ICICI Bank Limited shows 53.52 per cent share in the retail banking segment from its total income during Q1 FY ’10. The bank registered a major decline in share of retail segment about 10.936 per cent as compared to the last year same period. The total income of thebank during the period stood at Rs. 9223.32 crore and the revenue comes from retail banking was about Rs. 4936.18 crore. Development Credit Bank Limited recorded 52.26 per cent share in retail banking from its total income during Q1 FY ’10. The total income of the bank during the period stood at Rs. 147.08 crore and revenue from retail banking was Rs. 76.85 crore, registering a 7.52 per cent growth in share as compared to the same period last year. • Other banks which recorded major share in retail banking segment from their total income were Axis Bank (47.16 per cent), South Indian Bank (46.92 per cent), J&K Bank (45.90 per cent), IDBI Bank (43.45 per cent) and The Bank of Rajasthan Limited (22.91 per cent). The banks which registered decline in share of retail banking during Q1 FY ’10 as compared to the same period last year were The Federal Bank Limited (20.07 per cent), IndusInd Bank (16.22 per cent), Dhanalakshmi Bank (15.89 per cent) and Karnataka Bank ( 13.29 per cent),


 The respondents were asked to rank the following factors according to their preferences

Word of mouth



Interest rates


40 35 30 25 %20 15 10 5 0





in the extent to which they influence their purchase decision.  Majority of the respondents considered processing time to be the major influencing factor for making purchase decision while interest rate forms a close


F actors

second.  Time is the most valuable factor in today’s world of hectic schedules, that’s the reason why processing time is considered as most valuable factor in consideration list.

Re ta il P ro d ucts Ava ile d
Oth e r s 11% cr e d it car d s 25% Ho u s in g lo an 21%

 In our survey majority of the respondents had availed Vehicle loan followed by credit cards.  In our survey majority of the respondents belong to the age group of 25-40 and majority of them are salaried people. This is the stage where people try to bring alive their aspirations of

Pe r s o n al lo an 10%

Ed u catio n lo an 6%

V e h icle lo an 27%

having their own home and vehicle and hence these loan constitute major chunk of retail product availed by the respondents.

BANKS CONSIDERED FOR RETIAL OFFERINGS Respondents were asked which banks they considered for purchasing a retail offering before selecting a specific bank. The responses for different retail products were as follows-

Ba nks Conside re d For Housing Loa n ICICI 23%

 Majority of the respondents considered HDFC and ICICI for availing housing loan.  25 years of superior service has helped HDFC in creating goodwill in the mind of people and has helped the bank for consideration.


HDFC 37%

SBI 12%

 ICICI has created a place of its
Ba nks Co nside re d Fo r V e h icle Loa ns

own in the mind of customers by its heavy advertisement and superior service in every category of retail offering.  ICICI forms the major chunk in the consideration list for vehicle loan followed by HDFC.  Through aggressive advertisements and superior


HDFC 25%

SBI 9%

service ICICI has created a major place in the consideration list.

Ba nks Co nside re d F or Cre dit Ca rd s

 Majority of the respondents considered CITI BANK for credit cards followed by STAN CHART and HSBC.  Being the first bank to launch credit cards and through aggressive advertisements in the past CITI BANK has created awareness amongst the

HSBC 18%

customers and by providing superior service it CITI BANK still acquire major share in the
B an ks C o n sid e red F o r E d u ca tio n a l Loan

consideration list.  SBI and HDFC form the major chunk for consideration in this category followed by SBI.


HDFC 2 2%

S BI 35%

 Interest rates being the major factor for educational loan PSUs have the competitive edge due to low interest rate.

B an ks C o nsidered Fo r E du catio n al Lo an
C O R P O R A T IO N B A NK 5%


HDFC 22%

SBI 35%

 SBI outrages other banks in the consideration list for educational loan.  Low interest rates and an extensive presence in varied locations seem to be the primary reason for this. AWARENESS OF BANKS THROUGH VARIOUS ADVERTISING MEDIUMS
Awareness Of ICICI Through Various Mediums
Billboards / Hoardings 17% Television 35%

ICICI in general has a

high level of awareness among the people owing to its extensive advertising.  Among these, awareness through television

Word Of Mouth 18% Radio 3%

New spapers & Magazines 27%

Aw a rne ss Of S BI Through V a rious M e dium

is the highest level followed by newspapers.

Billboards / Hoardings 17% Word Of Mouth 26% Radio 3%

Telev ision 19%

New s papers & Magaz ines 35%

 

Customer’s awareness of SBI through various media was measured. SBI, being an old and experienced player, has immense awareness through the word of mouth media.

Awareness Of HDFC Through Various Medium
Billboards / Hoardings 22% Television 13%

 HDFC being a private and an aggressive player, especially in the home finance arena, has taken the print media as its stalwart for awareness.  The reason for the largest pie is that a large chunk of the TG is also an avid reader of newspapers and magazines.

New spapers & Magazines 39%

Word Of Mouth 21% Radio 5%

Top Of Mind Awareness For Car Loan


 The graph reveals that close to fifty percent of the awareness is about ICICI and HDFC.
SBI 10%


HDFC 21%


 Customers do not seem to regard HSBC as a bank offering car loan owing to its limited advertising about this product.

Top Of Mind Awareness For Personal Loan

 The personal loan market is a relatively fragmented market
SBI 12%


with respect to awareness.

HDFC 14%


Top Of M ind Aw a re ne ss For Housing Loa n

 According to our survey HDFC is the clear market leader in the awareness paradigm.  This area is also being aggressively invaded by many other players owing to the increased requirement for homes.

HDFC 31%

SBI 20%

Top Of M ind Awareness For Cre dit Cards

ICICI 19% SBI 12%

 CITIBANK is also perceived to be a market leader, besides being one.  A quarter share of the awareness pie of ‘Others’ can be attributed to a gamut of the recent new launches as also the varied co-branded credit cards.



HSBC 16%

Relation between basic-banking and retail-banking choices:
The survey also tried to study, analyze and correlate respondents’ decision in selecting a bank for general banking purposes and for availing retail products. The findings revealed that people

generally prefer PSU banks close to their locality to bank with whereas private banks and foreign banks have higher preference on the retail banking front. The reason associated with this behavior is the close proximity and long existence of PSU banks making them safe and trustworthy. Also people have had accounts with the PSU banks as private banks were non-existent earlier, and hence are reluctant to change their banks. However due to efficient service, short processing time, competitive rates and a caring attitude people have started to prefer private banks for meeting their retail needs.

There is a need of constant innovation in retail banking. In bracing for tomorrow, a paradigm shift in bank financing through innovative products and mechanisms involving constant upgradation and revalidation of the banks’ internal systems and processes is called for. Banks now need to use retail as a growth trigger. This requires product development and differentiation, innovation and business process reengineering, micro-planning, marketing, prudent pricing, customisation, technological upgradation, home / electronic / mobile banking, cost reduction and cross-selling. While retail banking offers phenomenal opportunities for growth, the challenges are equally daunting. How far the retail banking is able to lead growth of the banking industry in future would depend upon the capacity building of the banks to meet the challenges and make use of the opportunities profitably. However, the kind of technology used and the efficiency of operations would provide the much needed competitive edge for success in retail banking business. Furthermore, in all these customers’ interest is of paramount importance. The banking sector in India is demonstrating this and I do hope they would continue to chart in this traded path.

BOOKS 1) Marketing research by BERRY G.C 2) Marketing Research by Malhotra N.K. , fifth edition SITES

(http://www.icmrindia.org/free%20resources/casestudies/banking1.htm#b1 www.hdfcbank.com/ www.hsbc.co.in/ www.icicibank.com/ www.yesbank.in/ www.db.com www.rocw.raifoundation.org/fashion/BAfashion-mktg/brandpositioning/lecture-notes/lecture04.pd

1. C.Ashokan, Hariharan.G, “Profile and Perception of Retail Consumers – An Empirical study in Palakkad District”, Indian Journal of Marketing, Vol: XXXVIII, Number: 2, February 2008, PP – 44 2. Vigg Silky, Mathur Garima, Holani Umesh,“Customer satisfaction in retail services: A comparative study of public and private sector banks”, The Journal of Indian Management & Strategy 8M, Volume: 12, Issue: 2, Year: 2007. 3. R.A. Ravi , “User Perception of Retail Banking Services: A Comparative Study of Public and Private Sector Banks”, The ICFAI Journal of Bank Management, Vol. 12, No. 2, May 2008 , pp. 32-46 QUESTIONNAIRE 1. Which bank(s) do you bank with presently? ____________________________________ 2. Rank the following factors according to their weightage in your purchase decision. Cost _______ Processing time _______ Goodwill _______ Word of mouth _______ Advertisement ________ 3. Which retail banking product have you availed?

‫ ڤ‬Housing Loan ‫ ڤ‬Personal Loan

‫ ڤ‬Car Loan ‫ ڤ‬Education Loan ‫ ڤ‬Others, Please specify _________________

4. Which banks did you consider in your decision making before buying this product? a) b) c) d) _______________________ _______________________ _______________________ _______________________

5. How did you become aware of them? (tick relevant) Banks => Television Newspapers & Magazines Radio Word of mouth Billboards/Hoardings a) b) c) d)

6. Which bank did you choose and why? _____________________ Reason:_____________________________________________________________ ____________________________________________________________________ __________________________________________________ 7. Are you satisfied with the bank’s service? Yes No 8. Would you suggest any improvement? ____________________________________________________________________ ________________________________________________________ 9. Which bank comes to mind when thinking about car loan ____________________________________ 10. Which bank comes to mind when thinking about personal loan ____________________________________ 11. Which bank comes to mind when thinking about housing loan. 12. Are you satisfied with your bank atm services  Yes  No

13. Is your bank providing e banking facilities are you satisfied or not  Yes  No

14. Which bank is providing good online services. ____________________________________ 15. Would you recommend your bank to someone else for the same product or any other product that your bank offers?  Yes  No

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