EXECUTIVE SUMMARY

Have you ever thought of applying for Priority Banking with your bank (also called as
Preferred banking)? A lot of banks offer something called as “Priority Banking Solutions”
to their customers who qualify the eligibility criteria. A priority banking customer is treated
in a more special way and is taken care with priority by bank.

The first question to understand is why do banks have a Priority banking model at all ?
The reason is very simple, to treat different level of customers differently. If you want to
harshly put it, then it’s just a way of keep a separate list of High Net-worth Individuals and
focus on them more and service them in a better manner, because one customer who is
eligible for priority banking will give 100 times more business/profit to bank compared to
a normal customer. A preferred banking customer will have a few eligibility criteria to
honor, which is generally linked to his bank amount balance

Facilities provided to Priority Banking Customer

A Priority banking customer has few advantages over normal customers and gets more
features. Some of the most common one’s are:

 Separate queue for in the bank so that you don’t wait

 No charges on NEFT and RTGS transactions through Net banking

 Free “At Par” cheque book payable at any Bank branch across the country, so you
do away with the need to ask for demand drafts

 Charges waiver for DD cancellation, Cheque return, Duplicate statement charges,

Demand Draft Charges, Discount in Locker Charges,

 Cheque pick-up facility

 No charges on balance inquiries and cash withdrawals if you transact on Other Bank
ATMs in India.

 Many other benefits

 Premium Credit Cards

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 However, all this is not so real and true
 While banks list down these facilities on their website, on the ground level – there
are many real life customers who say that at the end of the day, you never get what
is promised from these banks. There are a lot of things just on papers. Most of the
banks just use Preferred banking route to attract high net worth customers and
finally end up calling then for investments products. A relationship manager keeps
in touch with you (the target), he has all the information on how much money you
have and when money comes and goes out of your account.

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 INTRODUCTION TO BANKING

1. HISTORY

Banking in India originated in the last decades of the 18th century. The first banks were
The General Bank of India which started in 1786, and the Bank of Hindustan, both of
which are now defunct. The oldest bank in existence in India is the State Bank of India,
which originated in the Bank of Calcutta in June 1806, which almost immediately
became the Bank of Bengal. This was one of the three presidency banks, the other two
being the Bank of Bombay and the Bank of Madras, all three of which were established
under charters from the British East India Company. For many years the Presidency
banks acted as quasi-central banks, as did their successors. The three banks merged in
1925 to form the Imperial Bank of India, which, upon India’s independence, became
the State Bank of India.
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848
as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established
in 1865 and still functioning today, is the oldest Joint Stock bank in India. It was not the
first though. That honor belongs to the Bank of Upper India, which was established in
1863, and which survived until 1913, when it failed, with some of its assets and
liabilities being transferred to the Alliance Bank of Simla.

The Bank of Bengal, which later became the State Bank of India. The first entirely Indian
joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed
in 1982. The next bank incorporated was the Punjab National
Bank, established in Lahore in 1895, which has survived to the present and is now one of
the largest banks in India.
Around the turn of the 20th Century, the Indian economy was passing through a relative
period of stability. Around five decades had elapsed since the Indian Mutiny, and the social,
industrial and other infrastructure had improved. Indians had established small banks, most
of which served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks
and a number of Indian joint stock banks. All these banks operated in different segments
of the economy. The exchange banks, mostly owned by Europeans, concentrated on
financing foreign trade. Indian joint stock banks were generally under capitalized and
lacked the experience and maturity to compete with the presidency and exchange banks.
This segmentation let Lord Curzon to observe, “In respect of banking it seems we are
behind the times. We are like some old fashioned sailing ship, divided by solid wooden
bulkheads into separate and cumbersome compartments.”

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 The period between 1906 and 1911, saw the establishment of banks inspired by the
Swadeshi movement. The Swadeshi movement inspired local businessmen and political
figures to found banks of and for the Indian community. A number of banks established
then have survived to the present such as Bank of India, Corporation Bank, Indian Bank,
Bank of Baroda, Canara Bank and Central Bank of India.

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2.BANKING AND BANKING SYSTEM

Banking is a business of accepting deposits and lending money. It is carried out by financial
intermediaries, which performs the functions of safeguarding deposits and providing loans
to the public.

In other words, Banking means accepting for the purpose of lending or investment of
deposits of money from public repayable on demand and can be withdrawn by cheque,
draft order and so on.

Banking Company: Any company, which transacts the business of banking

Banking System is a principal mechanism through which the money supply of the country
is created and controlled. The banking system enables us to understand Commercial Banks,
Secondary Banks, Central Banks, Merchant Bank or Accepting Houses and Discount
Houses but to exclude the Saving Banks and Investment and other intermediaries.

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 PRIORITY BANKING

INTRODUCTION

Priority banking is relatively new in the Indian context. In this form of banking, the
bank identifies its priority customers (often customers with deposits above 1 lakh-
however this is different for each individual bank) and some special benefits are
provided to these first class customers by the bank.
Eg. They do not have to wait in the queue for transactions. They are assigned client
relationship managers to take care of all their banking needs. These customers can
use banks premises for holding meetings, can access the Internet free of cost and
several other benefits are also provided.
The basic purpose of this form of banking is to make the experience of banking has
free and less time consuming. This is not to be confused with wealth management
where the thrust is on providing first-class customers, customized services and
expert advice on various financial needs. This is generally carried out by the wealth
managers of the bank. However priority banking as part of its service offerings may
include wealth management.

May 3 2010
State Bank of India (SBI), India’s biggest, and Society General of France are in talks to
form a joint venture that will offer priority banking services to ultra high net worth
individuals in India. SBI will be the first public sector bank to start specialized services for
the very rich. Ultra high net worth individuals are those who have at least $1 million in
assets (about Rs 4.45 cores).

INDIAN HISTORY

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 Since the launch of the priority banking product in august 2005,business dynamics
including the lifestyle of the target segment have changed. To ensure that the product is in
sync with the needs and expectations of the target audiences the existing priority banking
product has been revised and
the eligibility net has been widened to include customer important to other business lines
of the bank. Further, cost rationalization has been done to gain competitive advantage. All
these changes have now made the product more complex. The processes set at the initial
launch of the product required revision to ensure delivery of the product.

Deepen the relationship by cross selling as many of the bank’s product and services
to priority customers. This will result in higher loyalty and greater profitability of this
relationship. Provide best service to customer. Thus each priority relationship will have a
relationship manager take care of all service need. Through a process of referrals from
existing priority customer and through targeted programs on select customer databases,
acquire new priority customer into the program.

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 INTRODUCTION OF PRIORITY BANKING IN INDIA

Priority Banking emerged in India with the advent of foreign banks. Foreign banks usually
have the habit of serving their prized/high value customers with priority service. Seeing
them woo their high value customers like this, the banks in India, especially the private
banks.

Similar services were started for their valued Customers. Slowly the government banks
started this service as well and nowadays almost all banks in India provide priority banking
services to their customers. The basic purpose of this form of banking is to make the
experience of banking hassle free and less time consuming .Priority banking service is born
out of the desire of customers today for a comfortable and personalized environment to
discuss an array of financial services, whether of a business or personal nature. There are
many banks coming up with these unique services, Priority banking is a name given by
banks to their private banking services. Priority banking is a service that goes beyond
investment advice and addresses all financial needs of a customer, ranging from managing
and growing his assets to handover of his wealth to future generations. It is the banking
service offered to wealthy clients a service. It is offered by some financial institutions to
high net worth individuals.

e.g. –Standard Chartered, HDFC, Axis bank, Citi bank, and HSBC also the nationalized
banks of India like state bank of India excel in providing mass banking services as well as
priority banking.

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 PRIORITY BANKING AS AN EXTENSION TO PRIVATE
BANKING

While traditionally, banking meant "borrowing and lending" in the latter part of the 20th
century, the word took on a different meaning altogether. Banks no longer restricted
themselves to traditional banking activities, but explored newer avenues to increase
business and capture new markets. Priority banking is one such service.
Priority banking is a big part of the consumer bank. It’s highly customer-centric approach
will lead to more holistic relationship with the customers, with better product development
and risk management for the bank.
Priority banking in India has so far been the domain of foreign banks and some private
banks. They offer ultra high net-worth individuals a bouquet of services, including
investments.

PRIORITY BANKING V.S RETAIL BANKING SERVICES

Retail banking aims to be the one stop shop for as many financial services as possible on
behalf of retail clients. Some retail bank has even made a much into investment services
such as wealth management brokerage accounts private banking add retirement banking.
Priority baking is much more personalized services even to an individual to invest
substantial sums.
The most noticeable differences between retail and priority services are that private clients
receive customer service on 1-basis via a relationship.
Priority banking, or the provision of banking services to high net worth individuals, has
recently become just as fashionable as investment banking was back in the eighties. It
seems that every provider wants to get into the private banking market, or has weighted its
strategy more towards private clients, because the margins here are still attractive and
assets under management continue to grow worldwide. This in turn means that high salaries
and bonuses are paid in this business to attract and retain human resources that would
otherwise be dispersed across other areas of banking or different industries altogether. Until
about a year ago, another attraction of private banking was that it was less exposed to
economic cycles than investment banking or the brokerage business. But 2001 marked a
turning point: there was a massive collapse in profits in private banking, and far greater
pressure on Switzerland's financial industry (banking secrecy, tax amnesties). The outlook

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has now deteriorated, and many banks have had to drastically cut their costs, which had
been allowed to spiral out of control in the expansion drive during the previous boom. It
may well be said that private banking is about to enter a downward cycle that could last at
least three years. The challenges facing institutions active in priority banking are becoming
more demanding all the time.

What are classed as new money clients require increasingly innovative and also
complex products?
They are also more discerning about the services on offer and put greater emphasis on
investment returns. The competition is generally getting
tougher as new players enter the market, investment banks aggressively fight for the most
affluent clients and online communication channels offer low-cost broker services to
wealthy (but price-conscious) private clients. At the same time, offshore financial centers
are coming under increasing pressure from US and EU governments to harmonize
disclosure regulations and tax legislation. Tax authorities are showing considerable zeal
and ingenuity in procuring evidence for undeclared wealth, and to this end are sending their
officers to offshore financial centers to track funds down. Many clients in these offshore
centers feel uneasy and are reconsidering their options for the future. Banks, which route a
substantial portion of their private client business through such offshore centers, therefore
have to press ahead with the creation of alternative financial centers for their clients, or
offer clients the necessary support to switch their assets into onshore investments, as well
as providing suitable tax advice. Although both asset growth and profit margins are, as
already stated, still relatively attractive for Swiss private banks both in the offshore and
onshore domain, one of the main prerequisites for future success in this industry will be a
reappraisal of the bank's own client strategy and also the resources available to implement
it. After all, in the current environment it is not particularly difficult to copy competitors'
products and services! The bank plan to face the challenges of the next few years by:
 Concentrating on the customer, the most important element in private banking.
 Continuing to expand on our high degree of specialist expertise and our close network
of relationship.
 Maintaining close proximity to the client in a personal manner.
 Emphasizing flexibility, style, empathy, honesty and openness.
 Understanding international interrelationships (with multilingual skills).
 Utilizing the Internet as a contemporary and powerful information channel.
 Providing the necessary operational and technical back office resources.
 Highlighting the currency of the Swiss financial marketplace.

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Although the biggest challenge for private banks at the moment in Asia is the business
cycle, they should prepare for the expected growth in wealth in the region by building up
platforms, training people and expanding footprints. To meet the increasing demand for
high-quality service, the industry needs more patience to focus on developing people
internally rather than relying on hiring from competitors.
To tackle rising cost bases in an environment of low fees, wealth management firms need
to look at where they can control costs and make savings. Resources need to be allocated
to building onshore wealth management businesses in Asia now; even though these are
unlikely to be profitable in the near term as offshore platforms remain dominant.

Improving the quality of advice

As Asia develops, clients are increasingly demanding high-quality service from truly
trusted advisers – especially in the wake of the financial crisis.

So as an industry, there is a need to prepare for this improvement in terms of better

explanations, better training and better disclosure, he explained, adding that this is essential
to regain the trust of clients.

However, given that good quality salespeople are not easy to come by, one of the biggest
challenges the private banking industry faces is the lack of training and talent management.

More patience is needed, rather than hiring from competitors, said Mak, explaining that
this means a greater focus on training and developing people internally by putting in the
required resources.

Tackling rising cost bases despite lower fees

According to Mak, cost bases in Asia have been rising over the past 10 to 20 years.

But at the same time he said the wealth creation and related opportunities have enabled
firms to offset these costs.

Yet in the current difficult environment, firms need to look at where they can control costs
and make savings, and should realise they need to prioritise how they expand their
businesses.

Industry outlook

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In terms of economic growth, Asia is second to none compared with the other regions of
the world. The last 10 years in particular have seen great wealth creation in China, India
and other parts of Asia.

With regulatory changes in the US and Europe, he predicted that a lot of hedge funds and
private equity firms will move to Asia, which will in turn enhance the region’s
development.

Banks with the proper scale, products and people will therefore be profitable and enjoy
growth.

In terms of the potential for building onshore wealth management businesses in Asia, Mak
said he doesn’t expect the bank’s ever-widening footprint across the region to be profitable
in the short term. As a result, offshore platforms will remain the way to go over the near
term.

Instead, these onshore moves are long term, strategic investments based on the future
expected growth in various markets, which require resources to be put in now.

Priority banking encompasses and array of services for high network individual. that might
mean personal banking, but might also entail sophisticate service: currency hedging, asset
deposition tax advice, portfolio management and mergers and acquisition on smaller scale.

Investment banking provides services, advice and products to large corporation around the
world. That too might mean basic corporate banking, might entail complex, debt or equity
financing, takeover defense, project finance, convertible bond offerings, or equity share
repurchases.

Priority banking aims at establishing close relationship with clients who are senior industry
leaders or established enterprises. Wealth management is the target growth area for priority
bankers. They focus on accumulating assets and special banking product and services.
They provide customer with flexibility to move from priority banking to other banking
services. They generally target high net worth customers.

On other hand, investment banking puts continuous emphasis or innovation, new product
and novel financial techniques. This service is mainly provided to share holders. They add
value to share holders by offering something new and special. Investment banking is
intellectually challenging, adrenaline building and stimulating. This business is a cyclical
but banker tried to stabilize it by offering counter cyclical like restructuring advice to share
holder.

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Investment banking cannot transfer into priority banking, but priority banking may transfer
into investment banking. Especially when they bring deep relationship with important
people within the industry.

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 IMPORTANCE OF PRIORITY BANKING

Why does a bank have Priority Banking Model?

The reason is very simple, to treat different level of customers differently. If you want to
harshly put it, then it’s just a way of keep a separate list of High Net-worth Individuals and
focus on them more and service them in a better manner, because one customer who is
eligible for priority banking will give 100 times more business/profit to bank compared to
a normal customer. A preferred banking customer will have a few eligibility criteria to
honor, which is generally linked to his bank amount balance
 BANKS PROVIDING PRIORITY BANKING SERVICES

There are many banks coming up with these unique services, Priority banking is a name
given by banks to their private banking services.

e.g. –Standard Chartered, HDFC, Axis bank, Citi bank, and HSBC also the nationalized
banks of India like state bank of India excel in providing mass banking services as well as
priority banking.

BENEFITS OF PRIORITY BANKING

BENEFITS AVAILABLE TO PRIORITY CUSTOMERS:

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The following benefits will be available to all Priority customers in the form of wide array
of products and services offered by the banks to meet the diverse complex financial needs
of HNW individuals:
 relationship management

 consumer and business deposits

 general lending solutions

 jumbo mortgages

 aircraft financing

 treasury management

 trust and investment management

 retirement plans

 brokerage accounts

 insurance

 customized travel and educational activities

All Priority customers will have a dedicated Relationship Manager to look

after their relationship. The role of the RM will be to offer all products and Services of the
bank to the customers and make it easy for the customers.

BENEFITS TO BANKERS:

Depositing money with a bank is reward enough, of course, whether into the bank or into

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one of its financial products, but priority banking when it has an advisory nature and is not
accompanied by lending or borrowing may be fee-based. The level of the fees is highly
variable: they will be lower if the bank will get the benefit from time to time of being able
to offer bridging finance, or of holding large amounts in transit etc, or if it can hope for
more substantial involvement with the customer in future. If the relationship is purely
between financial adviser and client, then the fees may be substantial.

Satisfaction drivers in priority banking in Indonesia

Introduction:

The growth in recent years of developing economies across the Asia-Pacific region has led
to a massive increase in the number of affluent and emerging affluent consumers living in
the region. With this rapid increase in accumulated wealth, banks see this segment as a
potentially lucrative area to target due to high take up rates of financial products and
Services.

One way banks have sought to meet the needs of this affluent segment is through the
provision of ‘priority banking’ programs, which often provide what is perceived as a
superior banking experience through various product and service experiences, such as
access to relationship management, wealth management advice and priority banking
privileges.

Primarily using results from the July 2012 Indonesia Priority and Retail Banking Council
(IPRBC) survey, this report explores the demographic profile of a typical priority banking
customer, and the various contributors towards satisfaction in priority banking programs,
as well as identifying areas which priority banks should focus on in future periods to
increase satisfaction and reduce switching attrition whilst also increasing cross-sell product
uptake amongst their priority banking customers.

Highlights

There is a strong relationship between satisfaction with a priority bank and the bank’s
ability to provide high quality relationship management services. Ultimately, relationship
managers focusing on providing quality banking and financial services and advice is likely
to result in improved satisfaction amongst existing customers.

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Priority banking customers generally derive the most satisfaction from a priority program’s
core banking attributes. Although performing well over such core attributes is of paramount
importance to a banks’ ability to satisfy the widest possible range of customers, priority
banks specifically need to also be able to provide facilities and services above and beyond
what a normal retail bank is able to provide to attract and maintain high value clients.
A priority customer’s satisfaction with their main priority bank also heavily influences their
product uptake of additional retail banking products from the same institution. Across a
plethora of core retail banking products, it was found that satisfied priority banking
customers are much more likely to both apply and use products from their main priority
bank as their main retail banking products.

PRIORITY BANKING SERVIES IN BANKS

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 PRIORITY BANKING SERVIES BY AXIS BANK:

Axis Bank Limited (formerly UTI Bank) is the third largest private sector bank in India. It
offers financial services to customer segments covering Large and Mid-Corporate, MSME,
Agriculture and Retail Businesses. Axis Bank has its headquarters in Mumbai,
Maharashtra.

Eligibility Criteria

You can sign up for Priority Banking service by agreeing to any one of the following
criteria
 Average quarterly balance of Rs. 1 Lakh in your savings account ( this requirement is Rs.
75,000 if in case you have a salary account with Axis Bank).

 Average quarterly balance of Rs. 5 lakhs in combination of your savings and term deposits
account.

PRIORITY BANKING OF AXIS BANK

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 Preferential Entertainment
Treatment Lifestyle
Privileges Benefits

Beyond Banking
Access to Premium Services
Meeting Rooms.

1. Preferential Treatment
 Enjoy preferential treatment when you walk into our branches or when you call our
Phone Banking Centre. Enjoy a specially designed Axis Mobile App.
 Get access to a dedicated relationship manager to help plan your investments.
 Earn points on your credit & debit card spends, as well as on select savings account
transactions to enroll.

2. Lifestyle Privileges
 As a Priority customer, get access to the Premium Privileges program.
 With a new theme every month, you can choose from a selection of customized
delights, special deals & discounts, and exclusive experiences that suit your style.
 Get 15% or more discounts at over 1,000 restaurants in over 80 cities. Just flash
your Priority Platinum debit card, and dine in style.

3. Entertainment Benefits.
 Get 25% cash back* on movie ticket bookings (including online bookings) with
the Priority Platinum, Debit Card.
 Shopping up to Rs 1.5 lakhs in a single day.
 High ATM cash withdrawal limit of up to Rs.1 lakh in a single day.
 Unlimited ATM transactions at any other bank ATMs.

4. Access to Premium Meeting Rooms.

 Conduct your own private business meetings in any exclusive Premium Meeting
Rooms in 16 cities.

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  Check availability of Premium Meeting Rooms and book online 24x7.

5. Beyond Banking Services.

 Financial Health check – Now get your latest CIBIL score through Axis Bank.
 Language assistance for foreign travelers, Simplified process at customs &
immigration Fast-track exit from the airport.
 Book this service online using your VISA debit card and enjoy a discount on the
services.

6. Other services
 As a Priority banking customer an individual will have access to an exclusive
‘Priority Banking Lounge’ at branches. This will allow an individual to conduct his
financial transactions in utmost comfort and confidentiality through an exclusive
Relationship Manager.
 Dedicated Relationship Manager An individual will enjoy access to a dedicated
Relationship Manager who will be his one point contact at branch for all an banking
transactions thus ensuring that An individual would neither have to move from one
counter to the other nor stand in queues to await his turn.
 Home Banking Experience the convenience of Axis Bank’s home banking
facilities. Avail of free cash and cheque pick-up delivery at an individual’s or
residence.
 Exclusive Priority Banking International Debit card This card allows an individual
free access to all VISA ATMs in Idea. The card also comes with higher ATM
withdrawal limits; higher POS transaction limits at merchant establishments,
enhanced insurance over and a host of special discounts and offers. An individual
also get Preferential Interest Rates and lowered Processing Fees on select Retail
Loans.
 Investment Privileges avail of assistance in financial planning. Investment advice
market information reports and invitations to investor meets are offered
complimentary to an individual.

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4.2 STANDARD CHARTERED BANK :

21
 PRIORITY BANKING

Resident In a segmentation study undertaken in 2002, it was found that 2.72 % of

Axis Bank’s retail customers contribute to nearly 49.05% of Axis Bank . The clients that
bring a larger share of business to the Bank expect a differentiated standard of service.
This also makes Business sense, as more often than not, most of the business in a particular
Branch flows from a handful of clients. Hence, Priority Banking was launched in order to
cater to the needs of the high net worth customers within the bank. The product has at its
core, the idea of providing certain bit of differentiation in service and treatment to a
segment of its customers with a view to customer retention, acquisition and cross selling.
The nucleus of these services has essentially four important components.

 Personalized service
 Investment advisory Service
 Preferential pricing of banking products/services
 Lifestyle privileges.

The definition of the value of relationship and services offered differs across
Banks. In general, MNC banks define the HNI segment taking into account
The customers’ liability as well as, assail relationship with the bank) whereas the Indian
private banks only take in the Savings bank balances and term deposits Bank believes
Standard Chartered customers should enjoy the rewards of their success. With Priority
Banking the customer step into a world of exclusive personalized banking that will ensure
them get the VIP treatment that they truly deserve.

PRIORITY SERVICES OF STANDARD CHARTERED

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 Comprehensive wealth
management services
Foreign Travelex
exchange discount Remote account
opening

STANDARD
CHARTERED BANK
PRIORITY
Access to BANKING SERVICES
international
priority banking
center Emergency cash

Special privileges for

business owner

1.Comprehensive Wealth Management Services

Standard Chartered Priority Banking has created a set of financial tools to assist customers
in planning, building and protecting your wealth.

PLAN-First financial tools is to identify customers needs, analyze customers situation,

evaluate risk appetite and chart the best plan to meet goals.

BUILD-To executes your plan and help there grow your wealth through a wide range of
portfolio management products and solutions.

PROTECT -Help maintaining the value of what customer have built and ensure sufficient,
long term protection for customer

2. Special Privileges for Business owners

These include invitations to networking events where you can make new and valuable
business contacts and access to priority Banking Centres where you can host meetings
while on business trips. Priority Banking customers also has the benefit of maintaining
savings and current accounts, time deposits, special foreign investment deposit accounts as
well as other benefits such as globally accepted credit card services;

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3. Access to international Priority Banking centers

Where a customer qualifies as a Priority Banking customer in any one country, his/her
status will extend worldwide. This will allow the customer as well as his/her family to
enjoy the same privileges for accounts in other countries.

4. Remote Account Opening

Here a customer will have the benefit of opening an offshore account pre-arrival in the
event of migration to another country.

5. Emergency Cash

Here customers have the benefit of having emergency cash delivered to any of the Bank’s
Priority Banking Centers worldwide in the event of an unexpected incident such as losing
your wallet.

6. Foreign Travelex exchange discounts

Where a customer can present his/her Priority Banking cards and receive special discounts
on foreign exchange at Travelex outlets in over 740 locations across 20 countries.

 Customised benefits tailored to suit your unique individual needs.

As a Priority Banking customer you have the advantage of enjoying customised benefits
that recognise your total relationship with us and have been tailored to suit your individual
needs.

And because we know they mean the world to you, some of these benefits also extend to
your family.

1. Privileged Pricing

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As your financial partner, we offer you the best value on your banking requirements
tailored by your Relationship Manager.

Some of your pricing privileges include:

 Special fee waivers and/or discounts on your routine banking transactions

 Special pricing for your deposits and loans
 Free international funds transfers between your accounts
 Charge free overseas ATM cash withdrawals

2. Household Recognition

We know your family is your greatest asset, so we have made them our priority. It’s our
way of ensuring a total banking relationship for you.

Your household benefits include:

 Complimentary Priority Banking membership for your spouse and children

 Family access to Priority Banking Centres, teller counters and hotlines
 Privileged pricing on routine banking transactions and services
 Invitations to specially designed lifestyle events

Total Relationship Rewards

It is not only about making the right choice of your financial partner but also enjoying the
fruits of a total banking relationship with us

Our exclusive and unique total banking rewards scheme allows you
to earn points on:

 Your card spends

 Your bank deposits

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  Your investments and
 Your home loans with us

Your reward points can be accessed through the prestigious

Priority Banking Visa Infinite Card, which is key to unlocking these exclusive benefits
from your relationship with us.

5.Exclusive Lifestyle Privileges

You are interested in more than just a financial relationship. So we have made it our priority
to extend special privileges that match your status and lifestyle.

Your exclusive lifestyle privileges include:

 Special premium offers from our carefully chosen partners

 Invitations to previews and special lifestyle events

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ARTICLES:

Standard Chartered launches 'Priority Banking' service for non resident Indians.
As part of its Priority Banking offering, Standard Chartered has launched a service for
affluent non resident Indians (NRIs) in the UAE after customers have expressed the want
for tailored service. The account, which can be opened either in India or the UAE, provides
customers with access to a single Relationship Manager (RM) who understands and can
address the specific banking requirements of NRIs living in the United Arab Emirates.

Standard Chartered launches enhanced priority banking offerings.

Standard Chartered Bank Bahrain continues to serve its priority banking customers in the
Kingdom exclusively by reaffirming its commitment to focus on high net worth customers.
Designed specifically for those who appreciate only the finest things in life, Priority
Banking offers the very highest levels of personalized banking.

Source:
25 April, 2010, United Arab Emirates

PRIORITY BANKING OF HDFC BANK:

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 HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation
Limited (HDFC), India's largest housing finance company. It was among the first
companies to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set
up a bank in the private sector. The Bank started operations as a scheduled commercial
bank in January 1995 under the RBI's liberalization n policies.

 As a Preferred customer also receive On demand exclusive privileges including :

 No charges on NEFT & RTGS transactions through Net banking.

 Free Preferred Easy shop Platinum Debit card with limit of Rs. 1,00,000 at ATMs and
Rs. 1,25,000 at merchant establishments per day .

No charges for balance enquiries and cash withdrawals if you transact on non HDFC
Bank
ATMs (VISA/ MasterCard / Euronet/ SBI/ Andhra Bank) in India.

An HDFC Bank Credit Card which offers you exclusive and preferential benefits.

Free "At Par" cheque book payable at any HDFC Bank branch across the country, so you
do away with the need to ask for demand drafts.

Locker facility at just 50% of the annual fee. (Subject to availability)

Demat Folio Maintenance Charges waived off for the first year. Differential Transaction
Based Folio Maintenance charges from second year onwards.

Preferential Forex rates.

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 Combined monthly statement for your Savings, Current and Fixed Deposit accounts for
which you are the principal holder. This facility is also available
for email statements.

You are eligible for the HDFC Bank Priority customer if you:

 Hold at least one Savings or Current account, sole or joint, with HDFC Bank.

 Maintain a minimum Average Monthly balance of Rs. 15 Lakhs across all your accounts
(Savings, Current and Fixed Deposits*) OR

 Maintain an Average Quarterly Balance of Rs. 2 Lakhs in your Savings account.

OR

 Maintain an Average Quarterly Balance of Rs. 5 Lakhs in your Current account.

In the same way, other banks also keep criteria of maintaining high balance in saving bank
account. That simply means that bank would get lots of cash to use for their own business
and naturally they can treat these customers very well. Check out this survey on best banks
in India.

Facilities provided to Priority customers:

 A Priority banking customer has few advantages over normal customers and gets more
features. Some of the most common one’s are.

 Separate queue for in the bank so that customers don’t wait.

 No charges on NEFT and RTGS transactions through Net banking

 Free “At Par” cheque book payable at any Bank branch across the country, so you do away
with the need to ask for demand drafts

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 Charges waiver for DD cancellation, Cheque return, Duplicate statement charges, Demand
Draft Charges, Discount in Locker Charges.

 No charges on balance inquiries and cash withdrawals if you transact on Other Bank
ATMs in India.

Kotak Mahindra Bank:

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 Established in 1985, the Kotak Mahindra group has been one of India's most reputed
financial conglomerates. In February 2003, Kotak Mahindra Finance Ltd, the group's
flagship company was given the license to carry on banking business by the Reserve Bank
of India (RBI). This approval created banking history since Kotak Mahindra Finance Ltd.
is the first non-banking finance company in India to convert itself in to a bank as Kotak
Mahindra Bank Ltd. Today, the bank is one of the fastest growing bank and among the
most admired financial institutions in India.
The bank has over 323 branches and a customer account base of over 2.7 million. Spread
all over India, not just in the metros but in Tier II cities and rural India as well, it is
redefining the reach and power of banking. Presently it is engaged in commercial banking,
stock broking, mutual funds, life insurance and investment banking.
Privy League
Privy League is the evolution of the concept of Priority Banking, wherein a select few can
expect to enjoy a wider range of benefits and services. Whether it is the dependability on a
single point of contact, the benefits of personal or business banking or cutting-edge
investment advisory, Privy League offers you a world of banking benefits and investment
advisory that truly places you in a league of your own.

 Privy League is the evolution of the concept of Priority Banking, wherein a select few can
expect to enjoy a wider range of benefits and services. Whether it is the dependability on a
single point of contact the benefits of personal or business banking or cutting-edge
investment advisory, Privy League offers you a world of banking benefits and investment
advisory that truly places you in a league of your own.

 Privy League Advantage:

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 Offers a customized financial plan, keeping your financial objectives at its core Kotak
Group offers you a wide

 range of investment options, under one roof, to meet customers goals Offers key benefits
of the Kotak

 Mahindra Bank account free of charge

 Banking Privileges:
As a Privy League member, you get more than a just a choice of bank account. You get to
enjoy a host of our Banking privileges on your Privy League relationship.
 Ease of Banking & Investing

 ActivMoney: 2-way sweep into Term Deposits

 Free Demand Drafts & Banker’s Cheques

 Free At-par, pre carbonated cheque books

 Lockers at discounted rates

 Gold at preferential rates

 Customized Financial Planning

 Understanding financial health

 Understanding financial goals

 Planning investments

 Constructing portfolio

 Reviewing and balancing portfolio.

 Criteria for Privy League:

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  Privy League Platinum plan is available at an initial Relationship Value of INR 25 Lakhs
, and average quarterly

 Balance of INR 50,000

 Privy League Gold plan is available at an initial Relationship Value of INR 10 Lakhs,
and average quarterly balance of INR 50,000

Kotak Priority Banking empowers customer with:-

 A consistent investment planning process based on customer risk profile, financial goals
and time horizon.

 Access to wide range of investment products.

 Mutual Funds

 Insurance

 Exclusive investment products

 A comprehensive suite of banking products

 Ease of executing and managing investment with In-depth research and information on
market movements and new investment opportunities.

Terms and Conditions

 The Privy League program is open for Resident Individuals, Non Individuals and Non
Resident Individuals only. Each customer is provided with a unique Customer Relationship
Number (CRN) and all relationships and accounts held by the customer are consolidated
under the CRN.
 This program is offered to business banking and family based on Relationship Value (RV)
and Average Quarterly Balance (AQB) and Forex throughput.
 These eligibility criteria can be reviewed and amended by the Bank from time to time

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 When you start a new Privy League Family relationship with a Relationship Value less

Post reclassification to regular Current Account, the customer has the option to retain
existing Privy League Business Platinum card at a fee or has the option to hand over the
Privy League Business Platinum Debit Card to the nearest branch along with a request to
issue a new Debit Card.
than the eligibility criteria, then it is desirous that you meet the required criteria within 3
months.
 Post reclassification to regular Current Account, the customer has the option to retain
existing Privy League Business Platinum card at a fee or has the option to hand over the
Privy League Business Platinum Debit Card to the nearest branch along with a request to
issue a new Debit Card.
 When you start a new Privy League Family relationship with a Relationship Value less
than the eligibility criteria, then it is desirous that you meet the required criteria within 3
months of account opening.
 In case you fall short of the requisite criteria, the Bank has a right to reclassify your
relationship. In case of reclassification to normal Savings Account, fee and charges as per
GSFC will be applicable. In case of reclassification to normal Current Account, fee and
charges as per GSFC will be applicable.

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 PRIORITY BANKING COMPARATIVE STUDY:

(KOTAK MAHINDRA BANK AND STANDARD CHARTERED)

 Standard Chartered Bank

Standard Chartered Bank launch a new priority banking offering for India’s increasingly
sophisticated and discerning banking customers in the year august, 2009.
They provide customers with wealth management services, that is, a financial tool to assist
in planning, building and protecting the customer’s wealth. They provide privileges to
business owners by inviting them to networking events where the business owners can
make new and valuable business contacts and can access to the priority banking centres for
hosting business meeting when they are on trips. It gives global recognition to the
customers. They provide access to international priority banking centres, remote account
opening, emergency cash facility, ATM fee waiver, cross border OTT fee waiver, Travelex
foreign exchange discounts, etc.
They provide various deposit products to their customers such as HKD time deposits,
foreign currency time deposits, HKD savings and current account, US dollar savings and
current account, renminbi services, etc.

Kotak Mahindra Bank

Kotak Mahindra Bank leading private sector bank opened its first Priority Banking Branch
for its HNI & Priority customers at Juhu in Mumbai.

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Kotak Mahindra Bank has over 183 branches in 108 locations in India
Offers you a customized financial plan, keeping your financial objectives at its core
Offers you key benefits of the Kotak Mahindra Bank account free of charge.

Customer satisfaction level is 90% in terms of priority banking services

Data analysis:

Duration of Relationship with Bank:

The above diagram shows that 30% of the respondents are associated with Kotak Mahindra
Bank for 0-2 years.

A majority 55% are associated for 2-5 years and only 15% are associated between 5-10
years. It shows that Kotak Priority is slowly still in the nascent stage in Priority Banking
as most of the respondents (85%) have a relationship with it for 0-5 years.

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 About 80% of the respondents of Standard Chartered Priority Banking are associated with
its priority banking for a 0-5 years.

CASE STUDY OF KOTAK MAHINDRA BANK

FINDINGS:
There is a strong relationship between satisfaction with a priority bank and the bank’s
ability to provide high quality relationship management services. Ultimately, relationship
managers focusing on providing quality banking and financial services and advice is likely
to result in improved satisfaction amongst existing customers.

 Every bank has different name for their high valued customers but the service provided
by them are similar.

 In priority banking the priority customers are given free pickup and delivery service of
instruments.

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 In every banks relationship managers deal with priority customers.

 Every bank involved priority banking have special policy designed for the customer which
is different and unique form other.

 Banks dealing with priority banking treat their customer with a great care by providing
services to the fullest

 There is increasing number of HNW customer’s because of priority service which are
provided by banks, it distinguish them from regular customers.

RECOMMENDATIONS:

 Customers must be aware of their priority services being a priority customer.

 Banks should provide equal services to all the priority customers.

 More of Innovative ideas should be added.

 Bank should come to new priority policy to attract more priority customers.

 The term “priority banking” is not that popularized in India because of lack of awareness,
more advertisement should be made by the banks to attract more customers.

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39
 CONCLUSION

Priority banking in India is still at a nascent stage. Among the fastest growing wealth
markets, India is one of the top 2 growth markets. As an estimation HNW client in with
ingestible funds in bank deposits, mutual funds, shares and securities exceeding Rs.20
lakhs (say, $50000), the four metros, along with Bangalore, Hyderabad, Pune and
Ahmadabad, together would offer a potential market of considerable proportion for banks
to exploit.
Worldwide, this service serves a lot of Indian billionaires, but on the domestic side, it is
still a growth market. Five years from now, India will probably contribute about 10% in
terms of overall profitability of priority banking. The Asian contribution will be 40%,
compared to around 26-27% in the next 5 years.
It is in an early phase. The critical piece is not only the product development, but laws
transparency in how clients should be investing in products and that they should work
within the regulatory framework. Education and transparency services are important in this
phase of development.
India as the financial markets mature and the choice of investment opportunities expand
and become simultaneously more complex. Banks can play a pivotal role in catering to the
market that defines the needs of HNW individuals.
Thus we can say that priority banking has huge scope for growth in India.

 Does your bank deal with priority banking?

 What are the schemes provided under priority banking for customers?

 How does your bank select your priority customers?

 What are the procedures for getting priority to customer?

 Any charges for priority banking customer?

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 Are the customers happy with your banks priority service?

 What are the services which customer likes the most?

 Does RBI issue any special license to your bank for priority service?

 Is there any privilege to priority bank customer?

 How does your bank treat priority customers other than regular customers?

 Any suggestion given by the customer?

 Do you think priority banking service has changed your banking strategy?

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 BIBLIOGRAPHY

www.rbi.org.in

https://www.axisbank.com/webforms/Priority_Microsite/index.aspx

http://priority.standardchartered.com.my/en/termcondition.html

http://ebookbrowse.com/7-priority-banking-products-services-jan2010-pdf-d23245052

http://www.deccanchronicle.com/130804/news-businesstech/article/how-important-
priority-status

http://www.efinancialnews.com/story/2013-06-26/bankers-top-challenges-deloitte-
temenos-report

http://www.kotak.com/kotaklpbank/privy_league/privy_league.html

http://www.standardchartered.ae/media/press/en/2010/20100425.pdf

http://www.business-standard.com/article/finance/kotak-revises-premium-banking-offer-
113061800437_1.html

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