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(Affiliated to Guru Gobind Singh Indraprastha University)

(Recognized by UGC U/S2 (F))


This is to certify that LAIRENLAKPAM MANGAL SINGH of BBA (B&I) (M) 3rd
SEMESTER has accomplished the project report title ‘AXIS BANK’ under my
guidance and provision.

He has submitted this project in the partial fulfillment of requirement as per the GURU

I further certify that this is an original work. All sources of information and help have
been duly mentioned and acknowledged.






This project has been possible through the direct and indirect cooperation of various
people who bear the imprints of their efforts for my work. I take this opportunity to
acknowledge the invaluable assistance of the people who helped me in the completion of
this project report.

I humbly convey my sincerest gratitude to my internal guide Dr. Monika Bohra for her
guidance, suggestions and unintended support, without which the project would not have
been possible. I would also like to thank the faculty members who provided me all the
necessary information in the completion of the project report.

Last but not the least; I would like to place a word of thanks for all those who directly or
indirectly helped me in the successful completion of the project.



BBA (B&I) (M) 3rd Semester


Chapter 1: Introduction

Objectives of the study 6

Research methodology 7
Limitations of the study 8

Chapter 2: Profile of the organization

Evolution 12
Mission and Values 16
7 Ps of the Bank 24
Achievements 35

Chapter 3: Analysis and Interpretation

Financial Performance 50
S.W.O.T Analysis 57

Chapter4: Conclusion 59

Annexure: Bibliography 62





The first bank in India, though conservative, was established in 1786. From 1786 till today,
the j o u r n e y o f I n d i a n B a n k i n g S y s t e m c a n b e s e g r e g a t e d i n t o t h r e e d i s t i n c t
p h a s e s . T h e y a r e a s mentioned below:

PHASE I - Early phase from 1786 to 1969 of Indian Banks

PHASE II - Nationalization of Indian Banks and up to 1991
PHASE III - Indian Financial & Banking Sector Reforms after 1991.


The General Bank of India was set up in the year 1786. Next came Bank of
H i n d u s t a n a n d Bengal Bank. The East India Company established Bank of Bengal (1809),
Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it
Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly Europeans shareholders. During the first phase
the growth was very slow and banks also experienced periodic failures between 1913 and 1948.

There were approximately 1100 banks, mostly small. To streamline

t h e f u n c t i o n i n g a n d a c t i v i t i e s o f commercial banks, the Government of India came up
with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No.23 of 1965).

Reserve Bank of India was vested with extensive powers for the supervision
of b a n k i n g i n I n d i a a s t h e C e n t r a l B a n k i n g A u t h o r i t y . D u r i n g t h o s e d a y ’ s p u b l i c h a
s l e s s e r confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings
bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to
the traders.


Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized
Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas.
Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks.
This step brought 80% of the banking segment in India under Government ownership. The following are the
steps taken by the Government of India to Regulate Banking Institutions in the Country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 crore. After the nationalization of banks, the
branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge
jump by 11,000%. Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.


This phase has introduced many more products and facilities in the banking sector in its reforms measure. In
1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the
liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are
being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire
system became more convenient and swift. The financial system of India has shown a great deal of resilience. It
is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is
not yet fully convertible, and banks and their customers have limited foreign exchange exposure.


Reserve bank of India

(central bank & supreme
monetary authority of
the country)

Scheduled banks

Co-operatives bank
Commercial Banks

Public sector Private sector Foreign banks Regional Rural

(27) (25) in India (39) Banks (357) Urban
Banks (53)

State Cooperative
Banks (31)
Old Private Banks banks (19)

New Private
State Bank of India & Banks (8)
its Associates (8)


To gain the knowledge of products and services of Axis Bank Ltd. and to compare
it vis-vis other banks.
To identify the perception of consumer about their banks with comparison to other
Recommendations to increase customer satisfaction level.

Because of the following reasons, I prefer this project work to get the
knowledge of the banking system.

Banking is an essential industry.

It is where we often wind up when we are seeking a problem in financial crisis

and money related query.

Banking is one of the most regulated businesses in the world.

Banks remain important source for career opportunities for people.

It is vital system for developing economy for the nation.

Banks can play a dynamic role in delivery and purchase of consumer durables


1. Descriptive Research
2. Follow Questionnaire method
3. Primary Data: In some cases the researchers may realize the need for collecting
the first hand information. As in the case of everyday life, if we want to have first
hand information on any happening or event, we either ask someone who knows
about it or we observe it ourselves, we do the both. Thus, the two methods by
which primary data can be collected is observation and communication. Those
data collected first hand, either by the researcher or by someone else, especially
for the purpose of the study is known as primary data.
4. Secondary Data: Any data, which have been gathered earlier for some other
purpose, are secondary data in the hands of researcher.
5. Information was collected through both primary and secondary sources.

The data collected for this project has been taken mostly from the
secondary source.


Some of the limitations of the project are listed as below:

1. Due to the financial and time constraints a cluster analysis of the population so
as to get better results was not feasible.

2. It was difficult to break the ice with the common people initially. It was a
daunting task to convince them to fill in the personal details of the questionnaire
where they have to mention the monthly income, occupation etc.

3. To convince the people for a proper interviewing process is also difficult.

4. Figures keep on changing from time to time.

5. Data may be outdated.

6. Compilation of data on competitor analysis was difficult due to non-availability of

correct information.

7. The figures have been taken as approximations.



Type Public

Traded as BSE: 532215


Industry Banking, Financial services

Founded 1994

Headquarters Mumbai, India

Key people Adarsh Kishore, Chairman

Shikha Sharma MD & CEO

Products Credit cards, consumer banking, corporate banking, finance and

insurance, investment banking, mortgage loans, private banking, private
equity, wealth management

Revenue 198.26 billion (US$4.02 billion)(2011) [1]

Net income 33.88 billion (US$687.09 million)(2011) [1]

AUM US$ 40.121 billion (2010)

Employees 21,640 (2010)[2]



Axis Bank India, the first bank to begin operations as new private banks in 1994 after the Government of India
allowed new private banks to be established. Axis Bank was jointly promoted by the Administrator of the
specified undertaking of the

 Unit Trust of India (UTI-I)

 Life Insurance Corporation of India (LIC)
 General Insurance Corporation Ltd.
Also with associates viz. National Insurance Company Ltd., The New India Assurance Company, The Oriental
Insurance Corporation and United Insurance Company Ltd. Axis Bank in India today is capitalized with Rs.
43,283.77 Crores. It has more than 1281 branch offices and Extension Counters in the country with over 6270
Axis Bank ATM proving to be one of the largest ATM networks in the country. This is the first bank in India to
offer the AT-PAR Cheque facility, without any charges, to all its Savings Bank customers in all the places across
the country where it has presence. With the AT PAR cheque facility, customers can make cheque payments to
any beneficiary at any of its existence place. The ceiling per instrument is Rs. 50,000/-.The latest offerings of
the bank along with Dollar variant is the Euro and Pound Sterling variants of the International Travel Currency
Card. The Travel Currency Card is a signature based pre-paid travel card which enables traveler’s global access
to their money in local currency of the visiting country in a safe and convenient way. The Bank has strengths in
both retail and corporate banking and is committed to adopting the best industry practices internationally in
order to achieve excellence.

It is has a diversified presence across business and product lines with corporateAdvances
constituting ~57% of its total loan book, retail ~20%, SME ~14% and agriculture ~9%, as on December 31, 2010.

The bank was formerly known as UTI Bank; it changed its name to Axis Bank in July 2007.

The bank has overseas offices at Singapore, Dubai and Hong Kong and a representative office in



UTI was established in 1964 by an Act of Parliament; neither did the Government of India own it nor
contributes any capital. The RBI was asked to contribute one-half of its initial capital of Rs 5 crore, and given the
mandate of running the UTI in the interest of the unit-holders. The State Bank of India and the Life Insurance
Corporation contributed 15 per cent of the capital each, and the rest was contributed by scheduled commercial
banks which were not nationalized then. This kind of structure for a unit trust is not found anywhere else in the
world. Again, unlike other unit trusts and mutual funds, the UTI was not created to earn profits. In the course of
nearly four decades of its existence, it (the UTI) has succeeded phenomenally in achieving its objective and has
the largest share anywhere in the world of the domestic mutual fund industry.'' The emergence of a "foreign
expert" during the setting up of the UTI makes an interesting story. The announcement by the then Finance
Minister that the Government of India was contemplating the establishment of a unit trust caught the eye of
Mr. George Woods, the then President of the World Bank. Mr. Woods took a great deal of interest in the Indian
financial system, as he was one of the principal architects of the ICICI, in which his bank, First Boston
Corporation Bank, had a sizeable shareholding. Mr. Woods offered, through Mr. B.K. Nehru, who was India's
Executive Director on the World Bank, the services of an expert. The Centre jumped at the offer, and asked the
RBI to hold up the finalization of the unit trust proposals till the expert visited India. The only point Mr. Sullivan
made was that the provision to limit the ownership of units to individuals might result in unnecessarily
restricting the market for units. While making this point, he had in mind the practice in the US, where small
pension funds are an important class of customers for the unit trusts. The Centre accepted the foreign expert's
suggestion, and the necessary amendments were made in the draft Bill. Thus, began corporate investment in
the UTI, which received a boost from the tax concession given by the government in the 1990-91 Budget.
According to this concession, the dividends received by a company from investments in other companies,
including the UTI, were completely exempt from corporate income tax, and provided the dividends declared by
the investing company were higher than the dividends received. The result was a phenomenal increase in
corporate investment which accounted for 57 per cent of the total capital under US-64 scheme. Because of
high liquidity the corporate sector used the UTI to park its liquid funds. This added to the volatility of the UTI

The corporate lobby which perhaps subtly opposed the establishment of the UTI in the public sector made use
of it for its own benefits later. The Government-RBI power game started with the finalization of the UTI charter
itself. The RBI draft of the UTI charter stipulated that the Chairman will be nominated by it, and one more
nominee would be on the Board of Trustees. While finalizing the draft Bill, the Centre changed this stipulation.
The Chairman was to be nominated by the Government, albeit in consultation with RBI. Although the
appointment was to be made in consultation with the Reserve Bank, the Government could appoint a person of
its choice as Chairman even if the Bank did not approve of him.

Board of Directors

The members of the Board are

Dr. Adarsh Kishore Chairman

Smt. Shikha Sharma Managing Director & CEO

Shri S. K. Chakrabarti Deputy Managing Director

Dr. R.H. Patil Director

Smt. Rama Bijapurkar Director

Shri R.B.L. Vaish Director

Shri M.V. Subbiah Director

Shri K. N. Prithviraj Director

Shri V. R. Kaundinya Director

Shri S. B. Mathur Director

Shri Prasad R. Menon Director

Shri R. N. Bhattacharyya Director

Shri Samir K Barua Director

SHAREHOLDING (as on March31,2011)

Shareholding pattern (Per cent)


June 2010 September 2010 December 2010 March 2011

Promoters 37.7 37.5 37.4 37.2
Fll 36.3 37.2 36.6 37.7
Dll 6.5 5.5 5.3 5.1
Others 19.5 19.7 20.8 20.0

Above charts show, Axis Bank’s net advances are skewed towards the corporate segment, of which the
financial industry, infra, power, and metal together make up around 42%. Only 20% of the net advances are in
retail banking, with a major exposure to the housing segment followed auto loans. Each of them (corporate and
retail banking) contributes 23% to the net revenue of the Bank.



 Customer Service and Product Innovation tuned to diverse needs of individual and corporate
 Continuous technology up gradation while maintaining human values.
 Progressive globalization and achieving international standards.
 Efficiency and effectiveness built on ethical practices.


 Customer Satisfaction through

Providing quality service effectively and efficiently
"Smile, it enhances your face value" is a service quality stressed on
Periodic Customer Service Audits
 Maximization of Stakeholder value
 Success through Teamwork, Integrity and People


Axis Bank wants to achieve following marketing objectives by the end of the year 2011.

 To get the market capitalization 500 Crore

 To get the 200 Crore retail investment
 To get 125 Crore Corporate investments
 To get the 175 Crore Capital investments




The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle'
approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's
liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name
of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995.


HDFC Bank Limited offers a range of commercial and transactional banking services, and treasury products to
wholesale and retail customers. It operates in three segments:

 Retail Banking,
 Wholesale Banking,
 Treasury Services.


The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corporate to
small & mid-sized corporate and agri-based businesses. For these customers, the Bank provides a wide range of
commercial and transactional banking services, including

 Working capital finance,

 Trade services,
 Transactional services,
 Cash management,


The objective of the Retail Bank is to provide its target market customers a full range of financial products and
banking services, giving the customer a one-stop window for all his/her banking requirements. The products
are backed by world-class service and delivered to the customers through the growing branch network, as well
as through alternative delivery channels like

 ATMs,
 Phone Banking,
 Net Banking,
 Mobile Banking.

Within this business, the bank has three main product areas –

 Foreign Exchange and Derivatives,

 Local Currency Money Market & Debt Securities,
 Equities.



ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-
owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46%through a public offering of shares in
India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's
acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales
by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of

the World Bank, the Government of India and representatives of Indian industry. The principal objective was to
create a development financial institution for providing medium-term and long-term project financing to Indian
businesses. In the

1990s, ICICI transformed its business from a development financial institution offering only project finance to a
diversified financial services group offering a wide variety of products and services, both directly and through a
number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various
corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking
industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view
that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would
create the optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance
value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for
earning fee-based income and the ability to participate in the payments system and provide transaction-
banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and
scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry
into new business segments, higher market share in various business segments, particularly fee-based services,
and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI
and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved
by shareholders of ICICI and ICICI Bank in January2002, by the High Court of Gujarat at Ahmedabad in March
2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent
to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been
integrated in a single entity.

Performance Review – Quarter and year ended March 31, 2010

35% year-on-year increase in standalone profit after tax to Rs. 1,006 crore for the quarter ended
March 31, 2010 from
Rs. 744 crore for the quarter ended March 31, 2009
Highest ever consolidated profit after tax of Rs. 4,670 crore for the year ended March 31, 2010; 31%
increase from Rs.
3,577 crore for the year ended March 31, 2009
Current and savings account (CASA) ratio increased to 41.7% at March 31, 2010 from 28.7% at March
31, 2009

Net non-performing asset ratio decreased to 1.87% at March 31, 2010 from 1.96% at March 31, 2009
and 2.19% at December 31, 2009
Strong capital adequacy ratio of 19.4% and Tier-1 capital adequacy of 14.0%
Dividend of Rs. 12 per share proposed

Balance sheet

During the year ended March 31, 2010, the Bank has significantly strengthened its deposit franchise. This
is reflected in the strong growth in savings and current account deposits and increase in the CASA
ratio. The Bank continues to invest in expansion of its branch network to enhance its deposit
franchise and create an integrated distribution network for both asset and liability products.

CASA deposits increased 34% to Rs. 84,216 crore (US$ 18.8 billion) at March 31, 2010 from Rs. 62,668
crore (US$ 14.0 billion) at March 31, 2009 and the CASA ratio increased from 28.7% at March 31,
2009 to 41.7% at March 31, 2010. Total deposits of the Bank were Rs. 202,017 crore (US$ 45.0 billion)
at March 31, 2010, compared to Rs. 218,348 crore (US$ 48.6 billion) at March 31, 2009.

The branch network of the Bank has increased to 1,741 branches at April 24, 2010 giving the Bank a wide
distribution reach in the country.

The loan book of the Bank decreased to Rs. 181,206 crore (US$ 40.4 billion) at March 31, 2010 from Rs.
218,311 crore (US$ 48.6 billion) at March 31, 2009 mainly due to the repayments from the retail loan
portfolio and the loan portfolio of overseas branches.



The origin of the State Bank of India goes back to the first decade of the nineteenth century with the
establishment of the Bank of Calcutta in Calcutta on 2 June 1806.Three years later the bank received its charter
and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock
bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the
Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern
banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921.Primarily Anglo-Indian
creations, the three presidency banks came into existence either as a result of the compulsions of imperial
finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary
manner to modernize India's economy. Their evolution was, however, shaped by ideas culled from similar
developments in Europe and England, and was influenced by changes occurring in the structure of both the
local trading environment and those in the relations of the Indian economy to the economy of Europe and the
global economic framework.


The business of the banks was initially confined to discounting of bills of exchange or other negotiable private
securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were
restricted to Rs. one lakh and the period of accommodation confined to three months only. The security for
such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods
'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against
goods like opium, indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted
but such finance by way of cash credits gained momentum only from the third decade of the nineteenth

All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or
hypothecated to the bank. Demand promissory notes were signed by the borrower in favor of the guarantor,
which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses,
land or other real property was, however, forbidden. Indians were the principal borrowers against deposit of
Company's paper, while the business of discounts on private as well as salary bills was almost the
exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three
banks, as far as the government was concerned, was to help the latter raise loans from time to time and also
provide a degree of stability to the prices of government securities.





Indian Overseas Bank (IOB) was founded on February 10, 1937 by Shri.M.Ct.M. Chidambaram Chettyar. IOB had
the unique distinction of commencing business on the inaugural day itself in t h r e e b r a n c h e s
s i m u l t a n e o u s l y - a t K a r a i k u d i a n d C h e n n a i i n I n d i a a n d R a n g o o n i n B u r m a (presently
Myanmar) followed by a branch in Penang.

Indian Overseas Bank was the first Bank to venture into consumer credit. It introduced the popular Personal
Loan scheme. In 1964, the Bank made a beginning in computerization in the areas of inter-branch reconciliation
and provident fund accounts. IOB was one of the 14 major banks that were nationalized in 1969. On the eve of
Nationalization in 1969, IOB had 195branches in India with aggregate deposits of Rs 67.70 crores and
Advances of Rs 44.90 crores. In1977, IOB opened its branch in Seoul and the Bank opened a Foreign Currency
Banking Unit in the free trade zone in Colombo in 1979.As of March 2003, IOB had 1427 branches in India and 6
branches overseas. Besides the Bank has a network of over 240 ATMs and 243 Extension Counters. IOB has
specialized branches to cater to the exclusive needs of Commercial & Industrial credit, Industrial finance, Small
Scale industries, hi-tech agriculture and foreign exchange.


 Saving Bank Deposits

 No Frills SB Accounts
 Current Account
 Fixed Deposit
 Reinvestment Deposit
 Recurring Deposit Account
 Annuity Deposit Plan
 Multiple Investment Scheme
 Cumulative Benefit Deposit
 Multiple Deposit Account

Once the marketing strategy is developed, there is a "Seven P Formula" that should be used to continually
evaluate and reevaluate your business activities. These seven are:

People, as products, markets, customers and needs change rapidly, company must continually revisit these
seven Ps to make sure you're on track and achieving the maximum results possible for you in today's


To begin with, develop the habit of looking at your product as though you were an outside marketing
consultant brought in to help your company decide whether or not it's in the right business at this time. Ask
critical questions such as, "Is the current product or service, or mix of products and services, appropriate and
suitable for the market and the customers of today?"

Develop a habit of assessing your business honestly and asking,

Are these the right products or services for our customers today?
Compared to your competitors, is your product or service superior in some significant
way to anything else available? If so, what is it? If not, could you develop an area
of superiority? Should you be offering this product or service at all in the current market
Product variety, quality and its features.
Is there a market for the service on offer?
Is the market growing or shrinking?
Is the service new or established?
The competition prevailing in the market for the service on offer?
The USP of the product.
Products and Services on offered by AXIS Bank

 Accounts:

Easy Access Accounts Car Loans

Prime Savings Account Study Loans
Salary Account Two Wheeler Loan
Women’s Saving Account Consumer Loan
Senior Privilege Account  Investments:
Defense Salary Account Online Trading
Trust & NGO Savings Account Mutual Funds
Azzadi –No frills Fixed Income
RFC (D) Account Depository Services
Pension savings Account. E Depository Services

 Deposits:  Insurance:

Fixed Deposits Health Insurance

Recurring deposits Family Health
Encash 24 Health Guard
Tax Saver Fixed Deposits Hospital Cash

 Loans:
Home loan
Personal loan
Loan Against Property
Loan Against Security


The second P in the formula is price. Develop the habit of continually examining and reexamining the
prices of the products and services you sell to make sure they're still appropriate to the realities of the
current market. Sometimes you need to lower your prices. At other times, it may be appropriate to raise
your prices. Many companies have found that the profitability of certain products or services doesn't
justify the amount of effort and resources that go into producing them. By raising their prices, they may
lose a percentage of their customers, but the remaining percentage generates a profit on every sale.
Could this be appropriate for you? Sometimes you need to change your terms and conditions of sale.
Sometimes, by spreading your price over a series of months or years, you can sell far more than you
are today, and the interest you can charge will more than make up for the delay in cash receipts.
Sometimes you can combine products and services together with special offers and special promotions.
Sometimes you can include free additional items that cost you very little to produce but make your
prices appear far more attractive to your customers. In business, as in nature, whenever you experience
resistance or frustration in any part of your sales or marketing activities, be open to revisiting that area.
Be open to the possibility that your current pricing structure is not ideal for the current market. Be open
to the need to revise your prices, if necessary, to remain competitive, to survive and thrive in a fast-
changing market place.

AXIS bank has developed innovative strategies against its competitors with respect to pricing by use of
technology. The use of technology is the strategic differentiator for AXIS bank that helps in cost
minimization and creating efficiency for the customer. The creation of centralized processing system
linking all its branches has been a major strategic move in this regard.

The pricing mechanism and features of various HDFC products are as follows: Home Loans:

Floating rates:

 For loan of up to five years for amounts between Rs one lakh and Rs 50 lakh is at9.25 per
cent (9 per cent).
 The rate for loans of 5 years and above up to 10 years is now at 9.75 per cent (9.50 per cent).
 The interest rate for above ten years now stands at 10.25 per cent (10 per cent)

Description of Charges Regular Savings Account
Minimum Average Quarterly Rs 5000 (urban),
Balance Rs 2500(Semi Urban),
Rs 1000 (Rural branch),
Rs 500 (student account)
Charges on non maintenance thereof Rs750 per quarter(urban & semi urban)
Rs 500 (Rural branch),
Rs 250 (student account)
Cheque Book, Pass Book Issuance Free

Account Statements Free

Phone banking and Net banking Free


The third habit in marketing and sales is to think in terms of promotion all the time. Promotion includes
all the ways you tell your customers about your products or services and how you then market and sell
to them. Small changes in the way you promote and sell your products can lead to dramatic changes in
your results. Even small changes in your advertising can lead immediately to higher sales.

AXIS bank has devised an aggressive promotional strategy through its diversified distribution mix which
includes tied agencies and alternate channels like banks, brokers, telemarketing, direct sales force,
internet advertizing .

Some of the promotional activities undertaken are:

 Cross Selling exercises

 Organizing school level painting competitions in order to create awareness about the
environmental concerns and the wild life to promote kids advantage account.

 Wheels of fortune - This promo are targeted at all those customers who avail a personal
loan, car or a two wheeler loan. There will be lucky draw at the end of the promo and the
winners would get exotic prizes.
 Personalized promos by sending mailers about various products on offer to all those who
come in contact during the mass promotion strategies.
The promotional strategies are carried out with an objective of positioning AXIS bank as a one stop
financial super market. The focus of the promotions are not just confined to acquisition of new products
but also extends to creating product awareness, enhancing usage, and also provide value add to the
customers for their faith and loyalty. These promotions are scientifically designed based on data analysis
and data mining in order to have maximum impact on the target audience.


The fourth P in the marketing mix is the place where your product or service is actually sold. You can sell
your product in many different places. Some companies use direct selling, sending their salespeople out
to personally meet and talk with the prospect. Some sell by telemarketing. Some sell through catalogs or
mail order. Many companies use a combination of one or more of these methods. It refers to those
activities of the company that makes the product available to target consumers. It includes geographic
spread, distribution channels, dealer ships that facilitate network establishment. Axis bank is widely
spread in India and its core banking operations has huge network–

 1281 branches and extension counters foreign offices – in Singapore, Hong Kong,
Shanghai and Dubai
 6270 ATMs reaches out to 34 states and union territories across the country
AXIS bank owns a wholly owned distribution channel with dedicated workforce, thereby lowering
the operating costs. It uses its network base to good effect to sell customized products.


The fifth element in the marketing mix is the process. Develop the habit of standing back and looking at
every visual element in the process or service through the eyes of a critical prospect. Remember, people
from their first impression about you within the first 30 seconds of seeing you or some element of your
company. Small improvements in the process or external appearance of your product or service can
often lead to completely different reactions from your customers. With regard to the process of your
company, your product or service, you should think in terms of everything that the customer sees from
the first moment of contact with your company all the way through the purchasing process.

Process refers to the way your product or service appears from the outside. Packaging refers to your
people and how they dress and groom. It refers to your offices, your waiting rooms, your brochures,
your correspondence and every single visual element about your company. Everything counts.
Everything helps or hurts. Everything affects your customer's confidence about dealing with you.


The next P is positioning, the habit of thinking continually about how you are positioned in the hearts
and minds of your customers.

 How do people think and talk about you when you're not present?
 How do people think and talk about your company?
 What positioning do you have in your market, in terms of the specific words people use
when they describe you and your offerings to others?
AXIS Bank has positioned its branches in all the strategic position so that it is easily accessible to
maximum customer. It has also come up with some phone banking centre and centralized collection and
payment hub.


The Bank’s Centralized Phone Banking Centre provides customers across the country Access to the Bank
over the phone, handling multiple queries in about 7000 calls per day.


The Bank’s Centralized Collection and Payment Hub (CCPH) manages the entire collection and payment
activity under the Bank’s Cash Management Services (CMS) across the country, handling on an average
about Rs.5000 crores per month on the collection front and aboutRs.1500 crores per month on
the payment front.


The final P of the marketing mix is people. Develop the habit of thinking in terms of the people inside
and outside of your business who are responsible for every element of your sales and marketing
strategy and activities. It's amazing how many entrepreneurs and businesspeople will work extremely
hard to think through every element of the marketing strategy and the marketing mix, and then pay
little attention to the fact that every single decision and policy has to be carried out by a specific person,
in a specific way. Your ability to select, recruit, hire and retain the proper people, with the skills and
abilities to do the job you need to have done, is more important than everything else put together. An
essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the
right staff and training them appropriately in the delivery of service is essential if the organization has to
obtain competitive advantage. AXIS bank values its human resources very highly and is on a constant
endeavor to continuously develop its human resources by laying strong emphasis on training
development. It possesses a highly motivated team of professionals and has the lowest
employee turnover rate in the industry.


In early 1950's most of the markets were choking with surplus products on offer, defying the theory "the
best quality will always sell". The emergence of Branding as a value in offering has kept many
organizations leaders, and in survival. Branding is termed as a part of offering, created in the mind of
customer and consumer of superior values that he or she perceives and ready to pay for. The brand

can be associated with superior product, superior services, and superior sales after services, or easy
access. In today's era with increasing competition, is that not important enough to revisit Brand as a
marketing offering (Product or Service).


UTI has officially announced the change of its name to ‘Axis Bank’. The awareness campaign titled ‘UTI
Bank is now Axis Bank; everything is the same except the name’, has been created by O&M and is the
brainchild of Sumanto Chattopadhyay.

The decision to re-brand the bank emanated from the need to move out of a scenario of brand
confusion that is created by several shareholder-unrelated entities using the UTI brand. On the creative
point of view, the change of name from UTI Bank to Axis Bank is precisely just a name change.
Everything else about the brand remains the same. Axis is a strong name with an international aura to it.
It is very much in keeping with UTI’s success story in the private banking arena.


The logo design of Axis Bank is based on the letter ‘A’. It is a contemporary, universal and solid design
that retains the burgundy color of the original UTI logo as a link to its heritage


On the marketing initiatives, a multimedia campaign was unfolded on August 1 that will go on for the
next few weeks. It seeks to reassure customers that the change of name will in no way affect the
services offered by the bank. On the thought process the creative platform adopted for the name
change is based primarily on twins -- siblings whose names are different, but are identical in every other
way. This campaign will run on

 Television
 Outdoor
 Print
 Radio and other 360-degree media.
Some interesting innovations are planned in the print medium. On radio, the name change is being
expressed in a slightly different manner, in keeping with the nature of the medium.

Growth Prospects of Axis

Over the last five years, the CAGR for loan growth for the banking industry has been 25-26 per cent; for
Axis Bank it has been above 40 per cent.

Nonetheless, the bank is still expected to grow its loan portfolio at 1.5-1.7x the industry average.

In FY09 its advances grew at the rate of 37.5 per cent.

In FY10 they are expected to grow at the rate of 27-28 per cent and in FY11 at 25 per cent.

For the banking industry as a whole, the loan book is expected to grow at 18 per cent in FY10 and 16 per
cent in FY11.

Thus, Axis Bank’s fast pace of growth is expected to sustain over the next couple of years.

Marketing Objectives

Axis Bank wants to achieve following marketing objectives by the end of the year 2011.

 To get the market capitalization 500 Crore

 To get the 200 Crore retail investment
 To get 125 Crore Corporate investments
 To get the 175 Crore Capital investments

Net Revenue Segmentation (FY 10)

In FY10, treasury operations contributed ~54% of total revnue, retail banking ~23
% and corporate/ wholesale banking ~23%. In December 2008, the bank launched
its new investment advisory service exclusively for high networth clients.
In January 2009, the bank set up Axis Asset Management Company to carry on the
activities of managing a mutual fund business. Alsoit incorporated Axis Mutual
Fund Trustee Ltd to act as the trustee for the mutual fund business.
In February 24, 2010, the bank launched ‘Call & Pay’,a mobile payments solution
using Axis debit cards.

Axis is the country’s first bank to provide a secure debit cardbased payment servic
e over interactive voice response (IVR).


March 2011 Bank launches ‘ e-Wallet Card’

September 2009 Bank launches private banking business in

the domestic market to cater to highly
affluent individuals and families
March 2008 Axis Bank launches Platinum credit card,
India’s first EMV chip based card
September 2007 Axis Bank ties up with Privee Edmond de
Rothschild Europe for Wealth Management
July 2007 UTI Bank re-brands itself as Axis Bank
July 2007 UTI Bank ties up with Tata Motors Ltd. for
Car Loans
June 2007 UTI Bank’s expansion into Asia supported by
April 2007 UTI Bank opens a Financial Services Category
I Branch in the DIFC in Dubai
April 2007 UTI Bank ties up with Hyundai Motor India
Ltd. for Car loans
March 2007 UTI Bank ties up with IIFCL to provide
finance for infrastructure projects in the
March 2007 UTI Bank launches Car Loans in association
with Maruti Udyog Ltd.
August 2006 UTI Bank becomes the first Indian bank to
successfully issue Foreign Currency Hybrid
Capital in the International Market
July 2006 UTI Bank opens Representative Office in
May 2006 UTI Bank and LIC join hands to launch an
Annuity Card for group pensioners of LIC
May 2006 UTI Bank ties up with Geojit Financial
Services to offer Online Trading services to
its customers
April 2006 39 UTI Bank opens its first international branch
in Singapore
December 2005 UTI Bank wins International Financing
Review(IFR) Asia ‘India Bond House’ award for
the year 2005
May 2005 UTI Bank and Bajaj Allianz join hands to
distribute general insurance products
March 2005 UTI Bank gets listed on London Stock Exchange,
raises US$ 239.30 million
February 2005 UTI Bank appointed by Govt. of Karnataka as
the sole banker for the Bangalore One (B1)

February 2004 UTI Bank (by pursuing a proactive strategy of

forging bilateral agreements and being a
progressive player in the multi-lateral
consortiums for shared ATM network) offers
its customers access to over 7000 ATMs across
the country – the largest to be offered by any
December 2003 Bank inaugurated its ATM at Thegu near the
Nathula Pass in Sikkim. This ATM is at the
highest altitude in India
August 2003 The Bank’s Debit Card crosses 1 million mark
August 2003 Total advances crosses Rs. 7000 crore
May 2003 Banks declares a net profit of Rs. 192.18 crores
for FY 03, a growth of 43% over the previous
February 2003 Bank in a pioneering move, launches the AT
PAR Cheque facility, free of cost, for all its
Saving Bank customers
February 2003 Bank wins mandate to set up 14 ATMs at the
Western Railway Stations along the Mumbai
August 2002 Bank signs MoU with BSNL regarding bill
collection services across the country through
both online and offline channels
March 2002 Deposits Cross Rs. 12000 crore
January 2002 The Bank’s 100th branch opens at Tuticorin,
Tamil Nadu
The Bank opens an ATM at Gol Dak-Khana, i.e.
January 2002 the New Delhi GPO, making it the first instance
of a commercial bank setting up an ATM at any
post-office in the country.

July 2001 Bank ties up with Govt. of Andhra Pradesh for
collection of commercial tax

December 2000 Bank opens its 200th ATM. It becomes the 2nd
largest ATM network in the country , a position
held even today

October 2000 Bank becomes fully networked

April 2000 UTI Bank calls off its proposed merger with
Global Trust Bank and surges ahead on its own

March 1995 Completes first profitable year in operation

April 1994 First branch of UTI Bank inaugurated at
Ahmedabad by Dr. Manmohan Singh, Hon’ble
then Finance Minister of India

December 1993 Registered office at Ahmedabad; Head office in





Some ratios that are relevant for evaluating banks include

Credit to deposit ratio

Capital adequacy ratio
Non-performing asset ratio
Provision coverage ratio
Return on assets ratio
We thought it would be an interesting idea to look and compare these numbers for the leading private
(HDFC Bank, ICICI Bank and Axis Bank) and public sector (SBI, Punjab National Bank and Bank of Baroda)
banks. In addition, we will also see how the same ratios have changed over the past few years.

Credit to deposit ratio: This ratio indicates how much of the advances lent by banks is done
through deposits. It is the proportion of loan-assets created by banks from the deposits received. The
higher the ratio, the higher the loan-assets created from deposits. Deposits would be in the form of
current and saving account as well as term deposits. The outcome of this ratio reflects the ability of the
bank to make optimal use of the available resources.

If we see the following chart, ICICI Bank distinctly stands out from its peers. A strong reason for the
same would be its aggressive nature. Further, PSU banks and Axis Bank have seen their ratios increase
gradually over the years. The credit to deposit ratio of HDFC Bank on the other hand, has been fairly

Capital adequacy ratio: A bank's capital ratio is the ratio of qualifying capital to risk adjusted
(or weighted) assets. The RBI has set the minimum capital adequacy ratio at 9% for all banks. A ratio
below the minimum indicates that the bank is not adequately capitalized to expand its operations. The
ratio ensures that the bank do not expand their business without having adequate capital.

It must be noted that it would be difficult for an investor to calculate this ratio as banks do not disclose
the details required for calculating the denominator (risk weighted average) of this ratio in detail. As
such, banks provide their CAR from time to time.

Considering that the Indian banking sector has been growing at a strong pace, all the leading banks, both
private and public have been expanding operations at a strong pace. As such, their CAR ratios are well
above the prescribed limit of 9%. Private Banks such as HDFC Bank, Axis Bank and ICICI Bank have in fact
increased their CAR over the past four to five years.

As for the public banks, SBI and Punjab National Bank (PNB) have seen their CAR steadily expand over
the past few years as well. However, this ratio for Bank of Baroda has been fairly stable.

Non-performing asset ratio: The net NPA to loans (advances) ratio is used as a measure of
the overall quality of the bank’s loan book. An NPA are those assets for which interest is overdue for
more than 90 days (or 3 months). Net NPAs are calculated by reducing cumulative balance of provisions
outstanding at a period end from gross NPAs. Higher ratio reflects rising bad quality of loans.

The NPA ratio is one of the most important ratios in the banking sector. It helps identify the quality of
assets that a bank possesses. If we look at the chart below, we can clearly see a differentiation between
India’s largest banks. A bank such as ICICI Bank would garner one of the highest NPA ratios amongst
private banks on the back of its aggressive nature. As the banks lends out strongly to customers, the
chances of them defaulting also rises. Plus, considering that private banks charge higher interest costs
would only make things more difficult for its customers. At the same time, the NPA ratio of a relatively
much conservative bank such as HDFC Bank would remain low. It is clearly evident from the above chart.
The marginal spurt in this ratio during FY09 is due to its acquisition of Centurion Bank of Punjab.

Further, Axis Bank has done well in the recent past to bring down its NPA ratio. So is the case for Bank of
Baroda (BoB). PNB has done well to keep its NPA levels low as well. As for India’s largest bank SBI, its
NPAs are relatively much higher than that of its PSU peers. This can also be attributed to its aggressive
period over the past few years.

Provision coverage ratio: The key relationship in analyzing asset quality of the bank is

between the cumulative provision balances of the bank as on a particular date to gross NPAs. It is a
measure that indicates the extent to which the bank has provided against the troubled part of its loan
portfolio. A high ratio suggests that additional provisions to be made by the bank in the coming years
would be relatively low (if gross non-performing assets do not rise at a faster clip).

On observing the above chart, we can notice that private banks such as HDFC Bank & ICICI Bank as also
PNB and Bank of Baroda have been quite conservative when it comes to covering their NPAs. Axis Bank
on the other hand has been extra conservative in the past few years. This explains the reason for the
sharp improvement in the NPA ratio as well. The same can however, not be said about SBI, which is the
only large bank which has seen its provision coverage ratio deteriorate over the past four years.

Return on assets ratio: Returns on asset (ROA) ratio is the net income (profits) generated by
the bank on its total assets (including fixed assets). The higher the proportion of average earnings assets,
the better would be the resulting returns on total assets.

While HDFC Bank has done well to maintain its ROAs over the past few years, that of ICIC Bank has been
gradually on a decline. The other banks, has however done well to improve their return ratio over the
past few years.


Looking at the above mentioned parameters, it would be quite easy to differentiate the aggressive
banks from the conservative ones. During good times and bad, banks such as HDFC Bank have managed
to keep things under control. Relatively aggressive banks such as ICICI Bank and SBI have been facing
some problems. Further, PNB, Axis Bank and Bank of Baroda have done well to improve their asset
quality, return ratios over the past few years as well.

The Most Social Media Friendly Private Bank in India

Although HDFC Bank is ahead of the competition, India’s number one private sector bank; ICICI is giving
it a tough fight in the social media space too. Axis Bank and Yes Bank are at third and fourth spot,
respectively. The detailed numbers are in the table below

Competitive Position

Fixed Deposit Rates of Various Banks

Base Rates

Balance Sheet ------------------- in Rs. Cr. -------------------

Axis Bank HDFC Bank ICICI Bank Kotak Mahindra

Mar '11 Mar '11 Mar '11 Mar '11 Mar '11

Capital and Liabilities:

Total Share Capital 410.55 465.23 1,151.82 368.44 465.97

Equity Share Capital 410.55 465.23 1,151.82 368.44 465.97

Share Application Money 0.00 0.00 0.29 0.00 7.98

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 18,588.28 24,914.04 53,938.82 6,464.95 3,350.92

Revaluation Reserves 0.00 0.00 0.00 0.00 225.35

Net Worth 18,998.83 25,379.27 55,090.93 6,833.39 4,050.22

Deposits 189,237.80 208,586.41 225,602.11 29,260.97 34,365.37

Borrowings 26,267.88 14,394.06 109,554.28 11,723.95 5,525.42

Total Debt 215,505.68 222,980.47 335,156.39 40,984.92 39,890.79

Other Liabilities & Provisions 8,208.86 28,992.86 15,986.35 3,032.36 1,694.83

Total Liabilities 242,713.37 277,352.60 406,233.67 50,850.67 45,635.84

HDFC ICICI Kotak IndusInd
Axis Bank
Bank Bank Mahindra Bank

Mar '11 Mar '11 Mar '11 Mar '11 Mar '11


Cash & Balances with RBI 13,886.16 25,100.82 20,906.97 2,107.72 2,456.04

Balance with Banks, Money at Call 7,522.49 4,568.02 13,183.11 363.26 1,568.56

Advances 142,407.83 159,982.67 216,365.90 29,329.31 26,165.65

Investments 71,991.62 70,929.37 134,685.96 17,121.44 13,550.81

Gross Block 3,426.49 5,244.21 9,107.47 831.80 971.26

Accumulated Depreciation 1,176.03 3,073.56 4,363.21 406.20 399.20

Net Block 2,250.46 2,170.65 4,744.26 425.60 572.06

Capital Work In Progress 22.69 0.00 0.00 0.00 24.41

Other Assets 4,632.12 14,601.08 16,347.47 1,503.33 1,298.32

Total Assets 242,713.37 277,352.61 406,233.67 50,850.66 45,635.85

Contingent Liabilities 429,069.63 559,681.87 883,774.77 12,291.30 79,647.25

Bills for collection 57,400.80 28,869.10 47,864.06 4,470.06 7,860.30

Book Value (Rs) 462.77 545.53 478.31 92.74 81.95

Comparison of various Banks

Name Last Price Market Cap. Net Interest Net Profit Total Assets
(Rs. cr.) Income

HDFC Bank 471.40 110,167.83 19,928.21 3,926.39 277,352.61

ICICI Bank 821.00 94,607.93 25,974.05 5,151.38 406,233.67

Axis Bank 1,049.50 43,283.77 15,154.81 3,388.49 242,713.37

Kotak Mahindra 502.35 37,105.96 4,303.56 818.18 50,850.66

IndusInd Bank 261.55 12,202.94 3,589.36 577.32 45,635.85

YES BANK 293.65 10,308.46 4,041.74 727.13 59,007.00

Federal Bank 390.70 6,682.83 4,052.03 587.08 51,456.37

ING Vysya Bank 320.10 4,795.15 2,694.06 318.65 39,013.98

Karur Vysya 378.45 4,056.24 2,217.69 415.59 28,224.84

JK Bank 817.25 3,961.85 3,713.13 615.20 50,508.15

South India Bk 23.00 2,599.26 2,446.01 292.56 32,820.21

StanChart IDR 81.55 1,957.20 - - 1,945,725.80

City Union Bank 44.00 1,789.54 1,218.41 215.05 14,591.52

Karnataka Bank 79.80 1,501.98 2,370.84 204.61 31,693.01

Lakshmi Vilas 97.95 955.59 1,064.84 101.14 13,301.19

DCB 40.10 802.99 536.26 21.43 7,372.33

Dhanlaxmi Bank 63.95 544.45 906.42 26.06 14,268.16

Goldman BEES 2,774.35 284.66 - - -

Financial Performance of Axis Bank

The net interest income (NII) of Axis Bank, over the last 10 years, has rocketed by 54.8% CAGR
from Rs. 98 Cr. in FY01 to Rs. Rs. 5004 Cr. in FY10; and its total income has grown by 34.9%
CAGR. During the same period its book value and EPS have jumped by 37% and 28% resp.

The bank has maintained its net profit to total fund ratios between 1 and 1.25 during FY05 to
FY08, whereas in the last two financial years, this ratio has been above 1.25. This increasing
trend of net profit to total fund ratio shows that it has continuously increased its efficiency of
utilizing funds. The non-performing assets (NPA) to net advances ratio has also shown a
decreasing trend from 3.46% in FY02 to 0.4% in FY10 which shows the bank has continuously
increased its assets quality. It has also maintained a very good capital adequacy ratio (CAR) of
15.8% at the end of FY10, well above the RBI guide line of 9%, which indicates that it can easily
cover all the associated risks.

Hence, the 10 YEAR X-RAY of Axis Bank is Green (Very Good).

Analysis of Axis Bank Ltd

In the short-term

Axis Bank’s target for FY11: -

Business growth (Advances + Deposits) of 25%

Opening 200-250 new branches and 1000 new ATMs

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

• It has shown a 36% jump in the Net Profit at Rs. 891.36 Cr. and a 28% rise in the Net Interest Income
to Rs. 1733.12 Cr. on the back of robust 46% credit growth.
• The other income of the Bank inched up by 16% to Rs. 1147.71 Cr. mainly on the back of 21% jump in
the fee income at Rs. 968 Cr.
• CAR has decreased to 12.46% in Q3 FY11, compared to 16.8% in the same quarter last year.
• Its Net Interest Margin (NIM) stood at 3.81% during Q3 FY11, compared to 4% during Q2FY10 (much
higher than the industry standard of 2-2.5%).
• The net NPAs of Axis Bank stood at 0.29% in Q3 FY11, which is amongst the lowest in the banking
industry; the provision coverage ratio stood at 82.69%, much higher than the regulatory requirement of

Advances of the Bank have reported a strong growth of 46% on y-o-y basis and 12% on q-o-q basis to
Rs. 123547 Cr. in the December 2010 quarter. The growth in the advances was driven by 69% jump in
the corporate segments at Rs. 70518 Cr. and 33% rise in the retail segment at Rs. 25204 Cr. Agri &

microfinance loan book grew by 24% to Rs. 10772 Cr. and SME by 9% to Rs. 17053 Cr. Exposure to the
Microfinance institutions is around 1% of advance book and that of telecom (mainly 2G license
advances) constitutes 6% of total advance book.

For the nine months ended December 2010, Axis Bank has reported 37% rise in the NII at Rs 4861.99 Cr.,
19% in fee-based income at Rs. 2559 Cr., and 6% in the other income at Rs 3181.73 Cr. compared to that
of corresponding quarter last year respectively. In FY11, so far, it has opened 142 branches and 1010
ATMs. Thus, the bank is on line to achieve its target for FY11.

Increasing cost of funds is a cause for concern:

The RBI has increased the Repo rate, Reverse repo rate, and CRR in the last one and a half year in several
phases to control inflation. This has lead to lower loan able fund availability in the bank and continuous
increase in cost of funds, which can be seen in the chart. As, the inflation rate is still on the higher side,
tight monetary policy is expected to continue in the short-term. So, we expect that the cost of funds will
also increase further in the short-term, which will keep margins under pressure.

RBI, recently, has increased provisioning percentage on housing, real estate, and many other types of
loans. This will affect the profitability of the bank because, in the retail segment, it finances almost 70%
advances in housing.

Considering above factors, we expect that the short-term future prospects of Axis Bank will be Orange
(‘somewhat good’)

Strength of Axis Bank:

• It is India’s third largest private bank, with 1281 branches and 5303 ATMs, and a customer base of
over 150 Lakh as on 31st Dec, 2010
• It has the largest EDC network, the third largest ATM network, and the fourth largest base of debit
cards in India.

• It already has branches in Singapore, Hong Kong and Dubai International Financial Centre. About 14%
of the bank’s asset book is from international operations. It is further going to set up a subsidiary in
London and upgrade its representative office in Shanghai to a branch.
• 100% core banking facilities with advanced technology
• On-line trading facilities in alliance with Geojit BNP Paribas

In Jan 2011, Axis Bank, , announced the launch of AxisDirect, an online trading platform– a product of
its wholly-owned subsidiary, Axis Securities and Sales Ltd. AxisDirect will offer trading in cash,
derivatives, IPO segments through NSE and BSE; and provide well-researched information about various
corporate, access to independent third-party research, stock research and analysis tools.

Axis Bank has maintained a very good Current Account Savings Account (CASA) ratio, above 40% in
the last three years, which is higher than the industry standard of 35-40%. CASA plays a very
significant role in keeping cost of funds low and margins high. Only four other banks – SBI, PNB, HDFC
Bank, and ICICI Bank – have more that 40% CASA ratio.

Product strategy designed to benefit customers:

To beat the market, Axis Bank is adopting different product strategies. Recently, it has extended the
repayment period of the standard home loan to the maximum tenure of 25 years. In the step down
product (a type of home loan product), the customer has to pay a higher EMI when the combined family
income is higher and a lower EMI when the family income has reduced over a period of time. Apart from
this, the Bank has given option to its customers to close the loan before its maturity with no prepayment

Banking Sector – Heading towards a high-performing sector:

The banking sector is poised to grow in line with the growth of the economy. The Indian economy is
expected to have a high growth in the long-term and so is the Indian banking sector, which is currently
in consolidation stage. According to Mckinsey Report on India Banking 2010, ‘The banking index has
grown at a compounded annual rate of over 51% since April 2001 as compared to a 27% growth in the
market index for the same period (2001 to 2010)’. The report says that the Indian banking sector is
heading towards a high-performing sector. Axis Bank, being the third largest private bank in India, is
ready to take full advantage of this growth opportunity.

Financial Inclusion Program:

Under Financial Inclusion Program, RBI is taking initiative to provide banking services at affordable costs
to the weaker sections of society or the unbanked segment, which does not have any access to the
formal banking system. As of now, it is estimated that 60% of the Indian population does not have
access to formal banking facility and RBI is keen on achieving 100% financial inclusion for sustaining
equitable growth. Axis Bank is taking following initiatives under this Program:

o Targets to cover 12,000 villages in the next 5 years: Axis Bank plans to cover 5,500 villages for financial
inclusion by March 2011 and scale it up to 12,000 villages in five years time. It is looking at opening 18-
lakh no-frills accounts, Rs. 40 Cr. of deposits, and Rs. 10 Cr. of advances. The 18-lakh account would
include 12-lakh accounts that they have already opened for government-sponsored scheme. The bank is
looking at several low-cost delivery models such as smart card, mobile banking and point of transaction

o Tie up with Janalakshmi Social Services to tap urban poor: To tap unbanked population in urban areas,
Axis Bank has tied up with a Bangalore-based microfinance institution, Janalakshmi Social Services.
Janalakshmi will use its client base to provide banking services of Axis Bank and will work as business
correspondent to sell other products of the Bank. This service would be spread from Bangalore to 50
other cities in the near future.
o MoU with Idea to test a Branchless Banking Model: Axis Bank has signed a Memorandum of
Understanding with Idea Cellular to test a ‘Branchless Banking’ model through a mobile enabled
remittance pilot. Idea will act as a ‘Business Correspondent’ of Axis Bank to provide an entire range of
financial products and services offered by the Bank, through the mobile operator’s retail outlets. Idea’s
network will help Axis Bank gain access to widespread distribution reach and a low-cost delivery channel
for offering financial products and services, based on the mobile platform. On the other hand, Idea can
offer value-added services to its customers by offering financial products and services.
There is still a question mark on the viability of Financial Inclusion Program which primarily targets
the low-income group. This leaves little scope of high margins under this program. However, this
initiative is expected to help in economic development, and hence is expected to be fruitful in the

Diversified into non-banking financial services:

Axis Bank has started non-banking financial services to carry out investment and lending activities with a
focus on infrastructure and other activities. It has five wholly-owned subsidiaries:
1. Axis Securities and Sales Ltd. – to market credit cards , retail asset products and online trading
2. Axis Private Equity Ltd – to manage equity investments & provide venture capital to support
3. Axis Trustee Services Ltd – to engage in trusteeship activities
4. Axis Asset Management Companies Ltd. – to carry on the activities of managing mutual fund
5. Axis Mutual Fund Trustee Ltd. – to act as the trustee for the mutual fund business

Acquisition of Enam’s investment banking business expected to fill the gap in their portfolio:

Axis Bank has acquired Enam’s investment banking and institutional broking businesses for R.s 2,064 Cr.
in a stock-swap deal. Pursuant to the scheme and in consideration for the proposed demerger, Enam
shareholders will receive 5.7 shares of Axis Bank for every 1 share held in Enam; translating into an
approximately 3.37% shareholding in Axis Bank. While the acquisition appears to be at a slight premium,
it will help Axis Bank fill a key gap in portfolio, increase fee-based income and bring significant long-term
benefits. Also, as these businesses are profit-making and enjoy one of the highest margins in the
industry, they will contribute to Axis Bank’s profits and will be earnings accretive.


Brand Name Not having good image.
Support of various promoters. Market capitalization is very low.
High level of services. Not been capable to position itself
Knowledge of Indian market. correctly.


Growing Indian banking sectors. Advent of MNC banks.

People are becoming more service Foreign banks
oriented. Government banks
In the global market. Future market trends.
Dissatisfied customers.

Risks & Concerns

a) Low exposure in high-margin retail banking.

b) New Bank License would hamper banks’ profits: RBI is providing banking licenses to selected NBFCs
from 2011. This would increase competition among banks which would consequently hampers their
c) RBI, in Bancon 2010 held in Mumbai, has indicated that Indian Banks should operate at lower
margin, in line with global standard. They should decrease lending rate and increase savings rate to
help in achieving double digit economic growth. RBI may also increase Capital Adequacy Ratio
benchmark from 2013.
d) As the banks have mainly financial assets, they have to manage several risks such as credit risk,
market risk, liquidity risk, country risk etc. So, banking business, as a whole, is considered as risky

e) Government regulation increases uncertainty in the banking sector: The Government of India
frequently changes monetary policies by changing CRR, repo rate, reverse repo rate etc. to maintain
stability in the economy. It increases uncertainty in the banking sector.
Considering the strong position that Axis Bank has established for itself in the banking industry and its
recent acquisition of Enam, we can expect that the long-term future prospects of Axis Bank will
be Green (Very Good).



So, is it an investment-worthy Bank?

The economy is expected to grow roughly by 5-7% in the next 5 years. The
banking sector is poised to grow in line with the growth of the economy.
Considering the bank’s large size and its strengths, we can expect this economic
growth to have a positive impact on Axis Bank’s growth.

Yes, Axis Bank is an investment worthy bank, but only at the right
price. Currently, it is trading at a price of Rs. 1304.65. But, does this price offer an
attractive discount to its right value (MRP) or is it over-priced? It is always best to
invest at an attractive discount to its MRP, to get maximum returns at minimum
risk. Become a member of to know its sensible buy- price
and hence take the right action for this company.

Conclusion & Recommendation

Axis Bank is one of the few clean (in terms of asset book), rapidly growing,
profitable, & competitive private-sector banks in India; thus it will be a major
beneficiary of the favorable banking environment. The Indian banking sector is in
a sweet spot: consumer and corporate lending is strong, asset quality is improving
and fee-income opportunities are growing. We expect this favorable environment
to continue in the medium term but recognize that a key challenge for banks will
be funding growth. Looking at its profile, I believe Axis Bank stands to gain
disproportionately from existing opportunities in the sector. The bank has strong
technology & products, an expanding distribution franchise, adequate scale, a
strong service culture, and management enterprise -features that should help it
stay ahead of the dominant government banks to win market share.

Private players such as Axis Bank that offer a multitude of delivery channels and
have an integrated technology platform could potentially achieve comparable
distribution reach in the top 200 cities to government banks with substantially
fewer branches. With a presence in the top 150 cities, I think Axis Bank is very
well positioned to rapidly reap the benefits of the expanded reach by scaling up
its retail foray.

Moreover, earnings CAGR is likely to be stronger than the larger private peers as it
begins to benefit from the distribution expansion.


The following books and websites have been consulted for the preparation
of this project.


Philip Kotler’s Marketing Management. Twelfth edition


Business & Economics (September/October)

Web sites:

Annex: Glossary


An automated teller machine (ATM) is a machine in which a customer can use his card along with PIN to
get cash, information and other services.

Bank Guarantee

Bank guarantee is a promise by a bank on behalf of its customer to a third party to pay an amount
specified in the guarantee deed in case the customer fails to perform the obligation as stipulated in the

Banking Ombudsman

Banking Ombudsman is an independent dispute resolution authority set up by Reserve Bank of to deal
with disputes between the bank and individual / small businesses.


Bills are financial negotiable instruments such as Bills of Exchange or Promissory Notes. Bill of Exchange
is issued by a seller to his buyer directing him to make payment for the goods supplied / services
rendered. Bill in the form of a promissory note is issued by a buyer to his seller undertaking to make
payment for the goods received / service rendered.

Bill discounting

In case of discounting of a bill, a bank buys a bill (i.e. Bill of Exchange or Promissory Note) before it is due
and credits the value of the bill after discount charges to the customer’s account. The transaction is
practically an advance against the security of the bill and the discount represents the interest on the
advance from the date of purchase of the bill until it is due for payment. Only usance bills are


Card is a general term for any plastic card, which a customer may use to pay for goods and services or to
withdraw cash. In this Code, it includes ATM / Debit / Credit Cards.

Cash Credit / Overdraft

Cash credit / overdraft is a form of credit facility in which a borrower is sanctioned a pre-arranged limit
with the freedom to borrow as much money as he requires. In case of flow of credit to the account, he
can withdraw afresh subject to the limit sanctioned. As such, the limit works as a revolving line of credit.
Bank charges interest on the outstanding balances.

Cash losses

Cash loss mean net losses minus depreciation.

Cheque Collection Policy

Cheque Collection Policy refers to the policy followed by a bank in respect of various local and
outstation cheques and instruments deposited with the bank for credit to an account. The policy, inter
alia, deals with

Cheque purchase requests.

Time frame for credit of cheques
Payment of interest in case of delay in collection of cheques
Instant credit of local and outstation cheques
Cheque instruments lost in transit

Collateral Security / Security

Collateral are assets pledge / hypothecated / mortgaged by a borrower as a security for a credit facility.
In the event of the borrower defaulting on the loan, the lender bank can claim these assets in lieu of the
sum owed.

Compensation Policy

Compensation Policy refers to the policy followed by a bank for compensating its customers for the
financial losses incurred by them (the customers) due to the acts of omission or commission on the part
of the bank.

Credit facilities / Bank Loan

Credit facilities from the bank may be in the form of a term loan or in the form of overdraft or cash
credit, that is extended by a bank to its customer for a specified period and he is charged interest on the
outstanding balances.

Credit reference agencies

Credit reference agency means a credit information company formed and registered under the
Companies Act, 1956 that has been granted a Certificate of Registration under the Credit Information
Companies (Regulation) Act, 2005.

Current Account

A form of demand deposit wherefrom withdrawals are allowed any number of times depending upon
the balance in the account or up to a particular agreed amount.


An MSE or its authorized representative who has an account with a bank or who avails of other
products / services from a bank.

Deceased account

A Deceased account is a deposit account in which case either the single account holder has deceased or
in case of joint accounts one or more of joint account holders has / have deceased.

Demat accounts

A Demat account refers to dematerialized account and is an account in which the stocks of investors are
held in electronic form.

Deposit Accounts:

“Savings deposits" means a form of demand deposit which is subject to restrictions as to

the number of withdrawals as also the amounts of withdrawals permitted by the Bank
during any specified period;
"Term deposit" means a deposit received by the Bank for a fixed period withdraw able
only after the expiry of the fixed period and includes deposits such as Recurring / Double

Benefit Deposits / Short Deposits / Fixed Deposits /Monthly Income Certificate
/Quarterly Income Certificate etc.
"Notice Deposit" means term deposit for specific period but withdraw able on giving at
least one complete banking day's notice;

Electronic Clearing System

The Electronic Clearing System (ECS) is an online transmission system which permits the electronic
transmission of payment information by the banks / branches to the Automated Clearing House (ACH)
via a communication network.


Equity means a part of capital of a corporate entity which is represented by the shares of the company
whether in physical or in dematerialized form


Factoring is a financial option for the management of receivables. It is the conversion of credit sales into

Government Bond

Government bond means a security, created and issued, by the Central or State Government for raising
a public loan.


A promise given by a person

Letter of Credit

A letter of credit is a document issued by a bank, which usually provides an irrevocable undertaking for
payment to a beneficiary against submission of documents as stated in the Letter of Credit.


Mail is a letter in a physical or electronic form.

Merchant Services

Merchant services generally refer to merchant accounts allowed to trading and service establishments
for acceptance of payments through credit / debit cards. The cards may be accepted over the counter
through card terminals i.e. Point of Sale (POS) machines or over phone or through internet.

Micro and Small Enterprises

Micro and Small Enterprises are those enterprises engaged in manufacturing or rendering services.

A micro enterprise is defined as:

An enterprise engaged in the manufacture or production of goods pertaining to any industry where the
investment in plant and machinery does not exceed Rs. 25 lakh.


An enterprise engaged in rendering services where investment in equipment does not exceed Rs. 10

A small enterprise is defined as:

An enterprise engaged in manufacture or production of goods pertaining to any industry where the
investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore.


An enterprise engaged in rendering services where investment in equipment is more than Rs. 10 lakhs
but does not exceed Rs. 2 crore.

Net worth

Net worth means sum of Capital and free reserves minus accumulated losses.

Nomination facility

The nomination facility enables the bank to : make payment to the nominee of a deceased depositor, of
the amount standing to the credit of the depositor, return to the nominee, the articles left by a
deceased person in the bank's safe custody, release to the nominee of the hirer, the contents of a safety
locker, in the event of the death of the hirer.

Non-fund based facility

Non-fund based facilities are such facilities extended by banks which do not involve outgo of funds from
the bank when the customer avails the facilities but may at a later date crystallize into financial liability if
the customer fails to honor the commitment made by availing these facilities. Non-fund based facilities
are generally extended in the form of Bank Guarantees, Acceptances and Letters of Credit.

Non-Performing Asset

A Non-Performing Asset (NPA) is a loan or an advance where

Interest and / or installment of principal remain overdue for a period of more than 90 days in respect of
a term loan.

The account remains ‘out of order’ in respect of an Overdraft / Cash Credit (OD/CC).

The bill remains overdue for a period of more than 90 days in the case of bills purchased or discounted.


An organization which collects payments from a customer’s account in line with customer’s

Other security information

A selection of personal facts and information [in an order which the customer knows],which may be
used for identification when using accounts.

Out-of-date [stale] cheque

A cheque, which has not been paid because the date written on the cheque is of a date exceeding six
months from the time of its presentation.


The Permanent Account Number is an all India unique Number having ten alphanumeric Characters
allotted by the Income Tax Department, Government of India. It is issued in the form of a laminated
card. It is permanent and will not change with change of address of the assessee or change of Assessing


A word or numbers or a combination or an access Code, which the customer has chosen, to allow them
to use a phone or Internet banking service. It is also used for identification.

Payment and Settlement Systems

Payments and Settlement Systems mean financial system creating the means for transferring money
between suppliers and user of funds usually by exchanging debits or credits among financial institutions.

PIN [personal identification number]

A confidential number, use of which along with a card allows customers to pay for articles/ services,
withdraw cash and use other electronic services offered by the bank.


Repossession is the process by which a creditor with a loan secured on house or goods (e.g. car) takes
possession of the security, if the debtor does not repay as per the terms of the loan agreement.

Rehabilitation Package

Rehabilitation package is the package drawn for the rehabilitation of a sick unit. The package has to be
drawn in accordance with RBI stipulations and it usually consists of

i. Working Capital with relaxation in the rate of interest in terms of regulatory guidelines.
ii. Funded Interest Term Loan
iii. Working Capital Term Loan
iv. Term Loan
v. Contingency Loan Assistance


Represents assets used as support for a loan or other liability.


i. In respect of small and micro service enterprises, services refer to small road and
water transport operators, small business, professional and self-employed persons,
and all other service enterprises.
ii. Services rendered by the banks include various facilities like remittance (issue of
DDs, MTs, TTs, etc.), receipt and payment of cash, exchange of notes and foreign
exchange, etc. provided by the banks to the customers.

Sick Unit

Sick unit refers to a unit whose account has remained substandard for more than six months or there
has been erosion in net worth due to accumulated cash losses to the extent of 50% of the net worth
during the previous accounting year and the unit has been in commercial product for at least two years.


A substandard asset would be one, which has remained NPA for a period less than or equal to 2 months.

Tariff Schedule

The charges levied by a bank on the products and services offered by it to its customers

Unpaid Cheque

This is a cheque, which is returned 'unpaid' [bounced] by the bank.



Section A: Personal Information

1. NAME:

a) Male b) Female


a) Single b) Married

4. AGE:
a) 15-20 yrs b) 21-30 yrs

c) 31- 40 yrs d) 41-50 yrs

e) >50 yrs


a) Government b) Private Service

c) Business d) other


a) Up to 2 lacs b) Between 2-3 lacs

c) 3-5 lacs d) Above 5 lacs

7. If given an option, which bank will you prefer to deal with as a customer?
a) Axis Bank b) HDFC Bank c)SBI d) Other______

8. In terms of saving ba nk account opening, which bank would you prefer?

a) Axis Bank b) HDFC Bank c)SBI d) Other______

9. What are the services you use of a bank, in saving account?

a) ATM/Debit Card b) Internet Banking c) Cheque book at Par

d) Mobile Banking f) Relationship Manager

10. Which bank as per your experience provides the best customer service when you
personally visit the Bank?
a) Axis Bank b) HDFC Bank c) SBI d) Other______

11. What average balance account services you usually avail from your existing bank?

a) < = Rs. 1000 b) = > Rs. 5000 c) = > Rs.10000

d) = > Rs. 25000 e) = > Rs. 100000

12. Which Bank’s ATM you use the most for cash withdrawal?
a) Axis Bank b) HDFC Bank c) SBI d) Other______

13. Which is the most customer friendly Bank in terms of charges as per you?
a) Axis Bank b) HDFC Bank c) SBI d) Other______

14. Are all the Bank informed to you at the time of Saving Bank Account opening

a) Yes b) No

15. If you have to do an investment, which Bank would you consult for Portfolio
a) Axis Bank b) HDFC Bank c)SBI d) Other______

16. Kindly rate the below mentioned banks as per the ambience and infrastructure facilities provided to the
customers? NOTE: in Ranking 1 being the Best and 5 being the Last preference.

a) Axis Bank Ltd. [ ]

b) HDFC Bank [ ]
c) SB I [ ]
d) ICICI [ ]
e) PNB [ ]