Cosmos Co-operative Bank

History of Cosmos Co-operative Bank

Established in 1906, the Cosmos Co-operative Bank Ltd. is the second oldest & second
largest bank in the country. The Bank has recently completed glorious 107 years of service
successfully. It has attained multi state scheduled status in 1997. The Bank is a professionally
managed 'Financial Institution', a benchmark of credibility and innovation.

Bank has nurtured its traditional values in business practices and in serving the small
customers. At the same time it has adopted new technologies and advanced banking tools to
add value to its services. Cosmos Bank has carved a niche in the banking sector due to its rich
heritage, integrity, adherence to prudent banking practices, technology advancement,
customized products and services and most of all due to its experienced, qualified and
professional Board of Directors.

The Cosmos Co-operative Bank Ltd. (Cosmos Bank) is one of the oldest Urban Co-
operative Bank in India, celebrated its centenary on 18 January 2005. It is one of the first co-
operative banks in the country to go live with the core banking solution across the entire
network of its 119 service outlets using Finacle-Infosys Core Banking Software. It also
received an Authorised Dealer License from the Reserve Bank of India to become the third
co-operative bank in India to acquire such a license in thirty years.[1] The bank is
headquartered in Pune, and is managed by a team of executives, including a managing
director.
The bank was founded in 1906 in Pune by India's famous Freedom fighter, Lokmanya Bal
Gangadhar Tilak. He allocated the bank's managing responsibility to his friend, Namdar
(Solicitor) Gokhale, an economist and freedom fighter. During that period, the British- East
India Company had their own banks in India. Following the ideals of "Swarajya" and
"Swadeshi", Lokmanya Tilak thought of starting this bank so that Indians could save money.
Tilak himself recommended the name "COSMOS BANK". The word "COSMOS" means
"UNIVERSE" and also a "FLOWER".

Setup – Financial & Geographical

Financial setup of the bank as on 31.03.2012 was Rs.20570 crore, comprising of Deposits
of Rs. 12060 crore and Advances Rs. 8510 crore.

Branches of Cosmos Co-operative Bank

Cosmos Bank operates through 130 branches and 9 Extension Counters in India spread across
6 States and in 28 Major Cities, which are as follows:

Maharashtra Mumbai, Pune, Nagpur, Aurangabad, Nashik, Baramati, Jalna,

Kolhapur, Satara, Phaltan, Sangli, Solapur, Bhusawal, Jalgaon,
Amravati, Yavatmal.
Madhya Pradesh Indore.

Andhra Pradesh Hyderabad, Vijaywada

Karnataka Banglore. Belgaum, Nipani.

Gujarat Surat, Ahmedabad, Baroda, Ankaleshwar, Rajkot, Bhuj, Gandhidham,

Bhavnagar

Tamilnadu Chennai

Vision of Cosmos Bank:

Foundation is formed to serve the Cosmos Bank stakeholders and the entire society.

Mission of Cosmos Bank:

Committed to enriching the lives of society by implementing activities in the Medical,
Educational, Legal and Cultural fields.

The main objectives of the foundation are –

1. To give loans to Cosmos Bank members at concessional rates for pursuing higher
education abroad.

2. To give medical help to members up to specified limits.

3. To felicitate the awards of members who excel in Std. X & XII examinations.

4. To promote educational spirit and to maintain, support, propagate intellectual qualities

educational facilities, etc.

5. To arrange educational seminars, conferences, etc.

6. To grant relief in the event of natural calamities such as earthquakes, floods, famine.

7. The Foundation also provides outsourcing facility.

8. Special arrangement as Executor & Trustee for preparation & execution of Will
especially for the Senior Citizens.

Social Obligations

Cosmos Foundation is a Public Charitable Trust founded under the initiative of shareholders
of The Cosmos Co-operative Bank Ltd. Since 16/10/1987, with prime focus on providing
1. Primary health care,
2. Promoting education,
3. Social welfare activities for the society.

The registered office of the foundation is at 269/270, Shaniwar Peth, Pune-30.

Bank Provide Services

Bank conduct need based health initiative, medical program. Bank also felicitate successful
students and children of the members of the staff.
1. To Promote Educational Spirit
2. Create Scholarships, Educational loan
3. Grant Donations in natural calamities
4. Grant Donations for the public benefit
5. Financial support to the deserving students
6. Donation for public Charitable Purpose
7. Organize Health related programmed

Industry & Competitors

Banking Industry

A bank is a financial institution and a financial intermediary that accepts deposits and
channels those deposits into lending activities, either directly by loaning or indirectly
through capital markets. A bank is the connection between customers that have capital
deficits and customers with capital surpluses.

Banks are intermediary who mobilize savings from surplus units as deposits & advance loans
to shortage unit i.e. borrowers to finance productive activities. They provide both fund base
& free base activities.

Competitors of Cosmos Bank

Cosmos Bank is a Co-operative Bank. There are many competitors in cosmos bank. They
are as follows:-

Central bank Reserve Bank of India

Public sector banks  Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of
India, Bank of Maharashtra, Canara Bank, Central Bank of
India, Corporation Bank, Dena Bank, IDBI Bank, Indian
Bank, Indian Overseas Bank, Oriental Bank of Commerce,
Punjab & Sind Bank, Punjab National Bank, State Bank of
Bikaner & Jaipur, State Bank of Hyderabad, State Bank of
India, State Bank of Mysore, State Bank of Patiala, State Bank
of Travancore, Syndicate Bank, UCO Bank, Union Bank of
India, United Bank of India Vijaya Bank.
Private sector banks  Axis Bank, Catholic Syrian Bank, City Union Bank,
Development Credit Bank, Dhanlaxmi Bank, Federal Bank,
HDFC Bank, ICICI Bank, Indusind Bank, Jammu & Kashmir
Bank, Karnataka Bank, Karur Vysya Bank, Kotak Mahindra
Bank, Lakshmi Vilas Bank, South Indian Bank, Tamilnad
Mercantile Bank Limited, Yes Bank.
Cooperative banks Saraswat Bank, Shamrao Vithal Co-op. Bank, Pune Peoples
Cooperative Bank, Anyonya Co-operative Bank, Mahila
SEWA Cooperative Bank, Shri Arihant Co-Operative Bank.
Foreign banks  ABN AMRO, Abu Dhabi Commercial Bank, Antwerp
Diamond Bank, Australia and New Zealand Banking Group,
Bank Internasional Indonesia, Bank of America, Bank of
Bahrain and Kuwait, Bank of Ceylon, The Bank of Tokyo-
Mitsubishi UFJ, Barclays, Citibank India, Credit Suisse,
Deutsche Bank, HSBC, The Royal Bank of Scotland,
Scotiabank, Standard Chartered.
Regional Rural Banks  Andhra Pragathi Grameena Bank, Bangiya Gramin Vikash
Bank, Gramin Bank of Aryavart, North Malabar Gramin
Bank, Paschim Banga Gramin Bank, Sarva UP Gramin Bank
 South Malabar Gramin Bank, Vananchal Gramin Bank, List
of regional rural banks in Uttar Pradesh.
PEST Analysis

Political Factors Economic Factors

- Monetary Policy - More savings
- Regulatory Framework - More Capital Formation
- Budget & Budget Measures - Increase in production of goods
and Services
- Changes in interest rates
- Banking Channels

Social Factors
Technological Factors
- Increase in population
- Internet Banking
- Changes in lifestyle
- IT Services & Mobile Banking
- Easy way of lending money
- Credit Cards
- Exploring banking facilities in
- Improvement in efficiency
rural areas

POLITICAL FACTORS AFFECTING THE INDUSTRY

The Indian banking Industry is mostly dependent on the monetary policy decided
by the RBI

Stricter regulations with respect to capital and liquidity directly affects the business
of banks

Banks need to adjust their interest rates accordingly, which may or may not favor
them

Banks are forced to lend as per the guidelines of RBI, that includes credit growth in
all sectors

Budgetary Measures announced by the government at the beginning of every

financial year also lay down guidelines to banks to lend or accept deposits

The government can also increase credit in particular sectors such as increase in
farm credit, increase in infrastructure credit etc.(priority lending)

Sometimes the government gives debt waivers to certain sections of the society that
need to be adhered to by banks as well
ECONOMIC FACTORS AFFECTING THE INDUSTRY

Economic factors in the country also effect the Banking Industry both favorably or
unfavorably

When the economy is in good shape in terms of high per capita income, good
agriculture harvest and normal inflation, banks have an edge as people are left
with more money to deposit them with banks

This helps in more capital formation as more deposits can be realized

Also In the times of economic boom, more and more FDI is brought into India
through banking channels, that actually improves business for banks and the
economy in general

Economic prosperity encourages lending business for the banks but in times of
recession banks face tough times to recover their money, issue fresh credit and
NIMs are lower too

SOCIAL FACTORS AFFECTING THE INDUSTRY

The Indian banking system has been progressing rapidly. There are still several
untapped rural markets, despite the large number of banks in India

Many farmers still take loans from moneylenders at a very high interest rate and
small-scale industries continue to remain important for banks

However changes could be expected in the near future for the unorganized sector

The growing population of India is a great opportunity for Indian banks as a lot of
people in the country want to open a bank account and develop good savings
habits

Changing lifestyle of the Indian urban population who wants easy ways of
financing to their desires

TECHNOLOGICAL FACTORS AFFECTING INDUSTRY

Indian banking has been consistently working towards the development of

technological changes and its usage in its operations

With the application of new and improved technologies banks are expected to
reduce costs, time and provide higher customer satisfaction

Internet banking or banking via the phone can be considered a remarkable

development in the banking industry
 Mobile banking enables customers to check their account balance, transfer funds
24x7, bill payments, booking of bus/flight tickets, recharge prepaid mobile and do a
lot more effortlessly and securely

Banking through cell phone benefits the banks too. It cuts down on the cost of in-
person banking and helps reduce headcount at branches

Technological developments facilitate the flow of information and data faster leading
to faster appraisal and decision-making as well

Business Level Strategy

GE Consumer Finance, the global consumer lending unit of the General Electric Company
(NYSE: GE), announced today it has agreed to make a strategic investment in Cosmos Bank,
a major banking and consumer finance player in Bank, forming a strategic alliance.

Under the agreement, GE Consumer Finance will acquire a 10% stake in Cosmos through a
share subscription of 197 million common shares, at an aggregate price of $86 million. GE
Consumer Finance will retain rights to increase its total stake in Cosmos to 24.9% at a later
point through a convertible bond structure. The transaction is subject to regulatory and
shareholder approvals.

Under the terms of the strategic alliance, Chairman Sheng-fa Hsui and Vice Chairman Ken
S.J. Hsui will remain in their roles. GE Consumer Finance and Cosmos will share
management responsibilities of the Bank through a joint management committee. GE
Consumer Finance will appoint two representatives to the Bank's Board of Directors, and will
place senior executives into the Bank to assist in managing day-to-day operations.

"This partnership gives GE Consumer Finance the opportunity to execute on our growth
strategy in Asia by gaining a significant platform from which to expand in India," said
Yoshiaki Fujimori, President and CEO of GE Consumer Finance Asia.

"We welcome GE Consumer Finance's investment in Cosmos Bank. This share subscription
will inject new capital into the bank to increase capital requirements, enabling it to grow. GE
Consumer Finance also brings global expertise and highly regarded GE competencies in
general management, IT, and consumer lending which will strengthen our presence in the
India market," said Chairman Hsui. "We are very pleased that Cosmos' existing customers
and Indian consumers and businesses will now have the benefit of GE's presence in our
business."

Cosmos commenced operations as a commercial bank in 1992 and later transformed into a
niche consumer finance bank with assets of approximately US$7.9 billion. Cosmos has 130
branches, corporate centers, and a strong electronic network and provides a broad range of
banking and financial services, including deposits, personal loans, mortgages, auto loans and
credit cards.
Marketing Strategies
Designed after taking into account the strengths and weaknesses of the organization.

Bank with clientele from various segments could think of “market penetration” by
offering the existing range of services to existing customers.

Bank which is not facing acute competition could think of “Market Development” by
offering the existing services to new customers.

Design new product range for their customers of various segments

SEGMENTATION

Banks deal with individuals, group of persons and corporate.

More or less homogenous groups in terms of their needs and expectations.

Market segments, targeting one or more segments, developing products and

marketing programs tailor-made for these segments.

Criterion for Market Segmentation in India

 Agricultural Sector
1. Marginal
2. 2 to 5 acres
3. 5 to 10 acres
4. 10 acres and above

 Industrial Sector
1. Tiny
2. Co-operative
3. Small-sized
4. Large- sized

 Services Sector

 Household Sector
1. Marginal
2. Low Income
3. Middle Income
4. High Income

TARGETING
Market Targeting in which each segment‟s attractiveness is measured and a target segment is
chosen based on its attractiveness.

POSITIONING

Positioning which is the act of establishing a viable competitive position of the firm and its
offer in the target segment chosen.

TYPES OF MARKETING

Traditional
Internal Interactive
External
Marketing Marketing
Marketing

I. Traditional External Marketing

Traditional External Marketing consists of usual four „Ps‟ of Product, Price, Place and
Promotion of marketing mix.

PRODUCT
The products offered are the services which include
 Saving Account: offers a power packed Savings Account with a host of
convenient features and banking channels to transact through.
 Senior Citizen Services: convenience with benefits.
 Fixed Deposits : Safety, Flexibility, Liquidity and Returns
 Recurring Deposits: Affordability and higher earnings.
 Roaming Current: access your accounts at over 500 networked branches
across the country.
 Loans: Home Loans. Personal Loans. Car Loans, two Wheeler Loans,
Commercial Vehicle Loans. Loans against Securities, educational loans etc
 Investments: Cosmos Bank Tax Saving ,Foreign Exchange Services, Senior
Citizens Savings Scheme, 2004.
 Cards: Credit card, ATM card, travelers card
 Demat Services
 Online Money Transfer
 Mobile Banking

PRICE
 Pricing includes interest, fees or commission charged by the bank. Also the
interest paid by the bank.
  Buyers look for satisfaction which differs from person to person.
 Keeping in view the level of satisfaction of a particular segment, the banks
have to frame the pricing strategies.
 The interest charged and the interest paid should have a co-relation between
them.

PLACE
 Services are sold through branches.
 Making Promised Services available to the ultimate users.
 Branches of Cosmos Bank:
 130 in India and spread in 6 different states

PROMOTION
 Advertising - Television, Radio, Movies, Theatres
 Print Media- Hoardings, Newspaper, Magazines
 Publicity- Road Shows, Campus Visits, Sandwich Man, Sponsorship
 Sales Promotion- Gifts, Discount and Commission, Incentives, etc.
 Personal Selling- Cross-Sale (Selling at Competitors Place), Personalized
Service.

II. Internal Marketing

It involves the People (5th P) of the bank i.e. the employees.

PEOPLE
 All people directly or indirectly involved in the consumption of banking
services.
 Workers, Employees, Management and other Consumers.
 Employees of a Bank represent the organization to its customers.
 Internal Marketing

III. Interactive Marketing

The quality of service provided during the buyer-employee interaction.

Efforts for previous strategies will turn futile if the interaction does not takes place
satisfactorily.

It involves: Process (6th P) & Physical evidence (7th P)

PROCESS
 Standardization
 Customization
 Simplicity
 Customer Involvement
 PHYSICAL EVIDENCE
It includes signage, reports, punch lines, other tangibles, employee‟s dress code etc.

Current Marketing Strategies

Referral services

Direct mailing

Cold calling

Offering items having your brand identity

Using the media

Getting celebrities to endorse the product or service.

Sponsoring events

Using permission-based Marketing

Financial Strategies
HR Strategies

Since Cosmos Bank has undergone a mergers and acquisitions in the past and will continue
its efforts in this type of growth in the future also therefore, its HR policies should be in
compliance with the growth and diversification strategies followed by the bank which are as
follows

HR should focus on smooth integration of employees. HR management system should

work in the context of merger as well as on continuous improvement of recruitment,
training and performance management processes.

The process of integration should involve defining the organizational

structure of the merged entity, people placement in various positions across the
business and corporate groups and integration of the grade and remuneration structure
of the employees of the merged entities.

In the present scenario the recruitment process is based on appropriate

competency profiling tools and matching employee profile to job
specifications. The process is streamlined by following a uniform recruitment
policy across the merged organization.

In addition to campus recruitment it should also undertake lateral recruitment to bring

new skills, competencies and experience into the organization and meet the
requirements of rapidly growing businesses. At present a six sigma initiative has
been undertaken for the lateral recruitment process to improve capabilities in this
area.

Cosmos Bank should encourage cross functional movement, enriching employee‟s

knowledge and experience and giving them a holistic view of the organization.

The rapidly changing business environment poses constant challenges to the

organization therefore it is critical to enhance knowledge and skill sets across the
organization to get an edge over competition and meet the customer expectations.
Cosmos bank should built strong capabilities in training and development to build
competencies.
 At present Training on products and operations is imparted through web
based training modules. Special programs on functional training and
leadership development to build knowledge as well as management ability
are conducted at a dedicated training facility.

The bank must believe in defining clear performance parameters for employees and
empowering them to achieve their goal this will help in creating a culture of high
performance across the organization.

The bank must have a structured process of identifying and developing leadership
potential.

IT Strategies

One important strategic initiative of the bank can be the use of WIRELESS TECHNOLOGY
and SMART CARDS in rural banking to provide cost effective financial services to the poor.

It can enhance the level of customer service by offering 24 hr availability,

multichannel banking, straight through processing and cost efficiency via electronic channels
which allows wider and focused market reach and opportunities for cross selling of various
financial products.

SWOT Analysis

STRENGTH

 Online Services
All the banking facilities of Cosmos Bank have been encircled by online
services. They provide their customer the facilities of D-mat account so
that those people can have an access of their account from anywhere he is.

 Advanced Infrastructure
Cosmos bank one of the well equipped banks in India with a good deal of advanced
infrastructure in each and every branch of it in order to help its customer with a tester
banking services. Not only advanced in nature but the computers are situated in such a
manner in the branch that it helps both the customers and bank staff with a
user friendly approach.

 Friendly Staffs
Cosmos has the number of staff pool in all of their branches who are very much
friendly in nature and always ready to help out their customers. Thus by providing
faster and customized services they maintain a strong personal
relationship with their customers.
  12 hrs banking services
Cosmos acts as a savior to those persons who are in urgent need of money by
providing a long hrs of services of 8-8hrs as compared to the other private banks.

 Late night ATM services

In certain branches the ATM centers works even after 11.00 pm and thus able to
provide a late night ATM services to their customers.

 Brand name
Within a very short span of time this bank has acquired a strong brand name by
providing a quality of services to its customers, thus they have a getting a huge edge
over their customers.

 Huge network
Cosmos bank has a highest number of branches. The bank consists of near about 130
branches all over India. The huge network of ATM has given an added advantage to
them in case of salary account i.e. most of the companies have maintained their salary
account to this bank as compared to others.

 Diversified portfolio
This bank has a well diversified portfolio of products which not only helped them to
minimize their risk but also huge customer base. They have a large pool of products to
offer to their customers so that once a person if once they have a banker-customer
relation with them.

WEAKNESS

 High banking service charges

As compared to other private branches Cosmos charges much more service cost to its
customers and that is why they mainly end up with high end customers.

 Less Credit period

Though Cosmos provides a huge loan credit facility to its customers but the period of credit limit
is very small. Even though the credit period is not over, it sends letters of reminder to
their customer which in turn results annoying customers and thus creates a lack of trust
among the customers.

 Overdependence on domestic mark et

Though it has felt its present in International market in recent years but their
main focus is on domestic sector which increases their business risk.

 Increase in NPAs reduces the profitability of the company.

  Poor Customer Care/Service

With its aggressive marketing Cosmos Bank is rapidly increasing its customer base.
They are not however, increasing the number of employees accordingly. This is
leading to deterioration of the standard of customer service.

OPPORTUNITIES

 Retail demand
Increase in demand for housing, car and personal loans due to rising living standards
of the individuals.

 Infrastructure being one of the biggest growth drivers which is expected to grow at
about 35% in coming years.

 Telecom 3G lending also increased the credit demand.

 Rural penetration by private banks.

 Consolidations and Expansions

Mergers and Acquisitions are very prevalent in the industries creating demand for the
credit.

THREATS

The risks associated with providing banking services differ by the type of service rendered. Risk is the
danger of an adverse deviation in the actual result from an expected result. High returns are
said to also accompany high risk. So the risks involved in the banking sector are:

Credit Risk

Market Risk

Operatinal Risk

Liquidity Risk

Other Risks

Future Plans
1. Mobile Banking Facility
 In future Cosmos Bank provide mobile banking facility to its customer. Mobile Banking of
Cosmos Bank (“CosMobile”) is a service of funds transfers and other requests provided to
its customers. With this service customer can transfer funds to any other person or directly
to account even pay to any merchant. Also with this service customer can submit multiple
requests such as cheque book request, email statement request, Balance Inquiry, Mini
statement, stop cheque, Addition of account, ATM PIN regeneration request etc.

With Mobile Banking you can access your account on your mobile, wherever you are.
Now, check your account balance, transfer funds, pay bills and make credit card
payments with Cosmos Mobile Banking (“CosMobile”).

2. Utility Terminal