A Project Report

On

“RETAIL BANKING WITH SPECIAL REFERENENCE TO

ALLAHABAD”

University of Mumbai for partial completion of the Degree

of Bachelor of Commerce-Banking & Insurance

SUBMITTED BY
Kamini Pandurang Kotkar

PROJECT GUIDE

PROF. KISHOR CHAUHAN

BACHELOR OF COMMERCE (BANKING & INSURANCE)

2019-2020

SMT. SUSHILADEVI DESHMUKH COLLEGE OF ARTS, SCIENCE&

COMMERCE

SEC-4, AIROLI, NAVI MUMBAI-400708.

 A Project Report
On

“RETAIL BANKING WITH SPECIAL REFERENENCE TO

ALLAHABAD”

University of Mumbai for partial completion of the Degree

of Bachelor of Commerce-Banking & Insurance

SUBMITTED BY
Kamini Pandurang Kotkar

PROJECT GUIDE

PROF. KISHOR CHAUHAN

BACHELOR OF COMMERCE (BANKING & INSURANCE)

2019-2020

SMT. SUSHILADEVI DESHMUKH COLLEGE OF ARTS, SCIENCE&

COMMERCE

SEC-4, AIROLI, NAVI MUMBAI-400708.

 DECLARATION

I the undersigned Mrs. Kamini Pandurang Kotkar here by, declare that the work
embodied in this project work titled “RETAIL BANKING WITH SPECIAL
REFERENENCE TO ALLAHABAD”,forms my own contribution to the research work
carried out under the guidance of KISHOR CHAUHAN is a result of my own research work
and has not been previously submitted to any other University for any other Degree/Diploma to
this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as
such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented
in accordance with academic rules and ethical conduct.

Student’s Signature

Kamini Pandurang Kotkar

Certified by

PROF.KISHOR CHAUHAN
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in
the completion of this project.

I take this opportunity to thank the University of Mumbaifor giving me chance to do this
project.

I would like to thank the Principal, Dr.Shalini Vermani for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our coordinator Kishor Chauhan for her moral support and
guidance.

I would also like to express my sincere gratitude towards my project guide

Kishor chauhan whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various

reference book and magazines related to my project.

Lastly, I would like to thank each an every person who directly and

indirectly help me in the completion of project especially My Parents and

Peers who supported me throughout my project.
 TABLE OF CONTENT

CONTENTS

A. Executive Summary 7-11

B. Introduction to the concept 12-15

C. Industry profile 16

D. Company profile 17-19

- Product/Services Profile 20-26

- Workflow model (end to end) 27-28

E. Mckinsey’s Seven S Model 29-31

-Structure 32

-Skill 33

-Style 33

-Strategy 34-35

-System 35

-Staff 35

-Shared Values 36

-SWOT Analysis 37-38

F. Research Methodology 39

- Title of the Project 40

- Statement of the problem 40

- Objectives 40

- Operational definitions 41
 - Data collection 41

- Statistical Tools used for research 41

- Sampling Technique – Sampling Unit, Sample Size a nd 42-44

Sampling method.

- Plan of Analysis 45

- Limitations to the study 46

G. Data Analysis and Interpretation 47-66

H. Summary of findings 67-68

I. Suggestions 69-71

J. Conclusions – Future Growth 72

K. Learning Experience 73

L. Annexure 74

- Financial Statements 75-80

- Questionnaires 81-83

- Bibliography 84
 EXECUTIVE SUMMARY

TITLE OF PROJECT

“A Study on Retail Banking with special reference t o ALLAHABAD BANK”

STATEMENT OF THE PROBLEM

As there are immense opportunities of the retail banking in India. This dissertation is on the
issues and challenges in the retail banking because of the competition of the various banks and
the customer satisfaction of the services which the banks are providing and at the same time to
solve the complaints of the customer and maintaining the sound relationship for the future and
by this way to estimate the future growth of the retail banking.

OBJECTIVES

To study the issues and challenges in retail banking. To study the recent trends in retail
banking.

To ensure high satisfaction level and reduce percentage of complaints of customers in retail
banking.

To estimate the future growth of Indian retail banking. To understand Optimization of retail
banking channels.

1
To suggest strategies for improvement in Customer Service.

DATA COLLECTION
 Data was collected from two sources-primary and secondary sources.

1. Primary data collection- The primary data was collected by meansof survey.
It was collected from different customers through questionnaire.

2. Secondary data collection-This data was collected fromInternet, Company’s

websites, Books & Magazines.

SAMPLE SIZE

Sample size was restricted to 50 respondents, since it was not possible to cover

the whole universe in the available time period.

SAMPLING METHOD

For this research Non- Probability Convenience Sampling has been used because time limit
for the completion of the work is limited and also managers and employees were not available
all the time.

SUMMARY OF FINDINGS
 90% of customers are happy with the bank timings & they belief that it is very good.

80% of respondents like the branch ambience & layout & find it friendly. 80% of respondents
said branch was clean and well maintained.

Respondents were of view that Branch personnel had listened to them patiently and have been
able to respond to their queries and clarifications.

74% of respondents responded that Branch personnel had been very helpful and courteous.

72% of respondents opinion that branch personnel does ‘Need Analysis’ & ‘Risk Assessment’
of customer savings b efore recommending any investment option to them.

86% of respondents that branch personnel are aware of Product and Services and responded to
your queries.

SUGGESTIONS

3
As 10% customer response is not good for the clarification of the queries response towards
them so bank personnel should improve this issue because customer is a source through which
 business can be increase and satisfy customers is a source to create more customers, with
reference to table no. 4.

As it is only 10% respondent said that sometime there was a error in the transaction happened
so to avoid these kinds of errors should be avoided because it is unnecessarily results in
wastage of time for both staff members and service rendered, with reference to table no. 9.

With reference to table no. 6, large number of branch personnel should do ‘ Need Analysis’ &
‘Risk Assessment’ before recommend ing anyinvestment option to customer.

With reference to table no. 7, more branch personnel should be aware of Product and Services
and responded to customer’s queries.

With reference to table no. 10, Allahabad Bank should look into the feedback provided by
customer and takes necessary action wherever required.

With reference to table no. 12, Allahabad Bank should focus on MahilaSanchay Saving Bank
account as small 10% of customer likes this.

4
5
 RETAIL BANKING AN INTRODUCTION

Retail banking has become a very important component in the business mix of banks. Retail
banking offers multiple comfort factors for banks to do business. Large and divergent customer
base across income segment offers huge scope for banks to develop and offer multiple products
and services. In addition to traditional products and services offered by banks over the years,
the retail model has undergone rapid innovation in the past decade with regard to products,
processes, people and technology.

Technology has become the driver for retail banking explosion, and technology products like
ATM, Internet Banking, Mobile Banking, Card products like Debit Cards and Credit Cards and
remittance products like RTGS and NEFT are making their presence felt in retail space. Banks
are embracing different strategies, redesigning their conventional business silos, reengineering
their channels, product and services to increase the share of customer wallet.

A bank functions can be divided into various divisions like:

Retail/Personal Banking:

This division provides a range of financial servicesto individual customers and small
companies. It operates mainly through branch networks.

Retail banking includes routine transactions like deposits and withdrawals of money; money
transfer; foreign currency exchange and traveller'scheque encashment. They also deal with
 personal and small loans, credit and mortgages; insurance policies; investment schemes;
pension funds; and advice to customers on various financial matters. Apart from offering home
loans, car loans, educational loans, consumer loans, etc. they also develop various deposit
schemes and help people fill their coffers.

Corporate Banking:

They deal with medium to large-scale companies andgovernment agencies. It could start at the
local branch manager level, though more complex dealings are routed through corporate
divisions of clearing banks and their merchant banking subsidiaries. Corporate banking deals
with credit and advances, trade finance, foreign exchange management, asset management,
lease financing of heavy equipment, infrastructure, machinery, credit risk assessment, etc. They
also advise clients on matters such as corporate mergers and acquisition, raising capital and
business strategy regarding competitors and outside factors.

Merchant Banking:

Investment management is the primary activity of thisgroup. It could be on behalf of corporate

clients, or institutional investors-like pension funds, investment trusts, or those in the securities
business. This groups also handles public issue and marketing of shares, debentures and other
such papers. It may also include other stock market functions like dematerialization services,
investment advisory services, etc. Merchant banking executives research into capital market,
advice and manage funds of various corporate and individual customers.
 Treasury group:

This group takes care of the total funds of a bank includingforeign exchange reserves.
Responsibilities include bank portfolio management, dealing in foreign currency, etc. There are
Forex (foreign exchange) dealers in this group who exclusively deal with the foreign market.
They buy and sell foreign exchange at the minimum exchange cost thereby earning
maximum profit from the transactions.

Rural Banking:

This group deals with the banking and credit needs of peoplein the rural sector.
Not all banks have this group and some banks have separate subsidiary
companies for rural banking.
 Product Management:

This group conceptualizes various banking services andthen develops; implements and
manages them. They have the responsibility for a banking product (meaning services like
personal loans, home loans, credit cards, loans against shares, educational loans, etc.).

Apart from these main functional groups, there is an appraisal group to analyse economic
feasibility of industrial projects, the bank's exposure to financial risk and long term returns.
There are internal auditors who audit the bank's internal books of accounts.

There are various groups of professionals like lawyers, engineers, agricultural scientists,
chartered accountant, company secretary, cost accountant and economists who work in various
departments in advisory capacities. They help make decisions on issues that are legal, technical
or economic in nature. For example, the economist advises various functional groups on the
implications of the Union budget on the business of the banks, consumer buying pattern, etc.
 POTENTIAL FOR RETAIL IN INDIA: IS SKY THE LIMIT

The Indian players are bullish on the Retail business and this is not totally unfounded. There are
two main reasons behind this. Firstly, it is now undeniable that the face of the Indian consumer
is changing. This is reflected in a change in the urban household income pattern. The direct
fallout of such a change will be the consumption patterns and hence the banking habits of
Indians, which will now be skewed towards Retail products. At the same time, India compares
pretty poorly with the other economies of the world that are now becoming comparable in
terms of spending patterns with the opening up of our economy. For instance, while the total
outstanding Retail loans in Taiwan is around 41% of GDP, the figure in India stands at less
than 5%. The comparison with the West is even more staggering. Another comparison that is
natural when comparing Retail sectors is the use of credit cards. Here also, the potential lies in
the fact that of all the consumer expenditure in India in 2001, less than 1% was through plastic,
the corresponding US figure standing at 18%.
 Type Public Company

Traded as BSE: 53 2480

NSE: A LBK
Allahabad Bank in 1865, has its head-quarters
Industry Banking, Financial services

whic h began operations

Founded 1865
in Kolkata is the oldest joint stock bank in India. The ban k was founded

in Headquarters
Allahabad in 1865 and
Kolkata, as of 31 March 2012 now has over 2500 branches
India

Number of 2,500 br anches (2012)

locations

Shubh alakshmiPanse(Chairman & MD)

Key people
T.R Ch awla(Executive Director)

Services Finance and insurance

Consum er banking

Corporat e banking

Revenue 16,8 22 crore(US$3.1 billion) (2012)

Operating income 3,77 0 crore(US$690 million) (2012)

Net income 1,86 7 crore(US$340 million) (2012)

Total equity 500 crore (US$92 million) (2012)

Website allahaba dbank.in

throughout India. The bank has a branch in Hong Kong and a representative office in Shenzen.

19th century

On 24 April 1865, a group of Englishmen at Allahabad founded Allahabad Bank. By the end of
19th century it had branches a t Jhansi, Kanpur, Lucknow, Bareilly, Nainital, Calcutta, and
Delhi.

20th century

In the early 20th century, with the start of Swadeshi movement, Allahabad Bank witnessed a
spurt in deposits. In 1920, P & O Banking Corporation acquired Allahabad Bank with a bi d
price of 436 (US$8.00) per share. I n 1923 the bank moved its head office and the registered
office to Calcutta for reasons of both operational convenience and business opportunities. Then
in 1927 Chartered Bank of India, Australia and China acquired P&O Bank. How ever,
Chartered Bank continued to operat e Allahabad Bank as a separate entity.

On 19 July 1969, the Go vernmentnationalised Allahabad Ban k, together with 13 other banks.

In October 1989, Allahab ad Bank acquired United Industrial B ank, a Calcutta-based bank that
had been established in 1940. Two years later, Allahabad Bank established AllBank Finance
Ltd, a wholly owned Merchant Banking subsidiary.

21st century

The government's ownership of Allahabad Bank shrank in October 2002 after the bank engaged
in an Initial Public Offering (IPO) of 10 crore (US$1.8 million ) of shares, each with a face
value 10. The IPO reduced the Government's shareholding to 71.16%. Then in Apr il 2005 the
bank conducted a second pub lic offering of 10 crore of shares, e ach with a face value 10
and selling at a premium of 72. This offering reduced the Government's ownership to 55.23%

In June 2006 the bank o pened its first office outside India w hen it opened a representative
office in S henzen, Mainland China. In February 2007, Allahabad Bank opened its first
overseas branch, in Hong Kong. In March, the bank's business crossed the 1 m illioncrore
mark.
 PRODUCT AND SERVICES

1. Personal Banking

2. Social Banking

3. MSME Banking

4. Corporate Banking

5. International Ban king

6. Other Services
 PERSONAL BANKING

Personal banking of Allahabad Bank is further divided into three main categories:

i) Deposit Products

ii) Retail Credit Products; and

iii) Other Credit Products

Deposit Products:

It includes:-

a) Flexi-Fix Deposit

b) MahilaSanchay Account

c) Monthly Plus

d) Current Plus Deposit Scheme

e) Rs 5 Banking

f) Vikash SB Account

g) SishuMangal Deposit Scheme

h) Premium SB Account

i) Premium Current Account

 j) Tax Benefit Term Deposit Scheme

Retail Credit Products:

It includes:

a) Housing Loan

b) Saral Loan

c) Furnishing Loan

d) GyanDipika Scheme

e) Gold Loan Scheme

f) Personal Loan for Pensioners

g) Education Loan

h) Loan Against NSC(National Saving Certificate)/KVP(KisanVikasPatra)

i) Property Scheme

j) Reverse Mortgage Scheme

k) Loan Scheme for Doctors/Medical Practitioners

l) Commercial Vehicle Finance

m) Dream Car

n) Bank Rent Scheme

o) Trade Scheme
 p) IPO/FPO Finance Scheme

q) Mobike Scheme

r) Overdraft Facility in SB Account

s) Housing Loan Scheme for NRI’s(Non-Resident Indians)/PIO’s(Persons of Indian Origin)

Other Credit Products:

a) Akshaykrishi – Kisan Credit Card Scheme

b) Allahabad Bank – EXPO Scheme

c) Allahabad Bank Tax Benefit Term Deposit Scheme

SOCIAL BANKING

Social Banking is also further segmented into three different categories:

i) Priority Sector

ii) Financial Inclusion

iii) Credit Facilities to Minority Communities

 MSME BANKING

MSME stands for Micro, Small and Medium Enterprise. An “enterprises” means an Industrial
undertaking or a business concern or any other establishment, by whatever name called,
engaged in the manufacture or production of goods pertaining to any industry specified in the
First Schedule to the Industries (Development and Regulation) Act 1951 or employing plant
and machinery in the process of value addition to the final product having a distinct name or
character or use or engaged in providing or rendering of any service or services.

Some important MSME portals of Allahabad Bank are:

i) MSME Policy of the Bank
ii) Presence in MSME Cluster

iii) Specialized MSME Branches in Each State

iv) MSME Campaigns held and number of borrowers given loan in the campaigns

v) Training provided for the bank staff on MSME needs and number of persons trained

vi) Online system of acknowledgement of loan application and loan tracking system

vii) Format of loan application form with check list

viii) Interest on MSME/Services Charge
ix) OTS Scheme of the Bank
x) Rehabilitation of sick MSME

xi) Number of people trained in RSETI’s and of them those provided credit linkage

xii) Branch Level Customer meets held

xiii) Grievance Redressal Mechanism for MSME’s

xiv) Name of Nodal Officer of the bank for MSME complaints and queries: Sri A.K.
Mohapatra

Assistant General Manager Priority Sector Credit Department Head Office, 2 N.S. Road
Kolkata – 700001

CORPORATE BANKING

Corporate banking includes:

i) Cash Management Services
ii) Gold Card Scheme for Exporters
iii) Allahabad e – Trade
iv) 3 – IN – 1 Account (Triple Advantage)

INTERNATIONAL BANKING

Allahabad Bank is well spread out in India and one overseas Branch at Hong Kong, besides a
Representative office at Shenzhen, China. Bank has also arrangements with correspondents at
various important overseas locations, which will ensure extending to all our NRI customers rich
banking experience.

We understand your needs and value your patronage and would request you to invest your
surplus funds in the various products offered by our Bank.

Non – Resident:
 A. In terms of Regulation 2(vi) of FEMA 5, a Person resident outside India, who is a citizen
of India or is a person of Indian Origin.

B. Indian Residents working abroad on assignment with Foreign Governments, Government

agencies or in UNO and its affiliates IMF, IBRD etc and Government officials and other
officials of PSU's deputed abroad or assignments or posted abroad to their own offices
including Diplomatic Missions abroad.

C. A person of Indian Origin who is a citizen of any other country other than Bangladesh or
Pakistan if:

i. He/She at any point of time, held an Indian Passport.

ii. He/She or either of his/her parents or any of his/her grandparents was a citizen of India by
virtue of Constitution of India or Citizenship act 1955 (57 of 1955).

iii. The persons are a spouse of an Indian Citizen or a person referred to in sub clause b (i) or
(ii) above.

Students going abroad for studies are treated as Non Resident Indians provided their stay
abroad is for m ore than 182 days in the preceding financial year and their intention to stay out
side India for an uncertain period whe n they go abroad for studies.
 Deposit Account:

Non Resident Indians can open accounts under Repatriable and Non-Repatriable deposit
schemes. In respect of Repatriableschem e the NRIs have the choice of following schemes for
depositing their savings with Our Bank.

OTHER SER VICES

Other important services of Allahabad Bank are:

i) Insurance and M utual Fund

ii) Government Business

iii) Depository Serv ices

iv) E – Products

v) Cards
vi) ASBA(Application Supported by Block Amount) Facility

vii) Account – Portability

viii) Agriculture Deb t Wavier

ix) All AyushmanBimaYojana

x) SamadhanFinancial Literacy & Credit Counselling Centre

xi) Deceased – Settlement

xii) Depository Rec eipt

xiii) International De bit – Cum – ATM Card

xiv) Money Transfer Services

xv) National Eligibility Fund Transfer(NEFT)

xvi) New Pension Sy stem(NPS)

xvii) Non – Life Busi ness Insurance

xviii) Real Time Gross Settlement(RTGS)

xix) Regional MSM E Care Centres

NOTE:

VARIOUS RETA IL LENDING SCHEMES (Hyperlink ):

 Rate of Interest under Retail Credit Products.

Discretionary Authority under Various Retail Schemes. Services C harges, Processing Fees and
Prepayment Fees

MCKINSEY’S SEVEN S MODEL AS APPLICABLE TO THAT

ORGANIZATION

The Seven-S is a framework for analyzing organizations and their effectiveness. It looks at the
seven key elements that make the organizations successful, or not: strategy; structure; systems;
style; skills; staff; and shared values.

Consultants at McKinsey & Company developed the 7S model in the late 1970s to help
managers address the difficulties of organizational change. The model shows that
organizational immune systems and the many interconnected variables involved make change
complex, and that an effective change effort must address many of these issues simultaneously.
 7-S Model – A Systemic Approach to Improving Organizations

The 7-S model is a tool for managerial analysis and action that provides a structure with
which to consider a company as a whole, so that the organization's problems may be
diagnosed and a strategy may be developed and implemented.

The 7-S diagram illustrates the multiplicity interconnectedness of elements that define an
organization's ability to change. The theory helped to change manager's thinking about how
companies could be improved. It says that it is not just a matter of devising a new strategy and
following it through. Nor is it a matter of setting up new systems and letting them generate
improvements.

“ Shared values ―are commonly held beliefs, mindsets, and assumptions thatshape how an
organization behaves – its corporate cultur e. Shared values are what engender trust. They are
an interconnecting centre of the 7S’s model. Values are the identity by which a company is
known throughout its business areas, what the organization stands for and what it believes in, it
central beliefs and attitudes. These values must be explicitly stated as both corporate objectives
and individual values

― Strategy” is a plan of an organization formulates to reach identified goals, and a set of

decisions and actions aimed at gaining a sustainable advantage over the competition.
―Systems” define the flow of activities involved in the daily operation of business, including
its core processes and its support systems. They refer to the procedures, processes and routines
that are used to manage the organization and characterize how important work is to be done.
―Style” refers to the cultural style of the organization, how key managers behave in achieving
the organization's goals, how managers collectively spend their time and attention, and how
they use symbolic behaviour. How management acts is more important that what management
says. ―Staff” refers to the number and types of personnel within the organization and how
companies develop employees
 and shape basic values. ―Skills” refer to the dominant distinctive capabilities and
competencies of the personnel or of the organization as a whole.

Structure” is the organizational chart and associated information that showswho reports to
whom and how tasks are both divided up and integrated. In other words, structures describe the
hierarchy of authority and accountability in an organization, the way the organization's units
relate to each other: centralized, functional divisions (top-down); decentralized (the trend in
larger organizations); matrix, network, holding, etc. These relationships are frequently
diagrammed in organizational charts. Most organizations use some mix of structures -
pyramidal, matrix or networked ones - to accomplish their goals.
 STRUCTURE

Board of Directors

Mrs. SubhalakshamiPanse Chairman & Managing Director Allahabad Bank

Shri Tilak Raj Chawla Executive Director Allahabad Bank

Shri Arun Tiwari Executive Director Allahabad Bank

Dr. ShashankSaksena Government Nominee Director Allahabad Bank

Shri A. Udgata RBI Nominee Director Allahabad Bank

Shri Rajesh Madanmohan

Chatruvedi Chartered Accountant Director Allahabad Bank

 Shri Gour Das Workmen Employee Director Allahabad Bank

Dr. SudipChauduri Shareholders’ Director Allahabad Bank

SKILLS

Highly skilled candidates are recruited at various levels across the organization. Skills can be
classified broadly into highly skilled and semi skilled routine work. Various training program
are organized regularly to impart training needs of the employees.

STYLE /CULTURE

The culture of the organisation, consisting of two components:

Organisational culture:

the dominant values and beliefs, and norms,which develop over time and become relatively
enduring features of organisation life.

Management Style: More matter of what managers do than what theysay how do a company‘s
managers spend their time? What are they focusing attention on?

Symbolism – the creation and maintenance (or sometimes deconstruction) of meaning is a

fundamental responsibility of managers.
 Building a high performance culture is another key prerogative of the HR function. Allahabad
bank envisage a credible and transparent performance management process that helps in
aligning individual goals with corporate objectives, both quantitative and qualitative, and
encourages cross sell and team spirit. Allahabad bank performance management process will be
supported by a robust rewards and recognition strategy for each business and a market based
compensation structure that is flexible, responsive and helps retention through asset building
and wealth creation for top performers.

STRATEGY

Being one of the leading banking institutions with rich culture of professionalism the bank has
various strategies to tackle with competitors in the market. The bank has the strategy to make
use of the growing potential of the rural sector as well as the global academy, the business
landscape will be changing magically and so will the financial service need.

The bank has the strategy to enhance the reach of anytime and anywhere banking. It has the
ATM’s almost in all the cities and in good numbers. With the growing of the net banking the
bank have several new products and facilities with state-of-the-art facilities, enabling you to
conduct all your banking activities using your personal computer, from the comfort of your
home or office. Thus providing you with secure, 24 hour access to all your accounts from
anywhere in the world.

Unique Advantages:

Single Access Key:Our revolutionary technology allows you to accessyour account with
your debit card PIN. Just log on to our website, select Internet Banking services and key in your
Customer ID and debit card PIN. On successful validation you will be allowed to select an
Internet password. It's that easy.
 Secure Technology: For the first time in India, our Two FactorAuthorization allows for
"One Time Passwords" for Internet Banking transaction authentication to be delivered via SMS
to your Mobile Phone. This password enhances your Internet Banking security and allows you
the freedom of banking without remembering multiple passwords.

Instant Payment Solutions: Our Real Time Gross Settlement (RTGS)Payment and
Electronic Funds Transfer (EFT) facilities allow you to transfer funds to own or third party
accounts instantly. You can also request for multiple Demand Drafts at various locations and
set up standing instructions for your account to execute routine payments

SYSTEM

Formal and informal procedures that support the strategy and structure (systems are more
powerful than they are given credit).

The bank follows a systematic procedure at all the levels. The bank has very good performance
appraisal system, training and development system, resource allocation system, distribution and
recovery system. The instructions flow from top management to lower levels of management.

The training needs are developed after TNI (Training Needs Identification) and all the
programs are put on the monthly/annual training calendar to be implemented.

STAFF
 The people/human resources management – processes u sed to develop managers, socialization
processes, ways of shaping basic values of management cadre, ways of introducing young
recruits to the company, ways of helping to manage the careers of employees.

Allahabad Bank envisaged that for an individual to work with the organization in perfect
synergy, his/her goals had to be linked with the goals of the organization. This process of
aligning individual and organizational goals was termed as the performance management
process. The main objective of these innovative performance management practices was to
encourage the employees to think innovatively.

SHARED VALUE

The bank aimed at building a culture to inculcate professional entrepreneurship in them to

make themselves and the shareholders prosperous. Allahabad Bank has planned to steadily
increase its presence in retail business. Earlier bank has purposely maintained a low-key
presence in the retail market, now is planning to increase exposure in this segment. There is
tremendous scope for Allahabad Bank’s growth as it was trying to take care of the latent needs
of the customers with highly skilled and involved employees.

Advantages of Retail Banking

Retail banking is a concept which is relatively new and all banks are giving thrust to retail
banking, it refers to providing banking services to individual customers and focus is on small
ticket transactions rather than big ticket transactions. Retail banking has many advantages, let’s
look at some of them –

1) The first and foremost advantage of retail banking is that it increases the overall business
of the banks and also helps in improving the brand image because a customer is more likely to
remember a brand when he or she uses it himself or herself rather than just seeing it in
newspapers or television advertisements. So for example in banking if you ask a normal
individual about name of bank which has retail operations then he or she will quickly recognize
it but if you ask the same individual about some big investment bank dealing with corporate
 clients having operations in many countries chances are individual would not have even heard
the name of that bank because he or she has never dealt with them.

2) Since in retail banking the ticket size of loan is smaller and if borrower or group of
borrowers becomes insolvent then it does not put that much strain on the bank balance sheet as
opposed to some big corporate going bankrupt because the ticket size of loan is quite high in
case of corporate loans. In simple words one can say that retail banking gives the advantage of
diversification to the bank.

3) Cost of deposit of funds in case of retail banking is much lower as compared to wholesale
banking because retail customers unlike corporate customers do not bargain for rate of interest
on their fixed deposits as they do not have large sums of money and hence they are price takers
rather than price makers.

4) Brand loyalty in case of retail customers is higher as compared to large companies or

high net worth individuals because normal individuals want better customer service and safety
of their funds and if bank is able to provide them both then chances are that they will not switch
the bank and will continue be loyal customers of bank for many years.

5) It is easy to sell third party products like insurance, mutual fund and provide other non
fund based services to retail customers and therefore improve the bottom line of the banks
without any credit risks which is there if bank depends only on loans as their income and that is
the reason why many banks today are focusing more on non fund based portfolio rather than
fund based portfolio.

As one can see that there are many advantages of retail banking and that is the reason why in
spite of it being a new concept it has gained tremendous attention among all major banks all
over the world002E
 DISADVANTAGES

o Designing own and new financial products is very costly and time consuming for the bank.

o Customers now-a-days prefer net banking to branch banking. The banks that are slow in
introducing technology-based products, are finding it difficult to retain the customers who wish
to opt for net banking.

o Customers are attracted towards other financial products like mutual funds etc.

o Though banks are investing heavily in technology, they are not able to exploit the same to the
full extent.

o A major disadvantage is monitoring and follow up of huge volume of loan accounts inducing
banks to spend heavily in human resource department.

o Long term loans like housing loan due to its long repayment term in the absence of proper
follow-up, can become NPAs.

o The volume of amount borrowed by a single customer is very low as compared to wholesale
banking. This does not allow banks to to exploit the advantage of earning huge profits from
single customer as in case of wholesale banking.
 Fast Facts

 Services offered include savings and checking accounts, mortgages, personal

loans, debit/credit cards andcertificates of deposit(CDs).
 The focus is on the customer.
 Retail banking aims to be theone-stop shopfor as many financial services as
possible on behalf of individual retail clients.

Expanded Services in Retail Banking

Banks are adding to their product offerings to provide a greater range of services for their retail
clients. In addition to basic retail banking accounts and customer service from local branch
financial representatives, banks are also adding teams of financial advisors with broadened
product offerings, with investment services such aswealth management,brokerage
accounts,private bankingandretirement planning.

Outsourced third-party affiliations also offer ancillary services. All of the expanded offerings
allow for increased convenience through greater connectivity of accounts, which helps
customers to access funds and make personal transactions more quickly and easily.

Outsourced third-party affiliations also offer ancillary services. All of the expanded offerings
allow for increased convenience through greater connectivity of accounts, which helps
customers to access funds and make personal transactions more quickly and easily.

Real World Example of Retail Banking

In the 21st century, a movement toward internet finance banking operations has also broadly
expanded the offerings for retail banking customers. Several online banks now provide banking
services to customers purely through Internet and mobile applications.

These banks offer nearly all of the accounts and services provided by traditional banks, often
with lower fees from reduced banking branch expenses. Examples of these banks include
Simple, Moven and GoBank.

U.S. Banking Landscape Profile

In 2018, the top five largest U.S. commercial banks held over half of the industry's customer
deposits. As of 2018, the top five largest commercial banks were:

 JPMorgan
 Bank of America
 Wells Fargo
 Citibank
 Goldman Sachs
 In the banking industry, consumers also rely on the Federal Deposit Insurance Corporation
(FDIC) to insure their bank deposits. As a leading U.S. government entity, the FDIC was
responsible for ensuring deposits at 5,670 banking institutions at the end of 2017.

Customer Behavior,
Experience and Loyalty in Retail Banking:

Mobile first

A global race is on to “mobilize” banking. Banks around the world have been working
furiously to improve their mobile applications and optimize their websites for customers’
smartphones and tablets. Yet the race has just begun. Leading banks are still learning how to
take a mobile-first approach to reimagine customer experiences in everything from buying a
home to resolving an incident of fraud.

By migrating customers to digital channels, banks have begun to reap significant cost savings
as they drive bad and avoidable interactions (generated by errors or better routed to lower-cost
and more convenient digital channels) out of the branch and call center. And the benefits
extend well beyond cost. Mobile channels are far more likely to delight and less likely to annoy
than the branch or call center experiences, leading to increased loyalty with higher customer
retention, repeat purchases and referrals.

This shift entails new roles for the branch and frontline employees. Complex sales and service
activities, for instance, now usually start with the customer turning first to digital, often mobile,
channels. Customers increasingly expect to follow up with bank staff through digital chat,
video or other real-time options rather than having to visit a branch or separately call a contact
center. As a result, most branches no longer need their own product specialists, because pooled
specialists can deliver better service with higher productivity. So not only is the branch’s role in
routine transactions rapidly diminishing, configuration of sales and service in the branch
network is not so clear.

Consumers continue to lead the mobile charge in most markets, spurred by the ease and
convenience of mobile through leaders in other categories, from Alibaba to Uber. As a quick
indicator, consider that when Bain & Company’s 2015 global survey asked 114,696 consumers
which they’d miss more for a day, their mobile phone or physical wallet, more than half chose
their phone, with the share reaching 79% in China. Mobile clearly has advanced past the
tipping point.
 But the pace of progress in encouraging customers to migrate from branches to digital channels
varies dramatically from country to country and from bank to bank within countries. The
Netherlands and South Korea may provide a view of the future as they have the highest mobile
adoption of countries surveyed, both in total and for sales and service; Dutch respondents’
mobile usage has risen fourfold in two years while the branch plays a minor role. Similarly, the
inroads made by digital insurgent companies vary around the globe, with China demonstrating
the most comprehensive examples so far. So banks can learn from the global leaders that have
advanced furthest down the experience curve, not just from their competitors next door.

As more banking activities go mobile, a major challenge for bankers has been to identify the
right priorities and sequence of moves—right both for earning greater customer loyalty and for
funding investments in digital channels through cost reductions in the branch network. Bain’s
latest consumer research and statistical analysis, summarized below, points the way to the right
priorities by shedding light on the relationship between specific channel experiences and
customer loyalty.

The new hub of personal finance

Our analysis shows that for the average bank, a high priority is to migrate routine activities out
of the branch, where they are more likely to annoy customers, into self-service digital channels,
including mobile. That means improving the mobile experience to the extent that it truly
delights customers, making the experience fast, intuitive, convenient, and capable of handling
the most common transactions and service requests. Moreover, given scarce resources, it’s
more valuable to focus on improving a mobile app than a website because, on average,
customers use apps almost twice as often as mobile web browsing for routine interactions, and
apps are consistently more likely to delight.

Indeed, mobile has evolved from a separate channel to become the hub of personal finance. To
succeed in banking, therefore, demands new capabilities of bank organizations:

 Extraordinary design discipline, given the small screen, slow speed of accurate
typing and impatience of users (many will give up if a screen load takes more than a few
seconds)

 Radical simplification of products, processes and communications

 Personalization, powered by good data and analytics, so that only relevant

information is displayed to the user
  Contact methods that allow for anytime, anywhere chat and video calls with fast
authentication

 Much faster development cycles to keep up with the pace of new functionality and
rising expectations of consumers

 A new operating model that provides organizational agility, based on a

commitment to breaking down barriers that divide internal departments and a willingness to
collaborate with third-party developers

Both the quality of the channel experience and the mix of channel volumes matter when
creating a great experience for customers. Among US banks, 70% of the difference in channel
experience scores (defined as the channel’s likelihood to delight minus its likelihood to annoy)
between the average regional bank and top performer USAA is due to quality of the experience
as rated by consumers; the mix of channels accounts for the other 30%.

These factors also have a strong influence on a bank’s Net Promoter ScoreSM, Bain’s key metric
for customer loyalty. Our statistical analysis shows that the most significant factors for a bank’s
Net Promoter Score are annoyance with the branch experience, the branch’s share of
interactions, and delight in the mobile and online experiences.

Investing in mobile, in part to reduce branch transactions, clearly pays off in greater loyalty.
Apps used for routine transactions, for instance, are one-third more likely to delight US
customers than similar transactions at the branch and only half as likely to annoy (see Figure 1).
Mobile beats phone and ATM channels as well; in fact, phone interactions are most likely, on
average, to cause annoyance.

The mobile payoff also shows up in consumers’ propensity to switch banks. In the US,
customers who use a bank’s mobile channel frequently are 40% less likely to switch to another
bank as customers who use mobile rarely. Conversely, customers who use branches frequently
are almost three times more likely to switch banks as customers who rarely use branches.

Reimagining the branch

Banks cannot rely exclusively on mobile, of course. Human interactions still offer a means to
excel in customers’ eyes, and those customers who use both physical and digital channels still
tend to be more loyal and more valuable to their primary bank. Interactions with bank staff, a
bank’s product value proposition (including rates and fees), and the emotional connection (or
lack thereof) to the brand all play important roles in loyalty. However, the role of the branch
and frontline staff is changing rapidly. Our consumer surveys and evidence from leading bank
initiatives all show that routine interactions work better and cost less when done digitally,
without requiring a customer to visit a branch or call a contact center. Many banks have started
down this path. In Germany, for example, banks have cut routine interactions at the branch by
half over the past two years by migrating those interactions online and to ATMs.

Employees still play essential roles in more complex sales, service and advice, but the way they
interact with customers is changing as well. They’re increasingly communicating not in a
branch but via chat or video. Dutch bank ABN Amro, for instance, has been advising on and
processing mortgages via webcam so that customers don’t have to physically hand over
documents at a branch. As banks plug their frontline staff into the mobile hub, they can raise
sales and service productivity by reaching more customers and reducing paperwork.

The writing is on the wall: Customers increasingly view having to use branches and call centers
as an inconvenience for many transactions. We estimate that 50% to 70% of call volumes at a
typical bank are bad or avoidable. So although omnichannel customers still give higher loyalty
scores than digital-only or branch-only customers, the branch as currently configured will not
survive. At all cost, banks should avoid policies (such as ceilings on remote deposits) that force
customers to go to a branch and stand in line.

Some banks, including mBank in Poland, Hana Bank in South Korea and NatWest in the UK,
have made exceptional progress in mobile and point the way for others. Since launching its app
in 2011, mBank has kept innovating the mobile experience. For example, users can access basic
financial information without needing to log in, obtain one-click loans with 30-second approval
and disbursement, and make peer-to-peer money transfers using their smartphone’s contact list.
These banks have discovered that mobile adoption in conjunction with advanced ATM
functionality that can eliminate cash handling from branches offer the best opportunity in
decades for cost take-outs.

Once banks have established solid apps for routine transactions, the next big mobile
opportunity is to improve product sales capabilities. Already, 26% of respondents globally use
mobile channels to research or purchase banking products, and that behavior is even more
pronounced in Asia. In China and India, 52% and 43% of respondents, respectively, do their
product research through mobile. In China and the UK, 20% and 18%, respectively, actually
buy through mobile. Banks that lead in mobile purchases as a share of all purchases include
Barclays in the UK, China Minsheng Bank, and Commonwealth Bank of Australia (CBA).

Consumer pull, bank push

The pace of mobile innovation varies substantially around the world. In some countries, such as
South Korea and China, consumer enthusiasm for mobile has led to stunningly rapid adoption;
roughly half of all bank interactions in South Korea happen through mobile devices. Elsewhere,
such as in Japan and Germany, consumer adoption of mobile commerce has been much slower,
and banks have been slow to push the pace of change. This raises a classic chicken-and-egg
question: Does consumer pull or bank push influence mobile adoption?
 Evidence suggests that banks have a significant ability to push consumers along, and the
differences in mobile adoption depend on how aggressively banks compete with each other on
mobile innovation rather than on the structure of their markets.

Consider the different trajectories of Australia and Canada, which have similar market
structures, income distributions, smartphone adoption and regulatory regimes. Australia has
roughly 50% greater mobile banking usage and two-thirds the branch usage as Canada. The
explanation for this disparity lies in early moves by CBA to pursue mobile innovations and
thereby distinguish itself with customers. That prompted other big banks in Australia to invest
in mobile in order to maintain their share. By contrast, no big bank in Canada made an early bid
to out-invest in mobile, and innovation and customer adoption have lagged, leaving banks there
to play global catch-up.

And catch up they must. In product after product, consumers have proven more willing than
suppliers anticipated to transact via mobile or online. Just as the share of customers who would
pursue online flight check-in soared past the airlines’ notional maximum, the adoption rate of
mobile banking will significantly exceed what many banks are planning for today. And if one
bank won’t make it easy enough to do so, another one will.

China leads the disruption

With customers’ expectations for the mobile experience rising, bankers will be forced to
measure their offerings against competitors around the world, not just within their home
country. The biggest threat comes not from banks but from insurgent companies devising better
ways to deliver banking services through mobile. Much of the industry’s attention has focused
on companies based in Silicon Valley, including LendingTree, Betterment and Apple Pay. Yet
these Western insurgents have not yet managed to achieve large scale or the coveted network
effect in their banking and payments offerings. Chinese insurgents such as Alipay and WeChat,
meanwhile, have leapfrogged the West and offer a compelling example of what Silicon Valley
has been threatening to do at scale.

In China, for instance, some 600 million users active on Tencent Holdings’ WeChat messaging
app can pay merchants and utilities, send money to friends, deposit investments into money
market accounts, book travel tickets, borrow money, and carry out other daily financial
transactions with just a touch or two. WeChat shows how payments, commerce and social
media can converge. More than half of users open the app at least 10 times a day, and purchase
volume to date has been 11 billion yuan ($1.7 billion) through WeChat Wallet. On the most
recent Chinese Lunar New Year’s Eve, WeChat users sent 1 billion virtual red envelopes,
inspired by the Chinese holiday tradition of gifting cash-stuffed red envelopes—hongbaoin
Chinese—to friends and family (see Figure 2).
The scariest part for bankers: While WeChat’s wallet functionality currently operates only in
mainland China, WeChat now has more than 100 million users abroad. Other messaging
 platforms such as WhatsApp, which has 900 million active users and was acquired in 2014 by
Facebook, also aspire to add similar broad wallet functionality, further pressuring banks.

The chapters that follow explore the 2015 survey data on the rise of mobile usage and its
propensity to delight or annoy, the next horizon in mobile sales, customers’ channel behavior,
and global loyalty trends. The data and insights can help banks accelerate their transition to a
leaner, more balanced model in which each channel is designed for both efficiency and delight
—and to mount a strong response to the digital insurgents.

1. The rapid rise of mobile

 Customers of all stripes rely heavily on their smartphones in daily life, with
younger customers being the most dependent on mobility. Customers in most countries and age
groups continue to use mobile devices more frequently for their banking transactions and online
computer channels less. In fact, mobile interactions now exceed online interactions in 10 of 16
countries measured. The biggest mobile/online shifts since 2013 occurred in the Netherlands,
South Korea and China.

 Customers have increased the volume of their mobile interactions as well, with
the largest increase coming in the Netherlands.

 Most banks are responding to their customers’ demand for mobile access through
apps as well as websites with responsive design. While app usage is more common than the
browser everywhere, usage frequency does vary. Consumers in the Netherlands and South
Korea show the highest usage while Japan and Germany lag.

 Higher mobile usage generally correlates with less branch usage. But it’s not a
one-to-one relationship. Although routine interactions through mobile channels have increased
dramatically over the past two years, routine branch interactions declined much more slowly as
it takes time and effort to change customer habits. For every 100 mobile interactions, on
average, there’s a decline of only about 16 interactions at the branch. Australia, the Netherlands
and South Korea could point the way for banks elsewhere in teaching customers to use mobile
and other self-service channels such as advanced ATMs.

 Within any country, there’s significant dispersion among individual banks in their
mobile/branch usage ratio. Moving bad and avoidable volumes out of the branch doesn’t
simply happen once an app launches; banks need to teach customers to take advantage of the
app’s benefits at every opportunity.
 2. Creating customer delight through mobile

 Experiences that are easy, reliable and efficient create stronger loyalty. Mobile
apps, especially for routine transactions, are more likely to delight customers than branch or
phone experiences. An app is one-third more likely to delight a US customer than a branch visit
for a routine interaction. Conversely, a routine branch visit is 2.4 times more likely to annoy
than a routine mobile app interaction.

 The pattern is similar in the Netherlands and South Korea, where mobile usage is
highest. In South Korea, the functionality of advanced ATMs also performs well.

 Mobile gets high experience scores (defined as the percentage of recent

interactions that delighted minus the percentage that annoyed) in most countries, and its lead
over other channels is most pronounced in the US. ATMs also score favorably in India, Mexico
and Brazil, where broad ATM rollouts have reduced the need to visit a branch and wait in line.

 Within a country, some banks excel far more than others in using mobile to
delight. Those leaders and top mobile performers in other industries raise the bar for all banks.

 In the US market, for instance, Chase has steadily progressed in loyalty rankings
relative to regional banks, in part by developing a distinctive mobile experience. This creates a
challenge for regional banks that struggle to match the investment required to lead in mobile.
But the biggest winner in creating distinctive experiences is direct bank USAA.

 The quality of all channel experiences accounts for roughly 70% of the difference
in experience scores between USAA and regional banks, with the mix of channels accounting
for the other 30%.
 3. On the horizon, mobilizing sales

 Mobile took off by making routine interactions easy to carry out anywhere,
anytime. Now it’s coming on strong in sales and service. Almost one-third of sales or service
interactions occurred via mobile in the past quarter, with the greatest share in the Netherlands
and South Korea.

 Some 59% of buyers used both digital and traditional channels for their research
and purchase. The share of digital-only research and purchase was significant at 28%, with the
highest shares in the UK and the Netherlands.

 For research alone, online is the most common method, but mobile has risen as
well—especially for simpler products and notably in China, India, Hong Kong and Singapore.

 For actual purchases, while the branch still dominates, markets such as China, the
UK and Hong Kong show mobile’s potential. Younger customers are even more likely to go
digital for product research and purchases, highlighting the need for banks to develop digital
sales capabilities.
  Within every country, there’s a wide variation among banks in the share of
product purchases made via mobile channels. In the UK, for instance, Barclays has attained
25% compared with the UK average of 18%.

 Mobile is more likely than the branch to delight customers in sales and service
interactions and less likely to annoy in most countries.

4. The branch will change or die

 Most customers, including younger people, still use both physical and digital
channels. In most countries, these omnichannel customers give their primary bank higher
loyalty scores, as measured by Net Promoter Score, than branch-only or digital-only customers,
and they are more likely to buy a product from their primary bank. Also, the more interactions
that omnichannel customers have, the higher their Net Promoter Scores.

 When it comes to switching behavior, the more customers use a branch the more
likely they are to switch banks: In the US, frequent branch use correlates with an almost three
times higher likelihood of switching than infrequent use. By contrast, frequent use of mobile
and online channels correlates with a 40% lower likelihood to switch banks than infrequent use.

 Banks have been trying to shift their branches away from routine transactions
such as deposits, payments and cash withdrawals and into digital self-service channels instead.
Progress in making that shift varies widely, with the Netherlands leading and Mexico lagging;
Mexico has more than six times the number of routine branch interactions per respondent than
the Netherlands.

 The prevailing wisdom has assumed that as banks shed routine volumes from the
branch, they should increase sales and service activities. Yet the data show divergent paths: In
some markets, such as Hong Kong and Singapore, banks have indeed been transforming
branches to take on more sales and service activities. In other markets, such as China and South
Korea, banks have downshifted on all interactions, whether routine or sales-oriented.
 5. Movement on the loyalty leader boards

 Large traditional banks continued to make meaningful improvements in their Net

Promoter Scores relative to direct or smaller competitors. That change was most pronounced in
the US and UK.

 While it is hard to foster change in large organizations, some big banks have
demonstrated sustained progress over the past few years. In the UK, Santander has significantly
improved its Net Promoter Score, rising to the No. 2 position among traditional banks.
Santander has focused on a simplified current account proposition, fully digital, streamlined
account opening and a dedicated switching team to onboard customers. In the US, Chase has
followed a similar upward trajectory relative to its competitors.

 What matters most to an individual bank is how it performs relative to its peer
group within their market. Using that lens, Net Promoter Scores varied widely from bank to
bank. In Germany, for instance, top performer ING-DiBa had a Net Promoter Score that was 97
percentage points higher than the worst performer and 52 points above the country average.

 In-country differentials between the loyalty leader and the laggard were highest in
Spain, the US Northeast region, the UK and Germany.

 While there have been some changes in loyalty leadership positions, several banks
have held the top spot year over year. These include USAA and Huntington in the US, Bendigo
in Australia, Sparda-Bank in Germany and first direct and Nationwide in the UK.

Appendix: Methodology

Bain & Company partnered with Research Now, the online global market research
organization, to survey consumer panels in Australia, Brazil, Canada, China, France, Germany,
Hong Kong, India, Japan, Mexico, the Netherlands, Poland, Singapore, South Korea, Spain, the
UK and the US. The survey’s purpose was to gauge customers’ loyalty to their principal bank
and the underlying reasons customers hold the views they do. Conducted between July and
September 2015, the survey polled 114,696 respondent consumers of national branch network
banks, regional banks, private banks, direct banks, community banks and credit unions in these
countries.

In the Americas and Europe, for the individual bank analysis, we included only those banks for
which we received at least 200 valid responses. In Asia, we included banks with at least 100
responses. In many instances, sample sizes exceeded these thresholds.

The most important features of retail banking?

Retail banking is, however, quite broad in nature – it refers to the dealing of commercial banks
with individual customers, both on liabilities and assets sides of the balance sheet. Fixed,
current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing,
auto, and educational) on the assets side, are the more important of the products offered by
banks. Related ancillary services include credit cards, or depository services.

Retail banking refers to provision of banking services to individuals and small business where
the financial institutions are dealing with large number of low value transactions. This is in
contrast to wholesale banking where the customers are large, often multinational companies,
governments and government enterprise, and the financial institution deal in small numbers of
high value transactions.

Retail Banking caters to individuals like you and me and to small businesses.

Retail Banking offers various standard Liability products (Deposits) and Asset products (Loan
types) to its customers. It is characterized by small ticket sizes but with large volumes.
Distribution is the key and Technology plays a major role to make than happen.

The Retail banking products are standardized unlike Wholesale banking (which caters to large
corporate houses, MNCs and others) where the product deals and services are customized.
Retail banking products are very simple to understand whereas the wholesale banking products
are quite complex in nature.

You can refer to this book titled ‘Be a BankPro’, a comprehensive guide on banking with a
major focus on Retail Banking.
 Sub-types of retail banks

 Community development bankare regulated banks that provide financial services

and credit to underserved markets or populations.
 Private banksmanage the assets ofhigh-net-worth individuals.
 Offshore banksare banks located in jurisdictions with low taxation and regulation.
Many offshore banks are essentially private banks.
 Savings banksacceptsavingsdeposits.
 Postal savings banksare savings banks associated with national postal systems.

Products

A retail bank inLeeds,United Kingdom.

Typical retail banking services offered by banks include:

 Transactional accounts
 Checking accounts(American English)
 Current accounts(British English)
 Savings accounts
 Debit cards
 ATM cards
 Credit cards
 Traveler's cheques
 Mortgages
 Home equity loans
 Personal loans
 Certificates of deposit/Term deposits
In some countries, such as the U.S., retail bank services also include more specialised accounts,
such as:
 SWOT ANALYSIS

STRENGHTS:

· It has an extensive distribution network comprising of 2716 branches.

· The Bank has a strong retail depository base & has good number of customer.

· Bank boasts of strong brand equity.

· The bank has a near competitive edge in area of operations.

· The bank has a market leader in cash settlement service for the

major stock exchanges in its country.

· Allahabad Bank is one of the largest public sector banks operating in India.

· It has a highly automated environment in terms of information technology &

communication system.

· Infrastructure is best.

· It has many innovative products like kids Instapay, NRI services.

WEAKNESS:
 Some time account opening and delivery of cheque book take comparatively more time.

Occasionally link failure.

OPPORTUNITY:

Branch expansion.

Door step services.

Infrastructure improvements & better systems for trading & settlement in the government
securities & foreign exchange markets.

THREATS:

o The bank has started facing competition from players like SBI, HDFC Bank in the
finance market itself.

o This reduces the profit margins in the future.

o Some Private Banks have 7 days banking.

 ITLE OF THE PROJECT

“A Study on Retail Banking with special reference t o Allahabad Bank”

STATEMENT OF THE PROBLEM

As there are immense opportunities of the retail banking in India. This project is on the issues
and challenges in the retail banking because of the competition of the various banks and the
customer satisfaction of the services which the banks are providing and at the same time to
solve the complaints of the customer and maintaining the sound relationship for the future and
by this way to estimate the future growth of the retail banking.

OBJECTIVES OF STUDY

To study the issues and challenges in retail banking. To study the recent trends in retail
banking.

To ensure high satisfaction level and reduce percentage of complaints of customer in retail
banking.

To estimate the future growth of Indian retail banking. To understand Optimization of retail
banking channels.

To suggest strategies for improvement in Customer Service.

 OPERATIONAL DEFINITION

Retail banking refers to banking in which banking institutions execute transactions directly
with consumers, rather than corporations or other banks. Services offered include: savings and
checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth. And to
know about the customer’s perceptions about the different products of the bank like current
account, savings account, FD, Smart Saver, Smart Access and others.

DATA COLLECTION

There are several approaches of data collection. The primary sources of data

collection are done through: -

Observation

Questionnaire

Questionnaire:

Questionnaire is the method of data collection, which is very much popular, particularly in big
cities. Different modes of questions are put up on the paper and the particular universe, on
which the research is conducted, are asked to fill their responses.

The Secondary source includes data collection through:

Magazines, Journals, Books, Newspapers etc.

Company Website.
 SAMPLING TECHNIQUE

(a) Sampling Unit: - Walk in customers and the company database of highended customer.

(b) Sample Size:-

Sample size for this project was restricted to 50 respondents. Since it was not possible to cover
the whole universe in the available time period, it was necessary for me to take a sample size of
50 respondents.

(c) Sampling Method:-

There are three methods of sampling:-

1. Probability Sampling

2. Non-Probability Sampling

3. Quota

For this research work Non- Probability Convenience Sampling has been

chosen because time limit for the completion of the work is limited.

Area of Study - Durgapur, West Bengal

Duration - 2 months (13thMay ’17 – 13thJuly ’18)

 DATA COLLECTION METHOD

Data for the present study is collected from two sources:

1. Primary Data:

The data are collected directly from the universe by conducting interviews, etc. these are the
original sources from which the researcher directly gathers data which are not previously
referred. All the people from different profession were personally visited and interviewed. They
were the main source of primary data. The method of collection of primary data was personal
direct interview through a structured questionnaire.

The primary data was collected by means of survey. Questionnaires wereprepared and
customers of Allahabad Bank were approached to fill up these questionnaires. The filled up
information was later analyzed to obtain the required information.

2. Secondary Data:

The data are collected from the secondary sources such as magazines, journals, etc. These
sources consist of already variable data in the form of statements, and reports, which may
include sensory reports, financial statements of the company, reports of governments
departments, etc.

It was collected from internal sources. The secondary data was collected on the basis of
organizational file, official records, newspapers, magazines, management books, preserved
information in the company’s database and the website of the company.

Both Primary and Secondary sources was used for data collection.

For primary source, Questionnaire was used. For secondary source Internet, Books and
Newspapers etc were used.
 RESEARCH DESIGN

Research design is simply the framework or plan for a study, used as a guide in collecting and
analyzing data. There are three types of Research Design:-

1. Exploratory Research Design

2. Descriptive Research Design

3. Casual Research Design

For the study, Exploratory Research Design was undertaken to classify the investors on their
risk and return profile.

PLAN OF ANALYSIS

The data obtained from the structured questionnaire was interpreted and recorded. The table
and graph were constructed using data from the questionnaire through simple techniques like
average, percentage, etc. which was then used for analyzing the acquired data.
 LIMITATIONS

Designing own and new financial products is very costly and time consuming for the bank.

Customers now-a-days prefer net banking to branch banking. The banks that are slow in
introducing technology-based products, are finding it difficult to retain the customers who wish
to opt for net banking.

Customers are attracted towards other financial products like mutual funds etc.

Though banks are investing heavily in technology, they are not able to exploit the same to the
full extent.

A major disadvantage is monitoring and follows up of huge volume of loan accounts inducing
banks to spend heavily in human resource department.

Long term loans like housing loan due to its long repayment term in the absence of proper
follow-up, can become NPAs.

The volume of amount borrowed by a single customer is very low as compared to wholesale
banking. This does not allow banks to exploit the advantage of earning huge profits from single
customer as in case of wholesale banking.
 Profile of Respondents

Respondents were the customers of Allahabad Bank of Durgapur city (West Bengal) of age
group 21-65 years.

A. Opinion on Branch experience.

The Branch timings (10 :00 am to 3:30 pm from Monday to Friday and 10:00 am to 12:30
pm o n Saturday) are convenient?

Table: 1

Parameter In numbers

Very Good 19

Good 5

Satisfactory 2

Could be better 4

Interpretation

The purpose of this question is to know the whether the bank timings are convenient for the
customer, 90% of respondents says that b ank timings are very good and 10% of r espondent
replied that timings are go od. None of the customers have any problem with respect to timings.

Inference: As 90% responded very well, it seems high number are happywith bank timings.

Is the branch ambience & layout is very friendly?

Table: 2
 Parameter In numbers

Very Good 4

Good 18

Satisfactory 5

Could be better 3

Interpretation

80% were of the respondent says that branch ambience is very good, 14% were of the
respondent replied that branch ambience is good while 4% says that it is satisfactory & just 1%
replied that it could be better.

Inference: As 80% of respondents say branch ambience is very good, sonot too many
respondents like the branch ambience.

Is the Branch was clean and well maintained?

 Table: 3

Parameter In numbers

Very Good 3

Good 13

Satisfactory 9

Could be better 5

Interpretation

80% were of the respondent says that branch cleanness is very good, 14% were of the replied
that branch cleanness is good while 4% says that it is satisfactory & just 1% replied that it
could be better.

Inference: As 80% of respondents say branch cleanness is very good, sonot too many
respondents like the branch cleanness.
 B. Opinion of the customer regarding Branch personnel.

Is the branch personnel have listened to you patiently and have been able to respond to
your queries and clarifications?

Table: 4

Parameter In

numbers

Very Good 7

Good 16

Satisfactory 7

Could be better 0

Interpretation

76% of respondent says that branch personnel listened patiently& have been able to respond to
their queries, 14% of respondents replied that it is good. While only 6% of respondent says that
it is satisfactory and 4% replied that it could be better.

Inference: As only 76% of respondent says that branch personnel listenspatiently and have
been able to respond to queries and clarifications, so not too many respondents are satisfied.
 Is the branch personnel have been very helpful and courteous?

Table: 5

Parameter In numbers

Very Good 8

Good 4

Satisfactory 13

Could be better 5

Interpretation

74% of respondent says that branch personnel have been very helpful and courteous, 16% of
respondents replied that it is good. While only 6% of respondent says that it is satisfactory and
4% replied that it could be better.

Inference: As only 74% of respondent says branch personnel have been veryhelpful and
courteous, so not too many respondents are satisfied.
 Is the branch personnel have done a “Need Analysis” & “Risk Assessment” before
recommending any investment opti on?

Table: 6

Parameter In numbers

Very Good 10

Good 10

Satisfactory 7

Could be better 3

Interpretation

72% of the respondent says that risk assessment before recommending any investment is very
good, 20% of respondents replied that it is good, 6% of respondent says that it satisfactory and
only 2% replied it could be better.

Inference: As only 72% of respondent says that branch personnel does a“Need Analysis” &
“Risk Assessment” before recommending a ny investment option, so not too many respondents
have positive response.
 Is the branch personnel were aware of Product and Services and responded to your
queries?

Table: 7

Parameter In numbers

Very Good 8

Good 9

Satisfactory 11

Could be better 2

Interpretation

86% respondent says that branch personnel responded to their queries and is very good, 6%
says to be good & 6% satisfactory. Only 2% said it could be better.

Inference: As 86% of respondent says that branch personnel were aware ofProduct and
Services and responded to customer queries, so not too many respondents are satisfied.
 OPPORTUNITIES AND CHALLENGES

Retail banking has immense opportunities in a growing economy like India. As the growth
story gets unfolded in India, retail banking is going to emerge a major driver. How does the
world view us? The BRIC report is viewing India as an economic superpower. A.T. Kearney, a
global management-consulting firm, recently identified India as the ―second most attractive
retail destination of 30 emergent markets.

The rise of Indian middle class is an important contributory factor in this regard. The
percentage of middle to high-income Indian households is expected to continue rising. The
younger population not only wields increasing purchasing power, but as far as acquiring
personal debt is concerned, they are perhaps more comfortable than previous generations.
Improving consumer purchasing power, coupled with more liberal attitudes towards personal
debt, is contributing to India‘s retail banking segment.

The combination of above factors promises substantial growth in retail sector, which at present
is in the nascent stage. Due to bundling of services and delivery channels, the areas of potential
conflicts of interest tend to increase in universal banks and financial conglomerates. Some of
the key policy issues relevant to the retail-banking sector are: financial inclusion, responsible
lending, and access to finance, long-term savings, financial capability, consumer protection,
regulation and financial crime prevention.
 Challenges for the Industry and its Stakeholders:

First, retention of consumers is going to be a major challenge. Accordingto a research by

Riechheld and Sasser in the Harvard Business review, 5 percent increase in customer retention
can increase profitability by 35 percent in banking business, 50 percent in insurance and
brokerage, and 125 percent in the consumer credit card market. Thus, banks need to emphasis
on retaining consumer and increasing the market share.

Second, rising indebtedness could turn out to be a cause for concern in thefuture. India’s
position, of course, is not comparable to that of developed world where household debt as a
proportion of disposable income is much higher. Such a scenario creates high uncertainty.
Expressing concerns about the high growth witnessed in consumer credit segments the reserve
bank has, as a temporary measure, put in place risk containment measures and increased the
weight from 100 percent to 125 percent in the case of consumer credit including personal loans
and credit cards.

Third, information technology poses both opportunities and challenges.Even with ATM
machines and Internet Banking, many of the customers still prefer the personal touch of their
neighbourhood branch bank. Technology has made it possible to deliver services throughout
branch network, providing instant updates to checking accounts and rapid movement of money
for stock transfers. However, this dependency on the network has bought IT department‘s
additional responsibilities and challenges in managing, maintaining and optimizing the
performance of retail banking networks.

Fourth, KYC Issues and money laundering risks in retail banking is yetanother important issue.
Retail lending is regarded as a low risk area for money laundering because of the perception of
the sums involved. However, competition for clients may also lead to KYC procedures being
waived in the bid for new business. Banks must also consider seriously the type of
identification documents the will accept and other processes to be completed. The Reserve
Bank has issued details guidelines on application of KYC norms in November 2004.
 Trends in Retail Banking

Growing a retail banking business is becoming increasingly challenging. The yield curve is
flattening, reducing bank’s net interest margin. Competition is intensifying, as new, non-
traditional players enter the retail banking space. And consumer preferences for financial
products, payment methods and distribution channels continue to evolve, providing revenue
opportunities, but also introducing new operational challenges.

The changing dynamics of the retail banking business have significant implications for
financial institutions. In order to successfully compete in this environment, banks must provide
a distinctive customer experience and offer innovative product solutions in order to
differentiate their value proposition in the marketplace.

Key trends in retail Banking are:

1. Bifurcation of the retail banking business: National- Consolidate- Credit Cards Home
Equity Loans Mortgages

Local- Fragmented- Deposits

Instalment Loans & Small Business Loans

2. Lack of differentiation in retail financial services:

Many financial institutions are struggling to differentiate their value propositions in the retail
banking market.

Free checking is now offered by all or most financial institutions.

Most institutions no longer charge for online banking or online bill payment.

Extended branch hours are increasingly common in many markets, as banks seek to increase
customer convenience.
 3. Proliferation and growth of electronic payments.

4. Increasing demand for ATM access.

Strategies for Ensuring high Customer Satisfaction

Set service expectations and standards of behaviour - this means that managers must set clear
service expectations and standards of behaviour, beginning with defining "excellent service."

Identify and eliminate barriers and obstacles. Policies that do not make sense; procedures that
get in the way; and rules, norms that make satisfying customers difficult all need to be
eliminated to successfully improve service.

Learn and develop skills. Clearly, personnel at all levels should learn new skills related to
service excellence and serve the customer.

Listen to your customers. Measurement of customer satisfaction can be a powerful way to

improve service if the feedback is not focused on punishment.

Managers need to help staff hear, first hand, how they are doing. For this feedback to be
effective, however, it must be tied to specific targets and goals and needs to be frontline driven.

Reinforce and support continuous improvement. The real challenge is keeping the energy,
learning, and improving alive.

SUMMARY OF FINDINGS
 With reference to table no.1, 90% of customers are happy with the bank timings & they said
that it is very good.

With reference to table no. 2, 80% of respondents like the branch ambience & layout & find it
friendly with reference to table no.3, 80% of respondents said branch was clean and well
maintained.

With reference to table no.4, 76% respondents view that branch personnel had listened to them
patiently and have been able to respond to their queries and clarifications.

74% of respondent responded that Branch personnel had been very helpful and courteous with
reference to table no.5.

With reference to table no. 6, 72% of respondent says that branch

personnel do “Need Analyses” & “Risk Assessment” of customer savings

before recommending any investment option to them.

With reference to table no.7, 86% of respondent that branch personnel are aware of Product and
Services and responded to your queries.

With reference to table no 8, 80% of respondents says that waiting time at the Teller Counter is
minimum and is very good.
With reference to table no.9, 90% of respondent says that transactions are smooth and error free
& is very good.

With reference to table no. 10, 82% of respondent responded that Allahabad Bank looks into
the feedback & is very good.
 SUGGESTIONS

Suggestions are always considered to be the most important part of any project report because
for every pros; there is cons associated with and to reduce the effect of latter, following
suggestions must be taken into consideration in regard to retail banking.

The Branch personnel should listen to customer patiently and should be able to respond to their
queries and clarifications because some customer are new to some of the bank services and
until and unless they will come to know about those services they will be not be satisfied.

With reference to table no. 5 as not many respondents said that Branch Personnel are helpful
and courteous, so I will suggest that Bank personnel should be helpful & courteous towards
maximum number of customers.

With reference to table no. 6, larger number of branch personnel should do ‘Need Analysis’ &
‘Risk Assessment’ before recommending any investment option to customer.

With reference to table no.7, more branch personnel should be aware of Product and Services
and responded to customer’s queries.

With reference to table 10, Allahabad bank should look into the feedback provided by customer
and takes necessary action wherever required.

With reference to table no. 12, bank should focus on MahilaSanchay Saving Bank A/C as small
10% of customer likes this.
Some time the customer has to wait at the Teller Counter, the service should be improved by
appointing more staff, with reference to table no.11.

Information in the Bank Statement should be more clear, easy to understand and adequate.

Along with customer satisfaction employee’s participation must be kept active by appraising
their salary as well as their work.

Frequently customers must be kept delighted by providing them regards and by maintaining
customer relationship so that their interest can be kept maintained.

The Allahabad bank should focus on business and service portfolio for a reputation of being
niche players in the industry.

CONCLUSIONS – FUTURE GROWTH

 The project aims to study the retail banking operations of ALLAHABAD BANK. The study
was very fruitful, it yielded the desired results, helped me understand the retail banking. The
study also helps in what are the customer opinions towards operations of bank & its various
product and services.

Any serious discussion of the future of the retail banking industry eventually raises a basic
question: will future customers still need retail banks? The answer, it turns out, depends on
banks themselves. With technology and non blank businesses providing new options for
safeguarding and managing their finances, customers will continue to depend on banks only as
long as banks can provide service and value that cannot be found anywhere else.

The need to become highly customer focused has forced the slow-moving public sector banks
to adopt a fast track approach. The unleashing of products and services through the net has
galvanized players at all levels of the banking and financial institutions market grid to look a
new at their existing portfolio offering. Conservative banking practices allowed.

Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now
quoting at higher valuation when compared to banks in other Asian countries (viz. Hong Kong,
Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets
(NPAs) and payment defaults.

Co-operative banks are nimble footed in approach and armed with efficient branch networks
focus primarily on the high revenue niche retail segments.

The Indian banking has finally worked up to the competitive dynamics of the new Indian
market and is addressing the relevant issues to take on the multifarious challenges of
globalization. Banks that employ IT solutions are perceived to be
 LEARNING EXPERIENCE

The dissertation is to define the retail banking and regarding the general services of bank.

The study was very fruitful, it yield the desire result, helped me to understand the banking
services better. The study also yields what are the factors that banking is looking forward for
the customer.

The Indian banking has come from a long way from being a sleepy business institution to a
highly proactive and dynamic entity. This transformation has been largely brought about by the
large dose of liberalization and economic reforms that allowed banks to explore new business
opportunities rather than generating revenues from conventional streams (i.e. borrowing and
lending). The banking in India is highly fragmented with 30 banking units contributing to
almost 50% of deposits and 60% of advances.

Under the ambit of the nationalized banks come the specialized banking institutions. The bank
gives great importance towards customer satisfaction. The senior staffs with their busy schedule
try to advice the customer how to invest in better way. The employees in the bank are well
behaved and give a great deal of satisfaction to see them how they approach their customers.

The bank plays an important role not only to fulfil their duties towards customer but also to
understand them better regarding what they want and how to maximize the return on the
investment.

The bank has set up separate department to impart training program for the employees. The
biggest achievement is the implementation of core banking solution.
 BIBLIOGRAPHY

BOOKS:

Retail Banking (By Indian Institute of Banking and Finance), Macmillan Retail
Management (By Bajaj TulsiShrivastva), OXFORD, University

Press
 INTERNET:

www.wikipedia.org

www.moneycontrol.com

www.wikipedia.org/Mckinsey_7S_Framework

www.mindtools.com/pages/article/newSTR_91.htm
 QUESTIONNAIRE

We would like to know about your experience of banking with us. Please tick as appropriate.

A. How was the Branch experience?

1) Is the branch timings (10:00 am to 3:30 pm from Monday to Friday and 10:00 am to
12:30 pm on Saturday) are convenient?

a) Very Good b) Good c) Satisfactory d) Could be

better

2) Is the branch atmosphere & layout is very friendly?

a) Very Good b) Good c) Satisfactory d) Could be

Better

3) Is the Branch was clean and well maintained?

a) Very Good b) Good c) Satisfactory d) Could be

Better

B. How did you find our Branch personnel?

4) Is the Branch personnel have listened to you patiently and have been able to respond to
your queries and clarifications?

a) Very Good b) Good c) Satisfactory d) Could be

better
 5) Is the Branch personnel have been very helpful and courteous?

a) Very Good b) Good c) Satisfactory d) Could be better

6) Is the branch personnel have done a ‘Need Analyses’ & ‘Risk Assessment’ before
recommending any investment option?

a) Very Good b) Good c) Satisfactory d) Could be better

7) Is the branch personnel were aware of Product and Services and responded to your
queries?

a) Very Good b) Good c) Satisfactory d) Could be

better

C. How was your experience of transacting in our Branches?

8) Is the waiting time at the Teller Counter was minimal?

a) Very Good b) Good c) Satisfactory d) Could be better