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We would like to extend our heartfelt gratitude to our course instructor for “Organizational Behavior”, Ms. Arjya Chakarvarty for guiding us through the Project which was a real learning experience. It provided us with an opportunity to study and analyze the challenges faced by a private bank in the current scenario. We would especially like to thank Mr. Sameer Imam, Assistant Vice President, ING Vysya, Mr. Abhishek Srivastava, HR Manager and Mr. Imran Khan, Operations Manager, ING Vysya for their support in answering our questions and giving us the detailed information about the Bank.
ABOUT ING VYSYA
ING Vysya Bank today is a part of the ING Group, the world's fourth largest financial services company and the seventeenth largest global corporation. The ING Group brings to ING Vysya 150 years of financial services experience and a heritage trusted by 60 million customers in 50 countries ING Vysya in India, is active in life insurance, asset management and banking. The bank intends to bring to its customers in India a range of integrated financial solutions tailored to meet customer needs in banking. ING`s mission is to be a leading, global, client-focused, innovative and low-cost provider of financial services through the distribution channels of the client‟s preference in markets where ING can create value. It is an entity formed with the coming together of erstwhile, Vysya Bank Ltd, a premier bank in the Indian Private Sector and, a global financial powerhouse ING of Dutch origin, during Oct 2002.The origin of the erstwhile Vysya Bank was pretty humble. It was in the year 1930 that a team of visionaries came together to form a bank that would extend a helping hand to those who weren't privileged enough to enjoy banking services. On the other hand, ING group originated in 1990 from the merger between Nationale – Nederlanden NV the largest Dutch Insurance Company and NMB Post Bank Group NV. Combining roots and ambitions, the newly formed company called “Internationale Nederlanden Group”. Market circles soon abbreviated the name to I-N-G. The company followed suit by changing the statutory name to “ING Group N.V.”. It‟s one of the specialization is ING Direct, an Internet and direct marketing concept with which ING is rapidly winning retail market share in mature markets. Finally, ING distinguishes itself internationally as a provider of „employee benefits‟, i.e. arrangements of nonwage being the immediate benefit to the bank. As at the end of the year December 2010, ING's total assets exceeded 1247 billion euros,with a underlying net profit of 3893 million euros, employed around 105000 people, serves over 85 million across 40 countries. This global identity coupled with the backup of a financial power house and the status of being the first Indian International Bank, would also help to enhance productivity, profitability, to result in improved performance of the bank, for the benefit of all the stake holders.
CHALLENGES FACED BY THE BANKING INDUSTRY
The banking industry in India is undergoing a major transformation due to changes in economic conditions and continuous deregulation. These multiple changes happening one after other has a ripple effect on a bank trying to graduate from completely regulated seller market to completed deregulated customers market. The major challenges faced by banks are: Deregulation: This continuous deregulation has made the Banking market extremely competitive with greater autonomy, operational flexibility and decontrolled interest rate and liberalized norms for foreign exchange. The deregulation of the industry coupled with decontrol in interest rates has led to entry of a number of players in the banking industry. At the same time reduced corporate credit off take thanks to sluggish economy has resulted in large number of competitors batting for the same pie. New rules: As a result, the market place has been redefined with new rules of the game. Banks are transforming to universal banking, adding new channels with lucrative pricing and freebies to offer. Natural fall out of this has been a series of innovative product offerings catering to various customer segments, specifically retail credit. Competition: Efficiency: This in turn has made it necessary to look for efficiencies in the business. Banks need to access low cost funds and simultaneously improve the efficiency. The banks are facing pricing pressure, squeeze on spread and have to give thrust on retail assets. Diffused Customer loyalty: This will definitely impact Customer preferences, as they are bound to react to the value added offerings. Customers have become demanding and the loyalties are diffused. There are multiple choices; the wallet share is reduced per bank with demand on flexibility and customization. Given the relatively low switching costs; customer retention calls for customized service and hassle free, flawless service delivery. Misaligned mindset: These changes are creating challenges, as employees are made to adapt to changing conditions. There is resistance to change from employees and the Seller market mindset is yet to be changed coupled with Fear of uncertainty and Control orientation. Acceptance of technology is slowly creeping in but the utilization is not maximized. Competency Gap: Placing the right skill at the right place will determine success. The competency gap needs to be addressed simultaneously otherwise there will be missed opportunities. The focus of people will be on doing work but not providing solutions, on escalating problems rather than solving them and on disposing customers instead of using the opportunity to cross sell.
QUESTIONNAIRE (Answered by Mr. SAMEER IMAM, Assistant Vice President, North Zone, ING VYSYA)
1) What is the annual turnover of ING VYSYA bank? And what is its target for this
year? Ans:-Net Profit is 319 cr with annual deposit of 31,000 cr and advances of 25,000 cr. The Bad Debts of bank is around 1.2% of total advances. The target is to increase the revenue at least by 30% as of now.
2) How well ING is establishing itself in India?
Ans:-After collaborating with Vysya it established itself in tier1 and tier2 cities effectively and now it is focusing in tier3 and rural market. It has a business setup of 20 existing branches in UP and 20 proposed branches.
3) What are the major Challenges being faced by ING in the current year? What
are the strategies of ING to counter these challenges? Ans:-Inflation and rising Interest rates are the major challenges faced by ING in current year. Its strategies are as follows: Bank working in accordance with RBI policy. Decentralisation of authority at regional headquarters.
4) What are the changes taking place in the work environment during the recent
period? How are the employees and company reacting to these changes? Ans:-Cross selling being major part of job to fetch in more and more business, there is a constant pressure on employees. So, to lower the pressure More authority is given to the employees. With better incentive structure employees feel motivated. Better HR policies.
5) Is changing work environment a problem for the organisation or is it beneficial?
Ans:-Of course it is beneficial as any organization needs to adopt itself to an “AMOEBIC” Structure to counter contingent work atmosphere.
6) What kind of changes need to be done to withstand the growing competition and
Ans:-There are two major changes need to be done: Personalise and Customise services to the customers. Better HR policies for motivating our internal customers i.e. employees.
7) What are the general issues faced by your bank? How are the employees dealing
with them? Ans:-Hard to capture ultra HNI‟s(High Network Individuals) in Lucknow as they are few in number and they have already developed the relationships with other banks. The employees should constantly endeavor to fetch in these HNI‟s.
8) The world is looking down on another Recession type situation. What are the
measures that the bank intends to take to counter the situation? Ans:- Measures need to be taken are: Follow the Fundamentals. Be synchronised in our communication with both internal and external customers.
9) How is devaluation of Rupee affecting the banking industry in general? What
about ING VYSYA? Ans:-Exchange rate is fluctuating. So, of course we are getting more of foreign exchange. And a part of banking is getting affected, not the entire activity.
10)Does the bank plan to expand its business in near future? If yes, what are the
challenges ahead? Ans:-Yes, we are looking ahead to expand as our foremost effort is to open more and more branches. Challenges faced are again: Global Recession Rising Competition
QUESTIONNAIRE (Answered by Mr. IMRAN KHAN, Operations Manager, ING VYSAYA) 1) What is the annual turnover of ING VYSYA? And what is its target for this year? Ans:-NET PROFIT – 319 Corers Total Deposits – 31,000 corers Advances – 25,000 corers Non Performing Assets- 1.2% of total advances. And our target is to increase our turnover by 30% by increasing the deposits and free income. 2) How well ING is establishing itself in India? Ans:-ING has been establishing itself in INDIA quite well by increasing number of branches state wise and introducing new products(Current Account, Saving Account) for Indian market. 3) What are the major Challenges being faced by ING in the current year? What are the strategies of ING to counter these challenges? Ans:-ING has less number of branches therefore increasing its footprint in the whole country is a major challenge and giving quality service to the customers. 4) What are the changes taking place in the work environment during the recent period? How are the employees and company reacting to these changes? Ans:-Changes have been occurring especially after it‟s becoming ING VYSYA, Quality of staff has changed as it has become a multinational bank. Employees are looking forward to changes as they are well qualified.
The qualification of the employees is reciprocating well in the work and Bank is performing well. 5) Is changing work environment a problem for the organisation or is it beneficial? Ans:- It is beneficial as now employees play key role in decision making and are always entertained for their suggestions. 6) What kind of changes need to be done to withstand the growing competition and economic environment? Ans:-We have to respond according to the changes in the economy and the market as it is a service oriented company. We must align ourselves to market conditions.
7) What are the general issues faced by your bank? How are the employees dealing with them? Ans:-The major issue is to design our product in such a way that it distinguishes us from our competitors and yet attract high end customers. Employees are continuously trained for cross selling and they very well cooperating with the bank. 8) The world is looking down on another Recession type situation. What are the measures that the bank intends to take to counter the situation? Ans:-The bank has to mainly take care that the capital of the bank is enough to take care of its bad loans through their own capital. 9) How is devaluation of Rupee affecting the banking industry in general? What about ING VYSYA? Ans:-Devaluation of money mainly affects the export and import market, bank is not directly or wholly affected by it. Bank has three different activities which are Wholesale Banking Retail Banking Treasury
Only Treasury is getting affected by the rupee devaluation. 10) Does the bank plan to expand its business in near future? If yes, what are the challenges ahead? Ans:-Yes, the bank plans to expand its business in near future and the challenges are mainly competition, RBI policies, Deregulation etc.
Interview of Mr. ABHISHEK SRIVASTAVA, HR Manager, ING VYSYA
1) How readily are the employees adapting to the changes in work environment? As they are well qualified and experienced, they are very well adapting to the changes in work environment. 2) How are new interns trained according to the changing environment? They are given On- Job as well as Off-Job training by rotating them in all the departments of the bank varying from sales to operations, finance everywhere. 3) What is your major concern while recruiting an employee? Employee‟s experience along with looking into their ability to align themselves to organizational processes and policies and how long will they be able to remain in our organization. 4) What is the level of satisfaction in your employees? Are they getting proper rewards and growth for their efforts? The level of satisfaction is good and they are being given proper incentives and appraisal for their effort. 5) What are the growth opportunities for an employee in ING VYSYA? There are a lot of growth opportunities for an employee in ING VYSYA as the bank still is establishing and is also going to open a number of branches. Thus, it offers very good opportunities for the employees.
Challenges: As we interviewed the three managers from the bank, the most important thing that we came around is ING struggling to increase its footprint in the entire nation. Right now in lucknow ING VYSAYA has three branches which is less as compared to other private banks. So, their prime objective is to establish more and more Branches in all the cities of India including Rural Market also where it is quite difficult to step. Second challenge faced by the ING is to attract more and more customers especially HNI‟s as it is new in the country, earlier it was vysaya bank. It became ING Vysaya in 2002, since then there is severe competition in banking sector. So, to compete with others they have to come up with some new and distinguishable product. Lastly, Increasing interest rate and continuous changing RBI policies is also a major concern for ING. Getting license from the bank to open more and more branch is a tedious job.
Strategies: We think the best strategy that they can employ is to personalize and customize their services. Being in service industry they must focus on customers (that includes both the internal as well as external customers). Any organization can perform its best by aligning itself to the market demands and conditions. Focusing on internal customers means increasing employee satisfaction and employee involvement in all the banking activities. The other important strategy that can be implemented across was decentralization of decision at regional headquarters. This will give an opportunity for effective and immediate action. By setting immediate targets and achieving them and finally focusing on their prime concern of opening more and more branches ING can establish itself in India very well.
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