Banking Sector in India
• Banking is an essential industry. • It is vital system for developing economy for the nation. • It is where we often wind up when we are seeking a problem in financial crisis and money related query. • Banking is one of the most regulated businesses in the world. • Banks can play a dynamic role in delivery and purchase of consumer durables. • Banks remain important source for career opportunities for people.

• 1991 - a committee was set up which worked for the liberalization of banking practices. • Country flooded with foreign banks and their ATM stations. • Phone banking and net banking introduced. •

ADD-ONS AND FREEBIES:• Free collection of specified number of outstation instruments • Instant credit of outstanding cheques up to Rs.15000/• Concession in exchange on demand drafts and pay-orders and commission on bills of exchange • Issuance of free personalized cheques books • Free issuance of ATM, Debit, Credit and add-on Cards • Free investment advisory services

• Grant of redeemable reward points on use of credit cards • Free internet banking, phone banking and any where banking facilities • Issuance of discount coupons for purchase of various products like computer accessories, music CDs, cassettes, books, toys, garments etc.etc. • Last but not the least, issuance of free PVR, Trade Fair tickets etc. • Concession in rate of interest on Group advances • Exemption in upfront fees

PEST Analysis

• Government and RBI policies affect the banking sector. • Various banks in the cooperative sector are open and run by the politicians. • Various policies are framed by the RBI looking at the present situation of the country for better control over the banks.

• Every year RBI declares its 6 monthly policy. • The Union budget affects the banking sector to boost the economy by giving certain concessions or facilities.  Eg. Encouraged savings, FDI limits etc.

• Banks provide various types of loans to farmers, working women, professionals, and traders. • Also provide education loan to the students and housing loans, consumer loans, etc. • Banks having big clients or big companies have to provide services like personalized banking to their clients. • Banks have changed the culture of human life in India and have made life

• Encouraged the bankers to change the concept of branch banking to anywhere banking. • The use of ATM and Internet banking has allowed ‘anytime, anywhere banking’ facilities. • Credit card facility has encouraged an era of cashless society. • Started home banking through telecommunication facilities and computer technology. • Banks are also using SMS and Internet as major tool of promotions and giving great


• Intangibility  Characteristics of a service indicating that it has no physical attributes that a person may feel, hear, taste before they buy it. • Inconsistency  It refers to variability or heterogeneity.  Eg. “Punjab National Bank”

• Inseparability  Inseparability is that characteristics of a service indicating that it cannot be separated from creator-seller of the product.  3 ways of service production: Coproduction, isolated production, self service production. • Inventory  Inventory relates to the perishable characteristics of the service

RATER Analysis

– It is defined as the ability to perform the promised service dependably and accurately. – The company delivers on its promises–promises about delivery, service provision, problem resolution, and pricing.

– Indian Overseas Bank has ensured that whoever comes in for cash withdrawal will receive his/her cash within five to ten

• Employee’s knowledge and courtesy and the ability of the firm and its employees to inspire trust and confidence.

• Indian Overseas Bank assures the customers coming up to the bank that the money they invest is secure; the interest rate that is being provided to them is at par or sometimes

• Tangibles are defined as the appearances of physical facilities, equipments, personnel and communication materials.

• At Indian Overseas Bank, the entire premise is air-conditioned. • They have computerized systems in place and therefore quick, accurate and efficient service can be provided to the customers. • The tables and chairs are conveniently located for the customers. • The personnel always have a cheerful and helping veneer and are always ready to help

• Empathy is defined as the caring, individualized attention the firm provides its customers.

• The empathy shown by the employees of the Indian Overseas Bank is good as they are always polite humble and helpful. • This bank regularly holds seminars and training workshops so that they can understand the

• Responsiveness is the willingness to help the customer and provide him with immediate and fast service.

• The Indian Overseas Bank is prompt at providing its customers with the information and services that they seek. • It is extremely prompt when it comes to resolving the complaints of the customers.

Kotak Mahindra Bank
• Established in 1985 as Kotak Mahindra Finance Ltd. • In 2003 got converted into Kotak Mahindra Bank Ltd. • Offers Banking solutions that covers almost every sphere of life • Awards:
– Best Corporate Governance Practices, 2009 – Ranked 19 by “Hewitt Best Employers in India 2009” – Business superbrand, 2008 – Best Workplaces in India, 2008
– Indian Express Technology Senate Uptime

7 PS



Banking & Savings Banking A/cs Credit Cards Demat

Investment Loan & Corporate & Insurance Borrowings & Life Car Finance Institutional Corporate Insurance Finance Mutual Home Investment Funds Loans Banking Share Loan Institutional Trading against Equities Deposits Structured Personal Treasury property Products Loans Wealth Gold Commercial Managemen Loans NRI Estate t Services Planning

• RBI administered rates leave less room for pricing decisions • Elasticity of Demand & supply & competitors strategy affect pricing • The BPLR acts as benchmark for fixing rates • Differentiating Factors:
– Time Period – Service charges – Allied service benefits

• • • • BPLR – 15.50% Home Loan – 8.49% Personal Loan – 15% - 20% Car Loan
– New – 12% – Used – 16%

• • • • • Spread over 8 countries 126 cities in India 217 Branches all over India Over 800 ATMs

• Promotion strategy of Kotak Bank targets to grow by cross selling products rather than by building a huge assets base. • Tag lines:
– Think Investment. Think Kotak – Lets make money simple – Jeene ki aazadi – Faidey ka insurance

• Tie up with • Tie up with for offering the Products/Services for sale at a discounted rate netc@rds (“Cardholders) holders • Exclusive Discounts for Kotak Gold Netcard users on booking of air ticket, hotel or holiday  via • Drawing Competition

• Kotak Mahindra Bank amongst Hewitt’s ‘Top 25 Best Employers’ • 9800 employee base • i-mint Kotak B2E program : The STARS for consistent and timely recognition of excellence

• Superior technology which is their differentiator • Customer driven operations • Product innovation to meet customer requirements • Global reach

Physical Evidence
Logo Office Interiors


Web page


Gold Credit Card

• Demographic Variable:
– Urban areas with tier 2 cities – Age group – 18-50 – Occupation –
• Business Persons • Salaried • HNIs

• Psychographic Variable
– Youthful appeal – Seedy service
 

• Targeting at the higher end customer compared to what most of the other domestic banks are doing; reason: device and solutions provider, and not just a bank • Tries to leverage from existing client base • Holistic targeting done by using the network across the group, including the high-end customer base in private client business in securities firm, mutual fund customers and car


• In terms of industry positioning, Kotak Bank has recently embarked on the banking journey and there is a long way to go • Kotak Bank views commercial bank as a broader financial services play, and not just a standalone business. • It has a positioning which is consistent with the advice and solutions theme • The Bank is basically a central platform for customer relationships with other businesses positioned around it for providing value to the customer • Kotak Bank claims to be in the business of creating wealth for our customers

SWOT Analysis

Capital markets franchise Professional management Strong technology Well capitalized Construction equipment financing business Comprehensive cash management system Capturing supply chain businesses

• • • • • • •


• Wholesale Funding Costs • Latecomers • ·Less Promotional Activities

SWOT Analysis


• Scalability through increased brand awareness, market penetration  and service offerings across all categories of financial services • Increase in customer’s wallet share • Leveraging the latest technology for providing quality and client  centric services


• Oil prices and rising inflation • Increasing interest rate scenario

Axis bank
• First of the new private bank to began operation in India. • The Bank was promoted jointly by the Administrator of the specified undertaking of:
– The Unit Trust Of India (UTI - I) – Life Insurance Corporation Of India (LIC) – General Insurance Corporation Of India(GIC) – National Insurance Company Ltd – The New India Assurance Company Ltd – The Oriental Insurance Company Ltd – United India Insurance Company Ltd.


Personal Accounts Deposits DepthLoans Cards Investments Insurance Payments



Accounts Accounts Credit Deposits Capital Market Remittances Treasury Services Cash management Govt. Business

Priority Banking Accounts Deposits Loans Cards Investments Payments Remittances

• • • • BPLR – 14.75% Home Loan – 8% Personal Loan – 14%-21% Car Loan
– New – 9.5%-15%(Fixed)

• Value for money • Low fee charges

• • • •

Spread over 5 countries Present in all states of India 827 Branches all over India Over 2764 ATMs

• Name changed from UTI Bank to Axis bank creating a global modern bank image • Tie up with dish tv • Tie up with Jet Airways • Advertising • Print media • Publicity • Personal selling • Tele marketing

Physical Evidence

Web page


Logo Office Interiors Credit Cards

• • • • • 14000 employee base Professionally qualified staff Service oriented organization Relationship Management Rigorous Training

• • • • •

Flow of activities Standardization Customization No. of steps Simplicity

• Demographic
– Location
• metros & divisional cities

– Occupation
• Business person • Salaried class • Working women

– Age
• Senior citizen • Minor

• Psychographic variable
– Life style

Targeting strategy
• Corporate banking market • Capital market • Retail banking market • Selective specializtion strategy

M1 Gold card Silver card Secured card



• Axis Bank has positioned itself as a bank which gives higher standard of services through product innovation for the diverse need of individual & corporate clients. So they highlight the following points in their positioning statement
– Customer centric – Service oriented – Product innovation

SWOT Analysis


• Support of various promoters • High level of services • Knowledge of Indian market


vNot having good image vMarket Capitalization is very low vNot been fully able to position itself correctly

SW O T A nal s ysi


• Growing Indian Banking sector • People are becoming more service oriented • In the global market

– Foreign banks – Govt. banks

• Future market trends • From various competitors:

• Incorporated in August 1994 • Among the 1st in new generation commercial bank • Best Performing Bank Award by CNBC TV18 Financial Advisor Award, 2009 • Most tech-savvy award at Business world Best Bank Award, 2009 • Most Trusted Brand, by Economic Times, 2009



Personal NRI Banking Banking & Accounts Accounts & Deposits Deposits Loans Remittances Cards Investment & Investment & Insurance Loans Insurance Forex & Trade NRI preferred services banking Payment Payment servicesBanking services Private

Wholesale Banking Corporate SME Financial institutions & Govt. sectors Trust

• BPLR 15.75% • Home Loan – 8.25% (30% of market share) • Car Loan –
– New 13.75% – Used 15.50% - 18.00%

• Personal Loan 13.00% - 16.50%

• • • • Global presence in 5 countries 635 cities 1506 branches 3573 ATMs

• RSCG India recently launched 2 TVC campaigns for HDFC Bank titled “Moon” & “Lost Boy” • Launched its Life Insurance campaign, “Papa kabhi gum nahi honge” • Tag line :
– “We understand your world” making its presence felt making its message clear and ubiquitous with its customers – “Sar utha ke jiyo”

• Feature in movies


• 7500 + employees • Focus on continuous training by both internal & external faculties • Esop scheme covering a large no. of employees •

• Operates in a highly automated environment in terms of IT & communication system Centralized Derive

processing units Electronic straight through processing Data warehousing, CRM Innovative Technology Applications

Economies of scale Reduced

transaction cost Improved cost efficiency, cross sell Provide new & superior products

Physical Evidence

SWOT Analysis
Strengths : • Right strategy for the right products. • Superior customer service vs. competitors. • Great Brand Image. • Products have required accreditation. • High degree of customer satisfaction. • Good place to work • Lower response time with efficient and effective service. • Dedicated workforce aiming at making a long-term career in the field.

Weakness : • Some gaps in range for certain sectors. • Customer service staff need training. • Processes and systems, etc • Management cover insufficient.

SWOT Analysis
Opportunities : • Profit margins will be good. • Could extend to overseas broadly. • New specialist applications. • Could seek better customer deals. • Fast-track career development opportunities on an industry-wide basis. • An applied research center to create opportunities for developing techniques to provide added-value services.

Threats : • Legislation could impact. • Great risk involved • Very high competition prevailing in the industry. • Vulnerable to reactive attack by major competitors. • Lack of infrastructure in rural areas could constrain

• Demographic variables
– Posh and up market urban area – HNIs both salaries & self employed – All age groups

• Psychographic Variables
– Personalized services – Conventional Banking services


• Niche marketing with focus on HNIs • Privilege and priority banking services and professional services for corporate clients • Product specific targeting


• Positioned as a bank for affluent people and corporate clients

• PLR Rates
– Kotak 15.50% – Axis 14.75% – HDFC 15.75%

• ATM coverage
– Kotak 800 + – Axis 2764 + – HDFC 3573 +

• Differentiator
– Kotak provides all financial services under one roof – Axis tries to build a global modern bank image – HDFC promotes financial independence

• Differentiator
– Kotak believes in cross selling – Axis is trying to increase customer base – HDFC is building a brand

Service Blueprinting Process
Step 2 Step 3 Step 4 Step 5 Step 6

view. y the process to theMap the process from the customer’s actionsofonstage and back-stage. at each customer Identify be blue-printed.customer segment. customer , Add evidence of service customer or Map contact employee point Link and contact person activities to needed support functions

Service Blueprint for making a Bank Draft
Bank hall Token Demand Draft Slip Cash & Slip
Deposit Cash And demand slip

Part of Slip





Arrive at bank

Take token

Filling of slip

Takes one Part of slip

Shows the slip and take Draft

Greet and give token

Cashier greets customer and check Gives slip demand draft slip

Manager greets and hand back the draft

Counts Cash

Give other part of slip to issuer of DD

Issuer Prepares Draft and pass it to manager

Manager checks the slip and sign on draft

Take Cash from Cashier

Pass slip to issuer

Pass draft to manager


• The pervasive influence of information technology will continue to revolutionize banking. • Internationally, the number brick and mortar structure has been rapidly yielding ground to click and order electronic banking with a plethora of new products. • Banks will strongly rely on the merits of relationship banking. • CRM , therefore, will become the new mantra in customer service management, which is both

Possible drawbacks
• Boom in housing loan market, the sign of overheating has also started surfacing with potential problem for banks that have not exercised sufficient caution. • The pressure on margins is mounting partly because of fierce competition and partly as a result of falling interest rates environment. •


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